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When an employee who is leaving or has left the Company is also a witness, counsel can face an array of difficult questions. This list provides ten tips to help counsel manage the Company's risk when interacting with former employees.


Before Disputes Arise


1. Identify potentially key employees before they leave.


Avoiding problems starts before employees become "former." Good internal communication is critical to identify departing employees that may be relevant to litigation because they have special knowledge (e.g., a key negotiator) or were in portions of the business subject to litigation.


2. Conduct exit interviews of potential witnesses.
  • Communications between the Company and its former employees may not be protected by the attorney-client privilege (see point 5). Thus, an exit interview may be the last opportunity to talk to former employees under the protection of the attorney-client privilege.
  • Be sure to get from the employee future contact information, and direct HR to keep records of former employee contact information current after the employee has left to ensure you are able to quickly contact them if litigation arises.
  • Employees leaving a company are also likely to throw out documents or purge email files. Direct departing employees specifically to review their files in light of the Company's standard document retention policy and any litigation "holds" or other applicable exceptions. Counsel may need to be involved in this process.

3. Obtain agreements to cooperate for key employees.

  • Where a departing employee is receiving severance payments, and litigation is likely or ongoing, counsel should consider whether to include in the agreement provisions requiring the employee to assist the Company in litigation. Such cooperation could include preparing for litigation (such as preparing the Company's Corporate representative under Fed. R. Civ. Proc. 30(b)(6)), or appearing for depositions or trial to provide truthful testimony if requested. Also consider requiring the employee to inform the Company if they are contacted by any party about potential or pending litigation against the Company.Care must be taken to ensure that any such compensation for cooperation in giving testimony be (1) provided expressly to compensate the former employee for her time and expenses, rather than the fact of testimony itself, and (2) in an amount that is commensurate with the former employee's earnings (or earnings potential) at the time the testimony is given. (See points 8 & 9).
  • Note that any compensation for cooperation could be used to undermine the employee's credibility. Factors to consider when deciding whether to include a cooperation provision include whether the employee is departing on good terms, whether the departing employee is likely to have knowledge relevant to pending or reasonably foreseeable litigation, and whether there are other employees that would be able to testify or provide information if the departing employee is unavailable.

When a Dispute Is on the Horizon


4. Identify the key players as soon as possible.
  • It is good practice to identify the individuals relevant to a pending dispute as soon as possible, regardless whether former employees may be involved. Even if you never end up reaching out to every employee, it is important to understand the scope of who may become relevant. Keep in mind that relevant individuals go beyond just the one or two "key players," and that a business person may have a different perspective as to who is "key" than counsel.

5. Be careful with the privilege!

  • Communications between the Company's counsel and former employees may not be privileged. Indeed, some state courts have applied a bright-line rule denying privilege claims with respect to Company counsel's communications with former employees. Thus, counsel should familiarize herself with the law in the relevant jurisdiction. Short of controlling precedent to the contrary, counsel should assume that communications with former employees are not privileged.

6. Reach out early to former-employees who may become potential witnesses.

  • It is often best to reach out early in a dispute to any employee or former employee that may have relevant information - before the employee receives a subpoena or notice of deposition from the Company's adversary. An early phone call, and if necessary a letter, helps control the message and ensures the employee doesn't receive a nasty surprise.
  • These calls can be difficult. No one wants to be drawn into litigation. Moreover, former employees are often "former" for a reason. They may harbor ill will toward the Company or its current employees. Or they simply may not care what happens to the Company. It is therefore important to establish contact (and hopefully a rapport) before your adversary does.
  • Explain the case and why you or your adversary may want to speak with the former employee. Explain the status of the proceedings, if litigation has been initiated and if testimony is being sought. Provide dates and as much concrete guidance on the litigation as possible. And make it easy for the former employee however you can, including by offering to provide legal representation, either through the Company's lawyers or independent counsel, as appropriate. (See point 8.)
  • Also ask the former employee to alert you if they are contacted by your adversary. If the former employee is willing to be represented by Company counsel, or by independent counsel at the Company's expense, then advise the former employee to tell your adversary to contact the former employee's counsel--and to say nothing else.
  • Note that, given that he or she may still be reacting to the news that he or she may become embroiled in a legal dispute, and that it may not be clear how aligned the employee is with the Company and its position, a first call may not be the best time to begin discussing the dispute's substance (especially given the privilege concerns, see points 5 and 8).

