No job? Bad credit? No problem! (In Illinois.)

Illinois recently enacted legislation that broadly restricts a private employer from using credit reports regarding job applicants or current employees. Subject to certain exceptions, an employer may not inquire about, order, or obtain a job applicant’s credit report, or fail or refuse to hire or recruit an individual based on the individual’s credit report or history. With respect to current employees, an employer may not discharge or otherwise discriminate against an employee because of the employee’s credit history or credit report. The law also prevents an employer from requiring an applicant or employee to waive any rights under the new law and prohibits retaliatory and discriminatory acts by the employer. Importantly, the law creates a private right of action for an individual to seek injunctive relief and damages and provides for prevailing-party attorneys’ fees.

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No Question about Quon: U.S. Supreme Court Unanimous in Overturning Ninth Circuit

On June 17, 2010, in a decision authored by Justice Anthony Kennedy, the U.S. Supreme Court unanimously overturned a decision by the U.S. Court of Appeals for the Ninth Circuit in a case involving an employee’s assertion that a government employer had violated the Fourth Amendment by unreasonably obtaining and reviewing personal text messages sent and received on employer-issued pagers.  Click here to read our Client Alert about this important decision.

In case you were wondering, we previously reported on the Ninth Circuit's decision, and denial of rehearing en banc, in Quon v. Arch Wireless here and here.

New Jersey's High Court Ruling Reaffirms Employer's Right To Monitor and Restrict Computer Use

In a continuation of the Stengart v. Loving Care Agency case we wrote about here, the New Jersey Supreme Court ruled on March 30, 2010 that emails sent by an employee from a company laptop via a web-based email account (Yahoo!) to her attorney were protected from disclosure by the attorney-client privilege. In reaching this conclusion, the Court also ruled and provided insight on a far broader and more practical issue for employers -- namely, how to draft enforceable computer usage policies and/or make existing policies more effective.

Click here for more about this momentous decision and some practical tips about drafting sustainable computer usage policies from Proskauer’s Labor & Employment attorneys who submitted a “friend of the court” brief in the case on behalf of Employers Association of New Jersey.

Special Radio Report: Oncidi Talks Privacy in the Workplace

There is an inherent tension between an employee's right to privacy and an employer's right -- and obligation -- to maintain a safe, productive, and hostility free environment at the office. The California business community is perhaps all too familiar with this conflict. Article I, section 1 of the California Constitution guarantees all California residents a right to privacy, including in some instances in their capacity as employees. A patchwork quilt of statutes, regulations and common law decisions also carves out certain areas to which a right of privacy may attach. But these rights must be balanced against an employer's business needs and legal responsibilities.

Click here to listen to Proskauer partner Anthony Oncidi talk about privacy in the workplace with Mari Frank, the host of KUCI's Privacy Piracy radio show.

Why All the Fuss about Reading an Employee's Emails?

Lately we've been writing a lot about employers, and their ability to read their employees' e-mails. From New Jersey, to Idaho, to France, this is a hot topic and we are following new developments in this area closely. To read Proskauer partner Katharine Parker's take on the issues, please take a look at her comments to the Wall Street Journal, published on November 19, 2009.

Attorney-Client Privilege Waived by Imputed Knowledge of Employee And Employee's Attorney of Employer E-Mail Monitoring

In August, we wrote about the ruling of a New Jersey appellate court in Stengart v. Loving Care Agency, Inc., in which the court took a very narrow view of the ability of employers to monitor the e-mail communications of employees over its computer networks. In that case, which is now on appeal to the New Jersey Supreme Court, the appellate court held that an employee did not waive her attorney-client privilege with respect to e-mails that she sent to her attorney while using the employer's computer network, but via her personal Web mail account, despite the existence of a broadly worded communications policy giving the employer the right to access all communications occurring over its network. The appellate court court ruled that even if the employer's policy applied to the employee (she disputed its applicability), the employer's right to access to such communications pursuant to that policy was limited by the employer's "legitimate business interests." Such interests did not extend, the court concluded, to the employee's communications with her attorney.

In contrast to the New Jersey court's narrow view of the applicability of such policies, the district court judge in Alamar Ranch, LLC v. County of Boise, 2009 U.S. Dist. LEXIS 101866 (D. Idaho Nov. 2, 2009), held that knowledge of employer monitoring of employee communications over its network could be imputed, not only to the employee but to the employee's attorney as well. As a result, the court held, the attorney-client privilege had been waived with respect to messages sent by the employee to the attorney using her employer-assigned e-mail account, and to messages sent to the employee at her employer e-mail address by the attorney.

