Ethics Opinion 365

Conflict of Interest Analysis for Government Agency Lawyer Defending Agency from Furlough-Related Employment Complaints While Pursuing Her Own Furlough-Related Employment Complaint

Can a government lawyer represent an agency employer in defending the agency from furlough-related complaints brought by other agency employees when the lawyer was also furloughed and is pursuing her own complaint in which the allegations are substantially similar to those in the complaint she is defending? Under the D.C. Rules of Professional Conduct, a lawyer has a conflict of interest in a matter when “[t]he lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by the lawyer’s responsibilities to or interests in a third party or the lawyer’s own financial, business, property, or personal interests.” Rule 1.7(b)(4). Such a conflict plainly exists in this situation. However, so-called individual interest conflicts like this one can be waived under Rule 1.7(c) if:

1. Each potentially affected client provides informed consent to such representation after full disclosure of the existence and nature of the possible conflict and the possible adverse consequences of such representation; and

2. The lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client.

The only affected client here is the agency. The agency’s informed consent to the conflicted lawyer’s representation notwithstanding her individual interest conflict would satisfy the requirements of the first paragraph. But client consent alone is not enough. Under the second paragraph, the lawyer must also reasonably believe that she can provide competent and diligent representation to the agency in the matter despite her personal interest, and her belief must be objectively reasonable under the circumstances. That may be a difficult standard to meet when the lawyer is pursuing her own challenge to the furlough while being asked to defend the agency against substantially similar challenges by other affected agency employees.

Applicable Rules

• Rule 1.7 (Conflict of Interest)
• Rule 5.1 (Responsibilities of Partners, Managers, and Supervisory Lawyers)
• Rule 5.2 (Subordinate Lawyers)

Inquiry

As has been widely reported, automatic cuts to the federal government’s budget – the so-called “sequester” – are requiring federal agencies to find ways to reduce their costs of operation. One way to reduce costs is to furlough government employees. The Committee has received a number of inquiries from government lawyers about their obligations under the D.C. Rules of Professional Conduct when asked to work on sequester-related furlough disputes that may affect them personally. The inquirers are lawyers in the federal government whose normal responsibilities include defending their agencies against employment-related complaints brought by agency employees. These lawyers are themselves agency employees, each of whom has the right to challenge agency employment actions, including furloughs, that affect them personally. When multiple employees file complaints, we understand that each employee’s complaint is handled separately in an administrative proceeding or litigation that involves only the agency and the individual employee as parties.

Employment-related complaints normally turn on the specific facts relating to the particular employee. Even when a single action such as a furlough affects a group of employees, complaints brought by individual members of that group may be factually distinguishable from each other. For example, a complaint by an employee who met certain filing deadlines would be distinguishable from an otherwise identical one brought by an employee who failed to meet the deadline. Different individuals may choose to challenge the decision affecting them in different ways. Accordingly, as discussed further below, whether an attorney may have a conflict of interest in defending the agency against a furlough complaint while pursuing her own furlough complaint against the agency will depend on the similarity between the allegations in the attorney’s complaint and the complaint she is defending, and on whether the outcome of the complaint the lawyer is defending will have a persuasive or binding effect on her own complaint. The specific rules that govern furloughs, including employees’ notice and appeal rights, depend on the nature and length of the furlough. See generally 5 C.F.R. pt. 351, Reduction in Force; 5 C.F.R. pt. 752, Adverse Actions.

To crystalize these issues for discussion, we will hypothesize a situation involving all the following elements:

1. One agency’s implementation of the sequester resulted in a decision to furlough a specific group of employees, including agency lawyers who normally defend the agency against employment-related complaints.

2. An agency lawyer normally charged with defending the agency in such matters has filed a complaint challenging her own furlough.

3. Her personal complaint about her furlough is pending and unresolved when she is asked to defend the agency against furlough-related complaints filed by one or more other members of that furloughed group, the allegations of which are substantially similar to those in her own complaint. The resolution of one of the complaints may have a persuasive or binding effect on the other complaints.

4. The agency assigning her to defend against the other complaints knows that the lawyer is challenging her own furlough but still wants (and, perhaps, needs) that lawyer to defend against the substantially similar complaints brought by other members of the furloughed group.

