Archive for the 'Corporate Law' Category

A Year After Stengart: What’s Changed?

SteveK March 28th, 2011

It’s been a year since the New Jersey Supreme Court decision in Stengart v. Loving Care Agency. 990 A2d 650 (2010) and what has changed?  The Stengart case shook the world of employment law because it is one of the first cases to provide that an employee has an expectation of privacy in personal, password protected, web-based emails sent on a company computer through a company server, irrespective of the fact that the employer had a computer use policy in effect at the time.  The Court held that the Plaintiff had a subjective expectation of privacy in her emails because they were password protected and she did not save them on the company computer, as well as the fact that the emails were between her and her attorney, which is a fiduciary personal relationship.  When the company captured the emails from her computer after she left employment and shared those emails with their defense attorneys, the defense attorneys had an obligation to not read them because the emails were privileged and to promptly return them to the Plaintiff’s attorneys.

 Will Stengart mean that employees have an unfettered expectation of privacy in personal emails at work so long as they are sent and received on a web-based platform and are password protected?  Probably not.  That would be a broad end-run around a company’s computer use policy and that isn’t the message from the Court in Stengart.  Rather, Stengart may end up meaning that employers have to be more precise in giving adequate warning to their employees that the contents of emails from a personal account may be monitored.  Employers will have to drill into specifics in their computer use and internet use policies, so that any argument that the policy or policies are ambiguous is obviated.  As the Court in Stengart held, “Our conclusion that Stengart had an expectation of privacy in e-mails with her lawyer does not mean that employers cannot monitor or regulate the use of workplace computers.”  The Court went on to say that ”Companies can adopt and enforce lawful polices relating to computer use to protect the assets, reputation, and productivity of a business and to ensure compliance with legitimate corporate policies….But employers have no need or basis to read the specific contents of personal, privileged, attorney-client communications in order to enforce corporate policy. 

 Will Stengart mean that there is a narrow expectation of privacy in personal emails at work when the emails are with an attorney and fall under the attorney-client privilege?  Probably not.  If that were the case, the Court would not have gone through its detailed logic in arriving at its holding.  Instead, it could have simply said personal emails at work with an attorney are privileged and are not discoverable.  But it did not say that.  In fact, the Court went to great lengths to discuss a concept called a “subjective expectation of privacy” and also to discuss computer use policy ambiguity. 

 The Stengart message is that an employer would be wise to not construe Stengart too narrowly in thinking its application is only for attorney-client communication; nor should an employer construe Stengart too broadly in thinking that an employee now has an unfettered expectation of privacy in his emails so long as the emails meet certain criteria, namely that they are password protected and are sent on a web-based platform.  Rather, a cogent course for an employer to take is the middle ground.  There may well be an employee expectation of privacy in emails that are sent on a password protected web-based platform, regardless of whether it is with the employee’s attorney, unless there are pro-active steps taken by the employer to obviate a subjective expectation of privacy and to clarify any computer use or internet use policy ambiguities.  Employers should consider not only revising their computer use and internet use policies to be more precise as to this point, but also should consider the design and implementation of a rigorous and consistent employee training programs that include employee acknowledgements. 

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in  technology and privacy matters. For additional information about the matters in this bulletin or in the firm’s insurance practice, please contact Todd. R. Ruback, Esq. who heads our Technology and Privacy Law Department

A.M.Best Podcast on Insurance and Privacy Law

SteveK January 19th, 2010

Steven Kunzman and Todd Ruback of the firm recently participated in a podcast with A.M Best regarding developments in privacy law and related insurance issues. To hear the podcast go to: http://www3.ambest.com/bestfeed/insurancelaw/Insurance_Law_Podcast_40.mp3

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in insurance coverage matters as well as technology and privacy matters. For additional information about the matters in this bulletin or in the firm’s insurance practice, please contact Steven A. Kunzman, Esq. who heads our Insurance Coverage Department; for additional information about the firm’s technology and privacy practice, please contact Todd. R. Ruback, Esq. who heads our Technology and Privacy Law Department

10th Circuit Court Allows PRP to Intervene to Challenge CERCLA Settlement.

SteveK December 8th, 2009

On November 10, 2009 the Court of Appeals for the the10th Circuit permitted Union Pacific Railroad (UPR) to intervene in the CERCLA action for the purpose of challenging a pending settlement between 44 other PRPs and the U.S. 

 In U.S. v. Albert Investment Company, et. al. the 10th Circuit Court weighed in on a dispute among courts in various jurisdictions as to whether protection of the right of contribution under Section 113 is an interest that is legally sufficient to permit intervention as of right. The Court held that it is and reversed a decision of the District Court denying UPR’s motion to intervene.

