15 Sep 23

Asserting the Attorney-Client Privilege in FTC Probes

| by

Last Updated on: 18th September 2023, 01:05 am

Asserting the Attorney-Client Privilege in FTC Probes

When a company finds itself the subject of an FTC investigation, one of the most important privileges it can assert is attorney-client privilege. This allows for confidential communication between attorney and client that the FTC cannot force them to disclose. However, there are limitations and exceptions to this privilege that companies should understand before asserting it.

What is Attorney-Client Privilege?

Attorney-client privilege protects confidential communications between an attorney and their client made for the purpose of obtaining legal advice. The privilege encourages open and honest communication so the attorney can provide fully informed legal advice. Attorney-client privilege is recognized in the FTC’s Rules of Practice as well as case law and is considered a key aspect of due process in FTC proceedings.

Who Can Assert the Privilege?

Only the client can assert attorney-client privilege, not the attorney. The “client” refers to the company or organization, not individual employees. However, former employees usually cannot assert privilege over communications that occurred during their employment. There are two requirements for asserting privilege:

  1. The person or entity asserting privilege must be/have been a client of the attorney at the time of communication.
  2. The communication must have been with an attorney licensed to practice law.

In-house counsel can be considered attorneys for privilege purposes as long as they are licensed. Outside counsel hired to assist with an FTC investigation would also qualify.

What Types of Communication are Protected?

The communication must meet the following criteria:

  • Made between privileged persons (attorney and client)
  • Made in confidence
  • For the purpose of obtaining or providing legal advice

This includes verbal discussions, written memos, emails, notes taken by attorneys during client meetings, and other correspondence related to legal advice. Facts are not protected, only the advice/analysis provided by counsel. Courts determine privilege on a document-by-document basis.

When Can Privilege be Waived?

There are certain situations where attorney-client privilege can be waived, eliminating confidentiality:

  • Sharing communications with third parties – This includes anyone outside the attorney-client relationship.
  • Using communications for non-legal business purposes – Courts may rule this waives privilege if it exceeds the scope of legal advice.
  • Disclosing privileged information to government agencies – Either intentionally or by mistake. Precautions must be taken.
  • Raising an advice-of-counsel defense – The company opens itself up to discovery of related communications.

Companies under FTC investigation must be very careful not to inadvertently waive privilege. Once waived, there is no getting it back.

Best Practices for Maintaining Privilege

Here are some best practices companies should follow:

  • Clearly mark privileged communications as “Attorney-Client Privileged”
  • Segregate privileged documents to avoid accidental disclosure
  • Limit sharing of privileged communications within the company
  • Create privilege logs detailing any privileged documents withheld
  • Get written confidentiality agreements before disclosing anything to third parties
  • Scrub any documents given to the FTC for privileged information

Having clear policies and procedures around privilege are key to avoiding waiver. Companies should work closely with counsel to assert and maintain privilege appropriately.

Responding to FTC Requests for Privileged Information

The FTC will often request documents and communications from a company that may be subject to attorney-client privilege. The company can object and refuse to provide privileged material, but it must clearly explain the specific grounds for privilege on a document-by-document basis. Blanket assertions of privilege will be challenged by the FTC and can lead to waiver if the court finds them unjustified.

If privileged documents are accidentally disclosed, the company can request their return by the FTC. However, the FTC may argue the disclosure waived privilege, in which case the court will decide the status of the documents. It is best for companies to avoid disclosing anything potentially privileged in response to FTC requests.

Challenging FTC Access to Privileged Information

If the FTC obtains privileged information through other means, such as employee interviews, companies can challenge their ability to use it. In Upjohn Co. v. United States, the Supreme Court ruled companies can prevent their attorneys from being compelled to disclose privileged information. FTC lawyers are also bound by confidentiality rules prohibiting them from viewing privileged materials inadvertently disclosed during an investigation.

That said, the FTC maintains that privileged information already in its possession can still be used, even if improperly obtained. The company would have to convince a court to both suppress the evidence and disqualify FTC lawyers exposed to it. This is difficult given the high burden of proof.

Weighing the Pros and Cons of Asserting Privilege

While protecting confidentiality is usually advisable, asserting privilege has potential downsides companies should consider:

  • May draw FTC suspicions if used excessively/improperly
  • Can limit company’s access to its own communications if litigation occurs
  • FTC may seek privileged information from other sources
  • Delays investigation process
  • Risk of waiver if privilege claims challenged

Companies should work with experienced counsel to determine if privilege assertions are worthwhile or could backfire in specific situations.

Takeaways for Asserting Privilege in FTC Probes

Here are some key takeaways for companies asserting attorney-client privilege during an FTC investigation:

  • Understand the requirements – Who can assert privilege, what communications qualify, and how privilege can be waived.
  • Implement privilege best practices – Marking documents, limiting access, creating privilege logs, etc.
  • Object properly to FTC requests – Clearly explain grounds for privilege without blanket assertions.
  • Get confidentiality agreements – Before disclosing anything to third parties like consultants.
  • Work closely with counsel – Weigh risks/benefits of asserting privilege in each specific situation.
  • Avoid privilege pitfalls – Like sharing privileged info internally too loosely or producing privileged documents accidentally.

Asserting privilege comes with hazards like drawing FTC suspicions or having privilege claims challenged. The key is working with experienced counsel to invoke privilege carefully, deliberately, and only when truly justified. Companies should focus on explaining their privilege assertions reasonably without appearing resistant or obstructionist. With proper preparation and prudence, attorney-client privilege can provide critical protections in an FTC investigation.


[1] Corporate Client-Attorney Privilege – UMKC School of Law

[2] ‘What’s Up, John?’: A Refresher on the ‘Upjohn’ Standard – Babst Calland

[3] Employee’s Written Statements and Corporate Privilege – Andrew Scrabtree

[4] scramblis.html – GitHub

[5] CodaLab Vocabulary List

[6] Hugging Face Vocabulary List