ACC Focus on the New Jersey Chapter - May 2012 (Print All Articles)

President's Message

The month of May is exciting for the NJCCA.  On May 16, we will hold our annual Spring Cocktail Reception at the Pleasantdale Chateau in West Orange.  This is one of our premier annual events and always provides great opportunities for networking in an informal and relaxed environment.  The Pleasantdale Chateau provides a lovely backdrop for the event. The food and music are always excellent.  Additionally, as we have done for the past several years, we will offer two hours of ethics-based CLE from 4 to 6 p.m., immediately prior to the start of the cocktail reception.  There is still time to register for this event, and I hope to see you there!

We are extending the deadline for submissions to the NJCCA’s Legal Fiction Writing Competition from May 25 to September 30 to give our members and sponsors time to work on their submissions over the summer.  This is our first year hosting this competition and we have received several submissions already. The winner(s) of the competition will receive free admission to various NJCCA premier events over the next year as well as recognition in our Newsletter and at the Annual Dinner in November, so start writing!  Please do not feel that you need “prior experience” as a writer to enter the competition – our goal is to tap into the vast reservoir of talent that we know exists among our ranks. Don’t forget – the competition is open not only to NJCCA members, but also to non-member, non-attorney employees of members’ organizations.  We are excited to read all the submissions!

Finally, I want to briefly discuss the issue of membership.  At more than 1,200 members, NJCCA’s membership is at an all-time high!  I hope you’ve had an opportunity to review our searchable annual Membership Directory, which, this year for the first time, has been delivered exclusively in electronic format.  As an organization, we’ve set a goal for ourselves to achieve a level of 1,300 members over the next year and a half.  If you know of anyone who you believe would benefit from a membership in NJCCA and might be interested in joining, please share their name(s) with me.  Thank you!

As always, I look forward to receiving feedback from members.  Please do not hesitate to call me at (201) 272-5308 or e-mail me at joseph.aronds@acc-njcca.org.  See you on May 16!

Sincerely,

Joe Aronds,
President, NJCCA

Privacy of Privileged Communications on Personal, Password-Protected E-mail Accounts

Peter J. Gallagher
Companies with employees and computers in multiple locations across the country need to be aware of the different standards that currently apply in different jurisdictions and structure their policies accordingly.

By now, nearly all companies have adopted policies governing the use of company computers by their employees.  The advice most often given when developing these policies is to make sure that they are thorough, well crafted, and widely distributed so that the company is protected against, among other things, any suggestion that they improperly reviewed an employee’s communications.  While this advice is undeniably sound, questions still exist regarding whether even the most comprehensive policy can permit a company to review e-mails between employees and their counsel on private, password-protected e-mail accounts.  In New Jersey, the answer to this question is almost certainly no.  However, in several other states, including New York, such a policy might permit employers to monitor e-mails on private accounts, even e-mails between the employee and counsel.  Whether New Jersey is at the forefront of a change in the law or stands outside of the mainstream on this issue remains to be seen.  Nonetheless, it is important for companies with employees and computers in multiple locations across the country to be aware of the different standards that currently apply in different jurisdictions and structure their policies accordingly.
 
As noted above, whether employers in New Jersey can monitor attorney-client communications on private, password-protected e-mail accounts appears well settled.  In Stengart v. Loving Care Agency, Inc., 201 N.J. 300 (2010), the Supreme Court ruled that employees have a reasonable expectation of privacy when using company-owned computers to communicate with counsel, at least when such communications are made using a private, password-protected e-mail account as opposed to the employee’s company account.  The Supreme Court held that, by using a private e-mail account, an employee takes reasonable steps to keep these communications confidential, and thus maintains a reasonable expectation of privacy in the employee’s e-mails with counsel. 
The internet usage policy at issue in Loving Care permitted the “occasional personal use” of e-mails and did not indicate whether the contents of e-mails sent via personal accounts could be retrieved by the company.  The New Jersey Supreme Court ruled that this policy “created doubt about whether those e-mails are company or private property.”  Id. at 322.  However, the Supreme Court was quick to point out that a more restrictive policy – one that purported to render attorney-client communications, wherever made, fair game for review by the company – would not be permitted:

Because of the important public policy concerns underlying the attorney-client privilege, even a more clearly written company manual – that is, a policy that banned all personal computer use and provided unambiguous notice that an employer could retrieve and read an employee’s attorney-client communications, if accessed on a personal, password-protected e-mail account using the company’s computer system – would not be enforceable.

