Selected Privilege Issues for Franchise Counsel

This article updates issues of attorney-client privilege, using an important case from 2009 and federal Rule 502, which was enacted in 2008.

Communications Through an Employer's Computer System

In Stengart v. Loving Care Agency, Inc., et al. (Docket No. A-3506-08T1 Sup. Ct. NJ, App. Div. (June 26, 2009)) a New Jersey appellate court ruled that an employee's communication with her attorney effected through the employer's computer was protected by the attorney-client privilege in a case filed by the employee against the employer. While not a franchise case, Stengart is potentially relevant for franchisors that incorporate their franchisees on their computer system.

Stengart, the employee, had used the laptop provided her by Loving Care Agency, her employer, to access her private e-mail provider and send messages to her attorney related to the claim she ultimately filed against Loving Care. The company later extracted the e-mails from the laptop's hard drive, and its counsel read and used them in preparation of its case, without telling Stengart's counsel. Her counsel discovered this when, months later, certain of the e-mails were referenced, and some were provided in response to interrogatories. Stengart, through her counsel, asserted that the e-mails were protected by the attorney-client privilege and requested that all such messages be identified and returned. When Loving Care's counsel refused, Stengart took the issue to the trial court through a motion. The trial court denied the motion, and Stengart appealed the ruling.

The Company Handbook

Loving Care had an electronic communications policy in its company handbook, where it reserved the right “to review, audit, intercept, access and disclose all matters on the company's media systems and services ' at any time, with or without notice.” The handbook also said, “E-mail and voice mail messages, Internet use and communication and computer files are considered part of the company's business and client records. Such communications are not to be considered private or personal to any individual employee.” And it stated that “[t]he principal purpose of electronic mail (e-mail) is for company business communications. Occasional personal use is permitted.” (Id. at 4.)

However, the facts in the record made it appear that there were multiple versions of the “policy.” Loving Care did not produce any document from Stengart confirming receipt of the handbook or the policy, which the court said was the “custom among employers in these matters.” And the court was not persuaded ' as the trial judge apparently was ' that a person in Stengart's executive position with the company would have constructive knowledge of the policies. Further, there was a certification from Stengart, as well as another former Loving Care executive, that the policy did not apply to executives.

The court also questioned whether the policy was clear regarding whether it applied to e-mails sent through the employee's personal, password-protected Internet e-mail account when a company computer was the vehicle used to send and receive those emails. The trial judge had felt that the policy put the employees on notice that emails through the company computer would be subject to company review ' affording no reasonable expectation of privacy ' regardless of whether it was sent from a work account or a personal Web-based account.

It's All in the Language

The court seized the “occasional personal use is permitted” language to underscore the confusion around the intent of the policy as the final blow to the company's arguments. It could not reconcile the concept of “personal use” with the thought that the company could retain all e-mails, even personal/private ones, as its property, other than in the case where there was some valid basis to protect the company's interests. The court could not conclude that the employee would not have an expectation of privacy regarding personal e-mails.

The ruling walked through an analysis of why the company may have an interest in certain information that an employee may send through or store on its computer ' information relating to criminal activities, such as theft or child pornography ' and why the company has an interest in monitoring whether the employee is devoting himself or herself to company duties. But then the court explained that the company cannot use the fact that it is a company computer to “rummage among information having no bearing upon its legitimate business interests” (Id. at 23.) It compared the company's interest in these communications with “the highly impermissible conduct of electronically eavesdropping on a conversation between plaintiff and her attorney while she was on lunch break.” (Id. at 20.) The court further compared it with “when an employer rifles through a folder containing an employee's private papers or reaches in and examines the contents of an employee's pockets.” (Id. at 18.) Interesting analogies. The court seems to go well beyond the “occasional personal use” language as an exception to the asserted interests of the company as the basis for its analysis.

The Final Ruling

Ultimately, the court held that the attorney-client privilege applied to the e-mails in question. In fact, the court took Loving Care's counsel to task for not “returning” the e-mails to Stengart's counsel without reading them, and it remanded the case to the trial court the issue of whether and what type sanctions should be levied on counsel for the ethical breach. (Id. at 29-30.)

