By Ross Farr
You successfully settle a lawsuit brought against a corporate client by a former employee, who had claimed your client fired him in retaliation for pointing out violations of federal environmental regulations. The agreement, which includes a financial settlement, requires that the former employee not cooperate voluntarily with any official investigation of your client unless compelled by law.1
You congratulate yourself for remembering to include the "non-cooperation clause" and consider it a good day's work, right? Maybe not. You might want to rethink the risks associated with the non-cooperation clause.
At least one commentator believes your client - and possibly you - has just obstructed justice under 18 U.S.C. ¤¤ 1503(a), 1505 and 1512(b).2 These statutes variously prohibit corruptly influencing another person not to cooperate in the administration of justice or the law.
In particular, section 1512(b) makes it a crime to "corruptly persuade another person" to "hinder, delay, or prevent the communication to a law enforcement officer or judge of the United States of information relating to the commission or possible commission of a Federal offense . . . ." This broad language prohibits even an attempt to hinder such communication. Merely providing that the former employee may cooperate if compelled by law is unlikely to save the non-cooperation clause from violating these statutes.
Can you go to jail for simply asking another person not to voluntarily cooperate in a federal investigation? The question depends on what "corruptly persuade" means in the context of section 1512(b). Courts have defined it to mean "motivated by an improper purpose," which could simply be preventing the discovery of information tending to prove your client is criminally or civilly liable. Courts have only had occasion to speculate on whether merely asking another person to withhold information is enough, and no court has addressed the precise scenario described above.3
Under a textual analysis, offering a person money not to talk could be "corruptly persuading" because offering money looks like bribery. "[A]ttempting to bribe someone to withhold information . . . constitute[s] Ôcorrupt persuasion' punishable under ¤ 1512(b)."4 Therefore, "a party who requests or makes a contractually binding noncooperation promise as part of a settlement agreement, and a lawyer who assists that party, should recognize that the conduct may be held illegal under one of the obstruction statutes."5
Lawyers who help negotiate non-cooperation agreements also may be acting unlawfully. Section 1515(c) provides an arguable defense to a lawyer who assists a client in negotiating a non-cooperation agreement. It states, "This chapter does not prohibit or punish the providing of lawful, bona fide, legal representation services in connection with or anticipation of an official proceeding." This sentence may not create a safe harbor, however, if negotiating such a clause is not lawful.
Whether a non-cooperation clause in a settlement agreement would violate Washington's witness tampering or bribery statutes also is an open question. RCW ¤ 9A.72.120 makes it a Class C felony to "induce a witness or person" whom you have "reason to believe is about to be called as a witness in any official proceeding or a person whom" you have "reason to believe may have information relevant to a criminal investigation . . . to [a]bsent himself or herself from such a proceeding" or withhold information from a law enforcement agency relevant to a criminal investigation."
RCW ¤ 9A.72.090, in relevant part, makes it a Class B felony to offer any benefit to a person you have "reason to believe is about to be called as a witness in any official proceeding or upon a person whom" you have "reason to believe may have information relevant to a criminal investigation" with the intent to "[i]nduce that person to refrain from reporting information relevant to a criminal investigation."
No case has applied these statutes to settlement agreements containing non-cooperation clauses. While it is conceivable that a party to a non-cooperation agreement may be charged under the state witness tampering and bribery statutes, the textual analysis would be different from that under federal law.
Instead of prohibiting an attempt to hinder any communication with law enforcement regarding a possible federal offense, under state law a prosecutor would arguably have to prove that the employer or lawyer had reason to believe the former employee was about to be called as a witness or had information relevant to a pending criminal investigation. Also, unlike the federal statute, the state statute does not involve obstruction of civil investigations, with the exception of civil investigations of child abuse.
Lawyers also should remember that RPC 8.4(d) defines professional misconduct, in part, as "engag[ing] in conduct that is prejudicial to the administration of justice."6 This arguably makes advising a client to pay another to withhold information from an official investigation an ethical violation. n
Ross Farr is an associate attorney with Ogden Murphy Wallace, P.L.L.C. in its Employment and Labor Law Practice Group. He can be reached at rfarr@omwlaw.com. The information in this article is a summary overview only and does not constitute legal advice.
1 This hypothetical and the federal legal analysis were developed by Stephen Gillers, Speak No Evil: Settlement Agreements Conditioned on Noncooperation Are Illegal and Unethical, 31 Hofstra L. Rev. 1 (2002).
2 Id. at 3.
3 United States v. Farrell, 126 F.3d 484 (3d Cir. 1997); United States v. Khatami, 280 F.3d 907, 908 (9th Cir. 2002); United States v. Shotts, 145 F.3d 1289 (11th Cir. 1998); United States v. Thompson, 76 F.3d 452 (2d Cir. 1996).
4 Gillers, supra at 12 n. 55 (quoting United States v. Farrell, 126 F.3d 484, 488 (3d Cir. 1997)).
5 Id. at 12.
6 This rule would be unchanged by the proposed amendments pending before the state Supreme Court. See www.wsba.org/lawyers/groups/ethics2003/ethics2003suggestedrulesfinalspacedandformattedmarkup.doc.
