1. Introduction
There has been a marked increase in the number of attorneys turning to corporate employment and a correlative awareness of their professional obligations as in-house or corporate counsel./1/ As the California Supreme Court observed, a recent survey shows that 10 percent of all lawyers are employed by corporations and that the number of such lawyers has doubled in the last decade over the prior fifteen years.

Salaried lawyers are subject to the usual ethical constraints imposed on all lawyers./2/ After ending their employment, they cannot accept a retainer adverse to substantially similar matters on which they counseled their employers./3/

This article concerns those issues that have distinguished in-house lawyers. One issue concerns identifying negligence liability to those persons who have claimed a duty of care. Another issue is the considerations that arise principally because the client not only pays the salary but also influences counsel's career and conduct. Those pressures were examined by a 1994 California Supreme Court decision, discussed infra § IV.B.

Of course, the potential for such a dilemma is common to outside counsel as well. But, unlike their in-house counterparts, outside lawyers enjoy a measure of professional distance and economic independence that usually serves to lessen the pressure to bend or to ignore professional norms. Here again, the distinguishing feature of the in-house attorney is a virtually complete dependence on the goodwill and confidence of a single employer to provide livelihood and career success./4/

2. Conflicting Interests
Conflicts can exist for in-house corporate counsel in representing the corporation in a derivative action. A California district court said that in-house counsel should not represent the corporation in a derivative action, particularly concerning approval of a settlement./5/ The court emphasized the appearance of impropriety of counsel recommending a settlement endorsed by the defendant-directors who were the attorney's superiors. Because counsel would be reluctant to disagree with those who control his or her future, the settlement decision should be examined by independent counsel.

3. Liability to Whom
The prevailing rule is that an attorney for an entity owes a duty of care only to that entity. Most of the case law concerns failed efforts by third persons to impose a duty. The following discussion concerns the notable exceptions.

An attorney can assume a duty to an officer, director, shareholder, or employee. To establish this duty, much more is required than mere advice or communications, since the function of a corporation's lawyer is to communi-cate to the client's officers./6/ For example, an attorney retained by a corporation to draft a shareholder's agreement did not assume a duty to an officer./7/ In litigation, an officer may be sued for conduct in that capacity and represented by the corporation's attorney. The Court of Appeals for the Sixth Circuit held that more was required to establish that the representation was personal./8/

The Alaska Supreme Court extended a director's duty to preserve the assets of an insolvent corporation to the attorney for the corporation./9/ This informal trust fund theory was applied to an attorney who represented both the insolvent corporation and its sole shareholder and controlled corporate assets. Under the unique facts of the case, the lawyer filed for bankruptcy for both the corporation and its sole shareholder. In a lawsuit brought for the same clients, the lawyer placed $100,000 from a settlement in his trust account, distributing the money to himself for fees and to the sole share-holder. Because there was a conflict between the interests of the corporation and the individual to the proceeds, creditors could succeed to assets of the dissolved corporation, similar to shareholders of the dissolved corporation. There was a question of fact whether the lawyer had breached a duty.

A lawyer may have exposure to liability from the client's employees. The major source of exposure is the failure to explain to the employee that personal representation is not being provided. For example, a lawyer who deals with an employee regarding that person's invention may be the subject of a claim for malpractice based on an alleged attorney-client relationship. A Texas lawyer was sued for erroneously advising an employee that she was required to assign her patent rights./10/

The aforementioned exposure arises mostly for the patent lawyer, concerning representation of both the employee and employer regarding an invention. Often, attorneys represent corporations whose employees may develop a patentable device. The attorney may then undertake to represent the corporation and the employee in securing the necessary patents. The potential for a conflict of interests is high. If the attorney, while purporting to represent both, favors the interests of the corporation, the lawyer can be liable to the employee for a fiduciary breach.

