Former Executive Has No Right To Possess A-C Privileged Documents

Suppose that a corporation terminates its president and chief executive officer who then sues for breach of his employment contract.  Does the former executive officer have a right to access and use materials subject to the attorney-client privilege that were created during his tenure with the corporation?  If so, what would be the theory?

In Las Vegas Sands Corp. v. Eighth Judicial Dist. Court, 319 P.3d 618 (Nev. 2014), the former officer argued that he was entitled to privileged documents under the “collective corporate client” exception to the attorney-client privilege.  This exception is based “on the idea that there is one collective corporate client that includes the corporation itself as well as each member of the board of directors”.  Id.  The exception is grounded on the notion that directors are collectively responsible for the management of the corporation and treating them as joint clients is consistent with this responsibility.  Apparently, this idea sometimes gets extended to officers.

Although the Nevada Supreme Court noted several decisions in other jurisdictions applying the collective corporate client exception, the Court declined to follow suit:

We . . . conclude that it is inconsistent with Nevada privilege law.  Allowing a former fiduciary of a corporation to access and use privileged information after he or she becomes adverse to the corporation solely based on his or her former fiduciary role is entirely inconsistent with the purpose of the attorney-client privilege.

Footnote omitted.

 

 

Topics:  Attorney-Client Privilege, Breach of Contract, C-Suite Executives, Employer Liability Issues, Former Employee, Hiring & Firing

Published In: Civil Procedure Updates, General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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