Chen-Oster et al v. Goldman, Sachs & Co. LLC. et al

Filing 183

MEMORANDUM AND ORDER: For the reasons discussed above, the plaintiffs' application for an order compelling Goldman Sachs to disclose information relating to the Diversity Objects fields is denied without prejudice to renewal if and when the plaintiffs are able to proffer evidence that would negate Goldman Sachs' claim of privilege. (Signed by Magistrate Judge James C. Francis on 6/18/2013) Copies Mailed By Chambers. (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
H. CRISTINA CHEN-OSTER; LISA
:
PARISI; and SHANNA ORLICH,
:
:
Plaintiffs,
:
:
- against :
:
GOLDMAN, SACHS & CO. and THE
:
GOLDMAN SACHS GROUP, INC.,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

(ECF)

10 Civ. 6950 (AT) (JCF)
MEMORANDUM
AND ORDER

Privileged information can be communicated in myriad ways:
orally, in writing, by e-mail, with text messages, or even through
social media. This opinion addresses the circumstances under which
information

contained

in

a

database

may

be

protected

from

disclosure by either the attorney-client privilege or the work
product doctrine.
Background
The plaintiffs allege that their employers, Goldman, Sachs &
Co. and The Goldman Sachs Group, Inc. (collectively, “Goldman
Sachs”), engaged in a pattern of gender discrimination against
female professional employees in violation of Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the New
York City Human Rights Law, N.Y.C. Admin. Code § 8-107 et seq.
particular,

the

plaintiffs

contend
1

that

they

have

In

been

discriminated against in evaluation, compensation, and promotion.
They seek to represent “a Class of all female financial-services
employees who are at the Associate, Vice President, and Managing
Director corporate level” at Goldman Sachs.

(First Amended Class

Action Complaint (“Am. Compl.”), ¶ 58).
In a prior opinion, I determined that information from certain
of Goldman Sachs’ human resources databases was relevant to the
issues in this case and that the cost and burden of producing that
information was generally not disproportionate to its importance to
the litigation. Chen-Oster v. Goldman, Sachs & Co., 285 F.R.D. 294
(S.D.N.Y. 2012).

Two of the databases within Goldman Sachs’ data

management system are particularly relevant to the current dispute.
The PeopleSoft database is the company’s comprehensive repository
for human resources information.

Id. at 296.

The Compensation

Recommendation System, or “CRS,” database has a more specific
function:

it

contains

the

compensation review process.

results

of

the

annual

year-end

Id.

In the course of complying with my prior order and producing
information from the CRS database, Goldman Sachs disclosed the
names of thousands of data “fields,” each of which refers to a
category of data elements. (E-mail of Geoff Weirich dated Dec. 29,
2012 (“Weirich E-mail”), attached as Exh. B to Letter of Adam T.
Klein dated April 11, 2013 (“Klein 4/11/13 Letter”); List of
2

fields, attached as Exh. A to Klein 4/11/13 Letter).

These

categories can be linked to generate reports containing information
relevant to business decisions.

To give a simple example, one

field may consist of employee names, while another comprises
current job titles.

A report drawing from just these two fields

would list every Goldman Sachs employee together with his or her
title.
After producing a spreadsheet of CRS fields, defendants’
counsel discovered that they had inadvertently disclosed the names
of a group of fields collectively referred to as the “Diversity
Objects.”

(Weirich E-mail).

Arguing that these fields were

created at the behest of counsel, Goldman Sachs maintained that
their “very existence” is “privileged and reflects attorney work
product”

and

redaction.

demanded

that

(Weirich E-mail).

the

spreadsheet

be

returned

for

The plaintiffs agreed to sequester

the spreadsheet and refrain from making use of it until its legal
status was resolved, as required by Rule 502(b) of the Federal
Rules of Evidence and Rule 26(b)(5)(B) of the Federal Rules of
Civil Procedure.

(Letter of Adam T. Klein dated Jan. 4, 2013

(“Klein 1/4/13 Letter”), attached as Exh. C to Klein 4/11/13
Letter, at 1).

