Individuals accused of wrongdoing in their capacity as corporate employees often have previously consulted with company counsel related to some aspect of the conduct they are later called on to defend. Advice of counsel, if properly invoked and satisfactorily proven, can provide an affirmative defense where intent is an element of the offense or claim, showing that a defendant lacked improper intent or acted in good faith. However, invoking the advice-of-counsel defense puts “at issue” privileged communications, requiring waiver of the attorney-client privilege as to communications related to the attorney’s advice, so as to establish the bona fides of the defense and prevent the privilege from being used both as a sword and a shield.

Deciding whether the benefits of waiving the privilege outweigh the risks of laying bare one’s communications with counsel can be difficult and involves a careful considerations of the competing concerns. Where—as in the case of a corporate employee—the privilege is held and controlled by an entity other than the defendant seeking to invoke the defense, the privilege-holder may well have a different risk/benefit calculus than the defendant, and may resist or refuse to waive. U.S. District Judge Jesse M. Furman’s decision this fall in United States v. Wells Fargo Bank1 explores this clash of interests between the privilege holder and the defendant, and holds, in a case of first impression in the U.S. Court of Appeals for the Second Circuit, that a corporation cannot be forced to disclose privileged communications, even if those communications would provide a complete defense to one of its employees—at least in the context of a civil dispute.

‘Wells Fargo’

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