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Cal. Supreme Court Has a Look at Cameras in the Workplace

In Hernandez v. Hillsides, Inc., S147552 (Aug. 3, 2009) [pdf], the California Supreme Court unanimously held that the mere placement of a hidden video camera in an employee's office could constitute an invasion of privacy, even if the camera was never actually used to record the employee.  Under the specific facts of the case, however, the Court ultimately found no liability because the intrusion was relatively minor, limited and justified, but California employers should be aware that the use of hidden surveillance cameras without notice or warning in "semi-private" office space is likely to produce an actionable claim for invasion of privacy in many cases. 

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E-Verify Litigation Resumes as Homeland Security Decides to Implement Mandatory Use Rule

In January 2009, we reported on the postponement of a controversial federal regulation resulting from a legal challenge filed by Proskauer Rose on behalf of several trade organizations, including the U.S. Chamber of Commerce. The rule, the result of an executive order signed by then-President George W. Bush, requires most federal contractors and subcontractors to verify their employees’ work eligibility using the Department of Homeland Security’s E-Verify system. On July 8, 2009, President Barack Obama’s Administration announced its plan to go forward with the rule. Immediately after this announcement, the U.S. Senate approved legislation that would codify the rule into law.

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"Houston's, We Have A Privacy Problem . . . ."

On June 16, 2009, in Pietrylo v. Hillstone Restaurant Group, USDC D.N.J. Case No. 2:06-cv-5754-FSH-PS, a New Jersey federal jury found that the Houston’s restaurant chain violated the Stored Communications Act (SCA) and the New Jersey Wiretapping and Electronic Surveillance Control Act (NJWESCA) by allegedly requiring an employee to surrender to Houston’s managers login information that would allow access to an employee MySpace gripe group called “Spec-Tator.” Spec-Tator’s creators, Brian Pietrylo and Doreen Marino, were fired for violating Houston’s policies regarding professionalism and positivity. They sued for alleged violations of their common law right to privacy, freedom of speech, the SCA and the NJWESCA, and for wronful termination.

Liability hinged on whether access to Spec-Tator was unauthorized. When Pietrylo and Marino created the group, they invited a select group of Houston’s employees, but no managers. The SCA and the NJWESCA extend liability to parties that exceed authorization to access electronic communications. Thus, the jury form asked: “Did Houston’s knowingly or intentionally or purposefully access the Spectator without authorization from Karen St. Jean?” The jury answered in the affirmative and awarded to plaintiffs $17,000 in compensatory and punitive damages.

While employers with appropriately-worded policies may monitor employee communications using company equipment, the Hillstone verdict, as well as the court’s refusal to dismiss the SCA and NJWESCA claims on summary judgment, indicate that employers may be liable if they exceed their authorization by accessing protected sites not intended for them to see. However, there is extensive grey area yet to be explored. For example, the outcome of the case might have been different had a Spec-Tator user logged in using a work computer and failed to log herself out, or if Spec-Tator had dropped a cookie onto her computer permitting persistent login.

Summer Associate Todd Mobley contributed to this report.

Court Uses Computer Privacy Law to Crack the Whip on Use of Work Computer to Solicit Dominatrix-Prostitute

The Ohio Court of Appeals, in State v. Wolf, No. 08-16, slip op. (Ohio Ct. App. 5d April 28, 2009), recently upheld application of Ohio’s computer crime law to an employee who used his work computer to engage in criminal conduct (solicitation of a dominatrix-prostitute). While this holding may seem uncontroversial, another aspect of the decision might open the door to imposing criminal liability on employees for violating employer computer use policies.

Wolf was a Shelby City Wastewater Treatment Plant employee. The plant superintendent discovered nude photographs on Wolf’s work computer while performing routine maintenance. The superintendent notified police, who discovered that Wolf used the city-owned computer to solicit a prostitute, visit pornographic websites and upload nude photographs of himself during work hours.  At trial, the jury found him guilty of soliciting prostitution, theft in office and unauthorized use of a On appeal, Wolf challenged the trial court decisions overruling his motion for acquittal on both the charge of theft in office and the charge of unauthorized access to a computer. The Court of Appeals agreed that the trial court should have acquitted on the theft in office charge, but ruled that Wolf’s use of the office computer was unauthorized under Ohio law.

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Rehearing En Banc Denied in Quon . . . With Dissent

On Tuesday, the Ninth Circuit denied rehearing en banc in Quon v. Arch Wireless, previously discussed here.  The dissent (1)  disagrees with the panel's conclusion that the SWAT team members had a reasonable expectation of privacy in the text messages on the grounds that the decision undermines the standard established by the Supreme Court in O’Connor v. Ortega, 480 U.S. 709 (1987); and (2)  finds that the method used by the panel to determine whether the search was reasonable conflicts with Supreme Court precedent holding that the Fourth Amendment does not require the government to use the “least intrusive means” when conducting a “special needs” search.  The dissent can be found here.  Judge Wardlaw's concurrence in the denial of rehearing en banc can be found here.  We will keep you posted on this one.

