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Posts Tagged ‘confidentiality’

What Should a California Lawyer Do With An Inadvertently Produced Privileged Document?

Posted on: February 6th, 2020

By: Greg Fayard

Sometimes privileged documents are accidentally produced to opposing counsel. Usually, this occurs in a document production in a lawsuit where, buried in the documents, is a communication between a lawyer and client that is clearly privileged and confidential. What should the lawyer do? In California, a new Rule of Professional Conduct 4.4 codifies case law on this issue and is based on common sense.

When it is reasonably apparent that the lawyer has received a privileged document (or attorney work product, like case strategy notes) then the lawyer is to:

  1. Stop examining the document;
  2. Notify opposing counsel or the sender of the privileged document; and
  3. Return it

After that, the lawyer should seek to reach an agreement with the sender over the writing’s future use in the matter. If the opposing sides cannot come to an agreement, they should seek guidance from the court or tribunal.

If you have any questions or would like more information, please contact Greg Fayard at [email protected], or any other member of our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

Employment Arbitration Agreements are Still Alive in California, At Least For Now

Posted on: October 4th, 2018

By: Rebecca Smith

As Freeman Mathis & Gary brought out in its August 24, 2018 Blog by attorney Dave Daniels, the California Senate had voted to approve Assembly Bill 3080 (“AB 3080”) intended to combat the use of mandatory arbitration agreements and confidentiality clauses to prevent the public disclosure of workplace sexual harassment.  September 30, 2018 was the last day for Governor Brown to sign or veto legislation passed by the California Legislature this year.  Included in the last day of vetoes, Governor Brown vetoed AB 3080.

AB 3080 sought to amend the California Fair Employment and Housing Act and the California Labor Code making it an unlawful employment practice to require an applicant, employee or independent contractor to agree to arbitrate claims arising under the Fair Employment and Housing Act and Labor Code.  AB 3080 would also have added Section 432.4 to the Labor Code, which would have barred any person from prohibiting an applicant, employee, or independent contractor, “as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement,” from “disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract.”

In returning the bill unsigned, Governor Brown pointed to several recent court decisions that invalidated state policies which unduly impede arbitration.  “The direction from the Supreme Court,” Governor Brown indicated “has been clear – States must follow the Federal Arbitration Act and the Supreme Court’s interpretation of the Act.”  “Since this bill plainly violates federal law,” Governor Brown indicated in this statement, “I cannot sign this measure.”

So, at least for the time being, California Employers are still able to use arbitration agreements as long as they are drafted with care.  Employers should review all arbitration agreements and practices to ensure that the agreements they are using will withstand challenge, or to update their agreement to comply with recent authorities addressing arbitration agreements.  Additionally, this will, in all likelihood not be the last challenge which will be made to arbitrations in the employment context in California as bills similar to AB3080 have previously been introduced and undoubtedly will be introduced again in the future.

If you have any questions or would like more information please contact Rebecca Smith at [email protected].

California Attacks Arbitration Agreements …. Yet Again!

Posted on: August 24th, 2018

By: Dave Daniels

On August 22, 2018, the California Senate voted to approve AB 3080, a bill prompted by the #MeToo movement against sexual harassment. Nominally, the bill is intended to combat the use of mandatory arbitration agreements and confidentiality clauses to prevent the public disclosure of workplace sexual harassment, a practice vigorously opposed by the #MeToo movement. As written, however, AB 3080 goes much further, imposing a ban on mandatory arbitration agreements for all claims of employment discrimination, retaliation, and harassment, as well as wage and hour claims.

The bill is currently on Governor Jerry Brown’s desk, awaiting his signature or veto. If signed, the new law would apply to any employment contracts “entered into, modified, or extended” on or after January 1, 2019, and would make several sweeping changes to the California employment law landscape:

Ban on Mandatory Arbitration Agreements

Arbitration agreements are ubiquitous in employment contracts and provide for a low-cost, efficient means of resolving employment disputes.

