Clark Atlanta Settles with EX-GC

May 8, 2003

BYLINE: R. Robin McDonald

Clark Atlanta University has settled a breach-of-contract suit filed by its former general counsel, who claimed he was fired for objecting to alleged misconduct by the university’s president and its trustees.

The settlement, which was reached barely a month after the Daily Report objected to CAU’s attempt to seal the court record, leaves unresolved allegations made by CAU’s former General Counsel Michael A. Baskin of ethical lapses at CAU and the college’s counterclaims that Baskin had engaged in repeated professional misconduct.

It also leaves open two intriguing legal questions that were raised in initial filings and during the only hearing in the case. One of those questions involves attorney-client privilege and the limits of that confidentiality when an attorney alleges wrongdoing by a client.

The second question goes to the heart of a general counsel’s employment-whether an employment contract remains valid if the client company or institution becomes dissatisfied and wants new representation.

Clark Atlanta paid Baskin approximately $215,000 to end the litigation, according to Baskin and his attorney, A. Leroy Lee Parks Jr., a partner at Parks, Chesin & Walbert. The settlement is worth approximately one year of Baskin’s salary and benefits and also includes a $40,000 bonus for 2002 that CAU had not paid Baskin, according to a joint statement by CAU and Baskin. CAU also paid Baskin’s legal fees.

In return, Baskin agreed to forego the remaining four years of his five-year, evergreen contract, which he signed when he was hired as general counsel in 1986 by what was then Clark College. Atlanta University and Clark College merged in 1989, and Baskin became general counsel of the newly formed Clark Atlanta University.

Explosive Allegations Simmer

As part of the settlement, both sides agreed not to discuss further charges or countercharges contained in Baskin’s complaint and CAU’s counterclaim. In a joint news release, both sides expressed regret that the matter was not resolved without accusation and counter accusation. The settlement amicably resolved the contract dispute.

Parks said he and Baskin won’t say any more about allegations of misconduct by CAU officials. We’ve settled the case. That’s all we can say about that. We’ve resolved his [Baskin’s] issues, which were to get him the money to move on to a new career.

CAU and its trustees, Parks said, have bought their peace.

Baskin also declined to comment on his allegations of illegalities at CAU because the settlement agreement includes a nondisparagement clause. He called his allegations of CAU misconduct history. It’s not for me to ponder or consider. I’m moving on. I’ve moved on.

R. William Bill Ide III, of counsel at McKenna Long & Aldridge, and McKenna Long partner John P. Hutchins, who represented CAU, declined to comment on the case outside of the contents of the news release.

The allegations made by both Baskin and CAU were explosive.

In his complaint, Baskin alleged that CAU allowed its trustees and other selected prominent alumni to report tuition payments for their children or the children of close friends as charitable, tax-deductible donations to the school-an illegal practice Baskin said the board ended only after he reported the misconduct to then-President Thomas Cole.

Baskin also alleged that Board Chairman Carl Ware, executive vice president of public affairs and administration at Coca-Cola Co., used his position to strong arm CAU into retaining a friend as the college’s housekeeping contractor, although the contractor was not the lowest bidder. Ware allegedly wanted that contractor retained because he was a friend and because the low bidder was a white-owned company.

Ware was out of town and could not be reached for comment. Sheila Jack, director of communications and special assistant to CAU’s president, referred all questions to the school’s attorneys.

CAU, in turn, claimed that Baskin was fired because of his repeated violations or threatened violations of his ethical duties. CAU said Baskin tried to coerce the school by threatening to go public with allegations of misconduct if he wasn’t paid hundreds of thousands of dollars in future salary and benefits.

CAU also alleged that Baskin was verbally abusive to Walter D. Broadnax, the university’s president.

Baskin claimed in his suit that CAU owed him past-due compensation, including unpaid retirement benefits, annual raises and a $40,000 bonus.

In an April 7 hearing before Fulton County Superior Court Judge Gail S. Tusan, Hutchins called Baskin’s allegations absolutely false, insisting that some are fabrications bordering on outright fantasy (Daily Report, April 8, 2003).

Efforts to Conceal Suit

CAU attorneys went to extraordinary lengths to keep Baskin’s allegations out of the public arena. When McKenna Long attorneys filed for a protective order, they wrote on it Filed under seal. Public Access Prohibited. However, a judge had not authorized the file to be sealed and the attorneys placed the prohibition on the record without any court authority.

Absent a judge’s order, court clerks placed the motion in public files and on the clerk’s Web site.

McKenna Long attorneys attempted to evade publicly filing an accompanying brief by sending it directly to Tusan to view in camera. Again, the filing violated court procedures. As a result, Tusan told the attorneys in court that she didn’t read their brief because it hadn’t been filed officially.

Atlanta attorney Mark G. Trigg, a partner at Greenberg Traurig, successfully opposed the motion for a protective order. Trigg argued on behalf of the Daily Report, which is normally represented in First Amendment matters by McKenna Long.

Trigg argued that the State Bar of Georgia permits disclosure of privileged confidences between an attorney and his or her clients when that attorney’s professional conduct is called into question. CAU’s counterclaim accused Baskin of professional misconduct that allowed the college to terminate his contract on Feb. 14, 2002, without either buying it out or paying him severance. Trigg argued that CAU made an affirmative decision, an offensive decision to file a counterclaim…. As a consequence of its decision to put attorney-client privilege at issue, it [CAU] has clearly waived protection of privilege.

Tusan agreed. She denied Clark Atlanta’s motion from the bench, ruling that the record would remain open. In her order, the judge cited the Georgia Bar’s Rules of Professional Conduct, which permit a lawyer to use or disclose confidential client information in order to resolve a dispute with a client regarding compensation.

In addition, Tusan wrote, The matters contained in the complaint about which the defendant complains fall within the exception to the otherwise uniform protection afforded client confidences. Quoting a 1983 5th Circuit case, Doe v. A. Corp., Tusan noted that a lawyer does not forfeit his rights simply because to prove them he must utilize confidential information. Doe v. A. Corp., No. 709 F.2d 1043, 1048 (5th Cir. 1983).

CAU attorneys also had argued that the university had the absolute right to select its own counsel as a matter of public policy in Georgia-a right, they argued, that trumps any employment contract by allowing a client to terminate a general counsel without penalty. AFLAC v. Williams, a 1994 Georgia Supreme Court ruling, determined that because of the fiduciary relationship between an attorney and his client, the client has the absolute right to discharge the attorney, even without cause. AFLAC v. Williams, No. S93G1805 (Ga. Sup. June 27, 1994).

However, the AFLAC dispute concerned a private attorney that AFLAC had kept on retainer through a seven-year, automatically renewable contract. In a footnote in his order, Chief Justice Norman S. Fletcher wrote, This opinion deals only with contracts of attorneys in private practice and does not address the employment relationship between employers and in-house counsel or other full-time employees.

Parks said that CAU attorneys were attempting to build on Baskin’s litigation to see if they could extend the law. If they had been successful, the ramifications might have been significant for general counsel of Georgia, he said.

Baskin agreed. I think my colleagues at Coca-Cola, Georgia Pacific and Georgia Power would be very concerned if that [AFLAC] was the case, Baskin said. But, he added, I think the law has always been clear. I think the court specifically excluded in-house counsel from the thought that a client could terminate an attorney…. I would like to tell my brethren at the bar that we are happy this matter has concluded and regret very much it had to result in the filing of a lawsuit. We’re happy it ended in what I like to think is an amicable resolution.