Because an in-house attorney who met with a management employee about a sexual harassment allegation did not make clear that he was not representing that employee, he could not later disclose the substance of the meeting to company management or outside counsel, the Rhode Island Supreme Court Ethics Advisory Panel has ruled.

The ruling “highlights the importance of an organization’s counsel’s responsibility to clarify his or her role before counsel takes on representation of both the organization and its constituent in the same matter,” the panel stated.

“Counsel, at the outset, has the obligation to make clear who his or her client is, to determine and explain potential adverse interests between the constituent and the organization, and to advise the constituent that in light of potential adverse interests, the constituent may wish to obtain independent representation.”

Because that did not occur in the case at issue, “[t]he manager is the inquiring attorney’s former client [and] Rule 1.6 prohibits [him or her] from revealing his/her notes, the manager’s timeline, or any information which the inquiring attorney generated or acquired during meetings with his/her former client.”

The three-page decision is Rhode Island Supreme Court Ethics Advisory Panel Opinion No. 2012-03.

Managing expectations

The decision illustrates how in-house attorneys can find themselves caught between conflicting interests.

“When a general counsel comes into the room, managers tend to think that he’s there to represent them, but that’s seldom the case,” said Wayne M. Kezirian, senior vice president and general counsel at Johnson & Wales University.

The lesson for in-house counsel, he said, is “to be careful, disclose upfront and disclose in writing.”

Providence employment attorney Gerald C. DeMaria went a step farther, recommending that companies provide separate outside counsel for employees whenever the company is itself a party to potential litigation.

Otherwise, if the attorney later determines that the employee was acting outside the scope of his authority, there is a conflict of interest and the attorney will have to obtain the employee’s written permission to use any information he has obtained to better the company’s position, DeMaria said.

Conversely, he said, the lawyer would be compelled to share information discovered during common representation that helped an employee, even if it hurt the company’s case.

Sexual harassment complaint

On the first day on the job as in-house counsel for a number of affiliated companies, the attorney in the case met alone with a manager in a conference room. The manager, an assistant manager and the company were named in a sexual harassment complaint that an employee had filed with the Rhode Island Commission for Human Rights.

The predecessor to the attorney entered an appearance before the commission to represent the manager, assistant manager and company. The manager and assistant manager no longer work at the company for reasons unrelated to the sexual harassment claim.

The attorney stated that at the time he met with the manager, he believed both the company and the manager were his clients. The attorney asked several questions, took a single page of handwritten notes and received a timeline of events from the manager relevant to the sexual harassment matter.

The company subsequently retained outside counsel to represent it in the sexual harassment matter and that lawyer now wishes to review the notes and timeline in the possession of in-house counsel.

Expectation of loyalty

The panel held that Rule 1.6 of the Rules of Professional Conduct prohibits the attorney from disclosing the notes, timeline or any other information that he generated or acquired during his meeting with the manager, unless he obtains the manager’s consent.

The opinion focused on Rule 1.13’s requirement that “[i]n dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing.”

The manager “had good reason to believe that at the time of the meeting with the inquiring attorney, the inquiring attorney was his attorney for the sexual harassment claim,” the panel found. “With that belief came a reasonable expectation of loyalty and confidentiality.”