Ethics Opinion 69: Propriety of Communicating with Employee or Former Employee of an Adverse Party Organization; Revised 6/20/87; Addendum Issued 1995

Introduction and Scope

The Ethics Committee is aware of a great concern by members of the Bar about the propriety of communicating with the employee or former employee of an adverse party organization. This opinion is being offered in order to provide guidance in this area of concern. It is intended to cover not only the situation where attorneys wish to communicate with the employee of an organization that is named as a party, but also to those situations where there is actual knowledge of representation prior to litigation. This opinion does not address the scope of the attorney-client privilege, the persons protected thereunder, or the limitations on ex parte contacts that flow therefrom. See Upjohn Co. v. U.S., 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981); Wright v. Group Health Hospital, 103 Wash.2d 192, 691 P.2d 564 (1984).

Syllabus

When deciding whether or not to communicate with a current employee of an organization named as a party, which organization the lawyer knows to be represented on the subject matter of his communication, the lawyer should obtain the prior consent of the lawyer representing that organization in that matter unless the employee is or was solely a bystander witness, or unless the communication is otherwise permitted by law.

A current employee is not a bystander witness if he or she has the authority to commit the organization to a position with regard to the subject matter of the representation. The employee's authority may emanate from his or her position as an officer or manager of the organization; or because the employee's acts, omissions, or statements may be imputed to the organization as a matter of law.

All other current employees are bystander witnesses and may be contacted without the consent of the organization's attorney.

An attorney does not avoid the requirement of obtaining the prior consent of the organization's lawyer by directing another to communicate with the organization's current employee.

An attorney may interview a former employee ex parte with regard to all matters except as to communications which are the subject of the attorney-client privilege.

Opinion

The disciplinary rule in question is DR 7-104(A)(1), which provides as follows:

Communicating With One of Adverse Interest

(A) During the course of his representation of a client a lawyer shall not:

(1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.

The purpose of DR 7-104(A)(1) is to prevent the deprivation, undermining, or bypassing of a client's right to the advice of counsel. In re McCaffrey, 275 Or. 23, 549 P.2d 666 (1976); see also Code of Professional Responsibility EC 7-18 (1977). An attorney's advice to his or her client includes explaining the law for the client's best interests; protecting the client against unfair and misleading settlements; correcting errors in the client's communication; protecting the client against self-prejudice; and preserving the client's right to privileged communications. See Abeles v. State Bar, 9 Cal.3d 603, 510 P.2d 719, 108 Cal. Rptr. 359 (1983); see also ABA Canons of Professional Ethics, Canon 9 (1908).

In other words, the purpose of DR 7-104(A)(1) is to prevent opposing counsel from impeding an attorney's performance for his or her client. ABA Comm. on Professional Ethics and Grievances, Formal Op. 108 (1934); see also Leubsdorf, "Communicating With Another Lawyer's Client: The Lawyer's Veto and the Client's Interests," 127 U.Pa. L.Rev. 683 (1979); Kurlantzik, "The Prohibition on Communication With an Adverse Party," 51 Conn.B.J. 136 (1977); Note, "DR 7-104 of the Code of Professional Responsibility Applied to the Government 'Party,'" 61 Minn. L.Rev. 1007 (1977); Annot., 1 A.L.R.3d 1113 (1965).

The commentators who favor a broad application of the rule reason that the imbalance in knowledge and skill between a lawyer and a lay adverse party may cause even well-intended acts of the lawyer to have a coercive impact on the party and to induce a party to disclose privileged information. Others argue that the information that a lawyer obtains from unrepresented adverse parties often leads that lawyer to dilute his or her zeal for pursuing the client's claim. Thus, the conflict exists between one's right to receive and be protected by the advice of one's attorney and a client's interest in a quick and inexpensive exploration of a potential legal claim.

Because of this conflict, the Code has admittedly been interpreted in such a way as to create great confusion. See ABA, Annotated Code of Professional Responsibility 336 (1979).

The rule can be broken down into five parts:

 

1. "Communication."

    

2. "Subject of the Representation."

    

3. "Party."

