Calif. Ruling Spotlights Risks Of Secret Cameras

By Erin Marie Daly

Law360, New York (August 31, 2009) -- Although California’s highest court recently found in favor of an employer that faced privacy invasion claims by two female workers after it installed a hidden camera, companies should proceed with extreme caution before using surveillance measures, lawyers said.

The Aug. 3 decision by the California Supreme Court upheld the dismissal of claims against Hillsides Inc., a residence for abused children, over the use of video surveillance equipment in the facility’s office meant to track down a suspected pornography viewer. The facility did not expect or intend to catch the plaintiffs on tape, and in fact they were never recorded.

The high court said that while the plaintiffs had a “reasonable expectation” that their employer would not install video equipment capable of monitoring and recording their activities behind closed doors without their knowledge, the intrusion was neither “highly offensive” nor “sufficiently serious” to constitute a privacy violation.

However, the court did note that the ruling was not 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.”

Although the facts of the Hillsides case were particularly unique, employers can — and should — look at the ruling more broadly, primarily because the court went out of its way to discuss forms of workplace monitoring that weren’t at issue in the case, said Aaron Roblan, a shareholder at Ogletree Deakins Nash Smoak & Stewart PC.

“Although the court was clear in saying employees do have some expectation of privacy in the workplace, the ruling also sends a pretty good signal to employers that if they provide their employees with notice about the various types of surveillance they might be subjected to — such as e-mail, Internet, video and phone monitoring — the court will uphold their right to do so, as long as they put reasonable limits on the scope and duration,” Roblan said.

Another takeaway, he said, is the court’s guidance for employers on the types of areas that are considered “private” versus those that are not. The more private the area, the less acceptable surveillance is, he said.

“A lot of employers believe they can’t possibly be violating employees’ privacy by installing cameras in public areas, because those are all open to the naked eye,” he said. “They think that if they can walk by and see the employees there, certainly they should be able to videotape them without violating the law.”

But the court, Roblan said, drew attention to the distinct difference between the mere fact that a person can be seen by someone, and the intrusive effect of hidden cameras and video recorders in settings that otherwise seem private.

He noted that according to the court’s ruling, “it has been said that the ‘unblinking lens’ can be more penetrating than the naked eye with respect to ‘duration, proximity, focus and vantage point,’” and that “such monitoring and recording denies the actor a key feature of privacy — the right to control the dissemination of his image and actions.”

Maria Anastas, also a shareholder at Ogletree Deakins, said that while it varied by industry, employers used surveillance technology fairly frequently, especially in the retail and health care sectors.

But an important factor to weigh in evaluating the benefits and risks of such technology is whether the employer is unionized, she said.

For employers with binding union contracts, Anastas said, mere notice isn’t enough.

“I’ve had a fair number of unionized clients say they’re having a problem and want to put a camera up, but it’s a mandatory subject of bargaining,” she said. “Unlike employers who don’t have binding union contracts, for those that do, those agreements don’t make reference to the right to install surveillance, so they’d have to bargain with the union.”

Anastas cautioned that particularly in light of the anticipated passage of the Employee Free Choice Act, employers who anticipate unionizing in the future should seriously think about the extent to which they want to have cameras installed — and if so, carry out those plans sooner rather than later.

“It’s unlawful to install surveillance once you learn unionizing has begun,” she said. “Employers need to be very careful.”

The first step for employers, Roblan said, is to identify the various types of monitoring they may wish to engage in. They should then identify the level of expectation of privacy employees have in those areas, and, finally, evaluate ways to narrowly tailor the monitoring, he said.

“But no matter what you’re going to do, you have to give notice,” he said.

Anthony Oncidi, a partner at Proskauer Rose LLP, called the ruling a “near miss” in favor of the company, noting that other employers should heed the court's warning that "nothing we say here is meant to encourage such surveillance measures, particularly in the absence of adequate notice to persons within camera range."