They also requested that Goldman Sachs provide an

affidavit establishing the basis for any asserted privilege.
(Klein 1/4/13 Letter at 1-2).
3

In response, Goldman Sachs profferred a declaration from Gena
Palumbo, an employment attorney in the firm’s legal department
since 2001, who became head of the Employment Law Group in 2012.
(Declaration of Gena Palumbo dated Feb. 8, 2013 (“Palumbo Decl.”),
attached as part of Exh. D to Klein 4/11/13 Letter, at 1).
According to Ms. Palumbo, the legal department was often asked “for
advice about the legal risks that might be posed by the tentative
compensation
division]

had

decisions

that

proposed.”

the

managers

(Palumbo

Decl.

within
at

2).

[the

revenue

The

legal

department ultimately formulated a system for responding to such
inquiries:
In approximately 2003 or 2004, the Employment Law Group
decided to establish a set of data fields to assist us in
providing such legal advice when requested to do so.
Therefore, I asked the Human Capital Management Division
(“HCM”) to create reports for the lawyers from data in
the Compensation Recommendation System (“CRS”) database.
HCM created special data fields for this purpose and
housed them in a data category called Diversity Objects
in the CRS database. We identified several categories of
information for these reports that would identify certain
tentative decisions (e.g., absolute or relative increases
or decreases in tentative compensation for an individual)
on which we wanted to focus in assessing risk.
[The
then-head of the Employment Law Group] and I were the
ones who decided on the parameters for the Diversity
Objects data fields when we began these analyses; they
were based on our mental impressions about the manner in
which the data could help us identify circumstances in
which the legal department could provide useful advice to
the divisions. The field names reflect the criteria and
parameters that we set for the requested reports, and
they reveal our thinking about the factual circumstances
we consider most important to identify for further
4

investigation and assessment of legal risk.
(Palumbo

Decl.

at

2).

In

reviewing

tentative

compensation

decisions, the lawyers in the Employment Law Group begin with
reports that are generated from the Diversity Objects fields and
may

then

solicit

additional

information

about

particular

individuals in connection with providing legal advice.
Decl. at 3).

(Palumbo

They engage in a similar process in order to evaluate

legal risks involved in the designation of managers by quartile.
(Palumbo Decl. at 4).

The lawyers’ role is confined to the

provision of legal advice; they do not make compensation or other
personnel decisions.
There

are,

(Palumbo Decl. at 3).

then,

effectively

related to the CRS database.

three

types

elements

fields.
database.

themselves,

information

First, there are the names of the

fields of data, such as the Diversity Objects.
data

of

the

information

Then there are the
that

populates

the

And, finally, there are reports generated from the
The current dispute involves the Diversity Objects

fields and the data elements contained in them.

Goldman Sachs

maintains that both are protected from discovery by the work
product doctrine and the attorney-client privilege.
Discussion
A. Work Product
The

burden

of

establishing
5

any

right

to

work

product

protection is on the party asserting it.

In re Grand Jury

Subpoenas Dated March 19, 2002 & August 2, 2002, 318 F.3d 379, 384
(2d Cir. 2003) (party asserting work product protection faces
“heavy” burden). The protection claimed must be narrowly construed
and its application must be consistent with the purposes underlying
the asserted immunity.

Id.

The work product doctrine “shields from disclosure materials
prepared ‘in anticipation of litigation’ by a party or the party’s
representative, absent a showing of substantial need.”

United

States v. Adlman, 68 F.3d 1495, 1501 (2d Cir. 1995) (quoting Fed R.
Civ. P. 26(b)(3)).

It is designed to protect “mental impressions,

conclusions, opinions or theories concerning [] litigation.”
United States v. Adlman, 134 F.3d 1194, 1194 (2d Cir. 1998).

A

document is prepared “in anticipation of litigation” if “in light
of the nature of the document and the factual situation in the
particular case, [it] can fairly be said to have been prepared or
obtained because of the prospect of litigation.”
(internal quotation marks omitted).

Id. at 1202

Although a document “does not

lose protection . . . merely because it is created in order to
assist with a business decision,” id., “[i]f, regardless of the
prospect of litigation, the document would have been prepared
anyway, in the ordinary course of business . . . , it is not
entitled to work product protection,” Clarke v. J.P. Morgan Chase
6

& Co., No. 08 Civ. 2400, 2009 WL 970940, at *7 (S.D.N.Y. April 10,
2009) (citing Adlman, 134 F.3d at 1202).
While legal risks may ripen into litigation, not all risk
management qualifies as anticipation of litigation.

