When HR Pros Go Bad: Spoliation & Personal Identifiable Information

A HR professional emailed to his home computer the personnel files of 68 employees when he feared layoffs were coming. 

That is only the beginning of a really ugly fact pattern.

The data included past and current employee names, social security numbers, date of births, compensation, and addresses.  The former employer (now the Plaintiff) sued the HR professional (now the Defendant) for “conversion, breach of contract, breach of the duty of loyalty, and sought injunctive relief.”   1-800-East W. Mortg. Co. v. Bournazian, 2010 Mass. Super. LEXIS 158 (Mass. Super. Ct. July 18, 2010)

A temporary restraining order was entered against the Defendant, preventing him from “deleting, altering, erasing or otherwise tampering with any information on any computer, hard drive, thumb drive, flash drive, or other electronic data storage device owned by [the Defendant or his wife] or resident on any web-based account or data storage service until further order of this Court.”  1-800-East W. Mortg. Co. at *2.

Two days after being served with the TRO, he downloaded an evidence erasing program and wiped a large amount of the data.  1-800-East W. Mortg. Co. at *2.

Eleven days after the TRO, the Court permanently enjoined the Defendant from:

Deleting, altering, erasing or otherwise tampering with any information on any computer, hard drive, thumb drive, flash drive, or other electronic data storage to which they have access until such time as a forensic expert hired by East West Mortgage may make a bit map copy of the data on these devices and/or accounts.

1-800-East W. Mortg. Co. at *2.

Ironically on the anniversary of the Watergate break-in, the Defendants were to provide to the Plaintiff’s expert, “each and every computer hard drive, thumb drive, flash drive or other electronic data storage device owned by them for the purpose of creating a bit map copy of said electronic media and for analysis of the contents thereof consistent with the protocol for the acquisition of electronically stored information.” 1-800-East W. Mortg. Co. at *2-3.

Destruction of Evidence

Following the lead of Nixon and Lewinsky, the Defendant tried deleting everything with the data destruction software Ccleaner and destroyed his external hard drive with a “mini-sledge hammer.”  1-800-East W. Mortg. Co. at *3-4.

The Defendant’s destruction of evidence took place on the day the injunction was entered against him.  1-800-East W. Mortg. Co. at *3.

The Defendant tried explaining his actions with 5 different stories, which the Court found to be highly un-credible.  1-800-East W. Mortg. Co. at *5.

The stories ranged from his work computer was crashing to he wanted to make a template to the hard drive fell in the bath tub.  1-800-East W. Mortg. Co. at *5.

Wrath of Court

The Court did not take kindly to the willful violations of the court orders.  1-800-East W. Mortg. Co. at *6-7. 

The Defendant was sanctioned with the following order: 

  1. Damages including fees for a credit monitoring service of the 68 employees in the amount of $4,549.30;
  2. Damages including the cost of the forensic expert in the amount of $10,549.50;
  3. Attorneys fees to be proven; 

 

Permanent injunction from distributing, sharing, divulging, displaying, disseminating or otherwise distributing any confidential information from the Plaintiff.

1-800-East W. Mortg. Co. at *8-9. 

Bow Tie Thoughts

The willful violation of the court orders and destruction of evidence makes case law that sounds like Book of Revelations.  Throw in the theft of personal identifiable information and a judge will act like one of the Four Horsemen of Apocalypse. 

The protection of personal identifiable information and the transitory nature of electronically stored information will be heavily litigation in the years to come.  It is a matter of time before such information is foolishly hosted in the “Cloud” that results in an ugly data breach.

Conversion of Intangible Property

 The traditional rule for conversion is any unauthorized act which deprives a person of “his property permanently or for an indefinite amount of time.”    Blacks Law Dictionary, Sixth Edition, citing Catania v.Garage De e Paix, Inc., 542 S.W.2d 239, 241. 

 cyber-crime

Today, personal information such as banking information is stored on laptops, credit card numbers are “remembered” by online services and iPhones contain a verity of personal information.  Can intangible electronically stored information be subject to conversion?  

 Courts have allowed causes of action for conversion of electronic information or “intangible property.”  Cases such as Thyroff v.Nationwide Mut. Ins. Co., 2007 NY Slip Op 2442 found the state of New York has a common law cause of action for conversion of electronic information.  The Court stated:  

 …it generally is not the physical nature of a document that determines its worth, it is the information memorialized in the document that has intrinsic value… In the absence of a significant difference in the value of the information, the protections of the law should apply equally to both forms–physical and virtual. Thyroff v.Nationwide Mut. Ins. Co., 2007 NY Slip Op 2442, 9 (N.Y. 2007).

 The common law remedy of conversion of intangible property is highly similar to, but different than, the statutory remedy of identity theft.  California law defines identity theft as the “unauthorized use of another person’s personal identifying information to obtain credit, goods, services, money, or property.”  Cal Civ Code § 1798.92(b).   In short, conversion is the act of depriving someone of their property, where identity theft is the act of obtaining a benefit from it.

 There could be many differences in the application of these common law and statutory remedies, such as a music artist being deprived the original music created on their laptop.  In that situation, conversion is more approrpriate more appropriate then identity theft.  However, states that have not enacted identity theft statutes might be able to find common law remedies for conversion of electronically stored information for those who are the victim of digital torts.