Douglas v. DynMcDermott Petroleum Operations Co.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 96-30883

_____________________

KORDICE M. DOUGLAS,

Plaintiff - Appellee-Cross-Appellant,

versus

DYNMcDERMOTT PETROLEUM OPERATIONS

COMPANY; JOHN POINDEXTER,

Defendants - Appellants-Cross-Appellees.

_________________________________________________________________

Appeals from the United States District Court for the

Eastern District of Louisiana

_________________________________________________________________

June 18, 1998

Before JOLLY, DAVIS, and BARKSDALE, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This case presents the question whether an in-house counsel’s

disclosing informally to third parties information relating to

interoffice complaints of discrimination against her constitutes a

breach of her professional ethical duties of confidentiality and

loyalty, and if so, whether such conduct is protected under Title

VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and

42 U.S.C. § 1981. We hold that, although an attorney’s unethical

disclosures may constitute opposition to practices made unlawful by

Title VII, such conduct is nevertheless unprotected under Title VII

(and § 1981) as a matter of law. Accordingly, we reverse the

verdict and judgment of the district court.

2

I

DynMcDermott Petroleum Operations (“DynMcDermott”) is a

private corporation that employs over 900 individuals and manages

the Department of Energy’s (the “DOE”) Strategic Petroleum Reserve

facilities. Kordice Douglas is a black female attorney. She was

hired by DynMcDermott to review procurement contracts, oversee

ongoing litigation, and assist DynMcDermott’s human resources

department with legal issues. As in-house counsel, she was privy

to all of her employer’s legal files and confidential information

concerning employee disputes.

Before signing on with DynMcDermott, Douglas worked as

in-house counsel for Boeing Petroleum Services, Inc. (“BPS”), the

company that previously had managed the petroleum reserve

facilities. DynMcDermott successfully bid on the management

contract for the facilities and took over its administration in

1993. More than 90% of BPS employees made the transition to

employment with DynMcDermott, including Douglas who initially began

work with DynMcDermott on April 1, 1993, without a temporal gap

between employment. Douglas’s job responsibilities and salary

remained the same except that she also was assigned to serve as the

primary legal contact for the human resources department of

DynMcDermott.

3

The relationship between DynMcDermott and the DOE was purely

contractual and at arm’s length. Under the contract, DynMcDermott

simply agreed to perform certain managerial and administrative

services for the DOE. The contract required that DynMcDermott

operate free from discriminatory practices, but DynMcDermott

neither implicitly nor explicitly waived any of its rights of

confidentiality or privilege with respect to its in-house counsel.

In connection with the antidiscrimination provision, DOE officials

met with DynMcDermott employees at various times to assure that

DynMcDermott was complying with this aspect of the contract (“EEO

audits”). Just such a meeting occurred on June 6, 1994, between

John Poindexter--DynMcDermott’s general counsel and Douglas’s

supervisor--and three DOE employees.

Poindexter requested that Douglas attend the June 6 meeting

because she was familiar with the DOE’s particular areas of inquiry

regarding DynMcDermott’s employment practices. DynMcDermott was

unhappy with Douglas’s professional conduct at this meeting.

Specifically, the DOE auditors asked if Douglas were aware of any

equal pay claims of women at the different sites. Douglas

indicated that she was not, but further responded, “Maybe I’ll get

my money now.”1 When informed by the DOE of a large number of

1

This remark arose in the context of demonstrating Douglas’s

alleged dissatisfaction with her salary. Douglas submits that she

previously had discussed her dissatisfaction with her salary with

4

complaints that it had received from DynMcDermott employees,

Douglas also voluntarily offered her opinion that it was a

dangerous situation--”a class action waiting to happen.” She

further informed the auditors of one particular employee’s (Becky

Roussell’s) discrimination complaint that had not been resolved to

the employee’s satisfaction. The day after the meeting, Douglas

disclosed to the DOE attorney, who had initiated the audit,

additional information--allegedly confidential--regarding her

investigation into Ms. Roussell’s claim.2

Two weeks after the meeting with the DOE auditors, Poindexter

met with Douglas to discuss her written performance evaluation.

One of the comments in the evaluation indicated that Douglas had

failed to exercise good judgment during the June 6 meeting with the

DOE officials. Douglas objected to several critical comments in

her evaluation, including one concerning her alleged lack of

discretion during the DOE meeting. Poindexter upwardly adjusted

several specific ratings, but maintained her overall evaluation of

“fully satisfactory.”

Poindexter, that he had failed to take any action on her behalf,

and that her remark at the audit was a protest of her allegedly

unequal pay.

2

The day after the audit, Douglas told the DOE attorney that

she had prepared a report of the “Becky incident,” but that she

thought DynMcDermott’s Human Resources Department manager had

changed the report.

5

Douglas was still dissatisfied with her performance

evaluation. Thus, a few days later, she composed a five-page

response (hereinafter “Response Letter” or “Response” or “Letter”)

to her evaluation in which she complained that she had been

subjected to racial and sexual discrimination. She also further

discussed events surrounding Becky Roussell’s complaint and a

separate business matter that she had handled for DynMcDermott

involving BellSouth Mobility. Douglas presented her Response

Letter not only to Poindexter, but also to three other DynMcDermott

employees, and to Richard O’Neill, a whistle-blower officer with

the DOE. Upon inquiry from O’Neill, however, Douglas confirmed

that the DOE was not to treat the Response as a whistle-blower

complaint.

