Can an attorney for a corporation's adversary in litigation contact and interview a former employee who was actively involved in the litigation strategy when he or she was employed by the corporation? The New York Court of Appeals recently held that such ex parte contacts are permitted, so long as the attorney takes certain steps to ensure that the former employee does not disclose privileged or confidential information.
In Muriel Siebert & Co., Inc. v. Intuit, Inc., 2007 NY Slip Op 3956 (N.Y. 2007), the Court allowed Intuit's counsel to speak with Nicholas Dermigny, the former Executive Vice President and Chief Operating Officer for Siebert, without first notifying Siebert. Upon learning of the interview, Siebert moved to disqualify Intuit's attorneys from the case, to enjoin them from using any information provided by Dermigny, and to stay Dermigny's deposition. The Supreme Court of New York granted Siebert's motion. It did not grant the motion based on Disciplinary Rule 7-104(A)(1), which provides that "during the course of the representation of a client, a lawyer shall not communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by a lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so." Because Dermigny was not a current employee, DR 7-104(A)(1) did not apply. Nevertheless, the trial court granted Siebert's motion on the ground that communications with Dermigny brought the appearance of impropriety because of the "strong possibility that privileged information was disclosed by the former executive to defense counsel during the ex parte interview."
The Appellate Division reversed, finding there was no appearance of impropriety because defense counsel never misled Dermigny about its role. To the contrary, counsel had specifically warned Dermigny not to disclose privileged or confidential information. Muriel Siebert & Co., Inc. v. Intuit Inc., 2006 NY Slip Op 6252 (1st Dep't 2006).
The Court of Appeals agreed with the Appellate Division. It based its decision on Niesig v. Team I, 76 N.Y. 2d 363 (1990). In Niesig, the Court held that (a) ex parte communications with non-managerial employees are permitted, but (b) ex parte communications with employees who have the power to bind the corporation in litigation, are charged with carrying out the advice of the corporation's attorney, or are considered organizational members possessing a stake in the representation are not permitted. In Niesig, a personal injury litigation, the Court decided that only managerial employees who fell into the above categories were considered "parties" for purposes of DR 7-104(A)(1). Thus, plaintiff's counsel was permitted to interview defendant's employees who witnessed the accident at issue so long as those employees did not have speaking authority for the corporation. Niesig sought to strike the appropriate balance between, on the one hand, protecting parties from making "improvident settlements, ill-advised disclosures and unwarranted concessions," and, on the other hand, encouraging informal discovery devices, like ex parte interviews, that have the potential to streamline discovery and foster the prompt resolution of claims.
The Southern District has applied the same principles in deciding whether an adversary's counsel may communicate with a current or former employee of a represented party. In Wright v. Stern, 2003 U.S. Dist. LEXIS 23335 (S.D.N.Y. 2003), for example, the Court denied the defendants' request for a protective order precluding plaintiff's counsel from interviewing defendants' non-managerial employees on the ground that such employees were not in a position to bind the defendant by their actions or admissions. Likewise, in Merrill v. City of New York, 2005 U.S. Dist. LEXIS 26693 (S.D.N.Y. 2005), the Court rejected the defendants' argument that plaintiff's attorney could not ethically communicate with a former New York City police officer who was reportedly involved in policing the demonstration at which plaintiff was arrested. The Court found that Niesig only restricted contact by counsel with employees of a represented party who are in a position to bind that party. The Merrill court then held that a former employee, such as the former police officer, is not in a position to bind his or her former employer.
Though DR 7-104(A)(1) applies only to communications with current employees of a represented party, the thrust of the case law seems to be that adversary counsel can communicate with anyone, whether they be a former or current employee, so long as that employee does not have the power to bind the represented party. As a practical matter, by taking certain measures to avoid eliciting privileged or confidential information, an adversary's attorney will increase the chances that such ex parte communications are proper. First, counsel should identify himself or herself as representing an interested party in the matter when approaching a potential witness. Second, adversary counsel should advise the person whom he or she is hoping to interview that they are free to decline to respond. Third, and perhaps most importantly, counsel should advise the employee or former employee not to disclose any privileged or confidential information. Furthermore, counsel should caution the witness that if during the interview, he or she is asked a question that could potentially lead to the disclosure of privileged or confidential information, he or she should so advise counsel and decline to answer the question.
In Siebert, the Court emphasized that Intuit's attorneys properly relayed these warnings and then only questioned Dermigny about the underlying facts of the case. Dermigny was an important participant in the events at issue and was a member of Siebert's litigation team after the lawsuit began: "He participated in the negotiations of the Siebert-Intuit agreement and discussions with Intuit relating to its implementation. He also assisted in drafting the complaint and responses to interrogatories, was privy to discussions concerning Siebert's litigation strategy, and was engaged in privileged and confidential communications with Siebert's counsel." Id. at *2. Had counsel not first warned him not to communicate any privileged or confidential information, the Court likely would have granted Siebert's motion to disqualify Intuit's attorneys from the case.
Given this case law supporting the right of an adversary's counsel to contact and interview both current and former employees, a corporation's management may want to further restrict which employees are privy to sensitive information, especially information relating to a litigation strategy. Furthermore, a corporation involved in a lawsuit may find it beneficial to keep those who have been privy to privileged or confidential information on the payroll until the dust settles.
Published August 1, 2007.
