The purpose of the attorney-client privilege is to facilitate open communication between the client and its counsel. It allows for the client to disclose highly confidential facts to counsel and for counsel to provide frank legal advice in confidence. In the corporate context, the “subject matter” test typically renders privileged any communication between an employee acting within the scope of employment and corporate counsel. The alternative “control group” test protects only communications with employees who are in a position to take a substantial part in the client’s decision for which the corporation seeks advice.
At one time, the “control group” test had widespread support but was rejected by the U.S. Supreme Court as too narrow. Where the “subject matter” test applies, privileged communications may be shared confidentially without waiver between and among all employees of the corporation acting in the scope of their employment.