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ULLRICH v. HEARST CORP.

November 13, 1992

SUSAN ULLRICH, Plaintiff
v.
THE HEARST CORPORATION, Defendant. MELISSA TARDIFF, Plaintiff, v. THE HEARST CORPORATION, Defendant. SHEILA SULLIVAN, Plaintiff, v. THE HEARST CORPORATION, Defendant.



The opinion of the court was delivered by: PIERRE N. LEVAL

 PIERRE N. LEVAL, U.S.D.J.

 Defendant, The Hearst Corporation, moves to disqualify its former attorney, Jeffrey M. Bernbach, from representing three former employees of Hearst in actions accusing Hearst of various forms of illegal employment discrimination, retaliation and illegal discharge. The court finds that Mr. Bernbach's representation of these three former employees against Hearst violates Disciplinary Rule 5-108 of the New York Code of Professional Responsibility and that Mr. Bernbach must be disqualified. The issues raised in Mr. Bernbach's three new representations that are adverse to Hearst are closely related to Mr. Bernbach's earlier representation of Hearst. His representation of these plaintiffs raises a very high likelihood that he would unavoidably use confidential information imparted to him by his former client to the disadvantage of the former client. Under these circumstances an attorney may not accept a representation which is adverse to his former client.

 Background

 For nearly 20 years prior to assuming the questioned representations, Mr. Bernbach represented the defendant Hearst Corporation on labor employment and personnel matters. On June 18, 1973, he joined the staff of Hearst's legal department, working on labor matters. From July 1974 through the end of 1976 he was the staff attorney principally responsible for labor and employment issues within the office of the General Counsel. He then went into private practice and became Hearst's primary outside legal counsel with respect to labor and employment matters. In 1980 Hearst hired Francis A. McAnaney Jr. to supervise the labor and employment field in the General Counsel's office. Thereafter, Bernbach continued to represent Hearst with respect to numerous labor and employment matters. For the period 1979 to 1991, Bernbach's bills to Hearst for legal services in these matters exceeded $ 800,000. This work included providing Hearst's defense in numerous litigated cases, negotiating settlements of disputes and claims, and consulting with the management of Hearst so as to provide general legal advice on labor and employment. *fn1"

 In the years leading up to the severance of the relationship in 1991, Bernbach represented Hearst in discrimination claims before the Equal Employment Opportunity Commission and the New York State Division of Human Rights; he handled numerous discrimination lawsuits in the federal courts and negotiated numerous settlements of employee discrimination claims and severance packages; in addition, he provided advice to the management of Hearst in connection with labor and employment matters, including terminations, company strategy for the defense of lawsuits arising from terminations, policies regarding leaves of absence, maternity and paternity leaves, reductions in work force, evaluation of job performance, retirement plans, leave policies, affirmative action plans, and many other employment-related issues.

 In defending Hearst with respect to these various charges of discrimination, retaliation, and improper termination, Mr. Bernbach was duty bound to become familiar with Hearst's operations, policies, and procedures relating to such matters. His responsibility to consult with and advise Hearst management on such policies required him to be intimately familiar with the corporation's practices, policies and procedures.

 During 1989 Bernbach began to have disagreements with Hearst concerning the terms of his retention. Hearst expressed dissatisfaction with the amount of his hourly charges. Bernbach wrote to Hearst's General Counsel, Harvey Lipton, advising that he had been asked in the recent past to assume representations adverse to Hearst and that if he ceased to represent Hearst he might well assume representations "on the other side of the table." Bernbach sought a retainer arrangement, which Hearst resisted. Later, Bernbach learned that Hearst had hired an outside attorney to handle a labor matter. On March 14, 1991, Bernbach wrote to Victor F. Ganzi, Esq., the new General Counsel for Hearst, complaining that, since he left Hearst at the end of 1976, he had "represented it on all labor matters in the New York City area . . . [and that] to the extent that Hearst retains other counsel to handle labor matters in New York City, such represents a profound change in [our] relationship." (Emphasis in the original.) He went on to say that notwithstanding a decrease in the volume of legal matters he had recently handled for Hearst, he had "in deference to our long-standing attorney-client relationship, declined to take on any other matters which could in any way have the potential of conflicting with Hearst's interests," making it clear that he had done so "in the belief . . . that the reduced volume of business was based simply on absence of relevant matters. Had such, in fact, been the result of assigning labor matters to other outside attorneys, I certainly would not have exercised such forbearance." Bernbach closed, stating, "I can no longer exercise any restrictions on the clients I will represent simply because Hearst may choose to retain me in the future."

