Be Careful Who You E-mail on Your Employer’s Computer

Anthony Davis wrote an article in the New York Law Journal on November 4th summarizing the state of the law with regard to privacy matters when one is using his work computer to send personal e-mails.

A New York decision,  Scott v. Beth Israel Medical Center Inc., 2007 WL 3053351 (N.Y. Sup. Oct. 17, 2007), held that if you send e-mails to your attorney, even using your personal e-mail account like gmail or aol.com, on your employer’s computer, you may have waived your right to invoke your “attorney-client privilege” with regard to that e-mail. If the employer had a privacy policy in place, that employee’s were notified of, that the employer had the right to access any information an employee transmits using the employer’s computer.

The Scott court also held that even if the attorney had a standard notice at the bottom of each e-mail that the contents of the e-mail were to be private between the attorney and the client, that such notice is ineffective to save the communication from the client’s constructive waiver of the privilege resulting from the client’s decision to use his office computer to communicate with his attorney. Thus, the court suggested that attorneys should advise their clients that they should not use their office computers for communications between them, especially if the attorney feels that there is some risk that the employer might have a motivation to look into the employee’s personal e-mails.

On the other hand, a New Jersey court, in  Stengart v. Loving Care Agency Inc., 973 A.2d 390 (N.J. Super. A.D. July 29, 2009), came to the opposite conclusion. In that case, the court held that even an employer’s e-mail policy granting it access to all employees’ e-mails on their computers, will not be valid to waive the employee’s attorney-client privilege. The employer-defendant in that case has appealed that case to the New Jersey Supreme Court, which just heard arguments on the case. When that court comes to a decision in the matter, at least New Jersey will have come up with a definitive conclusion on the matter.

For the time being, in New Jersey, and especially in New York, you should not send any e-mails, using one’s work computer, that you would like to keep private. This is especially true if you are writing your attorney regarding a case against the employer on whose computer you are sending the e-mail.

It is better to either wait until you have access to your home computer after work to send private e-mails, or to use a cell phone, iPhone, or (privately owned) Blackberry if you have to send private e-mail during business hours.

As always, if you need help with any kind of personal injury, contract, or other litigation, you can call our office 24/7 at 800-344-6431 or send us an e-mail (not necessarily on your boss’ computer!)

Picture courtesy of The Office Rat.

Reporting Employer-Provided Health Insurance Benefits as Income

Many employers in New York employ those with a relatively low salary. Both the employer and the employee may be concerned that the employee remain eligible for the Child Health Plus health plan, WIC, free and reduced cost lunch programs, and food stamps. Thus, they both have an interest in making sure that the employer does not erroneously report too much income for the employee on pay stubs and W-2 forms, which may negatively affect the employee’s eligibility for these programs.

For example, does the employer have to report health insurance contributions made on behalf of the employee as part of the employee’s gross pay?

An employer must give the employee, with every paycheck, a statement (pay stub) indicating (1) the employee’s gross wages, (2) deductions from salary for taxes, benefit contributions, etc., and (3) net pay. NY Labor Law § 195(3).

In order to understand which wages and non-cash benefits an employer must report as gross income to the employee, we must first understand whether § 195(3)‘s requirement to specify the employee’s “gross wages” means that the employer must report the health plan contributions it made on the employee’s behalf.

The NY Labor Law Definitions do not define either “wages” or “gross wages.” Therefore, we turn to how the Internal Revenue Code defines “wages.” 26 USC § 3401(a)(21)  says that “wages” means all remuneration an employer gives to an employee, including the cash value of non-cash benefits except for, among other things, payments made for the benefit of an employee if the non-cash benefit would not be included in the employee’s gross income under 26 USC § 106(b).

§ 106 says that generally, “gross income of an employee does not include employer-provided coverage under an accident or health plan.” U.S. Tax Court judges have interpreted this section to mean that payments by an employer to reimburse an employee for medical expenses or pay the employee’s health insurance premiums are not included in the employee’s gross income. Schmidt v. Comm’r, 2003 WL 22790862, *6 (T.C. Nov. 25, 2003). An earlier Tax Court clarified that “[s]ection 106 provides that an employee’s gross income does not include employer-provided coverage (e.g., accident and health insurance premiums) under an accident and health plan.” Rugby Productions Ltd. v. Comm’r, 100 T.C. 531, 535 (T.C. 1993).

