Use of Lawyer-Client Privileged Information by In-House Counsel Whistleblowers in Their Own Retaliatory Discharge Actions Under the Environmental Laws

The U.S. Department of Labor has recently blown a big hole in the protection for whistleblowers under the federal environmental laws, and in so doing has reduced the protection of all of us from environmental hazards. In a recent decision by the Department of Labor Administrative Review Board (ARB), (1) the ARB held that lawyers employed by corporations, in-house counsel, may not use any documents or information covered by lawyer-client privilege in claims for illegal retaliation when they blow the whistle on their employers' environmental law violations. (2) The ARB's decision ignores the leading cases allowing the use of privileged information by in-house counsel in lawsuits brought to seek redress for their illegal firing or other discriminatory action, (3) as well as a recent American Bar Association formal opinion on legal ethics addressing this problem. (4) In Willy, a lawyer who was tasked by his employer to head a team to visit and review environmental compliance at one of the corporation's plants, and who was an expert on environmental law and the Environmental Protection Agency's regulations, wrote a report critical of the compliance status of the plant, pointing out numerous probable violations of law. (5) The lawyer was severely chastised for writing the report in that manner and ultimately, he claims, fired for it. (6) He filed a complaint with the Department of Labor in 1984 under the Clean Air Act, and at the hearing introduced a draft copy of the report, over the objection of the corporation, as part of his proof of the series of events that culminated in his discharge. (7) The case made its way to the Secretary of Labor who held in 1994 (before the establishment of the ARB), that in-house counsel are entitled to the same protections as other employees under the whistleblower provisions of the environmental laws, and that they can utilize otherwise privileged information to vindicate their own rights under those laws, consistent with an attorney's ethical obligations to his client. Eight years after the Secretary remanded the case to the Administrative Law Judge to calculate damages due the attorney, the ARB reconsidered the question whether it was proper to admit the attorney's report in evidence, thereby destroying the client's privilege. (8) In February 2004, the ARB held the document should not have been admitted and, absent any other evidence of retaliatory intent, dismissed the complaint, 20 years after it had been filed. (9) In Kachmar v. Sungard Data Systems, Inc., the Third Circuit held that an in-house counsel claiming that she was discharged for opposing her employer's alleged discriminatory policies is protected by the anti-retaliation provision of Title VII of the Civil Rights Act of 1964 and may, with appropriate protections devised by the trial court, utilize attorney-client privileged information to prove her claim. (10) In concluding that a house counsel is protected by Title VII from retaliation for raising her own discrimination claims as well as objecting to the discriminatory treatment of others, the Third Circuit agreed with the statement of the Fifth Circuit over ten years earlier in Doe v. A Corporation, that [a] lawyer ... does not forfeit his rights simply because to prove them he must utilize confidential information. Nor does the client gain the right to cheat the lawyer by imparting confidences to him. (11) The court in Kachmar noted that every other federal court that had considered the question whether house counsel may pursue retaliation claims against their former employers concluded that they could. (12) Although the court recognized the important policy embodied in the rule of attorney-client confidentiality, the Third Circuit in Kachmar held nevertheless that In balancing the needed protection of sensitive information with the in-house counsel's right to maintain the suit, the district court may use a number of equitable measures at its disposal designed to permit the attorney plaintiff to attempt to make the necessary proof while protecting from disclosure client confidences subject to the privilege. …