College of Labor & Employment Lawyers Seventh Circuit

Transcription

1 College of Labor & Employment Lawyers Seventh Circuit Challenging Issues in Government Investigations: Who does the government attorney represent and who can the government attorney contact directly (and indirectly though investigators)? 1 The government attorney represents the government, and not the individual. But this simple fact can cause complex problems. This is because one role the government s attorney will be required to assume is that is advocate in the name of the government on behalf of the claimant in court proceedings. This presents the second problem suggested above: whether or to what extent the RPC 4.2 restrictions on both government and management counsel s communications with witnesses, including the claimant, come into play. The interests of the government agency and the claimant are usually closely aligned, although not necessarily identical. But there is room for those interests to come into conflict, raising ethical concerns. Moreover, the government attorney can easily find himself or herself inadvertently also representing the individual claimant, and that is a big problem. 1 Michael J. Leech Fellow, College of Labor & Employment Lawyers (Talk Sense Mediation, mleech@talk-sense.com) v ADMINISTRA

2 In addressing this question, one necessarily addresses ethics issues that impact union, employee and management attorneys as well. Statutory Authority For The Relationship The relationship between the government lawyer who is acting on behalf of an individual claimant is first a function of the statute which gives the agency authority to act in the interest of an individual. The Equal Employment Opportunity Commission serves as a useful and familiar example. The Commission s attorney, as a counselor to and zealous advocate for the EEOC, must first keep in mind the statutory charge: to prevent any person from engaging in any unlawful employment practice prohibited by the Act. 42 U.S.C. 2000e-5(a) The relationship between the government and the individual claimant begins as one in which the EEOC (and therefore its attorneys) does not act on behalf of an individual; EEOC acts in a neutral investigative role. Its statutory direction is to serve a copy of the charge that initiates the relationship with the claimant on the respondent, and then, to make an investigation thereof. 42 U.S.C. 2000e-5(b) If it finds a lack of reasonable cause to believe the charge is true, the Commission is required to dismiss the charge and issue a right-to-sue letter. If it does find reasonable cause, 2

3 The Commission shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation and persuasion. Id. If that effort fails, the EEOC is authorized to file suit: the Commission may bring a civil action against a respondent 42 U.S.C. 2000e-5(f). Title VII provides for claimants to participate on behalf of the individual as an intervenor and provides for appointment of counsel in cases where the individual has brought suit. Id. From this several things about the relationship contemplated by the statute are clear: (1) that the EEOC is acting in the public interest, to eliminate discrimination; (2) that the Commission must first make its own determination of whether or not there is reasonable cause to believe the claim has merit; (3) that after such a finding, that it may seek relief on behalf of individual claimants; (4) that the interests of the claimant are recognized as not necessarily identical to those of the Commission, since the statute authorized individual representation by way of intervention. Since the EEOC is the named party bringing the action, it obtains the rights of parties plaintiff under the Federal Rules of Civil Procedure. 3

4 Nothing in the statute spells out any particular rights of claimants other than as intervening parties in litigation, and nothing in the statute spells out restrictions on actions of the Commission, leaving it free, for instance, to compromise on terms acceptable to it, or even to dismiss, if it finds those actions to be in line with the statutory direction to prevent unlawful employment practices. This raises the possibility that the interest of the Commission and that of the individual claimant may come into conflict, a fact of paramount significance to the government lawyer dealing on behalf of the Commission with a claimant. The EEOC attorney needs to secure the cooperation and, preferably, the enthusiastic participation of the claimant in the litigation process if the action is to be prosecuted successfully from the EEOC s standpoint. The Government Lawyer Under the Rules of Professional Conduct Attorneys are licensed and regulated by the States; in Illinois, by the Attorney Registration & Disciplinary Commission. The government attorney is no different. RPC 1.13 spells out the basic rules applicable to the conduct of an attorney representing an organization, including, according to Comment 9, a government agency. This means that the 4

5 government lawyer is not exempt from compliance with the requirements of the Rules of Professional Conduct. Restrictions On Communication With Corporate Constituents RPC 4.2 provides that In representing a client, a lawyer shall not communicate about the subject of the representation with a person 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 by law or a court order. The new comments to the rule provide clarification and confusion on some important points. The is applicable to the conduct of government attorneys, as reflected in comment 5, but there is a potentially huge exception: Communications authorized by law may include investigative activities of lawyers representing governmental entities, directly or through investigative agents, prior to the commencement of criminal or civil enforcement proceedings. 2 From management s point of view, the critical word above is may. The typical situation where direct contact is authorized by law involves the giving of a statutory or contractual notice to the adverse party. 2 This comment goes on to provide that in criminal investigations, the government lawyer must also comply with constitutional restrictions, although such compliance does not necessarily satisfy the requirements of RPC