When DynMcDermott learned that Douglas had furnished her

Response Letter to an individual outside the confines of the

company, it convened a “termination board” to discuss the

consequences of Douglas’s actions. The board members included the

president, the director of human resources, the deputy project

manager, and Poindexter, the company’s general counsel. After

meeting several times and conducting research into Douglas’s

attorney-client duties of loyalty and confidentiality and the

company’s duties under the antidiscrimination statutes, the board

6

unanimously agreed to terminate Douglas’s employment. DynMcDermott

informed Douglas of the decision on July 7, 1994.

After her termination, Douglas forwarded her Response Letter

to several other individuals outside DynMcDermott, including the

local head of the NAACP, Congressman William Jefferson, and Hazel

O’Leary, the Secretary of the DOE. In addition to the Letter,

Douglas also furnished O’Leary with a package of DynMcDermott’s

private documents gathered from the company’s legal files before

she was discharged. She later filed a claim of discrimination with

the EEOC alleging as the sole basis of liability that DynMcDermott

retaliated against her when she “opposed practices made unlawful

under Title VII.” The EEOC issued her a right-to-sue letter and

she timely filed an action in federal district court.

II

Douglas filed suit in the Eastern District of Louisiana

against John Poindexter, DynMcDermott, and other corporations

connected to DynMcDermott alleging (1) retaliation under Title VII,

(2) retaliation under 42 U.S.C. § 1981, (3) conspiracy under 42

U.S.C. § 1985, (4) race discrimination under § 1981 regarding her

right to enter into future employment contracts as an attorney, (5)

race and sex discrimination under Title VII, and (6) state law

claims for defamation, intentional infliction of emotional

distress, and gender discrimination. She sought back pay,

7

compensatory and punitive damages, injunctive relief, and

reinstatement with DynMcDermott or front pay. Ruling on the

defendants’ motion to dismiss, the court dismissed Douglas’s § 1981

retaliation claim and her § 1985 conspiracy claim, but otherwise

allowed her action to proceed to trial.

The jury returned its verdict finding that Douglas was not

terminated because of her race or sex, but that she was discharged

in retaliation for engaging in activity protected under Title VII.

The jury refused to award front pay, but allowed $7,830 in back

pay, $238,840 in compensatory damages, and $375,000 in punitive

damages.3

3

The two verdict forms provide in relevant part:

VERDICT FORM

1. Do you find by a preponderance of the evidence that

plaintiff’s race was a determining factor in DynMcDermott’s

decision to discharge her?

Yes No X

PROCEED TO QUESTION NO. 2.

2. Do you find by a preponderance of the evidence that

plaintiff’s sex was a determining factor in DynMcDermott’s decision

to discharge her?

Yes No X

PROCEED TO QUESTION NO. 3.

3. Do you find by a preponderance of the evidence that a

determinative factor in the plaintiff’s discharge was that she

engaged in an activity protected by Title VII?

8

Yes X No

PROCEED TO QUESTION NO. 4.

4. a) Do you find by a preponderance of the evidence that

defendant John Poindexter made a defamatory statement about the

plaintiff to a third person?

Yes No X

IF YOU ANSWERED “NO” TO PART “a,” PROCEED TO QUESTION NO. 5. IF

YOU ANSWERED “YES” TO PART “a,” PROCEED TO PART “b.”

b) Do you find that the statement was privileged, that is made

by the defendant in good faith with an interest or duty to a party

with a corresponding interest or duty?

Yes No

PROCEED TO QUESTION NO. 5.

5. a) Has plaintiff proven by a preponderance of the evidence

that the conduct of defendant John Poindexter was extreme and

outrageous?

Yes No X

IF YOU ANSWERED “NO” TO PART “a,” PLEASE SIGN AND DATE THIS FORM

BELOW AND ANSWER NO FURTHER QUESTIONS. IF YOU ANSWERED “YES” TO

PART “a,” PROCEED TO PART “b.”

b) Has plaintiff proven by a preponderance of the evidence

that defendant John Poindexter desired to inflict severe emotional

distress or knew that severe emotional distress would be certain or

substantially certain to result from this conduct?

Yes No

[Signed and dated by the jury foreperson]

VERDICT FORM

* * *

9

The district court entered judgment for Douglas for $621,670

against DynMcDermott and Poindexter, dismissed all claims against

the remaining defendants, and denied front pay and reinstatement

after finding that Douglas would have been legitimately terminated

for her unethical conduct of gathering internal legal documents

before her discharge. The court subsequently amended the judgment

to comport with the statutory cap on compensatory and punitive

damages under Title VII, which reduced Douglas’s final award to

$307,830, and memorialized that Douglas prevailed only on her Title

VII claim of retaliation against DynMcDermott and Poindexter. All

parties appealed.

4. a) Do you find that the defendants would have legitimately

terminated the plaintiff based on statements made by the plaintiff

to Lansing Barrow the day after the audit interview with the

plaintiff?

Yes No X

PROCEED TO PART “b.”

b) Do you find that the defendants would have legitimately

terminated the plaintiff for collecting records that belonged to

DynMcDermott’s legal department prior to her termination on July 7,

1994?

