What Is a Clawback Agreement? FRE 502(d) Explained

The three subsections share a goal, cutting the cost and risk of privilege review in large productions, but operate on different machinery. Read the text closely. The words do a lot of work.

Rule 502(b) is the default safety net. Disclosure “does not operate as a waiver in a federal or state proceeding if” the disclosure is inadvertent, the holder took reasonable steps to prevent it, and the holder promptly took reasonable steps to rectify the error, including, if applicable, following Federal Rule of Civil Procedure 26(b)(5)(B). Three prongs, all of which the producing party has to satisfy. If your screening process can’t survive scrutiny, you don’t get the shield. The Advisory Committee called this the middle ground between strict-accountability and intent-only approaches.

Rule 502(d) is the court order. A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court, and that order also bars waiver in any other federal or state proceeding. Two clauses, both load-bearing. The court can enter the order by stipulation or on its own motion. And the protection travels: a 502(d) order entered in your federal case is enforceable in the state-court matter your adversary files three years later. The Advisory Committee Note frames the order as the mechanism by which courts authorize return of documents “irrespective of the care taken by the disclosing party.” That phrase will reappear in Section V.

Rule 502(e) is the bare party agreement. An agreement on the effect of disclosure in a federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order. That last clause is the trap. A 502(e) agreement is contractual. It binds A and B. It doesn’t bind C, the regulator, the future plaintiff, or the state court. The Advisory Committee was explicit: if parties want protection against non-parties from a finding of waiver by disclosure, the agreement must be made part of a court order. Rule 26(b)(5)(B) walks through clawback mechanics (notify, sequester, return), but procedure can’t help when a spoliation fight in a parallel proceeding puts the same documents on the table.

Without a 502(d) order, you’re stuck arguing 502(b). And 502(b) is a hard test to pass when the production is large and the screening was sloppy. Three prongs, every one of them litigated.

Prong one: was the disclosure inadvertent? Courts read this narrowly. Coburn Group, LLC v. Whitecap Advisors LLC, 640 F. Supp. 2d 1032, 1038 (N.D. Ill. 2009), treats inadvertence as “much simpler” than reasonable steps, asking whether the party intended a privileged or work-product protected document to be produced or whether the production was a mistake. That part isn’t usually where producing parties lose.

Prong two is. “Reasonable steps to prevent disclosure” gets unpacked through a five-factor analysis that the Advisory Committee Note traces to Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104 F.R.D. 103 (S.D.N.Y. 1985), and Hartford Fire Insurance Co. v. Garvey, 109 F.R.D. 323 (N.D. Cal. 1985): the reasonableness of precautions, the time taken to rectify, the scope of discovery, the extent of disclosure, and the overriding issue of fairness. Mt. Hawley Insurance Co. v. Felman Production, Inc. applied that framework and held the producing party hadn’t taken reasonable precautions. Mt. Hawley, 271 F.R.D. 125, 135 (S.D. W. Va. 2010). The lesson generalized fast. Rhoads Industries applied the analysis to an inadvertent production of over 800 privileged documents and found waiver as to documents not logged by the privilege-log deadline, preserving privilege only for the timely-logged subset. Rhoads Indus., 254 F.R.D. 216 (E.D. Pa. 2008). In Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483, at *6 (S.D. Ohio Aug. 28, 2012), the court found waiver as to 347 in-house counsel emails after concluding that the producing party had not taken reasonable precautions, the number of documents disclosed was significant, no privilege log accompanied the production, and the mitigation effort was thin.

Prong three is the rectification clock. The producing party has to move quickly under Rule 26(b)(5)(B), and courts look at how prompt is prompt. Two days is fine. Two months is not.

What actually counts as “reasonable steps”? The Advisory Committee Note, anticipating technology-assisted review by a decade: a party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken reasonable steps, depending on the circumstances. Analytical tools can satisfy reasonable steps. They don’t guarantee it. The record you build is what carries you through.

Here’s where careful drafting matters. A bare 502(d) order that just says “any inadvertent production is non-waiver” might not actually displace the 502(b) reasonableness inquiry. The cases are sharper on this than most practitioners realize.

The leading decision is Irth Solutions, LLC v. Windstream Communications LLC. The court surveyed three approaches to clawback agreements: a no-fault approach (return privileged documents on demand, full stop), a recklessness approach (clawback fails only if the production was completely reckless), and a default approach where Rule 502(b)’s reasonableness analysis applies unless the agreement displaces it. Irth Sols., No. 2:16-CV-219, 2017 WL 3276021, at *5 (S.D. Ohio Aug. 2, 2017). The court found Windstream’s review “completely reckless,” noting more than ten percent of the produced documents were privileged and the same documents had been produced twice. The agreement didn’t save the privilege. On reconsideration the following year, the magistrate judge held that the clawback agreement didn’t displace 502(b)(2)’s reasonable-steps duty because the agreement “did not specify what precautionary measures, if any, should be taken to prevent disclosure.” Irth Sols., 2018 WL 575911, at *4 (S.D. Ohio Jan. 26, 2018).

That’s the gap-filler problem. If the order doesn’t expressly tell the court reasonable steps aren’t required, the court will assume they are. The Maxtena court said the same thing more directly: an order or agreement must provide concrete directives regarding each prong of Rule 502(b), or Rule 502(b) will be used to fill in the gaps. Maxtena, Inc. v. Marks, 289 F.R.D. 427, 444 n.16 (D. Md. 2012).

The drafting north star is the Advisory Committee Note’s “irrespective of care” language. An order that incorporates “irrespective of care,” or its functional equivalent “whether inadvertent or otherwise,” signals to the court that the parties have bargained out of the 502(b) reasonableness inquiry. An order without that language leaves you exposed to the Irth Solutions and Maxtenagap-fillers. The court-order shield’s strength depends entirely on what the order actually says.

Three moves that work for a solo or small-firm federal litigator. None of them is optional.

First, ask for a 502(d) order at the Rule 26(f) conference, not after the first production. Judge Peck’s two-paragraph model order is the cleanest template in circulation. Paragraph one declares that production of privileged or work-product documents, whether inadvertent or otherwise, is not a waiver of privilege in this case or in any other federal or state proceeding, and directs the court to interpret the order to provide the maximum protection allowed by Federal Rule of Evidence 502(d). Paragraph two preserves each party’s right to conduct relevance, responsiveness, and privilege review before production. Two paragraphs. The shorter the order, the harder it is for a court to read a reasonableness inquiry back into it.

Second, write the order to maximize 502(d)’s reach. The phrase “whether inadvertent or otherwise” knocks out the 502(b) gap-filler problem from Irth Solutions and Maxtena. The phrase “any other federal or state proceeding” tracks the statutory portability language. The two clauses together are why the Sedona Conference Appendix A model and the Northern District of California model stipulated protective orders both include them as baseline.

Third, pair the 502(d) order with a documented privilege screening process. The order eliminates 502(b) inside the case. It doesn’t eliminate every collateral challenge, and it won’t help in state-court attacks on the privilege under different rules. The Advisory Committee Note’s recognition of advanced analytical software applications and linguistic tools as potential reasonable steps for 502(b) is your insurance policy.

A 502(d) order is the fallback, not the plan. The plan is a defensible 502(b) record: documented review, sampled QC, and a reviewable audit trail of the calls your team made. Hintyr is an agentic document review platform built for small and mid-size firms. The validation report it generates is the kind of screening record you would want to attach to a 502(b) brief if you ever had to write one. The 502(d) order catches what slips through. The validation record is what keeps the order from being the only thing standing between you and waiver. For the underlying sampling work, see our explainer on technology-assisted review.