Ag-gag bill would strangle business investigations

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State lawmakers have made it more difficult for lawyers to perform an act the North Carolina State Bar found to be ethical in a recent proposed opinion.

The Ethics Committee published a proposed opinion that an attorney may supervise a private investigator acting as what they’re calling a “tester,” someone who will misrepresent his identity and purpose when conducting an investigation into potentially unlawful activity, so long as the attorney is acting in the pursuit of a legitimate public interest.

However, the North Carolina Senate approved a House measure that would allow business owners to sue employees who conduct undercover investigations for equitable relief, compensatory damages, costs and fees, and exemplary damages of up to $5,000 per day. The final vote in the Senate was 32-13.

House Bill 405, the “Property Protection Act,” was sitting awaiting the signature of Gov. Pat McCrory on Friday, when North Carolina Lawyers Weekly was printed. McCrory had until May 30 to act on the bill. Unless he vetoes it, the bill will become law with or without his signature.

In a statement to Lawyers Weekly, the Ethics Committee said its opinion does not reflect a contradiction to the proposed law, saying the committee would never encourage lawyers to break state law.

“If the bill passes and becomes law, a lawyer must comply with it and the ethics opinion would not be directly contradictory,” said Alice Mine, the bar’s assistant executive director and ethics counsel. “A lawyer is always expected to comply with the law and is prohibited from instructing an investigator to break the law.”

Animal rights organizations say it’s an “ag-gag” bill – that is, it’s specifically intended to prevent undercover operations at agricultural facilities such as poultry farms. However, the final version of the legislation is not limited to agriculture. It would apply to any employee in any place of business and, therefore, would make it more difficult for attorneys and their private investigators to investigate any companies.

Critics of the controversial bill have come from the Democratic side of the Senate and have been heard via Twitter and Facebook. Sen. Josh Stein, who is also a lawyer, voted against the bill and used language in his public expression of displeasure that was similar to that of the ethics committee opinion.

The bill also includes language that any employee who knowingly records audio and/or video at their place of work and disseminates that information can be sued for damages and court costs.

“Our whistleblower law does nothing for an employee who brings forth a violation of the law that affects the general public,” Stein said on May 18.

“We should not be going so far,” he cautioned. “The public will be worse off as a result of this bill. There will be violations of law that will occur that would not (have occurred), because of this bill.”

The Ethics Committee opinion stated that the lawyer’s case must involve “legitimate public interest” with specific examples given being discrimination in housing, employment and accommodations; patent and intellectual property infringement; and the production and sale of contaminated and/or harmful products. However, it instructs that the lawyer must have already concluded the evidence sought is not reasonably available through other means and that the case is not simply a personal matter for the client.

The April opinion removed language from a January 22 opinion on the same matter that stated that such behavior by an attorney was prohibited according to the Rules of Professional Conduct. According to RPC 8.4(c), it is considered professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

The ethics committee is currently taking comments on this opinion, along with others, and will take those into consideration before they are scheduled to meet on July 16.

Follow Matthew Stevens on Twitter @NCLWStevens