News for the Hospitality Executive |
By
Jim
Butler and the Global Hospitality
Group® Hotel Lawyers | Authors of www.HotelLawBlog.com July 19, 2012 Hotels and restaurants are among many other businesses that monitor employees at work through video surveillance, and through employees' use of company-issued computers and smart phones. While employers gain benefits such as reducing theft, decreasing liability and ensuring safety procedures are followed, employees can feel that this electronic monitoring violates their privacy. In his article below, Mark Adams, a litigator in JMBM's Global Hospitality Group®, shares with us how courts are ruling in lawsuits that deal with electronic surveillance of employees. He also gives employers advice on how to prevent these lawsuits from happening. Losing the expectation of
privacy bit by bit, byte by
byte
by Mark S. Adams
| Hotel Lawyer A version of this article was first
published in The
Bottom Line, the official publication of the California State Bar's
section on
Law Practice Management &Technology . For a generation that has become exceedingly
facile with
electronic gadgetry and desensitized to the massive amounts of data
this
gadgetry produces, it perhaps comes as no surprise that video
surveillance and
on-line monitoring by employers of present and potential employees'
electronic
profiles and fingerprints have become the norm. Billions of emails are sent and received
every day. Facebook
has over 750 million active users, Twitter more than 75 million users,
and
YouTube boasts more than 24 hours of uploads every minute, every day,
with over
2 billion viewers daily. Closed circuit digital video cameras are
commonplace,
from office security cameras to ATMs. All of this data can be available
for
review and analysis by friend or foe, including current and potential
employers. Social Media Many employers now routinely vet their
recruits through the
Internet--not just before a formal offer is given, but before even
taking an
interview. Social media sites provide firms with the kind of
information about
candidates that was simply unavailable from any source just a few years
ago. A
company can now easily get a glimpse of a candidate's off-duty persona
to help
determine if there will be a good fit. For example, an Internet-chatty
candidate may say some nasty things about his or her former employer
that would
never appear on a resume; perhaps express an ambivalence about the
industry;
show an unhealthy appetite for engaging in high risk, dangerous
activities; or
flaunt an illicit, drug-friendly lifestyle. In short, the Internet may
reveal a
person who is far different than the well-dressed, firm-handshaking,
smiling
face that's sitting in the lobby waiting for his or her interview.
Absent the
use of this Internet vetting process for the purpose of unlawful
discrimination, at present, employers are free to make such Internet
investigations without any legal repercussions. Unlike potential employers, current
employers have always
kept an eye on their employees, and rightly so, because employers
suffer the
cost of such behaviors as employee theft and various kinds of employee
mishaps
and indiscretions. Although social media provides current employers
with that
same window into their employees' lives--a window voluntarily opened by
employees when they post things on a social media site--the new age of
electronics offers current employers even more insight. Current
employers have
access to their employees' electronic cache. Some employees may have a
company-issued smartphone and computer. Usually the company will also
assign an
email address and provide the Internet access. These give access to
information
and activities that are not volunteered by the employee. For example,
an
electronic file scan may catch an employee receiving and sending
sexually
explicit emails, creating a sexually hostile work environment, or
disclosing
sensitive company communications via email to third party friends and
family. But there is a big difference between
looking at something
an employee voluntarily makes public and something obtained from the
employee
without their permission. California courts have provided some
guidance on what types
of actions cross the line from appropriate supervision to invasion of
an
employee's right to privacy. If the line is crossed, the employer risks
a claim
for invasion of privacy against an employer based on two separate legal
theories, one grounded on the California Constitution, and the other
based on a
common law tort of invasion of privacy. Morphed together, the two types
of
privacy claims turn on the nature of the intrusion upon the reasonable
expectations of privacy, and the offensiveness or seriousness of the
intrusion,
including any justifications. This leads to an inevitable balancing of
interests, the outcome of which is often decided on a case-by-case
basis. To protect themselves from meritorious
claims, employers
should seek to diminish their employees' expectations of privacy. This
can be
done by implementing and religiously following a "no expectation of
privacy policy," in which a written statement clearly expressing the
policy is given to and acknowledged by all of the employees, from
executives to
entry level staff. This statement should also be clearly posted in any
areas
where videotaping is done. Such a policy typically states that the
employer
routinely, and without any further notice to the employee, will monitor
computer use; read emails, texts and Twitter updates; listen to
voicemails; and
review hidden videotaped surveillance. But beyond the implementation
and
acknowledgement of such a policy, the facts in a particular case always
carry
ponderous weight on whether the employee has a reasonable expectation
of
privacy. Emails Regarding emails, the reasonable expectation
of privacy can
depend on whether the employee used a company computer, the company's
Internet
service provider, a company-issued email address, and a secret password
to
transmit and receive their emails. In Holmes v. Petrovich Dev. Co.
