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By Robert Milligan and Joshua Salinas

A New York federal district court recently dismissed Computer Fraud and Abuse Act (CFAA) claims asserted against defendant advertising company Interclick and some of its advertising clients. Plaintiff consumer Sonal Bose alleged that the defendant advertising company’s use of “supercookies” and “history sniffing” invaded her privacy, misappropriated her personal information, and interfered with her computer’s operations. The court dismissed the CFAA claims because Bose failed to show the statutorily required damage or loss.

Bose alleged that Interclick used browser cookies to advertise for various companies online. Cookies are small files placed in a computer user’s web browser to gather information about the user’s online habits and behaviors. Cookies are helpful for users who want to autopopulate data, such as usernames or passwords, when they return to a website. These cookies are also extremely beneficial for marketing companies who can track a users online habits and behaviors.   Thus, an advertising company such as Interclick can use this information to provide specifically tailored advertisements based on the user’s profile. If a user does not want to be tracked or have this information available, he or she can always delete the cookies from the web browser.

The problem Bose alleged in this case was that Interclick used “supercookies” aka “flash cookies.” These supercookies are not as delicious as they sound. When a user deletes his or her cookies, the supercookie “respawns” the deleted cookie without the user’s notice or consent. As in this case, Interclick allegedly continued to track Bose and collect her information, despite her attempt to delete the cookies and protect her privacy. Bose also alleged that Interclick used “history sniffing,” in which it allegedly looked at her computer’s browsing history to tailor its advertisements toward her.

Bose claimed that she suffered: (1) impaired computer services and resources, (2) loss due to collection of personal information, and (3) loss due to interruption of internet service. The defendants moved to dismiss on grounds that Bose failed to allege a cognizable injury to meet the $5,000 threshold statutorily required for CFAA civil claims. (18 U.S.C. § 1030 (c)(4)(A)(I)).

First, the court recognized that physical damage is not necessary for CFAA claims. As we have discussed in previous blogs, courts are expanding the CFAA’s definition of “losses” and have recognized computer forensic investigation costs and outside counsel fees as sufficient to meet the statutory threshold. However, the court here stated that Bose failed to quantify her damage and did not specifically show the impairment of her computer functions or any diminution of value.

Second, the court cited Doubleclick and stated that Bose’s allegations for invasion of privacy, trespass, and misappropriation of confidential data are not cognizable economic losses. (In re Doubleclick Inc. Privacy Litig., 154 F. Supp. 2d 497, 524, n. 33 (S.D.N.Y 2001)). The court found Bose claims similar to the California case La Court v. Specific Media, Inc. No. SACV 10-1256-GW(JCGx), 2011 WL 1661532 (C.D. Cal. Apr. 28, 2011), which also dismissed supercookie CFAA claims for failure to allege an economic injury. The court emphasized that “advertising on the internet is no different from advertising on television or in newspapers,” as marketers and retailers constantly collect consumer personal data and demographic information. In other words, no harm, no foul.

Finally, the court found that Bose failed to allege any specific damage or loss regarding the interruption of her internet service. Bose did not show that the cookies damaged, shutdown, or even slowed her computer.

This case is significant because it demonstrates that courts still require some quantifiable or cognizable loss for CFAA civil claims, despite the growing trend to allow claims absent any damage or interruption of service. Courts will not accept CFAA civil allegations merely based on the invasion of privacy. Indeed, privacy has at least a $5,000 price tag under the statute.

The use of supercookies will continue to rouse privacy advocates. In fact, this summer the European Union issued its “Cookie Directive” to address cookie privacy concerns.

The court dismissed the CFAA claims, but kept the claims against Interclick for alleged deceptive business practices. While supercookies may not be unlawful under the CFAA, how a company uses these tracking devices may still subject them to liability.

This area of law continues to be white hot as the plaintiffs’ bar tries to leverage privacy and other claims against companies who collect computer users’ data as class actions for large settlements. 

 

Plaintiff IDG USA, LLC (“IDG”), a Georgia company with its principal place of business in North Carolina, commenced an action against a former employee, Kevin J. Schupp (“Schupp”), a New York resident, alleging breaches of a Non-Compete Agreement, breach of a Confidentiality Agreement, unfair competition, and theft of trade secrets.

