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Lara Curto v. Medical World Communications, Inc., et al.

Employee Does Not Waive Attorney Client Privilege By Communicating Via Company Laptop

Affirming the decision of the Magistrate Judge, the District Court holds that an employee did not waive any attorney client or work product privileges that may exist in various email communications with her personal counsel transmitted to and from the employee's personal AOL email account by using a company laptop to send them from her home.  Plaintiff's employer had obtained these emails by "restoring" deleted files stored on the hard drives of these company laptops.  The Court reached this result notwithstanding the fact that the Company had a computer usage policy, of which the employee was aware, that warned employees that they had no right of privacy in Company computer equipment, the contents of which could be inspected by the Company.

Employee Uses Company Laptop To Send Communications To Counsel  

Plaintiff Lara Curto ("Curto") was an employee of defendant Medical World Communications Inc. ("Medical World").  For an approximately 16 month period, Curto worked for Medical World out of her home office.  To assist her in those efforts, Curto was given a Company laptop.  Later, Curto exchanged this laptop for another provided by the Company.  Upon her termination by Medical World in October, 2003, Curto also returned this second laptop to the Company.

Prior to delivering the laptops to Medical World, Curto deleted personal files she had maintained on both computers.  These personal files included various e-mail communications with her attorneys, a draft EEOC Complaint, and a Chronology of Events, prepared by plaintiff and her counsel, describing events pertaining to the instant action.  These e-mails had been sent by Curto from a personal AOL account.  Because they were sent from her home, these emails did not pass through, and could not be found on, Medical World's servers.

Company Computer Usage Policy Warns Against Expectation Of Privacy

Medical World had in place throughout the relevant time period a computer usage policy that advised its employees, including Curto, that they should have no expectation of privacy in Company computer equipment, which was subject to inspection and review by Medical World.  The Policy further advised employees not to use Company computer equipment for personal purposes.  More particularly, the Policy provided:

The computers and computer accounts given to employees are to assist them in the performance of their jobs. Employees should not have an expectation of privacy in anything they create, store, send, or receive on the computer system. The computer system belongs to the company and may be used only for business purposes.

Employees expressly waive any right of privacy in anything they create, store, send, or receive on the computer or through the Internet or any other computer network.  Employees consent to allowing personnel of [MWC] to access and review all materials employees create, store send, or receive on the computer or through the Internet or any computer network. Employees understand that [MWC] may use human or automated means to monitor use of computer resources.

Plaintiff was aware of the Policy.

Employer Obtains Employee's Communications With Counsel From Company Laptop 

Sometime after plaintiff commenced this action, Medical World hired a computer consultant to inspect the Company laptops plaintiff had used.  This consultant was able to restore a number of files Curto had attempted to delete, including the communications at issue.  After producing these communications to plaintiff's counsel, Medical World moved for an order permitting their use in the instant litigation.  The Magistrate Judge held that Curto had not waived any attorney-client or work product privilege she may have had in these communications either by transmitting or storing them on a Company laptop.  The District Court agreed.

Inadvertent Production

The District Court analyzed this question as an inadvertent production of privileged materials.  Courts look at four factors in determining whether such an inadvertent production constitutes a waiver of applicable privilege.  As explained by the Court:

the courts are called upon to balance four relevant factors: [1] the reasonableness of the precautions taken by the producing party to prevent inadvertent disclosure of privileged documents; [2] the volume of discovery versus the extent of the specific disclosure [at] issue; [3] the length of time taken by the producing party to rectify the disclosure; and [4] the overarching issue of fairness.

The Magistrate Judge held that it was also appropriate to consider a fifth 'sub factor,' namely "whether or not there was enforcement [by the employer] of any computer usage policy."  Such enforcement, or lack thereof, bore on the reasonableness of the precautions taken to protect the communications by using company computers.  The District Court agreed that it was appropriate to consider this factor as well in analyzing whether the production was inadvertent, because "it goes right to the heart of the overriding question which guides the Court's analysis: was plaintiff's conduct so careless as to suggest that she was not concerned with the protection of the privilege."

Analyzing the factors here, the Court held that the production of materials was inadvertent, and did not constitute a waiver of applicable privileges.  According to the Court, (i) plaintiff took reasonable precautions to prevent inadvertent disclosure both by sending the e-mails at issue through a private AOL account from her home and not through the Company's servers, and by attempting to delete them from the laptops prior to their return; (ii) the volume of privileged material was relatively minor compared to the other documents produced in the action; (iii) plaintiff immediately sought return of the communications upon learning that defendants had them, and (iv) fairness favored protecting client communications from invasion so as to encourage full disclosure between client and counsel.

The Court further noted that the Company rarely enforced its computer usage policy.  This had the effect of lulling Medical World employees into a 'false sense of security' regarding their personal use of Company owned computers.  Indeed, this sense of 'security' was heightened in plaintiff's case by the fact that "plaintiff's laptops were not connected to [Medical World's] computer server and were not located in [Medical World's] offices; thus [Medical World] was not able to monitor plaintiff's activity in her home-based laptop or intercept her e-mails at any time."

As a result, the Court concluded that Curto had not waived any privilege attendant to the communications at issue, and remanded the case to the Magistrate Judge to determine if the communications were in fact protected from disclosure by applicable privilege.

The Court noted its ruling was limited to a determination of plaintiff's right to claim attorney-client privilege as a result of her personal use of a company owned computer in her home.  It did not "address an employee's right to privacy in an office computer in general."

Finally, in reaching this result, the Court was unpersuaded by defendants' citation to cases that they claimed held that an employee has no expectation of privacy in workplace computer files where company guidelines and policy inform employees that no such privacy exists.  Rather, the Court noted, "given the great variety of work environments … the question whether an employee has a reasonable expectation of privacy must be addressed on a case by case basis."  O'Connor v. Ortega, 480 US 709, 718 (1987).