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IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Monday, December 16, 2013.

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Presentation on theme: "IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Monday, December 16, 2013."— Presentation transcript:

1 IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Monday, December 16, 2013

2 IOWA CLE ACTIVITY INFORMATION Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Sponsor: BROWN WINICK LAW FIRM Start Date: 12/16/2013End Date: 12/16/201 City: DES MOINES Class Type: Live Webcast Total CLE Hours Approved: 2.0 (includes ethics hours) Ethics Hours Approved: 2.0 Activity Number:

3 NEBRASKA CLE (webinar) ACTIVITY INFORMATION Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Sponsor: BROWN WINICK LAW FIRM Start Date: 12/16/2013End Date: 12/16/201 City: DES MOINES Class Type: WEBINAR Total CLE Hours Approved: 2.0 Prof. Resp. Hours Approved: 2.0 Activity Number: 87042

4 NEBRASKA CLE (seminar) ACTIVITY INFORMATION Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS SEMINAR AND WEBINAR Sponsor: BROWN WINICK LAW FIRM Start Date: 12/16/2013End Date: 12/16/201 City: DES MOINES Class Type: Regular/Traditional Total CLE Hours Approved: 2.0 Prof. Resp. Hours Approved: 2.0 Activity Number: 86910

5 Addressing Internal Employee Complaints and Issues Ethically: Review the Role of the Iowa Rules of Professional Conduct in Conducting Internal Investigations and Handling Employee Complaints Rebecca A. Brommel BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile:

6 The Role of Counsel Advisor Advocate Negotiator Evaluator

7 Attorney as Evaluator Examine legal affairs Report about legal affairs to client (the company) or others

8 Scenario: An employee comes to you with a complaint about being bullied by a supervisor. The supervisor has sent s containing put- downs, yelled at the employee during meetings with others and made the employee “on edge” for fear of losing her job. The employee wants to keep this quiet and confidential as she fears further retaliation from the supervisor.

9 Ethical Requirement: Competence Rule 32:1.1: A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. Do you have the required knowledge and skill to conduct an investigation? Can you conduct a thorough analysis of the factual and legal issues?

10 Ethical Requirement: Diligence Rule 32:1.3: A lawyer shall act with reasonable diligence and competence in representing a client. Can you pursue this matter despite opposition, obstruction or personal inconvenience? Is your work load such that you can handle this investigation competently? Can you act with reasonable promptness?

11 Ethical Requirement: Communication Rule 32:1.4: A lawyer shall reasonably consult with client about means by which objectives are to be accomplished, keep the client reasonably informed about status, promptly comply with reasonable requests for information, and consult with client about any limits on lawyer’s assistance with client matter. Do you need to inform anyone at company regarding the investigation? Are you already vested with company authority for certain actions and decisions? Who do you represent? Have you made that clear?

12 Ethical Requirement: Confidentiality Rule 32:1.6: A lawyer shall not reveal information relating to representation unless client gives consent, the disclosure is impliedly authorized in order to carry out the represented or it fits into one of the limited exceptions (prevention of reasonably certain death or substantial bodily harm, prevent/mitigate/rectify crime or fraud that is reasonably certain to result in substantial injury, etc.) Who do you represent and thus, whose information are you protecting? How much information can you give during interviews of witnesses?

13 Ethical Requirement: Conflicts of Interest Rule 32:1.7: A lawyer shall not represent a client if the representation involves a concurrent conflict of interest. Who do you represent? (parent – subsidiary – affiliated organization) Who do you represent? (board of directors – company) Affirmative duty to disclose when you know or reasonably should know that the organization’s interests are adverse to those of the constituents with whom you are dealing. Rule 32:1.13(f) Can represent directors, officers, shareholders, employees, members, shareholders or other constituents – subject to this conflict of interest rule. Rule 32:1.13(g)

14 Ethical Requirement: Organization as Client Rule 32:1.13: (a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. (b) If a lawyer for an organization knows that an officer, employee, or other person associated with the organization is engaged in action, intends to act, or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law that reasonably might be imputed to the organization, and that is likely to result in substantial injury to the organization, then the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Is the manager acting in violation of a legal obligation or in violation of the law that might be imputed to the organization? What is the “best interest” of the organization?

