A Minnesota Court of Appeals panel has affirmed the issuance of a temporary injunction against a co-owner of an LLC blocking him from accessing emails of his partner from the company’s server in the midst of their business dispute.  The unpublished decision, Gates v. Wheeler A09-2355 (Minn. App. November 23, 2010), raises some interesting issues regarding email privacy under unsettled Minnesota law.

The parties were co-owners of a limited liability company called Residential Science Resources. After a falling out, Gates sued Wheeler under a Minnesota law which allows the court to grant equitable relief in the case of a management deadlock. Wheeler was the designated administrator for the company’s server. Without informing Gates, Wheeler hired an outside information technology contractor to obtain access to Gates’ personal and business emails. The information included correspondence between Gates and his wife, financial and password information, discussions with his accountant, and communications with his lawyer regarding the pending lawsuit. After learning of the interception at a deposition, Gates sought an injunction halting Wheeler’s access. The district court granted the injunction, concluding that Gates had established a "probability of success on the merits for claims of invasion of privacy, violation of the Minnesota Privacy of Communications Act, violation of the Federal Wire and Electronic Communications and Transactional Records Access Act, conversion, and unjust enrichment." Gates had not asserted these claims prior to his request for an injunction, but did so later by amending his complaint. In response to Gates’s challenge, the Appellate Court held that the court’s authority to issue an injunction is not limited to matters raised in the underlying complaint, relying in part on the court’s broad equitable powers in business disputes.

The Court also affirmed the district court’s analysis that the privacy claims had a probability of success on the merits, noting however that there were no published Minnesota cases applying common law invasion of privacy claims to interception of email. Although noting that Gates and Wheeler were partners and not employer and employee, it also cited the analysis in In re Asia Global Crossing Ltd, a Bankruptcy Court decision from the Southern District of New York regarding employee expectations of privacy in workplace email. The court also stated that

the division of Gates’ account into personal and  private business files indicates that Gates expected the personal file would be private.

This suggests that individuals with company email accounts should take similar steps to differentiate personal information. Surprisingly, the court did not delve into the issues of privilege regarding Gates’ communications with his attorney.

The decision reflects increasing tensions over the privacy of information contained on employer email servers and may encourage more litigation in Minnesota under state and federal privacy laws involving emails.