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Learn from Recent BYOD Lawsuits

Learn from Recent BYOD Lawsuits

Lessons from the Courtroom Set Important Precedents about BYOD Policies

March 25, 2015

In the years since Bring-Your-Own-Device entered the business environment, BYOD has grown to become an incredibly popular strategy for organizations looking for IT simplicity and cost savings.

Starting from an early push toward BYOD adoption (see Half of Employers May Adopt BYOD by 2017), enterprises have been continuously learning best practices and strategies for implementing BYOD. Recent developments have included stronger enterprise security regarding BYOD (such as eliminating common security mistakes), and specifying ownership and support in BYOD contracts.

Now, after years of analyzing the effects and results of enterprise BYOD, recent legal cases have illuminated much of the gray area surrounding BYOD policies. Going forward, these verdicts will provide valuable insight into the future of organizational BYOD.


Lessons from the Courtroom

Amanda Tomney, an associate at the law firm of DLA Piper, outlined these court cases in a recent blog post.*

BYOD: Work-Related Content vs. Personal Content

In the recent case of Rajaee v. Design Tech Homes et al., a sales rep sued his former employer for wiping his BYOD device when he left the company, citing the Electronic Communications Privacy Act (which makes it illegal to intentionally access electronic information without authorization) and the Computer Fraud and Abuse Act (which makes it illegal to cause $5,000 or more in damage to electronically stored information).

Ultimately, both claims were rejected. The verdict set important precedents for a divide between personal and work-related information on BYOD devices:

  • Information in a mobile device is not “electronic storage” (as defined under the ECPA).
  • Despite the fact that the former employee lost all personal items on his device (e.g. photos, videos, contacts, passwords), there was no “loss” (as defined under the CFAA).*

TIP: Clearly define the circumstances under which a device will be wiped, and consider mandatory separation between work-related and personal content on BYOD devices.

BYOD: Overtime Reporting and Exempt Employees

In Mohammadi v. Nwabuisi, an employer was found guilty for failing to compensate an employee who performed overtime work on a BYOD device. However, White v. Baptist Memorial Health Care Corp. showed that employers aren’t responsible for overtime compensation if the employee did not follow proper reporting procedure.

These cases teach us that:

  • Even non-exempt employees can be compensated for overtime if proper reporting procedures are not established by the employer.
  • However, employers are not responsible for compensating employees for overtime if the employee did not follow the employer’s clear, established procedures for reporting this uncompensated work.

TIP: Establish a clear process for reporting overtime. In addition, consider limiting BYOD to exempt employees, or ensure time-reporting systems and policies are updated and effectively capture all time worked.*

BYOD: Reimbursing Phone Bills

The case of Cochran v. Schwan’s Home Services Inc. ruled that, according to California labor laws, employers must reimburse BYOD employees for a “reasonable” percentage of their phone bills – regardless of whether or not employees incur additional expenses.

Though this ruling only applies in California, Tomney predicts that other states may follow suit, “given that California isn’t the only state with laws that require reimbursement for all necessary expenditures incurred by employees in discharging their work duties.”*

  • Employers in California must reimburse BYOD employees for percentages of their device bills.

TIP: Consider that employers nationwide may soon be required to reimburse BYOD employees for percentages of their device bills. Take this into account when evaluating the costs of BYOD for your business.

BYOD: The Issue of E-Discovery

Electronic discovery refers to any process in which electronic data is sought, located, secured, and searched for evidence in a civil or criminal legal case. Understandably, BYOD throws a wrench into traditional e-discovery methods, most notably when it comes to litigation holds.

In Small v. Univ. Med. Center of S. Nevada, the university’s medical center “failed to issue any litigation hold addressing BYOD devices despite the fact that several key employees confirmed that they used their personal mobile devices for work-related purposes,” says Tomney. “The (e-discovery) special master declared the defendant’s conduct a ‘mockery of the orderly administration of justice,’ and recommended that the court enter an order of default judgment.”*

In other words:

  • Failing to issue litigation holds on BYOD devices could land employers in hot water.

TIP: Learn from this cautionary tale and understand that litigation holds and e-discovery requirements may apply in a court of law when it comes to BYOD.


Looking Ahead

It’s clear that, despite what you should know about BYOD, it’s still a fairly new strategy that continues to make critical legal precedents today.

Thus, a critical component of implementing BYOD for your organization is to ensure that your BYOD policy is thorough and clearly stated.

As gray areas in BYOD fade away as cases pass through the legal system, it’s important to keep your own company policy up-to-date. In this way, you’ll avoid legal troubles and make BYOD worthwhile for your business.

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* Tomney, Amanda. What Recent Case Law Can Teach About BYOD Workplaces, The Labor Dish. DLA Piper LLP US. 17 March 2015.