June 17, 2014 Articles

Hacking, Wiretapping, and Other Misdeeds as "Protected Activity"

Decisions to discipline or fire employees engaged in such activity should be made only with the assistance of qualified legal counsel.

By Kevin J. O'Connor – June 17, 2014

With the broadening of antidiscrimination laws in the United States and stated intent on the part of state and federal courts to broadly apply such statutes to fight the cancer of discrimination, some employees have felt emboldened in their pursuit of such cases and have violated statutes and common law when attempting to gather evidence for their claims. They have hacked into computers and supervisors’ files and have secretly taped coworkers and supervisors. A recent opinion of the New Jersey Appellate Division addressed the novel issue of whether two employees of a state agency who surreptitiously taped supervisors, and violated a state wiretapping law in the process, could be protected from discipline or termination when they turned the tape over to their attorney for use in the litigation.

Courts throughout the country have sought to strike a balance between the interests of employees in pursuing their claims and that of the employer in maintaining some semblance of order in the workplace. Employees caught accessing confidential files or hacking into computers have argued that they were protected because of the pendency of litigation and the fact that they turned over the incriminating evidence to their lawyer to use in the litigation.See generally Niswander v. Cincinnati Ins. Co., 529 F.3d 714, 717 (6th Cir. 2008); O’Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 763 (9th Cir. 1996); Watkins v. Ford Motor Co., 2005 U.S. Dist. LEXIS 33140 (S.D. Ohio 2005); Quinlan v. Curtiss-Wright, 204 N.J. 239 (2010).

In Quinlan, the court ruled that Joyce Quinlan, an employee of Curtiss-Wright, engaged in protected conduct under New Jersey’s Law Against Discrimination (LAD), N.J. Stat. Ann. § 10:5-12 et seq., when she copied confidential data in the workplace and provided it to her attorney for use in her ongoing discrimination lawsuit.

The majority in Quinlan devised a seven-part balancing test for determining whether an employee’s LAD rights outweighed an employer defendant’s trade-secret rights. There, the court concluded that the employer was free to terminate the employee for taking the documents, but it would be for the jury to determine whether the employee could still recover damages under an LAD theory of recovery that the firing was really in retaliation for protected conduct, rather than her wrongful conduct. The court concluded:

Applying this balancing test to the documents before the court, we find ourselves in agreement with the distinction that the trial court drew. The trial court correctly told the jury that plaintiff’s act of taking the documents, including the Lewis appraisal, was not protected and that the employer was free to terminate her for doing so. In its charge, the trial court asked the jury to decide whether the employer fired her for taking the documents or for pursuing her claim that the failure to promote her was discriminatory. Our application of our balancing test compels us to conclude that the trial court’s approach was the correct one. When presented with that question, the jury found for plaintiff, concluding that she was the victim of retaliatory discharge. We find no warrant to interfere with that finding.

Thus, the end result in Quinlan was a decision holding that the employer was within its rights to terminate the employee for having taken the documents, but the employee was permitted to get to a jury on the retaliation claim and tell the jury all about the firing. She then recovered millions of dollars in damages under the LAD for that very firing.

In the words of the Ninth Circuit in O’Day (which was relied on in Quinlan), “[a]n employee’s opposition activity is protected only if it is ‘reasonable in view of the employer’s interest in maintaining a harmonious and efficient operation.” 79 F.3d at 763. The court in O’Day ruled that an employer was fully justified in terminating an employee who broke into his supervisor’s office, rummaged through his files, copied confidential documents, and provided them to a coworker. The court ruled that the statute in question did not give the employee “an insurance policy [or] license to flaunt [sic] company rules or an invitation to dishonest behavior.” Id. at 763–64; see also Niswander, 529 F.3d at 726 (adopting a six-part test of reasonableness to determine whether activities by employee in copying confidential company data may be considered protected activity).

In the wake of the New Jersey Supreme Court’s decision in Quinlan, there was much debate among legal commentators about whether the court was sanctioning employee theft of documents or other misdeeds in aid of enforcement of antidiscrimination statutes. In the words of Justice Albin in his dissent, “[t]oday’s ruling sends a disturbing signal to both the business community and the bar that employee theft may actually pay.” 204 N.J. at 231.Quinlan left unresolved exactly how its holding would be squared with conflicting employee obligations under state and federal statutes prohibiting employee misconduct, such as statutes prohibiting the pilfering of confidential data, hacking of email, or even illegal recording of coworkers or supervisors.

A decision last week from New Jersey’s Appellate Division, however, has dealt with the novel issue of whether employees who surreptitiously taped supervisors, and thereby violated a state wiretapping law, would be allowed to get to a jury on their retaliation claims where the underlying recording arguably contained statements that could be construed in their favor by a jury on the discrimination issues. In Stark v. South Jersey Transportation Authority, No. A-1758-11T2 (N.J. Super. Ct. App. Div. May 19, 2014), the court ruled that the mere existence of a pending discrimination lawsuit does not shield an employee from firing for violating the state’s wiretapping law and, further, that the content of the illegal tape was properly excluded from evidence under the wiretapping law.

This new decision makes clear, as did Quinlan, that decisions to discipline or fire employees engaged in such activity should be made only with the assistance of qualified legal counsel. These recent cases should prompt employers to closely analyze their workplace handbooks and internal policies to be sure to keep close tabs on, and clearly mark and limit disclosure of, confidential data in the workplace, and establish clear guidelines for discipline where employees violate the multitude of statutes implicated by employee self-help.

Keywords: litigation, employment law, labor relations, antidiscrimination, protected activity, retaliation

Kevin J. O'Connor is a shareholder with Peckar & Abramson, PC, in River Edge, New Jersey.

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