July 12, 2020

Volume X, Number 194

July 10, 2020

Subscribe to Latest Legal News and Analysis

July 09, 2020

Subscribe to Latest Legal News and Analysis

D.C. Circuit Court Rejects Lower Court’s Restrictive Reach of Upjohn Attorney-Client Privilege

Attorney-client privilege protects against disclosure of internal investigation documents if a significant purpose of the communication is obtaining or providing legal advice, according to the influential D.C. Circuit Court of Appeals,. In Re Kellogg Brown & Root, Inc., et al., No. 14-5055 (D.C. Cir. June 27, 2014).

In this case, the company objected to the district court’s order requiring it to turn over documents related to a prior investigation into alleged fraud.  KBR had conducted the investigation pursuant to its Code of Business Conduct, not as a result of any pending or threatened litigation.   Unfortunately, the district court’s decision offered an interpretation of the U.S. Supreme Court’s Upjohn that would narrow the attorney-client protectionIn Upjohn Co. v. United States449 U.S. 383 (1981), the Court established that the attorney-client privilege protects confidential employee communications made during an organization’s internal investigation led or overseen by lawyers for the business. The district court judge held the attorney-client privilege did not apply because KBR had not proved the investigation “communication would not have been made ‘but for’ the fact that legal advice was sought.” Imposing an “either/or” standard, the court said the privilege did not apply because the investigation was “undertaken pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice.”

The Court of Appeals rejected the district court’s attempt to narrow the protections of the attorney-client privilege under Upjohn. It ruled that the attorney-client privilege did apply to the prior fraud investigation documents because:

  • KBR initiated the investigation to gather facts and ensure compliance with the law after being informed of potential misconduct;

  • KBR’s investigation was conducted under the auspices of the KBR’s in-house legal department, acting in its legal capacity (as opposed to a purely business capacity); and

  • Obtaining or providing legal advice was one of the significant purposes of the internal investigation – it need not be the sole or “but for” purpose.

The appeals court rejected the argument that the privilege should not apply because the company had to conduct the investigation to comply with various regulations, whether or not it sought legal advice. That is very important in light of the increasing number of laws and regulations that require organizations to investigate claims and reports alleging improper conduct. The appeals court also ruled the privilege applied regardless of whether the lawyers involved were in-house counsel or outside counsel. It ruled the privilege applied to communications between non-lawyer investigators and others, so long as the investigators were acting at the request of the lawyers. It also ruled the investigators did not have to use any “magic words” to inform interviewees that the investigation was being overseen by lawyers.

Jackson Lewis P.C. © 2020National Law Review, Volume IV, Number 189


About this Author

Maurice G. Jenkins, Jackson Lewis, Civil Rights Arbitrations Attorney, pharmaceutical manufacturing lawyer

Maurice G. Jenkins is a Principal in the Detroit, Michigan, office of Jackson Lewis P.C. He has practiced labor and employment law for more than 30 years.

A trial lawyer, Mr. Jenkins, who is a Fellow in the American College of Trial Lawyers, has first chaired jury trials, labor and civil rights arbitrations, NLRB hearings and state civil rights administrative cases on behalf of employers in such business sectors as automotive (OEM; Tier .5-4 suppliers and retail), pharmaceutical manufacturing, international, national and...

David R. Jimenez, Jackson Lewis, Title VII discrimination claims Lawyer, Fair Labor Standards Attorney

David R. Jimenez is a Principal in the Hartford, Connecticut, office of Jackson Lewis P.C. He is the Co-Chair of the firm’s Corporate Governance and Internal Investigations Practice Group.

Mr. Jimenez advises employers on complex matters and litigation including:

  • Class Action cases involving Title VII discrimination claims, the Fair Labor Standards Act, and matters related to contingent, temporary, and independent contractor workforce categorization;

  • Domestic and international corporate re-organizations and reductions in force;

  • Sarbanes Oxley, whistleblower, retaliation, employee investigations and corporate governance matters;

Mr. Jimenez also provides counsel to employers on a variety of strategic matters including HR compliance, outsourcing/in-sourcing HR initiatives, code of conduct development and organizational compliance, and management of employment law exposures.

L. Dale Owens employment litigation law attorney Jackson Lewis law firm

L. Dale Owens is a Principal in the Atlanta, Georgia, office of Jackson Lewis P.C. He has represented employers in all types of employment litigation.

Mr. Owens defends employers in multi-plaintiff and collective actions under the Fair Labor Standards Act, as well as Rule 23 class actions. He also defends employers against discrimination claims (race, sex, age, religion, and national origin), as well as claims of sexual harassment, hostile environment, and retaliation. Mr. Owens defends employers in contract disputes, principal and fiduciary claims relating to...