One of the more well-publicized parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) is a whistleblower program that provides bounty payments to individuals who voluntarily provide original information leading to successful SEC enforcement actions. However, according to the New York County Lawyers’ Association (NYCLA) Ethics Opinion No. 746 (Oct. 7, 2013), available here, Dodd-Frank prohibits New York lawyers from collecting whistleblower bounties in exchange for disclosing confidential information about past or present clients because a whistleblower disclosure generally triggers a conflict between the lawyers’ interests and those of their clients. As such, the New York Rules of Professional Conduct (N.Y. Rules) do not permit disclosure of confidential information under the Dodd-Frank whistleblower regulations, even when such disclosure is permissible under the SEC rules, if that disclosure does not fit within limited exceptions such as providing reasonably necessary information to rectify client fraud, crime, or false evidence. The NYCLA therefore concluded that New York lawyers “acting as attorneys on behalf of clients” presumptively may not ethically serve as whistleblowers under Dodd-Frank’s bounty program. However, the ethics opinion would not apply to the extent that a corporate officer or compliance officer might happen to be a lawyer but is not necessarily representing a client in performing his or her duties. Similarly, in U.S. v. Fair Laboratory Practices Assocs., No. 11-CV-1565 (2d Cir. Oct. 25, 2013), the Second Circuit Court of Appeals held that a former general counsel violated his ethical duties under the N.Y. Rules when he participated in a qui tam action because he used confidential information to the disadvantage of his former employer. In sum, New York attorneys generally may not ethically use confidential information against the interests of their clients or employers, even when such disclosures are apparently authorized under whistleblower statutes.
The Beltway Buzz is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C. could impact your business.
On March 14, 2019, Keith Sonderling, the acting administrator of the Wage and Hour Division (WHD) of the Department of Labor (DOL) issued an opinion letter clarifying the DOL’s position on designating and taking leave under the Family and Medical Leave Act (FMLA) and placing the department at odds with the Ninth Circuit’s Escriba decision.
NLRB Restores Employers’ Right to Restrict Employees’ Personal Use of Company Email and Other IT Resources
In Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, Case 28-CA-060841 (December 16, 2019), the National Labor Relations Board ruled that employees do not have a statutory right under the National Labor Relations Act to use their employer’s email system or other information technology (IT) resources for Section 7 purposes, such as union organizing.