Many in-house legal groups have at least one non-lawyer on their team. But when conducting internal investigations, is the non-attorney team member acting for business or legal purposes? Is his or her work privileged?

Last month, the Washington D.C. Circuit Court overturned a district court ruling and held that correspondence in internal investigations will remain privileged if the sole primary purpose of the investigation is to provide legal advice, and also if it is “one of the significant purposes” of the internal investigation. In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014).

The Case in Question

In the case before the district court, Kellogg Brown & Root, Inc. (KBR), conducted an internal investigation of a potential Code of Business Conduct violation. The district court found that KBR used non-attorneys to conduct interviews and did not inform the interviewees that the interview was privileged or would be used to obtain legal advice for the company. Additionally, a non-attorney drafted all the documents at issue in the case and then sent the documents to the general counsel’s office only upon completion of the investigation. While the internal investigation was conducted within the legal department, no attorney was involved with the report until it was completed.

The district court held that a “party invoking the privilege must show ‘the communication would not have been made “but for” the fact that legal advice was sought,’” and consequently ordered KBR to produce the internal investigation documents.  United States ex rel. Barko v. Halliburton Co., 1:05-CV-1276, 2014 WL 1016784 (D.D.C. Mar. 6, 2014).

Overruled! 3 Key Points

The D.C. Circuit Court rejected the holding of the district court. In its decision, the court stated that in order for an internal investigation to be deemed privileged, an organization need only demonstrate that one significant purpose of the internal investigation was for the purpose to obtain legal advice, either from outside or in-house counsel.

In other words, privilege would apply to an internal investigation whether it was required by statute or regulation or conducted pursuant to company compliance programs, as long as one significant purpose was to obtain legal advice.

The court relied on a Supreme Court case, Upjohn, to make three points:

  1. Retention of outside counsel is not necessary for privilege to apply.
  2. Correspondence made by non-attorneys serving as agents for attorneys, such as in conducting interviews during an internal investigation, are protected by attorney-client privilege.
  3. Organizations do not need to use “magic words” in employee interviews for it to be privileged.

Upjohn Co. v. United States, 449 U.S. 383 (1981).

5 Precautions to Keep Internal Investigations Privileged

So what are some steps you can take to keep internal investigations privileged?

  1. Ensure attorney direction and oversight of internal investigations. Investigations can be delegated to non-attorneys as long as an attorney is overseeing their work.
  2. In all internal investigation correspondence, indicate that the internal investigation is being conducted under the control and supervision of counsel.
  3. Explain to interviewees that the contents of the interview will be given to the company’s legal counsel and it is the company that is being represented by counsel.
  4. Document and communicate the legal purpose of the internal investigation.
  5. Update written corporate policies and procedures indicating that all internal investigations will be at the direction of company counsel.

 

This blog is for informational purposes only and does not constitute a legal opinion or advice.