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Legal Report April 2011


PRIVACY. A California appellate court has ruled that an employee’s e-mails to her attorney are not privileged because she sent them over the company’s e-mail system. The employee had no expectation of privacy, ruled the court, because the company had clearly noted that e-mails were not private and could be inspected at any time.

In June 2004, Paul Petrovich hired Gina Holmes as his executive assistant. The next month, Holmes informed Petrovich that she was pregnant, the baby was due in December, and that she would be taking six weeks of maternity leave after the baby was born. Petrovich sent Holmes an e-mail in early August asking to discuss how to cover her work for the six weeks she would be out starting in early December. Holmes replied that she planned to begin her maternity leave in November and might be out as long as four months.

A series of contentious e-mails were sent back and forth between Petrovich and Holmes. Petrovich was concerned that Holmes would be out for such a long time after having just started her employment. Holmes felt that Petrovich was being discriminatory and retaliating against her for her pregnancy.

Petrovich forwarded these e-mails to several other people in the office. This upset Holmes, who felt the e-mails should be private. Holmes was forwarding these same e-mails from her work account to her attorney.

Holmes resigned her position in mid- August and filed a lawsuit against Petrovich, claiming sexual harassment, retaliation, wrongful termination, infliction of emotional distress, and violation of privacy.

Petrovich requested summary judgment—a hearing based on the facts of a case without a trial. The trial court granted the summary judgment on three of the charges, and a jury found in favor of Petrovich on the other charges. At trial, the judge allowed Petrovich to use the e-mails Holmes had sent to her attorney as evidence in his defense.

Holmes appealed the summary judgment and the jury verdict. She also argued that the e-mails she sent to her attorney were privileged and that the trial court should not have allowed the defense to use those as evidence.

The California Court of Appeals upheld the lower court’s verdict and ruled that the e-mails Holmes sent to her attorney were not privileged because they were sent over her employer’s corporate e-mail network. Holmes had read and signed the company handbook, which clearly stated that the corporate e-mail system should be used for business purposes only and that communications made via the corporate e-mail system were subject to inspection by the company at any time.

In the written opinion, the court noted that “the e-mails sent via company computer under the circumstances of this case were akin to consulting her lawyer in the 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.”

The appellate court contrasted the decision in this case with another decision (Stengart v. Loving Care  Agency, Inc., New Jersey Supreme Court, 2010) in which a court ruled that the plaintiff’s e-mails to her attorney were privileged. The California court noted that in Stengart, the plaintiff was using a company computer to access her private, password-protected e-mail account. In the current case, Holmes was using her employer’s e-mail system, so she had no expectation of privacy, and her emails with her attorney were not privileged. (Holmes v. Petrovich, California Court of Appeals, No. C059133, 2011)

SEARCH WARRANT. The California Supreme Court has ruled that police do not need a warrant to search the text messages on the cell phone of a suspect. In the case, law enforcement officers arrested Gregory Diaz on suspicion of purchasing the drug ecstasy. Once Diaz was in custody, officers seized his cell phone.

Diaz denied any involvement in the drug transaction. After interviewing Diaz, the officers noticed that Diaz had a text message with a code that indicated that he was selling the drug. When confronted with the text message evidence, Diaz confessed.

Diaz later recanted and pleaded not guilty. His attorneys moved to suppress the text message evidence, arguing that police needed a warrant to search the cell phone and that officers violated the Fourth Amendment when it accessed the message.

The California Supreme Court ruled that police did not need a warrant to access the messages. The court determined that the cell phone was an item of personal property and that Diaz had that property in his possession when he was arrested. Police do not need a warrant to confiscate personal property carried by a suspect at the time of arrest. The court ruled that the nature of the item being confiscated is not relevant.

Judge Kathryn Werdegar issued a dissenting opinion in the case, arguing that current law should be reevaluated because it does not take the nature of electronic devices into consideration. In her opinion, Werdegar noted that “the potential impairment to privacy if arrestees’ mobile phones and hand-held computers are treated like clothing or cigarette packages, fully searchable without probable cause or a warrant, is correspondingly great.” (People v. Diaz, Supreme Court of California, No. S166600, 2011)

BACKGROUND SCREENING. The U.S. Supreme Court has ruled that a background screening program used by a government agency does not violate employee privacy rights.

In the case, 28 employees of the California Institute of Technology, under contract to do work for the National Aeronautics and Space Administration (NASA), claimed that the government’s screening policy is too intrusive. The policy was implemented in 2004 under a government homeland security directive.

The U.S. Court of Appeals for the Ninth Circuit ruled that the policy of conducting background screening on existing, low-security contract employees was too invasive. The policy allows the government to collect any information from any source including schools, former employers, businesses, and personal friends. According to the government’s policy, part of the background screening includes “open-ended questions” asked to encourage sources to reveal any adverse information about a person’s “employment, residence, or activities.”

The appeals court ruled that the background screening requirements raise privacy issues and do not seem to further the government’s legitimate interests because they target existing, low-level employees, some of whom have worked for the same company for more than 20 years.

The government appealed the appellate ruling to the U.S. Supreme Court. In a unanimous decision, the Court ruled that the agency’s extensive screening requirements are valid and can help the government make informed employment decisions. For example, when addressing the open-ended questions used as part of the screening process, the Court noted that the “questions are reasonably aimed at identifying capable employees who will faithfully conduct the government’s business.” The Court went on to say that “asking an applicant’s designated references broad questions about job suitability is an appropriate tool for separating strong candidates from weak ones.”

The Court also noted that the methods used by the agency are pervasive in both the private and public sector. And it disagreed that the government should ask only questions that seem, to the public, to be relevant or reasonable. In the written opinion of the case, the Court said, “We reject the argument that the government, when it requests job-related personal information in an employment background check, has a constitutional burden to demonstrate that its questions are ‘necessary’ or the least restrictive means of furthering its interests.” (NASA v. Nelson, U.S. Supreme Court, No. 09-530, 2011)


BACKGROUND CHECKS. A bill (H.R. 321) introduced by Rep. Steve Cohen (DTN) would make it illegal for employers to use the credit history of an applicant or employee in employment decisions. The prohibition stands even if the applicant or employee gives authorization for the use
of credit information.

The bill contains exceptions for positions that require national security or Federal Deposit Insurance Corporation clearance. Credit reports may also be used if required by law.

The bill has 21 cosponsors and has been referred to the House Financial Services Committee.

HOMELAND SECURITY. A new law (P.L. 112-3) signed by President Obama reauthorizes portions of the Patriot Act that are set to expire this year. A provision granting the government the power to conduct roving electronic surveillance and a provision that designates that a “lone wolf” terrorist is considered an agent of a foreign government were both set to expire at the end of February. The new law only extends the measures through May 2011, though several bills were introduced to extend the measures for longer periods of time.


SCHOOL SAFETY. A new bill (A.B. 13) introduced in the California Assembly would expand prohibitions against sex offenders working in state schools. Under existing law, public schools may not employ anyone convicted of a sex crime or controlled substance offense unless the conviction is reversed or the charges are dismissed. The new bill would clarify that these provisions also apply to charter schools. The bill would also prohibit anyone who has been convicted of a sex crime, controlled substance offense, or violent crime from working as a volunteer in schools.

BACKGROUND CHECKS. A bill (S.B. 15) introduced in Michigan would prohibit certain convicted felons from being employed by the state. Under the bill, the state could not hire anyone who had been convicted of a felony involving dishonesty, deceit, fraud, or a breach of public trust in the previous 20 years to any position in which the employee would set policy or have discretionary authority over public assets.

This column should not be construed as legal or legislative advice.