Labor and Employment Update - Spring 2009



A New Jersey lower court recently held in Stengart v. Loving Care Agency, Inc., that emails sent by an employee to her personal attorney from a company-issued laptop were not protected by the attorney-client privilege and, therefore, could be used by the defendant, her former employer, at trial.
It is often noted that the attorney-client privilege is one of the oldest and most sacrosanct privileges found in law. It is a privilege that protects communications between a client and his/her attorney from use or disclosure at trial, as a means of preserving candor in the attorney/client relationship. A client, however, may “waive” the privilege with respect to an attorney-client communication if he/she discloses the communication to a third party. There are some complexities in the application of this general rule, and minor or “inadvertent” disclosures do not always constitute waivers of the attorney-client privilege under the law.
In Stengart, the plaintiff, Maria Stengart, filed an Order to Show Cause alleging that her former employer’s attorneys, Sills Cummis & Gross, PC, had breached the attorney-client privilege by obtaining a copy of an email that she had been sent from a company-issued laptop to her attorney while she was still employed. In sending the email, Ms. Stengart had actually taken the precaution of not using her company email account to send the message to her attorney; rather, she had first signed onto her personal Yahoo email account in order to send the message. By doing so, however, Ms. Stengart’s company-issued laptop computer retained an electronic copy of the message as a “temporary internet file,” which was subsequently discovered when Sills Cummis retained a forensic expert to search the laptop computer as part of the discovery process. The email in question included communications made by Ms. Stengart to her attorney discussing her decision to resign from the Company (which she later claimed was a forced, “constructive discharge” arising from a “hostile environment” at the Company). Ms. Stengart argued that the email was privileged and requested sanctions against the attorneys; the Company argued that the privilege had been “waived” when Ms. Stengart had sent it on the Company’s computer during business hours. The Company also pointed to its Electronic Communication policy, which stated, inter alia, that “Technology resources are considered company assets and must be protected from unauthorized access” and that “Email and voicemail messages, internet use and communication and computer files are considered part of the company’s business and client records. Such communications are not to be considered private or personal to any individual employee.”
In considering the question of waiver, the Court noted the increasingly critical role played by computers in the business world and the “novel questions for both employers and employees with respect to the legal ramifications of such use.” Reviewing the case law and ABA opinions on the use of email for attorney-client privileged communications, the Court noted that, “lawyers and clients may communicate confidential information through E-mail with a reasonable expectation of privacy.” However, where an employee sends an email using a company account, the Court noted that several courts had found that the privilege had been waived if the employer maintains a policy warning its employees that email correspondence from company accounts are subject to review. With respect to emails sent using a personal, password-protected account, using a Company computer during work hours (as was the case in Stengart), the Court concluded that the privilege also would be waived where the employer maintains a policy warning that any and all internet use, files and communication conducted on the employer’s computer are not private and would be considered part of the business’s records. The existence of the Company policy was a critical part of the Court’s finding; indeed, “the question of whether an employee has a reasonable expectation of privacy in a communication made on a work-issued computer is based on the degree of notice the employer has provided to its employee regarding their right to privacy in electronic communications.”
In light of this and similar opinions, employers should carefully review their email/internet/computer policies to ascertain whether the policies contain adequate disclosures as to whether email, internet files and communications are considered company property, with no protections or expectations of employee privacy in such communications. Employers (and individuals) should also be mindful of when and where they are sending email communications to attorneys that they wish to maintain as privileged. Sending emails from another company’s computer, a public computer or a computer owned by another individual may be problematic in terms of maintaining confidentiality and the attorney-client privilege for such communications. 
Despite the United States Supreme Court’s ruling in 14 Penn Plaza, LLC v. Pyett, employees may still not be required to arbitrate employment discrimination claims under certain circumstances. In Kravar v. Triangle Services, Inc., the court held that when the Collective Bargaining Agreement (“CBA”) allows the Union to preclude individual claims from being arbitrated, the employee cannot be compelled to arbitrate such claims. The court held that because an employee’s Union--the Service Employees International Union--was permitted to block such claims, it was a material and a “substantive waiver” of the rights the employee otherwise would have enjoyed under the Americans with Disabilities Act. The court held that this was an exception to the decision in 14 Penn Plaza
In 14 Penn Plaza, the Supreme Court overruled the longstanding position that unions could not waive employees’ rights to litigate their employment discrimination claims (See Alexander v. Gardner-Denver and Gilmer v. Johnson/Interstate Lane Corp.) The Court held that because the National Labor Relations Act allows employees to designate a union as their representative regarding rates of pay, hours of employment and other conditions of employment, a CBA that compels arbitration of “federal anti-discrimination statutory claims” is valid and enforceable. 
Employers should be very specific about the language they include in their CBA (or employment agreements) if they wish to compel employees to arbitrate such claims. Courts will continue to construe these provisions narrowly and the Kravar decision is an example because it found an exception to 14 Penn Plaza less then 6 weeks after the Supreme Court made its decision.
For employers, the Family and Medical Leave Act (“FMLA”) has historically been a complicated statute to properly interpret and apply, and it just became more so as a result the recent decision by the United States District Court for the Western District of Pennsylvania in Moore v. Czarnowski Display Service, Inc. The language of the FMLA provides that an employer with 50 or more employees within a 75 miles radius is obligated to provide its employees (who have worked a minimum of 1250 hours in the prior 12 month period) with 12 weeks of unpaid leave for certain medical and child-related events. In the Moore case, the Western District Court was asked to decide whether an employer with less than 50 employees, who had made certain representations to its employees with regard to the FMLA, could be obligated to provide FMLA leave despite not meeting the threshold number of employees, and the Court found in the affirmative. 
The plaintiff in the Moore case, Tracy Moore, had pursued a claim under the FMLA against her prior employer, Czarnowski Display Service, Inc., after having been terminated shortly after returning from an approved medical leave. The facts forming the basis of Moore’s suit were that she had: (1) made a request for a two-week medical leave from her supervisor and stated her “intention to take FMLA leave;” (2) filled out the relevant paperwork she had been provided; and (3) been approved for “FMLA leave” by Czarnowski. The Czarnowki employee handbook, stated that the company, although “not legally required to comply with the FMLA” at certain of its locations, would “grant authorized…medical leave[ ]…in accordance with the requirements of the [FMLA].” 
During her approved leave, Moore’s work email account was suspended and her building access card was deactivated. When she returned from leave, Moore was questioned about a work-related incident that had taken place shortly before her leave and then she was subsequently suspended and terminated. Moore then sued Czarnowski in federal court under the FMLA. In an effort to dismiss Moore’s case, Czarnowski argued that Moore was an “ineligible employee” under the FMLA due to her work location having less than 50 employees. Citing Czarnowski’s oral and written representations to Moore that she was entitled to, and eligible for, leave under the FMLA, and her consequent reliance on such representations, that Court held Moore to be covered employee under the FMLA. In support of its decision, the Court pointed to the legal concepts of equitable estoppel and detrimental reliance.
The lesson from Moore for employers with less than 50 employees is clear. Employees should not be offered “FMLA” leave, either orally or in writing, unless there is an intention to abide by the statutory obligations of the FMLA. The guidelines and criteria for medical related leaves (if offered) should be set forth clearly, and specified as being unrelated to the FMLA. As with any employer-provided benefit, eligibility or lack thereof should be easily interpretable by the employee.   

