May a former senior associate disclose client confidences to her own attorney to evaluate a wrongful discharge claim against her old firm, and may either of them publicly disclose those confidences in the litigation?

Plain-English summary

The opinion analyzes a fact pattern in which Senior Associate engages Attorney to evaluate a potential wrongful discharge claim against her former Firm. Pursuing the claim will require disclosing embarrassing confidential information about at least one Firm client, because that information is bound to the core of Senior Associate's claim.

The committee divides the analysis into three parts.

First, private disclosure to her own counsel. Drawing on Fox Searchlight Pictures v. Paladino (2001), General Dynamics v. Superior Court (1994), and Solin v. O'Melveny & Myers (2001), the committee concludes Senior Associate may reveal client confidential information to Attorney for the limited purpose of evaluating her potential claim. Disclosure to her counsel is itself private because her counsel is bound by the same confidentiality and privilege rules. The committee limits this private disclosure to "only so much of the Firm client's confidential information ... as is necessary."

Second, public disclosure to pursue the claim. The committee concludes that neither Senior Associate nor Attorney may publicly disclose Firm-client confidences in the litigation. The committee relies on the absolute language of Business and Professions Code section 6068(e)(1), amended only to allow permissive disclosure in dire circumstances, and on General Dynamics's instruction that an in-house attorney who publicly exposes the client's secrets will usually find no sanctuary in the courts. Under General Dynamics, if elements of the wrongful discharge claim cannot be fully established without breaching the attorney-client privilege, the suit must be dismissed in the interest of preserving the privilege. The committee notes Favila v. Katten Muchin Rosenman (2010) for the possibility of a conditional stay rather than dismissal where there is a realistic possibility of waiver.

Third, Attorney's duties. The committee concludes that Attorney has two sets of duties to Senior Associate: a confidentiality duty under section 6068(e)(1) and former Rule 3-100 to protect what Senior Associate reveals (which derivatively binds Attorney as to the firm-client information Senior Associate reveals), and a competence duty under former Rule 3-110 to avoid harm to Senior Associate. Because Senior Associate cannot publicly disclose the firm client's confidences, Attorney is equally prohibited from doing so.

The committee expressly does not address whether the firm-client confidences may be disclosed in some other manner (e.g., filing under seal, protective orders, or in camera proceedings).

In practice

Under California's rules as they stood at the time of the opinion, the framework runs in three layers. First, the lawyer-employee may consult her own counsel and share so much of the former employer-firm's client confidences as the consultation requires; her counsel is bound by privilege and confidentiality and is not a public conduit. Second, in the litigation itself, neither she nor her counsel may publicly disclose those confidences, even to make out elements of the wrongful discharge claim, and General Dynamics and Solin indicate the suit must be dismissed if it cannot be tried without breaching the privilege. Third, the gratuitous disclosure of confidences unrelated to the claim is not protected; the protection runs only to disclosure necessary to evaluate or pursue the legitimate claim. The committee does not opine on whether protective orders, in camera proceedings, or filings under seal would change the analysis. Verify against current Rules 1.6 and 1.9 before relying on this framework.

Common questions

Q: Can a lawyer share her former firm's client confidences with her own lawyer to evaluate suing the firm?

A: Per the opinion, yes, but only as much as is necessary. The committee, drawing on Fox Searchlight and General Dynamics, holds that the lawyer may privately disclose firm-client confidences to her own attorney to the extent necessary to evaluate her potential claim.

Q: Can she publicly disclose those confidences in pleadings or open court to prove her claim?

A: Per the opinion, no, except in the narrowest of circumstances. The committee, relying on the absolute language of Business and Professions Code section 6068(e)(1) and General Dynamics, holds that an in-house lawyer who publicly exposes the client's secrets will usually find no sanctuary in the courts. If the elements of the claim cannot be established without breaching the privilege, the suit must be dismissed.

Q: What about the lawyer's own counsel, who is not the former firm's lawyer?

A: Per the opinion, the same restriction applies. Attorney is bound by his confidentiality duty to Senior Associate (which includes information about the firm client) and by a competence duty not to harm her. Attorney cannot publicly disclose what Senior Associate cannot publicly disclose.

Q: Does the opinion address protective orders or filing under seal?

A: Per the opinion, no. Footnote 11 expressly does not address whether the firm's client confidences may be disclosed in some other manner, citing General Dynamics, Favila, Solin, and Costco Wholesale Corp. v. Superior Court (2009).

Q: Can the lawyer freely disclose confidences if her former firm's client is not a party to the lawsuit?

A: Per the opinion, no. The committee notes that here the firm's client is not a party, but the duty of confidentiality runs to former clients as well as current ones, citing Wutchumna Water Co. v. Bailey (1932) and David Welch Co. v. Erskine & Tully (1988).

