Workplace Privacy Counsel : San Francisco Employment Privacy Law Lawyer & Attorney : Littler Mendelson Law Firm : Employment Related Privacy Issues

Although Stengart is binding only on employers doing business in New Jersey, the court’s ruling and analysis, apparently the first from any state supreme court, likely will influence other courts addressing similar circumstances. Consequently, it is critical that employers located anywhere in the United States understand the limits of the New Jersey Supreme Court’s decision:

• The case does not change the commonly accepted principle that employers can use a well-crafted policy to reduce employee’s privacy expectations in communications stored on, or transmitted through, corporate electronic resources;
• The court did not establish that employees have a right, as a matter of public policy, to use corporate electronic resources to communicate with a personal attorney;
• The court itself acknowledged that employers can discipline employees for violating an electronic resources policy even if the violation is constituted by the employee’s communication with a personal attorney, albeit New Jersey employers cannot properly read the content of employee-attorney communications on which the discipline is based., It remains unclear if the decision means that other types of communications normally subject to privilege, such as with a doctor, clergy member or spouse, are also protected;
• The court repeatedly emphasized the attorney-client nature of the communication and did not suggest that its finding of Stengart’s reasonable expectation of privacy would have been the same had Stengart been exchanging e-mail with a non-lawyer;
• While the court found that Stengart had a reasonable expectation of privacy in her e-mail, it did not suggest that Stengart had a viable claim against Loving Care for invasion of privacy, which would require a showing that the employer’s review of the e-mail would be highly offensive to a reasonable person.

In short, the decision does not create a dystopia for employers in which employees can engage in unrestrained personal, e-mail use of corporate electronic resources, through either a corporate or personal e-mail account. The decision, nonetheless, should be a call to action for employers to revise or supplement their existing electronic resources policies as follow:

• Inform all employees that the policy applies to every employee;
• Warn employees that the company will monitor the use of employees’ electronic resources;
• Notify employees that duplicates of e-mail transmitted through a personal, web-based e-mail account using company equipment could be stored on that equipment;
• Explain that the company may, in its discretion, review all communications stored on, or transmitted by, company equipment regardless whether a personal account is used, subject to state laws regarding attorney-client communications
• Prohibit employees from using any company resources (including the telephone) to communicate with a personal attorney except with the company’s prior approval;
• Warn employees that they can be disciplined for violating the policy, including the prohibition on communications with a personal attorney using corporate electronic resources.

Significantly, employers should ensure that all employees receive, review and acknowledge receipt of the new/amended electronic resources policy. In addition, employers should establish guidelines for handling potentially privileged communications discovered on the employer’s information systems. First, IT and HR professionals should be trained in the indicators of potentially privileged communication, told not to review such communications except to the extent necessary to determine whether they might be privileged, and to promptly inform in-house or outside counsel about the discovery. Second, counsel should not review such communications except as minimally necessary to determine whether they might be privileged and, if so, follow applicable ethical rules for addressing waiver of privilege arising from the inadvertent disclosure of an attorney-client communication. Third, if the employer has implemented the policies described above, it should fully document the extent of the violation of company policy and determine whether and to what extent the employee should be disciplined.

Employers clearly have an overriding interest in preventing employees from using corporate electronic resources to plan potentially devastating litigation against the employer. Stengart does not bar employers form doing so.

For further analysis of this development, see Littler's ASAP New Jersey Supreme Court Rules that E-Mails Exchanged Between Employee and Her Attorney Using Company's Computer Remain Privileged.

This entry was co-authored by Philip L. Gordon and Christopher M. Leh.

