An employee who had delivered confidential, proprietary documents to her lawyers in a class-action employment lawsuit against the company was properly fired for violating the company’s privacy policy and code of conduct, the Sixth Circuit rules.

The worker was a claims adjuster who worked from home, and who subsequently joined in a sex discrimination lawsuit against her employer. The plaintiffs attorney had requested “any” documents related to her employment or which might be “remotely helpful” to the case, and the worker sent material she believed was relevant to the case, including confidential information about the company’s policyholders. The company’s policies expressly prohibited the disclosure of confidential information, including personal information about policyholders, and subsequently terminated the employee when the incident came to their attention. When she sued the company for retaliation, a lower court found that she was not engaged in a protected activity when she released information concerning the policyholders.

On appeal, the Sixth Circuit agreed with the district court, observing that if the documents that the worker gave to her lawyers “had been directly or even indirectly relevant” to the claims raised in the discrimination lawsuit, “her delivery of those documents would clearly constitute participation in that lawsuit.” The Court outlined six factors to determine whether a release of confidential documents was reasonable: “(1) how the documents were obtained, (2) to whom the documents were produced, (3) the content of the documents, both in terms of the need to keep the information confidential and its relevance to the employee’s claim of unlawful conduct, (4) why the documents were produced, including whether the production was in direct response to a discovery request, (5) the scope of the employer’s privacy policy, and (6) the ability of the employee to preserve the evidence in a manner that does not violate the employer’s privacy policy.”

The Court says that “concluding that [her] conduct here is protected participation in the [discrimination] lawsuit would provide employees with near-immunity for their actions in connection with antidiscrimination lawsuits, protecting them from disciplinary action even when they knowingly provide irrelevant, confidential information solely to jog their memory regarding instances of alleged retaliation.” Niswander v. The Cincinnati Insurance Co.

The Equal Employment Opportunity Commission has been barred by the D.C. Circuit from divulging confidential employer information to a third party until it can show that its disclosure rules do not conflict with various federal laws, including the Freedom of Information Act and the Trade Secrets Act.

In the course of its investigation of age discrimination complaints brought against the Venetian Casino Resort, the EEOC required submission of numerous documents that the company had marked confidential. The company subsequently sued for an injunction, contending that an EEOC rule permitting it to disclose an employer’s confidential information to potential plaintiffs without first notifying the employer that its information will be disclosed violated the FOIA.

The company’s concern was that competitors and labor unions would obtain confidential information regarding its hiring practices, which they could use to its economic detriment.

The D.C. Circuit found that the EEOC could not provide a reconciliation between its rule and the FOIA. “Absent an adequate justification, the Commission’s disclosure policy must be deemed arbitrary and capricious,” the Court holds, and remands the case to the district court to enjoin the EEOC from disclosing the company’s confidential information without adhering to the notice and other requirements of the agency’s regulations implementing the FOIA. Venetian Casino Resort LLC v. EEOC

According to a recently released Proofpoint survey (free copy available), 41 percent of large U.S. corporations employ staff to read employee e-mail, and 26 percent have terminated employees for e-mail policy violations in the past year. Proofpoint, a computer security firm, conducts an annual survey of outbound e-mail and data loss prevention issues in large companies.

The survey also found that 44 percent of the surveyed companies investigated an e-mail leak of confidential information in the past 12 months; 23 percent said their business was impacted by the exposure of sensitive or embarrassing information; and 34 percent of the largest companies (20,000 or more employees) reported that employee e-mail was subpoenaed in the last 12 months.

The Equal Employment Opportunity Commission has filed suit against Seven Eleven of Hawaii, Inc. and its parent company, Seven Eleven Japan Co., Ltd. for disclosing an employee’s health information to a prospective employer during a reference check. “Employers in Hawaii need to be aware that the EEOC will vigorously enforce anti-discrimination laws and work to provide a level playing field for all employees,” says Timothy Riera, director for the EEOC’s Honolulu Local Office. The Americans with Disabilities Act prohibits employers from disclosing employee medical information except under very limited circumstances.

The Occupational Safety and Health Administration has issued a directive to its personnel concerning the accessing of personally identifiable employee medical records during compliance reviews or where OSHA standards require such information. The directive notes that an employee’s right to privacy regarding their health information “is not absolute,” and in order for OSHA to carry out its statutory obligations, it is necessary for it to review certain medical information of employees. The directive is instructive for employers in determining what kind of records and medical information OSHA is entitled to obtain.