## Facts

- DynMcDermott Petroleum Operations Co. managed the U.S. Department of Energy’s Strategic Petroleum Reserve and employed over 900 workers.
- Kordice M. Douglas, a Black female attorney, became DynMcDermott’s in-house counsel in 1993 after a management-contract transition from her prior employer, with no gap in employment.
- Her duties included reviewing procurement contracts, overseeing litigation, and serving as the primary legal contact for human resources; she had access to confidential legal files and employee dispute information.
- During a DOE Equal Employment Opportunity audit, Douglas spoke with DOE officials and described what she believed were unresolved discrimination complaints and discriminatory practices affecting her and other employees.
- Douglas later sent a detailed letter to DOE officials further describing alleged racial and sexual discrimination and referencing confidential employee complaints and internal company matters.
- DynMcDermott convened a termination board and discharged Douglas for breaching professional duties of confidentiality and loyalty by disclosing confidential information to third parties without authorization.
- Douglas sued for race discrimination and retaliation; only her Title VII retaliation claim proceeded to trial.
- A jury returned a verdict for Douglas; the district court entered judgment and reduced damages under Title VII’s statutory cap.

## Issues

1. Whether Douglas’s disclosures to DOE officials of confidential information concerning internal discrimination complaints and employment matters breached her professional duties of confidentiality and loyalty as in-house counsel.
2. Whether ethically prohibited disclosures by an in-house attorney can constitute protected “opposition” activity under Title VII’s anti-retaliation provision (and under 42 U.S.C. § 1981).

## Decision

- The Fifth Circuit reversed the district court’s judgment for Douglas and rendered judgment for DynMcDermott.
- The court held that Douglas’s disclosures were unethical breaches of attorney duties of confidentiality and loyalty to her employer-client.
- Even assuming the disclosures could be characterized as opposition to unlawful employment practices, the court held that unethical disclosure of client confidences is unprotected under Title VII and § 1981 as a matter of law.
- Because Douglas’s conduct was not protected activity, she could not satisfy the protected-activity element of retaliation, requiring the jury’s verdict to be set aside.

## Legal Principles

- In-house counsel owe their employer-client the same professional duties as other attorneys, including core obligations of confidentiality and loyalty.
- An employer does not waive attorney-client confidentiality or privilege merely because it is subject to government audits or contractual equal-employment obligations absent an explicit or implicit waiver.
- Title VII’s opposition clause does not protect employee conduct that consists of unauthorized disclosures of client confidences by an attorney; such conduct is unprotected as a matter of law under Title VII and § 1981.
- When the alleged protected activity is legally unprotected, a retaliation claim fails at the threshold because the plaintiff cannot establish the protected-activity element.

## Conclusion

The Fifth Circuit held that an in-house lawyer’s unauthorized disclosure of confidential employer-client information to third-party government auditors, even when aimed at opposing discrimination, is unprotected under Title VII and § 1981; the retaliation verdict for the attorney was therefore reversed and judgment rendered for the employer.


Douglas v. DynMcDermott Petroleum Operations Co., 144 F.3d 364 (5th Cir. 1998)