    

4. "Knows" to be represented.

    

5. "Authorized by law" to communicate without prior consent.

"Communication" is that made either by the attorney or his or her agent because of the phrase "causes another to communicate." ABA Comm. on Professional Ethics, Informal Op. No. 663 (1963). This includes causing one's client to communicate directly with the opposing party. ABA Comm. on Professional Ethics and Grievances, Formal Op. 75 (1932).

Furthermore, whenever an attorney is going to communicate with a witness, he or she should identify himself or herself and the reason for the interview. ABA Comm. on Professional Ethics and Grievances, Formal Op. 117 and 118 (1934); ABA Comm. on Professional Ethics, Informal Op. 908 (1966); see also Ceramco, Inc. v. Lee Pharmaceuticals, 510 F.2d 268 (2d Cir. 1975). There are several reasons for this. The rule's purpose of preserving and promoting a person's right to the advice of his or her attorney will be undermined because a person will be less likely to utilize counsel if he or she is unaware that the questioner is the representative of a potentially adverse party. This nondisclosure of identity and purpose might also be viewed as a false statement of fact violating Code of Professional Responsibility DR 7-102(A)(5) (1977); or conduct involving deceit or misrepresentation violating Code of Professional Responsibility DR 1-102(A)(4) (1977). Such anonymity could also create the appearance of impropriety violating Code of Professional Responsibility, Canon 9 (1977). For these and other reasons, a trial court has even excluded a defendant's statement to the plaintiff's investigator because the defendant believed that the investigator was sent by his own attorney. Trans-Cold Express, Inc. v. Arrow Motor Transit, Inc., 440 F.2d 1216 (7th Cir. 1971).

The parameters of the group protected by DR 7-104 differ in material respects from those who are clients entitled to the attorney-client privilege. Upjohn Co. v. U.S., 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981); Wright v. Group Health Hospitals, 103 Wash.2d 192, 691 P.2d 564(1984). One should also consult American Protection Insurance Co. v. MGM Grand Hotel-Las Vegas, Inc., No. CV-LV-82-26-HDM (D.Nev. March 11, 1986).⁽¹⁾

The phrase "subject of the representation" concerns the matter in which the interviewing counsel is representing his or her client. If the interviewing lawyer is communicating with the opposing party regarding a matter outside the interviewing lawyer's representation, then there would be no violation of the rule; or, if the questioning lawyer knows that the opposing party is represented by a lawyer, but knows that such representation is on a totally unrelated matter, then such communication would not be a violation.

Where the interviewing lawyer knows that the opposing party is represented by an attorney but he or she is unclear about the area of that representation, he or she is best advised to check with that lawyer before commencing the communication. See State v. Yatman, 320 So.2d 401 (Fla. Dist. Ct. App. 1975), where a criminal defendant was represented by counsel in an existing criminal case and the prosecutor's attempt to interview that defendant for the purpose of filing a separate case based on the same criminal episode was found to have been an improper attempt. See Abeles v. State Bar, 9 Cal.3d 603, 510 P.2d 719, 108 Cal. Rptr. 359 (1973), where California ruled that where a party had counsel of record, the attorney could not communicate with that party without the consent of the counsel of record, even where the client denied being represented personally by counsel of record; and In re Schwabe, 242 Or. 169, 408 P.2d 922 (1965), where an attorney was reprimanded for contacting a party directly to determine if he was in fact represented by another attorney who had so notified him of such representation. Thus, if there is any question about whether the representation of a party is for the subject matter of the communication, it is advisable to contact the purported counsel for that party in order to determine the nature of that representation, if any, before proceeding.

