Upjohn Warnings: Best Practices and Tennessee Ethical Requirements

Corporate crime is big news. Lawyers practicing in Tennessee face an increasing likelihood of being asked to assist business clients in responding to an allegation of criminal wrongdoing. To protect the business and to avoid inadvertent harm to others (and your license), counsel must both understand the attorney-client privilege of an organization.

A common misstep is to fail to inform potential employee/witnesses of the scope of the attorney-client privilege, thereby either causing the employee to waive the privilege involuntarily or the organizational client not to be able to use the information obtained because of a reasonable claim of privilege by the employee. The American Bar Association has published "best practices" guidelines that all lawyers should carefully consider when planning a corporate investigation. The ABA recommends giving employee witnesses a formal disclaimer about the nature of the representation and then documenting it fully. While the recommended warnings may seem awkward in some situations, it is imperative that counsel adopt a consistent and workable way to protect the attorney-client privilege.

ABA Best Practices

To ensure witnesses make informed decisions and that no attorney-client relationship is created inadvertently, lawyers have developed various versions of what are known as "Upjohn warnings," from Upjohn v. United States, 449 U.S. 383 (1981) (the scope of corporate attorney-client privilege can extend beyond "control group" to employees whose acts may bind corporation). The Upjohn decision itself provides no guidance on the issue of warnings to witnesses and considerable confusion has existed regarding how much of a warning is required.

In response, the ABA Criminal Justice Section recently endorsed "best practices" for providing Upjohn warnings.[1] The ABA suggests that, prior to all interviews with employees, counsel make the following statements orally:

I am a lawyer for or from Corporation A. I represent only Corporation A, and I do not represent you personally.

I am conducting this interview to gather facts in order to provide legal advice for Corporation A. This interview is part of an investigation to determine the facts and circumstances of X in order to advise Corporation A how best to proceed.

Your communications with me are protected by the attorney-client privilege. But the attorney-client privilege belongs solely to Corporation A, not you. That means that Corporation A alone may elect to waive the privilege and disclose this discussion to such third parties as federal or state agencies, at its sole discretion, and without notifying you.
In order for this discussion to be subject to the privilege, it must be kept in confidence. In other words, with the exception of your own attorney, you may not disclose the substance of this interview to any third party, including other employees or anyone outside of the company. You may discuss the facts of what happened, but you may not discuss this discussion.

Do you have any questions?
Are you willing to proceed?

The ABA recommends reading this statement to the witnesses and making a record either through handwritten notes or a contemporaneous memorandum.

Reading such a formal statement can produce awkward moments. Counsel should be aware, however, that some attempts to use "watered down" warnings have been strongly criticized by courts as potentially misleading to witnesses.[2]

The Importance of the Warnings

Counsel must not create an unwarranted belief that counsel also represents the interviewed witnesses. When lawyers create that misimpression, witnesses may forfeit what they subjectively believed to be attorney-client privileged information, or corporate clients can end up losing control of the privilege, the right to use the information, or could lose their lawyer.[3]

The Tennessee Ethical Rules

Tennessee's Rules of Professional Conduct provide some guidance, but the actions required by the Rules may come too late. When dealing with an organizational client, Rule 1.13(d) mandates a warning only when "it is or becomes apparent that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing." As a practical matter, the interview may be the source of the information making it "apparent" that the witness's interests differ, and the witness may already believe his or her interests, including privileged communications, are being protected.

Similarly, Rule 4.3 provides that when a lawyer knows or reasonably should know an unrepresented witness "misunderstands the lawyer's role," the lawyer must "make reasonable efforts to correct the misunderstanding" and that when there is a reasonable possibility that a conflict exists, a lawyer may not give the witness advice, other than to secure counsel.

By recommending that a warning be given to all "constituents," the ABA's "best practices" aims to prevent misunderstandings and identify preventable conflicts on the front end.

The best solution is often for the witness to have counsel and for the lawyers to discuss whether to enter into a common interest or joint defense agreement to preserve privileges. It is both proper and often necessary for corporations to indemnify employees for legal fees.[4]

Conclusion

While it might be difficult, for example, for a lawyer to read the ABA statement to a nurse he or she has known for years in representing a medical practice, the small business setting potentially makes formal warnings even more important, because it is imperative that the lawyer does not create the false impression that the employee is personally represented or controls the privilege, if that is not the intent.
Regardless of whether counsel chooses to read the ABA warning verbatim, counsel must

(1) determine whether the client company desires the witness to be able to control the privilege,
(2) if not, inform the witness that counsel represents only the entity that controls the privilege, including the right to disclose the substance of the statements,
(3) obtain the consent of the employee-witness, and
(4) document the warning.

Notes

  1. Upjohn Warnings: Recommended Best Practices When Corporate Counsel Interacts With Corporate Employees, American Bar Association, White Collar Crime Committee Working Group (July 17, 2009). Available at http://meetings.abanet.org/webupload/commupload/CR301000/newsletterpubs/...
  2. See In re Grand Jury Subpoena: Under Seal, 415 F.3d 333, 35-36 (4th Cir. 2005).
  3. See United States v. Ruehle, 583 F.3d 600 (9th Cir. 2009) (examples of issues created when experienced white collar defense counsel failed to give adequate Upjohn warnings to CFO; district court referred matter for disciplinary action).
  4. Tenn. Code Ann.  § 48-18-507 (indemnification of officers, employees, agents); United States v. Stein, 541 F.3d 130 (2d Cir. 2008)(the government violated the Sixth Amendment right to counsel of employees by pressuring corporation not to advance legal fees).

Wade Davies WADE DAVIES is the managing partner at Ritchie, Dillard & Davies PC in Knoxville. He is a 1993 graduate of the University of Tennessee College of Law. The majority of his practice has always been devoted to criminal defense. Davies is a member of the Tennessee Bar Journal Editorial Board. This is the first of Davies’ quarterly columns about criminal law.