The former acting general counsel and chief compliance officer at New York-based Mitsubishi Chemical Holdings America Inc. may proceed with her gender discrimination lawsuit against the company following a federal judge's recent ruling.

But Jennifer Fischman's tort claims of intentional infliction of emotional distress and negligent destruction of employment opportunity, as well as her state law claim of retaliation, were slashed from the suit by Judge Jesse Furman of the U.S. District Court for the Southern District of New York.

In denying Mitsubishi's motion to dismiss the sex discrimination claim, however, Furman rejected its argument that the 2018 complaint should be tossed because it uses alleged privileged and confidential information learned during the job in the pleading.

“Defendants' primary argument—that the case must be dismissed because Fischman relies in the Complaint, and is likely to rely in the future, on privileged or confidential information—fails for three independent reasons,” according to Furman's order. “First, Defendants waived any privilege with respect to the contents of the Complaint by failing to take immediate steps to remedy any misuse by Fischman. Second, the Complaint does not actually include any privileged or confidential information. And third, even if it did and Defendants had not waived the issue, dismissal would not be the appropriate remedy at this stage of the proceedings.”

Fischman accuses Mitsubishi of passing her over for the permanent role of GC and chief compliance officer in favor of a less qualified, younger and less experienced male attorney. The suit also alleges that Fischman was illegally fired after speaking out against wrongful discrimination against her and other female employees. Mitsubishi's current GC and president are also named defendants.

In his ruling, Furman noted that all but three of the statements at issue involved narratives of recent events, rather than communications, and thus are not subject to the attorney-client privilege.

“The three redactions that do involve communications recount informal conversations between employees about sexism in the company; those communications are not comments made for the purpose of obtaining or providing legal advice. Accordingly, none of the redacted information is actually protected by attorney-client privilege,” he wrote.

He continued: “Indeed, the argument that the Complaint includes privileged information is so weak that Defendants shift in their motion to dismiss to focus instead on the argument that the obligation to protect client confidences 'goes far beyond protecting communications that are subject to the attorney-client privilege.'”

In a statement emailed to Corporate Counsel, Mitsubishi, represented by Francis Giambalvo of the New York office of Gordon Rees Scully Mansukhani, said it continues to believe that Fischman's “improper reliance on confidential information learned as former in-house counsel justified pre-answer dismissal of the remaining causes of action for gender discrimination and retaliation.”

The company “remains confident that once the facts of this case are presented, it will be wholly vindicated in its position that the remaining allegations in the Complaint are meritless,” according to the statement.

Matthew Berman, who along with Sara Wyn Kane and Robert Valli Jr. of Valli Kane & Vagnini, is representing Fischman said they are “thrilled” that the gender discrimination claim is moving forward.

“There are not too many cases that discuss the use of privileged information” in-house, Berman said in an interview. “This judge really laid out good law: Only communications that are seeking or rendering legal advice are privileged. It clarifies something that all lawyers should know but [about which] there is very little case law.”

In addition to finding that the privilege was not applicable, Furman also ruled that even if Fischman's complaint did include privileged or confidential information, and defendants had not waived the issue, dismissal would be inappropriate at this stage of the proceedings.

“Here, Fischman alleges behavior that, if true (and the Court must assume that it is true at this stage of the litigation), could form the basis of meritorious litigation,” the judge wrote. “Thus, even if the allegations rely in part on improperly disclosed client information—or Fischman is likely to rely on such information to prove her case—it would be 'to the detriment of the justice system' to dismiss the Complaint.”