A final note. The court seemed to attach some importance to the fact that Stengart sent her e-mail through her personal provider, even though she accessed that provider through the company's computer. But the court did not say that fact was determinative. In view of the court's focus on the privacy issues and the analogies used by the court in that regard, it may be that the same result would obtain had Stengart used the company's email account. (See Convertino v. United States Department of Justice, Civil Action 04-0236, U.S. District Court, District of Columbia (December 10, 2009). The court upheld the privilege as to e-mails sent by an employee of the Department of Justice (DOJ) to his private attorney from his DOJ account, saying the DOJ had no ban on the private use of its company e-mail for private communication, and the employee did not know that DOJ regularly accessed and saved e-mails sent from its system, so the employee's expectation of privacy was reasonable.)

Counsel for any franchise system that has its franchisees on its computer system should consider the reasoning in the case when working with a franchisor to develop its policies around use of the system. Any policy relating to the franchisor's interest in information sent through the system must be clear, unambiguous, and communicated to the franchisees. Further, the franchisees must be required to have a policy in place relating to their employees' use of the system acceptable to the franchisor, and the franchisor will want to have confirmation that it has been communicated to the employees. And even in that event, the franchisor needs to understand that it may not be able to push aside a claim of attorney-client privilege made by the franchisee as to information communicated through the system by the franchisee to its counsel.

A Road Map for Avoiding Waiver by Inadvertent Disclosure

Document production has become an enormously time-consuming and expensive undertaking. With the explosion of the use and availability of electronically stored information, this problem has grown exponentially. It is no longer uncommon for cases to involve the disclosure of hundreds of thousands of documents involving millions of pages.

High-volume document production substantially increases the cost and effort involved in pre-production reviews of documents to ensure that materials such as those covered by the attorney-client privilege and the attorney work product doctrine are not released to the opponent. However, the chance of inadvertent disclosure of privileged materials increases with the volume of documents produced in any given case.

To address the growing incidence of and confusion over inadvertent disclosures, FRE 502 was written, and it was signed into law by former President Bush on Sept. 19, 2008. The rule applies to all proceedings commenced after that date “and, insofar as is just and practicable, in all proceedings pending on such date of enactment.”

Before the enactment of FRE 502, it had already become commonplace for counsel to enter into so-called “claw-back” and “quick peek” production agreements. A claw-back agreement, the most common approach, generally requires the parties to use good-faith efforts to cull privileged documents from their production, but also allows them to “claw-back” or take back privileged documents that were inadvertently produced. The claw-back agreement typically provides that neither party will claim a waiver of privilege based on the other's inadvertent production of privileged materials, reserving the right to contest whether the privilege applied to the document in the first place. An alternative and much more risky approach was the use of a “quick peek” production agreement under which all responsive documents are produced without any prior review for privilege. Following the initial review by the receiving party, the documents are returned to the producing party which then conducts the privilege review of only those documents the opposing party designated as those it wished to receive.

However, this system was fraught with uncertainty, including longstanding conflict between district courts and the circuits over the consequences of inadvertently disclosing information subject to the attorney-client privilege or work product doctrine. Over time, three distinct approaches had evolved: 1) a “never waived” rule, under which inadvertent disclosure of privileged materials never constitutes a waiver; 2) an “always waived” rule; and 3) a middle-ground or balanced approach, under which the court assesses various factors such as the reasonableness of the precautions taken to prevent inadvertent disclosure, the time taken to rectify the error, the scope of the discovery and the extent of the disclosure. But attorneys could never be sure which rule would be invoked by which court.

FRE 502 is designed to end those conflicts. Under FRE 502, the disclosure of an attorney-client privileged or work product protected document in a federal proceeding generally results in a waiver of the privilege only for the disclosed communication or information. Subject matter waiver will only apply “in those unusual situations in which fairness requires a further disclosure of related, protected information in order to prevent a selective and misleading presentation of evidence to the disadvantage of the adversary.” (Explanatory Note, Subdivision (a), supra.)

If the inadvertent disclosure is made in a federal proceeding, the federal court rules on subject matter waiver govern any subsequent proceeding in federal or state court concerning the scope of the waiver resulting from the disclosure in question.

FRE 502(e) reiterates that the parties to a federal proceeding can enter into agreements that have the effect of limiting their exposure for the inadvertent disclosure of privileged materials. If the parties desire to have the agreement bind parties who are not in the litigation of the federal proceeding, the agreement must be made part of a court order to that effect under FRE 502(d).

This is an important step forward in creating a uniform set of guidelines that govern the consequences of an inadvertent disclosure of privileged materials in federal courts. The rule brings some, but not total, certainty to the process. As written, the rule places a tremendous burden upon the judiciary, requiring federal courts to engage in a case-by-case and sometimes intensive, expensive and subjective review of both the precautions taken to prevent inadvertent disclosure and the steps taken to rectify same following their discovery.

Attorneys and the New Reality

Attorneys should adapt their agreements with opposing counsel to reflect the new reality. Borrowing in part from an order entered by the court in Alcon Manufacturing, Ltd. v. Apotex, Inc., 2008 WL 50704465 (S.D.Ind. Nov. 26, 2008), we offer the following example of a provision that may be used to limit the effect of an inadvertent disclosure of materials subject to the attorney-client privilege or work product protection:

If a Producing Party inadvertently or mistakenly produces or provides information, documents or tangible items via discovery in this Action that the Producing Party was entitled to withhold subject to a claim of attorney-client privilege or work product immunity, such production shall not prejudice such claim or otherwise constitute a waiver of any claim of attorney-client privilege or work product immunity regarding such information, provided that, upon its discovery, the Producing Party promptly makes a good-faith representation that such production was inadvertent or mistaken and takes prompt remedial action to withdraw the disclosure. Within three (3) business days of receiving a written request to do so from the Producing Party, the Receiving Party shall return to the Producing Party any documents or tangible items that the Producing Party represents are covered by a claim of attorney-client privilege or work product immunity and were inadvertently or mistakenly produced. The Receiving Party shall also destroy all copies or summaries of, and all notes and/or recordings relating to, any such inadvertently or mistakenly produced information; provided, however, that this Order shall not preclude the Receiving Party returning such information from making a motion to compel production of the returned information on a basis other than a waiver because of its inadvertent production as part of a discovery production under this Order. Return of the document or thing by the Receiving Party shall not constitute an admission or concession, or permit any inference, that the returned document or thing is, in fact, properly subject to a claim of attorney-client privilege or work product immunity nor shall it foreclose any party from moving the Court for an order that such document or thing has been improperly designated or should be producible for reasons other than a waiver caused by the inadvertent production. The Producing Party shall retain copies of all returned documents and tangible items for further disposition. (Id. at 4.)

The parties may wish to further define how promptly after discovering that it has disclosed privileged materials, the producing party must take remedial action to withdraw the disclosure and further define those steps in including amending both discovery responses and privilege log, if the document was not previously listed in the log.

In addition, we believe that a party producing discovery in litigation should take the following steps to minimize the risk that inadvertent disclosure of privileged materials will not result in a waiver:

