Ex-Employee Waived Attorney-Client Privilege as to Deleted Emails Later Recovered from Employer-Provided Laptops

Kaufman v. SunGard Inv. Sys., 2006 WL 1307882 (D.N.J. May 10, 2006) (Unpublished)

This case is similar to Curto v. Med. World Communications, Inc., 2006 WL 1318387 (E.D.N.Y. May 15, 2006), but it reaches a different result.

Kaufman and OSI, a financial software company owned by Kaufman, initiated suit action against SunGard, alleging, among other claims, breach of contract in connection with SunGard’s acquisition of OSI’s assets and hiring of Kaufman as a senior executive. In its answer and counterclaim, SunGard asserted state law claims against Kaufman based on the alleged disclosure of SunGard confidential information.

In May 2005, SunGard brought an Order to Show Cause against Kaufman for several items of relief relating to files Kaufman copied from two laptops that she returned to SunGard in January 2005. SunGard asserted that some or all of the copied files were proprietary and confidential. SunGard utilized a computer technician to determine the files that were copied, as well as to recover and restore certain files that were deleted by Kaufman prior to returning the two laptops. Among the deleted files that were recovered were emails between Kaufman and her attorneys. These emails were sent from and received on SunGard’s email system during Kaufman’s employment with SunGard. The relevant emails exchanged with counsel fall into two categories. First, email communications (including hard copies) exchanged prior to the November 8, 2002 closing and SunGard’s purchase of OSI’s assets (“Pre-Closing Communications”) – these emails remained on OSI computers after closing because OSI continued to operate at the same location. The second group included emails between Kaufman and her attorneys after the November 8 closing date (“Post-Closing Communications”). In opposition to the order to show cause, Kaufman asserted that the restored emails were protected by the attorney-client privilege.

SunGard argued that Kaufman “waived the attorney-client privilege as to Pre-Closing Communications by failing to delete same,” and that the Post-Closing Communications exchanged after November 8, 2002 were not protected based on SunGard’s employment policies governing email communications.

The magistrate ruled that all of the communications were discoverable because Kaufman had waived the attorney-client privilege. As to the Pre-Closing Communications, the magistrate found that Kaufman’s actions in transferring the disputed emails were “deliberate.” The record showed that Kaufman had confirmed that she did not remove or segregate communications with her counsel at the time of the closing, nor did she take steps to protect or segregate the existing communications after the closing.

As for the Post-Closing Communications, the magistrate relied on provisions of SunGard’s employment policy which provided that all information and emails stored on SunGard’s computer systems was SunGard property and that all emails were subject to monitoring. The magistrate held that any applicable privilege was waived because Kaufman knowingly utilized SunGard’s network with the knowledge that company policy provided that SunGard could search and monitor email communications at any time.

In this unpublished letter opinion and order, the district court affirmed the magistrate’s rulings.

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