Can You Invoke Your Right to Remain Silent to Avoid Disclosing Your Company Phone Passcode?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Oct 27, 2015

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Hands Holding Smart PhoneA US federal court in Pennsylvania ruled that, under the Fifth Amendment to the US Constitution, people under investigation for crimes don’t need to disclose their personal passcodes to smartphones issued to them by their employers.

As the court noted, the case involves “the interplay of mobile technology, employer rights and former employees’ Fifth Amendment protections.”

As the Tech Times reported, data analysts Bonan Huang and Nan Huang were former employees of the credit card company Capital One.

The two men had smart phones that were issued by Capital One. They were allowed to create and set their own passcodes to access the phones, and told to make no records of the numbers. When they were fired by the company, they were required to return the phones.

Insider Trading

The Securities and Exchange Commission (SEC) alleged that the two men took advantage of insider information they gained during their time at the company. The men allegedly looked at sales trends at major US companies and used that information to buy and sell stocks ahead of public announcements by the companies.

The SEC alleged the men used the information to trade the stocks of 170 companies. They allegedly turned $150,000 into $2.8 million.

The SEC requested access to the password-protected phones in order to look for evidence of the alleged offenses. However, without the passcodes it couldn’t get to the information inside.

The SEC then sent a formal request to the men requesting that they turn over the codes.

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Taking the Fifth

The men refused, invoking their Fifth Amendment rights, and the SEC sought a court order to compel them to provide the information. The SEC argued that the men were “corporate custodians in possession of corporate records” and in that role had no Fifth Amendment rights to invoke.

The Fifth Amendment to the US Constitution states, in pertinent part:

No person… shall be compelled in any criminal case to be a witness against himself…

This means that people accused of crimes don’t have to testify if by doing so they can incriminate themselves. Witnesses can “plead the Fifth” to avoid answering such questions.

Miranda Warnings

The Fifth Amendment also limits police questioning of crime suspects, under the Supreme Court’s famous Miranda v. Arizona ruling.

Most people can recite the Miranda warnings by heart, thanks to cop shows:

  • you have the right to remain silent;
  • anything you say can and may be used against you in a court of law;
  • you have the right to have an attorney present before and during questioning; and
  • you have the right, if you cannot afford the services of an attorney, to have one appointed, at public expense.

Thought Processes

The court found that

as the SEC is not seeking business records but Defendants’ personal thought processes, Defendants may properly invoke their Fifth Amendment right… [T]he SEC seeks to compel production of the passcodes which require intrusion into the knowledge of Defendants…

The case is Securities and Exchange Commission v. Huang.

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