Manager’s ‘free lunch’ came with a high-pressure sales pitch

Question: I manage a large condominium project in Los Angeles. Unsolicited, an attorney sent me an invitation to meet with him over lunch. He then phoned me several times, including the day before the lunch, explaining the purpose was to speak only with homeowner association managers.

Twelve managers were present, and he advised us that we should all network and that we could call him day or night with any questions we had and that he would not charge us. Then he grilled us about our associations. One manager asked whether the attorney-client privilege was in place during this meeting. The attorney said he was not representing us, so the privilege was inapplicable. Working the table like a sales pro, he asked question after question, offering us several incentives and cash bonuses if our associations engaged his services and even gave us instructions on how to influence our boards to hire him.

I felt very uncomfortable with him and explained that the questions he was asking about my association were confidential and I refused to answer. He told us there was nothing confidential about it, saying that my association doesn’t own me and that I’m a free agent.

He tried to give each of us $50 for attending, but I refused. He kept repeating that in meeting with him we weren’t doing anything wrong. Is he right?

Answer: Once the attorney started asked questions regarding the homeowners associations, each manager should have left the luncheon.

Whether an independent contractor or a directly employed manager, you are an agent of the association. As an agent, your duty is one of allegiance and accountability to your employer and is to safeguard its information. Part of that duty -- even if only to protect yourself -- includes immediately reporting the incident in writing to the board of directors. No attorney has the right to ask you to breach the association’s confidences. To do so might subject you to potential individual liability.

The attorney’s questions were inappropriate and arguably unethical. His attempts to pay managers in exchange for their attendance could be construed as bribes meant to induce the managers into betraying their relationships with their employers. In a situation like this, even eating the free lunch could be construed as accepting a bribe.

It is interesting that the attorney claimed there was no privilege merely because he was not your attorney. The privilege resides with the client, not the attorney. The State Bar’s ethics rules and the Rules of Professional Conduct say that when anyone consults an attorney and speaks with the attorney in his or her professional capacity, the privilege exists, whether or not there is a formal attorney-client relationship.

If you were expecting your conversation to be kept confidential, he was mistaken about the relationship having to exist before the privilege arose. The attorney must refuse to disclose what was said. Only the client can waive the privilege, or disclose the contents of the conversation.

Soliciting and then paying the “capper” (one who solicits business on behalf of an attorney -- in this case, the association manager) would subject both of you to potential criminal liability. If your association is represented by counsel, this attorney is violating State Bar ethics by soliciting clients he knows to be represented by other counsel. In either case, the attorney could be suspended or disbarred for such conduct, but that would be for the State Bar to decide after a complaint is filed.

You are the type of manager an association can be proud of. You refused to discuss your client’s affairs with an outsider who had no authorization to speak with an agent of the association, let alone learn of its business practices. You refused to talk about your employer in front of other managers and agents. You refused to take what amounts to a bribe to sell out the association to this attorney. You even questioned his right to be doing what he was doing in the first place. Your character and actions are commendable because they adhere to the loyalty owed to your employer, the association.

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Send questions to P.O. Box 11843, Marina del Rey, CA 90295, or e-mail noexit@mindspring.com.