(2011) 191
Cal.App.4th 1047, the plaintiff sent emails to her attorney regarding a
possible legal action against her employer. The employer obtained the
emails
from her computer: the plaintiff demanded them back claiming that they
were
attorney-client privileged communications, and sued the employer for
invasion
of privacy. The court held that the emails did not constitute
"confidential communication between client and lawyer" within the
meaning of Evidence Code section 952 because the plaintiff used the
employer's
computer to send the emails despite the facts that she had been told of
the
company's policy that its computers were to be used only for company
business
and that employees were prohibited from using them to send or receive
personal
email. She had been warned that the company would monitor its computers
for
compliance with this company policy and thus might "inspect all files
and
messages ... at any time;" and she had been explicitly advised that
employees using company computers to create or maintain personal
information or
messages "have no right of privacy with respect to that information or
message." The court stated: When Holmes emailed her attorney, she did
not use her home
computer to which some unknown persons involved in the delivery,
facilitation,
or storage may have access. Had she done so, that would have been a
privileged
communication unless Holmes allowed others to have access to her emails
and
disclosed their content. Instead, she used the defendants' computer,
after
being expressly advised this was a means that was not private and was
accessible by Petrovich, the very person about whom Holmes contacted
her lawyer
and whom Holmes sued. This is akin to consulting her attorney in one of
defendants' conference rooms, in a loud voice, with the door open, yet
unreasonably expecting that the conversation overheard by Petrovich
would be
privileged. The Holmes court distinguished Stengart v.
Loving Care
Agency, Inc. (2010) 201 N.J. 300, 990 A.2d 650, 659, 663-664, in which
that
court found that the employee had a reasonable expectation of privacy
in the
use of a personal Web-based email account--even though accessed from
the
employer's computer--where the use of such an account was not clearly
covered
by the company's policy and the emails contained a standard hallmark
warning
that the communications were personal, confidential, attorney-client
communications. Video Surveillance As to the covert videotaping of employees,
the legality of
this is anchored by two extremes: covert videotaping in open and
accessible
workplace areas, and videotaping in areas reserved for personal acts. Videotaping in open and accessible workplace
areas can be
lawful. For example, the lobby and hallways of your hotel may
electronically
monitor the comings and goings of guests and employees for security
purposes.
That is lawful. However, videotaping areas reserved for personal acts,
such as
employee restrooms, is unlawful. Indeed, there is little justification
in any
company, that would override the right and expectation of privacy in
such a
personal area. The outcome in situations that fall somewhere in between videotaping in open and accessible workplace areas, and videotaping in areas reserved for personal acts, are factually driven. For example, a computer server room, which is locked and accessible only by a few people in the firm, may have electronic surveillance all the time. It is only actually monitored a few times a day, or when a high heat sensor, or a water intrusion alarm is triggered. This is a rational, reasonable intrusion. Even so, the eye of the camera can catch unintended images, and so the best practice is to always make a clear disclosure that electronic surveillance is taking place, even if the surveillance is for a rational, lawful purpose. Employer wins with limited intrusion In Hernandez v. Hillsides Inc. (2009) 47
Cal.4th 272, the defendants
operated a private, nonprofit residential facility for neglected and
abused
children, including the victims of sexual abuse. Plaintiffs were
employees of
the defendants. The plaintiffs shared an enclosed office and performed
clerical
work during daytime business hours. Their office had a door that could
be
locked, with blinds that could be drawn, and the plaintiffs could
perform
grooming or hygiene activities or conduct personal conversations,
during the
workday in that office. The director of the facility, learned that late
at
night, after the plaintiffs had left the premises, an unknown person
had
repeatedly used a computer in the plaintiffs' office to access the
Internet and
view pornographic Web sites. Such use conflicted with company policy
and with
the defendants' aim of providing a safe haven for the children. Concerned that the culprit might be a staff
member who
worked with the children, and without notifying the plaintiffs, the
defendants
set up a hidden camera in the plaintiffs' office. The camera could be
made
operable from a remote location, at any time of day or night, to permit
either
live viewing or videotaping of activities around the targeted
