Gina Holmes started working as an executive assistant at Petrovich Development Co., a retail developer, in June 2004. The next month she told her boss, Paul Petrovich, the president of the company, that she was pregnant. In August, Petrovich began e-mailing Holmes to plan her maternity leave. In one message he wrote, “I need some honesty. How pregnant were you when you interviewed with me?”

Holmes explained that she had waited to announce her pregnancy, disclosing that she had lost pregnancies in the past. Concerned she was going to quit, Petrovich forwarded the e-mail to several people in the company involved in human resources, payroll and legal.

Days later, Holmes used her company computer and e-mail account to e-mail her lawyer asking for a referral to a labor attorney. She explained that Petrovich had made a personal e-mail “common reading material for employees” and made her feel like an “outcast.” The next day, Holmes e-mailed Petrovich with her resignation.

In September 2005, Holmes sued Petrovich Development Co. and Paul Petrovich for sexual harassment, retaliation, wrongful termination, violation of the right to privacy and intentional infliction of emotional distress.

At trial, the defense introduced the initial e-mails between Holmes and her attorney as evidence that she had been encouraged to take legal action and that she was merely frustrated and annoyed–not suffering from severe emotional distress. The Superior Court of Sacramento County subsequently dismissed most of Holmes’ claims. Holmes argued on appeal that the evidence should not have been allowed because the e-mails were protected by the attorney-client privilege. On Jan. 13, the California Court of Appeal ruled the e-mails were not privileged.

“[Holmes] used defendants’ computer, after being expressly advised this was a means that was not private and was accessible by Petrovich, the very person about whom Holmes contacted her lawyer and whom Holmes sued,” the court wrote. “This is akin to consulting her attorney in one of the defendants’ conference rooms, in a loud voice, with the door open.”

Polished Policy

The ruling in Holmes v. Petrovich Development Co. adds to a developing area of law–the question of employee privacy rights as applied to rapidly evolving forms of electronic communication.

“This is one of the few cases that’s clearly said, at least when the employer has a clear policy on e-mail use, an employee has no privacy interest in e-mails sent on a company’s server,” says Tom McInerney, a shareholder at Ogletree Deakins.

The Court of Appeal’s ruling hinged on Petrovich Development’s policy on employee use of company technological resources, which it clearly spelled out in its employee handbook. Holmes gave signed confirmation that she’d read it.

The handbook tells employees they are prohibited from using company resources for personal use and that the company may inspect files and messages at any time, including periodic monitoring to ensure compliance with the policy. It states clearly that employees who use company resources for personal use “have no right of privacy with respect to that information or message.” The policy further specifies, “E-mail is not private communication, because others may be able to read or access the message.”

The clarity of the policy, along with Holmes’ written acknowledgement of having viewed it, led the court to reject many of Holmes’ arguments.

Holmes said, for instance, that she expected privacy because her computer was password-protected and she had deleted the e-mails after sending them. The court called that belief “unreasonable” given the company’s policy. Holmes also said despite the content of the e-mail policy, the “operational reality” was that Petrovich didn’t audit or access its employees’ computers, and thus she had a reasonable expectation of privacy. This argument, too, the court rejected.

“There is a whole host of legitimate reasons why an employer should be able to have access to its e-mail server,” McInerney says. “It belongs to the employer, not the employee. Especially here, where the plaintiff was told this and knew this, it’s really hard for the employee to turn around and say they had a right to privacy.”

Clear Message

The case underscores the importance of clearly written company policies. “I’m advising my employer clients to take another look at e-mail/computer policies and make sure they’re clear and comprehensive and they put employees on notice not to expect those types of communications to be confidential,” says Anthony DeCristoforo, a partner at Stoel Rives.

Still, there exists some tension on the issue of workplace e-mail privacy rights. Many employees expect some level of privacy when using company-owned computers, despite policies
warning otherwise.

“It’s very difficult in this day and age to tell employees you can’t use your computer for personal stuff,” says Mark Askanas, a partner at Jackson Lewis. “The reality of the situation is that people aren’t going to use their company computers just for company business. It’s important for employers to acknowledge that but try to limit the use of the computer for personal use and … put the employee on notice that he or she should not have any expectation of privacy in that regard.”