Employee communications made in confidence during a company’s internal investigation can be protected by the attorney-client privilege even where in-house counsel leads the investigation, the D.C. Circuit Court of Appeals has said in a recent ruling.
While the result in In Re: Kellogg Brown & Root, Inc. is not surprising, the case is noteworthy both because the District Court had denied the privilege and ordered the in-house counsel to produce the documents relating to its investigation, forcing the D.C. Circuit (in a mandamus action) to decide the matter, and because of the broad support in the opinion for the assertion of the privilege by in-house counsel.
In holding that the privilege attached, the Court of Appeals rejected the District Court’s attempts to distinguish Upjohn Co. v. United States (the United States Supreme Court opinion holding that privilege applies in internal investigations). The D.C. Circuit said that the privilege exists
- even though outside counsel was not consulted;
- even though some of the interviews were not conducted by lawyers; and
- even though the employees who were interviewed were not told that the investigation was conducted to assist the company in obtaining legal advice.
The Court of Appeals also dismissed the District Court’s rationale that the privilege did not attach because the internal lawyers were conducting the investigation to comply with government regulations, not to secure legal advice. The Court of Appeals said that
the District Court’s novel approach would eradicate the attorney-client privilege for internal investigations conducted by businesses that are required by law to maintain compliance programs, which is now the case in a significant swath of American industry.
That would chill what the court deemed “the valuable efforts of corporate counsel to ensure their client’s compliance with the law.”
To the extent that in-house lawyers wish to assert the attorney-client privilege over the results of their internal investigations, it remains important to proceed under the Upjohn framework and to document the bases for the work. But the D.C. Circuit’s opinion in Kellogg Brown & Root will provide support, in the event that the assertion of the privilege is challenged.