In recent years, many federal government agencies have adopted policies that erode the attorney-client privilege, the work product doctrine, and employee legal protections in the corporate context. Each of these policies—including the Justice Department’s 2006 "McNulty Memorandum" (PDF), the Securities and Exchange Commission's 2001 "Seaboard Report" (PDF), the Environmental Protection Agency’s "Audit Policy" (PDF), and similar policies by other agencies—pressure companies and other organizations to waive their attorney-client privilege and work product protections as a condition for receiving full cooperation credit during investigations. The 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 them 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 Privilegehave 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 U.S. 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), the General Services Administration/FAR Councils (June 2008, PDF), and the Treasury Department's Office of Foreign Assets Control (November 2008), 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. In addition, the Justice Department replaced the McNulty Memorandum with new corporate charging guidelines (PDF) in August 2008 that bar prosecutors from pressuring companies to waive their attorney-client privilege, work product, or employee legal rights in return for cooperation credit. The SEC also issued a new Enforcement Manual (PDF) in October 2008 that provides additional guidance for agency staff but does not formally change the SEC's waiver policy outlined in the Seaboard Report. Although the Manual places some limits on the ability of SEC staff to request waiver, it contains numerous loopholes and cannot be viewed as a substantial departure from past SEC policies and practices that have led to widespread government-coerced waiver.

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. In addition to Senator Specter, S. 186 is cosponsored by Senators Joseph Biden (D-DE), Thomas Carper (D-DE), Thad Cochran (R-MS), Elizabeth Dole (R-NC), Dianne Feinstein (D-CA), Lindsey Graham (R-SC), John Kerry (D-MA), Mary Landrieu (D-LA), Claire McCaskill (D-MO), Mark Pryor (D-AR), and James Webb (D-VA).

On June 27, 2008, Senator Specter introduced a revised bill, S. 3217 (PDF) and all of the Senators that previously cosponsored S. 186—plus Senators Tim Johnson (D-SD) and John Cornyn (R-TX)—have cosponsored the new bill as well. S. 186, H.R. 3013, and S. 3217—known collectively as the “Attorney-Client Privilege Protection Act”—enjoy strong bipartisan support, and all three measures currently are pending in the Senate Judiciary Committee. The ABA and its bar and coalition allies continue to urge Congress to pass the legislation as soon as possible.

• S. 3217 and H.R. 3013 would protect fundamental attorney-client privilege, work product, and employee constitutional rights during government investigations. The legislation would prohibit federal agencies from pressuring companies and other organizations to waive their attorney-client privilege and work product protections in order to receive full cooperation credit—and more favorable treatment—during investigations. The legislation also prohibits federal agencies from violating employees’ Sixth Amendment right to counsel and Fifth Amendment right against self-incrimination by pressuring companies 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 guilt has been shown.

• The new DOJ policy, standing alone, does not provide a permanent, comprehensive solution to the problem of government-coerced waiver. The Department’s new corporate charging guidelines are its fifth such policy in ten years and can be changed again at any time. In addition, the new DOJ guidelines do not carry the same weight as a federal statute, and as was the case with the Department’s 2006 McNulty Memorandum, many prosecutors in the field may not closely follow the new guidelines. The new DOJ policy also does nothing to change the policies adopted by the SEC, the EPA, HUD, or the informal practices of many other agencies, which pressure companies and employees to waive their fundamental rights in return for cooperation credit. Therefore, comprehensive legislation is still needed to make the DOJ-type reforms permanent, give them the full force of law, and apply them to all federal agencies.

• The new SEC Manual contains numerous loopholes and fails to solve the government-coerced waiver problem. Although Section 4.3 of the SEC Manual states that agency staff should not directly ask companies to waive the attorney-client privilege or work product, it permits the staff to demand waiver if approved by a supervisor. The SEC Manual also pressures companies to “voluntarily” waive the privilege—and to take punitive actions against employees who decline to waive their legal rights—in return for full cooperation credit. Thus, the new Manual cannot be viewed as a substantial departure from past SEC policies and practices that have led to widespread government-coerced waiver.

• S. 3217 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 and other law enforcement officials to obtain the important, non-privileged factual materials they need to punish wrongdoers and enforce the law.

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 the 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.