Ex parte contacts with employees: Rules not always clear-cut

Your company is sued for sexual harassment and the plaintiff’s attorney wants to interview some of your employees.

In addition to in-house counsel, the company has engaged outside counsel to litigate the case, of which the plaintiff’s attorney is aware. Can the company prevent the plaintiff’s attorney from having ex parte communications with its employees?

The answer is not so clear-cut. It depends on such variables as whether the intended witnesses are current or former employees, whether the witnesses were in a position of responsibility so that they could bind the company with their testimony, and whether the case is being heard in federal or state court.

The result has been quite a bit of confusion on both sides of this issue. It is crucial, therefore, for corporate counsel to be aware of their state’s rules governing ex parte contacts.

State Rules

Virginia Rule of Professional Conduct 4.2 generally prohibits a lawyer from communicating with a person the lawyer knows to be represented by another lawyer in the matter without the consent of the other lawyer.

This rule is fairly easy to apply in the case of individual parties, since a person either does or does not have an attorney in a case. Obviously, the more difficult issue is in the case of corporate parties, since corporations are made up of any number of individuals with varying degrees of corporate responsibility.

Comment 4 to Virginia RPC 4.2 states that in the case of a company, the prohibition on ex parte communications extends to “control group” employees, or persons who may be regarded as the “alter ego” of the company.

But what exactly do these terms mean?

As with many other states, courts in Virginia have struggled for a uniform approach to defining “control group” or “alter ego” employees. Most recently in a nursing home medical malpractice case a circuit judge in Lancaster County ruled that the plaintiff’s attorney could not talk to any current employees of the nursing home – even those employees the court found to be outside of the control group.

Another issue confronting corporate counsel is whether the prohibition on ex parte contacts extends to former employees. Virginia RPC 4.2 expressly states that the prohibition on ex parte communications does not apply to a company’s former employees. Yet, some federal courts in Virginia have refused to allow ex parte communications with former employees.

The most often cited case for this is Armsey v. Medshares Management, in which a federal judge in Abingdon prohibited ex parte discussions with former employees because the plaintiff’s purpose was to impute liability to the defendant through the former employee’s statements.

A survey of neighboring states reveals much of the same confusion regarding the propriety of ex parte contacts as in Virginia.

For instance, the Maryland Rules of Professional Conduct, as in Virginia, seem to allow ex parte communications with former employees of a corporation.

However, in Zachair Ltd v. Driggs, a federal district judge ruled the plaintiff’s attorney could not interview the defendant’s former general counsel. The judge reasoned that although the general counsel was no longer employed by the company, he had been exposed to confidential information in his position and passing that along to plaintiff’s counsel through an ex parte conversation would greatly prejudice the company in the case.

What’s a company to do?

Given this lack of controlling precedent regarding ex parte communications, what is a company to do when faced with this situation? Perhaps the best advice is to be proactive, since once these ex parte discussions take place with an opposing counsel, whether permitted under the Rules or not, the information is out there and the damage is hard to undo.

With respect to current employees, companies should have an express policy requiring employees to immediately notify in-house counsel or other senior management if they are contacted by an opposing counsel. At least this way you can challenge the attempted witness interview with the court before it actually takes place.

It is much more difficult, obviously, to exercise this same level of control over former employees. One suggestion is to include a provision in your company’s severance agreement requiring, as a condition of the severance payment, that the departing employee provide immediate notice to the company if he or she is contacted by an attorney seeking information on the company.

While you may not ultimately be able to prohibit the communication with the attorney, at least the company will know about it before it occurs and take any needed steps to protect itself.