7. Pick the right point of contact.

  • Having a lawyer be the first to reach out is not always the best option. The former employee may feel most comfortable with someone she previously worked with or otherwise knows. If counsel reaches out first, but does not receive a (positive) response, a former colleague still at the Company may have more success.
  • Caution, however, should be exercised if the non-lawyer is a potential witness him- or herself. Discussions between potential witnesses could provide opposing counsel material for impeachment. Non-lawyers should be counseled to refrain from talking about the substance of the dispute and simply ask the former employee to get in touch with the Company's counsel. Consider whether a lawyer should listen in on this initial call.

8. Consider offering representation.

  • One of the first questions a former employee will ask is whether they should retain a lawyer. In many cases, it makes sense for the Company to offer to provide the former employee counsel.
  • Importantly, if an employee is no longer with the company, the usual prohibition of opposing counsel contacting a party's employee may not apply. See, e.g., Model Rules of Prof'l Conduct R. 4.2; see also Model Rules of Prof'l Conduct R. 4.2 cmt. at ¶ 7 ("Consent of the organization's lawyer is not required for communication with a former constituent.")); but see, e.g., N.J. Rules of Prof'l Conduct R. 1.13 ("Former agents and employees who were members of the litigation control group shall presumptively be deemed to be represented in the matter by the organization's lawyer but may at any time disavow said representation."); id. R. 4.2 ("Nothing in this rule shall, however, preclude a lawyer from counseling or representing a member or former member of an organization's litigation control group who seeks independent legal advice."). To ensure that an adversary does not contact a former employee directly, the former employee must retain counsel.
  • Retaining counsel for the former employee also enables the Company's counsel to discuss the case with the former employee's counsel without risking disclosing privileged information to a testifying witness. Retention of counsel can also provide former employees who lack experience with litigation greater confidence and willingness to cooperate.
  • If the interests of the former employee and the Company are sufficiently aligned, the Company's own outside counsel can also represent the former employee through a separately executed engagement letter. See Restatement (Third) of the Law Governing Lawyers §§ 122, 131. Usual conflicts of interest rules apply, of course, but if the Company's counsel "reasonably concludes . . . that the multiple representation is permissible," he may offer representation without running afoul of the rule against solicitation. See, e.g., NYCLA Prof'l Ethics Op. 747 (2014).
  • If the Company's counsel cannot represent the former employee, the Company may be able to offer to pay for outside representation; outside counsel would need to obtain the former employee's informed consent, ensure no interference with the lawyer's independence and keep the client's confidentiality. See, e.g., Model Rules 1.6 and 1.8(f); N.Y. Rules of Prof'l Comm. R. 1.6, 1.8(f).

In Litigation


9. Determine whether (and how much) the Company can pay a former employee to be a witness.
  • Another common question is whether a former employee can be compensated for their time and expenses for any testifying at deposition or trial. The short answer is "yes," but with several caveats.
  • Most importantly, under Model Rule 3.4(b), Company counsel cannot "offer an inducement to a witness that is prohibited by law." Despite this limitation, the ABA Committee on Ethics and Professional Responsibility, Formal Opinion 96-402, clarifies that Model Rule 3.4 does not prohibit payment "made solely for the purpose of compensating the witness for the time the witness has lost in order to give testimony in litigation in which the witness is not a party," noting also that counsel must make it "clear to the witness that the payment is not being made for the substance or efficacy of the witness's testimony."
  • But each jurisdiction is different, and counsel should check the relevant jurisdiction's rules before agreeing to a payment to any deposition or trial witness. New York's Rule 3.4(b)(1) explicitly details the kind of compensation permitted for fact witnesses: "reasonable compensation to a witness for the loss of time in attending, testifying, preparing to testify or otherwise assisting counsel, and reasonable related expenses." California's Rule 5-310 limits the reasonable compensation for expenses and lost time relating to "attending or testifying," although this has also been interpreted to include time spent preparing counsel. See State Bar of Cal., Formal Op. No. 1997-149.

10. Consider deposing former employees.

  • Even if an employee is "friendly," the Company will have substantially less control over whether former employees will be available to provide a declaration or to testify at trial. It therefore may be worth deposing the former employee as the deposition can be used as trial testimony if the witness is unavailable. See, e.g., Federal Rule of Civil Procedure 32(a)(4). That said, be sensitive to how cooperative your former employee is; it's often not worth angering a former employee by subjecting them to sworn testimony and cross-examination if they will take out their frustration on the record.

Related Resources

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The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.

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