Can employees use your confidential documents to prove discrimination?

If you are reading this and you are a New Jersey employer, then the answer is yes. But only under certain circumstances. I’ll lay out the test for you after the jump.

In Quinlan v. Curtiss-Wright Corp., the New Jersey Supreme Court adopted what it termed a “flexible totality of the circumstances approach” to determine whether an employee is privileged to take or to use confidential documents belonging to the employer establish discrimination under New Jersey’s Law Against Discrimination:

1. How the employee came into possession of, or obtained access to, the
   document;
2. What the employee did with the document;
3. The nature and content of the particular document in order to weigh the strength of the employer’s interest in keeping the document confidential;
4. Whether there is a clearly identified company policy on privacy or confidentiality that the employee’s disclosure has violated;
5. The
   circumstances relating to the disclosure of the document, balancing its relevance against considerations about whether its use or disclosure was unduly disruptive to the employer’s ordinary business;
6. The strength of the employee’s reason for copying the document rather than, for example, simply describing it or identifying its existence to counsel so that it might be requested in discovery; and
7. Consideration of the broad remedial purposes the Legislature has advanced through our laws against discrimination, including the LAD, as well as consideration of the effect, if any, that either protecting the document by precluding its use or permitting it to be used will have on the balance of legitimate rights of both employers and employees.

At first blush, this is a very scary opinion for NJ employers. However, a closer look at this seven-part test suggests that employers still have a good amount of protection. For example, the Court suggested that if an employee finds a confidential document laying around, then that would cut in favor of allowing the employee to use it as part of a discrimination action. However, if the employer takes appropriate steps to safeguard proprietary information, and the information that the employee seeks to use is, in fact, confidential, then these factors cut in favor of not allowing the employee to use the documents as part of the employee’s case-in-chief. The employer has an even stronger case if it has implemented a written, confidentiality policy. So, if you don’t have one, get one.

Bottom line: employers that take reasonable steps to protect confidential and proprietary information should generally be able to avoid having it used against them in a discrimination action.