On the heels of a recent Delaware Court of Chancery decision re: "In re WeWork Litigation,Consol. Civil ActionNo. 2020-0258-AGB," Kirkland & Ellis' "Don’t Risk Your Privilege by Directors Using Their Employer’s Email Account" is simply a great reminder about the privilege waiver risks associated with officers and directors using their corporate email accounts for work associated with other roles/engagements they hold at different companies. Generally, the case involves officers and directors who wore multiple hats with respect to their portfolio companies, and the use of email accounts associated with one of the companies that was not involved in the subject matter of the litigation (but which was majority owned by the defendant company) to send and receive documents associated with the litigation, which resulted in a waiver of privilege with respect to those documents.
The firm offers this sound guidance:
This decision is an important reminder that, depending on the specific circumstances, outside directors may want to avoid using their work email accounts (i.e., of their primary employer) to send or receive board materials that otherwise may be privileged. Despite the convenience of doing so, many employers have email use policies that could cause privilege issues under the four-factor test described above. It may be preferable to utilize confidential board portals, to use personal email accounts (even better if they are “special purpose” personal accounts used only for the specific role), or to arrange for director email accounts to be set up by the company where they serve.
See also this summary from Fenwick; our prior relevant reports: "Benchmarking Director Communication Practices," "Director Communications: Security & Privacy Considerations," and "Confidential Board/Director Communication Practices"; and additional resources on our Cybersecurity/Data Privacy page » Board/Director Communications.
This post first appeared in the weekly Society Alert!