Blog

HeplerBroom Legal Assistant Tanya Kasiyan, who is currently a law school student, helped with the research and writing of this blog post.

The Takeaway

A party claiming attorney-client privilege for communications with non-employees needs to satisfy the control group test and/or the common interest doctrine to avoid waiver of privilege.

Introduction

In Illinois, if attorney-client privilege is challenged, it is the duty of the party claiming privilege to prove the communications are protected. Per Illinois law, not all communications made by every employee to the corporation’s attorney are privileged. Illinois adopted the “control group” test to evaluate the merit of attorney-client privilege claims in a corporate setting.

Under the control group test, there are two tiers of corporate employees whose communications with the corporation's attorney/insurer are protected:

1. Decision-makers or top management (i.e., those who have the ability to make final decisions in litigation)
2. Employees who directly advise top management and upon whose opinions and advice the decision-makers rely (i.e., decisions would not normally be made without these employees’ advice or opinions; in fact, their opinions form the bases of any final decisions by those with actual authority) Consolidation Coal Co. v. Bucyrus-Erie Co., 89 Ill. 2d 103 (1982).

Illinois federal courts have expanded the scope of the control group to include non-employees. These courts have held that agents or outside consultants of the control group can also receive access to privileged communications without waiving attorney-client privilege protection if the following can be proven:

1. The non-employee agents served as advisors to top management of the corporate client.
2. This advisory role was such that the corporate principal would not normally have made the decisions without the non-employees' opinions or advice.
3. The non-employees' opinions or advice formed the bases of the final decisions made by those with actual authority within the corporate principle. Caremark, Inc. v. Affiliated Computer Services, Inc., 192 F.R.D. 263, 267 (N.D. Ill. 2000).

Court’s Reasoning

In Sols. Team, Inc. v. Oak St. Health, MSO, LLC, the court addressed whether defendant, Oak Street Health, waived attorney-client privilege over documents shared with Oak Street’s non-employee, Bruce Schaumberg. 17 CV 1879, 2020 WL 30602 (N.D. Ill. Jan. 2, 2020).

Oak Street’s argument was two-pronged:

1. Schaumberg was a non-employee member of Oak Street’s control group.
2. Schaumburg (as a co-defendant) shared a common interest with Oak Street. Id. at 1.

Control Group Test

The court held that Oak Street met its burden in proving that Schaumberg was part of their control group. It found that:

1. Schaumberg spent extensive time consulting with Oak Street executives about whether to terminate the contract between TST and Oak Street before it renewed.
2. Those executives were directly involved in the decision to terminate the contract with TST.
3. The executives relied heavily on Schaumberg’s recommendations in making their decision to terminate the contract.
4. They would not have made their decision without consulting Schaumberg, and they relied on his advice and insights.

The court reasoned that because Schaumberg contributed to the decision making relative to the legal issue, Oak Street established that he had an agency relationship of sufficient substance and character to preserve attorney-client privilege. Id. at 3.

Common Interest Doctrine

Furthermore, the Court held that Oak Street and Schaumberg also shared a common interest.

Under the common interest doctrine ... the disclosure of privileged material to a third party will not result in waiver if the parties share a common interest in the case. Costello v. Poisella, 291 F.R.D. 224, 231 (N.D. Ill. 2013) (internal quotation marks omitted). As the Seventh Circuit has explained, the common interest doctrine applies “where the parties undertake a joint effort with respect to a common legal interest” and is “limited strictly to those communications made to further an ongoing enterprise.” United States v. BDO Seidman LLP, 492 F.3d 806, 816 (7th Cir. 2007). Nonetheless, “communications need not be made in anticipation of litigation to fall within the common interest doctrine.” Id.