How often does information shared with counsel end up haunting an employer?
It comes up all the time. It's one of those things for which a little bit of prevention and forethought can probably overcome some potential problems down the line.
The crux of the misunderstanding is that attorney-client privilege protects communication between employers and their attorneys but not facts, correct?
Historically, one of the basic concepts of encouraging people to talk to lawyers and having lawyers help with the dispute-resolution process has been this notion of confidentiality. It means if you go talk to your lawyer down the street about your will or a family matter, that's confidential. You, as the person who gave the information, are the one who has control over it. In other words, the lawyer can't go around and talk about it unless you say it's OK.
L. Marshall Smith, Jackson & Lewis
Where's the problem?
This confidentiality notion is aimed at the conversation you have. The idea is to encourage you to talk so the lawyer will know everything about the problem in order to resolve it better. But it doesn't protect information that you just know or facts that are in your head. So if you observed one of your cohorts doing some things that were either contrary to company policy or inappropriate in some other way, and then you reported it, your report to a general counsel or attorney should be confidential and privileged. But the information and your observations, what you actually saw, that can't be privileged.
And that's where employers get into trouble?
Sometimes people get that [difference] confused. Even lawyers do sometimes, especially with documents created in a situation in which they may not have been confidential at the time they were put together. For instance, memos saying, "Have you checked into this?" or, "We're concerned about that." People will sometimes hope if they give their lawyer memos that never had a lawyer involved at all, somehow that will insulate them. It really doesn't.
Can you give an example of what would be protected?
If a person who saw [potential workplace illegalities] talked to the general counsel and said, "I think we ought to check into this," and the two had a heart-to-heart conversation about [the problem], that's a whole other ball game. Now what you're doing is you're communicating information, you're looking for advice. That's the kind of communication this privilege is aimed at to encourage people to tell their lawyers the whole story and to get all the information out. Your observations, what you saw and what you heard, can't be protected, but when you talk more about [the situation] and express opinions and get opinions, that's protected.
What do you mean by opinions?
When you talk to the attorney and he or she says, "Here's what that means"-in other words, the attorney's rendering an opinion-that's going to stay protected. When the lawyer renders an opinion or gives advice, that should be confidential, so you're free to get the information you need to manage your affairs.
Can you walk through this concept in a sexual-harassment situation?
Let's say Sam, a manager, overheard an individual saying things that sound offensive. Sam calls the general counsel. Then Sam, the appropriate supervisors and counsel hold a conference, and Sam says, "Here's what I heard, here's what I saw, what should I be doing about it?" The things Sam says in this conference in all probability will be confidential because the purpose for it is to get some legal advice and to talk no holds barred. On the other hand, if down the road this gets into litigation and Sam is subpoenaed and brought in to testify what he heard that individual say on that particular occasion, he will have to reveal. What happened later on in the conference should stay safe. The key to [keeping confidentiality] is that the purpose of the conference was to get legal advice-it involved an attorney and other individuals necessary to make the attorney's advice useful to the company. It wasn't a meeting with somebody who happened to be a lawyer who was also acting as a personnel manager, just talking about personnel matters.
So the lawyer has to be acting specifically as the company's counsel for the privilege to apply?
Yes. Just because a person is admitted to the bar and he or she has the title lawyer doesn't mean everything the individual does is practicing law. These days, when it seems like every third person you meet is a lawyer anyway, there are an awful lot of lawyers who are in positions in a company that don't involve practicing law. If an individual isn't acting in the capacity of giving legal advice, if in that instance he or she was just doing management [tasks], the fact the person is a lawyer doesn't turn the communication into lawyer-client privileged communication.
Can you again address this in the sexual-harassment context?
To go back to the hypothetical conference: If there's a lawyer involved in the conference but the lawyer isn't there for the purpose of giving legal advice-that's not his or her job title, it's HR manager-then the fact that he or she happens to be a lawyer is pretty much irrelevant. There are two basic principles to protect communications with the attorney-client privilege: that it was confidential, you didn't do it on a party line or in the middle of a [restaurant]; and that the purpose of the communication was to get or receive legal advice.
What if a communication's purposes are mixed, and it isn't solely to receive legal advice?
That's an area where things are really fuzzy and where the outcome in a particular situation will depend as much on whom the judge is as anything else. Very often, especially in a business setting when you're talking about problems, you don't make clear dividing lines: "Now we're talking about legal problems, now we're not." You don't do that because that's not how people really operate, and the same is true of communications such as letters. In theory, careful corporate lawyers are good about couching things in a way that makes it clear they're either seeking information or dispensing legal advice. But if they're not as careful as they ought to be, there can be three paragraphs about the advisability of the next move in a business sense, or in a personnel sense. Then the next paragraph may be, "getting back to our sexual-harassment policy " If the communication has those kinds of elements in it, it creates a wonderful opportunity for a creative lawyer to say, "This isn't attorney-client communication. This is a communication from a lawyer, but he's giving business advice, personnel advice, so it shouldn't be privileged and we should be able to get it."
What's the best way for employers to handle this situation?
There seems to be two approaches. One is the "dominant purpose" approach, which is to say that if the basic purpose of this communication was for legal advice, the whole thing will be protected even if there's some incidental stuff in there that wasn't legal advice at all. The other approach is to say, "We'll take out the parts that we're giving legal advice, but you can have the other stuff." This is during the pretrial stage, what's called discovery, when people are trying to gather all this information before going to court.
What about documents such as interviews of employees, memos sent to counsel by the investigators and memos exchanged between co-counsel, are they privileged?
After there's a real, live, operating dispute and either litigation has been filed, a complaint has been filed or even if there's an internal complaint that's likely going to go into litigation-once you've reached that stage, it's no longer a company trying to investigate itself. A whole [new] set of rules start to apply. The proposition here is that both sides to the dispute should be able to do a complete job of investigating without worrying that what each finds is going to be turned over to the other side and basically do the other side's job. All those investigative notes and [interviews] are part of this pretrial, prelitigation or litigation investigation. If the purpose of the preparation is to get litigation, pretty much the whole shebang will be covered by the work-product protection.
When there's a live dispute, each side gets to investigate-gather all its information, look at the good and the bad and to really understand the whole problem. That's going to get the kinds of protection described as work-product protection-even the [information] not gathered by lawyers. The key is it's being done under the direction of the attorneys and is part of the litigation process that the attorneys are directing. The actual things that happened, that were observed, they're going to come out eventually. But if the investigator is taking notes and making observations such as, "This witness seems nervous when we talk about this topic"; "This person's facial expression looked hostile when I asked him about so and so"; and "I don't think this person is telling the truth"; their reflections and opinions, these are going to get a different kind of protection. That's going to get an opinion kind of protection that's very unlikely to come out, [as opposed to] a straight witness statement. The likelihood of that staying confidential is pretty small.
So what's the bottom line to HR on communications?
The walls have ears. [People] get to thinking-especially when doing e-mail or sending memos-that what they're sending is really private. If there's going to be any kind of dispute down the road, the odds are it's not going to be private. You hate to say this to people, but whenever you're sending an e-mail or writing a memo, you should take a minute and think what it would look like if somebody saw it other than the person you're sending it to. How would it look for you and the company?
Workforce, August 1997, Vol. 76, No. 8, p. 66.