In a 12 page decision, IDG USA, LLC v. Schupp, Slip Copy, 2010 WL 3260046 (W.D.N.Y. Aug.18, 2010), the District Court granted IDG’s Motion for a temporary restraining order and preliminary injunction, enjoining Schupp from: (1) working for any competitor of IDG within 50 miles of IDG’s Amherst, New York office, (2) soliciting orders from IDG’s identified “major” customers with whom Schupp had had contact , and (3) disclosing or using confidential information and/or trade secrets of IDG. The court also denied Schupp’s Rule 12(c) cross-motion to dismiss the Complaint, expressly finding that IDG’s allegations that Schupp used his knowledge of IDG’s major, revenue-generating customers and its pricing policies for the benefit of his new employer, and disclosed information regarding IDG’s Amherst Office’s control over pricing issues to one of those customers were sufficient to render the causes of action plausible for purposes of a Rule 12(c) analysis.

The Complaint alleged that IDG is a national distributor and supplier of industrial materials, has a Northeast Division, with a principal office in York, Pennsylvania, an a regional office in Amherst, New York, which  is responsible for the company’s customer base in upstate New York and western Pennsylvania.  It was further alleged that in 1998, IDG acquired Schupp’s previous employer, AFL, and retained most of AFL’s employees including Schupp, whom immediately began working out of IDG’s Amherst, New York office as a Sales Associate.  IDG claimed that Schupp serviced many of IDG’s major revenue generating clients, most, if not all of whom were assigned to Schupp by IDG, which had preexisting relationships with the clients.

The operative agreements before the District Court were a Non-Compete Agreement (the “NCA”) and a Confidentiality Agreement, entered into between IDG and Schupp.  The Court found that Schupp received “additional compensation in the amount of Three Thousand Dollars ($3,000) in consideration for his execution, delivery, and performance of th[e] [NCA] .”   Notably, the Court found that the NCA restrained Schupp, for the period of one year from the date of the termination of his employment with IDG, from accepting employment with any competitor of IDG, for work similar to that he performed at IDG, within a fifty (50) mile radius of any office to which he was assigned during the twelve months prior to the termination.

The Complaint went on to allege that on January 14, 2010, Schupp voluntarily terminated his employment without advance notice, and that within days after his resignation he commenced employment as a sales representative with Abrasive-Tool Corp. (“Abrasive”), a company that sells many of the same products as IDG and offers customers similar services.  It was shown that Schupp worked out of Abrasive’s Buffalo office, which is within ten miles of IDG’s Buffalo office.  The Court found that Schupp had solicited orders on behalf of Abrasive from long-standing, major revenue producing clients he was assigned to service and entertain during his employment with IDG, and further disclosed to an IDG customer confidential information regarding its Amherst Office’s control over pricing issues.

Of primary interest, the District Court found that IDG had demonstrated the threat of irreparable harm by Schupp’s conduct by reason of: (a) Schupp’s contacting three “Major Customers” of the  company” (identified by the Court as customers whose purchases from IDG exceeded $25,000 in the previous twelve months) and quoting prices for Abrasive’s goods and services to one of these Major Customers; (b) three Major Customers requesting pricing information and quotes from IDG, something they had not required in the previous ten years; (c) another Major Customer informing IDG that it would no longer do business with IDG; and (d) the fact that the month following Schupp’s resignation from IDG, IDG experienced a reduction in its sales to ten of the thirteen Major Customers which had been serviced by Schupp.

Specifically, the Court held:

Here, IDG has sufficiently demonstrated that Schupp violated paragraph 7(a) of the NCA when he commenced work at Abrasive, as a sales associate in its Buffalo office, immediately after resigning from IDG. Likewise, IDG has sufficiently demonstrated that Schupp immediately began soliciting orders on Abrasive’s behalf from IDG’s Major Customers in violation of the NCA’s paragraph 7(b). Schupp does not dispute IDG’s attestations in this regard. In addition, the NCA expressly provides that “if Schupp is permitted, after cessation of his employment with [IDG], to trade upon th[e] training and th[e] confidential information which he had received by virtue of his position of trust and confidence with [IDG] … irreparable damages will result to [IDG],” and that “any breach of the [NCA’s] covenants … would not be readily or appropriately compensable in damages”  Courts have found that such language in an employment agreement “ ‘might arguably be viewed as an admission by [the former employee] that plaintiff will suffer irreparable harm were he to breach the contract’s non-compete agreement.’ ” On the evidence presented at this juncture, including the NCA’s provisions, Schupp’s conclusory assertion that any damage to IDG can be rectified by a monetary award is rejected.

