The Rocky Mountain Employer


Labor & Employment Law Updates

When the Corporate Witnesses Have Diverging Stories and Your Case Has Difficult Facts

A.                Reliance on Testimony of a Former Corporate Employee – Summary of Issues and Practical Tips.

A key challenge to preparing for trial in an employment case is choosing the best corporate witnesses.  Among other traits, a corporate witness should have knowledge on key facts supporting the defense and should be able to testify consistently with the corporate storyline.  A corporate witness of course should also be credible and have a good demeanor.  The challenge of choosing a witness is heightened in employment litigation, where agency investigations and litigation often spans several years, during which time corporate turnover leaves an employer unable to effectively tell its story through testimony of its own corporate officers and management.  As a result, employers often must rely on the testimony of their former employees. 

Relying on the testimony of former employees to defend a company’s interest can be a scary prospect—particularly when your client fired your witness. While former employees may have knowledge key to the employer’s defense, their own history with the employer may cloud their ability and desire to testify to the facts known to them when they were still employed.  A disgruntled former employee may lack the motivation to properly prepare for trial and come across as not knowledgeable or credible. Even worse, such an employee may become hostile at trial as a way of getting back at the company.

As explained below, corporate counsel may take steps to avoid being forced to rely on the testimony of a disgruntled ex-employee. And trial counsel faced with this situation must determine if the former witness is necessary at trial and, if so, counsel must properly and thoroughly prepare the witnesses for trial. 

1.                  Companies Should Preserve Evidence and Testimony as Events Occur in Order to Minimize the Need to Rely on Testimony of Former Employees.

Preservation of testimony and evidence long before trial is critical in defending an employment case and can minimize the need to rely on former corporate employees at trial.  Agency investigations of alleged discrimination are typically a condition precedent to a lawsuit and are lengthy.[i]  Years may pass between the date of the alleged adverse activity and the filing of a complaint, with trial occurring months or years later.[ii]  Given the lengthy delay to get to trial, corporate witnesses’ memories often fade and their ability to recall details from key events is either incomplete, or worse, inaccurate.  This is particularly true where the corporate witness has changed employers, especially if she did so involuntarily.  Preserving testimony and evidence from former corporate witnesses therefore is critical for the company to effectively tell its story at trial.

2.                  Methods of Preserving Evidence and Testimony

Employers have various means of preserving testimony and evidence.  Several of these practices are summarized below:

a.                  Proper and Thorough Maintenance of Employee Files.

Employers should take steps to ensure that employee files are thorough and up-to-date, and that managers’ own files on employees are preserved upon an employee’s termination and ideally integrated with the “main” employee files.[iii] 

b.                  Preservation of Documents (Electronic and Otherwise)

It is imperative to preserve documents when litigation is filed, threatened, or reasonably anticipated.  Employers should take steps to ensure that potentially useful documents (both electronic and hard-copies) are preserved even before litigation is filed or threatened, or becomes reasonably anticipated.  Maintaining all documents pertaining to an employee’s employment—including but not limited to emails, evaluations, and awards—for the required statutory period is a necessary step.[iv]

c.                   Inclusion of Cooperation Clauses in Release Agreements

Employers should consider having a departing employee sign a cooperation clause as part of a separation agreement or severance package.  Such clauses require former employees to fully cooperate in future investigations and litigation, particularly where the employee is a key witness. 

Employers using cooperation clauses must be careful about how they compensate a former employee for time spent working under the terms of the agreement.  The Federal Anti-Bribery Statute permits employers to compensate former employees for reasonable expenses or reasonable time lost.[v]  However, employers should not provide compensation “for” or “because of” trial or deposition testimony as the court may view such compensation as payment for testimony, which may lead to an adverse jury instruction.[vi]  The following is a sample cooperation clause agreement designed to address these concerns:[vii]

