Internal Investigations: Who is the client?
It is common in many internal investigations to give the so-called Upjohn warnings. Those warnings, based on the Supreme Court’s decision in UpJhohn Co. v. United States, 449 U.S. 383 (1981), typically are given to an employee in an internal investigation and state that investigating counsel: 1) represents the company and not the employee; 2) that information learned during the interview is privileged to the company and that only the company will determine whether to provide such information to the government and the employee will not be consulted; 3) information discussed at the interview is to be kept confidential to preserve the company’s privilege; and 4) the employee should state that he or she understands the warnings. The dangers of not giving the warnings are illustrated by the recent decision in In Re: Grand Jury Subpoena: Under Seal, 415 F. 3d 333 (4th Cir. 2005), cert. denied, 2006 U.S. LEXIS 229 (Jan. 9, 2006). There investigating counsel conducting an internal inquiry of AOL told employees that they represented the company and that the privilege and the right to waive it belonged to the company. Investigating counsel also told employees that they “can” represent them and advised one employee that they did not recommend retaining separate counsel in response to a question. When information from the interviews was subpoenaed in a grand jury inquiry the employees moved to intervene claiming that they had an attorney client relationship with investigating counsel based in part on the statements that such counsel “can” represent the employees. The court rejected the claim, drawing a distinction between “can” and “do.” The court was careful however to note that its holding was not an endorsement for watering down the Upjohn warnings. Indeed, while in many instances it may be convenient to “water down” the full warnings, this case illustrates the potential pitfalls with that approach.