The turncoat employee has always presented a particularly troublesome and thorny problem for corporate defendants. The United States Supreme Court's recent decision in Baker v. General Motors Corp., 118 S.Ct. 657 (1998), reminds us of the difficult nature of handling what can become a defendant company's legal nightmare: a disgruntled former employee testifying against the company's interests. The Baker Court allowed a former employee to testify against General Motors despite an injunction banning such testimony which the former employee had voluntarily agreed to enter.
The Baker decision illustrates the importance of developing strategies and procedures for identifying and dealing with former employees who may have an inclination toward testifying against the employer's interests. This article attempts to outline critical issues a corporation should consider to protect itself from the testimony of potential disgruntled employees.
BAKER V. GENERAL MOTORS
The Supreme Court's decision in Baker significantly limits the potential effectiveness of an injunction, even if agreed to by the parties, in preventing a former employee from testifying against the employer's interests. Ronald Elwell was a GM engineer assigned to study the performance of GM vehicles for more than fifteen years. The relationship between Elwell and GM soured and Elwell agreed to retire in 1991. That same year, Elwell was deposed in a Georgia product liability claim against GM. Despite GM's objection, Elwell testified that the GM truck fuel system was inferior to competing models. One month later, Elwell brought suit in a Michigan Court alleging wrongful discharge and other tort and contract claims. GM counter-claimed that Elwell breached his fiduciary duty to GM. As part of the settlement, the parties stipulated to the entry of a permanent injunction barring Elwell from testifying as a witness in any litigation involving GM without GM's consent, excluding the pending litigation in Georgia.
Shortly thereafter, the Bakers subpoenaed Elwell to testify in their Missouri product liability action against GM. GM objected to Elwell's appearance, claiming that the Michigan injunction served to bar Elwell from testifying in Missouri. The federal district court found that the Michigan injunction violated Missouri's public policy, which favors full disclosure of all nonprivileged, relevant information. The Eighth Circuit Court of Appeals did not agree, holding that the Michigan injunction was entitled to full faith and credit in Missouri. Baker v. General Motors Corp., 86 F.3d 811 (8th Cir. 1996).
On certiorari, the Supreme Court reversed and remanded the Baker case. It said that "Elwell may testify in the Missouri action without offense to the national full faith and credit command." In its reasoning, the Court said, "Michigan's judgment . . . cannot reach beyond the Elwell-GM controversy to control proceedings against GM brought in other States, by other parties, asserting claims the merits of which Michigan has not considered." 118 S.Ct. at 666.
Elwell, the quintessential turncoat employee, was allowed to testify against GM despite an agreement he had voluntarily entered, and GM was left unprotected. The Baker Court's holding leaves open the question of whether defendants can rely on an injunction entered in an earlier matter even if the lawsuits are in the same jurisdiction. The Baker decision is evidence that waiting to address potential disgruntled employee problems until such an employee faces you during litigation is not the most effective way of protecting a corporation's interests. An injunction, even if agreed to between a corporation and its former employee, is probably too little protection, too late. While probably disappointing to companies who have relied on injunctions to curb former employees' activities, Baker v. General Motors does provide guidance. Now knowing the limitations on their efforts, companies and their counsel can work to prevent former employees from becoming turncoat employees. They can still use several tools to prevent those who are disgruntled from being able to testify.
IDENTIFY THE POTENTIAL TURNCOAT EMPLOYEE
The ex-employee with a grudge against his or her former employer is a situation which probably dates back to the beginnings of master-servant relationships. The causes for deterioration of the relationship are so numerous that there is no point in trying to list them. For example, downturns in the economy which may result in downsizing and restructuring have the potential fallout of creating ex-employees who feel, rightly or wrongly, that their loyalties have been betrayed. Such ex-employees may be ripe prospects for a retaliatory strike delivered by testifying against their former employer in, for example, a product liability claim.
Within a large organization, there is no way that every individual who could potentially become a turncoat can be identified. However, recent history suggests that the most likely candidates in the product liability context are either within the group of those involved in design decisions or those who are or were part of the litigation defense team. These individuals can be identified by management. Management should be aware that employees in these two areas are in possession of information which is capable of being distorted by an adversary and used as a powerful weapon against the company. With respect to such persons there must be, during employment and particularly at termination, a conscious effort to minimize the risk that they will testify against the company. Addressing any "personnel issues" in a timely fashion by the employee's supervisor and the company's human resources department may be the best way to prevent future litigation problems.