[”Yes” written in]

* * *

[Signed and dated by the jury foreperson]

10

III

DynMcDermott4 argues, in sum, that Douglas disclosed client

confidences in her Response Letter, that her actions thus cannot be

classified as “protected activity” under Title VII’s opposition

clause, and that she was terminated because of her unethical

disclosures and not because of her participation in any protected

activity. Douglas counters that the evidence adduced at trial

supports the jury’s verdict that she engaged in protected

activities and that those activities prompted DynMcDermott to

retaliate against her by terminating her employment. Further, in

making her own appeal Douglas argues that the district court erred

in dismissing her retaliation claim under § 1981 and that we should

reinstate the jury’s total award of damages because § 1981 has no

statutory damages cap.

We need not reach the latter issues because we hold that

Douglas’s conduct constituted a breach of her duties of

confidentiality and loyalty to DynMcDermott, that, accordingly, the

conduct was not protected activity as a matter of law, and that

DynMcDermott therefore did not unlawfully retaliate against her

when it terminated her employment because of that conduct.

IV

4

For convenience, we will refer to both DynMcDermott and

Poindexter as DynMcDermott, unless specifically addressing an issue

relevant only to Poindexter.

11

We employ a deferential standard of review when examining a

jury’s verdict for sufficiency of the evidence. Ham Marine, Inc.

v. Dresser Indus., Inc., 72 F.3d 454, 459 (5th Cir. 1995). “Unless

the evidence is of such quality and weight that reasonable and

impartial jurors could not arrive at such a verdict, the findings

of the jury must be upheld.” Ham Marine, 72 F.3d at 459. We may

not reweigh the evidence, re-evaluate the credibility of the

witnesses, nor substitute our reasonable factual inferences for the

jury’s reasonable inferences. Hiltgen v. Sumrall, 47 F.3d 695,

699-700 (5th Cir. 1995). We must view the evidence in the light

most favorable to upholding the jury’s verdict and may only reverse

if the evidence points “so strongly and overwhelmingly in favor of

one party that the court believes that reasonable men could not

arrive at a contrary conclusion.” Hiltgen, 47 F.3d at 700; Pagan

v. Shoney’s, Inc., 931 F.2d 334, 337 (5th Cir. 1991). Questions of

law, of course, we review de novo. United States v. O’Keefe, 128

F.3d 885, 893 (5th Cir. 1997), cert. denied, U.S. ,

S.Ct. , L.Ed.2d , 1998 WL 130816 (1998); Munn v. Algee,

924 F.2d 568, 575 (5th Cir. 1991).

V

A

Douglas is a member of the Louisiana Bar and is thus governed

by the Louisiana Rules of Professional Conduct. She is duty-bound,

12

as are all lawyers, not to disclose her client’s confidences

without authorization and loyally to serve the interests of her

client. Rule 1.6 provides in toto:

(a) A lawyer shall not reveal information relating to

representation of a client unless the client consents

after consultation, except for disclosures that are

impliedly authorized in order to carry out the

representation, and except as stated in Paragraph (b).

(b) A lawyer may reveal such information to the extent

the lawyer reasonably believes necessary:

(1) To prevent the client from committing a criminal

act that the lawyer believes is likely to result in

imminent death or substantial bodily harm; or

(2) To establish a claim or defense on behalf of the

lawyer in a controversy between the lawyer and the

client, to establish a defense to a criminal charge or

civil claim against the lawyer based upon conduct in

which the client was involved, or to respond to

allegations in any proceeding concerning the lawyer’s

representation of the client.

Louisiana State Bar Articles of Incorporation, Rules of

Professional Conduct, Rule 1.6, La. Rev. Stat. Ann. § 37:219

Ch.4-App., Art. 16 (hereinafter “Ethical Rule” 1.6).5 Thus, except

under specified limited circumstances, an attorney may not divulge

her client’s confidences. See United States v. Cavin, 39 F.3d

1229, 1308 (5th Cir. 1994); Abell v. Potomac Ins. Co., 858 F.2d

5

The ethical rules provide us with guidance in evaluating an

attorney’s conduct appearing before us as they set out the

profession’s own articulation of its ethical standards. Brennan’s,

Inc. v. Brennan’s Restaurants, Inc., 590 F.2d 168, 172 n.5 (5th

Cir. 1979).

13

1104, 1124 (5th Cir. 1988) (noting that disclosing material facts

to third persons may breach duty to keep confidences as required by

good ethics), vacated on other grounds sub nom. Fryar v. Abell, 492

U.S. 914, 109 S.Ct. 3236, 106 L.Ed.2d 584 (1989). A “confidence”

in this context means exactly what the rule says--any “information

relating to representation of a client.” Ethical Rule 1.6(a); see

also Brennan’s, Inc. v. Brennan’s Restaurants, Inc., 590 F.2d 168,

172 (5th Cir. 1979) (noting ethical duty of confidentiality is

broader than evidentiary privilege; confidentiality involves all

“information” gained in representation, as opposed to “confidence”

or “secret”).

In addition to the duty of confidentiality, Ethical Rule 1.7

provides that “[l]oyalty is an essential element in the lawyer’s

relationship to a client.” The duty of loyalty to the client, with

which the duty of confidentiality is inherently intertwined, is one

of the basic tenets of the legal profession. Cavin, 39 F.3d at

1308. The obligations of this profession are not “merely hortatory

appeals to [one’s] conscience,” but enforceable strictures of a

lawyer’s conduct. Id.; McCuin v. Texas Power & Light Co., 714 F.2d

1255, 1264-65 (5th Cir. 1983) (“An ethical code is not a garment

that lawyers may don and doff at pleasure.”). Violation of one’s

ethical duties can lead to sanctions as severe as disbarment.

