Legal Issues and Recent Developments, Published by the Lurie Law Firm LLC

Posts Tagged ‘discovery’

Employees Have Reasonable Expectation of Privacy in Personal Attorney-Client E-Mails From Company Computers

Tuesday, March 30th, 2010

On March 30, 2010, the New Jersey Supreme Court held that employees have a reasonable expectation of privacy in e-mails sent to their attorneys from their company computers.  In Stengart v. Loving Care Agency, plaintiff, Marina Stengart, communicated several times with an attorney about a potential lawsuit against her employer, Loving Care Agency.  While she communicated with him through her personal Yahoo account, she did so using her company provided computer.  Shortly thereafter, she resigned from Loving Care, claiming constructive discharge, and filed a lawsuit, alleging that she was subjected to harassment, discrimination and retaliation.  At the time of her separation, she returned her company computer.

In anticipation of litigation, Loving Care retained a forensic expert to retrieve all of plaintiff’s e-mails and web-based activity.  Unbeknownst to plaintiff, the company had the ability to obtain all communications that were sent from her personal account on the company computer, including the communications with her lawyer.

The company claimed that plaintiff had no expectation of privacy and had waived the attorney-client privilege, and that the company had a right to look at these e-mails, based on its Electronics Communication policy.  That policy stated:

 The company reserves and will exercise the right to review, audit, intercept, access, and disclose all matters on the company’s media systems and services at anytime, with or without notice.

 . . . .

E-mail and voice mail messages, internet use and communication and computer files are considered part of the company’s business and client records. Such communications are not to be considered private or personal to any individual employee.

 The principal purpose of electronic mail (e-mail) is for company business communications. Occasional personal use is permitted; however, the system should not be used to solicit for outside business ventures, charitable organizations, or for any political or religious purpose, unless authorized by the Director of Human Resources.

The Court held that this policy did not provide adequate notice to employees that their e-mails, sent from their private accounts, could be accessed by their employer.  In this regard, the court noted that the term “company’s media systems” was vague; employees might reasonably expect that this applies to company e-mails, and not to e-mails from personal accounts that happened to be sent from the company computer.  Further, according to the Court, the policy gives no notice to employees that their personal e-mails are somehow stored on their hard drive, and therefore accessible to their employer.  The Court further observed that the policy is entirely silent on whether e-mails on private web-based accounts even fall within this policy.  Finally, the court noted that the policy allows employees to use e-mail for occasional personal use, creating further ambiguity as to whether personal e-mail is considered company property.

In contrast to the ambiguity of the electronic communications policy, the Court found there was no ambiguity in the strong public policy protecting attorney-client communications.   In this regard, the Court noted that other cases have have found no reasonable expectation of privacy when employees view or save inappropriate material on their company computers.   Further, employers might have a legitimate interest in monitoring communications that might have a detrimental effect on their business.

The Stengart Court noted that a different analysis might apply to attorney-client communications.  The Court noted that other courts have recognized that individuals do expect that their communications with their lawyers are private, particularly where the employee took reasonable steps to protect their confidentiality, e.g., using their personal accounts rather than company accounts, sending messages from their company laptop at home rather than through the company’s server, and whether they saved their log in information on their company computer.   Further, the e-mails, on their face, noted that they were to and from and attorney, and that they were subject to the attorney-client privilege.  Accordingly, the Court found that the documents were privileged, and that the company’s attorneys may have violated rules of professional conduct by reviewing them and by not returning these e-mails as soon as they discovered their existence.

The Stengert decision provides some valuable lessons.  First, employers should review their electronic communications policies to make sure that they are not overly vague and ambiguous.  Given the strong public policy protecting attorney-client communications, it is unlikely, however, that a Court would hold that there is no right to privacy in e-mails from a private web-based account using the employer’s equipment, even if the policy somehow specifically included these within the definition of employer electronic media.  Employees should also be careful not to send confidential information from their employer’s e-mail accounts; if they want information to remain confidential, they should use their private e-mail accounts for this purpose, and preferably not do so using their company computers.  It is also prudent to include the legend “ATTORNEY-CLIENT COMMUNICATION” at the top of such communications.  Further, attorneys should immediately return these documents as soon as they are aware that they have them.  As noted in an earlier post, employers may have a legitimate interest in their confidential documents, and should accord the same deference to confidential documents of their employees.   Finally, this decision should not be interpreted to imply that employers do not have a legitimate right to monitor improper use of electronic media by employees.

