Courts understand. Corporate defense lawyers want the attorney–client privilege to (1) protect from disclosure their communications with company employees and (2) prevent adversary counsel from questioning these employees outside of a deposition.
Courts understand. Adversary lawyers want to interview—ex parte—company employees who possess relevant information so defense counsel’s presence does not inhibit the employees’ candor.
So, how do lawyers reconcile these competing interests in a way that complies with ethical requirements and secures the most privilege protection? Should company counsel also represent the employee—personally—so adversary counsel cannot conduct ex parte interviews? Is an attorney–client relationship with the employee necessary to secure privilege protection? May corporate counsel form an attorney–client relationship to prevent ex parte interviews without violating Model Rule 3.4, which prevents a lawyer from obstructing another party’s access to evidence?
One court has answered. In Newsuan v. Republic Servs., Inc., 2019 WL 2528793 (Pa. Super. Ct. June 20, 2019), the court ruled that, absent a conflict waiver, a company’s lawyer may not personally represent the company’s employees. And absent personal representation, adversary counsel may interview employees ex parte; otherwise, the representation unethically obstructs adversary counsel’s access to evidence.
The company’s privilege, however, is sufficient to protect the lawyer’s employee interviews. Read the opinion here. Actually, read it twice.
Personal Representation of Corporate Employees
A front-end loader crushed Karen Newsaun’s leg in an accident at a recycling center. She sued Republic Services and asked Republic to disclose the name of 16 employees who were at the worksite when the accident occurred. Republic refused.
Republic’s lawyers announced that they also represented the employees, and that this representation and Model Rule 4.2 prevented Newsaun’s lawyer from interviewing them ex parte. But the lawyers did not inform the employees of a potential conflict of interest in representing them and their employer. Under Model Rule 1.7, lawyers must disclose a conflict associated with concurrent representation and obtain a waiver before proceeding with the representation.
The Newsaun Court rejected this interview-blocking attempt, stating that—
[O]nly upon the employee’s informed consent to retain counsel despite the risk of conflict, which consent is accomplished through the employee’s completion of a waiver form clearly notifying him or her of the conflict, is a valid attorney–client relationship formed.
The Court refused to recognize any attorney–client relationship between the company’s lawyer and the company employees.
Corporate Attorney–Client Privilege
The Court held, however, that the lack of a specific attorney–client relationship did not destroy the privilege. Applying the corporate attorney–client privilege adopted in Upjohn Co. v. United States, 449 U.S. 383 (1981), the court held that the privilege protects company counsel’s communications with employees. It is the company’s privilege that applies, not the employee’s privilege. Indeed, the employees had no reason to seek legal advice about Newsaun’s injury.
Some of these employees/witnesses were now former employees. But no matter, the court said. It held that the privilege still applies, contrary to a Washington Supreme Court’s opposite ruling, which you may review here.
Upjohn Warnings Required?
The court noted that company counsel’s failure to give the employees Upjohn warnings before interviewing them did not destroy the privilege. Relying on the Commonwealth v. Schultz, 133 A.3d 294 (Pa. Super. Ct. 2016), a decision analyzed here, the court held that Upjohn warnings were unnecessary because the employees “neither sought legal advice, consulted with corporate counsel regarding personal legal matters, nor had any apparent need for legal representation.”
Company counsel, according to the court, “muddled the relevant attorney–client scheme somewhat by ending the interviews with an offer to represent the employees in their capacities as witnesses.” The totality of circumstances, however, revealed that the employees had sufficient notice that their discussions with company counsel were solely for Republic’s use.
Ex Parte Interviews
Even though the privilege applies, the court held that adversary counsel may conduct ex parte interviews because it invalidated company counsel’s purported attorney–client relationship with the employees.
The privilege protects from disclosure the company lawyer’s interview with a company employee. It is the company’s privilege. It is not necessary to enter an attorney–client relationship with the employee to establish and secure privilege protection. Note, however, that the privilege does not prevent adversary counsel from talking—ex parte—with the employee.
If company counsel wants to form an attorney–client relationship with the employee, a potential conflict of interest arises and the relationship may go forward only if the employee waives the conflict through informed consent. If the relationship properly forms, then adversary counsel may not conduct ex parte interviews with the employee.