Can Your Attorney Get You Fired? How Should An Attorney Handle Conflicts In The Joint Representation Of Both Employee and Employer?

In Yanez v. Plummer (No. C070726 – 11/5/13), the Third Appellate District reversed summary judgment in favor of the defendant attorney (Plummer), finding that a question of material fact existed as to whether Plummer’s conduct, while representing the plaintiff (Yanez) during his deposition in a co-worker’s (Garcia’s) workers’ compensation case against the same employer (Union Pacific), caused Yanez to be terminated from his job.

Yanez and Garcia were both employed as machinists by Union Pacific Railroad Company (Union Pacific) when Garcia sustained an injury on the job. In his initial witness statement, Yanez wrote that Garcia “had sliped [sic] and fell on concrete floor, soaked in oil & grease.” In a later statement, Yanez stated that he “saw [Garcia] slip & fall down on oil soaked floor.” During his pre-deposition meeting with Plummer, who was in-house counsel for Union Pacific, Yanez confirmed that he had not actually seen Garcia fall. Yanez also expressed concern that his testimony concerning the physical conditions on the job would be unfavorable to Union Pacific and asked who would protect him. Plummer responded that he would be Yanez’s attorney at the deposition, and that as long as Yanez told the truth, his job would not be in jeopardy. Plummer failed to disclose to or advise Yanez of any actual or potential conflicts of interest.

After Garcia’s attorney elicited testimony in deposition that Yanez had not seen the incident and was aware of unsafe conditions, Plummer questioned Yanez and confirmed Yanez’s testimony that he did not witness Garcia fall. Plummer also introduced as an exhibit Yanez’s second statement that he had seen Garcia fall. When Yanez sought to explain that he had “worded that statement wrong,” Plummer failed to follow up on this comment. Plummer also failed to use Yanez’s first statement as an exhibit. As a result, Union Pacific held a disciplinary hearing against Yanez, during which Yanez explained that he had intended to write that he saw that Garcia “had slipped and fell down on oil soaked floor.” Union Pacific subsequently terminated Yanez’s employment for dishonesty. Yanez later filed suit against Union Pacific for wrongful discharge and against Plummer for legal malpractice, breach of fiduciary duty and fraud. Plummer obtained summary judgment on the issue of causation, i.e., whether his conduct had proximately caused Yanez’s termination.

The fundamental issue presented on appeal was whether a triable issue of material fact existed as to whether Plummer caused Yanez to be terminated. The appellate court highlighted Yanez’s evidence of the conflict of interest between Yanez and Union Pacific in light of Yanez’s knowledge of unsafe working conditions that may have contributed to Garcia’s injury. In violation of Rule 3-310(C)(2) of the California Rules of Professional Conduct, Plummer had failed to advise Yanez about such conflict and failed to obtain Yanez’s written consent to Plummer’s representation despite the conflicts.

However, the court explained that while “violation of the State Bar Rules of Professional Conduct prohibiting concurrent representation of conflicting interests without each client’s informed written consent constitutes evidence of malpractice liability and breach of fiduciary duty,” it “does not, standing alone, prove the malpractice or the fiduciary breach.” In support of his argument that he did not cause Yanez’s termination, Plummer pointed out the following: he was not involved in drafting the second statement, Yanez testified initially that he did not see the incident, a formal investigation was conducted in the form of the disciplinary hearing, Yanez had an opportunity to explain the discrepancy, and Plummer had no role in Union Pacific’s decision to terminate Yanez.

The appellate court disagreed, finding that Plummer’s conduct combined with that of Union Pacific caused the termination. In particular, the court found that Plummer “played a substantial role, during Yanez’s deposition in the Garcia case in uncovering the deception Union Pacific charged against Yanez, and that without the deposition testimony, Yanez likely would not have been charged with dishonesty – the deposition triggered the charge (and the charge resulted in Yanez’s termination).”

This decision is a reminder of well-recognized rules of professional conduct concerning conflicts of interest, and offers a cautionary tale where an employee possesses evidence which may be in conflict with the employer’s interests. Attorneys should be mindful of their obligation to advise their joint clients, particularly the employee, of any potential or actual conflicts and obtain written consent to proceed as joint counsel, as they may otherwise face liability if the employer discharges the employee due to his or her testimony.

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