When the names of former employees have to be disclosed in discovery, the company or its counsel should contact them to alert them of this fact and to let them know that they may be contacted by plaintiff's counsel. Obviously, ethical considerations must be honored. Whereas a present employee may be advised to refrain from giving information to another party, the same is not true with respect to former employees. Rule 3.4(f) of Model Rules of Professional Conduct. However, it should be permissible to suggest to ex-employees that in view of possible obligations arising out of the past employment, they might prefer to refer plaintiff's counsel either to their own attorney or to the company's counsel. In any event, a serious effort should be made to build a positive relationship with the ex-employee, possibly utilizing the good offices of a present employee friendly to the former colleague.
Defense counsel may also wish to contact and interview former employees before plaintiff's counsel contacts them. The former employees can be interviewed to learn whether they possess knowledge or information which is relevant to the subject claim. If the former employee's anticipated testimony may contain trade secrets and other confidential matters steps can be taken to prevent the disclosure of such information.
ETHICAL LIMITATIONS
If a person is represented by counsel, rules of professional ethics bar opposing counsel from engaging in ex parte communication with that person. Whether a former employee is considered a represented party in a case where the employer is sued determines whether plaintiff's counsel can contact them regarding the claim. If the former employee is a represented party, the plaintiff may be barred by ethical limitations from contacting that former employee.
All states have adopted ethical rules that preclude ex parte communications with parties to litigation who are represented by counsel. Annotated Model Rules of Professional Conduct (ABA 2d Ed. 1992). These rules are based on Rules 1.6, 2.2, 3.4(f) and 4.2 of the Model Rules of Professional Conduct Rule.
It is not clear that these ethical rules preclude plaintiff's counsel from contacting the former employee. In Polycast Technology Corp. v. Uniroyal, Inc., No. 87 3297, 1990 Westlaw 180571 1990 U.S. Dist. LEXIS 15382, at *3 (S.D.N.Y. November 15, 1990), the district court rejected defendant's argument that the Model Rules explicitly prohibited opposing counsel from contacting former employees and noted the comments accompanying the Rules were far from clear. See also, 129 F.R.D. 621 (S.D.N.Y. 1990). In fact, the majority of Courts have ruled that ethical limitations do not bar counsel from communicating with former employees of the opposing party. See, e.g., Sherrod v. Furniture Center., 769 F. Supp. 1021, (W.D. Tenn. 1991); Aiken v. Business and Industry Health Group, Inc., 885 F. Supp. 1474 (D.Kan. 1995).
Moreover, the ABA itself has recently taken this position:
It is the opinion of the Committee that a lawyer representing a client in a matter adverse to a corporate party that is represented by another lawyer may, without violating Model Rule 4.2, communicate about the subject of the representation with an unrepresented former employee of the corporate party without the consent of the corporation's lawyer.
ABA Committee on Ethics & Professional Responsibility, Formal Opinion 91-359 (1991).