Id. at 325.  Thus the New Jersey Supreme Court went beyond the narrow issue presented by the case before it to announce a bright-line rule that employers cannot read attorney-client e-mails exchanged by their employees on personal password-protected accounts.
  
 In other jurisdictions, however, including right across the river in New York, the extent to which an employer may review its employees’ e-mails, sent on company computers but using a private password-protected account, is not so clear.  For example, the U.S. District Court for the Southern District of New York held that e-mails sent by an employee to counsel on a company computer using the employee’s private, password-protected account were not privileged because the employer’s computer use policy prohibited personal use and permitted employer review of all data “flowing through its system.”  Long v. Marubeni America Corp., 2006 WL 2998671 (S.D.N.Y. Oct. 19, 2006). 

However, the U.S. District Court for the Eastern District of New York concluded that an employee had a reasonable expectation of privacy in e-mails that she sent through her personal e-mail account, which did not go through her employer’s server, particularly because the employer failed to enforce its computer usage policy.  Curto v. Medical World Communications, Inc., 2006 WL 1318387 (E.D.N.Y. May 15, 2006); see also National Economic Research Associates, Inc. v. Evans, 2006 WL 2440008 (Aug. 3, 2006 Mass. Superior Court) (holding that employer was not permitted to review attorney-client communications sent via a private password-protected e-mail account and stored in a temporary file because, among other things, the company did not notify the employee that such files were stored by the employer and subject to retrieval and review).  Accordingly, in jurisdictions like New York, the question of whether an employer can review e-mails sent by its own employees to their private counsel on company computers, but using password-protected e-mail accounts, remains unsettled.

 To be clear, the uncertainty arises only in connection with e-mails sent using personal, private, password-protected e-mail accounts, not company e-mail accounts.  The law in most jurisdictions is settled that, provided an employer has a comprehensive and well-publicized computer usage policy, all e-mails sent using the employer’s e-mail account, including e-mails to counsel, are not privileged and are subject to review by the employer.  One New York court ruled that the effect of comprehensive computer usage policies is “to have the employer looking over your shoulder each time you send an e-mail,” a situation that would obviously negate any claim of privilege.  Scott v. Beth Israel Medical Center, 17 Misc. 3d 934, 938 (Sup. Ct. 2007).  Similarly, a California court held that, in the face of a computer usage policy that indicated that all company e-mails were subject to review, an employee’s e-mails with counsel over her employer’s e-mail system were “akin to consulting her lawyer in her employer’s conference room, in a loud voice, with the door open, so that any reasonable person would expect that their discussion of her complaints about her employer would be overheard by him.”  Holmes v. Petrovich Dev. Co., LLC, 191 Cal. App. 4th 1047, 1051 (Cal. Ct. App. 3d Dist. 2011).
 
Finally, the American Bar Association recently issued an ethics opinion on the obligations of in-house counsel who discover communications between an employee and the employee’s private counsel (Opinion 11-460).  The ABA concluded that there was no ethical obligation under Model Rule of Professional Conduct 4.4(b) to notify an employee’s lawyer when the employer discovers the employee’s private communications with counsel “in the employee’s business e-mail file or on the employee’s workplace computer or other device.”  The ABA reasoned that Rule 4.4(b) deals only with documents that are “inadvertently sent,” which is not the case when documents are “retrieved by a third person from a public or private place where it is stored or left.”  However, even without an obligation to notify opposing counsel, the ABA noted that it would “often [] be in the [employer’s] best interest to give notice and obtain a judicial ruling as to the admissibility of the employee’s attorney-client communications before attempting to use them,” because this “minimizes the risk of disqualification or other sanction if the court ultimately concludes that the opposing party’s communications with counsel are privileged and admissible.” 