Generalized

steps to avoid non-specific litigation are not accorded work
product protection.

See Montgomery County v. MicroVote Corp., 175

F.3d 296, 305 (3d Cir. 1999) (Greenberg, J., concurring) (“A party
must show that there existed an identifiable specific claim or
impending litigation when the materials were prepared.” (internal
quotation marks and citation omitted)); Prowess, Inc. v. Raysearch
Laboratories AB, No. WDQ-11-1357, 2013 WL 509021, at *7 (D. Md.
Feb. 11, 2013) (“The work product protection only extends to
documents created because a specific litigation is anticipated, and
[i]t is not enough . . . that the mere possibility of litigation
exists.” (alterations in original) (internal quotation marks and
citations omitted)); In re Grand Jury Proceedings, No. M-11-189,
2001 WL 1167497, at *15 (S.D.N.Y. Oct. 3, 2001) (“[A] generalized
desire

to

avoid

anticipation

of

litigation

is

litigation’

insufficient

requirement.”);

to
see

meet
also

the

‘in

Skurka

Aerospace, Inc. v. Eaton Aerospace, L.L.C., No. 08 Civ. 1565, 2011
WL 5008571, at *2 (N.D. Ohio Oct. 20, 2011) (quoting In re Grand
Jury Proceedings, 2001 WL 1167497, at *15).
The

point

at

which

the

threat
7

of

litigation

becomes

sufficiently concrete to trigger work product protection is not
always obvious, but the Second Circuit has provided some guidance:
If, for example, a party expects to be sued by a
particular adverse claimant in the event it undertakes to
trade under a disputed mark or publishes a book the
copyright of which is contested, we see no reason why
work-product protection should not apply to preparatory
litigation studies undertaken by that party (or its
representatives) before it begins to trade under the
contested mark or publishes the book. Nor should the
answer be different for a party that prepares to initiate
the lawsuit in the expectation that another is about to
begin trade under the party’s mark, or about to publish
a work to which the party claims the copyright.
Adlman, 68 F.3d at 1501. Although in these illustrations there may
be many contingencies that would need to be met before a litigation
were actually commenced, there is at a minimum an identifiable
potential adversary and a defined legal claim.
In this case, Goldman Sachs has proffered no such specifics.
Ms. Palumbo states that the Diversity Objects data fields are
utilized to provide advice concerning “the legal risk that might be
imposed by [] tentative compensation decisions.” (Palumbo Decl. at
2).

Tellingly, she does not characterize the risk as the prospect

of litigation.

Nor does she specify the nature of the potential

claim or identify any individual or group of individuals who might
file a lawsuit.

As the court observed in In re Grand Jury

Proceedings, “[T]o find that avoidance of litigation without more
constitutes ‘in anticipation of litigation’ would represent an

8

insurmountable barrier to normal discovery and could subsume all
compliance activities by a company as protected from discovery.”
2001 WL 1167497, at *15 (internal quotation marks and citations
omitted).

Wherever the precise boundary between general risk

management and anticipation of litigation may lie, the information
at issue here falls outside the protection of the work product
doctrine.
This conclusion does not, however, preclude a determination
that the information at issue is protected from discovery by the
attorney-client privilege.

“The attorney-client privilege and the

work product rule serve different objectives.”

Adlman, 134 F.3d

at 1200 n.4; accord Prowess v. Raysearch Laboratories AB, No. WDQ11-1357, 2013 WL 1856348, at *2 (D. Md. April 30, 2013) (“[T]he
work product protection . . . arises from different circumstances
and

protects

different

interests

than

the

attorney-client

privilege.” (internal quotation marks and citations omitted));
Trustees of Electrical Workers Local No. 26 Pension Trust Fund v.
Trust Fund Advisors, Inc., 266 F.R.D. 1, 13-14 (D.D.C. 2010);
Stoffels v. SBC Communications, Inc., 263 F.R.D. 406, 412 (W.D.
Tex. 2009).

I will therefore turn to the privilege.

