Tag: Liable

An Employer Can Be Liable for Accessing an Employee’s Personal Email Even if the Employee Engaged in Misconduct

Over the last several years, communication via email and text has become commonplace in the workplace. Oftentimes, employees use one device for both personal and work-related communication regardless of whether that device is employee-owned or employer-provided. There is no doubt that employers may have legitimate business reasons for monitoring employee communications. For example, an employee may leave the company and the employer is concerned that she has taken confidential information or illegally solicited clients. Employers feel entitled to review data stored on employer-provided, particularly where employees are instructed that the company owns the devices and has the right to monitor the data.  As a general rule, the law supports employers here.  An employer’s zeal to snoop, however, may subject it to both civil and criminal penalties under both federal and state statutes.

The Electronic Communication Privacy Act (ECPA) and the Stored Communications Act (SCA) both govern an employer’s ability to review electronic communications. The ECPA prohibits the interception of electronic communications, and the term “interception” as used in the ECPA has been interpreted narrowly. The SCA makes it illegal to “access without authorization a facility through which electronic communication service is provided,” making it illegal to obtain access to certain communications in electronic storage. With regard to an employer’s review of employee emails sent through web-based email accounts like Gmail or Hotmail, the most frequent scenario is where the former employer is able to access the former employee’s web-based email account because the employee saved his username and password on a device provided by the employer. In these cases, courts have typically sided with the former employee and have been reluctant to punish the former employee for failing to take appropriate steps to secure their own personal information and allegedly private communications.  The former employee’s own negligence in securing personal data is not a defense for the employer.

Bottom line – an employer should seek advice before accessing an employee’s personal email account without authorization even though it has the ability to do so.

For more information on this topic please contact:

Howard Teplinsky at:

312-368-0100 or hteplinsky@lgattorneys.com.

Taxpayer Held Liable For Withholding Tax Penalty After Agent Embezzles The Funds

Plaintiff was the owner of a corporation which was the owner-operator of five McDonald’s restaurant franchises. Plaintiff paid certain withholding penalties assessed against him and sought to recover penalties and related interest paid to IRS for the corporation’s alleged failure to make Federal tax deposits and pay taxes regarding its payroll taxes.

Plaintiff alleged that beginning “some 30 years ago,” the corporation engaged an outside payroll service to process all aspects of the corporation’s payroll, including the issuance of paychecks to the corporation’s employees, the withholding of federal and state taxes from these paychecks, the preparation of employment tax returns, and the depositing of withheld taxes with the IRS. The corporation would electronically transfer the funds necessary for payroll and associated taxes from its bank account to a third party payroll service. Plaintiff claimed that it “reasonably relied upon the outside payroll service and the clearinghouse bank to discharge their duties to remit withheld employment taxes to the IRS,” but instead, “the payroll service and/or the bank absconded with the timely submitted Federal Tax Deposits, which were not remitted to the IRS, resulting in the imposition upon Plaintiff of penalties and interest.

Plaintiff claimed that it learned that its payroll tax deposits to the IRS and had been embezzled, perhaps by the bank or the payroll service. It was later informed by representatives of the U.S. Treasury Inspector General’s Office that the bank was the subject of a Federal grand jury investigation. Plaintiff alleged that:

Through no fault of Plaintiff, unscrupulous third parties illegally diverted the EFTs intended for the payment of Plaintiff’s payroll taxes to their own purposes and failed to tender such amounts to the IRS. Plaintiff reasonably relied on [the payroll service] to tender its tax deposits to the IRS and exercised reasonable business care and prudence in so doing. An employer, like Plaintiff, is entitled to rely on a professional payroll tax service, such as [payroll service], to deposit payroll taxes from the employer’s sufficient available funds with a federal-authorized depositary, like [the bank], and to thereby discharge the employer’s obligations under the Internal Revenue Code and related Treasury Regulations to pay over withheld payroll taxes.

The Court held that, “at the heart of this action is plaintiff’s contention that its good faith delegation-to a third-party agent-of the responsibility to pay taxes in a timely manner may constitute “reasonable cause.” The Court concluded, as many other courts with similar facts have concluded, “a taxpayer may not avoid the adverse consequences of the failure of its agent to perform the taxpayer’s responsibility to timely file and pay federal taxes.”

If you have any questions regarding withholding tax liability, please contact:

Morris Saunders at:

msaunders@lgattorneys.com or (312) 368-0100.

Water Leaks in Condominiums–Who is Responsible for Repairs?

Water leaks are one of the most common causes of disputes between condominium owners. Water can travel between condominium units and cause significant damage to multiple units and association common areas in a short period of time. While common sense may dictate that the owner of the unit the leak originated from is responsible to pay for any resulting water damage, the condominium governing documents and applicable laws often provide otherwise.

Many factors are involved in determining who is liable for water leaks, including the cause of the damage, the association’s declaration and bylaws, and the insurance carried by the association and unit owners.

Generally, a unit owner is not responsible for damage to a neighboring unit unless the owner failed to take reasonable care in maintaining their unit or acted negligently or intentionally. For example, a unit owner would be liable for damage caused by his failure to fix a slow leaking pipe, but would not be responsible for damage caused by major storm that results in a leak from the unit. The condo association declaration, however, can expand a unit owner’s liability and could require that unit owners obtain insurance for damage to another unit caused by the unit owner’s negligence, or regardless of any negligence.

Due to the fact that all association declarations are different and that the situations in which water damage to a unit arise are different, a condominium association or unit owner should contact legal counsel in addition to their insurance carrier to determine how to handle each situation.

If you have any questions regarding your condominium association governing documents or a water leak in your condominium , please contact:

Kristen E. O’Neill at:

koneill@lgattorneys.com or 312-368-0100.

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