Background and rules framework

The opinion interprets former Rules 1-120, 3-100, and 3-110 of the California Rules of Professional Conduct and Business and Professions Code section 6068, subdivisions (e)(1) and (e)(2). The duty of confidentiality under section 6068(e)(1) is broader than the attorney-client privilege and covers "secrets" in addition to client confidences. Former Rule 3-100(B) and section 6068(e)(2) allow permissive disclosure only to prevent a criminal act reasonably believed likely to result in death or substantial bodily harm. The current California analogues are Rules 1.6, 1.9, and 1.1 (competence).

Citations and references

Rules of Professional Conduct (former, in effect at time of opinion):

• Former California Rule 1-120
• Former California Rule 3-100
• Former California Rule 3-110
• Former California Rule 3-310

ABA Model Rules (referenced for guidance):

• ABA Model Rule 1.6(b)(2)

Statutes:

• California Business and Professions Code section 6068(e)(1), (e)(2)
• California Evidence Code sections 950, 916, 955, 965.5

Cases:

• Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, duty to former clients
• David Welch Co. v. Erskine & Tully (1988) 203 Cal.App.3d 884
• Commercial Standard Title Co. v. Sup. Ct. (Smith) (1979) 92 Cal.App.3d 934
• Fox Searchlight Pictures v. Paladino (2001) 89 Cal.App.4th 294, private disclosure to own counsel
• General Dynamics v. Superior Court (1994) 7 Cal.4th 1164, wrongful discharge and client confidences
• Solin v. O'Melveny & Myers (2001) 89 Cal.App.4th 451, malpractice and client confidences
• McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378, derivative-action privilege
• Favila v. Katten Muchin Rosenman (2010) 188 Cal.App.4th 189, conditional stay
• Dixon v. State Bar (1982) 32 Cal.3d 728
• Goldstein v. Lees (1975) 46 Cal.App.3d 614, scope of "secrets" under section 6068(e)
• Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66
• Channel Lumber Co. v. Porter Simon (2000) 78 Cal.App.4th 1222, agency

Other opinions cited:

• San Diego County Bar Ethics Opinion 2008-1
• California State Bar Formal Opinion 1986-87
• California State Bar Formal Opinion 1995-144
• California State Bar Formal Opinion 1993-131
• California State Bar Formal Opinions 2003-161 and 1993-133

See also

• CA COPRAC Op. 2003-161: Confidentiality in Non-Office Consultations
• CA COPRAC Op. 2015-192: Withdrawal and Client Confidences
• CA COPRAC Op. 1998-152: Imputed Knowledge and Former Client Consent
• CA COPRAC Op. 2016-195: Client Secrets and Publicly Available Information

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Original PDF: https://www.calbar.ca.gov/sites/default/files/portals/0/documents/ethics/Opinions/CAL-2012-183-ADA-rev.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

THE STATE BAR OF CALIFORNIA
STANDING COMMITTEE ON
PROFESSIONAL RESPONSIBILITY AND CONDUCT
FORMAL OPINION NO. 2012-183

ISSUE: May an attorney disclose client confidences to her own attorney to evaluate a wrongful discharge action against her former firm and, in pursuing her claim, may she or her attorney publicly disclose those client confidences?

DIGEST: While an attorney may disclose client confidences to her own attorney to evaluate a potential wrongful discharge claim against her former firm, neither she nor her attorney may publicly disclose those confidences except in the narrowest of circumstances.

AUTHORITIES INTERPRETED: Rules 1-120, 3-100, and 3-110 of the Rules of Professional Conduct of the State Bar of California. Business and Professions Code section 6068, subdivision (e)(1) and (e)(2).

STATEMENT OF FACTS

Senior Associate engages Attorney to represent her in a potential wrongful discharge action against her former Firm. If litigation ensues, embarrassing confidential information about at least one Firm client might need to become public because the information is inextricably bound to the core of Senior Associate's wrongful discharge claim. Attorney believes Senior Associate has a valid claim, but both are concerned that pursuit of such a claim could lead to violations of their professional responsibilities with respect to confidential information of the Firm's clients and may not be permissible.

DISCUSSION

1. Senior Associate's duty of confidentiality to Firm's client does not bar her right to seek legal advice.

Senior Associate has a duty of confidentiality to her former clients. (Bus. & Prof. Code, § 6068(e)(1); rule 3-100(A).) The duty of confidentiality continues even after termination of the attorney-client relationship. As a consequence, Senior Associate must guard against disclosure of client confidential information unless otherwise permitted by law.

Does this duty, however, prevent Senior Associate from seeking legal advice from Attorney and in doing so, disclosing to Attorney client confidential information?

Notwithstanding section 6068(e)(1) and rule 3-100(A), case law would permit Senior Associate to disclose confidential information both about the Firm and the Firm's client to Attorney to obtain legal advice about her rights against the Firm. (See Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 308-315.)

In Fox Searchlight, the court held that a former in-house counsel could disclose to her attorney all facts relevant to her termination, including employer confidences and privileged communications, in order to seek advice about, and to prosecute, a wrongful termination lawsuit against her former employer-client. The Fox Searchlight court reasoned that the California Supreme Court in General Dynamics v. Superior Court (1994) 7 Cal.4th 1164 contemplated that, in a wrongful termination case, a limited disclosure of employer-client confidences to the plaintiff's own attorney is necessary. In addition, Fox Searchlight recognized that the attorneys for the in-house counsel were themselves bound by the rules of confidentiality and attorney-client privilege and, thus, disclosure to them would not be a public disclosure.

