New Hampshire Ball Bearings, Inc. v. W. Scott Jackson, et al.
No. 2008-073, 3/18/2009
The following summary of a New Hampshire Supreme Court case is based on a slip opinion. Slip opinions are subject to change following motions for rehearing and/or motions for reconsideration. The Court may also modify an opinion without motion. The final version of the Court’s opinion is that which appears in the New Hampshire Reports.
Municipal officials are becoming accustomed to thinking about electronic records in terms of the Right to Know Law, RSA 91-A. A “governmental record” is “any information created, accepted or obtained by, or on behalf of, any public body, or a quorum or majority thereof, or any public agency in furtherance of its official function.” RSA 91-A:1-a, III. “Information” is defined as “knowledge, opinions, facts, or data of any kind and in whatever physical form kept or maintained, including, but not limited to … electronic … form.” RSA 91-A:1-a, IV. Officials must keep in mind that e-mails and other files on their personal computers may be governmental records. Under RSA 91-A:4, III-b, a record in electronic form is no longer subject to disclosure after it has been lawfully deleted.
This case does not involve a municipality, but it illustrates the very broad technical and legal possibilities for accessing data stored on computers when it comes to civil litigation and discovery. Jackson was a 20-year employee of New Hampshire Ball Bearings, Inc. (NHBB) in various engineering capacities. He interviewed for a job with Sargent Controls and Aerospace (Sargent), a competitor, on January 29, 2006, and, on February 1, 2006, Jackson resigned from NHBB, turned in his company-issued laptop computer and accepted the job with Sargent. NHBB used forensic software to capture a “forensic image” of the laptop, which discloses the peripheral devices connected to the computer, what a user accessed, what has been stored on the device and when it was last accessed or modified. Both current and deleted files can be determined unless they are completely overwritten with new data. The forensic image showed that, on January 29, Jackson had remotely accessed various NHBB files containing trade secrets and other confidential information and had used a flash drive peripheral device. NHBB filed suit against Jackson for violation of the confidentiality terms of his employment agreement and against Sargent for misappropriation of trade secrets.
A protracted struggle over discovery of Jackson’s and Sargent’s computer files ensued. The trial court initially issued a discovery order that is generally applicable in civil litigation: “all parties are under an obligation to preserve documents and records from the time that the party is reasonably on notice that a document or record may become evidence or be subject to discovery in a lawsuit.” NHBB requested access to all Sargent’s servers and back-up tapes and the hard drives of all employees’ computers. The trial court limited the discovery to back-up tapes and computers of 35 employees in the relevant department. NHBB also examined Jackson’s wife’s laptop, MP3 player and flash drives. Discovery was inconclusive. No NHBB files were found, but there was evidence that Sargent had used anti-forensic software, had overwritten data and had replaced some hard drives. Jackson likewise had overwritten and defragmented information.
During the 33-day trial one issue was whether Sargent and Jackson had violated the discovery order, which would permit the jury to “draw an unfavorable inference.” The jury verdict found Jackson liable for violating the confidentiality agreement and Sargent not liable for misappropriating trade secrets. The Supreme Court affirmed.
The case should serve as a reminder of the need for discipline in the use of e-mail and other electronic data storage in connection with municipal business, both on municipally owned computers and the personal computers of officials. It is also a reminder that destruction of information is not permitted once an official is “reasonably on notice” that the information may become evidence or subject to discovery in a lawsuit.
Please be advised that the foregoing case summary is based upon a Supreme Court slip opinion. Slip opinions are subject to change following motions for rehearing and/or motions for reconsideration. The Court may also modify the opinion without motion. The final version of the Court’s opinion is that which appears in the New Hampshire Reports.< Back to Court Update Home