Today, The New York Times reported on a privileged memo sent to Wal-Mart from its outside lawfirm back in 1995 that "found widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take basic steps — like posting every job opening and creating specific goals to promote women and minorities — to avoid liability." (For more background, see this post by the Workplace Prof Blog.) 

Wal-Mart in response has said that the memorandum was part of a investigation conducted by the lawfirm and that the report was a privileged communication between its lawfirm and it.  No doubt it will argue that its disclosure — or use in a pending sex discrimination class action — would be improper.  

But it raises another interesting question that some company attorneys might be wondering about: What ever happened to the "self-critical analysis" privilege that companies tried to use to insulate themselves from critical memorandum like this one? The rationale behind the theory developed in the medical field, where – for example – hospitals were encouraged to review their safety protocols and procedures after a significant event with the idea that such studies improved safety and should be encouraged.

In the employment context, the U.S. Supreme Court seemed to limit that argument back in 1990 in the University of Pennsylvania v. EEOC case where the court rejected the application of an "academic peer review privilege" in a discrimination suit against the University of Pennsylvania. (Amazingly, I worked for the school newspaper that covered the case at the time.)   That case has been cited in many lower court decisions rejecting the self-critical analysis privilege.

The privilege still lives on in some instances, at least in theory.  (See also this case from the Connecticut Supreme Court in 1999 about the privilege in the medical context.) But it’s very difficult to establish and its hard to imagine that Wal-Mart would get much traction out of this argument right now.

Should the privilege be advanced further? Perhaps, but until and unless Congress or state legislatures act to explicitly create such a privilege, courts are going to continue to be reluctant to act upon it.  Companies should certainly not anticipate that this privilege is going to apply in most circumstances.

For now, I’m reminded of an oft-quoted rule: Never put something in writing that you don’t want to see on the front page of The New York Times (or its business section).  Its easy in theory to follow, but hard in practice.  That approach often gets tested when the client requests something in writing from the lawfirm or the attorney wants to do so to make sure the client understands the ramifications.