An employee plans on leaving his current employer for its competitor. Before he leaves, he decides to send some emails to himself and his soon-to-be employer that may have contained proprietary information and trade secrets. The former employer finds out, and sues for misappropriation of trade secrets. And what does the former employee do after finding out about the lawsuit? He destroys some of the evidence. Didn’t your mom teach you that you destroying things is bad? Guess not.

The employee behaving badly in this case was the former Director of Hockey Marketing for Easton Sports, Inc. Before moving over to a competitor, Warrior Lacrosse, the employee engaged in a series of actions that gave Easton reason to believe he was misappropriating trade secrets. Acting upon these suspicions, Easton filed suit. Exactly one day after the suit was filed and served on the defendants, including the employee, the employee deleted his Yahoo email account from which he allegedly sent the proprietary information. Deleting the email address caused the destruction of all the employee’s Yahoo records concerning computer use, including his email history to his new company.

Since Easton unable to look at the emails the employee caused to be destroyed, the company brought a motion before the court seeking sanctions against the defendants. In granting Easton’s motion in part, the court determined that the employee’s conduct was at least negligent because he had a duty to preserve the evidence and failed to meet that duty. The sanctions the court imposed were:

1. A jury instruction that destroyed evidence may be presumed to be unfavorable evidence to the party responsible for the destruction;
2. The plaintiff was allowed to present evidence of the defendants’ failure to preserve the electronic data; and
3. Easton was allowed to argue in favor of the negative inference.

So what should we all learn from this? Don’t destroy evidence! If you destroy evidence when you knew or should have known that destroying it was wrong, the court will sanction you. Some people may think that destroying electronic data will wipe away any trace of it. With the abilities of computer forensics companies, that just simply isn’t true. The important thing to remember then is that you shouldn’t destroy information if it relates to a lawsuit in which you are involved.

Even though the notice of the lawsuit should have been enough to give the employee here reason to not delete the information, perhaps a litigation hold notice issued by Warrior Lacrosse to the employee and others would have reinforced and clarified the duty to preserve the evidence. After all, that is the function of the litigation hold notice. Sometimes, non-lawyers may not understand their evidentiary responsibilities after initiation of a lawsuit. A litigation hold notice can rectify such issues, and perhaps would have prevented the spoliation of evidence in this case. Regardless, the fact remains that you shouldn’t destroy information that may be applicable to a lawsuit. I sure hope your mom taught you better than that.

Tim Cedrone is a third year student at Seton Hall Law School.

In the race to find that perfect ad slogan—one so catchy that consumers find it difficult to get out of their heads—Nextel found itself in the middle of a trademark dispute over the term “Push to Talk.” Nextel employed an advertising agency, TBWA/Chiat/Day (“TBWA”), and Nextel and TBWA employees communicated via email, a practice that has become commonplace in the business world.

Cellco Partnership, doing business as Verizon Wireless (“Verizon”), believing that information related to the trademark dispute was contained in email communications, issued a subpoena to TBWA seeking production of several emails. TBWA resisted, and Nextel asserted two claims: attorney-client privilege and attorney-work product.

Generally, both doctrines have the potential to prevent the discovery of electronically stored information. Both have limits on their protective powers, however, as Nextel learned here.

Six of the emails at issue were sent from Nextel marketing employees to TBWA employees, and in these emails, the Nextel employees recounted advice given by Nextel’s in-house counsel. Because legal advice was contained in the emails, Nextel believed the communications should be protected.

Had Verizon sought discovery of emails sent directly from Nextel’s in-house counsel to Nextel’s marketing employees, the attorney-client privilege may have prevented discovery—the privilege protects confidential communications that occur between an attorney and his or her client and that relate to a legal matter. Here, however, the attorney-client privilege failed for two reasons:

1. The attorney-client privilege is automatically waived by disclosure to a third party. Even though a business relationship existed between Nextel and TBWA, neither company acted as an attorney for the other, and TBWA is considered a third party for disclosure purposes. The emails at issue, containing otherwise protected legal advice from Nextel’s in-house counsel, disclose this information and as a result, are discoverable.
2. No attorney-client relationship existed between the in-house counsel, with whom the legal advice originated, and the recipient of the email. To further illustrate why the attorney-client privilege did not apply, the court discussed a prior case with similar facts. In that case, a corporation’s in-house counsel provided legal advice directly to an ad agency. However, because no attorney-client relationship existed between the in-house counsel and the agency—the agency never demonstrated its intent to have the in-house counsel act as its attorney—the communications were not protected by the attorney-client privilege. In Nextel’s case, TBWA was even farther removed from the advice of in-house counsel—legal advice traveled from in-house counsel to Nextel employees to TBWA employees—and the communications were even less deserving of privilege protection.

Nextel asserted one other claim of privilege regarding an email sent by Nextel’s in-house counsel to Nextel employees and to one TBWA employee. Because the email contained legal advice and was created in anticipation of litigation, Nextel argued that the email qualified as attorney work-product and should be protected.

The court found that the email did qualify as work-product, but as with the attorney-client privilege, the work-product doctrine is also subject to a disclosure limitation. Unlike the attorney-client privilege, however, work-product privilege is not automatically waived upon disclosure to a third party. It is waived only where the disclosure “substantially increases” the ability of adverse parties to acquire the information contained in the communication.

In Nextel’s case, Verizon’s opportunity to obtain the information contained in the email at issue was not increased by disclosure to the TBWA employee. In fact, TBWA was under a contractual obligation not to disclose any information to third parties regarding business dealings with Nextel. As a result, this email was the only one that received privilege protection and that was not subject to discovery.

Although the ruling in this case follows general rules of privilege, it has particular salience in the current climate of electronic communications—particularly where recipients are routinely added via “cc” or “bcc”.

Liza Montesano is a third-year student at Seton Hall Law School and a Senior Editor of the Seton Hall Law Review.