14

These duties--confidentiality and loyalty--serve to fortify

the client’s trust placed with the attorney and to ensure the

public’s confidence in the legal system as a reliable and

trustworthy means of adjudicating controversies. See In re

American Airlines, Inc., 972 F.2d 605, 618-20 (5th Cir. 1992) (“The

trust a lawyer’s duty of loyalty inspires in clients encourages

them freely to confide in the lawyer and freely to rely on the

advice provided by the lawyer.”) (citing E.F. Hutton & Co. v.

Brown, 305 F.Supp. 371, 395 (S.D. Tex. 1969); Duncan v. Merrill

Lynch, 646 F.2d 1020, 1027 (5th Cir. 1981) (“[T]he integrity of the

judicial system would be sullied if courts tolerated . . . [the

unethical disclosure of confidential information] by those who

profess and owe undivided loyalty to their clients.”)); McCuin, 714

F.2d at 1265 (“The purpose . . . [of ethical precepts] is to

preserve public confidence in the bar and in the legal process.”).6

B

(1)

6

For a contrary view as to the necessity of the duty of

confidentiality, see Daniel R. Fischel, Lawyers and

Confidentiality, 65 U. Chi. L. Rev. 1 (Winter 1998) (submitting

that the duty of confidentiality is used as an economic incentive

that benefits the legal profession more than the client or the

public).

15

Against the backdrop of these declarations demonstrating the

obligations of confidentiality and loyalty in a lawyer’s

relationship with her client, we must first determine whether

Douglas breached her professional ethical duties. We therefore

turn to the specifics of the information that Douglas disclosed to

persons outside DynMcDermott.7 In her Response Letter, Douglas

wrote:

I wish to deal with one instance specifically. The

complaint of Becky R. regarding Brian S. I interviewed

Becky and looked at the documentation and wrote a

response. I specifically asked John Poindexter if I

could speak to Eugene T. and Brian S. I was told No. I

turned the letter over to him. I never heard a response.

In the performance evaluation meeting, he told me he

spoke to Brian S. privately. This is an example of

disparate treatment. Brian S. can get a private

consultation about something that was documented, but,

yet, I am asked to listen more and improve my

interpersonal relationships with other employees in

writing in a performance evaluation.

She also discussed in some detail her handling of a business matter

with BellSouth Mobility on behalf of DynMcDermott. She included in

7

In her brief, Douglas notes that the evidence would not

support a finding that DynMcDermott terminated her employment

because of the disclosures she made during the EEO audit or in the

conversation she had with a DOE officer a day after the meeting.

We agree that the evidence is clear that these disclosures were not

the basis for DynMcDermott’s decision to discharge her. Therefore,

like the parties, we restrict our discussion to the information

revealed in Douglas’s Response Letter that she disseminated to

outside parties.

16

her Response Letter her employer’s wishes with respect to the

matter and the steps she took in dealing with the file.8

The disclosed matters clearly include information that Douglas

gained through her representation of her client, DynMcDermott, and

is “information relating to representation of [that] client.”

Ethical Rule 1.6(a) (emphasis added). As we have noted before, the

“use of the word ‘information’ . . . is particularly revealing of

the drafters’ intent to protect all knowledge acquired from a

client. . . . This is true without regard to whether someone else

may be privy to it.” Brennan’s, Inc., 590 F.2d at 172. The

disclosed matters thus, pursuant to Ethical Rule 1.6 (a),

constitute confidences and Douglas divulged them to the DOE. The

next question to be considered is whether Douglas’s indiscretions

amounted to a breach of her duties of confidentiality and loyalty.

(2)

Douglas first contends that her disclosures were justified

because she reasonably understood the DOE to be her client along

8

For instance, Douglas noted that when a BellSouth Mobility

matter became a problem, DynMcDermott turned the file over to her.

She set out in her Response Letter what actions she took with

respect to the matter, such as contacting BellSouth Mobility and

all of the involved employees and drafting a payment agreement.

She also stated that Carol Parrella, presumably employed as part of

DynMcDemott’s upper management, did not want DynMcDermott’s

employees to sign the payment agreement and that she drafted a

second agreement. All of these disclosures were “information

relating to representation of a client” under Rule 1.6 and thus

constituted confidential information.

17

with DynMcDermott. This argument is patently implausible.

DynMcDermott alone hired her, directed her, and paid her salary.

Douglas completely understood that DynMcDermott was her sole

employer. There is no evidence that the DOE ever retained or

relied on her services as an attorney or that DynMcDermott

consented to any dual representation by her. See Ethical Rules

1.7; 1.13 (setting out prerequisites before attorney may consent to

dual representation; noting duties specific to corporate counsel).

Douglas had been engaged in the practice of law for almost

fifteen years when DynMcDermott hired her. If she is serious in

her contention that she considered the DOE to be her client in

conjunction with the corporation she was specifically employed to

represent, she has a distorted understanding of her professional

duty. DynMcDermott was her client; it hired her and paid her. The

DOE was not her client; indeed, the DOE was a potential adversary

to her client. DynMcDermott therefore reasonably expected her

loyally to represent it--which obviously encompassed the

expectation that she would not disclose its confidences to third

parties.

