New Jersey Whistleblowers May Face Criminal Charges for Theft of Company Documents
The Supreme Court of New Jersey affirms an employee’s indictment for taking an employer’s confidential documents without authorization, allegedly to support discrimination and retaliation claims.
In a decision issued on June 23, the Supreme Court of New Jersey held that an employee who takes confidential files from an employer to support discrimination and retaliation claims may face trial for theft. The court’s earlier decision in Quinlan v. Curtiss-Wright Corp. (204 N.J. 239 ) had led some to believe that the court would dismiss the indictment against a former school board employee, Ivonne Saavedra, who removed confidential student files, allegedly to support claims under the Law Against Discrimination (LAD) and Conscientious Employee Protection Act (CEPA). In Quinlan, the court held that, under a “totality of the circumstances” test, a plaintiff potentially could establish that removal of employer files for use in litigation against the employer is “protected activity” under the LAD. In State v. Saavedra, No. A-68-2013, 073793 (N.J. June 23, 2015), the court rejected the argument that Quinlan prohibited the prosecution of an alleged whistleblower for various crimes, including theft. The court left open the possibility that at the criminal trial, the employee could establish an affirmative defense to theft if she could demonstrate a “claim of right” to the confidential documents. As a result of this potential criminal liability, New Jersey employees will need to think twice before removing company documents or property for use in civil suits against their employers.
Saavedra was an employee of the North Bergen Board of Education (the Board). In November 2009, Saavedra filed suit against her employer, alleging that she had complained about the Board’s alleged violations of the law and public policy, including pay irregularities, improper administration of employee vacation and family leave, violations of unspecified child study regulations, and unsafe conditions at a Board facility. She further alleged that in retaliation for her complaints (and because of her race, ethnicity, national origin, and gender), the Board and its employees denied her benefits, compelled her to work in a hostile work environment, and terminated the employment of her son and his girlfriend in violation of a host of statutes, including the LAD and CEPA.
According to the prosecution, Saavedra removed 367 confidential student records from Board offices, which she intended to use to support her claims against the Board. In June 2011, Saavedra’s lawyer provided copies of the documents to counsel for the Board in response to the Board’s discovery requests. The Board subsequently notified the county prosecutor’s office of Saavedra’s alleged theft of the documents. In April 2012, a grand jury returned a two-count indictment, charging Saavedra with second-degree official misconduct and third-degree unlawful taking. The prosecutor did not expressly inform the grand jury that Saavedra intended to use the documents in support of her civil suit against the Board. Saavedra thereafter voluntarily dismissed her civil lawsuit against the Board.
Saavedra sought to dismiss the indictment, contending that her removal of the documents was authorized by the court’s decision in Quinlan and that the prosecutor had withheld critical, exculpatory evidence from the grand jury by failing to disclose how Saavedra intended to use the documents. The trial court denied the motion to dismiss the indictment, and the Appellate Division affirmed that decision in 2013. Saavedra then successfully moved for leave to appeal to the Supreme Court of New Jersey.
The Supreme Court of New Jersey’s Decision
The Supreme Court of New Jersey first held that the prosecutor had presented sufficient facts to the grand jury to support an indictment charging official misconduct and theft and that the state’s case satisfied each prima facie element of the criminal charges. Next, the court determined that the state had not withheld exculpatory evidence from the grand jury, because the prosecutor had no obligation to suggest to the jury that Saavedra believed her conduct to be justified by virtue of her employment discrimination and retaliation lawsuit against the Board.
Finally, the court rejected Saavedra’s reliance on Quinlan to argue that her indictment contravened public policy. In Quinlan, the court considered whether an employee’s conduct in taking an employer’s documents for use in a discrimination claim—and in using those documents to support that claim—constituted protected activity for purposes of a retaliation claim. In that case, a jury returned a verdict for Quinlan, finding that her employer terminated her employment in retaliation for her taking copies of confidential personnel records. The Quinlan court set forth a “totality of the circumstances approach,” identifying an eight-factor balancing test for determining when an employer would be prohibited from taking adverse employment action against an employee based on an employee’s unauthorized copying or taking of company documents.
In rejecting Saavedra’s reliance on Quinlan to overturn her indictment, the court clarified that “Quinlan did not endorse self-help as an alternative to the legal process in employment discrimination litigation.” The court further stated that Quinlan did not “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.” Importantly, the court emphasized that alleged whistleblowers (and other plaintiffs) can obtain allegedly relevant documents through the discovery process—including by using standard discovery devices such as document requests, interrogatories, depositions, and motions to compel and, in appropriate cases, prelitigation orders to preserve evidence.1 The court also reiterated that Quinlan did not create, literally or figuratively, a “get out of jail free card” and, in fact, plaintiffs run a “high risk” that unauthorized taking of company records ultimately will justify an employer’s disciplinary decision and not the plaintiff’s decision to take the records. “[E]mployees may still be disciplined for [taking an employer’s records] and even under the best of circumstances, run the significant risk that the conduct in which they engage will not be found by a court to fall within the protection our test creates. The risk of self-help is high[.]”2
In closing, the court observed that Saavedra is free, at her criminal trial, to assert that her intent to use the documents at issue to support discrimination and retaliation claims gives rise to a “claim of right” defense or other defense of justification, if such assertions are supported by the evidence at trial. The fact that such a defense may not be considered until trial may come as cold comfort to employees considering engaging in “self help” by removing an employer’s confidential documents. On the other hand, the Saavedra decision underscores that the discovery process authorized by the Rules of Court will provide, in the normal course, all of the means necessary to preserve and obtain relevant evidence.
After Saavedra, potential whistleblowers (and their lawyers) need to balance the desire to obtain evidence in support of civil claims for discrimination and retaliation against the very real possibility that criminal liability may attach to such conduct. Plaintiffs’ lawyers, in particular, have expressed concerns that their review of purloined documents may put counsel for whistleblowers in jeopardy of facing criminal charges for receipt of stolen property. In any event, the Saavedra decision makes clear that the best avenue for securing documents to support a plaintiff’s claims is the discovery process governed by the New Jersey court rules.
Implications for New Jersey Employers
Despite the holding in Saavedra, it remains vital for an employer to carefully scrutinize any decision based on an employee’s unauthorized taking or copying of confidential documents. As the dissent by Justice Barry Albin (who also dissented in Quinlan) points out, the multifactor test in Quinlan does not provide clear guidance for employees or employers on whether removing company property is or isn’t “protected activity.” New Jersey employers should consult counsel before taking action against an employee suspected of taking company property, particularly if that employee has raised allegations of discrimination or arguably objected to or characterized employer conduct as unlawful.
In addition, New Jersey employers should review their policies concerning the unauthorized use and taking of company property. As the Supreme Court of New Jersey has observed, a “clearly identified” policy on confidentiality puts employees on notice of prohibitions against the unauthorized taking of confidential records. Employers also should assess the adequacy of safeguards for preventing unauthorized access to, and removal of, confidential or proprietary documents. This review should include an assessment of both physical and digital security measures.
. Slip Op. at 39 (“Thus, our court rules provided defendant the opportunity to obtain from the Board relevant documents in support of her civil claim, subject to procedural safeguards and judicial oversight.”).
. Slip Op. at 42 (quoting Quinlan, 204 N.J. at 272).