Editor’s Note – Mark Lies, II, is a partner in the Chicago, IL, law firm of Seyfarth, Shaw, Fairweather and Geraldson, who specializes in labor and employment law as well as occupational safety and health. Legal topics provide general information, not specific legal advice. Individual circumstances may limit or modify this information.
This article will discuss in general terms the various rights that employees have in the marketplace to maintain privacy both as to personal information and to their activities at work and off premises.
An employee generally has four sources of privacy rights within the workplace:
• Constitutional (state and federal);
• Statutes (state and federal);
• State common law;
• Contract.
Within every workplace there is a constant competition between the interest of the employer and employee which directly impacts these privacy rights:
• Employer interest in securing and maintaining information about a job applicant or employee that must be disclosed to others;
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• Employee interest in limiting the acquisition and use of such information;
• Employer legitimate interests which require observation and regulation of employee conduct;
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• Employee interest in general autonomy and being free of employer regulation and surveillance inside and outside of the workplace.
This article will discuss these various rights in general terms. While federal laws tend to have uniform application, since each state will have different protections for these rights, it is necessary to conduct a more detailed analysis on a state-by-state basis before taking specific employment action.
Constitutional Law
Generally, constitutional protections for employee privacy rights are intended to prevent state or federal government invasion of such rights. Therefore, employees who work for private industry (as opposed to governmental bodies) are not subject to governmental action and generally do not have such protections. Again, since some states may have constitutional protections extended to private sector employers, such inquiry is necessary to determine the scope of any such rights.
Statutory Law
There are numerous federal and state laws, some of which will be discussed below, which provide employees with certain privacy rights (e.g., Americans with Disabilities Act (ADA) which places restrictions on disclosure of private medical information; Occupational Safety and Health Administration (OSHA) Bloodborne Pathogens Standard (29 CFR 1910.1030) which places restrictions on disclosure of physician testing of employee for workplace exposure to bloodborne diseases).
Common Law
Each state has developed certain protections of employee rights against intrusion into the employee’s private affairs unless the employer can establish a legitimate business reason. The employer (as well as managers and co-employees) can be liable for damages if the employer intrudes into the employee’s private life in a way that is highly offensive to a reasonable person (e.g., disclosure of highly embarrassing, but truthful, information about the employee to other employees, for example, that the employee engaged in unlawful conduct).
The employer can also violate an employee’s privacy rights if it discusses private facts (e.g., employee prior history of alcoholism) or if it publishes false or misleading information about an employee that is highly offensive or defamatory (e.g., falsely indicating that the employee was involved in criminal activity). A recurring area of liability in this area occurs when the prior employer provides inaccurate job reference information to a prospective employer, resulting in the loss of a job opportunity by the former employee.
Contract
Employees may also have additional privacy rights that the employer must respect by contract, which may be contained in an employee handbook, in a labor contract, or in representations made by the employer to the employee during the relationship.
Privacy Affects All Aspects of Employment
These privacy issues can affect all aspects of the employment relationship, including:
• Screening of applicants;
• Hiring of applicants;
• Monitoring of employee performance;
• Regulation of employee performance;
• Evaluation of employee conduct;
• Conduct of investigations of employee misconduct;
• Maintenance of employee records;
• Litigation and settlement of employee claims.
Medical Screening
At the outset of the hiring process, the ADA places limitations on the employer from seeking medical information or examinations from a job applicant until an offer of employment is made. Once the employment relationship exists, all medical-related information must be kept separate from the employee’s personnel file. Further, the ADA, the Family and Medical Leave Act, and Office of Federal Contract Compliance programs require that employee medical information be kept confidential by the employer and that disclosure be limited to certain persons, including:
• Supervisors and managers may be informed of work restrictions and necessary accommodations;
• First aid and safety personnel may be informed if treatment may be necessary;
• Governmental officials investigating legal compliance may be provided the information;
• State worker’s compensation offices and insurance companies may be informed.
Drug and Alcohol Testing
Most employers prohibit employees from using illegal drugs or being under the influence of drugs or alcohol in the workplace. In some cases, the employer’s action is mandated by the Drug-Free Workplace Act. Further, drug and alcohol testing may be required by certain regulations (e.g., Department of Transportation) depending upon the employer’s business. Thus, the employer will either want to test or may be compelled to do so. There are, however, many potential restrictions. For example, in a union environment, the employer must bargain with the union in order to establish the program.
In addition, the employer can establish a program under which testing can be pre-employment, random, or for cause, but each such form of testing must have certain procedures under which the tests can occur. Once the program is established, the employer must consider that the ADA places limitation on scope of testing, which may prohibit testing that screens for prescription medications and for alcohol and prohibits testing unless the employer can establish business necessity. In addition, state laws may be even more restrictive on the employer’s right to conduct such testing. Finally, once the tests have been conducted, the results must be kept confidential.
AIDS Testing
There is no current test for the disease of Acquired Immune Deficiency Syndrome (AIDS) nor is there a commercially available test for Human Immunodeficiency Virus (HIV). Because individuals who have AIDS or are HIV positive are protected under the ADA, employers should not test for HIV. Some states prohibit testing for either. Further, any employer disclosure of employee AIDS or HIV status without a compelling legal reason is likely to result in employer liability. Conversely, there are certain federal regulations that mandate the employer offer medical screening to employees who may have been exposed to bloodborne diseases (HIV, hepatitis) at the workplace. The employer is required under OSHA regulations to attempt to test an employee post-exposure to human bodily fluids (e.g., needle stick, first aid) who may have been contaminated with blood for bloodborne diseases. The employee may decline such testing. These regulations contain limitations on disclosure of medical tests.
