*1 This matter comes before the Court by way of motion [D.I. 134] of Plaintiffs, Sonya Ivanovs and Katie Hoffman, on behalf of themselves and those similarly situated, seeking to compel Defendant, Bayada Home Health Care, Inc., to respond to questions posed during the deposition of Defendant's Rule 30(b)(6) witness. Plaintiffs also seek sanctions in the form of attorney's fees and costs incurred in filing the present motion. The Court has considered the submissions of the parties and decides this matter pursuant to Federal Rule of Civil Procedure 78(b). For the reasons that follow, Plaintiffs’ motion is denied without prejudice.

The background of this case is set forth in the District Court's Opinion dated September 24, 2018, and the Court shall recount herein only those facts relevant to the present motion. Plaintiffs generally allege in this action that Defendant “unlawfully classifies all of its Client Service Managers (‘CSMs’) nationwide as exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (‘FLSA’).” (Opinion [D.I. 56], Sept. 24, 2018, p. 2.) In its answer, Defendant admitted that Plaintiffs were not paid overtime compensation but asserted that they “were exempt from overtime pay under federal law.” (Answer [D.I. 11], p. 7, ¶ 38.) Defendant also asserted in its answer a number of affirmative defenses, including the following:

(Id. at pp. 11-12, ¶¶ 17-19, 22.) The District Court conditionally certified Plaintiffs’ collective action on September 24, 2018. (Order [D.I. 58], Sept. 24, 2018.)

In the course of discovery, Plaintiffs requested the deposition of Defendant's corporate designee pursuant to Federal Rule of Civil Procedure 30(b)(6). (Pls.’ Mem. of Law in Supp. of Mot. to Compel Answers to Questions Posed at Deposition (hereinafter, “Pls.’ Br.”) [D.I. 134-1], p. 1.) On October 30, 2020, Defendant produced its Rule 30(b)(6) witness. (Id.) The issue presently before the Court involves defense counsel's assertion of the attorney-client privilege during the Rule 30(b)(6) deposition of Defendant's corporate designee and instruction to the witness not to answer several questions “related to the degree of involvement of counsel in the decision to classify CSMs as exempt or the substance of any such involvement.” (Id.) At the deposition, Plaintiffs objected to the characterization of such information as privileged, and the parties contacted the Court by telephone to address the issue. (Id. at p. 6.) After hearing the parties’ positions, the Court directed the parties to file a formal motion concerning those questions that were not answered during the Rule 30(b)(6) deposition on the basis of the attorney-client privilege. (Order [D.I. 129], Nov. 2, 2020, p. 2.)

*2 In support of their motion, Plaintiffs contend that Defendant put its advice of counsel at issue in this litigation, thereby waiving any privilege afforded to its communications with counsel. Specifically, Plaintiffs argue that Defendant's assertion, by way of affirmative defenses, that it acted in good faith in classifying its CSMs as exempt employees under the FLSA opened the door to discovery into Defendant's classification decision. (Pls.’ Br. at p. 2.) Plaintiffs represent that in an effort to ascertain the factual basis for such affirmative defenses, they served interrogatories which sought to identify the individuals who participated in the decision to classify CSMs as exempt from overtime pay and the factors that Defendant considered in its decision. (Id. at p. 3.) In response, Defendant confirmed that it obtained the advice of counsel when deciding how to classify the CSM position, stating in its interrogatory answers that “[o]utside counsel was involved in the creation and review of the CSM job descriptions” and that Defendant “has determined that its CSMs are exempt employees under the FLSA through consultation with in-house and outside counsel.” (Id.)[1] Plaintiffs assert that because Defendant's interrogatory responses confirmed that the decision to classify CSMs as exempt was based on consultations with counsel, Plaintiffs are entitled to discovery of Defendant's attorney-client communications.[2] (Id. at p. 6.)

In opposition to the motion, Defendant contends that it did not waive the attorney-client privilege because it did not assert an “advice of counsel” defense to the claims in this case. (Defendant Bayada Home Healthcare, Inc.’s Mem. of Law in Opp. to Pls.’ Mot. to Compel (hereainfter, “Def.’s Br.”) [D.I. 137], p. 2.) Defendant represents that its good faith affirmative defenses are not based on the advice of counsel, and Defendant notes that it has not disclosed the substance of its communications with counsel or ever claimed that it would rely on such communications as a defense. (Id. at p. 6.) Defendant contends that because it is not claiming that its liability is limited because it relied on the advice of counsel, there has been no waiver of the attorney-client privilege. (Id.)

