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Labor & Employment Law

The Bosses’ Eyes and Ears: The Privacy for Consumers and Workers Act

Kristen Bell DeTienne and Richard D. Flint

1Statistics on current levels of electronic employee monitoring show that the practice is widespread and growing at a very rapid rate. The National Institute for Occupational Safety and Health reports that as many as 26 million workers are monitored by computer surveillance in the United States. Also, it is estimated that employers listen in on phone calls between workers and consumers 400 million times per year.

Pros and Cons of Electronic Monitoring. The pervasiveness of electronic monitoring in the workplace is evidence of just how useful it is to employers. One of the most common arguments made in favor of employee monitoring is that it increases productivity. In a time of vigorous competition from foreign corporations, American employers are continuously searching for ways to get more out of their employees. Electronic monitoring can help managers accomplish this goal by enhancing an employer’s ability to schedule workloads; effectively evaluating employees for pay raises, promotions, discipline, or termination; and giving employees proper feedback so they can improve their job performance.

A high percentage of monitoring occurs in the areas where an employee is dealing directly with consumers. One study claims that through monitoring and other management techniques, General Electric was able to attain a 96 percent customer satisfaction rating at its "answer center" customer service line. Another reason often given for employee monitoring is reduction of theft. Studies estimate that over $40 billion in cash and merchandise is lost each year to employee theft. Employers also must be concerned with protecting intangible property, such as trade secrets, from employee theft. Electronic surveillance can be used to catch employees who steal from their employer and to deter others from ever trying.

Many employees fail to see electronic monitoring as a positive addition to the workplace environment. One argument frequently made against monitoring is that it causes stress and subsequent health problems for employees. A second argument often made against electronic monitoring is the potential for abuse by employers. A third argument is that it invades employees’ privacy.

The stated goal of the Privacy for Consumers and Workers Act is to prevent abuses of electronic monitoring without prohibiting monitoring altogether. Employers who violate the provisions of the PCWA can be subject to both civil penalties and private civil actions. The penalties are made even stronger by the fact that an employee cannot waive any rights under the PCWA, unless the waiver is part of a court settlement.

Definition of Electronic Monitoring. The bill begins with a definition of electronic monitoring. Comment-ators have noted that the definition used by the bill is extremely broad and encompasses nearly every form of electronic monitoring currently available.

Notice Requirements. The PCWA specifically provides that employers who engage in electronic monitoring must give the proper notice to all affected parties. First, the bill requires employers to obtain a notice from the Secretary of Labor and post it "in conspicuous places on its premises where notices to employees are customarily posted." This notice should inform employees: (1) that the employer engages in electronic monitoring; (2) the specific circumstances under which an employee is entitled to additional notice of monitoring; and (3) the rights and protections provided by the PCWA. Second, the bill also requires that prior written notice be given to each employee who will be electronically monitored. The PCWA also requires that employers notify prospective employees about electronic monitoring in the workplace. At the first personal interview, the employer must give a verbal notice of existing forms of electronic monitoring that may affect the prospective employee if hired. If the prospective employee requests, or if he or she is offered a job, the employer must then provide formal written notice of existing electronic monitoring in the workplace. Finally, the PCWA requires that employers who engage in telephone service observations shall inform the customers who may be subject to this electronic monitoring.

The PCWA provides that no employer may periodically or randomly review data obtained through continuous electronic monitoring. However, two relevant exceptions to this requirement are: (1) when the data are obtained from an electronic card access system; and (2) when the data appear simultaneously on multiple television screens or sequentially on a single screen. Also, the PCWA states that employers can review data obtained by continuous electronic monitoring, after the monitoring was completed, only if review is limited to specific data that the employer has reason to believe contain information relevant to an employee’s work.

These provisions seem to mean that an employer may freely review data obtained from an electronic card system or video surveillance displayed on a television screen if the review takes place at the exact moment the employee is being monitored. However, if the data are recorded and stored on computer disk or videotape, the employer can only go back and review them when he or she is looking for specific relevant information.

The PCWA places specific restrictions upon the way employers may use the information obtained through electronic monitoring. First, the employer cannot take any action against an employee as a result of electronic monitoring, unless the employer has completely complied with all requirements of the PCWA. Second, an employer may not use data obtained through electronic monitoring as the sole basis for either individual employee performance evaluation, or setting production quotas or work performance expectations.

In an effort to protect employee privacy, the PCWA lists some areas that are strictly off limits to electronic monitoring. First, no employer may intentionally collect personal data about an employee that is not confined to his or her work. However, so long as the employer is in compliance with the PCWA, the monitoring will not be prohibited just because it happens to pick up some personal data. If the employer inadvertently collects some personal data about an employee, the employer can disclose it only to a third party in a few narrow circumstances. Second, the act provides that no employer shall engage in electronic monitoring in bathrooms, locker rooms, or dressing rooms. Finally, an employer may not engage in electronic monitoring of an employee when the employee is exercising First Amendment rights.

Employers in the United States currently have a great deal of freedom with the use of electronic monitoring in their workplaces. Many simply require employees to "bargain away" most of their privacy expectations as a condition of employment. If the Privacy for Consumers and Workers Act is passed, the costs associated with electronic monitoring will rise immensely. Effectiveness of monitoring will likely suffer. Advance employee notice will be a requirement in most circumstances where electronic monitoring is employed. Also, some forms of random monitoring will be completely prohibited. If employers are going to comply with the PCWA, they must create a very detailed procedure that will govern all forms of electronic monitoring. All policies should be outlined in writing, and the requirements of the PCWA must be followed at every step. Only complete compliance with the PCWA will keep employers free from legal liability—broad disclaimers will no longer do. An employer’s unrestrained use of electronic monitoring as a second set of eyes and ears will simply not stand up under the PCWA.

Kristen Bell DeTienne is an assistant professor in the Marriott School of Management at Brigham Young University; Richard D. Flint is an associate at the law firm of Berman, Gaufin, Tomsic & Savage in Salt Lake City, Utah.

This article is an abridged and edited version of one that originally appeared in The Labor Lawyer, Spring 1996 (12:1).

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