Avoid Problems Caused by Use of Personal Devices for Business Purposes

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Last week Bailey Dorsey, one of our lawyers, attended a conference on electronic discovery presented by the National Employment Lawyers’ Association. It was a weekend devoted to the intense study of new advancements, issues, problems and strategies, in the field of electronic discovery. In a nutshell, electronic discovery means an exchange of emails, e-documents, social media posts and activity, databases, etc…between parties to a lawsuit.

When I entered the legal profession all “legal discovery” was done by exchanging a large number of boxes full of paper. Now the most important discovery in any lawsuit is exchanged via Dropbox, CD, email transfer, or other e-means. Today, even in a simple case, there can be tens of thousands of documents and emails involved. While there are numerous issues raised, I want to highlight some little problems which can cause serious problems if handled incorrectly:

Use of personal electronic devices for business purposes.

Many of my clients report that they routinely use their personal devices, smart phones, laptops, tablets, desk top personal computers for business. Some (perhaps most) use devices they share with a spouse, children, or friends for business purposes. Most employers have policies against such shared or mixed use. Most employers do not enforce those polices. Most employees do not understand the policies and for convenience sake will use these non-company devices to work while away from the office.

Normally, this kind of mixed use goes unnoticed without incident. When a legal dispute between an employee or executive and the company arises, this mixed use can have devastating effect on the outcome of the case, and drive up the cost of pursuing or defending the case significantly.

Employers often have a very expansive definition of “confidential or proprietary information.” All documents and information workers create as part of their job belongs to the company. When an employee inappropriately shares those sensitive documents or emails outside the company and subsequently leaves the company – employers become very concerned that their secrets could be disclosed to competitors, vendors, customers, or the media. Frequently we see that our clients have emailed sensitive documents to themselves and accessed those documents on non-company devices. Once this occurs it becomes a nightmare to return or destroy those documents in a legal way.

When any employee leaves a company (whether voluntarily or involuntarily) the company will do some sort of IT audit to see if the employee misused, misappropriated, or mishandled sensitive confidential or proprietary materials. Depending on the nature and amount of any such material the company might bring a lawsuit against the former employee to retrieve the material and seek damages (money) or monetary penalties for the misuse. This type of lawsuit is very expensive to defend. Companies are becoming more and more aggressive in this area.

Alternatively, companies often raise these problems as defensive measures in lawsuits or claims brought by former employees for wrongful termination, unpaid wages or commissions, defamation, or retaliation. These defenses can raise the cost of the litigation and distract from the substance of the employee’s claim. Often innocent transfers can appear sinister particularly if the employee cannot definitively prove that she did not disseminate the sensitive material clandestinely from the personal device to a new employer, vendor, competitor or other third party.

Cases involving non-competition agreements, business dissolutions, allegations of breaches of fiduciary duty by business partners, or business divorces can spawn massive fights over the misuse of this information shared to third party devices; often the investigation into where this information went and why can be more expansive than the main allegations of the lawsuit itself. It is not uncommon for these types of disputes to add hundreds of thousands of dollars to the cost of such lawsuits/claims.

The take away? Employees and executives must be very disciplined on the use of business related electronic documents and materials. They should not use personal or shared devices for business period. Doing so will expose that device to discovery in a potential lawsuit which will result in increased cost and possible disclosure of personal and private information also stored on that device. They should avoid emailing materials to themselves to work on outside of the office unless they are doing so on a company device. Thumb drives and other small portable storage devices can be a big problem. Do not mix business and personal materials on these types of devices either. A lost thumb drive with important and confidential information can appear mysterious. It is best to be able to produce these devices at a moment’s notice.

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