When Privileged Emails Follow a Former Employee: A New California Appellate Decision on Attorney Disqualification

California employers, employees, and their lawyers often battle over documents, emails, and confidential workplace information. But a newly published California Court of Appeal decision addresses a narrower and especially sensitive problem: what happens when a former executive takes company emails that appear to be attorney-client privileged, gives them to her own lawyer, and that lawyer wants to use them in litigation against the former employer? In Guardian Storage Centers, LLC v. Simpson (Mar. 24, 2026, G064847, G064852), the court confronted that question directly and issued an important opinion about attorney ethics, privilege, and disqualification.

The court described the issue this way: a lawyer receives from a client an email that appears to belong to the opposing party, appears attorney-client privileged, and was originally sent to the client only because the client was then an executive employed by the opposing party. Later, without the employer’s knowledge, the executive had forwarded the email to a personal account and then supplied it to counsel for use in litigation against the former employer. The Court of Appeal held that this situation must be analyzed through the same protective lens that California courts apply when a lawyer receives privileged materials through inadvertence.

The underlying dispute

The respondents in the case were all former employees of Guardian Storage Centers. Julie Simpson had served as Guardian’s chief operating officer, Tracie Dotterer had served as chief financial officer, and Rhiana Davis and Gustavo Amezola held other positions. John Minar was Guardian’s chief executive officer and co-owner.

The litigation grew out of two related employment disputes.

In the first, Guardian and Minar sued Simpson after terminating her in October 2023. Their claims included breach of contract, breach of fiduciary duty, conversion, and interference-related claims. They alleged, among other things, that Simpson had confidentiality obligations, failed to return company property, and forwarded 25 company emails to her personal email address in the months before her termination. Simpson answered with a cross-complaint alleging sexual harassment, wrongful termination, retaliation, and failure to prevent harassment and retaliation. Her pleading alleged that, in the weeks before her termination, employees complained to her about discrimination, harassment, and a hostile work environment, that she raised those concerns internally, and that she was fired shortly afterward.

In the second action, filed in March 2024, Dotterer, Davis, and Amezola sued Guardian, Minar, and another individual, alleging harassment, retaliation, wrongful termination, negligent hiring, supervision and retention, and related claims. According to the opinion, Davis alleged sexual harassment by a supervisor, Amezola alleged he was terminated after complaining, and Dotterer alleged she was marginalized and later fired after reporting concerns and refusing to sign a separation agreement. Guardian and Minar cross-complained against Dotterer as well, alleging misconduct similar to what they had alleged against Simpson, including forwarding confidential company emails to a personal account.

The privileged emails at the center of the fight

The appellate dispute focused on three emails that Simpson produced in discovery and had previously shared with her lawyers at Aarons Ward. Guardian asserted those emails were privileged communications among Guardian’s in-house legal counsel, owners, and then-officers, including Simpson and Dotterer, discussing sensitive legal and workplace issues involving two employees. The opinion notes that each email bore counsel’s signature block and a confidentiality warning stating the message was intended only for the addressee and might contain privileged and confidential information. Guardian claimed Simpson had forwarded two of the emails to her personal account while still employed, and that Dotterer had forwarded the third to Simpson’s personal account after Simpson’s termination.

Guardian told opposing counsel the emails were privileged, demanded their return, and asked that they not be used. According to the opinion, the law firm representing the former employees refused. Guardian then moved to disqualify the firm from representing the former employees in both actions, arguing the firm had reviewed the emails in depth, failed to notify Guardian when it obtained them, refused to return them, and intended to use them against Guardian in the litigation.

The former employees opposed disqualification. They argued the emails were not privileged because counsel was allegedly giving business advice rather than legal advice, that Simpson could waive privilege as to emails she authored, and that Guardian had impliedly waived privilege by placing the emails at issue in its own claims and by potentially relying on an adequate-investigation defense to the harassment and retaliation claims.

What the trial court did

The trial court denied the disqualification motions. It concluded the emails were privileged and that Guardian, not Simpson, held the privilege. Even so, it declined to disqualify counsel. The trial court emphasized that Simpson had been an intended recipient of the emails when they were originally sent and reasoned that California courts are reluctant to disqualify attorneys who receive confidential information from their own clients. It also concluded Guardian had not shown how Simpson would use the privileged information to Guardian’s disadvantage because the contents of the emails were not necessary to prove Simpson’s wrongful termination claims. The same result followed in the related Dotterer action.

The Court of Appeal reversed

The Court of Appeal reversed the orders denying disqualification and sent the matter back for reconsideration under the proper legal standards. It began by reaffirming several basic points. Trial courts have inherent authority to disqualify counsel when necessary to protect the integrity of the judicial process. Disqualification is not supposed to be punitive. It is a forward-looking remedy designed to prevent future prejudice where counsel has obtained privileged information that could likely be used advantageously against the other side. The key question is whether there is a reasonable probability the lawyer obtained privileged information that could be used to gain an unfair advantage in the litigation.

