ABA Connection

The Boss Is Watching

And employees are finding they have fewer places to hide

Posted Jan 1, 2008 3:53 PM CDT
By Jill Schachner Chanen

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Illustration by Brian Stauffer

You know that little thinga­mabob you have to use every day to get into the office? It might be able to do a whole lot more than just clear building security and magically unlock a door. It might just get you fired.

It’s becoming increasingly common for smart cards, fobs and other work-issued devices to be embedded with Global Position­ing System chips, radio frequency identifi­cation and other technologies that allow employers to track every movement of their employees—both at work and away from it.

So if you’re an employee who attends an Alcoholics Anonymous meeting during the privacy of your lunch hour or visits an HIV/ AIDS clinic after work, your boss might be following you there through company-issued cell phones, cars, keycards and other devices.

New, cheaper and more accessible technologies are making it easier than ever for employers to monitor what their workers do, where they go, what they eat, whether they smoke and even how long they wash their hands in the company restroom. And employ­ers are taking full advantage of that growing capability.

Even with union agreements or employment procedure guidelines in effect at many workplaces, the pervading principle of employment law in the United States is employment at will. Under this standard, either the employer or the employee may terminate the employment relationship at any time, with or without cause.

Nevertheless, both employers and employees long have recognized a barrier between the workplace and the private lives of employ­­ees when they are away from the office or plant. But now that barrier is starting to crum­ble as employers gain the capability to track the activities of their employees away from the workplace.

Lawyers who represent workers and unions say it may be time for the courts or legislatures to draw a clear line between an employer’s right to monitor employee activities and the privacy rights of employees.

In some instances, they say, employers are using the information they’ve acquired about employee behavior both on and off the job to discipline or even fire workers.

“What is it telling the employer that the employer doesn’t already know?” says Rachel J. Minter, a solo practitioner in New York City who represents employees and unions. “Everyone is looking at what you can do with the data.”

These are just a few cases from recent years:

• In 2000, a national supermarket chain fired a long-term company truck driver after finding out he liked to cross-dress in his spare time.

• In 2003, a Colorado beer distributor fired a worker for drinking a competitor’s beer at a private bar during his off hours.

• In 2004, an Alabama woman was fired from her job at a housing insulation company for refusing to remove a Kerry-Edwards bumper sticker from her private car.

• In 2005, a Michigan community college stopped hiring smokers for full-time jobs.

• In 2006, a teacher in Texas was fired after her partner posted topless pictures of her on a photo-sharing website.

• In 2007, a carpenter in New York City was fired after a GPS chip in his work-issued cell phone showed that he had been falsifying time cards.

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Nathan Kaitz. Photo by Stephen Sherman

A FADING LINE

Jeremy E. Gruber, legal director of the national Work­rights Institute in Princeton, N.J., fears the line that separates employee privacy and employer monitoring may be disappearing forever.

“Some employers have become emboldened over the last few years as a result of a complete lack of legislative oversight,” says Gruber. “Very few workplace-related laws have been passed since 1986, particularly in the area of privacy.”

Thirty states do have “lifestyle discrimination” stat­utes that protect employees from being fired for engaging in otherwise protected activity such as smoking cigarettes or drinking alcohol. But the laws offer inconsistent protections. Some, such as New York’s, protect individuals who engage in a variety of lawful political activities, use consumable products legally and engage in recreational activities outside the workplace, according to the institute. But other statutes, such as Virginia’s, are largely the byproducts of lobbying by the tobacco industry to protect workers who smoke.

But even with these laws on the books, most private-sector employees have few protections against employers monitoring private activities, says Patricia C. Slovak, a partner at Schiff Hardin & Waite in Chicago and past chair of the ABA Section of Labor and Employment Law.

Generally, courts have upheld workplace policies that may be perceived as invasions of privacy as long as they relate to a legitimate business concern, Slovak says. Courts have upheld arguments by employers that they have legitimate business reasons to monitor employee use of company computers, telephones and other telecommunications equipment, and that those reasons generally trump employee claims that their communications using that equipment are confidential or private.

Despite the apparent uptick in employer monitoring of employees’ activities, management-side lawyers insist that companies don’t really want to intrude on the privacy of the people who work for them. Rather, they say, many of these perceived intrusions into worker privacy are the result of real business needs to control the rising cost of health insurance, increase worker efficiency, maintain higher standards of employee conduct and limit liability.

“I don’t think that employers have an interest in mon­itoring their employees’ off-duty behavior,” says Nathan L. Kaitz, a management-side employment lawyer at Morgan Brown & Joy in Boston. “It’s not their goal.”

Gruber agrees that attempts to control health insurance costs have triggered much of the monitoring activities by businesses and other employers. “Employers are clearly facing the rising costs of health care and are struggling for ways to deal with managing those costs,” he says. “The majority of employers often have done so by adopting some form of wellness program to give employees tools to help them get healthier, as they have come to realize that preventive health care is far cheaper than the costs of improper diet and exercise.”

