Under federal law, a disclosure of a privileged communication or work product in a state or federal proceeding or to a federal office or agency is not a waiver if "the disclosure is inadvertent" and if the holder of the privilege or protection "took reasonable steps to prevent disclosure" and "promptly took reasonable steps to rectify the error." Parties may, by agreement, ensure that the disclosure does not constitute a waiver of privilege or work product protection. The federal court's entry of an order incorporating such an agreement makes that agreement binding on all parties in future state or federal proceedings. No clear standard has yet emerged for determining what constitutes a party's "reasonable" efforts to prevent the disclosure of privileged information under the rule. Courts have found a waiver of privilege based on the determination that the party who disclosed the privileged communications either failed to take sufficient care in reviewing documents for privilege before the disclosure or failed to provide information sufficient to allow the court to assess the reasonableness of efforts to avoid such disclosure.

Because of the differing purposes of attorney-client privilege and work product doctrine, the terms governing the privilege and the conditions constituting waiver differ significantly. Generally, waiver of the attorney-client privilege occurs upon the disclosure of the privileged communication to any third party. In contrast, work product protection is not waived by mere disclosure to any third party. Instead, work product protection is typically waived only where the disclosure would substantially increase the likelihood of an adversary's or potential adversary's obtaining the work product. For this reason, disclosure of work product to neutral third parties, or to persons with a common interest — whether a business interest or a legal one — usually will not waive the protection. Disclosures of work product to the government might result in a waiver; such determinations are, at least in the Second Circuit, made on a case by case basis and may depend on whether the prior disclosures to the government were made subject to an executed nondisclosure agreement.^[1]

However, depending on the jurisdiction, disclosure of an attorney-client-privileged communication or document to a third party may not waive the attorney-client privilege (or work product protection, if applicable) where any of the following apply:

• The disclosure was made among co-defendants represented by the same attorney or trial team in the context of actual or threatened litigation, where the communications pertain to common issues and are made to facilitate representation in subsequent litigation (often called the "joint defense privilege")
• The disclosure was made between or among the lawyers of two or more clients who have a "common interest" in the litigation (often called the "common interest privilege")
• The disclosure was made to a "communicating agent," such as a tax expert, who serves effectively as a translator of technical or specialized information and whose true purpose is to facilitate the communication of legal advice (often called the "translator privilege")
• The disclosure was made to an agent of the attorney who assists in the attorney's representation. Notably, some courts only apply this exception to agents who are "necessary" or "nearly indispensable" to facilitate attorney-client communications. Indeed, courts are divided as to whether communications with a public relations consultant retained by an attorney are privileged because they disagree as to whether a public relations strategy is a reasonably necessary component of the representation

Such exceptions to the waiver rules are often inaccurately termed privileges in their own right. The applications of the exceptions will vary, depending on the particular jurisdiction and the circumstances of the case. Furthermore, these protections tend to be somewhat narrowly construed. For instance, the fact that an attorney has retained a tax expert does not render the communications with that expert legal advice. The US Court of Appeals for the Ninth Circuit has held that the work file of a tax appraiser whom an attorney had hired to prepare a report to value an income tax deduction was not privileged; the tax appraiser was deemed not to be providing legal advice in that context.

Another exception to the general rule that disclosure constitutes a waiver of an attorney-client privileged document may arise when the disclosure was inadvertent. The Federal Rules of Evidence provide for the retention of attorney-client privilege or work product protection notwithstanding "inadvertent disclosure" during discovery, provided that the disclosing party took reasonable measures to prevent inadvertent disclosure and took prompt remedial measures upon discovering the inadvertent disclosure. Under the Federal Rules of Evidence, the parties can enter into an agreement limiting the effect of waiver resulting from disclosure between or among them. While such an agreement ordinarily binds only the parties to the agreement, Rule 502 makes clear that if the parties want to extend that protection from a waiver finding to prevent disclosure to non-parties, such as parties in other proceedings, their agreement must be incorporated into a court order.

In addition to these exceptions to waiver, it is important to note two important circumstances that generally are not recognized as exceptions and that will result in waiver of the attorney-client privilege or work product protection. First, an attempt to selectively disclose certain attorney-client privileged communications or work product — such as those that are favorable to one's case — while withholding related documents as privileged or protected will result in a "subject matter waiver," such that the court will require disclosure of all such communications pertaining to that subject matter. This rule of waiver prevents parties from "cherry picking" favorable privileged documents or work product and thereby presenting a distorted record. However, under the Federal Rules of Evidence, an inadvertent disclosure will not constitute a subject matter waiver; rather, subject matter waiver applies where the waiver is intentional and where the disclosed and undisclosed communications concern the same subject matter and ought in fairness be considered together.

Second, courts have generally declined to recognize "selective waiver," or the ability to disclose privileged communications to a single party or entity, such as the federal government, upon an investigation or inquiry, while claiming to retain the privilege or protection as to the rest of the world. Generally, the turning over of documents to an entity or person will result in a total waiver of the privilege with respect not only to that entity or person but to all future litigants.

The Southern District of Florida's decision in S.E.C. v. Herrera, 324 F.R.D. 258 (S.D. Fla. 2017) is instructive, and shows that courts may rule that a party waived a privilege even when it only discloses privileged content to third parties through oral communications. In that case, a party retained an international law firm to conduct an internal investigation, including interviews of more than three dozen of its employees. The law firm then orally shared notes regarding twelve of its interviews with the SEC. The court ruled that, through its oral disclosures, the law firm had waived all work product protection relating to those twelve interviews and ordered it to disclose its corresponding work product to the civil litigants who moved to compel its production.

[1] See, e.g., In re Steinhardt Partners, L.P., 9 F.3d 230, 236 (2d Cir. 1993); see also In re Symbol Techs., Inc. Sec. Litig., No. CV 05-3923 (DRH) (AKT), 2016 U.S. Dist. LEXIS 139200, at *19 (E.D.N.Y. Sep. 30, 2016).