HR Undercover

Factor in privacy rights before rolling out surveillance programs.

By Clifford H. Nelson Jr. and Leigh Tyson Oct 1, 2010

October coverEvery week, we hear stories about violence in the workplace. Drug use and the sale of controlled substances also are on HR professionals’ minds, as are concerns regarding theft, pornography, lowered productivity and on-the-job injuries.

These issues, coupled with the ever-increasing costs of litigation, trouble large and small employers that must struggle to find appropriate ways to minimize risks before they result in loss, litigation or injury. For many companies, surveillance represents one solution.

More employers are turning to the use of video surveillance cameras and similar high-tech security measures to monitor employees and prevent injuries, misconduct and other types of loss.

According to the 2007 Electronic Monitoring and Surveillance Survey conducted by the American Management Association and the ePolicy Institute, 48 percent of the 304 companies surveyed used some form of video monitoring in the workplace, while 66 percent monitored their workers’ Internet use. Of the surveyed companies, 30 percent reported having terminated employees based on findings from Internet monitoring and 28 percent of the respondents had terminated employees for misuse of e-mails.

If done properly, monitoring can increase employee productivity and curb misconduct. From an HR perspective, however, the implementation of a monitoring system in the workplace brings its own set of problems.

To Tell or Not to Tell?

In implementing a workplace surveillance program, the first issue is a practical one: whether to tell employees that they’re being watched.

Some employers say that this type of security response should be implemented in secret to increase its effectiveness. Others say that simply notifying employees of the monitoring may be sufficient to curb misconduct, and that the mere existence of surveillance can serve as a deterrent to problematic behavior.

More important, many employers have recognized that telling employees they are being monitored gives them some degree of "fair warning."

From a legal perspective, disclosing surveillance is the smartest tactic. Letting employees know that they will be monitored removes the employees’ reasonable expectation of privacy—the element that often forms the basis for invasion of privacy lawsuits arising under common law.

While only a handful of states—California, Connecticut, Delaware and Massachusetts—have enacted legislation to require the disclosure of workplace monitoring or to create a private cause of action for invasion of privacy, the increased public focus on workplace privacy will likely result in legislation and litigation in more jurisdictions. Although the law is not yet well-developed on the issue, the cases that have been decided suggest that the courts will consider the disclosure factor in determining whether an employee’s privacy rights have been violated or whether other unlawful activity has occurred.

The California Supreme Court weighed the respective rights of employers and employees in workplace monitoring in Hernandez v. Hillsides Inc. (47 Cal. 4th 272 (2009)). There, the employer, operator of a center for abused children, discovered that someone had been viewing pornography on one of the center’s computers. The computer in question was located in an office shared by two female employees. However, because the pornography had been viewed after hours, center managers did not suspect that the women had been involved, and they were not considered to be subjects of the investigation.

To catch the person accessing the pornography, center officials installed hidden video surveillance cameras in the office shared by the women. The cameras were kept off during working hours and only began recording after the women had left for the day. In the end, neither woman was ever filmed, nor was the perpetrator identified. Still, the women discovered the camera in their office and sued the employer for invasion of privacy.

Although the trial court originally granted summary judgment on the women’s claims, the court of appeals reversed, finding that the sole fact that a camera had been placed in the office constituted a per se violation of the women’s right to privacy. The employer appealed this decision to the California Supreme Court.

In reviewing the claim, the state Supreme Court considered the specific facts of the case, noting that the employer had not informed the employees of the presence of the recording equipment. At the same time, however, the court recognized that the employees in question had not actually been recorded and had not, in fact, been subjected to monitoring.

The court recognized that while employees do have a reasonable expectation of privacy in their workplace—particularly in their own offices, behind closed doors—the rights of employees may nonetheless be limited by an employer’s legitimate business interests in conducting surveillance and preventing or discovering misconduct.

In this case, the employer’s legitimate business concern in discovering the identity of the person accessing pornographic images in a children’s home was more compelling than the employees’ expectation of privacy. Moreover, the court noted that the surveillance and related investigation were narrowly tailored in scope, place and time, and had been specifically crafted to catch only the misconduct on film. Accordingly, the court concluded that summary judgment in favor of the employer was proper, and it reversed the appeals court decision.

In the end, while the California Supreme Court’s decision certainly doesn’t encourage employers to use monitoring practices in their own workplaces, it does demonstrate that some types of monitoring—if carefully tailored—will be found permissible. This seems consistent with the approach taken by other courts.

While the basis of the privacy claim differs by jurisdiction, courts that have considered the question usually engage in a fact-specific analysis. They weigh the reasonable expectation of privacy by the employee and whether the employer has a legitimate business interest for conducting the surveillance.

