Client Alert

Contact:
Steven B. Harz, Esq., Chairperson
Labor & Employment Law Group
201-342-6000
September 8, 2008

APPELLATE COURT RULES THAT NEW JERSEY EMPLOYEES HAVE NO LEGITIMATE
EXPECTATION OF PRIVACY IN FILES STORED ON THEIR WORK COMPUTERS.

Dear Clients and Friends:

On August 29, 2008, the Appellate Division of the Superior Court of New Jersey ruled that an employee has no legitimate expectation of privacy in information stored on his work computer. In State v. M.A., A-4922-06, the court held that the defendant's employer, as the owner of the computers on which defendant worked, could consent to their search by police without any resulting violation of the defendant's right to be free from unreasonable search and seizure.

In M.A., the defendant employee was accused of stealing approximately $655,000 from his employer. As the bookkeeper and person in charge of his employer's computer systems, the defendant drafted numerous checks on his employer's account to himself and a side business which he owned, made wire transfers of his employer's funds to himself and his mother, and secretly increased his salary by approximately $80,000. The defendant was terminated after the salary increase was discovered. His employer reported the theft to police, and signed consent forms consenting to a search by the New Jersey State Police High Technology Crimes Investigation and Support unit of two computers that had been utilized by the defendant. Information retrieved from the computers contained significant evidence of the various instances of theft by the defendant. A motion by the defendant to suppress the evidence obtained from the computers was denied by the trial court.

On appeal, the defendant argued that his motion to suppress should have been granted because he had a legitimate expectation of privacy in the “personal information” stored on his work computers. He pointed to the fact that he had a private office and had placed confidential passwords on the computers restricting access to the information. The Appellate Division disagreed, finding that while the defendant may have had a subjective expectation of privacy in the information, that expectation was not reasonable or legitimate under the circumstances.

In reaching its decision, the Appellate Division pointed to a number of key facts. First, the employer owned the computers used by the defendant, and specifically advised the defendant at the outset of his employment that the computers were company property. Further, the computers were connected to the employer's network system and contained business software. A superior and colleague of the defendant's had access to the computers, and the defendant's “private office” was never locked or closed.

The Appellate Division's ruling is consistent with its holding in Doe v. XYZ Corp., 382 N.J. Super. 122 (App.Div. 2005), that an employee has no reasonable expectation of privacy in a workplace computer in the civil context. In XYZ Corp., the employer had a written policy noting that all messages transmitted on the employer's email system were the property of the employer. The court also noted that the employee's office did not have a door and that his computer screen was readily visible from outside the office.

New Jersey employers who wish to protect themselves from privacy claims by employees regarding workplace computers should take note of the facts of both M.A. and XYC Corp. The prudent employer will advise an employee at the outset of the employment relationship, by way of a clearly-drafted written policy, of the employer's ownership of workplace computers and any information or electronic messages stored on or transmitted to or from such computers. As M.A. illustrates, a clear policy of which the employee has notice will defeat any assertion of privacy in a workplace computer, even where an employee has taken the affirmative step of utilizing a confidential password in an attempt to restrict access to alleged “personal information.”

If you have any questions with regard to the application of this case to your Company or with respect to any other labor and employment law matter, please do not hesitate to contact Steven Harz, Esq. at (201) 342-6000, or via email at sharz@hertenburstein.com