New Jersey at the Forefront in Protecting Employees from Employer Intrusion into “Private” Electronic Communications

Matthew V. DelDuca and Terry D. Johnson

The proliferation of electronic media, such as e-mail, texting, MySpace, and Facebook, allow employees to communicate in and about the workplace more than ever before. Around the country, the courts have tried to apply existing legal theories to manage issues raised when employers seek to monitor employee electronic communications or to take action against employees for things they say in cyberspace. New Jersey is one of very few states in which private sector employees have a right of privacy in the workplace. Recent cases demonstrate how New Jersey courts have interpreted this right to limit the employer’s right to access and take action resulting from employees’ electronic communications.

Seventeen years ago, in a case involving random drug testing, the New Jersey Supreme Court held that private sector employees have a right of privacy in the workplace. Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81, 97-99 (1992). The right of privacy extends to those areas in which employees have “a reasonable expectation of privacy.” In the years since the Hennessey decision, many employers have implemented policies informing employees that any communications made on company computers or phones belong to the employer, and that the employee therefore has no reasonable expectation that those communications will be private.

In a recent case of first impression, the New Jersey Appellate Division recently held that, despite the company’s policy, private emails that an employee sent using a company issued laptop were not the property of the employer. Stengart v. Loving Care Agency, Inc., 408 N.J. Super. 54 (App. Div. 2009). Marina Stengart was the former Executive Director of Nursing at a home health agency in New Jersey, Loving Care Agency, Inc (“Loving Care”) who resigned from her position and filed an employment discrimination suit against Loving Care. After Stengart filed suit, Loving Care’s attorneys reviewed the hard drive of Stengart’s company-issued laptop and discovered that, before she resigned, Stengart had repeatedly used the company laptop to access her private, password-protected Yahoo email account and communicate via e-mail with her attorney about potential claims against Loving Care. The company’s attorneys accessed the e-mails without informing Stengart or her lawyers.

During the suit, Loving Care’s lawyers disclosed that they had obtained copies of the e-mails. Stengart immediately requested that Loving Care identify and return all copies of correspondence between Plaintiff and her counsel that were in Loving Care’s possession. When Loving Care refused, Stengart moved for a restraining order, arguing that Loving Care should be prohibited from using the emails because they were attorney-client privileged communications and that the company’s lawyers should be disqualified. The trial court denied the motion, finding that Loving Care’s electronic communications policy placed Plaintiff on notice that her emails were company property and that Stengart had therefore waived the attorney-client privilege. Stengart appealed. The Appellate Division granted interlocutory review.

The Appellate Division reversed. First, the court found that there were material factual disputes about the terms of the company policy and whether it had been communicated to employees, which the trial court did not properly resolve before rendering a decision. Second, the court found that the strong public policy supporting the attorney-client privilege outweighed any interest the employer might have to claim ownership of the e-mails. The court could have reversed based solely on those two fairly narrow grounds. The court did not stop there, however. The court went on to decide to what extent the employee’s right of privacy protects private e-mail communications in the workplace, even where the company’s policy clearly claims ownership of those communications.

The Loving Care court recognized that employers do have a right to monitor and regulate workplace communications. The court held, however, that this right is not limitless. Rather, the court held that, regardless of what the company’s policy provides, an employer does not own and has no right to access private employee communications unless the communication “should concern the terms of employment and ‘reasonably further[s] the legitimate interests of the employer.’”

The Appellate Division noted that its decision did not limit the ability of employers to “monitor whether an employee is distracted from the employer’s business” or to “take disciplinary action if an employee engages in personal matters during work matters.” Employers are prohibited from claiming ownership of an employee’s private communications or using the substance of those communications against employees.

The Appellate Division remanded the matter for entry of an order requiring Loving Care to produce all emails exchanged between Stengart and her attorney. The court also remanded for a hearing on whether defense counsel should be disqualified and sanctioned for viewing and using the privileged communications. Last week, the New Jersey Supreme Court granted certification in the case.

