The attorney-client privilege protects communications between a company lawyer and an environmental consulting firm in responding to an order issued by state authorities. [Olson v. Accessory Controls and Equipment Corp., No. SC 16218, Conn. Supreme Ct., Aug. 8, 2000]
State officials inspected Accessory's manufacturing plant where William Olson worked as an operations manager. The inspection report noted only two concerns regarding hazardous waste discharge and storage. Thereafter, the state issued a sweeping order to Accessory covering waste handling procedures and facilities throughout the entire site.
The company promptly retained a lawyer to advise it on how to proceed. In turn, the lawyer hired a consulting firm to perform "confidential services in anticipation of possible litigation" with the state. The engagement letter recited that all information and communications between the consultant and "any attorney ... or employee acting for [Accessory] are to be confidential," and that papers prepared by the consultant would belong to counsel.
Months later, the consultant issued a report to the attorney and Accessory about waste contamination throughout the plant, including areas not addressed in the state's inspection report. As a manager, Olson received a copy of the evaluation (known as the Diaz report).
The consultant was fired after refusing to prepare separate reports for different areas of the plant. Another firm limited its study to the original report. The company sent the latter study to the state, but not the Diaz report.
Sometime later, Teleflex bought a stake in Accessory and visited the plant. After promising Olson confidentiality and no reprisal, Teleflex asked him about the facility's history of waste handling. He disclosed the illegal storage and disposal incidents, as well as the existence of the Diaz report. After failed attempts to force Olson to resign, the company eliminated his position.
Olson sued Accessory for wrongful dismissal, alleging retaliation for his telling about environmental violations. Pre-emptively, the company successfully sought a court order prohibiting disclosure of or reference to any communications between the company and its lawyer, and any information protected under the attorney-client privilege, including the Diaz report. Without such evidence, Olson could not present a case, and his suit was dismissed.
On appeal, the Connecticut Supreme Court upheld the decision to shield certain communications and information, and to dismiss the lawsuit. The justices found that the Diaz report enabled the lawyer to assess her client's legal position and to render advice on an appropriate response to the state.
The court also brushed aside Olson's contention that Accessory's failure to submit the Diaz report to the state equaled fraud and thereby negated the attorney-client privilege. For one thing, the court noted that counsel was actually negotiating a compliance agreement with the state. For another, state law does not require a regulated business to report all past or present environmental violations.