The appellate court also upheld the trial court’s determination that the emails were privileged and that Guardian held the privilege. It rejected the employees’ waiver arguments. Guardian’s claims against Simpson and Dotterer were not based on the substance of the emails, the court explained, but on what they allegedly did with them, namely sending them to personal accounts. The court also rejected the argument that Guardian impliedly waived privilege by potentially asserting an adequate-investigation defense. The opinion emphasized that Guardian’s investigation into employee complaints had been conducted by Claire Minar, a nonattorney, not by legal counsel, and that Guardian represented it would rely on that nonprivileged investigation if it chose to assert the defense. Under those circumstances, the privileged emails were not essential to a fair adjudication and therefore were not waived.

The importance of State Fund and Rico

The most significant part of the decision concerns what lawyers must do when they receive what appears to be the opposing party’s privileged material.

California law has long recognized an ethical rule associated with State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644. In State Fund, the defendant’s lawyer received privileged documents because the plaintiff’s lawyers inadvertently sent them along with discovery. The Court of Appeal held that when a lawyer receives materials that obviously appear privileged and it is reasonably apparent they were made available through inadvertence, the lawyer should stop reviewing them beyond what is necessary to determine whether they are privileged and must immediately notify the sender.

That rule later took on even greater force when the California Supreme Court decided Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 807. As the Guardian court explained, Rico confirmed that disqualification is an available remedy when a lawyer violates the State Fund rule. In Rico, the circumstances included the inadvertent receipt of protected material, noncompliance with the rule, dissemination of the material to experts, and surreptitious use of its contents during a deposition. The Supreme Court held disqualification was within the trial court’s discretion.

Why the “intended recipient” point did not save counsel here

The trial court had treated State Fund and Rico as inapplicable because Simpson and Dotterer were intended recipients of the emails when the emails were originally sent. The Court of Appeal rejected that reasoning.

The court acknowledged that Simpson and Dotterer were, in one sense, intended recipients. But that was only because they were then serving as Guardian executives. They received the communications in their corporate capacities, not in their later individual capacities as litigants suing Guardian. Once they later forwarded those communications to personal accounts and delivered them to their own lawyers for use against Guardian, the situation changed. The court held that a person who receives a privileged communication within the scope of corporate employment may not later use it in an individual capacity against the privilege holder and then rely on “intended recipient” status to avoid the normal privilege protections.

In language likely to be widely quoted, the court held that the State Fund rule, as refined by later authority including Rico, applies not only to inadvertent disclosure by the privilege holder, but also where it is reasonably apparent that privileged material was impermissibly taken from the privilege holder without authorization. The court then articulated the governing rule for these circumstances: when a lawyer receives material the lawyer knows or reasonably should know is attorney-client privileged or work product, and it is reasonably apparent the material was impermissibly taken from the privilege holder without authorization, the lawyer should refrain from examining it any more than necessary to determine whether it is privileged or protected and must immediately notify the privilege holder.

The court also found the trial court’s prejudice analysis too narrow

The trial court had also denied disqualification because, in its view, Guardian had not shown how the privileged information would be used to its disadvantage in the wrongful termination case. The Court of Appeal held that this was too narrow a way to think about prejudice.

According to the appellate court, the future-prejudice inquiry is not confined to whether the privileged information is strictly necessary to prove a claim at trial. The inquiry is broader. Courts must consider whether the information could give counsel a strategic advantage during discovery, depositions, settlement posture, witness examination, or trial preparation, and whether counsel’s continued involvement could undermine public confidence in the fair administration of justice.

That broader concern was significant here because the emails reportedly contained legal counsel’s opinions and suggestions regarding harassment and discrimination complaints, along with legal analysis of potential liability. Those issues overlapped directly with the claims asserted in the litigation. The court therefore concluded there was a reasonable probability that opposing counsel had obtained privileged information likely to be used advantageously against Guardian. The court also noted evidence that counsel had already included an allegation concerning the content of the emails in Simpson’s cross-complaint, underscoring the practical risk of future prejudice.

What the court actually ordered

Even though the Court of Appeal found the denial of disqualification to be an abuse of discretion, it did not itself order immediate disqualification. Instead, it reversed the challenged orders and remanded the matter to the trial court with directions to vacate those orders and reconsider the disqualification motions under the correct legal standards. In other words, the appellate court held that the trial court used the wrong framework and too narrow a prejudice analysis, so the motions must be decided again on remand.

Why this decision matters for employers, employees, and lawyers

This decision matters for employers because it underscores the importance of controlling internal access to privileged communications, especially among executives and managers who may later become adverse witnesses or litigants. It also highlights the value of strong confidentiality policies, disciplined offboarding, and prompt action when privileged materials appear to have been removed or misused.

It matters for employees and former employees because not every internal company email is fair game in later litigation, especially when the email reflects legal advice to the company. A person’s having received a communication during employment does not necessarily mean the person may later weaponize that communication in litigation against the employer.

And it matters especially for lawyers. The opinion sends a clear message that counsel cannot assume privileged material is safe to use merely because it came from their own client. If the circumstances make it reasonably apparent that the material belongs to the opposing party and was taken or retained without authorization, California law requires caution, restraint, and notice. That principle is now tied expressly not only to State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, but also to Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 807, and the Court of Appeal has now extended that framework to a modern employment-dispute setting involving executives, email forwarding, and post-employment litigation.

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