The opinion of the court was delivered by: Justice Burke
Appeal from the Circuit Court of Cook County. Honorable Loretta C. Douglas, Judge Presiding.
Plaintiff Luciano Franzoni appeals from an order of the circuit court disqualifying Carey Stein (Stein), plaintiff's counsel, and the law firm of Ashman & Stein from representing plaintiff in his retaliatory discharge action brought against defendant Hart Schaffner & Marx (HSM) pursuant to section 4(h) of the Workers' Compensation Act (Act) (820 ILCS 305/4(h) (West 1996)). Plaintiff contends on appeal that the trial court erred in disqualifying Stein based upon Stein's prior unrelated representation of defendant and/or defendant's parent company, Hartmarx Corporation (HC).
On December 10, 1998, plaintiff filed a complaint against HSM, plaintiff's former employer and a wholly-owned subsidiary of HC. Plaintiff alleged in his complaint, in pertinent part, that HSM, through its president and chief operating officer, had informed plaintiff in September 1997 that he had to retire because he was 71 years of age. Plaintiff further alleged the following: plaintiff filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC), HC then reassigned plaintiff from a private office in HC's corporate headquarters to a "blue-collar" position in a factory and distribution center operated by HSM; plaintiff, subsequently, experienced distress and discomfort due to his new working environment; HC and HSM then refused to accommodate plaintiff's disability; plaintiff filed a claim under the Act; and HSM unlawfully terminated plaintiff's employment on December 8, 1998, because HSM believed "the extent of [plaintiff's] injuries" that were the subject of plaintiff's worker's compensation claim "were not what [plaintiff] claimed them to be."
In response to plaintiff's complaint, HSM filed a motion to disqualify both Stein and Ashman & Stein. HSM claimed that Stein had, prior to representing plaintiff in the instant matter: (1) served more than 14 years as in-house counsel with HC and its affiliates, including HSM; (2) become general counsel of HC before leaving HC's employ in 1994; (3) obtained or had access to confidential information about HSM employment policies, practices and procedures relevant to plaintiff's claims against HSM; (4) been directly involved in the drafting and revision of a royalty agreement between a HC subsidiary and plaintiff, an agreement relevant to plaintiff's employment discrimination claims; and (5) was privy to or had access to many confidential assessments of plaintiff's performance and worth to the company, information relevant to HSM's reasons for taking the employment action about which plaintiff was complaining. HSM moved to disqualify Stein from representing plaintiff pursuant to Rule 1.9(a)(1) of the Rules of Professional Conduct (134 Ill. 2d R. 1.9(a)(1)) because Stein's knowledge of confidential HSM information relevant to the instant case made his representation of plaintiff "substantially related" to his former representation of HSM. HSM further moved that Ashman & Stein be prohibited from representing plaintiff pursuant to Rule 1.10(a) of the Rules of Professional Conduct (134 Ill. 2d R. 1.10(a)).
In support of its motion to disqualify, HSM submitted the affidavit of Taras Proczko, an assistant general counsel of HC. Proczko averred that Stein had served as in-house legal counsel for HSM and the other subsidiaries and affiliates of HC since at least August 1980 and, following a series of promotions by HC, Stein had reached the upper echelon of HC's management as executive vice president, chief administrative officer, secretary, and general counsel. Proczko further averred that Stein, as general counsel of HC until his employment with HC ended in April 1994, had been HC's chief legal officer responsible for all legal matters for HC and its subsidiaries and affiliates, including HSM.
Additionally, Proczko averred that during Stein's employment with HC, and in his capacity as general counsel and head of HC's legal department, Stein had provided legal counsel to HC and its subsidiaries in more than 580 employment-related matters. Of the 580 employment-related matters, more than 431 were claims of some type of employment-related discrimination by a HC subsidiary or affiliate. Stein's handling of these matters, according to Proczko, included both evaluating the claims and advising and consulting with management concerning the claims' strengths and weaknesses, the appropriate litigation strategies, and/or the settlement options. In several "crucial" cases, Stein had assumed the role of HC's defense "lead counsel."
Proczko also averred that Stein had become privy to the information of HC and its affiliates, including their secrets and confidences, in the course of his providing legal representation in the employment-related matters. Those secrets and confidences included employer-employee relationships as well as the policies, procedures, and practices of HC and its affiliates relating to their employees. According to Proczko, Stein, as general counsel, had formulated and implemented HC's employment policies and practices, and those policies and practices are "still in place today at HC and its affiliates."
Proczko further averred that employment matters with which Stein had been "intimately involved" included those relating to plaintiff. In 1989, a HC subsidiary had negotiated and entered into a royalty agreement with plaintiff relating to plaintiff's use of his name in the marketing of certain products. Stein had reviewed, revised, and drafted significant portions of the agreement; corresponded directly with plaintiff about it; discussed its terms and conditions with plaintiff's legal counsel; and advised various HC executives about it. Consequently, Stein was privy to or had access to many "confidential assessments" of plaintiff's performance and worth to the company, including HC executive's "subjective evaluation" of plaintiff's talents, skills, productivity, weaknesses, and value to HC. In late 1991, plaintiff had negotiated an amendment to the agreement, and Stein had assigned the work on the amendment, subject to Stein's supervision and control, to Proczko. Proczko had, subsequently, kept Stein advised and "fully apprised and informed" of the developments in the matter, including the status and substance of the negotiations and the ultimate amendment of the agreement.
Proczko also averred that HSM was aware that Stein had undertaken to represent plaintiff in the case at bar and that HSM, neither in the past nor in the present, had consented to such "adverse representation" by Stein.
Subsequent to numerous pleadings filed by both parties, plaintiff stated in a surreply to HSM's motion to disqualify that Ashman & Stein had last represented HC, or one or more of its subsidiaries, in May 1995, two years before the occurrence of the first event alleged by plaintiff in his complaint. During arguments before the trial court, the following colloquy occurred: "MR. STEIN: [I] brought
numerous exhibits, one of which I would like to hand to you, which we've marked Defendant's Exhibit 6. There are five exhibits that we've already introduced.
THE COURT: Show them to counsel before you show them to the Court.
MR. McNEIL [counsel for HSM]: Yes, he has it in front of him. And what this is [is] a bill of July 18, 1996, from Ashman Stein regarding their representation of ...