Upjohn Warnings from Both Sides of the Table

danger thin iceI recently participated on a panel at the excellent NACDL White Collar Defense College with Ellen Brotman, Preston Pugh, Brian Bieber and Cynthia Orr. The College aims to teach lawyers how to handle white-collar cases from start to finish. We were tasked with presenting about the ethics of handling an internal investigation.

As in years past, our discussion about Upjohn warnings led to the most questions and engendered a little controversy. The main issue was whether the company’s lawyers should tell interviewed employees that the company will disclose what the employee says to the government.

I have different views on this issue based on where I’m sitting: on the company’s side of the table or on the employee’s side of the table.

But let’s back up to the basics.

What is an Upjohn Warning?

An Upjohn warning is a set of statements made by the lawyer for the company at the start of an interview with an employee. The purpose is to inform the employee about the company lawyer’s role and the privileged nature of the conversation. It ensures that the employee understands who the lawyer is, who she represents and, more important, who she doesn’t represent.

There are generally four parts to the warning:

  1. I was hired by the company to investigate [insert vague topic] at the company. The company thinks the employee may have useful information to share about this topic.
  2. I represent the company in this investigation. I do not represent the employee and cannot give the employee any legal advice.
  3. The interview is protected by the attorney-client privilege, so the employee should not disclose it to anyone.
  4. The company, which “owns” the privilege, may choose to disclose the contents of the interview to people outside of the company, including to the government or to law enforcement.

Then you ask if the employee understands and whether the employee has any questions.

That’s it. It’s not exactly rocket science, but it’s a critical part of any interview during an investigation.

I usually ask the employee not to talk with others at the company about the conversation either, for two reasons. First, we know that the investigation itself can cause apprehension within the company, and gossiping about the interview with other employees only adds to that anxiety. Second, when we talk with other employees, we want their fresh recollection of what happened, not tainted by other people’s recollections.

Pro Tips

It’s critical to document in your interview memo that you gave the Upjohn  warning and that the witness acknowledged receiving it. You should always have a second person at the interview with you so there is a witness to the warning (and all of the employee’s other statements). That second person can also take much better notes than you can if you are asking all of the questions.

Some people give the Upjohn  warning in writing and ask the employee to sign it before starting the interview. That’s the safest route. But I don’t do that because I think it formalizes things too much at the start of the interview. If I’m the company’s lawyer, I want the employee as relaxed as possible – because she is more willing to share information – and throwing a written warning at them doesn’t help create a relaxed environment.

Some of my NACDL co-panelists shared that they give the employee the warning in writing at the end of the interview and ask the employee to sign an acknowledgement of receipt. I like that approach much more because at that point, you already have the information you wanted from the interview, but you also can document the Upjohn warning. (Hey, I sit on panels because I learn stuff too.)

Why Do You Give an Upjohn Warning?

Ethics.

You are dealing with an unrepresented party at this point, so you have to be careful.

ABA Model Rule 4.3 provides:

In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client.

D.C. Rule 4.3 is pretty much the same:

(a) In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not:
(1) Give advice to the unrepresented person other than the advice to secure counsel, if the interests of such person are or have a reasonable possibility of being in conflict with the interests of the lawyer’s client; or
(2) State or imply to unrepresented persons whose interests are not in conflict with the interests of the lawyer’s client that the lawyer is disinterested.
(b) When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding.

The three key takeaways are these:

  1. You cannot tell the person that you are disinterested in the matter – that is, you have to tell the employee that you represent the company.
  2. You cannot give any advice to the employee other than whether to seek counsel under certain circumstances. The employee may ask “should I get a lawyer?” Under the rule, you can advise the person to get a lawyer if the person’s interests are in conflict with your client’s interests. But it’s hard to know whether the employee’s interests are in conflict with the company until you’ve interviewed him. In that situation, I usually explain that we can stop the interview if they’d like to get counsel but that I can’t advise them either way about whether they should get counsel.
  3. If the employee is confused about any part of the warning, you have to clear up the confusion as best you can and not proceed until the employee understands. Let’s say that the employee starts recounting what happened and then stops and asks “this is just between us, right?” You need to give the warning again and make sure the employee understands that no, it is not just between the employee and you. You will certainly tell the company what she says and the company may decide to tell the government or others what she says.

