Protecting Attorney-Client Privilege When Emailing with Outside DirectorsPDF
To qualify for protection under the attorney-client privilege, communications of legal advice, including email, must be made in confidence. When company counsel is communicating with a board of directors comprised of outside directors, thoughtful attention should be given to whether or not email communications with those directors are indeed confidential, and therefore privileged.
Most outside directors have other business interests, and many are employed by other companies. Often, outside directors use their employer's email system as their primary means of email communication. Does a confidential and privileged attorney-client communication retain those characteristics when sent by counsel for Company A to an outside director employed by Company B and using Company B's email system? That email -- intended to be privileged and confidential -- is controlled by another company, and is subject to actions of that other company, which may jeopardize the confidential and privileged nature of the email.
In analogous cases examining whether an employee's personal emails on an employer's email system are privileged, courts look to the expectation of the receiving party (here, the director) to determine whether the communication on the employer's email system is indeed privileged. In examining a director's expectation of privacy, a court may ask: Does the director's employer have a policy regarding email use and privacy? Does the director's employer have practices that include monitoring email content? What was the director's role within the organization?
If the director's employer has a policy or practice of accessing or monitoring email content, the director may not have a privacy expectation that is sufficient to protect the attorney-client privilege. On the other hand, if the director's employer allows personal use of the email system and does not have a policy or practice of monitoring email content, the director's expectation of privacy would be much greater and the privileged communications would likely be protected.
A potential threat to the confidential nature of privileged email communications arises if the director's emails on the employer's system are ever subject to discovery in an investigation or civil action -- whether that discovery is relevant to the employer's business or the company's business. If the employer must collect and review the director's emails for a matter related to the employer's business, company counsel likely will never know that privileged email communications regarding company business have been accessed and reviewed by the employer or its counsel.
If the director's employer receives a subpoena for company-related emails, or if the employer is cooperating to provide the emails voluntarily to the company, the logistics of the discovery process still present challenges. Retrieving the emails from the director's employer's system will require the employer's IT personnel to access the confidential and privileged emails. The director's employer may be unwilling to produce the director's emails to the third party serving the subpoena, or even company counsel, without first reviewing the emails to segregate those regarding the company from those relating to the employer's business.
If the director's emails are reviewed by counsel for the employer, the confidentiality of those communications is compromised and a court may find the attorney-client privilege was waived. Two alternatives may be used to avoid this result, but both require forethought and cooperation from the director's employer. Company counsel can provide the director's employer with search terms to identify and segregate the director's emails regarding company business. If the director's employer desires to review the documents prior to production, company counsel should attempt to negotiate a review by contract or other lawyers working at the direction of company counsel -- not the employer's counsel -- to protect the privilege.
A best practice for all email communications regarding board business is to indicate clearly in the subject line that the email relates to company business and is a privileged and confidential communication. This practice may increase the director's expectation of privacy -- if the language is treated by the employer as deserving confidential treatment under the employer's polices and practices. Further, if possible the director should segregate all emails regarding board business.
Both of these actions will allow the emails to be located more easily and may obviate the need for the employer to review them prior to production, in the situation discussed above.
To avoid these issues entirely, company counsel should consider alternative means of email communication with board members, including providing company email accounts to directors or instructing directors to use personal email accounts, rather than their employer's email systems, for board-related communications.
Protecting the confidential nature of privileged email communications with outside directors may require some changes to practice, but they should be considered thoughtfully to avoid unintended waiver of the privilege.