News & Noteworthy

Using Your Work Email Could Waive the Attorney-Client Privilege

This post provides a cautionary tale about using work email for confidential communications with your attorney.  It might seem obvious that discussing confidential legal strategy with your attorney in a crowded elevator could waive the attorney-client privilege because you shared the secret with the strangers in the elevator.  What happens if an employee emails with her lawyer on her work email?  The answer is — it depends — factors include what the employer’s email use policies are and whether the employer reserves ownership of the email and the right to review it (relatively common provisions in corporate email policies).

Technological advancements drive more and more communications to email, text message and other written form, leaving a lasting and mountainous record of electronically stored information (ESI) that commercial litigators and courts are forced to deal with.  The proliferation of smartphones and other communications technology continues to blur the line between communications and ESI in people’s business and personal lives.  In Peerenboom v. Marvel Entertainment, LLC, 148 A.D.3d 531, 50 N.Y.S.3d 49 (1st Dep’t 2017), the First Department Appellate Division in Manhattan held that the chairman of Marvel Entertainment waived his attorney-client privilege by using his work email to communicate with counsel.

The case arose from a dispute about management of the parties’ tennis club and spiraled into litigation claims of defamation in Florida state court.  Plaintiff Harold Peerenboom subpoenaed Marvel Entertainment seeking the email of its chairman, defendant Isaac Perlmutter.  Perlmutter and Marvel resisted production and the dispute landed in New York state court where Marvel is located.  Defendant, among other objections, alleged that certain emails were protected by the attorney-client privilege.

A party can lose the privilege over communications with an attorney if the party fails to safeguard the secret nature of the communications.  The court held the key issues are whether Perlmutter held a reasonable expectation of confidentiality and if Perlmutter’s use of the employer’s email system can remove the “reasonable assurance of confidentiality” necessary to invoke the attorney-client privilege.  Waiver of the privilege is a fact-based inquiry and the court adopted and applied the four part test used by federal courts sitting in New York to determine whether a person has a reasonable expectation of privacy in emails sent through an employer’s email system:  (1) does the employer maintain a policy banning personal emails, (2) does the employer monitor an employee’s e-mail, (3) do third parties have a right of access to the emails, and (4) did the employer notify the employee, or was the employee aware, of the company’s use and monitoring policies.

The court found that Marvel’s stated policy allowed its employees to use its email system for personal purposes, but that Marvel “owned” all emails on its systems and the emails were subject to Marvel’s rules and policies as well as periodic audit by Marvel.  The court further found that Perlmutter had constructive, if not actual, knowledge of Marvel’s policies through his status as Marvel’s chairman.  With actual or imputed knowledge that Perlmutter knew Marvel “owned” the emails and reserved the right to review the emails, the court held Perlmutter did not have the requisite assurance of confidentiality and his use of Marvel’s email systems to communicate with his attorneys waived the attorney-client privilege.