Ni v. HSBC Bank USA, N.A.

Background

Kelly Ni brought claims against HSBC under the Fair Labor Standards Act and New York Labor Law. She alleged that she and other Personal Bankers performed unpaid work during meal breaks, short rest breaks, and evenings. The opinion concerns only Ni’s motion to disqualify HSBC’s counsel and for sanctions; it does not decide the underlying wage claims.

Ni moved to disqualify Morgan Lewis & Bockius, LLP from representing HSBC and Yang Vogel, a former HSBC employee and Ni’s former branch manager, at Vogel’s deposition. Ni argued that HSBC might blame Vogel for the alleged wage violations, that Vogel might face personal liability as an employer under the wage laws, and that HSBC might seek contribution from her. Ni also sought sanctions based on what she described as improper conduct surrounding the deposition.

Court’s analysis

The court applied New York professional-conduct rules concerning conflicts of interest. It explained that disqualification motions are disfavored and require a high standard of proof. The court concluded that the possible conflict between HSBC and Vogel was potential rather than actual. Among other reasons, Ni had not previously sought to sue Vogel, it was unlikely at that stage that Vogel could be added as a defendant or third-party defendant, and HSBC represented that it would not add Vogel or seek contribution from her.

The court also stated that contribution and indemnification claims are not available against an employee under the Fair Labor Standards Act, even if the employee might otherwise meet the legal definition of an employer. It further noted that Morgan Lewis’s representation of Vogel was limited to her deposition and that similar representation of a nonparty witness and a defendant can be allowed when there is no actual conflict.

Because the court found the joint representation proper, it also found no basis for sanctions. The court stated that HSBC had complied with its deposition-related orders, that Ni offered no evidence that HSBC lied about its inability to reach Vogel, and that Ni chose to cancel the deposition and file the motion.

Disposition

Judge Katharine H. Parker denied Ni’s motion to disqualify and for sanctions in its entirety. The clerk was directed to terminate the motion, and the court stated that a revised discovery schedule for Ni’s individual claim would be set at a later conference.