The subject of e-mails, letters, and conversations between an attorney and their client are protected under attorney-client privilege. This privilege prevents third-parties from compelling attorneys from disclosing client communications to them. However, how does this privilege function when a business with multiple officers and employees is the client of an attorney? This article examines the nature and extent of attorney-client privilege for businesses.
California Law on Attorney-Business Client Privilege
The rules involving attorney-client privilege in California are recognized explicitly by statute under California Evidence Code § 950 et seq. The evidence code and related case law interpreting its provisions broadly define attorney-client privilege to protect all communications between a person and their attorney regarding their legal concerns.
In addition to the California Evidence Code, all attorneys owe a duty of confidentiality to their clients. As a result, lawyers are ethically bound not to disclose privileged information without the client’s authorization. Attorneys can face disciplinary action for violating their duty of confidentiality.
However, clients can waive privilege by communicating what would otherwise qualify as privileged information to third-parties. Thus, a client can inadvertently break privilege if their communications to the attorney are conducted in the presence of a third party.
Significantly, communications that are made for the purpose of perpetrating a crime are not protected by attorney-client privilege.
Who Qualifies as a “Client?”
In situations where an attorney represents a business entity such as a corporation, partnership, or LLC, determining to whom an attorney owes a duty of confidentiality can be tricky. Under California Evidence Code § 951, “client” is broadly defined as someone who “consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity.”
When an attorney represents a business entity, the business itself is the client. This includes officers and employees. However, when an employee, officer, or partner’s legal interests are adverse to that of the business as a whole, a conflict of interest can arise.
Under California law, employee communications are protected under attorney-client privileged under the following circumstances:
- Communications are made for securing legal advice;
- The employee is communicating with the attorney at the behest of their superior;
- The superior directs the employee to communicate with the attorney in order to secure legal advice;
- The subject matter of the communications falls under the scope of the employee’s business duties;
- The communication does not extend beyond those who need to know its contents.
Significantly, corporations do not enjoy a constitutional privilege against self-incrimination. Thus, individual employees who are concerned about criminal liability should retain independent counsel with regard to that issue. However, corporate employees cannot be compelled to give self-incriminating testimony. This might include producing business records and documents. Employees can be forced to provide oral testimony regarding the identification of nonprivileged documents that is the subject of a subpoena.
Call Allen, Semelsberger & Kaelin, LLP for Experienced Legal Advice
At Allen, Semelsberger & Kaelin, LLP, we have the necessary experience and knowledge to ensure your business’ interests and rights are adequately protected. We can handle transactional matters such as business formation, incorporation, and document preparation and review. We can also advise on matters of business litigation.
To schedule a free consultation with one of our experienced business lawyers, call Allen, Semelsberger & Kaelin, LLP at (888) 998-2031 or contact us online today.