15 Ethical Requirement: Organization as Client (con’t) Rule 32:1.13: Unless lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances to the highest authority that can act on behalf of the organization as determined by applicable law. How far “up the chain” do you need to go? What if those above you do nothing? See Rule 32:1.13(c)

16 Ethical Requirement: Truthfulness and Honesty Rule 32:4.1: In the course of representation of a client, a lawyer shall not (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by the confidentiality rule. What can/can’t you say to the witnesses you are interviewing? What can/can’t you say to the complaining employee?

17 Ethical Requirement: Truthfulness and Honesty (con’t) Rule 32:8.4: It is professional misconduct for an attorney to… (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; … (g) engage in sexual harassment or other discrimination in the practice of law or knowingly permit staff or agents subject to the lawyer’s discretion and control to do so. When should the investigation be initiated? Who is under your direction and control?

18 General Pointers on Conducting an Ethical Investigation Be diligent. Be thorough. Consider whether you are the right person to conduct the investigation. Matters can be kept as confidential as possible internally, but do not let that impact your investigation. Document, document, document. Communicate clearly, completely and accurately. Take appropriate action – and get your superiors involved.

19 An Example of How NOT to Handle an Employee Complaint [YouTube video: Despair, Inc. – The Art of Demotivation: “Addressing Employee Complaints”]

20 QUESTION & ANSWER SESSION

21 Ethical Issues Regarding Technology in the Workplace Haley R. Van Loon BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile:

22 Social Media

23

24 Social Networking Sites Status updates Relationship status Online chatting capabilities Listing favorites (books, movies, quotes, hobbies) Political affiliation Groups or networks And the list goes on and on...

25 People like to share...

26 Real Tweets

27 Can I friend the judge and vice versa?

28 Different states have given different answers, including: NO! Maybe... What a great idea! Social networking allows the judge to better know the community and the community to better know the judge.

29 Be warned: Being friends with the judge might lead to the judge’s recusal. A judge should never be friends with a witness.

30 Your company has been sued. Can you ask your assistant to go on Facebook and try to friend the plaintiff?

31 Rule 32:4.2(a) 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.

32 “A lawyer may not make a communication prohibited by this rule through the acts of another.” Comment 4 to Rule 32:4.2. “It is professional misconduct for a lawyer to: violate or attempt to violate the Iowa Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.” Rule 32:8.4

33 Since you can’t have your assistant dig for dirt on social media, can you request the following in discovery? Passwords/access to all of the Plaintiff’s social media accounts. Copies of all social media posts. A list of all deletions from social media accounts.

34 Maybe, but... Relevancy concerns Overbreadth concerns

35 My company is involved in litigation and we just got the list of potential jurors – can I research those jurors using social media?

36 This is a common practice, but there can be issues, including: privacy concerns; improper contact with jurors; and striking jurors for impermissible reasons.

37 My company was involved in litigation and the judge just ruled against us. I just tweeted some choice words about the judge – was that a bad idea?

38 Rule 32:8.2 Judicial and Legal Officials (a)A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer, or public legal officer, or of a candidate for election or appointment to judicial or legal office. (b)A lawyer who is a candidate for judicial office shall comply with the applicable provisions of the Code of Judicial Conduct.

39 Employees’ Online Activity Employees’ online activity may Harm employer’s reputation Disparage managers, co-workers, etc. Disclose confidential information Result in vicarious liability Misuse or waste company assets Violate FTC guidelines Otherwise violate company policy or the law Not limited to work hours or company technology

40 What’s an Employer to do? How to deal with employees’ online activity? Preventative steps (i.e., monitoring) Reactive steps (i.e., discipline or termination)

41 Employees’ Online Activity

42 Kevin, Thanks for letting us know – hope everything is ok in New York. (cool wand) Cheers, PCD

43 Responding to Employees’ Online Activity General Rule: At-Will Employment, but... Contractual Limitations

44 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws

45 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws State or Local Laws

46 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws State or Local Laws Retaliation Protections

47 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws State or Local Laws Retaliation Protections Labor Laws

48 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws State or Local Laws Retaliation Protections Labor Laws Privacy Issues

