When a file is protected with a sensitivity label using Information Rights Management (IRM) protection, encryption is applied to the file to help secure the content against unauthorized access. For most files stored in SharePoint Online or OneDrive, encryption is managed by the SharePoint or OneDrive of the organization whose label it is.
In this instance the file belongs to a different organization, however, and that organization can’t manage a label belonging to your organization.
It’s sort of like putting your own lock on somebody else’s door.
Note: If the file is not coauthorable then the protection is not managed by SharePoint or OneDrive and protection can be applied with labels from other organizations.
What can I do?
Use a label that doesn’t change protection
If you want to apply a label from your own organization to files located in other organizations, choose a sensitivity label from your organization’s policy that doesn’t apply or remove protection.
Make your own copy of the file
If you want to apply a protected label from your own organization, and you have sufficient privileges, you can save a copy to your device or to your own SharePoint or OneDrive and then apply the label from your organization.
Important: This will create a new copy of the file that isn’t shared with the original organization. If you choose this option, you should first ensure that this action is consistent with the policies and agreements for information contained in the file.
Have somebody in the other organization apply one of their labels
You can ask someone in the organization where the file is located to label the file appropriately. You will only see information about permissions and not the label applied in Office, since this label would be from a different organization than yours.
Important: This may result in your losing permissions to the file if the sensitivity label applied restricts permissions in a way that excludes you.
Sign in using an account in the other organization
If you have an account in the organization where the file resides, and that user account is licensed for sensitivity labels, you can sign in with that account and apply a label from that organization to the file.
Important: If you do that you may have to use that other account to view the file in the future since your account in your home organization might not have access once the protections are applied.
Don’t apply a label
You can decide to leave the file as-is without any labels.
