Upjohn Co. v. United States

Upjohn Company, a pharmaceutical manufacturer, discovered that its foreign subsidiaries had made questionable payments to foreign government officials. The company's general counsel conducted an internal investigation, sending questionnaires to managers and conducting interviews with employees at all levels. When the IRS sought the questionnaires and interview notes during a tax investigation, Upjohn asserted attorney-client privilege and work-product protection.

Justice Rehnquist, writing for the majority, reasoned that the control group test frustrated the purpose of the privilege by discouraging the communication of relevant information by employees to corporate counsel. Lower-level employees often possess the most relevant information about corporate activities, and the privilege must extend to their communications to encourage full and frank disclosure to lawyers. The Court declined to adopt a rigid replacement test, instead applying the privilege based on the totality of the circumstances. The communications here were made by employees at counsel's direction, concerned matters within the scope of their employment, and were made for the purpose of obtaining legal advice for the corporation. The Court also found the interview notes constituted opinion work product, requiring a heightened showing of need for disclosure.

Upjohn is the controlling federal standard for corporate attorney-client privilege and has been enormously influential. By rejecting the control group test and extending the privilege to lower-level employees, the decision enabled corporations to conduct thorough internal investigations with the assurance of privilege protection. This has led to the modern practice of internal investigations by corporate counsel, which has become a cornerstone of corporate compliance and government enforcement cooperation.