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Ex Parte Contacts With Former Employees:
Gold Mine or Land Mine?
© 1997 Charles F. Luce, Jr.
All Rights Reserved Worldwide
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         Fewer things gladden more the heart of the trial attorney than the discovery of a disgruntled ex-employee. One who knows the inner workings of the opposing party, the "family" secrets that may be hidden even from its counsel. This is a prized gem, a treasure above all others, particularly if the ex-employee will come across, not as a bitter, vindictive loser, but as an abused, sympathetic and trustworthy whistle-blower.

         Is it any wonder that names and addresses of former employees are so often sought in discovery? But, the question arises, is that incredibly helpful former employee truly a gold mine? Or is this situation more likely to be a landmine, attractive bait attached to a motion to disqualify? The answer is, potentially, both.

         The starting point for analysis is R.P.C. 4.2, which provides:

         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 by law to do so. (Emphasis added.)

        In the case of a corporation, or other fictional entity, the Rule begs the question: "who in the organization constitute the 'party'." The Official Comment to Rule 4.2 states:

         In the case of an organization, this Rule prohibits communications by a lawyer for one party concerning the matter in representation with . . . persons having 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 the purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization.

This Comment has been the source of considerable debate and derision, at least with regard to its applicability to former employees.

         The Colorado Supreme Court has yet to opine regarding Rule 4.2. Two Colorado Federal District Court opinions have discussed it, however. Since the Federal Court has adopted the Colorado Rules of Professional Conduct, these cases are worth close attention, although, because the Tenth Circuit and Colorado Supreme Court have yet to weigh in, the author hardly believes these decisions are either the final, or necessarily the correct interpretation of the Rule.

         Interestingly, both U.S. District Court cases cite and generally follow Colo. Bar Ass'n Ethics Opinion 69, Propriety of Communicating with Employee or Former Employee of an Adverse Party Organization (Revised, June 20, 1987), an opinion interpreting the former, though substantially similar, Colo. Code of Professional Responsibility DR 7-104(A). Opinion 69 is well summarized in Sequa Corp. v. Lititech, Inc., 807 F. Supp. 653 (D. Colo. 1992):

         Colorado Bar Association Revised Ethics Opinion 69 interprets this rule in the context of present and former employees of an adverse party. As to a present employee of an adverse party, Revised 69 permits an ex parte interview if the employee is a "bystander" witness who has no authority to bind the organization to a position in the litigation. As to a former employee, Revised 69 allows an ex parte interview "with regard to all matters except as to communications which are the subject of the attorney-client privilege." The opinion mandates that an interviewing attorney may not inquire into privileged communications or listen while the former employee divulges privileged communications voluntarily.

807 F. Supp. at 659-60.

         In its original form, Opinion 69, extended the prohibition against ex parte contact to former employees, as well as current employees, upon the authority of an unpublished opinion, American Protection Insurance Co. V. MGM Grand Hotel-Las Vegas, Inc., Nos. 83-2674, 83-2728 (9th Cir., Dec. 3, 1984). Original Opinion 69's possession was correctly criticized in an unpublished Order of Judge Matsch. Moreover, the MGM Grand Hotel decision relied upon was subsequently withdrawn and repudiated. See American Protection Insurance Co. V. MGM Grand Hotel-Las Vegas, Inc., 765 F.2d 925 (9th Cir. 1985). Under continuous assault from the Colorado Bar at large, Opinion 69 was revised regarding ex parte discussions with former employees, the only limitation being that the attorney may not solicit privileged information nor silently listen while a former employee discloses attorney-client confidences.

         Both Revised Opinion 69 and Sequa Corp. were interpretations of DR 7-104(A). In Sequa Corp., defendants moved for disqualification of plaintiff's firm, and dismissal of plaintiff's complaint, based on an plaintiff's counsel's ex parte contacts with one defendant-attorney's former legal secretary. After reviewing a truly bizarre set of facts -- including a seemingly vindictive ex-employee willing to ransack her former employer's offices for documents, "leaked" false faxes and faked letters, invisible ink on photocopy paper designed to catch the former employee making copies, and the unethical recording of telephone conversations -- the court reached the correct result: none of the communications actually relayed by the former employee to plaintiff's counsel were protected by attorney-client privilege.

