United States: The Evidentiary Effects Of Corporate E-Mail

You just finished typing a really aggressive analysis memorandum that really set forth why you think your plan for the company can and would destroy the competition. Later, you think the e-mail was a bit too bold, particularly that attachment that showed how much marketshare you can steal from the competition, and hopefully take over the lion’s share of work in your home town. You decide to delete the e-mail. It’s gone right? History will never see it. Wrong.

Almost everyone in business uses e-mail, and most people who have access to it are completely dependent upon its speed, simplicity, and versatility in today’s fast paced marketplace. It makes our lives so much easier. We’re addicted to it, checking it constantly, mainly because most of it contains very important information, some of which may be highly confidential and very damaging. So why do we continue to treat e-mail like its just another telephone conversation, instead of treating it for what it legally is – a discoverable communication?

Because of its unique qualities and expanding use in the business place, electronic evidence, particularly e-mail, is playing a greatly increasing role in all forms of technology and corporate litigation. First, e-mail is almost impossible to destroy, mainly because the act of deleting e-mail doesn’t mean its content is completely gone. That’s because when a user deletes a file, the computer simply acts to rename the file, removing it to another part of the hard drive, where it will probably remain for the life of the computer. Even if the hard drive is destroyed, the same information can usually be retrieved from a company's back-up tapes. Attached documents and unsent e-mail drafts are usually recoverable as well. Besides the e-mail itself, other pertinent information such as who authored it, what computer it was typed on, where it was saved, and when it was prepared, can also be recovered.

E-mail is becoming increasingly useful in litigation because few people filter out what they would otherwise exclude in a phone conversation or formal memorandum. In fact, e-mail’s speed and informality have made it a trap for the unwary in several recent cases. A few simple e-mails have turned the tide in some very well known, multi-million dollar, business litigation cases.

In a recent interview of Carla J. Feldman, a prominent Los Angeles employment attorney, the New York Law Journal reported that Feldman had obtained successful defense verdicts in at least three or four recent trials as a direct result of damaging e-mails sent by the plaintiff. In one sexual harassment case Feldman cited, the plaintiff had painted herself as a pious, churchgoing soul who had suffered greatly when her company’s supervisor allegedly inquired about her dating history. But the plaintiff's claim suffered when a search of her e-mail revealed hundreds of pages of pornographic material and jokes.

Plaintiffs and prosecutors are finding that e-mail can provide a fertile ground for discovery. According to Feldman, e-mails bites companies all the time; it's an incredible tool for people to say things in a completely unedited format. In fact, e-mail has seriously affected some major corporations in recent litigation.

Other notable examples include problems encountered by even the largest and most sophisticated e-mail users, like Microsoft Corporation. In Strauss v. Microsoft Corp., 1995 LEXIS 7433 (S.D.N.Y. 1995), a federal court held that e-mails containing jokes, forwarded by a supervisor to other staffers, were evidence of a discriminatory attitude relevant to the employee’s sexual discrimination claim. Similarly, in Caldera, Inc. v. Microsoft Corp., 72 F.2d 1295 (D. Utah 1999), a federal district court found that a series of intra-company e-mails offered "direct evidence" that the corporation was actively trying to destroy a competitor.

Other examples, even outside the courts, include massive e-mail abuses that go undetected by employers for years at a time. Examples of uncontrolled e-mail abuses include the mass firing incidents at the Clinton White House, Xerox Corp., Dow Chemical Co., The New York Times, and other companies that have terminated hundreds of employees for improper use of e-mail. In those cases, a clearly articulated, written policy, can help the employer defend its actions, or prevent liability to competitors.

These cases illustrate that even the most sophisticated participants of the high tech revolution can fall victim to the evidentiary pitfalls of e-mail. Each and every statement made on e-mail may be essentially just as significant as a statement made on paper. Every company needs to accept the fact that it may be at risk at not even know it.

Companies that are concerned about the impact of e-mail on future litigation are not without solutions. Many firms offer e-mail monitoring software and service that a company can use on a regular basis to periodically test whether employees are engaging in inappropriate or dangerous communications. Such software can also serve to shield a company from certain viruses and junk e-mail. Nearly 40 percent of American companies now monitor their e-mail systems, up 15 percent from four years ago.

Unfortunately, however, once a communication is made, it is hard to take back. Thus, training your employees to avoid certain communications by e-mail, although difficult to do in today’s world, may be the best defense.

A new issue then arises: what e-mails are private and not subject to employer review? The Electronic Communications Privacy Act protects certain e-mail from "unauthorized searches." The Act has not been readily tested yet in the courts, so its interpretation is still open to debate. The Act protects e-mails in which the employee has a "reasonable expectation" of privacy.

Therefore, at this point, a company using e-mail would be well advised to simply notify its employees at the outset that their e-mail might be monitored. In order for certain e-mails to be protected, an employee must have a reasonable expectation of privacy in the communication itself. That expectation is vitiated in most circumstances by telling the employee up front that e-mail will be periodically monitored. The best way to articulate such a policy is in writing, to the employee, who reviews the policy and acknowledges having read its contents, before work is started on the first day. Thereafter, employers should limit their periodic review to those instances when they have a legitimate reason to make the review, such as where an employer has reason to suspect an employee may be trading inappropriate jokes, pictures, or discussing matters via e-mail that are potentially damaging to the company.

The net result is that every company should have a clearly articulated, written policy, in place to delineate what is acceptable conduct of its employees. On the other side, management needs to cautiously be ware of making off the cuff remarks and inappropriate criticisms that are now engrained in their electronic systems. Those companies that are at risk for commercial, employment, antitrust, or other types of litigation, where e-mail may become evidence, should also evaluate what electronic statements may now exist in their system, in light of the recent Microsoft cases. Perhaps the best rule of thumb is simply this: be very careful when typing into e-mail that which you would never want published to the world through a courtroom.