Finally, the Court rejected Schupp’s argument that IDG had “materially breached” the NCA by reducing his annual salary from that stated in the NCA, prior to his resignation. IDG argued that because the salary reduction was not a “material breach,” Schupp was not excused from performance of his obligations and, in any event, Schupp waived any breach when he continued to work for IDG after his salary was modified.  The District Court found IDG’s contentions that it did not materially breach the agreement and that Schupp acquiesced to a modification of the NCA consistent with New York decisional authority involving employment agreements similar to the NCA, citing: In re Footstar, Inc., 04-22350, 2007 Bankr.LEXIS 2302, at *12-13 (S.D.N.Y. July 6, 2007); Hanlon v. MacFadden Publications, 302 N.Y. 502, 505, 99 N.E.2d 546 (1951)); Bottini v. Lewis & Judge Co., 211 A.D.2d 1006, 1007-1008, 621 N.Y.S.2d 753 (3d Dep’t 1995); Dwyer v. Burlington Broadcasters Inc., 295 A.D.2d 745, 745-746, 744 N.Y.S.2d 55 (3d Dep’t 2002); Gebhardt v. Time Warner Entm’t-Advance/Newhouse, 284 A.D.2d 978, 978-9, 726 N.Y.S.2d 534 (4th Dep’t 2001); Bottini, 211 A.D.2d at 1007-1008, 621 N.Y.S.2d 753; and Mosely v. Island Computer Prods., 2006 U.S. Dist. LEXIS 6437, 2006 WL 318815, at *2-4 (E.D.N.Y. Feb.9, 2006).

Emigra Group, LLC v. Fragomen, Del Rey, Bernsen & Loewy LLP, et al., No. 07 Civ. 10688 (LAK) (S.D.N.Y. Mar. 31, 2009).

In a decision that should be considerable reassurance to employers in general and law firms in particular, a district judge in New York has rejected an antitrust claim brought by a consulting firm against its former employer, an attorney who returned to his former law firm. 

Emigra, an immigration consulting firm, sued its former vice president of operations, Ryan Freel, and the law firm that was his prior and subsequent employer after Freel resigned from Emigra and returned to practicing law at Fragomen, Del Rey, Bernsen & Loewy, an international immigration law firm headquartered in New York. Emigra alleged that Freel took confidential and trade secret information that he had obtained while employed by Emigra, including strategies, customer lists, pricing information, and profit and loss data; disclosed this information to Fragomen; and used it to contact Emigra’s customers on Fragomen’s behalf.

However, the court noted that while Emigra filed “the usual state law claims for misappropriation of trade secrets, unfair competition, and the like,…it did not seek a preliminary injunction.” Instead, Emigra asserted a number of antitrust claims and, the court noted, there is reason to believe that it did so in order to “gain access through pretrial discovery to precisely the sort of competitively sensitive information about Fragomen’s business that Emigra claims Freel improperly disclosed to Fragomen about Emigra’s business.”  

In a lengthy 63-page opinion, the district judge granted the defendants’ summary judgment motion. Among other findings, the court concluded that Emigra had offered no evidence of price control, exclusion of competition, or monopoly power in violation of the antitrust laws, and that “a contrary conclusion would turn many disputes over the hiring by one competitor of an employee of another, the stuff of everyday commercial tort claims, into monopolization or attempted monopolization cases.” The court further noted that Emigra cannot avoid summary judgment through “gamesmanship” by withholding its own evidence while insisting that its competitor reveal its competitively sensitive information. For these and other reasons, the court dismissed the federal antitrust claims on the merits with prejudice, and declined to exercise supplemental jurisdiction over the remaining state-law trade secret and unfair competition claims. The decision serves as a warning to litigants who might consider pursuing questionable antitrust claims in federal court as a means for obtaining discovery that would not otherwise be available to them in a state court proceeding.

Opening with a tribute to the iconic New York City subway system, complete with citations to sources as diverse as Leonard Bernstein and The Bonfire of the Vanities, the Second Circuit Court of Appeals earlier this week vacated and remanded a preliminary injunction barring a braking system manufacturer from disclosing proprietary drawings and other information to the New York City Transit Authority during the contracting process. 

In 1993, SAB Wabco (Faiveley Transport Malmo AB’s predecessor-in-interest) entered into a license agreement with then-sister company Wabco (Wabtec’s predecessor-in-interest) that gave Wabco the authority to use SAB Wabco’s “know-how,” including manufacturing data, specifications, designs, plans, and trade secret information. Among other information, this included details related to BFC TBU, described by the court as “a unique air brake system designed to stop trains quickly and smoothly, if not always quietly.”