         The first and only Colorado case to actually construe Rule 4.2, Johnson v. Cadillac Plastic Group, Inc., 930 F. Supp. 1437 (D. Colo. 1996), also cites Revised Opinion 69 with general approval. There, plaintiff-employee's attorney(1) conducted a pre-litigation investigative interview of a current employee-manager of the future defendant-employer. Defendants filed a motion in limine, to prevent either the interviewed manager or the investigating attorney from testifying. In reversing the magistrate judge's recommendation that the motion in limine be granted, Judge Kane faced the "who is a party" issue head on. The court first concluded that the entity-employer was not a "party" under Rule 4.2 at the time of the pre-litigation interview. In reaching this conclusion, the court noted the chilling effect a contrary holding would have:

         I agree an organization or business entity may be a "party" under the Rule before litigation formally commences. That does not mean, however, that a corporation is immune from legitimate informal fact-gathering processes as soon as an employee notifies it that he is unhappy and has consulted counsel. An interpretation of Rule 4.2 that limits counsel to (and burdens their clients with the costs of) formal discovery during the investigatory stages of civil litigation is not only fundamentally unfair, but also frustrates the purposes of Rule 11, Fed.R.Civ.P.

         930 F. Supp. at 1441. In taking this possession, the court quoted with approval the decision in Weider Sports Equipment Co., Ltd. v. Fitness First, Inc., 912 F. Supp. 502, 508-509 (D. Utah 1996):

         [a broad construction of Rule 4.2 would] transform the Rule from "a matter of ethics" to "a rule of political and economic power that shelters ... business organizations from the legitimate less costly inquiry and fact gathering process sometimes necessary to make a legitimate assessment of whether a valid claim for relief exists." Id. at 508, 509. Rule 4.2, it concluded, should be held applicable only after litigation has been commenced. Id. at 509.(2)

Significantly, Judge Kane declined to adopt the "bright line" approach to Rule 4.2 approved in Weider Sports Equipment Co.:

         As previously stated, the CBA Ethics Committee does not require one to have been formally named a "party" to litigation before being afforded the protections of the Rule and I see no need to interpret the Rule as narrowly as the Weider court. The reasoning in Weider supports a conclusion consistent both with Revised 69 and the Tenth Circuit's decision in Ryans, namely, that the protections of Rule 4.2 attach only once an "adversarial relationship" sufficient to trigger an organization's right to counsel arises. Under the facts of this case, Cadillac was not a "party" for the purposes of Rule 4.2 in October 1993.

930 F. Supp. at 1441.

         Judge Kane also declined to adopt defendant's position that contact with a current manager was a per se violation of Rule 4.2, based on the ABA Comment:

         The ABA comment has been roundly criticized by courts and commentators alike, see Weider, 912 F.Supp. at 508-09 (and citations therein), and the CBA Ethics Committee has declined to interpret it expansively. Contrary to the Magistrate Judge's finding, Revised 69 specifically states "not all managerial employees are 'parties.'" . . . "The protection of [the Rule]," it explains, "is limited to those managerial employees with authority to commit the organization to a position regarding the subject matter of representation." Id. Examples of the types of employees capable of committing an organization are those "whose duties include making litigation decisions" or "answering the type of inquiries posed." Id. Neither Trujillo's affidavit nor any other evidence in the record establishes that Trujillo was such an employee.

         Revised 69's narrow reading of the ABA comment ensures that Rule 4.2 remains a rule of ethics, rather than of corporate immunity.

930 F. Supp. at 1442.

         Indeed, the ABA itself has duly ignored its own Comment to Model Rule 4.2. In 1991 the ABA's Committee on Ethics and Professional Responsibility issued Formal Opinion 91-359, following the approach of Opinion 69. This opinion takes the incredible position that Rule 4.2 simply does not address the issue of former employees, and cannot be read as doing so. The rhetoric of the ABA opinion, however, suggests that the ABA Committee's analysis was clouded by a collective perception that motions to preclude ex parte interviews of former employees are simply another unnecessary discovery obstacle, a view shared by many of the courts embracing ABA Opinion 91-359 or its conclusion.

