Edison, No. 86 C 0236, 1987 WL 13595, at *1 (N.D. Ill. July 8, 1987), aff'd in part and rev'd on
other grounds, 119 F.R.D. 394 (N.D. Ill. 1988) (“[flew charges result in law suits . . [so] the fact
that the EEOC had notified defendant of a charge and was investigating it did not carry with it a
strong likelihood of litigation”). However, unlike the defendant in Commonwealth Edison,
Staffing Network prepared the statements and notes with legal assistance and instruction, which
suggests that it did expect litigation to result. Compare Commonwealth Edison, 1987 WL 13595,
at *2 (no evidence that defendant expected litigation to result from EEOC charge because it
conducted investigation on its own without consulting an attorney).

The EEOC also claims that defendant has failed to show that the primary motivating
purpose behind the creation of the interview notes and statements was to aid in future litigation.
Pl. Reply, p. 5. According to the EEOC, the documents were created in the ordinary course of
business, as evidenced by defendant’s sexual harassment policy. That policy states that
defendant will handle complaints of harassment “in a timely and confidential manner” which, the
EEOC says, can only be accomplished by conducting an investigation. Pl. Reply, p. 5. But this
is mere speculation on the EEOC’s part, and there is no evidence that defendant routinely
investigates EEOC charges with the assistance of legal counsel. The EEOC has not presented
any basis for disputing defendant’s representation that the nonparty statements were prepared in
anticipation of litigation — that is, in response to Stuker’s EEOC charge and any private lawsuit
that could follow. See, e.g., Kennedy v. Fritsch, No. 90 C 5446, 1991 WL 277624, at *3 (N.D.
Ill. Dec, 19, 1991) (“[a]t the time of its creation, the report’s purpose was to help [defendant]

evaluate its response to the EEOC lawsuit and prepare for an expected private suit by plaintiffs”).



contrary because as the Kemezy court stated, Zazu Designs merely raises the possibility that a
defendant’s net worth may be irrelevant, and the majority of courts addressing this issue have
reached the opposite conclusion. And given the broad discovery contemplated by Rule 26, the
court cannot say that defendant’s financial information is irrelevant in this case.’ See Scranton
Gillette Communications, Inc. v. Dannhausen, No. 96 C 8353, 1998 WL 566668, at *1 (N.D. II.
Aug. 26, 1998) (“[t]he general purpose of the Federal Rules of Civil Procedure is to promote
liberal discovery in an effort to narrow the issues for trial and to prevent unfair surprise”); Hahn
v. Village of Downers Grove, No. 98 C 7281, 1999 WL 350861, at *4 (N.D. Ill. May 26, 1999)
(“[bJecause the Federal Rules contemplate liberal discovery, ‘relevancy’ for Rule 26 purposes is
extremely broad”).

Defendant also argues, again without any citation, that the EEOC’s request is “premature
unless Staffing Network claims to be unable to comply with any caps for damages that might be
assigned.” Def. Mem., p. 6. Given defendant’s lack of any supporting authority for this
argument, the Court sees no basis for allowing defendant to delay the production of its financial
records. Accordingly, defendant is ordered to produce the documents sought in Request Nos. 23
and 24.

Cc. List of Terminated Employees

The EEOC seeks a list of all employees who were discharged from Staffing Network

between January 1, 1999 and December 31, 2000, and the reason(s) they were discharged.

Defendant objects that this information invades the privacy of the former employees, and argues,

‘ Defendant does not argue that it will suffer harm due to the confidential nature of

the documents.


803, 810 (7" Cir. 2001) (plaintiff “waived . . . claim by failing to press it before the district
court”).

In sum, the documents defendant withheld from its response to Request No. 7 are
privileged and defendant did not waive that privilege either by delaying its production of a
privilege log or by putting the documents at issue in the case. The EEOC’s motion to compel the
production of these documents is therefore denied.

The EEOC raises one additional argument with respect to Request No. 7; it claims that
even if the documents are privileged, it is entitled to the underlying facts contained in those
documents. In that regard, the EEOC now seeks to compel a response to Interrogatory No. 5,
which requests a list of witnesses with knowledge relating to the claims or defenses in the case
and a description of that knowledge. Pl. Reply, p. 7. 4. Because the EEOC raised this
alternative theory for the first time in its reply brief, the Court will give defendant an opportunity
to respond prior to ruling on this issue. Accordingly, defendant has until November 7, 2002 to
submit its response, and the EEOC will have until November 14, 2002 to submit its reply.

