The Applicability Of Privilege And Work Product Protection To Communications With Former Corporate Employees

A decision last year by the United States District Court for the Western District of North Carolina underscores the need for lawyers to exercise care, and plan ahead, when communicating with former corporate employees who may become witnesses in civil litigation. Although the attorney-client privilege and work product doctrine may offer some protection to your communications with former employees, they may not completely shield those communications from discovery. Practitioners must also thoughtfully consider asserting both privilege and work product protections when contesting discovery disputes.

In Winthrop Resources Corporation v. Commscope, Inc. of North Carolina, No. 5:11-CV-172, 2014 WL 5810457 (W.D.N.C. Nov. 7, 2014), Judge Richard Voorhees ruled that the defendant could not claim the protection of attorney-client privilege with respect to some communications between its attorney and a former senior executive, and that the defendant had waived its potential work product protection for these communications by failing to assert it before the magistrate judge in response to the plaintiff's motion to compel.

In this article, we will explore the principles governing the attorney-client privilege and the work product doctrine as they apply to communications between corporate counsel and former employees, summarize the Winthrop Resources decision, and offer some practical tips for preserving privilege and maximizing confidentiality in communications with former employees.

Background

In Upjohn v. United States, 449 U.S. 383 (1981), the Supreme Court considered whether discussions between a corporation's attorney and its current employees would be subject to the attorney-client privilege. The Court rejected the "control group" test, which focused on the ability of the employee to take discretionary action on the advice of the corporate attorney, and indicated that communications with a corporate attorney would be protected by the attorney-client privilege if the communications (1) were made to the corporate counsel in his or her capacity as an attorney; (2) were made at the direction of superiors for the purpose of seeking legal advice; (3) concerned matters within the scope of the employee's corporate duties; and if (4) the employees were sufficiently aware that they were being questioned to assist in giving legal advice to the corporation. Id. at 394-395. The majority did not address the issue of communications with former employees, although Chief Justice Burger did so in a concurring opinion.

Burger wrote 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." Id. at 402-403 (Burger, J., concurring). Most lower courts have since followed Chief Justice Burger's concurrence and extended the attorney-client privilege to cover communications with former employees, including the United States Court of Appeals for the Fourth Circuit. In re Allen, 106 F.3d 582, 605 (4th Cir. 1997).

North Carolina state courts have not expressly ruled on whether the attorney-client privilege applies to former employees under North Carolina law. The North Carolina Business Court, however, applying federal law, has followed In re Allen and extended the attorney-client privilege to a corporate attorney's communications with a former employee made in an effort to gather factual information necessary to provide legal advice to the corporation. See Morris v. Scenera Research, LLC, No. 09 CVS 19678, 2011 NCBC 33, 2011 WL 3808544 (N.C. Super. Ct. Aug. 26, 2011) and supplemental order, 2011 WL 8116566 (N.C. Super. Ct. Oct. 10, 2011).

The Peralta Decision

The now-familiar Upjohn rule has a number of practical applications. Should the privilege extend only to communications between the corporate attorney and former employee that occurred during the term of employment? Should it extend to post-employment communications about information that the employee learned during her employment? Should it cover post-employment communications that relate to litigation, such as witness preparation?

In the wake of Upjohn, many courts that have considered these issues have followed Peralta v. Cendant Corp., 190 F.R.D. 38 (D. Conn. 1999). In Peralta, the court addressed the boundaries and limits of privileged communications between a former corporate employee and the corporation's attorney. Id. at 38. The Peralta court offered the following guidepost to differentiate between attorney-client privileged and non-privileged communications with former employees:

[D]id the communication relate to the former employee's conduct and knowledge, or communication with defendant's counsel, during his or her employment? If so, such communication is protected from disclosure under Upjohn. As to any communication between defendant's counsel and a former employee whom counsel does not represent, which bear on or otherwise potentially affect the witness's testimony, consciously or unconsciously, no attorney-client privilege applies.

Id. at 41-42. Applying this guidepost in that case, the Peralta court held:

Any privileged information obtained by the former employee during employment remains privileged after her termination. Id. at 41. Any post-employment interviews by the...