Rummage Through An Employee's E-mails? Not So Fast.
Imagine that you are a supervisor at a company with an electronic communications policy. The policy states, in part, that the company reserves and will exercise the right to review, audit, intercept, access and disclose all matters on the company's media systems and servers at any time, with or without notice. The policy goes on to state that the principal purpose of e-mail is for company business communications and that occasional personal use is permitted. However, certain uses of the e-mail system are specifically prohibited including messages that contain offensive material, forwarding chain letters, job searches or other employment activities outside the scope of company business. Imagine further that one of your executives resigns and the following month files a lawsuit against the company asserting various claims including violations of New Jersey's Law Against Discrimination. After the lawsuit is filed, you extract and create a forensic image of the laptop that had been issued to the employee. By doing so, you are able to discover and review e-mails between the former employee and her attorneys which even map out strategies for the lawsuit. Was this a good strategic move on your part? .

The answer is no according to the case of Stengart v. Loving Care Agency, Inc., in which the New Jersey Supreme Court on March 30, 2010 unanimously affirmed a decision of a three judge panel of the New Jersey Appellate Division. The Supreme Court held that the electronic communications policy partially quoted above did not allow the employee's e-mails with her attorney, although sent on her personal password protected web based e-mail account but using her employer's computer, to become the employer's property. Specifically, the case held that Loving Care Agency, Inc. (the "Employer") was not entitled to read the e-mails exchanged between former employee Marina Stengartd, and her attorneys sent through her Yahoo account even though the e-mails were stored on the company issued laptop.

A few facts help to put the case into its proper context. The plaintiff had been the Executor Director of Nursing at Loving Care Agency, Inc. She resigned in January 2008 and in the following month filed a lawsuit against the company. After the lawsuit began, Loving Care duplicated the laptop's hard drive and Loving Care's attorneys were able to review the e-mails between the plaintiff and her attorneys. This was not disclosed to the former employee until she received the employer's answers to her interrogatories (written questions that are answered under oath). It was in these answers that the employer disclosed that it had reviewed the e-mails. The employee then demanded, in part, the identification of the e-mails and a return of the originals and all copies. The employer refused and a trial court judge denied the employee's application to obtain the e-mails. The trial court judge was of the opinion that the employer's electronic communications policy put the employee on notice that her e-mails would be viewed as company property and were not protected by the attorney-client privilege.

The Supreme Court examined the meaning and scope of the electronic communications policy and found that the policy did not give express notice to employees that these types of personal messages on personal web based accounts were subject to monitoring. The Court also noted that the policy permitted occasional personal use.

Since no prior New Jersey decision was on point, the Court looked to cases from other states and federal courts and specifically a four part test set forth in one of these cases to determine an employee's expectation of privacy. This test requires an analysis of 1) did the employer ban personal use; 2) does the employer monitor employee use of email; 3) can third parties have a right of access to the e-mail; and 4) did the employer notify the employee, or did the employee know of, the use and monitoring policies? The Court found that under all the circumstances of the Stengart case, the employee could reasonably expect that her e-mails with her attorneys were private. Using a personal e-mail account and not saving her password demonstrated her subjective expectation of privacy. Finally, the Court found that her expectation was objectively reasonable because the communication policy was less than clear, the communication was with her attorneys and public policy favors free and full disclosure of information between attorney and client.

The Court remanded the case back to the trial court to determine whether the employer's attorneys should be sanctioned for violation of the Rules of Professional Conduct (RPC 4.4(b)) since the attorneys read the e-mails and did not set aside privileged client communications and did not notify their adversary or the Court before completing their review of the e-mails.

Employers can still implement enforceable coherent policies to monitor and regulate the use of workplace computers. The policies governing corporate use must relate to protecting the assets, reputation and productivity of a business and to ensure compliance with legitimate corporate policies. The Court specifically pointed out that an employee who spent "long stretches of work" getting personal and confidential legal advice from a private attorney could be disciplined for violating a policy that allowed only occasional personal use of the internet. However, the Court cautioned that the employer would have no legitimate reason to read the contents of these communications to enforce the policy.

Employers would be well advised to take protective action in light of this decision. Employers should consider adopting a single electronic resources policy and require every employee to acknowledge receipt and an understanding of the policy. The policy should set understandable limits on an employee's use of the employer's computer system and clearly state that the employer retains the right to review any communication or files stored on any company owned equipment during or after the end of the employee's employment. The policy should also specifically prohibit using personal accounts to conduct company business.

It appears that as the use of computers expands to virtually every aspect of our lives, the courts will continually be called upon to balance an employer's legitimate business interests with the type of information employees seek to keep private. For more Information, please contact Michael A. Spero at 609.989.5009 or mspero@sternslaw.com.

Sterns & Weinroth Welcomes Pacifico S. Agnellini Sterns & weinroth is pleased to announce that Pacifico S. Agnellini (Pat) has joined the firm as a Director/Shareholder and member of the Gaming Practice Group. Pat formerly served as an Executive with Trump Entertainment Resorts, Inc. in Atlantic City where his responsibilities included regulatory affairs for Trump Marina Associates. Pat has a Masters of Law in Taxation and concentrates his practice in all aspects of casino gaming law and various commercial transaction and tax matters.

Michael A. Spero obtained a jury verdict in the Superior Court dismissing a law suit brought against Princeton University
Michael A. Spero, a director with the firm's Litigation Practice Group, obtained a jury verdict on February 26, 2009 in the Superior Court, Mercer County, dismissing a law suit brought against Princeton University.  In Jones v. Princeton University, the plaintiff alleged that he fell on black ice while delivering newspapers at a graduate student housing complex owned by the University.  Jones alleged that his injuries from the fall required two surgeries and have left him with a permanent disability.  On behalf of the University, Mr. Spero was able to demonstrate to the jury that Princeton University was not negligent in its efforts to remove snow and ice and keep its property reasonably safe.  Mr. Spero has represented Princeton University in negligence defense matters for more than 20 years.

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