A few courts have read Rule 4.2 as prohibiting ex parte communication with former employees of a corporate party "if there is the possibility of the witnesses' testimony being imputed [to the company]". Public Service Electric & Gas Co. v. Associated Electric & Gas Insurance Services, Ltd., 745 F. Supp. 1037, 1042 (D.N.J. 1990). Such a position effectively precludes ex parte contact with all former employees who may have any information about the events in litigation. The Ninth Circuit has even ruled that ex parte communication with a former employee should be prohibited because such employees "may possess the relevant information needed by corporate counsel to advise the client with respect to actual or potential difficulties. Again, the attorney-client privilege is served by the certainty that conversations between the attorney and client will remain privileged after the employee leaves." In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 658 F.2d 1355, 1361 n.7 (9th Cir. 1981)
In Lang v. Superior Court (East Valley Jeep/Eagle, Inc.), 170 Ariz. 602, 826 P.2d 1228 (1992), the Court refused to follow the ABA's formal opinion because former employees may be persons whose acts or omissions in connection with the matter in litigation might be imputed to the corporate defendant. In Dillon Cos. v. SICO Co., No. 92-1512, 1993 Westlaw 492746, 1993 U.S. Dist. LEXIS 17450, at *11 (E.D. Pa.), the court articulated the following test to determine when Rule 4.2 should be applied to former employees:
A rational approach should be employed whereby the propriety of the ex parte contact is determined by assessing the actual likelihood of disclosure of privileged materials, not a nebulous fear that such disclosure might occur. That assessment would depend upon weighing such factors as the positions of the former employees in relation to the issues in the suit; whether they were privy to communications between the former employer and its counsel concerning the subject matter of the litigation, or otherwise; the nature of the inquiry by opposing counsel; and how much time had elapsed between the end of the employment relationship and the questioning by opposing counsel. When such factors point to the conclusion that there is a substantial risk of disclosure of privileged matters, as opposed to the risk of the adverse party learning information which might be damaging to the former employer's litigation position, then appropriate notice should be given to the former employees concerning the prohibition against disclosing attorney-client confidences of the former employer and, perhaps, the former employer's counsel should be notified prior to any ex parte interview. Any question concerning the appropriateness of the adversary's decision to proceed with ex parte contact with specific former employees can be resolved by determining whether any information gathered by the opponent actually intrudes upon privileged matters. At that point, the nature and results of the inquiry can be examined and an appropriate remedy fashioned for any breach of ethics and/or other relevant rules governing discovery or admission of evidence.
The New Jersey Supreme Court articulated standards of conduct under its state's Profession Rule of Conduct 4.2 which bars ex parte contact with employees, whether current or former, who are part of either:
- the control group, which, for now, we interpret to mean those employees of the organization entrusted with the management of the case or matter in question, [or]
- the employee or employees whose conduct, in and of itself, establishes the organization's liability. The rule also requires that counsel give notice to an organization's attorney that they intend to interview employees in group (2).
In re Opinion 668 of the Advisory Comm. on Professional Ethics, 134 N.J. 294, 303, 633 A.2d 959, 964 (1993).
STRATEGIES FOR PREVENTING A FORMER EMPLOYEE'S TESTIMONY
- Confidentiality Agreements: Requiring employees with access to confidential or litigation-sensitive information to sign confidentiality agreements may bar such employees from testifying regarding such information in the future. A company's practice of having employees sign confidentiality agreements provides evidence that the employee was aware that the company deemed the information confidential and proprietary. For example, in Mangren Research & Dev. Corp. v. National Chem. Co., 87 F.3d 937, 942-43 (7th Cir. 1996) the Court found that trade secrets were protected because efforts were undertaken to maintain secrecy of mold release formula, including having employees sign confidentiality agreements. In Uniroyal Goodrich Tire Co. v. Hudson, 873 F. Supp. 1037, 1044 (E. D. Mich 1994), aff'd, 97 F.3d 1452 (6th Cir. 1996), the court enforced an agreement signed by a former employee of Uniroyal prohibiting him from disclosing or using Uniroyal trade secrets and confidential or proprietary information after he left the company.
As with any contract, confidentiality agreements require consideration to be enforceable. Therefore, it probably is best to require them at the commencement of employment. A company policy requiring every employee to sign a confidentiality agreement before he or she starts work created a presumption that every employee is aware that they may at some time during their employment be entrusted with confidential company information that must never be disclosed. A confidentiality agreement signed at termination as a condition of obtaining the final paycheck may not reflect sufficient consideration.
- Injunctions based on confidentiality agreements: Turncoat employees can be enjoined from working with plaintiff's counsel on the grounds that doing so breaches a valid confidentiality agreement. In Uniroyal Goodrich v. Hudson, for example, the Court granted a permanent injunction against William Hudson, a former Uniroyal employee, from giving expert testimony in product liability actions pending in state Court in Georgia. The company successfully argued that the agreement signed by Mr. Hudson, which prohibited him from disclosing or using Uniroyal trade secrets and confidential or proprietary information, was a valid and enforceable contract, and that Mr. Hudson's testimony would conflict with the secrecy agreement. In effect, Uniroyal satisfied its burden of proof by showing both that an irreparable injury would result if the injunction were not granted and that no other legal remedy was available. Uniroyal, 873 F. Supp. at 1041. The confidentiality agreement successfully prevented a potential turncoat witness from testifying.
