The Intersection Between Employment Claims and Attorney Disciplinary Liability

BY STEVE CORNELIUS, ESQ. AND JEFF TORRELLI

1 See https://www.eeoc.gov/newsroom/eeoc-and-justice-department-warn-against-unlawful-dei-related-discrimination; https://www.eeoc.gov/wysk/what-you-should-know-about-dei-related-discrimination-work.

WITH AN INFLUX OF employment claims involving lawyers and law firms, understanding the potential exposures associated with the modern practice of law is critical to identifying and managing risks. In addition to civil and sometimes criminal liability, various Rules of Professional Conduct can be implicated when lawyers engage in employment misconduct, including discrimination, retaliation, and sexual harassment.

Recently, the media has bombarded nationwide news outlets with coverage of the Trump Administration’s Executive Orders targeting diversity, equity, and inclusion (“DEI”) programs in the public and private sectors. Agencies tasked with enforcing laws against unlawful employment practices, including the Equal Employment Opportunity Commission (“EEOC”) and Department of Justice (“DOJ”), have undertaken calculated measures targeted at law firms to end “illegal DEI initiatives,

policies, and programs.”1 The EEOC, for example, issued letters to several “big” law firms seeking extensive information and data concerning “potentially unlawful DEI practices at law firms.”2 The expansive scope of these investigative efforts, the resulting negative publicity, the potential loss of security clearances, and other factors caused some of these law firms to voluntarily resolve matters with the EEOC, without admission of liability, to avoid an extended dispute.”3 Others, as well as interested related parties, are gearing up for, or are already enthralled in, heated litigation.4

While the news covers these issues involving law firms on a macro-level, presumably to appeal to a broader audience, a number of attorneys are unaware that there are specific Rules of Professional Conduct that relate to employmentbased claims. Specifically:

It is professional misconduct for an attorney to … knowingly manifest by words or conduct when acting in a professional capacity bias or prejudice based upon race, sex, religion,

employees in connection with employment decisions, including hiring, promotion, termination, etc. With the aggressive initiatives of the EEOC and DOJ addressing DEI-related programs at law firms, there are potential ethical implications for attorneys ultimately deemed to have “unlawfully discriminated,” even if the attorneys genuinely believed such programs were implemented for what they considered to be a noble purpose (e.g., to address inequalities and create more inclusive workplaces). Thus, it is imperative for law firms to assess their current policies and practices, as well as the manner in which they have marketed themselves on social media, in job advertisements, and in publications, so as to address the potential for, and ramifications of, being scrutinized by agencies such as the EEOC or DOJ.6

And the concerns are not limited to DEI-related issues. Studies continue to reflect that issues of racial and gender bias, as well as sexual harassment, remain pervasive in the legal profession.7 For example, in 2018, the International Bar Association (“IBA”) conducted an expansive global survey

A number of attorneys are unaware that there are specific Rules of Professional Conduct that relate to employment-based claims.

national origin, disability, age, sexual orientation or socioeconomic status when such action is prejudicial to the administration of justice, provided, however, that legitimate advocacy is not a violation of this section[.]5

To date, there has been little discussion from the news media, or otherwise, on the nature and extent of potential consequences for attorneys deemed to have discriminated against prospective, current, or even former

of the legal profession and determined “that bullying and sexual harassment are ongoing, chronically underreported and prevalent in every area of the profession.”8

All of these issues pose a threat of exposure to attorneys and decision-makers at law firms, not just from a monetary and reputational perspective, but also from an ethical standpoint. An adverse finding or judgment against an individual attorney in a discrimination or harassment case could very well be considered “Misconduct” in violation of Maryland Rule of Professional Conduct 8.4, quoted in part,

2 See https://www.eeoc.gov/newsroom/eeoc-acting-chair-andrea-lucas-sends-letters-20-law-firms-requesting-information-about-dei.

3 https://www.eeoc.gov/newsroom/eeoc-settlement-four-biglaw-firms-disavow-dei-and-affirm-their-commitment-merit-based; see https://www.abajournal.com/news/article/ law-students-sue-eeoc-over-investigative-letters-sent-to-20biglaw-firms.

4 See, e.g., Perkins Coie LLP v. U.S. Department of Justice, et al., United States District Court for the District of Columbia, Case No. 1:25-cv-00716; see also https://www. abajournal.com/news/article/law-students-sue-eeoc-over-investigative-letters-sent-to-20biglaw-firms (describing a separate lawsuit filed by three law students “asking a federal court to order the Equal Employment Opportunity Commission to withdraw investigative letters sent to 20 BigLaw firms and to return and delete information that it gathered from them.”).