4. Duty of Disclosure
The converse of a duty to a nonclient is the scope of the duty to the client-entity. This principle of privity has been dramatically underscored in federal litigation concerning actions brought by the Resolution Trust Corporation (RTC) or previously by the Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance Corporation. The point made is the extent of the duty of loyalty to the entity in disregard of the relationship with or instructions of the officers. The 1992 Ninth Circuit decision of Federal Deposit Insurance Corp. v. O'Melveny & Meyers/11/ concerned the duties of a law firm to a corporation whose two principals and sole shareholders fraudulently overvalued assets, engaged in sham sales, and "cooked the books" to disguise the banks dwindling net worth. In preparing the private placement memorandum, the law firm did not consult with the accountants or the regulators. The bank failed, and the FDIC succeeded as conservator of the bank. The law firm contended that it had no duty to ferret out the principals' fraud. The court said, "An important duty of securities counsel is to make a 'reasonable, independent investigation to detect and correct false or misleading materials' ¼ . In its high specialty field, O'Melveny owed a duty of care not only to the investors but also to its client, ADSB."/12/

Other courts have reached a similar conclusion regarding an attorney's duty to disclose the misconduct of an officer to the governing body of the entity./13/ This attitude was reflected in the statement by a federal District of Columbia judge:

A Tenth Circuit decision upheld the liability of a law firm for the fraud of the bank's president and vice president in Federal Deposit Insurance Corp. v. Clark./15/ The FDIC sued two lawyers and their firm for failing to uncover and prevent a fraud that had been perpetrated against the bank by third parties. The attorneys had been involved in establishing the bank and handling its corporate affairs, and one of the attorneys was corporate secretary. The firm was hired to defend litigation by a debtor concerning the laundering of $9 million in stolen currency in a sale for $2 million to the president and vice president of the bank, among others. These officers arranged for fraudulent loans, forged checks, and used these devices to drain the money from the bank.

The lawyers were alerted to the scheme when two borrowers sought to cancel their obligation to repay $350,000, alleging the facts constituting the scheme. The lawyer called the president, who said the suit was a "misunder-standing" that would be resolved. The attorney-secretary explained the lawsuit in similar terms to the board of directors, suggesting that the bank was a party solely to put additional pressure on the officer-defendants. The board took no action and was later informed that the case was settled. In the meantime, however, the fraudulent scheme continued, to the further injury of the bank in the amount of $1,756,484. The lawyers' liability was limited to "the degree or percentage of negligence or fault attributable to such defendant ¼ ." The lawyer-secretary was liable for 14 percent, his partner for 5 percent, and the firm was jointly liable for both.

Perhaps the most ominous decision was an Arizona federal district court action against the professionals who provided services, the subject of In re American Continental Corp./Lincoln Savings & Loan Ass'n./16/ The law firm of Jones, Day, Reavis & Pogue wrote an opinion letter in connection with a 1986 registration statement. Having done the regulatory audit, the firm allegedly knew that Lincoln had backdated files, destroyed appraisals, and altered other records. The law firm was accused of advising its client on how to rectify the deficiencies so it would not be apparent to the Federal Home Loan Banking Board and make political contributions in exchange for "liberal" fee billing. The court was critical of the defendants' claim of their obligation to maintain confidentiality:

In denying the law firm's motion for summary judgment, the court insisted on strong action and disclosure where the law firm learns that its client's officers are engaged in improper conduct:

A subsequent Arizona district court decision distinguished this prior authority in rejecting RTC's contention that a law firm had broad duties of disclosure concerning a savings and loan (S&L) association's business affairs./19/ The law firm incorporated the S&L and virtually was its only outside lawyers. Further, one of its members was an incorporator, director, and officer. The RTC contended that the law firm should have advised the directors that a loan exceeded the Loans to One Borrower limit. Despite the broad representation, the court found the following factors precluded implying such a duty. The lawyers' work in documenting loans only began after a loan was negotiated by the S&L and did not involve execution or closing. The firm was never authorized to audit their client's regulatory compliance or borrower suitability. The law firm was aware that the S&L had in-house procedures for complying with the Loans to One Borrower regulations and had no reason to believe that the client would not comply.

Pennsylvania lawyers were sued for allegedly allowing a savings and loan association to engage in unsound, highly speculative lending practices./20/ The lawyers failed to caution the client that it lacked adequate lending policies and procedures and that the loans were poorly documented and underwritten.

The lawyer who pursues the entity's claim against the principal may be sued by that person who views such conduct as tortious. A Kentucky federal action was brought by a president of a coal company for wrongful discharge against the corporation and legal malpractice against the corporation's attorney./21/ The plaintiff claimed that, because the law firm had represented him previously, its participation in the investigation of kickbacks to him was a conflict of interests. Although the law firm had represented the president in defending an environmental action, the court of appeals observed that the defense was in his capacity as an officer and not personal, though he could be subjected to personal liability.

