By Roy Simon [Originally published in NYPRR August 2001]
An adversary’s former employees are often the most valuable witnesses in litigation. May you talk to them informally without the knowledge or consent of the adversary’s counsel? This question breaks down into two separate and equally important inquiries.
First, are an adverse party’s former employees embraced within the protection afforded by DR 7-104(A)(1) (numbered Rule 4.2 in most states)? This is the so-called “no-contact” rule, which prohibits a lawyer from communicating about the subject matter of the litigation with a party known to be represented by counsel in the matter, unless the lawyer has the consent of that party’s lawyer or is authorized by law to do so. Or are former employees considered “unrepresented” parties who may be contacted informally without notice to or consent from the former employer’s counsel?
Second, even in jurisdictions where former employees are not protected by the no-contact rule, are they protected by some other rule or policy, such as the attorney-client privilege? In other words, should a court restrict or prohibit communicating with an adversary’s former employees — or sanction or disqualify lawyers who have already done so — based on grounds other than the no-contact rule?
This article will focus only on the first inquiry: Are former employees protected by the no-contact rule? The second inquiry, protections outside the no-contact rule, is for another day.
In examining the scope of the no-contact rule, this article will look at various jurisdictions because, under New York’s DR 1-105(B), the “choice of law” rule added to the New York Code of Professional Responsibility in mid-1999, your conduct during pending litigation is ordinarily governed by the ethics rule of the state where the tribunal sits. Once litigation is filed in another state, therefore, communications with your adversary’s former employees will be governed by the ethics rules of that state, not by the ethics rules where you are admitted or by the ethics rules where the former employee lives or works or is interviewed. [See, In re Prudential Insurance Co. of America Sales Practices Litigation, 911 F. Supp. 148 (D.N.J. 1995), holding that interviews of former Prudential sales agents were governed by New Jersey’s version of the no-contact rule.] Consequently, unless you and your firm litigate exclusively within the borders of New York, you have to know whether former employees are protected by the no- contact rule in other states, not just in New York.
New York’s Rule: ‘No-Contact’ Rule Does Not Protect Former Employees
The New York Court of Appeals addressed communications with former employees in dicta in Niesig v. Team I [76 N.Y.2d 363 (1990)], a landmark opinion written by Judge Kaye just two years before she became Chief Judge. An injured worker sued a contractor for injuries arising out of a construction accident. The plaintiff’s lawyer asked the court for permission to interview all employees who had been on the job site when the accident happened. The contractor argued that all of the employees were off limits under New York’s “no-contact” rule, DR 7-104(A)(1), and could be interviewed only with the consent of the contractor ‘s counsel (or in a deposition) because the contractor was represented by counsel.
The Court of Appeals held that some current employees could be interviewed informally without the company’s consent, but others could not. “The test that best balances the competing interests,” the court said, is one that defines the word “party” in the no-contact rule to include three categories of people:
• “corporate employees whose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the corporation’s ‘alter egos’)” or
• “corporate employees whose acts or omissions in the matter under inquiry are … imputed to the corporation for purposes of its liability,” or
• “employees implementing the advice of counsel.”
“All other employees,” the court said, “may be interviewed informally.” Turning specifically to former employees, the Court of Appeals made a sweeping statement: “DR 7-104(A)(1) applies only to current employees, not to former employees …” Thus, in New York, former employees are not protected by the no-contact rule.
Majority Rule Follows New York
The ABA’s influential ethics committee soon echoed the Niesig dicta. ABA Formal Ethics Op. 91-359 (1991) said that neither the text nor the comment in ABA Model Rule 4.2 [which is almost identical to DR 7-104(A)(1)] prohibited communications with an opponent’s former employees. Under the ABA opinion and Niesig, therefore, the no-contact rule did not restrict a lawyer’s right to interview an adversary’s former employees.
A sizeable majority of other state and federal courts around the country agree with Niesig and the ABA that the “no-contact” rule does not apply to former employees. Bar association ethics committees have taken the same approach. [See, H.B.A. Management, Inc. v. Estate of Schwartz, 693 So.2d 541 (Fla. 1997), “among bar ethics committees nationwide, the ‘clear consensus is that former managers and other former employees are not within the scope of the rule against ex parte contacts’.”] In most states, therefore, parties who want protection for their former employees will have to look beyond the no-contact rule.
