Privacy and Employer-Owned Materials

August 3rd, 2009

I have probably generated 500 standard-form employee confidentiality/inventions agreements, and a good number of employee manuals, all of which say that basically anything an employee does on work time with employer-owned equipment (computers) belongs to the employer.

It is very useful to see the limits of these policies. A recent case from the New Jersey Appellate Division has some useful guidelines.  Here is my summary of the helpful considerations in under 500 words.

Case Facts
The CEO of a company got into a dispute with her employer.  The employer took back its computer when the CEO quit and found on it cached copies of emails the CEO had sent to her attorney from her personal Yahoo account.

The employer said that the emails belonged to it since *everything* on the computer belonged to it pursuant to the employer’s policies.  The CEO said that purely personal matters fell outside the scope of the policy.

Court Ruling
The appeals court said that it is not enough for a company to say it owns everything done on its computers- there has to be a need to reach out and take ownership of entirely personal matters.  Based on that, the court held that the emails were not the property of the employer and the employer had no right to hold and use them.

Useful Concepts
None of this is strictly relevant outside of New Jersey, of course, but the case brings up a few interesting ideas:

1) Personal vs. work email.  The CEO did not use her work email account to communicate with her lawyer.  This was an important point in establishing the CEO’s expectation that her emails would remain private.

2)  The court likens the employer’s actions to rifling “a folder containing an employee’s private papers” or examining “the contents of an employee’s pockets”.  To me, this is the most important point.  An employer can certainly *review* an employee’s file folders, but if it finds purely personal items it is obligated to return those to the employee.  Computers are no different- people may store personal information on them.  Employers need to be aware that they are not entitled to review or use these simply because the employer owns the computer.

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