Pursuant to Federal Rule of Evidence 501, “[t]he common law – as interpreted by United States courts in the light of reason and experience – governs a claim of privilege” in a civil case where federal law provides the rule of decision. FED. R. EVID. 501. This case involves claims under the FLSA and, therefore, assertions of privilege are to be governed “in accordance with ‘federal common law.’ ” Bowen v. Parking Auth. of the City of Camden, Civil No. 00-5765, 2002 WL 1754493, at *4 (D.N.J. Jul. 30, 2002)(quoting Wei v. Bodner, 127 F.R.D. 91, 95 (D.N.J. 1989)); see also Pearson v. Miller, 211 F.3d 57, 66 (3d Cir. 2000) (“Federal privilege law, as conceived by Rule 501, is determined by ‘the principles of common law as they may be interpreted by the courts of the United States in the light of reason and experience.’ ”)(quoting FED. R. EVID. 501). “Under federal law, communications are protected under the attorney-client privilege ‘when: (1) legal advice of any kind is sought (2) from a professional legal advisor in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence, (5) by the client, (6) are at his insistence permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection [may] be waived.’ ” AstraZeneca LP v. Breath Ltd., Civil No. 08-1512, 2010 WL 11428457, at *3 (D.N.J. Aug. 26, 2010) (quoting In re Grand Jury Proceeding Impounded, 241 F.3d 308, 316 n.6 (3d Cir. 2001)), reconsid. denied, 2011 WL 13074072 (D.N.J. Apr. 29, 2011). The party that asserts the privilege has the burden of proving that the privilege attaches. Grand Jury Empanelled February 14, 1978, 603 F.2d 469, 474 (3d Cir. 1979).

*3 In this case, the parties do not dispute that the questions posed during the Rule 30(b)(6) deposition seek the disclosure of information protected by the attorney-client privilege. The only issue before the Court is whether Defendant's assertion of good faith affirmative defenses, coupled with its discovery responses which confirm that Defendant consulted with counsel in making its classification decision, effected an implied waiver of the attorney-client privilege. Plaintiffs argue that Defendant's actions fall within the “at issue” waiver standard articulated by the Second Circuit in United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991), cert. denied, 502 U.S. 813 (1991), thus requiring disclosure of attorney-client communications. (Pls.’ Br. at pp. 8-9.) Defendant contends that the Second Circuit's standard for “at issue” waiver is not binding on this Court and argues that the Court should instead consider the “at issue” waiver standard set forth by the Third Circuit in Rhone-Poulenc Rorer, Inc. v. Home Indem. Co., 32 F.3d 851, 863 (3d Cir. 1994). (Def.’s Br. at pp. 3-4.) Defendant argues that under the Third Circuit's formulation of an “at issue” waiver, it has not waived the attorney-client privilege. (Id. at p. 6.)

“There is authority for the proposition that a party can waive the attorney client privilege by asserting claims or defenses that put his or her attorney's advice in issue in the litigation.” Rhone-Poulenc Rohrer, 32 F.3d at 863. In describing an “at issue” waiver, the Third Circuit stated:

Id. (emphasis supplied). In Rhone-Poulenc Rohrer, the defendants sought production of documents demonstrating advice of counsel, arguing that the plaintiffs waived the attorney-client privilege by filing suit and putting the advice of counsel in issue. Id. at 856-57. The Third Circuit noted that although an attorney's advice may be relevant, “[a] party does not lose the privilege to protect attorney client communications from disclosure in discovery when his or her state of mind is put in issue in the action.” Id. at 864. The Third Circuit further stated that “[w]hile the attorney's advice may be relevant to the matters in issue, the privilege applies as the interests it is intended to protect are still served by confidentiality.” Id. The Third Circuit concluded that the plaintiffs had not “interjected the advice of counsel as an essential element of a claim in this case” and thus need not produce privileged documents. Id. at 864. In so holding, the Third Circuit rejected the decisions from other courts which “have extended the finding of a waiver of the privilege to cases in which the client's state of mind may be in issue in the litigation.” Id. The Third Circuit noted that “[r]elevance is not the standard for determining whether or not evidence should be protected from disclosure as privileged, and that remains the case even if one might conclude the facts to be disclosed are vital, highly probative, directly relevant or even go to the heart of an issue.” Id.