A recent decision from the U.S. District Court for the Northern District of California, Terraphase Engineering, Inc., et al. v. Arcadis, U.S., Inc., reveals the wisdom of the ABA’s advice.  In Arcadis, the defendant/employer’s outside counsel and one of its in-house attorneys reviewed and relied upon e-mails that had been sent to a former employee’s company e-mail address by an attorney representing the former employee in a lawsuit against the employer.  The employee sought a protective order preventing the employer from using the e-mails in any way during the lawsuit.  In response, the employer and its counsel argued, among other things, that their review of the e-mails was appropriate because they were sent “unsolicited” to the individual employee’s work e-mail, in which the employee had no reasonable expectation of privacy.  The district court emphatically disagreed, and punished the employer by: disqualifying its outside counsel and the in-house counsel who reviewed the e-mails; ruling that the general counsel must be “removed from all aspects of the day-to-day management of the case, including . . . making any substantive or strategic decisions with regard to the case;” ordering that the employer dismiss its counterclaim without prejudice to re-filing the pleading with new counsel; and awarding the employee costs and fees in connection with bringing the motion for protective order.  Thus, although the scenario presented in Arcadis was almost identical to the hypothetical presented by the ABA in Opinion 11-460, the result reached by the district court was decidedly different than the one articulated by the ABA.
        
Ultimately, what these decisions make clear is that it is crucial for employers, particularly those with a regional or nationwide presence, to understand the law in each state in which they have offices.  As the situation with New York and New Jersey demonstrates, a practice or policy that may be appropriate in one state may be entirely inappropriate in a neighboring state.

Peter Gallagher is a commercial litigator at Porzio, Bromberg & Newman, P.C. and an adjunct professor at the Seton Hall University School of Law.

Obstacles to Change

Giuliano Chicco

Having trouble with innovation and change, you're not alone.

These are interesting times for the legal profession. Innovation and change are the watch words, and both law firms and law departments are struggling to do more with less, find new ways to deliver services, and generally trying to improve.  Many law departments will undertake some change, and launch all manner of initiatives with the hope of increasing efficiency or improving overall performance, and but for some notable exceptions, most will fail.

Change is difficult, and even more so for the legal profession. Why do so many innovation initiatives fail? What follows is a litany of some of the structural impediments to success, or to rephrase it, what are the obstacles you need to be aware of so that your “initiative”, whether it is knowledge management, process improvement or anything else, is successful.

PEOPLE:

Change and innovation are frequently framed as initiatives.  They need to become the normal way of doing business.  The risk is that they are perceived as another "flavor of the month” and a “this too shall pass” moment.

Key players need to have the time to focus on innovation, if they are busy, the innovation will take a back seat.  Senior attorneys, including the General Counsel and practice group leaders, need to “walk the talk,” junior attorneys also have to be onboard.

The roll out of the initiative to the department must be effective, with enough time spent explaining the program, adequate training when appropriate, and rewards and/or recognition for successful compliance. The innovation champions have to be empowered, individual contributors need to understand their rolls, and a sense of teamwork and collaboration must be fostered.

PROCESS:

The innovation champions must provide the department a compelling vision or reason for the initiative. They have to “sell it.”  On the other hand a promising and necessary initiative can be doomed by analysis paralysis, by sponsor teams that don’t meet frequently enough, and by lack of training, each of which can foster low morale and cynicism.

Any overemphasis on cost cutting, ambiguous stages for evaluating progress, or the lack of a strategy for sustaining the effort will doom any program.

EXECUTION:

Any law department initiative that relies on an overemphasis on structures, protocols, and processes, an over-reliance on technology or unrealistic time frames is guaranteed to fail.

Failure to insure adequate funding, failure to plan for scaling the initiative up, no provision in place to get timely feedback, and  lack of a reward or recognition program also foreshadow a grim end to the program.