AB 3080 would put a stop to this by adding Section 432.6 to the Labor Code, which would prohibit any person from requiring an applicant or employee, “as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement,” “to waive any right, forum, or procedure” for claimed violations of the California Fair Employment and Housing Act (“FEHA”) or the California Labor Code.

In other words, if AB 3080 is signed, it will be unlawful—indeed a misdemeanor—for an employer to require its employees to enter into mandatory arbitration agreements for any claims covered by FEHA (i.e., discrimination, retaliation, harassment) or the Labor Code (i.e., wage and hour claims).

While the bill only applies to mandatory arbitration agreements, Section 432.6(c) makes clear that employers will not be able to sidestep the new prohibitions by using opt-out clauses or otherwise requiring an employee to “take any affirmative action to preserve their rights.”  Moreover, Section 432.6(b) prohibits employers from threatening, terminating, retaliating against, or discriminating against any employee or applicant who refuses to voluntarily sign an arbitration agreement.

Finally, because these new provisions appear in the Labor Code, violations could subject employers to civil penalties under the California Labor Code Private Attorneys General Act, also known as PAGA.

Elimination of Settlement Agreements

Because AB 3080 prohibits any person from requiring an applicant or employee “to waive any right, forum or procedure” “as a condition of entering into a contractual agreement,” it arguably also eliminates or curtails employers’ ability to enter into settlement and general release agreements with their employees for FEHA and Labor Code claims.  Given that the vast majority of these types of claims are settled, the full extent of AB 3080’s impact remains uncertain.

Ban on Confidentiality Agreements for Sexual Harassment

AB 3080 would also add Section 432.4 to the Labor Code, which would bar any person from prohibiting an applicant, employee, or independent contractor, “as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement,” from “disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract.”

In short, employers will no longer be able to impose confidentiality obligations on their employees or independent contractors with respect to claims of sexual harassment.

Individual Liability

Importantly, AB 3080 applies to any “person” who commits any of the above-noted violations, not just an employer.  An earlier version of the bill was restricted to “an employer,” but was subsequently amended to replace “an employer” with “a person,” signaling the Legislature’s intent to impose individual liability for violations.

What Employers Should Know Now

For the moment, as it awaits Governor Brown’s signature, AB 3080 is still not the law.  In 2015, Governor Brown vetoed a similar bill, AB 465, which would have outlawed the use of mandatory arbitration agreements as a condition of employment.  In his veto message, Governor Brown noted that there is significant debate about whether arbitration is less fair to employees, and explained that he was “not prepared to take the far-reaching step proposed by this bill.”  Remember, however, that Governor Brown’s term ends in January 2019, and a re-introduced version of the bill could find a more sympathetic audience in his successor.

Even if Governor Brown signs the bill, there will be immediate legal challenges arguing that the bill is unenforceable under the Federal Arbitration Act, which the United States Supreme Court has steadfastly enforced, most recently in Epic Systems Corp. v. Lewis. AB 3080 is just the latest in a long history of California’s antagonism towards arbitration agreements, both in the employment context and beyond.

Notwithstanding the hurdles that AB 3080 faces, employers should now begin reviewing their arbitration agreements and practices in light of these potential changes.  In particular, employers will want to think about best approaches to take during the period after the bill is signed and legal challenges work their way through the courts.

If you have any questions regarding the state of arbitration agreements in the Golden State, please feel free to contact Dave Daniels in our Sacramento office at 916-472-3301 or [email protected].

How Can The Trump-Cohen Tape Be Public?

Posted on: July 31st, 2018

By: Greg Fayard

A lawyer and client talk. The lawyer records the conversation. The recording is made public. How can this be?

That’s what happened to then candidate Donald Trump and his New York lawyer Michael Cohen. The conversation occurred in September 2016. Trump was not aware Cohen recorded the discussion. The recording is a few minutes long and encompasses several topics, including reference to a possible payment to a Playboy model with whom Trump allegedly had an affair in 2006, although this is never expressly discussed. At one point a cash or check payment is referenced. The two speak in a verbal shorthand.

