General Motors Co. lawyers who lost their jobs over the auto maker's ignition-switch crisis will avoid relinquishing their law licenses.

Michigan authorities in February and March denied requests from an ignition-switch victim's father to investigate a half dozen former GM employees, according to documents The Wall Street Journal reviewed.

Jay Gass, a Tennessee retiree, asked Michigan's Attorney Grievance Commission to launch the probes and suggested the former employees be stripped of their state law licenses, the documents show. Mr. Gass's 27-year-old daughter died in 2014 in a car with the faulty switch after GM failed for more than a decade to recall vehicles with the safety defect, now linked to 124 deaths.

The back-and-forth is part of the fallout from GM's ignition-switch crisis that continues to reverberate, even after the Detroit auto maker reached settlements with the U.S. Justice Department, shareholders and thousands of consumers totaling more than $2 billion. Jurors will deliberate as soon as this week in an ignition-switch trial under way in a New York federal court, and GM faces other probes two years after recalling roughly 2.6 million older vehicles with the defective part.

GM's safety crisis sparked debate over lawyers' obligations to sound alarms on the defective switches, which can slip from the run position and disable safety features including air bags. Some GM lawyers reviewed and settled cases involving the switch that didn't reach senior executives' desks for years, according to a company-commissioned report by former U.S. attorney Anton Valukas.

GM paid a $900 million penalty in September to settle a Justice Department criminal investigation and admitted to misleading regulators and consumers about the switch. But no individuals were charged. None of the lawyers Mr. Gass cited has been accused of wrongdoing by the Michigan commission or other authorities.

The Michigan commission, a state supreme court arm that polices lawyer misconduct, rejected his requests, saying the matters were litigated and resolved. "The tragedies that resulted from various individuals employed by General Motors are not subject to review by this agency," a commission staffer wrote in separate letters to Mr. Gass that the Journal reviewed. The letters supported decisions not to reveal confidential client information.

A corporate lawyer's obligation to speak up varies by state. Florida lawyers, for instance, must breach confidentiality to warn consumers at risk of death or bodily harm. But GM lawyers weren't required to do so under Michigan's professional conduct rules, said Stephen Gillers, a legal ethics professor at New York University's law school.

Michigan and most other states "leave it up to the lawyer's conscience," Mr. Gillers said. Lawyers also aren't likely to face discipline by state authorities for failing to alert senior executives absent complaints from GM, he said.

Mr. Valukas found a longtime pattern of incompetence and neglect but no intentional coverup in GM's failures with the switch. Chief Executive Mary Barra in June 2014 said employees were dismissed over the switch for reasons including failing to act responsibly or urgently.

"They failed to take the extra step," said Mr. Gass, a 61-year-old former FedEx Corp. manager, referring to GM lawyers.

The Gass family accepted more than $1 million from a GM compensation fund supervised by outside lawyer Kenneth Feinberg, part of the $595 million the company offered victims. But Mr. Gass expressed frustration that former GM employees lost only their jobs.

His daughter died March 18, 2014, when her 2006 Saturn Ion with the defective switch crashed into a tractor trailer on a Virginia interstate highway. Mr. Gass had received a recall notice days earlier.

The lawyers Mr. Gass referenced included William Kemp, who worked at GM for decades and sat on a committee deciding whether to settle legal cases. Mr. Kemp didn't alert GM's general counsel, Mike Millikin, to the ignition switch defect until early 2014 and in hindsight said he probably should have, Mr. Valukas's report said. The report absolved the since-retired Mr. Millikin.

Mr. Kemp told the Michigan commission that he continually pushed the ignition-switch issue with other employees, didn't improperly conceal information and wasn't required to divulge confidential client information.

His response expressed condolences to the Gass family and added that the slow pace of GM's investigation of the switch had frustrated him. Mr. Kemp also said he disagreed with many aspects of the Valukas report. A lawyer for Mr. Kemp declined to comment.

"GM's legal team has undergone profound changes," a company spokesman said. Mr. Millikin in July 2014 told lawmakers he directed lawyers to alert him to any future potential settlements involving death or serious injury. His replacement, Craig Glidden, has worked with regulators on taking more proactive safety measures. GM endorses regulators' desire for exceptions in confidential legal settlements so car companies will share information with government officials.

Write to Mike Spector at mike.spector@wsj.com

 

(END) Dow Jones Newswires

March 27, 2016 23:35 ET (03:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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