1992-12

QUESTION:
“I have filed two (2) complaints against Acme (“Acme”), copies enclosed. The suit in Any County is a proposed class action which alleges improper mortgage balances and interest rates charged to Acme customers. The suit charges Acme with fraud and breach of contract. The crux of the complaint filed in Low County is outrage, slander, invasion of privacy and intentional infliction of emotional distress arising out of the branch manager’s treatment of an Acme customer.

The credit union President, John Don, has been named as a defendant in both suits. Mr. Don’s former secretary, Amy Honey has retained our firm to represent her in connection with sex discrimination arising out of Mr. Don’s treatment of Mrs. Honey when she became pregnant and took maternity leave. Upon return after maternity leave, Mrs. Honey learned that she had been replaced.

As stated, Mrs. Honey was employed by Acme as Mr. Don’s secretary. She types correspondence to and received correspondence from Acme’s legal counsel pertaining to the two (2) cases I already have pending. She also had specific conversations with Mr. Don about the two (2) cases I have pending.

We need a written opinion as to whether Rule 4.2 or any other rule of Professional Conduct precludes me from asking Mrs. Honey about facts or information she knows concerning the two (2) previously filed cases.”

ANSWER:
You are not precluded from communicating with this former employee under the set of facts you have described in your request.

DISCUSSION:
Rule 4.2 of the Rules of Professional Conduct prohibits communication about the subject matter of the representation with a “party” known to be represented by other counsel. Consent of the other counsel obviates the problem. Rule 4.2 is a successor to Alabama DR 7-l04(A)(1) and two provisions are substantially identical. In RO-88-34 (also published in The Alabama Lawyer), the Disciplinary Commission held that a plaintiff’s counsel in a tort claim action could contact and interview current corporate employees/witnesses. There can be no ex parte contact when the employee is an executive officer of the adverse party or could otherwise legally bind the adverse party by his/her testimony, or if the employee was the actual tort feasor or person whose conduct gave rise to the cause of action. In any of these situations, prior consent of counsel for the adverse party would be required.

Ex parte contact with a former employee, as here, is not subject to the same scrutiny. In fact, there is a strong argument that Rule 4.2 does not even apply to former employees at any level. A former employee cannot speak for the corporation. The ABA Committee on Ethics and Professional Responsibility in Formal Opinion 91-359 (1991)[attached as “Appendix “A” and set forth in its entirety) stated that former employees of a corporation may be contacted without consulting with corporation’s counsel because they are no longer in positions of authority and thus, cannot bind the corporation. The Disciplinary Commission believes that contact with a former employee is ethically permissible, unless the ex parte contact is intended to deal with privileged matter, i.e., the inquiring counsel is asking the former employee to divulge prior communications with legal counsel for the adverse party, and these communications were conducted for purposes of advising the adverse party in the litigation or claim. If the former employee was the actual person giving rise to the cause of action, contact is also permissible so long as that person is not represented by counsel.

Appendix “A”

ABA Formal Opinion 91-359

The prohibition of Rule 4.2 with respect to contacts by a lawyer with employees of an opposing corporate party does not extend to former employees of that party.

The Committee has been asked for its opinion whether a lawyer representing a client in a matter adverse to a corporate party that is represented by another lawyer may, without the consent of the corporation’s lawyer, communicate about the subject of the representation with an unrepresented former employee of the corporate party.

The starting point of our inquiry is Model Rules of Professional Conduct 4.2, which states:

In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so.

The rule is, for purposes of the issue under discussion, substantially identical to DR 7-104(A)(1), which states, as follows:

(A) During the course of his representation of a client a lawyer shall not:

(1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.

The comment to Rule 4.2 makes clear that corporate parties are included within the meaning of “party” in that Rule, and is helpful in defining the contours of that rule as it applies to present employees of corporate parties.

[1] This Rule does not prohibit communication with a party, or an employee or agent of a party, concerning matters outside the
the representation. For example, the existence of a controversy between a government agency and a private party, or between two organizations, does not prohibit a lawyer for either from communicating with non-lawyer representatives of the other regarding a separate matter. Also, parties to a matter may communicate directly with directly with each other and a lawyer having independent justification for communicating with the other party is permitted to do so. Communications authorized by law include, for example, the right of a party to a controversy with a government agency to speak with government officials about the matter.

[2] In the case if an organization, this Rule prohibits communications by a lawyer for one party concerning the matter in representation with persons having a managerial responsibility on behalf of the organization, and with any other person whose act or omission in connection with that matter may be imputed to the organization for purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization. If an agent or employee of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for the purposes of this Rule. Compare Rule 3.4(f).