Individual Cooperation and Reimbursement.  Individual agrees to cooperate reasonably with Employer in connection with any dispute, lawsuit, proceeding, or any internal or external investigation involving Employer (a “Proceeding”) with respect to which Employer reasonably believes Individual may possess relevant information.  In that event, upon reasonable notice and at reasonable times, and for reasonable periods, Individual agrees to make herself reasonably available for interviews, witness preparation sessions, and appearances in connection with any Proceeding (including, but not limited to, appearances at depositions, hearings, and trials).  Recognizing that Individual’s separation from Employer, participating in interviews or witness preparation sessions may be a burden, Employer agrees to reimburse Individual for the time Individual spends involved in interviews and witness preparation sessions requested by Employer at a rate equal to Individual’s final base salary with Employer, computed on an hourly basis (assuming a 40 hour work week), for such time actually spent in such interviews or witness preparation sessions.  In addition, Employer will reimburse Individual for reasonable expenses Individual incurs in connection with such interviews and witness preparation sessions.  The parties agree that Employer will not be obligated to reimburse Individual for lost wages, lost opportunities, or other financial consequences of such cooperation, or to make any other payment to Individual other than the payments by Employer referred to in the two previous sentences.  The parties further agree that the Employer will not, and will not be obligated to, reimburse Individual for any time spent testifying in any Proceeding (including, but not limited to, appearances at depositions, hearings and trials), although Employer will reimburse reasonable expenses for such appearances, as provided above.  Nothing in this Agreement shall limit, restrict, preclude, require, or influence Individual’s testimony in any Proceeding or cause Individual not to provide truthful testimony or information in any matter or in response to any inquiry by government official or representative.  Employer’s obligation to reimburse Individual as described above is conditional upon Individual providing, at all times, information that she in good faith believes to be truthful in connection with any internal or external investigation, interview witness preparation session or Proceeding.

d.         Obtaining Information in Exit Interviews

An employer may use exit interviews as a way to identify and preserve evidence for trial. Besides assessing how the employee might feel about the company at his termination, an employer should collect any employee notes, files, and electronic files related to outstanding employment matters and/or employees who may become problematic.  The employer should also ensure that it has a terminated employee’s best contact information, including the employee’s cell phone and email address, in the event that the employer needs to get in contact with the former employee for on-going litigation or trial. 

e.         Obtaining Employee Statements Before an Employee’s Termination

Although it may seem basic, some employers fail to capture important information related to potential employment claims when events that lead to claims occur.  It is important while an employee is still employed for the company to speak with the employee to determine whether she has knowledge of facts related to the case and if her information is helpful to the company.  If the employee has helpful information, the employer should consider having the employee write out or type up their statement providing details of what they know about the situation.  It is important that the employee sign the statement after writing it.  Some employers may draft a declaration for the employee to review and sign based upon information that the employee provided to the employer in an interview. 

Employers and defense counsel often are reluctant to obtain statements because they typically are not protected by the attorney-client privilege and may be used against the company at a later date. Such concerns should be weighed against the need to obtain and preserve evidence.  While a statement or declaration will likely be discoverable, having documentary evidence that ties a soon-to-be former employee to a story that is consistent with the company’s story, may prove invaluable at trial for impeachment, if the former employee changes her testimony. 

f.          Obtaining Evidence Through a Deposition

Where a case has been filed and is in discovery, employers may also consider preserving testimony of an employee, before their termination, through a deposition.  An employer may notice its own deposition,[viii] but doing so alerts opposing counsel to the significance the employer places on the witness, especially if opposing counsel had not noticed the deposition. 

Opposing counsel will also have the opportunity to cross examine the witness during the deposition and may attempt to discredit the witness’s testimony.  This option may be useful where the employer is concerned about the employee altering or changing her testimony or where the employer is contemplating a reduction in force, and the key witness is one of the employees likely to lose her job.  In those situations, it may make sense for the employer to notice the employee’s deposition before the RIF, while the employee still thinks highly of the company. 

g.         Providing a Thorough Factual Response to an Agency Charge.

Thoroughly investigating a claim at the Charge stage can minimize the need to rely on an ex-employee’s testimony at trial.  Investigations are costly, and the risk of a protracted lawsuit may not be apparent when an employer first receives a Charge of discrimination.  However, employers may greatly benefit by engaging in a thorough investigation and obtaining (and preserving) evidence that may be useful in an eventual trial.  Such an investigation provides a strong foundation for defending the case and may uncover facts related to a former employee that allows the company to implement some of the strategies discussed above. 

