California’s view on audio surveillance on the job
California traditionally afforded employees an exceptionally high expectation of privacy, whether it be on the telephones, in meetings, on email, or in the workplace. However, with the passage of its 1988 Electronic Communications Privacy Act (CalECPA) (Cal. Penal Code § 1546 et seq.), California is now deemed to have the most robust protection of electronic privacy rights of any state in the country; which includes, among other things, trojan horses, keystroke loggers, cameras, hidden videos and audio recordings and wiretaps. A concise history of CalECPA is here.
The Legislature established a legislative finding and declaration that "unreasonable intrusions into private communications and data threaten individual privacy and may contribute to the growth of identity theft. The Legislature further finds that electronic communication is distinguishable from other forms of communication because it is often recorded, stored, and backed-up. Unlike traditional methods of communication, advances in technology require participants in electronic communications to consider not merely the person or persons with whom they are communicating, but also their location in place and time, the placement and movement of data in storage and during transmission, and the various entities that have access to that data while it is stored and in transit."
The Courts later made it clear in Vargas v. HB Cellar , Inc. (2014) that the electronic communication described was not limited to "all electronic communications." And at least one federal court has applied CalECPA to suggest that an employee has an expectation of privacy in his or her workplace electronic communications, including business communications where the employer has made it clear that the employee should expect the communications to be private.
While there is no "penalty" per se for violation of CalECPA, an employer may be subject to injunctive and declaratory relief and may be liable for damages.
In addition, Cal Penal Code Section 632 imposes criminal liability on an employer (and managers) engaged in workplace electronic surveillance. Even if CalECPA does not apply, an employer who secretly records conversations may still run afoul of California Penal Code Sections 632 et seq. See Pardee v. J.R. Howerton, 2012 U.S. App. LEXIS 7221.
Note that in Reyes v. Lin, the Court held that a videographer’s surreptitious videotaping of unpaid interns working in a California spa sufficiently fits the definition of a "place" for purposes of a civil action under Section 632. Reyes v. Lin (2012) 205 Cal. App. 4th 1443, review granted, (2012) 210 Cal. Rptr. 3d 858, 2012 Cal. LEXIS 7374.
Employee’s privacy rights in California
Employees do not generally have a right to privacy in the workplace. As is the case with many other states, California does not recognize a common law right to privacy in the workplace. Even still, it may be illegal for employers to secretly record private conversations.
Article I, Section 1 of the California Constitution: The Right to Privacy
Despite the lack of a common law cause of action, employees may have certain privacy rights under the California Constitution, which has been broadly interpreted to afford employees some level of privacy in the workplace. In Hill v. National Collegiate Athletic Assn., 7 Cal. 4th 1, 25 (1994), the California Supreme Court held that Article I, Section 1 of the California Constitution provided employees with a reasonable expectation of privacy in their personal effects. In an online context, the California Court of Appeal has held that website operators cannot revoke a user’s privacy right by stating that by using the website, the user waives such privacy right. Mohammed v. Google, Inc., 2015 Cal. App. LEXIS 210 (Cal. App. 2d Dist. 2015). Similarly, in In re Facebook Privacy Litigation, the California Court of Appeal noted that "[w]hether a reasonable expectation of privacy exists is a fact-specific inquiry . . .." In re Facebook Privacy Litigation, FB, Inc., FB, Inc., fb-case-13-15964-2013-cal-app-unpublished-opinion, at *16 (Cal. App. 6th 2013).
Labor Code Protections
In addition to the protections under the California Constitution, Article I, Section 1 of the California Constitution, Labor Code sections 229 and 980 prohibit employers from spying upon and harassing employees in the course of their work.
Employers’ obligations and limits
An employer must adhere to the legal requirements under CIPA by giving notice of the use of audio/voice recordings when the recordings are used for work-related communications. Employers face challenges in determining how to provide notice of the use of recordings when a recording device is present or is in operation, but not actually listening to the recording at all times. Fortunately, Section 632(d) states that only if an employee uses the recording device for "purposes related to the employer’s business," such as communicating with other employees, may the employer provide notice of the use of recordings.
If an employer allows any employee to record conversations for purposes unrelated to the employment, i.e., for personal use, notice is not required. The employer may avoid CIPA restrictions altogether if it allows employees to use recording devices for personal use only, which would establish that the employees’ "use of the recording device was not ‘reasonably for the employment purposes’ of the business."
An example where an employer may not have to comply with CIPA is where an employer permits employees to use recording devices for personal use, and then makes a recording of the employees for job-related or business purposes. Should litigation arise over whether notice is required to be given, however, the employer would have to prove that the previous permission and knowledge was sufficient to constitute "implied consent." An employer could clearly fulfill said requirement simply by providing notice of audio surveillance on the company’s employee handbook, policy manual, or by posting a conspicuous sign in a location where employees are likely to see it.
Another option would be to include consent provisions in the employees’ Individual Employment Contracts. In this regard, an employer might require that employees either (1) acknowledge that they have read the handbook and/or individual employment contract containing the notice or (2) post the notice in workplace venues where employees are likely to be gathering or passing through.
