In a recent DC Circuit case, In re: Kellogg Brown & Root, Inc., No. 14-5055 (June 27, 2014), the DC Court of Appeals clarified the scope of the attorney-client privilege in the context of a business’s internal investigation and described four aspects of an internal investigation that may vary while leaving the privilege intact.
The doctrine of attorney-client privilege protects confidential communication between an attorney and client if the communication was made for the purpose of obtaining or providing legal advice to the client. The Supreme Court determined in Upjohn Co. v. United States, 449 U.S. 383 (1981) that attorney-client privilege protects clients that are corporations, and found that the communications between attorneys and employees in the course of the company’s internal investigation were confidential and protected by attorney-client privilege.
The district court in In re: Kellogg Brown & Root attempted to distinguish the case from Upjohn in several ways. The DC Court of Appeal’s dismissal of these distinctions provides the following four takeaways concerning the DC Circuit’s interpretation of Upjohn and the scope of attorney-client privilege in the context of an internal business investigation:
1. In-house versus outside legal counsel: Companies do not need to consult outside legal counsel as a prerequisite for attorney-client privilege to apply. An internal investigation conducted solely by in-house counsel does not dilute the privilege
2. Attorney versus non-attorney interviews: The conduct of interviews by non-attorneys does not negate attorney-client privilege if attorneys direct the internal investigation.
3. Explicit disclosure versus employee knowledge: Employees being interviewed do not need to be expressly informed that the interview’s purpose is to assist the company in obtaining legal advice for the interview communications to be protected by attorney-client privilege, so long as the employees know that the company’s legal department is conducting a sensitive investigation and that information the employees disclose would be protected.
4. Purpose of the internal investigation: The internal business investigation does not need to be instigated at the company’s discretion; attorney-client privilege can apply even if the investigation is initiated in order to comply with regulations. For the privilege to apply, obtaining or providing legal advice needs to be a significant purpose of the investigation, but it does not need to be the sole purpose.