In a 4-3 vote, the Washington Supreme Court held that an institution’s lawyers’ communications with former employees did not deserve privilege protection. Newman v. Highland Sch. Dist., No. 90194-5, 2016 Wash. LEXIS 1135 (Wash. Oct. 20, 2016). This decision places Washington in a distinct minority position – but is it a big deal?
The Newman majority emphasized the predictability of a per se rule that “the privilege does not broadly shield counsel’s postemployment communications with former employees.” Id. at *3. A strong dissent relied on the Supreme Court’s seminal decision in Upjohn Co. v. United States, 449 U.S. 383 (1981). As the dissent correctly explained, Upjohn rejected the earlier “control group” standard for corporate privilege protection – which looked at the employee’s place in the corporate hierarchy. Instead, Upjohnfocused on the employees’ factual knowledge that the corporation’s lawyer needs before advising his corporate client. Upjohn did not explicitly extend privilege protection to former employees with such knowledge, but the Newman dissent noted that those Upjohn employee interviews held to be within privilege protection included seven former employees.
Nearly every court since Upjohn has adopted that decision’s focus on employees’ knowledge rather than their place in the corporate hierarchy — and extended privilege protection to former employees. See, e.g., Indergit v. Rite Aid Corp., No. 08 Civ. 9361 (JPO)(HBP), 2016 U.S. Dist. 150565, at *11 (S.D.N.Y. Oct. 31, 2016) (holding that a Rite Aid lawyer’s conversation with former employees “concerning their conduct and duties while employed by Rite Aid would also be within the attorney-client privilege”). Newmanhas sparked many articles sounding the alarm about this erosion of corporate privilege protection. But is it a big deal? The next two Privilege Points will answer that question.