The Genetic Information Nondiscrimination Act (“GINA”), which was signed into law on May 21, 2008, prohibits discrimination based upon genetic information in employment related decisions. GINA was enacted by Congress to address public concerns about corporate abuse of genetic information. Currently, the EEOC, who has been charged with the implementation of GINA, is wrapping up the comment period before issuing final GINA rules. 
Under the proposed GINA rules, employers cannot collect genetic information through any workplace testing or other means. Provisions of GINA also prohibit health insurers and health plans from requiring any genetic testing for enrollment or premium decisions. Genetic information includes information about an individual’s or the relative of an individual’s genetic tests. Genetic information does not include information about an individual’s age, race, or drug or alcohol use. 

Employers will only be permitted to collect genetic information under the following limited set of exceptions.

-  Inadvertent acquisition of genetic information;
-  Health/Genetic services (as part of a voluntary wellness program);
-  Family Medical Leave Act compliance;
-  Publicly available information;
-  Genetic monitoring if toxic substances exist in the workplace and the employer is
    monitoring for its effects;
-  DNA testing for law enforcement or corpse identification purposes.
There will also be very strict workplace confidentiality and disclosure rules on any genetic information in the employer’s possession. In fact, if an employer possesses genetic information, it must maintain it in a confidential file, separate from the employee’s personnel information. These rules are similar to the Americans with Disabilities Act regulations requiring that all medical information be maintained in a separate file.
Though the EEOC does not anticipate that the regulations will pose any additional cost on employers, employers who collect genetic information should perform a compliance audit to ensure that any records in the employer’s possession are (1) obtained lawfully; (2) maintained lawfully; and (3) protected from disclosure. The new GINA rules will likely become effective on or around November 21, 2009.  
The Labor and Employment Group represents and counsels employers in all aspects of the employment relationship, including EEO litigation, union avoidance, negotiations, arbitrations, executive compensation, corporate transactions, and non-competition/non-solicitation agreements, as well as compliance with federal and state laws such as the Family and Medical Leave Act, the Americans with Disabilities Act, the Health Insurance Portability and Accountability Act, the Fair Labor Standards Act and the Occupational Safety and Health Act.
This document is published for the purpose of informing clients and friends of Klehr Harrison about developments in the areas of labor, employment and benefits, and should not be construed as providing legal advice on any specific matter. For more information about this publication or Klehr Harrison, contact Charles A. Ercole, Chair of the Labor and Employment Group, at (215) 569-4282 or visit the firm’s Web site at
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