The Ethics of Workplace Investigations

Presented by:Anne BreauxLisa Narrell-MeadMark N. Mallery

Ethical Implications During Investigations

Attorney-Client Privilege

Boca Investerings Partnership v. United States, 31 F. Supp. 2d 9 (D.D.C. 1998).

“There is a presumption that a lawyer in the legal department or working for the general counsel is most often giving legal advice, while the opposite presumption applies to a lawyer . . . who works for the Financial Group or some other seemingly management or business side of the house.”

Attorney-Client Privilege

In re Vioxx Prod. Liab. Litig., 501 F. Supp. 2d 789 (E.D. La. 2007)

The Court recognized the difficulty of applying attorney-client privilege to modern corporate counsel who have become involved in all facets of corporations and requiring clear showing in house counsel was acting in professional legal capacity.

Investigations Counsel acting as an

attorney for the company

Counsel should take action to preserve their position as an attorney for the company

Preserve and protect your company’s right to claim attorney client privilege work product

Blurred Lines

Investigations undertaken in the ordinary course of business may not qualify as work product

If reasonableness of investigation is raised as a defense, privilege can be waived regarding investigatory materials

Duran v. Andrew, 2010 WL 1418344 (D. D.C. 2010)

Compelling production of documents when employer’s motive in investigation included business purposes such as determining whether plaintiff should continue to be employed.

Long v. Anderson University, 204 F.R.D. 129 (S.D. Ind. 2001)

Compelling production of investigative materials because they were created in accordance with harassment policy, not in anticipation of litigation.

Whittenburg v. Zurich American Ins. Co., 786 So.2d 163 (La. App. 4th Cir. 2001)

Court compelled production of audio recordings because “the attorney work product exception to general discovery refers only to writings and does not include tangible things such as videotapes, films, or photographs.”

Business vs Legal Advice

Usually business decisions, not legal decisions? Documents likely not

privileged, particularly if an attorney regularly participates in such decisions.

Leazure v. Apria Healthcare, Inc., 2010 WL 3895727 (E.D. Tenn. 2010)

Documents generated by in-house counsel about plaintiff’s RIF selection were discoverable; in-house counsel was acting as business advisor and active participant in the RIF decision-making process.

Disclosures

Louisiana Rule of Professional Conduct 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).

Disclosures about the internal investigation

and/or its findingsSarbanes Oxley

Gloss v. Marvell Semiconductor, Inc.False Claims Act

United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center

NLRBAm. Baptist Homes of W. d/b/a

Piedmont Gardens

Outside Counsel as Investigator

Rule 3.7. Lawyer as Witness

a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness

Outside Counsel as InvestigatorEEOC v. Spitzer, 2013 WL 2250757,

(N.D. Ohio 2013) Outside counsel involved in investigation Ultimately forced to withdraw from the case

due to assertion of Faragher/Ellerth defense and necessity that attorney act as a witness

Failed to disclose notes from investigation Failure to disclose resulted in mistrial Trial judge granted the plaintiffs’ motion for

sanctions and ordered the employer and its counsel to pay over $300,000 to the plaintiffs.

Unclear if the waiver extends to remedial advice stemming from

investigation

Sampson v. School District of Lancaster,

262 F.R.D. 469 (E.D. Pa. 2008) No waiver of privilege for memorandum that

precipitated an employee discharge where employer did

not place the attorney’s advice at issue.

Unclear if the waiver extends to remedial advice stemming from

investigation

Reitz v. City of Mt. Juliet, 680 F.Supp.2d 888 (M.D. Tenn. 2012)

Court detailed many cases in which employer did not have to produce investigatory reports when they did not use investigation as a defense

Koumoulis v. Independent Financial Marketing Group, Inc. 2013 WL 5934032

(E. D. N. Y. 2013)Employer waived any attorney-client

or work-product privilege attached to communications between its human resources department and outside counsel as to an investigation into employee's claim for discrimination by asserting Faragher/Ellerth affirmative defense.

Ethics Rules Relating to Communications with Others

Who is the “Client”?

La. Rule of Prof. Conduct 1.13: “A lawyer employed or retained by an organization represents the organization . . .”

“A lawyer employed or retained to represent an organization represents the organization as distinct from its directors, officers, employees, members, shareholders or other constituents . . . ”

Louisiana Rule of Professional Conduct 1.13(f): “In dealing with an organization's directors,

officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization's interests are adverse to those of the constituents with whom the lawyer is dealing.”

Louisiana Rule of Professional Conduct 4.3

In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested.

When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer's role in a matter, the lawyer shall make reasonable efforts to correct the misunderstanding.

Gutierrez v. Johnson & Johnson, 2003 WL 26477887 (D. N.J. 2003)

Defendant, as the interviewee's employer, has certain rights to defend itself by conducting a factual investigation which include interviews with its employees.Defendant provided numerous warningswhich were sufficient to advise employees that the attorney's interests may be adverse to their own. Rule 4.3 requires only that counsel make clear the attorney's conflict of interest, not the individual's, which was clearly stated.

Importance of an Introductory Statement

Upjohn WarningsDerived from U.S.

Supreme Court Decision in Upjohn Co. v. United States

ABA recommends Upjohn warnings contain the following information:

Attorney represents corporation and does not represent the employee personally.

The purpose of interview is to gather information for the corporation to provide legal advice to the corporation.

The communications between the attorney and the employee are privileged.

The employee should not disclose the substance of the interview because it is confidential and disclosure could effectively waive the privilege.

The privilege belongs solely to the corporation and the corporation may waive the privilege and disclose the communications to third parties.

