Welcome back to Legal Geek. This week, we review an interesting decision from a Federal Court in Pennsylvania about personal smartphone passwords and whether they are protected under the 5th Amendment.
https://archive.org/details/LegalGeekEp53
The 5th Amendment of the U.S. Constitution provides a number of rights, including the right of a defendant to not be compelled in a criminal case to self-incriminate oneself. Some of the interesting exceptions and limits to this rule were invoked this week in a case involving the Security and Exchange Commission and two defendants being prosecuted for possible insider trading.
More specifically, two former employees of Capital One are being investigated by the SEC for allegedly making over $2.8 million dollars trading on advance company earnings information gained as a part of their former jobs as data analysts for the bank. What led to the ruling this week was the fact that Capital One issues company-owned smartphones for employees, and the SEC wants to access the information on the former employees' phones to scour for incriminating evidence to prove the insider trading occurred.
But the fact that turned this ruling is this: Capital One has employees pick their own private passwords for the phones, and it is company policy to not have employees give this password to the company for security reasons. So even though these employees returned the phones to Capital One when they were fired a few months ago, Capital One cannot access the information stored on these smartphones because the former employees are the only ones who know the password.
The SEC argued under a rule called the collective entity doctrine that these were corporate records possessed by former employees, which are generally not protected by the 5th Amendment. But the court ruled that the confidential passwords chosen and maintained by the former employees could not be deemed corporate records since only the former employees know that information. Indeed, the fact that Capital One asks employees to not keep records of these personal passwords is directly contrary to assuming this is something owned by the corporation.
The SEC then tried to argue a different exception to the 5th Amendment applied, the so called foregone conclusion doctrine. That doctrine causes information to not be shielded from 5th Amendment protection when the government already knows of its existence and location. However, the court disagreed with this argument because the SEC is really on a fishing expedition, and the government agency doesn't know absolutely for certain that incriminating information is on those phones.
So the company and the government both do not have any rights to access data protected by personal passwords kept secret by the former employees and current defendants. The 5th Amendment protects the former Capital One employees from potential self-incrimination based on whatever was stored on those company phones.
The Bottom Line is, despite the 5th Amendment winning the day with these facts, one would be wise to limit all types of personal information you put on company property, whether the computer or smartphone has private personal passwords or not. It can only lead to tough situations if a firing ever occurs.
Until next time, stay smart with personal privacy and hope you never have to rely on the criminal protections offered in the Constitution.
----------------------------------
Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy
No comments:
Post a Comment