Is the General Counsel ("GC") or Other In-House Attorney Prohibited by ERISA from Serving as a Benefit Plan Committee Member? No. The GC can wear different hats in different roles. When the GC serves as a benefit plan committee member engaged in fiduciary activities, he or she is subject to the fiduciary standards of ERISA.
What are the Practical Considerations?
- Exception to the attorney-client privilege:
- Communications to the GC (or any other member of the committee) in his or her role as a fiduciary may not be privileged under an exception to the attorney-client privilege rule.
- When communication between the committee or its members and counsel relates to fiduciary activities, courts have held that the fiduciary is acting on behalf of the Plan, and that the legal advice contained in those communications is for the benefit of participants and beneficiaries; therefore, these communications are not privileged.
- The Department of Labor ( DOL ) has taken the position that such communications are not privileged as to the DOL because it acts on behalf of participants and beneficiaries when it audits or investigates a benefit plan or benefit plan fiduciaries.
- Plaintiffs frequently assert this exception to the attorney-client privilege in litigation involving the Plan.
- Issues may arise in discovery as to whether claim-related communications to the GC are: (i) discoverable on the basis of the GC’s committee membership; or (ii) privileged because the communication was with the GC in his or her corporate role.
- Plan fiduciaries, including the GC, may find it difficult to prove precisely when a threat of litigation arises so that the fiduciaries and participants have become adverse in interest, at which point the privilege could apply to communications pertaining to potential fiduciary defenses.
- In certain circumstances this exception can become a factor in the nature of the communications between fiduciaries and their attorneys.
- The same privilege issues can arise with respect to an “outside” lawyer who participates in committee meetings or discussions.
- In the event of a claim or a litigation, will the GC be as able to analyze the matter if he or she: (i) participated in the decision-making process related to that matter; and (ii) is potentially subject to personal liability for breach of fiduciary duty?
- How will the GC influence committee discussions involving legal considerations? Do other committee members understand the GC’s role as another committee member rather than as counsel to the committee? What training has the committee received in this regard?