Symbolic notice is not sufficient and employers may have to establish that, through some form of actual notice, their employees knew or should have known that the employer constitutes a "("two-party" [Under Section 632(a)]) consent state." Employers should consider consulting an employment lawyer with experience in electronic surveillance in the workplace to determine which notice provision methods would be the most reasonable, sufficient, and appropriate based on their particular circumstances and what proof would be necessary to fulfill the "implied consent" requirements.
Consequences of unlawful audio surveillance
California law imposes many steep consequences on employers that engage in unauthorized recording of audio in the workplace. The first notable consequence is imposition of civil liability under the secret recording statute.
Civil Damages
As detailed above, under California Penal Code Section 637.2, for a private right of action under California Penal Code Section 632, each instance of unauthorized secret recording may result in a fine up to $5,000 for each violation of the statute, plus recovery of costs and attorney’s fees.
In addition to paying exemplary damages of $5,000 for each incident of secret recording, California Civil Code Section 52.4 permits formation of organizations and corporations whose primary purpose is to enforce the rights of employees under the privacy laws ("organizations") to pursue class action claims on behalf of employees against employers who have unlawfully surveilled them. In other words, an organization may bring a lawsuit against an employer in violation of California’s privacy laws for up to $50,000 for each member in its organization for each instance of secret recording, plus attorney’s fees and costs .
Criminal Penalties
Moreover, employers who secretly record audio in the workplace may also be subject to criminal penalties under Section 632 of the California Penal Code. Under Section 632, every person who, intentionally and without consent of all parties to the communication, uses any electronic amplifying or recording device to eavesdrop upon or record the confidential communication of another is guilty of a misdemeanor. The statute further states, "[e]xcept as provided in subdivision (c), every person who, without consent as provided in subdivision (a) of Section 632.7, willfully and without authorization of all parties to the communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication of a cellular radio telephone, mobile satellite telephone, or cordless telephone shall be punished by imprisonment in the county jail for a period of not more than one year, or by a fine of not more than two thousand five hundred dollars ($2,500), or by both that fine and imprisonment."
Best practices to stay onside
Employees will likely have more confidence in a company’s surveillance practices if it has a policy that specifically addresses such issue. The policy should address the legality of surveillance and the reasons for conducting surveillance, such as for the purposes of protecting company property or tracking productivity.
A surveillance policy should also explain what type of surveillance is being done, including whether audio, video, or other methods are being used, and where surveillance will occur, such as on an employee’s desk or in their work area. Crucially, the policy should address whether employees may use their work email or phone for personal reasons, and whether audio surveillance will be conducted in those situations even though the employer permits such personal usage at work. Finally, a surveillance policy should also address whether video surveillance will be conducted in bathrooms or locker rooms, since the CCPA and California law otherwise prohibit such surveillance.
Employers should also have employees consent to surveillance at hiring, and should periodically re-consent in writing, particularly when an employee changes positions or work areas subject to surveillance. It is a best practice to have employees sign an employment contract that specifically consents to and acknowledges audio surveillance at the workplace.
Recent cases and legislations
Recent California cases underscore the continuing trend by courts of interpreting California wiretap laws broadly, even as the legislature has moved to carve out certain exemptions.
In September 2018, the California Court of Appeal held that a plaintiff-employer could not maintain an action for breach of written contract, breach of the implied covenant of good faith and fair dealing, and violation of the CUTPA (Connecticut Unfair Trade Practices Act) against a former employee who had recorded conversations without the company’s consent and disclosed the recordings to third parties. Tele-Communications v. Graumont, 30 Cal. App. 5th 159 (2018). The court rejected the employer’s argument that the defendant was liable under California’s two-party consent law. The court held that the statute of limitations applicable to the five-year statue of limitations for electronic interception claims, California Penal Code section 637.2(c), and thus dismissed the causes of action as time-barred. In Consolidated v. Davis, 26 Cal. App. 5th 253 (2018), another recent case addressing the limits of California’s wiretap laws with respect to employer workplace monitoring , a California Court of Appeal ruled that an individual cannot bring a claim against a California-based telephone service provider in federal court under California penal code section 631 where, although defendant’s customer service center is located in California, the intercepted communications occurred outside of California. See also, Persad v. Watson, 2018 WL 4848919, at *4 (Cal. Ct. App. Oct. 4, 2018) (holding that an audio recording of employee’s conversations without his consent may constitute a private nuisance, and affirming a $ 350,000 jury verdict against an employer.) These and other cases may demarcate the boundaries of the continuing trend of California courts broadly interpreting prohibitions against audio surveillance, especially in the privacy context of the workplace. These recent cases are likely to be relevant to other contexts as well. For example, California’s penal code section 632 proscribing "interceptions" could extend to employer remote control over computers. Even though the statute explicitly covers only telephones, any system that the employer installs on the employee’s computer that could record or overhear workplace conversations would probably lead to the same outcome.