The memo says McGahn's immunity from congressional testimony is separate and broader than a claim of executive privilege.
The immunity "extends beyond answers to particular questions, precluding Congress from compelling even the appearance of a senior presidential adviser - as a function of the independence and autonomy of the president himself," Engel wrote.
That immunity, the memo insists, does not evaporate once the adviser in question leaves the government, because the topics of interest to Congress are discussions that occurred when the person worked for the president.
As a private citizen no longer in the government, McGahn is not necessarily bound by the White House directive, or the OLC memo, to refuse to comply with the subpoena. There was no immediate word from McGahn's lawyer on whether he would defy the White House.
Testifying, however, could jeopardise business and professional standing for McGahn, who works for Jones Day, a law firm with close ties to the Trump campaign and Republican electoral politics. Jones Day, re-election campaign officials say, will still be involved in the campaign but will have a reduced role from 2016, when it was the main firm.
The move to bar McGahn from answering lawmakers' questions angered House Democrats already eager to respond to what they view as White House stonewalling. The defiance raises the possibility that the House will hold McGahn in contempt of Congress, as House Judiciary Committee Chairman Jerrold Nadler has threatened.
"It is absurd for President Trump to claim privilege as to this witness's testimony when that testimony was already described publicly in the Mueller report," Nadler said. "Even more ridiculous is the extension of the privilege to cover events before and after Mr McGahn's service in the White House."
The chairman said the committee would still meet tomorrow, and "Mr McGahn is expected to appear as legally required".
An increasing number of frustrated Democrats also want to begin impeachment proceedings against Trump even though House Speaker Nancy Pelosi last week privately downplayed the possibility and encouraged her members to focus on their policy agenda.
Some Democrats believe opening an impeachment inquiry will strengthen their hand in trying to force the White House to comply with document requests and witness testimony, including McGahn's.
House Democrats were hoping to make McGahn their key witness as they seek to unpack the findings of the Mueller report - particularly regarding questions of whether Trump obstructed justice.
Trump and his Administration have thwarted House investigations of the report, the president's businesses and efforts to obtain his tax returns, frustrating Democrats who said they are trying to conduct oversight.
McGahn emerged as a central player in Mueller's findings, a senior confidante who documented in real-time Trump's rage against the Russia investigation and the President's efforts to shut it down.
Democrats wanted him to testify for a national television audience about the two episodes in which Mueller found McGahn was a critical witness and in which investigators say they have substantial evidence Trump was engaged in obstruction of justice that would normally warrant criminal charges.
In mid-June 2017, Trump tried to pressure McGahn to intervene with the Justice Department to try to push for Mueller's removal from office based on alleged conflicts of interest, the report said. Then, in February 2018, Trump summoned McGahn to the Oval Office and urged him to deny a news account that suggested the President asked for his help in ousting Mueller.
The McGahn confrontation carries echoes of another former White House lawyer who was subpoenaed by Congress - Harriet Miers, a former adviser to President George W. Bush. Congress held her in contempt in 2007 for refusing to comply with a subpoena in its investigation of the firings of US attorneys. As with McGahn, the Administration took the position that Miers' departure from the government did not leave her susceptible to a congressional subpoena.
The McGahn news was not surprising. This month, the White House invoked executive privilege to bar McGahn from complying with a congressional subpoena to provide documents to Congress related to Mueller's investigation, though the White House never filed the paperwork to assert the White House secrecy prerogative.