As you may have read in our previous blog post, prudent employers should embrace the “righteous whistleblower” in service of their culture of compliance. But what is an employer to do when a whistleblower has engaged in “unrighteous” conduct, such as stealing proprietary or confidential documents? The issue of improperly removed or retained company documents arises in a large percentage of whistleblower retaliation cases and can present significant problems for employers that need to safeguard information for business or legal reasons.
The act of whistleblowing does not give an employee carte blanche to violate his or her employer’s policies, his or her legitimate contractual obligations, or the law. Even so, employers must take particular care in taking action against a whistleblower. The line between appropriate consequences and retaliation can be very fine, especially when the improper conduct is related to the whistleblowing activity.
Courts have struggled with the issue of how to handle a whistleblower’s taking confidential documents, and the decisions vary widely. Some courts have held that neither policies nor confidentiality agreements should preempt an employee’s right to preserve evidence of his or her claim. Other courts have drawn narrower lines, giving weight to an employer’s right to protect its information. Most often, the issue has been decided in civil cases, usually as a discovery issue, but also as a counterclaim—if the forum permits counterclaims.
New Jersey is one of the states that generally favor a whistleblower’s right to take documents to support his or her claims. A recent New Jersey Superior Court criminal case, State v. Saavedra, No. A-1449-12T4 (December 24, 2013), however, draws some important boundaries around that general rule.
Ivonne Saavedra had a number of complaints about her employer, the North Bergen Board of Education, including allegations about pay irregularities, improper vacation time reimbursement, and wrongful denial of unpaid family and medical leave. She filed a civil complaint claiming that the Board had discriminated against her and terminated her son’s employment because of her whistleblowing.
During discovery, Saavedra’s counsel produced 367 of the Board’s documents, including at least 69 originals. Some of the original documents contained “highly confidential” and “very sensitive information,” including a school parent’s personal bank statement, a psychiatrist’s appointment schedule with information regarding special-needs students, and a parent’s consent to authorize the Board to seek Medicare reimbursement for health-related support services.
The general counsel for the Board alerted a local prosecutor to the possibility that sensitive, confidential documents belonging to the Board might have been misappropriated. The prosecutor presented the matter to a grand jury, which indicted Saavedra for official misconduct and theft of movable property.
Saavedra moved to dismiss the indictment, relying on a New Jersey case allowing a plaintiff to take confidential documents to support her claims in a civil action. The judge denied her motion, holding that “an employee’s removal of documents from his or her employer for use in a suit” is not always or automatically lawful, whether in a civil or criminal case. Saavedra appealed, but lost, because there was no allegation or evidence that she would have been unable to obtain necessary documents through normal avenues of discovery—or that the Board was likely to destroy documents favorable to her. Furthermore, Saavedra did not argue that she had only taken “smoking gun” documents that directly related to her claims, and, in reality, she had not.
The Saavedra case makes clear that whistleblowers cannot cross certain lines to advance their claims. Most employers will never—and should never—resort to criminal proceedings in these circumstances, not least because of ethical constraints and other considerations. Employers should be vigilant, however, about maintaining the integrity of their document protection policies, procedures, and contractual obligations so that they are in the best position to argue for sanctions or assert claims against an employee who takes documents improperly.