In Stengart v. Loving Care Agency, 2009 N.J. Super. LEXIS 143 (App. Div. June 26, 2009), a New Jersey appellate court refused to enforce a provision in an employer’s electronic communications policy that purported to give the employer ownership of all employee personal communications on the employer’s system. The particular messages at issue were sent by an executive to her attorney on her personal, password-protected Web mail account. The opinion contains some valuable reminders for employers that promulgate such policies, and a caution for attorneys who may be called upon to review such communications.

Marina Stengart, an executive at a nursing care agency, was issued a laptop computer and a company e-mail address by her employer. Prior to her resignation, she used the work-issued laptop to communicate with her personal attorney regarding a discrimination lawsuit that she would later file. The communications were sent via Stengart’s personal, password-protected Web mail account.

The employer created a forensic image of the laptop hard drive, which was reviewed by an attorney at the law firm representing the employer in Stengart’s discrimination lawsuit. He was able to recover and read numerous e-mail messages between Stengart and her attorney that were sent through Stengart’s personal Web mail account. When some of these e-mails were produced in discovery, Stengart’s attorney, citing the attorney-client privilege, sought an order requiring the return of the e-mails and the deletion of all copies by the employer’s law firm.

The trial court ruled that employer’s electronic communications policy had put Stengart on “sufficient notice” that electronic communications, whether conducted via a company e-mail address or a Web mail account, were not private or personal and would be subject to review as property of the employer. But an appellate court disagreed on both procedural and substantive grounds.

The appellate court found that there should have been an evidentiary hearing to resolve disputed issues of fact, in particular, which version of the policy was applicable (several different versions were proffered by the employer); whether the policy had been finalized and disseminated to employees, and whether the policy applied to executives such as Stengart. The appellate court pointed out that the employer had not produced any signed acknowledgment of the policy from Stengart, “as is the custom among employers in these matters.”

But even assuming that the policy had been disseminated and that it applied to Stengart, the appellate court found that the version of the policy proffered by the employer contained significant ambiguities. First, the court noted that the policy contained very broad language reserving to the employer “the right to … intercept … matters on the company’s media systems and services,” but the policy failed to specifically define those systems and services.  Second, the court noted that while the policy contained broad language declaring electronic communications and records to be “part of the company’s business and client records” and not “private or personal to any individual employee,” the policy also permitted “[o]ccasional personal use.” However, the term “personal use” was not defined, nor did the policy contain any other provisions delineating the scope of permitted personal use.

What the policy did delineate, the court pointed out, were specific prohibited uses, including illegal or offensive communications, or those that would be damaging to the employer, in breach of an employee’s duties to the employer or in violation of law. This enumeration of prohibited uses that would vindicate the employer’s “legitimate business interests” could lead an objective reader to conclude that personal e-mails that did not fit into the enumerated prohibited uses would be “occasionally permitted.” These ambiguities, the court concluded, left the policy open to the interpretation that the policy applied to communications on the company’s work-based system but not to personal communications via a private e-mail account.

The court then proceeded to consider the substance of the policy, assuming arguendo that it applied to Stengart’s communications.The court found that while unilateral employer policies are generally enforceable, under New Jersey law there must be a “nexus” between the policy and “what an employer may reasonably require of its employees.” The policy must “concern the terms of employment” and “reasonably further the legitimate business interests of the employer.”

Many of the provisions of the employer’s policy were found to be “reasonable and represent ‘helpful’ directions in employment relationships.” The court found that the express prohibitions of certain uses “provide clear rules for the use of company computers that the company may legitimately enforce as a means of protecting itself, other employees, and the company’s reputation; those specific declarations impose a definite understanding that company computers are to be used in aid of the company’s business.”

