Communications from Outside Directors: Maximizing the Protection Potential of Solicitor-Client Privilege | woodruff sawyer
A more recent case decided by the Delaware Court of Chancery, In re Dell Technologies Inc. Class V Shareholders Litigationshows how an independent administrator could continue to use corporate email and retain the privilege, while reinforcing some lessons learned from In the event of a WeWork dispute.
In addition to explaining the latter case, this blog will provide steps outside administrators can take to help maximize the potential for attorney-client privilege protection, as well as some best practices when disclosing sensitive information.
In re Dell Technologies Inc. Class V Shareholders Litigation
In a shareholder class action lawsuit against majority shareholders of Dell Technologies, Inc. (Dell), the Delaware Court of Chancery ruled that one of Dell’s outside directors did not have to produce certain documents after determining that the documents were protected by an attorney. – customer privilege.
The outside director in this case was using an email platform owned by Accenture, a company of which he was formerly CEO and board member. The director continued to use his Accenture email account as part of his service on the Dell board, as well as several other boards he served on.
The question before the court was: Did the outside administrator have a reasonable expectation of privacy regarding Dell-related communications, despite using his Accenture email account?
Similar to Chancellor André Bouchard in In the event of a WeWork disputeChancellor Travis Laster applied the test set out in a separate earlier decision, Regarding Asia Global Crossing, Ltd. Applying the test, Chancellor Laster found that the Dell director’s emails that were the subject of the plaintiff’s discovery request were protected by solicitor-client privilege because the director had a reasonable expectation of confidentiality. when using his Accenture email account.
Looking at the four factors of Asia World test, it should be noted that Chancellor Laster did not require all four factors to be present in order to conclude that the discovery request was protected by solicitor-client privilege.
The four factors are:
- Does the company maintain a policy prohibiting personal or objectionable use?
- Does the company monitor employee computer or email use?
- Do third parties have a right of access to the computer or e-mails?
- Did the company inform the employee, or was the employee aware, of the usage and monitoring policies?
In considering the first factor, the court of Dell reviewed Accenture’s email policies and found the following:
Accenture policy recognized that personal use was permitted; that Accenture would respect personal use except in certain circumstances (see below); and that Accenture should, and would, engage in system-wide monitoring to protect the entity and the system.
“…if there is a reasonable suspicion that the communication is really not personal but is, in fact, business-related; …if there is a reasonable suspicion that a criminal offense has occurred…; if the access is necessary in connection with a company-related dispute or an internal or external investigation; … [and] inadvertent access during general corporate monitoring activities…”
Looking at the second factor in Asia World employee email surveillance test, the court found the following:
Accenture’s policy maintains the right, subject to all applicable local laws, regulations, agreements and policies “to open items marked ‘private’ or ‘personal'” in the circumstances listed above. The policy also stated that Accenture would engage in widespread activities to verify compliance with the policy, including, among other things, monitoring some or all inbound and outbound email.
Looking at the third factor in the Asia World test concerning third parties having a right of access to the computer or e-mails, the court found the following:
This factor is largely superfluous when dealing with a company-sponsored system. In addition, the court noted that there was a record of Accenture’s policies indicating that company devices and technology, including email, can be monitored and inspected.
If we consider the fourth and final factor of the Asia World criterion regarding the company informing or informing employees of the use and monitoring policies, the court concluded that:
The outside administrator acknowledged that he was generally aware of Accenture’s email policies, some of which were put in place while he was CEO of Accenture.
The court in Dell noted that if the last three factors of the Asia World favored the production, he viewed the first factor as the dominant factor in the analysis to determine that the director had a reasonable expectation of privacy. Distinguishing the case of In the event of a WeWork disputethe court of Dell pointed to Accenture’s policy, which allowed personal use; that the use of the outside director was purely personal; and the director’s relationship with Accenture’s messaging system, which he viewed as analogous to a service provider, such as Google or AOL.
Take away food
The Dell The case is probably not the last we will see to address the issue of privacy and privilege in electronic communications. Here are some ways outside administrators can help ensure they don’t unwittingly waive attorney-client privilege in the context of their sensitive emails, as well as some best practices when communicating sensitive information. .
- Be aware of when emails are or are not sensitive and potentially litigation-related. Emails are only preferred if the communication is between a lawyer and a client and for the purpose of obtaining legal advice. Dinner reservations and travel arrangements are not that. In other words, administrators should feel comfortable using their work email for such trivial communications.
- If the communication is about a concern about potential or likely litigation, think twice. Admins will want to be more careful with what information they don’t want to provide to the other party as part of a discovery request. Now is the time to make the effort to use a personal email account. Another option is to use an advice portal.
- Think carefully about what needs to be written down. For sensitive topics, board members are generally best served to avoid communicating via email. Live chat lends itself to nuance, which is essential in sensitive situations. Email inevitably lacks this nuance, and email strings therefore run the risk of being misinterpreted afterwards.
- It’s not just emails. The judgment of the court in In the event of a WeWork dispute could potentially extend to messages (e.g. SMS or instant messages) sent/received on a mobile device provided by a third party. For example, if you use your company-provided cell phone to send a text message to the general counsel of the company of which you are a board member, those text messages may not be protected by the attorney-client privilege. ‘lawyer. In the event that you are using a mobile device provided by the company, whether it is a mobile phone or a tablet, it is best to avoid sending text messages or instant messages in your capacity. administrator on this device until you confirm your company’s policy regarding personal use.
- Refrain from any form of casual joking when involved in an email chain related to litigation or potential litigation. Emoticons, GIFs, and memes that seem funny in the moment definitely won’t be in a lawsuit.
- Keep your future deposition in mind. Assume that everything you send or receive will be detectable and you could be impeached. This mindset should help limit the sending of informal and/or unclear emails that could become problematic in the face of litigation months or years later.
- When in doubt, switch to a personal email platform to avoid taking the risk of your emails being discovered and not protected by solicitor-client privilege. If the company for which you are an external administrator has not sent you an e-mail in the exercise of your functions as an administrator, it is better to avoid using the e-mail account of your own. employer and instead use a personal email account, such as Gmail or AOL.