B. Attorney-Client Privilege
The attorney-client privilege protects from disclosure “(1) a
communication between client and counsel that (2) was intended to
9

be and was in fact kept confidential, and (3) was made for the
purpose of obtaining or providing legal advice.”

In re County of

Erie, 473 F.3d 413, 419 (2d Cir. 2007) (citing United States v.
Construction Products Research, Inc., 73 F.3d 464, 473 (2d Cir.
1996)); accord United States v. Mejia, 655 F.3d 126, 132 (2d Cir.
2011); United States v. Ghavami, 882 F. Supp. 2d 532, 536 (S.D.N.Y.
2012); National Immigration Project of the National Lawyers Guild
v. United States Department of Homeland Security, 842 F. Supp. 2d
720, 728 (S.D.N.Y. 2012).1

The privilege protects not only the

advice of the attorney to the client, but also the information
communicated by the client that provides a basis for giving advice.
See Upjohn Co. v. United States, 449 U.S. 383, 390 (1981); In re
Six Grand Jury Witnesses, 979 F.2d 939, 943-44 (2d Cir. 1992); Oak-

1

An alternative and more detailed articulation of the
attorney-client privilege provides that:
(1) where legal advice of any kind is sought (2) from a
professional legal advisor in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by
the legal advisor, (8) except the protection be waived.
United States v. International Brotherhood of Teamsters,
Chauffers, Warehousemen and Helpers of America, AFL-CIO, 119 F.3d
210, 214 (2d Cir. 1997) (quotation marks and citation omitted);
see also Kingsway Financial Services, Inc. v. PricewaterhouseCoopers LLP, No. 03 Civ. 5560, 2007 WL 473726, at *7 (S.D.N.Y.
Feb. 14, 2007); In re Rivastigmine Patent Litigation, 237 F.R.D.
69, 73-74 (S.D.N.Y. 2006); Bank Brussels Lambert v. Credit
Lyonnais (Suisse) S.A., 160 F.R.D. 437, 441 (S.D.N.Y. 1995).
10

Jin Oh v. Sim & Park, LLP, No. 12 MC 66, 2012 WL 1193755, at *1
(S.D.N.Y. April 10, 2012).

“It is axiomatic that the burden is on

a party claiming the protection of a privilege to establish those
facts

that

are

the

essential

elements

of

the

privileged

relationship, a burden not discharged by mere conclusory or ipse
dixit assertions.”

In re Grand Jury Subpoena Dated Jan. 4, 1984,

750 F.2d 223, 224-25 (2d Cir. 1984) (citations and internal
quotation marks omitted); accord von Bulow by Auersperg v. von
Bulow, 811 F.2d 136, 144 (2d Cir. 1987); Ghavami, 882 F. Supp. 2d
at 536; Schanfield v. Sojitz Corp. of America, 258 F.R.D. 211, 214
(S.D.N.Y. 2009).
1. Database Information as Communication
The

plaintiffs

contend

that

Goldman

Sachs’

assertion

of

privilege fails in several respects. At the outset, they note that
the privilege protects only communications and argue that “[t]he
CRS Diversity Objects fields . . . are not communications -- they
are database fields -- that are ‘not shared with anyone other than
members of the [Employment Lawyers Group],’ and, therefore, not
provided to the firm’s business managers when the ELG provides
legal advice.” (Klein 4/11/13 Letter at 5-6 (quoting Palumbo Decl.
at 3)).
This analysis is flawed.

Communication is very simply “a

process by which information is exchanged between individuals
11

through a common system of symbols, signs, or behavior.”

Merriam-

Webster’s Collegiate Dictionary 251 (11th ed. 2003).

In this

instance, when the Human Capital Management Division populates the
database with information in the Diversity Objects fields, it is
taking the initial step in communicating that information to
counsel for the purpose of obtaining legal advice.

That the

information then resides in the database for some period of time
before being passed on to the attorneys is of no moment. Likewise,
the Diversity Objects fields -- the names of the data categories -are

communications.

They

are

the

organizational

principles,

dictated by counsel, that the client uses to sort and package the
information provided to the attorneys.
syntactical

structure

for

the

In effect, they are the

communication

of

privileged

information, and syntax is an indispensable aspect of the way
verbal communication transmits meaning. Were the Diversity Objects
fields to be disclosed, the ability of the client to seek legal
advice would be chilled, which is precisely the result that the
privilege is intended to avoid.
Furthermore, the plaintiffs’ observation that the Diversity
Objects fields are not provided to Goldman Sachs’ business people
when the lawyers are giving advice is immaterial.

