[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]

Where a company official used company email for privileged communications and sold the server holding those communications, he waived the attorney-client privilege.  Jim Daws Trucking, LLC v. Daws, Inc., 2025 WL 27111278 (D. Neb. Sep. 23, 2025). 

The Jim Daws court denied defendants’ “Motion for Protective Order and Destruction of Privileged Documents in Plaintiff’s Possession or Control.” It addressed purportedly privileged pre- and post-sale communications that were stored on the sold server.

JDT sued Mr. Jim Daws and multiple defendants over a sale to JDT of Daws Trucking as a “going concern.” Mr. Daws was the founder of Daws Trucking.  The court’s decision is important to both transactional attorneys and information governance professionals.  It also illustrates the principle that all attorneys should check the email domain of communications that should be privileged.

FACTS: THE SALE OF ASSETS INCLUDED A SERVER

Plaintiff, JDT, was formed to acquire Daws Trucking via an Asset Purchase Agreement (“APA”).  Under the APA, JDT acquired all tangible and intangible assets “used in the business of Daws Trucking.” The server was specifically listed and valued in the APA.

Jim ran other businesses and he used an @daws-trucking.com email domain for his businesses.  He retained the Karavas law firm to represent him in the JDT asset-purchase transaction. Jim communicated about the then-prospective sale, with counsel, via email on a Daws, Inc., server. 

That Daws, Inc., server was sold to JDT under the APA, and the buyer, JDT, unsurprisingly asserted that all data on it – including Jim’s pre-sale communications with counsel – had been sold under the asset purchase.  It argued that was a voluntary disclosure of privileged information.

After the sale of Daws Trucking to JDT Jim continued to work at JDT as a JDT employee.  He had post-sale communications with his attorney on the same daws-trucking.com email account.

Jim, however, was not “tech savvy” and said that he did not “intend” to sell those data to JDT.  He believed that his communications with the Karavas law firm were confidential.

While, during his tenure at Daws Trucking, Jim had never monitored employee emails, JDT did.  JDT’s review found emails that it claimed were adverse to JDT, including emails between Jim and his attorney allegedly working to create a mass resignation from JDT that would decrease its value to the point that Jim could reacquire it at a lower price.¹

JDT approached Jim about selling the assets back to him.  Jim communicated by email with his attorney at Karavas using the same email, @daws-trucking.com. After months of unsuccessful negotiations, Jim resigned from JDT.  However, he kept using the company email domain and even communicated with the Karavas firm after JDT threatened to sue him. The court wrote:

On Jim’s last day of employment at JDT, September 30, 2024, JDT informed [attorney] Karavas that JDT was taking the position that Jim had waived all privilege relating to communications using his jim@daws-trucking.com e-mail address, and it intended to read his email communications with his attorneys…. Jim and his attorneys disputed JDT’s position.

Jim Daws Trucking, LLC v. Daws, Inc., 2025 WL 27111278 (D. Neb. Sep. 23, 2025).

Another error followed.  On the days following Jim’s termination from JDT, “Jim’s attorney inadvertently sent … [two] e-mails to the ‘jim@daws-trucking.com’ e-mail address.”

THE PARTIES’ POSITIONS

The court explained JDT’s position:

JDT has taken the position that all e-mails between Jim and his attorneys—regardless of subject-matter or timeframe—are not privileged because they exist on a server purchased by JDT in 2022 and are JDT’s property as Jim’s employer.

Id.

Jim asserted privilege over 428 files that were on the server that he had sold to JDT.  JDT had an employee handbook.  Jim claimed he never received it. Jim asserted that JDT never told him it could monitor his email.  The court wrote that “Jim asserts that had he known JDT would claim any communication using that e-mail address was property of JDT, he would not have communicated with his attorneys using it.”

JDT claimed that the handbook was simply a continuation of the predecessor (Daws Trucking) handbook that it had purchased under the APA.

JIM’S PRE-SALE COMMUNICATIONS ON EMPLOYER’S SYSTEM = WAIVER

Jim  moved for a protective order commanding destruction of the documents.  Plaintiff JDT argued waiver.  Because jurisdiction was grounded on diversity of citizenship, Nebraska law governed privilege and waiver as to the pre-sale communications that were on the server it had purchased. 

On the following facts, JDT prevailed.  First, Jim and the Defendants “do not address the voluntary disclosure of allegedly privileged e-mails through the sale of the server.”  Second, they never instructed JDT to delete any pre-sale communications.  Third, after the sale, JDT took possession of the server and the communications.  Fourth, while Jim asserted he did not intend to sell them, the court wrote that “through the asset sale, Jim voluntarily disclosed the communications contained on the server, thereby waiving the attorney client privilege.” 

