Oliver Fenceroy v. Gelita USA, Inc., Tom Haire, and Jeff Tolsma

IN THE SUPREME COURT OF IOWA
No. 16–0775

Filed February 23, 2018

OLIVER FENCEROY,

Appellee,

vs.

GELITA USA, INC., TOM HAIRE, and JEFF TOLSMA,

Appellants,

and

BOB KERSBERGEN and JEREMIE KNEIP,

Defendants.

Appeal from the Iowa District Court for Woodbury County,

Jeffrey A. Neary, Judge.

Interlocutory review of a district court order denying a protective

order and permitting discovery into defense counsel’s prelawsuit

investigation. DISTRICT COURT ORDER AFFIRMED AND CASE

REMANDED.

Aaron A. Clark of McGrath North PC LLO, Omaha, Nebraska, for

appellants.

Stanley E. Munger of Munger, Reinschmidt & Denne, LLP,

Sioux City, for appellee.
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CADY, Chief Justice.

This review presents a significant issue regarding the boundaries

of attorney–client privilege and work-product protection. We must decide

whether plaintiff’s counsel may depose defense counsel and obtain

counsel’s prelawsuit work product. After leaving his job, plaintiff filed an

administrative complaint charging his former employer with race

discrimination. In response to the charge, the employer hired an

attorney to defend the company and investigate the merits of the charge.

The employer filed an administrative position statement wherein it relied

upon the attorney’s investigation to support its Faragher–Ellerth

affirmative defense. In the subsequent civil action, the employer retained

the same attorney and again raised the affirmative defense. The

employer claimed attorney–client privilege and work-product protection

over the investigation and moved for a protective order to prevent plaintiff

from deposing defense counsel and obtaining her investigation notes.

Yet, in its motion for summary judgment, the employer again relied upon

the investigation to support its defense. The district court denied the

protective order, and we granted the employer’s interlocutory appeal.

We conclude the district court did not abuse its discretion by

denying the defendants’ protective order. When an employer raises a

Faragher–Ellerth affirmative defense and relies upon an internal

investigation to support that defense, the employer waives attorney–client

privilege and nonopinion work-product protection over testimony and

documents relating to the investigation. On remand, the employer is

permitted to amend its answer and brief to limit the affirmative defense

to only the period of plaintiff’s employment. If the employer declines to

so amend, it may not claim attorney–client privilege or work-product
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protection over the 2013 investigation, and plaintiff may depose defense

counsel as well as obtain counsel’s investigation notes.

I. Factual Background and Proceedings.

Oliver Fenceroy, an African-American man, was employed by Gelita

USA, Inc. (Gelita), a maker of gelatin products. He began working at

Gelita’s Sergeant Bluff plant in 1975. In this lawsuit, he alleges he

experienced consistent racial harassment from coemployees and

supervisors throughout his employment. His complaint identified a

number of workplace incidents involving racially disparaging comments

by employees.

Gelita implemented an antiharassment policy that barred

disparate treatment in the workplace on the basis of race. Fenceroy

acknowledged receiving a written memorandum that discussed the

antiharassment policy in August of 2010. Additionally, Fenceroy

attended company trainings in 2011, 2012, and 2013 that discussed

workplace harassment. He also received copies of Gelita’s Code of

Conduct, which contained the company’s antiharassment policy, in 2011

and 2012. Further, Gelita conducted a survey in 2012 that requested

anonymous feedback about potential problems or changes to the

company. Fenceroy received the survey but did not report any

harassment.

Gelita’s antiharassment policy contained detailed reporting

procedures. The policy instructed employees to report any harassment

to their supervisors or to the human resources department. If an

employee is harassed by his or her direct supervisor, the policy permitted

an employee to bypass that individual and report the harassment to the

supervisor’s superior.
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It is undisputed that Fenceroy only made one complaint to Gelita

about racial harassment. In September of 2011, Fenceroy complained to

Gelita’s Vice President of Business Support, Jeff Tolsma, about a rope

tied on the company’s production floor. Fenceroy believed it represented

a noose. Tolsma notified the plant’s production manager, Jeremie Kneip,

of the complaint. The two individuals located the rope and determined it

was not a noose, but rather a loop used to facilitate pulling a scale

downward. Nevertheless, they untied the knot so there was no longer a

loop in the rope.

Fenceroy stopped working for Gelita in March 2013. He filed a

complaint with the Iowa Civil Rights Commission (ICRC) a short time

later. The complaint charged Gelita with race discrimination. Upon

receipt of Fenceroy’s ICRC charge, Gelita retained attorney Ruth

Horvatich and tasked her with developing a strategy to defend the

company during administrative proceedings.

Pursuant to this representation, Horvatich interviewed several

Gelita employees to ascertain the merits of Fenceroy’s complaint. Tolsma

was present for and participated in each interview. A union

representative, John Hoswald, was also present during the employee

interviews. At the end of each interview, Horvatich drafted a witness

statement that summarized the employee’s account and instructed the

employee to sign the document.

Horvatich’s investigation revealed some Gelita employees had made

racially disparaging comments in the workplace. Gelita subsequently

terminated one employee, Bob Kersbergen, and disciplined others,

including Kent Cosgrove, Tom Haire, and Lewis Bergenske. Horvatich

did not participate in any of the disciplinary decisions.
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On May 30, 2013, Gelita filed a position statement with the ICRC

in response to Fenceroy’s discrimination charge. The statement, drafted

by Horvatich, addressed the merits of Fenceroy’s racial harassment

claim. It argued Gelita could not be held vicariously liable for supervisor

harassment because it could assert the Faragher–Ellerth affirmative

defense. Specifically, in discussing the affirmative defense, Gelita

argued,

[T]he Company distributed a valid discrimination and
harassment policy, which contained flexible reporting
procedures and listed individuals that acts of harassment
could be reported to, who were in a position to take
corrective action. The discrimination and harassment policy
also contains detailed procedures relating to the
investigation and resolution of complaints. After learning of
Complainant’s complaint relating to the rope, the Company
took immediate action. The same day of the complaint, the
Company performed an investigation and resolved the
complaint by untying the knot that was in the rope, which
has remained untied since that time. The Company notified
the Complainant of this resolution. Additionally, after the
Complainant filed the charge at issue with the Iowa Civil
Rights Commission, the Company investigated the allegations
of harassment, which resulted in the termination of Mr.
Kersbergen and the discipline of Mr. Haire, Mr. Bergenske,
and Mr. Cosgrove. During his employment, Complainant
only made one report of harassment and unreasonable failed
to report any other allegations to management, despite the
Company’s clear reporting procedures. Thus, it is clear that
the Company exercised reasonable care to prevent
harassment, promptly corrected any harassing behavior, and
the Complainant unreasonably failed to take advantage of
the Company’s clear reporting procedures. As a result, the
Complainant’s allegation of racial harassment fails.

(Emphasis added.) Thus, the statement Gelita filed with the ICRC

signaled it would rely on its investigation into the complaint to help

support the first prong of its affirmative defense that it exercised

reasonable care to prevent and correct harassing behavior.

