In a decision last week in the government’s FIRREA action against Wells Fargo (previous coverage here), Judge Furman ruled that, at least in civil cases, an individual cannot force his former employer to waive privilege so the employee can assert an advice-of-counsel defense. Judge Furman found that allowing a forced waiver in these circumstances would make the privilege “intolerably uncertain”:
Notably, there are many forms of privileges that are qualified and can, therefore, be overcome by a showing of sufficient need. As [the U.S. Supreme Court in] Swidler & Berlin makes plain, however, the attorney-client privilege is not among them.
. . .
[T]o hold that [the employee] can pursue his defense over the Bank’s objection would “render the privilege intolerably uncertain” and prejudice Wells Fargo, which would “losethe attorney-client privilege because of the litigation strategy deployed by its former employee.” . . . .[I]t would also create a perverse “incentive for plaintiffs to pursue claims against individual employees in the hopes of forcing a waiver of the corporation’s privilege.”
Judge Furman also noted that the decision may not be as harsh as it seems, as companies may choose to waive the privilege (and allow their employees to present the defense) in order to avoid indemnification, vicarious liability, or bad press. (H/T National Law Review)