The House has passed a bill prohibiting federal agencies from pressuring companies to waive their privileges or take punitive actions against their employees as conditions for receiving cooperation credit during investigations. At the same time, HR 3013 specifically preserves the ability of prosecutors and other federal officials to obtain the important, non-privileged factual material they need to punish wrongdoers. H.R. 3013 is an effort to strike the proper balance between effective law enforcement and the preservation of essential attorney-client privilege, work product and employee legal protections.
The Attorney-Client Privilege Protection Act is a bipartisan bill, sponsored by Representatives Bobby Scott, John Conyers, Lamar Smith, Randy Forbes, and eight other Members of Congress. A companion bill in the Senate, S. 186, is still in committee.
H.R. 3013 is a comprehensive reform measure designed to roll back a number of federal agency policies that the House believes are eroding the attorney-client privilege, the work product doctrine and the constitutional rights of employees. The genesis of the policies is a series of Department of Justice memoranda, the latest of which is the 2006 McNulty Memorandum, that pressures companies and other organizations to waive their privileges as a condition of receiving cooperation credit during investigations.
While the McNulty Memorandum bars prosecutors from requiring companies to not pay their employees' legal fees in some cases, according to a letter from the American Bar Association, it continues to allow the practice in many instances. The ABA cited a report by former Delaware Chief Justice Norman Veasey, recently sent to congressional leaders, indicating that the McNulty Memorandum has not significantly reduced the incidence of government coerced waiver, and federal prosecutors continue to routinely demand waiver of the privilege during investigations despite the new policy.
While the McNulty Memorandum does state that the waiver requests should be the exception rather than the rule, it continues to threaten the viability of attorney-client privilege in business organizations by allowing prosecutors to request a waiver of privilege upon the finding of legitimate need.
According to the Housed committee report, these policies have created a culture of waiver despite the fact that their tone may be moderate and the officials representing these government agencies may stress their intent to implement them in reasonable ways. By creating a differential in the treatment of a company based upon whether that company waives these policies put undue pressure on companies to relinquish fundamental rights.
HR 3013 prohibits an agent of the United States in any investigation or criminal or civil enforcement matter from conditioning a charging decision upon, or using as a factor in determining cooperation, any one of five specified actions:
- making a valid assertion of attorney-client privilege or attorney work product;
- providing counsel or contributing legal defense fees or expenses to an employee;
- entering into joint defense, information sharing, or common interest agreements with an employee;
- sharing relevant information with an employee; and
- failing to terminate or otherwise sanction an employee because of that employee's decision to exercise legal protections