Controversy over Point 4 in the Upjohn Warning

So, what came up at the NACDL conference?

A (very) experienced white-collar lawyer in the audience was clearly frustrated with our cautious approach to telling employees that the company “may” decide to disclose the conversation to the government. His point was this: companies always decide to disclose to the government, so it is simply incorrect to say the company may decide to disclose. Instead, company counsel should be completely upfront and tell the employee that what he says will be turned over to the government.

This is where I’m of two minds about what to do.

I’m often brought into a case to represent an individual after he’s already been interviewed by the company. In many ways, I would have preferred that the company’s lawyers gave a very robust Upjohn warning and told my client that his statements would be disclosed to the government. That may have encouraged my client to have asked to get a lawyer before progressing with the interview. It’s always frustrating to come into a case when your client is locked into an explanation before you’ve had a chance to analyze the facts.

But when I represent the company, it’s an entirely different calculus. My obligation isn’t to protect the employee’s interests. It’s to learn as much unvarnished information as possible, as quickly as possible. An Upjohn warning that deters an employee from talking with me is not helping my client obtain its goals. To be clear, I’m not going to give a watered-down Upjohn warning that violates the rules of ethics. But I am going to give one that won’t discourage an employee from talking with me and telling me what happened.

I plan to stick with the language that what the employee tells me “may” be disclosed to the government. Here are the two problems I have with my colleague’s concerns about our use of the word “may”:

First, if the company truly hasn’t decided to go to the government, then, no, I’m not going tell the employee that it will do so. That’s not true. (I suppose we could find some middle ground and say “very likely” or “most likely” will turn the information over to the government.)  It’s not a bright-line rule that companies tell the government everything they learn during an investigation.

For example, in some cases, I’m investigating a whistle-blower complaint that may go nowhere, or I’m investigating internal wrongdoing (such as minor employee embezzlement) that may not require law enforcement involvement.

In other situations, the company may have to disclose to the government before the investigation is complete. For example, in an FCPA case where the company is engaged in a government contract, it may have been obligated under the FAR to self-disclose  potentially improper payments. If I’m following up with an employee after that initial disclosure, I will make it clear that we are cooperating actively with the government.

Second, telling the employee that the interview will definitely be turned over to the government could open up the employee to extra criminal liability for obstruction of justice. This would be a very aggressive move for a prosecutor, but there’s a little bit of precedent.

In 2004, two high-ranking executives of Computer Associates were indicted for obstruction of justice based on statements they made to the company’s private law firm during an investigation into accounting fraud. The theory of liability was that the executives knew the statements would be turned over to the government and intended that their misstatements to the law firm would mislead and obstruct the government.

I’ll be the first to say it: this prosecution was complete bullshit. It’s gratifying that the theory hasn’t been widely adopted by DOJ. But the theory did survive a motion to dismiss and the defendants ultimately pleaded guilty to conspiracy to obstruct justice. So, that makes it a problem. An Upjohn warning that tells the employee that the statements will definitely be turned over will help the government make out an obstruction charge.

I never like to help the government do anything. No matter what side of the table I’m sitting on.

This entry was posted in Attorney client privilege, internal investigation, Obstruction. Bookmark the permalink.

2 Responses to Upjohn Warnings from Both Sides of the Table

  1. Tom Carr says:

    Good article. Very good article. What is the consequence of not giving an Upjohn warning at all? Other than a sanction for violating an ethics rule, if and when a bar counsel finds out or cares? Not, not that I suggest that. Does the failure in any way affect the information you obtain or your report? Thanks. Tom Carr

    • Sara Kropf says:

      The ethics sanction is serious, as you suggest. Plus, the person you are interviewing could claim that (1) you represented him individually and (2) you committed malpractice by telling the government what the person said without his consent. I don’t otherwise see how it affects the accuracy of what is in your report. It just opens a couple of huge cans of worms.

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