As noted above,

the privilege protects certain communications between attorney and
client regardless of the direction in which the information flows.
12

See, e.g., Upjohn Co. v. United States, 449 U.S. 383, 390 (1981).
Here, the Diversity Objects fields are an integral part of the
exchange of information between in-house counsel and their business
clients at Goldman Sachs.
The plaintiffs also argue that the Diversity Objects fields
and their contents are simply “facts” and, as such, cannot be
subject to the privilege.

(Klein 4/11/13 Letter at 6).

The

plaintiffs are correct about the legal principle: “[t]he privilege
only protects disclosure of communications; it does not protect
disclosure of the underlying facts by those who communicated with
the attorney.”

Upjohn, 449 U.S. at 395; accord Federal Housing

Finance Agency v. UBS Americas, Inc., Nos. 11 Civ. 5201, 11 Civ.
6188, 11 Civ. 6189, 11 Civ. 6190, 11 Civ. 6192, 11 Civ. 6193, 11
Civ. 6195, 11 Civ. 6196, 11 Civ. 6198, 11 Civ. 6200, 11 Civ. 6201,
11 Civ. 6202, 11 Civ. 6203, 11 Civ. 6739, 11 Civ. 7010, 2013 WL
1700923, at *1 (S.D.N.Y. April 16, 2013); Gucci America, Inc. v.
Guess?, Inc., 271 F.R.D. 58, 70 (S.D.N.Y. 2010).

But the facts

here are the attributes of Goldman Sachs employees, not the
collection and communication of those facts through the Diversity
Objects fields.

The attributes -- the facts -- are available in

the PeopleSoft database, which is not cloaked by the attorneyclient privilege, and which has been disclosed to the plaintiffs.

13

2. Confidential Legal Advice
Of course, identifying something as a communication is only
the first step in establishing the applicability of the attorneyclient privilege.

The communication must have been made in

confidence for the purpose of providing legal advice.

Here,

Goldman Sachs has made a prima facie showing that these two
prerequisites are met.

It has represented that the information at

issue

with

is

“not

shared

anyone

other

than

members

of

the

Employment Law Group and those in [Human Capital Management] who
work at [the lawyers’] direction to collect facts relevant to [the
lawyers’] review.”

(Palumbo Decl. at 3).

requirement of confidentiality.
characterized

counsel

as

This satisfies the

Similarly, Goldman Sachs has

utilizing

the

information

from

the

Diversity Objects fields exclusively to provide legal advice,
meeting the second requirement.

(Palumbo Decl. at 3).

The plaintiffs challenge these representations, arguing that
the Diversity Objects fields contain “information that is used for
the business operations of Goldman Sachs.”

(Tr. at 7).2

But this

contention, unsupported by evidence, does not overcome the sworn
testimony of a witness with personal knowledge.

Should evidence

obtained

undermine

during

the

course

of

2

discovery

the

“Tr.” refers to the transcript of the oral argument held
on May 31, 2013.
14

representations
revisited.

made

by

Goldman

Sachs,

these

issues

may

be

The plaintiffs are entitled, for example, to test

whether managers have access to the CRS database, and specifically
to the Diversity Objects fields, a fact that could militate in
favor of finding that these fields are maintained for business
purposes and would not be privileged.

But until such evidence

comes to light, the privilege must be respected.
3. Forfeiture
Finally, the plaintiffs contend that even if the information
related to the Diversity Objects fields is privileged, Goldman
Sachs has forfeited any protection by placing it at issue in this
litigation.

It

is

well-established

that

“the

privilege

may

implicitly be waived when defendant asserts a claim that in
fairness requires examination of protected communications.” United
States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991).

The

plaintiffs’ theory is that by denying corporate liability under the
New York City Human Rights Law (the “NYCHRL”), Goldman Sachs has
placed at issue its corporate knowledge, including that of its
attorneys.