But some companies have taken it a step further by imposing punitive costs on those who either fail to participate in wellness programs or fail to meet certain health benchmarks such as cholesterol levels, body mass indexes and blood pressure rates. In the most extreme cases, businesses have fired employees who engaged in behavior or made other personal choices that resulted in higher health insurance costs.

Gruber says a recent action by the U.S. Department of Labor will give employers more impetus to continue this trend. In late 2006, the department adopted regulations that interpret the Health Insurance Portability and Accountability Act of 1996 to allow an employer to impose surcharges of as much as 20 percent on workers for health-related factors that might affect the company’s overall health insurance policy. (View the regulations here.)

Gruber maintains that litigation may be the best vehicle for some employee pushback against these company policies. One argument might be that harsh penal­ties for failing to participate in wellness programs or follow wellness guidelines violate the Americans with Disabilities Act.

But so far, that argument hasn’t been tested in the courts, which have been reluctant to stretch the protections of the ADA. Frank Van Dusen of Seattle’s Miller Nash says there was a time when many management-side lawyers feared that the ADA would allow employees to claim successfully that nicotine addiction, for instance, was a protected disability. But now, he says, the consensus among the labor and employment bar is that those types of claims would fail. Meanwhile, Boston lawyer Harvey A. Schwartz is taking another tack in representing a man who is fighting back against his employer’s efforts to control his activities away from the workplace.

Schwartz, a name partner at Boston’s Rodgers, Powers & Schwartz, represents Scott Rodrigues, who is suing Ohio-based Scotts Miracle-Gro Co. In 2006, the company fired Rodrigues for violating its total smoking ban, instituted in 2005 in an effort to control the costs of health insurance. Rodrigues v. Scotts Co., No. CA 07-10104-GAO (D. Mass.).

The lawsuit claims that the Employee Retirement Income Security Act prohibits employers from discriminating against employees or taking action against them to keep them from receiving benefits. Schwartz is arguing that his client does not yet have a medical issue, but that Scotts is denying him benefits based on behavior that the company believes will lead to an expensive medical issue.

“It could be obesity or it could be skydiving. It’s a slippery slope, but a steep one,” says Schwartz.

Scotts has filed a motion to dismiss Rodrigues’ claim. There had been no ruling on the motion at the time this issue of the ABA Journal went to press.

MONITORING GETS EASIER

If one of the reasons why employers are engaging in more employee monitoring is to limit the impact that behavior has on them, another explanation is simply that employers are gaining more capability to engage in that monitoring. More employee access to communications technology further complicates the issue.

“Technology has allowed the traditional four walls of the workplace to disappear,” says Gruber of the Nation­al Workrights Institute. “The line between the workplace and the home has disintegrated, and employers have taken full advantage of that. But what they have not come to understand is that when the lines between personal life and the workplace disappear, there is going to be personal information that will intrude on your workplace life.”

Schwartz cites the example of a man who wanted to know whether he had any case against an employer who fired him for violating a workplace policy on computer usage. A friend regularly sent him e-mails containing pornographic images. The fired worker had set his e-mail program to automatically delete the friend’s e-mails, but a regular scan of his computer’s hard drive revealed the pornographic images. The worker’s explanation failed to appease his supervisors, who fired him.

The company eventually settled with the fired employee, but Schwartz says the case illustrates the conundrum so many American workers are facing as technol­ogy blurs the lines between work and private lives.

“You can understand it to some extent,” says Schwartz. “Businesses don’t want their computers used that way. But as technology lets you work more and more, and merges with private lives, it is hard to draw the line.”

Management-side lawyers say employers have to protect themselves. In one case that is often cited, a company was held liable for tort damages to a victim of child pornography on grounds that the company had reason to know that one of its employees was using a work computer to disseminate pornographic images of the child. Doe v. XYC Corp., 382 N.J. Super. 122 (2005).

BLOG, BLOG, BLOG

But the cases don’t always have to be that extreme. Craig M. Cornish of Cornish & Dell’Olio in Colorado Springs, Colo., says several courts have held that employees have no expectation of privacy in virtually any aspect of the use of work-issued computers or other technologies.

Cornish cites a recent case where he represented a claims adjuster who had taken her work-issued digital camera on a weekend ski trip. She took several personal pictures. Months later, as part of the ordinary course of business, her digital camera was examined by her employer. When the images from the ski trip were discovered, the claims adjuster was fired for violating the company’s ban on personal use of the camera. Current case law did not give her any recourse, he says.

Blogs are becoming a growing concern for employers. Because so many workers are using personal computers to create private blogs that contain information about their workplaces, businesses now feel a need to monitor what they are saying.

Van Dusen says he is advising corporate clients to create blogging guidelines for employees to protect intellectual property and trade secrets, and to prevent disclosure of information that could draw scrutiny from the Securities and Exchange Commission.