At the culmination of the administrative proceedings, the ICRC

issued Fenceroy a right to sue. On May 30, 2014, Fenceroy filed a civil
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action in district court against Gelita and four named employees: Bob

Kersbergen, Tom Haire, Jeff Tolsma, and Jeremie Kneip. Fenceroy

alleged the defendants engaged in racial harassment in violation of the

Iowa Civil Rights Act and he was constructively discharged. He also

alleged Kersbergen and Haire engaged in tortious infliction of severe

emotional distress.

Gelita again retained Horvatich to defend the company, as well as

Haire and Tolsma, in the civil action. The defendants filed an answer

that raised a number of affirmative defenses. One defense alleged

Fenceroy “unreasonably failed to take advantage of any preventative or

corrective opportunities provided by Defendant Gelita”; and Gelita

“exercised reasonable care to prevent and promptly correct any harassing

behavior.”

During discovery, defendants produced the witness statements

drafted by Horvatich and signed by the employees during her 2013

investigation. Fenceroy deposed some of the employees Horvatich

interviewed during the investigation. He also deposed Tolsma and

inquired into the nature and scope of the 2013 investigation, as well as

the subsequent disciplinary decisions.

On March 23, 2016, counsel for Fenceroy issued a notice to depose

Horvatich. He also requested Horvatich provide “notes from the

investigation that resulted in Gelita’s Position Statement,” as well as any

“notes from interviews” with Gelita employees.

Defendants moved for a protective order. They asserted Fenceroy’s

discovery request sought privileged information. They claimed the 2013

investigation was solely for the purpose of preparing a defense to

plaintiff’s ICRC charge, and all communications between Gelita and

Horvatich, as well as any notes taken by Horvatich, were done in
 7

anticipation of litigation. They further argued the investigation was not

“at issue” in their affirmative defense because it occurred after Fenceroy

left the company and their actions could not have remedied any terms or

conditions of his employment.

In resisting the protective order, Fenceroy asserted the defendants’

impliedly waived any privileges. He claimed the proceedings before the

ICRC revealed Gelita intended to rely on its postcomplaint investigation

by Horvatich to help prove its affirmative defense. More specifically, he

argued the investigation conducted after he left his employment was

relevant to the lawsuit because it could be used in two ways. First, the

investigation could be used to show its reasonableness in preventing

harassing workplace behavior. Second, it could help establish that

Fenceroy should have taken advantage of its response by making his

complaint before he left his employment.

Prior to the hearing on the motion for a protective order,

defendants filed a motion for summary judgment. This motion claimed

defendants were entitled to judgment as a matter of law based on their

Faragher–Ellerth defense. Within its discussion of this defense,

specifically within a subsection titled “Gelita Exercised Reasonable Care

to Prevent and Correct Promptly Any Harassing Behavior,” defendants

asserted that “[e]ven though Plaintiff was no longer with Gelita at the

time of his Complaint, in response to his charge, the Company

investigated his allegations, discharged one employee, and disciplined

three others.”

The district court denied the protective order, finding the

defendants waived attorney–client privilege with respect to the 2013

investigation. It concluded Horvatich’s investigation was a key piece of

evidence in litigating the affirmative defense and Fenceroy “must be
 8

permitted to probe the substance of [the investigation] to determine its

sufficiency.” The court further held defendants waived work-product

protection by placing the 2013 investigation at issue. Defendants filed

for, and we granted, interlocutory review.

On review, defendants continue to maintain their Faragher–Ellerth

defense is “based upon Fenceroy’s unreasonable failure to take

advantage of preventative and corrective opportunities” during his

employment. Defendants further allege the investigation cannot be “at

issue” with respect to the affirmative defense because the evidence is “not

necessary” to prevail in their Faragher–Ellerth defense. Fenceroy argues

on review that defendants’ position is contrary to their actions before the

district court. To illustrate, Fenceroy points to defendants’ summary

judgment motion, which referenced the investigation as evidence of

Gelita’s reasonable corrective actions when faced with a harassment

complaint.

II. Standard of Review.

We review district court rulings on discovery matters for abuse of

discretion. Jones v. Univ. of Iowa, 836 N.W.2d 127, 139 (Iowa 2013).

Discovery rulings are “committed to the sound discretion of the trial

court.” State v. Ary, 877 N.W.2d 686, 702 (Iowa 2016). “A district court

abuses its discretion ‘when the grounds underlying a district court order

are clearly untenable or unreasonable.’ ” Sioux Pharm, Inc. v. Eagle

Labs., Inc., 865 N.W.2d 528, 535 (Iowa 2015) (quoting Mediacom Iowa,

L.L.C. v. Inc. City of Spencer, 682 N.W.2d 62, 66 (Iowa 2004)).

III. Analysis.

A. Implied At-Issue Waiver of Attorney–Client Privilege.

1. The Faragher–Ellerth affirmative defense. Our law has long

recognized that employers have a duty to take reasonable measures to
 9

investigate and eliminate workplace discrimination. At the same time,

growing attention has focused on workplace discrimination committed by

supervisors and managers, largely due to their authority over

subordinate employees bestowed on them by the employer. See Faragher

v. City of Boca Raton, 524 U.S. 775, 802, 118 S. Ct. 2275, 2290 (1998)

(reasoning that supervisors who engage in workplace harassment are

aided in their agency relationship to the employer). This attention has

made employers vicariously liable for discriminatory harassment by

supervisors and heightened the importance for employers to affirmatively

act to prevent workplace discriminatory conduct and properly respond to

employee claims of workplace discrimination when they arise. See id. at

807–08, 118 S. Ct. at 2292–93; Burlington Indus., Inc. v. Ellerth, 524 U.S.

742, 764–65, 118 S. Ct. 2257, 2270 (1998). It has also led to a two-part

affirmative defense to claims of vicarious liability for employers who

responsibly act to avoid workplace discrimination. Faragher, 524 U.S. at

807, 118 S. Ct. at 2293. This defense allows these employers to escape

vicarious liability for claims that do not involve tangible employment

action. Id.

The two-part defense requires employers to show reasonable care

was exercised to “prevent and correct promptly any . . . harassing

behavior” and to further show the claimant employee “unreasonably

failed to take advantage of any preventive or corrective opportunities

provided by the employer.” Id. This remedial action defense was set out

in two landmark decisions by the United States Supreme Court in 1998,

and is commonly known as the Faragher–Ellerth defense. See id.; Ellerth,

524 U.S. at 765, 118 S. Ct. at 2270. We adopted the defense in

Farmland Foods, Inc. v. Dubuque Human Rights Commission, 672 N.W.2d

733, 744 n.2 (Iowa 2003). The policy behind the affirmative defense is
 10

simple and direct. By offering a complete defense to vicarious liability, it

encourages employers to prevent workplace discrimination and

harassment by adopting antidiscrimination policies and complaint

procedures or by taking other suitable action.

In adopting the vicarious liability standard established in Faragher

and Ellerth, we recently clarified that vicarious liability does not replace

the direct negligence theory of employer liability, but rather supplements

the theory with an additional agency-based standard. Haskenhoff v.