The FBI, as part of an investigation by the U.S. Attorney’s Office for the Southern District of New York, confiscated the recording in April 2018 (see earlier blog discussing this here) while investigating attorney Cohen. The recording was made public in July 2018, but it is unclear by whom.

The conversation between Cohen and Trump is ordinarily protected by the attorney-client privilege, although it is clear other people were around Trump and Cohen, calling into question whether Trump waived the privilege by speaking openly to his lawyer in front of others. Nevertheless, a special master, working under United States District Judge Kimba Wood in New York determined the tape to be privileged. Trump, as Cohen’s client, “owns” the privilege.

However, the President’s legal team “waived” the attorney-client privilege, permitting the tape’s disclosure. The question is why? Four possible reasons come to mind:

  1. The tape had already been leaked, leaving the President no other viable option but to waive the privilege;
  2. Waiving the privilege permits the President’s advisors to discuss the tape openly;
  3. Discussing the tape without officially waiving the privilege might open the door to a broader waiver of communications between Cohen and Trump; and/or
  4. If Trump’s team asserted the privilege over the tape, the government could try to overcome the privilege by asserting the “crime/fraud exception.” Simply put, a client’s communication to an attorney cannot be privileged if the communication was made with the intention of committing or covering up a crime or fraud.

At worst, if a payment to the model was actually made (not yet confirmed), such a payment might have to be reported under federal campaign finance law. The failure to do so could be a campaign finance violation. Trump allies, however, would argue any such payment was not campaign-related, but a common occurrence for a celebrity dealing with the tabloids. In any event, failing to report a campaign-related payment is not a ordinarily a crime.

Lastly, why would an attorney record his privileged conversations with a client? Only attorney Cohen can answer that (and he has not). It could be innocuous—instead of taking notes, he recorded conversations. But not advising Trump of the recording is problematic. Nevertheless, under New York law, one party recording another party without his consent is legal. (N.Y. Penal Law §§ 250.00, 250.05.)  If Cohen, however, leaked the tape when it was still considered privileged, and before Trump waived the privilege, he could face discipline from the State Bar of New York for breaching an attorney’s duty of confidentiality. (New York Rule of Professional Conduct 1.6.)  Regardless, the President was certainly not pleased with Cohen’s secret recording:

If you have any questions or would like more information, please contact Greg Fayard at [email protected].

NLRB Provides Guidance on Investigation Confidentiality Policies

Posted on: April 22nd, 2013

By: Anthony Del Rio

In July 2012, the National Labor Relations Board (“NLRB”) ruled that a blanket policy requiring confidentiality during all internal workplace investigations violates employees’ rights under Section 7 of the National Labor Relations Act (“NLRA”). The ruling represented a somewhat conflicting position, because one of the primary reasons confidentiality provisions were put in place was to protect employees and witnesses from retaliation.

This past week, the NLRB released an a memorandum that provides guidance on what it considers permissible confidentiality policies in workplace investigations. The NLRB’s memo suggests that, rather than using language that requires all investigations mandate confidentiality, policies should use the following language:

[Employer] may decide in some circumstances that in order to [protect the integrity of an investigation and to protect witnesses from harassment/retaliation], we must maintain the investigation and our role in it in strict confidence. If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

Confidentiality in employer investigations is key in order to protect both the employer and the employee. For that reason, a confidentiality provision that has actual force to it is necessary. However, at the same time, avoiding the scrutiny of the NLRB is also very important. For that reason, employers should consider reviewing and modifying their current policies to conform with the language suggested in the NLRB’s memorandum.

Furthermore, as we suggested in our prior coverage of this issue, before prohibiting employees from discussing pending investigations, employers must consider whether there is a real need for confidentiality based on risks of witness coercion, destruction of evidence, or other legitimate business concerns. Blanket prohibitions against discussion of internal investigations without this type of individualized assessment will likely violate Section 7 of the NLRA.