International Society of Primerus Law Firms

Attorney-Client Privilege Outweighs Company Electronic Communications Policy Allowing it to Pry Into Employees Private Emails

By: Thomas Paschos

Thomas Paschos & Associates, P.C.

Haddonfield, NJ

In Stengart v. Loving Care Agency, Inc., — A.2d —, 2010 WL 1189458 (N.J March 30 2010), Plaintiff Marina Stengart was Executive Director of Nursing at Loving Care, Inc. until her resignation on January 2, 2008. The following month, she filed an action against the company alleging, among other things, violations of the Law Against Discrimination. Prior to her resignation, plaintiff communicated with her attorneys, Budd Larner, P.C., through her personal, password protected, Yahoo email account on her company provided laptop. These communications pertained to plaintiff’s anticipated suit against the company.

After plaintiff filed suit, the company extracted and created a forensic image of the hard drive from plaintiff’s computer. In reviewing plaintiff’s Internet browsing history, an attorney at Sills Cummis discovered numerous communications between plaintiff and her attorney from the time period prior to her resignation. Sills Cummis did not advise Budd Larner that the image extracted from the hard drive included these communications.

Many months later, in answering plaintiff’s interrogatories, the company referenced and included some of plaintiff’s emails with her attorneys. Plaintiffs attorney requested the return of the originals and all copies of all such communications. Sills Cummis refused and plaintiff applied for an order to show cause with temporary restraints. The judge denied temporary restraints but scheduled the application as a motion. In support of its claimed right to pry into and retain plaintiff’s communications with her attorney, the company relied upon the electronic communications policy allegedly contained in the company handbook. In seeking the return of her emails with her attorney, plaintiff argued that the company failed to demonstrate it had ever adopted or distributed such a policy and, that she was unaware of an electronic communications policy that applied to executives such as herself. The trial judge denied plaintiff’s motion finding that the emails were not protected by the attorney-client privilege because the company’s electronic communications policy put plaintiff on sufficient notice that her emails would be viewed as company property. Plaintiff appealed.

On appeal, the court found that there was a factual dispute regarding the application of the company policy which was not resolved by the trial court. The court, however, did not resolve the factual issues regarding the application of the company policy. Instead, the court chose to focus on the enforceability of such a company policy, which purports to transform private emails or other electronic communications between an employee and the employee’s attorney into company property. The court noted that this required a balancing of the company’s right to create and obtain enforcement of reasonable rules for conduct in the workplace against the public policies underlying the attorney-client privilege.

The court weighed the company’s ebbing interest in enforcing its regulations, as the means of prying into an employee’s private affairs, against the employee’s considerable interest in maintaining the confidentiality of her communications with her attorney. The court provided that, absent the impact of the company’s policy, the attorney-client privilege applies to the emails and would protect them from the view of others. The court provided [e]ven when we assume an employer may trespass to some degree into an employee’s privacy when buttressed by a legitimate business interest, we find little force in such a company policy when offered as the basis for an intrusion into communications otherwise shielded by the attorney-client privilege.

The court reversed the order of the trial court and remanded for the entry of an order requiring the turnover of all emails exchanged by plaintiff and her attorney in possession of the company, the company’s attorneys, or their agents or employees. The court also ordered the deletion of all these emails from any computer hard drives upon which they were stored and demanded a hearing to determine whether Sills Cummis should be disqualified from further representing the company.

The Supreme Court granted Loving Cares motion for leave to appeal and focused its analysis on two principal areas: the adequacy of the notice provided by the Policy and the important public policy concerns raised by the attorney-client privilege. After its review of the parties arguments, the Supreme Court modified and affirmed the judgment of the appellate court holding that Stengart had an objectively reasonable expectation of privacy in pre-suit e-mail messages exchanged with her attorneys; the e-mail messages were protected by attorney-client privilege; Loving Cares counsel violated professional conduct rule regarding handling of communications inadvertently sent to a lawyer; and remand was necessary, for hearing on what sanctions, if any, should be imposed on Loving Cares counsel.

For more info on Thomas Paschos & Associates, visit the International Society of Primerus Law Firms or paschoslaw.com.

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