Dual Representation Leads to Malpractice

We previously discussed the potential for a conflict arising when an attorney represents an employer and possibly an employee in the context of the Penn State/Sandusky scandal. The issue for the attorney is to delineate whether she represents the employer, the employee or both. An attorney cannot wear all the hats and therefore must disclose to an employee the possibility of a conflict. A recent decision from the California Court of Appeals demonstrates how easily a conflict may arise in this scenario.

In Yanez v. Plummer, Michael Yanez was the only witness to the fall of his co-worker while both were working for their employer, Union Pacific railroad company. At the employer’s request, Yanez provided a written statement and was later deposed in his co-worker’s subsequent lawsuit against Union Pacific.

In preparing for his upcoming deposition, Yanez met with Union Pacific’s in-house counsel. During the meeting Yanez expressed concern that his testimony might not be favorable for Union Pacific. Yanez told counsel that he was aware of several unsafe working conditions that led to the fall. Yanez asked the attorney to protect him in the event that Union Pacific considered terminating Yanez as a result of his testimony.

The deposition did not go well for Yanez when he was confronted with discrepancies between his testimony and the statement he issued previously. Importantly, it was Union Pacific’s attorney who questioned Yanez about the alleged discrepancy presumably in an effort to “distance” Union Pacific from alleged unsafe working conditions.

Following the deposition, Union Pacific terminated Yanez purportedly due to the inconsistency and claimed that Yanez was “dishonest.” In turn, Yanez sued Union Pacific for wrongful termination and its attorney for malpractice.

On appeal, the court held that the attorney failed to disclose a conflict of interest and violated his ethical obligation to Yanez. The court found that Yanez and Union Pacific occupied adverse positions in the slip-and-fall lawsuit yet the attorney represented both employer and employee.

Attorneys representing corporate entities should be ever watchful for potential conflicts. Attorneys should not juggle clients. If it is apparent at the outset that a conflict might exist, the attorney should disclose the potential conflict immediately, should obtain a written waiver, or advise the employee to retain separate counsel.