In a 5-4 decision, the Washington Supreme Court has ruled that all communications between in-house counsel and employees stop being subject to privilege once they extend into a postemployment period. The court found that attorney-client privilege does not carry over once an employee has left an organisation as the end of employment also signals the end of the principal-agent relationship between the company and the former employee.

Privilege ends when employment does

The case before the court related to Highland High School student Matthew Newbury, who sustained a permanent brain injury during a school football game in 2009. Mr Newbury’s parents sued Highland for negligence, claiming that the quarterback was sent in to play despite sustaining a concussion during practice the day before the game. When lawyers for Newman sought discovery concerning communications between Highland’s counsel and former coaches during time periods when the coaches were no longer employed by Highland (and thus unrepresented by the school’s counsel), Highland responded with a motion for a protective order on the grounds that such communication was shielded by attorney-client privilege.

However, the Washington Supreme Court upheld an earlier superior court ruling that Highland’s protective order be denied. Though the coaches were employed by Highland at the time of Mr Newman’s injury – and thus possessed information relating directly to their period of employment – their communications with Highland’s counsel after they left the school were no longer privileged. The court’s opinion reads: ‘Although we follow a flexible approach to application of the attorney-client privilege in the corporate context, we hold that privilege does not broadly shield counsel’s postemployment communications with former employees.’

Implications for in-house counsel

The ruling is significant in its potential implications for internal misconduct investigations, as former employees often possess important information relating to their period of employment that can be of use to in-house lawyers when compiling the facts of alleged misconduct. Association of Corporate Counsel for Washington DC vice president and chief legal strategist Amar Sarwal explains: ‘[Former employees] are a treasure trove of information about what happened, and in-house counsel need to speak to them to find out. But this decision will ensure that never happens.’

A strongly worded dissent by Washington Supreme Court Justice Charles Wiggins held a similar line of argument. He wrote: ‘I disagree with the majority’s decision to adopt a bright-line rule that will cut off corporate attorney-client privilege at the termination of employment, and will exclude from its scope all postemployment communications with former employees, even when those employees possess relevant personal knowledge regarding the subject matter of the legal inquiry and even though had they remained employed, such communications with counsel would have been privileged.’

Sources: Corporate Counsel; Washington Courts