Ethical Issues in Employment Law: When Is (and Isn’t) Joint Representation Permitted?
Article by Douglas Hart, Esq.
From inadvertently disclosing electronic records in discovery to dealing with third-party payment issues (i.e., when an employer agrees to cover an employee’s legal fees), various ethical issues can arise in the employment law context. However, perhaps no issue is more complex—or more common—than the issue of joint representation.
Ethical Considerations for Joint Representation of Employers and Employees
Under the American Bar Association’s Model Rules of Professional Conduct, attorneys are permitted to accept joint representation in various scenarios. In fact, under Model Rule 1.7, the default rule is that in the absence of a conflict resulting in a “material limitation” of an attorney’s ability to provide zealous advocacy, joint representation is permitted. Model Rule 1.7(b) even allows joint representation in the presence of a “material limitation” conflict if: (i) both clients provide informed consent; (ii) the clients are not asserting claims against one another in litigation; and, (iii) the lawyer “reasonably believes” that he or she “will be able to provide competent and diligent representation to each affected client.”
Let’s consider a common scenario: An employee sues his or her employer and supervisor for sexual harassment. Under state law, the employer has an obligation to defend, or at least indemnify, the supervisor (state laws vary on this issue). Is joint representation of the employer and supervisor appropriate?
As with most legal questions, the answer is, “It depends.”
In this type of scenario, joint representation has the potential to provide several benefits. The most obvious benefit is cost. This is true not only in terms of the cost of defense but also in terms of the risk of an employee’s defense being ineffective and leading to employer liability.
There are also practical efficiencies to be gained from the joint representation. For example, the employer’s representatives will generally be more familiar with the company’s policies and procedures and have better access to other employees who may serve as witnesses. If the case proceeds to trial, joint representation can also signal to the jury that the employer and supervisor are aligned, and this on its own can sidestep a number of potential challenges. Joint representation also serves to help ensure the supervisor’s cooperation and loyalty—and this can both streamline the employer’s defense and avoid the risk of cross-claims.
But, there are several potential drawbacks as well. Most significantly, if the supervisor reveals facts suggesting that a company executive condoned harassing conduct, an attorney providing joint representation may not be able to disclose this information to the employer without violating the attorney’s duties to the supervisor. As a result, the attorney may have no choice but to withdraw his or her representation of the employer. Conversely, if the employer’s best defense is to stand behind its anti-harassment policy and its reasonable efforts to prevent harassment (known as a Faragher/Ellerth defense), then there may be no practical way to provide effective joint representation.
Identifying, Avoiding, and Addressing Conflicts in Employer-Employee Joint Representation
Given these considerations, when evaluating the possible joint representation of an employer and employee in employment-related litigation, an attorney must make an informed decision in light of the particular facts at hand. In most cases, this begins with conducting an initial investigation into the plaintiff’s allegations. The attorney will want to interview the employee who is being sued as well as any other company employees who may have relevant factual information, in addition to reviewing any relevant documentation that may be available.
Importantly, unless it is clear from the outset that no conflict exists, the attorney should make clear that he or she is representing the employer at this stage. If this point is not clearly made, statements made by the employee/co-defendant may be subject to the attorney-client privilege. The attorney should also emphasize that if the employee reveals any wrongdoing, the attorney may have to disclose this to the employer—and the employer may have to take corrective action in turn.
If the decision is made to move forward with joint representation, then both clients should sign engagement agreements that clearly outline the nature of the representation, the consequences of any conflicts that may arise, and their consent to the representation. Each client’s engagement agreement should also indicate that the attorney may have to withdraw in the event of a conflict, address financial responsibility, and include all other appropriate terms.