September 8, 2008 / Law Alert

Justice Department Changes Rules for Prosecutors Investigating and Prosecuting Business Organizations

In recent years, the Justice Department has received criticism for pushing corporations and other business organizations to waive the attorney-client privilege in exchange for "cooperation credit" in charging and sentencing-recommendation decisions. In an effort to forestall legislation pending before Congress, Deputy Attorney General Mark Filip has issued a memorandum restricting prosecutors' ability to seek such waivers, superseding the "McNulty Memorandum," which stated the Department's former policies. Under the new memorandum, cooperation credit will no longer depend on whether a business has waived privilege, but rather on whether it has disclosed all relevant facts. Also, prosecutors may no longer ask for privilege waivers with respect to non-factual attorney work-product and communications. Prosecutors also may not consider, at least for the purpose of evaluating cooperation, whether a business has advanced attorney's fees to employees, engaged in a joint-defense agreement, or disciplined or terminated employees.