Professional Conduct and Legal Ethics
| Jurisdiction | United States,Federal |
| Citation | Vol. 51 No. 5 Pg. 42 |
| Pages | 42 |
| Publication year | 2022 |
PRIVILEGED COMMUNICATION WITH CURRENT AND FORMER CORPORATE EMPLOYEES
BY BEN LEBSACK AND JOHN LEBSACK
In Upjohn Co. v. United States, the US Supreme Court determined that communications between current employees and the corporation's lawyers are protected by the attorney-client privilege, and a concurrence suggested extending that to former employees, but courts nationally are split on whether and how to apply that privilege to former employees. This article addresses conditions that could make communications with former employees privileged.
The bedrock principle of attorney-client privilege can get complicated when the client is a corporation or other form of legal entity.[1] While die corporation clearly is entitled to raise the privilege, it is less clear which communications are protected. That question sometimes arises with respect to communications with current employees, but it becomes even more difficult— and legally murky—when the corporation's attorney communicates with someone who no longer works for the company. Former employees often have crucial information, but the attorney may wonder if the privilege applies to an interview with a former employee. Confusing the matter further, courts across the country have not come to a consensus.
The Corporate Privilege Conundrum
Generally, communications between a corporation's lawyer and its current employees are privileged subject to a few conditions, including (1) the communication is made at the direction of corporate superiors and (2) the lawyer reasonably expects that the employee will treat the communication as confidential. But former employees typically are not obligated to follow the direction of their former superiors, so the same conditions are generally not met for communications between a corporation's attorney and its former employees.[2] Although the conditions underlying communications with former employees are different, several courts have held the privilege applies to former employees in the same way it applies to current employees, while other courts have universally rejected any extension of the privilege. Still others have adopted a more nuanced limited application, recognizing that a bright line test cannot account for the various types of attorney communications. These courts distinguish between (1) privileged communications about information the former employee obtained during their employment and (2) unprivileged communications about information obtained outside of employment. These approaches are discussed later in this article.
On the surface, a blanket application or rejection of the privilege might seem appealing because it provides the most predictability for attorneys—the privilege either does or does not apply to communications with former employees in the same way it applies to current employees. However, such an approach doesn't leave as much room for communication- or case-specific considerations as the nuanced approach. A blanket application ignores that the same conditions that give rise to the privilege with current employees do not generally exist with former employees, while a blanket rejection ignores that certain communications with former employees may meet these conditions. Put simply, a bright line rule does not account for all the subdeties of attorney communications.
Upjohn Extends the Privilege Beyond the "Control Group"
In Upjohn Co. v. United States, the US Supreme Court held that a corporation's attorney's communications with the corporation's employees were privileged because:
1.they were made to the corporate counsel, acting as such;
2. they were made at the direction of corporate superiors, for the purpose of securing legal advice from counsel;
3. they concerned matters within the scope of the employees' corporate duties; and
4. the employees were sufficiently aware that they were being questioned so the corporation could obtain legal advice.[3]
The case arose from a government investigation of corporate bribery of foreign governments. At the direction of Upjohn's attorneys, the company sent questionaries to overseas managers. Unsurprisingly, the government wanted to see the answers. Upjohn objected, citing attorney-client privilege and work product protections.
The lower court held that the privilege only extended to communications between the attorney and the "control group"—that is, those officers and agents who directed the attorney's work. But the Supreme Court rejected that narrow framework, explaining that such a limited application "frustrates the very purpose of the privilege by discouraging the communication of relevant information by employees of the client to attorneys seeking to render legal advice to the client corporation."[4] Upjohn noted that middle- and lower-level "employees can, by actions within the scope of their employment, embroil the corporation in serious legal difficulties, and it is only natural that these employees would have the relevant information needed by corporate counsel if he is adequately to advise the client with respect to such actual or potential difficulties."[5]
Colorado follows Upjohn.[6] The Colorado Supreme Court has even extended the privilege to communications with independent contractors, determining that "a formal distinction between an employee and an independent contractor conflicts with the purposes supporting the privilege."[7]
While Upjohn did not announce a general rule regarding the scope of the privilege for communications between a corporation's attorney and its employees, Colorado courts generally examine the same four factors as Upjohn:
First, the information was provided by corporate employees to counsel acting as counsel for the corporation at the direction of corporate supervisors. Second, the purpose of the communications was to allow counsel to provide legal advice to the corporation. Third, the employees were made aware that they were being questioned by attorneys so that the corporation could secure legal advice. Last, the employees were informed that the communications were highly confidential.[8] Thus, before questioning an employee, an attorney must give the employee an "Upjohn warning" stating that the communication is for the purpose of legal advice to the corporation and must be kept confidential. Such warnings also clarify the distinction between legal advice, which is privileged, and business or human resources advice, which is not privileged.[9] An Upjohn warning also prevents assertions by an employee that the employee owns the privilege.[10]
The Upjohn Concurrence and Its Impact Extending the Privilege to Former Employees
Chief Justice Burger wrote a concurring opinion in Upjohn disagreeing with the majority's decision to limit the holding to the facts of the case. He instead attempted to "articulate a standard that will govern similar cases."[11] In his view, the court should have announced a broader general rule that a "communication is privileged at least when, as here, an employee or former employee speaks at the direction of the management with an attorney regarding conduct or proposed conduct within the scope of employment."[12]
Chief Justice Burger's concurrence did not analyze why the privilege should extend to former employees. Outside of the concurring opinion, the only other references to former employees in Upjohn are in footnotes where the majority (1) stated that because the parties and lower courts did not analyze application of the privilege to communications with former employees, it would not reach that issue;[13] and (2) referenced a discussion on workproduct as "relevant to counsel's notes and memoranda of interviews with the seven former employees should it be determined that the attorney-client privilege does not apply to them."[14] The latter footnote did not address when the privilege would or would not apply in that instance.
Courts Applying the Upjohn Concurrence
Several courts have adopted Chief Justice Burger's short comment, applying it to extend the privilege to communications between a corporation's attorney and its former employees. For example, the Fourth Circuit extended the privilege to a communication where a former West Virginia Attorney General's office employee provided information to a lawyer for that office who had to advise the office about a claim based on activities that happened during the witness's employment.[15] The Fourth Circuit emphasized a "need to know" rationale for the privilege, explaining that the "privilege 'rests on the need for the advocate and counselor to know all that relates to the client's reasons for seeking representation if the professional mission is to be carried out.'"[16] And the Ninth Circuit, in applying the privilege to communications between a corporation's lawyer and a former employee during an "orientation session" before a deposition, explained that "the same rationale applies___Former employees, as well as current employees, may possess the relevant information needed by corporate counsel to advise the client with respect to actual or potential difficulties.""[17] Meanwhile, the Seventh Circuit declined to resolve whether the privilege extends to former employees, but it read the Fourth Circuit's and Ninth Circuit's holdings as concluding that "the distinction between present and former employees is irrelevant for purposes of the attorney-client privilege."[18] The Tenth Circuit has not yet addressed the issue.[19]
The Colorado Court of Appeals agreed with Chief Justice Burger's concurrence in Upjohn, explaining that "the attorney-client privilege exists not only to protect the giving of professional advice to those who can act on it, but also the giving of information to the lawyer by lower level employees to enable the lawyer to give sound and informed advice."[2...
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