IN-HOUSE COUNSEL
LAST CHANCE ETHICS
SEMINAR AND WEBINAR
Monday, December 16, 2013
IOWA CLE
ACTIVITY INFORMATION
Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS
SEMINAR AND WEBINAR
Sponsor: BROWN WINICK LAW FIRM
Start Date: 12/16/2013 End 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: 120698
NEBRASKA CLE (webinar)
ACTIVITY INFORMATION
Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS
SEMINAR AND WEBINAR
Sponsor: BROWN WINICK LAW FIRM
Start Date: 12/16/2013 End 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
NEBRASKA CLE (seminar)
ACTIVITY INFORMATION
Program Name: IN-HOUSE COUNSEL LAST CHANCE ETHICS
SEMINAR AND WEBINAR
Sponsor: BROWN WINICK LAW FIRM
Start Date: 12/16/2013 End 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
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 50309-2510
Telephone: 515-242-2452
Facsimile: 515-242-8552
E-mail: brommel@brownwinick.com
The Role of Counsel
•
•
•
•
Advisor
Advocate
Negotiator
Evaluator
Attorney as Evaluator
• Examine legal affairs
• Report about legal affairs to client (the
company) or others
Scenario: An employee comes to you with a
complaint about being bullied by a supervisor.
The supervisor has sent emails containing putdowns, 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.
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?
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?
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?
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?
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)
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?
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)
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?
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?
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.
An Example of How NOT to
Handle an Employee Complaint
[YouTube video: Despair, Inc. – The Art of
Demotivation: “Addressing Employee
Complaints”]
QUESTION &
ANSWER SESSION
Ethical Issues Regarding
Technology in the Workplace
Haley R. Van Loon
BrownWinick
666 Grand Avenue, Suite 2000
Des Moines, IA 50309-2510
Telephone: 515-248-6625
Facsimile: 515-248-6626
E-mail: vanloon@brownwinick.com
Social Media
Social Media
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 . . .
People like to share . . .
Real Tweets
Can I friend the judge and vice versa?
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.
Be warned:
Being friends with the judge might lead to
the judge’s recusal. A judge should never be
friends with a witness.
Your company has been sued. Can you ask
your assistant to go on Facebook and try to
friend the plaintiff?
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.
“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
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.
Maybe, but . . .
• Relevancy concerns
• Overbreadth concerns
My company is involved in litigation and we
just got the list of potential jurors – can I
research those jurors using social media?
This is a common practice, but
there can be issues, including:
• privacy concerns;
• improper contact with jurors; and
• striking jurors for impermissible reasons.
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?
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.
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
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)
Employees’ Online Activity
Employees’ Online Activity
Kevin,
Thanks for letting us
know – hope everything
is ok in New York.
(cool wand)
Cheers,
PCD
Responding to Employees’
Online Activity
General Rule: At-Will Employment, but . . .
• Contractual Limitations
Responding to Employees’
Online Activity
• Contractual Limitations
• Anti-Discrimination/Harassment Laws
Responding to Employees’
Online Activity
• Contractual Limitations
• Anti-Discrimination/Harassment Laws
• State or Local Laws
Responding to Employees’
Online Activity
•
•
•
•
Contractual Limitations
Anti-Discrimination/Harassment Laws
State or Local Laws
Retaliation Protections
Responding to Employees’
Online Activity
•
•
•
•
•
Contractual Limitations
Anti-Discrimination/Harassment Laws
State or Local Laws
Retaliation Protections
Labor Laws
Responding to Employees’
Online Activity
•
•
•
•
•
•
Contractual Limitations
Anti-Discrimination/Harassment Laws
State or Local Laws
Retaliation Protections
Labor Laws
Privacy Issues
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
QUESTION &
ANSWER SESSION
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 50309-2510
Telephone: 515-242-2468
Facsimile: 515-323-8568
E-mail: mckinney@brownwinick.com
IN-HOUSE / CORPORATE COUNSEL
Who do you take direction
from?
Who do you take direction from?
Shareholders?
Officers?
Directors?
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.”
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.
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.
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.
Who
do YOU
you represent?
WHO
CAN
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.
Can you represent the director being sued?
Can you represent the corporation?
CASE STUDY
In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993)
FACTS
Shareholder Plaintiff files a breach of fiduciary duty lawsuit
against several Oracle Directors;
Conflict of Interest
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.
CASE STUDY
In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993)
ANALYSIS
• “The conflict of interest could not be stronger.”
• “Contrary
to the
assertions
of
defense
representation
of
“If
the
same
counsel
represents
bothcounsel,
the
corporation
and the
the
The
“The
organization
general
counsel
is entitled
would
tobe
an
reluctant
evaluation
to and
recommend
representation
that
the
corporation's
interests
in-house
counsel
notdirectors
ameliorate
director
andtake
officer
defendants,
the interests
ofdoes
the
corporation
are
corporation
its
institutional
interests
any
position
byby
independent
adverse
to
counsel,
the defendant
unencumbered
for
by
this
conflict,
for on
in-house
attorneys
areand
inevitably
subservient
to
the
likely
tohereceive
insufficient
protection.
An
increased
recovery
forwith
the
whom
potentially
works
conflicting
a day-to-day
obligations
basis
to any
defendant
who
control
officer.
his future
interests
of the
defendant
directors and
whom
serve.
corporation
is wholly
incompatible
withofficers
the goal
of they
limiting
the
the corporation.”
The corporation's
house
counsel orcounsel
regular is
outside
defendants'
liability.