When the agreement terminated at the end of 2005, Wabtec began to develop its own line of BFC TBU through reverse-engineering, and in 2007 was awarded a sole source contract to provide the braking system for the Transit Authority’s overhaul of a certain class of subway cars. Faiveley sought a preliminary injunction in federal district court, asserting that the BFC TBU information constituted trade secrets that Wabtec was misappropriating by manufacturing the braking system and disclosing information to the Transit Authority during the contracting process. The district court granted the injunction.

On appeal, however, the Second Circuit held that although the district court had not erred in finding that Faiveley was likely to succeed on the merits of its misappropriation claim, there was no evidence of irreparable harm and, thus, no basis for entry of a preliminary injunction. Most notably, the court made a point of correcting the misapplication of the law by some district courts that had erroneously read Second Circuit precedent as meaning that a presumption of irreparable harm automatically arises upon the determination that a trade secret has been misappropriated. Instead, the court clarified that, although a rebuttable presumption of irreparable harm may arise where there is a danger that the trade secrets will be disseminated to a “wider audience” or their value otherwise impaired, no such presumption is warranted where “a misappropriator seeks only to use those secrets—without further dissemination or irreparable impairment of value—in pursuit of profits” because such harm can be compensated with money damages.

Thus, the Second Circuit found that no injunction was merited here because the evidence showed only that Wabtec had used Faiveley’s proprietary information to gain a competitive advantage, but had not disseminated any trade secrets and, indeed, was treating the information with the same confidentiality given its own proprietary information. Because there was no risk that Wabtec would further disclose or irreparably harm Faiveley’s trade secrets, the court vacated the injunction and remanded the matter to the district court. This decision serves as an important reminder of the facts that must be alleged and established to prove irreparable harm when seeking temporary or preliminary injunctive relief for trade secret misappropriation.

Nixon Peabody v. Taylor Wessing France, 2008 NY Slip Op. 51885(U) (Sup. Ct. Monroe Cty. Sept. 16, 2008).

A trial court in upstate Monroe County, New York earlier this month granted summary judgment for law firm Nixon Peabody LLP (“Nixon”), which sought a declaratory judgment and injunctive relief as a result of alleged tortious interference with prospective business relations by French law firm Taylor Wessing France (“Taylor Wessing”). 

On July 31, 2007, in anticipation of entering into merger discussions, the two firms had executed a Mutual Non-Disclosure Agreement (the “Agreement”) containing a non-solicitation provision stating that neither firm would “employ or offer partnership directly or indirectly” to any partners or attorneys of the other firm for a period of two years from the date of the agreement. The merger negotiations eventually broke down in October 2007. However, Taylor Wessing’s founding partner subsequently joined Nixon and brought with him a dozen of Taylor Wessing’s non-equity partners. 

When Taylor Wessing sought to enforce the Agreement’s non-solicitation provision, Nixon filed this action, seeking a declaration that the Agreement was unenforceable and requesting injunctive relief preventing Taylor Wessing from interfering with its former partners’ right to join Nixon. Taylor Wessing brought suit against Nixon in New York County Supreme Court (subsequently consolidated with the Monroe County action and transferred to Monroe County) asserting claims for breach of the Agreement, aiding and abetting a breach of fiduciary duty, and tortious interference with contractual relations.

In a detailed decision that could have significant consequences for law firms engaged in merger or acquisition talks, the Monroe County trial court held that the Agreement was unenforceable as violative of New York State public policy. Citing to a 1989 New York case that “codified” ethics opinions by the ABA and the New York County Lawyers Association, the court noted that it is unethical for an attorney to include a restrictive covenant in an employment contract with another attorney. However, the court went on to observe that the policy “embraced” by this rule is not limited solely to employment agreements, and that this authority has been “woven into the fabric of New York case law.” The court concluded that the rationale behind the rule — protecting lawyers’ autonomy and the ability of clients to freely chose their counsel — applies to the Agreement in this case which, as the court characterized it, contained “an out-right prohibition[n] on the practice of law,” to which the affected non-equity partners had not agreed and of which they had no knowledge.  The court also granted summary judgment in favor of Nixon on Taylor Wessing’s fiduciary duty and tortious interference claims. The slip opinion can be viewed here. 

