Occupational Safety and Health Review Commission Establishes Test to Determine Whether Attorney-Client Privilege Applies to Company Audits

The Occupational Safety and Health Review Commission has established a three-part test to determine whether third-party safety and health audits are protected from disclosure by the attorney-client privilege. Secretary of Labor v. Delek Refining, Ltd., OSHRC No. 09-0844 (July 11, 2011).

Delek hired a third party to conduct an audit of its process safety management program. This audit was meant to assist legal counsel in its compliance efforts. After the Occupational Safety and Health Administration (OSHA) investigated an explosion and fire at a Delek facility, litigation followed. During discovery, the Secretary of Labor requested a copy of the audit report, but Delek claimed the report was protected by attorney-client privilege. The Administrative Law Judge (ALJ) denied Delek’s motion to quash on the basis of privilege, and the company sought review of the denial with the Commission.  

The Commission set forth a three-part test to determine whether the privilege applies to third-party reports:

1. The company must have provided information to the third party (rather than the third party providing its own information).  
2. The company must have sought legal advice. 
3. In order to provide the legal advice, the attorney needed the services of the third party to translate technical or complex information.

The Commission did not rule on whether the report at issue met this test, it instead remanded that question to the ALJ to review the facts of the case in light of the three part test.

This case sets forth important factors for employers to consider when contracting with a third party to perform safety and health audits.