49 Responding to Employees’ Online Activity Contractual Limitations Anti-Discrimination/Harassment Laws State or Local Laws Retaliation Protections Labor Laws Privacy Issues Constitutional Issues for Public Employers

50 QUESTION & ANSWER SESSION

51 Ethics and Litigation – Fundamental, Yet Unique Issues Facing In-House and Outside Counsel Matthew H. McKinney BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile:

52 Who do you take direction from? IN-HOUSE / CORPORATE COUNSEL

53 Who do you take direction from? Shareholders?Officers? Directors?

54 Who do you represent? Restatement (Third) of Law Governing Lawyers: When a lawyer is employed or retained to represent an organization the lawyer: “represents the interests of the organization as defined by its responsible agents acting pursuant to the organization’s decision-making procedures.” “...the lawyer must follow instructions in the representation... given by persons authorized so to act on behalf of the organization.”

55 Who do you take direction from? Restatement, Section 96, cmt. “d” “Who within an organization or among related organizations is authorized to direct the activities of a lawyer representing an organization is a question of organization law...” Bylaws; Shareholder Agreement; Operating Agreement; Partnership Agreement.

56 Who do you take direction from? Iowa Rules of Professional Conduct A lawyer employed or retained by an organization represents the organization acting through its “duly authorized constituents.” Iowa R. Prof. C 32:1.13; Officers, directors, employees, and shareholders are the constituents of the corporate organizational client. Id. Cmt. 1.

57 Intra-Corporate Disputes Derivative Disputes Shareholder demands the corporation take action against directors, officers, or others for wrongdoing that is harmful to the corporation. When corporation refuses, the shareholder, as a representative, brings a derivative action against alleged wrongdoers on behalf of and for the benefit of the corporation. When corporation refuses, the shareholder, as a representative, brings a derivative action against alleged wrongdoers on behalf of and for the benefit of the corporation.

58 Who do you represent? EXAMPLE: You are corporate counsel for ABC Corp. and frequently advise the board on various legal matters. A shareholder and director of ABC Corp. files a derivative lawsuit against another director for corporate waste and mismanagement. WHO CAN YOU REPRESENT? Can you represent the director being sued? Can you represent the corporation?

59 CASE STUDY FACTS Shareholder Plaintiff files a breach of fiduciary duty lawsuit against several Oracle Directors; After litigating for 2 years, the parties negotiate and ask the Court to approve a settlement; Upon assessing whether to approve the settlement, the Court notes that Oracle’s counsel not only represents Oracle, but also represents the individual Defendant, Directors. In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993) Conflict of Interest

60 ANALYSIS “The conflict of interest could not be stronger.” “If the same counsel represents both the corporation and the director and officer defendants, the interests of the corporation are likely to receive insufficient protection. An increased recovery for the corporation is wholly incompatible with the goal of limiting the defendants' liability. Defendants' counsel is thus placed in an untenable position, and more often than not he will succumb to the pressure to approve any settlement between the shareholder and his individual clients.” “Contrary to the assertions of defense counsel, representation of the corporation's interests by in-house counsel does not ameliorate this conflict, for in-house attorneys are inevitably subservient to the interests of the defendant directors and officers whom they serve. The corporation's house counsel or regular outside counsel... are too financially dependent on the board to be disinterested.” “...While the in-house attorney is nominally the representative of the corporation, his personal loyalties will inevitably be to the individual executives who hired him.” “The general counsel would be reluctant to recommend that the corporation take any position adverse to the defendant directors for whom he works on a day-to-day basis and who control his future with the corporation.” The organization is entitled to an evaluation and representation of its institutional interests by independent counsel, unencumbered by potentially conflicting obligations to any defendant officer. CASE STUDY In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993)

