Self-Help Discovery by Whistleblowers: Protected Activity or Terminable Misconduct?
It has become almost routine for employees pursuing whistleblower and other employment-related claims against their employer to engage in "self-help discovery," using their access to files and databases to collect and gather, in violation of company policy, documents and data relating to their claims. The company often becomes aware of this type of misconduct during internal investigations, when a forensic review of the complainant's computer or statements by witnesses reveal that the complainant has collected or is collecting evidence. Or, the misconduct may not become evident until after the employee has filed a charge or a lawsuit, when confidential company documents are referenced in the charge or complaint or the employer undertakes discovery.
This misconduct appears to be fueled by the belief — on the part of both claimants and at times even their counsel —that current employees have an unfettered, protected "right" to engage in self-help discovery to develop evidence supporting their claims. Indeed, it appears that plaintiffs' counsel still encourage this behavior, requesting that their clients gather "the goods" while they are still employed so that counsel can use the fruits of their efforts in demand letters, draft complaints and litigation. In one recent case, a prominent D.C. plaintiff's attorney proudly touted that her client had gathered and retained over 10,000 proprietary emails and other documents that allegedly supported her client's claims.
When a company learns or suspects that an employee is engaging in such behavior, it may feel paralyzed from taking action, fearing that the employee will claim that her termination for stealing records was retaliatory. But, as with any other form of employee misconduct, the employer should undertake an investigation to determine whether the employee has violated company policy and carefully consider a termination is justified and defensible. There is an emerging (although not entirely consistent) body of case law recognizing that, except in certain circumstances, employees do not have the right to engage in self-help discovery and that employees who do can be terminated, even if the evidence was gathered to support their anticipated or pending claims.
Courts had struggled with the issue of whether this "self-help" discovery rises to the level of "protected activity" that insulates the employee from termination. Some courts have been willing to offer at least some protection to the employee, as long as the documents or data related to his claim and were not obtained through "improper" means. However, other courts have recognized that an employee's right to pursue a valid complaint or claim does not license him to plunder his employer's files and databases looking for evidence relevant to it. The analysis of an employee’s self-help efforts necessarily depends on the types of claims the employee is asserting, the types of information the employee takes, and how the employee uses the purloined information.
The factors considered by courts in determining whether self-help discovery is protected activity vary depending on the claims asserted by the whistleblower. False Claims Act cases, for instance, provide a sharp contrast in approaches to the issue. For instance, in Cafasso v. General Dynamics C4 Systems, Inc., 2009 WL 3723087 (D. Ariz. Nov. 4, 2009), a terminated employee removed eleven gigabytes of documents from her employer's databases without permission before her computer access was suspended. When her former employer, GDC4S, brought a breach of contract claim against her, she filed qui tam and retaliation claims under the False Claims Act. The court explained that the "False Claims Act required [the whistleblower] to give the Government substantially all material evidence and information she possessed." However, the court noted, the whistleblower was not required to show the Government evidence that she did not properly possess and did not have the right to possess evidence unlawfully.
The court concluded that confidentiality agreements between defense contractors and their employees serve vital economic and national security interests, including "protect[ing] the secrecy of new technologies that play a part in the nation's military and domestic security operations." The court explained that the whistleblower “willfully compromised these interests for no legitimate litigation purpose, only the speculative pursuit of self-help discovery.... In short, every principle of substantive and procedural law cut against [the whistleblower's] self-help discovery tactic....” On appeal, the Ninth Circuit affirmed judgment in favor of the employer, noting that even if a public policy exception existed, “it would not cover Cafasso’s conduct given her vast and indiscriminate appropriation of GDC4S files.” Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1062 (9th Cir. 2011). The court explained that were it to adopt a public policy exception for FCA cases “those asserting its protection would need to justify why removal of the documents was reasonably necessary to pursue an FCA claim” through a “particularized showing.” Id.
However, as the Ninth Circuit’s Cafasso decision recognized, the False Claims Act endorses some forms of self-help discovery by employees, as long as it is reasonably tailored to their claims and does not constitute unrestrained pilfering. In Head v. Kane Co., 668 F. Supp. 2d 146 (D.D.C. 2009), a False Claims Act qui tam action, the whistleblower signed a separation agreement agreeing that all records were the sole property of the company and acknowledging that he had returned all records to the company. In subsequent qui tam action, the employer brought asserted counterclaims for failing to return a confidential email. The court held that the counterclaim was void as against public policy, explaining that "[e]nforcing a private agreement that requires a qui tam plaintiff to turn over his or her copy of a document, which is likely to be needed as evidence at trial, to the defendant who is under investigation would unduly frustrate the purpose" of the False Claims Act, which requires relators to disclose to the Government all material evidence and information in their possession. See also United States v. Duke University, 2018 WL 4211372 (M.D.N.C. Sept. 4, 2018) (self-help discovery is “a goal contemplated by the False Claims Act” as “the FCA contemplates and condones gathering and producing documents prior to service of the complaint and the beginning of formal discovery”); United States v. Boston Scientific Neuromodulation Corp., 2017 WL 6403853 (D.N.J. Dec. 15, 2017) (granting summary judgment in favor of FCA claimant on employer’s counterclaim for breach of confidentiality agreement).
As these decisions reflect, there are circumstances where employers may, consistent with their contracts, policies and prior practices, have the right to address theft and other misconduct by a current employee, even if she is pursuing a whistleblower complaint against it. An employer, however, should first undertake a full investigation and consider the circumstances surrounding the removal and use of the documents or data. The employer should also make certain that any action it takes against the employee is consistent with its policies and practices and its treatment of employees who have engaged in comparable misconduct. Also, it is important for an employer to take action promptly when it discovers the misconduct so that its decision is not viewed as retaliatory or pretextual.
With respect to claims by former employees, self-help discovery should be explored by an employer as soon as it anticipates claims. Through the forensic review of the former employee's computers, devices, databases and accounts, an employer should be able to determine whether the former employee engaged in self-help discovery conduct while employed by the company. If the employer determines that the former employee stole documents or data in violation of company policy, it may be able to establish a defense to liability or a limitation on damages under an after-acquired evidence or "unclean hands" theory. In addition, the employer may be entitled to assert counterclaims or obtain discovery sanctions against the former employee based on his or her misconduct.