In the alternative, Douglas argues that because she was

instructed as in-house counsel for her former employer, BPS, to

treat the DOE as her client, it was reasonable for her to assume

that DynMcDermott also desired that she maintain a similar

18

relationship with the DOE when DynMcDermott took over management of

the petroleum reserve facilities. From this assumption, Douglas

extrapolates that DynMcDermott consented to the disclosures under

Ethical Rule 1.6(a). That Douglas’s former employer may have so

consented is irrelevant. DynMcDermott--her one and only client

during the time at issue--did not expressly or impliedly consent to

any such arrangement or to the disclosures here involved. See

Ethical Rule 1.6(a). In sum, Douglas cannot ethically justify her

disclosure of client confidences to the DOE under Ethical Rule

1.6(a) because (1) DynMcDermott was her sole client and (2)

DynMcDermott did not consent to the disclosures.

(3)

Because she revealed to third parties information relating to

her representation of DynMcDermott--i.e., the company’s handling of

an internal complaint and her dealings with the BellSouth Mobility

matter--Douglas breached the duty of confidentiality unless the

disclosures fall within one of the limited exceptions in Ethical

Rule 1.6(b). Douglas maintains that she ethically revealed the

confidential information because she reasonably believed that the

matter she publicized to the DOE was necessary to establish her

claims of discrimination in the workplace.9 In her Response

9

A second exception allowing disclosure occurs when an

attorney reasonably believes it necessary “to respond to

allegations in any proceeding concerning the lawyer’s

19

Letter, she cited an example of alleged disparate treatment in the

company’s procedures for handling internal complaints: She received

a written report that would be placed in her employment file while

“Brian S.”--a white male--was only privately reprimanded.10

Although we have doubts as to whether Douglas’s disclosures of

confidential information reasonably were necessary to establish a

claim of discrimination, we need not address this issue because she

simply was not attempting to establish a “claim or defense” on her

behalf in a controversy with DynMcDermott when she provided the DOE

officer with a copy of her Response Letter containing client

representation of the client.” Ethical Rule 1.6(b)(2). Here,

however, when Douglas made the disclosures, no “proceeding” was

ongoing between DynMcDermott and Douglas.

Because Douglas represented an organizational client, an

additional exception may theoretically be available under Ethical

Rule 1.13 (“[I]f a lawyer for an organization knows that an

officer, employee or other person associated with the organization

is engaged in action . . . in a matter related to the

representation that is a violation . . . of law which reasonably

might be imputed to the organization, . . . the lawyer shall

proceed as is reasonably necessary in the best interest of the

organization.” Ethical Rule 1.13. Douglas has not urged this

section as a basis for her actions in this appeal, however, and we

generally do not consider arguments that have not been raised by

the parties. United States ex rel. Thompson v. Columbia/HCA

Healthcare Corp., 125 F.3d 899, 903 n.3 (5th Cir. 1998).

10

Demonstrating that similarly situated employees were not

subjected to adverse employment actions for engaging in conduct

identical to that in which the plaintiff engaged may be

illustrative of discrimination. Nieto v. L&H Packing Co., 108 F.3d

621, 623 & n.5 (5th Cir. 1997); Barnes v. Yellow Freight Sys.,

Inc.,778 F.2d 1096, 1101 (5th Cir. 1985). We note, however, that

Douglas proffered no meritorious argument justifying her

revelations with respect to the BellSouth Mobility matter.

20

confidences. When the DOE officer asked whether he should treat

the Letter as a whistle-blower complaint, Douglas responded that he

should not do so at that time. This negative answer leads

ineluctably to the conclusion that Douglas’s disclosures do not

fall within the narrow exception contained in Ethical Rule

1.6(b)(2). We thus conclude that the evidence establishes as a

matter of law that Douglas breached her duty of confidentiality,

and thereby her duty of loyalty, to DynMcDermott.

C

(1)

We must next determine, in the light of our conclusion that

Douglas violated her ethical obligations, whether Douglas

demonstrated that DynMcDermott unlawfully retaliated against her

when it terminated her employment. Title VII imposes liability for

unlawful retaliation where (1) the employee engaged in activity

protected by Title VII, (2) the employer took adverse employment

action against the employee, and (3) a causal connection exists

between that protected activity and the adverse employment action.

Mattern v. Eastman Kodak Co., 104 F.3d 702, 705 (5th Cir.), cert.

denied, U.S. , 118 S.Ct. 336, 139 L.Ed.2d 260 (1997);

Shirley v. Chrysler First, Inc., 970 F.2d 39, 42 (5th Cir. 1992).

The ultimate determination is whether, “but for” the protected

conduct, the employer would not have engaged in the adverse

21

employment action. Long v. Eastfield College, 88 F.3d 300, 305 n.4

(5th Cir. 1996); Johnston v. Harris County Flood Control Dist., 869

F.2d 1565, 1571 (5th Cir. 1989) (noting employee must prove

causation-in-fact); McDaniel v. Temple Indep. Sch. Dist., 770 F.2d

1340, 1346 (5th Cir. 1985) (same).

Activities protected under Title VII fall into two broad

categories--opposition and participation. An employee has engaged

in protected activity when she has (1) “opposed any practice made

an unlawful employment practice” by Title VII or (2) “made a

charge, testified, assisted, or participated in any manner in an

investigation, proceeding, or hearing” under Title VII. 42 U.S.C.

§ 2000e-3(a); Grimes v. Texas Dep’t of Mental Health & Mental

Retardation, 102 F.3d 137, 140 (5th Cir. 1996). Douglas claims

protection under both prongs.