• Encourage your clients to maintain an efficient system of records management before litigation;
• Encourage your clients to regularly and clearly designate privileged materials as such in their records;
• Plan for the inevitable production of large amount of documents as far in advance as possible;
• Seek to enter into a claw-back agreement in every case;
• Seek the federal court's approval of the claw-back agreement (and even if you are in state court where there is no similar procedure, ask the court to approve the claw-back agreement);
• Move for a court order under FRE 502(d) if your opponent will not agree to a claw-back agreement;
• Be mindful of any applicable state ethics rule requirement to safeguard your client's confidences from unauthorized or inadvertent disclosure;
• Diligently comply with the privilege log requirements of Fed. R. Civ. P. 26(b)(5) or any comparable state rule if you are in state court;
• In cases with large numbers of documents, use advanced analytical software applications and linguistic tools in pre-production screening for privileged materials;
• Employ experienced and qualified personnel to apply the software-based screening techniques;
• For electronic searches, carefully and expansively choose keywords for the privilege document search;
• Ensure that the software is capable of searching the entire body of each document, not just the title or subject line of an e-mail;
• Provide explicit instructions for those undertaking preproduction reviews, and supervise them diligently;
• Carefully explain to your client the risks and rewards of dispensing with or substantially reducing the scope of the pre-production review;
• Engage in a post-production review of documents provided to the opponent;
• Attempt not to allow a tight discovery schedule to dictate the nature and scope of your pre-production review; if you need more time, ask for it early;
• If there has been an inadvertent disclosure, take immediate steps to rectify the disclosure and strive to bring the matter to the fore before your opponent does so;
• If an inadvertently disclosed document surfaces in a deposition for the first time, immediately object to its use during the deposition and demand its return;
• Immediately add an inadvertently disclosed document to your privilege log; and
• Immediately demand the return of an inadvertently disclosed document under the terms of the claw-back agreement, the court's order under FRE 502(d), and Fed. R. Civ. P. 26(b)(5)(B).

Eric H. Karp is a partner at Witmer, Karp, Warner & Ryan LLP in Boston. He is counsel to numerous franchisee associations, Editor-in-Chief of The Franchise Lawyer, and was an elected 1995 delegate to the White House Conference on Small Business. He can be contacted at [email protected] or 617-423-7250. Les Wharton is senior counsel at Epstein Becker Green in Atlanta, and served as chair of the International Franchise Association's Legal/Legislative Committee and Corporate Counsel Committee, as well as chairing the Legal Symposium Task Group in 2004, 2005, and 2006. He can be contacted at [email protected] or 404-869-5347.

It is common, and in many cases absolutely necessary, for an employer to provide a laptop to its workers. Twenty years ago, virtually no one had a “portable” computer. Where a filing cabinet or a desk drawer would have been the repository for correspondence 20 years ago, the correspondence now resides on a server, or on a PC or a laptop hard drive. Text and voice messages are also sent through a PC or a handheld device or a telephone. A telephone would not have stored a message, at least not for very long, whereas now the numbers that have been called and received, as well as text and voice messages, can be recovered from the computer or laptop hard drive, if not the phone itself.

As recent litigation has demonstrated, the use of new communications devices with new capabilities is having an effect on how attorneys and their clients communicate, and, therefore, is raising issues in attorney-client privilege.

Computer technology also has led to the proliferation of documents and their easy access through online storage. Federal legislation has attempted to address inadvertent disclosure by electronic media.

This article updates issues of attorney-client privilege, using an important case from 2009 and federal Rule 502, which was enacted in 2008.

Communications Through an Employer's Computer System

In Stengart v. Loving Care Agency, Inc., et al. (Docket No. A-3506-08T1 Sup. Ct. NJ, App. Div. (June 26, 2009)) a New Jersey appellate court ruled that an employee's communication with her attorney effected through the employer's computer was protected by the attorney-client privilege in a case filed by the employee against the employer. While not a franchise case, Stengart is potentially relevant for franchisors that incorporate their franchisees on their computer system.

Stengart, the employee, had used the laptop provided her by Loving Care Agency, her employer, to access her private e-mail provider and send messages to her attorney related to the claim she ultimately filed against Loving Care. The company later extracted the e-mails from the laptop's hard drive, and its counsel read and used them in preparation of its case, without telling Stengart's counsel. Her counsel discovered this when, months later, certain of the e-mails were referenced, and some were provided in response to interrogatories. Stengart, through her counsel, asserted that the e-mails were protected by the attorney-client privilege and requested that all such messages be identified and returned. When Loving Care's counsel refused, Stengart took the issue to the trial court through a motion. The trial court denied the motion, and Stengart appealed the ruling.

The Company Handbook

Loving Care had an electronic communications policy in its company handbook, where it reserved the right “to review, audit, intercept, access and disclose all matters on the company's media systems and services ' at any time, with or without notice.” The handbook also said, “E-mail and voice mail messages, Internet use and communication and computer files are considered part of the company's business and client records. Such communications are not to be considered private or personal to any individual employee.” And it stated that “[t]he principal purpose of electronic mail (e-mail) is for company business communications. Occasional personal use is permitted.” (Id. at 4.)

However, the facts in the record made it appear that there were multiple versions of the “policy.” Loving Care did not produce any document from Stengart confirming receipt of the handbook or the policy, which the court said was the “custom among employers in these matters.” And the court was not persuaded ' as the trial judge apparently was ' that a person in Stengart's executive position with the company would have constructive knowledge of the policies. Further, there was a certification from Stengart, as well as another former Loving Care executive, that the policy did not apply to executives.

The court also questioned whether the policy was clear regarding whether it applied to e-mails sent through the employee's personal, password-protected Internet e-mail account when a company computer was the vehicle used to send and receive those emails. The trial judge had felt that the policy put the employees on notice that emails through the company computer would be subject to company review ' affording no reasonable expectation of privacy ' regardless of whether it was sent from a work account or a personal Web-based account.

It's All in the Language

The court seized the “occasional personal use is permitted” language to underscore the confusion around the intent of the policy as the final blow to the company's arguments. It could not reconcile the concept of “personal use” with the thought that the company could retain all e-mails, even personal/private ones, as its property, other than in the case where there was some valid basis to protect the company's interests. The court could not conclude that the employee would not have an expectation of privacy regarding personal e-mails.

The ruling walked through an analysis of why the company may have an interest in certain information that an employee may send through or store on its computer ' information relating to criminal activities, such as theft or child pornography ' and why the company has an interest in monitoring whether the employee is devoting himself or herself to company duties. But then the court explained that the company cannot use the fact that it is a company computer to “rummage among information having no bearing upon its legitimate business interests” (Id. at 23.) It compared the company's interest in these communications with “the highly impermissible conduct of electronically eavesdropping on a conversation between plaintiff and her attorney while she was on lunch break.” (Id. at 20.) The court further compared it with “when an employer rifles through a folder containing an employee's private papers or reaches in and examines the contents of an employee's pockets.” (Id. at 18.) Interesting analogies. The court seems to go well beyond the “occasional personal use” language as an exception to the asserted interests of the company as the basis for its analysis.

The Final Ruling

Ultimately, the court held that the attorney-client privilege applied to the e-mails in question. In fact, the court took Loving Care's counsel to task for not “returning” the e-mails to Stengart's counsel without reading them, and it remanded the case to the trial court the issue of whether and what type sanctions should be levied on counsel for the ethical breach. (Id. at 29-30.)

A final note. The court seemed to attach some importance to the fact that Stengart sent her e-mail through her personal provider, even though she accessed that provider through the company's computer. But the court did not say that fact was determinative. In view of the court's focus on the privacy issues and the analogies used by the court in that regard, it may be that the same result would obtain had Stengart used the company's email account. (See Convertino v. United States Department of Justice, Civil Action 04-0236, U.S. District Court, District of Columbia (December 10, 2009). The court upheld the privilege as to e-mails sent by an employee of the Department of Justice (DOJ) to his private attorney from his DOJ account, saying the DOJ had no ban on the private use of its company e-mail for private communication, and the employee did not know that DOJ regularly accessed and saved e-mails sent from its system, so the employee's expectation of privacy was reasonable.)

Counsel for any franchise system that has its franchisees on its computer system should consider the reasoning in the case when working with a franchisor to develop its policies around use of the system. Any policy relating to the franchisor's interest in information sent through the system must be clear, unambiguous, and communicated to the franchisees. Further, the franchisees must be required to have a policy in place relating to their employees' use of the system acceptable to the franchisor, and the franchisor will want to have confirmation that it has been communicated to the employees. And even in that event, the franchisor needs to understand that it may not be able to push aside a claim of attorney-client privilege made by the franchisee as to information communicated through the system by the franchisee to its counsel.

A Road Map for Avoiding Waiver by Inadvertent Disclosure

Document production has become an enormously time-consuming and expensive undertaking. With the explosion of the use and availability of electronically stored information, this problem has grown exponentially. It is no longer uncommon for cases to involve the disclosure of hundreds of thousands of documents involving millions of pages.