.0 Confidentiality Issues

1. Zero Subsequent (Adverse) Representation
   An attorney who worked as in-house counsel could be precluded from representing an adversary of his or her former employer in an identical or similar matter in which the lawyer had previously represented the former employer./22/ For example, if counsel had access to the corporation's files on patents and patent applications, the lengthy life of patents can preclude adverse representation against the corporation for decades./23/

   The ethical constraints also apply to a client's salaried counsel./24/ The court can exercise broad powers in devising remedies to protect confidences. A New York federal court not only disqualified the plaintiffs' counsel, but also dismissed their action because of the taint of former in-house counsel's misconduct./25/ The former in-house counsel for one of the defendants was a source of information to the plaintiffs. He had drafted the private placement memorandum for the transaction that was in dispute. After he left, he met with counsel for plaintiffs for three hours, discussing potential legal claims arising out of the private placement memorandum. He also reviewed the complaint and billed for that review. Because plaintiffs' counsel deliberately affiliated with a defendant's lawyer and relied on privileged information for drafting the complaint, that law firm and co-counsel, who likewise relied on such information, were disqualified. The court dismissed the complaint, in which the allegations were derived from the disclosures of the in-house lawyer, without prejudice against those defendants.

   A 1997 decision by a Pennsylvania federal court concerned whether to enjoin an in-house lawyer who left a costume jewelry retailer to work for a competitor./26/ Over the years, the lawyer acquired detailed knowledge of every aspect of the business except the income of the higher salaried executives. Although the former client sold jewelry manufactured by others and the present client made its own original jewelry, the court found that the clients competed for store locations. The injunction was limited to preclud-ing the lawyer from any representation or disclosures on that subject.

2. Wrongful Termination, Whistleblowing, and Employment-Related Issues
   An area of recent examination by the courts is the remedies available to salaried lawyers for being actually or constructively terminated by their employers./27/ Salaried lawyers may be limited regarding remedies for being improperly terminated. Lawyers who have been fired have brought a variety of actions against their former employers for damages./28/

   The initial obstacle in many jurisdictions is the common-law rule that precludes a cause of action for an at-will employee, including a salaried lawyer./29/ That rule applies to both nonlawyers and lawyers./30/ A Texas court explained that a lawyer was compelled not to engage in unethical conduct, but counsel's refusal entitled the client to end his employment./31/

   Public policy exceptions have been applied to the at-will termination rule. According to an Illinois federal court, the Age Discrimination in Employment Act provided a statutory exception to a terminated assistant general counsel./32/ An unpublished federal district court opinion from New York upheld a cause of action against a corporation under 42 U.S.C. § 1981./33/ The lawyer was hired to be the corporation's president but was fired after advisers cautioned that "hiring a 'New York Jew' would be disastrous for" the company. Thereafter, the lawyer continued to be employed as counsel but was terminated in a telephone call because "advisers" had suggested that the corporation should not continue to retain a "New York Jew" as its attorney. The court concluded that § 1981 applied on its face to racial discrimination, despite the rule that a client could terminate a lawyer at will. Although protecting a client's right to discharge a lawyer may make it appropriate to impose a higher standard of proof of discriminatory intent, the evidence that the lawyer was discharged because he was "a New York Jew" invoked the § 1981 remedy.

   Further, although Pennsylvania recognizes an exception in which the discharge of an employee violates public policy, a court held that an insurance company's general counsel could be fired for failing to undertake policy filings, though he believed the conduct would violate state law./34/ The court concluded that belief was general and not sufficiently serious to warrant the exception.

   In the majority of jurisdictions there is a modern exception to the at-will termination rule, a remedy for retaliatory discharge./35/ Even then, the obstacle for salaried counsel is that the employment relationship is augmented by an attorney-client relationship. The usual rule is that the client may end that relationship any time, even over the objection of the attor-ney./36/ Where the state recognizes a remedy for wrongful termination, the question remains whether the attorney-client relationship invokes the principle of at-will termination to deprive a salaried lawyer of the remedy. Since 1990, most courts have allowed a fired employee to pursue ordinary remedies if the fiduciary obligations owed the employer-client are not implicated./37/

