Former Employee Not Required to Hand Over Personal iPhone in Trade Secret Litigation: NY Appellate Division | Practical Law

Former Employee Not Required to Hand Over Personal iPhone in Trade Secret Litigation: NY Appellate Division | Practical Law

In AllianceBernstein L.P. v. Atha, the Appellate Division of the New York State Supreme Court held that a trial court could not compel a financial analyst to provide his personal iPhone to his former employer's attorneys in trade secret litigation. The Appellate Division held that the court should perform in camera review of the phone to determine which information was relevant to his former employer's discovery request. 

Former Employee Not Required to Hand Over Personal iPhone in Trade Secret Litigation: NY Appellate Division

by PLC Labor & Employment
Published on 19 Nov 2012New York
In AllianceBernstein L.P. v. Atha, the Appellate Division of the New York State Supreme Court held that a trial court could not compel a financial analyst to provide his personal iPhone to his former employer's attorneys in trade secret litigation. The Appellate Division held that the court should perform in camera review of the phone to determine which information was relevant to his former employer's discovery request.
In AllianceBernstein L.P. v. Atha, the defendant, Atha, was a financial analyst for the investment firm AllianceBernstein who left the company to work for Morgan Stanley. AllianceBernstein sued Atha, alleging that he violated his employment contract by taking confidential information, including customer lists, with him to Morgan Stanley, where he solicited AllianceBernstein customers. AllianceBernstein sought a temporary restraining order (TRO) to prevent Atha from retaining or using this confidential information. The New York State Supreme Court granted the TRO. Because Atha stored some of AllianceBernstein's confidential information on his personal iPhone, Atha gave his iPhone to his lawyers to comply with the TRO.
AllianceBernstein demanded that Atha provide iPhone call logs from the date he left the company. Atha refused, on the basis that doing so would violate his privacy rights. AllianceBernstein then wrote a letter to the court, requesting a pre-motion discovery conference. The court did not grant the conference and did not allow Atha to respond to the letter. Instead, it ordered Atha to provide his phone to AllianceBernstein's counsel to obtain the confidential information it sought in deposition. Atha appealed this order.
On November 15, 2012, the Appellate Division of the New York State Supreme Court vacated the trial court's order because it was too broad. AllianceBernstein requested information from Atha's iPhone and the TRO was a sufficient response to AllianceBernstein's concern that Atha may have retained confidential information about its customers. The Appellate Division also held that the trial court should have allowed Atha to respond to the letter.
However, the court's order that Atha provide his iPhone to AllianceBernstein's lawyers was too broad. Because of the applications and internet search function of the iPhone, the order was tantamount to providing a personal computer for review. The iPhone would likely disclose Atha's privileged communications or confidential information irrelevant to this case. Therefore, the Appellate Division held that the iPhone and a record of its contents should be provided to the court for in camera inspection, to ensure that only relevant, non-privileged information is disclosed.
Court documents: