Discrimination claimants frequently name supervisors and managers separate and apart from their employer. They view this as one means of “getting even” for what they considered supervisory harassment. Supervisors named individually could have to retain their own attorneys. They could also face personal liability under certain laws even if the company is found not liable.
Some companies offer individually named supervisors the option of selecting their own counsel and then reimburse the supervisor for those costs. Many companies allow the company’s regular employment counsel to represent jointly all defendants or respondents, the company and all individually named supervisors or managers. Such joint representation generally involves initial meetings with all “clients,” corporate or individual, to ascertain the facts and the absence of conflicting interests between or among those clients. Counsel then prepares a joint representation letter explaining to the jointly represented supervisor that the company remains the client whose interests that attorney must protect at all times. The joint representation letter also explains the implications and other conditions of this common representation by a single attorney or law firm.
The attorney who embarks on such common or joint representation runs several risks. Those common clients’ interests may diverge during the case. The respective clients may quickly disagree on strategy and, also, on whether the case will be settled and, if so, on what terms. Individual supervisors understandably want complete exoneration and can differ strongly with the company when possible settlement terms (such as apologies or reference letters) are discussed.
The ethical rules governing lawyers’ obligations in a joint representation situation have always been quite strict. Those rules became even stricter as a result of a May 7, 1999 decision by Federal District Judge Alvin K. Hellerstein in Felix v. Balkin, 49 F. Supp. 2d 260 (S.D.N.Y.). That case began with an ordinary sexual harassment claim by a male employee, Michael Blake, against his employer, Thierry Mugler Parfums, and his female supervisor, Lourdes Morales. Blake and Morales both worked at the Thierry Mugler counter at the Saks Fifth Avenue department store in Midtown Manhattan. Blake claimed he had been sexually harassed by Sharon Balkin, a Saks supervisor, by unwanted and unwelcome touchings and suggestive comments during a 30-day period during the summer of 1996. Blake alleged he reported Balkin’s harassment to Morales (as well as to Saks), nothing was done and he was quickly terminated after making that report.
Blake filed a discrimination charge with the New York City Human Rights Commission. He alleged Thierry Mugler, Saks and Morales had discriminated against him. When Thierry Mugler’s parent company, Clarins U.S.A. Inc., notified its insurer of this discrimination claim, the insurer retained an employment attorney to represent the company and Morales jointly. That attorney obtained a “thumbnail sketch” of the case from Clarins’ Manager of Human Resources and concluded he could proceed with the joint representation. The attorney then met with Morales in the presence of the Human Resources Manager to discuss the case further and to prepare a joint answer. The attorney told Morales she “could get her own counsel if she wanted” and that he could represent her since he “didn’t see any conflict.” Morales said she “didn’t think there was a conflict either” and that she “had no objection” to the joint representation. The attorney did not meet with Morales separately. He also did not prepare a joint representation letter for her signature explaining the implications of a joint representation.
After filing the joint answer denying the allegations of Blake’s City Commission complaint, Morales filed her own discrimination complaint against Thierry Mugler with the EEOC. She alleged a sexually hostile work environment existed at the company’s Saks perfume counter, the same counter at which Blake had worked. Morales’ complaint contradicted her earlier joint answer denying Blake’s allegation of a sexually hostile work environment at this perfume counter. Upon learning about this new claim, the attorney withdrew as Morales’ counsel in the Blake matter. Morales actually “strenuously” objected to this withdrawal even though she was being represented by a plaintiffs’ firm in her own action. The attorney and his law firm also withdrew from representing Thierry Mugler and another insurance defense firm was substituted as counsel.