High-volume document production substantially increases the cost and effort involved in pre-production reviews of documents to ensure that materials such as those covered by the attorney-client privilege and the attorney work product doctrine are not released to the opponent. However, the chance of inadvertent disclosure of privileged materials increases with the volume of documents produced in any given case.

To address the growing incidence of and confusion over inadvertent disclosures, FRE 502 was written, and it was signed into law by former President Bush on Sept. 19, 2008. The rule applies to all proceedings commenced after that date “and, insofar as is just and practicable, in all proceedings pending on such date of enactment.”

Before the enactment of FRE 502, it had already become commonplace for counsel to enter into so-called “claw-back” and “quick peek” production agreements. A claw-back agreement, the most common approach, generally requires the parties to use good-faith efforts to cull privileged documents from their production, but also allows them to “claw-back” or take back privileged documents that were inadvertently produced. The claw-back agreement typically provides that neither party will claim a waiver of privilege based on the other's inadvertent production of privileged materials, reserving the right to contest whether the privilege applied to the document in the first place. An alternative and much more risky approach was the use of a “quick peek” production agreement under which all responsive documents are produced without any prior review for privilege. Following the initial review by the receiving party, the documents are returned to the producing party which then conducts the privilege review of only those documents the opposing party designated as those it wished to receive.

However, this system was fraught with uncertainty, including longstanding conflict between district courts and the circuits over the consequences of inadvertently disclosing information subject to the attorney-client privilege or work product doctrine. Over time, three distinct approaches had evolved: 1) a “never waived” rule, under which inadvertent disclosure of privileged materials never constitutes a waiver; 2) an “always waived” rule; and 3) a middle-ground or balanced approach, under which the court assesses various factors such as the reasonableness of the precautions taken to prevent inadvertent disclosure, the time taken to rectify the error, the scope of the discovery and the extent of the disclosure. But attorneys could never be sure which rule would be invoked by which court.

FRE 502 is designed to end those conflicts. Under FRE 502, the disclosure of an attorney-client privileged or work product protected document in a federal proceeding generally results in a waiver of the privilege only for the disclosed communication or information. Subject matter waiver will only apply “in those unusual situations in which fairness requires a further disclosure of related, protected information in order to prevent a selective and misleading presentation of evidence to the disadvantage of the adversary.” (Explanatory Note, Subdivision (a), supra.)

If the inadvertent disclosure is made in a federal proceeding, the federal court rules on subject matter waiver govern any subsequent proceeding in federal or state court concerning the scope of the waiver resulting from the disclosure in question.

FRE 502(e) reiterates that the parties to a federal proceeding can enter into agreements that have the effect of limiting their exposure for the inadvertent disclosure of privileged materials. If the parties desire to have the agreement bind parties who are not in the litigation of the federal proceeding, the agreement must be made part of a court order to that effect under FRE 502(d).

This is an important step forward in creating a uniform set of guidelines that govern the consequences of an inadvertent disclosure of privileged materials in federal courts. The rule brings some, but not total, certainty to the process. As written, the rule places a tremendous burden upon the judiciary, requiring federal courts to engage in a case-by-case and sometimes intensive, expensive and subjective review of both the precautions taken to prevent inadvertent disclosure and the steps taken to rectify same following their discovery.

Attorneys and the New Reality

Attorneys should adapt their agreements with opposing counsel to reflect the new reality. Borrowing in part from an order entered by the court in Alcon Manufacturing, Ltd. v. Apotex, Inc., 2008 WL 50704465 (S.D.Ind. Nov. 26, 2008), we offer the following example of a provision that may be used to limit the effect of an inadvertent disclosure of materials subject to the attorney-client privilege or work product protection:

