Saturday, 25 February 2017

EMails Are Likely Not To Be Confidential or Privileged

Written by Posted On Wednesday, 24 July 2013 00:00

"The Good Book says that Samson slew a thousand Philistines with the jawbone of an ass. Ten times that many sales are slain every day with the same weapon." I love that observation. It attests to the fact that many salespeople -- not just real estate agents, but certainly including them -- are liable to talk too much. But if you think that real estate agents tend to be overly verbal in conversations, you should read their emails. They really get going there. For some reason the email medium tends to encourage verbosity. (And, of course, that phenomenon is not restricted to real estate agents.)

The point of today's column is to encourage my fellow agents and brokers to exercise caution and restraint about what they say in emails, especially when the subject matter of those emails is some transaction issue that might someday be the cause of a legal action. Why? Because, in most cases, when we are sending emails using office computers or the company's network, we ought not to assume that these communications can be considered confidential or privileged.

A recent case from a federal court in New York (United States v. Finazzo, No. 10-cr-457, Feb.19, 2013) illustrates the point. It is not a case involving a real estate transaction, so we need not dwell on the particulars. Suffice it to say that the defendant, Finazzo, had received (not sent), on his company account, an email from his attorney that contained material which, in another context, could be prejudicial to him. That other context occurred some time later when, while conducting an unrelated internal investigation, the email came to the company's attention. Not only did the contents result in Finazzo's termination, but also they led to Federal charges being filed against him.

Finazzo objected to the use of the email contents at trial. He claimed attorney-client privilege, but the court disagreed. He knew, or should have known, that the company had the right to, and might, monitor his email. Given that, he should have advised his attorney not to communicate to him through the email any material that was meant to be privileged.

The court employed a four-factor test:

  1. Is there a company policy banning personal use of company e-mail?
  2. Does the company monitor the use of e-mail?
  3. Does the company have access to all e-mails?
  4. Does the company notify the employee about these policies?

Those factors were all present in the case of the employer's policies. Of particular note is the court ruling that, although the company did not have a history of actively monitoring employee use of the email system, the fact that it reserved the right to do so weighed against Finazzo's claim that he had a reasonable expectation of privacy.

It is no doubt true that many real estate companies -- especially small brokerages -- don't have an email policy like Finazzo's employer did. Many have no policy at all. But it might be a surprise to quite a few agents how many companies do. And they are likely to meet the four-factor test that the court used.

This is not to say that real estate brokerages with such email policies are likely to be snooping into their agents' emails. But it is meant to sound a word of caution. Often we are likely to engage in emails about topics that could later become at issue in a legal action ("Do we need to disclose this? How should we put it?" etc.) We do well to remember that those emails could be subject to discovery. And they probably won't be protected by any claim of confidentiality or privilege.

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Bob Hunt

Bob Hunt is a former director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at scbhunt@aol.com.

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