Bankruptcy Litigation Committee

ABI Committee News

 

Ex Parte Contact With Debtor’s Former Employees

You are defending a client in a preference action, and the client tells you that its main contact at the pre-petition debtor was Bob Jones, the head of purchasing.  Mr. Jones left the debtor before the petition filing, but your client knows how to contact him.  Your discussions with your client suggest that Mr. Jones may provide helpful testimony on “the ordinary course of business” and other defenses.

Can you contact Bob Jones directly and if so what restrictions if any would apply to such contact?  Yes, subject to certain ethical guidelines which vary from state to state, you may contact and interview Mr. Jones.

Former employees of adverse parties can be very useful sources of information, and courts have recognized the benefits of allowing ex parte contact with an adversary’s former employees.  For example, “California cases have stressed that prohibiting attorneys from contacting an opponent’s former employees would unfairly hinder litigants from investigating and pursuing factual evidence relevant to their case.”[1]

The ethics rules prohibit ex parte contacts with parties known to be represented by counsel, without that counsel’s consent.  See ABA Model Rule 4.2.  The rule applies when the represented party is a corporation.  But a former employee of a corporation is not the corporation, nor will he or she necessarily be represented by the corporation’s counsel.  The commentary to Model Rule 4.2 provides that “[c]onsent of [an] organization’s lawyer is not required for communication with a former constituent.”[2]

This is not to suggest that there are no ethical limitations on contacting former employees of an adverse party.  There are.  Thus, before contacting such a former employee, a lawyer should be familiar with the guidelines and limitations which have been adopted in the applicable jurisdiction – which may be found in the bankruptcy court’s own rules or case law or, more likely, in the rules or case law of the state whose ethical guidelines apply in the particular bankruptcy case.

In many states, courts and ethics panels have recognized that policies underlying the no-contact rule apply equally to former employees, and have developed guidelines for such contacts.  In Ohio, for example, contacting former employees ex parte is permissible, subject to certain guidelines that include:  advising the former employee that the lawyer represents a party adverse to his or her former employer; asking whether the former employee is represented by his own counsel or the corporation’s counsel; informing the former employee not to divulge privileged communications he or she may have had with corporate counsel or his or her own counsel;  and, of course, securing the former employee’s consent to the interview.[3] 

Similar guidelines have been adopted in Delaware,[4] Massachusetts,[5] New York,[6] and many other states.[7] One overriding theme is that an attorney interviewing a former employee of an adverse party should not inquire into privileged matters.[8]  Also, in some jurisdictions, the status of the former employee is important; ex parte contact may be prohibited if the former employee is within a “litigation control group” that may be “responsible for, or significantly involved in, the determination of the organization’s legal position in the matter.”[9]

Once you have determined that the applicable rules and guidelines permit you to contact Mr. Jones, provided you do certain things and refrain from doing other things, you should document your compliance.  For reference, place in your witness file on Mr. Jones a copy of the controlling case law or ethics opinion.  Note that Mr. Jones consented to your interview; that you explained you represented a party adverse to his former employee; and that he confirmed he was not represented by corporate counsel or his own counsel.  Note also that you advised Mr. Jones not to reveal any privileged communications, and that he did not do so during the course of your interview.  Record that you did anything else the applicable rules require, and that you did not do anything else that the applicable rules prohibit.  These notes may be useful later in responding to any suggestion by your adversary that your interview of Mr. Jones strayed beyond the permissible boundaries.

Finally, in conducting an interview of a former employee of an adverse party, you should keep in mind the potential debate you may have later over whether the content of your interview is discoverable by your opponent.  Courts have recognized that inquiry about the questions discussed in witness interviews “… tend[s] to disclose the mental impressions, conclusions, opinions, or legal theories” of the attorney.[10]   For this reason, the work product privilege has been applied to limit questioning of a third party witness about what he or she discussed with opposing counsel.[11] On the other hand, because a third party witness has no obligation to keep your discussion confidential (even if you ask him or her to do so), there is an argument that whatever was revealed to the third party witness has lost whatever confidentiality protection it might have once had.  Thus, even though a work product objection may be a valid one, it remains prudent to be cautious in what you reveal to a third-party witness about your thought processes and mental impressions.

 



[1] EXDS, Inc. v. Devcon Construction, Inc., 2005 WL 2043020, *3 (N.D. Cal. 2005) (citing Continental Ins. Co. v. Superior Court, 32 Cal. App. 4th 94, 120-21 (1995) (noting that ex parte contacts with an opponent’s former employees facilitates identification of those witnesses with relevant knowledge and reduces the need for expensive and unnecessary formal depositions) and Bobele v. Superior Court, 199 Cal. App. 3d 708, 713-14 (1988) (noting that limiting attorneys’ contact with opponents’ former employees to formal depositions makes litigation too costly). 

[2] aba model rule 4.2, comment 7 (2007).  See Clark v. Beverly Health and Rehabilitation Services, 797 N.E.2d 905, 908 (Mass. 2003)  (“While [Rule 4.2] prohibits lawyers from making ex parte contact with a former employee who counsel knows to be represented, it neither prohibits, nor purports to regulate, private contacts between an adverse party and the organization’s former employees as such.”).

