Court issues written opinion explaning decision regarding applicability of Red Flags Rule to attorneys

As we first blogged here, hours before the last Red Flags enforcement deadline, a federal court judge in the D.C. Circuit ruled from the bench that attorneys would not be subject to the Red Flags Rule. The court released Judge Walton's written opinion was released on December 1, 2009, which provides clarification of his comments from the bench. Click here for the opinion. Walton found the Federal Trade Commission overreached when it tried to define lawyers as "creditors". Walton wrote, "The Court is confident in concluding that the term attorney-client is nuanced enough that if Congress, which is comprised of many members who are themselves attorneys, intended to regulate attorneys and their invoiced billing practices it would have used the appropriate terminology to denote that intent and not hidden it in a statute expressly targeted at the credit industry." Judge Walton further noted, "Attorneys are already obligated to conduct themselves in a manner that promotes the objectives of the Red Flags Rule, and the Commission's position that its regulation is needed to protect third-parties against identity theft is just not the case."

On October 31, the FTC extended the Red Flags enforcement deadline for the fourth time to June 1, 2010.

Related Link:
Privacy and Security Information - Privacy MATTERS: Happy Halloween - No Red Flags Enforcement Until June 1, 2010.........

What is "reasonable expectation of privacy" in an employment context?

Written by Cynthia and Jennifer

A recent decision by the Maine Supreme Court highlights the tension between an employee's reasonable expectation of privacy in conducting personal business through a company's computer system and the individual's right to prevent the company's publishing of such material. In Fiber Materials, Inc. v. Subilia, the Maine Supreme Court dismissed an interlocutory appeal by a former executive who charged the company with improperly accessing and publishing the executive's attorney-client privileged communications with his attorney which had been stored on the company's computer system. While the court dismissed the appeal for procedural reasons, the court criticized the company's counsel for taking the preemptive position that the material retrieved was appropriately disclosed publicly without first seeking advice from state bar counsel before publishing it in a complaint.

The issues in this case are similar to those raised in the Scott v. Beth Israel case, where a New York trial court concluded that an employee's use of the employer's email system to communicate with his attorney waived the privilege because the employer's policy expressly prohibited personal use of the email system.

While these cases appear to produce two different results, they dictate the care employees and employers alike must take with respect to accessing information on a company-owned computer system and the use of that system in the first instance to conduct any type of personal business, especially sensitive personal business.