Nasir and Matt talk about expanding email usage for employees to include non-work purposes. They then answer the question, "How do I get out of a lease? We have been there for years, but our lease is ending in two. We originally signed a guarantee, but we didn't in our renewal, so I'm willing to possibly walk away if we can stop ourselves from personal liability? In NorCal."
NASIR: All right. Welcome to Legally Sound Smart Business and I’ve already messed up the intro again. Welcome to our podcast where we cover business in the news and answer some of your business legal questions that you, the listener, can send in to firstname.lastname@example.org.
My name is Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: Matt Staub is joining us, nice. I love it.
MATT: You know, when you say the actual name of the podcast, that doesn’t mean you messed it up but…
NASIR: Well, yeah, that’s true. But, as we’ve discussed many times before, if I say the name of the podcast, then it’s like, why do we even have an intro to our intro? I guess… should we just start talking and not even have an intro?
MATT: Make it a choose-your-own-adventure so the audience can choose which way they want to go.
NASIR: That would be awesome.
MATT: I don’t know if that’s possible to do. Probably not.
NASIR: Oh, someday with audio and you can integrate it. I think we should implement that.
MATT: Well, Friday episode, I guess this is relevant because what do employees do on a Friday other than use their work email for personal reasons, right?
NASIR: I was going to say, other than spying on your employees and going through your employees’ emails.
MATT: Yeah, I don’t use my work email for personal reasons. Maybe, like, two percent of the time when people accidentally email me on the wrong one, but I keep mine separate, especially with technology these days.
NASIR: It’s so easy to do so, right?
MATT: Yeah, I mean, on your phone… Actually, I don’t check my personal email. I’ll usually check it in the morning and, like, around noon, and then not till I’m done for the day because I never really get anything that important in my personal email so I just don’t want to get distracted with nonsense.
NASIR: In my Gmail account, I have both my work email and my personal email going there, so I do happen to, once in a while, like you said, someone sends something to my work email and that’s the only time that you don’t separate it.
MATT: All right, and I think that’s our episode.
NASIR: That’s our episode. Thank you for joining us.
MATT: Email tips.
So, what we’re dealing with is, it’s what decisioned by the National Labor Relations Board, basically saying that employees who have been given access to their employer’s email system, that those employees can then use that email for non-business purposes. You know, the big thing in this one was union organization was a possibility that these employees could use the work email for but I look at it as, for a range of non-business purposes, these employees can now use their work email which should be pretty interesting to see how employers deal with this.
NASIR: Yeah, the NLRA which is a board that has been charged with dealing with some union disputes but also unfair employer practices as well. So, it’s not often that they do have a limited scope but they do have some kind of wide-reaching effect sometimes with some of their decisions, especially in this case where the implications for employers are such that, now, you can’t do an outright ban or non-work use of the email system which can be interesting because a lot of people are like, “Okay, just use the email for work purposes only,” but now they’re saying that there’s a certain statutory protected communication that cannot be restricted during non-work time so long as there’s no – how do they put it?
MATT: Creates a danger of server overload or damage from excessive use.
NASIR: Yeah, that was a specific example, but the restriction is justified by special circumstances necessary to maintain production or discipline. And so, basically, what the board is saying is that, unless you have a very compelling reason, you can’t do this because they’re saying that it’s going to be a rare exception to the rule.
MATT: Yeah, this doesn’t mean that employees can just go to work and use their work email and that blast away on a ton of personal emails to their work. I mean, that’s not the ruling that came down here. It’s just that, when the time is right and appropriate, the employees can use their work email.
NASIR: And, unfortunately, the actual decision is not as clear as many of us would like to be as far as the legal world is so it’s not yet clear how this is going to develop and how it’s going to impact actual employers. But one thing we do know is that the scope of protection for these kinds of employment activity has been broadened. And so, the takeaway from all this is that, if you have a policy where you are (1) restricting the use of the email and (2) even surveilling your email – because, again, now that employees can use this email for non-work activity, that may be protected under different privacy laws in both federal and even state from actually surveilling such emails. So, I think there should be an alternative policy that would fit the decision – Purple Communications decision. But it’s a very subtle issue that you don’t want to get into trouble with. So, if you do have those kinds of policies, get it reviewed by an attorney.
