Key Takeaways

  • Attorney-client privilege protects confidential legal communications but can be waived intentionally or inadvertently.
  • Corporations hold the privilege, but its waiver may depend on the authority of corporate agents and court interpretations.
  • Courts follow either a per se or case-by-case approach when assessing corporate waivers.
  • The privilege can be destroyed through third-party disclosures, crime-fraud exceptions, or failure to object in legal proceedings.
  • Federal and state rules, such as FRE 502, guide the scope and limits of privilege waivers.
  • Joint representation and fiduciary exceptions may create unintended privilege waivers.
  • Privilege logs and strategic documentation are critical in avoiding unintentional waivers.
  • Post-employment privilege waivers for corporate counsel and privilege-sharing between companies raise complex issues.

To waive attorney client privilege, a court has to first determine whether the privilege can be waived and who has the authority to waive it. Waiving attorney-client privilege can have a significant impact on the outcome of a legal case because it results in the disclosure of attorney-client communications. In the corporate context, a court may use the per-se waiver approach or case-by-case waiver approach to analyze attorney-client privilege waiver.

What Is Attorney-Client Privilege?

Attorney-client privilege refers to the legal privilege that maintains the secrecy of communications between a lawyer and his or her client. Attorney-client privilege is asserted when there is a legal demand for such communications, such as a demand for the attorney to testify under oath or a discovery request. In general, it covers oral and written legal advice and discussions between an attorney and his or her client.

How Attorney-Client Privilege Works in the Corporate World

In the groundbreaking Upjohn Co. v. United States case, the Supreme Court decided that the attorney-client privilege not only applies to individuals but corporations as well. Since the corporation itself, not the management, is the client, it is the holder of the attorney-client privilege. Although corporations can hold such a privilege, a corporation is considered a legal fiction and cannot speak for itself.

In another case, Commodity Futures Trading Commission v. Weintraub, the Supreme Court determined who has the right to waive corporate attorney-client privilege. In the end, the Court decided the management of the corporation has the authority to waive the privilege and the directors and officers are usually the ones who exercise the authority.

Although most courts accept that the management of a corporation has the power to waive attorney-client privilege, the situation becomes more complicated when the corporation itself asserts the privilege while a director or officer makes a disclosure that possibly results in a waiver. Courts are divided as to whether it is possible to waive attorney-client privilege asserted by a corporation when one of its officers discloses otherwise privileged communications. When evaluating corporate waiver, courts use two predominate approaches, which include:

  • Per-se waiver approach – In this approach, a court decides that the attorney-client privilege of a corporation can be waived if otherwise privileged communications are disclosed by a corporate officer.
  • Case-by-case approach – This approach, on the other hand, rejects the per-se approach to attorney-client privilege waiver. Instead, it requires a court to examine the facts of a case before making the final decision.

Privilege Challenges in Internal Investigations

Internal corporate investigations often raise nuanced questions about privilege. Companies frequently retain outside counsel to ensure that findings remain protected. However, to maintain that protection:

  • The investigation must be conducted for the purpose of legal advice, not purely for regulatory compliance or HR.
  • Employee communications should clarify that they are speaking with legal counsel, not HR or management.
  • Upjohn warnings should be given to employees, informing them that the corporation—not the individual—is the client and holds the privilege.

Failure to follow these protocols could result in courts compelling disclosure of investigative materials if privilege is not properly established.

Can Attorney-Client Privilege Be Destroyed?

Attorney-client privilege is an important factor in any lawsuit. However, in some situations, it can be destroyed, either by accident or design. There are five circumstances you need to take into consideration, including:

  • Non-legal advice – Generally, attorney-client privilege does not apply to communication that discusses issues unrelated to the law. To determine if a communication is privileged, a court usually focuses on its primary purpose.
  • Informed waiver – An agreement to waive the attorney-client privilege is another way to destroy it. Usually, a waiver must be expressed in writing, and it cannot be undone. Sometimes, a government entity will agree to waive attorney-client privilege to show that it has nothing to hide.
  • Waiver by communicating with a third party – Having a third party present when the communication is taking place is a common way to waive attorney-client privilege. Waiver can also occur if privileged information is disclosed to a third party at a later time. There are a number of exceptions, including disclosure of information to language interpreters and a third party who happens to be the client of the attorney in the same matter.
  • Failure to object – Failure to object usually occurs at the pretrial discovery stage, when both parties request information and documents. In the event that privileged information is shared and a party fails to object promptly, the privilege can be lost forever.
  • Crime-fraud exception – When a client and an attorney discuss how to commit or perpetuate a criminal or fraudulent act, attorney-client privilege usually does not apply.

Attorney-client privilege is not easy to destroy. However, it is not uncommon for the privilege to be challenged during the course of a legal case. If you are involved in a lawsuit, it is important to ask your attorney exactly what is covered, so you will not accidentally destroy the attorney-client privilege.

Exceptions That Override Privilege Protections

Some legal doctrines override attorney-client privilege, even if it would normally apply:

  • Fiduciary Exception: In certain trust or corporate settings, beneficiaries or shareholders may access privileged communications if those communications concern their interests.
  • Post-Employment Communications: Courts may compel disclosure of privileged conversations between former in-house counsel and a corporation if the privilege is deemed waived or if the subject matter involves company misconduct.
  • Common Interest Doctrine Limitations: While parties may share privilege under a common legal interest, any breakdown in that shared interest (e.g., litigation between allies) can jeopardize the protection.

Common Pitfalls That Can Waive Attorney-Client Privilege

The following scenarios commonly lead to unintentional waivers:

  • Email Communications: Using non-secure or employer-monitored email systems can expose confidential exchanges to third parties.
  • Shared Legal Counsel: In cases of joint representation (e.g., co-defendants or affiliated companies), disclosures made to shared counsel may not remain privileged against one another.
  • Incomplete Privilege Logs: During discovery, failing to accurately document and justify withheld materials can result in court-ordered disclosure and waiver.
  • Business Discussions with Legal Overlap: When legal advice is intertwined with business guidance, courts may deem the primary purpose non-legal, thus unprivileged.

Being proactive in training staff and legal teams on privilege-preserving practices is essential.

Federal Rules and Inadvertent Waivers

Under Federal Rule of Evidence 502, parties can protect themselves from inadvertently waiving attorney-client privilege or work-product protection. FRE 502(b) specifies that an unintentional disclosure does not result in a waiver if:

  1. The disclosure was inadvertent,
  2. The holder of the privilege took reasonable steps to prevent disclosure, and
  3. The holder promptly took reasonable steps to rectify the error.

Additionally, FRE 502(d) allows courts to issue protective orders that enforce non-waiver provisions across other proceedings. This rule can be especially valuable in complex litigation involving voluminous document discovery.

Frequently Asked Questions

  1. Can a company waive attorney-client privilege without informing employees?
    Yes. The privilege belongs to the corporation, not the individual employee, and management may waive it even if employees object.
  2. Is attorney-client privilege automatically waived if documents are shared with a third party?
    In most cases, yes. However, exceptions apply for agents like interpreters or those covered under common interest agreements.
  3. Does attorney-client privilege survive the end of the attorney-client relationship?
    Generally, yes. Privilege continues beyond the termination of representation, unless it is expressly waived or overridden by a legal exception.
  4. What should be included in a privilege log?
    A privilege log should list each withheld document, the type of document, its date, the parties involved, and a brief description justifying the privilege.
  5. Can privilege be reinstated after an accidental waiver?
    If handled promptly under FRE 502(b), an inadvertent waiver may not be binding, especially if reasonable steps were taken to prevent and correct it.

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