Solicitation or Shrewd Tactics? Ethics of Speaking for Ex-Workers

The court held that all other employees, such as those who were witnesses to the events at issue in the litigation, may be interviewed by opposing counsel. The court reached this result after weighing the interest in informal discovery — which it found can “streamline discovery and foster the prompt resolution of claims” — against the fear that unrestricted contact with company witnesses would lead to “improvident settlements, ill-advised disclosures and unwarranted concessions.”[FOOTNOTE 5] While Niesig primarily addressed the status of current, rather than former, employees, the decision affirmed the Appellate Division’s conclusion that the definition of “party” in DR-7-104(a)(1) did not apply to former employees.[FOOTNOTE 6]

In 2007, the Court of Appeals provided further guidance on the issue of contacting former employees. In Muriel Siebert & Co. v. Intuit Inc., 8 NY3d 506 (2007), the defendant’s lawyers interviewed the plaintiff’s former chief operating officer, who had participated in privileged communications with plaintiff’s counsel and had helped the company draft the complaint and respond to interrogatories. Before conducting the interview, defendant’s counsel informed the witness that he should not disclose any privileged communications or any information about plaintiff’s legal strategy.

Citing the public policy argument set forth in Niesig concerning the importance of informal discovery methods, the court found that counsel may interview any (unrepresented) former employee of an opposing party, provided that counsel disclose its role in the proceedings and whom it represents and refrain from eliciting attorney-client communications. Thus, the court found that there was no ethical prohibition against contacting former employees and doing so did not create an appearance of impropriety.

Both Niesig and Siebert addressed the effect of DR-7-104(a)(1) on communications with employees or former employees of an adversary. However, neither case addressed DR 2-103(a)(1) and the ethics of joint representation of a client’s former employees. Thus, it does not automatically follow from the Court of Appeals decisions in these cases that the conduct at issue in Rivera constitutes “solicitation.” Indeed, the court in Niesig noted that courts must be flexible and apply an interests of justice standard when it is unclear whether disciplinary rules apply to a situation.[FOOTNOTE 7]

SOLICITING IN ‘RIVERA’?

The Rivera court assumed, but did not address, whether counsel’s motives met the definition of “solicitation” under the Code of Professional Responsibility. In relevant part, “solicitation” is defined in DR 2-103(b) as:

Any advertisement initiated by or on behalf of a lawyer or law firm that is directed to, or targeted at, a specific recipient or group of recipients, or their family members or legal representatives, the primary purpose of which is the retention of the lawyer or law firm, and a significant motive for which is pecuniary gain.[FOOTNOTE 8]

Arguably, there was no solicitation because pecuniary gain was not a “significant motive” for contacting the former employees. In fact, the Rivera decision suggests that the court believed that counsel was motivated by obtaining a tactical advantage, not pecuniary gain.[FOOTNOTE 9] Moreover, because counsel represented the witnesses at no charge to them, and counsel’s time interviewing or preparing these witnesses presumably would be charged to the hospital, there was no additional financial incentive to represent these witnesses. Thus, it seems that counsel’s motivation for contacting these witnesses was to represent zealously, or perhaps overzealously in the view of the court, another client.

Furthermore, the conduct at issue does not seem to fall within the harm which the anti-solicitation rule seeks to prevent. The U.S. Supreme Court has found that anti-solicitation rules exist to prevent overreaching and undue influence on lay people, protect individuals’ privacy, and prevent lawyers’ own financial self-interest from clouding their judgment.[FOOTNOTE 10] In Rivera, it does not appear that the former employees were harmed by the offer of free representation. Once defendant identified the former employees as potential witnesses, there was a very high likelihood that they would be deposed. By accepting representation, the former employees could avoid additional phone calls or in-person visits by other lawyers and counsel could serve as an intermediary who could schedule a deposition at a time and place that minimized the inconvenience to the witnesses.

COMMITTEE ON ETHICS

Moreover, an advisory opinion from the New York County Lawyers’ Association Committee on Professional Ethics can be interpreted as condoning the representation of former employees. In Amended Opinion No. 729, a plaintiff’s lawyer had contacted its adversary’s former employee and wanted to suggest that the witness should be represented by independent counsel and the plaintiff would bear the cost.[FOOTNOTE 11] The committee observed that there were several reasons why a third party might want to have its own counsel present during an informal interview, such as to better understand complex legal proceedings, prevent the former employee from disclosing trade secrets or other sensitive information, or comfort the witness.