Specifically,

section

8-107(1)(a)

of

the

NYCHRL

prohibits discrimination on the basis of gender, and section 8107(13)(b)

imposes

vicarious

liability

on

an

employer

discriminatory acts by its employees or agents where:
(1)

the

employee

or

agent
15

exercised

managerial

or

for

supervisory responsibility; or
(2) the employer knew of the employee’s or agent’s
discriminatory conduct, and acquiesced in such conduct or
failed to take immediate and appropriate corrective
action; an employer shall be deemed to have knowledge of
an employee’s or agent’s discriminatory conduct where
that conduct was known by another employee or agent who
exercised managerial or supervisory responsibility; or
(3) the employer should have known of the employee’s or
agent’s discriminatory conduct and failed to exercise
reasonable diligence to prevent such discriminatory
conduct.
According

to

the

plaintiffs,

Goldman

Sachs’

Forty-Fourth

Affirmative Defense, addressed to the NYCHRL claims, implicates the
Diversity Objects information.

That defense states:

If any employee of Goldman Sachs engaged in any unlawful
discriminatory practice, which Goldman Sachs expressly
denies, Goldman Sachs is not liable with respect to any
and/or all of Plaintiffs’ purported NYCHRL claims
because: (1) Goldman Sachs did not know of or acquiesce
to any employee’s or agent’s discriminatory conduct; (2)
Goldman Sachs did not fail to take immediate and
appropriate corrective action upon learning of any
discriminatory conduct; (3) there is no basis for
concluding that Goldman Sachs should have known of the
employee’s or agent’s discriminatory conduct; and (4)
Goldman Sachs did not fail to exercise reasonable
diligence to prevent such discriminatory conduct.
(Answer to First Amended Class Action Complaint, ¶ 236).
The Second Circuit has made clear that “[t]he key to a finding
of implied waiver . . . is some showing by the party arguing for a
waiver

that

the

opposing

party

relies

on

the

privileged

communication as a claim or defense or as an element of a claim or

16

defense.

County of Erie, 546 F.3d at 228.

Assertion of an advice

of counsel defense is the “quintessential example” of an implied
waiver.

Id. (internal quotation marks and citation omitted).

On

the other hand, the fact that a privileged communication may simply
be relevant to a claim or defense is insufficient to effect
forfeiture of the privilege.

Id. at 229; accord Aiossa v. Bank of

America, N.A., No. 10 CV 1275, 2011 WL 4026902, at *2 (E.D.N.Y.
Sept. 12, 2011).
Here, the plaintiffs contend that Goldman Sachs has asserted
a good faith defense that implicates its state of mind.
4/11/13 Letter at 6-7).

(Klein

When a defendant places at issue what it

knew or believed regarding the conduct in question, it implicitly
waives the privilege because its adversary, in fairness, must be
allowed inquiry into the basis of that knowledge or belief.

See

County of Erie, 546 F.3d at 228-29; Bilzerian, 926 F.2d at 1292;
Xuedan Wang v. Hearst Corp., No. 12 Civ. 793, 2012 WL 6621717, at
*2 (S.D.N.Y. Dec. 19, 2012); MBIA Insurance Corp. v. Patriarch
Partners VIII, LLC, No. 09 Civ. 3255, 2012 WL 2568972, at *6-7
(S.D.N.Y. July 3, 2012); Arista Records, LLC v. Lime Group, LLC,
No. 06 Civ. 5936, 2011 WL 1642434, at *2-3 (S.D.N.Y. April 20,
2011); Leviton Manufacturing Co. v. Greenberg Traurig LLP, No. 09
Civ. 8083, 2010 WL 4983183, at *3-5 (S.D.N.Y. Dec. 6, 2010).
But the claim that the plaintiffs advance under the NYCHRL
17

simply does not allow for a good faith defense.

They assert that

Goldman Sachs has systematically discriminated against its female
employees in compensation and promotion based on their gender.
Thus, the illegal conduct alleged is that of its management
personnel.

This falls within the first subdivision of NYCHRL

section 8-107(13)(b), which imposes liability on the employer for
the

discriminatory

acts

of

an

employee

where

the

employee

“exercised managerial or supervisory responsibility.”

