Labor Logic

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John D. Finerty, Jr.

In employment litigation, a former employee’s medical records may be relevant to a number of issues. For example, medical records are used routinely in worker’s compensation cases, disability claims and OSHA cases. However, does an employee have a claim against defense counsel when company lawyers file a former employee’s medical records in a court case? One California plaintiff thinks so.

Rakich v. Paul Hastings Janofsky & Walker

The law firm of Paul Hastings Janofsky & Walker represented EMC Corp. as defense counsel in a wrongful termination case brought by a former employee, Caron Rakich. Not only did Rakich sue EMC Corp., but, she has also sued the Paul Hastings firm, alleging the firm violated her right to privacy by disclosing medical information during the course of litigation. According to Rakich’s attorney, he filed a form complaint alleging breach of privacy and is currently deciding whether to continue pursuing the claim. If so, he intends to amend the complaint, possibly adding additional claims.

Rakich v. EMC Corp.

Caron Rakich sued EMC Corp. in the U.S. District Court for the Northern District of California for everything from misrepresentation to unfair business practices — 14 causes of action in all. She sought both declaratory relief and monetary damages, in addition to a permanent injunction. Rakich also wanted $1 million in emotional distress damages.

During the litigation, a discovery dispute developed over Rakich’s medical records. Rakich’s claim for emotional distress over her termination, EMC’s lawyers argued, put at issue all medical evidence related to her emotional state of mind, including the names of her doctors and all her medical records. Rakich and her attorneys refused to turn over her medical records, citing privacy rights.

Paul Hastings, on behalf of EMC, filed a motion to compel with a supporting declaration that included as an exhibit an "evidence of insurability" form. The U.S. Magistrate Judge in the case denied EMC’s discovery request; Rakich claimed the insurance form EMC filed in support of its motion disclosed private medical information. The parties promptly agreed to seal the exhibit after the plaintiff objected but, according to Rakich’s attorney, the damage had already been done.

Wisconsin Law on Medical Records Privacy

Sections 146.81 to 146.84 of the statutes governs the confidentiality of medical records in Wisconsin. Under the statute, "All patient health care records [Health Care Records] shall remain confidential." Wis. Stat. § 146.82(1). Health care records "may be released only to [certain persons designated in Wis. Stat. § 146.82(1)] or to other persons with the informed consent of the patient or of a person authorized by the patient." Id. Thus, absent an "informed consent" of the individual, no one may disclose health care records.

This statute may apply to entities other than health care entities. The statute’s penalty provisions for example, Wis. Stat. § 146.84, apply to "[a]ny person, including the state or any political subdivision of the state" who violates Wis. Stat. § 146.82 or 146.83. Wis. Stat. § 146.84(1)(b), (bm). Similarly, penalties (including a fine of up to $25,000 and up to 9 months in prison) can be applied to "[w]hoever" obtains certain confidential information under false pretenses or with knowledge that the disclosure is unlawful and not reasonably necessary to protect another from harm. Wis. Stat. § 146.84(2)(a).

At least one court has relied on this broad language in holding that these provisions can apply to non-health care entities. In Hannigan v. Liberty Mutual Ins. Co., 230 Wis.2d 746, 604 N.W.2d 33, 1999 WL 667303 (Wis. Ct. App. 1999) (unpublished), the Wisconsin Court of Appeals held that this statute could apply to Liberty Mutual Insurance Company and a law firm, Borgelt, Powell, Peterson & Frauen, S.C. Note, however, that the opinion is unpublished and therefore has limited precedential value; and another unpublished Wisconsin Court of Appeals decision seems to have reached the opposite result, although with far less analysis.

Wistrom v. Employers Ins. of Wausau, 249 Wis.2d 489, 639 N.W.2d 224, 2001 WL 1465314, n.2 (Wis. Ct. App. 2001) (unpublished).

In yet another unpublished decision, Korntved v. Advance Health Care, Case No. 2004AP1604 (Ct. App., Jul. 19, 2005), the court held that an employer could not be held liable for the release of medical records by an employee who acted outside the scope of her employment. In that case, a lab technician at Advanced Health Care accessed and released the medical records of two patients. In doing so, the technician breached Advance Health Care’s confidentiality policy that she signed as a condition of employment.

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The court, therefore, concluded the technician acted outside the scope of her employment and, as a result, Advanced Health Care could not be held liable under the patient health care records statute, Wis. Stats. § 146.82(1) or the privacy statute, Wis. Stats. § 895.50.

Other Considerations

Even if the patient privacy statute applies to non-health care entities, such as la
w firms, lawyers have a number of legal and practical tools at their disposal to protect against these type of claims. First, Wisconsin recognizes a limited litigation privilege that protects attorneys from third-party claims over statements made or evidence presented, in good faith, during litigation. See Strid v. Converse, 111 Wis. 2d 418, 428-429 (1983) (discussing Goerke v. Vojvodich, 67 Wis. 2d 102; and Langen v. Borkowski, 188 Wis. 277 (1925)). Second, the parties may stipulate, or a party may seek a court order, to allow release of employee medical records; compliance with a court discovery order is a dispositive defense to a breach of privacy claim. See Wis. Stats. § 146.82(2)(A)(4).

For more information on these issues or for assistance with employment litigation, contact John D. Finerty, Jr. or John L. Barlament at Michael Best & Friedrich LLP.