workstation. It
is undisputed that the camera was not operated for either of these
purposes during
business hours, and, as a consequence, the plaintiffs' activities in
the office
were not viewed or recorded by means of the surveillance system. The
defendants
did not expect or intend to catch the plaintiffs on tape. After discovering the hidden camera in their
office, the
plaintiffs sued the defendants, for, among other things, violation of
their
privacy rights under the California Constitution. The California
Supreme Court
reversed the Court of Appeal, and reinstituted the trial court's order
granting
the defendants' motion for summary judgment. The Supreme Court stated: We appreciate plaintiffs' dismay over the
discovery of video
equipment--small, blinking, and hot to the touch--that their employer
had
hidden among their personal effects in an office that was reasonably
secluded
from public access and view. Nothing we say here is meant to encourage
such
surveillance measures, particularly in the absence of adequate notice
to
persons within camera range that their actions may be viewed and taped. Nevertheless, considering all the relevant
circumstances,
plaintiffs have not established, and cannot reasonably expect to
establish,
that the particular conduct of the defendants that is challenged in
this case
was highly offensive and constituted an egregious violation of
prevailing
social norms. We reach this conclusion from the standpoint of a
reasonable
person based on defendants' vigorous efforts to avoid intruding on
plaintiffs'
visual privacy altogether. Activation of the surveillance system was
narrowly
tailored in place, time, and scope, and was prompted by legitimate
business
concerns. Plaintiffs were not at risk of being monitored or recorded
during
regular work hours and were never actually caught on camera or
videotape. Employer loses when intrusion goes too far In Carter v. County of Los Angeles (C.D.Cal
2011), 770
F.Supp.2d 1042, a case involving government employees (who have greater
expectations of privacy from their government employers), the employer
received
an anonymous complaint alleging that a plaintiff employee, had engaged
in
sexual activity with a visitor in the dispatch room while she was on
duty at
night. The employer then installed a hidden video camera in a fake
smoke
detector in the dispatch room, and set it to record continuously, every
hour of
every day. The camera recorded several incidences of the act. One of
the
plaintiffs discovered the hidden camera a few months after it was
installed and
she (and other employees) sued her employer for, among other things,
violation
of her privacy rights under the California Constitution. In assessing
the
reasonableness of the plaintiffs' privacy expectations, the court noted
that
the dispatch room door remained closed during regular business hours,
non-dispatcher employees would typically knock before entering, and no
one
could see into the dispatch room. Furthermore, after regular business
hours, it
was not uncommon for plaintiffs to work alone in the room. The court
concluded
that the plaintiffs had a reasonable expectation of privacy in the
dispatch
room. In assessing whether the surveillance was a
sufficiently
serious intrusion as to constitute an egregious breach of social norms,
the
court noted that the plaintiffs were recorded while they unknowingly
performed
private acts, the surveillance was constant, and it continued even
after the
stated objective was complete. The defendant monitored all of the
employees,
not just the subject plaintiff. Finally, there were several less
intrusive
methods available to the defendants in investigating the allegations
against
the plaintiff employee, but the defendants did not utilize them. Thus,
the
court held that the defendants violated the plaintiffs' right to
privacy under
the California Constitution. The Bottom Line Right to privacy cases turn on whether the
employee had a
reasonable expectation of privacy under the circumstances. The employer
has to
somewhat manage the risk of a claim of a violation of privacy and an
adverse
result by minimizing the employee's reasonable expectation of privacy.
The employer
should disclose to the employee that the employee is being observed and
monitored, and how that is being done. Mark S. Adams is an experienced trial lawyer and a member of JMBM's Global Hospitality Group® and Chinese Investment Group™. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark's trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California's annual 50 largest jury verdicts in the same year. Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949. 623.7230 or [email protected]. _________________________ This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We've done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from hotels. Who's your hotel lawyer? Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" and you will see why. Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. |
Contact: Jim Butler [email protected] 310.201.3526
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