In dispute over tender offer between WeWork and SoftBank Group (SBG), certain parties requested e-mails from two custodians who wore multiple hats, including the Sprint CEO who was also assisting the SBG COO and WeWork Chairman, and another Sprint employee who was seconded to SBG. (From mid-2019 until April 2020, SBG owned approximately 84% of Sprint.) According to SBG, these two custodians, while acting on SBG’s behalf, sought and received legal advice from SBG’s internal and external counsel regarding WeWork. The Court, however, found that there was no expectation of privacy when using their Spring e-mail accounts for SBG-related purposes.
Applying the Asia Global factors – (1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee’s computer or e-mail, (3) do third parties have a right of access to the computer or e-mails, and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies? – the Court found that: “Combes and Sternberg were aware of Sprint’s email policies and thus could not have had a reasonable expectation of privacy when they used their Sprint email accounts to share SBG’s information, the subject matter of which concerned WeWork and had nothing to do with Sprint.”
“The fact that Combes and Sternberg are parties to agreements obligating them to keep SBG’s information confidential does not mean that they had a reasonable expectation of privacy in using their Sprint email accounts for non-Sprint matters. To that end, SBG points to no language in any agreement where Sprint, which is in possession of the Documents, authorized Combes or Sternberg to use Sprint’s email accounts for non-Sprint or SBG-related purposes….
“It also is significant that SBG does not, and could not credibly, argue that Combes and Sternberg’s use of their Sprint email accounts to send or receive the documents was inadvertent. As discussed above, multiple SBG employees – including its Chief Legal Officer (Townsend), Claure’s Chief of Staff (Sternberg), and his Staff Operations Director (Wilson) – raised concerns about protecting SBG’s information and, more specifically, its legal privileges. To that end, Combes and Sternberg both had alternative emails accounts at their disposal for conducting SBG business. Despite these arrangements, they both failed to ensure the confidentiality of SBG’s privileged information on numerous occasions – 64 times for Combes and 25 times for Sternberg. Given these circumstances and the lack of any legal authority supporting SBG’s position, the court declines to deviate from the Asia Global framework simply because the party seeking to overcome the privilege is not the corporation whose email system was used for non-work related purposes.”
In re WeWork Litigation, No.2020-2568, 2020 WL 7624636 (Del. Ch. Dec. 22, 2020).
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