By Zack Needles, From New Jersey Law Journal

Neither side of the employment bar had high praise for the decision by a divided New Jersey Supreme Court that employees can be criminally prosecuted for stealing or copying confidential documents from their employers to bolster their discrimination lawsuits.

In State v. Saavedra, the justices ruled 6-1 to uphold an Appellate Division decision that defendant Ivonne Saavedra could be prosecuted for theft and official misconduct for taking documents from her former employer, the North Bergen Board of Education, against which she had filed a lawsuit alleging that she was the victim of gender, sexual and ethnic discrimination.

The high court said its 2010 decision in Quinlan v. Curtiss-Wright—which held that, under certain circumstances, employers could not fire employees for taking confidential documents—had no bearing on whether criminal charges could be brought for such conduct.

The court did, however, note that its decision in Saavedra would not preclude a criminal defendant from raising a defense at trial that he or she was justified in stealing an employer’s documents based on New Jersey’s policy against employment discrimination.

Still, lawyers on both sides of the employment bar took issue with aspects of the ruling.

Glen Savits, an employee-side attorney who was not involved in the case, called it “a terrible decision.”

“Clearly this will create a chilling effect on potential whistleblowers if they feel that, ‘Gee, if I copy certain documents, I’m going to be prosecuted criminally,'” said Savits, of Green Savits in Florham Park. “It’s something I think management attorneys are going to love because [employers] can tell people, ‘If you take anything you can be prosecuted.'”

But Keith Rosenblatt, an employer-side attorney who also was not involved in the case, said the Saavedra ruling did nothing to allay employers’ primary concern with regard to the Quinlan decision: that it is now more difficult to terminate employees who steal confidential documents.

“From the standpoint of representing employers, I don’t know that it gives them much to work with,” said Rosenblatt, of Littler Mendelson in Newark.

All the Saavedra ruling means for employers, Rosenblatt said, is that if an employee is found to have stolen confidential information for use in a discrimination action, “you can report them to the police, but you can’t fire them.”

Savits, however, said Quinlan did provide some protections to employers that allowed them to fire employees for document theft under certain circumstances. Saavedra, meanwhile, offers no similar protection from criminal prosecution for employees, he said.

Similarly, Saavedra’s attorney, Mario Blanch of West New York, said the decision places “a strong weapon in the arsenal that employers have to retaliate against employees who speak out against them.”

But while Rosenblatt acknowledged that employers could conceivably use the threat of criminal action to try to deter employees from stealing information, he was skeptical of how realistic that threat would be in most cases. Rosenblatt said Saavedra was a unique case in that the documents at issue included student educational and medical records that were protected by federal and state privacy laws. But most employment records do not rise to that level of sensitivity, he said.

Saavedra, a clerk with the North Bergen school board’s child study team, sued the board and board officials in November 2009, alleging that she was a victim of gender, ethnic and sexual discrimination, according to court documents. Saavedra eventually told her attorney in the civil case that she was in possession of hundreds of documents belonging to the board.

The attorney told the board’s attorney and general counsel, who then informed the Hudson County Prosecutor’s Office, which then launched a grand jury investigation, court documents said. That grand jury was told that the documents—some of which were originals—were “highly confidential” and “very sensitive.” They included parents’ personal banking records and student psychological reports.

The grand jury charged Saavedra with second-degree official misconduct and third-degree theft, and she faces a possible 10-year prison term if convicted.

The civil suit has since been dismissed.

In moving to quash the indictment, Saavedra relied on Quinlan, in which the Supreme Court established a seven-part test that balances the right of employees to a workplace free from discrimination and retaliation against the right of employers to operate their businesses and safeguard confidential documents.

The Quinlan test looks at how the employee obtained the document; what the employee did with it; whether the employer had a clear policy on confidentiality; the employer’s interest in keeping the document confidential; whether the disclosure unduly disrupted the employer’s business; and how good a reason the employee had for copying the record rather than merely telling his or her lawyer about it so it could be obtained through discovery.

Hudson County Superior Court Judge Lisa Rose denied the motion to dismiss the indictment, and Appellate Division Judges Douglas Fasciale and Jose Fuentes affirmed. Judge Marie Simonelli dissented, saying the law gave no clear warning that her conduct was illegal.

Saavedra appealed.

Justice Anne Patterson, writing for the Supreme Court majority, rejected Saavedra’s argument that her conduct was protected by Quinlan.

“This court’s decision in Quinlan did not endorse self-help as an alternative to the legal process in employment discrimination litigation,” Patterson said. “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 issue of criminal law.”

Patterson was joined by Chief Justice Stuart Rabner and Justices Jaynee LaVecchia, Faustino Fernandez-Vina and Lee Solomon, as well as Judge Mary Catherine Cuff, temporarily assigned.

Patterson said the Quinlan ruling pertained only to the retaliation provision of the New Jersey Law Against Discrimination.

“In short, 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,” Patterson said.

Patterson did say, however, that Saavedra could still pursue a claim-of-right or justification defense at trial.

“Should this matter proceed to trial, the jury may consider such issues as the contents of the documents, the presence or absence of confidentiality policies, the privacy interests at stake, the circumstances under which defendant gained access to the documents, the extent to which she disclosed them, and her reasons for taking an original or copying a document rather than simply seeking it in discovery,” Patterson said.

Justice Barry Albin dissented, arguing that the majority’s ruling, like the Quinlan decision before it, failed to clearly lay out what conduct the law proscribes, offering little guidance to employees.

“The law should not place whistleblowers in a position where they are playing Russian roulette with their careers or their liberty,” he said, adding that, in light of the majority’s Saavedra ruling, “it may be possible that an employee taking confidential documents from an employer’s files to pursue a LAD claim will win a multimillion-dollar discrimination lawsuit but serve time in prison for committing a crime.”

A spokesman for the Hudson County Prosecutor’s Office could not be reached for comment.

Photo: Ken Brown/iStockphoto.com

For more on this story go to: http://www.njlawjournal.com/id=1202730424253/Whistleblower-Ruling-Draws-Fire-From-Employment-Bar#ixzz3e63rb6mq