Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: High-Tech Firm's Emails to Consultant Were Protected from Discovery in Suit over Employee Wage Fixing and Non-Solicitation, (Mar 4, 2013)

By E. Darius Sturmer, J.D.

In a putative class action lawsuit brought by former technology firm employees alleging that Google Inc., Intuit Inc., Apple Inc., Adobe Systems Inc., and several other companies in the high-tech sector violated federal antitrust law by colluding to avoid poaching each other’s employees and to stabilize compensation packages, the federal district court in San Jose, California, refused to compel production of certain emails among Google counsel, executives, and a consultant who was contemporaneously serving as Chairman of the Board at Intuit (In re High-Tech Employee Antitrust Litigation, February 28, 2013, Grewal, P.).

Google had either redacted or failed to produce the 166 documents at issue on the grounds that they were subject to the attorney-client and/or work product privilege. The plaintiffs contended that by including the consultant, Bill Campbell, among the recipients of the emails, Google had waived whatever privilege it claimed over the communications.

The court found that Campbell constituted a Google employee—or the functional equivalent of one, anyway—and was therefore eligible for the attorney-client privilege even before he and Google executed an employment agreement in 2007. His high-level position and advisory role suggested that a blanket denial of the attorney-client privilege would undermine the recognized purposes of the privilege—to enable a corporation both to provide information to its counsel and to obtain guidance from its counsel, the court reasoned. While it was clear that “in many communications Campbell spoke instead as either an employee or Intuit or an employee of Apple,” rather than “as an agent of Google,” there was sufficient evidence that he served as an advisor to Google. However, the evidence did not support Google’s assertion of blanket protection for every communication its counsel had with Campbell prior to 2007, the court added.

An argument by the plaintiffs that the communications were not confidential because they were sent to Campbell’s Intuit email account was rejected. Regardless of Intuit’s corporate policy, which included a reservation of its right to review employees’ emails, Campbell and Google had an objectively reasonable expectation of confidentiality in emails sent through Intuit’s system.

The court arrived at this conclusion after evaluating the factors identified in In re Asia Global Crossing, Ltd., 322 B.R. 247 (S.D.N.Y. 2005) for determining the issue of confidentiality of emails sent over an employer’s email system. Thus, the court considered: (1) whether Intuit had a policy banning personal use; (2) whether Intuit monitored employees' use of email; (3) whether third parties have a right of access to the computer and the email; and (4) whether the company notified Campbell or Google—or whether Campbell or Google were aware of—the use and monitoring policy.

“Intuit perhaps did not expect the type of use that Campbell engaged in” when it added a qualification that “as a general rule” employees should only use the company’s resources for company business, the court explained, but the policy did not “represent[] an all-out ban on personal use.” In addition, the lack of any evidence suggesting that Intuit actually monitored its employees’ emails, or Campbell’s emails in particular, weighed in favor of Google’s expectation of confidentiality in the emails. Although Intuit’s right of access to Campbell’s emails and Campbell’s assumed constructive knowledge of Intuit’s email policies weighed against a reasonable expectation of confidentiality, “the importance of the attorney-client privilege as well as the lack of evidence that Intuit in fact monitored Campbell’s emails supported the preservation of the privilege in this case,” in the court’s view.

Furthermore, the court’s review of the samples of communications indicated that Google, through its employees and including Campbell, was either seeking legal advice from Google’s attorneys or was receiving advice. Because it could not be determined whether the privilege applied to other communications withheld by Google and owing to Campbell’s dual role, however, the court granted the plaintiffs in camera review of all 166 documents at issue.

In a separate opinion issued the same day, the court granted in part and denied in part several motions to seal or redact documents relating to the nature and terms of Google’s relationship with Campbell and to communications between its executives regarding employee retention. Although parts of the documents properly may be sealed, such as Campbell’s Social Security number and the amount and nature of his compensation, the court said, Google failed to make a particularized showing how descriptions of the services Campbell provided to Google would be detrimental if revealed, especially in light of the publicity around his role at Google. Emails attached to the plaintiffs’ motion containing Google employees’ conversations about strategies for employee retention could remain under seal, however, as the privacy interests of third parties outweighed the limited public interest in their information that accompanies a non-dispositive motion.

The case is No. 11-CV-2509-LHK-PSG.

Attorneys: Anne Brackett Shaver (Lieff, Cabraser, Heimann & Bernstein LLP) for the plaintiffs. Anne M. Selin (Mayer Brown LLP) for Google Inc.; Christina Joanne Brown (O'Melveny & Myers) for Apple Inc.; Catherine Tara Zeng (Jones Day) for Intuit Inc.; Donn P. Pickett (Bingham McCutchen , LLP) for Intel Corp.; Craig Andrew Waldman (Jones Day) for Adobe Systems Inc.; Cody Shawn Harris (Keker and Van Nest LLP) for Lucasfilm Ltd.; Robert T. Haslam, III (Covington & Burling LLP) for Pixar Animation Studios.

Companies: Google Inc.; Apple Inc.; Intuit Inc.; Intel Corp.; Adobe Systems Inc.; Lucasfilm Ltd.; Pixar Animation Studios.

Cases: Antitrust CaliforniaNews