Gucci America Inc. has fired its director of legal affairs after discovering during a lawsuit that he was not properly licensed to practice law. Now the big question before the court: Can Gucci still claim attorney-client privilege?

The secret about then-legal chief Jonathan Moss came out during a trademark infringement suit brought by Gucci against competitor Guess? Inc. in the Southern District of New York.

Last summer, Gucci accused Guess of selling clothing and accessories bearing “studied imitations” of several Gucci trademarks. “Indeed, in many instances, Defendants have replicated entire Gucci product designs, to the point that there appears to be a concerted effort to Gucci-ize Defendants’ product line,” states the complaint in Gucci America Inc. v. Guess? Inc., 09 cv 4373.

Guess attorneys from O’Melveny & Myers are now claiming that communications between Mr. Moss and Gucci or its attorneys with regard to the suit were not privileged because Mr. Moss was not allowed to practice law.

On April 2, Gucci’s outside counsel Louis Ederer, a partner at Arnold & Porter in New York who signed the company’s trademark infringement complaint, filed a motion for a protective order prohibiting the disclosure of the privileged communications of “plaintiff’s in-house legal counsel Jonathan Moss.”

Purportedly blind-sided by the allegations questioning Mr. Moss’ status, Gucci placed him on administrative leave on Jan. 25, and fired him on March 1 after an internal investigation, according to court documents filed last week.

Daniella Vitale, Gucci’s president and chief executive officer, said in a court declaration dated March 26 that Mr. Moss had “performed well,” but she had been “personally shocked” by his admission that he was only an “inactive” member of the California bar “since this was not consistent with the clear understanding I had, for seven years, that Jonathan was a lawyer authorized to practice law. In my mind, this admission raised serious questions about Jonathan’s trustworthiness.”

David Wechsler of Wechsler & Cohen, who represents Mr. Moss, said in an interview yesterday that Gucci’s motion papers do not “tell the full and complete” story with respect to the allegations against his client.

“When all the facts come out, we believe Jonathan’s good name will prevail,” he said.

Gucci maintains in its court papers that the “basic rule is that the attorney-client privilege applies if the person to whom the communication was made ‘is a member of the bar of a court.’”

The company claims that during his employment Mr. Moss was a member of the California bar, albeit an inactive one, as well as of the bars of the U.S. district courts for the Central and Southern districts of California.

According to the California State Bar’s Web site, only active members can practice law in the state. Inactive members may participate in state bar sections, remain eligible for bar-approved insurance and “transfer to active at any time upon request.”

Active members must pay an annual fee of $410 and complete 25 hours of continuing legal education over a three-year period. The yearly fee for inactive members is $125.

Attorneys admitted to practice in California’s Southern District must be “active members in good standing of the State Bar of California,” according to the district’s Web site. The Central District of California says in its voice recording that a prerequisite to admission in that federal court is that an attorney must be an active member of the state’s bar.

But Gucci argues it is still entitled to invoke the attorney-client privilege.

“As is demonstrated by the declarations submitted in support of this motion, it is clear that, throughout the course of Moss’ employment, Gucci personnel, when they communicated with Moss in confidence, at all times reasonably believed that he was a lawyer authorized to practice law,” the company argues.

‘The Company’s Lawyer’

According to the declarations, Mr. Moss graduated from Fordham University School of Law and then passed the California bar in 1993. He went on inactive status three years later. State records show that he resumed his active status on Feb. 5, 2010, shortly after Gucci began investigating his status.

Mr. Moss joined Secaucus, N.J.-based Gucci in 2002, after two of Gucci’s outside counsel at Patton Boggs in Washington, D.C., referred Mr. Moss to Arthur Leshin, then-Gucci’s chief financial officer. The two, George Borababy and Timothy Chorba, testified they were doing a favor for an old friend, Mr. Moss’ father. According to Mr. Borababy, neither “Art nor anyone else associated with Gucci asked me to check Jonathan’s legal qualifications, and I did not do so, since Art has said that the job for which he was considering Jonathan was not a lawyer position.”

At first, Mr. Moss analyzed real estate financials for Gucci. But he quickly started handling legal affairs, including submitting court papers in a bankruptcy proceeding in federal court in late 2002.

In 2003, Gucci gave him the title of in-house counsel and had him report directly to the president of the company. Mr. Moss represented Gucci in legal proceedings, filed documents with the U.S. trademark office, and worked with outside counsel.

Gucci in 2005 promoted Mr. Moss to director of legal services, and in 2008 he became vice president and director of legal and real estate.

Along the way, no one asked Mr. Moss if he was properly licensed, and he failed to inform anyone about his inactive status, company officials said.

Christy Leleck, Gucci America’s director of human resources, declared in a statement that Mr. Moss “had always held himself out as a lawyer, was already considered the company’s lawyer, and for years had received good reviews for his work in his position as Legal Counsel. There was, therefore, no reason for me, or anyone else at [Gucci America] to my knowledge, to suspect that Jonathan had not properly maintained his bar status, or for some reason was not authorized to practice law.”

Gucci’s motion for a protective order is before Magistrate Judge James Cott, who is handling discovery issues in the case assigned to Judge Shira Scheindlin.

Guess is slated to file opposition papers on April 16. The lead attorney for Guess, Robert Welsh, of O’Melveny & Myers’ Los Angeles office, declined to comment.

Mr. Ederer declined to comment.