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The Advice-of-Counsel Defense and the Corporate Employee: A Loss of Balance

By Gary Stein

Ordinarily, a defendant who wishes to assert the defense of advice of counsel must unlock the door that shields his privileged communications with counsel and divulge those communications to his adversary. But when the defendant is a corporate employee who claims to have relied on advice from the corporation's attorney, the employee may not be able to unlock that door, because it is the company, as the owner of the privilege, that holds the key.

Over the past decade, courts have sought to mitigate the unfairness that can result when a corporation refuses to waive the privilege in aid of an individual employee's defense of a criminal prosecution or other law enforcement proceeding. These courts have reasoned that the corporation's right to control its attorney-client privilege must be balanced against the individual's right to present a defense, and that the latter can trump the former in appropriate circumstances. See, e.g., United States v. W.R. Grace, 439 F. Supp. 2d 1125 (D. Mont. 2006).

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