MATT: Yeah, and in terms of monitoring the email systems, the employers have the responsibility to show that the monitoring policies are not seen as improper surveillance or an illegal response to specifically protected employee communications. So, it’s a little bit tougher for employers as well.
NASIR: Yeah, no doubt. I was taken aback from this decision, actually. It seems a little too much. I mean, why not be able to just restrict your employees in such a way? I don’t think that that is too much of a restriction from an employee’s perspective.
MATT: No, I agree, but it’s not the first time you’ve been wrong so that’s all right.
NASIR: All right, let’s get to our question of the day.
MATT: Question of the day. Well, the actual question’s only a few words at the beginning, but there’s some follow-up. I’ll read the whole thing just so people get a full idea.
NASIR: Yeah, read the whole thing.
MATT: “How do I get out of a lease? We have been there for years but our lease is ending in two. We originally signed a guarantee, but we didn’t in our renewal, so I’m willing to possibly walk away if we can ourselves from personal liability in NorCal.”
NASIR: Northern California.
MATT: Very interestingly worded, grammatically structured question. But, nonetheless, it’s a good question.
NASIR: Yeah, it is a good question. I think the first thing that spotted out with me is the guarantee aspect. You know, a lot of times, even if you have a renewal, these guarantees are worded as such that they extend to even renewals. So, even if you do a renewal, unless the guarantee doesn’t provide this – but most do, especially leases – you have to put in there that the guarantee is cancelled or terminated. Without that, this person may want to walk away but he or she may not be able to because the guarantee still may be good. So, that would be the first thing I would check before walking away.
MATT: Yeah, I mean, I guess it’s hard to know, but I would want to know why they want to get out of the lease. Is it because they just feel like the rent is too high which is one thing or is it because they feel like their landlord’s not doing what they’re supposed to be doing on their end? Because, if that’s the case, then it’s going to be easier for you if you can show that the landlord’s doing things incorrectly. But, at the same time, I think oftentimes there is clauses in there allowing basically, usually the tenant has to provide written notice of a landlord’s breach and then the landlord will have something like 30 days to cure the breach so it seems like there’s always a lot of protections in there for the landlord.
NASIR: I assume it’s because of money reasons. I mean, that’s usually the case when a tenant wants out of the lease. It’s usually difficult for a landlord in a commercial lease to not be upholding its bargain. It’s not too often that they end up being the ones who are breaching. But, yeah, it does happen, of course.
How I approach it is that the best that you can do is just negotiate with your landlord. I mean, this is dollars and cents from the landlord’s perspective. If they can find either a new tenant or, even better for you is, if you sublease a space – let’s say it’s money reasons – if you are able to sublease part of the space and use the other, save some money, and be able to pay your rent and fulfill your obligations without extending yourself to personal liability, that’s usually the best option. Keep in mind that there’s obligation from the landlord – and this is a general law – that the landlord must mitigate its damages. So, even though under California law, for example, this person is in Northern California, landlords are entitled to receive the total consideration of the lease after default. So, if there’s two more years left and you break the lease, then they can receive the rent for those two years. However, those tenants in the same circumstance will argue that, if they can demonstrate that they can reduce the losses by leasing it to somebody else, then they can reduce the damages. But there’s a particular statute provision that allows landlords, if they put it within the lease, to remove this obligation to mitigate damages. It’s not in most of the standard forms, but occasionally they are and they’re very dangerous. Look out for this. It’s Civil Code 1951.4 so I would take a look to make sure that it’s not in there because, if they comply with those restrictions, it could mean that they don’t have to mitigate damages which would be a huge, huge difference, and take the consideration of being able to put in a sublease or a sub-tenant in there out of the question.
MATT: Yeah, that would be a big one in terms of… it would be bad for the person asking the question, I suppose.
NASIR: I think the first thing is to evaluate what your lease says. If you can find a reason to get out of the lease, that’s fine, but that’s very unlikely; the real thing that you need to be looking at it is – worst case scenario – if you walk away today, what are your responsibilities? And those are two things to look at.
MATT: Tough situation for the tenant, but keep it sound and keep it smart.