New Jersey Appellate Court Protects a Company Executive’s Personal Privileged Communications Conducted on a Company-Owned Computer

July 22, 2009

Most companies have adopted employee policies allowing the company to review employees’ personal e-mails communicated on company-owned computers. Most courts hold that such policies eliminate any expectation of confidentiality and therefore destroy whatever privilege would otherwise protect the employees’ communications with their personal lawyers.

However, a New Jersey court has taken a strikingly different view. In Stengart v. Loving Care Agency, Inc., No. A-3506-08T1, 2009 N.J. Super LEXIS 143 (N.J. Super. Ct. App. Div. June 26, 2009), the court held that a company’s e-mail policy did not overcome an executive’s privilege protecting her communications with her personal lawyer using a company-owned laptop — but through the executive’s “personal, web-based, password protected Yahoo email account.” Id. at *2. The court acknowledged that the company policy said that e-mails sent or received on company-owned computers “‘are not to be considered private or personal to any individual employee,'” but also pointed to a policy provision permitting “‘[o]ccasional personal use.'” Id. at *4. The court held that it would “be an unreasonable interpretation” to assume that such “‘occasional personal use'” e-mail would “nevertheless become company property.” Id. at *10 n.5. The court analogized the company’s examination of the executive’s personal e-mails to “reach[ing] in and examin[ing] the contents of an employee’s pockets” at work — and even remanded to see if the company’s lawyer should be disqualified for having read the personal e-mails. Id. at *19.

It is too early to tell if this decision will be upheld, or represents a new trend. However, companies might want to consider (1) making sure that their policies give the company access even to “personal, web-based, password protected” e-mail accounts for which the employees use a company-owned computer; and (2) making it clear that a company can access even the employees’ “occasional personal use” e-mails.