As noted above, Plaintiffs contend that the Third Circuit's ruling in Rhone-Poulenc Rohrer is inapplicable to this case and argue that the Second Circuit's decision in Bilzerian warrants a finding that Defendant waived the attorney-client privilege. In Bilzerian, the defendant was charged with violations of the securities laws, and at trial he argued that he believed in the lawfulness of his conduct. 926 F.2d at 1289, 1291. The Second Circuit noted that the defendant testified that he “thought his actions were legal” and therefore “put his knowledge of the law and the basis for his understanding of what the law required in issue.” Id. at 1292. As such, “[h]is conversations with counsel regarding the legality of his schemes would have been directly relevant in determining the extent of his knowledge and, as a result, his intent.” Id. The Second Circuit premised its decision on fairness principles, noting that a party cannot use the attorney-client privilege as both a sword and shield. Id. The court in Bilzerian stated: “A defendant may not use the privilege to prejudice his opponent's case or to disclose some selected communications for self-serving purposes. Thus, the privilege may implicitly be waived when defendant asserts a claim that in fairness requires examination of protected communications.” Id. (citations omitted).

*4 Plaintiffs argue that the decision in Bilzerian has been applied in the context of FLSA actions such as the present one. (Pls.’ Br. at 9.) Plaintiffs cite a litany of case law in which courts around the country have concluded that a good faith affirmative defense constitutes a waiver of the attorney-client privilege in FLSA actions. (Id. at pp. 9-11.)[3] However, several courts have rejected the Second Circuit's formulation of waiver as set forth in Bilzerian and its progeny, instead utilizing the waiver standard set forth by the Third Circuit in Rhone-Poulenc Rohrer. See, e.g., In re Schlumberger Tech. Corp., 818 F. App'x 304, 306-07 (5th Cir. 2020)(where defendant-employer asserted affirmative defense that it “made good-faith efforts to comply with the FLSA” and “relied in good faith ‘on applicable law, administrative regulations, orders, interpretations and/or administrative practice or policy enforcement[,]’ ” Fifth Circuit concluded that defendant did not waive attorney-client privilege because defendant “did not claim that counsel advised it that its decisions complied with the FLSA” and “its answer did not allude to advice of counsel”); McKee v. PetSmart, Inc., 71 F. Supp. 3d 439, 442 (D. Del. 2014)(defendant's assertion of good faith affirmative defense in FLSA action did not constitute “at issue” waiver of the attorney-client privilege because defendant had not “relied on privileged communications or testimony in support of its defense[,]” noting that even if party puts state of mind at issue, it does not waive attorney-client privilege unless it relies on privileged communications in support of its position); see also United States ex rel. Derrick v. Roche Diagnostics Corp., Civil No. 14-4601, 2019 WL 1789883, at *4 (N.D. Ill. Apr. 24, 2019) (adopting waiver doctrine of Rhone-Poulenc Rohrer and finding no waiver of attorney-client privilege even though defendant asserted good faith affirmative defense and produced documents demonstrating that defendant sought advice of counsel, where defendant “represents it does not intend to” rely on “the substance of its communication with counsel in mounting its defense,” and court found that it “must and will take [defendant] at its word”); N. River Ins. Co. v. Philadelphia Reinsurance Corp., 797 F. Supp. 363, 370 (D.N.J. 1992) (where defendant represented that it had “no intention to prove its case in any way by reliance on any attorney-client communication, whether produced or withheld from discovery[,]” defendant was not “using the attorney-client privilege as a ‘sword and shield’ through selective disclosure of privileged documents” and did not place advice of counsel or contents of any privileged communication in issue).[4] The Third Circuit's construction of waiver articulated in Rhone-Poulenc Rohrer is more narrow than the Second Circuit's “at issue” waiver doctrine, a distinction which has been noted by other courts. See Hicks v. T.L. Cannon Mgmt. Corp., Civil No. 13-6455, 2015 WL 5167225, at *5 (W.D.N.Y. Sept. 3, 2015)(standard set forth in Rhone–Poulenc Rohrer “differs materially from the Second Circuit precedent that applies to this case”); McKee, 71 F. Supp. 3d at 443 (“[T]he court cannot credit the unpublished decisions from the Southern District of New York cited by plaintiffs over binding precedent from the Third Circuit ... [.]”). This Court is bound by the construction of waiver articulated by the Third Circuit in Rhone-Poulenc Rohrer and finds that a defendant in an FLSA action does not waive its attorney-client privilege by asserting as an affirmative defense that it acted in good faith.[5]

