Legal Opinions - U.S. District Court, Maryland: September 2, 2008

Daily Record, The (Baltimore), Sep 2, 2008

The Teamsters again argued that employees cede control over all aspects of claims arising under their collective bargaining agreement to their union. However, even though a union has the exclusive right to litigate a claim under [section]301 of the LMRA, the individual employee retains the right to receive the proceeds of the litigation. Allowing the employee to assign that right has no impact on the union's exclusive right to litigate the claim.

The Teamsters also argued that the WARN Act is more akin to the civil rights statutes than to other federal statutes. The court disagreed. The WARN Act gives the individual employee a right to recover under the statute. Nothing in the statute's structure or purpose evidences an intent by Congress to limit the ability of the individual employee to control that right as he sees fit.

PRACTICE TIPS: The Teamsters argued that Robert Minkoff, an employee of Liquidity and a licensed attorney, violated MRPC 4.2 because he directly contacted the individual employees and not their counsel in bankruptcy. There were two fatal flaws in the Teamsters' argument.

First, a violation of an ethical rule cannot create independent civil liability nor does it create a presumption that a legal duty has been breached. See Maryland Nat'l Bank v. Resolution Trust Corp., 895 F. Supp. 762, 771 (D.Md. 1995). The Teamsters identified no case in which the court held that such a violation warranted rescission of a contract. Accordingly, whether Minkoff violated a cannon of ethics was irrelevant to the enforceability of the assignment contracts.

Second, Minkoff, although a licensed attorney, was acting as an executive of Liquidity, not as an attorney, when negotiating the assignment contracts. If a lawyer pursues his own business interests, he is not acting in a representative capacity, and the anti-contact rule, therefore, did not apply. See Pinsky v. Statewide Grievance Comm., 578 A.2d 1075, 1079 (1990).