Employment lawyers often advise on sensitive matters. But what if a matter is so sensitive, or electric, that it is likely to attract the attention of the press? Is formulating a public relations strategy the appropriate role of counsel?
What if your client is facing the possibility of negative publicity relating to allegations of unfair labor practices that could damage its reputation and perhaps lead to a government prosecution?
If counsel retains an expert to implement a public relations or other strategy, should the attorney-client privilege shield the advice from discovery?
The Supreme Court recognized, in Gentile v. State Bar of Nevada (a case dating back more than 25 years) that "[a]n attorney's duties do not begin inside the courtroom door…[A]n attorney may take reasonable steps to defend a client's reputation…including…in the court of public opinion."1
Gentile struck down a bar association restriction on extrajudicial statements as violating the First Amendment. While the privilege was not at issue, the court's view sets the stage.
The Kovel Doctrine
A consideration of the privilege and its application to third parties must begin, at least in the Second Circuit, with a review of United States v. Kovel.2 In Kovel, Judge Henry Friendly famously held that the privilege protects communications between a lawyer, client, and accountant, where the lawyer or the client employs the accountant to help the lawyer understand the issues at play in a tax law case.
The court analogized the accountant's role to that of an interpreter of a foreign language. Echoing Abraham Lincoln, the judge stated: "Accounting concepts are a foreign language to some lawyers in almost all cases, and to almost all lawyers in some cases."
Thus the presence of an accountant in an attorney's meeting with a client should not defeat the privilege any more than would the presence of a foreign language interpreter in such a meeting. Indeed, the attorney's presence is not necessary for the privilege to apply. If the accountant meets alone with the client and then conveys the information to the attorney to assist the lawyers' understanding the issues and rendering legal advice, then the privilege protects the communications.
However, the court cautioned: "If what is sought is not legal advice but only accounting services…or if the advice sought is the accountant's rather than the lawyer's, no privilege exists."
Martha Stewart
Martha Stewart's lawyers scored a groundbreaking victory in preserving the confidentiality of advice they received from a public relations firm when they defended her against securities fraud charges in a grand jury proceeding.3 (Stewart's name did not appear in the opinion; she is referred to as "Target.") The case, the court acknowledged, was a "high profile matter," in which there was "intense public interest." Her lawyers hired a public relations firm to help them address their concern that the prosecutors would feel compelled by public pressure to bring charges.
Thus, Stewart's lawyers argued, the consulting firm's primary responsibility was "defensive"—to communicate with media in a way to restore balance and accuracy, and neutralize the environment. The target audience was in fact not the public, but prosecutors and regulators.
The government served grand jury subpoenas on the public relations firm. Finding the communications between the law firm, public relations counsel, and defendant privileged, Judge Lewis Kaplan recognized that the media, prosecutors, and law enforcement often engage in activities that color public opinion to the detriment of the subject's reputation and right to obtain a fair trial, and that prosecutors are influenced by public opinion in deciding whether to bring charges.
The court held that the lawyers' ability to advise on whether to speak to the media, whether to do so directly or through representatives, whether and to what extent to comment on specific allegations, whether to say "no comment" or provide detailed factual presentations, and how they would be reported, and similar issues, required professional advice.
Thus, the court concluded: Confidential communications between lawyers and PR consultants hired by the lawyers to assist them in dealing with media "in cases such as this," that are made for the purpose of giving or receiving advice, directed at handling the client's legal problems, may be privileged.
However, certain communications directly between Stewart and the consultants were held not privileged, such as her questions about the PR consultant's view of media coverage and regarding particular stories in the media, because they were not asked at counsel's direction or intended to help her lawyers formulate legal strategy. Also, the court emphasized: "No one suggests that communications between Target and [the consultants] would have been privileged if she simply had gone out and hired [them] as public relations counsel."
