Tag: court

Sixth Circuit Explicitly Sidesteps the NLRB’s McLaren Macomb Decision

The Sixth Circuit Court of Appeals recently declined to comment on the National Labor Relations Board’s (the “Board”) McLaren Macomb decision which took aim at overbroad non-disparagement and non-disclosure agreements.

We first reported in February 2023, on the significant decision by the Board in McLaren Macomb, 372 NLRB No. 58 (Feb. 21, 2023), which concluded, among other things, that proffering a severance agreement with broad confidentiality and non-disparagement provisions could violate Section 7 of the National Labor Relations Act (“NLRA”) – a decision and rationale we wrote about in depth here. The decision drove employers to reevaluate existing severance agreements with such provisions.

On appeal, the Sixth Circuit sidestepped the most salient aspects of the Board’s McLaren Macomb decision, namely those portions addressing the lawfulness of confidentiality and non-disparagement provisions in severance agreements, writing, “we do not address [the Board’s] decision to reverse Baylor [Univ. Med. Ctr., 369 NLRB No. 43 (2020)] and IGT[, 370 NLRB No. 50 (Nov. 4, 2020)], or whether it correctly interpreted the NLRA in doing so.” In other words, the Sixth Circuit did not offer any insight or pass judgment one way or another on the Board’s ruling that broad-based non-disparagement and confidentiality provisions are unlawful under NLRA. Indeed, while the Sixth Circuit did find the specific severance agreements at issue unlawful, it did so under previous Board precedent (not for the reasons articulated in McLaren Macomb), further reinforcing the Court’s unwillingness to address this critical issue directly.

What does this mean for employers? While there is lingering uncertainty for employers, it reinforces, at least for now, that the Board may continue to find severance agreements offered to non-supervisory employees that include broad-based confidentiality and non-disparagement provisions as unlawful. Consequently, employers should continue to review their existing severance agreements with the assistance of employment counsel to determine whether, when, and to what extent they may include appropriately crafted non-disparagement and confidentiality clauses.

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 For more news on the Sixth Circuit NLRB Ruling, visit the NLR Labor & Employment section.

Keeping Third Party Communications Protected by the Attorney-Client Privileged

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A recent Pennsylvania federal court decision highlights the difficulty in keeping third party communications privileged.  (King Drug Co. of Florence, Inc. v. Cephalon, Inc., No. 06-CV-1797, 2013 WL 4836752 (E.D. Pa. Sept. 11, 2013)).  In Cephalon, the court found third party communications privileged because the third party performed a role for Cephalon substantially identical to that of Cephalon employees.  The Federal Trade Commission (FTC) had sought an order requiring Cephalon to produce documents shared with or created by its third party consultants in connection with work the consultants performed for Cephalon that Cephalon withheld or redacted based upon theattorney-client privilege.

In keeping the documents protected, the court followed other courts and adopted the broader “functional equivalent” approach to third party communications.  According to the court, this approach “reflects the reality that corporations increasingly conduct their business not merely through regular employees but also through a variety of independent contractors retained for specific purposes.” Cephalon, 2013 WL 4836752, at *7.  The broader “functional equivalent” analysis looks at the following factors.  First, third party consultants must perform a role substantially identical to that of an employee.  For example, in Cephalon, the consultants worked closely with employees by providing managerial support, strategic advice, and participating in making preservations to senior management.  The consultants also had dedicated office space and were subject to confidentiality agreements.  Second, the documents or communications must be kept confidential.  And, third, the documents or communications must be made for the purpose of providing or obtaining legal advice.

However, not all courts agree with this broader approach.  Other courts have adopted a narrower “functional equivalent” test.  The main differences with the narrower approach are that consultants must be incorporated into the staff to perform a corporate function that is necessary in the content of actual or anticipated litigation, and possess information needed by attorneys in rendering legal advice.  See In re Bristol-Myers Squibb Sec. Litig., No. 00-1990, 2003 WL 25962198, at *4 (D.N.J. June 25, 2003).

The varying scope of the functional equivalent test highlights that the most important factor in keeping third party communications privileged is to know your jurisdiction’s viewpoint.  Other considerations include making certain that consultants are the functional equivalent of employees, and that the communications are kept confidential and created for the purpose of obtaining or providing legal advice.

Article by:

Karne O. Newburn

Of:

McDermott Will & Emery

Today’s Tip for Commercial Litigators: Making a Legal Argument Versus Being Argumentative

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Trials are the culmination of extensive discovery and oftentimes unsuccessful attempts to resolve matters out of court. Parties can spend significant resources preparing for trial; they have a lot to gain or lose; and they expect a great deal from their attorneys. As a result, the tension can get thick between opposing attorneys during trial.

Keep in mind that no matter what your feelings may be about opposing counsel by the time of trial, demeaning a lawyer in court never helps your client’s case. Similarly, stay cool if opposing counsel acts disrespectfully towards you for the following reason—juries may not understand the nuances of a legal argument, but they know a cheap shot when they see it.

The same holds true for cross-examination, which can be sufficiently aggressive to fit the purpose. Yet an overly aggressive cross-examination can backfire when an attorney’s apparent hostility towards a witness becomes more prominent than the substance of the questions and answers.

For example, suppose you represent a plaintiff in a breach of contract action. The civil defendant’s mother is testifying about a conversation she alleges took place between the parties. Your goal during cross-examination is to undermine her testimony by showing that she is inherently biased. Instead of attacking the mother, perhaps cross-examination could consist of the following, “Ma’am, it is true that you love your son, correct? You are aware that your son is being sued for breaching a contract with my client, correct? Are you are aware that if your son is found to be in breach of the contract, he would owe my client a significant amount of money? Is it fair to say that you don’t want to testify in a way that would hurt your son?”

At this stage, most reasonable juries are going to discount whatever the mother says. However, if you simply go on the attack, the cross-examination will be more about disrespecting someone’s mother than showing the witness’ bias. The point is that zealous advocacy for a client does not translate into exhibiting hostility towards opposing counsel or an adverse witness.

Article by:

Stephen C. Shannon

Of:

Odin, Feldman & Pittleman, P.C.