California Legal Brief

The Rule of Paknad v. Superior Court is that when an employer defends against an employee's discrimination lawsuit by asserting an avoidable consequences defense based on the scope and adequacy of its internal investigation, the employer waives attorney-client privilege and work product protection as to all factual findings about the employee's allegations and information relevant to the investigation's scope and adequacy, under circumstances where the employer voluntarily put the investigation's thoroughness and independence at issue in its pleadings and discovery responses.

Appeal from order granting motion to compel production of investigative reports in Santa Clara County Superior Court.

Petitioner was Michelle Paknad — the former Intuitive Surgical employee who alleged sexual harassment, gender discrimination, and unlawful retaliation and sought production of investigation reports.

Real Parties in Interest were Intuitive Surgical, Inc. and Intuitive Surgical Operations, Inc. — the employers who retained attorney Andrea Kelly Smethurst to investigate Paknad's complaints and asserted avoidable consequences defense.

The suit sounded in employment discrimination and retaliation. Paknad alleged eight causes of action including sex discrimination, sexual harassment, retaliation, wrongful discharge, and failure to prevent harassment.

The key substantive facts leading to the suit were that while employed by Intuitive, Paknad made two formal complaints of discrimination, harassment, and retaliation. Intuitive retained attorney Smethurst to investigate, who interviewed witnesses, reviewed documents, and produced two reports with findings and conclusions. After Paknad was fired, she sued. Intuitive asserted an avoidable consequences defense, citing the thoroughness and independence of the Smethurst investigations.

The procedural result leading to the Appeal: The trial court conducted in camera review of the Smethurst reports and accepted Intuitive's proposed redactions that excised all factual findings, ruling that the redacted materials constituted protected attorney work product under Code of Civil Procedure section 2018.030(a).

The key question(s) on Appeal: Whether Intuitive's waiver of work product protection by putting the investigation's adequacy at issue extended to the investigator's factual findings, or whether those findings remained protected as core attorney work product.

The Appellate Court held that Intuitive waived attorney-client privilege and work product protection as to all of Smethurst's factual findings about Paknad's allegations and information relevant to the scope or adequacy of the investigation, because by asserting an avoidable consequences defense touting the investigation's thoroughness and independence, Intuitive voluntarily put those matters at issue such that disclosure became essential for fair adjudication.

The case is inapplicable when an employer does not rely on or reference its internal investigation as part of its defense strategy, or when the employer limits its defense to matters unrelated to the investigation's scope, adequacy, or thoroughness.

The case leaves open the extent to which findings about third-party complainants unrelated to the plaintiff's specific allegations may remain redactable, and the precise boundaries of what constitutes "pure legal advice" that might remain protected despite waiver of factual findings.