Limits On Employee Rights When Preparing For Litigation In New Jersey

Thursday, April 1, 2010

In many employment relationships, the employers have the upper hand and they know it. However, sometimes employees recognize improper employer conduct and the employees look to the law for help. In New Jersey, two cases about the rights of employees contemplating discrimination lawsuits against their employers are gaining attention.

The New Jersey Supreme Court recently announced in Stengart v. Loving Care Agency that private e-mail communications between a client and lawyer exchanged on a work computer are privileged or exempt from admission at trial. In Quinlan v. Curtiss-Wright, a case currently pending before the Supreme Court, it is considering whether to protect an employee’s actions when she copied company documents in anticipation of litigation against her employer and was fired because of it. People closely watching these cases speculate whether the court ruling in Quinlan will express the same pro-employee spirit the court demonstrated in Stengart.

Stengart v. Loving Care Agency

Marina Stengart decided to sue her employer Loving Care Agency for creating a hostile work environment and other discriminatory practices. Prior to entering her legal claim, but before quitting her job, Stengart traded several e-mails with her lawyer through her personal Web-based e-mail account, but she used a company laptop and its network’s Internet connection. Following the filing of her lawsuit, Stengart and her attorney discovered that the lawyers for Loving Care Agency had recovered and read the e-mail exchange. Stengart’s attorney claimed the e-mails should be excluded from use in the lawsuit because of the attorney-client privilege, which is a legal concept to protect what clients disclose to their attorneys from pretrial discovery or trial.

The trial court found in favor of Loving Care Agency, citing the company’s electronic-communication policy and the use of a work computer as the basis for Stengart’s forfeit of the attorney-client privilege. On appeal, the Superior Court of New Jersey’s Appellate Division ruled instead for Stengart. It also agreed with Stengart’s lawyer that the legal counsel for Loving Care Agency violated the rules of professional conduct when they read and used the e-mails as evidence in the discrimination lawsuit.

The Supreme Court of New Jersey agreed with the Appellate Division. The court held that Stengart had a reasonable expectation of privacy when she communicated over an online personal e-mail account with her attorney, despite using a work computer. While this decision helped to define in New Jersey which types of attorney-client communications are protected when an employee is preparing for litigation, another case seeks approval for using as evidence employee-acquired documents belonging to the employer during the litigation process.

Quinlan v. Curtiss-Wright

When human-resources executive Joyce Quinlan was passed over for a promotion, which instead went to a less-qualified male colleague, she began preparation for a gender discrimination lawsuit against her employer, Curtiss-Wright. In addition to hiring a lawyer, she copied various Curtiss-Wright personnel documents in support of her claim, despite having signed a company confidentiality agreement prohibiting this practice. Quinlan then passed these on to her attorney, who forwarded them to the company’s legal counsel during discovery. When Curtiss-Wright realized that Quinlan had taken company files without its knowledge, management accused her of stealing and fired her.

The trial court verdict was for Quinlan and the jury awarded her over $10 million in both punitive and compensatory damages, and other legal fees. While the trial-court judge advised the jury that Quinlan’s behavior in duplicating the company documents and taking them was not free from punishment, he stated that her attorney’s use of them during the course of the lawsuit was valid.

The Superior Court of New Jersey’s Appellate Division disagreed with the lower-court judge on this distinction, stating this might prompt other employees to copy internal records in violation of agreements if they think their employers cannot stop them from removing information in anticipation of lawsuits. Oral arguments were heard before the New Jersey Supreme Court in early March of this year, so this highly anticipated decision is still unsettled.

Employment Law and Public Policies

The Stengart case seemed to strike a good balance between employee rights and employer policies. The Supreme Court did not want to say that all personal use of work computers should be banned, or that companies cannot monitor the use of their equipment, such as computers. The court instead decided that preserving an employee’s right to privacy between herself and her attorney weighed heavier than an employer’s right to violate it. This ruling also put lawyers defending employers on notice that they must avoid reading these privileged communications between employees and their private attorneys, or the in-house legal staff may face professional fines, or other sanctions.

It is hard to know which way the Supreme Court will swing in Quinlan. During the recent oral arguments in front of the Supreme Court, the justices were quick to challenge plaintiff Quinlan’s position and her attorney’s claims that even if confidential documents are taken – without consent and outside of the litigation process – they should be protected and available for use as evidence against the defendant employer.

Observers of the case suggest that the Supreme Court was overly aggressive in their questioning of Quinlan’s attorney. This could be read as an early sign that the court will find in favor of the employer Curtiss-Wright, and against the use of “purloined” documents in court. However, court watchers note that the court acted similarly with Stengart’s attorney, but she still prevailed.

Potential Consequences

It is intimidating for employees to stand up for themselves, and for future victims, against employer discrimination, especially if courts put limits on how employees can gather evidence to make their cases while still in awkward and stressful work environments. Employees in New Jersey can be assured that communications with their private lawyers through their personal e-mail accounts, even on work computers, will not be used against them, but what should they do about copying and removing potentially important company documentation? Will the Supreme Court make them ask their employers for these incriminating documents, risking that the records might be destroyed, possibly endangering their cases?

It is difficult to know where the court will draw the line with regard to employee expectations about which electronic communications or company documents, sent privately or garnered for litigation purposes, are privileged or protected, and which are improperly read or stolen and should not be allowed in court. Should the Stengart reasoning for protecting workplace activities performed in anticipation of litigation such as sending e-mails to an attorney extend to the document gathering in Quinlan? It is possible that the New Jersey Supreme Court, or at least a majority of justices, will agree that it should.

In a related case of national importance, advocates for protecting employee privacy rights await the U.S. Supreme Court’s ruling in the case of City of Ontario, Cal. v. Quon, which was argued before the Court on April 19, 2010. If the Court finds in favor of a police officer caught sexting on his work pager, some employer monitoring activities may be prohibited. A decision is expected sometime this summer.

Legal Advice is Important

Problems with an employer can be complicated and stressful, so if you have questions about employment-related issues, practices or laws, contact an experienced New Jersey employment law attorney today. It is better to know the full extent, and limits, of your rights with regard to suing your employer for discrimination or another claim before taking things into your own hands.