Commercial Division Blog
Employees' E-mails With Counsel Sent on Employer's Computer System Not Privileged
On February 11, 2020, Justice Scarpulla of the New York County Commercial Division issued a decision in Rad v. IAC/Interactivecorp, 2020 NY Slip Op. 30410(U), holding that employees' e-mails sent on their employers' computers were not privileged, explaining:
In Peerenboom v. Marvel Entertainment, LLC, the Appellate Division, First Department endorsed application of the four factors set forth in In Re Asia Global Crossing, Ltd, 332 BR 247 (Bankr. SDNY 2005) to determine whether a party waives attorney-client privilege by sending the communications through its employer's email system.
The four factors are:
(1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee's computer or e-mail, (3) do third parties have a right of access to the computer or e-mails, and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?
Defendants have submitted electronic communication policies from Tinder, Match and IAC all showing that, while Defendants did not ban personal use of Defendants' electronic communications systems, Defendants did strictly limit personal use, expressly told employees that they should have no expectation of privacy while using Defendants' electronic communication systems, and Defendants reserved the right to monitor employees' use of the electronic communications systems. The parties also submit affidavits showing that Defendants widely disseminated their electronic communications policies so that employees would have actual or constructive notice thereof.
Thus, the Tinder electronic communication policy in place during relevant periods provided:
Tinder, Inc. employees shall have no expectation of privacy in anything they store, send or receive on the company's email system. Tinder, Inc. may monitor and read all email messages without prior notice. Users are responsible for exercising good judgment regarding the reasonable use of equipment for personal use. Any personal use should not unreasonably place any system in jeopardy of compromise or conflict with any HR policies. . . For security and maintenance purposes, authorized individuals within Tinder, Inc. may monitor any and all equipment, systems and network traffic, including decrypting traffic when necessary, without further notification to the user. . . Tinder, Inc. reserves the right to audit networks and systems on a periodic basis to ensure compliance with this policy.
Similarly, IAC's electronic communication policy during the relevant time periods provides, among other things, that:
The Company Systems and all communications created, received, stored, or transmitted on, by, or through the Company Systems are and will at all times remain the property of IAC. Accordingly, the Company Systems should be used for Company purposes only. While the Company understands that some personal use may occur from time to time, such use should be kept to a minimum.
* * * * *
IAC reserves the right to inspect, examine, and monitor the use of the Company Systems at any time, without notice, and for any reason, including the enforcement of this and other IAC policies. Further, IAC reserves the right to review and disclose employees' electronic communications in connection with potential and pending lawsuits, investigations, and other proceedings. Accordingly, no employee should have any expectation of privacy as to his or her use of the Company Systems.
In addition, in 2016 IAC consolidated a number of individual policies into an employee handbook (the 'IAC Employee Handbook') which was posted on IAC Connect. The first line of the IAC Employee Handbook section concerning "Information Security and Use of Computer Systems" states, in bright red letters:
Let's be clear, you should have absolutely no expectation of privacy with regard to ANYTHING you do on Company computers or systems.
Finally, Match's electronic communication policy during the relevant time period stated:
Match reserves the right to inspect, examine, and monitor the use of all of its computers, computer networks, electronic mail, telephone systems (including voicemail), and other electronic communication systems at any time and without notice to the extent necessary or appropriate to ensure that electronic media and services are being used in compliance with the law and with this and any other applicable Match policies. No employee should have any expectation of privacy as to his or her usage of any of these Match systems or the content of any communications thereon.
Defendants' electronic communication policies are substantially the same as those in Peerenboom and Miller. And, as in those cases, application of the four Asia Global factors here shows that Movants could not have had a reasonable expectation that their communications with their personal attorneys, sent and received on Defendants' electronic communications systems, would be confidential. First and foremost, every policy of Tinder, Match and IAC plainly states that employees should not have any expectation of privacy with respect to communications sent and received on Defendants' electronic communications systems. Further, Defendants each reserved the right to monitor and review all electronic communications. And, while none of Defendants strictly prohibited personal electronic communications, Defendants made clear that personal electronic communication should be minimal and should conform to Defendants' electronic communications policies.
Significantly, Movants, who were all high-level, key Tinder employees, do not deny that that they had access to Defendants' electronic communications policies, all of which plainly stated that Defendants had the right to monitor and review all electronic communications on Defendants' electronic communication systems. Nor do Movants deny that they knew that their electronic communications were not private and could be reviewed and monitored. In fact, Defendants submit email and text messages from and to Movants which show their understanding that electronic communications sent and received on Defendants' electronic communications systems were not private.
Considering Defendants' express electronic communication policies, and the evidence submitted evidencing that Movants understood that their electronic communications were not private, I find that Movants have not met their burden of showing that they had a reasonable expectation of privacy in their Tinder electronic communications with their personal attorneys. I deny the motion for a protective order. I note that Movants have not claimed work product or any other privilege with respect to the allegedly privileged communications, thus I have not considered the application of any other privilege.
(Internal citations omitted).
An issue that arises in almost all complex commercial litigation is identifying evidence that should be withheld from production in evidence because it is subject to the attorney-client or other privilege. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client have questions regarding the attorney-client, common interest, work product or other privileges or exemptions from production of evidence.