Employees Stealing Employer Confidential Information Not Immune From Criminal Charges
Five years ago, in Quinlan v. Curtiss-Wright, 204 N.J. 239 (2010), the New Jersey Supreme Court adopted a balancing test for trial courts to use to determine if the unauthorized taking of confidential company documents by an employee constituted protected activity in support of the employee’s claim under the Law against Discrimination. Now, the Supreme Court has ruled that the Quinlan decision does not preclude criminal charges from being brought against an employee who steals confidential documents from her employer in support of a whistleblower lawsuit. On June 23, 2015, in a 6-1 ruling, the New Jersey Supreme Court decided State v. Saavedra, and upheld the denial of defendant Ivonne Saavedra’s motion to dismiss the indictment against her for official misconduct and theft by unlawful taking of movable property. The high court found that the State presented a prima facie showing to the grand jury with regard to the two charges, that the State did not withhold exculpatory information from the grand jury regarding defendant’s intent to use the stolen documents in her civil lawsuit, and – most importantly for employers – that the indictment does not violate due process standards or public policy by conflicting with Quinlan.
Defendant Saavedra, a former employee of the North Bergen Board of Education (“Board”), filed a lawsuit against the Board alleging that the Board violated “law and public policy” by denying her overtime, improperly administrating employee vacation and leave time, violating “child study regulations,” and creating unsafe conditions in violation of the New Jersey Law Against Discrimination, the Conscientious Employee Protection Act, and other statutes. During the course of discovery, defendant produced to the Board hundreds of documents consisting of “highly confidential student educational and medical records that were protected by federal and state privacy laws” that she removed from the Board’s office without permission. The Board reported the theft and a grand jury returned the above-noted indictment. Thereafter, the trial court denied defendant’s motion to dismiss the indictment, a decision that was subsequently affirmed by the Appellate Division.
The Supreme Court’s Opinion
Writing for the majority, Justice Patterson rejected defendant’s argument that “Quinlan stands for the proposition that an employee has a legally recognized right to take confidential employer documents for use in employment discrimination litigation, and, accordingly, criminal prosecution for that act is barred by due process principles and public policy.” The Court explained. Quinlan “did not endorse self-help as an alternative to the legal process in employment discrimination litigation. Nor did Quinlan bar prosecutions arising from an employee’s removal of documents from an employer’s files for use in a discrimination case, or otherwise address any issues of criminal law.” The Court noted that Quinlan created a balancing test to weigh the employee’s right to be free from discrimination by safeguarding confidential information they gain legally through the employment relationship against the employer’s right not to have the employer steal confidential information. But “nothing in Quinlan states or implies that the anti-discrimination policy of the LAD immunizes from prosecution an employee who takes his or her employer’s documents for use in a discrimination case.”
The Court did hold, however, that although Quinlan does not shield an employee from criminal prosecution, a defendant may still assert a “claim of right” affirmative defense. Generally, a “claim of right” defense provides that a defendant’s genuine belief that she has a legal right to property can protect her from criminal liability. While Quinlan does not govern the “claim of right” defense, evidence that is used for the Quinlan balancing test may be relevant to that defense. Whether or not the defense applies to defendant is a matter for the trial court.
The Court also analyzed the elements of the two charges against defendant and held that the State had presented a prima facie showing of each element. Neither charge required the State to produce exculpatory evidence that defendant stole the confidential documents to use as evidence in her employment discrimination lawsuit. Nonetheless, the State did offer some limited testimony that defendant had an “outstanding” lawsuit, which the majority found was sufficient.
The Saavedra decision provides some protection for employers against employees who might otherwise be tempted to misappropriate confidential documents protected by federal and state privacy laws. Nevertheless, Quinlan remains good law, and an employer must tread carefully before taking action against an employee because the employee, albeit without permission, has taken confidential documents to support his or her discrimination or whistleblower claim.
For questions regarding this blog please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.