Monday, December 29, 2014
E-Mail Correspondence With Attorneys Held Non-Privileged
C.A. Says Use of Company Computer System Waives Confidentiality as to Company
By a MetNews Staff Writer
A company executive has no reasonable expectation of privacy with respect to e-mails sent and received over the employer’s computer system—and that includes communications that would otherwise be subject to the attorney-client privilege, the Court of Appeal for this district has held.
Div. One, in an unpublished “By the Court” opinion filed Tuesday, granted a peremptory writ of mandate ordering the Los Angeles Superior Court to vacate an order to International Lease Finance Corporation (“ILFC”) to return and destroy copies of e-mails it retrieved after an executive, John Plueger, left its employ to join a competing enterprise.
ILFC is suing Plueger and his new employer for appropriation of trade secrets and other alleged wrongs.
The pre-resignation e-mails, between Plueger and the law firm of Munger, Tolles & Olson (“MTO”), were determined by Judge Jane L. Johnson to be privileged.
Disagreeing, the appeals panel said:
“It is well established that where a company employee uses the company computer system to send and receive electronic communications (emails), those emails are not protected from disclosure to the company that owns the computer system, particularly when the employee acknowledged in writing that the employee had no right to privacy when using the computer system. The result is no different for a company executive.”
Div. One noted that Plueger had acknowledged, in writing, in 1997, upon receipt of the company handbook, that he would have no expectation of privacy as to e-mail correspondence over a company computer. The opinion declared:
“Because the emails were not private, they were not confidential and, thus, not subject to the protection of the attorney-client privilege.”
Plueger argued that he was reasonable in expecting his communications to be private relied upon his knowledge that the company did not monitor e-mails.
The opinion said:
“Although ILFC did not regularly monitor electronic communications and may never have actually opened or reviewed any emails, ILFC had expressly warned in the Employee Acknowledgement that all files belong to ILFC and that there was ‘no right to privacy’ in any information on the computer or in the emails. Plueger had signed the Employee Acknowledgement and does not deny that he knew what he was signing. ILFC’s Personnel Policy Manual states that ILFC ‘has the right to monitor, access, review, copy, delete, disclose and block an employee’s e-mails, even those marked private.’ (Italics added.)
“That the emails sent between Plueger and MTO were marked as privileged does not override the express provisions that Plueger acknowledged in writing that he would have no privacy interest in them.”
Plueger also spotlighted the fact that the acknowledgement he signed contained these words:
“This Personnel Policy Manual is an important document intended to help you become acquainted with ILFC. This Manual will serve as a guide; it is not the final word in all cases. Individual circumstances may call for individual attention.”
The individual circumstances warranting a departure from the rule, Plueger asserted, was that ILFC “fully authorized and endorsed” representation of him and other members of the management team by Munger Tolles in the wake of an impending sale of the company.
The Court of Appeal’s opinion responded:
“At the time he communicated with the firm, Plueger…knew that MTO was ILFC’s law firm and, thus, Plueger was aware that the firm had dual loyalties to both Plueger and ILFC. Any expectation of confidentiality of communications between the firm and Plueger would have been unreasonable.”
The case is American International Group v. Superior Court, B258943.
Arturo J. Gonzalez, Eric A. Tate and Tritia M. Murata of Morrison & Foerster acted for the employer. Mark B. Helm, Carolyn H. Luedtke, Laura D. Smolowe and Amelia L.B. Sargent of Munger, Tolles & Olson represented Plueger’s new employer, Interest Air Lease Corporation. Alexander H. Cote and Katherine Farkas of Scheper Kim & Harris were appellate counsel for Plueger.
Copyright 2014, Metropolitan News Company