Homeland Energy Sols., LLC, 897 N.W.2d 553, 574 (Iowa 2017). In this

case, plaintiff has alleged harassment by both supervisory and

nonsupervisory employees. Consequently, defendants have properly

raised the Faragher–Ellerth affirmative defense in regard to the claims of

vicarious liability for supervisor harassment.

2. Waiver of attorney–client privilege through the Faragher–Ellerth

affirmative defense. In Iowa, affirmative defenses are raised in

responsive pleadings in a lawsuit. The evidence to support a defense is

then presented at trial or summary adjudication. While part of the focus

of the Faragher–Ellerth affirmative defense is on the reasonableness of

the plaintiff’s conduct in utilizing complaint procedures to avoid harm,

equal focus is on the conduct of the employer in preventing and

responding to incidents of harassment. This evidence can include the

actions of the employer in establishing and maintaining

antidiscrimination policies and complaint procedures, past conduct by

the employer in responding to complaints, and evidence of employer

conduct in responding to the specific allegations articulated by the

plaintiff in the pending legal proceeding. As a result, an employer’s

investigation into a harassment complaint that subsequently results in a

lawsuit can become the centerpiece of the affirmative defense. Moreover,
 11

those who assist the employer in the investigation can become important

supporting witnesses. Thus, the issue we confront in this case surfaces

when, as in this case, an employer uses an attorney to conduct an

investigation into a complaint, and the investigation gathered relevant

evidence sought to be used by the employer to support the Faragher–

Ellerth affirmative defense in a subsequent lawsuit.

Our law recognizes that a “confidential communication between an

attorney and the attorney’s client is absolutely privileged from disclosure

against the will of the client.” Shook v. City of Davenport, 497 N.W.2d

883, 886 (Iowa 1993), abrogated on other grounds by Wells Dairy, Inc. v.

Am. Indus. Refrigeration, Inc., 690 N.W.2d 38, 48 (Iowa 2004). At the

same time, a basic component of a fair trial requires that when a party

injects a legal issue into a lawsuit, the opposing party is entitled to

discover the relevant evidence concerning the issue. Squealer Feeds v.

Pickering, 530 N.W.2d 678, 684 (Iowa 1995), abrogated on other grounds

by Wells Dairy, 690 N.W.2d at 48. When these two venerable legal

principles come face to face because relevant information concerning an

issue injected into a lawsuit by a party includes communications

between that party and his or her attorney, we have concluded that the

party who injects the issue into the heart of a lawsuit impliedly waives

the attorney–client privilege. Id. The outcome is derived from basic

fairness and requires the party injecting the issue into the lawsuit to

decide if the privileged information is important enough to the lawsuit to

waive the privilege. These two legal principles come face to face in this

case.

We have confronted the clash of these two doctrines in prior cases,

but never in regard to the Faragher–Ellerth defense. Courts in other

jurisdictions, however, have held that when a defendant asserts the
 12

Faragher–Ellerth defense and then relies on an internal investigation to

support the defense, it waives attorney–client privilege over the

investigation. See, e.g., Angelone v. Xerox Corp., No. 09–CV–6019, 2011

WL 4473534, at *2 (W.D.N.Y. Sept. 26, 2011) (“[W]hen a Title VII

defendant affirmatively invokes a Faragher–Ellerth defense that is

premised, in whole in or part, on the results of an internal investigation,

the defendant waives the attorney-client privilege and work product

protections for not only the report itself, but for all documents, witness

interviews, notes and memoranda created as part of and in furtherance

of the investigation.”); Treat v. Tom Kelley Buick Pontiac GMC, Inc.,

No. 1:08–CV–173, 2009 WL 1543651, at *12 (N.D. Ind. June 2, 2009)

(“[A] defendant may also waive the attorney-client privilege if it asserts its

investigation as part of its defense.”); EEOC v. Outback Steakhouse of

Fla., Inc., 251 F.R.D. 603, 612 (D. Colo. 2008) (“The Court agrees that to

the extent that Defendants have asserted the Faragher/Ellerth affirmative

defense, they have waived the protections of the attorney-client privilege

and work product doctrine regarding investigations into complaints made

by female employees.”); Walker v. County of Contra Costa, 227 F.R.D.

529, 535 (N.D. Cal. 2005) (“If Defendants assert as an affirmative defense

the adequacy of their pre-litigation investigation into Walker’s claims of

discrimination, then they waive the attorney-client privilege and the work

product doctrine with respect to documents reflecting that

investigation.”).

This line of cases stems from the seminal case of Harding v. Dana

Transport, Inc., 914 F. Supp. 1084, 1096 (D.N.J. 1996). In Harding, two

female employees brought administrative complaints against their

employer, Dana, alleging sex discrimination. Id. at 1087. Dana

subsequently retained an attorney, who conducted an investigation for
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the purpose of formulating a response. Id. at 1088. The attorney

interviewed the company’s president, controller, and two managers. Id.

Dana then relied on this investigation as part of its affirmative defense in

the administrative proceedings, as well as the subsequent lawsuit. Id.

When plaintiffs’ counsel sought to depose the attorney about the

investigation, Dana argued the information was privileged because “it did

not assert reliance on the advice of counsel as an affirmative defense,”

but rather “merely intend[ed] to offer the fact that [their attorney] did

conduct an investigation.” Id. at 1096. The court concluded Dana

waived attorney–client privilege. Id.

Discovery of the content of the investigation is relevant
to much more than the state of mind of Dana. Rather, the
investigation, itself, provides a defense to liability. As
previously reviewed, Title VII permits employer liability which
employers may refute by proving that they reasonably and
sufficiently investigated the allegations of discrimination.
Dana has attempted to utilize the results of Mr. Bowe’s
investigation both as a defense to liability under Title VII and
as an aspect of its preparation for the sexual discrimination
trial itself. By asking Mr. Bowe to serve multiple duties, the
defendants have fused the roles of internal investigator and
legal advisor. Consequently, Dana cannot now argue that its
own process is shielded from discovery. Consistent with the
doctrine of fairness, the plaintiffs must be permitted to probe
the substance of Dana’s alleged investigation to determine its
sufficiency. Without having evidence of the actual content of
the investigation, neither the plaintiffs nor the fact-finder at
trial can discern its adequacy.

Id. (citation omitted). Consequently, the court found the employer could

not avoid discovery by arguing that the relevance of the investigation was

not its content, but that it was conducted. Id. Instead, the court found

that the adequacy or reasonableness of the investigation was the relevant

fact injected into the lawsuit by the defendant, which made the content

of the investigation relevant. Id.
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We agree that an employer who relies on a presuit investigation to

support a Faragher–Ellerth affirmative defense waives attorney–client

privilege when the investigation is conducted by an attorney. Normally,

the process of an investigation into a complaint is at issue when the

Faragher–Ellerth defense is asserted, “including what the employer knew

of the employee’s complaints and when.” Musa-Muaremi v. Florists’

Transworld Delivery, Inc., 270 F.R.D. 312, 319 (N.D. Ill. 2010). When an

employer affirmatively relies on the reasonableness of its investigation to

support the defense, “[t]he only way that Plaintiff, or the finder of fact,

can determine the reasonableness of the Defendant’s investigation is

through full disclosure of the contents” of the investigation. Id. (quoting

Brownell v. Roadway Package Sys., Inc., 185 F.R.D. 19, 25 (N.D.N.Y.

