Employee Can Face Criminal Charges for Theft of Documents

Employee Can Face Criminal Charges for Theft of Documents

In December 2013, the Appellate Division rolled out a decision in State v. Saavedra that somewhat quiets the thunder of the Supreme Court’s 2010 ruling in Quinlan v. Curtiss-Wright, an employment discrimination case where the court determined that an employee who copied her employer’s confidential documents for use in litigation against the company was engaged in protected activity within the meaning of the Law Against Discrimination (LAD). Quinlan v. Curtiss-Wright, 204 N.J. 239 (2010).

Quinlan vexed employers and their representatives, who criticized the decision for having the effect of emboldening employees to misappropriate confidential documents—a problem that was apparent even before, and could only be exacerbated by, this decision. Saavedra has partially tempered this storm, as the Appellate Division announced that employees who take confidential employer documents to support potential LAD and Conscientious Employee Protection Act (CEPA) claims will not categorically be insulated from criminal prosecution under theft and official misconduct statutes. State v. Saavedra, 433 N.J. Super. 501 (App. Div. 2013).

In Quinlan, the plaintiff, Joyce Quinlan, filed a sex discrimination claim against her employer, Curtiss-Wright, after being passed over for a promotion in favor of a male co-worker. During her employment, Quinlan photocopied approximately 1,800 confidential company documents to use in support of her claim, which she turned over to her attorney. Curtiss-Wright first learned of Quinlan’s actions when her attorney produced the documents during discovery. At that point, Quinlan was not terminated. Quinlan then came across the performance evaluation of the male co-worker who received the promotion she sought. She copied the document and gave it to her attorney, who used it during a deposition. When it was revealed during that deposition that Quinlan was continuing to confiscate confidential documents, Curtiss-Wright terminated Quinlan’s employment. Quinlan then amended her complaint to add a retaliation claim. The Supreme Court upheld an $8.7 million jury verdict in favor of Quinlan, finding that Quinlan’s termination constituted unlawful retaliation on the basis that the reason for her termination—the unauthorized taking and use of confidential company documents in support of her LAD claims—constituted protected activity. In doing so, the court established a seven-part totality of the circumstances test to determine whether an employer can terminate its employee for the unauthorized removal of documents for the purpose of supporting claims of discrimination.

Meanwhile, one year before the court decided Quinlan, Ivonne Saavedra filed suit against her employer, the North Bergen Board of Education, her supervisor and others, alleging claims of gender, ethnic and sex discrimination under the LAD as well as retaliation under CEPA. Saavedra was employed by the board as a clerk for a child study team. During discovery, Saavedra’s attorney produced several hundred confidential board documents, some of which were originals, that had been taken by Saavedra during the course of her employment. Among the documents taken were highly sensitive documents which appeared to have no relevance to Saavedra’s discrimination claims, including a bank statement provided to the board by a parent, a document containing treatment notes of a psychiatrist who treated students with special needs in the district, a document related to a Medicaid reimbursement program which the board was required to maintain on file in order to avoid liability exposure, and a letter from a parent regarding an emotional problem of the parent’s child.

After the documents were turned over in discovery, the board’s counsel reported Saavedra’s conduct to the Hudson County prosecutor, who determined that the matter should be presented to a grand jury. In May 2012, then two years after the Quinlan decision was issued, the grand jury indicted Saavedra and charged her with official misconduct and theft. Saavedra made a motion to dismiss the indictment, arguing that the Quinlan decision legalized the taking of confidential documents for the purpose of supporting LAD or CEPA claims, and that criminalizing Saavedra’s conduct would have a chilling effect on potential plaintiffs looking to raise such claims.

Both the trial court and the Appellate Division disagreed with Saavedra’s reading of Quinlan, finding that the decision did not establish, and was not intended to establish, an absolute right for employees asserting discrimination claims to take their employers’ confidential documents. Given the determination that a Quinlan analysis was not called for, Saavedra’s motion was evaluated based on the same well-settled standards applicable to all such motions, that is, that the motion should be denied if the state could produce sufficient evidence to establish a prima facie case that the defendant committed a crime (citing State v. Hogan, 144 N.J. 216, 236 (1996)).

In reaching this conclusion, the Appellate Division emphasized the factual differences between Quinlan and the matter before it, emphasizing that Quinlan was a civil matter, not a criminal one, that Quinlan concerned the conduct of a private individual, not a public employee, and that the documents at issued in Quinlan were directly relevant to the plaintiff’s claims, while the same was not clear with respect to those taken by Saavedra. The court also voiced many of the concerns harbored by critics of the Quinlan decision, namely, that Saavedra’s self-help measures were not required in light of the abundance of lawful discovery avenues available to her, coupled with other safeguards for employees who might believe their employers will hide or destroy evidence, such as adverse inference charges.

Ultimately, Saavedra’s motion to dismiss the indictment was denied, but the Appellate Division did note that Saavedra could assert an affirmative defense at trial that she honestly believed she had a right to the documents in question. In a strongly worded dissent, Judge Simonelli contended that it was fundamentally unfair to prosecute and imprison an individual for taking confidential employer documents while engaged in protected activity pursuant to the LAD and CEPA. The majority responded to this criticism, noting that a dismissal of the indictment would amount to the establishment of a public policy that employees must categorically be insulated from criminal prosecution if they take confidential documents to support LAD and CEPA claims—an approach the majority contended would violate the separation of powers doctrine.

While the Saavedra decision marks a step forward for employers looking to defend their confidential documents from unauthorized access and improper disclosure, the outlook going forward is anything but certain. The factual and procedural differences between Quinlan and Saavedra leave many gaps to be filled in by lower courts, and, of course, Supreme Court review of this matter would not come as a surprise. These occasions for interpretation and review may give employers opportunities to further chip away at the Quinlan decision, by appealing to concerns that self-help discovery should not supplant New Jersey’s well-established discovery procedures—a position that was espoused to some degree by the Saavedra court. In the meantime, while employers can be certain that Quinlan will not prevent the prosecution of public employees engaging in theft or official misconduct, the practical effect of the Saavedra decision is limited. Employers and their representatives should monitor further review of these decisions and should continue to avoid knee-jerk disciplinary reactions when dealing with employees engaging in self-help discovery in furtherance of discrimination or retaliation claims. •

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