Minority Rule: ‘No-Contact’ Rule Does Protect Certain Former Employees
Despite the strong majority tide, courts in a significant minority of jurisdictions have held that the no contact rule does protect former employees who fall into one of two categories: (1) former employees who were members of the adversary’s management team or control group during their employment, or who were “confidential employees,” or who were “extensively exposed” to the adversary’s confidential or privileged information during their employment; and (2) former employees whose acts or omissions during their employment were imputed to the former employer for liability purposes, or whose statements about their activities are considered binding admissions against the former employer under the rules of evidence.
A case addressing both categories is Armsey v. Medshares Management Services, Inc. [184 F.R.D. 569 (W.D. Va. 1998)]. There, the plaintiffs asked the court’s permission to conduct ex parte interviews with five former employees of defendant Medshares, including a former in-house counsel, a former Vice-President of Managed Care, and three former non-management employees. The court phrased the issue before it as “whether these former employees of Medshares should be considered represented ‘parties,’ whom the Plaintiffs’ attorneys should not contact ex parte.” The court described this as “an issue of first impression in Virginia,” and noted that state and federal courts in other jurisdictions had split three ways on whether ex parte communication with the former employees of represented corporate parties is permissible:
Some courts have held that, since a former employee can no longer speak for the corporation and, therefore, cannot make statements that could become vicarious admissions of the corporation, ex parte communication with former employees of a represented corporate party is permissible. [See, e.g., Wright by Wright v. Group Health Hosp., 103 Wash.2d 192, 691 P.2d 564, 569 (1984); Niesig v. Team I, 76 N.Y.2d 363, 559 N.Y.S.2d 493, 558 N.E.2d 1030, 1032 (1990).] Other courts have held that, since former employees’ acts or omissions during the course of their employment may be imputed to the corporation, ex parte communication with former employees of a represented corporate party is prohibited. [See, e.g., Amarin Plastics, Inc. v. Maryland Cup Corp., 116 F.R.D. 36, 40 (D.Mass.1987); Chancellor v. Boeing Co., 678 F.Supp. 250, 253 (D. Kan. 1988).] Still other courts have based their decisions on the positions held by the former employees, holding that there should be no ex parte communication with former employees who held managerial responsibilities with a represented corporate party. [See, e.g., Rentclub, Inc. v. Transamerica Rental Finance Corp., 811 F.Supp. 651, 658 (M.D. Fla. 1992); Porter v. Arco Metals Co., 642 F.Supp. 1116, 1118 (D. Mont. 1986); Camden v. State of Maryland, 910 F.Supp. 1115, 1122 (D. Md. 1996).]
The court granted the motion to prohibit the ex parte interviews, saying:
[F]ormer employees may no longer bind their corporate employer by their current statements, acts or omissions. Yet, this does not prevent liability being imposed upon their former employer based on the statements, acts or omissions of these individuals which occurred during the course of their employment. In fact, Plaintiffs’ counsel in this case has informed the court that it seeks to speak to each of these former employees because Plaintiffs believe that they can impute liability upon Medshares through the statements, actions or omissions of these former employees. …
Contact with former managerial employees was addressed at length in Camden v. Maryland [910 F. Supp. 1115 (D. Md.1996)], an employment discrimination suit. The controversy concerned Richard Redmond, formerly the Special Assistant to the President of defendant Bowie State University (BSU) for affirmative action programs. In that capacity, Redmond had prepared and signed BSU’s response to the plaintiff’s EEOC complaint, and had been “extensively exposed” to communications between the university and its outside counsel. After Redmond left the university on “unfriendly terms,” he met with the plaintiff’s lawyer, swore out an affidavit helpful to the plaintiff’s case, and gave plaintiff’s counsel a document that was “clearly marked ‘confidential’ as between Redmond and the top management of BSU and included specific references to communications with BSU’s attorneys.” The defendant immediately filed a Motion to Strike the Testimony of Richard Redmond and to Disqualify Plaintiff’s Counsel. The court granted the motion. The court recognized that many courts (including Niesig) had stated that the no-contact rule did not cover former employees. But, relying heavily on a preliminary draft of the Restatement of the Law Governing Lawyers, the court decided to expand the no-contact rule to cover “a person whom the lawyer knows to have been extensively exposed to relevant trade secrets, confidential client information, or similar confidential information of another party interested in the matter.” The court explained its reasoning as follows:
