LEGAL
The practice of law relies heavily on the attorney-client privilege – the evidentiary rule that shields the confidentiality of communications between an attorney and client. That maxim is no less true in the corporate setting, despite the unique application of the rule therein. That is, corporate counsel invoke the attorney-client privilege regularly to confidentially communicate with employees on legal matters on behalf of the corporation which they represent.
By and large, corporate counsel in many jurisdictions have been operating under the assumption that this privilege extends to communications with former employees much in the same way that it applies to communications with current ones.
According to a ruling by the Washington Supreme Court in October, this is categorically not true.
The decision, Newman v. Highland School District No. 203, held that attorney-client privilege does not extend to “postemployment communications between corporate counsel … and former employees” – a decision that likely came as quite a shock to employers across the state.
The case began after the parents of a high school student, Matthew Newman, who suffered permanent brain injury at a football game in 2009, sued the school district for negligence in 2012. Before the case went to trial, the counsel for the school district interviewed several former coaches and appeared on their behalf at their depositions (counsel was later barred from representing nonemployee witnesses).
Newman’s parents sought discovery about the communications between the school district’s counsel and the former coaches when they were unrepresented by the school district’s counsel. The school district responded with a protective order motion, asserting that attorney-client privilege protected these communications from discovery. The trial court denied the motion, and the school district appealed.
The Washington Supreme Court agreed to review the trial court’s decision, and in a 5-4 ruling, affirmed the lower court.
As would be expected, the majority began its argument with the landmark 1981 U.S. Supreme Court decision, Upjohn Co. v. United States, the case in which the Court first established that communications between corporate counsel and non-management employees were protectable under attorney-client privilege.
Several other court rulings since have relied on Upjohn – specifically the separate concurrence by Chief Justice Warren Burger that argued for the conditional extension of the privilege to former employees – to create that same expansion as was desired by Chief Justice Burger. But the Washington Supreme Court instead used Upjohn to buttress its claim that the privilege doesn’t extend to communications with former employees.
The thrust of the reasoning for this conclusion by the majority is that an ongoing principal-agent relationship is necessary to distinguish a former employee from another third-party fact witness “who may be freely interviewed by either party.”
In short, the majority was dubious of claims that a corporation “needs to know what its former employees know” without needing to share its conversations with the other side in litigation. The majority likened this need to a general such need felt by all litigants to discover what potential witnesses know without disclosing such conversations to opposing parties.
Considering the prevailing attitude about attorney-client privilege and former employees, with one 2005 court ruling even going so far as to claim that “[v]irtually all courts hold that communications between company counsel and former company employees are privileged if they concern information obtained during the course of employment,” Newman may have come as a bit of a shock to many corporate counsel.
But Newman is not the first decision to challenge this supposed norm. The question is, rather, how often will such a decision arise again?
That is, does Newman represent a shift in courts’ thinking on this issue, or is the ruling simply an aberration that may only rear its head on rare instances?
As of yet, there aren’t many signs to suggest the former. But that doesn’t mean that things won’t change – or that things haven’t already changed for corporate counsel practicing under Washington State evidentiary rules. If nothing else, for those directly unaffected by the decision, Newman may be an important reminder that a surprise court ruling may drastically change the way corporate counsel practice law.
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