61 CASE STUDY CONCLUSION “[T]he corporation must, before proceeding further with the derivative action, retain independent counsel having no prior relationship with the corporation or the individual defendants. Although some courts have gone so far as to appoint corporate counsel in derivative actions... it seems more appropriate here to defer to the independent directors on the selection of corporate counsel... And should difficulties arise, the parties or counsel may apply to the court for additional relief.” See also Rowen v. LeMars Mut. Ins. Co. of Iowa, 230 N.W.2d 905, 915 (Iowa 1975); Bell Atlantic Corp. v. Bolger, 2 F.3d 1304 (3d Cir. 1993); Musheno v. Gensemer, 897 F. Supp. 833 (M.D. Pa. 1995); Cannon v. U.S. Acoustics Corp., 398 F. Supp. 209 (N.D. Ill. 1975); Forrest v. Baeza, 67 Cal. Rptr. 2d 857 (Cal. App. 1997); Campellone v. Cragan, 910 So. 2d 363 (Fla. App. 2005); Lower v. Lanark Mut. Fire Ins. Co., 448 N.E.2d 940 (Ill. App. 1983); Tydings v. Berk Enterprises, 565 A.2d 390 (Md. App. 1989); Horowitz v. Horowitz, 542 N.Y.S.2d 708 (N.Y. App. 1989). In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993)

62 EXAMPLE: You are corporate counsel for ABC Corp. and frequently advise the board on various legal matters. A shareholder and director of ABC Corp. files a derivative lawsuit against another ABC Corp. director for corporate waste and mismanagement. WHO CAN YOU REPRESENT? Can you represent the director being sued? Can you represent the corporation? Pursuant to In re Oracle, no. Pursuant to In re Oracle, no.

63 CASE STUDY Rowen v. LeMars Mut. Ins. Co. of Iowa, 230 N.W.2d 905, 914 (Iowa 1975) FACTS Policyholders in LeMars Mutual Insurance Company filed a derivative claim on behalf of the insurance company and against past and present directors and officers to recover for various alleged wrongs; Law firm appeared and represented the Mutual as well as individual defendants; Plaintiffs sought to have the law firm that represented the Mutual as well as individual defendants disqualified.

64 IOWA SUPREME COURT ANALYSIS It is “well established that a potential conflict of interest exists when the same law firm attempts to represent the nominal corporate defendant in a derivative action while at the same time representing the corporate insiders accused of wrongdoing.” CASE STUDY Rowen v. LeMars Mut. Ins. Co. of Iowa, 230 N.W.2d 905, 914 (Iowa 1975) “[W]e are persuaded the interests of the policyholders will be better served by requiring LeMars to be represented by independent counsel. This should assure the policyholders that the merits of the derivative action will not be obscured by a conflict of interest of corporate counsel. This benefit justifies its cost.” Case remanded to trial court with instruction that the trial court “appoint independent counsel,” because otherwise, “[c]ounsel for the corporation would be subject to the control of those accused of wrongdoing.”

65 Iowa Rules of Professional Conduct …if the [derivative] claim involves serious charges of wrongdoing by those in control of the organization, a conflict may arise between the lawyer’s duty to the organization and the lawyer’s relationship with the board.” Iowa R. Prof. C 32:1.13, cmt. 14. “In those circumstances, rule 32:1.7 governs who should represent the directors and the organization.” Id. WHO CAN YOU REPRESENT?

66 Recap Analyze who you must to take direction from. In derivative actions, in-house / corporate counsel may not be allowed to represent the company. In derivative actions, in-house / corporate counsel counsel may not be allowed to represent officers and/or directors despite challenged conduct arising from action taken in an official capacity.

67 Subpoenas / Discovery As They Relate to Employee Communications Scenario: Employee uses “work / company ” to communicate with personal counsel. Scenario: Employee uses “work / company ” to communicate with spouse. Does the attorney-client privilege apply? Does the marital privilege apply? It Depends

68 CASE STUDY Asia Global employees (5 principal officers, the “Insiders”) communicated with outside counsel and sought legal advice. Asia Global files Chapter 11 bankruptcy. Bankruptcy Trustee is appointed and begins to conduct an investigation in to the Insiders, including by serving a subpoena upon Asia Global’s HR employee. HR employee turns over documents and s, but withholds certain documents and s based upon the attorney-client privilege. Bankruptcy Trustee files motion to compel seeking to compel HR employee to produce the Insiders’ attorney-client privileged records and s. In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005)

