Who Can Waive Corporations’ Privilege Protection?

May 31, 2017

In Upjohn states, corporations’ privilege can protect (1) communications in which corporate employees at any hierarchical level give the company’s lawyer facts she needs, and (2) such lawyer’s advice given to any employees who need it. Upjohn v. United States, 449 U.S 383 (1981). But who can waive that privilege? Courts obviously agree that loyal upper-management employees can waive the corporation’s privilege, but can mid- or lower-level employees who can engage in privileged communications under Upjohn also waive that privilege?

In Walker v. City of Pocatello, Case No. 4:15-cv-00498-BLW, 2017 U.S. Dist. LEXIS 46566 (D. Idaho Mar. 27, 2017), the court dealt with this issue in the analogous governmental context. Although the opinion does not make all the various employees’ roles clear, the court ultimately ruled that “[a]ny City of Pocatello employee who was entitled to the attorney-client privilege regarding [the pertinent] matter may also waive that privilege.” Id. at *5. The court held that (1) the City’s human resources director could waive the City’s privilege, but (2) a “lower ranking employee . . . cannot assert the attorney-client privilege” and therefore presumably could not waive it. Id. at *6.

The Walker court relied on one of the few decisions analyzing this issue: Jonathan Corp. v. Prime Computer, Inc., 114 F.R.D. 693 (E.D. Va. 1987). In that case, the court held that a marketing representative waived his employer’s privilege protection by giving an in-house lawyer’s legal analysis to a computer lessee in an attempt to resolve a dispute with the lessee. Under that court’s common-sense approach, loyal employees whom corporations trust to receive legal advice can waive the privilege by disclosing that advice to third parties. Needless to say, lawyers should warn their corporate clients’ employees about the somewhat counter-intuitive risk of such well-meaning disclosures.