Court Holds That the Attorney-Client Privilege Covers Communications With a Former Company Employee

February 11, 2004

Before 1981, most courts followed what is called a “hierarchical” test, under which the attorney-client privilege only protected communications between a company’s lawyer and company employees in the “control group.” However, the United States Supreme Court abandoned that approach in favor of a “functionality” test — under which the privilege can protect (under certain circumstances) communications with any level of company employee, as long as the employee’s “function” within the company necessitated the communication in connection with the lawyer’s rendering of legal advice to the company. Upjohn Co. v. United States, 449 U.S. 383 (1981).

Most — but not all — states now follow what is called the Upjohn test. Focusing on an employee’s “function” (rather than title in the company) has also led most courts to protect communications between the company’s lawyer and former employees. In Cool v. BorgWarner Diversified Transmission Products, Inc., No. IP 02-960-C (B/S), 2003 U.S. Dist. LEXIS 20137, at *6 (S.D. Ind. Oct. 29, 2003), the court held that the privilege applied if the former employee had “critical knowledge of the relevant facts” and the company’s lawyer “must seek information from the former employee” in order to provide legal advice to the company.

The extension of the attorney-client privilege to communications with former company employees can obviously provide an important protection, but lawyers should first confirm that the court in which they are litigating follows the majority rule.