B. Financial Documents

Document Request Nos. 23 and 24 seek defendant’s financial statements and tax returns
from 1999 to the present. The EEOC argues that this information is relevant to determining an
appropriate award of punitive damages. Defendant objects, essentially without citation, that
evidence of its financial worth “will be inadmissible as irrelevant because any punitive damages
which may be considered will be capped.” Def. Mem., p. 6. A Wisconsin court recently rejected
such an argument in E.E.0.C. v. Klockner H & K Machines, Inc., 168 F.R.D. 233 (E.D. Wis.

1996). In Klockner, the parties agreed that “as a general rule, a defendant’s financial status is



On these facts, the Court cannot say that the documents were created in the ordinary course of
business and, thus, the privilege applies.

The EEOC next claims that defendant has waived any privilege by putting the requested
statements and notes at issue in the litigation. Specifically, defendant raised the following
affirmative defense in its answer to the complaint: “This Defendant exercised reasonable care to
prevent and correct promptly any harassment and Roseann Stuker and the other unnamed class
members unreasonably failed to take advantage of any preventative or corrective opportunities
provided by this Defendant or to otherwise avoid harm.” Pl. Mem., pp. 1, 6. Defendant claims
that the affirmative defense is “premised on Staffing Network’s sexual harassment policy not any
investigation that occurred after Ms. Stuker made her written claim on May 1, 2000.” Def.
Mem., p. 4.

Based on defendant’s confirmation that it “is not relying on any investigation as an
affirmative defense,” Jd. at 5, the Court agrees that defendant has not put that investigation at
issue and need not produce otherwise privileged documents relating to it. Compare Jones v.
Scientific Colors, Inc., Nos. 99 C 1959 and 00 C 0171, 2001 WL 845650, at *1 (N.D. Ill. July 26,
2001) (defendant impliedly waived privilege by asserting affirmative defense that it exercised
teasonable care to prevent and promptly correct harassing behavior “as evidenced by its own
undercover investigation of the workplace”). However, to be clear, defendant will not be
permitted in the future to rely on its investigation as evidence of its affirmative efforts to prevent
or correct any alleged harassment, or of the class members’ unreasonable failure to utilize

defendant’s preventative or corrective opportunities. See Berry v. Delta Airlines, Inc., 260 F.3d


Point Int'l, Inc. v. Charlene Products, Inc., 932 F. Supp. 220, 223 (N.D. Ill. 1996) (excluding
evidence of defendant’s financial situation as irrelevant to punitive damages claim under federal
law)’; Yund v. Covington Foods, Inc., 193 F.R.D. 582, 586-89 (S.D. Ind. 2000) (finding that Zazu
Designs is controlling precedent and denying motion to compel disclosure of corporate
defendant’s financial information on that basis).

More recently, the court in Jones v. Scientific Colors, Inc., Nos. 99 C 1959 and 00 C
0171, 2001 WL 902778 (N.D. Ill. July 3, 2001), concluded that the language in Zazu Designs
regarding the relevance of a corporate defendant’s net worth is dictum and, thus, not controlling
authority on the issue. Jd. at *1. See also Koblosh v. Adelsick, No. 95 C 5209, 1997 WL 311956,
at *2 (N.D. IIL. June 5, 1997) (“evidence of a defendant’s financial position is admissible in
federal-question cases in which a plaintiff has introduced evidence that would support an award
of punitive damages”). And in Kemezy v. Peters, 79 F.3d 33 (7" Cir. 1996), the Seventh Circuit
stated that there was merely a “suggestion in Zazu Designs that [a corporate] defendant’s net
worth is irrelevant.’? Jd. at 36 (emphasis added). The court also noted that “plaintiffs who are
seeking punitive damages often present evidence of the defendant’s wealth,” though they are not
required to do so. Id. at 35-37.

The Court agrees that a corporate defendant’s financial information may be relevant for
purposes of Rule 26 regardless of the fact that punitive damages are capped under Title VIL.

