When Does Attorney Client Privilege Apply in the Corporate Setting?

1) Does the privilege apply only to an employee of the corporation or can it apply to an independent contractor.

The court in Blake v. Batmasian, 2018 WL 3829803 (S.D. Fla. Aug. 9, 2018), in concluding that the privilege could apply to either an employee or to an independent contractor, quoted In re Bieter Co., 16 F.3d 929 (8th Cir. 1994) stating that the privilege applies in situations where the company’s attorney needs to be able to confer confidentially with both employees and “nonemployees who, due to their relationship to the client, possess the very sort of information that the privilege envisions flowing most freely.” Id. at 938. The instant case involved an employee, who was CFO/controller for the employer Defendants, and so he was within the scope of the attorney-client privilege.


2)  Was the attorney-client privilege waived when the CFO/controller disclosed, during his deposition, one of the privileged documents that he had stolen by placing it on a thumb drive?

James Baker, the former CFO/controller of Defendants, misappropriated the document in question, DE 314-1, in 2013 and placed it on a thumb drive along with thousands of pages of other documents of the employer Defendants. Defendants only learned that Baker was in possession of their documents when he first attempted to disclose them to a litigation adversary of the Defendants. Defendants promptly sent demand letters to Baker demanding return of the documents, and when Baker refused, Defendants sued Baker and one Joseph Falso for misappropriation of confidential documents and conspiracy in the case of Batmasian et al. v. Baker and Falso, Case No. 2014CA008186AI.

The court in the instant case held that the limited dissemination of document DE 314-1 did not waive the attorney-client privilege by Defendants as they promptly demanded Baker return the document. Further, the court found that the Magistrate’s conclusion that there had been no waiver of the privilege was properly based on Defendants’ prompt demand for its return.

The Magistrate found that Defendants “are not going to adduce any evidence or testimony about any advice of counsel Defendants received,” and they “are not attempting in any way to rely on attorney-client privileged communications to support any defense in this case.” The court affirmed the United States Magistrate Judge’s Reports and Recommendations.