New Jersey Court Reaffirms that Internal Investigations May Be Discoverable

Tuesday, March 30th, 2010

A few weeks ago, I posted tips for conducting an effective investigation, noting that a good investigation can be an employer’s best friend, but that an improperly conducted investigation — and lack of follow up — can be a nightmare for an organization.   See here for more information.  A recent New Jersey trial court decision, Shanahan v. New Jersey Transit Corporation, reaffirms that such investigations are discoverable, such that employee litigants, and possibly juries, may have the opportunity to review and criticize the employer’s investigation and follow up.

In Shanahan, the plaintiff alleged that her employer, New Jersey Transit Corporation (NJT), subjected her to a hostile work environment based on her sexual orientation, and then retaliated against her when she complained about the harassment.  To support her claims, the plaintiff demanded that NJT turn over four documents that contained a discussion, analysis and recommendations regarding the rise in discrimination complaints under the tenure of plaintiff’s supervisor, as well as data comparing disciplinary actions against white males and minority members, and data regarding trends in hiring of female officers.  The court held that that these documents were clearly relevant, as the documents may have a tendency to prove or disprove that plaintiff’s supervisor had discriminatory motives, as well as to disprove the employer’s reasons for its actions against plaintiff.

After finding that the documents were relevant, the court then held that the documents were not privileged.  More specifically, NJT argued that the documents were protected by the “deliberative process privilege,” which allows governmental agencies to withold documents that reflect advisory opinions, recommendations, and deliberations to help the agency formulate policies and decisions.  The court rejected this argument, ruling that the deliberative privilege does not apply in employment discrimination cases.  In reaching this result, the court cited Payton v. New Jersey Turnpike Authority, 148 N.J. 524 (1997), in which the New Jersey Supreme Court specifically held that investigations of  discrimination complaints are not privileged, noting that “we particularly disfavor privileges in the employment-discrimination context.” 545.  The Shanahan court further noted that, for the deliberative privilege to apply, the documents must contain opinions, recommendations or advice to help make decisions, and not just facts.  Here, the court observed that the disputed documents contained only high level and general recommendation (e.g., “we do need to remain diligent in … insuring that their HR practices minimize the filing of complaints”) or recommended further review and analysis.

Finally, the court noted that at least one of the documents was never used in any deliberations.  According to the court: 

Ms. Illescas [the author of one of the reports] testified at her deposition that no action/no decision was ever made by Defendants in response to the T&J Associates report or her report. In fact the testimony of Ms. Illescas demonstrates that Defendants were dismissing these reports and findings and took no action whatsoever on them. Ms. Illescas testimony reveals that at least one of these reports (Ms. Illescas’ report) may have been used in a retaliatory fashion by Defendants.

In other words, not only was the document not protected by the deliberative process, the court found that it may support the plaintiff’s allegation of retaliation.

It would be a mistake for an employer to assume from this case that it should not investigate and/or document any potential areas for improvement.  It is axiomatic that ann organization should not put its head in the sand, in the hopes that everything is fine, or that no one will find out that there are any issues if they do not document them.  Rather, I have found that issues go to litigation precisely because they fester under an employer’s neglectful or unrealistic watch.  Moreover, while juries may understand that no organization is perfect, they tend not to be sympathetic to employers that turn a blind eye to potentially unjust treatment, or that engage in “blame the victim and shoot the messenger” when issues are raised.  Rather, a prudent employer should learn from this case that any investigation or issue may be discoverable, and that they should act as though all of their decisions and actions will see the light of day, and do the right thing.

This case is also a good reminder that there are numerous “investigative” records, besides formal investigations, that may document potential issues and recommendations, and which may be discoverable.  Many companies have HR issue software, which track investigations and issues, and may include the ability to run various analyses.  Following Sarbanes-Oxley, many companies routinely report audits and other issues to the  Board of Directors and/or Audit Committee.  The Federal Sentencing Guidelines recommends that organizations adopt compliance programs, which includes issue tracking asd part of risk assessments, as well as regular reports to compliance committees and senior management of issues and trends.  Many companies have also implemented hotline reporting systems, from which different analytics can be run regarding trends and statistics, including rise or decline or various issues, as well as statistics regarding the company’s response, which may or may not demonstrate that the company took these complaints seriously, as well as whether employees felt comfortable raising concerns.  Prudent employers would be wise to periodically review all of these documents to determine whether there are issues that need to be addressed.  Depending on the specific facts, plaintiffs might also be wise to consider including these documents in their discovery requests.

A copy of the Shanahan decision is on file with the author, and can be provided on request.