Judge Hellerstein criticized this attorney for not meeting separately with Morales, his other client. He described their joint meeting in the presence of the company’s Human Resources Manager as “likely to have engendered reticence rather than candor on Morales’ part.” Judge Hellerstein sharply criticized the attorney for not conducting a detailed independent study of the essential facts underlying Blake’s complaint of discrimination and instead relying on what he himself described as a “thumbnail sketch” of those facts following a “brief recitation” by the company’s Human Resources Manager. The attorney should have gained a “full understanding of all facts and circumstances” before undertaking the joint representation of the company and Morales. Finally, the attorney was criticized for not preparing an engagement letter for his new client, Morales, explaining the rules applicable to such joint representation.
To this point, Judge Hellerstein had simply rebuked this attorney for entering into the original joint representation with respect to Blake’s original sexual harassment claim without a close and detailed study of the facts and the possibility of a conflict between the company and Morales as to that claim. He then turned to Morales’ own discrimination claim and held that the attorney should have also asked Morales if she had her own complaints against the company. He held the attorney and his law firm “did not discharge their professional obligations. Had they inquired fully of Morales, they would have learned whether or not she had her own grievances against Clarins or Saks or the Saks supervisor [Balkin], and [they] could have developed a foundation for proceeding further, dually for both clients or separately for one or the other.”
If the attorney had asked Morales if she had any discrimination claims of her own, she would have either said “no” (thereby allowing the joint representation to proceed) or “yes” (thereby mandating separate representation).
This decision imposes a due diligence obligation on the attorney to ask the supervisor if he/she has independent claims (presumably of any nature) against the company. The attorney cannot simply inquire about the particular allegation then being made against the company and the supervisor together but must affirmatively explore a potential conflict by discovering if there are possible claims between his/her potential joint clients. Attorneys should not undertake that joint representation unless the supervisor affirmatively states he/she has no possible claims against the company.
Judge Hellerstein relied upon an earlier Second Circuit decision (Evans v. Artek System Corp., 715 F.2d 788, 1983), and New York Code of Professional Responsibility Disciplinary Rule 4-101(B). While the professional responsibility rules do not vary widely from state to state, companies and attorneys should review their own state’s rules.
Many companies and law firms will incorporate this affirmative due diligence inquiry into every potential joint representation situation involving individually named supervisors if they are not already doing so. One means is to add a separate paragraph at the bottom of the standard joint representation letter that is given to supervisors. That paragraph would confirm in writing that the supervisor was asked if he/she had any past or present claims of any type, nature or description against either the company or other individual defendants, and the supervisor freely and voluntarily answered “no.” The new paragraph should be highlighted by a separate heading, italics or capital letters. If the supervisor wants to take the document (including this new separate no-claim paragraph) home or otherwise “think it over,” that request should be granted. The letter should be discussed with the supervisor separately, apart from other company representatives. The attorney should not ask the company to give it to the supervisor. Have the supervisor return it, signed and notarized, directly to the attorney. Maintain it in the attorney’s files not the company’s. In-house lawyers should similarly obtain these letters through direct dealings with the supervisors.
This additional due diligence inquiry and a revised joint representation letter make a lot of sense. They avoid conflicts. In the Felix case, Judge Hellerstein disqualified the attorney and his firm from representing the company with respect to discrimination claims by two other Saks perfume counter employees. He also disqualified the law firm representing Morales because they asked her only about her own claims but had not learned she was already a named defendant in Blake’s City Commission case. Both claims involved sexual harassment at the same Saks perfume counter.
Asking supervisors if they have their own claims against the company will produce some interesting answers. More separate representations will result. Indeed, hesitation or doubt on the supervisor’s part should signal separate representation. The basic question should be asked again as the proceeding goes forward or the revised joint representation letter should specifically instruct the supervisor that he/she must immediately contact the attorney if any individual claim against the company arises subsequently. Having supervisors sign a revised joint representation letter that specifically confirms in writing that they have no claims of their own against the company can be a very powerful document should that supervisor later become a plaintiff or seek to join a class action. This heightened professional responsibility obligation may rest squarely on the attorney but it ultimately benefits all clients, whether they are jointly represented or not.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require and further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative.