Spying On Employees: What You Can And Can't Do

-Even though you may monitor your employees for legitimate business interests, such as productivity, efficiency, and quality control, there are a handful of laws that may restrict your ability to monitor.

Excerpted from Kentucky Employment Law Letter written by the law firm of Greenebaum Doll & McDonald PLLC

Advanced technology has provided employers with sophisticated monitoring tools that make it easy to monitor employees in the workplace. More and more employers are monitoring their employees' phone calls, voice mail, e-mail, and computer and Internet use.

Even though you may monitor your employees for legitimate business interests, such as productivity, efficiency, and quality control, there are a handful of laws that may restrict your ability to monitor - and may even hold you criminally liable. A better understanding of the various applicable laws and their exceptions will help you determine whether, and under what circumstances, you can monitor your employees.

Q: What laws regulate my ability to electronically monitor my employees?

A: The Federal Wiretapping Act (FWA) is the primary federal law that regulates your ability to electronically monitor your employees. Under the FWA, unless one of the exceptions (see below) applies, you can neither "intercept" any wire, oral, or electronic communication nor access a stored wire or electronic communication. In other words, it's unlawful for you to intercept or acquire the contents of communications such as telephone calls and e-mail while they are in transit. Once the wire or electronic communication is in storage, e.g., voice mail and e-mail, you can't access the stored communications without the help of one of the exceptions. It's also illegal for you to intentionally use a device to intercept a communication or to disclose or use the contents of any communications you illegally intercept. (Read on since the exceptions are important and generally "swallow the rule" against the interception of communications.)

The National Labor Relations Act (NLRA) prohibits you from restraining or interfering with your employees' right to engage in union activity or other protected concerted activity conducted for mutual aid and/or protection - even if your facility or company is nonunion. In other words, monitoring protected activities without an objectively reasonable basis will violate the NLRA because such monitoring may be considered to restrain or interfere with your employees' rights. This can include monitoring such mundane activities as employees discussing their wages if the discussion could be construed as having the purpose of mutual aid or protection. Thus, the NLRA affects whether you can monitor your employees and under what conditions.

Also be aware that many states have their own eavesdropping or privacy statutes. Be sure to check your state's laws for relevant statutes.

Q: What is my potential liability if I violate the FWA?

A: If you intercept, intentionally use a device to intercept, or disclose or use the contents of illegally intercepted communications, your potential criminal penalties include imprisonment for up to five years, a fine, or both. If your employee sues you under the FWA, he can recover the greater of (1) the sum of his actual damages and any profits made by you as a result of the violation; or (2) $100 a day for each day of violation or $10,000, whichever is greater.

If you illegally access stored communications, you could be imprisoned for up to two years, fined, or both if it's your first offense. If your employee successfully sues you under this provision, he can recover his actual damages and any profits made by you as a result of the violation, but no less than $1,000. If the court thinks you violated the law willfully or intentionally, it may order you to pay punitive damages as punishment. Finally, the employee will be able to recover reasonable attorneys' fees and other litigation costs.

Q: Are there any exceptions to the FWA's prohibition on interception that will permit me to intercept and monitor my employees' phone calls and e-mails?

A: Yes. The first exception, often called the "business extension" exception, allows you to monitor any business-related communication without your employees' knowledge or consent. For this exception to apply, however, you must use a telephone or telegraph device that is used by you in the ordinary course of your business and is either furnished to you by the provider of a wire or electronic communication service in its ordinary course of business or furnished by you to connect to your wire or electronic communication service provider's facilities. As you can see, this is a fairly technical exception.

Remember, because you can only monitor communications made in the "ordinary course of business" - in other words, business-related communications - you may monitor employees' personal communications only to the extent necessary to determine they are personal. Once you determine a particular communication is personal, you must stop monitoring. Although you can't discipline an employee for the content of any personal call or e-mail, you can discipline an employee for making the personal communication if it violates one of your policies. Because the phrase "ordinary course of business" is somewhat vague and doesn't include anything and everything that may interest you (such as an employee's conversation about an upcoming interview with another employer), this exception is the least desirable.

The more practical alternative to the "business extension" exception is the "prior consent" exception. Simply put, if one of the parties to the communication consents to monitoring, you don't violate the FWA. Although we recommend obtaining your employees' express consent, employees can also give implied consent to monitoring. Employees' consent may be implied if you (1) establish a policy stating you will (not "may") monitor their telephone and e-mail communications and (2) make your employees aware of the policy and inform them that by continuing to work for you, they consent to the policy.

If you decide to monitor telephone and e-mail communications using the prior consent exception, make sure that the monitoring fits within the scope of your employees' consent. If you've told your employees you will monitor their phone calls and they have consented, you can't then record their phone calls because that's not within the scope of their consent. Additionally, if you don't expressly inform them you will monitor all telephone calls and e-mails, including personal communications, a court might conclude that the employees have consented only to the monitoring of business- related communications.

Q: What exceptions to the FWA's prohibition on accessing stored wire and electronic communications will permit me to review my employees' stored voice mail and e-mail?

A: First, if you actually provide the wire or electronic communications service (e.g., the voice mail and e-mail systems) you will qualify for the "systems provider" exception, which enables you to access those communications without incurring liability. Second, and again the safer alternative, is to obtain your employees' consent to access their voice mail and e-mail. The same principles regarding express and implied consent that apply to interception of communications apply to consent regarding the access of stored communications.

Q: Do these laws prevent me from monitoring my employees' computer and Internet use?

A: Because the information you obtain from monitoring your employees' computer and Internet use is typically based on electronic communications, the FWA applies. Under the FWA, if you provide the computer systems and Internet access for your employees, you likely would fall under the protection of the "systems provider" exception. If you want to be on the safe side, you could simply obtain your employees' consent to monitor their computer and Internet activity.

Q: How can I protect myself against common-law claims, such as invasion of privacy?

A: To prevail on an invasion of privacy claim, your employee would have to prove that you intentionally intruded into her private affairs or seclusion in a manner that a reasonable person would find highly offensive. Your best defense in such a case is to show that the employee didn't have a reasonable expectation of privacy in the communication at issue.

For example, if the employee alleges that you invaded her privacy by listening to her voice mail and you have a clear policy expressly stating you will monitor employees' voice mail, she will have a hard time establishing that she had a reasonable expectation of privacy in her voice mail. Consequently, it's best to obtain employees' consent to all types of monitoring you intend to conduct.

Q: Can I videotape and/or photograph my employees?

A: In the absence of a union or union organizing activity, you can videotape or photograph your employees to further legitimate business interests - so long as the surveillance doesn't exceed reasonable boundaries and intrude into areas in which employees have a reasonable expectation of privacy. Such areas include restrooms and locker rooms, for example. Additionally, you must verify that any video surveillance doesn't also include audio surveillance. Otherwise, you may violate the FWA.

Q: When and what type of activities does the NLRA prohibit me from monitoring?

A: Basically, the NLRA prevents you from restraining or interfering with your employees' right to engage in union activity or other protected concerted activity conducted for mutual aid and/or protection. Consequently, the NLRA allows you to videotape or photograph your employees' routine work activities. If you are a union facility and subject to a collective bargaining agreement, however, the National Labor Relations Board (NLRB) has held that you must bargain with the union over the installation and use of hidden surveillance cameras, even to monitor routine work activities. Additionally, regardless of whether you are a union facility, you can't monitor protected activities without an objectively reasonable basis for doing so. It's also unlawful to place specific union supporters under surveillance or even give the impression of doing so. Colgate-Palmolive Co., 323 NLRB 515 (1997).

Although the courts haven't conclusively resolved the issue of routine employer surveillance of employees' e-mail or Internet use, the NLRB and courts would find a violation of the NLRA if you monitor employees' e-mail or Internet use expressly for the presence of protected concerted activity. Again, if you intend to monitor employees' routine work activities via e-mail and/or Internet use, keep in mind you will likely be required to bargain over those policies if you are bound by a collective bargaining agreement because they arguably "affect the terms and conditions of employment."

Additionally, you'll violate the NLRA if your policies expressly prohibit the use of e-mail for the distribution of union-related material. Instead, your policies must be neutral and consistently enforced. For example, if your policy limits employees' e-mail or Internet use to business purposes, the NLRB has held that you will violate the Act if you fail to consistently enforce the policy - such as allowing personal use for nonunion-related purposes but not union-related activities. E.I. Dupont DeNemours & Co., 311 NLRB 893 (1993).

Q: In light of the many potential sources of liability, how do I best protect myself against lawsuits?

A: Given the technical aspect of both the "business extension" and "systems provider" exceptions, we recommend you establish a clear policy stating you will monitor and review the content of telephone calls, e-mail (both in transit and storage), voice mails, and computer and Internet use.

A clear policy that is widely disseminated to employees - preferably with written acknowledgment of receipt and acceptance - reduces your employees' reasonable expectation of privacy and satisfies the statutory exceptions of prior consent. Your policy should expressly state that employees' passwords exist only to protect against security breaches and aren't intended to prevent your access to their computers, e-mail messages (sent or received), Internet records, or any other information in or passing through your computer equipment. Remember, you may need to bargain with the union concerning your policy, and you must consistently enforce it.

Although we can't guarantee you won't be sued by an employee, following these steps should limit an employee's likelihood of success if he files a lawsuit.

Copyright 2002 M. Lee Smith Publishers LLC. This Q&A is an excerpt from KENTUCKY EMPLOYMENT LAW LETTER. KENTUCKY EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kentucky employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.

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