In United States v. Chiarella (588 F2d 1358 [2d Cir 1978]), the federal Court of Appeals affirmed the District Court's ruling that in a securities fraud and insider trading case, as a matter of federal law, the apparent state-court privilege embodied in Labor Law 537 yields to federal rules and precedent. The court noted that Federal Rule of Evidence rule 501 and established precedent show a strong federal policy favoring admissibility of the type of statement which Labor Law 537 appears to protect. The court specifically declined to decide whether section 537 creates a privilege under New York law, since the court did not need to resolve that question in order to decide its own case.