[3] This Rule also covers any person, whether or not a party to a formal proceeding, who is represented by counsel concerning the matter in question.

The rationale on which Rule 4.2 was formulated was identified in Wright v. Group Health Hospital, 103 Wash.2d 192, 691 P.2d 564, 576 (1984).

The purposes of the rule against ex parte communications with represented parties are “preserving the proper functioning of the legal system and shielding the adverse party from improper approaches.” [Citing ABA Formal Opinion 108 (1934)].

The professional has traditionally considered that the presumptively superior skills of the trained advocate should not be matched against those of one not trained in the law. As discussed at Law. Man. Prof. Conduct 71:302.

The rule against communicating with the opposing party without the consent of that party’s lawyer does not admit of any exceptions for communications with “sophisticated” parties, Maru, 10861 (Fla. Bar Op. 76-21 (4/19/77). See also Waller v. Kotzen, 567 F.Supp. 424 (E.D. Pa. 1983)(plaintiff’s counsel contacted insurance company directly, after insurer was represented by counsel); Estate of Vafiades v. Sheppard Bus Service, 469 A.2d 971 (N.J. Super. 1983)(negotiations were conducted with insurance company for defendants).

Meat Price Investigators Assn. V. Iowa Beef Processors, 448 F.Supp. 1,3 (S.D. Iowa 1977) (while leaving question of culpability of counsel’s conduct to disqualify counsel for interviewing an officer of an opposing party who was a “sophisticated businessman who was openly willing to share his knowledge of the beef industry with attorneys he knew to be plaintiff’s counsel.”) See also Code of Professional Responsibility EC 7-18:

The legal system in its broadest sense functions best when persons in need of legal advice or assistance are represented by their own counsel. For this reason a lawyer should not communicate on the subject matter of the representation of his client with a person he knows to be represented in the matter by a lawyer, unless pursuant to law or rule of court or unless he has the consent of the lawyer for that person…

The comment to Rule 4.2 limits those present corporate employees covered by this rule to:

persons having a managerial responsibility on behalf of the organization, and … any other person whose act or omission in connection with that matter may be imputed to the organization for purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization.

The inquiry as to present employees thus becomes whether the employee (a) has “managerial responsibility” on behalf of the employer-corporation, or (b) is one whose act or admission in connection with the matter that is the subject of the potential communicating lawyer’s representation may be imputed to the corporation, or (c) is one whose “statement may constitute an admission” by the corporation.

Whether an employee falls into any of these three categories is inevitably an issue affected by a host of factors, the exploration of none of which need detain us. These include at least the terms of the relevant statutory and common law of the state of the corporation’s incorporation, applicable rules of evidence in the relevant jurisdiction, and relevant corporate documents affecting employees’ duties and responsibilities.

At least insofar as the test of imputable act or omission is concerned all of these factors, in turn, would have to be applied within the context of “the matter in representation” to determine whether the acts or omission of the employee can be imputed to the corporation with respect to that particular matter. That requires a determination of the scope of the subject matter of the potentially communicating lawyer’s representation.

The comment-by defining three categories of unrepresented corporate employees with whom communication “concerning the matter in representation” is prohibited absent the consent of the corporation’s counsel or authorization of law-clearly implies that communication with all other employees on “the matter in representation” is permissible without consent, subject only to such other rules and other law as may be applicable. (E.g., Rule 4.1, requiring truthfulness in statements to others and Rule 4.3, addressing a lawyer’s dealings with unrepresented persons.)

Neither the Rule nor its comment purports to deal with former employees of a corporate party. Because an organizational party (as contrasted to an individual party) necessarily acts through others, however, the concerns reflected in the Comment to Rule 4.2 may survive the termination of the employment relationship.

(It is appropriate to note here that those addressed by the Comment are not denominated “employees” but “persons”. The Rule presumably covers independent contractors whose relationship with the organization may have placed them in the factual position contemplated by the Comment. Because the issue this Opinion addresses deals expressly with former employees, we need not explore the ramifications of this expansive terminology.)

While Rule 4.2 does not purport by its terms to apply to former employees, courts confronting the issue have interpreted Rule 4.2 (as illuminated by its comment) and DR 7-104(A)(1) (which does not have such a comment or comparable discussion in any Ethical Consideration) in various ways.

