How Whistleblowers in Qui Tam, IRS, and SEC Whistleblower Cases Must Protect Email Communications

At the Healthcare Fraud Institute this past week, I was asked to address what steps whistleblowers should take to ensure confidentiality of emails with their lawyers. Although qui tam cases under the False Claims Act were the focus of our discussion, the same principles apply to tax whistleblowers and SEC whistleblowers.

Potential whistleblowers should never use their company’s email system, or any email account shared with or accessible to another person, for communicating with their attorney or for gathering information or evidence to report to the government.

Although the law encourages whistleblowers to report fraud, whistleblowers can create unnecessary problems for themselves by not following this rule.

First, emails between whistleblowers and their attorneys are privileged and confidential, but the privilege can disappear and be waived if the communication is disclosed to others.

Second, qui tam whistleblower cases under the False Claims Act are filed with a court order “sealing” the case from public view, while the government investigates. If an email accidentally exposes the case, the whistleblower may have violated the court’s “seal” order.

Third, alerting a defendant company that the whistleblower has reported the company’s fraud to the government is almost certain to provoke retaliation against an employee who is a whistleblower. Immediate suspension or firing often follows. Although the False Claims Act and the SEC and CFTC whistleblower laws create remedies for retaliation, those remedies take time to achieve. They will not pay the whistleblower’s mortgage next month–or this year.

We advise all of our clients that they must protect the confidentiality of their emails. Many people do not realize that emails sent from a company’s computer system usually leave some record, even if the employee is accessing a personal Gmail account.

In addition, using an email account “shared” with a spouse or roommate is a bad idea for attorney-client communications. It creates an opening to argue that the attorney-client privilege has been waived by disclosing the email to the spouse or friend.

Similarly, whistleblowers should avoid using hotel computers for confidential emails, since the information transmitted may be accessible to other persons. The same is true for other shared computers, such as those in public libraries.

The American Bar Association has issued an August 2011 opinion that lawyers ordinarily should advise clients of these risks when there is a significant chance that emails may be read by the employer or other third parties. (ABA Formal Opinion 11-459)

In a less shining moment, however, the ABA opined that, when an employer’s lawyer receives copies of an employee’s private communications with counsel, ethical rules do not require the employer’s lawyer to disclose that fact. (ABA Formal Opinion 11-460).

This latter opinion seems to contradict the rule that, when attorney-client communications “inadvertently sent” to someone else are obtained by opposing counsel, the opposing counsel “shall promptly notify the sender.” (ABA Model Rule 4.4(b)). When an employee accesses a Gmail or Yahoo email account from work, the employee apparently “inadvertently” can leave a record of those personal emails on a company’s computer system. The ABA should revisit this opinion, which highlights the need for whistleblowers to use great care in maintaining the confidentiality of their emails.

Our panel also discussed dilemmas that some of our past whistleblower clients have faced when the defendant company “guessed”–incorrectly–that another person was the whistleblower. Both the individual who seeks to report fraud and the company have rights to their own attorney-client relationships and their own protections of what courts refer to as “work product.” In addition, the whistleblower must help protect the government’s investigative privilege, among other things.

These issues of confidentiality make it important for potential whistleblowers to consult early with experienced counsel. Whistleblowers’ rights should be protected as they work to fulfill the law’s intent of exposing fraud that steals from taxpayers or investors.