This is the first in a two-part series on confidentiality in the changing business environment. Written by attorney and contributing writer C. Jaye Berger – Ed.

Maintaining Confidentiality in the Electronic Age

by C. Jaye Berger, Esq

E-mail has become the most widely used method of communication. As an attorney who deals with the repercussions of these issues, I can say that the art of letter writing is a thing of the past. Paper is becoming obsolete. Gone are the days when senior people in the office needed to review communications before they left the office. Now every employee carries an electronic device, which enables them to instantly communicate with anyone anywhere. It also enables them to copy huge quantities of corporate information and send it to others, with the click of a mouse. If you are the owner of a business, this can make your entire business’ pool of information “vulnerable” to copying and theft. In this Part, I will identify the nature of the problem. In Part II of this article, I will discuss what to do about it.

Imagine this scenario: An employee is looking for a new job. The employee corresponds with the new employer from his or her desk in your office. They discuss projects they hope to work on for the new employer and the new employee says “I have some information that may be helpful to you” and with the click of a mouse, sends it to the new employer. Was this planned? Was the employee just trying to be helpful? Despite whatever “intent” the employee had, did this give the new employer an “edge” in getting business with a client of the former employee’s firm? Was this just poor judgment on the part of the employee and no harm was done?

If the employee’s former employer was on the look out for such disloyalty and misconduct, all of the back and forth communication would have been easy to review. It could all have been saved or retrieved in the employee’s company file. It certainly gives the “appearance” of impropriety. The former employer might be tempted to have an attorney send a cease and desist letter to the new employer and the former employee threatening legal action for conspiring to use confidential information from the former employer. Among the many possible legal theories the new employer and the new employee might be accused of are: theft; conversion of confidential information; unfair competition; breach of duty of loyalty; misappropriation of trade secrets; conspiracy; unjust enrichment; and interference with contractual relations. The list could go on.

Even if employees are not misappropriating information to send to others, they are still spokespersons for your company and you, as employers, are liable for the things they may say and do in the course of their employment. If the company is involved in a lawsuit regarding a project and is asked to produce its correspondence files, each employee may have things he or she has saved that the employers know nothing about. In the new electronic age, a document stored in a computer file has the same “value” as a piece of paper kept in a file cabinet.

If any of this sounds familiar, then you might want to ask yourself what kinds of safeguards you have in your office to protect against such situations. Should employees be using the company computer to be writing to friends and prospective new employers? Do you know what kinds of communications your employees are having concerning your projects? My clients have called me for advice about employees looking at pornography when they are supposedly working late on a project. If company computers are supposed to be used only for company business, would these types of communications be grounds for dismissal? Regardless of the size of your company, there must be some type of policies and procedures manual.

The mistake that some companies make is that they do not have uniformity in the use of such manuals. Some employees have been given them and signed for receipt of them and others have not. Some employees vaguely recall having signed “something” years ago when they started, but they never kept a copy and do not recall exactly what it was. Employees need to sign such agreements when they start with the company and not a year or two later, when signing comes across as a threat to “sign or be fired”.

If employees were told at one time that certain types of information was “confidential”, then it should be clear and they should periodically be reminded of what is and what is not confidential. One of the elements of proving that something is “confidential” is that it is “treated” as being “confidential”. In other words, if files and contracts are left around the office and anyone can have access them, it is hard to say that it is “confidential” information.

Another common problem I hear about as legal counsel is former employees taking credit for larger roles on projects than they really had. Architectural firms may find former employees claiming certain projects were theirs on their new websites, when they were just an employee on the company’s project.

The Internet magnifies all of these problems, because so many people can see information at once. Once information is disseminated, there is no telling where it will go and it is next to impossible to reverse the effects. In the next article I will discuss what can be done to lessen the likelihood of such problems in your company.

C. Jaye Berger, is a construction, real estate, and litigation attorney in New York City. Her clients include owners, developers, contractors, architects, engineers, interior designers, co-ops, and insurance carriers.