1999)). In order to adequately challenge a Faragher–Ellerth affirmative

defense, plaintiff must be permitted to probe the nature and scope of the

relied upon investigation. It would be fundamentally unfair to allow an

employer to shield material facts from discovery simply by hiring the

same attorney who conducted a presuit investigation to represent the

employer in the subsequent civil action.

The key element behind this authority is that the Faragher–Ellerth

defense must not only be pled, but the employer must then rely on the

attorney’s investigation into plaintiff’s discrimination allegations in

proving the defense. When the reasonableness of the investigation into

the allegations is relied upon as a defense, the contents of the

investigation are placed into issue and become subject to disclosure.

3. Merits. Here, Gelita expressly relied on Horvatich’s

investigation to support its Faragher–Ellerth affirmative defense in its

ICRC position statement. In the civil action, defendants raised the

affirmative defense in their answer. When moving for a protective order,
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defendants argued the investigation could not be at issue, as Fenceroy

had already left his position. Yet, in their motion for summary judgment,

within a subsection entitled “Gelita Exercised Reasonable Care to Prevent

and Correct Promptly Any Harassing Behavior,” defendants argued that

“[e]ven though Plaintiff was no longer with Gelita at the time of his

Complaint, in response to his charge, the Company investigated his

allegations, discharged one employee, and disciplined three others.”

On appellate review, defendants continue to maintain they are not

relying on the Horvatich investigation. They assert their affirmative

defense is not related to the actions Gelita took in response to Fenceroy’s

complaint. Instead, defendants argue their defense is that Gelita

maintained a workplace reporting procedure and training process to

prevent and correct workplace harassment and that Fenceroy

unreasonably used the procedure to correct the alleged harassment

before he left his employment.

Defendants primarily rely on Treat, to support their position. In

Treat, three plaintiffs brought suit against their employer, Kelley, alleging

sex discrimination in violation of Title VII. 2009 WL 1543651, at *1.

During discovery, plaintiffs requested a number of documents, including

notes taken by Kelley’s counsel in response to plaintiffs’ administrative

charge, drafts of counsel’s administrative position statements and legal

memoranda, and emails and faxes between counsel and employees sent

in preparation of Kelley’s administrative position statement. Id. at *1–2.

Plaintiffs argued Kelley raised the Faragher–Ellerth affirmative defense

and, as such, waived all privilege over the presuit investigation. Id. at

*12. However, the court concluded “it ha[d] been fleshed out during the

discovery process that Kelley’s defense is not that it acted reasonably

upon learning of the Plaintiffs’ complaints, but rather that the Plaintiffs
 16

did not take advantage of Kelley’s policies in reporting harassment and

discrimination.” Id. at *13. Because the company was “not actually

relying on the adequacy of any investigation to support an affirmative

defense, Kelley has not placed outside counsel's investigation at issue.”

Id.

The critical point in Treat was the existence of a trial court record

to show the employer took a position that the Faragher–Ellerth defense

would only be supported by evidence that it had antidiscrimination

policies and reporting procedures in place at the time of the alleged

discriminatory conduct and that the plaintiffs failed to take advantage of

the procedures. The employer in Treat made it clear that it would not

offer any evidence of its actions after the plaintiffs made their complaints.

Treat underscores that an employer does not impliedly waive an

attorney–client privilege merely by using an attorney to investigate a

complaint of workplace discrimination but, rather, by subsequently

relying on the investigation to prove a Faragher–Ellerth defense asserted

in a lawsuit. In this case, as in Harding, Gelita clearly relied on the

investigation as proof of its affirmative defense during the administrative

proceeding. Additionally, unlike in Treat, defendants relied on the

investigation as proof of their affirmative defense during summary

judgment proceedings.

Importantly, contrary to defendants’ assertion on appeal, corrective

measures taken by an employer in response to a complaint by an

employee made after the employee has left the employment may be

relevant to the reasonableness of care exercised by an employer to prove

a Faragher–Ellerth defense. The Faragher–Ellerth defense was crafted in

order to provide a complete defense to vicarious liability for employers

who have demonstrated a commitment to abiding by antidiscrimination
 17

statutes. Through this defense, employers have an opportunity to

demonstrate they are the type of employer that takes discrimination

seriously and affirmatively works to prevent and correct it. Generally, if

an employee fails to notify the employer of wrongdoing, courts have

found that such failure, coupled with adequate preventative policies, is

sufficient to prevail in the defense. Faragher, 524 U.S. at 807–08, 118

S. Ct. at 2293.

However, defendants conflate what is necessary to prevail in the

defense in certain instances with what is relevant to the defense. All

evidence relating to an employer’s steps to prevent and correct

harassment goes toward proving that they are the type of company that

deserves a complete defense to vicarious liability. Parties can, and

frequently do, bolster their positions with evidence beyond what is

minimally necessary to succeed. The rules of discovery reach all offered

evidence, not merely the minimum evidence necessary to prevail on a

claim or affirmative defense. Here, defendants bolstered their affirmative

defense beyond what was necessary, in an effort to conclusively prove

they are the type of company that deserves a complete defense to

liability. This choice was entirely their own. If defendants wish to use

Horvatich’s investigation as evidence of their commitment to abiding by

antidiscrimination statutes, plaintiff may not be kept from disputing that

evidence, especially at the summary judgment stage.

The critical question presented when discovery of an attorney

investigation is sought in a lawsuit based on workplace discrimination is

whether the employer intends to rely on the investigation as evidence to

help prove the Faragher–Ellerth defense. When confronted with a

discovery request, the employer controls the outcome of the waiver issue.

The employer may decide to simply refrain from referencing the
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investigation in the civil action, in which case it will remain confidential.

Or, the employer may choose to explicitly cabin its defense to the period

of plaintiff’s employment, in which case any reference to the investigation

will be met with a relevance objection rather than a notice for deposition.

Of course, the employer may also choose to offer the investigation as

evidence of its proper corrective actions and waive any privilege over the

investigation. The employer’s decision must be clear because it will

become the basis for the court’s ruling.

Defendants plainly relied on Horvatich’s investigation to support

their affirmative defense in their motion for summary judgment. The

district court, therefore, did not abuse its discretion in finding

defendants waived attorney–client privilege over the investigation.

Our law permits a party who has waived attorney–client privilege to

retract the waiver and reinstate the privilege. See Squealer Feeds, 530

N.W.2d at 685. On appellate review, we are reviewing the district court’s

decision based on the record made before the court. Defendants’

position on appeal that the investigation is not “at issue” with respect to

the Faragher–Ellerth defense is consistent with their position before the

district court. But, this position is not a clear declaration by the

employer that an investigation into a complaint will not be relied upon to

help prove the Faragher–Ellerth defense. Instead, it is a legal assertion,

not entirely correct, that the investigation would not be relevant to the

Faragher–Ellerth defense. If defendants wish to retract their waiver, they

may make a new record before the district court that clearly and

unequivocally establishes the investigation will not be used to support

the defense.