In another recent case of first impression, the United States District Court in New Jersey ruled in an unpublished opinion that an employer who asked an employee for access to a private MySpace group discussion page devoted to complaining about the employer may have violated federal and state law. Pietrylo v. Hillstone Restaurant Group, No. 2:06-cv-05754, 2008 WL 6085437 (D.N.J. July 25, 2008). The plaintiffs, Brian Pietrylo and Doreen Marino, were two former employees of a restaurant chain, Houston’s, who were fired for creating a MySpace group page called Spec-Tator as a place for Houston’s employees to “vent about any BS” they dealt with at work. The group was designated as “private,” meaning access to the group was limited to MySpace users who received an invitation to join the group. Pietrylo invited several past and present Houston’s employees to join Spec-Tator, including Karen St. Jean. St. Jean accepted Pietrylo’s invitation and became an authorized member of Spec-Tator. St. Jean informed a Houston’s manager, TiJean Rodriguez about Spec-Tator, and accessed the group on Rodriguez’s home computer so that Rodriguez could read the posts. The posts included vulgar and sexually explicit comments, as well as references to theft of an internal test, violence, and illegal drug use. Rodriguez was offended by the comments posted about him and reported the group to a senior Houston’s manager, Robert Anton. Anton approached St. Jean and asked her to provide him with her personal login information so he could access Spec-Tator. St. Jean did so. St. Jean later testified that, although Anton made no threats against her if she refused to provide him with access, St. Jean thought that she “would have gotten in some sort of trouble” if she did not cooperate. Anton accessed the group, and shortly thereafter, Houston’s terminated Pietrylo and Marino based on their comments on the site and their involvement in creating it.

Pietrylo and Marino sued, alleging that their terminations violated their rights to free speech, and public policy in the form of the common law right of privacy in the workplace, the federal Stored Communications Act, 18 U.S.C. §§ 2701-11 and the parallel State statute, N.J.S.A. 2A:156A-27. These statutes make it illegal for any person to intentionally access stored communications without authorization. Both statutes provide an exception, however, “with respect to conduct authorized . . . by a user of that service.” Houston’s moved for summary judgment on all of Pietrylo’s and Marino’s claims. The court granted Houston’s motion on the plaintiffs’ freedom of speech claim, holding that the company’s actions did not violate the plaintiffs’ right to freedom of speech.

The court denied Houston’s motion, however, with respect to the plaintiffs’ remaining claims. The court found that there was a question of fact as to whether St. Jean’s authorization to the company to access the MySpace page was truly voluntary or whether it was given under duress.

The court also found that there were jury issues on the plaintiffs’ privacy and public policy claims. The District Court ruled that there was an issue of fact as to whether the plaintiffs, as members of the MySpace group, had a reasonable expectation that no one outside the invited group would ever gain access. The court reasoned that although any member of the group could lawfully reveal the contents of the MySpace page to any other person, a jury could conclude that it was reasonable for members to assume that company officials would not gain access to the group’s discussions through duress. Since the court found a factual issue on duress, it also found a factual issue on whether the company violated the plaintiffs’ right of privacy. A jury verdict was later entered against Houston’s.

These cases drive home that the New Jersey courts recognize a broad right of privacy and consistently using that right to protect employees from employers who seek to use “private” electronic communications at or about work against employees. Employers should carefully evaluate their policies in light of these decisions and carefully evaluate all of the risks before accessing employees’ electronic communications or taking any action against employees because of what they say in cyberspace.

Matthew V. DelDuca is a litigation partner in the Princeton Office of Dechert LLP, specializing in Health, Labor and Employment, Life Sciences/Pharmaceutical, Mass Torts and Product Liability litigation.

Terry D. Johnson is an associate in the litigation group at Dechert, LLP. He focuses his practice on labor and employment issues.

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