   The primary concern is the obligation of confidentiality. A consequence is that judicial protection of the client's confidences can preclude an employed lawyer from suing for wrongful termination. The Illinois Supreme Court held that an in-house corporate attorney could not sue his employer for retaliatory discharge./38/ The attorney claimed that he told his employer's president to reject a dialyzer shipment that would imperil the health of acute patients. His request was disregarded. He alleged that he was fired because he threatened to report the shipment to the Food and Drug Administration. The court adopted the conclusion of a prior decision,/39/ reasoning that the remedy of retaliatory discharge would impinge on the willingness of employers to be candid with their in-house lawyers, who could use the information in making such a claim. The public is protected because the lawyer is compelled to withdraw from representing the employer if to not do so would violate the state's ethical rules.

   A common-law or statutory exception can provide a remedy. Thus, under a New Jersey "whistleblower" statute prohibiting retaliatory action for refusing to participate in fraudulent or criminal conduct, a former in-house attorney was allowed to sue./40/ The attorney's obligation of confidentiality fell within the exception because his employer's conduct involved the fraudulent acquisition of privileged, confidential trade secrets of a competi-tor. A Michigan court upheld a $1.25 million judgment for constructive discharge for a former head of an insurance company's staff counsel operation./41/ The attorney was fired for refusing to violate his ethical duties to insureds. The court observed that the attorney also had performed administrative functions distinct from legal activities.

   A Minnesota corporate attorney, who protested surveillance of employees, was fired./42/ He sued for breach of contract and retaliatory discharge, alleging a violation of the whistleblower statute and that the company failed to follow its own procedures. The Minnesota Supreme Court found no reason to preclude an action for breach of contract by the employed, in-house counsel, though the employer is the only client. The court said that any concern regarding the attorney-client privilege can be addressed by the trial court if the issue arises. The remaining theories were not examined because no federal or state statute was violated by the employer.

   A 1995 Kansas decision examined the application of ethical rules regarding the employer's control over the employee's conduct./43/ A salaried attorney for the Kansas Department of Transportation was assigned to investigate a landowner's claim for additional expenses incurred in an earlier condemnation. The landowner was represented by a lawyer in the same firm that she consulted regarding a personal legal matter. For that reason, she told the Department that she could not handle the assignment. Her superior asked for more information on the specifics, but she declined. She was suspended for five days without pay. Although under Rule 5.2(b) she could accede to a supervisory lawyer's reasonable resolution of "an arguable question of professional duty," under 5.2(a) a "lawyer is bound by the rule of professional conduct notwithstanding that the lawyer acted at the direction of another person."/44/ Here, the lawyer knew that the work assignment could violate Rules 1.7(b) and 1.16. Thus, although a subordinate could rely on the judgment of their superior, she need not. The court said there were less intrusive ways of getting the information, such as asking her to have the law firm send a letter confirming its attorney-client relationship with her.

   Another Kansas decision concerned an action under the Civil Rights Act by a terminated general counsel for the State Banking Commission for violation of her First Amendment right to free speech, alleging that she was fired because she reported federal and state violations by a deputy commissioner to the FDIC./45/ In granting summary judgment for the defender, the trial court found that the plaintiff wrongfully communicated confidential information. The Kansas Supreme Court said that the attorney's obligation as counsel was first and foremost to her client. A balancing test was applied to weigh her First Amendment rights, giving wide deference to the employer's judgment.

   Here, the plaintiff, as counsel, had defended the very employee whom she later twice reported for violations. The court said that plaintiff used poor judgment and did not take steps available to her "that a reasonably prudent attorney would have taken prior to reporting what she suspected to be violations to the FDIC, thus destroying her effectiveness as counsel ¼ . Her acts destroyed any effectiveness she could have with the organization in the future. The governmental interest here must prevail over any first amendment rights that might be involved."/46/

   Similar reasoning resulted in reversal of a judgment awarded to a black lawyer who obtained a substantial jury verdict on her claim that her termination involved sexual and racial discrimination./47/ The Court of Appeals for the Fifth Circuit, however, reversed the judgment because the lawyer had disclosed confidential information to the Department of Energy of alleged discrimination by her employer. Her conduct could not be justified as a whistleblower complaint but was a breach of loyalty and confidentiality owed her employer-client./48/ The court held, "any betrayal of a client's confidences that breaches the ethical duties of the attorney places that conduct outside Title VII's protection."/49/

   The most comprehensive examination of the issues was by the California Supreme Court in 1994./50/ The court reviewed and rationalized the case law. The court saw no reason to discriminate against salaried counsel unless the fiduciary obligations were implicated. The court disagreed that the only option was for the lawyer to resign rather than commit an ethical breach. The court believed that failing to provide a limited remedy would degrade in-house counsel's professional status.