Oddly, payments made directly to an employee  for “personal injury or sickness” by a health plan which are attributable to an employer provided health insurance plan are  included in the employee’s gross income. 26 USC § 105(a). But if the employee laid out the money directly and is being reimbursed for those payments by the health plan, then the reimbursements are not included in the employee’s gross income. 26 USC § 105(b).

Thus, because health insurance premium payments by an employer are not counted towards the employee’s “gross income,” they should not need to be listed as part of the employee’s “gross wages” under the NY Labor Law pay stub requirement mentioned above.

Standard disclaimer applies. But as always, if you need assistance with any kind of legal issue, whether it be Matrioninal/Family Law, Bankruptcy, Personal Injury, Wills, Trusts, & Estates, Real Estate, or Criminal/DWI,  you can always contact us by e-mail or calling 800-344-6431.

Picture courtesy of About.com.

Jewish Groups Support Reversal of NY Court’s Nullification of Rabbinic Arbitration Decision

As reported here, and as Mitchell Rubenstein predicted, the Appellate Division of the Supreme Court will consider a teacher’s appeal of a Kings County Supreme Court’s nullification of a rabbinical arbitration panel’s decision in an employment case.

Following a dispute between the Hebrew Academy of Five Towns and Rockaway and one of its teachers, Nachum Brisman, regarding the school’s decision to terminate his employment, both sides agreed to have their dispute arbitrated by a well-known rabbinic panel, the Beth Din of America. The rabbinic panel’s arbitration decision favored the teacher in the dispute and when the teacher brought the decision to the Kings County Supreme Court to enforce the decision, it instead vacated it. Judge Balter’s decision can be read here.

Now, Brisman has appealed the lower court’s vacature of the arbitration before the Appellate Division. Three major orthodox Jewish organizations, the Orthodox Union, Agudath Israel of America, and Torah U’Mesorah, joined together last week to file a “Friend of the Court” brief, arguing that the Appellate Division should reverse Judge Balter’s vacature of the arbitration panel’s decision.

You can read the amicus brief here.

The organizations’ amicus brief emphasized that their support of Brisman’s appeal “should not be construed as advocacy on behalf of either party with respect to their underlying claims.” Rather, they clarified in the brief that they are advocating for the reversal of the Supreme Court’s vacature of the rabbinic arbitration agreement in order to prevent the weakening of the rabbinic arbitration system in general.

Indeed, it is difficult to fathom how the court could nullify an arbitration decision that both parties had agreed in advance to abide by. Such a decision seems to encourage the losing party in any kind of arbitration decision to appeal any decision if he knew that the state courts would vacate any decision that the losing party was unhappy with, as long as he could convince the court that the arbitration panel’s decision is “irrational.”

We will see if the Appellate Division agrees. Update 2/19/10: It does!

Picture courtesy of vosizneias.com

New IRS Form I-9 For Employers Starting April 3rd

Adjunct Law Prof Blog just posted that employers who hire an employee must verify their legal status to work and fill out the new I-9 form.  Employers must have the employee sign the form within three days of starting work. It would be wise to see the form and instructions right away, if you haven’t already done so. Those items are available here.

New Layoff Notice Requirements in New York

WorkforceManagement.com reported yesterday that a new law is now in effect in New York that requires many employers to give more notice to employees to be laid off, than previously required.

Currently, under the Federal government’s WARN statute, “most employers with 100 or more employees [are required to] to provide notification 60 calendar days in advance of plant closings and mass layoffs.”

In a move likely to make employers more hesitant to hire new employees, New York has enacted the stricter “Worker Adjustment and Retraining Notification Act” as of this past Sunday, February 1st. “The New York law applies to businesses with 50 or more full-time workers… when at least 25 employees lose their positions, if they make up one-third of the workforce, or when a company lays off at least 250 full-time employees.”

According to Workforce Management, “[t]he Business Council of New York State says some 13,000 small businesses that weren’t affected by the federal statute will now be covered by the state law.”

I understand that there are good intentions behind this law. As someone who was once laid off with three hours notice, and a family to support, I definitely understand the workers’ and unions’ position on this. But I think that it will have an overall undesirable effect on workers and employees.

In countries with stringent requirements like France, laws like these create a pressure on employers not  to hire new employees. The more a society chips away at the concept of at-will employment, the more hesitant companies, large and small, become in hiring new employees, because they know how difficult it will be to fire them if the need arises. Thus, France’s unemployment rate is worse than the United States’.

It will be interesting to see what affect the new law has.