Opinion ID: 1060390
Heading Depth: 1
Heading Rank: 7

Heading: proper standard to apply in tennessee

Text: In Tennessee, the elements of a typical common-law retaliatory discharge claim are as follows: (1) that an employment-at-will relationship existed; (2) that the employee was discharged, (3) that the reason for the discharge was that the employee attempted to exercise a statutory or constitutional right, or for any other reason which violates a clear public policy evidenced by an unambiguous constitutional, statutory, or regulatory provision; and (4) that a substantial factor in the employer's decision to discharge the employee was the employee's exercise of protected rights or compliance with clear public policy. See, e.g., Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 825 (Tenn.1994); Anderson v. Standard Register Co., 857 S.W.2d 555, 558 (Tenn.1993); Chism v. Mid-South Milling Co., 762 S.W.2d 552, 556 (Tenn.1988). However, as we have noted throughout this opinion, this case does not present the typical retaliatory discharge claim. Consequently, while the special relationship between a lawyer and a client does not categorically prohibit in-house counsel from bringing a retaliatory discharge action, other courts have held that it necessarily shapes the contours of the action when the plaintiff was employed as in-house counsel. For example, the courts in General Dynamics and Stewart held that a lawyer could pursue a retaliatory discharge claim, but only if the lawyer could do so without breaching the duty of confidentiality. See General Dynamics, 876 P.2d at 504; Stewart, 653 N.E.2d at 167-68. Indeed, the California Supreme Court went so far as to forewarn lawyers that those who revealed confidential information in a retaliatory discharge suit, without a basis for doing so under the ethics rules, would be subject to disciplinary proceedings. General Dynamics, 876 P.2d at 504. Since 1970, lawyers in this state have been subject to the Tennessee Code of Professional Responsibility, and, at least with respect to the ethical duty of confidentiality, our Code is similar to the ethical provisions relied upon in General Dynamics and Stewart . The Disciplinary Rules generally require that a lawyer not knowingly reveal the confidences or secrets of a client. See Tenn. Sup.Ct. R. 8, DR 4-101(B)(1). However, this rule is subject to some limited exceptions, including when the client consents, when compelled by law or court order, or when necessary to prevent the client from committing a crime. See DR 4-101(C). A lawyer may also reveal client confidences and secrets as a defensive measure against accusations of wrongful conduct, though no exception permits a lawyer to reveal client confidences or secrets offensively to establish a claim against a client, except in fee-collection disputes. Id. If we perceive any shortcomings in the holdings of General Dynamics and Stewart , it is that they largely take away with one hand what they appear to give with the other. Although the courts in these cases gave in-house counsel an important right of action, their respective admonitions about preserving client confidentiality appear to stop just short of halting most of these actions at the courthouse door. With little imagination, one could envision cases involving important issues of public concern being denied relief merely because the wrongdoer is protected by the lawyer's duty of confidentiality. Therefore, given that courts have recognized retaliatory discharge actions in order to protect the public interest, this potentially severe limitation strikes us as a curious, if not largely ineffective, measure to achieve that goal. However, some courts following versions of the Model Rules of Professional Conduct have reached different conclusions concerning a lawyer's ability to use confidential information in a retaliatory discharge action. Unlike Disciplinary Rule 4-101(C), Model Rule 1.6(b)(2) permits a lawyer to reveal information relating to the representation of a client when the lawyer reasonably believes such information is necessary to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client.... (emphasis added). Although some commentators have asserted that this provision merely permits lawyers to use confidential information in fee-collection disputes as under the Model Code, [5] the plain language of the Model Rule is clearly more broad than these authorities would presume. In fact, at least one state supreme court has held that this language permits in-house counsel to reveal confidential information in a retaliatory discharge suit, at least to the extent reasonably necessary to establish the claim. See Burkhart, 5 P.3d at 1041 (stating that a lawyer does not forfeit his rights simply because to prove them he must utilize confidential information. Nor does the client gain a right to cheat the lawyer by imparting confidences to him. (citation omitted)); see also Oregon State Bar Legal Ethics Comm., Formal Op. 1994-136 (stating that the plain language of a provision similar to Model Rule 1.6(b)(2) permits disclosure [of client confidences and secrets] to establish a wrongful discharge claim to the extent reasonably necessary to do so). We agree with the approach taken by the Model Rules, and pursuant to our inherent authority to regulate and govern the practice of law in this state, see In re Burson, 909 S.W.2d 768, 773 (Tenn.1995), we hereby expressly adopt a new provision in Disciplinary Rule 4-101(C) to permit in-house counsel to reveal the confidences and secrets of a client when the lawyer reasonably believes that such information is necessary to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client. This exception parallels the language of Model Rule of Professional Conduct 1.6(b)(2), and we perceive the adoption of a similar standard to be essential in protecting the ability of in-house counsel to effectively assert an action for discharge in violation of public policy. Nevertheless, while in-house counsel may ethically disclose such information to the extent necessary to establish the claim, we emphasize that in-house counsel must make every effort practicable to avoid unnecessary disclosure of [client confidences and secrets], to limit disclosure to those having the need to know it, and to obtain protective orders or make other arrangements minimizing the risk of disclosure. Model Rule 1.6 Comment 19.