Thus, the court wrote, even assuming that a privilege existed when Jim used the employer’s information technology system to communicate with his attorneys, as to all communications prior to the sale he waived any privilege by sale of the server.

The Jim Daws court quoted In re In-Store Advert. Sec. Litig., 163 F.R.D. 452, 458 (S.D.N.Y. 1995), for the principle that: “[W]here confidential attorney-client communications are transferred from a corporation selling assets to the corporation buying the assets, the privilege is waived as to those communications.”

JIM’S POST-SALE COMMUNICATIONS WITH COUNSEL = WAIVER

However, there were also post-sale communications with counsel on that server. The court noted that, after the sale Jim was a JDT employee and JDT had full access to the communications. 

Jim cited precedent that: “The majority view is that the employees do not waive the privilege in material on their work computer simply because the employer can monitor their communications.” 

Nevertheless, the court applied a four-factor test:

(1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee’s computer or e-mail, (3) do third parties have a right of access to the computer or e-mails, and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?

Id. at *7 (citation omitted).

Application of that test pointed to waiver. 

First, on the facts presented, Jim was a JDT employee covered by the handbook. While the handbook did not ban personal use, it stated that all data belonged to the company and the company could monitor email. 

Second, the Jim Daws court held that actual monitoring by the employer is not required; reservation of the right to do so is sufficient.

Third, as to third-party access, the court found that JDT was a third-party with access.  

Fourth, on the final factor: “As President, Jim was aware of the handbook policies, but simply interpreted the policies to not apply to him…. Jim’s misunderstanding of the handbook’s application to him does not change the fact that he was aware of the policy.”

The Jim Daws court concluded:

In sum, the Court finds that Jim did not have a reasonable expectation of privacy in his post-sale e-mail communications, thus waiving protections of the attorney-client privilege. JDT acquired the Daws’ handbook, which contained policies explicitly warning employees that information contained on workplace computers is not confidential and may be subject to monitoring…. Further, JDT had access to the company’s servers and employee e-mails without requiring access to the employee’s office computer. As the former president, Jim was aware of the Computer and E-mail policies of the Daws, Inc. handbook, which continued to apply after the APA was executed. Thus, the post-sale e-mail communications were not protected by the attorney-client privilege.

Id.

THE ATTORNEYS’ POST-TERMINATION EMAILS TO JIM AT THE COMPANY = WAIVER

The last loose end was the two emails sent by his attorney to Jim at the company email address after termination of Jim’s employment.  The Jim Daws court wrote:  “The Court finds this inadvertent disclosure waived any privilege that may have attached to those e-mails.” 

Citing Fed.R.Evid. 502(b)’s inadvertent disclosure provisions, it added: “Here, Defendants provided no evidence of reasonable steps taken to protect the e-mails from inadvertent disclosure, nor do they provide evidence of reasonable steps taken to rectify the error after learning of it. As such, the Court finds the inadvertent disclosure operated as a waiver of the privilege in these October 2024 e-mails.”

CONCLUSION = INFORMATION GOVERNANCE

The  “Defendants’ Motion for Protective Order and Destruction of Privileged Documents in Plaintiff’s Possession or Control” was denied.

Information governance policies are often critical to resolving discovery issues. Motion to Compel Searching of BYOD Devices – Defendant’s Information Governance Policy Determined Outcome (Apr. 11, 2025)(the Special Master recommended denial of Allergan’s motion to compel searches of BYOD (“bring our own device”) devices used under the precise terms of Revance’s information governance and BYOD policies). 

One decision addressed post-termination application of an employee handbook.  See Employer Erred by Downloading Former Employee’s Personal Email; But, Failure to Preserve it Was Not Spoliation; and, There Was a Gap in Employee Handbook Clause Permitting Employer Access Post-Termination (Dec. 6, 2024).

Permitting employees to use a company’s information technology system for personal purposes has long been recognized as fraught with hazards.  E.g., Bad Things Can Happen When Company Officers Use Their Private Email Accounts for Work (May 20, 2024); Information Governance Decisions Can Carry a Big Price Tag (Feb. 23, 2022); Recent Decision Shows the Need for Information Governance, Computer Usage Policies, and Employee Training (Nov. 19, 2021).

It may be impracticable to deny all personal use of company information technology for personal purposes; however, if permitted, it may be prudent to expressly exclude privileged information, medical information, and sensitive personal information, from permissive use, while reserving a right of inspection.  And, although Jim Daws held that reservation of the right to monitor sufficed, some authorities suggest that more is needed.

Jim Daws also demonstrates the need to be cognizant of email domains when privileged communications are transmitted.

Notes

1. A crime-fraud waiver was asserted by JDT, but not resolved in this opinion. ↩︎

Assisted by GAI and LLM Technologies per EDRM GAI and LLM Policy.