…Where the risk of breaching protected areas is great, prophylactic provision must be made for monitoring. This can be accomplished if either organizational counsel is present to object or if the court has set appropriate ground rules in advance. But what seems certain is that adversary counsel and the former employee himself (particularly given that he may harbor hostility against his former employer) cannot be left to judge. … Former employees whose exposure has been less than extensive would still be available for ex parte interviews. …
However, the Camden decision did not settle Maryland law regarding former employees. The following year, in Davidson Supply Co. v. P.P.E., Inc. [986 F. Supp. 956 (D. Md. 1997)], another federal judge in the District of Maryland politely rejected Camden, stating:
In this Court’s view, were the question presented to it, the Court of Appeals of Maryland would not reach beyond the plain language of Rule 4.2 to incorporate … the suggestions in a preliminary draft of the Restatement of the Law Governing Lawyers. In this Court’s opinion, the enforcement of such novel strictures and interpretations as may be found in that draft should be made by a duly promulgated amendment to the rule itself, rather than by the gloss of case law.
Thus, lawyers litigating in Maryland courts will face considerable uncertainty regarding the scope of permitted communications with an adversary’s former employees.
New Jersey’s Unique Version of Rule 4.2
In 1996, New Jersey adopted a unique version of the no-contact rule (Rule 4.2) that expressly addresses communications with former employees. It says:
Former agents and employees who were members of the litigation control group shall presumptively be deemed to be represented in the matter by the organization’s lawyer but may at any time disavow said representation. [Emphasis added.]
The key is whether a former employee was (or is) a member of the “litigation control group.” New Jersey’s Rule 4.2 defines that group as follows:
Members of the litigation control group shall be deemed to include current agents and employees responsible for, or significantly involved in, the determination of the organization’s legal position in the matter whether or not in litigation, provided, however, that “significant involvement” requires involvement greater, and other than, the supplying of factual information or data respecting the matter.
Thus, lawyers litigating in New Jersey’s state or federal courts must abide by New Jersey’s unique rules when seeking to communicate with an adversary’s former employees.
Pennsylvania’s Unique Multi-Factored Approach
Pennsylvania’s federal courts have developed a unique multi-factored approach to determining whether communications with former employees are protected by the no-contact rule. In Dillon Companies, Inc. v. The SICO Company [1993 WL 492746 (E.D. Pa. 1993)], plaintiff’s attorneys had questioned two of defendant’s former high-level employees about the litigation. Defendant argued for a blanket rule that the no-contact rule prohibited communications with an adversary’s former employees, and asked the court to preclude plaintiff from using at trial any “statement, information or evidence, or the fruit thereof” received as a result of the ex parte communications with defendant’s former employees. The court refused. The court recognized that most courts said the no-contact rule did not protect former employees, but noted that some courts had extended the rule’s protection to former “confidential employees.” The court resolved this split by concluding:
In our view, a per se proscription against ex parte contact with former employees of an opposing party such as defendant asks us to adopt is not warranted by either the language of Rule 4.2 or by any court decision interpreting it. Rather, if Rule 4.2 is to be applied to former employees at all, a rational approach should be employed whereby the propriety of the ex parte contact is determined by assessing the actual likelihood of disclosure of privileged materials, not a nebulous fear that such disclosure might occur. …
Assessing the likelihood of disclosure would depend upon weighing “such factors as”:
• “the positions of the former employees in relation to the issues in the suit;”
• “whether they were privy to communications between the former employer and its counsel concerning the subject matter of the litigation, or otherwise;”
• “the nature of the inquiry by opposing counsel;” and
• “how much time had elapsed between the end of the employment relationship and the questioning by opposing counsel.”
