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In-House Counsel Suing Employer Can’t Use Private Info Unless Opponent Opens Door

Wednesday, November 7, 2012

By Joan C. Rogers  

A former or current in-house counsel may not reveal confidential information to support a claim against her employer/client for discrimination or wrongful discharge unless the client puts the lawyer's conduct at issue or some other exception to confidentiality applies, according to an October opinion from the District of Columbia bar's ethics committee (District of Columbia Bar Legal Ethics Comm., Op. 363, 10/12).

The committee pointed out that unlike ABA Model Rule 1.6, the district's confidentiality rule allows lawyers embroiled in quarrels with their clients to disclose protected information only defensively to shield themselves, not offensively to establish a claim, except in fee disputes.

On the other hand, the opinion makes clear that corporate counsel is not prohibited from filing suit in the first place merely because the employer may want or need to disclose confidences or secrets in the litigation.

Defense, Not Offense.

The committee was asked whether an in-house lawyer may disclose or use her employer/client's confidential or secret information in a claim against it for discrimination or retaliatory discharge. The inquirer also wanted to know whether her right to sue would be precluded by the client's perceived need to use protected information in defending against the claim.


The lawyer may disclose the employer's confidences insofar as reasonably necessary to respond to its contention.
District of Columbia Ethics Op. 363

D.C. Rule of Professional Conduct 1.6 prohibits a lawyer from revealing a client's confidences or secrets, or using them to the lawyer's advantage or the client's disadvantage. The rule specifies that its prohibitions continue after the lawyer-client relationship ends.

One part of the confidentiality rule allows lawyers to reveal or use confidences or secrets “to the extent reasonably necessary to establish a defense to a criminal charge, disciplinary charge, or civil claim, formally instituted against the lawyer, based upon conduct in which the client was involved, or to the extent reasonably necessary to respond to specific allegations by the client concerning the lawyer's representation of the client.” Rule 1.6(e)(3).

Read literally, the committee pointed out, this provision is limited to defensive use of information and does not authorize offensive use of client confidences or secrets in a lawyer-client controversy. Another exception in the rule permits a lawyer to use or reveal such information offensively, but only in lawyer-client fee disputes, the panel pointed out.

In contrast, the committee noted, the Model Rules allow a lawyer to reveal information in a lawyer-client dispute offensively as well as defensively. It explained that Model Rule 1.6(b)(5) permits limited disclosure “to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client,” and that ABA Formal Ethics Op. 01-424 (2001) approved the offensive use of information for an in-house lawyer's wrongful discharge action against an employer.

The legislative and judicial history of D.C. Rule 1.6 compels the conclusion, the committee found, that an in-house lawyer may not reveal or use the client's secrets or confidences offensively in suing the client for discrimination or retaliatory discharge unless the disclosures are authorized by some other exception in Rule 1.6, such as the crime-fraud exception in Rule 1.6(d).

In a footnote, the committee cited a half-dozen cases from other jurisdictions in which particular policies or statutes, such as the Sarbanes-Oxley whistleblower provision, have been held to trump the attorney-client privilege. But the panel declined to express an opinion on whether a D.C. case might likewise find that some policy or statute overcomes Rule 1.6.

May File Suit.

On the other hand, the panel found nothing in D.C.'s ethics rules that limits an in-house lawyer's right to sue her employer/client merely because the employer might find it necessary or helpful to reveal its confidences or secrets in defending against the claim. Many decisions have noted that courts possess tools--such as protective orders and in camera document reviews--to protect the information revealed in these lawsuits from undue disclosure, the committee noted.

The committee also advised that “If the employer/client puts the lawyer's conduct in issue, … the lawyer may disclose or use the employer's confidences or secrets insofar as reasonably necessary to respond to the employer/client's contention.”

The leeway in Rule 1.6(e)(3) “to respond to specific allegations” could include responding to the employer's affirmative defenses, and the latitude to “establish a defense … to a civil claim” could including responding to a counterclaim by the employer, the committee explained. In a footnote, it suggested that a principle of proportionality applies in determining what disclosure is “reasonably necessary” for the in-house lawyer to respond.


Full text at http://www.dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion363.cfm.

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