Speak, You're on Candid Recorder

Psst ... Here's the 411 on secret phone recordings.

Is it time for you to go into the recording industry? Not in a recording studio, but your own office, secretly tape-recording selected sensitive phone conversations so you have it all on record if litigation ensues? 

In some states, the very act of secretly recording the conversation could invite a legal challenge. But other states allow secret taping. Does it ever make sense in these so-called “single-consent” states to tape conversations without the other person’s permission? 

The answer may vary not only by geography, but circumstance. In this developing area of the law one thing is loud and clear: Proceed with caution. 

Secret Taping

Fast-forward to this scenario: An HR representative in New York conducts an in-depth investigation into allegations of discrimination and harassment. Knowing that New York law allows a party to a telephone conversation to tape calls without the other party’s consent, the HR representative secretly tapes her conversations with the alleged harasser, who is based in the company’s California office. 

During the call, the alleged harasser denies the harassment, but does make a number of insensitive and disturbing remarks, all of which are recorded, and the company terminates the employee under its zero-tolerance non- harassment policy. 

The employee sues for wrongful termination. On discovering that he had been taped, he adds a claim against the company for violation of California’s wiretapping laws, which prohibit taping telephone calls without the consent of both parties to the conversation. 

Our HR representative is unsettled by the claim. She is about to start another investigation in Massachusetts, but now is unsure if she needs to determine the law of every one of the states in which the company has employees, even though she knows she has complied with her home state’s laws. 

As companies increasingly deal with employees across many states and even countries, and with different state courts approaching recorded telephone conversations differently, this issue can become a dangerous trap if ignored. But with a little planning and consideration, pitfalls can be avoided. 

Single vs. Dual Consent

Most states, as well as federal statutory law, require the consent of only one party to a call to legally tape a telephone conversation (so-called “single consent states”). 

However, at least 11 states—California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Montana, New Hampshire, Pennsylvania and Washington—require the consent of both parties to the call (“dual-consent states”). 

Where the call involves individuals who are both in single-consent states, the outcome is clear: As long as one person consented to the recording, the laws of neither state have been violated. Similarly, when the call involves individuals who are both in dual-consent states, the outcome also is clear: If both people consented, the taping was legal in both states, but if either party was unaware of the taping, it is illegal. 

The confusion arises, then, when a conversation between a person in a single-consent state and a person in a dual-consent state is taped. 

Location of Injury

A New York court addressed this issue in 2006. Diana Locke, who lived in California, claimed that Dr. Sherrell J. Aston, a New York resident, breached a contract between them, and submitted as evidence tapes of telephone conversations that she had secretly made of their telephone conversations. 

Aston countersued, arguing that Locke’s surreptitious taping of their conversations while she was in California, a dual-consent state, violated California law. Although the lower court originally agreed with Aston, the New York Appellate Division reversed the decision, holding that California law was intended to protect the right to privacy of the people of California. Because Aston resided in New York, which allowed single-consent taping, he was not entitled to the protection of the California law and could not assert a claim under it. 

The court took the view that one must look at where the injury caused by the secret taping occurred. Because the injury was in New York where Aston lived, New York’s single-consent law applied and no violation occurred—even though Locke clearly violated California’s own law. 

In short, the decision holds that, generally speaking, surreptitious taping of an individual located in a single-consent state such as New York on an interstate telephone call will not give that individual a tort claim—even where the person who recorded the call is in a state that requires the consent of all parties (Locke v. Aston, 814 N.Y.S.2d 38 (1st Dept. 2006)). But beware before placing too much reliance on this decision, as it is just one lower court’s decision. 

California addressed this issue in a case where the recorded party was a California resident. The plaintiffs were residents of California and were clients of a company in Georgia, which is a single-consent state. 

The California clients complained that the company had a practice of recording telephone calls clients made to its branch office in Georgia, in violation of California law, though permitted by Georgia law. The California court found that California’s interests in protecting the privacy of its residents would be severely impaired if its law were not applied in this context, and therefore concluded that its own law applied. 

