Courts Analyze Effect of Third Parties’ Participation in Privileged Communications: Part III

May 30, 2012

The last two Privilege Points dealt with the attorney-client privilege implications of third parties participating in otherwise privileged communications – on the client’s or the lawyer’s behalf. In some situations, corporate litigants argue that a third party is really the “functional equivalent” of a corporate employee.

As indicated in last week’s Privilege Point, a typical third-party consultant normally cannot meet this “functional equivalent” standard. However, some litigants have been more successful. In Gen-Probe Inc. v. Becton, Dickinson & Co., Civ. Nos. 09cv2319 & 10cv0602 BEN (NLS), 2012 U.S. Dist. LEXIS 49028, at *10 (S.D. Cal. Apr. 6, 2012), the court held that an independent contractor helping a company develop “an automated nucleic acid detection system” met the “functional equivalent” standard. Among other things, the independent contractor signed a typical employee confidentiality provision, assigned his intellectual property rights to the company, was listed on company documents as a “regular member” of the project team, and engaged in activities that were “equivalent to the type of work performed by actual . . . employees.” Id. at *11.

None of this high-stakes characterization of third parties is necessary in the work product context. Any client “representative” can create, or participate in the creation of, work product. In one case, the Southern District of New York held that an investment banker could claim work product protection for notes she prepared while attending a board meeting – even though her presence at the board meeting destroyed the attorney-client privilege. Nat’l Educ. Training Grp., Inc. v. Skillsoft Corp., No. M8-85 (WHP), 1999 U.S. Dist. LEXIS 8680, at *18 (S.D.N.Y. June 9, 1999). This is yet another reason why corporations should always assess the possible applicability of both the attorney-client privilege and the work product protection.