Lie Detector Tests
While the employer may wish to determine whether an employee is being truthful, the federal Employee Polygraph Protection Act prohibits lie detector tests on employees, except under limited conditions:
• Tests are prohibited for job applicants unless the employee is involved in certain occupations such as security, manufacturing of controlled substances, or for federal, state, or local government;
• Tests are allowed for existing employees in an investigation of economic loss or injury to a business, if the employee had access to property, and there is reasonable suspicion of involvement.
Background Investigations
In order to avoid claims of negligent hiring and to attempt to verify background information on potential employees, employers frequently conduct background investigations. There are significant restrictions on an employer’s ability to conduct background investigations utilizing a third party (consumer reporting agency (CRA)) to obtain the information at the time of hire or thereafter. The federal Fair Credit Reporting Act requires an employer to notify the employee (or applicant) that it is seeking information in a consumer report through a third party (CRA) about employee’s character, general reputation, credit standing, lifestyle, or other information. The employee or applicant must be informed in writing that the employer intends to obtain a consumer report and sign authorization. The employee must be advised of his or her rights if adverse action will be taken based upon the consumer report. Finally, state laws may impose additional restrictions on obtaining such information.
Monitoring Employees At Work
Employee Telephone Calls
Frequently, employers have an interest in determining whether employee electronic communications occurring at the workplace are for legitimate business purposes or may be in violation of employer policies (e.g., harassment). There are restrictions on how such monitoring may be conducted which protect employee privacy.
The federal Electronic Communications Privacy Act (ECPA) prohibits the employer from intercepting and taping most employee telephone calls placed or received on premises. There are, however, several exceptions that allow such monitoring:
• Prior consent by one party to the telephone call;
• If the employer is a service provider who owns a communication system and it is monitoring such systems;
• Course of business monitoring which allows the employer to evaluate its employee’s performance with its customers.
Frequently, state law may impose more stringent requirements. For example, the state of Illinois surveillance statute prohibits monitoring of telephone calls unless the employer is engaged in marketing or opinion research, or for quality control of telephonic solicitation; if the employer conducts such monitoring, it must cease monitoring as soon as it determines that the call is personal. Under Illinois law, employees must also be notified that surveillance monitoring is being done and the employer must provide employees with access to a telephone or pay phone that is not subject to monitoring. Finally, Illinois, like many states, prohibits the taping of a telephone call unless all parties consent.
Electronic Mail
The ECPA statute discussed above generally does not protect the privacy of messages sent on internal company e-mail systems. Several court decisions have held that employees do not have an expectation of privacy when they utilize the e-mail to communicate. In order to confirm that the employees should not expect such privacy, the employer should advise employees in a written policy that the employer reserves the right to monitor and that employees have no expectation of privacy regarding use of e-mail.
Regulating Employee Lifestyle and Off Duty Conduct
As a general rule, the employee’s activities outside work are not considered to be employer’s business to regulate. In order for the employer to be able to regulate such activities, the employer must show:
• The employee’s conduct is directly related to the employee’s assigned job; and
• Such employee conduct clearly threatens employer’s business with substantial adverse impact if not regulated (e.g., employee convicted of drunken driving off of work and employee’s job involves operation of motor vehicles at work).
Some states recognize employee rights to privacy for activities outside of work that the employer cannot regulate. For example, Illinois recognizes certain privacy rights by statute, in addition to common law. In Illinois an employer cannot discriminate against an employee for use of lawful products off of the employers premises during non-working hours, for example, lawful use of alcohol and tobacco.
Employer Investigations
The employer may be required to conduct investigations of employee complaints (e.g., harassment) in order to comply with state or federal employment laws or for other legitimate reasons (e.g., post accident investigation). The employer is authorized to conduct investigations for these purposes. During the course of the investigation, the employer will likely obtain private information. The employer has a duty to maintain the confidential nature of this information and must limit disclosure, which can include law authorities.
Workers’ Compensation
Employers are frequently interested in whether an applicant has had prior worker’s compensation claims because of the potential for future claims. Many state laws may prohibit such inquiries during the hiring process regarding whether employee had previous worker’s compensation claims because it could be used to deny employment where the previous worker’s compensation claim was valid. For example, Illinois prohibits and penalizes such inquiries.
On Premises Surveillance
The employer generally has the right to utilize visible surveillance cameras to observe employee activities at workplace for legitimate reasons (e.g., prevention of theft, eliminate employee misconduct). However, this right has limitations. If there is a union, the employer must bargain with the union over the placement of the camera. Further, the employer may have to bargain with union over use of undercover investigators on the premises. Employers must be extremely cautious regarding the placement of surveillance cameras or devices. Cameras may be prohibited by state law or common law in areas designed for employee health or personal comfort (restrooms, locker rooms, lounges).
Frequently, the employer may suspect that there is improper conduct occurring at the workplace and that evidence is contained in employer lockers or desks. Since employees generally have no expectation of privacy in their lockers or desks, the employer can search without cause unless:
• An employee handbook or workplace practice gives employee expectation of privacy;
• In a public sector workplace the employer may have to show cause to inspect;
• An employee may have an expectation of privacy in personal handbags; thus, the employer should reserve right to inspect all property brought onto premises and vehicles in parking lot.
Conclusion
From the foregoing, it is apparent that there are many potential restrictions on an employer’s right to obtain information about an employee’s private life and activities on and off of the premises. Unfortunately, an employer should not throw up its hands and abdicate its responsibility to control workplace activities without facing legal liability for employee activities that may violate federal and state employment, safety, and common law. If the employer prepares thoughtful employment practices that address these issues, it can lawfully obtain information about its employees to satisfy its compliance duties.
Labor and the Law - April 2001 Render