This leads to the next part of the Rule: "[K]nows" (the party) to be represented by a lawyer in that matter. . . ." "[K]nows" means information of representation received by direct verbal or written communication or by constructive notice from the pleadings. Constructive notice beyond that existing in the pleadings does not constitute knowledge.⁽²⁾ The reason is that this Rule, unlike several other rules in the Code of Professional Responsibility, does not include terms such as the following: "should know,"⁽³⁾ "it is obvious"⁽⁴⁾ or "under circumstances where."⁽⁵⁾

Therefore, even though one has indirect or general knowledge of legal representation, such as insurance carriers generally having legal counsel, there is no duty to inquire if a party has legal counsel in the specific matter in question.⁽⁶⁾

"Authorized by law" simply means that which is authorized by statute, rule or order of court, and most probably the rule of any administrative agency having jurisdiction over the case. Weinstein v. Rosenblum, 59 Ill.2d 475, 322 N.E.2d 20 (1974).

Regarding the meaning of the word "party," since the perceived potential for harm to the attorney-client relationship is not dependent upon the existence of a civil action, the protection of DR 7-104(A)(1) is not solely dependent upon the organization being named in litigation. The organization should be considered a party anytime it has specifically retained counsel to represent its interests regarding the subject of representation or has specifically referred the matter to house counsel. See Model Rules of Professional Conduct, Rule 4.2 comment (1980).

Once it has been determined that an organization is a party under DR 7-104(A)(1), it should be determined which persons within that organization constitute the party, and which individuals are bystander witnesses.

Employees who constitute the party are differentiated from those who are bystander witnesses by their authority to commit the organization to a position regarding the subject matter of representation. If the employee is "in a position to commit the municipal corporation in the particular situation because of his authority as a corporate officer or because for some other reason the law cloaks him with authority, then he, as the alter ego of the corporation, is a party for purposes of DR 7-104(A)(1)." ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1377 (1977); accord, ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1410 (1978); contra, Tenn. Ethics Op. 82-F-27 (1982).

An additional guideline as to which employees of the organization constitute the party is found in the comment to Rule 4.2 of the ABA Model Rules of Professional Conduct [the language of the rule is substantially identical to DR 7-104(A)(1)]. The comment prohibits contact "with persons having managerial responsibility on behalf of the organization, and with any other person whose act or omission in connection with that matter may be imputed to the organization for the purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization," Model Rules of Professional Conduct Rule 4.2 comment (1980).

It should be noted that not all managerial employees are "parties." The protection of DR 7-104(A)(1) is limited to those managerial employees with authority to commit the organization to a position regarding the subject matter of representation. An example of the type of employee who could commit the organization to a position is one whose duties include making litigation decisions or whose duties include answering the type of inquiries posed.

Managerial employees with the authority to commit the organization to a position, but not with respect to the subject matter of representation, would not be considered parties. Likewise, employees whose acts, omissions or statements are imputed to the organization, but not with respect to the subject of representation, are not protected. Thus, a president of a corporation who does not have decision-making authority regarding the subject matter of representation would not be protected by DR 7-104(A)(1) (unless his or her acts, omissions or statements regarding the subject of representation would bind the corporation). All other current employees are bystander witnesses and not protected by DR 7-104(A)(1).

In the case of In re FMC Corp., 430 F.Supp. 1108 (S.D. W.Va. 1977), the court limited the word "party" within a corporation to the president, chairman of the board, and plant managers. In ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1377 (1977), a building marshall, who had complete authority, including police power, to inspect, require correction and enforce the building code, could not be contacted regarding his conclusions as to the cause of a structural failure of a sewer line. On the other hand, it was permissible for an attorney for a person injured by falling on a slippery store floor to interview the store clerks who witnessed the accident, ABA Comm. on Professional Ethics and Grievances, Formal Op. 117 (1934).