The fact that the reasonableness of employees’ expectation of privacy usually plays a large part in a court’s analysis offers further support for the disclosure of monitoring activities.

By informing employees that their communications are not secure or that their activity will be monitored, the employer can lessen employees’ privacy expectation and in turn bolster the employer’s defense in court.

Such notice also may help with another significant problem facing employers using surveillance techniques: employee morale.

Big Brother Backlash

The question of employee morale presents another practical consideration for employers looking to implement surveillance in the workplace. If employees don’t agree to the idea, they may resent having their activities monitored by an employer that begins to look less approachable and more like Big Brother.

As such, the most successful applications of security systems stem from a shared understanding of the problems facing the employer and a recognition of the lack of other reasonable alternatives.

The next step is the question of limits—an employer must consider what types of intrusions are legally defensible and which ones make sense for the everyday activities of employees.

Managers in more than one company have found that trying to eradicate theft or drug use by implementing what may be perceived as heavy-handed security measures can destroy the fabric of good will and trust often necessary to create a productive work environment.

As a result, HR professionals should stress the need for a far-reaching communications program with all levels of managers, supervisors and rank-and-file employees before any final decision is reached on how to proceed with security. This is particularly true when considering the invasive and controversial measure of video surveillance.

Labor Relations Issues

Union companies face additional complications. The National Labor Relations Board has held that the video surveillance of any portion of the workplace is a condition of employment that must typically be negotiated with the union representatives and agreed upon prior to implementation. An exception does exist when the use of surveillance cameras has been addressed and waived in the management rights clause or another provision of the collective bargaining agreement. Even in that circumstance, communication and buy-in from the union representative will go a long way toward helping operate such a program.

The National Labor Relations Board—as well as the D.C. Circuit—addressed an employer’s obligation to bargain with a union over covert workplace monitoring in Brewers and Maltsters, Local Union No. 6 v. NLRB (414 F.3d 36, 39 (D.C. Cir. 2005)). In that case, the employer, Anheuser-Busch, installed hidden video cameras in an area where employees often took breaks. Although the facility was unionized, the company did not give the union notice of the cameras being installed. As a result of the monitoring, the company discovered widespread misconduct among the employees, including illegal drug use in the break area. The employees whose misconduct had been recorded were terminated.

The union challenged the terminations, arguing that the company had been required to provide the union with notice and an opportunity to bargain about the installation of the hidden cameras. The company countered that telling the union about the cameras would have eliminated their effectiveness and that the misconduct would not have been discovered.

Although the dispute began in 1998, it wasn’t until 2005 that the D.C. Circuit issued its decision agreeing with the union and finding that the installation and use of hidden cameras constituted a mandatory subject of bargaining. And, because the company had violated its duties under the National Labor Relations Act, the terminated employees arguably could be entitled to reinstatement and approximately seven years’ worth of back pay, regardless of their criminal activities.

Clearly, covert surveillance without bargaining can cause significant problems for the unionized employer, but even employers that are not unionized may find themselves having to deal with the National Labor Relations Board on this issue. This can occur when employers decide to implement a surveillance system in the middle of a union-organizing campaign. Under those circumstances, organizers often say the cameras serve to chill union activity by either spying on private employee conduct during non-working time or giving the impression of doing so.

In that instance, unless employers can show that there has been significant property destruction, break-ins or other security issues that increased with the onset of the union-organizing campaign, they will likely be on the short end of an unfair labor practice charge contesting implementation of the measures. Worse, even if well-intentioned, the employer may unwittingly assist the union’s campaign by creating a negative impression in the minds of many workers. And, as is often the case in the world of HR, perceptions, rather than reality, control.

Narrowly Tailored Monitoring

In the end, surveillance raises a number of practical and legal considerations. Any employer considering the use of monitoring systems to curb the everyday problems of theft, security and drug use should ensure that the monitoring is narrowly tailored, that the need is supported by a legitimate business justification and that no reasonable expectation of privacy exists among employees.

Employers also must make certain that monitoring programs do not violate collective bargaining agreements or create an atmosphere of surveillance in the middle of a union-organizing campaign. Employers should include HR professionals at the earliest stage of considering and ultimately implementing surveillance in the workplace, and should work toward a companywide solution that does not lower morale and is understandable to employees.

Finally, given the rapidly changing legal landscape surrounding this issue, any employer that decides to keep an eye on its employees should also be sure to keep an eye on the law.


The authors are attorneys at Constangy, Brooks & Smith in Atlanta.

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