In Spagnola v. Morristown, et al., 2006 WL 3533726 (D.N.J. Dec. 12, 2006), the U.S. District Court for the District of New Jersey held that an employee could pursue a negligent misrepresentation claim against her employer’s attorney. In that case, the Township/employer’s attorney allegedly told plaintiff that the harassing conduct about which she had complained did not violate any Township policy, and that she could not maintain a sexual harassment claim because there had been no sexual touching or sexual language directed at her. Plaintiff later filed suit against the Township, the alleged harassers and the Township attorney. Plaintiff asserted, in part, that the Township’s attorney was liable for negligent misrepresentation because he deliberately misled plaintiff about her potential claims.

In denying the Township attorney’s Motion to Dismiss plaintiff’s negligent misrepresentation claim, the court noted that:

  • an attorney-client relationship can exist absent express assent depending upon the surrounding circumstances;
  • the attorney’s duty-of-care extends to non-clients where the attorney knows or has reason to know that the non-client relies on him and the representations he makes in his professional capacity; and
  • the existence of a duty-of-care is a question of law for the court’s determination, which is only appropriate for analysis during summary judgment.

In-house counsel should be mindful of this decision, given their frequent interaction with Company employees who they do not personally represent. In-house counsel should always clarify that they represent the Company (as opposed to the employee), and that they cannot give employees legal advice. Moreover, whenever possible, in-house counsel should avoid expressing opinions regarding an employee’s claims directly to the employee, and should have the Company state its position through the Human Resources Department or supervisors.