01/03/2013

Does the employer own the emails sent by its executives if sent from a private email address or server? The answer may be NO.

In court proceedings involving companies, critical evidence may be contained in communication that executives for the company have either received or sent.  Every company should therefore ensure that it retains the “rights” over the contents of the all those emails so it can rely on them in any litigation.

Recently a UK Court considered whether the company had an enforceable property right in the content of the CEO’s emails insofar as they were sent or received on behalf of the company.

The company had applied to the court to seek access to emails sent to and from its CEO on an external server.

The company did not rely on claims of confidentiality, copyright or the agency/principal relationship, in part because the agreement between the company and its CEO was that the CEO was engaged through a corporate entity controlled by the CEO and the agreement stated all disputes were governed by the Dutch courts.  [Note that this is not a structure that would be acceptable here in Australia].

It was part of the CEO’s routine to have the emails sent to him automatically copied to his personal computer server and he responded directly from his personal computer server.  The effect was that not all of the emails sent to and from the CEO were on the company’s server (and therefore not in the company’s possession).

The company argued it had a property right over all the emails sent to and from the CEO when acting on behalf of the company.

The Judge found against the company and held that there was no property right the company could exert over all of the CEO’s emails irrespective of what server they were contained on.

The Judge said that some protection may have been afforded under the rights to confidential information or ownership of copyright but that those grounds were not pursued in this case (in part because of the agreement being governed by Dutch courts).

A similar “property right” argument has been pursued recently in Australian courts including a case where an individual sought to deny the company access to emails on the company’s server as the emails were private or personal or not sent on behalf of the company.  The court held in that case that the former executive did not have a property right in his emails and therefore the company was granted access to all the individual’s emails (subject to any separate claim for legal privilege over any specific emails).  

Based on these and other decisions it appears that there may not be an automatic right for the company over its executive’s emails particularly where those emails are located on external servers and may have been sent to and from a personal computer or personal email address.

Given that the engagements of senior executives, including CEOs, may include arrangements where the executives work remotely we suggest that the employing company ensure its agreements and policies make it as clear as possible that all email communication and other electronic documents produced or received by the executive as part of their role as a company executive are the property of the company irrespective of where the information is stored.  

Where applicable, the agreements and policies should also contain provisions to capture this information under confidential information and copyright obligations imposed on the executive in a carefully drafted agreement.

If you have any questions in regard to drafting or review of executive agreements or in relation to this article please call us on (02) 8296 6222.