Untitled Page
|
Entries tagged with "employee policies" |
| | Avoiding Liability for Breach of Employee Privacy Rights |  In New York, if a company terminates an employee and prohibits that employee from accessing personal information on a company computer, the company may find itself being sued for conversion. A recent decision by the New York Court of Appeals raises the possibility that by prohibiting a former employee from recovering private or personal electronic data from a company computer, the company might be sued for the tort of conversion. In making its decision, the court essentially recognized that electronic data is just another form of personal property protected by the law. Thyroff v. Nationwide Mutual Insurance, 2007 WL 844860 (N.Y. 2007), involved a Nationwide insurance agent who was terminated. The agent kept personal data and customer information on a company computer system, and after his termination, Nationwide denied him access to that information.
The Court of Appeals expanded the tort of conversion to encompass electronic data, reasoning that what was truly valuable about a document is its contents, not the medium of storage. If Nationwide had kept the agent’s personal papers or effects without permission, there would have been no question that the agent could have sued for conversion. The court recognized that more and more information is being stored electronically. Indeed, the court’s own opinion was drafted and stored on a computer system and distributed to the justices by e-mail.
The court treated the electronic data stored on Nationwide’s computer system as if it were a physical item, seeing no “reason in law or logic why this process of virtual creation should be treated any differently from production by pen on paper or quill on parchment.” The court noted that it was not deciding whether all forms of virtual information would fall within the scope of a conversion claim, but it is difficult to imagine what types of stored data might not be subject to a claim for conversion. When terminating an employee in New York, it is critical to recognize that an employee’s privacy rights and property rights may be affected. To avoid the possibility of a claim for conversion when a company terminates an employee, it may be a wise precaution to allow that employee, under supervision, to retrieve personal information stored on a company computer system.
|  | Tags: computer privacy computer privacy laws employee policies employee privacy employee privacy rights privacy in the workplace | | |
| | Other Ideas for Protecting Employee Privacy Rights in Personal Information Stored on Business Computers | The issue of employee privacy rights in data stored on an employer’s computer is a difficult one. If an employee displayed framed family photos on her desk, an employer would not refuse to turn those photos over to the employee upon termination. These days, the employee is just as likely to keep such photos as jpegs or gifs on her PC at work, along with many other types of personal information, from correspondence to recipes. Allowing a terminated employee access to that computer after termination does present practical difficulties, and a business that chooses this method of avoiding liability for breach of employee privacy rights should implement safeguards to prevent the former employee from compromising company security or having access to trade secrets and other valuable business information.
A company could adopt a policy prohibiting employees from storing personal information on a company computer, though this may be impractical to enforce. A number of courts have held that an employee has no privacy expectation in workplace computer files where company guidelines and policy explicitly inform the employee that no expectation of privacy exists. See, e.g., Muick v. Genayre, 280 F.3d 741, 743 (7th Cir.2002); United States v. Simons, 206 F.3d 392, 398 (4th Cir.2000); Thygeson v. Bancorp, 2004 WL 2066746 (D. Or. 2004); Kelleher v. City of Reading, 2002 WL 1067442 (E.D. Pa. 2002). A company could adopt such a policy, which could be used as evidence that when the employee stored the information, the employee was aware that she had no privacy interest in that electronic data and that the information no longer belonged to her.
It might also be helpful to require employees to acknowledge in writing that any information stored on a company computer belongs to the company and that they have no privacy interests in such information. The Thyroff decision did not indicate whether or not Northwest Mutual had such a policy in place. It is also not clear whether a court might conclude that whether or not there was a privacy expectation, the employee still had a property right in the information that could be enforced in an action for conversion. Nevertheless, a company’s litigation position would in all likelihood be strengthened by implementing and enforcing a policy regarding storage of personal data on company computers. | | Tags: employee policies employee privacy employee privacy rights privacy privacy in the workplace privacy policies | | |
| | Enforceability of Non-Compete Clauses May Be Questionable |  Many businesses understandably want to prevent their employees from leaving their jobs and seeking employment with competitors. The reasons may vary, but the desire typically stems from concern regarding company secrets falling into the hands of those who could use them to do the most damage to the bottom line. It is therefore common to see employment contracts that prohibit an employee either from competing directly with his or her former employer or from joining a competing company.
Courts always carefully construe these provisions. State laws are essentially unanimous in requiring that the provisions be reasonably limited, with their duration and scope – geographic and otherwise – narrowly tailored to protect the employer’s legitimate interests. Any ambiguity in such provisions almost always is construed against the employer, so employers must exercise considerable care in drafting them. In some states, however, non-compete clauses are even more particularly disfavored. For example, California law affirmatively prohibits “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind.” (Cal. Bus. & Prof. Code § 16600) In addition, courts construing the California law have made it clear that the statute applies not only to “traditional” non-compete clauses that expressly restrain an employee from engaging in competitive activities following termination, but also to differently structured provisions that have substantially the same effect as an express prohibition.
A recent example is found in the opinion of the U.S. District Court in the Northern District of California in the case of Applied Materials, Inc. v. Advanced Micro-Fabrication Equipment (Shanghai) Co. (May 20, 2009). There, the employer, Applied Materials, had attempted to enforce the following patent assignment clause against former employees and their new employer:
In case any invention is described in a patent application or is disclosed to third parties by me within one (1) year after terminating my employment with APPLIED, it is to be presumed that the invention was conceived or made during the period of my employment for APPLIED, and the invention will be assigned to APPLIED as provided by this Agreement, provided it relates to my work with APPLIED or any of its subsidiaries.
In defending the clause, Applied Materials argued that the clause merely created a presumption that a former employee would have the opportunity to rebut in order to avoid an assignment. However, the court disagreed, noting that the provision “does not state that an employee may rebut this presumption, nor does it state how an employee would do so.” The court further held that because the clause “touches post-employment inventions, regardless of when they were conceived or whether they were based on Applied's confidential information, [it] necessarily operates as a restriction on employee mobility.” As a result, the court determined the clause to be unlawful and void under California law and incapable of reformation.
Cases such as Applied Materials emphasize the point that, regardless of the jurisdictions in which they are located, companies need to look to various kinds of measures to protect their trade secrets and should not rely solely or even substantially on non-compete clauses. California businesses have a special burden to overcome, but even businesses in states that allow non-compete clauses must be wary of the scrutiny to which such provisions are subject. It is important to consult with counsel to identify and implement a holistic and diverse regime of trade secret protections. | | Tags: employee policies trade secrets trade secrets protection | | |
|
|
|