Rule 4.2 of Nevada’s Rules of Professional Conduct prohibits a lawyer from “communicat[ing] 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 to do so by law or a court order.”
This rule raises a question about what contact is appropriate with a “represented” person when the “person” is a corporation or other type of business. If an attorney is in active litigation against a company, does Rule 4.2 prohibit the attorney from contacting any employee of the company?
Whom Does Counsel for a Corporation Represent?
Many businesses are large and have many different types of positions with varying levels of responsibility. Typically, counsel for a corporation represents the business entity itself along with its owners, board of trustees, officers, and in some cases high-level managers. A company’s attorney typically does not represent lower-level employees of a company, unless the attorney specifically agrees to represent one as part of a specific dispute. Thus, when employees are not represented by corporate counsel and do not have a personal attorney, it would seem Rule 4.2 does not prohibit direct contact with those employees.
Has the Nevada Supreme Court Weighed in?
In 2002, the Nevada Supreme Court analyzed the various tests used in other states to address this question, and it settled on the “managing-speaking agent test.” Under this test, a represented “party” or “person” “is only those employees who have the legal authority to ‘bind’ the corporation in a legal evidentiary sense, i.e., those employees who have ‘speaking authority’ for the corporation.” Palmer v. Pioneer Inn Assocs., Ltd., 59 P.3d 1237, 1248 (2002).
The Court specifically noted the difference between an employee whose statement “may be admissible as a party-opponent admission” (see NRS 51.035(3)(a),(d)) or whose conduct “may be imputed to the organization” and one who can actually “bind the organization with his or her statement.” The first two scenarios do not automatically make the employee a represented employee of the company; the employee must “have managing authority sufficient to give them the right to speak for, and bind, the corporation.”
The Court explained that interested parties to litigation must have a reasonable opportunity to conduct an investigation, and prohibiting contact with every employee of a company would hamper that investigation. According to the Court, the managing-speaking agent test provides an appropriate balance by “providing ample opportunity for an adequate . . . investigation” and protecting against an overbearing opposing counsel who wants to contact representatives who can speak for and bind the organization.
Note that while any facts within a lower-level employee’s knowledge are generally not protected, any confidential communications between an employee and the company’s counsel regarding the subject of litigation would be protected by the attorney-client privilege.
Has the Nevada Bar Weighed In?
The Nevada Bar issued an opinion in 2001 that answers this question, which it updated in May 2005 following the Palmer decision. The opinion essentially reiterates the Supreme Court’s analysis and states that it “strikes a balance allowing informal and inexpensive discovery while providing a represented party with the advice and protection of counsel.” It concluded: “An employee of an organization may be interviewed by counsel for an adverse party unless the employee is a managing-speaking agent of the organization.” The Bar then revised its opinion again in 2019 to add the following:
The disqualification of an attorney who contacts a managing-speaking agent ex parte will be evaluated through a balancing test that weighs the possible prejudice to the parties arising from disqualification versus the public interest in the administration of justice (with emphasis on whether the information gained is material to the case).
Certainly, this standard may be open to interpretation in some cases, but at least it provides some guideline for attorneys who wish to contact witnesses within a defendant corporation.
Finally, it makes sense that former employees would be open to ex parte contact as a witness because former employees have no ability to speak for or bind their former employer, as federal district judge in Nevada concluded in Rebel Commc’ns, LLC v. Virgin Valley Water Dist.