*5 The Third Circuit's view of waiver is consistent with the “subject's leading treatises” on the issue. In re Itron, Inc., 883 F.3d 553, 560 (5th Cir. 2018). As quoted by the Fifth Circuit in Itron, the New Wigmore provides that “ ‘[t]he overwhelming majority of courts ... find [ ] waiver only when ... it is clear that the litigant's argument is that [it] w[as] relying on privileged advice from attorneys[.]’ ” Id. (quoting 2 The New Wigmore: A Treatise on Evidence § 6.12.4(b)(1) (3d ed. 2017)). As the Fifth Circuit also noted, Wright and Miller concur with The New Wigmore. Id. According to Wright and Miller, “some courts have carried this waiver concept beyond the situation in which the privilege–holder affirmatively uses privileged materials to support a claim or defense, and also applied it when the privilege–holder affirmatively uses privileged material to support a claim or defense, and also applied it when the privilege–holder raises certain legal or factual issues.” 8 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2016.6 (3d ed. updated Apr. 2017). These cases, Wright and Miller state, “do not fit within any sensible concept of waiver[.]” Id.[6] The Third Circuit in Rhone-Poulenc Rohrer similarly noted that cases that “extended the finding of a waiver of the privilege to cases in which the client's state of mind may be in issue in the litigation” are of “dubious validity.” Rhone-Poulenc Rohrer, 32 F.3d at 864.

Applying the “at issue” waiver standard applicable in the Third Circuit, the Court finds that Defendant did not place the advice of counsel in issue and therefore did not effect an implied waiver of the attorney-client privilege. Although Defendant argues that it classified CSMs as exempt in good faith and admitted that it consulted with counsel in making its classification decision, Defendant has explicitly represented that it is not relying upon the advice of counsel in proving any of its affirmative defenses. (Def.’s Br. at p. 2)(“BAYADA has consistently made clear it does not and will not claim an ‘advice of counsel’ defense, either in discovery or at trial, and has instead asserted the attorney-client privilege throughout this litigation to protect its communications with its counsel ... [.]”) Although attorney-client communications may be relevant to Defendant's affirmative defenses, relevance is not the standard for an “at issue” waiver in the Third Circuit, and Plaintiffs do not establish that there has been an “at issue” as defined in the Third Circuit. To the extent Defendant is able, it may attempt to establish its affirmative defenses through non-privileged communications and actions.

A fine line exists between Defendant's position that it had a good faith belief in the lawfulness of its classification decision, and the factual basis of that belief including consultation with counsel. Defendant has not further articulated the factual basis for its good faith affirmative defenses, and it is unclear how Defendant will support such defenses at trial without reference to advice of counsel – particularly in light of its response to Interrogatory #18, wherein Defendant indicated that it “has determined that its CSMs are exempt employees under the FLSA through consultation with in-house and outside counsel” and identified no other individuals who were responsible for such decision. (Pls.’ Br. at p. 3.) The Court nonetheless accepts Defendant's representation that it will not rely upon advice of counsel in support of its affirmative defenses. The Court will therefore deny Plaintiffs’ motion to compel, without prejudice to Plaintiffs’ right to file an appropriate motion if Defendant later attempts to advance the advice of counsel as a basis for its good faith defenses.[7]

Consequently, for the reasons set forth above and for good cause shown:

IT IS on this 27th day of May 2021,

ORDERED that Plaintiffs’ motion [D.I. 134] to compel Defendant to provide Rule 30(b)(6) deposition discovery that was withheld on the basis of attorney-client privilege and for sanctions shall be, and is hereby, DENIED WITHOUT PREJUDICE.