NJ Appellate Court Reverses Course: Attorney-client privilege revived
By Fernando M. Pinguelo and Andrew K. Taylor
Earlier we reported that a New Jersey state trial court found that a former employee waived the attorney-client privilege when she decided to use company time, equipment, and resources to communicate with her lawyer. Recently, an appellate court reversed that ruling and framed the issue as “whether workplace regulations converted an employee’s emails with her attorney ” sent through the employee’s personal, password-protected, web-based email account, but via her employer’s computer “into the employer’s property.”
Plaintiff had argued that the company failed to demonstrate that it had ever adopted or distributed the policy in question, that she was unaware that the policy applied to her, and even if the policy did exist, the company had not previously enforced it. The company argued that it had disseminated the policy, and that the policy did apply to the plaintiff. The appellate court determined that issues of material fact existed as to whether the policy at issue was in place and disseminated at the time of plaintiff’s employment and as to whether the policy applied to plaintiff and that these issues could not be resolved by the trial judge without a hearing on the matter.
The trial court determined that the company’s policy put employees on notice that electronic communications, whether made from the employee’s company email address or an internet based email address, would be subject to review as company property. According to the trial court, the policy warned that there was no reasonable expectation of privacy “with respect to any communications.” The appellate court disagreed. The appellate court found that there was a conflict between two paragraphs in the company’s policy. While paragraph two provided that “e-mail…internet use and communications” are considered “part of the company’s business” and “not private or personal to any individual employee,” paragraph three of the policy provided that “occasional personal use is permitted.” Because of this conflict, the appellate court determined that “an objective reader could reasonably conclude from a comparison of paragraphs two and three that not all personal emails are necessarily company property because the policy expressly recognizes that occasional personal use is permitted.”
The appellate court then turned to examining the enforceability of a company policy, which purports to transform private emails or other electronic communications between an employee and the employee’s attorney into company property. This analysis requires a balancing of the employer’s right to create and enforce reasonable rules of conduct in the workplace against the public policy underlying the attorney-client privilege.
The appellate court began by recognizing that employers may unilaterally disseminate company rules and policies through handbooks or manuals and impose their contents on employees. Such a right however is not limitless. An employer’s rules and policies must first be reasonable to be enforced. For the employer’s policies and rules to be enforceable, the regulated conduct should concern the terms of employment and reasonably further the legitimate business interests of the employer. While an employer does own communications made by an employee in furtherance of the employer’s business, the appellate court found that the policy at issue reached into the employee’s personal life without a sufficient nexus to the employer’s legitimate interests. Moreover, the company’s ownership of the computer is not dispositive in determining whether an employee’s personal emails may become the employer’s property.
The appellate court cited to New York case law for the proposition that “a computer in this setting constitutes little more than a file cabinet for personal communications.” Property rights are no less offended when an employer examines documents stored on a computer as when an employer rifles through a folder containing an employee’s private papers or reaches in and examines the contents of an employee’s pockets. The appellate court concluded that employees have a reasonable expectation of privacy in personal communications on a company owned computer. In sum, it held that a policy purporting to transform all private communications into company property “merely because the company owned the computer used to make private communications “furthers no legitimate business purpose.
Lastly, the appellate court observed that the company’s interest in enforcing its regulations must be weighed against the employee’s interest in maintaining the confidentiality of her communications with her attorney. It first noted the venerability of the attorney-client privilege and that absent the employer’s policy, the email communications at issue are certainly protected by the privilege. The appellate court determined that the company’s claimed interest in ownership of private communications based on its electronic communications policy must give way to the employee’s privacy interest in her communications with her attorney. The company policy is of insufficient weight when compared to the important societal considerations that undergird the attorney-client privilege.
The appellate court concluded by addressing the issue of attorney discipline for the company’s law firm that uncovered the emails. It determined that the law firm violated New Jersey Rule of Professional Conduct 4.4(b) because the lawyers failed to cease reading and examining the emails upon discovery and failed to notify plaintiff’s attorney promptly of their discovery. The appellate court ultimately determined that whether defendant’s counsel should be disqualified is a matter for resolution upon remand to the trial court.
Stengart v. Loving Appellate Opinion here
Fernando M. Pinguelo, a partner of Norris McLaughlin & Marcus and Co-Chair of its Electronic Discovery Group, devotes his practice to complex litigation and eDiscovery. A leader in the emerging area of eDiscovery, Fernando works with clients to develop strategies to manage issues related to electronic documents. Notably, Fernando was involved in New Jersey’s first case addressing its eDiscovery rule amendments, and lectured at the Judicial College on the topic. He created eLessons Learned, an eDiscovery best practices blog and teaches an eDiscovery course at Seton Hall Law School. Fernando can be reached at fmp@nmmlaw.com.
Andrew K. Taylor, an associate with the firm, practices in the firm’s Litigation Group. While at law school, Andrew worked with the UMDNJ Department of Legal Management. Prior to law school, Andrew worked in the area of environmental health and inspection. Andrew can be reached at aktaylor@nmmlaw.com.
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