Sixth Circuit Reaffirms Robust Privilege Protections in Corporate Internal Investigations

In a key decision affecting how companies handle internal investigations and compliance matters, the U.S. Court of Appeals for the Sixth Circuit recently clarified how attorney-client privilege and work-product protection apply to internal investigations conducted in the shadow of potential litigation.  The ruling in In re FirstEnergy Corp. confirms that when legal counsel directs an investigation primarily to address legal exposure, the resulting communications and materials generally remain protected even if business leaders later rely on the findings to guide corporate action.

Overview of the Ruling

In the FirstEnergy case, the Sixth Circuit overturned a lower court’s order that would have compelled FirstEnergy Corporation to produce documents from its internal reviews.  Those reviews were conducted by outside counsel after criminal charges were filed against an Ohio legislator allegedly connected to a bribery scheme involving the company.  The court concluded that the investigations were initiated for legal rather than business related purposes.  Because the primary aim was to secure legal advice and respond to looming enforcement risks, the documents remained privileged and shielded as attorney work product.

Privilege Analysis: Focus on Intent, Not Outcome

The Sixth Circuit emphasized that the decisive question in determining privilege is why the communication was made, not how it is later used.  The fact that company executives drew on counsel’s findings to inform operational or governance decisions did not transform those materials into unprotected business records.  Citing attorney-client privilege principles, the court made clear that businesses must be free to consult with their attorneys candidly about potential wrongdoing or exposure without fear that such discussions could later be compelled in litigation.  That freedom persists even when legal and business issues overlap, so long as legal advice is the predominant purpose of the communication.

Work Product Analysis: Litigation Anticipation as the Trigger

The court also reaffirmed that materials prepared “because of” the prospect of litigation qualify as attorney work product.  At the time of the investigations, FirstEnergy was confronting criminal inquiries, regulatory scrutiny, and shareholder claims — together creating risks that made legal action all but inevitable.  Under those circumstances, the Sixth Circuit found the investigations were plainly undertaken “because of” expected litigation, satisfying the work-product test.

Importantly, the court explained that dual-purpose materials that serve both compliance and business interests can still receive work-product protection if they would not have been created in the same way absent the threat of litigation.

Key Takeaways for Companies and Counsel

The FirstEnergy decision offers practical lessons for counsel and compliance officers managing internal reviews under legal pressure:

• Establish the legal mandate upfront.  Engagement letters or investigation plans should clearly describe the investigation as a legal initiative directed by or for counsel.
• Maintain a disciplined communication chain.  Limit the sharing of investigative findings to those who need the information for legal decision-making and avoid unnecessary distribution to business teams or outside parties.
• Separate legal and operational records.  Distinguish communications that seek or convey legal advice from those documenting business deliberations to minimize ambiguity over privilege claims.
• Consider regulatory implications.  Disclosing investigation findings to a regulator or third party can waive protections; businesses should carefully evaluate the risks and structure any disclosures strategically.
• Educate participants.  Employees involved in interviews or document collection should understand that the purpose of the process is to assist counsel in providing legal advice.

Broader Impact

The Sixth Circuit’s ruling reinforces confidence in the traditional privilege framework.  It affirms that organizations can, and should, seek frank legal advice during crises without compromising confidentiality.  For companies conducting internal investigations amid parallel regulatory, civil, or criminal proceedings, the FirstEnergy decision serves as a timely reminder: the durability of privilege and work-product protections depends on clear intent, controlled communication, and careful documentation from the outset.

For additional guidance on preserving privilege in internal investigations, please contact one of Honigman’s Labor and Employment attorneys here.