Overtime Lawyer Practice Tip: A Few Cases Holding That Companies Waive the Attorney-Client Privilege When They Base Their FLSA Willfulness/Good Faith Defense on Advice of Counsel

The FLSA permits several defenses necessitating an inquiry into the employer’s “state of mind” in implementing or correcting the challenged pay practice. Seee.g., 29 U.S.C. § 255(a) (limitations period extends back three – rather than two – years if FLSA violation is “willful”); 29 U.S.C. § 260 (liquidated damages avoided if employer’s conduct “was in good faith” and based on “reasonable grounds for believing” that the conduct complied with FLSA).

In many cases, employers rely on the advice of counsel in asserting these types of state-of-mind defenses. For example, a company executive might assert that, before implementing the purportedly illegal overtime pay policy, the company’s lawyer reviewed the policy. Under these circumstances, the employer will argue, the lawyer’s review renders any FLSA violation “non-willful” and/or “in good faith.”

All of this is well and good. But it sure is frustrating when the employer attempts to protect the underlying lawyer communications as covered by the attorney-client privilege. This seems entirely unfair. An employer relying on the advice of counsel as a defense should not be able to use the attorney-client privilege as a shield against the discovery process.

If you’re an employment rights lawyer and are faced with the above defense tactic, here are a few cases in which federal judges hold that an employer relying on the advice of counsel as the basis for its FLSA willfulness/good faith defense waives the attorney-client privilege. Be sure to check out these cases: Scott v. Chipotle Mexican Grill, Inc., 2014 U.S. Dist. LEXIS 175775 (S.D.N.Y. Dec. 18, 2014);  Phelps v. MC Communications, Inc., 2013 U.S. Dist. LEXIS 101965, *58-61 (D. Nev. July 22, 2013); Wang v. The Hearst Corp., 2012 U.S. Dist. LEXIS 179609, 2-8 (S.D.N.Y. Dec. 19, 2012); McLaughlin v. Lunde Truck Sales, Inc., 714 F. Supp. 916, 919-20 (N.D. Ill. Apr. 14, 1989).

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