   The court said that a remedy should be allowed where one is available to a nonlawyer and existing law removes the requirement of attorney confiden-tiality. Thus, a remedy would exist if the reason for termination was for following a mandatory ethical obligation. If the ethical obligation implicated was merely permissible but not required by statute or law, two questions were involved. First, would the employer's conduct provide a remedy to a nonlawyer? Second, did a statute or ethical rule allow the lawyer to disclose such confidences necessary for pursuing the retaliatory discharge remedy? The court emphasized the importance of strictly applying the contours of the attorney-client privilege to the discharged lawyer-employee.

6. Organizational Entitlement of Salaried Counsel

A related issue concerns the ability of salaried government or corporate attorneys to organize and sue their client-employer. A California decision concerned whether salaried county counsel could sue their employer to resolve a wage dispute./51/ In reversing a judgment for the employees, the appellate court emphasized the duty of loyalty and cited precedent concern-ing fired lawyers. The court held that the salaried counsel could not sue their governmental client. The California Supreme Court disagreed because the ethical standards did not prohibit a lawsuit by an employed attorney against his or her employer./52/ Rule 3-300 only regulated business transactions between attorney and client and acquisition by an attorney of a pecuniary interest adverse to a client. Similarly, Rule 3-310(B)(4) concerned conflicts with the "subject matter of the representation." The friction between client and employed attorney might generate ill will but not an ethical impropri-ety./53/ In turning to common-law principles, the court held that lawyers could organize into a bargaining organization and use those tactics that do not violate codified ethical principles. The wrong is conduct that interferes with competent representation.

4.0 Qui Tam Actions

A 1994 federal district court decision examined whether a former corporate house counsel could act as a relator in a qui tam action against his former employer./54/ As an employee, the attorney dealt with matters related to compliance with government regulations, eventually becoming primarily responsible for these matters. In early 1990, he became concerned that the corporation might be violating certain federal acquisition regulations and contract provisions by supplying the government with used or remanufactured equipment rather than with the required "new, including recycled" equipment. He reported his concerns to his supervisors and began an investigation of his employer's practices. In November 1990, he was transferred to another geographical office. In 1992, for reasons unrelated to the qui tam suit, the corporation terminated his employment. He took approximately 4,300 copies of corporate documents that he believed supported his allegations that his former employer defrauded the government.

Shortly thereafter, the former employee initiated the qui tam action under the Civil False Claims Act, serving a copy of the complaint with many exhibits on the Attorney General of the United States. The government notified the court of its concerns regarding whether some of these documents should have been provided because of the lawyer's status as former counsel. The court ordered the documents placed under seal and then held the qui tam proceeding.

The court ruled that the former corporate house counsel could disclose to the government his former client's confidential documents and information only if a reasonable attorney in the circumstances would conclude that the disputed documents and information clearly established the employer-client's fraud. The court found, however, that a reasonable attorney would not conclude that the disputed information and documents clearly established an ongoing fraud by the former employer. Therefore, the court ordered the former corporate house counsel to return the disputed documents and enjoined him from voluntarily disclosing the confidential information.

In the interim, the government and corporation settled the underlying dispute for the sum of $300,000. The lawyer requested that he be awarded 25 percent of the settlement for bringing the action. He also petitioned for attorneys' fees and costs. The government contended that the proper statutory award was only 15 percent. The employer contended that the lawyer's role as former attorney precluded him from participating in this action. Although the act applies to "any person," the employer argued that allowing attorneys to act as qui tam plaintiffs against their own clients would encourage fiduciary breaches in gathering their clients' confidential information for their own economic advantage.

The court was not persuaded, reasoning that the False Claims Act did not preempt an attorney's obligation to preserve client confidences. The risk of disciplinary proceedings provided the restraint on such abuses. Moreover, clients could protect against an attorney's unlawful disclosure of their confidential information by seeking injunctive or declaratory relief. The court believed that, if state law allowed disclosure of client confidences to prevent a future or ongoing crime or fraud, then the attorney's use of the qui tam mechanism should be encouraged, not deterred.

ENDNOTES
/1/ Hyman Cos. Inc. v. Brozost, 964 F. Supp. 168 (E.D. Pa. 1997); General Dynamics Corp. v. Superior Ct., 7 Cal. 4th 1164, 876 P.2d 487, 32 Cal. Rptr. 2d 1 (1994). See also article cited in note 2, infra.

/2/ See "The Effect of Rule 1.6 on the Professional Situation of In-House Counsel," 18 J. Legal Prof. 299 (1994).

/3/ Webb v. E.I. du Pont de Nemours & Co., Inc., 811 F. Supp. 158 (D. Del. 1992) (ERISA matter which had been subject of prior twenty-seven years' employment).

/4/ For example, see General Dynamics Corp. v. Superior Ct., 7 Cal. 4th 1164, 1182, 876 P.2d 487, 498, 32 Cal. Rptr. 2d 1, 12 (1994).

/5/ In re Oracle Sec. Litig., 829 F. Supp. 1176 (N.D. Cal. 1993).

/6/ See Federal Deposit Ins. Corp. v. Clark, 978 F.2d 1541 (10th Cir. 1992), aff'g 768 F. Supp. 1402 (D. Colo. 1989), discussed in § III.A. E.g., Waggoner v. Snow, Becker, Kroll, Klaris & Krauss, 991 F.2d 1501 (9th Cir. 1993). See also cases in note 1.

/7/ Goerlich v. Courtney Indus., Inc., 84 Md. App. 660, 581 A.2d 825 (1990), cert. denied, 322 Md. 130, 586 A.2d 13 (1991).

/8/ Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996) (president named in an environmental suit against the corporation).

/9/ Willner’s Fuel Distrib., Inc. v. Noreen, 882 P.2d 399 (Alaska 1994).

/10/ Dunbar v. Baylor College of Med., 984 S.W.2d 338 (Tex. App. 1998). The issue decided concerned the statute of limitations.

/11/ 969 F.2d 744, 749, 750 (9th Cir. 1992) (“This rule applies even when, as here, a single individual owns nearly all of the corporation’s stock”), rev’d and remanded on other grounds, 512 U.S. 79, 114 S. Ct. 2048, 129 L. Ed. 2d 67 (1994). See Dore, “Presumed Innocent? Financial Institutions, Professional Malpractice Claims, and Defenses Based on Management Misconduct,” Colum. Bus. L. Rev. 122 (1995).

/12/ The U.S. Supreme Court granted certiorari, but rev’d and remanded on an unrelated ground, 512 U.S. 79, 114 S. Ct. 2048, 129 L. Ed. 2d 67 (1994). The attorneys urged the defense of estoppel, contending that misconduct of officers is that of the corporation. The corporation, however, not the officers, was the client. Applying federal law, the court of appeals held that the officers’ conduct was adverse to the corporation and, thus, was not attribut-able to the corporation. The court said, “This rule applies even when, as here, a single individual owns nearly all of the corporation’s stock.” The U.S. Supreme Court held that state law controlled and remanded for that determi-nation. After remand, the Ninth Circuit applied California law, finding “it a closer question under state law than under federal law.” The court held that the FDIC was not barred by the equitable defenses O’Melveny could have raised against the bank. As before, the court reasoned that the receiver’s ability to collect would be frustrated by imputing the bank’s inequitable conduct to the receiver. The decision is questionable because the action against the law firm was not in equity but in law to recover damages, to which the fault of the former client is a defense under California law. Federal Deposit Ins. Corp. v. O’Melveny & Myers, 61 F.3d 17 (9th Cir. 1995).

/13/ In re American/Continental Corp./Lincoln Sav. & Loan Sec. Litig., 794 F. Supp. 1424 (D. Ariz. 1992); Federal Sav. & Loan Ins. Corp. v. McGinnis, Juban, Bevan, Mullins & Patterson, P.C., 808 F. Supp. 1263 (E.D. La. 1992).

/14/ Lincoln Sav. & Loan Ass’n v. Wall, 743 F. Supp. 901, 920 (D.D.C. 1990).

/15/ 978 F.2d 1541 (10th Cir. 1992), aff’g 768 F. Supp. 1402 (D. Colo. 1989).