B. Work Product. Although the district court did not abuse its

discretion with respect to waiver of attorney–client privilege, the issue
 19

remains whether plaintiff may discover Horvatich’s work product from

the 2013 investigation.

Parties may only discover “documents and tangible things” that

were prepared by another party “in anticipation of litigation or for trial,”

if the requesting party demonstrates a “substantial need of the materials”

and is “unable without undue hardship to obtain the substantial

equivalent of the materials by other means.” Iowa R. Civ. P. 1.503(3).

However, courts must protect against disclosing “mental impressions,

conclusions, opinions, or legal theories of an attorney.” Id. Iowa work-

product protection “resembles Federal Rule of Civil Procedure 26(b)(3),

‘and the history and cases under the federal rule provide guidance in

interpreting the Iowa counterpart.’ ” Iowa Ins. Inst. v. Core Grp. of Iowa

Ass’n for Justice, 867 N.W.2d 58, 70 (Iowa 2015) (quoting Ashmead v.

Harris, 336 N.W.2d 197, 199 (Iowa 1983), abrogated on other grounds by

Wells Dairy, 690 N.W.2d at 48). Although we have not yet considered

implied waiver of work-product protection, we have previously assessed

subject matter waiver of work-product protection. See Exotica

Botanicals, Inc. v. Terra Int’l, Inc., 612 N.W.2d at 801, 807–09 (Iowa 2000)

(concluding specific content of attorney’s testimony did not amount to

waiver of work-product protection).

Courts in other jurisdictions that have adopted the implied

at-issue waiver standard within the Faragher–Ellerth context have also

concluded a party waives work-product protection over investigation

documents if the party relies on the investigation to support its

affirmative defense. See, e.g., Koss v. Palmer Water Dep’t, 977

F. Supp. 2d 28, 31 (D. Mass. 2013) (“Defendants’ affirmative defense

waives the attorney-client privilege and work-product protection for the

bulk of the documents submitted for in camera review . . . .”); Reitz v.
 20

City of Mt. Juliet, 680 F. Supp. 2d 888, 894 (M.D. Tenn. 2010)

(concluding “the City waived its privilege and work-product protection

not by disclosing Berexa’s report, but by making tactical use of it in this

litigation” in support of a Faragher–Ellerth affirmative defense); McGrath

v. Nassau Cty. Health Care Corp., 204 F.R.D. 240, 246 (E.D.N.Y. 2001)

(“[W]hile the Court finds the waiver of some core work product difficult to

sustain, it agrees that NHCC’s invocation of the Faragher–Ellerth defense

has waived the work product privilege under the facts of this case. By

weighing fairness concerns against the purpose of the work product

privilege, the Court finds that it would be unjust to allow NHCC to invoke

the Faragher–Ellerth defense under these facts while allowing it to protect

the very documents it relies on to assert that defense.”).

We agree that when a party places an investigation at issue by

relying upon it in support of the Faragher–Ellerth affirmative defense, any

nonopinion work-product protection over that investigation is necessarily

waived. Like attorney–client privilege, a party may not use work-product

protection to shield documents from discovery while at the same time

relying upon those same documents to support their claim. This is

especially true in the context of the Faragher–Ellerth affirmative defense.

An employer may not point to the thoroughness of an investigation to

demonstrate compliance with the ICRA while at the same time shield the

plaintiff from disputing the investigation’s thoroughness.

Of course, an attorney–investigator’s mental impressions,

conclusions, opinions, and legal theories remain sheltered from

discovery. Although an employer opens the door to discovery of the facts

and process of its investigation by relying upon it in support of its

affirmative defense, opinion work product is not germane to the objective

reasonableness of an employer’s investigation. See Reitz, 680
 21

F. Supp. 2d at 895 (“Sections of the interview memoranda that reflect the

lawyers’ mental impressions, opinions, conclusions, judgments, or legal

theories are not relevant to the plaintiff’s remaining retaliation claim, nor

will they lead to the discovery of relevant information. This ‘opinion’ work

product has no bearing on the issues of Reitz’s work performance, the

discipline she faced before filing her internal complaint, or any other

aspect of Reitz’s current case.”). We therefore find the district court did

not abuse its discretion in concluding defendants waived work-product

protection over Horvatich’s investigation notes. Unless defendants

retract their waiver, they must produce all of Horvatich’s nonopinion

work product that resulted in the ICRC position statement.

C. Third-Party Waiver. Plaintiff argues that even if defendants

did not waive attorney–client privilege over the contents of the

investigation by raising the affirmative defense, they nevertheless waived

privilege over the desired information by conducting employee interviews

in the presence of a third party.

1. Error preservation. As an initial matter, the defendants contest

whether this issue is preserved for appeal. Generally, an issue is not

preserved unless “a party raises an issue and the district court rules on

it.” State ex rel. Miller v. Vertrue, Inc., 834 N.W.2d 12, 20 (Iowa 2013).

Here, plaintiff argued in his resistance to defendants’ motion for

protective order:
By conducting the investigation in the presence of a third
party who was not representing Gelita but was actually an
adversary to Gelita’s interests, Gelita waived and is estopped
from claiming attorney-client and work product privileges
apply to her communications with them. Ms. Horvatich’s
thought processes and communications were revealed to the
third party by her actions, questions and deeds at the time
of her investigation on behalf of Gelita. To the extent there
was a privilege, Gelita waived it by the presence of the union.
 22

Plaintiff plainly raised the issue at the district court level. However, the

district court did not rule on the third-party waiver issue, as it concluded

the affirmative defense waived attorney–client privilege and work-product

protections. Nevertheless, “a successful party need not cross-appeal to

preserve error on a ground urged but ignored or rejected by the district

court.” Venard v. Winter, 524 N.W.2d 163, 165 (Iowa 1994). Thus,

plaintiff sufficiently preserved the issue of whether the presence of the

union representative waived privilege over the investigation.

2. Merits. Communications that could be cloaked by privilege may

nevertheless be discoverable if made in the presence of, or disclosed to, a

third party. See State v. Romeo, 542 N.W.2d 543, 548 (Iowa 1996).

However, when the presence of a third party is “essential for the

rendition of a legal opinion, the presence of such persons at

attorney-client conferences does not destroy privilege otherwise existing.”

Tausz v. Clarion–Goldfield Cmty. Sch. Dist., 569 N.W.2d 125, 127 (Iowa

1997).

Plaintiff asks that we go well beyond the parameters of third-party

waiver and conclude a third party’s presence during investigatory

interviews waives privilege over the whole of the investigation. This we

decline to do. Horvatich conducted several employee interviews as part

of her investigation into the merits of plaintiff’s administrative charge. In

each interview, she was joined by Tolsma and union representative

Hoswald. There is no evidence in the record to demonstrate Hoswald

was privy to any internal decision-making or communications about the

direction or disposition of the investigation. As such, the only

communications that could potentially be discoverable are statements

made in Hoswald’s presence during employee interviews.
 23

During discovery, defendants produced all of the investigation’s

witness statements. As well, plaintiff had the opportunity to depose

employees who were interviewed and inquire into the nature and content

of their interviews. Accordingly, we need not reach the question of

whether the presence of a union representative during an internal

investigation waives attorney–client privilege, as defendants have not

claimed privilege over any communications made in the union

representative’s presence.

