6.9 SEPARATE AND JOINT REPRESENTATIONS OF EMPLOYEES
6.901 Introduction. Because lawyers representing corporations must obviously interact with human beings, it seems inevitable that those human beings might claim that the corporation's lawyer represents them.
In some situations, lawyers representing corporations intentionally establish a separate representation of a corporate employee, such as a representation of the employee involving a traffic ticket or a house purchase. Such a situation implicates ethics principles more than privilege issues. Although it is theoretically possible for a lawyer to accidentally create such a relationship, that seems very unlikely in the corporate setting.
Lawyers representing a corporation might also intentionally create a joint representation of a corporation and an employee on a matter relating to the corporation in some way. Such joint representations implicate both ethics and privilege principles. Lawyers who are not careful to follow the Upjohn warnings corporation's 'death,'" and concluding that "[t]he attorney-client privilege cannot be applied to a defunct corporation.").
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discussed below might find that they have accidentally created a joint representation of the corporation and a corporate employee. That carries very dangerous ethics and privilege implications.
In the absence of some explicit creation of such a joint representation or a disclaimer of such a joint representation, the law has developed a doctrine (called the Bevill doctrine) to determine if a corporate employee can claim such a representation by the same lawyer representing the corporation.
6.902 Analyzing Privilege Protection for Employee Communications. Although a joint representation of a corporation and an individual employee assures privilege protection, it is not necessary for the privilege to protect communications between the corporation's lawyer and the employee. In 2012, the Central District of California put it bluntly: "Corporate counsel does not need to represent the corporation's employees in their individual capacity for the privilege to apply." 130 As explained elsewhere in this chapter, nearly every court automatically protects communications between a corporation's lawyer and corporate affiliates' employees as long as the communications otherwise meet the privilege standards.
6.903 Intentional Separate Representations in Non-Corporate Matters. Lawyers who represent corporations sometimes intentionally create a separate representation of a corporate employee. Such a joint representation does not have any dramatic effect on either the corporation's or the employee's attorney-client privilege. The lawyer must maintain the privilege protecting communications with the employee on such a separate matter and must of course do likewise for any communications relating to the lawyer's representation of the corporation.
Such separate representations clearly carry ethics implications. A lawyer representing an employee on a traffic ticket matter has an attorney-client relationship with the employee, which precludes the lawyer from adversity to the employee even on unrelated matters (absent consent). This is one reason why wise lawyers try to avoid representing the employees of companies they also represent even on unrelated matters. For instance, a lawyer representing a corporate vice president in buying a house cannot (absent consent) advise the company's board about its right to fire that vice president. Consent would normally be unavailable as a practical matter because the board would not permit the lawyer to make the sort of disclosure necessary to obtain a valid consent. A lawyer might find it awkward to arrange for a prospective consent when beginning to represent the employee in his or her house purchase because it might send an unfortunate signal that such adversity might develop or be a "turn off to the lawyer's important contact and business generator in the corporate hierarchy.
6.904 Intentional Separate Representations in Corporate Matters. When a law firm explicitly represents both the company and an employee, it might be necessary to determine if the representations are joint or separate. As explained above, that analysis is fairly easy if the law firm represents the executive
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in some non-corporate matters such as a traffic ticket or a house purchase. However, law firms might try to "thread the needle" by claiming that they represented a company and an executive on a company-related matter but that their representations were separate rather than joint. This is nearly an impossible argument to successfully make absent very clear retainer letters.
A 2009 decision highlights the risks that a lawyer runs when intentionally entering into separate representations of both a company and one of its employees, who was under investigation for wrongdoing. In that case, a well-known California law firm undertook what the court called "three separate, but inextricably related, representations" of Broadcom and its CFO. 131 The law firm represented Broadcom in connection with the company's internal investigation of stock option issues, and the CFO in two lawsuits brought by shareholders alleging wrongdoing in connection with stock options. The law firm interviewed the CFO and then disclosed information it learned during the interview to the United States Attorney's Office, the SEC, and Broadcom's auditor. When the government pursued criminal charges against the CFO, he sought to suppress the statements he had made to the law firm during the interview, and the trial court granted his motion. Among other things, the court noted that the law firm had not advised the CFO before the interview that the firm was wearing only its "Broadcom" hat during the interview and that it might disclose to third parties what it learned from the CFO. The court explained that "whether an Upjohn warning was or was not given is irrelevant" because the firm clearly represented the CFO. 132 As the court put it, "[a]n oral warning to a current client that no attorney-client relationship exists is nonsensical at best—and unethical at worst." 133 In addition to suppressing the evidence, the court referred the law firm to the State Bar for "appropriate discipline" based on the firm's ethical misconduct that "[t]he Court simply cannot overlook." 134
The Ninth Circuit reversed the district court's holding, but lawyers should not breathe easy. 135 The Ninth Circuit (i) found that the law firm had represented both Broadcom and its former CFO Ruehle in connection with possible option backdating; (ii) agreed with Ruehle that the law firm had not provided the proper Upjohn warning to Ruehle, despite the lawyers' contrary claims (pointedly noting that the [law firm] lawyers "took no notes nor memorialized their conversation on this issue in writing"); 136 (iii) held that the district court had improperly applied California law rather than federal law to the privilege question (meaning that the district court might have been upheld if it had made the same findings under the federal standard); (iv) noted that Ruehle "was no ordinary Broadcom employee" because he knew that the law firm was sharing information with Broadcom's auditor Ernst & Young (a fact that will not be present in most situations involving law firms
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representing both corporations and executives); 137 (v) labeled as "troubling" the law firm's "allegedly unprofessional conduct"; 138 and (vi) emphasized that "our holding today should not be interpreted as carte blanche approval" of the law firm lawyers' testimony about their communications with Ruehle (implying that the law firm's proffer to...
