Page 24 - CCCA 243725 Magazine_Winter 2015

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YoU’Re The exeCUTIve vICe-PReSIdenT and
geneRal CoUnSel FoR a MId-SIze CoMPanY.
WhIle WoRkIng on a FIle, YoU noTICe SoMe
qUeSTIonaBle PRaCTICeS FRoM ManageMenT In
dealIng WITh an oveRSeaS ClIenT. YoU RePoRT
YoUR FIndIngS To SenIoR ManageMenT BUT TheY
don’T Take anY aCTIon. WhaT ShoUld YoU do?

his is the situation facing Sanford Wadler, former General
Counsel for Bio-Rad Laboratories Inc., a company based ✖ WHistleBloWing in CAnAdA
tin the U.S. He sued his former employer earlier this year
for wrongful termination, claiming that he was fred because of The fnancial scandals of the 2000s, beginning with Sharon
whistleblowing. Watkins blowing the whistle on Enron, put the issue in the
Wadler’s case brings up the complicated ethical issues sur- public eye. In the aftermath of the scandals, major reforms
rounding whistleblowing for in-house counsel. Lawyers must up- were made in fnancial reporting. As part of the reforms, the
hold their duty to confdentiality to the client but also have a duty American Bar Association (ABA) amended its rules to include
to protect the public from potential harm. When lawyers should third party disclosure. Model Rule 1.6(b)(3) permits lawyers to
blow the whistle, especially for in-house counsel, can be tricky. disclose information “to prevent, mitigate or rectify substantial
Whistleblowing is the last defense for lawyers. As trusted injury to the fnancial interests or property of another.” Model
advisors, whistleblowing can be seen as the fnal alternative to Rule 1.13 also allows lawyers to disclose information to third
prevent wrongdoing. The recent case of Edgar Schmidt, who parties “to the extent the lawyer reasonably believes necessary
blew the whistle in 2012 on the federal government’s failure to to prevent substantial injury to the organization.”
examine whether proposed legislation was in violation of the Jordan Thomas believes that whistleblowers should be pro-
Charter, is a reminder of the diffculty in coming forward. tected. As one of the lawyers who helped develop the Securities
“Whistleblowing is like the Bogeyman,” says Jean Nelson, and Exchange Commission (SEC) Whistleblower Program, he
Director, Governance and Legal Services at the Canadian Medi- believes that the U.S. has a strong duty to protect the public
cal Association. “No one wants to talk about it. It might not from economic harm.
be something that you directly experience but it can affect you. “In the U.S., we take the idea of protecting investors and
People come to lawyers because they see them as the conscience consumers seriously,” says Thomas, Partner at Labaton Sucha-
of the organization. People are looking to you for help.” row, who specializes in representing whistleblowers. “It’s an odd

24 CCCA MAgAzInE | WIntEr 2015 HIVEr