New Jersey Supreme Court Decision in Stengart Gives Employers Strong Reason to Review Corporate Technology Policies

Posted on April 12, 2010 by Randi W. Kochman

The New Jersey Supreme Court’s much-awaited March 30, 2010 decision in Stengart v. Loving Care Agency, Inc. provides guidance to all New Jersey employers issuing electronic communications policies. On April 22, 2009 and July 27, 2009, we wrote about Stengart, a case that is providing necessary guidance on the use of technology in the workplace. The New Jersey Supreme Court’s decision affirmed the Appellate Division and held that Stengart “could reasonably expect that email communications with her lawyer to her personal account would remain private, and that sending and receiving them via a company laptop did not eliminate the attorney/client privilege that protected them.” The Court thus found that Loving Care Agency and its attorneys violated Stengart’s privacy rights by reviewing emails sent between Stengart and her attorneys even though the emails were composed on a company computer.

In following the Appellate Division, the Stengart Court ruled that Stengart had a reasonable expectation of privacy in her emails. First , the Court noted that Loving Care’s electronic communications policy, as contained in its administrative and office staff employee handbook, was ambiguous. While the policy indicated that emails sent on company equipment could not be considered private or personal to any individual employee, it then acknowledged that “occasional personal use of email is permitted.” Keeping the policy’s ambiguity in mind, the Court also considered whether Stengart had a subjectively reasonable expectation of privacy in her communications with her attorney. The Court found that she did, noting that Stengart took steps to protect the privacy of her emails by using a personal, password-protected email account and by not leaving her password on her company’s computer. Finally, in assessing Stengart’s privacy expectations, the Court confirmed the important public policy concerns protecting her communications and underlying the attorney-client privilege.

New Jersey employers should heed the message of Stengart by immediately reviewing their electronic communications policies to ensure that such policies clearly communicate the employer’s rules and expectations.
 

Tags: , , , ,

Appellate Division Reverses Trial Court and Holds that Employee Did Not Waive Attorney/Client Privilege by Using Web-Based Email on a Company Computer

Posted on July 27, 2009 by Randi W. Kochman

On April 22, 2009, we wrote about Stengart v. Loving Care Agency, Inc., a case in which the New Jersey Superior Court held that an employee who used her personal web-based Yahoo email account on the company’s computer to communicate with her attorney waived her attorney-client privilege. In a sharp rebuke of the trial court, on June 26, 2009, the Appellate Division reversed the lower court’s decision and held that, “the policies undergirding the attorney-client privilege substantially outweigh the employer’s interest in enforcement of its unilaterally imposed regulation…” In so holding, the court first recognized the ambiguities in the employer’s handbook policies. While some policies clearly indicated that employees could not hold an expectation of privacy in their email communications, whether on the company computer or their web-based email accounts, other provisions conflicted and provided for occasional personal use. Notwithstanding these ambiguities, the court went on to find that the attorney-client privilege outweighs the “company’s claimed interest in ownership of or access to those communications based on its electronic communications policy.” Thus, although the Appellate Division’s decision confirms the importance of properly drafting handbook policies to protect a company’s interests, it leaves open the question of whether a company’s electronic communications policy could ever trump the attorney-client privilege.

Finally, the court went on to remand the matter for a hearing as to whether Loving Care’s attorneys should be disqualified as counsel given their review of Ms. Stengart’s emails to her attorneys.
 

Tags: , , , , ,

Court Holds Employee Waived Attorney-Client Privilege By Using Web-Based Email On A Company Computer

Posted on April 22, 2009 by Randi W. Kochman

The most recent case to highlight the importance of having properly drafted electronic personnel policies is Stengart v. Loving Care Agency. In Stengart, the New Jersey Superior Court held that an employee who used her web-based Yahoo email account on the Company’s computer waived her attorney-client privilege. In Stengart, the employee emailed her attorney during business hours from the laptop issued to her by her employer, Loving Care, before she left its employ. 

After Stengart brought suit alleging hostile workplace and constructive discharge claims against Loving Care, the Company conducted a routine review of her computer to comply with the Court’s discovery rules. During this review, the Company came upon the privileged communication. While Stengart argued that the email should be returned or destroyed and the Company had no right to retain it, Loving Care countered that Stengart waived the privilege by communicating with her attorney on Company time and through the use of a Company-issued laptop. Importantly, the Court relied upon the Company’s comprehensive handbook provisions that prohibited employees from using the email system for “employment activities outside the scope of the Company business” or for “solicitation or outside business ventures.” Moreover, the Court cited the Handbook’s provision that emails sent on the Company’s server are not to be considered private or personal to any employee. Finally, the Court noted that Stengart herself helped create and distribute the Handbook and, therefore, she could not reasonably claim that she was unaware of the policy. 

This decision confirms the importance of having properly drafted email, computer and personnel policies.

Tags: , , , , ,