Defendants'
thus counsel
placed ...in are
an
too financially
dependent
on the
board
to be
“...While
untenable
position,
and more
often
than
notdisinterested.”
he will succumb
to the
the in-house
attorney
is nominally
the representative
pressure
to approve
any settlement
between
the shareholder of
andthe
his
corporation,
his personal loyalties will inevitably be to the individual
individual
clients.”
executives who hired him.”
CASE STUDY
In re Oracle Sec. Litig., 829 F. Supp. 1176, 1189 (N.D. Cal. 1993)
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).
WHO CAN 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 ABC Corp. director for corporate waste and
mismanagement.
Can you represent the director being sued?
Pursuant to In re Oracle, no.
Can you represent the corporation?
Pursuant to In re Oracle, no.
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.
CASE STUDY
Rowen v. LeMars Mut. Ins. Co. of Iowa, 230 N.W.2d 905, 914 (Iowa 1975)
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.”
•“[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.”
WHO CAN YOU REPRESENT?
•
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.
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.
Subpoenas / Discovery
•Scenario: Employee uses “work / company email” to communicate
with personal counsel.
Does the attorney-client privilege apply?
It Depends
As They Relate to Employee Email Communications
•Scenario: Employee uses “work / company email” to communicate
with spouse.
Does the marital privilege apply?
CASE STUDY
In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005)
•
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 emails, but withholds certain
documents and emails 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 emails.
CASE STUDY CONT.
In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005)
•
•
Insiders assert the attorney-client privilege and the Trustee counters that the
privilege does not apply.
Trustee argues communications are not protected because the Insiders
1.communicated
Does the corporation
maintain
a policy
banning personal
or other objectionable
use?
via work
/ company
infrastructure
and the privilege
does not
apply under such circumstances as there is no reasonable expectation of
privacy.
2. Does the company monitor the use of the employee's computer or e-mail?
• Court adopts what have become known as the 4 Asia Global factors to
determine whether the attorney-client privilege applies.
3. Do third parties have a right of access to the computer or e-mails?
4. Did the corporation notify the employee, or was the employee aware, of the
use and monitoring policies?
Balancing Test
CASE STUDY - PRIVILEGED
Stengart v. Loving Care Agency, Inc., 990 A.2d 650, 655 (2010)
• Stengart uses her company-issued laptop to exchange e-mails with her personal lawyer
through personal, password-protected, web-based e-mail account;
• Stengart then files an employment discrimination lawsuit against employer;
• Employer hires a computer forensic expert to recover all files stored on the laptop,
including emails, which were automatically saved to the computer hard drive;
• Employer’s attorneys reviewed the emails and used information from the emails
during discovery;
• Stengart’s lawyer demands the communications be considered privileged and returned to Stengart.
• Employer argues attorney-client privilege does not apply.
CASE STUDY - PRIVILEGED
Stengart v. Loving Care Agency, Inc., 990 A.2d 650, 655 (2010)
Trial court rules that in light of the employer’s written policy on electronic communications, Stengart
waived the attorney-client privilege by sending e-mails 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 e-mail communications through her personal account would remain private
and that sending and receiving emails via a company laptop did not eliminate the attorney-client
privilege. By reading e-mails that were at least arguably privileged and failing to notify Stengart
promptly about them, employer’s counsel breached RPC 4.4(b).
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 emails between a Defendant and his wife.
Defendant transmitted emails at issue using employer’s computer.
Employer “Email Policy” was in place and Defendant admitted he was aware of the policy.
Defendant seeks to protect confidential communications by asserting the marital privilege.
CASE STUDY - NOT PRIVILEGED
In re Reserve Fund Sec. & Derivative Litig., 275 F.R.D. 154, 164 (S.D.N.Y. 2011)
Policy States:
Employees may use only the email system provided to communicate with clients and the
public;
Employees should limit their use of the email resources to official business;
Employees should remove personal and transitory messages from personal inboxes on a
regular basis;
Email communications are automatically saved regardless of content.
IT administrator will not routinely monitor employee’s email and will take reasonable
precautions to protect the privacy of email.
CASE STUDY - NOT PRIVILEGED
In re Reserve Fund Sec. & Derivative Litig., 275 F.R.D. 154, 164 (S.D.N.Y. 2011)
Holding:
“Application of the four Asia Global Crossing factors here indicates that
[Defendant] did not have a reasonable expectation of privacy in emails he sent or
received over [Employer’s] email system: [Employer] banned personal use of its
email system; [Employer] reserved its right to access employee email; [Employer]
warned employees that email sent over [Employer’s] system might be subject to
disclosure to regulators and the courts; and [Defendant] was aware of
[Employer’s] email policy.”
Because Defendant had no reasonable expectation of privacy in emails he sent
over [Employer’s] system, they were not sent ‘in confidence’ and are not
protected by the marital communications privilege.”
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).
QUESTION &
ANSWER SESSION
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 50309-2510
Telephone: 515-242-2430
Facsimile: 515-323-8530
E-mail: kahler@brownwinick.com
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
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).”
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.
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.”
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.”
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).
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.”
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.”
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.”
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.”
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 partyopponent. 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.
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.”
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.”
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.
Contact With Former Employees
 Terra Int’l, Inc. v. Mississippi Chemical
Corp., 913 F. Supp. 1306 (N.D. Iowa
1996).
 Cram v. Lamson & Sessions Co., 148
F.R.D. 259 (S.D. Iowa 1993).
QUESTION &
ANSWER SESSION
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