In business divorce litigation, as in many other types of cases, parties sometimes make admissions that you wish you had on tape. Because of this, sometimes surreptitiously recording a conversation with your business partner is the best way to prove certain things. For example, in one case where the majority shareholder was denying that the minority shareholder held any shares at all, a recording where he discussed the minority’s “ownership interest” was extremely helpful to have obtained.

The Legality of Recording Conversations

Obviously, it is critical to take into account the relevant state’s wiretapping law before recording anyone, anywhere. New Jersey, for example, is a “one-party consent” state, meaning that only one party to the conversation has to consent, and that can be the person doing the recording. (Requiring at least one party to consent prevents someone from leaving a recording device behind and recording when the person doing the recording is no longer in the room, which literally happened in a Seinfeld episode. Yes, George Costanza was a felon.) However, even this can create a problem at times.

One client wanted to make sure his business partner was not recording him. When I advised that simply getting someone to say they were not recording him was neither enforceable nor trustworthy, we devised another plan. When they were in the room together, my client had an employee who was on vacation in Florida call into the meeting. Since that person was in Florida, which requires all parties to a conversation consent to its recording (even if the conversation takes place over the phone in another state) Florida law had to be complied with. When it was announced that the person on the phone was in Florida and that if the business partner was recording my client, he was committing a felony, suddenly the other side had to cut the meeting short. His plan to record the meeting had clearly been thwarted.

Business Divorce Litigation Strategies

An approach like this is not for all cases, all circumstances, or even all people. Many times, you would be the one who wants to record your business partner and would not be worried about yourself being recorded. The point is, if you find yourself in a shareholder dispute, even before it gets to the point of filing litigation, you should consult with an experienced business divorce attorney who can help you get creative in figuring out exactly what your case needs.