Guarding Against Defamation and Other Tort Liability in Internal Corporate Investigations

Lesley Brovner & Mark Peters
May 13, 2026

Internal corporate investigations can expose corporations and their counsel to potential tort liability, particularly claims for defamation and related causes of action. Individuals who are criticized in investigation reports or referenced in regulatory filings may allege libel, slander, interference with economic interests, or emotional distress. Because these claims often arise after an investigation concludes, companies should structure investigations and reports carefully to reduce exposure. Courts recognize certain privileges that protect investigative communications, but those protections have limits. As a result, organizations conducting investigations should focus on maintaining objectivity, protecting confidentiality, and ensuring that investigative findings are presented in a balanced and accurate manner.

Understanding Defamation Risks in Corporate Investigations

Defamation claims may arise from statements made during the investigative process, within investigation reports, or in related public disclosures such as regulatory filings. When an investigation attributes misconduct or wrongdoing to specific individuals, those individuals may argue that the statements harmed their reputation or professional standing. Although employers and counsel may rely on qualified privilege for statements made in good faith during workplace investigations, that protection can be lost if statements are made with malice or outside the legitimate scope of the investigation. Because of this risk, companies must take care to ensure investigative communications remain focused on legitimate corporate interests and are conducted in a professional, neutral manner.

Steps to Reduce Liability Exposure During Investigations

Organizations can reduce tort exposure by adopting several best practices when preparing investigative documents and reports.

Use Generic References Where Appropriate

One technique for reducing defamation risk is using neutral identifiers rather than naming individuals directly in documents circulated beyond the core investigative team. Referring to individuals as “Employee 1” or “Supervisor A,” for example, can reduce the likelihood that an investigation report will become the basis of a defamation claim. Although generic language does not guarantee protection, it may reduce the chances that a person can be readily identified by readers outside the investigation.

Qualify Statements When Evidence Conflicts

Investigative reports should avoid presenting contested allegations as definitive conclusions when the evidence is uncertain. When testimony conflicts, reports should clearly explain the competing accounts rather than asserting that one version of events is correct without sufficient evidence. Neutral language such as noting that different witnesses provided inconsistent accounts can help demonstrate fairness and reduce litigation risk.

Avoid Informal Summaries for Third Parties

Companies should avoid summarizing investigative findings for the media, external stakeholders, or other third parties outside the formal reporting process. Instead, organizations should allow the final report to speak for itself. Public communications should typically be limited to describing the nature of the investigation and any corrective actions taken.

Verify Accuracy Throughout the Investigation

Accuracy remains one of the strongest protections against defamation claims. Investigative teams should confirm critical statements with witnesses and review evidence carefully before including assertions in a final report. Although truth is a defense to defamation, proving it can require extensive litigation, making it far preferable to avoid inaccuracies at the outset.

Demonstrate Good Faith in the Investigative Process

Employers are often protected by qualified privilege when they make statements in good faith while conducting workplace investigations. This privilege applies when communications are reasonably related to legitimate business purposes and occur within the employment relationship. Maintaining professional procedures, documenting investigative steps, and limiting communications to those with a legitimate need to know can help preserve this protection.

Privilege Protections in Court-Ordered Investigations

Investigations conducted pursuant to court orders or regulatory settlements may benefit from additional legal protections. Courts recognize both absolute and qualified privileges in certain judicial contexts.

Absolute Privilege in Judicial Proceedings

Statements made in connection with judicial proceedings are often protected by absolute privilege, provided they are reasonably related to the subject matter of the proceeding. This protection typically covers pleadings, affidavits, and other documents filed with the court. Reports submitted to the court as part of a court-ordered investigation may also fall within this privilege.

Court-Ordered Statements and Investigative Reports

Statements made pursuant to court order may also receive absolute protection. For example, when a court requires an investigation and directs that a report be filed with regulators or distributed to specific parties, those communications may fall within the privilege. In negotiating consent decrees or settlement agreements with regulators, counsel may seek provisions requiring the filing or distribution of investigative reports to strengthen privilege protections.

Quasi-Judicial Immunity for Official Functions

Certain officials performing duties closely associated with the judicial process may benefit from quasi-judicial immunity. Courts have extended this protection to individuals such as arbitrators, regulatory board members, and certain court-appointed investigators. While corporations themselves typically cannot claim this immunity, it may apply to court-appointed investigative counsel acting under a court’s authority.

Privilege Protections in Corporation-Initiated Investigations

Even when an investigation is initiated internally rather than by court order, certain privileges may still apply.

Attorney-Client Privilege in Internal Investigations

Under the principles established in Upjohn Co. v. United States, communications between corporate employees and corporate counsel may be protected when they are made confidentially for the purpose of obtaining legal advice. This protection extends to many communications gathered during internal investigations, including interview discussions and internal communications with counsel.

Statements Required by Law

In some circumstances, statements required by law may also receive privilege protection. When companies must make disclosures to regulators or other authorities pursuant to statutory requirements, those statements may be protected because the law compels their disclosure.

Statements to Government Officials

Communications with government officials during investigations may also be privileged in certain jurisdictions, particularly when made during official proceedings. However, the extent of the protection varies depending on the jurisdiction and the context in which the statements are made.

Practical Strategies for Protecting Against Tort Claims

The most effective protection against defamation and related tort claims starts with a carefully structured investigative process. Counsel should ensure the investigation remains within the scope of its authorization, uses neutral and objective language, and limits distribution of investigative materials to those with a legitimate interest. When investigations occur in connection with litigation or regulatory action, counsel should also evaluate whether court involvement or regulatory orders may strengthen privilege protections.

How Peters Brovner Helps Organizations Conduct Defensible Investigations

Internal investigations must balance thorough fact-finding with the need to protect individuals’ reputations and minimize litigation exposure. Peters Brovner advises corporations, boards, and compliance teams on conducting investigations that are accurate, fair, and legally defensible. Our attorneys help clients structure investigations, draft reports carefully, and manage communications in ways that reduce the risk of defamation and other tort claims.

Defamation and other tort claims can arise even after a well-intentioned investigation if investigative communications are not handled carefully. Peters Brovner works with corporations and compliance leaders to conduct investigations that are objective, defensible, and structured to minimize legal exposure. Contact Peters Brovner to discuss how our team can help guide your organization through sensitive internal investigations while protecting against potential liability.