Enforcement of E-Verify Regulation Postponed Once Again

Today is Data Privacy Day and we bring you a special post regarding E-Verify from guest contributors Lawrence Lorber, Malcolm Harkins, and James Segroves, of Proskauer's DC office, and David Grunblatt of Proskauer's Newark office.  Enforcement of a controversial federal regulation that raised significant privacy concerns has been postponed once again as the result of a legal challenge filed by Proskauer on behalf of the Chamber of Commerce of the United States of America and four other trade associations. See Chamber of Commerce of the U.S. v. Napolitano, Civil Action No. AW-08-3444 (D. Md.). The regulation in question would have required most government contractors and subcontractors to participate in E-Verify, an Internet-based system that allows employers to verify that individuals are eligible to work in the United States using an employee’s Social Security Number and other personal information. Pursuant to a January 27, 2009 agreement between the parties, enforcement of the regulation has been postponed until May 21, 2009, in order to give the recently inaugurated Administration of President Barack Obama an opportunity to review the regulation. A notice to this effect is scheduled to be published in the Federal Register on January 30, 2009.

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New York Restricts Employer Use of Employee Social Security Numbers

New York now prohibits employers from publicly displaying employee Social Security Numbers (“SSNs”), printing employee SSNs on identification cards, and communicating to the general public employee SSNs or “personal identifying information.”   For more information, see this Client Alert from Proskauer's Employment Law Counseling and Training Practice Group.

Tagging Cars for Labor-Organizing Purposes May Be Subject to Punitive Damages

 The Third Circuit recently ruled that a labor union violated the federal Driver’s Privacy Protection Act (“DPPA”) when it accessed the motor vehicle records of Cintas employees for an improper “labor-organizing” purpose. In Pichler v. UNITE, the divided court affirmed the district court’s grant of summary judgment to the plaintiffs whose home addresses were obtained as part of the Union of Needletrades, Industrial & Textile Employees’ (“UNITE”) drive to organize Cintas employees. In reaching its conclusion, the court held that punitive damages may be awarded for violations of the DPPA. The court also concluded that the union’s assertion that it collected and used personal information from motor vehicle records for litigation -- a permissible purpose under the DPPA -- did not overcome the lower court’s finding that it collected and used the information for impermissible labor-organizing activities.

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Wrath of Quon?

The June 18, 2008 Ninth Circuit panel decision in Quon et al. v. Arch Wireless et al., No. 07-55282 (9th Cir. June 18, 2008) has sparked a flurry of news reports and speculation regarding employers’ ability to monitor employees’ e-mails and text messages. In fact, the decision appears to change very little for private employers who wish to review employee communications stored on, or sent through, their own servers and computers. However, Quon does limit employers’ ability to request from third-party providers the contents of employees’ electronic communications. Continue Reading...

Ninth Circuit Upholds NLRB Test for Unlawful Employer Surveillance of Union Activities

In a unanimous panel opinion issued on January 28, 2008, the Ninth Circuit upheld the National Labor Relations Board’s (NLRB) newly-announced three-factor test for determining whether employer surveillance activity of potential union members is coercive and therefore in violation of the National Labor Relations Act (NLRA). The case, Local Joint Executive Board of Las Vegas et al. v. NLRB, No. 05-75515, -- F.3d --, 2008 WL 216935 (January 8, 2008), involved two incidents of alleged surveillance of union activities at Aladdin Gaming, LLC, in which Aladdin officials conferred with employees in the cafeteria who had been presented with union cards.

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California Court of Appeal Reaffirms Adequacy of Opt-Out Notice to Protect Privacy of Individual Identity and Contact Information in Litigation

On April 9, 2007, the California Court of Appeal, Second Appellate District, affirmed a ruling of the Los Angeles Superior Court permitting the disclosure to counsel for a putative class of the names, addresses, and telephone numbers of the defendant’s current and former employees unless, following proper opt-out notice, they objected in writing to the disclosure. Belaire-West Landscape, Inc. v. Superior Court, B194844 (April 9, 2007). The Belaire-West court applied the reasoning of the California Supreme Court's recent decision in Pioneer Electronics (USA), Inc. v. Superior Court, 40 Cal.4th 360 (2007) (discussed in our January 30 post) to employee data to hold that requiring current and former employees to object to disclosure of their identities and contact information “present[ed] no serious invasion of their privacy interests.” Continue Reading...