Thus, Fox Searchlight makes clear that lawyers have the right to disclose employer-client confidential information when seeking legal advice from their own lawyers whether for their own protection or in aid of the client's cause.

In Fox Searchlight, the client was the employer against whom in-house counsel wished to assert a wrongful discharge claim. Here, however, Senior Associate's claim is against her former Firm, a claim she believes will necessarily implicate the confidential information of at least one Firm client. We conclude that Fox Searchlight and General Dynamics permit Senior Associate to reveal only so much of the Firm client's confidential information to Attorney as is necessary for him to evaluate her potential claims against Firm.

Solin v. O'Melveny & Myers, LLP (2001) 89 Cal.App.4th 451 – decided two days after Fox Searchlight by a different division of the same Court of Appeal – impliedly reinforces a limited right to privately reveal a client's confidential information.

Thus, we conclude that Senior Associate may at least reveal Firm client's confidential information to Attorney in her consultation about a potential wrongful termination claim against her former Firm without violating Business and Professions Code, section 6068(e)(1) and rule 3-100(A). The facts state that the client confidential information is at the core of Senior Associate's wrongful discharge claim, so the gratuitous revelation of client confidences unrelated to any legitimate claim is not an issue.

2. Senior Associate may not publicly disclose Firm's client's confidential information to pursue her own claim.

To what extent, however, may Senior Associate and Attorney use that information in pursuit of Senior Associate's claims?

In General Dynamics, supra, 7 Cal.4th 1164, the Court concluded that, while nothing inherent in an attorney's role as in-house counsel precludes a retaliatory discharge claim, the attorney must establish the claim without breaching the attorney-client privilege or unduly endangering the values lying at the heart of the professional relationship.

"[T]he in-house attorney who publicly exposes the client's secrets will usually find no sanctuary in the courts. Except in those rare instances when disclosure is explicitly permitted or mandated by an ethics code provision or statute, it is never the business of the lawyer to disclose publicly the secrets of the client. In any event, where the elements of a wrongful discharge in violation of fundamental public policy claim cannot, for reasons peculiar to the particular case, be fully established without breaching the attorney-client privilege, the suit must be dismissed in the interest of preserving the privilege."

General Dynamics permits retaliatory discharge remedies in instances where "mandatory ethical norms embodied in the Rules of Professional Conduct collide with illegitimate demands of the employer and the attorney insists on adhering to his or her clear professional duty."

In Solin, supra, Solin sued O'Melveny for alleged negligent legal advice given to Solin about Solin's clients. The Solin court had to decide whether to allow Solin's malpractice action against O'Melveny to proceed when O'Melveny contended that it needed testimony concerning the substance and details of discussions between Solin and the O'Melveny partner, including Solin's clients' secrets. Solin's action could not proceed.

In McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378, 385, the court determined that the attorney-client privilege belonged to the corporation and refused to carve out a shareholder exception to that privilege even in a derivative action. But in Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189 at p. 221, the court concluded that a conditional stay, rather than dismissal, might be an appropriate remedy where there is a realistic possibility that the attorney-client privilege might be waived or an exception to the privilege may apply.

While no case directly addresses to what extent Senior Associate may publicly disclose client confidential information to the extent necessary to further her claims in a legal proceeding, in light of the absolute language in Business and Professions Code section 6068(e)(1) and the case law discussed above, we conclude that Senior Associate may not publicly disclose the Firm's client's confidences in order to pursue her own civil action.

3. Attorney has a duty to Senior Associate to protect confidential information of Firm's client.

Attorney, unlike Senior Associate, has no prior or current relationship with the Firm or its clients. As a consequence, may Attorney disclose confidences of a Firm client that Senior Associate disclosed in seeking legal advice?

Attorney has two sets of duties to Senior Associate. First, Attorney is bound by the attorney-client privilege and Business and Professions Code section 6068(e)(1) to protect what Senior Associate reveals to him in consulting him about her potential claim against the Firm. As a consequence, unless Senior Associate can publicly disclose her former Firm's client's confidences, and only to the extent that she would be permitted to do so, Attorney is equally bound to protect those confidences from public disclosure because of his duty to protect the confidential information Senior Associate disclosed.

Second, Attorney also owes Senior Associate a duty of competence under rule 3-110, not only to advance her interests but to avoid harming her. He is Senior Associate's agent and generally his conduct is imputed to her. Thus, if Senior Associate cannot publicly disclose the Firm's client's confidential information, we conclude that Attorney is prohibited from engaging in such conduct.

CONCLUSION

While Senior Associate has the right to consult with Attorney concerning a potential wrongful discharge claim against her former Firm, and in that consultation to reveal, as necessary, client confidential information, in the circumstances described here, Attorney may not publicly disclose those client confidences to pursue Senior Associate's wrongful discharge claim.

This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only.