Court-Sanctioned Employee Theft? Self-Help Discovery May Be Protected Activity In Discrimination Cases

5 minute read | June.14.2016

Recently in Verdrager v. Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., No. SJC-11901, 2015 WL 10937776 (Mass. May 31, 2016), the Supreme Judicial Court of Massachusetts held, as a matter of first impression, that self-help discovery “may in certain circumstances constitute protected activity” under the state anti-retaliation statute, provided that, “the employee’s actions are reasonable in the totality of the circumstances.”

Plaintiff Kamee Verdrager, an attorney who worked in the defendant-law firm’s employment, labor and benefits group, complained to her superiors and, ultimately, to the Massachusetts Commission Against Discrimination (MCAD), that she was being discriminated against because of her gender. After a demotion, which she believed to be the result of discrimination, and upon the advice of her attorney, she searched her firm’s document management system for information that might prove her claims. When the firm became aware of her searches, it terminated her “for cause.”

Verdrager then sued the firm alleging both that her demotion and her termination were the result of discrimination on the basis of gender, and that both also constituted retaliation for her having opposed such discrimination. The law firm moved for summary judgment on plaintiff’s claims. In opposing defendant’s motion for summary judgment, plaintiff argued that even if the defendant’s proffered reason for firing her—that she engaged in self-help discovery in support of her discrimination claims—ultimately was determined to be the real reason, it was nonetheless unlawful, because her acts of self-help discovery constituted protected activity under the state’s anti-retaliation statute.

The court concluded that self-help discovery may, in certain circumstances, constitute protective activity if “reasonable under the circumstances.” First, in determining what is “reasonable under the circumstances” the court noted that “self-help discovery ordinarily should not be expected to yield more than what a litigant would otherwise be entitled to receive through formal discovery mechanisms.”  The court then identified seven factors for determining when an employee’s self-help discovery is reasonable:

(1) How the employee came into possession of, or access to, the documents;

(2) Whether the seized documents will unduly disrupt the employer’s business;

(3) Whether the employee had good reason for copying the document rather than requesting it in discovery;

(4) Who the plaintiff shared the document with;

(5) Whether the document was meant to be confidential;

(6) Whether the employee’s conduct violated a clearly defined company policy on privacy and confidentiality of documents; and

(7) Whether the remedial purposes of the state antidiscrimination statute would be advanced.

The court noted that application of this test in particular cases may well result in determinations that certain acts of self-help discovery by the same employee are reasonable, while others are not. In those cases, resolution “would entail a determination whether the employee’s unreasonable and unprotected acts, standing alone, would have induced the employer to make the same adverse employment decision.” Here, the court, having determined that defendant was not entitled to summary judgment for other reasons, declined to make any determinations as to whether plaintiff’s self-help discovery was permissible, leaving that decision for the trial court.

However, the Massachusetts court’s approval of self-help discovery in certain circumstances is at odds with decisions in other jurisdictions. For example, in Pillsbury, Madison & Sutro v. Schectman, 55 Cal. App. 4th 1279 (1997), a California appellate court condemned self-help evidence gathering, stating as follows:  “[W]e will state clearly our agreement with those courts which have refused to permit ‘self-help’ discovery which is otherwise violative of ownership or privacy interests and unjustified by any exception to the jurisdiction of the courts to administer the orderly resolution of disputes. Any litigant or potential litigant who converts, interdicts or otherwise purloins documents in the pursuit of litigation outside the legal process does so without the general protections afforded by the laws of discovery and risks being found to have violated protected rights.”

Whether self-help discovery is protected and permissible may also depend on the statute at issue.  For instance, at least one Administrative Law Judge has concluded that an employee’s removal of sensitive company data which the individual later turned over to the IRS constituted protected activity under the whistleblower protections of the Sarbanes-Oxley Act (“SOX”).  See Vannoy v. Celanese Corp., ALJ Case No. 2008-SOX-00064, ARB Case No. 09-118 (ALJ July 24, 2013) (reaching such a conclusion after noting SOX “incentivizes the disclosure of confidential company information in furtherance of tax and securities laws” and because the complainant’s sole purpose in removing the documents was to “support his [internal] complaint to [the company] and/or his disclosure to the IRS”).  Under Title VII, though, courts have applied balancing tests to determine whether an employee’s self-help discovery constitutes protected activity, but no consensus exists among the courts as to the list of factors to be analyzed pursuant to such tests.  See Niswander v. Cincinnati Ins. Co., 529 F.3d 714, 725 (6th Cir. 2008) (applying a six factor test including examining (1) how the documents were obtained; (2) to whom the documents were produced; (3) the content of the documents; (4) why the documents were produced; (5) the scope of the employer’s privacy policy; and (6) the employee’s ability to preserve the evidence in a manner that would not breach the privacy policy); Kempcke v. Monsanto Co., 132 F.3d 442 (8th Cir. 1998) (relying on two factors in concluding that the employee’s failure to return his employer’s documents was protected: (1) innocent acquisition; and (2) dissemination only to counsel).

Whether a plaintiff may engage in self-help discovery in an employment case is jurisdictional and claim dependent. Nevertheless, employers should remain vigilant against employee theft and use reasonable means to protect their confidential information. Otherwise, they may see their confidential information used against them in court.