The California court did make a one-time exception for the Georgia company on the grounds that the law was not yet clear, and therefore did not penalize it, but the court put all other companies throughout the country on notice that such secret taping of California citizens was unlawful and would subject them to liability. The court also left open the question of whether the same obligation would be imposed on private citizens of other states (Kearney v. Salomon Smith Barney Inc., 39 Cal. 4th 95 (Sup. Ct. 2006)). 

Based on these two cases, California’s dual-consent law would apply to our scenario at the outset because the terminated employee suffered harm in California when he was recorded without his consent. Accordingly, our HR representative would have violated California law. 

Recording Site

The analysis changes, however, based on the state you are in, and thus our scenario would have had a different outcome if the harasser had been based in a different “dual-consent” state, such as Massachusetts. That is because the Massachusetts courts have looked to where the recording took place, and not to where the injury occurred. 

For example, in MacNeill Engineering Co. v. Trisport Ltd. (59 F. Supp. 2d 199 (D. Mass. 1999)), a Massachusetts federal court held that the plaintiff’s wiretap claim was futile because secretly recording an interstate telephone conversation outside Massachusetts did not give rise to a cause of action under Massachusetts law. 

In another case, an agent of AMS/Oil Inc. in Rhode Island—a single-consent state—secretly recorded a telephone conversation made from Rhode Island to the plaintiff distributor in Massachusetts. The court held that “the local law of the place of the wrong governs the existence of the tort claim” (Pendell v. AMS/Oil Inc., No. 84-4108-N (D. Mass. 1986)). 

Therefore, the court applied Rhode Island’s single-consent rule and found that the defendant’s conduct was “completely acceptable.” 

Suppose instead a call was recorded by an employee in Texas. A Texas federal district court has determined that when a company employee in Texas recorded another company employee in California, Texas’s single-consent law, rather than California law, should apply (Becker v. Computer Sciences Corp., 541 F. Supp. 694 (S.D. Tex. 1982)). So, if the call in our scenario at the outset had been made from Texas, instead of New York, the company and supervisor would have no cause of action, according to this ruling. However, whether state courts will accept the federal court interpretations in MacNeill Engineering, Pendell and Becker of state law remains to be seen. 

Dialed-Up Compliance

In sum, companies can navigate the issues presented by the conflicting state laws, but need to be aware that it no longer suffices to know your own state’s law. 

It is important to note, though, that the common practice of recording or monitoring business calls for customer service and employee training purposes is legal if the recording device was provided to the employer in the ordinary course of business and the device is being used in the ordinary course of business. In short, the monitoring should be necessary for business reasons and the monitoring should be of a business call, not an employee’s personal call. Employers should protect themselves against liability for violation of wiretap laws by preparing and distributing a notice of their telephone monitoring policy. The policy should contain a description of:

• How monitoring will be accomplished.
• When monitoring will take place.
• The means in which employees’ communications (e-mail, Internet access, telephone, voice mail) will be monitored.
• The types of communications that will be monitored.

Employers also should obtain signed acknowledgments of understanding and consent to the monitoring from all employees before implementing a monitoring practice. 

Of course, even where recording calls is perfectly legal, some employers opt not to record calls because of a company’s cultural or ethical reservations about the message that is sent to employees who might view the practice as invasive of their privacy.

Similarly, companies should give consideration from a strategic standpoint as to whether to record conversations. A recorded conversation could later be used as compelling evidence of the employer’s wrongdoing. Imprecise and off-the-cuff comments recorded during a conversation might later be used by an employee’s lawyer as an admission by the company, even if the statements were merely the result of not discussing all of the facts. 

On the other hand, this risk may be balanced by the ability to use the recordings to support appropriate corrective action as necessary. 

An employer should analyze its goals for taping conversations and ensure that taping legally, ethically and strategically meets those goals.

Editors Note: This article is not intended as legal advice. For specific situations, consult qualified employment law counsel.

Dov Kesselman and Tara Smith Williams are attorneys in the Labor & Employment practice group in the New York office of Seyfarth Shaw LLP.

Web Extras

SHRM web page: Workplace Law Focus Area home page

SHRM toolkit: Investigations

SHRM article: Investigating Security Breaches, Workplace Theft and Employee Fraud (Legal Report)

SHRM white paper: Searches and Surveillance in Today's Workplace

HR Solutions: Video surveillance: security measure or voyeurism?