         The approach taken by ABA Opinion 91-359 clumsily sidesteps that portion of Rule 4.2's comment most often cited as a possible basis for precluding ex parte interviews with former employees: "In the case of an organization, this Rule prohibits communications by a lawyer for one party concerning the matter in representation with . . . any other person whose act or omission in connection with that matter may be imputed to the organization for the purposes of civil or criminal liability . . . ." While it is undisputable that a former employee cannot make an admission which would bind an organizational party, the former employee's conduct may well be imputed to the organization under the doctrine of respondeat superior.

         Since the publication of ABA Opinion 91-359, nearly every court considering the issue has adopted the ABA's interpretation regarding ex parte interviews of former employees. Cases finding ex parte communications with former employees were not prohibited by Rule 4.2 include: Dubois v. Gradco Systems, Inc., 136 F.R.D. 341 (D. Conn. 1991) (but cautioning that the interviewing attorney must identify his role in the case pursuant to Rule 4.3, must scrupulously avoid discussions of privileged communications, and that, upon a showing of improper conduct in such interviews the court could order that they be discontinued), Shearson Lehman Brothers, Inc. v. Wasatch Bank, 139 F.R.D. 412 (D. Utah 1991), and Goff v. Wheaton Industries, 145 F.R.D 351 (D. N.J. 1992). The post-1991 cases rely heavily upon ABA Opinion 91-359.(3)

         Unfortunately, neither the facts of Sequa Corp. nor Johnson gave the court a clear opportunity to analyze how R.P.C. 4.2 may apply to former employees. While generally approving the approach of Revised Opinion 69, Revised Opinion 69 was not based on Rule 4.2, and does not consider the Comment to Rule 4.2 which the ABA seems itself to ignore. The author believes that, until the matter is squarely faced by the Colorado appellate courts or the Tenth Circuit, provided the other conditions of Rule 4.2 apply, a credible argument remains that ex-employees who can bind an entity under the doctrine of respondeat superior should be protected from ex parte contacts at any stage of litigation or investigation. Such an interpretation of "party" would protect the legitimate concerns of legal entities, without substantially prejudicing the administration of justice or unfairly impeding the discovery of wrongdoing. The author's view, however, is, at least today, decidedly in the minority.

         1. Interestingly, the original investigating attorney apparently did not ultimately bring the legal action.

         2. The Colorado District Court also cited the Tenth Circuit's decision in United States v. Ryans, 903 F.2d 731 (10th Cir. 1990), cited in Weider Sports Equipment Co.:

         Applying Rule 4.2 in a criminal case, the Tenth Circuit in Ryans found the Rule "contemplate[s] an adversarial relationship between litigants, whether in a criminal or civil setting." 903 F.2d at 739. The court reasoned "the contours of the 'subject matter of the representation' are uncertain during the investigative stage of the case, and therefore less susceptible to the damage of 'artful' legal questions which the disciplinary rule is designed in part to avoid." Id. (agreeing with the District of Columbia Circuit in United States v. Lemonakis, 485 F.2d 941, 955-56 (D.C.Cir.1973) and disagreeing with the contrary conclusion reached by the Second Circuit in United States v. Hammad, 858 F.2d 834 (2d Cir.1988)).

930 F. Supp. at 1441 n.5.

         3. Those few decisions barring or restricting ex parte interviews of former employees include Rentclub v. Transamerica Rental Finance Corp., 811 F. Supp. 651, 657-58 (N.D. Fla. 1992), Public Service Electric and Gas Co. v. Associated Electric & Gas Insurance Serv., Ltd., 745 F. Supp. 1037 (D. N.J. 1990) (establishing a bright line prohibition against interviewing former employees ex parte), Curley v. Cumberland Farms, Inc., 134 F.R.D. 77 (D. N.J. 1992) (criticizing Public Service, but suggesting that restrictions may be imposed by the court if the employer can demonstrate other ethical violations or questionable conduct by the interviewing attorney), Chancellor v. Boeing Co., 678 F. Supp. 250, 253 (D. Kan. 1988), and Amarin Plastics, Inc. v. Maryland Cup Corp., 116 F.R.D. 36 (D. Mass. 1987) (suggesting in dicta that ex parte communications might be prohibited if it could be demonstrated that the former employee could bind the organizational litigant, but finding no such showing was made). Most of these decisions have been distinguished, harshly criticized and questioned in recent years.

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