D. Subject Matter Waiver. Plaintiff further argues, for the first

time on appeal, that even if defendants did not waive attorney–client

privilege, employee depositions revealed “Ms. Horvatich’s thought process

and communications” during the investigation, and as such, the

employee testimony amounts to a subject matter waiver of the contents

of the investigation. Because plaintiff did not raise this issue to the

district court, it has not been preserved for our review.

IV. Conclusion.

We affirm the district court order denying defendants’ protective

order. The case is remanded to the district court for further proceedings

consistent with this opinion.

DISTRICT COURT ORDER AFFIRMED AND CASE REMANDED.

All justices concur except Waterman, Mansfield, and Zager, JJ.,

who dissent.
 24
#16–0775, Fenceroy v. Gelita USA, Inc.
WATERMAN, Justice (dissenting).

I respectfully dissent and would hold the district court abused its

discretion by compelling the deposition of Gelita’s trial counsel Ruth

Horvatich and production of her notes prepared in anticipation of

litigation.

First, Gelita never waived its attorney–client privilege or work-

product protection by pleading or arguing the Faragher–Ellerth defense in

district court. That defense was based solely on Mr. Fenceroy’s failure to

use Gelita’s reporting procedures during his employment, before he

retired and filed his discrimination complaint. The majority, contrary to

precedent, finds that Gelita impliedly waived the confidentiality of its

lawyer’s private notes and client communications by including this

sentence in its lengthy brief supporting its motion for summary

judgment: “Even though Plaintiff was no longer with Gelita at the time of

his Complaint, in response to his charge, the Company investigated his
allegations, discharged one employee, and disciplined three others.” I

disagree that sentence constitutes an implied waiver. Gelita never relied

on confidential attorney–client communications in asserting its defenses.

Gelita was not using the attorney–client privilege as both a sword and

shield and never blocked proper discovery into a matter it placed at

issue.

Second, even if it was a waiver, Gelita clearly has retracted it. The

majority questions that a retraction has occurred but allows Gelita the

opportunity to retract the waiver on remand. I think this is unnecessary

based on a fair reading of the record and Gelita’s appellate briefs.

Third, the majority also misses the opportunity to adopt the

showing required under Shelton v. American Motors Corp., 805 F.2d
 25

1323, 1327 (8th Cir. 1986), and confirm that compelling depositions of

opposing trial counsel during litigation should be a rare last resort, even

when information might be obtained that is not subject to a privilege.

This aspect of the court’s ruling could lead to a flurry of depositions of

opposing counsel and a corresponding decline in civility in the Iowa bar.

Frequently, both plaintiff’s counsel and defendant’s counsel have various

nonprivileged interactions with others in the course of working on a case.

The majority leaves the door open to each side deposing the other on

these interactions. I would not do this. Fenceroy is not entitled to

depose Gelita’s trial attorney Horvatich under Shelton.

I. Gelita Never Impliedly Waived Its Attorney–Client Privilege
or Work-Product Protection.

The majority makes it too easy to find an implied waiver of the

attorney–client privilege and work-product doctrine. There was no such

waiver here. Gelita never listed attorney Horvatich as a witness. See

Squealer Feeds v. Pickering, 530 N.W.2d 678, 684–85 (Iowa 1995),

abrogated on other grounds by Wells Dairy, Inc. v. Am. Indus.

Refrigeration, Inc., 690 N.W.2d 38, 48 (Iowa 2004). Gelita never disclosed

any privileged communications from Horvatich in responding to

Fenceroy’s claims. See Miller v. Cont’l Ins., 392 N.W.2d 500, 504–05

(Iowa 1986). Nor did Gelita rely on Horvatich’s 2013 investigation to

support its Faragher–Ellerth defense. Rather, Gelita made clear this

defense is based on Fenceroy’s failure to utilize Gelita’s complaint and

antidiscrimination reporting policy and procedures. It is undisputed that

Fenceroy’s employment ended before he filed his discrimination

complaint. Gelita did not place Horvatich’s legal advice at issue through

fleeting references to her investigation conducted after Fenceroy retired

and the subsequent termination or discipline of several employees. The
 26

cases relied on by the majority are distinguishable for that reason—in

the cases finding an implied waiver, the employer was relying on the

reasonableness of its counsel’s investigation conducted while the plaintiff

was still employed. Not so here.

The majority primarily relies on Harding v. Dana Transport, Inc.,

914 F. Supp. 1084 (D.N.J. 1996), while Gelita relies on cases such as

Treat v. Tom Kelley Buick Pontiac GMC, Inc., No. 1:08–CV–173, 2009 WL

1543651 (N.D. Ind. June 2, 2009). Treat is on point while Harding is

not.

In Harding, two employees filed an administrative complaint

alleging sexual discrimination; one employee filed her complaint while

still employed, unlike Fenceroy. 914 F. Supp. at 1087 & n.2. The

employer hired outside counsel to investigate their allegations. Id. at

1088. The employees later resigned and filed a Title VII claim. Id. at

1087 & n.2. In the Title VII lawsuit, the employer’s counsel admitted

that he intended to use the investigation as evidence the employer acted

reasonably. Id. at 1088. The defense attorney stated,

Dana is not submitting any of the specifics of [the attorney’s]
investigation as a basis of defense in this matter. Dana
merely intends to offer the fact that [the attorney] did
conduct an investigation as part of his representation of
Dana in response to allegations filed with the Division on
Civil Rights. Whether this investigation, coupled with other
actions taken on behalf of Dana in the context of the facts in
this case, constitutes evidence of reasonable conduct on the
part of Dana is a jury question, but does not compel
disclosure of the specifics of [the attorney’s] investigation.

Id. at 1093 (emphasis added). The Harding court concluded the

employer had put counsel’s investigation at issue, waiving its attorney–
 27

client privilege. Id. at 1096. Other decisions relied on by the majority

are distinguishable for the same reasons. 1

By contrast, in Treat, three employees filed an administrative

complaint after their employment ended, as did Fenceroy. 2009 WL

1543651, at *1, *13. The employer hired outside counsel to conduct an

investigation. Id. at *6. The employer used the attorney’s investigation

during the EEOC proceeding but did not rely on the investigation in

district court. Id. at *7, *13. The Treat court distinguished Harding and

found that the investigation was not put at issue and was not

discoverable. Id. at *12–13. The Treat court reasoned,

[I]t has been fleshed out during the discovery process that
Kelley’s defense is not that it acted reasonably upon learning
of the Plaintiffs’ complaints, but rather that the Plaintiffs did
not take advantage of Kelley’s policies in reporting
harassment and discrimination. In other words, because the
Plaintiffs allegedly did not report their complaints during
their employment, there is no internal investigation of any
complaints to rely upon; the only investigation (conducted by
outside counsel) was for the purpose of preparing for
litigation, once the EEOC charges were filed. . . . Thus,
because Kelley is not actually relying on the adequacy of any
investigation to support an affirmative defense, Kelley has not
placed outside counsel’s investigation at issue.