In addition, there are common law and statutory prohibitions in many states against the disclosure of confidential business information, and injunctions can be based on such laws. In Ohio, "no employee of another, who in the course and within the scope of his employment receives any confidential matter or information, shall knowingly, without the consent of his employer, furnish or disclose such matter or information to any person not privileged to acquire it."). Ohio Rev. Code § 1333.81. In Illinois, breaches of a confidential relationship or other duty to maintain secrecy may be enjoined. Illinois Trade Secrets Act, 765 ILCS 1065/2(a), (b). A Michigan federal court in Valassis v. Samelson, 143 F.R.D. 118, 124 (E.D. Mich. 1992), noted that individuals who become privy to privileged information during their employment remain precluded from disclosing that information even after they end their employment.
Let us look again at the Baker v. General Motors matter. In the original wrongful discharge suit brought by Ronald Elwell, GM obtained a permanent injunction precluding Elwell, the engineer, from consulting or discussing with or disclosing to any person any of GM's trade secrets, confidential information, or matters of attorney-client work product relating in any manner to the subject matter of any current or future product liability litigation, which Elwell received, had knowledge of, or was entrusted with during his employment with GM. Elwell v. General Motors Corp., No. 91-115946NZ, slip op. (Mich. Cir. Ct. 1992). Elwell was also enjoined from "testifying, without the prior written consent of GM, either upon deposition or at trial, as an expert witness, or as a witness of any kind, and from consulting with attorneys or their agents in any litigation already filed, or to be filed in the future, involving General Motors Corporation as an owner, seller, manufacturer and/or designer of the product(s) in issue." See 118 S.Ct. at 661. In so doing, the Court concluded that GM had met its burden of establishing that:
- it would be irreparably harmed if Elwell disclosed privileged information in his possession;
- GM had no adequate remedy at law; and
- the public interest weighed in favor of granting the permanent injunction. Id.
Of course, such an injunction will only apply to certain information held by the former employee. As seen in Baker, there may be information a former employee has which cannot be protected by a claim that it is confidential, a trade secret, or the subject of the attorney-client privilege.
The prohibition against disclosure of confidential business information is particularly strong and likely to be enforced with respect to those experts who had once worked for one side or the other. The defense should be able to enjoin a former employee who has worked with the defendant's attorneys from consulting and testifying for parties adverse to his or her former employer. In Cordy v. Sherwin-Williams Co., 156 F.R.D. 575 (D.N.J. 1994), an expert who first consulted with plaintiff's counsel was disqualified from testifying for the defendant (and defense counsel was also disqualified from representing the defendant). In Marvin Lumber & Cedar Co. v. Norton Co., 113 F.R.D. 588, 590-91 (D. Minn. 1986), the court granted plaintiff's motion to disqualify an expert witness who had consulted with plaintiff and noted that, inter alia, the expert had consulted with the plaintiff on prior, similar litigation. Similarly, the court in Conforti & Eisele, Inc. v. Division of Bldg. & Construction, 170 N.J. Super. 64, 405 A.2d 487, 492 (1979), found that an engineering firm which had been retained and used as expert by defendant in one phase of litigation was an agent of the defendant's attorney, and enjoined the firm from being used by the plaintiff in another phase.
- Attorney-client privilege: The attorney-client privilege can protect a corporate defendant from the testimony of some former employees. Where a former employee has information that is protected by the corporation's attorney-client privilege, the scope of inquiry is severely limited and effectively bars such employees' testimony as to that information. The privilege covering a communication between a former employee and an organization's counsel "belongs to the organization, and can only be waived by the organization." Cram v. Lamson & Sessions Co., 148 F.R.D. 259, 266 (S.D. Iowa 1993) (quoting Sequa Corp. v. Lititech, Inc., 807 F. Supp. 653, 668 (D. Colo. 1992)). The court, in Breedlove v. Tele-Trip Co., No. 91-C-5702, 1992 Westlaw 202147, at *2 (N.D. Ill.), concluded that no formal order barring communication with former employees who may be privy to privileged conversations or information was necessary because plaintiff's counsel, an officer of the Court, was "of course, barred from exploring these communications or other privileged matters with the witnesses." In Polycast Technology Corp. v. Uniroyal, Inc., supra, 129 F.R.D. at 628, the court observed that a tailored protective order is appropriate where there is a "strong likelihood" that the former employee possesses privileged information.
