Conducting an internal investigation in a disciplined and organized manner is essential to protecting privilege. A recent decision by the U.S. Court of Appeals for the Sixth Circuit, In the FirstEnergy Corporation caseNo. 24-3654 (October 3, 2025), emphasizes that courts will respect attorney-client privilege and work product protection when the attorney directs the investigation and the attorney's legal purpose is clear, even when the resulting work also informs a company's business decisions.
In FirstEnergyshareholders filed a securities fraud class action lawsuit against FirstEnergy and sought investigative materials from FirstEnergy's internal investigations related to a bribery scheme. The district court ordered the large-scale production of the company's internal investigative records, finding that privileges and work product protections did not apply because the company “initiated the investigations to obtain business advice, not legal advice” and “subsequently used the fruits of the investigations to make business decisions.” The Sixth Circuit took the rare step of granting mandamus and vacating the lower court's order requiring production of the internal investigation documents. The Sixth Circuit held that there was “no way to uphold the district court's decision without abandoning nearly half a century…of jurisprudence regarding the scope of the attorney-client privilege and work product doctrine or without discouraging full and frank communication between companies and their attorneys when investigating their own wrongdoing.” (citations omitted).
The Sixth Circuit's reasoning provides useful confirmation of “fundamental privilege and work product” protections and highlights why structured investigations conducted by outside counsel are essential to maintaining these protections:
- Attorney-client privilege. The Sixth Circuit held that attorney-client privilege applied because the company and its board of directors retained attorneys “for legal advice” on “the very significant legal risk they suddenly faced.” The court emphasized that the fact that the company relied on this advice to make business decisions did not change the analysis. As the court noted, “in the context of high-stakes criminal and civil allegations…it will be rare that a company does not also have a business purpose of seeking critical legal advice.” »
- Protection of work products. The Sixth Circuit noted that the company hired outside counsel to conduct internal investigations “because of actual, not just anticipated, legal and regulatory threats.” Simply put, labor protections applied because “criminal and civil investigations, state and federal regulatory actions, and numerous shareholder lawsuits led FirstEnergy to expect litigation and seek legal advice.”
- No waivers with limited disclosures to government and auditors. The Sixth Circuit also held that limited disclosures to the government in connection with obtaining a deferred prosecution agreement and providing documents to the company's auditors did not constitute a waiver because the materials disclosed were not privileged, were already discoverable, or consisted of “mere findings of the investigation,” not “the substance of counsel's advice.” Regarding the disclosures to the auditors, the court noted that the company had endeavored to conceal documents from the auditor based on privilege and that, regardless, the documents remained protected as work product because they had not been disclosed to an adversary.
THE FirstEnergy The decision affirms that privileges and work product protections will be maintained when internal investigations are thoughtfully structured and led by attorneys familiar with the many pitfalls that arise in the context of government investigations and parallel civil proceedings. The Sixth Circuit's decision reinforces the need to promptly retain counsel when legal risk arises, to clearly document that the purpose of the investigation is to obtain legal advice, and to carefully manage disclosures to the government and auditors to avoid waiver.
This article comes to us from Wachtell, Lipton, Rosen & Katz. It is based on the cabinet memorandum, “The Sixth Circuit Reaffirms Privilege and Work Product Protections in Internal Investigations,” dated October 6, 2025.