69 Trustee argues communications are not protected because the Insiders communicated via work / company infrastructure and the privilege does not apply under such circumstances as there is no reasonable expectation of privacy. Court adopts what have become known as the 4 Asia Global factors to determine whether the attorney-client privilege applies. CASE STUDY CONT. 1.Does the corporation maintain a policy banning personal or other objectionable use? 2.Does the company monitor the use of the employee's computer or ? 3.Do third parties have a right of access to the computer or s? 4.Did the corporation notify the employee, or was the employee aware, of the use and monitoring policies? Balancing Test Insiders assert the attorney-client privilege and the Trustee counters that the privilege does not apply. In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005)

70 CASE STUDY - PRIVILEGED Stengart v. Loving Care Agency, Inc., 990 A.2d 650, 655 (2010) Stengart then files an employment discrimination lawsuit against employer; Employer hires a computer forensic expert to recover all files stored on the laptop, including s, which were automatically saved to the computer hard drive; Employer’s attorneys reviewed the s and used information from the s during discovery; Stengart’s lawyer demands the communications be considered privileged and returned to Stengart. Stengart uses her company-issued laptop to exchange s with her personal lawyer through personal, password-protected, web-based account; Employer argues attorney-client privilege does not apply.

71 Trial court rules that in light of the employer’s written policy on electronic communications, Stengart waived the attorney-client privilege by sending s on a company computer; Appellate Division reverses and finds employer’s counsel violated RPC 4.4(b) by reading and using privileged communications; New Jersey Supreme Court holds that under these specific circumstances, Stengart could reasonably expect the communications through her personal account would remain private and that sending and receiving s via a company laptop did not eliminate the attorney-client privilege. By reading s that were at least arguably privileged and failing to notify Stengart promptly about them, employer’s counsel breached RPC 4.4(b). CASE STUDY - PRIVILEGED Stengart v. Loving Care Agency, Inc., 990 A.2d 650, 655 (2010)

72 CASE STUDY - NOT PRIVILEGED In re Reserve Fund Sec. & Derivative Litig., 275 F.R.D. 154, 164 (S.D.N.Y. 2011) Securities and Exchange Commission action against money market fund’s investment advisors, distributor, and their principals. SEC sought 60 s between a Defendant and his wife. Defendant seeks to protect confidential communications by asserting the marital privilege. Defendant transmitted s at issue using employer’s computer. Employer “ Policy” was in place and Defendant admitted he was aware of the policy.

73 Policy States: Employees may use only the system provided to communicate with clients and the public; Employees should limit their use of the resources to official business; Employees should remove personal and transitory messages from personal inboxes on a regular basis; communications are automatically saved regardless of content. IT administrator will not routinely monitor employee’s and will take reasonable precautions to protect the privacy of . CASE STUDY - NOT PRIVILEGED In re Reserve Fund Sec. & Derivative Litig., 275 F.R.D. 154, 164 (S.D.N.Y. 2011)

74 “Application of the four Asia Global Crossing factors here indicates that [Defendant] did not have a reasonable expectation of privacy in s he sent or received over [Employer’s] system: [Employer] banned personal use of its system; [Employer] reserved its right to access employee ; [Employer] warned employees that sent over [Employer’s] system might be subject to disclosure to regulators and the courts; and [Defendant] was aware of [Employer’s] policy.” Because Defendant had no reasonable expectation of privacy in s he sent over [Employer’s] system, they were not sent ‘in confidence’ and are not protected by the marital communications privilege.” Holding : CASE STUDY - NOT PRIVILEGED In re Reserve Fund Sec. & Derivative Litig., 275 F.R.D. 154, 164 (S.D.N.Y. 2011)

75 Practical Effects Lack of clear policy = uncertain privilege; Employees’ communications at risk for unwanted disclosure; Employees’ litigation hold obligations may indirectly effect employer; Employer thrust into unnecessary and costly litigation involving employees; Ethical Considerations (Stengart).

76 QUESTION & ANSWER SESSION

77 Preserving Corporate Attorney-Client Privilege and Protecting Employees from Contact by Opposing Counsel Brant D. Kahler BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile:

78 The Incident The Players: –ABC Corp. President In-House Counsel Job Site Supervisor Low Level Employee –Plaintiff The Basic Facts: –Car Accident: Vehicle 1 driven by Plaintiff Vehicle 2 –Owned by ABC Corp. –Driven by Job Site Supervisor –Low Level Employee also in the vehicle

79 Attorney-Client Privilege Iowa Rule of Professional Conduct 32:1.6(a): –“A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, or the disclosure is permitted by paragraph (b) or required by paragraph (c).”