6 Most of the other authority in this area involves criminal prosecutions, and in those situations law enforcement and prosecutors have fairly free reign, except that they have Miranda requirements and cannot have contact after indictment. There is nothing in Title VII which authorizes EEOC attorneys or the investigators who develop their evidence to communicate directly with respondents constituents who are within the rule and represented by corporate counsel in that capacity. But assuming that this conclusion is correct, there are still plenty of people that the rule permits the government attorney to contact directly. It is now clear that the in the case of a represented organization, the constituents to whom lawyers adverse to a corporation represented by counsel may not speak does not extend to former employees, including managerial employees. However, if the former employee is represented by an attorney even if that attorney is corporate counsel the rule s prohibition applies. An example, but not necessarily the only example, is where there are individual defendants with counsel of record. With respect to current employees, the comment provides that constituents who, for purposes of contact by adverse counsel, is someone who falls into one of these categories: 6

7 a) a constituent who supervises, directs or regularly consults with the organization s lawyer concerning the matter; b) a constituent who has the authority to obligate the organization with respect to the matter; or c) a constituent whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. This clarification is helpful to everyone in the bar, as it comes closer to providing the bright lines that prevent ethical problems in this area. The comments also provide an important protection for the attorney, including the government attorney, who speaks to a corporate constituent without knowing it: Comment 8 says, The prohibition on communications with a represented person only applies in circumstances where the lawyer knows that the person is in fact represented in the matter to be discussed. This means that the lawyer has actual knowledge of the fact of the representation; but such actual knowledge may be inferred from the circumstances. This suggests that government counsel should conduct what amounts to a voir dire of an individual who could be a constituent to ensure that she or he is on the right side of the line. It also suggests that at the earliest possible moment, management counsel should put the government lawyers on notice of specific persons who come within this standard. Communication Limits Beyond Rule 4.2 7

8 Even if the EEOC does not have limitation under RPC 4.2 on communicating with an individual, there are still important restrictions on discussions with corporate employees and former employees. RPC 4.3 addresses communications with unrepresented persons, and presents issues for government lawyers. The attorney shall not state or imply that the lawyer is disinterested. If the lawyer knows or reasonably should know that the person misunderstands the lawyer s role, the lawyer shall make reasonable efforts to correct the misunderstanding. In addition, if the lawyer knows or reasonably should know that there is a reasonable possibility that the person s interests have a reasonable possibility of bring in conflict with the interests of the client, in this case, the EEOC, the lawyer shall not give legal advice to an unrepresented person, other than the advice to seek legal counsel. The problems raised by this rule are considerable, not necessarily because of the rule s provisions, but in light of the usual context. Non-lawyers can readily misunderstand the role of the lawyer. They may have a significantly different recollection of the conversation from the recollection of the lawyer, perhaps simply as a result of that misunderstanding. 8

9 A government lawyer seeking to enforce the discrimination laws will certainly look like to an individual like someone who is disinterested. Current, and even former employees usually have good reasons not to want to be in conflict with their former employer. So the EEOC attorney who approaches the current or former employee with a view to adding them to the list of class members or witnesses may be engaged in a conversation that runs afoul of this rule suggesting to someone that they participate in Title VII proceedings can easily amount to legal advice, for instance, that violates this rule. Can Corporate Counsel Inhibit Contact With Government Lawyers? Yes, say the rules, management counsel can discourage employees from speaking with government lawyers. This is actually specifically authorized by RPC 3.4: A lawyer shall not: (f) request a person other than a client to refrain from voluntarily giving relevant information to another party unless: 9

10 (1) the person is a relative or employee or other agent of a client; and (2) the lawyer reasonably believes that the person s interests will not be adversely affected by refraining from giving such information Comment 4 elaborates that this permits a lawyer to advise employees of a client to refrain from giving information to another party, for the employees may identify their interests with those of the client. EEOC Counsel May Represent The Claimant Without Knowing It When attorneys who represent corporations, unions, plaintiffs classes or government agencies refer to an individual and say I represent so-andso, they usually do not mean what they say. A widely misunderstood principle of the law of attorney and client is the distinction between representing an entity, which by definition can only act through individuals and representing individuals. They are not the same thing. When one represents an entity, one is dealing with individuals who to a greater or lesser extent act on behalf of the entity, and because they play that role, some of the characteristics of an attorney-client relationship will attach to a limited extent. When one represents the individual as an individual, one undertakes duties to that person that can easily come into conflict with existing obligations to the entity. Usually, the attorney for the 10

11 entity undertakes representation of an individual who is also a corporate constituent at his or her peril. It should not be done casually and without carefully weighing the risks and benefits. But it is soooo easy to become a lawyer for someone without realizing that it has occurred. There are substantial duties owed by a lawyer to a client that do not come into play at all when the party being dealt with is not a client. the result can be unexpected professional liability, ethics charges and disqualification. The prima facie showing for an attorney-client relationship (in the tort sense, not the Title VII sense) is a person s testimony I thought s/he was my lawyer. If the conclusion is reasonable from the client s viewpoint, then the relationship exists. Current, and even former employees usually have good reasons not to want to be in conflict with their former employer Noting more is required. Current, and even former employees usually have good reasons not to want to be in conflict with their former employer There is no rehearsed speech or oral disclaimer that can ensure that there will be no attorney-client relationship. So when the EEOC attorney begins a relationship with a claimant, and announces that he is asserting a claim on behalf of the claimant, it is 11