Do the D.C. Rules of Professional Conduct permit the agency lawyer to represent her agency client in defending the agency from those furlough-related complaints in this situation?¹

Analysis

Rule 1.7 of the District of Columbia Rules of Professional Conduct groups conflicts of interest into two categories: (1) those that can be waived under some circumstances, and (2)those that can never be waived even if all affected clients consent. Rule 1.7(a) defines the non-waivable conflict: “A lawyer shall not advance two or more adverse positions in the same matter.” Rule 1.7(b) defines four types of conflicts that can be waived under circumstances set out in Rule 1.7(c). As discussed more fully below, the inquiry under consideration does not involve a non-waivable conflict under Rule 1.7(a) but an individual interest conflict under Rule 1.7(b)(4). However, whether that conflict can be waived under Rule 1.7(c) is a difficult question to which the answer will vary depending upon the facts of each individual situation.

1. Rule 1.7(a).

Although agency employer is asking the lawyer to defend her agency against furlough-related complaints by other agency employees at the same time that the lawyer is pursuing her own furlough-related complaint against her agency employer, there would be no violation of Rule 1.7(a) because each employee’s furlough challenge is a separate matter within the meaning of the rule.² Because they are separate matters, the lawyer would not be advancing “two or more adverse positions in the same matter.” Accordingly, this situation would not give rise to a non-waivable conflict under Rule 1.7(a).³

2. Rule 1.7(b).

Rule 1.7(b) defines four conflict situations that can be waived under circumstances defined by Rule 1.7(c).⁴ The fourth specifically addresses situations in which the lawyer’s individual interests may adversely affect the lawyer’s representation of a client:

(b) Except as permitted by paragraph (c) below, a lawyer shall not represent a client with respect to a matter if:

* * *

(4) The lawyer’s professional judgment on behalf of the client will be or reasonably may be adversely affected by the lawyer’s responsibilities to or interests in a third party or the lawyer’s own financial, business, property, or personal interests.

This rule generally applies to a lawyer who is asked to defend an agency’s furlough of other agency employees while the lawyer is pursuing her own challenge to the same furlough.⁵ A lawyer who is pursuing her own furlough complaint against the agency might be motivated to pull her punches in defending against substantially similar complaints brought by other agency employees, especially if the lawyer’s advocacy on behalf of the agency may detrimentally affect her own case. Thus, under the D.C. Rules of Professional Conduct, the lawyer cannot represent the agency in defending against others’ furlough complaints “[e]xcept as permitted by paragraph (c)” of Rule 1.7.

3. Rule 1.7(c).

Individual interest conflicts under Rule 1.7(b)(4) can be waived under the conditions set forth in Rule 1.7(c):

A lawyer may represent a client with respect to a matter in the circumstances described in paragraph (b) above if

1. Each potentially affected client provides informed consent to such representation after full disclosure of the existence and nature of the possible conflict and the possible adverse consequences of such representation; and

2. The lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client.

The phrase “informed consent” in the first paragraph means “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” Rule 1.0(e).

Our hypothetical assumes that the lawyer’s employer – her agency client – has given informed consent to her representation of the agency in defending against other employees’ furlough complaints while the lawyer pursues her own, substantially similar furlough complaint against the agency. In short, we assume that the agency has considered the lawyer’s potentially conflicting personal motivations and decided that it still wants the lawyer to defend it from substantially similar furlough complaints filed by others. Such a consent would satisfy Rule 1.7(c)(1).⁶

Under Rule 1.7(c)(2), however, the client’s consent alone is not enough to waive the conflict. In addition, in order to undertake a representation, the lawyer must “reasonably believe[] that the lawyer will be able to provide competent and diligent representation to each affected client.” That is, the lawyer must hold such a belief and that belief must be reasonable under an objective standard. Under Rule 1.0(j), “‘reasonable’ or ‘reasonably’ when used in relation to conduct by a lawyer denotes the conduct of a reasonably prudent and competent lawyer.”

As we recognized in another opinion:

[T]he prohibition of Rule 1.7(b)(4) . . . is one which is highly dependent on the circumstances of the representation and the lawyer’s own circumstances. In this Opinion, we can do no more than identify the conflict of interest considerations, and leave it to the inquirer to determine whether the particular circumstances of his representation of his client are such that his judgment “will be or reasonably may be adversely affected” by the fee arrangement. The test to be applied is an objective one, that is, whether a lawyer’s judgment “will be or reasonably may be adversely affected” by certain circumstances is determined by the position of a reasonable lawyer under the circumstances.