Id. at *13 (emphasis added). That is what we have here.

Other courts have likewise rejected implied waiver claims under

the Faragher-Ellerth defense when, as here, the employer confirms it is

1See Angelone v. Xerox Corp., No. 09–CV–6019, 2011 WL 4473534, at *1–3

(W.D.N.Y. Sept. 26, 2011) (concluding that documents relating to internal investigation
completed before employee filed an administrative complaint were discoverable because
employer invoked the Faragher–Ellerth defense, but recognizing that documents created
after the conclusion of the internal investigation were not discoverable as long as the
company does “not refer to or rely on these . . . documents or the adequacy of [the later]
investigation”); Walker v. County of Contra Costa, 227 F.R.D. 529, 535 (N.D. Cal. 2005)
(finding that the employer intended to rely on attorney’s investigation as a defense and
therefore “must turn over [the attorney’s] report as it pertains to the pre-litigation
investigation into [the employee’s] claim of discrimination”).
 28

not relying on the lawyer’s investigation but rather the employee’s failure

to use the employer’s complaint procedures. See, e.g., Robinson v.

Vineyard Vines, LLC, 15 Civ. 4972 (VB)(JCM), 2016 WL 845283, at *5

(S.D.N.Y. Mar. 4, 2016) (“Given these representations by Defendants’

counsel, I find that Defendants have not waived any privilege as to the

Investigative Documents by asserting the [Faragher–Ellerth] Defense.”);

Geller v. N. Shore Long Island Jewish Health Sys., No. CV 10–

170(ADS)(ETB), 2011 WL 5507572, at *4 (E.D.N.Y. Nov. 9, 2011) (denying

motion to compel because “defendants’ counsel has affirmatively

represented to the Court that defendants have no intention of ‘using the

investigation to avoid liability’ ”); City of Petaluma v. Super. Ct., 204

Cal. Rptr. 3d 196, 201–02, 207 (Ct. App. 2016) (holding there was no

waiver of attorney–client privilege or work-product protection when the

employer was not relying on the postemployment investigation but

instead was arguing that the employee “unreasonably failed to take

advantage of any preventative or corrective opportunities”); see also

McGrath v. Nassau Cty. Health Care Corp., 204 F.R.D. 240, 244–45

(E.D.N.Y. 2001) (rejecting the argument “that employers put any post-

harassment investigation conducted at issue simply by invoking the

Faragher–Ellerth defense” because the proposition “would eviscerate both

the attorney-client privilege and the work product doctrine” while

concluding that this employer did put the sufficiency of its investigation

at issue); cf. EEOC v. Rose Casual Dining, L.P., No. Civ.A. 02–7485, 2004

WL 231287, at *3–4 (E.D. Pa. Jan. 23, 2004) (concluding that plaintiff

was entitled to documents related to the employer’s internal investigation

because the employer “raised the reasonableness of its internal

investigation as an affirmative defense to [p]laintiff’s allegations” but
 29

denying plaintiff’s motion to compel documents generated from second

investigation that began only after the plaintiff had been terminated).

As the great weight of authority shows, the majority errs by

concluding Gelita waived its attorney–client privilege and work-product

protection merely by pleading the Faragher–Ellerth defense and referring

to its postemployment investigation in the agency proceedings and

summary judgment filings. In Exotica Botanicals, Inc. v. Terra

International, Inc., we held that a lawyer’s general testimony regarding

his investigation in prior litigation and related communications with an

adverse party did not waive work-product protection. 612 N.W.2d 801,

809 (Iowa 2000). We concluded the district court abused its discretion

by compelling production of documents constituting work product. Id.

We emphasized the adverse consequences that would result if courts

could find a waiver of work-product protections merely because the

lawyer “discuss[ed] the general nature of . . . information” relevant to

liability with an opposing party:

It was [attorney] Kalafut’s duty to communicate with
Du Pont regarding the Benlate claims and to evaluate Terra’s
liability in the matter. But to say that Kalafut waived his
work product privilege concerning information that might
potentially absolve Terra of liability, simply by discussing the
general nature of that information with Du Pont, would
mean that an attorney could never discuss the positive
aspects of his or her case with opposing counsel for fear that
such discussion would amount to a waiver of the work
product privilege as to all documents supporting that
position. If this were the case, settlement negotiations and
communication between the parties in general would break
down. Such a result would be inconsistent with a
commonsense application of the work product doctrine and
certainly inconsistent with the goal of resolving cases in a
timely manner.

Id.
 30

The majority’s decision today conflicts with Exotica Botanicals.

Iowa lawyers should not have to worry that they will waive privilege or

work-product protections simply by general references to their

investigation or their client’s position.

II. Gelita Already Retracted Any Alleged Waiver.

The majority correctly acknowledges that a party who waived the

attorney–client privilege by asserting a particular defense can retract the

waiver. See Squealer Feeds, 530 N.W.2d at 685. In Squealer Feeds, an

employee alleged the workers’ compensation insurer acted in bad faith.

Id. at 680, 683. The defendant asserted a defense of the advice of

counsel from the attorney who defended the workers’ compensation

claim and listed that attorney as an expert witness for trial. See id. at

680–81. We held the defendant thereby waived the attorney–client

privilege as to his advice on that issue, but we also made clear the

defendant could undo the waiver by withdrawing the lawyer as a trial

witness. Id. at 684–85 (noting a withdrawal of the witness designation

would “reestablish the attorney–client privilege”). Gelita never listed its

outside counsel, Horvatich, as a witness. In any event, Gelita has clearly

retracted any implied waiver.

In its opening brief on appeal, Gelita confirmed that it was not

relying on its attorney’s investigation to support a Faragher–Ellerth

defense:

In this case, the Faragher–Ellerth defense is based on
Fenceroy’s unreasonable failure to take advantage of
preventative and corrective opportunities available during
his employment. Defendants are not relying upon any
investigation conducted by defense counsel after Fenceroy
filed his discrimination charge. Those complaints were not
made by Fenceroy during his employment and therefore, the
adequacy of that investigation and remedial action
undertaken by the Company are not “at issue” nor are they
part of Gelita’s Faragher–Ellerth affirmative defense.
 31

Appellants’ Final Br. 14. Gelita made the same point in its reply brief:

Defendants’ Faragher–Ellerth defense is not that it conducted
a reasonable investigation after receiving the ICRC charge,
but that Plaintiff failed to report the alleged conduct during
his employment and thus failed to take advantage of the
Company’s policies on reporting harassment and
discrimination. Any investigation and remedial response
undertaken after Complainant left his employment and filed
his ICRC charge is simply not necessary to Defendant’s
Faragher–Ellerth defense and, as such, is not at issue.

Appellants’ Final Reply Br. 2–3. Because Gelita has already withdrawn

any alleged implied waiver, the district court on remand should grant

Gelita’s motion for protective order. The majority seemingly agrees in

principle, but wants Gelita to put its withdrawal on the record when this

case returns to district court. I do not think that is needed, although in

the long run it should not make a difference.