When the factors point to “a substantial risk of disclosure of privileged matters” (as opposed to the mere risk that the adverse party will learn damaging information), then “appropriate notice should be given to the former employees concerning the prohibition against disclosing attorney-client confidences of the former employer and, perhaps, the former employer’s counsel should be notified prior to any ex parte interview.” (Emphasis added.) Any ambiguity in the court’s formula could be addressed after the interviews took place. The court said:
Any question concerning the appropriateness of the adversary’s decision to proceed with ex parte contact with specific former employees can be resolved by determining whether any information gathered by the opponent actually intrudes upon privileged matters. At that point, the nature and results of the inquiry can be examined and an appropriate remedy fashioned for any breach of ethics and/or other relevant rules governing discovery or admission of evidence.
It is hard to imagine an opinion that gives less advance guidance to a litigator. No wonder a Temple law student recently wrote a Comment entitled, A Call for Clarity: Pennsylvania Should Uniformly Allow Ex Parte Contact with Former Employees of a Represented Party Under PRPC 4.2, 73 Temple Law Review 1095 (2000).
What Must Be Discussed, and What Must Not Be Discussed?
Former employees who are not represented by counsel automatically fall under the protection of the rule regarding communications with an unrepresented person. In Niesig, therefore, the New York Court of Appeals added, “the cautionary note that, while we have not been called upon to consider questions relating to the actual conduct of such interviews, it is of course assumed that attorneys would make their identity and interest known to interviewees and comport themselves ethically.” In Dubois v. Gradco Systems [1991 U.S. Dist. LEXIS 6198 (D. Conn. 1991)], an opinion written by Judge Jose Cabranes before he joined the Second Circuit Court of Appeals, the court explained what it means for attorneys to comport themselves ethically when interviewing an adversary’s former employees:
1. “[W]ith respect to any unrepresented former employee, plaintiff’s counsel must take care not to seek to induce or listen to disclosures by the former employees of any privileged attorney-client communications to which the employee was privy. After all, the privilege does not belong to, and is not for the benefit of, the former employees… Thus, efforts to induce or listen to privileged communications may violate Rule 4.4 … which requires respect for the rights of third persons.”
2. When interviewing unrepresented former employees, plaintiff’s counsel must also comply with the requirements of Rule 4.3, which “requires that plaintiff’s lawyer make clear to the former Gradco employees the nature of the lawyer’s role in this case, including the identity of the plaintiff and the fact that Gradco is an adverse party.”
If lawyers violate these rules, “the court could order the discontinuation of such interviews.” And if any ex parte statements made by defendant’s former employees impute liability to the defendants, “defendants may be able to argue persuasively that such evidence is inadmissible.”
Conclusion: Do Your Research Carefully
The applicability of the no-contact rule to an adversary’s former employees varies from jurisdiction to jurisdiction, and sometimes even within a jurisdiction, so you must carefully research the law of every jurisdiction in which you litigate. Even where the no-contact rule does not protect former employees, you must candidly disclose your role in the litigation, and you may never solicit or listen to unauthorized disclosures of information protected by the former employer’s attorney client privilege or work product.
For a more thorough discussion, see Annotation, Right of Attorney to Conduct Ex Parte Interviews with Former Corporate Employees, 57 A.L.R.5th 633 (1998).
Roy Simon is a Professor of Law at Hofstra University School of Law and the author of Simon’s New York Code of Professional Responsibility Annotated, published annually by West.
DISCLAIMER: This article provides general coverage of its subject area and is presented to the reader for informational purposes only with the understanding that the laws governing legal ethics and professional responsibility are always changing. The information in this article is not a substitute for legal advice and may not be suitable in a particular situation. Consult your attorney for legal advice. New York Legal Ethics Reporter provides this article with the understanding that neither New York Legal Ethics Reporter LLC, nor Frankfurt Kurnit Klein & Selz, nor Hofstra University, nor their representatives, nor any of the authors are engaged herein in rendering legal advice. New York Legal Ethics Reporter LLC, Frankfurt Kurnit Klein & Selz, Hofstra University, their representatives, and the authors shall not be liable for any damages resulting from any error, inaccuracy, or omission.