On January 9, 2020, the Supreme Court of Virginia approved Legal Ethics Opinion (“LEO”) 1890, which comments on a number of issues under Virginia Rule of Professional Conduct 4.2, “Communication with Persons Represented by Counsel”. Of particular interest to companies and other organizations is LEO’s 1890’s discussion regarding the scope of prohibited ex parte contacts under the Rule.
LEO 1890 reaffirms that Rule 4.2 “prohibits ex parte communications with employees of the represented corporation or organization” only “if the employee is in the entity’s ‘control group’ or is the ‘alter ego’ of the entity.”
As explained below, the relatively narrow scope of communications prohibited by Rule 4.2 has significant implications for how organizations, from small businesses to larger companies, approach the investigative and discovery phases of litigation.
Virginia’s version of Rule 4.2 states: “In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.” When the represented person is an organization, determining which individuals cannot be directly contacted by counsel requires further inquiry.
Comment 7 states that “this Rule prohibits communications by a lawyer for one party concerning the matter in representation with persons in the organization’s ‘control group’ as defined in Upjohn v. United States, 449 U.S. 383 (1981) or persons who may be regarded as the ‘alter ego’ of the organization.” A member of the control group is an individual, such as a director or officer, who by virtue of their position, has the authority to bind the organization to an agreement. See id. However, the Rule’s “prohibition does not apply to former employees or agents,” even if that former employee was a member of the control group. Id.
The implication of Rule 4.2 is that a litigant’s attorney, or their representative, potentially can contact the vast majority of an organization’s current and former employees without the organization’s prior authorization or knowledge. This is because the vast majority of employees—including most, if not all, non-managerial employees—will not be considered members of the organization’s control group.
Notably, Virginia is in the minority with its restrictive approach to Rule 4.2’s prohibitory scope. Many states, including neighboring ones in the Fourth Circuit, follow the Model Rule’s broader interpretation of employees who cannot be contacted by counsel.[1] See, e.g. N.C. R.P.C. 4.2(b); SCACR 407, RPC Rule 4.2 cmt. 7.
So, why does Virginia apply Rule 4.2 differently than most other jurisdictions, and what are the implications of this treatment?
In its petition to the Supreme Court to adopt LEO 1890, the Virginia State Bar (“VSB”) argued that Virginia’s interpretation of Rule 4.2 creates a bright-line rule that avoids ambiguity. In the Matter of Legal Ethics Opinion 1890, Petition of the Virginia State Bar at 13 (November 18, 2019). The VSB further argued that Virginia’s interpretation “strikes an appropriate balance between protecting the interests of a represented organization and an adversary’s access to relevant facts and witnesses.” Id. at 5. In other words, in the VSB’s view, a broader application of the Rule, such as that employed under the Model Rule, could enable organizations to improperly limit pre-suit investigation into potential claims and defenses. Id. at 7.
In the wake of LEO 1890, organizations should expect attorneys investigating potential claims in Virginia to be bolder and more confident in approaching and communicating directly with the organization’s non-control group employees. As discussed, this contact can occur without prior authorization, potentially enabling outside lawyers to obtain facts that could be vital to their client’s claim.
Accordingly, businesses facing the prospect of litigation should take early steps, with the help of legal counsel, to protect their interests. A legal team experienced in conducting investigations can, among other things, help identify and advise an organization as to which information should be preserved for discovery, and which employees should be interviewed and potentially deposed to preserve their recollection of events (before being contacted and interviewed by opposing counsel).
[1] Model Rule 4.2 “prohibits communications with a constituent of the organization who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability.” Ann. Model Rules of Prof’l. Conduct r. 4.2 cmt. 7.
