YOUR EMPLOYEE SAID WHAT??? Plaintiff Sanctioned for Undisclosed Communications with Defendant’s Employees

Written by Brian A. Cafritz, Esq.

Edited by Christopher E. Bergin, Esq.

In almost every case involving a corporate defendant, there comes a point where the company must wonder what damaging statements its employees may have made.  Despite training and educating employees not to talk to anyone but the company lawyers, it is practically and logistically impossible to prevent every employee from talking.   The fear is that an employee speaks without knowing the impact of his or her statement, and that statement winds up undermining the company’s defense to a major lawsuit.

Recently, a Virginia State Circuit Court Judge refused to allow statements by a defendant company’s employee, when the statements were obtained in surreptitious methods.  The case was Jalal Haidar v. Toto U.S.A., Inc. et al., from the Circuit Court of Arlington County.   In Haidar, the plaintiff sued Toto and others in a products liability case claiming personal injuries sustained in a hotel room accident.  Mr. Haidar was represented by counsel in the lawsuit, but he began having direct communications with Toto’s technical support/customer service departments related to the litigation without identifying himself as a litigant.  Plaintiff wanted to use the statements made by Toto’s employees at trial, and Toto moved for sanctions, asking the court to exclude those statements.

During the motion, the court learned that Mr. Haidar disclosed the contents of the communications to his attorneys, continued to have additional communications with department employees about the same subject matter, and again reported the contents to counsel.  Toto’s counsel ultimately learned of the illicit communications and contacted Haidar’s counsel demanding that Haidar cease and desist from any further communications.  The court granted the motion for sanctions and prohibited the statements from being used at trial.  In support of its ruling, the court considered two issues.

First, the court noted that the Rules of Professional Conduct allow parties to directly communicate with each other only if the attorney is aware and it does not involve the subject matter of the litigation.  See Rule 4.2, Comment 4.  “Contact with employees that may bind the corporation by their acts or omission should be contacted through formal discovery. See Upjohn v. U.S., 449 U.S. 383 (1981)(defining “control groups”). Rule 4.2 ‘prohibits ex parte communication with any member of an organizations control group as defined in Upjohn.’” Haidar at p3.  The court concluded that this communication violated those rules, and the administration of justice is best served when a more controlled process of discovery was used.  Id.  Moreover, it did not matter that litigation was pending.  Comment 8 of Rule 4.2 extends to communications with a represented party, “whether or not a party to a formal proceeding.”

Second, notwithstanding the Rules of Professional Conduct, the court considered whether or not the statements by the Technical Support Department were admissible under the rules of evidence.  Under Virginia’s Rules of Evidence, statements by a company employee can only be binding as a statement against interest if made by “a person authorized by the party to make a statement concerning the subject.” Va. R. Ev. 2:803(0)(C).  The court found that the Technical Support Department employees were neither part of Toto’s “control group” nor authorized to discuss or make statements concerning the subject matter of the litigation.  Accordingly, the statements were not Admissions by party-opponents and were inadmissible hearsay.

While this ruling gives a corporate defendant some sense of security in that it may not always be on the hook for a random employee’s comments, there are some stronger takeaways.  First, the court’s analysis of hearsay statements comments can be applied to post-accident statements made by unauthorized employees.  In instances where non-managers approach Plaintiff and volunteer statements about company processes or conclusions about how and why something happened, it is very possible that the rationale of Haidar can be used to exclude the statements.  Similarly, Plaintiffs often return to a location the day or week following an accident and ask employees questions.  These statements could also fall outside of the scope of Va. R. Ev. 2:803. If so, the only way to get that statement into evidence would be to call the employee to the stand at trial and try to reword the questions to make it admissible.

If you have any questions concerning the Haidar ruling or if any employee statements could be excluded, KPM LAW is ready to defend your interests or answer your questions.


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