The committee concluded that paying for or providing counsel to a third-party witness should not be interpreted as a payment to influence the content of the testimony. Accordingly, the committee found that a lawyer may ethically advance the counsel fees. In light of this advisory decision, it would be counterintuitive if a company’s adversary could suggest that a witness obtain counsel, but the corporation’s counsel could not do the same.

Arguably, the rule prohibiting solicitation would be undermined if its application elevated form over substance. For example, one decision in the U.S. District Court for the Southern District of New York suggests that solicitation turned on who had suggested the representation, counsel or the witness.[FOOTNOTE 12]

But it is debatable whether there should be an ethical difference if, instead of offering representation, a company’s counsel simply states that the witness is likely to be deposed and can either be represented by counsel or unrepresented at the deposition. If the witness were to respond that he or she would prefer representation but is concerned about the cost, the company’s counsel would then offer to represent the witness at the company’s expense. However, it does not seem that there should be a distinction between that scenario and the circumstances in Rivera, which the court deemed solicitation. No matter who first suggests the representation, the end result is the same — the opposing party may not contact the witness except through counsel.

In any event, it may not be useful to regulate this practice through an ethical rule governing the creation of an attorney-client relationship. To the extent that counsel seeks to prevent informal contact by an adversary’s lawyer with a former employee, the company’s counsel need not enter into an attorney-client relationship with the witness.

For example, the company’s counsel could ethically advise former employees that:

(i) they are likely to be witnesses at trial or deposition;

(ii) they have no obligation to speak with opposing counsel or cooperate in any way;

(iii) opposing counsel could serve the witnesses with subpoenas if it wants to speak with them; and

(iv) if the witnesses receive subpoenas, company counsel would be present at the depositions to protect the company’s interests and object to any improper questions.

The former employees may then decide to decline to cooperate with the company’s adversary, particularly if they want to preserve a good relationship with their former employers. Thus, even if no attorney-client relationship exists, it may be difficult to obtain informal interviews. Accordingly, while it may be inconvenient that some witnesses do not wish to participate in informal interviews, this may be an unavoidable hardship in vigorously contested litigation.

CONCLUSION

Rivera v. Lutheran Medical Center demonstrates that the joint representation of a company and its former employees in litigation may be subject to judicial disapproval. This case charts relatively new ground in New York by finding that representing former employees who are witnesses violates the Code of Professional Responsibility and constitutes improper solicitation.

However, there is a serious question whether the facts at issue fit either the literal definition of “solicitation” or the interests that the bar on solicitation was designed to address. Even if it does not violate any ethical rule, given the Court of Appeals’ pronouncements about the strong policy interests in favor of informal interviews by counsel, other courts may react harshly to what may be perceived as a tactical weapon that thwarts informal interviews with former employees.

Jeffrey E. Gross is of counsel at Vandenberg & Feliu, where he represents clients in complex commercial litigation.

:::::FOOTNOTES:::::

FN1 Rivera, 2008 WL 4635476, at *5.

FN2 N.Y. Comp. Codes R. & Regs., tit. 22, §1200.8 (2008).

FN3 Rivera, 2008 WL 462576, at *5.

FN4 N.Y. Comp. Codes R. & Regs., tit. 22, §1200.35 (2008).

FN5 Niesig, 76 NY2d at 372.

FN6 Id. at 369.

FN7 Niesig, 76 NY2d at 370.

FN8 N.Y. Comp. Codes R. & Regs., tit. 22, §1200.8 (2008).

FN9 Rivera, 2008 WL 4635476, at *5.

FN10 Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978).

FN11 NYCLA Eth. Op. 729, 2000 WL 684669 (N.Y. Cty. Law. Assn. Comm. Prof. Eth.).

FN12 United States v. Occidental Chemical Corp., 606 F.Supp. 1470, 1477 (S.D.N.Y. 1985) (contact with former employees was permitted but witness had to originate request for representation).