Indeed, juries are not permitted to know that the damages are capped. Zazu Designs is not to the

2 Pivot Point was decided by Judge Easterbrook of the Seventh Circuit, sitting by
designation; he is also the author of the majority decision in Zazu Designs.
3 The defendant in Kemezy was a natural person and not a corporation.
8


‘Minute Order Form (06/97)

United States District Court, Northern District of IHinois

"ae fale ee David H. Coar Sg Jae Other Nan R Nolan
CASE NUMBER 02 C 1591 DATE 10/31/2002
CASE EEOC vs. Staffing Network
TITLE

{In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.)

MOTION:
DOCKET ENTRY:
qd) o Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due ___.
(3) a Answer brief to motion due___. Reply to answer briefdue____.
(4) QO Ruling/Hearingon__setfor___—at
(5) oO Status hearing[held/continued to} [set for/re-set for] on setfor at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on___setfor__——saat_.
(7) Qo Trial[set for/re-set for]on__ at
(8) Oo [Bench/Jury trial] [Hearing] held/continuedto___at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) CLocal Rule 41.1 COFRCP41(a)\(1) OFRCP41(a)(2).
(0) [Other docket entry] Enter Memorandum Opinion and Order: EEOC’s Motion to Compel

Defendant Staffing Network to Answer Plaintiff's Second Set of Interrogatories and First Requests for
Production of Documents [12-1] is granted in part and denied in part.

(il) @ [For further detail see order attached to the original minute order,]
No notices required, advised in open court.
No notices required. cepa fn
VY | Notices mailed by judge's staff. Ov.04
Notified counsel by telephone. )4 2002 ;
Docketing to mail notices. :
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convoom SFE hd 1 ACH 20 delist
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< SS Dateline received in ; -
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(S.D. Ind, Aug. 13, 2002) (plaintiff entitled to personnel files of individuals employed in same
position during relevant time period); Wright v. Hollywood Casinos, No. 01 C 4704, 2002 WL
989457, at *2 (N.D. Ill. May 14, 2002) (same); Spina v. Forest Preserve of Cook County, No. 98
C 1393, 2001 WL 1491524, at *3 (N.D. Il. Nov. 23, 2001) (court ordered defendant to produce
personnel files of individual defendants and of females who, like plaintiff, complained of sexual
harassment and/or discrimination). However, this is of no consequence to the present motion.
In this case, the EEOC is not seeking to compel the production of any personnel files.
Rather, it seeks a list of the names and bases for discharge of all employees terminated by
defendant between January 1, 1999 and December 31, 2000. The Court does not see how the
EEOC will be able to determine whether an individual was discharged “without warning,” much
less whether this constitutes defendant’s “standard practice,” simply by obtaining this
information. However, defendant does not challenge the interrogatory on the grounds of
relevance. Moreover, “[t]he federal rules provide for liberal discovery, particularly in Title VII
cases,” Orlowski v. Dominick's Finer Foods, Inc., No. 95 C 1666, 1998 WL 26171 (N.D. Ill. Jan.
16, 1998), and the EEOC is not seeking any information generally believed to implicate privacy
concems. See Davis v. Precoat Metals, a Division of Sequa Corp., No. 01 C 5689, 2002 WL
1759828, at *4 (N.D. Ill. July 29, 2002) (finding the following personnel information
confidential and subject to redaction: “unlisted addresses and telephone numbers, social security
numbers, marital status, medical and health insurance information, criminal history, and credit
information (e.g ., request for garnishment of wages)”); Sykes v. Target Stores, No. 00.C 5112,

2002 WL 554505, at *3 n.5 (N.D. Il. Apr. 15, 2002). Defendant has not presented any basis for

1



without citation to any authority, that the EEOC’s request is “just another way of obtaining what
is contained in an employee’s personnel record that would otherwise be protected from
production.” Def. Mem., pp. 6-7. The EEOC claims that the information is relevant to the issue
of punitive damages; that is, whether defendant engaged in good faith efforts to implement an
anti-discrimination policy. Pl. Mem., p. 8. According to the EEOC, defendant discharged two
class members, Mona Gamer and Sheri Sprinkle, allegedly for poor performance. Neither
woman’s file contained any documentation of poor performance, but both had reportedly
complained about sexual harassment prior to being discharged. If these terminations were
retaliatory, the EEOC says, then they are relevant to establishing that defendant did not make
good faith efforts to implement an anti-discrimination policy. The identity of other discharged
employees “will allow EEOC to determine if Staffing Network’s standard practice was to
terminate employees for poor performance without warning or whether Ms. Garner and Ms.
Sprinkle were treated differently because they informed Staffing Network of sexual harassment.”
Id. at 8-9.

