An increasing number of courts treat as corporate employees independent contractors who are the “functional equivalent” of employees – a doctrine named for the Eighth Circuit decision in In re Bieter Co., 16 F.3d 929 (8th Cir. 1994). Courts are also increasingly adopting a multi-part test in analyzing whether a corporate employee can prove the existence of a separate attorney-client relationship with the company’s lawyer – which would give that employee some control over the company’s power to waive the privilege. This doctrine comes from the Third Circuit – In re Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d 120 (3d Cir. 1986).
In United States v. Graf, No. 07-50100, 2010 U.S. App. LEXIS 13860 (9th Cir. July 7, 2010), the Ninth Circuit adopted both the Bieter and Bevill doctrines. The court first found that a criminal defendant appealing a long prison term should be treated as an employee of a company for whom he claimed to have acted only as an independent contractor. After reaching that conclusion, the court then applied the five-part Bevill factors in finding that the defendant could not prove a separate attorney-client relationship with the company’s lawyer. Among other things, the court noted that the defendant “understood that he was getting legal advice on behalf of the corporation,” and that he “was not seeking personal legal representation.” Id. at *33.
It can be risky to put too much weight on privilege decisions arising in the criminal context, but the Ninth Circuit’s unequivocal embrace of both Beiter and Bevill clarifies the law in that circuit – and continues the spread of both doctrines.