III. Fenceroy Failed to Show He Was Entitled to Depose
Gelita’s Trial Counsel.

The majority opens the door to compelling the depositions of

opposing counsel in pending lawsuits. Compelled depositions of

opposing counsel have long been disfavored. See Hickman v. Taylor, 329

U.S. 495, 511–13, 67 S. Ct. 385, 393–95 (1947). We previously allowed a

deposition of plaintiffs’ counsel only after the plaintiffs waived attorney–

client privilege by testifying about their reliance on his specific legal

advice to them on the statute of limitations. Miller, 392 N.W.2d at 505.

We framed the issue as “whether plaintiffs may disclose a privileged

attorney communication . . . and then invoke a privilege to prevent

disclosure of other communications by the attorney about the same

matter.” Id. at 504. We concluded the “voluntary disclosure of the

content of a privileged communication constitutes waiver as to all other

communications on the same subject.” Id. at 504–05. That is not what
 32

Gelita did. Gelita disclosed no privileged communications by Horvatich

to support its Faragher–Ellerth defense. Miller is inapposite.

Two years after Miller, the United States Court of Appeals for the

Eighth Circuit in Shelton addressed the circumstances under which the

district court may compel the deposition of the opposing party’s trial

counsel. 805 F.2d at 1327. The Shelton court required a showing that

(1) no other means exist to obtain the information than to
depose opposing counsel; (2) the information sought is
relevant and nonprivileged [or the privilege has been waived];
and (3) the information is crucial to the preparation of the
case.

Id. (citation omitted). We should follow Shelton, and I would adopt it

now. Because Fenceroy cannot satisfy this test, the district court abused

its discretion by compelling the deposition of Horvatich.

The Shelton rule has been widely adopted by state and federal

courts as the standard for determining whether a litigant may compel the

deposition of opposing trial counsel. Id.; Nationwide Mut. Ins. v. Home

Ins., 278 F.3d 621, 628 (6th Cir. 2002); Thiessen v. Gen. Elec. Capital

Corp., 267 F.3d 1095, 1112 & n.15 (10th Cir. 2001) (citing Boughton v.

Cotter Corp., 65 F.3d 823, 830 (10th Cir. 1995)); 3M Co. v. Engle, 328

S.W.3d 184, 188 & n.15 (Ky. 2010) (citing McMurry v. Eckert, 833 S.W.2d

828, 830 (Ky. 1992)); Club Vista Fin. Servs. v. Eighth Judicial Dist. Ct.,

276 P.3d 246, 250 (Nev. 2012) (en banc); Estate of Mikulski v. Cleveland

Elec. Illuminating Co., No. 96748, 2012 WL 504505, at *4 (Ohio Ct. App.

Feb. 16, 2012); Voorhees Cattle Co., LLP v. Dakota Feeding Co., LLC, 868

N.W.2d 399, 407 (S.D. 2015).

The parties briefed and argued Shelton here. Yet the majority,

without expressly accepting or rejecting Shelton, declines to address the

showing required to depose a party-opponent’s trial counsel during a
 33

lawsuit. The majority assumes Gelita will reconfirm its retraction of any

alleged reliance on Horvatich’s investigation when the case returns to

district court and that the district court will then preclude her

deposition. Presumably so. The problem is that the majority today is

affirming the district court’s order compelling Horvatich’s deposition

based on the existing district court record. The majority thereby blesses

the overly aggressive practice of compelling the deposition of opposing

trial counsel without a proper showing of necessity.

Fenceroy cannot meet any of the three Shelton requirements.

First, Gelita already provided Fenceroy with the statements taken from

the witnesses Horvatich interviewed, and Fenceroy deposed those

witnesses. Fenceroy could explore why Gelita terminated one employee

and disciplined others by deposing the decisionmaker, Jeff Tolsma,

Gelita’s Vice President of Business Support. Fenceroy has not shown

why those sources of information are inadequate, much less

demonstrated that a deposition of Horvatich is his only means to obtain

discovery on Gelita’s investigation and resulting actions. A mere

allegation of need is insufficient. Cf. Iowa R. Civ. P. 1.503(3); Squealer

Feeds, 530 N.W.2d at 688–89 (requiring party seeking work product to

demonstrate the information could not be obtained by reviewing records

already produced, depositions of the company decision-maker, or other

nonprivileged sources). Second, Horvatich’s communications remain

privileged, with any alleged implied waiver retracted. Third, Fenceroy

has not shown that Horvatich’s testimony is crucial or even relevant to

his case.

I fear that the majority’s failure to clarify the showing required to

depose opposing trial counsel could lead to increasingly aggressive

litigation tactics that undermine the professionalism and civility of our
 34

trial bar and needlessly increase the costs and burdens of pretrial

discovery.

Going forward, I also fear today’s decision will have a chilling effect

on the routine practice of retaining outside counsel to investigate

discrimination claims. If the employer’s lawyer can be deposed by

plaintiff merely because the employer pleads a Faragher–Ellerth defense,

will two different law firms have to be retained—one to investigate and

the other to try the case? Will employers limit what they tell their lawyer

who may be compelled to testify by the litigation adversary? Or will some

employers be reluctant to retain a lawyer who might be compelled to

provide adverse testimony? Will such employers lose the benefit of

sound legal advice that would otherwise help them improve compliance

with employment laws?

Our legal system venerates the attorney–client privilege for vitally

important reasons:

The attorney–client privilege is the oldest of the privileges for
confidential communications known to the common law. Its
purpose is to encourage full and frank communication
between attorneys and their clients and thereby promote
broader public interests in the observance of law and
administration of justice. The privilege recognizes that
sound legal advice or advocacy serves public ends and that
such advice or advocacy depends upon the lawyer’s being
fully informed by the client.

Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 682

(1981) (citation omitted). Discouraging use of lawyers will undermine the

primary purpose of our civil rights laws—to avoid discrimination in the

workplace. See Faragher v. City of Boca Raton, 524 U.S. 775, 805–06,

118 S. Ct. 2275, 2292 (1998) (“Although Title VII seeks ‘to make persons

whole for injuries suffered on account of unlawful employment

discrimination,’ its ‘primary objective,’ like that of any statute meant to
 35

influence primary conduct, is not to provide redress but to avoid harm.”

(quoting Albermarle Paper Co. v. Moody, 422 U.S. 405, 417–18, 95 S. Ct.

2362, 2371–72 (1975))); cf. Haskenhoff v. Homeland Energy Sols., LLC,

897 N.W.2d 553, 578 (Iowa 2017) (“Employers would lose a key incentive

to take corrective action if they were automatically liable for harassment

whether or not they put a stop to it.”). We should encourage employers

to retain counsel to investigate, prevent, and help remedy discrimination.

The majority today instead discourages the use of employment lawyers

by allowing adverse litigants to easily invade the confidentiality so

important to the attorney–client relationship.

For these reasons, I respectfully dissent.

Mansfield and Zager, JJ., join this dissent.