The Court agrees that the production of personnel files implicates privacy concerns. See,
e.g., Gehring v. Case Corp., 43 F.3d 340, 342 (7" Cir. 1994) (turning over personnel files “would
invade the privacy of the other employees”); Ellman v. Hentges, No. 99 C 50269, 2001 WL
649508, at *1 (N.D. Ill. June 8, 2001) (finding that “likelihood of discovering relevant
information in . . . personnel files [was] outweighed by the employees’ privacy interests”);
Graham v. Casey's General Stores, 206 F.R.D. 251, 257 (S.D. Ind. 2002). The Court also agrees
that privacy concerns notwithstanding, personnel files may be discoverable under certain

circumstances. See, e.g., Tomanovich v. Glen, No. IP 01-1247 CY/K, 2002 WL 1858795, at *6-7

10



relevant when a claim for punitive damages has been made.” The defendant argued that this
general proposition is inapplicable where there is a cap on punitive damages, but the court
disagreed. Jd. at 235. The court found it significant that a jury cannot be informed of the cap,
and noted that the defendant failed to cite any authority for its position. Id. at 235-36. See also
U.S. v. Matusoff Rental Co., 204 F.R.D. 396, 399 (S.D. Ohio 2001) (“{t]he overwhelming
majority of federal courts . . . have concluded that a plaintiff seeking punitive damages is entitled
to discover information relating to the defendant’s financial condition in advance of trial and
without making a prima facie showing that he is entitled to recover such damages”); Roberts v.
Shawnee Mission Ford, Inc., No. 01-2113-CM, 2002 WL 1162438, at *4 (D. Kan. Feb. 7, 2002)
(“[i]f a plaintiff has alleged sufficient facts to claim punitive damages against a defendant,
information of the defendant’s net worth or financial condition is relevant because it can be
considered in determining punitive damages”) (internal quotations omitted); Wauchop v.
Domino’s Pizza, Inc., 138 F.R.D. 539, 550 (N.D. Ind. 1991).

Defendant acknowledges the decision in Klockner but argues, without citation, that it has
a good faith basis for disagreeing with it. Def. Mem., p. 7. This Court is aware of several
additional cases not cited by either party which merit discussion in this regard. In Zazu Designs
v. L'Oreal, S.A., 979 F.2d 499 (7" Cir. 1992), the Seventh Circuit reversed an award of punitive
damages because the district court improperly calculated the amount based solely on the
defendant’s net worth without addressing the issues of compensation and deterrence. Jd. at 508.
In discussing this conclusion, the court stated that it is inappropriate to consider a corporate
defendant’s wealth or net worth in assessing punitive damages. Jd. at 508-09. Several courts

have relied on this language to exclude evidence of a defendant’s financial status. See, e.g., Pivot



only that an inadequate privilege log cannot be the basis for a claim of privilege, not that a delay
in providing the log constitutes a waiver of the right to assert a privilege. See Christman v.
Brauvin Realty Advisors, Inc., 185 F.R.D. 251, 257-58 (N.D. Ill. 1999); ConAgra Inc. v.
Arkwright Mutual Ins. Co., 32 F. Supp. 2d 1015, 1018 (N.D. Ill. 1999).
The party claiming privilege has the burden of establishing that the privilege applies. See

In re Grand Jury Proceedings, 220 F.3d 568, 571 (7" Cir. 2000); Ocean Atlantic Development
Corp. v. Willow Tree Farm, L.L.C., No. 01 C 5014, 2002 WL 1968581, at *2 (N.D. Ill. Aug. 23,
2002). As noted, defendant claims that the documents at issue are protected by the work product
doctrine because they were prepared in anticipation of litigation; that is, “the material [came] into
existence because of the prospect of litigation or some articulable claim [was] likely to lead to
litigation.” In re Bank One Securities Litigation, First Chicago Shareholder Claims, 209 F.R.D.
418, 425 (N.D. Ill. 2002). In support of its claim of privilege, defendant states as follows:

[A]s for the statements and interview notes mentioned in out [sic]

response to your request for production #7, the interview notes

were taken by the attorney representing Staffing Network at the

time. The statements of [Iris] Rivera, [Chris] Thormo, [Janine]

Hanigan, and [MaryAnn] Arci, were taken by [Rob] Rutter and

were transcribed by Bobbie Larson [defendant’s Human Resources

Administrator].! The statements were taken at the direction of

Staffing Network’s attorney on May 10, 2000, after Ms. Stuker

filed her EEOC claim. Each statement is signed.

