A company computer and questions about e-mail privacy

When he was fired, Scott Sidell was angry enough. Then he found out that his former employer was reading his personal Yahoo e-mail messages, after he had left the company.

In a lawsuit that he filed in May against Structured Settlement Investments, the finance company he used to run, Sidell claims that executives at the company went so far as to read e-mail messages that he had sent to his lawyers discussing his strategy for winning an arbitration claim over his lost job.

"It's kind of like the other side gets your playbook, or they're spying on your locker room," said Russell Green, a lawyer representing Sidell. He said his client was now using a new e-mail address.

The lawsuit filed by Sidell in federal court in Connecticut involves an unsettled area of the law, where changes in technology create tension between expectations of personal privacy and companies' rights to monitor the equipment they provide to employees. The case's unusual combination of facts, which are in dispute, paves the way for a decision that could help set a precedent for dealing with personal e-mail at work.

The law governing e-mail communications is still evolving. Generally, courts have found that employers can monitor employees' e-mail communications on company computers. But courts have also recognized greater privacy protection for e-mail messages sent using personal, Web-based e-mail accounts. For example, this month, a panel of the United States Court of Appeals for the Ninth Circuit in California ruled that personal text messages sent on two-way pagers provided to police officers in Ontario, Calif., were protected from the department.

Sidell's case gives the courts an opportunity to address other questions, said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington. "This case raises a lot of new issues that reflect the changing place of e-mail in the workplace," Rotenberg said. "We have Web-based e-mail, which is not directly under the control of the employer."

In addition to concerns about privacy in the workplace, Sidell's claim involves communications between a lawyer and a client. "It's a nice set of factors that are all compacted into this," said Matt Zimmerman, senior staff attorney in the San Francisco office of the Electronic Frontier Foundation, a nonprofit civil-liberties organization that seeks to protect privacy rights online.

An employer's ability to read messages worries office workers everywhere, not least because e-mail messages have figured in criminal cases like the one brought last week against two former Bear Stearns hedge fund managers. People disclose all manner of personal information in e-mail messages, in the expectation--perhaps unfounded--that what they type will remain confidential.

Companies often adopt policies explicitly stating that everything an employee does on a computer provided by the employer is subject to monitoring. But even so, and especially in the absence of such a policy, employees may have a reasonable expectation of privacy, Zimmerman said.

Moreover, he said the expectation of privacy would be even higher, if employees used remotely hosted personal e-mail accounts like those provided by Yahoo. John Crossman, a lawyer at Zukerman Gore & Brandeis representing the company, said Structured Settlements had a policy that gave it the right to access its own computers. (Structured Settlement offers lump sums to people receiving installment payments--from personal-injury settlements or lottery winnings, for example.)

But Sidell was no longer an employee when his mail was supposedly read. And he said in his complaint that it went well beyond the company's rights to read e-mail messages from the personal account of a terminated employee to his lawyer.

"The plaintiff is alleging, and I think he may have a very strong argument, that his former employer exceeded (its) authority," Zimmerman said. "That is, he is accusing them of accessing his Yahoo account without authorization, in violation of federal law."

Another question is how it was possible to read Sidell's Yahoo e-mail messages. In his complaint, he said that when he returned to his office after he was fired, he may not have signed out of his Yahoo account. A feature of the account could have allowed anyone using his computer to access his e-mail messages for up to two weeks.

Rich Palma, the chief operating officer for Structured Settlement, outlined the company's position in a statement filed with the court. Palma said Sidell had returned to the office after he was fired and had begun using another employee's computer.

He said Sidell had used that computer without authorization and had sent trade secrets and confidential company information to his Yahoo e-mail account. Palma said the information included lists of customers, their home addresses and phone numbers, terms of deals, brokers who had sent business to the company, and personal information about the company's employees.

Crossman said the company could see what Sidell had done because Sidell's Yahoo e-mail account remained visible on the computer screen. "He did it in plain sight so that people in the office saw what he had done on the open, operating computer," he said.

That twist in the case, if true, may support the company's claim against Sidell for violating terms of his employment contract, which, among other things, prohibited him from competing against his employer for three years after leaving the company.

Of course, if the company learned of the contractual breach by improperly reading Sidell's personal e-mail, that could support his claim.

Crossman was careful in responding to that claim, saying, "It appears that the effort to assess the damage may have continued for several days, but the details of that are still being investigated."

The claims and counterclaims present "a very interesting fact pattern," said Rotenberg of the Electronic Privacy Information Center. "It would make a great exam question."

Entire contents, Copyright © 2008 The New York Times. All rights reserved.

More from News.com on this story's topics

E-mail messages

RSS feed

Privacy

Create an email alert | RSS feed

Lawsuits

Create an email alert | RSS feed

Yahoo

Create an email alert | RSS feed