Gary B. Eidelman, a partner at Saul Ewing in Balti­more, counsels corporate clients to make sure content on personal blogs is harmful before acting. “I become less concerned if the blog says, ‘My boss is a jerk,’ ” Eidelman says. “Does the employer like it? No, but we prefer that they talk to them about it. I think smart employers will use information [found on private blogs] proactively and not punitively. It’s a great way to take the pulse of what is going on.”

Nonetheless, one of Eidelman’s clients recently fired an employee who had a private blog that contained information about the company and its sales trends. Management was concerned that the blog might be discov­ered by competitors.

But it is cell phones—a fairly low-tech communications vehicle—on which employers have been focusing much of their monitoring efforts. And Van Dusen says employers are trying to closely watch how employees use their own cell phones as well as those that are company-owned.

Van Dusen represents a business that has been dragged into a sexual harassment claim arising out of text messages sent on private cell phones between two workers. One of the employees, while on a break during a graveyard shift, sent a text message to an off-duty colleague. The messages escalated, and the company ended up defending a harassment claim that one of the employees filed with the U.S. Equal Employment Opportunity Commission. The company is basing its defense on the fact that it has a workplace cell phone ban.

Eidelman predicts that cell phones equipped with cameras are going to become central to growing numbers of sexual harassment cases. And pictures snapped by fellow workers may give an employer enough proof to support discipline or termination of an employee accused of harassment.

In such cases, says Eidelman, “I am telling clients to start asking whether anyone was snapping photos with cell phones.”

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Rachel Minter. Photo by Steven Vote

EMPLOYERS IN THE DRIVER’S SEAT

GPS tracking is developing into an important technology for employ­ers seeking to monitor the whereabouts and activities of employees both during work and on their off-hours. As GPS becomes available for everything from cell phones and cars to employee identification badges, some unions have started to raise its use as a negotiating issue with employers, says Minter of New York City. Union concerns generally focus on how the technology will be used to track workers and what employers will do with the information they gather, she says.

The Teamsters union, for instance, has negotiated with UPS to allow the company to use GPS in its trucks during work shifts, but any data collected may not be used as the basis for disciplinary action against drivers, says Bradley Raymond, general counsel for the International Brotherhood of Teamsters.

Kaitz says he isn’t sure whether companies he rep­resents would be willing to go that far. He says GPS shouldn’t be interpreted as an intrusion on worker privacy because most workers don’t take home company vehicles or such things as handheld devices for tracking packages.

But litigation already is popping up. Last year a carpenter working for New York City lost his job after GPS on his employer-issued cell phone revealed that he was leaving work early. A state administrative law judge upheld the termination on grounds that the employee had falsified time cards. Department of Education v. Halpin, OATH Index No. 818/07 (Aug. 9, 2007).

Eidelman is starting to see transportation industry clients install cameras inside company-owned vehicles, particularly in the long-haul trucking sector. Doing so will help companies assure compliance with federal limits on the number of hours that drivers are behind the wheel in a given time period, but cameras in trucks also may come in handy to determine liability when accidents occur.

Management-side lawyers say monitoring the use of company vehicles during work shifts shouldn’t be an issue for employees because they have no expectation of privacy while using them. But there are questions about how far an employer may go to regulate conduct of an off-duty employee using one of its vehicles. Eidelman is not sure whether an employer may act against an employee simply because he or she was drunk in a company car. But if an employee’s off-duty drinking affects the ability to perform job functions, then an employer may have grounds for action, he says.

Minter says she recently fielded questions from mem­­bers of a nurses’ union regarding a hospital’s use of iden­­tification badges embedded with RFID. Though hospital management justifies RFID as a way to find nurses without using noisy intercom systems, the union says it amounts to an invasion of nurses’ privacy because management is able to track their every move at the hospital.

“Do you have a reasonable expectation of privacy if you are a nurse going from room to room?” says Minter. “Your supervisor could follow you into patient rooms. But what about following you into the break room?”

GPS is unlikely to be the last word in technology that allows employers to track the activities of their workers.

Minter is representing a union of design and construction industry professionals in an unfair labor practices dispute with New York City after the city installed biometric hand scanners in their offices. The union claims that the scanners are a high-tech punch card system that monitors their comings and goings, says Minter. The city maintains that the scanners are nothing more than part of a new time and payroll system.

These biometric devices, Minter fears, are only the tip of the iceberg. She says a new device on the market measures how long someone washes his or her hands. Ostensibly the device is meant to help control disease from spreading in health care institutions, but it raises another question about where the line should be drawn for employers seeking to monitor employees, she says.

Minter anticipates that the issue eventually will require a legislative solution. That is not necessarily cause for optimism, suggests Gruber of the National Work­rights Institute. Gruber says the United States is well behind other developed nations in adopting workplace privacy legislation. “To give you an idea of where we are,” he says, “we are still working on legislation that prohibits video cameras in workplace bathrooms and locker rooms.”

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