 Shortly thereafter, Mr. Bernbach, apparently having no further active matters for Hearst, undertook the representation of a Deborah Dunbar, an advertising salesperson for Hearst's Connoisseur magazine against Hearst. She alleged sex discrimination and harassment on account of pregnancy. Bernbach wrote to Gilbert C. Maurer, the Chief Operating Office at Hearst stating, "You and I know based on long experience that these matters are best settled before they become the subject of protracted litigation." Hearst's General Counsel replied at once advising Bernbach that it objected to his representation of interests adverse to Hearst and asserting that the representation of Dunbar constituted a conflict of interest in violation of the Code of Professional Responsibility, DR 5-108.

 On January 9, 1992, Bernbach wrote to Maurer advising that he now represented Susan Ullrich, a former sales representative in connection with her discharge by Hearst in July 1990. The letter asserted that Hearst had acted illegally and offered Hearst one week to settle Ms. Ullrich's claim before legal action would be instituted. Hearst replied that it was looking into Ullrich's allegations, but at the outset strongly objected to Bernbach's representation of Ullrich in view of clear conflict arising from his long representation of Hearst in employment matters. The letter urged that Mr. Bernbach "withdraw from your representation of Ms. Ullrich. . . ."

 Bernbach then initiated Ullrich's action in New York State court alleging violation of New York's Adoptive Parents' Child Care Leave Law, N.Y. Labor L. ┬ž 201-c, retaliatory discharge and defamation. Hearst removed the case to federal court on February 24, 1992, and answered on March 9, 1992.

 On March 23, 1992, Bernbach advised Hearst by letter that he represented Sheila Sullivan, a former fashion editor at Harper's Bazaar. He undertook to negotiate a severance package for Sullivan, asserting that the package offered to her "is woefully inadequate," and suggesting that her termination was unlawful. The next day, March 24, 1992, he wrote to Hearst on behalf of Melissa Tardiff, a former art director for Town & Country, alleging that her discharge constituted sex discrimination. Bernbach's letter asserted that there was an "almost complete absence of females in Hearst general management and the possibility that males are paid more than females in comparable jobs. . . ." He stated that the severance package offered to Ms. Tardiff was inadequate in the circumstances.

 Bernbach then filed the actions in question on behalf of Sullivan and Tardiff. Sullivan's suit alleged a federal cause of action for age discrimination and a New York cause of action under the Human Rights law. Tardiff alleged federal claims of sex discrimination under Title VII of the 1964 Civil Rights Act and under the Equal Pay Act of 1963, and New York claims under its Human Rights Law.

 Under the random system for assignment of cases in this court, Ullrich's case was assigned to this judge, Tardiff's case to Judge Conboy, and Sullivan's case to Judge Sprizzo.

 In early May, Mr. Bernbach wrote the court to request a conference to complain of Hearst's failure to furnish satisfactory responses to his document demands and interrogatories. Hearst's counsel wrote to the court on May 19, 1992, advising of its intention to move to disqualify Bernbach. A conference was held on these matters, and in due course Hearst's motion was made and answered. Thereafter Hearst made similar motions in the recently filed Tardiff and Sullivan cases. By order of Judges Conboy and Sprizzo, the Tardiff and Sullivan motions were assigned to this judge to be adjudicated together with the Ullrich motion.

 Discussion

 I. Disqualification

 Disciplinary Rule 5-108 of the Code of Professional Responsibility provides that without ...


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