“No employer should take away from this opinion the belief that it’s now okay to engage in surveillance except under very exceptional circumstances, which you won’t find in most employment situations,” he said. “The lives of children were at stake here, but it’s rare that an employer would have such a compelling public policy reason. If it doesn’t come close to this level of concern, for example protecting the well-being of third parties, employers would be well-advised not to engage in such measures.”

But the ruling, he said, was by no means an overwhelming victory for either side, and will have benefits for both employers and workers.

“For employees, there is now a very recent, very specific ruling reaffirming that they do have a right to privacy in the workplace under certain circumstances,” he said. “But for employers, it’s also good news, because the court showed a very realistic sense of what it’s like to run a workplace, and what the competing concerns are for management.”

Hillsides, Oncidi noted, wasn’t your typical employer, and because of that, the court took a more nuanced view of the issues at play.

“The employer in this case was between a rock and a hard place because it had a very serious obligation to safeguard the children, and the court recognized that was a motivating factor in the company doing what it did,” he said. “The court could have applied a much more sterile rule about privacy rights being violated, but it recognized that that there was a very good reason why the employer felt it had to go to such lengths.”

In another important example of how the court was influenced by the specific facts of the case, the plaintiffs themselves were never actually filmed or monitored by the camera, Oncidi pointed out.

“It’s like a tree falling in the forest with no one there to hear it,” he said.

The decision, he added, reinforces that if employers do decide to engage in some form of surveillance, they need to do what any entity would do to defeat a claim of privacy: give notice.

“We routinely advocate that companies notify employees that activity they engage in on computers and phones and pagers is subject to inspection at any time, for any reason,” he said.

Where employers go awry, Oncidi said, is when they fail to enforce such policies, and if nothing else, the Hillsides ruling reinforces that employers need to provide clear and adequate notice.

“Management and supervisors need to be trained as to these policies and communicate a consistent message to the work force,” he said. “The practice will trump the policy. Give notice and stick to it; say early and often that you plan to monitor these activities, and you’ll be able to defeat an expectation of privacy.”

Oncidi said the decision to use surveillance was a risky thing to do without giving notice to employees. If the decision to do so is made, he said, it’s very important for employers to understand what the reason for the surveillance is, and to fastidiously document it.

But oftentimes, he said, the benefit an employer would gain from recording employees could be achieved simply by putting up a camera — even if it’s not running.

“If the camera is notorious and everyone knows they’re being watched, you’ll have achieved 90 percent of your objective in putting it up,” he said.

The decision underscores the risk of installing hidden video cameras in offices and other nonpublic areas of the workplace, according Christine Lyon, a partner at Morrison & Foerster LLP.

“It’s very important to note that the court found that placing a hidden camera in the workplace was still an intrusion, even though in this case the employees weren’t even recorded,” she said. “There’s language in the case that other employers could borrow to prove that they had a legitimate business reason for surveillance, but it does raise the question of what sufficient justification for such an action will be in the future.”

Employers should also recognize that the court’s ruling was based on an extremely fact-intensive analysis, Lyon said.

“The employer was very sympathetic in this case, and used the camera in a limited way, but nonetheless it ended up in litigation for years,” she said. “Hopefully, this case will help employers defend themselves. But they should realize it’s not automatic, and it will always come down to the facts of the case, so they should really think twice and be very thoughtful about their actions.”

As for video surveillance in the workplace, Lyon noted that the good part of the decision was that it might still not be actionable if employers did it carefully.

“It’s risky, but it’s not per se illegal,” she said.

One important factor in deciding whether to use surveillance, Lyon said, is whether an employer’s objective could be achieved through simply telling employees a camera is being installed, which theoretically would have a deterrent effect.

“Employers can reduce the risk of privacy claims by notifying employees of the video surveillance,” she said.

In addition, she said, employers can reduce their risk by taking steps to limit the intrusiveness of the video surveillance, and by demonstrating a compelling need for the video surveillance.

The plaintiffs in the Hillsides case are represented by Eisenberg and Associates. The defendants are represented by Seyfarth Shaw LLP.

The case is Hernandez et al. v. Hillsides Inc. et al., case number S147552, in the Supreme Court of California.