- The ABA has similarly taken this position: With respect to any unrepresented former employee, of course, the potentially-communicating adversary attorney must be careful not to seek to induce the former employee to violate the privilege attaching to attorney-client communications to the extent that his or her communications as a former employee with his or her former employer's counsel are protected by the privilege (a privilege not belonging to or for the benefit of the former employee, but the former employer). Such an attempt could violate Rule 4.4 (requiring respect for the rights of third persons). ABA Committee on Ethics and Professional Responsibility, Formal Opinion 91-359 (1991).
A corporation faced with a turncoat former employee therefore has the right to aggressively protect privileged information from disclosure, particularly when the employee is playing a role in litigation against the company. In American Motors Corp. v. Huffstutler, 61 Ohio St. 3d 343, 575 N.E.2d 116 (1991), the Ohio Supreme Court, relying on the attorney-client privilege, reinstated a permanent injunction preventing one of AMC's former employees from testifying and consulting with attorneys in product liability litigation involving AMC without AMC's consent or an order of the court. The employee, Rahn Huffstutler, had worked for AMC as an engineer. While employed by AMC, he attended law school and, after graduation, was admitted to the Ohio bar. Huffstutler subsequently became manager of a product-design study group and worked closely with both in-house and private outside counsel on product liability cases. Later, he became a technical specialist, responsible for new vehicle model and production analysis, and thereafter, became AMC's manager of quality services. Huffstutler was terminated by AMC, and soon began marketing himself as an expert witness against AMC. 575 N.E.2d at 119.
In granting the permanent injunction the trial court found that:
Huffstutler was an agent of AMC Jeep's Legal Department and frequently gave legal advice and performed legal analysis; that he served from 1981 to 1982 as an important member of the products liability defense team; that he represented AMC Jeep as counsel in product liability matters and routinely consulted with AMC Jeep's legal staff and retained counsel; that he assisted AMC Jeep's legal staff in retaining expert witnesses and met with experts to prepare strategy for defense; that he recommended outside counsel; that he suggested lines of testimony and cross-examination; and that he gave generously of his engineering judgment and legal training to assist counsel in the preparation of defenses. Id. at 118.
In upholding this injunction, the Ohio Supreme Court viewed Huffstutler, at a minimum, as an agent of AMC's legal counsel and, as such, held him subject to all of the restrictions of the attorney-client privilege and work-product doctrine. Id. at 119. In so doing, the Court also explained that "[t]he attorney-client privilege . . . protects against any dissemination of information obtained in the confidential relationship. Thus, allowing consultation and discussion of privileged information (even without testifying) would effectively emasculate the privilege." Id. at 120-21.
Courts remain divided as to the characterization of former employees in attorney-client privilege inquiries. In Meenach v. General Motors Corp., 891 S.W.2d 398 (Ky. 1995), the Supreme Court of Kentucky refused to enforce a Michigan order granting a permanent injunction against Ronald Elwell from testifying against GM. The Court rejected the defendant corporation's attorney-client privilege argument, in effect, limiting Huffstutler to situations where the employee is an attorney. Meenach, 891 S.W.2d at 401. The Kentucky court reasoned that a blanket injunction against an employee could limit a litigant's access to relevant evidence which is not privileged. Id. at 402, citing United States v. Nixon, 418 U.S. 683 (1974), as disfavoring broad claims of "privilege".
The Baker v. General Motors decision does not reveal that GM attempted to assert the attorney-client privilege to bar Ronald Elwell's testimony. In an earlier case, General Motors Corp. v. Moseley, 213 Ga. App. 875, 447 S.E.2d 302 (1994), the court noted that Ronald Elwell had worked with GM's in-house litigation defense team on other cases involving the sidesaddle fuel tank on GM pickup trucks, but denied that his work on the team was protected by the attorney-client privilege. The court found that "'the defense team's utilization of Elwell's [the engineer's] expertise did not bestow any privilege upon [Elwell's] experience and observations.'" Moseley, 447 S.E. 2d at 308. The court noted that Elwell had not been called by plaintiff as an expert witness but merely to testify about his knowledge of the development of the sidesaddle fuel tank design which he acquired through years of employment with GM. Id.
