In today’s ever-growing gig economy, the line between contractor and employee is often blurred. For purposes of attorney-client privilege and outsourcing, a key concern is whether in-house counsel’s communications with outside consultants are protected. In an economy where contractors and consultants are used more frequently, this case promotes the in-house counsel’s role in the outsourcing landscape.
The laws differ by state, and some states have not yet addressed this area of law. Tennessee was one such state until recently when Bodker, Ramsey, Andrews, Winograd & Wildstein (BRAWW) represented The Krystal Company in a case of first impression that addressed this issue.
In Waste Administrative Systems, Inc. v. The Krystal Company, the Tennessee Court of Appeals ruled in Krystal’s favor and held that legal advice given by in-house counsel to a contractor is eligible for protection, because the contractor is a “functional equivalent” of an employee. This ruling is encouraging for in-house counsel who frequently interact with outsourced non-employees and vendors about issues of legal significance and who depend on the free flow of information that those vendors are uniquely situated to provide.
Although Georgia has not yet expressly adopted the “functional equivalent” test, Georgia federal courts have cited a case from outside of the state that allows for application of attorney-client privilege for communications between attorneys and nonemployees in certain contexts.
We congratulate BRAWW attorneys, Harry Winograd and Jessica Wood as well as paralegal Jamie Cheattom, on their hard work and victory on behalf of our client. Sloane Perras, Krystal’s SVP, Chief Administrative & Legal Officer and Tennessee counsel Jeff Thompson also participated in the successful outcome.