U.S. v. Ruehle, 583 F.3d 600 (9th Cir. 2009) Counsel interviewed CFO, and company later

turned over the interview to the US Attorney Dispute over warnings and dual

representation CFO moved to suppress statement In absence of documents memorializing

warning, the court referred counsel to disciplinary authorities for failing to obtain a written waiver of the conflict and failing to advice the CFO to get separate counsel

Louisiana Rule of Professional Conduct 4.4

(b) A lawyer who receives a writing that, on its face, appears to be subject to the attorney-client privilege or otherwise confidential, under circumstances where it is clear that the writing was not intended for the receiving lawyer, shall refrain from examining the writing, promptly notify the sending lawyer, and return the writing.

Stengart v. Loving Care Agency, Inc. (N.J. S.Ct. 2010)

Employee sent emails from her private, password protected email account, on a computer owned by her employer. The employer retrieved the emails from her computer.The emails were subsequently read by the employer’s counsel in the course of defending a sexual harassment action. The New Jersey Supreme Court found that an employer’s counsel violated the state’s Rule of Professional Conduct 4.4(b).

Louisiana Rule of Professional Conduct 4.2

Unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order, a lawyer in representing a client shall not communicate about the subject of the representation with:

(a) a person the lawyer knows to be represented by another lawyer in the matter

Represented Individuals

Obligation to avoid contact applies to all represented persons, not just parties

Counsel should not communicate with a represented person even if that individual initiates contact

Contact requires consent of the person’s counsel, not the person

Counsel may not contact a represented party through another individual

When can others conduct the interview at the direction of a

lawyer?

Overall Responsibility “A law firm . . . shall make reasonable

efforts to ensure that . . . all lawyers in the firm conform to the Rules of Professional Conduct.” Louisiana Rule of Professional Conduct 5.1(a).

“This includes . . . lawyers having comparable managerial authority in a law department of an enterprise or government agency.” ABA Model Rule Comment.

Louisiana Rule of Professional Conduct 5.3

(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer

Upjohn Co. v. Aetna Cas. & Sur. Co., 768 F. Supp. 1186 (W.D. Mich. 1991)

Relying on Model Rule 5.3, the court sanctioned a lawyer whose investigators conducted improper ex parte interviews of former employees of the attorney's opponent.

Louisiana Rule of Professional Conduct 8.4

It is professional misconduct for a lawyer to:

(a) Violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another

Holdren v. Gen. Motors Corp., 13 F. Supp. 2d 1192 (D. Kan. 1998)

Relying on Model Rule 8.4(a), to declare that an attorney may not direct an adversary's employee to obtain affidavits from other employees whom that attorney is forbidden to contact directly.

Louisiana Rule of Professional Conduct 8.4

It is professional misconduct for a lawyer to:

(b) Commit a criminal act especially one that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects

(c) Engage in conduct involving dishonesty, fraud, deceit or misrepresentation

Louisiana Rule of Professional Conduct 4.4

a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.

Surreptitious Recordings Has an attorney engaged in unethical conduct

by secretly recording a conversation?

In states where it is illegal to record without the consent of all parties – Yes

In states where only one party must consent to the recording – not unethical per se unless it is illegal or contrary to some other ethical standard

Louisiana has not established a position

Who asks the questions?

Turfgrass Group, Inc. v. Northeast Louisiana Turf Farms, LLC (W.D. La. 2013)

Under Louisiana's Private Investigators Law, it is unlawful for any person knowingly to “[e]mploy an individual to perform the duties of a private investigator who is not the holder of a valid registration card.” La. R.S. § 37:3520(A)(2).

Ethical Implications in Social Media

Relevant Rules / Authorities

4.1 (prohibiting false statements of fact or law)

4.2 (communications with represented parties)

5.3(b)(1) (responsibility for unethical conduct by non-lawyers)

8.4 (prohibiting deceptive or misleading conduct)

Friending Under False Pretenses (FUFP)

Facebook and other social networking sites often contain vast amounts of personal information about an individual.

Social Media

“Friending” an adverse party is not permissible (at least not without disclosure of why request is made)N.Y. State Bar Association Ethics Op.

843San Diego County Bar Association

Op. 2011-2

Ethical implications of reaching out to individuals on social media

Gathering information on a party can violate Rule 4.2 of the Rules of Professional Conduct.

Requesting to become a friend of a person represented by counsel can be considered “communicating with a party without counsel.”

Louisiana Rule of Professional Conduct 4.1

In the course of representing a client a lawyer shall not knowingly:

(a) make a false statement of material fact or law to a third person

What about a circumstance where the lawyer (or a surrogate) creates a pseudonym, or a fake profile, and seeks to friend a witness?

Using subterfuge to gain access to a private or semi-private Facebook page may violate the privacy rights of that person under Rule of Professional Conduct R. 4.1

Ethically, this type of activity may violate a lawyer's duty of candor.

Social Media - Third-Parties – Investigators And “Friends”

Philadelphia Bar Association Op. 2009-02 found it would violate Rule 8.4(c) and 5.3 if a lawyer asks a third party to friend the witness “the planned communication…is

deceptive. . . . namely, that the third party who asks to be allowed access to the witness’s pages is doing so only because he or she is intent on obtaining information and sharing it with a lawyer for use in a lawsuit….”

Can you send a person of interest a friend request using your own name?

Arguably this avoids avoiding a potential charge of misrepresentation.

Some lawyers may rationalize that they can do this even when the party of interest is represented by counsel, because after all, just sending a friend request cannot possibly be a communication with a represented party.

Social Media -- Third-Parties

Associate of the Bar of the City of New York Op. 2010-2“an attorney or her agent may use her real name and profile to send a ‘friend request’ to obtain information from an unrepresented person’s social networking website without also disclosing the reasons for making the request [if done without deception].”

Practical Considerations When Concluding an Investigation

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