Ninth Circuit Curbs Employers’ Ability to Monitor Employee Communications
 
September 3, 2008
 
Linda Auerbach Allderdice- Los Angeles

Employers who provide wireless equipment to their employees must take special care to safeguard their rights to audit communications, according to a recent decision of the United States Court of Appeals for the Ninth Circuit. Although the court’s ruling in Quon v. Arch Wireless Operating Co. concerned a public employer, it also has implications for private employers.

Arch Wireless provided wireless text-messaging services for various municipal departments in Ontario, California, including the city’s police department. The police department had a written policy expressly stating that e-mails and other electronic communications would be monitored. Under the department’s “informal policy,” however, the department did not audit text messages as long as employees paid the overcharges assessed for usage over the department’s monthly allotment.

The department decided to audit all text messaging, and at its request Arch Wireless released transcripts of the messages. Employees of the police department sued Arch Wireless, alleging violations of the federal Stored Communications Act (SCA), and they sued the police department for alleged violations of their right of privacy.

The SCA prevents providers of communication services from divulging private communications to certain entities or individuals. The SCA establishes different requirements for electronic communication service (ECS) providers than for remote computing service (RCS) providers. ECS providers offer users the ability to send or receive wire or electronic communications – such as text messages; they provide only temporary storage incidental to the communication and storage for back-up protection. RCS providers offer computer storage and processing services. To be considered an RCS, the communications provider would have to maintain copies of the messages for a substantial amount of time for the company to review or would have to ensure that messages were routed through and stored on the company’s own equipment. Under the SCA, both types of providers can release private information to or with the consent of an addressee or intended recipient of the communication. Only an RCS provider can release the information to the subscriber.

The Ninth Circuit found that Arch Wireless was not an RCS because it only stored messages for a short time to facilitate delivery of the message. Accordingly, the Ninth Circuit held that Arch Wireless violated the Stored Communications Act.

The Ninth Circuit further found that the department violated its employees’ privacy rights, as it conducted an unreasonable search of their text messages. The Court specifically noted that the employees could reasonably have relied on the informal “no audit” policy to support their expectation of privacy, particularly as the employer did not follow the monitoring policy.

The Arch Wireless decision has several practical implications. To avoid the circumstances that the Ninth Circuit found were violations of employees’ rights, employers should consider:

• implementing policies covering text messaging and access to and use of the employer’s computer/Internet/email systems and other electronically-stored information
• promulgating policies that advise employees and other users that the users have no expectation of privacy or confidentiality and should prohibit personal use of company-provided text messaging or computer systems; if employees occasionally use the company-provided (or paid) computer or email systems for their personal use, policies should provide that such usage is a limited exception, and not a waiver, of the company’s policy or of the company’s right to monitor compliance and to take appropriate action where necessary
• training supervisors and managers so they do not give conflicting directions or create expectations in employees contrary to policy; this is to avoid what the Ninth Circuit noted was a difference between stated policy and “operational reality”
• regularly monitoring employee compliance with the policy including inspection of computers, laptops and other electronic information storage devices
• developing policies for investigation of violations of a computer-use policy so that employees are advised what steps may be taken by the employer to ensure the integrity of its systems and adherence to policy
• regularly monitoring policies and their administration
  to ensure that they meet evolving legal standards

For more information, contact:

Linda Auerbach Allderdice
213.896.2422
linda.allderdice@hklaw.com
toll free: 1.888.688.8500