12 quite easy for the individual to regard the EEOC attorney as his or her own attorney. Particularly when during the deposition the EEOC attorney asserts attorney-client privilege and refers to the claimant as my client. We All Can Represent People Without Knowing It This same problem confronts all of us. For management counsel, unintentional formation of an attorney-client relationship with a manager or other employee or alleged joint employer can result in any of the difficult problems associated with representation of multiple clients, including disqualification, ethics problems due to failure to obtain informed consent and repayment of attorneys fees. The employee attorney who becomes the attorney for a fired employee without realizing it can be sued for failing to bring a timely legal action on the employee s behalf. The lawyer who formerly worked on the management side at another firm runs risks when consulted by any employee of that company. The lawyer may divulge information that the former client considers confidential, and face disqualification, professional liability or ethics charges. In Morris v. Margulis, 307 Ill.App.3d 1024, 718 N.E.2d 709, 241 Ill.Dec. 138, (1st Dist. 1999), the court said: 12

13 [A]n attorney-client relationship need not be explicit or expressed and it is not dependent on the amount of time the client spends with the attorney, the payment of fees or execution of a contract, the consent of the attorney, or the actual employment of the attorney.[citations omitted] Rather, the relationship can come into being during the initial contact between the layperson and the professional and appears to hinge on the client s belief that he is consulting a lawyer in that capacity and his manifested intention to seek professional advice.... If the client consults the attorney for the evident purpose of securing legal advice, an attorneyclient relationship will probably be found regardless of the attorney s intent or the fact that a further relationship does not develop as a result of the primary consultation. [citation omitted] There are a number of consequences that flow from the finding of an attorney-client relationship. Once a substantial relationship is found between the prior and present representations, it is irrebututably presumed that confidential information was disclosed in the earlier representation. [citation omitted] Morris v. Margulis, 307 Ill.App.3d 1024, 718 N.E.2d 709, 241 Ill.Dec. 138, 147 (1st Dist. 1999). Constituents (directors, officer, managers, employees) of the organization can become individual clients, but even if they have not become clients, attorneys are obligated to caution them when a conflict between their interests and those of the entity develops, RPC 1.13, Comment 10: 13

14 the lawyer should advise any constituent, whose interest the lawyer finds adverse to that of the organization of the conflict or potential conflict of interest, that the lawyer cannot represent such constituent, and that such person may wish to obtain independent representation.. Care must be taken to assure that the individual understands that, when thee is such adversity of interest, the lawyer for the organization cannot provide legal representation for that constituent individual, and that discussions between the lawyer for the organization and the individual may not be privileged. An investigation whether it be into sexual harassment allegations, potential Sarbanes-Oxley violations, corporate conflict of interest, or fraud and embezzlement presents the concern with being clear about the attorney s role in stark relief. By definition, one does not know in advance the outcome of an investigation. Many with whom the attorney will speak in investigating could potentially have interests adverse to the organization. The alleged wrongdoer could be guilty of what is claimed, or even more. The wrongdoer s manager and/or human resources representative may have failed to supervise the wrongdoer or even be personally implicated. The senior manager may have known what was going on and looked the other way and/or misrepresented the facts (deliberately or innocently) to the board or audit committee. 14

15 The attorney is thus ethically required to notify pretty much everyone about the role of the company attorney. This disclosure may not be exactly conducive to prompting employees and other constituents to baring their souls, and as a result, lawyers are always tempted to omit the appropriate warnings. Don t. The potential civil and criminal implications of investigations require special care. Given that the lawyer s position will be that the constituent is not a client, the requirements of RPC Rule 4.3 must be observed: In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When a lawyer knows or is reasonably should know that the unrepresented person misunderstands the lawyer s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client. When the result of the interview is information that incriminates or confirms that disciplinary or legal action is justified, it will appear that the person interviewed did not understand what was going on. A lawyer s accurate statement to the individual that the company has a legal right to know whatever information the interviewee has may then be claimed to 15

16 have been understood as legal advice from the individual s own attorney. Such a statement can also appear to be suggest compulsion; the individual always has the right to refuse to provide information and accept the legal consequences. Thus, the case law under the rule suggests that emphatic warnings should be given. In McCallum v. CSX Transp., Inc., 149 F.R.D. 104 (M.D. N.C. 1993), the court required not only that the attorney (or the attorney s investigator) disclose who was represented and the reason for the interview, but also to state that the interviewee may decline to be interviewed and that s/he has a right to have counsel present. See also Midwest Motor Sports, Inc. v. Arctic Cat Sales, Inc., 144 F.Supp.2d 1147 (D. S.D. 2001); Cole v. Appalachian Power Co., 903 F.Supp. 975 S.D. W.Va. 1995); Monsanto Co. v. Aetna Cas. & Sur. Co.., 593 A.2d 1013 (Del. Super. Ct. 1990). However excessive (not to mention counter-productive to a successful investigation) this may seem, it is the only way to ensure that the attorney who uncovers and documents wrongdoing avoids civil liability and problems with ethics charges. 16