Legal Definitions - subject-matter test

The subject-matter test is a legal standard used to determine whether communications between a company's employees and its attorneys are protected by attorney-client privilege. This test focuses on the *nature* or *subject matter* of the communication, rather than solely on the employee's position or rank within the company.

For a communication to be considered privileged under the subject-matter test, it must meet specific criteria:

• The employee's communication with the attorney must have been made at the direction of their supervisor or a higher authority within the company.
• The communication must concern matters within the scope of the employee's job duties or responsibilities.
• The purpose of the communication must be to obtain legal advice for the company.

This test is significant because it allows a broader range of employee communications to be protected by attorney-client privilege, extending beyond just senior management or those in a "control group." It recognizes that employees at all levels may possess information critical to the company's legal matters and that their directed communications with legal counsel should be protected to facilitate effective legal representation.

Here are some examples illustrating the subject-matter test:

• Example 1: Environmental Compliance

  A mid-level environmental engineer at a manufacturing plant discovers a potential violation of a new federal clean water regulation during a routine inspection. Her supervisor instructs her to compile a detailed report of her findings, including technical specifications and historical data, and to present this information directly to the company's in-house legal counsel. The legal team needs this information to assess the company's legal exposure and advise on necessary corrective actions.

  How it illustrates the term: The engineer is not a senior executive, but her communication with legal counsel is protected because it was directed by her supervisor, relates directly to her job duties (environmental compliance), and is for the purpose of obtaining legal advice for the company regarding a potential legal issue.

• Example 2: Product Safety Investigation

  A quality control technician at an electronics company identifies a recurring defect in a specific product line that could pose a safety risk to consumers. His department manager directs him to meticulously document all instances of the defect, including testing protocols and material specifications, and to provide this comprehensive data to the company's product liability lawyers. The lawyers are investigating potential legal claims and need the technical details to formulate a defense strategy.

  How it illustrates the term: The quality control technician is not part of the company's senior leadership. However, his communication with the attorneys is privileged because it was initiated by his manager, pertains to his work responsibilities (quality control and product safety), and is essential for the company to receive legal advice concerning potential product liability.

• Example 3: Data Security Incident

  A junior IT specialist at a financial institution detects unusual network activity that suggests a possible data breach. Her team lead immediately instructs her to gather all relevant technical logs, system alerts, and forensic data, and to report her findings directly to the company's cybersecurity legal counsel. The legal counsel needs this precise technical information to advise the company on its legal obligations, including potential regulatory notifications and incident response protocols.

  How it illustrates the term: The IT specialist is a relatively junior employee. Nevertheless, her detailed technical report to the legal team is protected under the subject-matter test because it was directed by her supervisor, falls squarely within her job duties (IT security and incident response), and is crucial for the company to obtain legal advice regarding a significant data security incident.