The California court of appeals has denied a bid by an employment discrimination defendant to disqualify the plaintiff’s legal team. The name partner in the law firm representing the plaintiff was formerly the employer’s chief operating officer — but the court rejected the assertion that his firm should be disqualified merely based on his knowledge of the employer’s “playbook.” The opinion shines a light on the playbook theory. (Hat tip to Dan Bressler over at Bressler Risk Blog, who also reports on the case.)

Bentley dealership woes

The plaintiff, Wu, was in sales at O’Gara Coach at its Beverly Hills Bentley dealership. Alleging that he was called “chink,” “Buddha” and “sumo wrestler” by his supervisor, Wu asserted racial discrimination and wrongful termination claims against his former employer. Wu retained the Ritchie Litigation law firm to represent him. According to the court’s opinion, the name partner, Ritchie, was a law school graduate who had joined O’Gara Coach in 2013 and worked his way up to be president and chief operating officer of the company before he left, passed the California bar exam, and established his law firm.

Based on Ritchie’s former role with the company, defendant O’Gara Coach moved to disqualify his firm, asserting that in his former role Ritchie was directly involved in policy-making, discussed strategy in pending employment claims with the company’s outside counsel, and was responsible for workplace policies when Wu’s claims arose.

O’Gara argued that although Ritchie was never a lawyer for the company, he had been involved in matters substantially related to Wu’s claims and exposed to O’Gara’s confidential information, mandating disqualification under California’s rules on former-client conflicts of interest.

Playbook in play?

Rejecting the employer’s argument and reversing the trial court, the court of appeals said that at most, Richie possessed confidential information about O’Gara’s workplace policies, operations and general litigation strategies.

The court noted that this is commonly referred to as “playbook” information, and as the ethics scholar Prof. Charles Wolfram described it, the usual claim is that a lawyer’s possession of this type of confidential but general company information “would give the lawyer significant advantage if it were permissible to represent an adversary against the former client, regardless of the factual dissimilarities between the two representations in other respects.”

But under California law, said the appeals court, a law firm is not subject to disqualification merely because “one of its attorneys possesses information concerning an adversary’s general business practices or litigation philosophy acquired during the attorney’s previous relationship with the adversary.”

Rather, the appeals court ruled, more is required — namely a “material link” between Richie’s knowledge of O’Gara’s anti-discrimination policies and the actual issues presented by Wu’s lawsuit. What Richie might know about O’Gara Coach based on his work as a non-lawyer executive had to be separated from his exposure to confidential and potentially privileged communications, the court said. And no category of information that Richie had, the court held, was directly at issue in the case or had unusual value for his firm’s representation of Wu.

Across the jurisdictions

As ethics authority Bill Freivogel puts it at his always-useful Freivogel on Conflicts site, the issue in the playbook analysis is “when does a lawyer learn enough about the former client’s thought processes and procedures that the new representation may be deemed ‘substantially related’ to the former one,” thus requiring disqualification under Model Rule 1.9(a) and its state counterparts.

The Wu case is a good example of the approach in the Golden State — but results may differ in your own jurisdiction.

For example, applying the New Jersey Rules of Professional Conduct, a New Jersey district court judge ordered disqualification last year based on a playbook theory. The defendant’s lawyers had formerly represented the plaintiff, and had gained information generally about its “patent prosecution strategy and [its] approach to defending the validity of its patents,” and knowledge about what the former client “protected as trade secrets apart from its patented inventions.”

When the playbook theory is in play, jurisdiction and factual nuances can matter.