Labor & Employment Law Daily Wrap Up, EVIDENCE, DISCOVERY—D. Ariz.: Advice-of-counsel defense leads to narrow waiver of attorney-client privilege in wage case, (May 7, 2026)

By Todd Harrison, J.D.

“…out of fundamental fairness, Plaintiffs are entitled to discovery into communications from both advice and trial counsel.”

An advice-of-counsel defense asserted by a transportation company related to a law firm’s 2021 advice on the Motor Carrier Act’s exemption to the FLSA’s overtime requirements affected a narrow waiver of the attorney-client privilege with the company’s current and former trial counsel, ruled a federal district court in Arizona. Absent the company’s withdrawal of the defense, the court found that fairness dictated that the plaintiffs be allowed to seek limited discovery to test whether the company did, in good faith, believe that their acts complied with the FLSA. The court’s finding was limited to communications and documentation regarding the MCA exemption. In addition, although the court found the plaintiffs’ subpoena to be slightly overbroad, it did not warrant the imposition of sanctions (McGhee v. J.E.T. Limousines & Transportation LLC, No. CV-24-03394-PHX-SMB (D. Ariz. May 6, 2026)).

On November 29, 2024, the plaintiffs initiated this class-action suit. They alleged, among other things, that a transportation company violated the FLSA and Arizona wage-and-hour laws by failing to pay overtime to non-exempt putative class members. The plaintiffs averred that the violations have been taking place since at least 2021.

Willful? Specifically, the plaintiffs alleged that the company’s failure to pay overtime was willful, entitling them to liquidated damages and a three-year statute of limitations. After some back and forth, the company admitted to relying upon an advice-of-counsel defense on the question of willfulness.

Subpoena. Following the company’s admission, the plaintiffs served a subpoena upon the company’s former trial counsel containing several commands for production. Former trial counsel objected to the subpoena in its entirety. In addition, the company filed a supplemental response to the plaintiffs’ request for admission.

In the supplemental response, the company provided a qualified admission whereby it admitted to asserting an advice-of-counsel defense that was limited to the advice it had received from opinion counsel in 2021.

Upon receiving former trial counsel’s objection and the company’s supplemental response, the plaintiffs filed this discovery motion, which the court here addressed.

Waiver. First, the court considered whether the company, by asserting an advice-of-counsel defense, had implicitly waived its attorney-client privilege. Because the company was affirmatively relying upon the advice-of-counsel defense in this action, it had, in fact, asserted the attorney-client privilege as the result of an affirmative act, observed the court.

As to whether the company had placed privileged information at issue in this action, the court noted that the company had acknowledged that they intended to assert the advice-of-counsel defense as to legal advice received on the MCA exemption to overtime wages. By asserting this defense to rebut a finding of willfulness, the company placed their knowledge of whether their employee classification complied with the MCA “at issue.” As such, any communication between the company and its counsel that formed the company’s belief that it was, in good faith, following the FLSA, has been placed at issue, explained the court.

Regarding whether allowing the privilege would deny the opposing party access to information vital to its defense, the court noted that by affirmatively asserting an advice-of-counsel defense and placing attorney-client communications at issue, it appeared clear to the court that allowing the attorney-client privilege to remain would prevent the plaintiffs from accessing vital information. Accordingly, the court found the company had waived the attorney-client privilege as to communications regarding the classification of employees under the MCA exemption to overtime wages.

Temporal scope. Next, the court addressed the temporal scope of the waiver. The crux of this issue was whether an implied waiver of the attorney-client privilege due to the advice rendered by opinion counsel necessarily extended to trial counsel, explained the court. Here, the court joined with others in the district as well as those throughout the Ninth Circuit that have found a temporal limitation to be inappropriate.

Specifically, the court found that a temporal limitation was inappropriate in this case because, though the company asserted that it relied on the advice of its opinion counsel in 2021 when it classified certain putative class members as exempt from FLSA overtime wages pursuant to the MCA, there existed the possibility that its former trial counsel either rendered advice that confirmed, contradicted, updated, or modified the opinions of opinion counsel.

Based on this possibility, and given the company’s change of policy in December 2025 regarding payment of overtime wages to certain categories of drivers—a change occurring only after commencement of this action—it appeared only fair that the plaintiffs may seek discovery into whether either counsel provided any opinion on the MCA exemption that might have prompted such a change, said the court.

Such discovery, continued the court, should not be limited to advice rendered prior to the commencement of this action because the alleged violation of the FLSA continued after this case had begun. Accordingly, the court refused to limit the waiver to advice rendered before this action commenced.

Subject-matter limitations. Turning to the issue of how broad the waiver of the attorney-client privilege should be, the court rejected the plaintiffs’ argument that the waiver should extend to all communications, documents, and attorney work product bearing on all alleged violations.

In this instance, the court observed that the company had only placed its reliance on the advice of counsel as to the MCA exemption to the FLSA’s overtime requirement at issue. Because its reliance on the advice of counsel was solely related to the MCA exemption, “fairness only requires that the waiver of the attorney-client privilege relate to that subject matter,” said the court. As such, the company and its previous trial counsel shall only be required to disclose communications and documentation that confirm, contradict, qualify, update, or modify the opinions of opinion counsel, explained the court, noting that its holding includes both disclosed and undisclosed communications.

Sanctions. Finally, the court addressed former trial counsel’s requests for sanctions and for denial, or, in the alternative, reduction of the subpoena’s scope. The court found that the plaintiffs’ actions in issuing the subpoena did not warrant sanctions under Rule 45(d)(1).

Although the court found the instant subpoena to be slightly overbroad, its overbreadth was not so severe as to require the imposition of sanctions, nor was it issued in bad faith. However, the court did agree that the subpoena should be narrowed, limiting the subpoena’s commands for production to communications and documents that previous trial counsel has not yet provided to the company’s current trial counsel, including both disclosed and undisclosed communications and documents.

The case is No. CV-24-03394-PHX-SMB.

Judge: Boyle, J.

Attorneys: Daniel Lee Bonnett (Martin & Bonnett) for William McGhee. Alison Pulaski Carter (Fennemore) for J.E.T. Limousines & Transportation LLC.

Companies: J.E.T. Limousines & Transportation LLC

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