But the provision that purported grant to the employer ownership of all employee communications on its system, even personal communications, failed the standard. The appeals court emphatically rejected the employer’s view that ownership of the computer system should be the sole determinant of whether employee personal e-mails could be deemed to be company property. Analogizing the personal e-mails to a folder of private papers or the contents of an employee’s pocket, the court concluded that “a breach of a company policy with regard to the use of its computers does not justify the company’s claims of ownership to personal communications and information accessible therefrom or contained therein.”

The appeals court did recognize that there is a “gray area” between business-related and purely personal employee communications: “personal communications that impact on [the employer’s] business or reputation.” But the e-mails in question, the court concluded, did not fall into this gray area. The employer had no greater interest in Stengart’s attorney e-mails “than it would if it [the employer] had engaged in the highly impermissible conduct of electronically eavesdropping on a conversation between plaintiff and her attorney while she was on a lunch break.”

The court also conceded that employers have a legitimate interest in monitoring non-business related communications and in disciplining or terminating employees engaged in personal matters during work hours. But that right, the court stressed, does not extend to confiscating an employee’s personal communications. In particular, with respect to Stengart’s attorney-client communications the court found that the employer’s communications policy was of “insufficient weight” when compared to the important societal considerations that undergird the attorney-client privilege.”

The appeals court also faulted the conduct of the employer’s law firm in reading and retaining Stengart’s e-mails and in failing to notify her that they had possession of them.  The court cited a New Jersey ethics rule that obligates an attorney who has reasonable cause to believe that a document has inadvertently been sent to notify the sending party and return it without reading it. Acknowledging that the law firm may have believed that the messages were not privileged, the court nevertheless concluded that the law firm had an affirmative duty to notify Stengart that it had possession of the e-mails so that the guidance of an impartial judge could be obtained on whether the e-mails were protected by the privilege.  

Attorneys involved in the review of employee communications should take note of the court’s pointed language in discussing an attorney’s ethical obligations with respect to attorney-client communications:

Here, rather than follow such an approach, Sills Cummis appointed itself the sole judge of the issue and made use of the attorney-client emails without giving plaintiff an opportunity to advocate a contrary position. That being the case, we reject the trial judge’s finding that Sills Cummis had no affirmative duty "to alert plaintiff that it was in possession of the subject E-mail before reading it because Sills Cummis believed in good faith, based on [the company’s] policy, that the E-mail was not protected by any privilege." Sills Cummis may have reached that determination in good faith; but counsel thereafter acted in studied indifference to the right of plaintiff to argue otherwise and to seek a contrary ruling from an impartial judge.

Although the court did not hold that the law firm should be disqualified from further representation of the employer in the matter because of its attorneys’ access to Stengart’s e-mails, the court remanded for a hearing on that issue.

The Stengart opinion is a reminder to employers of several important points:

(1)    It is important to have a clear, well-crafted employee communications policy that sets understandable limits on employee use of an employer’s systems.
(2)    The provisions of the policy should be reasonable, and further the employer’s legitimate business interests.
(3)    Employers should be able to document the dissemination of the policy, both generally and to specific employees.


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Photo of Jeffrey Neuburger Jeffrey Neuburger

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise…

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise, combined with his professional experience at General Electric and academic experience in computer science, makes him a leader in the field.

As one of the architects of the technology law discipline, Jeff continues to lead on a range of business-critical transactions involving the use of emerging technology and distribution methods. For example, Jeff has become one of the foremost private practice lawyers in the country for the implementation of blockchain-based technology solutions, helping clients in a wide variety of industries capture the business opportunities presented by the rapid evolution of blockchain. He is a member of the New York State Bar Association’s Task Force on Emerging Digital Finance and Currency.

Jeff counsels on a variety of e-commerce, social media and advertising matters; represents many organizations in large infrastructure-related projects, such as outsourcing, technology acquisitions, cloud computing initiatives and related services agreements; advises on the implementation of biometric technology; and represents clients on a wide range of data aggregation, privacy and data security matters. In addition, Jeff assists clients on a wide range of issues related to intellectual property and publishing matters in the context of both technology-based applications and traditional media.