Can an employer investigating an employee recover deleted messages?

In a recent case, an employer alleged that its former senior executive exploited his position and personally profited from it by arranging for the selection of Lattice Innovation, Inc. as a sub-supplier without disclosing his ties to the company.

After discovering these dealings, Advantest America, Inc. and Advantest Test Solutions, Inc. investigated Samer Kabbani, who used to be a senior executive. Through arbitration, Advantest brought claims against Kabbani; Lattice, which he allegedly managed and majority-owned; AEM Holdings Ltd., which purchased Lattice; and Wavem US Inc.

Advantest claimed that Lattice aided and abetted Kabbani’s wrongdoing when it failed to provide the intellectual property and work product that it created under contract for Advantest.

At arbitration, Kabbani admitted the following:

• Before turning over his personal cellular phone to Advantest’s lawyers, he purposely deleted the WhatsApp messaging application, which led to the loss of messages sent or received before June 5, 2020
• He might have used the app to discuss product development and other matters regarding Lattice
• He could not recall using the app for substantive business and financial discussions relating to Lattice
• He could have exchanged WhatsApp messages with certain people associated with Lattice, including its former president and current consultant and its senior engineer

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At Advantest’s request, the arbitrator ordered Lattice to produce copies of the WhatsApp messages between Kabbani and the Lattice employees. Lattice refused. It argued that it lacked possession, custody, or control over these messages and that its employees did not voluntarily consent to such disclosure.

The arbitrator issued subpoenas ordering the Lattice employees, who were not parties to the arbitration, to appear and to produce the documents at a hearing or to upload the documents to a specific website. The arbitrator then compelled compliance when the employees failed to do so.

The employees asked the trial court to cancel the arbitrator’s order compelling their compliance with the subpoenas.

The trial court refused. The subpoenas were “hearing” subpoenas, which were authorized under section 1282.6 of California’s Code of Civil Procedure, and were not discovery subpoenas, the trial court said.

Employees need not comply with subpoenas

In the case of McConnell et al. v. Advantest America, Inc. et al., the California Court of Appeal for the Fourth District, First Division reversed the decision.

The appellate court ordered the trial court to cancel the arbitrator’s order compelling the Lattice employees to comply with the subpoenas. The subpoenas were improper discovery subpoenas despite being labeled “hearing” subpoenas, the appellate court said.

Advantest was entitled to obtain copies of the WhatsApp messages from the Lattice employees since it could not get this evidence from Kabbani, its own employee, the appellate court acknowledged. However, the subpoenas issued here went beyond getting these messages and amounted to discovery, the appellate court found.

Specifically, the subpoenas asked for messages sent via seven other messaging apps and other messaging services or platforms relating to five broad categories, including Lattice’s finances and its business in the semiconductor test industry.

“Finances” as a category was so broad that it could possibly refer to financial information wholly irrelevant to the arbitration, including how much Lattice paid its employees, the appellate court said.