Zara Can See Many of Ex-GC’s Personal Docs on Laptop

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By Joan C. Rogers

Personal files that a former Zara general counsel created on his work laptop about suing the company aren’t privileged but might be protected work product, the New York Appellate Division, First Department held June 6 ( Miller v. Zara USA, Inc. , 2017 BL 189808, N.Y. App. Div. 1st Dep’t, 155512/154187N, 6/6/17 ).

The court found that the clothing retailer’s employee handbook prevented the lawyer from having a reasonable expectation of privacy in his personal use of the laptop, so he can’t claim the attorney-client privilege for files on it.

However, the ex-general counsel’s use of the computer for private purposes didn’t automatically waive attorney work product protection, the court ruled.

As authority for these rulings, the court cited its own recent decision in a similar discovery dispute involving emails that Marvel Entertainment‘s CEO exchanged with his personal counsel through the company’s email system.

Both cases illustrate the perils of using an employer’s electronic resources for personal legal communications, as employees—even apparently lawyers working in top company positions—sometimes do.

Ian Miller is suing Zara for employment discrimination and wrongful discharge. They agreed to put his company-issued laptop in storage while jockeying over the company’s right of access to his personal files on it.

The trial court denied Zara access to 106 files on the laptop that Miller identified as personal, privileged, or work product material. Miller’s interest in shielding his litigation strategy from disclosure outweighed Zara’s purported need for the documents, which were mostly created after the company terminated him, it found.

No Attorney-Client Privilege

The appeals court applied the four-factor test in I n re Asia Global Crossing, Ltd. for assessing the confidentiality of electronic communications on an employer’s computer and email system.

Application of those factors here “indicates that plaintiff lacked any reasonable expectation of privacy in his personal use of the laptop computer supplied to him by defendant Zara USA, Inc. (Zara), his employer, and thus lacked the reasonable assurance of confidentiality that is foundational to attorney-client privilege,” the court said.

The court pointed out that Zara’s employee handbook restricted use of company-owned electronic resources to business purposes. As general counsel, Miller had at least constructive knowledge of the policy, it found.

The court mentioned these provisions in the handbook:

  •  Any data collected, downloaded, or created on Zara’s electronic communications resources was its exclusive property.
  •  Employees should expect that Zara may access that information at any time without prior notice.
  •  Employees don’t have an expectation of privacy or confidentiality in any information transmitted or stored in Zara’s electronic communications resources.

But Work-Product Protection May Apply

On the other hand, the court decided that Miller didn’t lose attorney work product protection just by using the company-issued laptop for personal purposes.

Zara never exercised its right to access the laptop issued to Miller and never actually viewed any of the documents stored on it, the court said.

Given the lack of any actual disclosure to a third party, Miller’s use of Zara’s computer for personal purposes didn’t by itself waive work product protection, the court said.

The court sent the case back for the trial court to review the alleged work product items to see if they actually qualify as protected attorney work product.

The panel comprised Justices Dianne Renwick, Rosalyn H. Richter, Paul G. Feinman, Judith J. Gische, and Marcy L. Kahn.

Littler Mendelson P.C. represented Zara. Sanford Heisler LLP represented Miller.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bna.com

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