By its

terms, this is a strict liability provision that holds the employer
legally responsible without regard to whether the employer knew or
should have known of the conduct of the managerial employee.
Zakrzewska v. New School, 14 N.Y.3d 469, 479-80, 902 N.Y.S.2d 838,
841-42 (2010); see also Caravantes v. 53rd Street Partners, LLC,
No. 09 Civ. 7821, 2012 WL 3631276, at *25 (S.D.N.Y. Aug. 23, 2012);
Chisholm v. Memorial Sloan-Kettering Cancer Center, 824 F. Supp. 2d
573, 579 (S.D.N.Y. 2011); Zakrzewska v. New School, 598 F. Supp. 2d
426, 434 (S.D.N.Y. 2009).
The other two paths to liability under the NYCHRL -- that the
employer “knew of the . . . discriminatory conduct,” NYCHRL § 8107(13)(b)(2), or “should have known of the . . . discriminatory
conduct,” NYCHRL § 8-107(13)(b)(3) -- do require a showing of
knowledge and could lead to an implied waiver of privilege in
appropriate

circumstances.

But
18

these

provisions

relate

to

discriminatory

conduct

by

co-workers,

not

by

managers.

The

legislative history as set forth in the report of the New York City
Council’s

Committee

on

General

characterized

section

liability

employment

in

Welfare

8-107(13)
context

as
for

makes

this

providing
acts

of

clear;

for

it

“[s]trict

managers

and

supervisors; also liability in employment context for acts of coworkers where employer knew of act and failed to take prompt and
effective

remedial

action

or

should

have

known

and

had

not

exercised reasonable diligence to prevent.” (1991 N.Y. City Legis.
Ann. at 187 (quoted in Zakrzewska, 14 N.Y.3d at 480, 902 N.Y.S.2d
at 842-43).

In this case, the discrimination alleged is that of

managerial personnel, and the knowledge or good faith of Goldman
Sachs is not at issue.3
Thus, the Diversity Objects information is protected by the
attorney-client privilege and that privilege has not been waived.

3

The plaintiffs cite Johnston v. Apple, Inc., No. 11 Civ.
3321, 2011 WL 4916305, at *5 (S.D.N.Y. Oct. 14, 2011), for the
proposition that “vicarious liability under NYCHRL ‘require[s]
showing some level of [actual or constructive] knowledge on the
part of the employer.’” (Klein 4/11/13 Letter at 6 (alterations
in original)). The plaintiffs’ quotation of Johnston, however,
is incomplete in a significant respect. The court there referred
to the requirement of “some level of knowledge on the part of the
employer (implicitly when the employee is a manager).” Id.
(emphasis supplied). In other words, when the discriminatory
conduct is that of a manager, knowledge is automatically and
irrebuttably attributed to the employer, establishing vicarious
liability.
19

Conclusion
For the reasons discussed above, the plaintiffs' applic tion
for

an order compelling Goldman Sachs

relating

to

the

Diversity

Objects

to disclose

fields

is

inform

denied

wi

prejudice to renewal if and when the plaintiffs are able to pr ffer
evidence that would negate Goldman Sachs' claim of privilege
SO ORDERED.

~~.·E~~~·
~ ~~~D

STATES MAGISTRATE JUDGE

Dated: New York, New York
June 18, 2013
Copies mailed this date:

Adam T. Klein, Esq.

Carmelyn Malalis, Esq.

Cara E. Greene, Esq.

Cyrus E. Dugger, Esq.

Jennier L. Liu, Esq.

Dana G. Sussman, Esq.

Outten & Golden LLP

3 Park Avenue, 29th Floor

New York, New York 10016

Kelly Dermody, Esq.

Anne B. Shaver, Esq.

Alison M. Stocking, Esq.

Lief, Cabraser, Heimann & Bernstein, LLP

275 Battery Street, 30th Floor
San Francisco, CA 94111

20

Theodore O. Rogers, Jr., Esq.

Suhana S. Han, Esq.

Michael P. Reis, Esq.

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Barbara B. Brown, Esq.

Paul, Hastings, Janofsky & Walker LLP

875 15th Street N.W.

washington, DC 20005

C. Geoffrey wei ch, Esq.
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Sreet, NE
Suite 2400
Atlanta, GA 30308
Zachary D. Fasman, Esq.
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022

21