 

While the specific obstacles to implementing change can be as varied as the culture of the specific law department, consideration of the some of the items listed above before you undertake your next substantive initiative could be the difference between success and failure.

Giuliano Chicco is an attorney, knowledge manager and successful change agent, including stints at both GE and J&J.  He is also Vice-President for Communication for the New Jersey Corporate Counsel Association and can be contacted at Giuliano.Chicco@acc-njcca.org.

2012 Spring Cocktail Reception

There is still time to register for one of our most popular networking events.

2012 NJCCA Membership Drive is in Full Swing!

Gail Girard

If you're reading this you are already aware of the benefits.  Now share them with a colleague.

Dear NJCCA Members:

NJCCA’s membership is at an all-time high and continues to grow.  We recently launched a membership drive and would like to actively engage your assistance and support in making it a success.  Growing our numbers benefits us all in several respects. First, with more members we increase our networking opportunities.  Second, our advocacy efforts on behalf of the corporate community can become even more effective.  Third, with increased membership, we can attract additional volunteers to put on even more programs and events.

If you know any in-house attorney who is not a member of ACC and NJCCA but who is practicing or living in the State of New Jersey, please speak to them about the benefits of membership.  As you know, members of ACC and NJCCA have access to:

1) Legal Resources – ACC maintains a virtual library and publishes InfoPaks and a monthly magazine, the ACC Docket.  NJCCA publishes a monthly on-line newsletter that always contains an article of substantive legal interest, and offers a number of other on-line resources at its web site, as well.

2) Educational Programs – ACC and NJCCA provide a broad variety of on-line and in-person programs, including NJCCA’s highly popular Annual All-Day CLE Conference which offers up to 8.5 CLE credits to attendees.

3) Networking Opportunities – NJCCA hosts a number of networking opportunities throughout the year, including a Spring Cocktail Reception, a Golf/Tennis/Spa Outing, an Annual Conference, and an Annual Dinner.  Additionally, members have access to ACC’s committees, blogs and member-to-member directory, and NJCCA’s LinkedIn group.

4) Job Listings – ACC and NJCCA regularly advertise job listings.

Eligible persons can register today on-line or by mail by going to the membership page of the ACC website.  Note that by joining ACC, a person may automatically choose to become an NJCCA member at no extra cost.

If you or a prospective member has questions about the eligibility requirements or the benefits of membership, please feel free to call me on 609-312-7772 or by email at NJCCA@comcast.net.

Gail Girard
Executive Director, on behalf of the Membership Committee

Substantive Articles

Giuliano Chicco

With our new monthly feature, you now have multiple bites at the apple.

One of the features we value most is the substantive article featured in each monthly issue.  Starting with the January 2012 issue we will publish a rolling list of the substantive articles from the past twelve months.  We hope that this feature will make it easier to find that article you remembered reading.  Of course copies of all the articles going back several years are always available on the NJCCA website.    

Substantive Articles

Our New Members

Meet our most recent new members. 

Members Notes

Short notes of interest to and about our members

Brief notes for and about members, this month featuring news about Lee Braem plus our ongoing search for volunteers (see the Committee article).

 

Member Notes is our monthly vehicle for members to share professional and personal information with other members of the NJCCA.  If you have a new position, a new title, or have recieved a professional (or other) award, published a book or article, or have any other similar information you would like to share with the membership, please send a note directly to Giuliano Chicco, NJCCA Newletter Editor, at GChicco1@verizon.net.

AMONG OUR AUTHORS

Congratulations to Lee Braem, former NJCCA President and current Chair of the NJCCA’s Limited Licensing and Environment, Health, and Safety Law Committees, on his co-authored article entitled “Hazardous Material Enforcement is Spilling Into Unexpected Areas,” which appears in the May 2012 edition of the ACC Docket!.

TELL US ABOUT YOURSELF

Upcoming NJCCA Events

Register today for these relevant and insightful events.

SEPTEMBER

NOVEMBER

OVERRULED! by Aronds

As far as we know, still the only Chapter Newsletter with its own in-house cartoonist! And now in color!