Magistrate Judge Carlson recently entered a Memorandum Order wherein he refused to recognize the purported “self-critical analysis privilege” in a case in which over 1,000 Rite Aid assistant store managers allege that they were misclassified as exempt from the Fair Labor Standard Act’s (FLSA) overtime compensation mandates. Rite Aid argued that the self-critical analysis privilege should shield from discovery any documents concerning its voluntary internal assessment of its compliance with the FLSA. Judge Carlson refused to recognize the self-critical analysis privilege as valid within the Third Circuit. Indeed, the Third Circuit in Alaska Elec. Pension Fund v. Pharmacia Corp., 554 F.3d 342, 351 n.12 (3d Cir. 2009) was clear about the validity of the self-critical analysis privilege in the Third Circuit (comprised of Pennsylvania, New Jersey, and Delaware) stating that it “never been recognized by this Court and we see no reason to recognize it now.”
Moreover, Judge Carlson pointed out that in the limited circumstances where courts have applied such a privilege, it was in the context of where a defendant had prepared mandatory reports at the direction of the government. Further, Judge Carlson declined to recognize that the self-critical analysis privilege should exist under federal common law. Thus, Judge Carlson held that the privilege would not apply in this case.
In an FLSA action where liquidated damages are being sought, it is imperative that plaintiffs are able to request documents concerning whether a defendant’s violations of the FLSA were “willful” – a necessary requirement for a recovery of liquidated damages. Of course, a defendant will argue that even if it did violate the FLSA, its conduct was not willful; but this defense admits the potent relevance of documents concerning a defendant’s willful violations of the FLSA . Accordingly, this is why courts have often opined that a defendant cannot assert the use of a “privilege as both a sword and a shield” to prevent the production of documents. See Nguyen v. Excel Corporation, 197 F.3d 200, 207 n. 18 (5th Cir. 1999).
In this case, Plaintiffs allege that despite their job titles at Rite Aid of “Assistant Store Manager,” their primary duty did not involve management of the store and that they did not otherwise meet any of the overtime exemptions under federal law. As such, the Rite Aid Assistant Store Managers in this case allege that they were not properly compensated for overtime hours worked over forty within a single workweek.