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Your Secret Is Safe With Me, Or Not: E-mail Communications with Your Attorney May Not Be Privileged

You might assume that e-mail communications sent to your attorney would be privileged.  However, that may not be the case, if those communications were made using your work e-mail account.

Recently, in In re Info. Mgmt. Servs., 2013 Del. Ch. LEXIS 220 (Del. Ch. Sept. 5, 2013), the Delaware Chancery Court determined that e-mail communications between two senior executives and their personal attorneys were not protected by attorney-client privilege.

Information Management Services, Inc. (“IMS”) is a corporation primarily owned by two families, with members of one family running the day-to-day operations as senior executives of the business.  Subsequently, a dispute arose over how the business was being operated and a derivative suit was filed against several of the executives for breach of fiduciary duties.

During discovery, plaintiffs learned that two of the senior executives used their work e-mail accounts to communicate with their personal attorneys both before and after the lawsuit was filed.  Plaintiffs requested those communications, but the senior executives refused by asserting attorney-client privilege.  In response, plaintiffs filed a motion to compel arguing that attorney-client privilege did not apply because the communications were made using work e-mail accounts maintained on the IMS servers and that the IMS Policy Manual notified employees IMS had unrestricted access to communications sent using its computers and that personal use of IMS computers should not be considered private.

The court was tasked with determining if the two senior executives had a reasonable expectation of privacy/confidentiality in communications sent to their personal attorneys.  In making this determination, the court relied upon the four factors established in In re Asia Global Crossing, Ltd., 322 B.R. 247, 256 (Bankr. S.D.N.Y 2005).  The four factors are: (1) Whether the corporation maintains a policy banning personal use or other objectionable use; (2) whether the corporation monitors the use of the employee’s computer or e-mail; (3) whether third parties have a right of access to the computer or e-mails; and (4) whether the corporation notified the employee, or the employee was aware, of the use and monitoring policies?

In analyzing the first factor, the court found that IMS had a clear policy banning or restricting personal use of e-mail.  With regard to the second factor, the court held that despite the fact IMS had not historically monitored computer use by employees, IMS had made it clear in its policies that it reserved the right to monitor usage and the absence of past monitoring did not undermine IMS’s reservation.  In analyzing the third factor, the court indicated this factor was not relevant because the third factor was most helpful when analyzing access to webmail (personal e-mail) by employers and this analysis involved strictly work e-mail.  Reviewing the fourth factor, the court pointed to the IMS policy and evidence that the two senior executives were aware of the use and monitoring policies.

In balancing the four factors, the court found that the senior executives did not have a reasonable expectation of privacy that their e-mails would remain confidential.  However, the court quickly went on to discuss that it is a case-by-case analysis using the Asia Global factors and that the analysis may be different if the party trying to overcome the privilege is not the corporation.

Matthew A. Barley