Although there are some differences in the privacy standards applicable to public sector and private employers, the standards are sufficiently similar that the Supreme Court’s decision likely will provide important guidance for employers on at least three issues. First, the law is relatively well settled that private employers can review any communications stored on a corporate e-mail server when the employer notifies employees of the monitoring, typically through an electronic resources policy. Quon is one of the first cases to address whether the same rule applies when the employee’s communication is transmitted through a third-party service provider under contract with the employer. The issue has gained increasing importance as an increasingly large number of employees use text messaging during the work day. (A case currently under consideration by the New Jersey Supreme Court, Stengart v. Loving Care, addresses an employee’s privacy expectations in copies of e-mail stored on a company-issued laptop that were sent through the employee’s personal e-mail account to her attorney.)

Second, the Supreme Court’s decision likely will address how a formal employment policy that otherwise would defeat an employee’s privacy expectation could be countermanded by an informal representation to a specific employee. Here, private employers likely will receive guidance on the types of informal statements that could be sufficient to countermand a formal policy as well as the degree of authority of the person making the informal statement necessary to override the formal policy.

Third, the Supreme Court also granted review on the question whether the senders of text messages to the SWAT officer had a reasonable expectation that his government employer would not read them. This question raises an issue that often is overlooked in cases revolving around an employer’s review of employee e-mail, i.e., the privacy interests of the sender. Without further development, it is difficult to anticipate the extent to which the Supreme Court’s ruling on this issue might affect private employers and what that affect might be.

Notably, the Supreme Court denied the service provider’s request for review of the Ninth Circuit’s ruling that the provider violated the federal Stored Communications Act by disclosing the SWAT officer’s text messages to the Department without his consent. Under the Act, a communications service provider, such as an ISP or cell phone provider, generally cannot disclose stored communications without the sender’s or recipient’s consent. An exception permits disclosure to the subscriber — the Department in the Quon case — when the provider is a “remote computing service.” The Ninth Circuit ruled that a “remote computing service” is akin to an electronic filing cabinet. Because the provider in the Quon case was a facilitator of communications, it was not a “remote computing service” and, therefore, could not take advantage of the exception. With the growing prevalence of “cloud computing” services, the proper definition of a “remote computing service” has become increasingly important. The Supreme Court’s decision to forego review of this issue leaves the Ninth Circuit’s ruling on this issue intact.

At bottom, Quon reflects the dynamic nature of the law governing technology in the workplace as communications technology rapidly moves beyond e-mail, and societal expectations change.

This entry was written by Philip L. Gordon

Photo credit: Niklas Bildhauer

The New Jersey Supreme Court ruled that Reid had a reasonable expectation of privacy in the subscriber information that Comcast turned over to the local police. The Court reasoned that Internet use is integral to daily life and reveals substantial information about an individual’s private life, making ISP subscriber information similar to telephone billing records and bank records. Because New Jersey’s Constitution recognizes a reasonable expectation of privacy in both of those categories of records, ISP subscriber information also should be constitutionally protected. Given this constitutional protection, ISP subscriber information may be produced to law enforcement only in response to a grand jury subpoena. The Court, therefore, affirmed the suppression of Reid’s ISP subscriber information because Comcast had produced it in response to a municipal subpoena.

Jersey Diesel’s situation has become all too common for employers. Employees and former employees, hiding behind the anonymity offered by the Internet, are damaging their employers by posting defamatory or confidential information on the Internet or by engaging in more injurious conduct, such as that alleged against Reid. Like Jersey Diesel, employers typically receive a frosty reception when trying to obtain subscriber information from ISPs. After the Reid decision, ISPs almost surely will refuse to voluntarily disclose any information about New Jersey subscribers out of fear of being sued for invasion of privacy. Although the New Jersey Supreme Court’s decision applies only in New Jersey, employers can expect the decision to have a broader impact.

Notably, the New Jersey Supreme Court expressly refused to address the standard for issuing a civil subpoena that requires an ISP to disclose subscriber information. However, both New Jersey’s intermediate appellate court and California’s Court of Appeal have ruled that an employer has to satisfy a heightened burden before such a subpoena can be issued. The Reid decision most likely will be used in other jurisdictions to lend further support for this heightened standard.