A recent decision by the Iowa Supreme Court, Keefe v. Bernard, 2009 Iowa Sup. LEXIS 110 (Iowa Oct. 30, 2009), discusses the scope of attorney-client privilege and the work product doctrine in the context of communications between a corporation's legal counsel and its employees/agents.
The Keefe decision warrants a reevaluation of the approach currently taken to interviews of corporate employees—and the protection that may be available to the attorneys' notes of such interviews.
Test Focuses on Substance and Purpose of Communication
In Keefe, the Iowa Supreme Court addressed the test to determine when a communication between a corporate entity's legal counsel and its employees/agents is covered by the attorney-client privilege. The Iowa Supreme Court followed the United States Supreme Court's Upjohn Co. v. United States, 449 U.S. 383 (1981) decision that the privilege should not be limited to employees in the "control group." Instead, the test adopted by the Iowa Supreme Court in Keefe focuses on the "substance and purpose of the communication."
- Privileged Communications. Communications are protected by the attorney-client privilege if the employee discusses his/her "own actions relating to potential liability of the corporation." (emphasis added)
- Non-Privileged Communications. Communications are not protected by the attorney-client privilege if the employee is interviewed as a "witness to the actions of others." (emphasis added)
While not at issue in Keefe, the Iowa Supreme Court noted in a footnote that communications are also privileged when an employee "participates in discussions with legal counsel because of his or her position within the corporate decision-making structure" (and not because of what the employee has witnessed or the employee's own actions). In addition, the court parenthetically quoted the statement in Samaritan Found. v. Goodfarb, 862 P.2d 870 (Ariz. 1993) that "‘It is universally accepted that communications directly initiated by an employee to corporate counsel seeking legal advice on behalf of the corporation are privileged.'"
Keefe's Practical Application Not Yet Clear
Attorney interviews of employees are privileged under the Keefe test to the extent the communication concerns the employee's own actions and the corporation's potential liability for those actions.
The Keefe decision does not, however, provide significant instruction regarding how this test will be applied in practice. In many circumstances, there may not be a clear demarcation between when an employee is simply a "witness" and when an employee's own actions "relate to potential liability of the corporation." For example, how much involvement or influence on the termination decision is required before attorney communications with a non-decisionmaker employee concerning that involvement would fall within the scope of the test? Of course in certain circumstances, such as "failure to correct" hostile work environment claims, a manager's observation of certain behavior (coupled with subsequent inaction) may subject the corporation to liability.
Work Product Doctrine May Still Apply
As the Iowa Supreme Court noted in Keefe, even if a memorandum or other document is not protected by the attorney-client privilege, it may still be protected from discovery by the work product doctrine "if prepared in anticipation of litigation." Notes made by the corporation's attorney concerning an interview may constitute work product.
Iowa law recognizes two tiers of work product: (1) work product that reflects mental impressions or opinions of an attorney, which is "‘for all practical purposes, absolutely immune from discovery,'" and (2) work product that reflects facts or information, which is discoverable upon a showing by the party seeking discovery of (a) substantial need and (b) inability "without undue hardship to obtain the substantial equivalent of the materials by other means."
Work Product Doctrine May Not Shield Facts and Information
The Keefe opinion expressly recognized that attorney notes of a witness' statement have "been held to be opinion work product" and even cited language from Baker v. Gen. Motors Corp, 209 F.3d 1051, 1054 (8th Cir. 2000) indicating that "‘[a]ttorney notes reveal an attorney's legal conclusions because, when taking notes, an attorney often focuses on those facts that she deems legally significant.'" Nevertheless, while holding that portions of the memorandum reflecting mental impressions or opinions were "‘for all practical purposes, absolutely immune from discovery,'" the Iowa Supreme Court in Keefe also held that facts or information in the memorandum at issue were discoverable if the opposing party could show "substantial need" and "undue hardship."
In light of Keefe, when documenting interviews it is a good idea to keep in mind that any documented facts or information may be subject to discovery. In addition, as those portions of any attorney notes reflecting mental impressions or opinions likely remain protected from disclosure, it is a good idea to clearly label "mental impressions" in interview notes and memoranda.
In light of the Keefe decision, the manner in which interviews of corporate witnesses are conducted and documented should be revaluated. If there is a possibility under the Keefe test that the communication may not be deemed privileged, care should be taken to appropriately limit the content and scope of the interview as well as of any notes or memoranda created concerning the interview.
Finally, as the issue of waiver was raised by one of the parties in that case, the Keefe case also serves as a useful reminder to use caution if you are considering showing a witness a copy of any attorney notes in order to avoid the possibility of waiving a privilege.