Thinking Ethics: the Risky Business of Jointly Representing a Co. and Its Constituents

• Publication year: 2014
• Pages: 12
• Citation: Vol. 83 No. 3 Pg. 12

Thinking Ethics: The Risky Business of Jointly Representing A Company and Its Constituents No. 83 J. Kan. Bar Assn 3, 12 (2014) Kansas Bar Journal March, 2014

By Mark M. Iba

Many lawyers, especially in-house counsel, find themselves jointly representing a corporation and one or more of its directors, officers, employees, or other constituents. Before taking on this type of joint representation, it is critical to identify and deal with any potential conflicts of interest. A recent case in California highlights the problems lawyers may experience when they represent both a corporation and its employee without sufficiently recognizing potential conflicts of interest.

In Yanez v. Plummer, 221 Cal. App. 4th 180, 164 Cal. Rptr. 3d 309 (Cal. App. 2013), a former Union Pacific machinist sued one of the company's in-house lawyers for legal malpractice, breach of fiduciary duty, and fraud. Mr. Yanez was a witness concerning an injury that a co-worker suffered from a fall while working in the machine shop. Following the accident, Yanez provided two inconsistent statements about the accident. In the first, he said he was outside when his colleague slipped and fell; in the second, he said he saw his co-worker slip and fall. After the injured worker brought a FELA claim, Yanez was deposed about his statements and the conditions of the machine shop.

During a meeting with the company's in-house counsel to prepare for his deposition, Yanez expressed concern that his testimony might be unfavorable to the company and asked who would protect him at the deposition. The lawyer responded that he would be his attorney at the deposition and told him that his job would not be affected as long as he told the truth at the deposition. According to Yanez, the lawyer did not advise him about any potential conflict of interest between his interests and those of the company. He also claimed that the lawyer failed to explore with him the discrepancy between the two witness statements he had given.

At the deposition, the injured worker's counsel elicited from Yanez that he had not actually witnessed the accident. On cross examination, the company's lawyer, representing both Yanez and the company, had Yanez identify the second witness statement in which he erroneously said he had actually seen the accident. The lawyer did not examine Yanez about the first statement and did not give Yanez an opportunity to explain the discrepancy between the second statement and his...