Private e-mails between employee and lawyer off limits to employer

E-mail conversations between an employee and his lawyer – conducted via the employee’s private, web-based e-mail account but from a company-issued computer – were nonetheless protected by the attorney-client privilege, a Massachusetts Superior Court judge recently ruled.

The employee’s e-mail communications were stored on the company’s hard drive, which meant the company could view them. As a result, it argued the employee’s communications with his lawyer were not privileged because they were not made in confidence.

But Judge Ralph D. Gants ruled in favor of the employee and denied the company’s motion to compel production of the communications.

“Since a reasonable person in [the employee’s] position would not have recognized that e-mail communications with his private attorney made from a private Internet e-mail account could be read by [the company] simply by examining the hard disk of his [company-issued] laptop, he could not reasonably have understood that these attorney-client communications could be ‘overheard’ by [the company],” wrote Gants in
National Economic Research Associates, Inc., et al. v. Evans, et al. (Docket No. 04-2618 and Lawyers Weekly No. 12-283-06).

Screen shots

The employee, David Evans, was a consultant for National Economic Research Associates (NERA), a leading economic consulting firm and a subsidiary of plaintiff Marsh & McClennan Cos.

In 2002, Evans signed a non-solicitation agreement in which he agreed not to solicit certain former employees and clients of NERA for two years should he terminate his employment. He executed the agreement in order to exercise company stock options.
He resigned from the company on March 15, 2004, in order to go work for co-defendant LECG Corp.

Before leaving the company, Evans conferred with his private attorney concerning his departure from NERA and his employment with LECG. Many of these conversations were conducted over e-mail, with Evans sending and receiving e-mails from his personal, password-protected, Internet-based e-mail account with Yahoo, rather than from his company e-mail address.

Though he was often using a laptop that NERA had issued to him, he did not know that when he used his Yahoo account all the information he accessed was copied via a “screen shot” onto a temporary Internet file on the computer’s hard drive. As a result, unbeknownst to him, all communications between him and his attorney were potentially accessible by NERA.

When Evans resigned, he returned his laptop. Before doing so, he deleted personal files and ran a computer program called a “disk defragmenter” to prevent recovery of the deleted files.

He did not delete the e-mails from his Yahoo account that he had retrieved using the laptop because he did not know they had been stored on the hard drive. He purposely left all work-related files on the hard drive.

After Evans’ resignation, NERA retained a computer forensic expert to search the laptop’s hard drive. During the search, the expert was able to retrieve various attorney-client communications between Evans and his lawyer made via the Yahoo account. NERA indexed these e-mails but did not read them until it received guidance from the court.

The parties ultimately became embroiled in litigation over issues related to the defendant’s departure and NERA moved to compel production of the e-mails.

Expectation of privacy

Addressing NERA’s argument that the attorney-client communications were not privileged, Gants noted Evans’ use of his laptop was governed by policies set forth in a company manual posted on the company Intranet.

The manual warned employees that all company computer resources were reviewable by the company and that e-mails were not confidential. The manual also warned that a log of employee’s network activities – including logins, Internet sites visited and e-mail sent or received – would be kept.

“NERA contends that these warnings in the manual provided reasonable notice to [Evans] that the hard disk on his laptop belonged to [the company] and could be read by NERA,” wrote Gants. “As a result, [Evans] reasonably should have understood that [his Yahoo e-mails] could be read by NERA.”

But the judge was not persuaded by this argument.

While the manual expressly warned that it might monitor the content of e-mail sent using the company account, noted Gants, “[it] did not expressly declare, or even implicitly suggest, that NERA would monitor the content of e-mail communications made from an employee’s personal e-mail account via the Internet whenever those communications were viewed on a NERA-issued computer. Nor did NERA warn its employees that the content of such Internet e-mail communications is stored in the hard disk of a NERA-issued computer and therefore capable of being read by NERA.”
The judge was also unconvinced by NERA’s argument that any reasonable person would have known that the hard disk of a computer makes a “screen shot” of all it sees, and stores it on the hard drive, rendering it retrievable by a forensic computer expert.

No waiver

Gants also rejected NERA’s argument that Evans had waived his privilege by sharing his communication with it.

“In [the 1997 case, In the Matter of the Reorganization of Electric Mutual Liability Ins. Co. Ltd.], the [Massachusetts] Supreme Judicial Court made clear that the mere fact that an otherwise privileged attorney-client communication is overheard or inadvertently disclosed does not, by itself, constitute a waiver of the privilege,” wrote Gants.

In this case, by using a password-protected e-mail account rather than his company e-mail – and by attempting to delete all personal documents before returning his laptop – the defendant took “adequate steps” to protect the confidentiality of his privileged communications with his lawyer, Gants said.

The bottom line is that if an employer wants to be able to read an employee’s attorney-client communications made via an Internet-based e-mail account on a company-issued computer, it must plainly communicate to the employee that these e-mails are stored on the hard drive in a “screen shot” temporary file and that it expressly reserves the right to read them, said the judge.

James W. Nagle of Boston, who represented NERA, could not be reached for comment. Sharon R. Burger of Boston, counsel for Evans, declined comment.