Employment Law
Shortly after Martha Stewart's successful invocation of the privilege, the plaintiff in an age discrimination claim sought to protect via the attorney-client privilege and work product doctrine communications her lawyers had with a public relations consultant. In Haugh v. Schroder Investment Management,4 plaintiff's counsel retained a public relations expert who was also a lawyer to advise on "media strategy as it impacted on our litigation and the consequent support and handling of media communications." The firm's letter of retention specifically noted that the communications between the consultant and the law firm "are confidential and privileged."
Judge Denise Cote rejected application of the privilege, and distinguished Kovel and Judge Kaplan's decision in In re Grand Jury Subpoenas. She noted that the plaintiff had not shown that the consultant "performed anything other than standard public relations services," and, "more importantly," she had not shown that the communications between the consultant and plaintiff's counsel "were necessary so that [counsel] could provide [plaintiff] with legal advice."
The court concluded, "A media campaign is not a litigation strategy. Some attorneys may feel it is desirable at times to conduct a media campaign, but that decision does not transform their coordination of a campaign into legal advice."
Notwithstanding this rejection of the privilege, the court held that almost all of the documents were protected by the work product doctrine, because "they were all prepared by a party, her agent, attorney or consultant in anticipation of litigation."
In a March 2015 Fair Labor Standards Act collective action case filed in the Southern District, Scott v. Chipotle Mexican Grill,5 Chipotle sought to invoke Kovel to protect against discovery of a report from a human resources consultant who engaged in a job function analysis. The consultant had interviewed employees without mentioning the interviews were privileged, confidential, or to assist Chipotle in obtaining legal advice.
The court concluded that the consultant "did not provide any specialized knowledge that the attorneys…could not have acquired or understood on their own or directly through its client."
Federal v. State Privilege Law
In Egiazaryan v. Zalmayev,6 the court in the Southern District rejected application of the privilege to protect against discovery of emails sent or received from a public relations firm the plaintiff had hired, among other things, to assist his counsel with the case, to develop and implement a global media strategy, and to manage crisis communications.
Egiazaryan was a diversity case, and so New York State privilege law applied, rather than federal common law, which applied to Martha Stewart's case. The court noted that New York law is more limiting of extension of the privilege to third parties (i.e., the "agency exception") than is federal law.
The court concluded that In re Grand Jury Subpoenas was a "very narrow holding," and "limited by its context: the Court couched its finding in the narrow scenario of public relations consultants assisting lawyers during a high profile grand jury investigation."7
Conclusion
Notwithstanding the success of Martha Stewart's lawyers, courts have generally found that ruling limited to its facts. Stewart was a high-profile individual who was facing a grand jury in a very public case, and her firm carefully worked with the public relations firm to assist them in preparing a public story that was targeted to the prosecutors themselves, not merely to assist with their client's image.
In certain limited circumstances, communications between employment law counsel and a public relations consultant, and between the consultant and the client, may be protected against disclosure by the attorney-client privilege or work product doctrine. But counsel should not assume that the privilege will apply without taking careful limiting steps, and assuring that the relationship remains consistent with the limitations that case law mandates.
Endnotes:
1. 501 U.S. 1030, 1043 (1991).
2. 296 F.2d 918 (2d. Cir. 1961). However, as discussed further below, it is important to remember that in matters of privilege, one must consider whether federal common law or New York privilege law will apply.
3. In re Grand Jury Subpoenas, 265 F.Supp.2d 321 (S.D.N.Y. 2003).
4. 2001 U.S. Dist. LEXIS 14586 (S.D.N.Y. 2003).
5. 2015 U.S. Dist. LEXIS 40176 (S.D.N.Y. 2015).
6. 290 F.R.D. 421 (S.D.N.Y. 2013).
7. Quotes eliminate brackets, quotation marks, and citations.
Philip M. Berkowitz is a shareholder and U.S. co-chair of Littler’s International Law Practice Group. He is based in the firm’s New York City office. This article is reprinted with permission from the May 14, 2015 issue of the New York Law Journal. © ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
