Sixth Circuit: disclosing confidential company documents to an employee's attorney may not be "protected activity" under Title VII

On June 24, 2008, the Sixth Circuit decided Niswander v. Cincinnati Insurance Company, in which it held that a female claims adjuster, who was fired after she disclosed files containing customer names and other confidential company information to her attorneys pursuing an equal pay class action, did not engage in "protected activity" under Title VII.  

During her employment, Niswander, who worked from home, joined a lawsuit filed against her employer, Cincinnati Insurance Company ("CIC"). Her attorneys requested that Niswander "look around your house and office for any documents you think might be remotely helpful to our case and send them in right away." Niswander disclosed to her counsel various CIC claim files and other company documents that she had at her home office, some of which she believed were relevant to an anticipated retaliation claim. When the Company received those documents during discovery, it terminated Niswander’s employment because that disclosure constituted a breach of CIC’s Privacy Policy, Code of Conduct, and Conflict policy. Shortly thereafter, Niswander filed a retaliation claim, alleging that she was terminated for participating in the lawsuit.

The Sixth Circuit granted summary judgment to CIC on Niswander’s retaliation claim, holding that Niswander had not engaged in protected activity under Title VII's opposition clause. In its decision of first impression, the Court held that a balancing test should be applied in such circumstances, whether the “protected activity” was found to be “opposition” or “participation.” The ultimate question under that test is whether “the employee’s dissemination of confidential documents was reasonable under the circumstances.”

The Court held that Niswander’s delivery of the confidential documents was not reasonable as “participation” under Title VII because she admitted that the documents were not relevant to the claims in the lawsuit. The Court applied the following six factors to determine whether Niswander’s act was reasonable under the opposition clause:

1. how the documents were obtained;
2. to whom they 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 claims;
4. why the documents were produced;
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 determined that only two factors weighed in Niswander's favor, but not convincingly. First, while Niswander obtained the documents in the course of her employment, her acquisition was not entirely innocent. Rather, Niswander searched through those files for any information relating to her retaliation claim and turned it all over to her counsel. Second, the Court found that rather than disclosing confidential CIC documents to her attorneys to “jog her memory,” Niswander had alternative means of achieving such a goal such as taking notes to help remind herself of alleged incidents of retaliation.

The significance of this decision is that the disclosure of confidential, proprietary company documents to an employee’s attorney during the course of litigation may not be protected activity under Title VII sufficient to support a retaliation claim (if action is taken against that employee related to the disclosure of those documents). Niswander is the first time that the Sixth Circuit applied a balancing test in a retaliation claim where the plaintiff removed confidential documents. Because there are many factors involved in analyzing retaliation claims, however, it is advised that employers seek the advice of employment counsel on these issues.

[1] While the Sixth Circuit characterized the litigation as a “class-action,” it was instituted under the Equal Pay Act and was, therefore, a collective action.

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Categories: Ohio