New York Court Adds a Worrisome Twist to Employees’ Communications with Their Personal Lawyers on Company Servers

December 28, 2016

Numerous courts have held that corporate employees have no expectation of confidentiality (and thus no privilege protection) when using their employer’s server and other communication equipment – if the corporate personnel policy adequately warns them not to expect confidentiality. Nearly all of these cases involve employees communicating with their personal employment lawyers about adversity to the company whose server they used. But what if another adversary wants to challenge privilege protection?

In Peerenboom v. Marvel Entertainment, LLC, 2016 N.Y. Slip Op. 31957(U) (N.Y. Sup. Ct. Sept. 30, 2016), a Palm Beach condo resident sued his neighbor for defamation. The defendant neighbor was Marvel Entertainment’s CEO – who had “allegedly utilized Marvel’s e-mail server for his electronic communications.” Id. at 2. The court cited Marvel’s parent Disney’s personnel policy in concluding that Marvel’s CEO “did not have a reasonable expectation of privacy in connection with electronic messages sent and received on Marvel’s server, and has waived the attorney-client and work product privileges in connection with them.” Id. at 6-7.

Most courts would not find work product waiver in such circumstances, given its robust protection. But the Peerenboom approach could raise the privilege stakes when employees use their employer’s servers for personal privileged communications. Adversaries other than the employer/corporation might challenge privilege protection – such as divorce adversaries, commercial litigation adversaries, etc.