Dr. Norman Scott (“Dr. Scott”) entered into an employment agreement to be the chairman of the Orthopedic Department (the “Department”) of Beth Israel Medical Center, Inc. (the “Hospital”). The agreement provided a minimum annual salary of $1.75 million various severance benefits if the Hospital terminated Dr. Scott’s agreement without cause.
In early 2004, the Hospital advised Dr. Scott that it would be closing the division in which the Department was located and that his employment would be terminated. A month later, Dr. Scott participated in a public protest of such closure. Thereafter, the Hospital terminated Dr. Scott for cause on the grounds that his participation in the public protest and his alleged attempts to induce several of the Department's physicians to leave the Hospital constituted breaches of his agreement and of his duty of loyalty to the Hospital. Dr. Scott filed suit for breach of contract alleging he was entitled to $14,000,000 in severance benefits because he believed he was terminated without cause because of the closing.
As the parties were litigating Dr. Scott’s claims, Dr. Scott’s attorney forwarded correspondence to the Hospital’s attorney stating that the Hospital was in possession of e-mail correspondence between Dr. Scott and his counsel which Dr. Scott sent from his computer at the hospital regarding the pending litigation and that such e-mails were subject to the attorney-client privilege. The Hospital responded it believed that any potential privilege attached to the communications had been waived by Dr. Scott as a result of his use of the Hospital’s e-mail system.
The Hospital’s e-mail policy, which was contained in the Hospital’s Human Resource Policy and Procedures Manual, provided that all of the Hospital’s computer systems were property of the Hospital and should be used for business purposes only. Moreover, all information and documents created, received, saved or sent on the Hospital's computer or communications systems were the property of the Hospital. Finally, the policy provided notice that “(e)mployees have no personal privacy right in any material created, received, saved or sent using [the Hospital’s] communication or computer systems” and that the Hospital “reserves the right to access and disclose such material at any time without prior notice.”
In determining whether Dr. Scott’s communications were subject to attorney-client privilege, the Court noted the attorney-client privilege is inapplicable if: (1) the employer maintains a policy banning personal or other objectionable use of its computer system, (2) the employer monitors the use of the employee's computer or e-mail use, (3) third parties have a right of access to the computer or e-mails, and (4) the employer notifies the employee, or the employee was aware, of the use and monitoring policies. Thus, based upon the Hospital’s policy and Dr. Scott’s knowledge of the same, the Court found Dr. Scott’s e-mail communications with his counsel through the Hospital’s computer system were not subject to the attorney-client privilege.
Dr. Scott’s case provides a warning to employers and employees alike. Employers should be sure that they adopt a computer policy which allows them access to employee e-mail and communications so that the employer may monitor the same. Conversely, employees should not conduct their personal business on their employers’ computer systems.