Questions Still Exist Regarding Attorney-Client Privilege in Corporate Setting

Questions Still Exist Regarding Attorney-Client Privilege in Corporate Setting

The question of what constitutes privileged communication in the modern corporate setting is an increasingly important topic in today’s world of e-mail and e-discovery, which was the topic of a recent Webinar entitled “Attorney-Client Privilege in the Corporate Setting”, sponsored by LexisNexis.

“E-mail communication is the norm. I would say a majority of day-to-day communication involves email. The question becomes is there a duty to protect the confidentiality of email communication with clients,” said Christy J. Benton, Assistant General Counsel for John Crane.

Benton said that the American Bar Association addressed this very question in Formal Opinion 11-459, issued on Aug. 4, 2011.

Under that opinion, the attorney must tell the client the risk of sending those communications using a computer or other type of electronic device where there is a significant risk that a third party can gain access to that communication, said Benton.

“In the context of representing an employee, a lawyer has an obligation when he knows or should know that the client is likely to receive substantive lawyer client communications where there is a risk that it will be read by lawyer or third party,” she said.

“The law is well-settled that attorneys and clients can communicate confidential information through electronic means,” said Benton. However, that principle does not apply when those communications are between the employee and his or her personal employee.

Under the Fourth Amendment, the privilege applies when there is a “reasonable expectation” of privacy. However, “this protection doesn’t exist when the searching entity is a private employer,” said Benton.

“Private employers have a lot more freedom to peruse their employees’ work areas, computer and any other electronic means for any reason and they don’t have to consider the Fourth Amendment,” she said.

She said that courts consider four main factors in determining whether there was a reasonable expectation of privacy. These are: Does the corporation maintain a policy against personal use of computers or email; Does the corporation monitor employee email; Do third parties have a right of access to employee computers or emails and; Did the corporation notify the employee or was the employee aware of the use and monitoring policies of the company, said Benton.

“The main tip for electronic communications is when you are representing an individual is that the attorney advise the client that email communication sent from a work computer can result in the waiver of attorney-client privilege,” said Benton.

Daniel G. Wills, a Partner at Swanson, Martin & Bell, said that the attorney-client privilege can apply to corporations as well. There are two main tests that apply, the “control group test” and the “subject matter test.” The control group test, which was rejected recently by the Supreme Court, but still applies in some jurisdictions, applies the privilege to decision makers within the organization only.

The second test, which was affirmed by the Supreme Court, extends the privilege to communications between a lawyer and an employee as long as it relates to the subject matter of the litigation.

“The corporate privilege belongs to the corporation. An employee or a former employee cannot waive the privilege. Only the corporation can,” said Wills.

Additionally, the privilege generally does apply to former employees of a corporation; however, it only extends to communication made while that person was still an employee.

“Obviously if you represent a corporation in litigation and you have to deal with former employees preparing them for a deposition for example, you want everything to be privileged but it’s not going to be,” said Wills.

He suggests that attorneys, when dealing with former employees avoid sharing new information learned from the corporation, work product or strategy and to perform due diligence on the former employee.