Notable Ruling on the Attorney–Client Privilege and Former Employees

An issue often discussed but infrequently addressed is whether the attorney–client privilege protects communications between corporate counsel, including in-house lawyers, and the company’s former employees.  One federal court—predicting Louisiana law—recently ruled that the privilege protects counsel–former-employees’ communications in certain circumstances.  Hanover Ins. Co. v. Plaquemines Parish Gov’t, 2015 WL 546699 (E.D. La. Feb. 10, 2015). You may read the decision here.

The Issue

In a massive construction lawsuit over the design and building of a community center in Bootheville, Louisiana, the parties deposed the general contractor’s former vice-president and the architect’s former construction administrator.  Both were employed with their respective firms during the construction but had since left.  And each met with his former company’s lawyers to prepare for the deposition.

Deposing counsel asked about deposition-preparation conversations with their former employers’ counsel and the documents they reviewed.  Counsel for the former employers objected on attorney–client privilege grounds, and a motion to compel ensued.

The court framed the issue: “the question presented is simple, even if the answer is not: are conversations between counsel for a corporation and the corporation’s former employees entitled to the attorney–client privilege, and, if so, to what extent?”

Choice-of-Law

In this diversity case, the court first questioned whether federal or state privilege law applied, properly ruling that, under FRE 501 and the Erie Doctrine, federal courts apply state law which, here, is Louisiana’s law.  Louisiana courts have not issued a “reasoned decision” whether the privilege applies to former employees, so the federal court predicted Louisiana law in reliance upon Chief Justice Burger’s concurring opinion in Upjohn Co. v. United States, 449 U.S. 383 (1981) and opinions from the 4^th and 9^th Circuits. In re Allen, 106 F.3d 582 (CA4 1997); In re Coordinated Pretrial Proceedings, 658 F.2d 1355 (CA9 1981).

Ruling

The court found it clear that “some privilege exists” between a corporation’s counsel and its former employees, and just needed to outline its scope and parameters.  The court ruled that the privilege applies, “at a minimum,” where—

• The company employed the employee during the time relevant to the lawyer’s current representation;
• The former employee possesses knowledge relevant to the lawyer’s current representation; and
• The communication’s purpose is to assist the company’s lawyer in
  • evaluating whether the employee’s conduct has bound or would bind the company;
  • assessing the legal consequences of that conduct; or
  • formulating appropriate legal responses to actions that others have taken or will take with regard to that conduct.

POP Analysis

The Hanover decision provides authority for corporate lawyers—whether outside or in-house counsel—to claim privilege over communications/interviews with former employees. But corporate lawyers should not take this decision as a blanket privilege for all communications and, instead, should ensure that former-employee interviews specifically fall within the parameters. One suggestion is to discuss these parameters with the former employee before the substantive interview and perhaps have her sign a statement acknowledging the reasons for the interview and her understanding of its confidential and privileged nature.

The court applied Louisiana (the forum state) law without addressing whether Louisiana’s conflict-of-laws rules dictated the application of another state’s law.  Although likely a moot point because the communications occurred in Louisiana, judges and practitioners should always consider whether the forum state’s conflict-of-laws rules dictate that another state’s privilege law applies to the putatively privileged communication. For more information on this topic, see this post and my article titled The Application of Conflict of Laws to Evidentiary Privileges.