Fork it Over! Why Work E-mail Accounts Are Not Privileged

Earlier this month, the Delaware Chancery Court decided that corporate officials do not have a reasonable expectation of privacy in work e-mail accounts.  Alarming? I think so…

The case before the court involved two families—Evelyn and Michael Burton, and William, Andrew, and Jean Lake—who each own 50 percent of their company’s common stock.  Their company, Information Management Services, Inc., (“IMS”), provides products used to evaluate clinical trials for biomedical research.  In 2012, the relationship between the two families soured and the Burtons brought a suit alleging that William Lake breached his fiduciary duty as an officer of IMS by mismanaging the company.  They also alleged that Jean and Andrew Lake breached their fiduciary duties by enabling William to continue running the company.

During discovery, the company sought to collect emails that William and Andrew Lake had exchanged with their personal attorneys and advisors.  William and Andrew asserted attorney-client privilege.  The Burtons, in turn, moved to compel production of the e-mails, arguing that the privilege did not apply because William and Andrew communicated with their lawyers using work e-mail accounts on the IMS servers.

The court granted the motion to compel and held that William and Andrew could not invoke the attorney-client privilege for communications exchanged with their personal attorneys and advisors on their work e-mail accounts.

Are all work email accounts unsafe and at risk of disclosure? Not necessarily.  The court said that while putting the phrase “subject to the attorney client privilege” in the subject line is not enough, officers may “take more significant and meaningful steps to defeat access, such as shifting to a webmail account or encrypting their communications.” Moreover, officers should check their company’s policy manual because in this specific case, IMS had in its policy manual a section on computer privacy, which stated that employees are to assume files and Internet messages are open to access by IMS staff.  Ultimately, the court recognized that this was an issue of first impression in Delaware and different facts may lead to different outcomes in the future.

Click here to read more about the decision.

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