In-house Counsel Beware - Not All Comments Are Privileged.
A recent federal court decision in Michigan serves as a warning to in-house counsel that not every legal opinion that radiates from their hallowed lips is blessed with the protections of attorney-client privilege. ”
In Schankin v. Commercial Steel Treating Corp., the record revealed that the company’s General Counsel, Jeff Myles, had expressed to the plaintiff, the Human Resources Director, his concerns that the termination of three employees could be age discrimination. When asked if he offered an opinion to the HR Director as to the legality of the terminations, the employer claimed attorney-client privilege. The plaintiff challenged that designation, contending that Myles offered the opinion in “general conversation” and not in his role as an attorney-advisor on the decision.
Although the record seems mixed from our reading of the case (the in-house counsel put together the separation agreements, but was not otherwise consulted on the decision to terminate the employees), the Court focused on two elements of the attorney-client privilege: “whether legal advice of any kind was being sought, and if so, whether it was from a professional legal advisor in his capacity as such.”
In this case, the Court noted that the HR Director said she and the General Counsel were simply sharing their perceptions about the terminations as co-workers, she was not seeking his legal advice. Moreover, the record showed that the in-house counsel “had little to no involvement” in the decision-making processes for terminating the employees.
On this record, the Court directed that further deposition questioning of the in-house counsel be allowed to proceed, including specifically questions as to whether he recalled offering any opinion as to the legality of the terminations and, if so, whether he believed he was offering such an opinion in his capacity as corporate counsel. If those two questions were answered in the affirmative, then the Court would reconsider whether privilege attached.
No-brainer guidance for legal counsel
Do not assume any legal opinion you share with a colleague is protected by attorney-client privilege. To be safest, limit such opinions – especially as to employment discrimination and the like – to situations in which you are acting in an official capacity giving advice as the corporation’s attorney.