B.                 Reliance on Testimony of a Former Corporate Employee – Summary of Issues and Practical Tips.

Even where a company takes steps to preserve evidence and testimony, it may be necessary to rely on a former employee’s testimony at trial. As with all witnesses, preparation is key.  In the case of former corporate employees, certain unique considerations apply.

1.                  Application of Attorney-Client Privilege to Meetings with Former Employees

A key factor in determining how trial counsel prepares a former employee witness is whether the attorney-client privilege applies to the former employee.  As a general rule, communications that were privileged during the period of employment remain privileged after an employee’s termination.  Thus, communications made by an employee at the time she was an employee are privileged if: (1) the communications were made to the corporation’s counsel, acting as such; (2) the communications were made at the direction of corporate superiors for the purpose of seeking legal advice; (3) the communications concerned matters within the scope of the employee’s duties; and (4) the employee was aware they were being questioned so the corporation could obtain legal advice.[ix]

The existence of a privilege as to communications between a corporation’s attorney and a former employee that occur after the period of employment is less clear.  Most courts hold that post-employment communications may be privileged if the communications relate to the former employee’s conduct and knowledge obtained during the employee’s employment, and are limited to such knowledge.[x]  However, employers and counsel should not assume the privilege applies in such circumstances and should consider applicable law before meeting with a witness who is a former employee.[xi]

Even where an attorney’s communications with former employees may be privileged, the privilege is narrow.  Although the privilege belongs to the company,[xii] it can be unintentionally waived.  To ensure that communications with the former employee witness remains privileged, counsel must: (1) determine what conversations the employee had with corporate counsel during her employment, and remind her that those conversations are privileged and should not be revealed to anyone, except corporate management; and (2) not reveal work product or information learned from the client, other witnesses, or documents that was not available to the former employee during her employment.[xiii]

2.                  Understand the Reasons for the Former Employee’s Termination

It is important when preparing the former witness for trial to understand the reasons for the former employee’s termination.  Whether the former employee voluntarily quit or was fired—and the circumstances of such a departure—will have a tremendous impact on how to prepare the witness for trial, as well as determine whether the former employee will be hostile to the company and/or to other corporate witnesses.  Trial counsel must also know whether the former employee witness has a pending claim, or believes that he has an employment claim against the company.  If such a claim exists, trial counsel should not provide attorney-client privileged protected communication to the witness in trial preparation.  Counsel may also consider not having the witness testify live at trial and rely upon reading his deposition testimony at trial to prevent the former employee witness from creating a “mini trial” of his own claims in front of the jury.

Counsel should also determine whether there is an existing agreement requiring the witness to cooperate with testimony and, if so, the agreement likely was executed by the company paying money to the employee in consideration for the former employee releasing and waiving her employment claims against the company.  Reminding the former employee of her agreement may be useful in trial preparation to ensure that the witness totes the corporate line, but provides no assurance that her trial testimony will be consistent with the company’s position. 

3.                  Ensure You Have a Good Grasp on the Important Facts of the Case

Counsel must also have a good grasp on the important facts of the case.  A thorough understanding of the intricacies of each witness’s testimony and how it impacts both the case and the testimony of other witnesses is required before preparing the former employee witness for trial.  Counsel with only a cursory grasp of the facts may overlook key details that may be useful in helping the former employee witness fully develop her testimony.  Knowing the facts of the case also allows trial counsel to test the former employee’s knowledge of the facts and his ability to testify truthfully. 

4.                  Prepare the Witness Thoroughly and Ethically

A critical step counsel can take to ensure the witness testifies consistently with the company’s story is to thoroughly prepare the witness.  The issue of thorough and ethical preparation is not unique to former employee witnesses, and is not discussed at length here.  However, counsel must be careful to ensure that preparation reflects whether a privilege attaches to communications with the former employee.

