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What Happens When the Rules of Professional Conduct Meet an Employment Contract

Jared Karstetter worked as an in-house attorney for the King County Corrections Guild (Guild), a labor organization. His employment was subject to successive five-year contracts that included a requirement that terminations be for “just cause.” Under this provision, Karstetter was entitled to due notice of concerns and an opportunity to correct any acts that the Guild considered inappropriate.

During his employment, Karstetter was contacted about a whistleblower complaint against the Guild. At the direction of the Guild’s vice-president, Karstetter cooperated with the investigation. The Guild consulted with an outside firm; the firm advised the Guild to fire Karstetter after his participation. Karstetter sued for breach of contract and wrongful termination in violation of public policy. The Guild sought to dismiss the case on the grounds that it was entitled under the Rules of Professional Conduct, as the client in an attorney-client relationship, to terminate its attorney at any time, for any reason.

The Washington State Supreme Court reviewed the arguments and ultimately determined that it was not reasonable to apply that professional rule in all instances. The rule does not itself expressly address Karstetter’s circumstance. “The unique employment status of and demands on in-house attorneys” suggest that the Rule of Professional Conduct should not be applied rigidly. In-house attorneys are particularly dependent on the corporate employer for their livelihood which is different than the traditional attorney-client relationship. In the narrow context of this relationship, in-house attorneys may bring contract and wrongful discharge suits “without violence to the integrity of the attorney-client relationship.”