Defamation Claims Increase Cost Of Cooperation With Gov't

Law360, New York (July 15, 2013, 11:03 AM EDT) -- Disclosing the results of a company’s internal investigation to government investigators is always fraught with potential problems. The most obvious is the danger of waiving attorney-client privilege and work product protections that would otherwise shield the internal investigation from discovery in parallel litigation. But another less-heralded danger is the risk of defamation claims by employees identified through the investigation as having participated in illegal activity.

The risk associated with such claims was on display in a recent ruling by a Texas court of appeals, which held that Shell Oil Company was entitled to only a conditional privilege, and not “immunity,” for...

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