Corporate attorneys must understand when their conversations are protected by the attorney-client privilege. It is well-settled that the attorney-client privilege extends to employees of a corporate client. Upjohn Co. v. United States, 449 U.S. 383 (1981). When faced with attorney communications with the corporation’s former employees, however, the issue of privilege is much less obvious and varies widely state by state.
The United States Supreme Court addressed this issue in Upjohn, where it abandoned the “control group test” (a test applying the attorney-client privilege only to “officers and agents . . . responsible for directing [the company's] actions in response to legal advice”) and extended the attorney-client privilege to include lower-level employees. Importantly, however, the Court expressly declined to address whether employees who no longer work for the corporation would fit into this privilege. Upjohn, 449 U.S. at 394 n.3. Since that time, both state and federal courts have grappled with the application of the attorney-client privilege to communications with former employees. The Washington Supreme Court undertook that precise issue in Newman v. Highland School District No. 203, 381 P.3d 1188, 1190 (Wash. 2016). In a 5-4 decision, the Court held that the attorney-client privilege does not extend to communications with former employees. In Newman, the Plaintiff suffered a permanent brain injury during a football game. The plaintiff had also suffered a head injury at football practice the day before and alleged that the coaches negligently permitted him to play in the game “even though he exhibited symptoms of a concussion.” He filed suit against the school district.
During the course of discovery, the school district’s attorney interviewed – and purported to represent at deposition – coaches who were no longer employed by the school. Plaintiff’s counsel moved to disqualify the school district’s attorney, citing a conflict of interest. The trial court denied that motion but warned that the school district’s attorney could not “represent non-employee witnesses” going forward. After Plaintiff sought discovery on the conversations between the school district’s attorney and the former coaches, the school district moved for a protective order.
Relying on Upjohn but refusing to extend its protections to attorney interactions with former employees, the Washington Supreme Court affirmed the trial court’s order denying the school district’s request for a protective order. The Court reasoned that permitting the attorney-client privilege to extend past the employer-employee relationship would “frustrate the truth seeking mission of the legal process.” The Court acknowledged that employees’ conduct may “embroil the corporation in disputes” and that the conduct of former employees, while they were employed, may expose the corporation to vicarious liability. Nonetheless, the Court held that these concerns “do not justify expanding the attorney-client privilege beyond its purpose.” That “purpose,” according to the Washington Supreme Court, is “to foster full and frank communications between counsel and the client, not its former employees.”
Although this decision resolved an issue of first impression in Washington, several courts in other jurisdictions had previously ruled on this issue – with mixed results. In Infosystems, Inc. v. Ceridian Corp., 197 F.R.D. 303 (E.D. Mich. 2000), for example, the court declined to extend the attorney-client privilege to a former employee, but noted an exception for communications about subject matter that is “uniquely within the knowledge of the former employee when he worked for the client corporation, such that counsel’s communications with this former employee must be cloaked with the privilege in order for meaningful fact-gathering to occur.” Also notable is the holding of In re Grand Jury Subp. Dated July 13, 1979, 478 F. Supp. 368 (E.D. Wis. 1979), where the court applied the work-product doctrine to notes from interviews with non-employees but noted that “[t]he scope of the attorney-corporate client privilege . . . does not explicitly extend to information communicated to counsel by former employees.”
On the other hand, the Fourth Circuit, Ninth Circuit, and the Colorado Court of Appeals have held that the attorney-client privilege extends to former employees of an organization. The Fourth Circuit pronounced in In re Allen, 106 F.3d 582 (4th Cir. 1997), that “the analysis applied by the Supreme Court in Upjohn to determine which employees fall within the scope of the privilege applies equally to former employees.” Similarly, the Ninth Circuit in Admiral Ins. Co. v. U.S. Dist. Ct., 881 F.2d 1486 (9th Cir. 1989) affirmed that “the Upjohn rationale necessarily extended the privilege to former corporate employees” and declared that “[f]ormer 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.” Finally, in Denver Post Corp. v. U. of Colorado, 739 P.2d 874, 880 (Colo. App. 1987), the Colorado Court of Appeals noted that the rationale set forth in Upjohn “cover[s] communications between counsel and former employees of the client which concern activities during their period of employment.”
This split in authority demands thorough research into state-specific law anytime a conversation with a former employee becomes important to litigation. Any attorney representing corporations or organizations should fully understand the governing state’s approach to the attorney-client privilege.