If a Producing Party inadvertently or mistakenly produces or provides information, documents or tangible items via discovery in this Action that the Producing Party was entitled to withhold subject to a claim of attorney-client privilege or work product immunity, such production shall not prejudice such claim or otherwise constitute a waiver of any claim of attorney-client privilege or work product immunity regarding such information, provided that, upon its discovery, the Producing Party promptly makes a good-faith representation that such production was inadvertent or mistaken and takes prompt remedial action to withdraw the disclosure. Within three (3) business days of receiving a written request to do so from the Producing Party, the Receiving Party shall return to the Producing Party any documents or tangible items that the Producing Party represents are covered by a claim of attorney-client privilege or work product immunity and were inadvertently or mistakenly produced. The Receiving Party shall also destroy all copies or summaries of, and all notes and/or recordings relating to, any such inadvertently or mistakenly produced information; provided, however, that this Order shall not preclude the Receiving Party returning such information from making a motion to compel production of the returned information on a basis other than a waiver because of its inadvertent production as part of a discovery production under this Order. Return of the document or thing by the Receiving Party shall not constitute an admission or concession, or permit any inference, that the returned document or thing is, in fact, properly subject to a claim of attorney-client privilege or work product immunity nor shall it foreclose any party from moving the Court for an order that such document or thing has been improperly designated or should be producible for reasons other than a waiver caused by the inadvertent production. The Producing Party shall retain copies of all returned documents and tangible items for further disposition. (Id. at 4.)

The parties may wish to further define how promptly after discovering that it has disclosed privileged materials, the producing party must take remedial action to withdraw the disclosure and further define those steps in including amending both discovery responses and privilege log, if the document was not previously listed in the log.

In addition, we believe that a party producing discovery in litigation should take the following steps to minimize the risk that inadvertent disclosure of privileged materials will not result in a waiver:

• Encourage your clients to maintain an efficient system of records management before litigation;
• Encourage your clients to regularly and clearly designate privileged materials as such in their records;
• Plan for the inevitable production of large amount of documents as far in advance as possible;
• Seek to enter into a claw-back agreement in every case;
• Seek the federal court's approval of the claw-back agreement (and even if you are in state court where there is no similar procedure, ask the court to approve the claw-back agreement);
• Move for a court order under FRE 502(d) if your opponent will not agree to a claw-back agreement;
• Be mindful of any applicable state ethics rule requirement to safeguard your client's confidences from unauthorized or inadvertent disclosure;
• Diligently comply with the privilege log requirements of Fed. R. Civ. P. 26(b)(5) or any comparable state rule if you are in state court;
• In cases with large numbers of documents, use advanced analytical software applications and linguistic tools in pre-production screening for privileged materials;
• Employ experienced and qualified personnel to apply the software-based screening techniques;
• For electronic searches, carefully and expansively choose keywords for the privilege document search;
• Ensure that the software is capable of searching the entire body of each document, not just the title or subject line of an e-mail;
• Provide explicit instructions for those undertaking preproduction reviews, and supervise them diligently;
• Carefully explain to your client the risks and rewards of dispensing with or substantially reducing the scope of the pre-production review;
• Engage in a post-production review of documents provided to the opponent;
• Attempt not to allow a tight discovery schedule to dictate the nature and scope of your pre-production review; if you need more time, ask for it early;
• If there has been an inadvertent disclosure, take immediate steps to rectify the disclosure and strive to bring the matter to the fore before your opponent does so;
• If an inadvertently disclosed document surfaces in a deposition for the first time, immediately object to its use during the deposition and demand its return;
• Immediately add an inadvertently disclosed document to your privilege log; and
• Immediately demand the return of an inadvertently disclosed document under the terms of the claw-back agreement, the court's order under FRE 502(d), and Fed. R. Civ. P. 26(b)(5)(B).

Eric H. Karp is a partner at Witmer, Karp, Warner & Ryan LLP in Boston. He is counsel to numerous franchisee associations, Editor-in-Chief of The Franchise Lawyer, and was an elected 1995 delegate to the White House Conference on Small Business. He can be contacted at [email protected] or 617-423-7250. Les Wharton is senior counsel at Epstein Becker Green in Atlanta, and served as chair of the International Franchise Association's Legal/Legislative Committee and Corporate Counsel Committee, as well as chairing the Legal Symposium Task Group in 2004, 2005, and 2006. He can be contacted at [email protected] or 404-869-5347.