On August 6, 2008, New York Governor David A. Paterson signed Bill S02393, dubbed the “Broadcast Employees Freedom to Work Act” into law. The act, amends the New York Labor Law so as to prohibit non-compete agreements in the broadcasting industry.  The enactment is effective immediately, and is codified as section 202-k of the Labor Law

Specifically, the newly minted Section 202-k provides that a “broadcasting industry employer shall not require as a condition of employment, whether in an employment contract or otherwise,” that a broadcast employee or prospective broadcast employee, after the conclusion of employment, refrain from obtaining subsequent employment “(a) in any specified geographic area, (b) for a specific period of time, or (c) with any particular employer or in any particular industry.” The act further declares as unenforceable any contractual provisions that would waive these prohibitions.

Within Section 202-k definition of “broadcasting industry employer” are companies operating television, radio, cable stations, networks, and/or internet or satellite-based services “similar to a broadcast station or network,” any broadcast entities “affiliated” with such entities, and “any other entity that provides broadcasting services such as news, weather, traffic, sports, or entertainment reports or programming.”  Likewise, a “broadcast employee” is defined as any on- or off-air employee of a broadcasting industry employer, “excluding management employees.”

The act provides that broadcast employees, as defined, can seek civil damages, including attorney’s fees and costs, as against a broadcasting industry employer violating Section 202-k.

On Tuesday, July 14th at 1 p.m. Eastern, Seyfarth partner Robert Milligan is presenting a 90-minute Strafford CLE webinar, “Noncompetes Under New State Law Restrictions: Wage Requirements, Notice, Time, Layoffs, Proposed Federal Legislation.”

The program will discuss recent state legislative changes and case law trends regarding non-compete agreements and other restrictive covenants in New York, California, Illinois, Washington, and other states, as well as look at the proposed changes to federal labor law. The panel will offer best practices for structuring enforceable contracts and explain how to determine whether existing agreements are lawful.

The panel will review these and other issues:

  • What caused the growth in the use of non-competition provisions in employment contracts?
  • How and why are states restricting the use of non-competition agreements?
  • How can a non-competition provision be implemented properly in non-employment situations?

For more information or to register for this webinar, visit the Strafford website.

As we’ve previously written about on this blog, last summer the Massachusetts legislature passed a non-compete reform bill which went into effect on October 1, 2018. Readers of this blog will recall our concerns that the new law is in many ways confusing and may lead to unpredictable results. Now, nearly five months after its effective date, Magistrate Judge Dein of the United States District Court for the District of Massachusetts has issued the first published decision citing the new Massachusetts Noncompetition Agreement Act, Mass. Gen. Laws ch. 149, § 24L—unfortunately, this decision does not analyze an agreement that is subject to the Act, but it does confirm our suspicions that creative practitioners will try to use the new law to attack the enforceability of agreements entered into before the effective date. Continue Reading For the First Time, a Massachusetts Court Weighs in on the New Noncompetition Agreement Act – Well, Sort Of

Seyfarth Synopsis: The New Jersey Legislature recently passed Senate Bill 121 affecting claims of discrimination, harassment, and retaliation, which if signed into law, would render any prospective waiver of rights against public policy, including pre-dispute mandatory arbitration agreements. In addition, non-disclosure provisions in settlement agreements involving these  claims would be unenforceable against employees. 

On January 31, 2019, the New Jersey Legislature passed Senate Bill 121, which would prohibit employers from enforcing, among other things, mandatory pre-dispute arbitration and non-disclosure provisions in settlement agreements for claims of discrimination, retaliation, and harassment.  The bill seemingly does not affect existing waivers or non-disclosure agreements (“NDAs”).  Governor Phil Murphy has not commented publicly as to whether he will sign the bill into law.  If signed, the breadth of this law would surpass any similar law in the country.

Continue Reading Pre-Dispute Arbitration Agreements and Non-Disclosure Provisions on the Chopping Block in New Jersey

shutterstock_328329848Over the last decade, communication via email and text has become a vital part of how many of us communicate in the workplace. In fact, most employees could not fathom the idea of performing their jobs without the use of email. For convenience, employees often use one device for both personal and work-related communications, whether that device is employee-owned or employer-provided. Some employees even combine their personal and work email accounts into one inbox (which sometimes results in work emails being accidentally sent from a personal account). This blurring of the lines between personal and work-related communications creates novel legal issues when it comes to determining whether an employer has the right to access and review all work-related communications made by its employees.

