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It’s not a role he sought, but Paul O’Brien has unintentionally become a poster boy for some of the hottest topics currently bedeviling in-house lawyers. What should a general counsel do if he learns about possible wrongdoing at his company? What are his options if he reports the fraud, but no one responds? What recourse does he have if he quits his post? And if he sues the company, can he reveal privileged client information to make his case? O’Brien, the former GC at Connecticut-based Stolt-Nielsen Transportation Group Ltd., has recently become familiar with these questions. The 45-year-old lawyer says that in February 2002 he told his superiors about possible criminal activity at SNTG, a global chemical-shipping firm. But after no one acted on his reports, O’Brien says he felt he couldn’t stay on the job for ethical reasons. Shortly afterward he filed a wrongful termination suit against the company. This past June a Connecticut state judge declined O’Brien’s request for a pretrial ruling that would allow him to reveal confidential client information to make his case. Judge Taggart Adams wrote that it was too early to decide the issue. However, he gave O’Brien two other significant victories. The judge rejected an SNTG motion to strike O’Brien’s entire complaint in June, and in August rebuffed a subsequent company motion to halt discovery. In his June ruling, Judge Adams wrote that there was no basis “for denying an employee-attorney the right available to other employees to sue for wrongful discharge when the suit is premised on protecting a well-defined public interest.” Heartened by the judge’s ruling, O’Brien says, “The discovery is going forward, and I believe the trial will too.” SNTG declined repeated requests for comment about the suit. But in an amended annual report filed with the Securities and Exchange Commission in June, the company said, “We intend to vigorously defend ourselves against [O'Brien's] lawsuit.” The Feds Get Curious But O’Brien’s case isn’t all SNTG has to worry about. Prosecutors in the U.S. attorney’s office in Philadelphia called the ex�GC to testify before a federal grand jury in late September. The feds are looking into allegations that SNTG fixed prices with a competitor and engaged in prohibited trade with Iran. Prosecutors declined to talk about their probe. But according to sources familiar with the case, the government wants to hear O’Brien’s testimony so that it can decide whether to continue granting SNTG immunity from prosecution. The feds have already revoked that protection for former SNTG managing director Richard Wingfield. In a complaint filed in June, the government charges that Wingfield “[conspired] to suppress and eliminate competition by allocating customers, fixing prices, and rigging bids for parcel tanker shipping.” Wingfield has since been suspended by SNTG. He has yet to enter a plea, according to his attorney, Allen Black of Philadelphia’s Fine, Kaplan and Black. SNTG declined to comment about the federal probe. But in its June SEC filing the company noted, “We are the subject of investigations by U.S. and European antitrust authorities for which we have been granted conditional immunity. We may suffer fines and other penalties if we cannot satisfy the conditions of our immunity or if other regulators bring legal proceedings against us.” “Criminally Liable” If He’d Stayed SNTG’s problems go back a few years According to his complaint, O’Brien told unspecified superiors about suspected wrongdoing at the company, but they failed to respond. (In an interview, he says that he reported to Wingfield.) The GC resigned in March 2002 because he would have been “criminally liable,” he says, if he had stayed on the job. Filed in June 2002, O’Brien’s suit contains one count of wrongful discharge and one count of breach of contract. The ex-GC, who says he earned a base salary of $210,000, is seeking compensatory damages for past and future lost pay, as well as unspecified punitive damages. While his first two counts target SNTG, O’Brien has also lobbed a third count of tortious interference against Samuel Cooperman, the company’s former chairman of the board. O’Brien claims that Cooperman “caused SNTG to refuse to investigate or cease its ongoing illegal conduct in order to prevent exposure of his own wrongdoing and his potential criminal prosecution.” Stolt-Nielsen S.A., the London-based parent company of SNTG, has since replaced Cooperman as head of its American subsidiary, but he remains employed by the company. Cooperman’s attorney declined to comment. O’Brien’s original suit also contained two counts dealing with attorney-client privilege. One sought an injunction that, in effect, would have allowed the ex�GC to talk with prosecutors about any possible crimes at SNTG. The other asked for a declaratory judgment before the case began that would allow O’Brien to divulge confidential client information in court. Judge Adams struck both privilege counts in June, explaining that it remains to be seen whether O’Brien’s requests are necessary. SNTG claims that O’Brien cannot bring his suit because he would have to violate privilege in order to establish it. Arguing otherwise, O’Brien says that he can make his case even if he can’t introduce confidential material. Because he also served as senior vice president of projects and a member of SNTG’s board of directors, O’Brien says he has business knowledge of the company’s actions that fell outside his duties as GC. Room For More Precedent Only a few courts have addressed privilege in the context of an in-house attorney’s wrongful discharge suit. A 1991 decision in Illinois, which held that confidentiality is always inviolate, was one of the first rulings on the issue. But this past August the Utah Supreme Court ruled that two former in-house attorneys for State Farm Insurance Companies may disclose privileged communications “as reasonably necessary” to establish a claim in their wrongful discharge suit. The court specifically rejected the Illinois case, citing more recent decisions in the past three years by courts or ethics boards in Arizona, Montana, Oregon, and Tennessee. If O’Brien’s string of court victories continues, he may add yet more case law to the issue.

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