D.C. Legal Ethics Opinion 300 (2000).

In a later opinion, we raised concerns under Rule 1.7(b)(4) about an arrangement in which “success” in representing the client in an immigration matter would trigger extensive and long-lasting financial support obligations from the lawyer to the immigration client:

The significant financial obligations imposed by the Affidavit of Support can create exactly the kind of conflict addressed by this rule. A lawyer who has second thoughts or a change in financial circumstances, for example, may have an incentive to sabotage the client’s immigration application so that the lawyer’s support obligations never can take effect.

D.C. Legal Ethics Opinion 354 (2010).

The ABA’s Standing Committee on Ethics and Professional Responsibility considered personal interest conflicts in the context of a situation in which the lawyer is asked to post bail for a client. ABA Formal Ethics Opinion 04-432 (2004). Analyzing Model Rule 1.7(a)(2),⁷ that opinion concluded that the lawyer could post bail for the client “only in those rare circumstances in which there is no significant risk that [the lawyer’s] representation of the client will be materially limited by her personal interest in recovering the amount advanced.”⁸

In our view, the reasonable belief requirement of Rule 1.7(c)(2) is a difficult obstacle to surmount if the lawyer is asked to defend the agency against a furlough complaint with allegations that are substantially similar to the allegations she has raised in her own furlough complaint against the agency. The level of difficulty increases with the similarity of the allegations in the complaints. In other words, the obstacle becomes harder to surmount as the allegations converge towards sameness. The difficulty is compounded if an agency or court decision resolving one complaint will have a binding effect, or may have a persuasive effect, on the resolution of the other complaint. At the other end of the scale, it is less likely that Rule1.7(c)(2) will present an obstacle to the lawyer’s representation when there is no factual or legal overlap between the lawyer’s own furlough-related complaint and the complaints of others against which the agency has asked the lawyer to defend.

Although we can identify a framework for the analysis of these issues generally, the answer in any particular situation will depend on the allegations, the lawyer involved, and the procedural context of the complaint. If the lawyer does not believe that she can provide “competent and diligent representation to” her agency client in the furlough matters while pursuing her own furlough complaint – or if the hypothetical “reasonably prudent and competent lawyer” in her situation would not believe that she could – she may not undertake the representation of the agency client in such matters even if the agency is prepared to waive the conflict. Rule 1.7(c)(2).

4. Rules 5.1 and 5.2, Supervising and Supervised Lawyers.

This inquiry also raises issues for agency lawyers who supervise furloughed lawyers. Supervisors and managers who are lawyers can be held professionally responsible for their subordinates’ conduct. Rule 5.1(a) requires lawyers who possess “managerial authority in a law firm or government agency” to “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm or agency conform to the Rules of Professional Conduct.” Rule 5.1(b) requires a lawyer who has “direct supervisory authority over another lawyer” to “make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.” Rule 5.1(c)(1) provides that a lawyer “shall be responsible for another lawyer’s violation of the Rules of Professional Conduct” if the lawyer “orders or with knowledge of the specific conduct, ratifies the conduct involved.”⁹

In turn, a subordinate lawyer is responsible for complying with the professional conduct rules even if a supervisor or other person directs her to engage in prohibited conduct. See Rule 5.2(a) (“A lawyer is bound by the Rules of Professional Conduct notwithstanding that the lawyer acted at the direction of another person”). However, a subordinate lawyer does not violate the professional conduct rules “if that lawyer acts in accordance with a supervisory lawyer’s reasonable resolution of an arguable question of professional duty.” Rule 5.2(b).

Conclusion

We recognize that an agency lawyer would be placed in a difficult situation if her full-time employer, the agency, asked her to defend the agency against furlough-related complaints that raise allegations substantially similar to the allegations the lawyer is raising in her own complaint, even where the agency waived any individual interest conflict relating to the lawyer’s representation. Under the D.C. Rules of Professional Conduct, the client’s consent is necessary but not sufficient to enable a lawyer to undertake certain kinds of matters. Clients cannot waive their right to have a lawyer who reasonably believes she can provide competent and diligent representation. Moreover, supervisory lawyers must make reasonable efforts to ensure that their subordinate lawyers comply with the professional conduct rules. Lawyers have an affirmative obligation not to undertake matters that they do not reasonably believe they can handle competently and diligently. We suggest that agencies and their lawyers work together to resolve the ethical issues addressed in this opinion.

