How not to lose the attorney-client privilege over communications with your attorney

A recent ruling from a federal magistrate judge in the Western District of New York in a motion to compel called to mind a situation I experienced a few years ago. This blog post is being prepared not only for our clients, but for all smaller employers, regarding a problem that they might not consider until it is potentially too late.

My experience involved a client who received a subpoena from an Iowa administrative agency (not from a court) seeking a copy of a former employee’s personnel file. Rather than run the file through a photocopier and mail the copy to the agency as the subpoena “commanded,” the client sent me a copy of the subpoena as well as a copy of the personnel file as the client maintained it. The client asked me to prepare the response. In going through the materials, I found handwritten notes taken by the client’s HR representative of a conversation between the two of us before the individual was fired.  Had the client merely copied the materials in the file and sent it off to the agency, the notes of the conversation between an attorney and a client would have been disclosed. Indeed, under Iowa’s open records law, the materials may have been “public records” of the government agency that could be made available – with no advance notice or warning to the client -- to anyone asking to inspect and copy them.

The New York federal magistrate judge’s decision which reminded me of this prior event is the January 3, 2017 opinion in EEOC v. Sterling Jewelers, Inc., 08-CV-0706-RJA-MJR (W.D.N.Y.). The underlying litigation was filed by the EEOC in September 2008 on behalf of some 20,000 current or former female employees of the company. The EEOC asserted that since 2003, the company had engaged in an intentional pattern or practice of discrimination by paying female employees less than male employees, and denying the female employees promotional opportunities. 

In discovery through March 25, 2013, Sterling had produced “hundreds of thousands of hard copy and electronic documents” to the EEOC. On March 27, 2013, the EEOC told Sterling that over 1,000 of the documents Sterling had given to the EEOC had headings like, “attorney client privilege,” or “prepared at the request of counsel” or “attorney work product.”

In the federal court system, when a party asserts that a document is responsive to a request but it will not be produced to the other side because it is protected by attorney-client privilege, that party is required to give the other party a privilege log describing the document and asserting the privilege. The privilege log must sufficiently describe the nature of the withheld document so the other party can assess whether there are sufficient facts stated to establish the elements of a privilege or whether to challenge the claim of privilege and thus have the document disclosed. Fed.R.Civ.P. 26(b)(5)(A). 

Sometimes, however, privileged documents are inadvertently produced or disclosed to the opposing party.  Under the express provisions of the federal rule of civil procedure, a party that received inadvertently disclosed and privileged information must “promptly return, sequester, or destroy the specified information and any copies of it,” must not use or disclose it until the claim is resolved, must take reasonable steps to retrieve it if it has already been disclosed elsewhere, but can also present the matter to the court to determine if it is truly privileged. Fed. R. Civ. P. 26(b)(5)(B).

In May 2013, Sterling told the EEOC that it had inadvertently produced over 1,300 documents which it now contended were attorney-client privileged or privileged under the “work-product” doctrine.  Sterling also provided an updated privilege log including those documents and asking the EEOC to return, delete or destroy the “privileged” documents. Later in 2013, the EEOC agreed to return or destroy the inadvertently produced documents.

In November 2016, the EEOC filed a motion to compel Sterling to produce four specifically identified documents – documents that were not only identified in the privilege log but which had been inadvertently produced to the EEOC in 2013.  In denying the EEOC’s Motion to Compel the re-production of the privileged documents, the federal court magistrate judge described the attorney-client privilege:

The attorney-client privilege protects: (1) a communication between a client and

counsel, which (2) was intended to be and was in fact kept confidential, and (3) was made for the purpose of obtaining or providing legal advice.  .  .  . The privilege applies to both advice dispensed by an attorney to a client as well as to information provided by a client to an attorney for purposes of obtaining legal advice.  .  .  . Documents summarizing factual information are protected by attorney-client privilege if it is “sufficiently clear that the [documents] would not have been created had [the client] not needed the assistance of counsel.”  .  .  .  Further, the attorney-client privilege protects communications

among corporate employees regarding legal advice given by counsel to the corporation.  To that end, a privileged communication does not lose its protection if an executive relays legal advice to another member of management who shares responsibility for the subject matter underlying the consultation.  .  .  . Strougo v. BEA Associates, 199 F.R.D. 515, 519-20 (SDNY 2001) (“although dissemination of privileged information to third parties generally waives attorney client privilege, the distribution within a corporation of legal advice received from counsel does not, by itself, vitiate the privilege”).

Clients of lawyers should take the time to read and familiarize themselves with that description above. The attorney-client privilege belongs to a client, not to the attorney. The client can, by its own conduct, waive the privilege. If a client, or a representative of a client, disseminates information which might otherwise be privileged to an outsider, the ability to claim it is privileged may be lost.

Bear in mind the first part of the requirement – i.e., that the information “was intended to be and was in fact kept confidential.” If you, as a client, have documentary or electronic communications with an attorney, consider labeling it “Confidential” in the subject line, or at least at the top of the body of the email. And critically, store it in a folder or electronic file cabinet which is separate from general, non-privileged communications. You might want to go so far as to password-protect the document or the folder containing the privileged communications. If, as an employer representative, you are communicating with an attorney and take notes of the conversation, it makes good sense to label those notes (including emails) as “confidential,” or “privileged,” and perhaps to password-protect them or the location where stored.  If privileged communications are not kept in some separate document or folder, you should clearly indicate what communications are privileged and why. 

Consider also whether privileged snippets in an email chain should be separated from the chain and not be part of it—including whether, when and to whom you forward emails containing privileged conversations. As you do so, anticipate that someone down the road may have to review hundreds of documents, hundreds of emails, and then have to make a privilege log. Anything you can do now to assist that later segregation and identification of documents for which an attorney-client privilege may be claimed will most certainly work to your benefit down the road.

And that includes helping assure that you, internally, do not inadvertently make a disclosure of information which may be subject to an attorney-client privilege. 

Just to complicate matters a bit, there was (and still is) a nationwide class arbitration pending against Sterling Jewelers that made essentially the same claims of unlawful discrimination as those in the EEOC’s litigation. (The arbitration action brought by the impacted employees was virtually simultaneous with the court action brought by the EEOC on behalf of the same impacted employees, covering virtually the same claims. As one can appreciate, there are upsides and downsides to agreements that “employee will arbitrate any dispute arising out of the employment.”) In the arbitration proceeding, Sterling Jewelers had initially produced many of the same documents it “inadvertently” gave to the EEOC in the litigation. Sterling attempted to get them back in the arbitration matter, making the same type of claim of privilege and inadvertent disclosure that it made in the federal court matter.  That worked in the litigation, but not the arbitration. That is, the documents which the EEOC had to either destroy or return in its federal court proceeding against Sterling Jewelers were in fact available to the plaintiffs in the arbitration proceeding. The lesson here is that different forums have different rules.  No matter what forum you may end up in, it pays to be vigilant in protecting your privileged communications.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- Russ Samson