By Kevin Murphy
The ethical pitfalls of non-disclosure agreements have received renewed attention in the wake of the #MeToo movement. Less frequently discussed — but equally problematic for prosecuting sexual harassment and other employment law cases — are agreements that prohibit individuals from serving as witnesses in other cases. As Paul Simon (or, depending on your musical sensibilities, perhaps Disturbed) would tell you, “silence like a cancer grows.” Not only is a defendant able to avoid liability for conduct with the settling party, but the defendant may be able to frustrate other attempts to hold it accountable by depriving other plaintiffs of evidence and testimony of previous acts of assault, harassment, discrimination, etc. The next plaintiff is left to walk alone.
Common proposals from defense counsel often look something like this:
“[Plaintiff] agrees not to voluntarily assist other individuals in bringing claims against [Defendant], and [Plaintiff] will not provide any such assistance.”
For over eighty years, this type of request has been recognized as unethical:
“It is improper for an attorney . . . to influence persons, other than his clients or their employees, to refuse to give information to opposing counsel which may be useful or essential to opposing counsel in establishing the true facts and circumstances affecting the dispute. . . . All persons who know anything about the facts in controversy are, in simple truth, the law’s witnesses.” ABA Comm. on Prof’l Ethics and Grievances, Formal Op. 131 (1935); Jon Bauer, Oregon Law Review, Vol. 87, 481 (2009), Buying Witness Silence: Evidence-Suppressing Settlements and Lawyers’ Ethics.
Like the ABA Model Rules, North Carolina’s Rule of Professional Conduct 3.4(f) would also appear to prohibit this type of request. This rule prohibits an attorney from:
“request[ing] a person other than a client to refrain from voluntarily giving relevant information to another party unless:
- the person is a relative or a managerial employee or other agent of a client; and
- the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information.”
South Carolina’s Bar expressly opined long ago that that such clauses violate Rule 3.4 and are unethical. S.C. Bar Ethics Advisory Comm., Op. 93-20 (1993).
This rule is likely implicated with all settlement agreements including such a clause, but they are clearly outside the bounds of this rule with respect to former employees who are no longer employed by the defendant at the time the company offers a settlement agreement that requires their non-cooperation.
All would agree that paying a witness to ignore opposing counsel’s calls would be extremely unethical, but somehow this practice has come to feel appropriate if done in the context of settling another matter. There is no reason to treat these situations differently — especially if there is already another action pending between other employees and the company.
The South Carolina opinion also reminds plaintiffs counsel that recommending that your client sign such an agreement would also be unethical, as Rule 8.4(a) prohibits a lawyer from knowingly assisting another to violate any Rule.
These types of requests have also crept into the agency investigation portions of settlement agreements. Just yesterday, it seemed like employers were bending over backwards to ensure that settlement agreements did not give the impression that they were prohibiting former employees from bringing charges of discrimination or otherwise assisting with EEOC, NLRB, or other agency investigations. Two years into the Trump Administration, things are not only quieting down on that front, but some employers are beginning to actually prohibit former employees from assisting such investigations or independent legal actions brought by other injured employees.
Clauses like the following are becoming common:
“[Plaintiff] will withdraw the Charge and will not cooperate or participate in the investigation or prosecution of such action except to the extent required by law or subpoena.”
While the drafter likely feels secure in the inclusion of the last nine words, the Commission that brought us Equal Employment Opportunity Commission v. CVS Pharmacy, Inc., No. 1:14-cv-00863, (N.D. Ill, October 7, 2014), would certainly feel differently. It is hard to square the first part of this clause with the latter. The words “will not cooperate or participate in the investigation or prosecution of such action” are meaningless if not intended to obstruct the EEOC investigation—in the unlikely event that the Commission elected to continue investigating post-settlement.
Counsel on both sides of employment cases would be well-served to think hard about these types of clauses before proposing or accepting them because of ethical concerns and the larger public policy problems posed by such agreements. It is past time that we dare disturb the sound of silence.
For more information about non-disclosure agreements and how they affect employment law cases, contact the attorneys at Herrmann & Murphy.
South Carolina Ethics Advisory Opinion 93-20
UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 93-20
Plaintiff’s attorney in a consolidated action involving a number of cases, has received a proposal from defendant’s counsel to settle with the plaintiff conditioned upon an agreement that the plaintiff “not voluntarily testify” in the remaining consolidated cases. The plaintiff may be considered a material witness, is a listed witness, and is expected to testify in the remaining actions.
Question:
What ethical considerations should plaintiff’s counsel consider in advising his client to accept a settlement agreement conditioned upon the client agreeing to not voluntarily testify in the remaining actions?
Summary:
The answer to this depends on what the plaintiff’s attorney believes or determines the defendant’s attorney to mean by “not voluntarily testify.” If the plaintiff’s lawyer believes that the defendant’s lawyer is asking the plaintiff to refrain from voluntarily giving relevant information to another party, then it would be a violation of the Rules of Professional Conduct for the plaintiff’s attorney to advise his client to “not voluntarily testify” in the remaining actions under the facts of this inquiry.
Opinion:
Rule 3.4(f) prohibits a lawyer from requesting a person other than a client to refrain from voluntarily giving information to another party unless the person being requested not to testify is a relative or employee of that lawyer’s client. Consequently, if the defendant’s lawyer is requesting that the plaintiff withhold relevant information from another party, it is a violation for defense counsel in this case to ask the plaintiff’s counsel to request that his client not testify. (It is assumed, since not stated, that the plaintiff is neither a relative nor an employee of the defendant.) Rule 8.4(a) prohibits a lawyer from knowingly assisting another to violate any Rule. By recommending to his client an improper request of defense counsel, plaintiff’s counsel would be assisting the defense counsel in violating Rule 3.4(f), since that lawyer should not ask one who is not a relative or employee of his client to refrain from voluntarily giving relevant information. If, on the other hand, the plaintiff has already given all relevant information in the case to the other parties and the defense counsel is merely requesting that the plaintiff not volunteer to testify in the other cases, such a request is not prohibited by any of the Rules of Professional Conduct, and the plaintiff’s lawyer would not be participating in any prohibited conduct.
Consequently, the plaintiff’s lawyer must decide, and, if necessary, inquire to ascertain exactly what is being requested by the defense counsel. If the defense lawyer is attempting to prevent the plaintiff from providing relevant information, the request should not be recommended to the client. If defense counsel is simply requesting that the plaintiff not volunteer to testify, this request, useless as it and any return promise may be, is not improper. The plaintiff should be kept informed of all communications between counsel.
For more information about non-disclosure agreements and how they affect employment law cases, contact the attorneys at Herrmann & Murphy.
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