Most recently, in an aside in a case dealing with current employees under DR 7-104(A)(1), the New York Court of Appeals noted its agreement with the Appellate Division that the rule applies “only to current employees, not to former employees.” Niesig v. Team I et al, 76 N.Y.2d 363, 558 N.E.2d 1030 (1990). See also Wright by Wright v. Group Health Hosp., 103 Wash. 2d 192, 691 P.2d 564 (1984) (reasoning that former employees could not possibly speak (or or bind the corporation, and therefore interpreting DR 7-104(A)(1) as not applying to them); and Polycast Technology Corp. v. Uniroyal, Inc., 129 F.R.D. 621 (S.D.N.Y. 1990) (holding that DR 7-104 does not bar contacts with former corporate employees, at least in absence of a showing that the employee possessed privileged information).

On the other hand, other courts have held that former employees are covered (it is usually phrased that they will be considered “parties” for ex parte contact purposes) under certain circumstances. Thus, Rule 4.2 has been held to bar ex parte contacts with former employees who, while employed, had managerial responsibilities concerning the matter in litigation.” Porter v. Arco Metals, 642 F. Supp. 1116, 1118 (D. Mont. 1988). In Amarin Plastics v. Maryland Cup Corp., 116 F.R.D. 36 (D. Mass. 1987) the Court, while recognizing the possible applicability of Rule 4.2 to former employees, declined to apply it on the facts of that case. It noted, however, the additional possibility that communication between a former employee and his former corporate employer’s counsel may be privileged. Id., at 41. See also In re Coordinated Pre-Trial Proceedings in Petroleum Products Antitrust Litigation, 658 F.2d 1355, 1361 n.7 (9th Cir. 1981), cert. denied, 455 U.S. 99 (1982) (noting that the rationale of Upjohn v. United States, 449 U.S. 383 (1981), with respect to corporate attorney-client privilege applies to former as well as current corporate employees). In Public Service Electric and Gas Company v. Associated Electric and Gas Ins. Services, Ltd., 745 F. Supp. 1037 (D. N.J. 1990) the court interpreted Rule 4.2 to cover all former employees.

Commentators on the subject of ex parte contacts with former employees have likewise urged application of the prohibition on contacts to at least some former corporate employees. See, e.g., Stahl, Ex Parte Interviews with Enterprise Employees: A Post-Upjohn Analysis, 44 Wash. & Lee L. Rev. 1181 at 1227 (1987), recommending a functional approach deeming any present or former employee who is identified with an enterprise, either for purposes of resolving disputed issues or effective representation of the enterprise, to be a party representative for discovery purposes. Any other rule would put enterprises at a distinct and unfair disadvantage and may effectively deny enterprises the full benefit of representation by counsel…

See also Miller and Calfo, Ex Parte Contact with Employees and Former Employees of a Corporate Adversary: Is It Ethical?, 42 Bus. Law. 1053 at 1072-73 (1987).

[C]ourt authorization or opposing counsel’s consent to ex parte contact should be required if the former employee was highly-placed in the company (such as a former officer or director) or if the former employee’s actions are precisely those sought to be imputed to the corporation.

While the Committee recognizes that persuasive policy arguments can be and have been made for extending the ambit of Model Rule 4.2 to cover some former corporate employers, the fact remains that the text of the Rule does not do so and the comment gives no basis for concluding that such coverage was intended. Especially where, as here, the effect of the Rule is to inhibit the acquisition of information about one’s case, the Committee is loath, given the text of Model Rule 4.2 and its Comment, to expand its coverage to former employees by means of liberal interpretation.

Accordingly, it is the opinion of the Committee that a lawyer representing a client in a matter adverse to a corporate party that is represented by another lawyer may, without violating Model Rule 4.2, communicate about the subject of the representation with an unrepresented former employee of the corporate party without the consent of the corporation’s lawyer.

With respect to any unrepresented former employee, of course, the potentially communicating adversary attorney must be careful not to seek to induce the former employee to violate the privilege attaching to attorney-client communications to the extent his or her communications as a former employee with his or her former employer’s counsel are protected b the privilege (a privilege not belonging to or for the benefit of the former employee, by the former employer). Such an attempt could violate Rule 4.4 (requiring respect for the rights of third persons).

The lawyer should also punctiliously comply with the requirements of Rule 4.3, which addresses a lawyer’s dealings with unrepresented persons. That rule, insofar as pertinent here, requires that the lawyer contacting a former employee of an opposing corporate party make clear the nature of the lawyer’s role in the matter giving occasion for the contact, including the identity of the lawyer’s client and the fact that the witnesses’s former employer is an adverse party. See, e.g., Brown v. Peninsula Hospital Centers, 64 A.D.2d 685, 407 N.Y.S. 2d 586 (App. Div. 1978) (attorneys for defendant hospital should have disclosed potential conflict of interest before talking to treating physician and producing him for deposition as hospital’s representative); ABA Informal Opinion 908 (1966).

Download PDF