From CEOs and founders to file room folks, you may lose attorney-client privilege if using company email server

New York Court Rules that Attorney-Client Privilege is Lost if Otherwise Privileged Emails Go Through Employer’s Server. 

In a recent decision in Peerenboom v. Marvel Entertainment, a New York court ruled that email communications between a client and his attorney are not privileged – and are subject to full disclosure – if they are transmitted through an employer’s email system that is “monitored”.

The case arose out of a subpoena to Marvel seeking the allegedly defamatory emails of its CEO, Perlmutter, regarding a dispute with the plaintiff over the management of the tennis club at their condominium. Perlmutter objected on the grounds that some of the emails were between him and his attorneys and were protected by attorney-client privilege. The plaintiff contended that under Marvel’s policy, all emails sent through its server by employees were subject to being monitored, and, for that reason, among others, the attorney-client privilege was waived. The court agreed and ordered all emails produced.

Two general principles of U.S. law of privilege are important here. One is that, unlike in some other countries, in the U.S. the attorney-client privilege belongs entirely to the client – not the attorney. Second is that the privilege is generally deemed waived if the communications at issue are disclosed by the client to third parties.

The court considered four factors in deciding whether privilege had been waived: Whether (1) the employer maintains an email policy banning personal or other objectionable use; (2) the employer monitors the use of the employee’s computer or email; (3) third parties have a right of access to the computer or emails; and (4) the employer notified the employee, or the employee was aware, of the use and monitoring policies.

Based on these factors – all of which were deemed satisfied – the court concluded that the emails in question had lost their privileged status.

Notably, the four factors can be satisfied without any evidence that the emails had actually been viewed or read by a third party. There was no indication that any of Perlmutter’s emails were read by Marvel’s “monitors,” and none was required.

The court noted that “the use of one’s own personal home computer to communicate with an attorney on a private, unencrypted email account does not vitiate the attorney-client privilege.”

It should be noted this is a lower court decision and is subject to appeal but for now it stands as law.

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Note: This article is one of a series intended to de-mystify common legal issues for the non-lawyer and entrepreneur audience – they are designed to foster discussion and is by no means exhaustive. These materials are for informational purposes only. Nothing herein is intended nor should be regarded as legal advice. The distribution of this article to any person does not establish an attorney-client relationship with our firm. Rooney Nimmo assumes no liability in connection with the use of this publication. This bulletin is considered attorney advertising under the applicable rules of New York State. Rooney Nimmo UK is regulated by the Law Society of Scotland and Rooney Nimmo US by the New York Rules of Professional Conduct. All Attorneys and Solicitors listed in this firm stipulate their jurisdictional limitations. Rooney Nimmo in the USA is a law firm registered as a New York State Professional Corporation.

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