Washington Supreme Court Creates Bright-Line Rule for Attorney-Client Privilege in the Corporate Setting

Washington Supreme Court Creates Bright-Line Rule for Attorney-Client Privilege in the Corporate Setting

May 8, 2017

By: Ian J. Pisarcik

In October, the Washington Supreme Court held, in a 5-4 decision, that the attorney-client privilege does not extend to postemployment communications between corporate counsel and former employees. In so holding, the Court eschewed the flexible approach articulated in Upjohn Co. v. United States; a United States Supreme Court decision that a majority of jurisdictions have relied on to extend the attorney-client privilege to include communications with former employees.

 

The case at issue, Newman v. Highland Sch. Dist. No. 203, 381 P.3d 1188 (Wash. 2016), concerned a plaintiff who suffered a brain injury while playing high school football. The plaintiff brought a negligence suit against the school three years after the injury based on the school’s violation of the Lystedt law, which requires the removal of a student athlete from competition if he or she is suspected of having a concussion. At the time of the lawsuit, most of the coaching staff that had been employed when the plaintiff was injured were no longer employed by the school. Counsel for the school interviewed the former staff and the plaintiff sought discovery concerning those communications. Counsel moved for a protective order to shield the communications, asserting the attorney-client privilege. The Superior Court denied the protective order and counsel sought discretionary review.

 

In its opinion, the Washington Supreme Court spent a great deal of time discussing Upjohn. In Upjohn, the United States Supreme Court declined to establish a bright-line rule regarding the scope of the attorney-client privilege in the corporate setting and instead articulated a functional framework for determining whether the purposes underlying the attorney-client privilege would be furthered by its extension to the communication at issue. The Washington Supreme Court, however, argued that the flexible approach articulated in Upjohn “presupposed attorney-client communications taking place within the corporate employment relationship.” The Court therefore explained that, while it had adopted Upjohn, it nevertheless declined to extend the attorney-client privilege to communications outside the employer-employee relationship.

 

The Washington Supreme Court recognized that legitimate concerns exist with respect to postemployment communications between corporate counsel and former employees, but ultimately found these concerns unpersuasive.

 

Former employees may possess vital information about matters in litigation, and their conduct while employed may expose the corporation to vicarious liability. These concerns are not unimportant, but they do not justify expanding the attorney-client privilege beyond its purpose.

 

In a strongly-worded dissent, Justice Wiggins argued that the bright-line rule adopted by the Court “is at odds with the functional analysis underlying the decision in Upjohn and ignores the important purposes and goals that the attorney-client privilege serves.”

 

The practical implication of the Newman decision is that corporate attorneys must take care to consider other bases for protecting their communications with former employees. For example, corporate attorneys should consider asserting the work-product doctrine or jointly representing the corporate entity and the former employee (though this latter action may present conflict-of-interest issues).