The right to protect privileged information must also be balanced with the party's right to obtain evidence. Courts have been reluctant to expand this privilege to situations where there is little or no possibility that such a divulgence will occur. It is limited to situations where a threat exists that the employer will be harmed by the turncoat's testimony with regard to either its work product or client information. In Fruehauf Trailer v. Hagelthorn, 208 Mich. App. 447, 528 NW2d 778 (1995), the court noted the defendant's attempts to claim an attorney-client privilege in order to prevent the employee from rendering service to the plaintiffs. Yet it held the claimed privilege to be narrow; and found that the attorney-client privilege "attaches only to confidential communications by the client to its adviser that are made for the purpose of obtaining legal advice." 528 N.W.2d at 780. Furthermore, it extends only to the communication, and not to the underlying facts. Id., at 781.
Finally, employers may take comfort in knowing that a plaintiff's attorney giving consideration to exploitation of the turncoat may be given pause by the risk of violating either Rule 4.2 or 4.4 of the Rules of Professional Conduct and the fallout from such a violation, i.e., disciplinary proceedings, disqualification as counsel, or exclusion of testimony. The message in such circumstances to former employees and plaintiffs' counsel alike should be that the privilege and all communications that are encompassed by it will be maintained and defended by the corporation by whatever means necessary.
- Quashing third-party subpoenas: Even when a plaintiff has identified a pertinent former employee through discovery or investigation, that former employee may not be interested in being a turncoat. This has not deterred plaintiffs' counsel on occasion from noticing the deposition of such an individual and having a subpoena served to enforce the former employee's presence. The plaintiff's attorney may not be seeking to elicit new information to help his case, but may be attempting to put words into the reluctant witness's mouth, using leading questions and documents already in his possession, by means fair or foul.
An employer can move to quash the subpoena of a former employee if it "requires disclosure of privileged or other protected matter and that no exception or waiver applies. . . " Rule 45(c)(3)(A)(iii) of the Federal Rules of Civil Procedure. The same defense can be used if the subpoena "requires disclosure of a trade secret or other confidential research, development, or commercial information. . . ." Fed. R. Civ. P. 45(c)(3)(B)(i). A defendant corporation may further protect its interests by furnishing counsel to the former employee in such a situation.
The defendant company itself should have standing to seek, on behalf of a former employee, an order to protect the company's rights and privileges with respect to the information sought by way of deposition pursuant to Federal Rule 45. (The adverse party may move to quash a nonparty subpoena "if that party has its own rights to assert in suppressing the subpoena, as where the subpoena seeks materials that would fall under one of the privileged categories (involving the party's privilege, of course)." Siegel, "Federal Subpoena Practice," 139 F.R.D. 197, 233 (1992) (also at 28 U.S.C.A., Rules 38 to 50, at p. 391 (West 1992)).
TRIAL STRATEGIES
Despite every precaution, turncoat employees will show up as witnesses at trial. You can move to disqualify such a witness on the grounds discussed above. If that is unsuccessful you must consider what strategy you will use to cross-examine the former employee.
A motion to disqualify can be based on the grounds that the information is the subject of a confidentiality agreement, is trade secret or protected by the attorney-client privilege. All of these grounds are discussed above. A motion to disqualify turncoat employees is a tool to use at trial to prevent that employee from testifying. In Marvin Lumber & Cedar Co. v. Norton Co., supra, involving a product defect claim by a window manufacturer against a window sealant manufacturer, the plaintiff successfully moved to disqualify the defendant's expert on the ground that the expert had previously been engaged as a consulting engineer for the plaintiff. In granting this motion, the Court noted that the matters involved in the pending litigation were "substantially related" to the matters worked on by the expert, in which he obtained a "basic understanding of. . . modus operandi, patterns of operation, decision-making process and the like." 113 F.R.D. at 591. In some jurisdictions, a motion in limine may be the preferred vehicle to disqualify a former employee from testifying at trial, or at least to bar testimony including privileged or other confidential information. See Dillon Companies v. SICO, supra.
In a particularly egregious case, it may also be possible to move to disqualify the attorney, firm, or employee of the firm that improperly obtains privileged information. In Williams v. Trans World Airlines, Inc., 588 F. Supp. 1037 (W.D. Mo. 1984), involving a former TWA employee who had assisted attorneys in investigating employment discrimination charges, provides an example of a plaintiff's law firm disqualified for using the former employee.