5 Maryland Rules of Professional Conduct, Md. Rule 19-308.4(e).

6 See https://www.eeoc.gov/wysk/what-you-should-know-about-dei-related-discrimination-work.

7 See Interrupting Bias in the Legal Profession Report, You Can’t Change What You Can’t See: Interrupting Racial and Gender Bias in the Legal Profession (https://www. americanbar.org/content/dam/aba/administrative/women/biasinterrupters-executivesummary.pdf). © 2018 American Bar Association and Minority Corporate Counsel Association.

8 https://www.americanbar.org/news/abanews/publications/youraba/2019/july-2019/study-reveals-_chronic-legal-workplace-harassment--young-lawyers/; see https://www. ibanet.org/bullying-and-sexual-harassment.

9 See also Md. Rule 19-308.4 cmt. 3 (“Sexual misconduct or sexual harassment involving colleagues, clients, or co-workers may violate section (d) or (e) of this Rule. This could occur, for example, where coercion or undue influence is used to obtain sexual favor in exploitation of these relationships.”).

supra 9 In addition, partners, board members, supervisors, members of management and executive committees, and others with managerial authority within a law firm could be culpable.

While the Maryland Rules of Professional Conduct (“MRPC”) generally do not impose disciplinary liability on an attorney for the conduct of another partner, associate, or subordinate,10 there is a duty imposed upon attorneys with managerial authority in a law firm to “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all attorneys in the firm conform to the [MRPC].”11 Thus, an attorney is responsible for another attorney’s violation of the MRPC if:

(1) the attorney orders or, with knowledge of the specific conduct, ratifies the conduct involved; or

(2) the attorney is a partner or has comparable managerial authority in the law firm in which the other attorney practices, or has direct supervisory authority over the other attorney, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.12

For example, in an employment case involving alleged sexual harassment, the victim(s) may pursue employmentbased claims against the employer law firm, and depending on the circumstances, may also attempt to pursue an ethics complaint against the individual bad actor and attorneys at the law firm with managerial authority.13 This context is not necessarily limited to overt acts of ratification or failures to remediate; rather, such “vicarious disciplinary liability” could also be predicated upon a failure to establish and implement reasonable policies.14

In accordance with these principles, it is conceivable that a law firm that does not have policies in place for employees to report complaints of harassment or discrimination, a procedure for investigating such complaints, and/or a disciplinary policy is at risk of violating the MRPC.

The following hypothetical situation highlights the potential ethical violations on the part of partners and supervising attorneys at a law firm: a newly hired associate is being sexually harassed by a partner, who has a known history within the firm for making sexually explicit

comments and jokes, physically touching staff, etc. If the other partners or supervisors at the law firm know of this history and propensity to engage in inappropriate behavior, but fail to take appropriate remedial action, including enforcing reasonable policies and procedures to redress the same, the law firm and its attorneys with managerial authority face potentially significant repercussions, not only in the form of a civil employment lawsuit, but also potential disciplinary action.

To guard against these risks, there are a number of preventative measures that lawyers, especially those with managerial authority, should consider implementing at their law firms. First, significant effort should be undertaken to create an ethical atmosphere,15 including establishing legitimate internal policies and procedures, scheduling regular training sessions on employment-related topics, updating company manuals and handbooks, and empowering employees to earnestly report issues and problems, without fear of retaliation. Second, before making employment decisions involving a delicate situation or employee, consult a third-party resource, whether it be outside counsel, an employment hotline, or an outsourced human resources representative. Finally, law firms should consult with an experienced professional insurance broker to ensure they have the appropriate coverages in place, including both Lawyers Professional Liability (“LPL”) and Employment Practices Liability (“EPL”) insurance, to ensure that the law firm and its constituents are sufficiently protected.

10 See, e.g., Md. Rule 19-305.1 cmts. 7 & 8.

11 Id. at Md. Rule 19-305.1(a).

Steve Cornelius is a Maryland attorney who has spent his entire career at Eccleston and Wolf, and presently serves as the firm’s President and Managing Principal. Steve’s litigation practice focuses on the defense of lawyers, health care professionals, directors and officers, and employment matters, including advising and representing law firms in employment-related issues and disputes.

Jeff Torrelli is an Account Executive who has been working with HUB International for the past 25 years. His primary focus is working with law firms, providing Professional Liability, Employment Practices Liability, Management/ Directors & Officers Liability, and Cyber Liability Coverage.