Employers have legitimate business reasons for monitoring employee communications. Take, for example, the scenario in which an employee leaves her employment, and the employer is concerned that she has taken proprietary information or solicited clients in violation of her duty of loyalty or a contractual agreement. Another common scenario that gives rise to the need for employers to review all of an employee’s work-related emails is when the employer is in litigation that requires production of employee communications.

Most employers are comfortable with the notion that, with a properly worded policy that provides notice to employees of the ability and intent to monitor email, an employer can access emails on an email server provided by the employer. However, what about cases in which the employer does not provide the email service? With employees using web-based emails, like Gmail and Hotmail, and texts to communicate in the workplace, the relevant communications may be elsewhere. In these situations, what are an employer’s rights to access and review such communications?

An employer’s ability to review electronic communications is governed by the Electronic Communication Privacy Act (ECPA) and the Stored Communications Act (SCA). The ECPA prohibits the interception of electronic communications, and the term “interception” as used in the ECPA has been interpreted so narrowly that this title of the ECPA rarely comes into play in cases involving an employer’s review of employee email or texts. The SCA makes it illegal to access without authorization a facility through which electronic communication service is provided and thereby obtain access to communications in electronic storage.

With regard to an employer’s review of employee emails sent through web-based email accounts like Gmail or Hotmail, the most frequent scenario confronted by courts is one in which a former employer accesses the web-based email of a former employee, looking for evidence of malfeasance. In these cases, the former employer is typically able to access the former employee’s web-based email account because the employee has saved her username and password on a device provided by the employer, which was returned at termination, or failed to delink an account from such a device. In these cases, courts have been reluctant to punish the former employee for failing to take appropriate steps to secure their own personal, and allegedly private, communications.

For example, a district court in New York considered an employee’s claim that his former employer’s review of emails in his Hotmail account after his termination violated the SCA because it was unauthorized. The defendant argued that its review of the emails did not violate the SCA because the employee had implicitly authorized its review of the emails on his Hotmail account because the employee had stored his username and password on the employer’s computer system or forgot to remove such an account from an employer-provided phone before returning it.

The court rejected this argument, holding that it was tantamount to arguing that, if the employee had left his house keys on the reception desk at the office, he would have been implicitly authorizing his employer to enter his home without his knowledge. The court also noted that the employer’s computer usage policy did not provide the necessary authorization because it only referred to communications sent over the employer’s systems.

Likewise, a district court in Ohio confronted with similar facts, refused to hold the plaintiff responsible for his own failure to safeguard his information. In this case, the employee had turned in a company-issued blackberry upon termination without first deleting the Gmail account he had added to the phone. The former employer reviewed the emails in the former employee’s Gmail account, and the former employee alleged that this violated the SCA. The former employer argued that the former employee had negligently or implicitly consented to their review of the emails in her Gmail account by returning the blackberry to the company without deleting the account. However, the court held that the employee’s “negligence” in leaving the Gmail account on her phone when she turned it in was not tantamount to her authorizing the defendant to review the emails on her Gmail account.

However, a federal district court in California reached a different result in a case involving text messages. In this case, a company had sued its former employee for misappropriating trade secrets when it discovered, upon his termination, a number of text messages on the former employee’s company-issued iPhone that documented his misappropriation. The former employee had forgotten to delink his Apple account from the company phone he returned, and thus, his text messages continued to go to the phone — and his former employer. The court granted the company’s motion to dismiss the former employee’s counter claim that the company’s review of his text messages violated the SCA. The court held that text messages stored on phones are not in “electronic storage” within the meaning of the SCA, citing a Fifth Circuit case that reached the same conclusion about text messages. Of course, a violation of the SCA is not the only issue in these cases.

For example, in this case, the employee also alleged that his employer had invaded his privacy. However, the court held that the employee had no reasonable expectation of privacy in a company-owned phone that was no longer in his possession. In contrast to the two cases above, the court found that the employee’s failure to undertake precautions to maintain the privacy of his text messages showed he had no right to exclude others from accessing them.

The main lesson from these cases is that, if an employer wants to have the ability to review all employee communications that take place in the workplace, the employer needs to have, at a minimum, a policy that specifically provides for the right to monitor and review, for legitimate business reasons, any work-related communications made by the employee on a device provided by the company or a personal device used for work purposes. (Although the SCA does not require any showing about the employer’s motives in accessing the emails, a traditional invasion of privacy analysis would take this into account.) As a practical matter, the employer may not have the ability to access such accounts, but where access is available, this policy language is critical.