In disqualifying the former employee, the court wrote (id. at 1044):
Non-lawyer personnel are widely used by lawyers to assist in rendering legal services. Paralegals, investigators, and secretaries must have ready access to client confidences in order to assist their attorney employers. If information provided by a client in confidence to an attorney for the purpose of obtaining legal advice could be used against the client because a member of the attorney's non-lawyer support staff left the attorney's employment, it would have a devastating effect both on the free flow of information between client and attorney and on the cost and quality of the legal services rendered by an attorney. Every departing secretary, investigator, or paralegal would be free to impart confidential information to the opposition without effective restraint. The only practical way to assure that this will not happen and to preserve public trust in the scrupulous administration of justice is to subject these "agents" of lawyers to the same disability lawyers have when they leave legal employment with confidential information.
In Rentclub, Inc. v. Transamerica Rental Finance Corp., 811 F. Supp. 651 (M.D. Fla. 1992), the Court disqualified an attorney who hired the former CFO of the defendant as a "trial consultant" because the former executive was privy to relevant confidential and proprietary information. Although the court in University Patents, Inc. v. Kligman, 737 F. Supp. 325, 330 (E.D. Pa. 1990), denied plaintiff's motion for disqualification of defendant's attorneys who had conducted ex parte interviews with plaintiffs' employees, it precluded the use of the information obtained from the employees:
- who were officers, directors or managers;
- whose acts or omissions could bind or impute liability to the plaintiffs; and
- whose statements could be used as admissions against the plaintiffs.
THE TURNCOAT WITNESS AT TRIAL
There always will be cases in which, for whatever reason, the turncoat will appear as a witness and will be permitted great latitude by the Court to testify. The gravamen of the testimony of such a witness is generally not the merits of the case, i.e., whether a product defect caused the plaintiff's injuries. Rather the purpose of such testimony is the establishment of the defendant as a corporate rogue routinely making decisions exalting profits over safety, and systematically destroying or concealing unfavorable documents.
Development of strategy for dealing with the turncoat employee on cross-examination must begin with the understanding that every case and every witness is different. Although each defense lawyer has a personal method and style, and while style and strategy are subjective, there are a few observations which might be helpful. Consideration of the background of the ex-employee's feelings of antagonism may be helpful in developing an approach for cross-examination. The antagonism may not be universal. The employee may have fond relationships with former co-workers, even supervisors. With some individuals, bitter feelings may be overridden by appealing to the individual's sense of integrity or professionalism. Defense counsel should explore such opportunities which may induce the ex-employee to soften the effect of anticipated adverse testimony. Once the turncoat's role has been established, a searing and exhaustive deposition should be taken as promptly as possible. Limitations of the turncoat's knowledge and role in past decisions and events can be identified. Concessions may also be obtained, including the turncoat's observations of responsible conduct on the part of the corporation, which might undercut the theme of the rogue corporation.
As noted above, the turncoat employee is invariably, although not necessarily universally, hostile. If possible this hostility should be used to attack the witness's credibility. Merely establishing that the witness bears animosity against the former employer is seldom enough because the jury may view the animosity as justified. Unless the circumstances giving rise to the animosity weigh heavily against the former employee, it is probably best to establish the existence of hostility, and leave its whys and wherefores alone. The cross-examination of the turncoat, once hostility has been established, can set the stage for affirmative evidence presented by the corporate defendant in its own case to refute the substance of the turncoat's claims.
The ultimate goal should be to demonstrate that the subject ex-employee is a bitter individual who will exaggerate his or her importance, fill in the great gaps of his first-hand knowledge with raw speculation, and take great liberties with the truth in seeking revenge on his former employer. This may not always be possible, and it never will be easy to accomplish, but it just might make the plaintiff's attorney regret that he ever recruited the turncoat employee.
CONCLUSION
The reality that some of a company's employees will become turncoat witnesses cannot be ignored. Companies can identify employees who have access to confidential and important information and attempt to secure that information from disclosure at the outset of the employment relationship. When a claim is made, former employees whose knowledge may be of interest to plaintiff's counsel should be identified, possible turncoat witnesses must be anticipated, and steps should be taken to minimize the turncoat's impact upon the litigation.
*article courtesy of Paul D. Williams, partner, and Mary B. Cardin, associate, of Day, Berry & Howard in Hartford, Connecticut. The authors thank Philip S. Walker, a partner at Day, Berry & Howard, for his contributions to the article.