Lawyers investigating corporate misconduct must closely follow the rules.

I have been hired by a corporation to investigate misconduct within the corporation and its employees. Over the next couple of days, I will be meeting with a number of employees of the corporation. Under Upjohn, I advised the employees I do not represent them and there is no attorney-client relationship with me. I told them I will share the information with the corporate officers. Do I have any obligation to tell the employees that they could get in trouble depending on what they tell me? Further, do I have an obligation to tell them to get an attorney?

A lawyer investigating misconduct within a corporation, particularly misconduct that has criminal consequences, has to be very, very careful. Employees of a corporation will often think a lawyer represents them, or what they say is within some sort of privilege and cannot be used against them.

Clearly, the lawyer has the right to investigate on behalf of a corporate client. Further, the lawyer represents the corporation, not the individual employees. The lawyer, as noted in the question, has the obligation to advise the employees that the lawyer does not represent them and there is no attorney-client relationship and nothing is confidential that is being told to the lawyer.

But does a lawyer have an obligation to advise the employees they are interviewing that what they say can get them in trouble and, further, an obligation to advise them to seek independent counsel?

A significant case on these issues is Upjohn v. United States, 449 U.S. 383 (1981). It should be noted that the Commonwealth Court in Pennsylvania has, to some extent, extended the Upjohn protections to employees other than officers and directors, as in Gold v. City of Aliquippa, 750 A.2d 934 (Pa.Cmwlth, 2000). The question is the obligation. Clearly, the corporate lawyer must notify each employee that he or she is not their attorney. Further, he or she should advise the employees their communications are not confidential. That is an absolute obligation.

Are there any other duties? Rules of Professional Conduct 4.2, 4.3 and 4.4 may, at times, be applicable. Rule 4.2 prevents communication with a person already represented. If the employee has an attorney, the attorney hired by the corporation must go through that attorney. Rule 4.3 deals with the unrepresented person. That rule indicates that the lawyer cannot imply to the person that the lawyer is disinterested. In other words, the lawyer has to tell the person or employee he or she is interviewing that he or she is the lawyer for the corporation and interested in finding out exactly what happened on behalf of the corporation.

But the lawyer cannot give advice to the person who is not represented by a lawyer, other than advice to secure counsel if the lawyer knows or should know that the interest of this person could possibly be in conflict with the interest of the lawyer’s client. In other words, if it appears that the employee may have done something wrong or may have done something against the employer’s interest, then the corporate lawyer cannot give advice other than recommending the employee obtain counsel.

Under Rule 4.3(c), a lawyer has to correct any misunderstanding of the lawyer’s role.

Comment 2 to Rule 4.3 notes the distinction between the person whose interests are adverse to the lawyer’s client and those for whom there is not a conflict with the lawyer’s client. If the conflict is adverse, then the lawyer could be limited to giving the advice to obtain counsel. There are exceptions where a lawyer can negotiate the terms of a settlement or transaction with an unrepresented party as long as the lawyer explains the role and the terms of the document and the lawyer’s view of the matter.

In the situation of a lawyer representing a corporation interviewing one of the employees, if there is going to be any conflict or difference of interest, the lawyer should comply with Rule 4.3 and not give any advice other than to obtain counsel.

This duty is particularly important if the investigation is demonstrating serious misconduct or potential criminal conduct by this employee or a number of employees. The lawyer cannot give them advice.

There is also Rule 4.4. A lawyer cannot use methods of obtaining evidence that violate the rights of such a person. A lawyer has to be straightforward and cannot use improper methods to get information.

Therefore, it appears that the lawyer at a minimum should suggest a person retain independent counsel if there are any adverse consequences or conflicts between the lawyer’s client and the employee being interviewed. Rule 1.13(d) clearly notes that a lawyer has to explain the identity of the client when the lawyer knows that the corporation’s interests are adverse to those of the constituents the lawyer is talking to.

Comment 7 to that rule notes the lawyer has an obligation to advise a constituent of a corporation of any potential conflict or actual conflict and that the lawyer cannot represent the constituent and the person may wish to obtain independent counsel. This is required when organizations have just become adverse to the constituent. A lawyer, in that circumstance, also must advise the constituent that the contents of the discussion would not be privileged information within the attorney-client privilege.

Comment 8 to Rule 1.13 notes that whether such a warning should be given by the lawyer to any constituent would turn on the facts of each case. That analysis included the sophistication of the constituent and the degree of adversity to the lawyer’s client’s interest.

To answer the question, it appears the lawyer would have to tell the client to get independent counsel unless there was absolutely no adverse interest at all. Second, the lawyer cannot take advantage. Third, it would appear the lawyer has an obligation to tell the constituents that the information will be shared with the corporate structure. In conjunction with that, it would appear under the rules as stated, particularly Rules 4.3, 4.4 and 1.13, that the lawyer should tell the constituents that they could get in trouble depending on what they say. If they have questions, they should seek independent counsel. It would appear there is no other way around that without taking advantage of the represented person under Rules 4.3 and 4.4.

Obviously, this is a very difficult area. But this cannot be an area where an overzealous lawyer trying to impress the corporate client becomes the bull in the china shop with the various employees and constituents of the corporation. There are serious limits and restrictions as to what the lawyer can do and say and when the lawyer cannot question the client and can only tell the client to get independent counsel.

If there is any adversity or difference between the corporation and the constituent, then the duty is to advise the employee to get independent counsel and make it clear to the constituent and employee that any statements they say could get them in trouble and will certainly be given to the corporate officers with no privilege. Failure to do so would be a serious violation by the lawyer of the professional obligations.

Lawyers should not blindly sign secrecy 

I have a client who has been issued a subpoena to appear before a grand jury investigation in Pennsylvania. I want to enter my appearance, but I am told I have to sign a secrecy agreement. Is that ethical?

This is a difficult question. Pennsylvania grand juries are different from federal grand juries. Federal grand juries have a constitutional basis, while Pennsylvania grand juries have a statutory basis. Obviously, the first thing any attorney should do in dealing with a Pennsylvania grand jury is ask for the notice of submissions submitted by the prosecutors for the purpose of convening the grand jury. It is clearly important to learn the scope of the grand jury investigation for proper representation of a client. The prosecution files a motion to empanel a grand jury and then files a notice of submission of the purpose of the grand jury. Once the grand jury is empaneled, the lawyer who wants to represent a client should attempt to enter his or her appearance and ask for that notice of submission.

The requirement of lawyers to take an oath of secrecy is, at least in my mind, a relatively new requirement. Some judges absolutely require the lawyer to sign the secrecy oath before the judge will allow a lawyer to enter an appearance. Some do not.

The concern is that the secrecy requirement may interfere with a person’s chosen right to a particular counsel. A lawyer may want to ask for a cause hearing on the issue as to why the lawyer should be required to sign a secrecy agreement. It would appear there would be no ethical prohibitions about the lawyer signing the secrecy requirement if the supervising grand jury judge requires the same. But it certainly is troublesome since the lawyer is already bound by the attorney-client relationship. The secrecy oath may well impair the lawyer’s ability to properly represent his or her client or to investigate other aspects that may appear as a result of the grand jury investigation.

The bottom line is the lawyer should not just routinely sign such secrecy agreements. The lawyer should get the permission of the client and, at the same time, ask for a cause hearing as to why the secrecy is required for the lawyer and if there can be exceptions, as noted above. That would appear to be the ethical way to approach this matter. Clearly, if the lawyer raises the issues and loses, then the lawyer should sign the secrecy oath and then preserve any issues related to that for future appeals, if necessary. 

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa., 19381.