Daily Blast October 25, 2016

The Washington Supreme Court recently answered in the negative a novel legal question of first impression posed in Newman v. Highland Sch. Dist. No. 203, 2016 LEXIS 1135 (Oct. 20, 2016); namely, at what point in the employer/employee relationship the attorney-client privilege ceases to attach.

Highland High School quarterback Matthew Newman suffered a permanent brain injury at a football game in 2009, one day after he allegedly sustained a head injury at football practice. He sued Highland School District (Highland) for negligence. Before trial, Highland’s counsel interviewed several former coaches and appeared on their behalf at their depositions. Newman moved to disqualify Highland’s counsel from representing the former coaches, asserting a conflict of interest. The trial court denied the motion, but ruled Highland’s counsel could not represent non-employee witnesses in the future. Newman then sought discovery concerning communications between Highland’s counsel and its former coaches. Highland moved for a protective order to shield those communications, asserting attorney/client privilege. The trial court denied the motion and instructed Highland to respond to the discovery requests. Highland sought discretionary review of the discovery order, which the Washington Court of Appeals, Division III, denied. The Supreme Court subsequently granted discretionary review and entered a temporary stay of discovery.

The Supreme Court affirmed the trial court’s decision to deny a protective order to Highland, holding the flexible approach to protecting privileged communications recognized in the leading case addressing corporate attorney-client privilege does not justify applying the attorney-client privilege to postemployment communications with former employees. Newman at ¶ 8 (citing Upjohn Co. v. United States, 449 U.S. 383, 101 S Ct. 677, 66 L. Ed.2d 584 (1981)). The Court declined to expand the privilege to communications outside the employer/employee relationship because former employees categorically differ from current employees—former employees can no longer bind the corporation and no longer owe duties of loyalty, obedience, and confidentiality to the corporation.  Without an ongoing obligation between the former employee and employer that gives rise to a principal/agent relationship, a former employee is no different from any other third-party fact witness to a lawsuit, who may be freely interviewed by either party. The Court thus limited the corporate attorney/client privilege to the duration of the employer/employee relationship. The dissent disagreed with the majority’s decision to adopt such a bright-line rule, asserting the limitation is at odds with the functional analysis underlying Upjohn and ignores the important purposes and goals that the privilege serves. Unlike the majority, the dissent would hold that postemployment communications consisting of a factual inquiry into the former employee’s conduct and knowledge during his or her employment, made in furtherance of the corporation’s legal services, are privileged.

The Court denied Newman’s request for attorney fees on appeal because it determined Highland’s opposition to the discovery was reasonable given that the question of whether the corporate attorney-client privilege extended to former employees was a novel legal question of first impression in Washington. Justice Debra Stephens authored the majority opinion in which Justices Johnson, Fairhurst, González, and Yu concurred. Justice Charles Wiggins authored the dissent in which Justices Madsen, Owens, and Gordon McCloud concurred.  

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