A Visit From the Feds: What They Can and
Cannot Do
By: JOHN W. LUNDQUIST
January 2005
Most savvy business people believe that when a company is represented by counsel, the lawyer for the other side – or her investigator – should not contact its employees directly. Isn’t that, after all, how the system works?
Not necessarily. Consider the following hypothetical. A company is surprised when law enforcement agents make direct contact with its employees. In a well-orchestrated maneuver, the government dispatches dozens of agents to simultaneously visit scores of employees at their homes. This occurs even though the government knows the client is represented and, indeed, has drafted correspondence to its lawyer before the contacts are made.
The company quite naturally wants to know how this could happen and what, if any, remedies it may have to address the unwanted intrusion. Are there different rules for the government than for “regular folks”? The short answer is that a single rule applies to both the government and private litigants, but the government is likely to “interpret” it much more expansively than a private litigant.
The notion that counsel for an adverse party must communicate only through the other side’s lawyer springs from the Lawyers’ Rules of Professional Responsibility. The rule prohibiting a lawyer from communicating with a party the lawyer knows to be represented by another lawyer “in the matter” covers most significant employees of a company, as well. Congress explicitly made this rule applicable to government lawyers in 1998.
The government knows that when sophisticated clients learn of an investigation, they seek the advice of counsel. The communications from that point forward are more often than not controlled by counsel and, therefore, not nearly as likely to net the inappropriate spontaneous statement that may result from a surprise encounter with an employee. Talking to the company’s lawyer simply is neither as fun nor as productive for the government as a surprise meeting.
Although it would not refer to them in this fashion, the government often points to two “loopholes” justifying direct communications with the company or its employees. First, the government correctly argues that direct contact is permitted by the rule when “authorized by law.” It then reasons that, because the government enforces the law, direct contact is permitted whenever it believes such is necessary in the context of an investigation. Not surprisingly, the courts have given this argument short shrift.
The government invokes the other “loophole” when the contact takes place at the outset of an investigation. In such cases, the government will say that it did not know that the company was represented “in the matter.” Of course, the company would have no awareness of “the matter” until the agents showed up to interrogate employees or otherwise announce an investigation. In the hypothetical above, the government’s contention rings hollow in light of the fact that it already had addressed correspondence to counsel for the organization.
“So,” the company in our hypothetical asks, “Is it true that there is a right for every wrong? What is my remedy for the government’s inappropriate contact?” In appropriate cases, the courts will rule that the statement cannot be used as evidence in any subsequent legal proceeding.
Nevertheless, the government continues to maintain that it is at liberty to make direct contact with company employees in regard to new matters even when they know that the company is represented in “other matters.” Companies are, accordingly, forewarned to instruct employees to refer any and all inquiries to management so legal counsel immediately can be brought into the process. We have assisted clients in preparing such policies and procedures and would be happy to discuss how they may be implemented.