In recent years, a number of federal governmental agencies have adopted policies that erode the attorney-client privilege, the work product doctrine, and employee legal rights in the corporate context. Each of these policies—including the Justice Department’s 2003 "Thompson Memorandum" (PDF), and 2006 "McNulty Memorandum" (PDF), the Securities and Exchange Commission's 2001 "Seaboard Report" (PDF), the Environmental Protection Agency’s "Audit Policy" (PDF) and others—pressure companies and other organizations to waive their privileges as a condition for receiving credit for cooperation during investigations. The Justice Department, SEC, and certain other federal agency policies also contain separate provisions that weaken employees’ Sixth Amendment right to counsel, Fifth Amendment right against self-incrimination, and other fundamental legal rights by pressuring companies not to pay their employees’ legal fees during investigations, to fire the employees for not waiving their rights, and to take other punitive actions against them long before any guilt has been established.

The ABA and its Task Force on Attorney-Client Privilege have been working closely with a broad coalition of business and legal groups—ranging from the U.S. Chamber of Commerce to the American Civil Liberties Union—and with a growing number of state and local bar associations in an effort to reverse these government policies. The Senate and House Judiciary Committees held four separate hearings on this issue since early 2006 and the ABA and the coalition testified and/or submitted written statements at each hearing. The ABA also sent letters to the Justice Department (May 2006, PDF), the Sentencing Commission (March 2006, PDF), the Commodity Futures Trading Commission (July 2006, PDF), the Department of Housing and Urban Development (December 2006, PDF), the Securities and Exchange Commission (February 2007, PDF) urging them to reverse or modify their respective waiver policies.

After considering the concerns raised by the ABA, former Justice Department officials, congressional leaders, and others, the Sentencing Commission and the Commodity Futures Trading Commission voted to reverse their privilege waiver policies in April 2006 and March 2007, respectively. Unfortunately, the Justice Department, the SEC, and the other federal agencies have refused to reverse or fundamentally change their harmful privilege waiver and employee rights policies.

Although the Justice Department issued new cooperation guidelines in December 2006 as part of the “McNulty Memorandum,” the Department’s new policy falls far short of what is needed to prevent further erosion of fundamental attorney-client privilege, work product, and employee legal protections. While the new policy requires prosecutors to obtain high-level Department approval before they can formally demand waiver of a company’s privileges, it fails to end the practice. In addition, the new policy continues to encourage routine waiver by rewarding companies for their unsolicited, “voluntary” offers to waive. Also, while the new policy generally bars prosecutors from requiring companies not to pay their employees’ legal fees in return for cooperation credit, it still allows the practice in many cases and continues to pressure companies to fire their employees or take other punitive actions against them during investigations in return for cooperation credit.

In January 2007, Sen. Arlen Specter (R-PA) introduced legislation, S. 186 (PDF), which would reverse all of these harmful federal agency policies. The ABA and the coalition subsequently endorsed S. 186, and on June 4, 2007, the ABA sent a letter to Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and all other members of the Committee urging them to support the measure. Rep. Bobby Scott (D-VA) subsequently introduced similar legislation, H.R. 3013, in the House and on November 8, 2007, the ABA wrote a letter (PDF) to all Representatives endorsing the bill. The House overwhelmingly approved H.R. 3013 (PDF) on November 13, 2007. Meanwhile, S. 186 is still pending in the Senate Judiciary Committee.

• S. 186 and H.R. 3013 would roll back harmful provisions in the DOJ, SEC, and other similar federal agency policies that are seriously eroding the attorney-client privilege, the work product doctrine and the constitutional rights of employees. These policies pressure companies and other organizations to waive their privileges as a condition for receiving cooperation credit—and more favorable treatment—during investigations. They also violate employees’ Sixth Amendment right to counsel and Fifth Amendment right against self-incrimination by pressuring companies and other entities not to pay their employees’ legal fees during investigations, to fire the employees for not waiving their rights, or to take other punitive actions against them before any guilt has been established.


• The Justice Department and other federal agencies have refused to reverse or fundamentally change their harmful privilege waiver or employee rights policies. Although DOJ reluctantly issued new cooperation guidelines in December 12, 2006 as part of the “McNulty Memorandum,” the new policy falls far short of what is needed to prevent further erosion of fundamental attorney-client privilege, work product and employee legal protections.


• The McNulty Memorandum has not significantly reduced the incidence of government coerced waiver. As shown by former Delaware Chief Justice Norman Veasey’s recent report to Congress, federal prosecutors continue to routinely demand waiver of the privilege during investigations despite the new Justice Department policy. As a result, the new policy continues to weaken the confidential relationship between companies and their lawyers, which, in turn, impedes the lawyers’ ability to conduct thorough internal investigations and effectively counsel compliance with the law. This harms companies, employees and the investing public.


• The McNulty Memorandum also continues to unfairly harm employees. While the new DOJ policy bars prosecutors from requiring companies to forgo paying their employees’ legal fees in some cases, it continues to allow the practice in many instances. The new DOJ policy and other similar federal policies also continue to pressure companies to not assist their employees with their legal defenses and to fire them for exercising their Fifth Amendment rights, long before any guilt has been shown.


• S. 186 and H.R. 3013 would strike the proper balance between effective law enforcement and the preservation of essential attorney-client privilege, work product and employee legal protections. The legislation would prevent federal agencies from pressuring companies or other organizations to waive their privileges or take unfair punitive actions against their employees as conditions for receiving cooperation credit during investigations. At the same time, the legislation specifically preserves the ability of prosecutors to obtain the important, non-privileged factual materials they need to punish wrongdoers and enforce the law.


• The legislation also has been endorsed by numerous former Justice Department officials. In their July 30, 2007 letter to Senate and House Judiciary Committee leaders, a bipartisan group of nine former senior DOJ officials concluded that the McNulty Memorandum is fundamentally flawed and that prompt passage of S. 186 and H.R. 3013 or other similar legislation is needed in order to protect the attorney-client privilege, the work product doctrine and employee legal rights.

The ABA supports the preservation of the attorney-client privilege and work product doctrine and opposes governmental policies, practices, and procedures that erode these protections, including the routine practice by government officials of seeking to obtain a waiver of the attorney-client privilege or work product doctrine through the granting or denial of any benefit or advantage. The ABA also favors governmental policies, practices, and procedures that recognize the value of the attorney-client privilege and work product doctrine. The ABA also opposes government policies, practices, and procedures that have the effect of eroding the constitutional and other legal rights of employees by encouraging law enforcement officials to pressure companies to take certain punitive actions against the employees in return for cooperation credit. The ABA's views on government-coerced waiver are summarized in its recent Fact Sheet (PDF). In addition, the complete text of the ABA's privilege waiver and employee rights policies, letters to Congress and various federal agencies, and other related materials are available at ABA Privilege Waiver Materials.