An Ethical Rabbit Hole: Model Rule 4.4, Intentional Interference With Former Employee Non-disclosure Agreements, and the Threat of Disqualification, Part I

Publication year2021

89 Nebraska L. Rev.923. An Ethical Rabbit Hole: Model Rule 4.4, Intentional Interference with Former Employee Non-Disclosure Agreements, and the Threat of Disqualification, Part I


Maura Strassberg(fn*)

An Ethical Rabbit Hole: Model Rule 4.4, Intentional Interference with Former Employee Non-Disclosure Agreements, and the Threat of Disqualification, Part I


I. Introduction.......................................... 923

II. Liability in Tort....................................... 932
A. A Contract ........................................ 932
B. Knowledge of the Contract......................... 935
1. What Counts as Sufficient Knowledge.......... 938
C. Inducing or Otherwise Causing the Third Party Not to Perform the Contract ........................... 953
D. Intentionally Interfere ............................. 958
1. Incidental Intent ..............................959
2. Substantial Certainty With Actual and Less-than-Actual Knowledge........................960
E. Improper..........................................967
1. Privileged Conduct ............................ 968
2. Not Improper .................................. 983

III. Conclusion ............................................ 995


Can lawyers be disqualified from representation simply because they have had informal conversations with former employees with non-disclosure agreements? A few years ago,(fn1) lead counsel for plaintiffs in a major class-action suit faced just such a threat. A former


employee of the defendant corporation contacted a journalist writing about the case with important new information about wrongful acts taken by the corporation. The former employee had not previously been identified during several years of discovery. The journalist passed the employee's name to the plaintiffs' counsel, and when counsel spoke with the former employee, startling new information came to light. A subsequent request for documents related to the disclosure revealed to the defendant that there was an undisclosed employee source of information about the corporation, and the defendant demanded the name of the former employee. Upon discovering that the former employee had signed a non-disclosure agreement, the defendant claimed that the information in question was confidential business information, that its disclosure outside of formal discovery violated the non-disclosure agreement, and that counsel's conduct was unethical. In particular, counsel was alleged to have violated Rule 4.4 of the Model Rule of Professional Conduct,(fn2) which prohibits using a method of obtaining evidence that violates the rights of third parties,(fn3)by interfering with the non-disclosure contract. This claim of unethical conduct then formed the basis for a motion to disqualify counsel from representation in this major class-action suit, a case that had been pursued on a contingency basis for several years.

While vigorously opposing the disqualification on the merits at considerable expense, counsel offered not to use the evidence revealed by the former employee in order to avoid any suggestion of impropriety. There was no disqualification in the end, possibly because counsel had asked about the possibility of a non-disclosure agreement and the former employee had forgotten that any such agreement had been signed, but it was quite a scare. What if counsel had not asked or the employee had remembered? Would counsel have been disqualified? What if the evidence given up had been central to the case?

With employer use of non-disclosure agreements proliferating, the threat of an ethics violation, loss of evidence, and disqualification could well be enough to discourage lawyers from engaging in informal discovery with any former employees, some because they may be known to have signed a non-disclosure agreement, others because they merely might have signed such an agreement. However, is there really any possibility that it is unethical to informally communicate with a former employee with a non-disclosure agreement, known or unknown, and could this possibly justify disqualification anyway? Since Model Rule 4.4 only makes conduct that violates the rights of


third parties unethical, the legitimacy of such conduct will depend on whether it violates the substantive law of contract and tort.

Substantive law often plays an important role in defining conduct that conforms to or violates the Model Rules of Professional Conduct.(fn4) Criminal law and the law of fraud are particularly important for setting the bounds of ethical conduct.(fn5) Where certain non-criminal conduct associated with the practice of law may in fact be "prohibited by law," the Model Rules both alert lawyers to this possibility and make such conduct unethical where illegal.(fn6) Conversely, where statutory law expressly permits conduct that otherwise falls within broad descriptions of unethical conduct, the Model Rules may make an exception to the ethical prohibition by referencing authorization by "other law."(fn7) Lastly, the Model Rules also require lawyers to determine their


ethical obligations in the context of the law entire, both statutory and common, such as when it broadly forbids lawyers from representation of clients that would result in violation of other law,(fn8) or allows a lawyer to reveal client information when the lawyer reasonably believes disclosure is necessary to comply with other law.(fn9)

Although it may seem unnecessary to make unethical that which is already illegal, there are good reasons to "piggyback" ethical standards on at least some legal standards. First and foremost, our effectiveness as officers of the court, with a primary charge of furthering respect for and conformity to the law, requires that we ourselves respect and conform to the law, particularly as it applies to our conduct in the practice of law itself.(fn10) Second, referencing standards that have been thoroughly worked out in the legal context, such as the criminal law and the law of fraud, allows the Model Rules to take advantage of this work without complicating the Model Rules themselves. Third, it is generally not unreasonable to expect lawyers to have the skill and


knowledge required to determine the contours of applicable substantive law; after all, this is precisely what they are expected to do for clients. Finally, making such illegal conduct unethical ensures that the bar can discipline lawyers for conduct it wants to deter, even if such lawyers have managed to avoid judgment or liability due to lack of prosecution or suit.

Sometimes, however, determining the legality of "unethical-if-ille-gal" conduct will require a very complex analysis that may ultimately produce a conclusion that the legality of the conduct is unpredictable. In such situations, the purposes otherwise justifying legal referencing by the ethical rules are not served. When the law is unclear about what is and is not illegal, it may not be necessary for lawyers to avoid such conduct in order to maintain and promote respect for the law. Indeed, the reference to substantive law in such an ethical rule does not necessarily reflect agreement that the conduct in question is ethically problematic. In addition, what is otherwise a useful shortcut for the bar fails to operate as such. Both lawyers and disciplinary entities will be forced to enter an "ethical rabbit hole"-a long and tangled detour into the law producing an uncertain answer. If the possible ethical violation can be the basis of a motion to disqualify, then clients and the courts will also suffer the effects of the ethical rabbit hole, as such motions are easily made, highly strategic,(fn11) expensive to de-fend,(fn12) and ultimately require a judge to predict how a disciplinary panel would interpret this uncertain law.

Model Rule 4.4 contains just such an ethical rabbit hole. The relevant provision states, "In representing a client, a lawyer shall not ... use methods of obtaining evidence that violate the legal rights of [a third person]."(fn13) To the extent that the Rule forbids criminal methods of obtaining evidence, the prohibition is clear enough: methods of obtaining evidence such as burglary, extortion, physical compulsion, and illegal phone recordings(fn14) are forbidden to lawyers. Similarly, to the


extent the Rule prohibits methods of obtaining evidence which involve conduct prohibited by civil statutes or court rules, the reach of Rule 4.4 is not difficult to determine, as such statutes are likely to be quite narrow.(fn15) However, the Rule also appears to extend its prohibition to methods of obtaining evidence that involve tortious conduct. While this may not be problematic for a good deal of tortious conduct, if a lawyer's conduct falls within a tort whose contours are still evolving, it may be quite difficult to predict whether the conduct will be ethical.

The focus of this Article is on the possibility that a lawyer informally seeking evidence about an employer from a former employee will run afoul of the still-evolving tort of intentional interference with contract. Now that it is clear that the ethical rules allow attorneys to contact former employees without notice to, or the consent or presence of, counsel for their former employer,(fn16) lawyers can use informal methods of investigation to take advantage of the very useful information former employees often have...

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