It is not unusual for business people and/or in-house counsel to consult with accountants or other non-party experts when contemplating a potential business transaction. As the defendants in The C Company, Inc. v. Hackel recently learned, however, trying to protect such communications from disclosure based on the attorney-client privilege can be difficult, if not impossible.
In The C Company, attorney Todd Goldberg represented Michael Hackel and Dining-In, Inc. in connection with a 2008 transaction with The C Company and Nicholas Cercone. During negotiations, an employee of The C Company emailed a draft agreement to the company’s outside accountant, and asked him to evaluate the tax implications of the contemplated transaction. The accountant provided that advice, after which Attorney Goldberg and the accountant exchanged their own emails so that Attorney Goldberg could better understand the accountant’s viewpoint. After litigation related to the transaction was filed by The C Company and Cercone, they sought to discover all of the foregoing communications, and the defendants took the position that such communications were protected by the attorney-client privilege. In analyzing the matter, the Superior Court Judge began by stating that:
Massachusetts recognized the so-called “derivative” attorney-client privilege. Under this doctrine, the attorney-client
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While companies, like people, are entitled to protect privileged communications with their counsel, companies only can act through individuals. So what happens when the former CEO wants to disclose a privileged communication he had with his company’s corporate counsel? As SEC v. Present highlights, if the company does not want that communication disclosed, the former CEO may be barred from making such a disclosure.… Keep reading
The new Defend Trade Secrets Act (“DTSA”) allows owners of trade secrets to now bring a civil action in federal court to protect their trade secrets and confidential information. Further, under the DTSA, a trade secret owner may be awarded actual damages, injunctive relief, restitution, the extraordinary relief of ex parte seizure orders and, if there is willful or malicious misappropriation, exemplary damages (up to double damages) and attorneys’ fees. Although the DTSA is a big win for employers seeking to protect their trade secrets and confidential information, employers may be precluded from being awarded exemplary damages and attorneys’ fees if the employee’s confidentiality agreement does not contain an express exception for disclosures related to whistleblowing.… Keep reading
It is not unusual for employment agreements to mandate that when an employee leaves a company, whether voluntarily or by termination, he or she must return all company information. As the employer in EventMonitor v. Leness recently learned, however, relying on the courts to enforce such an obligation is risky, at best.… Keep reading
I’ve been involved in many cases where it is alleged that someone violated his or her non-compete agreement or misappropriated the company’s confidential information or trade secrets. Often, the key issue has been not what the former employee did, but what the company did not do to protect the information it contends is proprietary. The issue of failing to protect one’s confidential information and trade secrets was highlighted recently in the Appeals Court decision of Head Over Heels Gymnastics, Inc. v. Ware.… Keep reading