Case Law: Holmes v. Petrovich Dev. Co., LL

Friday, March 11, 2011 by Thought Leadership Team

Court Affirms Attorney-Client Communications over Employer Computer Not Privileged

Holmes v. Petrovich Dev. Co., LLC, 2011 WL 117230 (Cal. App. 3 Dist. Jan. 13, 2011). In this employment litigation, the plaintiff appealed the trial court’s finding that attorney-client communications sent over her work computer were not privileged. Regarding the transmission of electronic communications in the workplace, the court stated that privilege does not extend to when the employee uses the employer’s systems, is advised that the communications are not private, and is aware of and agrees to these conditions. Although the attorney-client communication was sent via the employer’s e-mail account and the plaintiff was informed of the usage policy, she argued communications were not monitored in practice and this contradiction provided her a reasonable expectation of privacy. Distinguishing the factual circumstances from City of Ontario v. Quon and Stengart v. Loving Care Agency, Inc., the court noted that “absent a company communication…explicitly contradicting” company policy, it is immaterial whether the company actually monitors communications. The court analogized the usage of an employer’s communication systems to consulting an attorney in the employer’s “conference rooms, in a loud voice, with the door open, yet unreasonably expecting that the conversation overheard” and accordingly affirmed the trial court’s finding that attorney-client privilege did not apply.


The issue of employee privacy in the workplace is one that has led to several conflicting rulings in various jurisdictions. As referenced in the summary above, the court in this case distinguished the facts from both City of Ontario, California v. Quon and Stengart v. Loving Care Agency, Inc. In Quon, the United States Supreme Court decided the case of narrow grounds without resolving the disagreement in O’Connor v. Ortega regarding the proper test in which to decide a public employee’s expectation of privacy in the workplace. However, the Supreme Court found that the City of Ontario’s search was legitimate and not excessively intrusive in scope. In addition, the Supreme Court relied on the City’s policy that clearly conveyed e-mail messages were subject to auditing. While pager text messages were not mentioned specifically, a meeting was held following the issuance of the pagers to ensure the employee officers were aware that the text messages would be treated in a similar fashion to e-mails. Quon affirms that “employer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated.”

In Stengart, the Supreme Court of New Jersey upheld the Appellate Division’s ruling that held the attorney-client privilege outweighed the defendant’s corporate Internet communications policy. In upholding the Appellate Division’s ruling, the Supreme Court of New Jersey again reviewed the company policy and determined the plaintiff did not have adequate notice that e-mails from her personal account were subject to company monitoring since the policy did not address personal, web-based e-mail accounts. Based on this lack of notice and the strong public policy considerations behind protecting the attorney-client privilege, the court held the e-mails should remain privileged. The court also concluded that employers have no need to read the specific contents of personal, privileged, attorney-client communications in order to enforce a company communications policy. In addition, the court remanded to the trial court the decision of whether sanctions should be imposed against the defendant’s counsel for reading the privileged emails without notifying the plaintiff.

Although there is no one consistent ruling on this subject, based on these employee privacy cases in general, network and technology usage policies are critical. Such policies should be as inclusive and explicit as possible, with clearly established expectations regarding the permissive use of devices such as cell phones, pagers and laptops. These policies should not be created in a vacuum, and should include involvement from the CIO and/or other key members from the IT managers and staff, and should also include legal, either in-house or outside counsel. Following policy creation, employees must be educated as to what is being monitored and why. Documenting the steps taken to ensure each employee has received and reviewed the policy is vital and will provide important supporting material in the event the policy is called into question as it was throughout the instant case.  Finally, it is important to make updates to the policy as new technologies and methods of communication emerge, such as social networking sites