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June 10, 2016

Legal Update
Christine M. Netski

Supreme Judicial Court: an employee’s “self-help discovery” may be protected

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On May 31, 2016, in a case of first impression, the Massachusetts Supreme Judicial Court (“SJC”) ruled in Verdrager v. Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., et al. (474 Mass. 382) that an employee who accesses and copies confidential company documents and shares those documents with an attorney as potential evidence in support of a discrimination claim may be deemed to have engaged in “protected activity” under G.L. c. 151B.

Case Summary

Verdrager, a female attorney, was employed by Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., as an associate from June 2004 to November 2008. Shortly after Verdrager was hired, she reported to the firm’s management that a male partner had made inappropriate comments to her. Verdrager received mixed performance reviews until she took a parental leave in 2006. Several months after returning from leave, Verdrager received a negative review and was then asked to take a two-year “step back” in seniority and salary.

In February 2007, believing she had been subjected to gender discrimination, Verdrager retained an attorney and also made an internal complaint alleging that the step-back was discriminatory. Shortly thereafter, Verdrager was working in the firm’s public document management system and came across an internal memorandum discussing a gender discrimination case that had been brought by another employee of the firm. On her attorney’s advice, Verdrager then conducted targeted searches in the system for documents relating to her claims and/or other gender discrimination issues at the firm. She accessed and forwarded dozens of firm documents to her personal email account and ultimately forwarded certain documents to her attorney. In December of 2007, Verdrager filed a charge with the Massachusetts Commission Against Discrimination (“MCAD”), alleging that the firm and certain partners at the firm forced her to take the two-year step back because of her gender.

While her MCAD case was pending, Verdrager conducted yet another search for documents that might be helpful to her claims. This time, she found a lengthy transcript of voicemails left for the firm’s chairman, accumulated over a ten-month period. One of the transcribed voicemails related to issues of gender discrimination at the firm, but numerous other messages were highly confidential communications in unrelated matters, many of which arguably were protected by the attorney-client privilege. Verdrager emailed a copy of the entire transcript to her personal email account.

In November 2008, as a result of the economic downturn, the firm selected Verdrager, along with other associates, for a layoff. Counsel for the firm contacted Verdrager and offered to settle her case if she would accept the layoff. Verdrager rejected the offer and showed a firm partner the portion of the voicemail transcript related to gender discrimination. That partner notified the firm’s chairman that Verdrager possessed a transcription of his voicemail messages. At the chairman’s request, the firm’s IT department investigated and learned that Verdrager had conducted searches of the document management system in an apparent effort to support her claims against the firm. The firm then terminated Verdrager for violating the firm’s confidentiality policies and the chairman filed a complaint with the Board of Bar Overseers (“Board”) claiming that Verdrager’s conduct in accessing confidential and privileged documents violated her ethical obligations. Ultimately, the Board found no ethical violation by Verdrager.

In September of 2009, Verdrager filed a second charge with the MCAD, alleging that, in demoting and terminating her, the firm had subjected her to gender discrimination and retaliation. In addition to claiming that she engaged in protected activity by initiating complaints internally and at the MCAD, Verdrager claimed that even if the proffered reason for firing her – that she engaged in self-help discovery – was the real reason for her termination, it was nevertheless unlawful because self-help discovery is a protected activity under G.L. c. 151B. In November 2009, Verdrager filed a complaint in Superior Court against the firm and several firm partners. The Superior Court judge granted the defendants’ motion for summary judgment on all counts and Verdrager appealed.

The Decision

The SJC ruled that Verdrager had presented sufficient indirect evidence to allow a reasonable jury to infer that the firm’s articulated justifications for the step-back and termination were a pretext for discrimination and that these adverse employment actions were retaliatory responses to her protected activity in reporting her claims internally and filing a charge with the MCAD.

Because the SJC ruled that the defendants were not entitled to summary judgment on Verdrager’s claim that her termination was retaliatory, it did not reach the question of whether her self-help discovery in accessing and sharing the firm’s confidential and privileged documents to advance her claims was “protected activity” for purposes of her retaliation claim. Nonetheless, without deciding whether Verdrager’s actions were protected activity, the Court ruled that self-help discovery in aid of a claim under Chapter 151B may constitute protected activity, but only when the employee’s actions are “reasonable in the totality of the circumstances.” This determination, the Court reasoned, is a question of law that must strike a balance between an employee’s right to be protected from unlawful discrimination and the employer’s legitimate need to protect confidential business and client information. Although the Court cautioned that employees who engage in such self-help discovery risk that their conduct may not ultimately be deemed to be protected activity by a court, it also emphasized that the mere fact that such discovery reveals confidential or privileged information does not, by itself, foreclose a retaliation claim. Instead, the confidential and/or privileged nature of the information at issue is one factor – albeit an important factor – in the overall assessment of whether the employee’s conduct was reasonable under all the circumstances.

The Court then outlined the contours of the analysis to be applied under the “reasonableness” test, stating that the first consideration is whether the information obtained by the employee would have been discoverable under Mass. R. Civ. P. 26 and emphasizing that discovery obtained through self-help ordinarily should not be broader than what the employee could obtain legitimately through formal discovery. In addition, the Court instructed that this determination should also include consideration of the following “nuanced factors” articulated by the New Jersey Supreme Court in Quinlan v. Curtiss-Wright, 204 N.J. 239, 269 (2010): (1) how the employee came to have access to the document; (2) the relevance of the document balanced against the disruption caused to the employer’s ordinary business; (3) the strength of the employee’s reason for accessing and copying the document (as opposed to requesting such a document in discovery); (4) what the employee did with the document; (5) the nature of the document and the employer’s interest in keeping it confidential; (6) whether there was a clear company policy that the employee violated in copying the document; and (7) in “close call” cases, the balance of the legitimate rights of the employee and the employer. The Court acknowledged the possibility that some self-help conduct by an employee might be reasonable, while other conduct might be unreasonable, which would require a determination of whether the unreasonable conduct – by itself – would have caused the employer to take the same adverse employment action.

Finally, the Court also left “for another day” whether the defendants could be held liable if Verdrager’s conduct is found to have been reasonable, but they are also found to have acted under a good faith mistake of law that her actions did not constitute protected activity under Chapter 151B.

Takeaway for Employers

Self-help discovery may be a protected activity depending on the specific circumstances surrounding the employee’s actions. Employers should review and update their policies and practices for determining what types of documents should not be saved publicly in document management systems and other company databases, and how access to various types of documents should be limited to authorized individuals with “a need to know.” In addition, employers should ensure that their employees are trained on how to maintain the security of documents they are authorized to access in performing their job duties. Finally, although it is only one of the factors identified by the SJC for determining the reasonableness of self-help discovery, employers should make sure their employee handbook and other written policies delineate clear rules and expectations for accessing, copying and sharing company documents.

This Alert was prepared for the clients and friends of Sugarman, Rogers, Barshak & Cohen, P.C. It is provided for educational and informational purposes only and is not a substitute for professional advice on your specific legal situation.

For questions regarding the information contained in this Alert, contact Christine Netski or Gwen Nolan King.