New Jersey Supreme Court Decides Email Case Restricts Employer's Right to Access Confidential Employee Communications: Time to Check the Company Policy

April 1, 2010

By: Glenn J. Williams, Esq. and Veronica P. Hallett, Esq.

Attention all employers, it may be time to check your email policy. In a unanimous decision issued March 30, 2010, the New Jersey Supreme Court, in Stengart v. Loving Care Agency, Inc., Docket No. A-16-09, held that an employee has a reasonable expectation of privacy in the contents of e-mails exchanged with her attorney using company-owned computers. In making its determination, the Court weighed the employee's common law right of privacy and the sanctity of the attorney-client privilege against the employer's right to enforce reasonable rules in the workplace.

The issue arose as part of a discrimination suit brought by Marina Stengart against her former employer, Loving Care Agency, Inc. ("Loving Care"). While Stengart was still employed by Loving Care, she exchanged e-mails with her attorney using her personal Yahoo webmail account on a company-issued laptop. After Stengart left the company and brought suit against it, Loving Care used a forensic computer analyst to retrieve information stored on the laptop's hard drive. In doing so, Loving Care gained access to and read the e-mail communications between Stengart and her attorney. Stengart demanded the return of the e-mails, which she maintained were privileged, and sought relief from the court. The case represented a novel issue of New Jersey law.

The Court's holding that Loving Care violated Stengart's expectation of privacy was partly based on the fact that Loving Care's written policy regarding personal use of company computers was ambiguous. Employees did not have explicit notice that messages sent or received on a personal, web-based e-mail account were subject to monitoring by the company. Therefore, employees had a reasonable expectation of privacy in the contents of those communications. The holding made it clear that employers must be explicit and unambiguous in the wording of their corporate policies.

Nonetheless, the Court warned that even a corporate policy stating in clear terms that an employer may retrieve and read an employee's personal attorney-client communications would be unenforceable. This is because the public policy underlying the attorney-client privilege outweighs an employer's interests in enforcing reasonable rules in the workplace. The Court noted, however, that companies may adopt "lawful policies relating to computer use to protect the assets, reputation, and productivity of a business" and that the decision does not mean that employers cannot monitor or regulate the use of workplace computers.

Florio Perrucci Steinhardt & Fader LLC provides comprehensive corporate and business law counseling to individuals and organizations from early stage start up to established multi-national companies. Members of our Corporate & Business Law team possess substantial knowledge and valuable experience gained from having served as in house General Counsel to both privately held and publicly traded companies doing business in the United States and abroad. We bring a unique perspective and a general counsel's balanced approach to the law - we understand business and our goal is to achieve success for our clients in the most expeditious and cost effective manner.

The Corporate and Business Law team stays abreast of the latest developments in the law and leverages the firm's expertise to counsel our clients on the myriad of issues, including those in the area of labor and employment where we collaborate with our Labor and Employment Group to provide counseling on employment-related issues including employee training, corporate reorganizations, relocations and acquisitions, workforce reductions, drafting and enforcement of employment contracts, including non-competition agreements, and preparing and auditing employee handbooks and personnel policies to name a few.

For more information regarding our Corporate & Business Law practice, or the various other legal services we offer, please contact Glenn J. Williams, Esq. at (908) 454-8300 or [1]gwilliams@florioperrucci.com, or one of our other dedicated attorneys at Florio Perrucci Steinhardt & Fader, LLC, where we will work hard everyday to a become partner in your success.

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