 The U.S. had negotiated a settlement with the 44 PRPs for the Double Eagle Lubricants Superfund Site in Oklahoma City. The 12-acre site was owned by UPR as a result of its acquisition of the Missouri Pacific Railroad Company. The U.S. filed suit against the 44 PRPs to effectuate the settlement by entry of a Consent Decree that provided the PRP group protection from suit. UPR, which had been sued separately, moved to intervene in the suit against the 44 since the Consent Decree would provide immunity from the contribution claims of UPR. The Court reasoned that when Section 113(f) is read as a whole that it is clear that a contribution right exists until it is eliminated by a settlement. The Court concluded that a delay in the proceedings to address UPR’s challenge would do no more than delay the allocation of costs among all the PRPs (including UPR) since the remediation was complete. Further, the Court held that the statutory right to contribution is worthy of protection. Finally, the Court held that UPR’s failure to agree to settlement does not diminish its right to intervene. The Court noted that the trial court might still decide against UPR and extinguish its contribution right; however, that does not make them any less interested or impair its interest in the disposition of the case. The Court also held that UPR’s right to comment on the settlement during the notice-and-comment period required for lodging of a Consent Decree was insufficient to protect UPR’s statutory rights because, in part, only a decision by a court on the claims of the intervenor would be subject to appellate review.

 This decision has potentially significant implications with regard to settlement of CERCLA matters. The government would have to be wary of bringing a separate suit against secondary PRPs  in anticipation of a quick settlement, expecting to be able to carve out other PRPs.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental Department.

EPA evaluating revised Preliminary Remediation Goals (PRGs) for Dioxin

SteveK October 20th, 2009

In May of 2009 the EPA Administrator, Lisa P. Jackson, determined that the agency should reassess the risks presented from human exposure to dioxin. This assessment is planned to be completed by the end of 2010. The Office of Solid Waste Emergency Response (OSWER) will be reviewing the current dioxin cleanup guidance which was developed in 1985 in light of current scientific knowledge with the goal to develop interim PRGs with a full review, including public comment. The interim PRGs will be based upon a review of current soil cleanup levels and toxicity values use by the states, the Agency for Toxic Substances and Disease Registry, as well as standards developed in other countries. The OSWER will give consideration to the currently recommended PRGs for Superfund, Federal Facilities, Brownfields and RCRA sites which are 1ppb for residential soil and in the range of 5ppb to 20 ppb in commercial/industrial soil where exposure is due to direct contact. The interim PRGs are intended to be used to evaluate pending cleanup decisions although they will not necessarily be employed as site specific clean-up levels. The PRG levels will be considered as a starting point for sites, but site specific factors, such as exposure frequency or acceptable cancer risk, will be taken into account to develop the site’s baseline risk assessment. The current schedule for the development of the interim recommended PRGs includes the opening of a public comment period this month, October 2009, with the interim recommended PRGs available for public comment in the Federal Register on December 31, 2009. The public comment period is to end in February 2010 and the guidance is to be issued in June 2010 depending on the extent of public comments received.

More information can be found at :www.epa.gov/superfund/policy/remedy/sfremedy/remedies/dioxininterimplan.html

 

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental Department. 

NJ Supreme Court Rejects Award of Counsel Fees to Employer in CEPA Case

SteveK October 19th, 2009

On October 15, 2009, the New Jersey Supreme Court broke new ground in Best v. C&M Door Controls, Inc. holding that a Defendant, employer is never entitled to an award of counsel fees pursuant to the “offer of judgment rules” in a case involving either the Conscientious Employer Protection Act (CEPA) or the Prevailing Wage Act (PWA), two New Jersey statutes protecting employees from retaliation if they engage in certain defined protected activity.

 

Plaintiff, Thomas Best sued his former employer, C&M Door Controls, for violations of the PWA and CEPA, claiming that he was underpaid for certain work covered by the PWA and  that when he complained his employer retaliated.  At some time prior to trial Best made an offer of Judgment, which included fees and costs, in the amount of $100,000; the defendants made counter offers of judgment in the amounts of $15,000 and $25,000 for the respective claims. All offers were rejected. The trial resulted in a defense verdict on the CEPA claim and a jury award of $2600 on the PWA claim.  Plaintiff applied to recover fees pursuant to the fee shifting provisions of the PWA in the amount of $122,000.

 

 The trial court granted plaintiff fees, but reduced the fee award by 40% based on plaintiff’s “limited success” and also awarded fees to the employer on the failed CEPA claim in accordance with the offer of Judgment rule. The Appellate Division affirmed the fees awarded to the defendants; however, the Supreme Court reversed. The Supreme Court held that a trial judge might consider the offer of judgment made by the employer and unjustifiably rejected by the plaintiff in determining the amount of fees to be awarded to a prevailing plaintiff, if “under all the circumstances” the offer of judgment was reasonable.  The Court ruled, however, that there is no basis to shift the fees to a defendant in such a case.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of parties in employment matters. For additional information about the matters in this bulletin or in the firm’s Employment Practice, please contact Richard P. Flaum, Esq.