The distinction between bystander and non-bystander witnesses does not apply to an organization's former employees. After leaving the organization's employ, a former employee cannot bind the organization as a matter of law. See, e.g., Rule 801(d)(2)(D), C.R.E.; 4 J. Weinstein and M. Berger, Weinstein's Evidence 801(d)(2)(D)[01] at 801-222 n. 16 (1985); Securities and Exchange Commission v. Geon Industries, Inc., 531 F.2d 39, 43 n. 3 (2d Cir. 1976). As a former employee is thus not the "party," i.e., the organization, an attorney does not violate DR 7-104(A)(1) by communicating directly with the organization's former employee about the substantive dispute without the prior consent of the organization's counsel. Wright v. Group Health Hospital, 103 Wash.2d 192, 691 P.2d 564, 569 (1984); see also American Protection Insurance Co. v. MGM Grand Hotel-Las Vegas, Inc., No. CV-LV-82-26-HDM (D. Nev. March 11,1986) (discussing who may be contacted ex parte, when the ex parte contact may occur, and the consequences arising from improper ex parte contacts) (see n. 1, supra). However, as discussed above, DR 7-104(A)(1) is designed in part to preserve the confidentiality of privileged attorney-client communications. Accordingly, the inquiring attorney may not, while communicating with the organization's former employee, inquire into privileged attorney-client communications; nor may the inquiring attorney listen while the former employee attempts to divulge privileged communications voluntarily. Any privilege existing between the former employee and the organization's counsel belongs to the organization, and can be waived only by the organization. See A. v. District Court, 191 Colo. 10, 550 P.2d 315, 323 (1976), cert. denied, 429 U.S. 1040 (1977).

In conclusion, then, a current employee of an adverse party organization who has authority - as described above - to commit the organization to a position with regard to the subject matter of the communicating attorney's representation, may not receive communication from the adverse party's counsel or his agent without the consent of the organization's attorney. A former employee of an adverse party organization may be interviewed ex parte with regard to all matters except as to communications which are the subject of the attorney-client privilege.

1995 Addendum

The Colorado Rules of Professional Conduct became effective on January 1, 1993, replacing the Code of Professional Responsibility. While the language of the Rules is somewhat different from the Code, the Ethics Committee considers this Opinion to continue to provide guidance to attorneys in this area. Attorneys are cautioned to review Tables A & B: Related Sections in the Colorado Rules of Professional Conduct and The Colorado Code of Professional Responsibility (found in the Colorado Ethics Handbook), to update the research contained in this Opinion and to conduct any independent research necessary.

Relevant provisions of the Colorado Rules of Professional Conduct, which should be examined together with this Opinion, are contained in Rule 4.2 (communication with person represented by counsel). Attorneys should note that although the text of former DR 7-104(A) did not distinguish between adverse parties and parties with interests compatible with those of the party represented by the communicating lawyer, the title of DR 7-104 was "Communicating with One of Adverse Interest." Rule 4.2 makes no distinction between adverse parties and aligned parties in proscribing communication with parties represented by counsel.

The Colorado Supreme Court also adopted the Comment to Rule 4.2 quoted in this opinion as contained in the ABA Model Rules of Professional Conduct. See Colorado Rules of Professional Conduct, Rule 4.2; Comment; Committee Comment. For further discussion of issues considered in this opinion, attorneys may wish to read In the Matter of Opinion 668 of the Advisory Committee on Professional Ethics, 134 N.J. 294, 633 A.2d 959 (1993), and authorities cited therein.

The Ethics Committee directs attorneys to Opinion 93 and the relevant provisions of the Colorado Rules of Professional Conduct contained in that opinion. This opinion is supplemented by Opinion 93 which should be reviewed in conjunction with the Rules.

1. To obtain a copy of this opinion, write to: Clerk, U.S. District Court, 300 Las Vegas Blvd. South, Las Vegas, NV 89101. There is a charge of 15 per page for this service. Phone number (702) 388-6061.

2. See CBA Ethics Comm., Formal Op. 64, in which indirect information of an ethical violation does not constitute sufficient "knowledge" for an attorney to be required to report that violation. Certainly, a stronger word like "knows" requires an even lesser duty, especially when one can expect a party to inform him whether or not he or she is represented.

3. Code of Professional Responsibility DR 6-101 (1977).

4. Id., at DR 2-109, DR 5-101, DR 2-110, DR 5-102, DR 7-102 and DR 8-101.

5. Id., at DR 8-101f(A)(1).

6. Based on the preceding discussion of "subject matter," if one has direct information, not indirect general knowledge, that the opposing party is represented by a lawyer and he or she is uncertain whether the representation extends to the subject matter of the communication, the safest course is to establish the scope of the representation and/or the communication with the lawyer before communicating.