(2)

(a)

Douglas first contends that she engaged in protected

participation when she responded to the DOE officers’ questions at

the EEO audit and when she disseminated her Response Letter to

O’Neill. As we have suggested supra in footnote 7, no evidence

indicates that DynMcDermott was motivated to terminate Douglas

22

because of her comments during the EEO audit.11 Although clearly

unhappy with her remarks at the audit, the evidence shows that

DynMcDermott was satisfied to address that matter in its

performance review. Douglas’s conduct during the EEO audit is

relevant to her discharge only as part of the background to her

subsequent response to her performance rating. We thus focus only

on the repercussions associated with Douglas’s Response Letter.

(b)

Douglas maintains that her Response Letter also constitutes

protected participation because it “should have been forwarded [by

the DOE] to the EEOC.” The participation clause affords protection

under Title VII by prohibiting retaliation for assistance and

participation in any manner “in an investigation, proceeding, or

hearing” under the statute. 42 U.S.C. § 2000e-3(a); Merritt v.

11

Although the evidence will not support a finding that

DynMcDermott was motivated to fire her because of her conduct in

the EEO audit, Douglas maintains that sufficient evidence supports

a finding that the comments she made in the EEO audit resulted in

the “low” rating she received on her evaluation and that her rating

is thus evidence of retaliation, albeit not of retaliatory

discharge. This contention is meritless. In the first instance,

DynMcDermott rated her performance as “fully satisfactory.” We

find it difficult to ascribe as low a “fully satisfactory” rating.

Second, even were we to allow that the rating Douglas received was

“low,” the evidence is insufficient to demonstrate that the

evaluation itself constitutes an adverse employment action

actionable under Title VII. See Mattern, 104 F.3d at 707; Dollis

v. Rubin, 77 F.3d 777, 781-82 (5th Cir. 1995); Landgraf v. USI Film

Prods., 968 F.2d 427, 431 (5th Cir.), aff’d, 511 U.S. 244, 114

S.Ct. 1483, 128 L.Ed.2d 229 (1994).

23

Dillard Paper Co., 120 F.3d 1181, 1186 (5th Cir. 1997); Pettway v.

American Cast Iron Pipe Co., 411 F.2d 998, 1006 n.18 (5th Cir.

1969). Douglas, however, specifically instructed O’Neill not to

treat the Letter as a whistle-blower complaint. She thus did not

participate in an “investigation, proceeding, or hearing” within

Title VII’s parameters and her five-page Response Letter,

informally given to third parties, does not fall within that class

of activities protected under the participation clause.

(3)

(a)

Our determination that Douglas’s conduct does not qualify for

protection under the participation clause does not end our inquiry,

however, because we must also consider whether we may fairly

characterize the Response Letter as an opposition activity.

Douglas’s response purports to complain of racism, sexism, and

retaliation--all of which Title VII deems unlawful employment

practices. As such, the Letter appears to meet the litmus test for

activity constituting opposition under Title VII. We thus assume,

for the purposes of this opinion, that Douglas’s Response qualifies

as opposition activity.

Not all activities taken in opposition to an employer’s

perceived discriminatory practices, however, remain insulated from

reprisal under Title VII’s shield. Smith v. Texas Dep’t of Water

24

Resources, 818 F.2d 363, 365-66 (5th Cir. 1987); Jones v. Flagship

Int’l, 793 F.2d 714, 727 (5th Cir. 1986). We have recognized that

some conduct, even though engaged in with the most sincere of

intentions, may be so inappropriate as to justify the curtailment

of statutorily-afforded safeguards. Jones, 793 F.2d at 727.

Our precedents have employed a balancing test to determine

whether Title VII’s protections may be denied to an employee’s

activities that adversely affect his effective performance of job

duties. Jones, 793 F.2d at 727. “‘[T]he employer’s right to run

his business must be balanced against the rights of the employee to

express his grievances and promote his own welfare.’” Jefferies v.

Harris County Community Action Ass’n, 615 F.2d 1025, 1036 (5th Cir.

1980) (quoting Hochstadt v. Worcester Foundation for Experimental

Biology, 545 F.2d 222, 230-34 (1st Cir. 1976)). The yardstick

against which the employee’s conduct must be measured is the

flexible and protean doctrine of “reasonableness in [the] light of

the circumstances.” Jefferies, 615 F.2d at 1036.

For instance, in Rosser v. Laborers’ Int’l Union of North

America, Local No. 438, we held that the plaintiff’s form of

opposition was unprotected as a matter of law. 616 F.2d 221, 224

(5th Cir. 1980). The plaintiff in that case had been employed as

the dues-posting clerk for the secretary-treasurer of the union.

After being approached by black union members who felt the union

25

was discriminating against them, Rosser decided to run against her

boss for his elected position. She eventually was disqualified

from the race and was discharged from her employment with the union

after her boss was re-elected. Rosser contended that she was fired

in retaliation for her engagement in opposition activity. We

agreed that she was fired because of her opposition activity, but

we ruled in favor of the defendant on the basis that Rosser’s form

of opposition--seeking her boss’s job--placed her loyalty and

cooperation in serious doubt and accordingly fatally diminished her

effectiveness as a dues-posting clerk. Rosser, 616 F.2d at 224.

We held that her conduct was thus unprotected under Title VII as a

matter of law and that her employer therefore had a legitimate non-

discriminatory reason for discharging her. Id.

We have since reaffirmed Rosser’s analysis, noting that

“[t]here may arise instances where the employee’s conduct in

protest of an unlawful employment practice so interferes with the

performance of his job that it renders him ineffective in the

position for which he was employed. In such a case, his conduct,

or form of opposition, is not covered by § 704(a).” Jones, 793

F.2d at 727 (quoting Rosser, 616 F.2d at 223).