Published: April 2013

1. This situation also involves questions under a separate body of law governing conflicts of interest for federal government employees generally. See generally 5 C.F.R. pt. 2635, Standards of Ethical Conduct for Employees of the Executive Branch. Such matters and any other requirements of substantive law are outside the D.C. Rules of Professional Conduct, and we lack authority and expertise to express any views on them. We note that lawyers are required to understand and comply with the requirements of any applicable substantive law as well as the requirements of the Rules of Professional Conduct.
2. We note that Rule 1.7(a) speaks of advancing adverse positions in “the same matter” while Rule 1.7(b)(1) speaks of conflicts between clients in a “matter” that “involves a specific party or parties.” D.C. Rule 1.0(h) defines “matter” to mean “any litigation, administrative proceeding, lobbying activity, application, claim, investigation, arrest, charge or accusation, the drafting of a contract, a negotiation, estate or family relations practice issue, or any other representation, except as expressly limited in a particular rule.” The meaning and effect of the limiting clause in Rule 1.7(b)(1) is discussed at length in D.C. Legal Ethics Opinion 344 (2008). Although the word “matter” in Rule 1.7(a) is not confined to matters involving specific parties, the only reading of Rule 1.7(a) that makes sense in the context of the current inquiry is one that treats each employee’s individual challenge to a furlough decision affecting that employee as a separate “matter.”
3. As explained in the comments to the rule, “[i]nstitutional interests in preserving confidence in the adversary process and in the administration of justice preclude permitting a lawyer to represent adverse positions in the same matter. For that reason, paragraph (a) prohibits such conflicting representations, with or without client consent.” Rule1.7 cmt. [2].
4. The first three paragraphs involve lawyers with two or more clients. Rule 1.7(b)(1) addresses a situation in which one client asks the lawyer to represent it in a matter that involves and is adverse to another client. Rules 1.7(b)(2) and (b)(3) deal with situations in which the representation of one client will be or is likely to be adversely affected by the lawyer’s representation of another client. These three subsections do not apply here because the agency lawyers have only one client, their agency employer.
5. See Rule 1.7 cmt. [11] (“The lawyer’s own interests should not be permitted to have an adverse effect on representation of a client.”).
6. A government agency that employs lawyers is a sophisticated consumer of legal services from whom it is easier to get an effective waiver of certain conflicts than from less sophisticated clients. See Rule 1.7 cmt. [28] (“Lawyers should . . . recognize that the form of disclosure sufficient for more sophisticated business clients may not be sufficient to permit less sophisticated clients to provide informed consent.”); D.C. Legal Ethics Opinion 354 (2010) (“While conflicts under Rule 1.7(b)(4) can be waived under certain circumstances, the enforceability of such a waiver from an individual immigration client in these circumstances is doubtful.”).
7. Model Rule 1.7(a)(2) defines several conflict situations, including one in which “there is a significant risk that the representation of one or more clients will be materially limited by . . . a personal interest of the lawyer.”
8. The ABA opinion lists several examples of “unusual situations” in which the bond-posting lawyer might conclude that continuing representation is permissible:
The amount involved may, for example, be negligible and of little or no consequence to the lawyer. There may be situations in which a lawyer who is a friend of the family of the client may expect that the family will indemnify her from loss when she has posted bond for the client in exigent circumstances. The lawyer could commit to herself, or even agree in writing to the client, that she would not exercise her right of legal recourse against the client. Yet again, circumstances may be such that the lawyer reasonably believes that there is little or no risk that the client will fail to appear.
9. In addition, Rule 5.2(c)(2) provides that a lawyer shall be responsible for another lawyer’s violation of the Rules of Professional Conduct if “[t]he lawyer has direct supervisory authority over the other lawyer or is a partner or has comparable managerial authority in the law firm or government agency in which the other lawyer practices, and knows or reasonably should know of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.”