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Clarke v. J.P. Morgan Chase & Co.

April 10, 2009


The opinion of the court was delivered by: Debra Freeman, United States Magistrate Judge


Presently before the Court is an application by defendant J.P. Morgan Chase & Co. ("Defendant") for an order compelling plaintiffs Andrew Clarke, et al. ("Plaintiffs") to return or destroy all copies of an e-mail message, dated December 3, 2007, allegedly sent from Defendant's Global Technology Infrastructure Management Team (the "GTI Management Team") to "all those in GTI who manage employees impacted by upcoming FLSA changes." Defendants contend that the e-mail is protected by the attorney-client privilege and the work product doctrine. For the following reasons, Defendant's application is denied.

A. The Parties' Contentions

Defendant, which has provided a copy of the e-mail to the Court for in camera review, asserts that it was drafted, in part, by Todd Gutfleisch, Esq. ("Gutfleisch"), Defendant's former Assistant General Counsel, to recommend to managers of Defendant's information technology ("IT") department that certain IT job positions be reclassified from "exempt" to "nonexempt" from overtime eligibility under the Fair Labor Standards Act ("FLSA"). (See Letter to the Court from Sam S. Shaulson, Esq., dated Mar. 3, 2009 ("Defendant's 3/3/09 Letter"), at 2, and Ex. A2 thereto.)*fn1 Defendant argues, first, that the e-mail communicates Gutfleisch's legal advice that the positions should be reclassified. (Id.) Second, Defendant argues that, to the extent the e-mail describes the factual basis for Gutfleisch's legal advice (i.e., the nature of the work performed by employees with the job titles in question), it necessarily communicates Gutfleisch's rationale for his legal conclusions, and hence his legal reasoning. (Id.) Third, Defendant points out that the e-mail references the fact that a number of Defendant's competitors had been involved in litigation regarding the alleged misclassification of IT positions, thereby suggesting a litigation context for counsel's advice. (Id.) Fourth, Defendant argues that the e-mail communicates Gutfleisch's advice as to how the reclassification should be implemented. (Id.) Finally, Defendant argues that the e-mail is protected not only by privilege, but also under the work product doctrine, as it was prepared by an attorney "'with an eye toward litigation.'" (Id. at 5 (quoting United States v. Adlman, 134 F.3d 1194, 1195 (2d Cir. 1994)).)

In response, Plaintiffs -- whose positions were reclassified pursuant to the directive set forth in the e-mail, and who obtained a copy of the e-mail in the course of their employment, prior to the commencement of this litigation -- argue that the e-mail should not be read to contain legal advice, was not a communication between an attorney and a client, and was not intended to be, or was in fact kept, confidential. (See Letter to the Court from Adam Klein, Esq., dated Mar. 5, 2009 ("Plaintiffs' 3/5/09 Letter"), at 1.) Plaintiffs further argue that the e-mail is not protected by the work product doctrine because it was not prepared "in anticipation of litigation or for trial." (See Letter to the Court from Adam Klein, Esq., dated Feb. 24, 2009 ("Plaintiffs' 2/24/09 Letter"), at 4-5 (citing Fed. R. Civ. P. 26(b)(3)).) Finally, Plaintiffs argue that, even if the e-mail were subject to protection as a privileged communication or as work product material, Defendant has waived such protection by dissemination of the e-mail to potential plaintiffs and by the failure of defense counsel to reclaim the document immediately upon discovering that a copy was in Plaintiffs' possession. (Plaintiffs' 2/24/09 Letter, at 5.)

B. Attorney-Client Privilege

The essential elements that must be shown by a party asserting the attorney-client privilege are: "(1) a communication between client and counsel, which (2) was intended to be and was in fact kept confidential, and (3) [was] made for the purpose of obtaining or providing legal advice." United States v. Construction Prods. Research, 73 F.3d 464, 473 (2d Cir. 1996).

1. Communication Between Client and Counsel

Based on a declaration submitted by Gutfleisch, the Court accepts that he was involved with the Management Team that prepared the e-mail, that he provided legal advice to the members of that team in connection with his review of Defendant's compliance with the FLSA, that he had a hand in drafting the e-mail, and that it incorporates his legal advice. (See Declaration of Todd Gutfleisch, Esq., dated Mar. 3, 2009 ("Gutfleisch Decl."), attached as Ex. A1 to Defendant's 3/3/09 Letter, at ¶¶ 3-5.) The Court also accepts that the e-mail was intended to be distributed only to Defendant's management-level employees, not to Plaintiffs. (See id., at ¶ 3.)

