Knowing the identity of persons who have given statements to the Secretary is not equivalent to knowledge of which of those persons were informers within the context of the privilege. Only when the content of the statement is disclosed will it be revealed whether the information was given reluctantly or voluntarily, whether the tone and manner in which it was given was friendly to the defendant or unfriendly, and whether it was accusatory or favorable. In short, if the employee is not known to the defendant as an informer but merely as a statement giver, then disclosure of the statement might reveal him as an informer.
459 F.2d at 306 (citations omitted).
Disclosure of the five employees' statements would reveal to ABJ for the first time whether any of the five were "informers," i.e. speakers who implicated ABJ, as opposed to mere "statement givers." See id. Such a disclosure would defeat the very purpose of the informant's privilege. Since ABJ does not know which of the five employees were "informers" as that term relates to the informant's privilege, see id., there has been no waiver of the informant's privilege as to their statements. Accordingly, ABJ is not entitled to disclosure of their statements.
B. Work Product Privilege
The federal work-product privilege is set forth in Fed. R. Civ. P. 26(b)(3). The privilege provides, in pertinent part, that materials prepared in anticipation of litigation by an attorney or his/her agents are subject to a qualified privilege from discovery.
This court has adopted a three-pronged threshold test for measuring the applicability the work-product privilege. Niagara Mohawk Power Corp. v. Stone & Webster Eng. Corp., 125 F.R.D. 578, 586 (N.D.N.Y. 1989) (McCurn, C.J.). For the privilege to apply, the material sought must be:
(1) a document or tangible things;
(2) prepared in anticipation of litigation; and
(3) prepared by or for a party, or by of for his representative.
There is a factual dispute as to whether DOL can satisfy the second threshold prong, i.e. that the statements were taken in preparation for litigation. At first glance, it appears that DOL has at least implicitly conceded that statements taken during the ABJ investigation were not taken in preparation for litigation. Most notably through the affidavit of Administrator Fraser, DOL asserts that litigation is not generally considered until after investigations are complete. Fraser, for example, averred that "investigations disclosing violations of the Act in which legal enforcement action appears appropriate are referred to the Solicitor of Labor for civil suit or, if sufficiently serious, for transmission to the Department of Justice for criminal prosecution." Fraser Aff. (1/29/91), at para. 4. In other words, matters are seemingly not considered for litigation until after investigations reveal violations.
Fraser's apparent concession would be consistent with the statutory scheme of the FLSA, which dictates that the DOL's Wage and Hour Division may investigate any industry subject to the Act for FLSA violations, even without suspicion of improprieties. FLSA § 11(a), 29 U.S.C. § 211(a). Moreover, the ABJ President, George Guthinger, has averred that the DOL representative who conducted the ABJ investigation informed him that DOL's investigation was a part of a "random" audit. Guthinger Aff. (1/11/91), at para. 3. The statements of the five employees whose identities are known by ABJ were taken during this allegedly random investigation. Certainly a generalized inquiry into the wage and hour practices of a particular business would not be considered "in anticipation of litigation," when there is not yet even a suspicion of improprieties. Cf. Horn & Hardart Co. v. Pillsbury, 888 F.2d 8, 12v (2d Cir. 1989) (Second Circuit requirement that material be prepared "with an eye toward litigation").
The court was prepared to hold that the statements sought by ABJ here were not taken in anticipation of litigation, and thus not covered by the work product rule, until the end of oral argument. Just before the court adjourned, DOL's counsel made the following statement to the court:
There is a statement in respondent's brief at page 45 with respect to Mr. Guthinger's affidavit which purports to represent a conversation with the investigator from the Wage and Hour Division, and I don't think this is a tremendously important point that the defendant is making, which is that Mr. Guthinger claims that he was told there was no complaint in this case, and somehow that bears on the work product privilege. But I just want to state for the record, so no one is left with a misapprehension, that we do dispute Mr. Guthinger's affidavit that that conversation took place as it was described.
Transcript (Oral Argument (9/16/91)) at 33-34.
Contrary to counsel's assumption, DOL's dispute does have a bearing on the applicability of the work product privilege, for it places into question whether the investigation at issue here was random, as opposed to being conducted in preparation of litigation. The application of the work product privilege here depends entirely on whether the statements were taken during an investigation that was conducted pursuant to a specific claim of impropriety. See, e.g., Horn & Hardart, 888 F.2d at 12.
DOL points to several FLSA cases that it feels are dispositive of this matter. In those cases, various district courts have used the work-product doctrine to preclude discovery of employees' statements. See Pl. Mem. at 26-27 (citing six district court cases, none from within the Second Circuit). With one exception, see infra, the courts in each of the cited cases immediately presumed, without elaboration, that the materials sought in those cases were prepared in anticipation of litigation. Despite their ultimate holdings, those cases are of little precedential value here because they simply do not address ABJ's persuasive argument that the investigative materials here were not prepared in anticipation of litigation.
The single case cited by DOL offering some explanation in support of its work-product argument entailed a case-specific holding that is necessarily distinguishable from case at bar. In McLaughlin v. Miles Laboratories, Inc., 124 F.R.D. 629, 630 (N.D. Ind. 1988), perhaps unlike the present case, DOL initiated a wage and hour investigation, and took statements pursuant thereto, in preparation for litigation. The court specifically noted that "there existed, from the initiation of the investigation, a specific claim of back-wages owed and it was incumbent upon the DOL's investigator to conduct the investigation with an eye toward ultimate prosecution of [the employer]." Miles Laboratories, 124 F.R.D. at 631. To be sure, the court stated in conclusion that its decision to apply the work-product privilege was "in light of the existence of a specific claim of back wages owed at the time of the investigator's work." Id. (emphasis added).
In sum, none of the cases relied upon by DOL are dispositive of this case. The only way that the court can determine whether the work product privilege is applicable here is to hold an evidentiary hearing to resolve the apparent factual dispute of whether the statements at issue here were taken by DOL investigators "with an eye toward litigation," i.e. in preparation for litigation. Horn & Hardart, 888 F.2d at 12. If the statements were taken in preparation of litigation, then the work product privilege will apply to preclude ABJ's discovery of the identity and statements of the ABJ employees.
As mentioned above, DOL may take measures to avoid the unnecessary burden of an evidentiary hearing, by attempting to properly assert the informant's privilege. Alternatively, DOL may request an evidentiary hearing, after which the court will determine the applicability of the work product privilege.
DOL's motion for a protective order is denied without prejudice insofar as it relies upon the informant's privilege, pending proper assertion of the privilege. DOL's motion for a protective order insofar as it relies on the work product privilege is also denied without prejudice, pending an evidentiary hearing on the matter. Discovery as to the identities and statements of ABJ employees (past and present) who were interviewed by DOL representatives is stayed for sixty (60) days to afford DOL an opportunity to proceed in accordance with the court's direction herein. In the event DOL elects not to so proceed, DOL shall provide the requested identities and statements.
IT IS SO ORDERED.
DATED: January 10, 1992
Syracuse, New York
Neal P. McCurn
Chief, U.S. District Judge