Communications between Counsel and Lower-Level Employees: Upjohn in Washington
In Upjohn Co. v. United States, the United States Supreme Court held that the attorney-client privilege protected communications between counsel for Upjohn – who were investigating possible illegal activities by the company – and lower-level company employees. The Supreme Court rejected the Sixth Circuit Court of Appeals’ holding that under the so-called “control group” test, the privilege only covered communications between counsel and “officers and agents … responsible for directing Upjohn’s actions in response to legal advice.” The privilege, the Supreme Court ruled, also applied to “communications by corporate employees to counsel for the corporation “acting as such, at the direction of corporate superiors in order to secure legal advice from counsel,” where the communications “concerned matters within the scope of the employees’ corporate duties, and the employees themselves were sufficiently aware that they were being questioned in order that the corporation could obtain legal advice.”
Surprisingly, until recently, no Washington State Supreme Court case expressly adopted Upjohn, although there were decisions referencing and applying it. For example, the Supreme Court cited Upjohn favorably in Wright v. Group Health Hosp., a medical malpractice action against a physician and his employer, a hospital corporation. The attorney-client privilege, the Supreme Court observed in Wright, “may in certain instances extend to lower level employees not in a ‘control group.’” But the issue in Wright was whether the plaintiffs’ counsel could contact lower-level employees, not whether defense counsel could have privileged communications with them. Further, in Sherman v. State of Washington, the Supreme Court noted that “correspondence between an attorney for a corporate entity and that entity’s employees is subject to the attorney-client privilege of the corporate entity.” But again, Sherman did not involve the corporate attorney-client privilege.
Earlier this year, in Youngs v. PeaceHealth, the Washington State Supreme Court expressly adopted Upjohn, or at least its “reasoning,” with limitations. Like Wright, Youngs was a medical malpractice action. The plaintiff moved to prohibit the defendant hospital corporation, PeaceHealth, from communicating ex parte with health care providers employed by PeaceHealth who had treated the plaintiff. The plaintiff’s motion was based on Loudon v. Mhyre, which held that “defense counsel may not engage in ex parte contacts with a plaintiff’s treating physicians.” The trial court denied the plaintiff’s motion.
The Supreme Court affirmed in part and reversed in part, adopting the Upjohn rule that “corporations … enjoy the protections of the attorney-client privilege” and “the privilege can extend to communications with certain … employees” outside the corporate “control group.” The Court explained that this rule was necessary to “‘facilitate[ ] the full development of facts essential to proper representation of the client [and] … encourage[ ] laymen to seek early legal assistance.’” However, the Court held that the corporate attorney-client privilege trumped the Loudon rule only to the extent that “an ex parte interview enables corporate counsel ‘to determine what happened’ to trigger the litigation.” Loudon “still bar[red] ex parte interviews as to information about prior and subsequent treatment (i.e., information about the plaintiff’s particular vulnerabilities or the nature of the plaintiff’s recovery or disabilities).”
After Youngs, it is now clear that under Washington law, with exceptions (e.g., Loudon), the Upjohn rule protects communications between corporate counsel and corporate employees the purpose of which is to enable the corporation to secure legal advice.
 128 Wn.2d 164, 190 (1996) (citing Upjohn, 449 U.S. at 394-95). The communication at issue in Sherman was between an assistant attorney general and a resident physician employed by the University of Washington School of Medicine. Id. at 170-71, 178-79, 188-90. The Supreme Court held that the communication in question did not establish an attorney-client relationship between the assistant attorney general and the physician. Id. at 188-90. The Supreme Court expressed no opinion regarding whether the communication was protected by the attorney-client privilege held by the university. Id.