[3] Ohio Supreme Court Board of Commissioners on Grievances and Discipline, Opinion No. 2005-3 (Feb. 4, 2005) (interpreting Ohio’s former Rule DR 7-104, which has since been replaced by Model Rule 4.2).

[4]  LaPoint v. AmerisourceBergen Corp., 2006 WL 2105862 (Del. Ch. July 18, 2006)  (finding the reasoning of the majority of states and the ABA persuasive, the court adopted the rule that “[o]ne party's attorney may contact a former manager of an adverse party ex parte, even if the former employee was privy to extensive privileged communications, as long as the attorney is seeking only key non-privileged facts, and makes the former employee aware that she cannot divulge any communications she may have had with the adverse party's attorneys, or any other privileged information.”).

[5]  Clark, 797 N.E.2d at 911-12 (Mass.) (counsel conducting ex parte interview of former employee must pay particular attention not to violate the duty of truthfulness to third parties, must not violate their duties as they relate to dealings with unrepresented parties, and must refrain from using unfair or illegal tactics to obtain evidence; also, counsel must be careful to avoid violating applicable privileges or matters subject to appropriate confidences and protections).

[6] Muriel Siebert & Co., Inc. v. Intuit, Inc., 868 N.E.2d 208 (N.Y. 2007) (Counsel may conduct ex parte interviews of an opposing party’s former employee provided that he conforms to all applicable ethical standards such as advising the former employee not to disclose any privileged or confidential information or offer any information concerning the former employer’s litigation strategy, and cautioning the former employee that if, during the interview, he was asked a question that could potentially lead to the disclosure of privileged information, he should decline to answer the question).

[7] See, e.g., Brown v. St. Joseph County, 148 F.R.D. 246, 254 (N.D. Ind. 1993) (lawyer who makes ex parte contact with former employee shall (1) never state or imply that the lawyer is disinterested, (2) make clear the lawyer’s role, including the nature of the case, the identity of the lawyer’s client, and the fact that the person’s former employer is an adverse party, (3) make reasonable efforts to correct any misunderstanding by the former employee regarding the lawyer’s role, and (4) never give the person advice other than that the person obtain counsel);   Orlowski v. Dominick’s Finer Foods, Inc., 937 F. Supp. 723, 728 (N.D. Ill. 1996) (former employees, including former managers, are not encompassed by Rule 4.2 and may freely engage in communications with opposing counsel; however, former employees are barred from discussing any privileged information to which they are privy).  See generally Benjamin J. Vernia, Annotation, Right of Attorney to Conduct Ex Parte Interviews with Former Corporate Employees, 57 A.L.R. 5th 633 (1998).

[8] See, e.g., Clark, 797 N.E.2d at 911, fn 10 (Mass.); Action Air Freight v. Pilot Air Freight Corp., 769 F. Supp. 899 (E.D. Pa. 1991); Westside-Marrero Jeep Eagle, Inc. v. Chrysler Corp., 1998 WL 186705, at *5 (E.D. La. 1998); LaPoint, 2006 WL 2105862 (Del.); Strawser v. Exxon Co., U.S.A., 843 P.2d 613, 622 (Wyo. 1992).  But see Widger v. Owens-Corning Fiberglas Corp. (In re Complex Asbestos Litig.), 232 Cal. App. 3d 572, 588 (1991) (no general duty to “warn” an opposing party’s former employees not to disclose confidential or privileged information); Continental Ins. Co., 32 Cal App. 4th at 119 (it is incumbent on the former employer to seek a protective order if it is concerned that there is a risk that a former employee might disclose privileged information).

[9] Michaels v. Woodland, 988 F. Supp. 468, 471-72 (D. N.J. 1997) (“If it is a former employee that the lawyer wants to interview, and that person was within the litigation control group, the witness is presumptively represented by the organization. RPC 1.13.”)  See also NAACP v. State of Florida, 122 F.Supp.2d 1335, 1340 n. 6 (M.D.Fla. 2000) (court fashioned a number of guidelines, the import of which was to enforce the Rules of Professional Responsibility to all contacts and to bar contact with former employees who “… may have been members of management or ‘high-level’ employees who had access to privileged or confidential communications/information, participated in decision-making activities, and/or worked with the attorneys representing the [defendant].”) C.f. Olson v. Snap Prods., Inc., 183 F.R.D. 539, 545 (D.Minn.1998) (Court declined to adopt a bright-line rule. Instead, it held that the pivotal question in such cases is whether the contact is likely to undermine the attorney-client privilege.)

[10] Barrett Indus. Trucks, Inc. v. Old Republic Ins. Co., 129 F.R.D. 515, 519 (N.D. Ill. 1990).

[11] E.g., Ford v. Philips Electronics Instruments Co., 82 F.R.D. 359 (E.D. Pa. 1979); Connolly Data Sys., Inc. v. Victor Tech., Inc., 114 F.R.D. 89, 96 (S.D. Cal. 1987).