Particle.news

Courts Split on Privilege for AI Chats, Raising Stakes for Workplace Use

The divergence leaves companies exposed when employees use public AI tools without lawyer direction or confidentiality safeguards.

Overview

  • Two recent federal rulings reached opposite results on AI materials, with a Michigan court treating a pro se litigant’s ChatGPT drafting as protected work product and an SDNY court rejecting privilege and work-product claims for a defendant’s Claude chats.
  • Judges focused on classic tests, weighing who used the tool, whether a lawyer directed the exchange, and if platform terms allowed the AI provider to collect or disclose prompts and outputs.
  • In the SDNY case, the court said public platform terms undercut any reasonable expectation of secrecy and found no attorney direction, so inputs and outputs were fair game in discovery.
  • Employment counsel now expect requests for AI prompts, outputs, auto-drafted reviews, and meeting transcripts, and the guidance urges vendor vetting, clear policies, training, tighter retention, and using secure, non-retaining enterprise AI under counsel’s direction.
  • JD Supra frames the issue as an emerging split with practical steps for employers, while National Law Review warns that pasting privileged content into a public chatbot can waive protection and invite subpoenas and regulator questions about AI use.