
    Joseph Carone et al., Appellants, v Venator Group, Inc., Formerly Known as Woolworth Corporation, Respondent.
    [735 NYS2d 515]
   Order, Supreme Court, New York County (Marilyn Shafer, J.), entered May 8, 2001, which denied plaintiffs’ motion to compel further disclosure, unanimously affirmed, without costs.

Plaintiffs, former employees of defendant, claim that they were defamed by an office memo that defendant circulated which falsely stated that they were suspended because of concern about possible disclosure of confidential information to a firm of securities analysts, when, in fact, defendant had other motives for circulating the memo and suspending them, i.e., retaliation against a former employee for his negative analysis of defendant. Defendant interposed truth and qualified privilege as defenses, and asserts that an in-house investigation conducted by its legal department showed that plaintiffs had made many phone calls to the firm of securities analysts. Plaintiffs respond that defendant’s answer put in issue the bona tides of its ostensible concern about leaks. Toward that end, plaintiffs seek to compel defendant’s in-house counsel, who headed up the investigation, to disclose certain communications he had with defendant’s officers and an outside management firm retained to assist in the investigation, as well as what he and others associated with defendant “believed” at certain times about plaintiffs, their loyalty to defendant and whether they had leaked confidential information. The disclosure sought is precluded by the attorney-client privilege (see, Rossi v Blue Cross & Blue Shield, 73 NY2d 588, 592). The privilege was not waived by counsel’s participation in the investigation (see, Upjohn Co. v United States, 449 US 383), or by his testimony regarding non-privileged matters (cf., Miranda v Miranda, 184 AD2d 286; Verschell v Pike, 65 AD2d 622). Defendant properly raised the privilege at deposition by objection to specific questions (see, 305-7 W. 128th St. Corp. v Gold, 178 AD2d 251, citing Verschell v Pike, supra). Concur — Rosenberger, J. P., Ellerin, Wallach, Rubin and Marlow, JJ.  