The EEOC argues that the mere fact that an EEOC claim has been filed is not a sufficient

threat of litigation for purposes of the work product doctrine. See E.E.0.C. v. Commonwealth

! For reasons unknown to this Court, defendant’s letter does not identify the
statements of two other witnesses, Crystal Saporito and Ray Castro, as privileged documents.
However, the Court assumes that defendant is asserting the privilege with respect to these
statements as well. See Pl. Reply, p. 1.



admissible evidence.” Fed.R.Civ.P. 26(b){1). “The test for relevance in the discovery area is an
extremely broad one.” AM Int’l Inc, v. Eastman Kodak Co., 100 F.R.D. 255, 257 (C.D. Ill.
1981). However, a court may limit discovery if, for example, it determines that it is
unreasonably cumulative or duplicative, obtainable from another source that is more convenient,
less burdensome, or less expensive, or the burden or expense of the proposed discovery
outweighs its likely benefit. Fed.R.Civ.P. 26(b)(2); Patterson v. Avery Dennison Corp., 281 F.3d
676, 681 (7 Cir. 2002).

In its motion, the EEOC seeks the following information: (1) documents relating to any
investigation defendant conducted as a result of Stuker’s EEOC charge (Request to Produce No.
7); (2) defendant’s quarterly and annual financial statements and federal income tax returns from
1999 to the present (Request Nos. 23 and 24); and (3) the identity of all employees terminated by
defendant between January 1, 1999 and December 31, 2000, and the reason(s) for the
terminations (Second Set of Interrogatories No. 14). The Court addresses each in turn.

A. Investigation Documents

In its response to document Request No. 7, defendant produced statements from two class
members, Sheri Sprinkle and Cheri Bacon, but withheld statements and/or interview notes from
seven other nonparty witnesses on the grounds of privilege. According to defendant, the
additional statements were prepared in anticipation of litigation and “were taken at the direct of
Staffing Network’s attorney.” Def. Mem., p. 5. The EEOC first argues that defendant waived
any claim of privilege by failing to provide a privilege log. Pl. Mem., p. 4. It is true that
defendant delayed some three months until October 22, 2002 in providing the privilege log

requested by the EEOC on July 24, 2002. Nevertheless, the cases cited by the EEOC establish


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
EQUAL EMPLOYMENT OPPORTUNITY, +)
COMMISSION, )
Plaintiff, }
vs. ) Case No. 02 C 1591
STAFFING NETWORK, L.L.C., }
Defendant. }

Gp. )

¢ zg”
Mi DUM O) ON AND ORDER
NAN R. NOLAN, Magistrate Judge:

Plaintiff Equal Employment Opportunity Commission (“EEOC”) filed a complaint
against defendant Staffing Network, L.L.C. alleging that the company subjected Roseann Stuker
and a class of women to sexual harassment, which resulted in their being constructively
discharged, and retaliated against Stuker for filing a complaint with the EEOC, all in violation of
Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000¢e et seq., as amended. Before the
Court is the EEOC’s Motion to Compel Defendant Staffing Network to Answer Plaintiff's
Second Set of Interrogatories and First Requests for Production of Documents. For the reasons
set forth below, the motion is granted in part and denied in part.

DISCUSSION
Federal Rule of Civil Procedure 26(b)(1) permits discovery into “any matter, not

privileged, that is relevant to the claim or defense of any party.” Information is relevant for

purposes of Rule 26 “if the discovery appears reasonably calculated to lead to the discovery of



withholding the information requested in Interrogatory No. 14, and the EEOC’s motion to
compel this information is granted.
CONCLUSION
For the reasons stated above, the EEOC’s motion to compel is granted in part and denied
in part. Defendant is ordered to produce documents responsive to Request Nos. 23 and 24, and
to respond to Interrogatory No. 14 by November 11, 2002. In addition, defendant has until
November 7, 2002 to respond to the EEOC’s motion to compel a response to Interrogatory No. 5.

The EEOC will then have until November 14, 2002 to reply.

NAN R. NOLAN
United States Magistrate Judge

Dated: oct 31 rd

12