Following last year’s Supreme Court decision in Quon v. Arch Wireless, a case that Yaron Dori and I explored in an earlier E-Commerce Law Reports article, courts across the country have been struggling to balance employers’ right to monitor employees’ electronic communications against employees’ privacy rights.  The latest volley in this area is an opinion released last week by a California appellate court in the case of Holmes v. Petrovich Development Company, LLC.

In Petrovich, the California Court of Appeal confronted the question of what happens when an employee uses her business email system to seek legal advice.  The plaintiff in the case, Julie Holmes, claimed that her employer and coworkers reacted negatively to her announced plans to take maternity leave, and she used her work email to contact a lawyer about a lawsuit against the company.  When the employer obtained those emails and introduced them as evidence against Holmes in the lawsuit, Holmes claimed that they were protected by the attorney-client privilege.

The court disagreed, finding that Holmes’ employer had made clear to her that business emails were not private and that office computers would be monitored to ensure that they were used only for business purposes.  Because of this clear policy, the court concluded that Holmes’ emails were “akin to consulting her attorney in one of defendants’ conference rooms, in a loud voice, with the door open, yet unreasonably expecting that the conversation overheard by Petrovich would be privileged.”

Although in this case the messages were sent through the employer’s email account, the Petrovich decision suggests the court would reach the same result even if the employee had accessed a personal email account through her work computer.  The court found it important that Holmes “used a computer of defendant company to send the e-mails” and the company had reserved the right to monitor “all files and messages” on computers assigned to employees.

In an attempt to protect her emails, Holmes relied on a key finding by the U.S. Court of Appeals for the Ninth Circuit in the Quon case — that a police officer had an expectation of privacy in text messages made on his government pager because the “operational reality” in the police department was that supervisors told employees that messages were not monitored, notwithstanding a written policy giving the employer the right to monitor them.  The Petrovich court found that argument did not help Holmes because, “[a]bsent a company communication to employees explicitly contradicting the company’s warning to them that company computers are monitored to make sure employees are not using them to send personal e-mail, it is immaterial that the ‘operational reality’ is the company does not actually do so.”

Now that electronic communications — and electronic discovery — are very much in the mainstream, courts regularly are forced to consider how to balance employee privacy against employers’ rights.  In contrast to the prevailing approach in Europe, U.S. courts are coalescing around the conclusion that employers have broad rights to access employees’ communications.  These decisions highlight the importance for employers of adopting effective acceptable use policies, enforcing them appropriately, and understanding how to acquire and use electronic records in the litigation process.