What Is Privileged Communication in Business Situations?

Privileged Communication in Business
••• Privileged Communication in Business. Jon Feingersh/Getty Images

Privileged communication is a legal principle that restricts certain people in positions of trust from communicating information to protect the other person. If you have watched "Law and Order" or other cop shows, you've probably seen a situation in which a priest can't be made to tell what someone told him in the confessional or that a doctor can't reveal about a patient's condition. 

How Privileged Communication Works

In most situations, if someone failed to testify in court, they could be held in contempt if they didn't testify.

But there are several very specific types of communication that are considered to be privileged. The most common are: 

  • Attorney and client
  • Accountant and client
  • Husband and wife
  • Religious professional (priest, pastor, rabbi, etc.) and parishioner
  • Doctor and patient 
  • Other health professionals and clients, including psychiatrists, psychologists, therapists, social workers, and professional counselors

The privilege works to protect the person who communicates confidential information, not the person receiving the information. For example, if Karen is a client of Sam, an attorney, and she reveals that she is cheating on her husband, the attorney can't reveal that information. 

If you think about it, if these kinds of conversations weren't privileged, no one would feel safe talking confidentially to a trusted professional. Making a confession to a priest or telling an attorney about illegal activity would not be possible.

In the case of healthcare professionals, they couldn't do their jobs without confidential information from the patient or client. 

The doctor/patient relationship includes all information about the patient's condition in addition to the information the patient discloses and it includes HIPAA protection.

In the case of the husband and wife, either party may be the privileged party, depending on who told who what.

Privileged Communication and State Laws

Each state has different laws regarding what types of communication relationships are privileged. Connecticut, for example, and some other states include the relationship between a battered woman and a sexual assault counselor is specifically set as being privileged. 

When Privileged Communication Is Waived

To be privileged, the communication must: 

  • Be only between the person and the professional advisor. In firms with more than one professional, the privilege extends to the other professionals (in a law firm, for example), but not to staff. 
  • Be only to a professional acting in his or her capacity as a professional. If Karen and Sam are talking in a bar and Karen confides in Sam about her infidelity, it probably isn't privileged. 
  • Be kept in confidence by both parties. If either party reveals the content of the communication, privilege is lost. This includes both intentional and accidental disclosure. 

The communication is no longer privileged if: 

  • The person reveals the communication to others. For example, if Karen tells her best friend about the cheating, the attorney isn't the only one who knows about it, so privilege doesn't apply. 
  • The person allows the professional to reveal the communication or part of the communication. Karen may agree to let her attorney tell about the cheating, but not who it was with. 

With variations in different states, the privilege may also be waived by a court in certain circumstances, depending on your state's laws: 

  • If the person is in danger of harm to him or her self or to others
  • If the person is ordered by the court to undergo a physical or mental exam
  • If the person shares information with others in your presence
  • If the person is a minor and is the subject of a custody dispute
  • If the person is involved in criminal activity

Privileged Communication in the Professions

The principle of privileged communications does not apply in most business situations, with the exceptions of certain specific professions.

If you are in one of the professions noted above, you need to be aware of the laws relating to privileged communication in your state. If you are in a social services position - a psychologist or counselor, for example—privilege may or may not apply to you. If you aren't sure, check with your state. 

How Privileged Communication Affects Your Business

If your business involves professionals whose interactions with patients or clients may be privileged, you should understand how you might be affected. You or other professionals may receive subpoenas asking you to reveal privileged information. You should immediately check with the client or patient to find out their express wishes in this situation.

For example, if you are a psychologist and a patient's spouse sends you a subpoena to reveal information in a divorce, check with your patient before revealing information. Get written consent and make sure it's specific. 

How to Deal With Privileged Communication in Your  Business

If your business involves privileged communications, you have some responsibilities. 

  • Get an attorney to help you understand your state's laws about privileged communication and how they apply to you and your business. 
  • Make sure all of your professional staff understand how privileged communications work so they can abide by the law and they will know what to do if they receive a subpoena. 
  • Make sure you keep emails confidential. Emails are communication. If you communicate through email about a patient or client to anyone except the client, you are breaking the privileged relationship. Separate counseling emails from general emails and protect them. 
  • Limit conversations about clients or patients within your professional staff.

In general, remember that waiver of privilege may be unintentional but it still might result in a lawsuit against you or your business.