"Can We Talk?" Speaking Of And To Former Employees
By Paul F. Carvelli and Alicyn B. Craig - 03 January 2012

OUTSIDE PERSPECTIVES

In litigation, information is power. The most informed party shapes the message, frames the issues and calls the shots. The most informed party also has a greater bargaining position and, in turn, routinely has greater success and happier clients. The litigant who has greater access to the flow of information enjoys a distinct advantage in both the conference room and the courtroom. To control your adversary's access to information is to control the coin of the realm.

As corporate litigators well know, an organization's former employees are a veritable well-spring of information, good, bad or otherwise. Whether their departure from the organization was amicable or acrimonious, or the individual involved was disinterested or disgruntled, former employees generally have a lesser interest in maintaining loyalty than current employees, who are not willing to risk the enmity of those who sign the paychecks. For that reason, former employees are more prone to "spill their guts" as witnesses -- sometimes even upon the slightest provocation. Whether plaintiff or defendant, a litigant who has access to the hearts and minds of the former employees gets to make first use of, and thus shape, the information they possess.

Questions to Ask

When and under what circumstances may counsel for an adverse party contact your organization's former employees and encourage them to "dish the dirt," and what steps may you take to stop them? When can you and your team reach out to your adversary's former employees for favorable evidence? The rules vary among jurisdictions and turn, in many instances, upon the former employee's participation in what has come to be known as the "litigation control group." The prudent corporate litigant should thus have a considered strategy in place for dealing with former employee communications. Here are the considerations:

Know the Rules

First year law students learn that the Rules of Professional Conduct ("RPC") prohibit a lawyer from engaging in ex parte communications with an adverse party who is represented by counsel. Each jurisdiction has its own particular take on ex parte contact with former employees, modeled upon RPC 1.13 and RPC 4.2. RPC 4.2 generally prohibits a lawyer from engaging in an ex parte communication with a person about the litigation (or "matter" in a non-litigation context) that the lawyer knows, or by the exercise of reasonable diligence should know, to be represented by another lawyer. RPC 1.13 recognizes the distinction between the litigant-organization and its individual "constituents" (in most instances its officers, directors or employees).

As adopted in many jurisdictions, however, RPC 1.13 deems the lawyer who represents the organization also to represent the members of the litigation control group. These jurisdictions do not uniformly agree upon the membership requirements of the litigation control group: some stress "significant involvement" in the determination of the organization's legal position; others stress involvement in the acts which gave rise to the litigation; still others focus on the concept of privilege.

Within these jurisdictions is a smaller subset that extends the prohibitions against ex parte communications between adverse counsel and control group members to include former employees. Some states, such as Florida , Indiana , Washington and Delaware , impose no limitations on attorneys engaging in ex parte communications with former employees of a litigant-employer: they are fair game for the adversary. Other states, such as New York , New Jersey , California , Arizona and Connecticut , prohibit an adversary's ex parte contact with an organization's former employees based on varying interpretations of the control group concept.

Bottom line: Familiarize yourself, perhaps with the aid of local counsel, with the local rules governing ex parte communications with former employees, respect the boundaries – no lawyer wants to run afoul of the ethical rules, even accidentally – and determine whether and to what extent such ex parte communications are prohibited. There is no ethical prohibition against using the RPC's to your strategic advantage, depending on the particular needs of your case.

Keep Personnel Records

Encourage your organization to place a premium upon keeping accurate personnel files that enable you to identify potential witnesses in the event of litigation. Keep current on former employees, particularly those who were in the litigation control group, those who enjoyed access to sensitive information and those who fall within the "disgruntled" category. Make it a priority for your organization to conduct exit interviews of all employees – and learn from them. Remember, these witnesses may well be available to both sides in a subsequent litigation. It does not bode well for you if your adversary finds your organization's former employees before you do. Take a lesson from the fact that many large companies maintain "alumni lists" of former employees; encourage your organization to do likewise. Take measures to avoid or minimize the scramble that inevitably ensues when your team is assigned the four-alarm task of identifying a former insider now known as "Confidential Witness 1" in the class action complaint that was recently filed against your organization.

Maintain Confidentiality

Develop a practice within your organization to have employees execute confidentiality agreements that survive the termination of employment. While this practice may not prevent a former employee from testifying at some date in the future about matters within his or her personal knowledge or experience, it will provide a degree of protection over the sensitive information within the former employee's knowledge. Confidentiality agreements, properly tailored, may also have a chilling effect upon a former employee's willingness to seek involvement in subsequent litigation.

Circle the Wagons

As witnesses, former employees present both sides with an opportunity and a challenge. When implicated in litigation, their individual interests often differ from the interests of their former employer, or from the plaintiff seeking their assistance in a case against their former employer. Conflicts of interest are inherent under the circumstances. Plaintiffs suing an organization should do their homework before filing suit: they should, as a matter of course, understand the organizational structure of their adversary and identify its current and former employees who engaged in or know about the conduct at issue in the lawsuit.

It is essential to have at the ready counsel considerate of your cause to represent former employees when the need arises. Similarly, an organization's in-house counsel and outside lawyers should have a roster of sophisticated counsel available to step in when litigation ensues. The side that controls the litigation landscape enjoys greater access to the flow of information and thus increases its chances for a more favorable outcome.

Conclusion

At the end of the day, preparation remains the key to successful and efficient dispute resolution. A litigant must stake out an aggressive winning strategy early in the game. A critical component of that winning strategy should include a measure of control over your organization's former employee network.