As most attorneys know, a privileged communication only can be waived by the client, and when the client is an individual, it is obvious who controls that ability to waive. Things become murkier, however, when the client is a company. While controlling the privilege generally resides with the board of directors and/or those controlling the business entity, who can access privileged communications when a former senior manager becomes adverse to the company is far less clear.
Until the end of 2016, John Mooney was the CEO of Pri-Med LLC, and John Wheelock was its senior vice president in charge of sales. Mooney and Wheelock also each owned 5% equity in Pri-Med and were entitled to have that equity repurchased at the appraised value of the company as of December 31, 2016. When the buy-out time arrived, however, Mooney and Wheelock claimed that the company and various individuals took steps to depress Pri-Med’s value so as to decrease the amount they would be paid.
Litigation ensued, and one of the items requested during discovery was communications amongst the defendants concerning Pri-Med’s 2015 and 2016 valuation. The defendants refused to produce those communications, however, claiming that they were protected from disclosure … Keep reading