General Dynamics Corp. v. Superior Court

In General Dynamics Corp. v. Superior Court (1994) 7 Cal. 4th 1164 32 Cal. Rptr. 2d 1, 876 P.2d 487, the plaintiff lawyer alleged in his complaint that, due to the untoward conduct of his employer, he was no longer bound by the attorney-client privilege; thus, he argued that his lawsuit could be fully prosecuted without disclosing confidential information protected by that privilege. The employer disagreed, claiming that the plaintiff continued to be bound by the attorney-client privilege. It was in the context of these facts that the Supreme Court charged the trial court with the responsibility to permit the plaintiff to try to establish that he could in fact prove his case without divulging confidences subject to the attorney-client privilege. The court held "there is no reason inherent in the nature of an attorney's role as in-house counsel to a corporation that in itself precludes the maintenance of a suit for breach of contract or wrongful termination provided it can be established without breaching the attorney-client privilege or unduly endangering the values lying at the heart of the professional relationship." (General Dynamics, supra, 7 Cal. 4th at page 1169). The court stressed its main concern with wrongful termination suits by in-house counsel was their potential for public disclosure of the former employer's confidences. The court suggested three ways to avoid unwarranted disclosure of privileged information. First, the court noted in-house counsel, like all attorneys, are bound by the ethical rule against disclosure of client confidences and observed "an attorney who unsuccessfully pursues a retaliatory discharge suit, and in doing so discloses privileged client confidences, may be subject to State Bar disciplinary proceedings," citing Dixon v. State Bar and Business and Professions Code section 6068, subdivision (e). Second, the court proposed "that by taking an aggressive managerial role, judges can minimize the dangers to the legitimate privilege interests the trial of such cases may present." Finally, if all else fails and the elements of the plaintiff's cause of action "cannot . . . be fully established without breaching the attorney-client privilege, the suit must be dismissed in the interest of preserving the privilege." The Supreme Court concluded an in-house attorney could assert a cause of action for wrongful termination based upon public policy when the attorney was fired for adhering to an ethical norm. However, General Dynamics Corp. narrowly prescribed the parameters of such a claim. In order for the attorney to be successful, he had to articulate the Rules of Professional Conduct or relevant statue upon which the purported ethical norm was based: "The contested ethical requirement must be clearly established by the ethics code or statutory provision; disagreements over policy are not actionable." ( Id. at p. 1191.)