Also known as: subterfuges · deceit · artifice
Written by attorneys — see sources below.
A stratagem or device used to conceal, evade, or avoid something, especially a legal obligation or liability.
Sofia Stern, a tax attorney, understated her law practice income and hid client cash fees in offshore accounts to reduce her personal tax liability. When the Department of Agriculture investigated, the concealment allowed her to evade detection of the full extent of her earnings. The conduct constituted professional misconduct because it involved a deliberate plan to avoid statutory reporting obligations.
Seth Shapiro, owner of BlueWave Shipping, told Horizon Logistics that its vessel had passed all safety inspections without deficiencies even though he knew serious issues remained. Horizon relied on the statement and signed the charter. The false assurance operated as a device to induce the contract and avoid disclosure of the true condition.
Sean Steele failed to disclose substantial income and assets during settlement negotiations with his spouse Skylar Sullivan. The resulting agreement was reached only because Skylar lacked knowledge of the true financial picture. The nondisclosure served as a device that allowed Sean to avoid a fair division and later justified setting the agreement aside.
Scott Summers at AeroSafe Components knew of dangerous defects in airbags but continued shipping them to Nova Motors while concealing the problems. Nova later discovered the concealment after a recall and sought recovery for losses caused by reliance on the supplier's silence. The concealment operated as the device that caused the pecuniary harm.
Sierra Santos challenged Western Airlines' mandatory retirement policy for flight engineers at age sixty. The airline defended the rule as part of a pension plan, but evidence showed it was adopted to sidestep the ADEA's prohibition on age discrimination. The plan functioned as a device to avoid the statute's core protections.
In 1978, Western Air Lines, Inc. operated commercial flights using aircraft such as the Boeing 727 and McDonnell-Douglas DC-10, each requiring a captain, first officer, and flight engineer in the cockpit. The Federal Aviation Administration prohibited pilots and first officers from serving after reaching age 60 but imposed no such mandatory retirement age on flight engineers. Western maintained a retirement plan requiring all cockpit crew members, including flight engineers, to retire at age 60. Respondents Criswell and Starley served as captains on DC-10s and turned 60 in July 1978. To avoid retirement, they bid for flight engineer positions based on seniority under the collective-bargaining agreement. Western denied their applications, citing the retirement plan provision. Respondent Ron, a career flight engineer, was also retired upon turning 60 that year. Criswell, Starley, and Ron filed suit in the District Court for the Central District of California alleging that Western's under-age-60 qualification for flight engineers violated the Age Discrimination in Employment Act of 1967. At trial, the parties presented evidence on the flight engineer's duties, which are less critical than a pilot's during normal operations but important in emergencies, along with conflicting medical testimony regarding age-related physiological changes and the feasibility of individualized medical examinations for persons over 60. Several airlines employed flight engineers over age 60 without safety issues. The jury received instructions defining the BFOQ defense and requiring Western to prove both the reasonable necessity of the age qualification to safe operations and the impracticality of individualized assessments. The jury returned a verdict for the plaintiffs and awarded damages. The District Court granted additional equitable relief. On appeal, the Court of Appeals for the Ninth Circuit affirmed the judgment in all respects. The Supreme Court granted certiorari to review the BFOQ instruction issue.
View caseSummit Bank implemented a new scheduling system that appeared neutral but was designed to prevent Textile Workers Union organizers from gaining access to employees. The system allowed the bank to claim compliance with labor rules while effectively blocking union activity. The scheduling change served as the device to evade federal labor obligations.
In 1953 the Textile Workers Union of America entered into a collective bargaining agreement with Lincoln Mills of Alabama. The agreement was to run for one year and from year to year thereafter unless terminated on specified notices. It contained a no-strike clause and established a multi-step grievance procedure whose final step, available to either party, was arbitration. Several grievances concerning work loads and work assignments arose under the agreement. The union processed the grievances through every step of the contractual procedure, after which the employer denied them. The union then requested arbitration, but the employer refused. The union filed suit in federal district court seeking an order compelling the employer to arbitrate the grievances. The district court held that it possessed jurisdiction and directed the employer to comply with the arbitration provisions of the agreement. On appeal the Court of Appeals reversed by a divided vote, concluding that the district court lacked authority under either federal or state law to grant the requested relief. The Supreme Court granted certiorari. After the Court of Appeals decision but before oral argument, Lincoln Mills terminated its operations, ceased all work at the mill in March 1957, and contracted to sell its mill properties. Some of the grievances sought back pay for increased workloads, and the collective bargaining agreement authorized the arbitration board to adjust compensation retroactively.
View caseSubterfuge requires an affirmative device or plan intended to conceal or evade a legal duty, whereas simple nondisclosure may not rise to that level unless it is part of a scheme to induce reliance. Courts examine whether the conduct involves deliberate concealment calculated to avoid liability or statutory obligations.
Yes. Model Rule 8.4(c) prohibits conduct involving dishonesty, fraud, deceit, or misrepresentation regardless of whether client funds are affected. A lawyer's use of concealment to evade personal tax obligations or regulatory requirements still reflects on honesty and fitness to practice.
A plan qualifies as a subterfuge when it is adopted or applied to evade the statute's prohibition on age discrimination rather than to achieve a legitimate business purpose. Evidence that the plan was designed to force retirement of older workers while preserving younger employees can establish the prohibited device.