In Jefferies, this court faced a situation that bears some

similarity to the conduct found in this case. The plaintiff was a

black female who, while employed by the defendant, copied and

26

disseminated confidential employment records that tended to

document her belief that she was a victim of discrimination. After

her termination, Jefferies sued for unlawful retaliation, arguing

that her conduct was protected because she had been attempting to

bring attention to an employment practice that allegedly

discriminated against her. Jefferies, 615 F.2d at 1036. After

weighing “the employer’s right to run his business” against

Jefferies’s right “to express [her] grievances and promote [her]

own welfare,” we determined that the plaintiff’s form of opposition

was unprotected. Id. We noted that Jefferies’s conduct was

clearly unreasonable in the light of the circumstances and her

employer legitimately discharged her because of it. Id.

Jones is yet another of our precedents that have found

employee conduct unprotected under Title VII. Just as the conduct

in Jefferies is similar to that of Douglas’s--publishing

confidential information--, the plaintiff’s position of trust in

Jones is approximate to that enjoyed by Douglas before her

termination. Like Douglas, Jones was a licensed attorney hired by

Flagship to handle charges of discrimination lodged against it and

to represent it before state and federal administrative agencies,

including the EEOC. Jones, 793 F.2d at 716. Flagship fired Jones

after learning that she had filed a charge of discrimination with

the EEOC, had solicited others to join in her suit, and intended to

27

serve as the named representative of a class action against her

employer. We determined that her conduct was unprotected under

Title VII because it rendered her ineffective for the position for

which she was retained. Id. at 728.

(b)

These precedents bring us to the immediate case we consider

today. They serve to illustrate that employee conduct, although

fairly characterized as protest of or opposition to practices made

unlawful by Title VII, may nevertheless be so detrimental to the

position of responsibility held by the employee that the conduct is

unprotected. Douglas’s behavior fits into this general category.

Furthermore, Douglas’s conduct not only undermined her

effectiveness as an employee, but her actions also violated the

ethical rules of the legal profession. Here, while employed as

in-house counsel for DynMcDermott, Douglas breached her

professional duties of confidentiality and of loyalty when she

revealed to a third party information relating to the

representation of her client. She took no precautions12 to preserve

12

Even when revealing confidences falls within an exception to

the ethical rules, there are appropriate means for revealing

confidences that limit the dissemination of information disclosed.

They include requesting in camera review, requesting that the court

seal the record in any proceeding, and obtaining permission to

prosecute the action without revealing the true name of either

party. See, e.g., Doe v. A Corp., 709 F.2d 1043, 1045 n.1 (5th

Cir. 1983); United States v. Scott, 909 F.2d 488, 494 n.10 (11th

Cir. 1990) (noting different protective measures attorneys may take

28

the attorney-client relationship and instead acted with thoughtless

indiscretion, demonstrating little regard for the ethical

obligations inherent in the legal profession. This dereliction of

professional duties meant that DynMcDermott could no longer place

full trust in her to keep confidences that she may acquire as its

attorney. In short, the trust undergirding the attorney-client

relationship was broken and Douglas could no longer function in her

role as in-house counsel. See Rosser, 616 F.2d at 223 (noting that

employee’s conduct can so malign the relationship that continued

employment is impossible). Her conduct, on the whole, also

reflected poorly on the legal profession and its obligation to

maintain standards of trust and loyalty.

We therefore turn to the weighing process that our precedents

have employed in other similar contexts. We first weigh the

importance of the employer’s reasonable expectation that its

in-house counsel abide by the profession’s ethically imposed duties

of confidentiality and loyalty. Corporations hire in-house counsel

specifically with the expectation that the attorney’s loyalty may

be fully relied upon. A corporate lawyer is expected to defend her

employer-client when adversary proceedings arise and may not, with

very limited and specified exceptions, act detrimentally to the

to protect client confidences when they suspect a client of

intending to commit perjury).

29

employer-client’s interests. In fact, by accepting employment, a

lawyer chooses to place his loyalties with his employer-client and

agrees to act as its confidant and advocate. An in-house attorney

enjoys a unique position of special trust, and her employer-client

necessarily occupies a concomitant position of vulnerability with

respect to its relationship with its counsel. The ethical precepts

of confidentiality and loyalty serve to assure that that trust is

not misplaced and to shield the employer-client from an abuse of

the power that the attorney has acquired as a result of her unique

position of confidence. The employer-client’s reasonable

expectation that its attorney will abide by the profession’s

ethical edicts is thus entitled to great weight.

In addition to weighing the interests of the employer in

determining whether unethical conduct should be protected under

Title VII, we, as a court, must also consider the interests of the

legal profession, whose members’ ethical conduct is critical to the

integrity and reputation of the courts and their processes. It is

axiomatic that the legal profession has a vital interest in

promoting the ethical conduct of its members, and as strong an

interest in discouraging unethical conduct. These interests would

be struck a damaging blow if the law afforded some safe harbor for

unethical conduct. To forgive a breach by allowing the legal

protections sought in this case obviously would have repercussions

30

beyond this one case because such a ruling would carve out a class

of individual rights that trump professional ethical

considerations--and, by extrapolation, could lead to further

tolerances with unanticipated consequences to the profession, and

thus become yet another bissagiatt.13 The particular duties at

stake here--confidentiality and loyalty--are of indisputable

importance to the attorney-client relationship itself, as this

opinion has repeatedly pointed out. Furthermore, they instill a

faith in the system necessary for the public to trust our legal

system in the resolution of its disputes--again, as we have made

abundantly clear in this opinion.

