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    Justices inquire into implications of reinstating lawyer to represent client after lawyer’s illegal discharge

    Alex De Grand

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    The Wisconsin Supreme Court held oral arguments testing whether federal anti-discrimination laws trump a corporate client’s right to choose an attorney.

    Jan. 6, 2010 – During oral arguments yesterday, the Wisconsin Supreme Court grappled with the implications of an arbitration panel’s award reinstating the illegally fired general counsel of Menard Inc. to her old job over the company’s objection.

    The panel found Menard had fired Dawn Sands in retaliation after she complained of the company’s Equal Pay Act and Title VII violations. Rather than grant Sands’ request for lost wages, the panel said that reinstatement would send a message that Menard could not unlawfully remove an employee and then remain rid of her.

    Attorney Beth Hanan, representing Menard, argued that the panel violated the client’s constitutional right to choose its own counsel. But Chief Justice Shirley Abrahamson suggested this situation might fall outside of that right contained in Art. I, sec. 21, cl. 2 of the Wisconsin Constitution. Abrahamson noted that text specifies the right applies “in any court of this state,” but that Sands, a lawyer licensed in Minnesota but not in Wisconsin, would be unable to represent Menard in a Wisconsin court.

    Justice Annette Ziegler focused on the practicality of pairing a lawyer with an unwilling client, asking   Sands’ attorney, Dan Shulman, if the situation would lead to disqualification under the ethics rules. Shulman responded that the ethics rules place the burden on Sands to consider whether she could fully perform the functions of the job, adding that Sands had satisfied Menard as general counsel for seven years until she protested the company’s discriminatory treatment of her.

    Following up on the inquiry into the practical effects of reinstatement, Justice David Prosser asked how well Sands could resume all of the functions of her old job, which included speaking to the media on the company’s behalf, after she had characterized the company’s actions as “monstrous” and “reprehensible” during this litigation.   Shulman replied that Sands would have to weigh those issues for herself under the ethics rules as they arose.

    Abrahamson asked why the ethics rule directing a lawyer to cease representing a client who has discharged her does not prevent Sands’ reinstatement. Shulman answered that giving the state ethics rule such an effect would run contrary to federal employment law, raising preemption issues.

    Shulman suggested that the court consider Sands’ situation as different from the typical attorney-client relationship.   “When [Menard] made her their lawyer, they had a choice of whether she would be outside counsel, an independent contractor, or should she be an employee,” Shulman said. “When they made her an employee, they obtained certain very significant benefits. One is cost. They were paying her $29 an hour instead of hundreds of dollars on an hourly rate. The second was access. There she was; they had her all the time. The third was control. They were the ones who would tell her what to do. And the fourth was exclusivity. She was not representing anybody else.

    “But at the same time, there is a tradeoff,” Shulman said. “When you make somebody an employee, that is a tacit agreement that you will be subject to all of the laws that regulate the employer-employee relationships, including federal laws. Not just the ones that you like. So their right to pick their lawyer is not unlimited.”

    Addressing the concern that vacating the reinstatement award could create a broad rule excluding lawyers from the full range of remedies available to others in employment actions, Hanan argued  that the court could rule narrowly on these facts to say the panel exceeded its authority pursuant to the parties’ agreement to arbitrate.

    The court expressed concern that if Sands did not receive the reinstatement as the arbitration panel ordered, Sands would not be receiving all of the compensation the panel intended to give her. Shulman said that Menard had already been found in contempt for its repeated refusal to reinstate Sands and so the justices should only act to permit the circuit court to calculate a monetary equivalent. Hanan asserted that the more than $1 million awarded to Sands for backpay and other injuries already compensated her adequately.

    By Alex De Grand, Legal Writer, State Bar of Wisconsin