5.                  Consider Need to Impeach Witness

Trial counsel should try to tell the corporate story with various witnesses and evidence and not rely too heavily on any one witness, especially a former terminated employee, because there is no guarantee that the former employee will be cooperative at the time of trial.  Going into trial, counsel should review deposition testimony and witness preparation to determine exactly what counsel believes the witness will testify to.  However, if the witness “goes rogue,” counsel may have to impeach the witness and Federal Rule of Evidence 607 allows impeachment of a party’s own witness.  Trial counsel should be prepared with impeachment documents and supporting arguments in case the witness contradicts previous testimony or statements at trial. 

Trying a case with a former terminated employee as a witness often is not an ideal situation for trial counsel.  To minimize the need to rely on such witnesses, counsel and employers may take steps to preserve evidence and testimony before an employee leaves.  When a former employee is a necessary witness, counsel must determine whether a privilege applies and ensure no waiver of the client’s privilege occurs.  If the former employee refuses to cooperate at trial, trial counsel should use properly preserved prior testimony and evidence to impeach the witness to ensure that his testimony is consistent with the corporate story.


[i] Under most employment statutes, the plaintiff must exhaust her administrative remedies by filing a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC”) prior to filing a complaint in federal court.  See, e.g., Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) (“Title VII”); the Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.) (“ADEA”); the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) (“ADA”); the Equal Pay Act (29 U.S.C. § 206(d) et seq.) (“EPA”).  But see 42 U.S.C. § 1983 (no exhaustion required for lawsuit against public entity).  Depending on the state, the plaintiff has up to either 180 or 300 days to file the Charge of Discrimination.  42 U.S.C. § 2000e-5(e)(1).  The EEOC then investigates the charge, which takes on average an additional ten (10) months, but often can take years.  See What You Can Expect After You File a Charge, EEOC, (last accessed Mar. 29, 2016).  After the investigation, the EEOC will issue a Notice of Right to Sue to the plaintiff, who then has ninety (90) days to file her lawsuit.  42 U.S.C. § 2000e-5(f)(1). 

[ii] See Theodore Eisenberg & Elizabeth Hill, Arbitration and Litigation of Employment Claims: An Empirical Comparison, 58(4) Dispute Resolution J. 44 (2003).

[iii] Although the company may have a centralized personnel file for each employee, inevitably, we find that managers keep their own “HR” file on employees and that file may contain important information to the case, but that information may not be included in the centralized personnel file.

[iv] See, e.g., 29 C.F.R. §§ 516.2-516.8, 570.6 (Under the Fair Labor Standards Act (“FLSA”), payroll records must be kept three (3) years from termination of employment); 29 C.F.R. §§ 630.1211, 825.500 (Family and Medical Leave Act (“FMLA”) records must be kept for three (3) years from the date the leave ended).

[v] See 18 U.S.C. § 201(d).

[vi] See Caldwell v. Cablevision Sys. Corp., 925 N.Y.S.2d 103 (Sup. Ct. App. Div. 2011).

[vii] This article does not purport to state that the following sample complies with all federal, state, and local laws and regulations.  Readers should consult with counsel to ensure this or similar language complies with applicable laws.

[viii] See Fed. R. Civ. P. 30(a)(1).

[ix] Upjohn Co. v. United States, 449 U.S. 383 (1981).

[x] See, e.g. Peralta v. Cendant Corp., 190 F.R.D. 38 (D. Conn. 1999); Hunt v. Merck-Medco Managed Care, LLC, 340 F. Supp. 2d 554, 558 (E.D. Pa. 2004).  But see Infosystems, Inc. v. Ceridian Corp., 197 F.R.D. 303, 305-06 (E.D. Mich. 2000) (holding privilege only applies to communications made: (1) during employment; (2) pursuant to agency relationship with the employer; or (3) concerning a confidential matter uniquely within the knowledge of the former employee when he worked for the company).

[xi] Where a privilege does not apply, counsel should consider whether there is a basis to form an attorney-client relationship with the former employee, and whether such representation would be ethnical and not create a conflict. If careful analysis determines that representation is permitted, communications with the former employee will be protected by the attorney-client privilege.

[xii] See Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343 (1985).

[xiii] See Meloney Cargill Perry, Attorney-Client Privilege and Deposition Preparation of Former Employees, FDCC Quarterly (Spring 2007).