/16/ In re American/Continental Corp./Lincoln Sav. & Loan Sec. Litig., 794 F. Supp. 1424 (D. Ariz. 1992).

/17/ Id. at 1452.

/18/ Id. at 1453.

/19/ Resolution Trust Corp. v. Blasdell, 154 F.R.D. 675 (D. Ariz. 1993).

/20/ Resolution Trust Corp. v. Farmer, 823 F. Supp. 302 (E.D. Pa. 1993).

/21/ Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996). The court observed that the lawyer’s obligation to the corporation required him to report the president.

/22/ See General Elec. Co. v. Valeron Corp., 428 F. Supp. 68 (E.D. Mich. 1977).

/23/ Baxter Diagnostics, Inc. v. AVL Scientific Corp., 798 F. Supp. 612 (C.D. Cal. 1992) (worked on predecessor patent, then represented adverse party). The issue of access to files was discussed in General Electric Co. v. Valeron Corp., 428 F. Supp. 68 (E.D. Mich. 1977). The unusually long duration of patents, and the long time consumed in developing inventions and applying for patents, adds a unique factor in these disqualification proceedings. In contrast, in the usual litigation context, the information possessed by an attorney becomes irrelevant in a short time as business practices change. For an example of the long duration of patent and trademark confidences, see Humble Oil & Refining Co. v. American Oil Co., 224 F. Supp. 909 (E.D. Mo. 1963), and Koehring Co. v. Manitowoc Co., Inc., 418 F. Supp. 1133 (E.D. Wis. 1976). One case suggested that an in-house patent attorney probably could represent an adversary challenging a patent of his former employers so long as the patent had not been applied for until after he left the company. American Roller Co. v. Budinger, 513 F.2d 982 (3d Cir. 1975). This approach, however, is too simplistic since in-house patent attorneys also can receive confidences concerning new products while they are still in develop-ment before any application is filed. Therefore, any judicial hearing on disqualification should include an investigation of preapplication disclosure of confidences to the patent counsel’s office.

/24/ See “The Effect of Rule 1.6 on the Professional Situation of In-House Counsel,” 18 J. Legal Prof. 299 (1994); Bigda v. Fischbach Corp., 898 F. Supp. 1004 (S.D. N.Y. 1995) (no breach for “thinking” about suing employer while still employed); and Crandon v. State of Kan., 257 Kan. 727, 897 P.2d 92 (1995) (the lawyer reported federal and state violations to the FDIC by a deputy commissioner whom she had represented).

/25/ Ackerman v. National Property Analysts, Inc., 887 F. Supp. 510 (S.D. N.Y. 1993).

/26/ Hyman Cos., Inc. v. Brozost, 964 F. Supp. 168 (E.D. Pa. 1997).

/27/ See “In-House Counsel’s Right to Sue for Retaliatory Discharge,” 92 Colum. L. Rev. 389 (1992); Abramson, “Why Not Retaliatory Discharge for Attorneys: A Polemic,” 59 Tenn. L. Rev. 271 (1991); Gillers, “Protecting Lawyers Who Just Say No,” 5 Ga. State U. L. Rev. 1 (1988); Reynolds, “Wrongful Discharge of Employed Counsel,” 1 Geo. J. Legal Ethics 553 (1988); Schneyer, “Professionalism and Public Policy: The Case of House Counsel,” 2 Geo. J. Legal Ethics 449 (1988); Wilbur, “Wrongful Discharge of Attorneys: A Cause of Action to Further Professional Responsibility,” 92 Dick. L. Rev. 777 (1988); Kalish, “The Attorney’s Role in the Private Organization,” 59 Neb. L. Rev. 1 (1988); Schneyer, “Limited Tenure for Lawyers and the Structure of Lawyer Client Relations: A Critique of the Lawyer’s Proposed Right to Sue for Wrongful Discharge,” 59 Neb. L. Rev. 11 (1988); Feliu, “Discharge of Professional Employees: Protecting Against Dismissal for Acts, within a Professional Code of Ethics,” 11 Colum. Human Rights L. Rev. 149 (1979); and “A Remedy for the Discharge of Professional Employees Who Refuse to Perform Unethical or Illegal Acts: A Proposal in Aid of Professional Ethics,” 28 Vand. L. Rev. 805 (1976).