80 Attorney-Client Privilege The attorney-client privilege applies to: –Communications; –Between attorney and client; –That are kept confidential; –That are for the purpose of providing legal advice; and –That have not been waived.

81 Attorney-Client Privilege Applies to the following corporate constituents: –Those who have decision-making power regarding the company’s legal representation (the so-called “control group”); Keefe v. Bernard, 774 N.W.2d 663 (2009) defined the control group as “corporate employees who are in a position to control or take a substantial part in corporate decisions.” Also, “when a corporate employee participates in discussions with legal counsel because of his or her position within the corporate decision making structure, not because of either the employee’s own actions or what the employee has witnessed, such communications are also protected by the corporation’s attorney-client privilege.”

82 Attorney-Client Privilege Applies to the following corporate constituents (cont.): –Those whose actions or statements might be imputed to the company, such that their conduct directly implicates the company’s need for legal counsel and representation; Keefe: “If an employee of a corporation or entity discusses [with corporate counsel] his or her own actions relating to potential liability of the corporation, such communications are protected by the attorney-client privilege.”

83 Attorney-Client Privilege Does not apply to the following corporate constituents: –Those who are not in the “control group” that witnessed actions or statements of others that might be imputed to the company. Keefe: Where “a corporate employee is interviewed as a witness to the actions of others, the communications should not be protected by the corporation’s attorney-client privilege.” –Please note: this exception to the attorney-client privilege under Iowa law is not applicable in federal court under Upjohn Co. v. U.S., 449 U.S. 383 (1981) or Diversified Industries, Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1977).

84 Employee Contact Iowa Rule of Professional Conduct 32:4.2(a): –“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.”

85 Employee Contact Iowa Rule of Professional Conduct 32:4.2, Comment [1]: –“This rule contributes to the proper functioning of the legal system by protecting a person who has chosen to be represented by a lawyer in a matter against possible overreaching by other lawyers who are participating in the matter, interference by those lawyers with the client-lawyer relationship, and the uncounseled disclosure of information relating to the representation.”

86 Employee Contact Iowa Rule of Professional Conduct 32:4.2, Comment [7]: –“In the case of a represented organization, this rule prohibits communications with a constituent of the organization who supervises, directs, or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. Consent of the organization’s lawyer is not required for communication with a former constituent. If a constituent 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 purposes of this rule.”

87 Employee Contact Opposing counsel cannot contact the following corporate constituents: –“a constituent of the organization who supervises, directs or regularly consults with the organization’s lawyer concerning the matter.”

88 Employee Contact Opposing counsel cannot contact the following corporate constituents (cont.): –“a constituent of the organization… who has authority to obligate the organization with respect to the matter” Governed by Iowa Rule of Evidence 5.801(d)(2)(D): –(d) Statements which are not hearsay. The following statements are not hearsay: *** (2) Admission by a party- opponent. The statement is offered against a party and is *** (D) a statement by the parties’ agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship.

89 Employee Contact Opposing counsel cannot contact the following corporate constituents (cont.): –“a constituent of the organization… whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability.”

90 Contact With Former Employees  Iowa Rule of Professional Conduct 32:4.2, Comment [7]: –“Consent of the organization’s lawyer is not required for communication with a former constituent.”

91 Contact With Former Employees  Not as scary as it sounds… –An employee’s ability to bind the company to an evidentiary admission ends upon termination of employment. –If during employment the employee was subject to the attorney-client privilege, termination of the employee’s employment does not terminate the attorney-client privilege for communications between in-house counsel and the former employee.

92 Contact With Former Employees  Terra Int’l, Inc. v. Mississippi Chemical Corp., 913 F. Supp (N.D. Iowa 1996).  Cram v. Lamson & Sessions Co., 148 F.R.D. 259 (S.D. Iowa 1993).

93 QUESTION & ANSWER SESSION

94 Website: Toll Free Phone Number: OFFICE LOCATIONS: 666 Grand Avenue, Suite 2000 Des Moines, Iowa Telephone: (515) Facsimile: (515) Franklin Place Pella, Iowa Telephone: (641) Facsimile: (641) DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.


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