This, however, does not end the inquiry as to whether the e-mail itself, as distributed, should be considered privileged. "The key, of course, to whether an attorney-client relationship existed is the intent of the client and whether he reasonably understood the [communications] to be confidential." Newmarkets Partners, LLC v. Sal. Oppenheim Jr. & Cie. S.C.A., No. 08 Civ. 04213 (WHP) (THK), 2009 U.S. Dist. LEXIS 15530 (S.D.N.Y. Feb. 26, 2009). While a communication from counsel does "not lose [its] privileged status when shared among corporate employees who share responsibility for the subject matter of the communication," Baptiste v. Cushman & Wakefield, Inc., No. 03 Civ. 2102 (RCC) (THK), 2004 U.S. Dist. LEXIS 2579, at *6 (S.D.N.Y. Feb. 20, 2004), those who receive the communication must still reasonably understand that they are receiving the advice of counsel. Otherwise, they cannot say that they understood that the communication was being made in the context of an attorney-client relationship.

Here, when distributed to management employees, the e-mail in question did not state that it was prepared by or was being sent from Gutfleisch; rather, the "sender"of the e-mail was identified only as the GTI Management Team. (Defendant's 3/3/09 Letter, at Ex. A2.) Nor did the e-mail state that it contained privileged information. (Id.) Nor did it state that any of the information incorporated therein had been obtained from counsel, or was based on communications from counsel, or even that counsel had been consulted. (Id.) Nor did it state that the policy change reflected in the e-mail was intended to implement a recommendation of counsel. (Id.)

Defendant has the burden of establishing that the e-mail is privileged, see Mercator Corp. v. United States, 318 F.3d 379, 384 (2d Cir. 2002), and, as a threshold matter, this includes showing that the recipients of the e-mail would have understood that it contained or referenced a communication from counsel. On this point, Defendant essentially asks the Court to assume that the recipients of the e-mail would have understood that the e-mail incorporated the advice of counsel because (1) the e-mail addressed the issue of FLSA compliance, (2) it noted facts regarding the IT employees' job duties on which, according to Defendant, "no non-lawyer manager could ever have been expected to focus" (Defendant's 3/3/09 Letter, at 4), and (3) it referenced litigation against other companies. Yet none of these aspects of the e-mail necessarily signaled to the recipients that the e-mail contained legal advice. Cf. Baptiste, 2004 U.S. Dist. LEXIS 2579, at *7 (finding that it was "of no moment that the e-mail was not authored by an attorney or addressed to an attorney" where the e-mail at issue "was clearly conveying information and advice given to [its author] by . . . outside counsel"); see also id. at *2 (noting that the e-mail at issue specifically referenced the author's having spoken with counsel).)

Indeed, all of the information in the e-mail could easily have been understood to have come from senior management, working in conjunction with Defendant's human resources ("HR") department, as can be seen from the follow-up memorandum that was apparently sent out by the HR department on or about December 11, 2007. (See Letter to the Court from Sam S. Shaulson, Esq., dated April 1, 2009 ("Defendant's 4/1/09 Letter") (enclosing the follow-up memorandum), and attachment thereto;Defendant's 3/3/09 Letter, at Ex. A2 (noting that follow-up would be sent on December 11 from "Corporate Sector HR").) Not only does that second communication also fail to mention any involvement of counsel, but it suggests that the recipients tell the reclassified employees that "Human Resources and technology management partnered to conduct a review of Technology jobs to ensure they are classified consistently from an overtime eligibility standpoint." (Defendant's 4/1/09 Letter, attached exhibit, at TG00003.)*fn2

Further, this follow-up memorandum explains that the reclassification was being made because, "[a]s a normal practice, we periodically review our jobs to ensure we have them classified consistently." (Id. at TG00006.)*fn3 There is no implication that this particular compliance review was actually conducted by counsel and that the upshot of the review was a recommendation by counsel to implement a reclassification. On the contrary, the plain implication of the communications, especially when read together, was that the ...

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