/28/ Ala.- Meredith v. C.E. Walther, Inc., 422 So. 2d 761 (Ala. 1982) (relief denied because of at-will rule).
Cal.- Chyten v. Lawrence & Howell Invs., 23 Cal. App. 4th 607, 46 Cal. Rptr. 2d 459 (1995) (at-will terminations do not preclude compensation); General Dynamics Corp. v. Superior Ct., 7 Cal. 4th 1164, 32 Cal. Rptr. 2d 1, 876 P.2d 487 (1994); and Hentzel v. Singer Co., 138 Cal. App. 3d 290, 188 Cal. Rptr. 159 (1982) (allegedly terminated because the lawyer wanted a smoke-free environment).
Colo. - Golightly Howell v. Oil, Chem. & Atomic Workers Int’l Union, 806 F. Supp. 921 (D. Colo. 1992) (union lawyer).
Ill. - Rand v. CF Indus., Inc., 797 F. Supp. 643 (N.D. III. 1992) (ADEA claim); Balla v. Gambro, Inc., 145 Ill. 2d 492, 164 Ill. Dec. 892, 584 N.E.2d 104 (1991), rev’g 203 Ill. App. 3d 57, 148 Ill. Dec. 446, 560 N.E.2d 1043 (1990); Kier v. Commercial Union Ins. Cos., 808 F.2d 1254 (7th Cir. 1987) (ADEA claim); and Herbster v. North Am. Co., 150 Ill. App. 3d 21, 103 Ill. Dec. 322, 501 N.E.2d 343 (1986), appeal denied, 114 Ill. 2d 545, 108 Ill. Dec. 417, 508 N.E.2d 728 (1987).
Mass. - Great Am. Life Ins. Co. v. Murphy, 647 F. Supp. 119 (D. Mass. 1986), rev’d on other grounds, 855 F.2d 1160 (5th Cir. 1988).
Mich. - Mourad v. Automobile Club Ins. Ass’n, 186 Mich. App. 715, 465 N.W.2d 395 (1991), appeal denied, 439 Mich. 896, 478 N.W.2d 443 (1991).
Minn. - Nordling v. Northern States Power Co., 478 N.W.2d 498 (Minn. 1991), aff’g 465 N.W.2d 81 (Minn. App. 1991).
N.J. - Parker v. M&T Chem., Inc., 236 N.J. Super. Ct. 451, 566 A.2d 215 (1989).
N.Y. - Bigda v. Fischbach Corp., 898 F. Supp. 1004 (S.D.N.Y. 1995), prior decision 849 F. Supp. 895 (S.D.N.Y. 1994); cf. Weder v. Skala, 80 N.Y.2d 628, 593 N.Y.S.2d 752, 609 N.E.2d 105 (1992) (action allowed for associate attorney fired by law firm for insisting that firm report ethical misconduct by another associate).
Pa. - McGonagle v. Union Fidelity Corp., 383 Pa. Super. Ct. 223, 556 A.2d 878 (1989) (general counsel for insurer allegedly fired for refusing to approve mailing perceived to violate state regulations).
Tex. - Willy v. Coastal Corp., 647 F. Supp. 116 (S.D. Tex. 1986) (termina-tion because of alleged insistence that company comply with environmental laws did not fall within public policy exception).

/29/ Rand v. CF Indus., Inc., 797 F. Supp. 643 (N.D. Ill. 1992) (rule recognized); MgGonagle v. Union Fidelity Corp., 383 Pa. Super. Ct. 223, 556 A.2d 878 (1989); Willy v. Coastal Corp., 647 F. Supp. 116 (S.D. Tex. 1986); and Meredith v. C.E. Walther, Inc., 422 So. 2d 761 (Ala. 1982).

/30/ McGonagle v. Union Fidelity Corp., 383 Pa. Super. Ct. 223, 556 A.2d 878 (1989).

/31/ Willy v. Coastal Corp., 647 F. Supp. 116 (S.D. Tex. 1986)

/32/ Rand v. CF Indus., Inc., 797 F. Supp. 643 (N.D. Ill. 1992). The court commented that the policy concerns expressed in Balla, supra note 38, do not apply to an age discrimination claim. Cf. Kier v. Commercial Union Ins. Cos., 808 F.2d 1254 (7th Cir. 1987) (dictum, but issue deemed to have been waived).

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