Furthermore, when an attorney is granted the privilege of

joining the ranks of this profession, she agrees to abide by the

ethical rules of the profession. These obligations are fully

understood by the attorney and, thus, the profession’s expectation

that its members will obey its internal canons is also reasonable.

Finally, the ethical rule that Douglas breached, with its noted

exceptions, is a reasonable rule to require of in-house counsel as

well as of the profession generally.

We next weigh an attorney’s right under Title VII to oppose

allegedly discriminatory practices by her employer. It is an

13

William Raspberry, Defining Deficiency Down, The Washington

Post, May 29, 1998, at A27 (coining the acronym “bissagiatt” from

the phrase “But It Seemed Such a Good Idea at the Time”).

31

extremely important right that we do not gainsay in the least. But

in engaging in the balancing exercise here, we must be more

specific. The specific right asserted by Douglas is the right to

oppose the allegedly unlawful practices of her employer-client, and

to do so in such a manner that violates the ethical duties of the

legal profession. As we have noted, when Douglas became an

attorney, she became bound to abide by the ethical rules of the

profession. When she was hired as an attorney by DynMcDermott, she

became its defender and advocate. Although she surely did not

surrender her Title VII rights when she signed on with DynMcDermott

as its in-house counsel--and no one is suggesting that she did--

she did in fact assume professional responsibilities that

constrained her exercise of those rights.

Requiring adherence to the profession’s ethical precepts does

not strip an attorney of all Title VII protections. Indeed,

Ethical Rule 1.6 specifically provides for disclosure once

disclosure becomes necessary in a dispute with the employer-client.

Rule 1.6 surely does not bar Douglas’s opposition and protest in

her conversations, dialogue, and remonstrations with her employer-

client.

In sum, although the right to oppose unlawful practices under

Title VII is a right that, independently, is entitled to great

weight in the balancing test, the exercise of that right in

32

violation of the profession’s ethical duties of confidentiality and

loyalty simply will not counter the weight of the employer-client’s

rights and the duty owed to the legal profession.

We therefore conclude that when an attorney’s Title VII right

to oppose her employer-client’s allegedly discriminatory practices

by disclosing confidential information contrary to the ethical

obligations of the profession is balanced against her employer-

client’s right to ethical representation and the profession’s

interest in assuring the ethical conduct of its members, the

employer’s and the profession’s interests must prevail. Given the

obligations to which an attorney agrees when she joins the

profession and when she accepts employment, and the importance of

the duties of confidentiality and loyalty to the employer-client

and to the integrity of the profession, we hold as a matter of law

that conduct that breaches the ethical duties of the legal

profession is unprotected under Title VII.14

14

Douglas also maintains that the district court erred when it

dismissed her § 1981 claim for retaliatory discharge on the basis

that such a claim was not cognizable. See Patterson v. McLean

Credit Union, 491 U.S. 164, 179-80, 109 S.Ct. 2363, 2374, 105

L.Ed.2d 132 (1989); Carter v. South Central Bell, 912 F.2d 832, 840

(5th Cir. 1990) (holding that § 1981 does not encompass retaliatory

discharge claims). She contends that the Civil Rights Act of 1991

superseded Patterson and Carter and now allows such a claim. We

need not reach this issue because, even were employees now able to

bring retaliatory discharge claims pursuant to § 1981, we hold as

a matter of law that DynMcDermott did not engage in unlawful

retaliation when it terminated Douglas’s employment because of her

conduct that constituted ethical violations of her professional

33

In reaching this holding, we are aware that the trial court

determined that there was “minimal disclosure of any substantive

information” and, therefore, that any indiscretion on Douglas’s

part did not warrant much consideration. This conclusion was error

because, as we hold today, any betrayal of a client’s confidences

that breaches the ethical duties of the attorney places that

conduct outside Title VII’s protection.15 The employer-client need

not tolerate baby steps of unethical conduct while anxiously

wondering when and if the giant step will occur, and with what

consequences. Once the trust between attorney and client is

breached in violation of professionally sanctioned duties, Title

VII provides no shield from retaliation.16

duties.

15

Conduct that does not constitute a breach of the legal

profession’s ethically imposed obligations, but that nevertheless

adversely impacts the employment relationship between an in-house

counsel and her employer-client, remains subject to the balancing

test set out in Jefferies and Jones before it may be determined to

be unprotected conduct under Title VII.

16

As is obvious from our opinion, we do not address violations

of Title VII against an attorney that, although arising from the

same factual scenario, occur independent of the ethical breach. We

only make it clear that an attorney who violates her profession’s

ethical rules is not entitled to any damages flowing from

retaliation taken by her employer-client because of her violative

conduct. So long as the conduct actually constituted a violation

of the profession’s ethically imposed duties, the employer is

insulated from liability irrespective of whether it took adverse

employment action because the conduct constituted a breach or

because the conduct was in opposition to discriminatory employment

practices. See Rosser, 616 F.2d at 224 (holding opposition

34

VI

For the reasons stated in this opinion, the judgment of the

district court is REVERSED and this case is REMANDED to the

district court for entry of a judgment of dismissal.

REVERSED and REMANDED for entry of a judgment of dismissal.

activity unprotected even though motive for discharge remained

disputed).

35