Corporate organization charts increasingly include slots for departments with names like  “risk management,” “claims handling,” and the like.  When lawyers head or staff such departments, does the attorney-client privilege cover their communications with company management?  Not necessarily, says a new opinion from the Eastern District of Pennsylvania, Casey v. Unitek Global Services, Inc. 

Sex discrimination allegations 

Casey sued her employer, Unitek, claiming sex discrimination and violation of the equal pay act.  Casey was Vice President of Risk and Safety.  She coordinated the insurance programs for Unitek and its subsidiaries, analyzed risk and managed litigation arising from insurable claims.  Although Casey had graduated from law school in 1993, she never practiced law; and as VP of Risk and Safety, she did not report to the company’s GC. 

Casey complained that she was paid less than male colleagues and was sexually harassed.  In January 2013, she e-mailed a complaint detailing the harassment. “Within minutes,” she was terminated. 

Unitek filled Casey’s former position with two non-lawyers. 

When Casey sued Unitek, the company sought a protective order barring her use of attorney-client communications to prosecute her case, arguing, among other things, that she was the company’s lawyer.  Unitek pointed to Casey’s presence at litigation meetings and her management of litigation.  But the court ruled, notwithstanding these facts, that the threshold factor for attorney-client privilege — an attorney-client relationship — was lacking here. 

No attorney-client relationship = no privilege 

The court explained that even though her legal training helped Casey in her job, her role did not signify that she was acting as Unitek’s lawyer.  There was no evidence that the company sought Casey’s legal advice on the litigation she oversaw. The court said that she was more like “an in-house insurance broker and claims adjuster.” 

This decision should give companies pause, given the trend toward the departmentalization of various litigation claims functions.  Even if the risk manager is a lawyer, communications with him or her may not be covered by attorney-client privilege, based on the reasoning in this decision. 

Sword or shield? 

The company’s attempt to prevent Casey from using confidential documents to prove her case also had some unexpected fall-out  — waiver of the attorney-client privilege. 

The company sought to file 15 exhibits in its brief under seal, claiming they were privileged.   The court ruled that while the privileged character of some of the exhibits would support Unitek’s position, it could not “ignore the manner in which the documents were used,” and denied the request to seal. 

Quoting precedent from the District of Delaware, the court said that “a party should not be permitted to use the privilege to shield information which it has deliberately chosen to use offensively.”  The court said that Unitek had tried to use the privilege on offense, i.e., to shut down the suit by precluding Casey from using any of the documents that would prove her allegations.  That conduct, said the court, waived the company’s right to use the privilege defensively by claiming privilege over some of the same documents and filing them under seal. 

The court did not explain whether the waiver extended only to the documents referenced in the request to seal, or would govern future proceedings in the case. 

The court’s reasoning on this point would seem to be open to question.  Did the company really use the privilege “on offense,” although it apparently did not seek to use against Casey any of the documents it claimed as privileged? 

Caution needed 

In all, this decision raises a caution flag for companies:  first, in their expectations about their communications with “risk management” lawyers; and second, regarding the possible consequences of using the privilege “on offense.”