Privacy Lawyer & Attorney : Proskauer Rose Law Firm : CAN-SPAM, FCRA, FACTA

Quon is a police officer for the City of Ontario, California. He was issued a pager active on the Arch Wireless network. The Ontario Police Department (OPD) subscribed to an Arch plan whereby each officer received a quota of 25,000 text characters per month. The informal policy of the OPD was to make officers pay for overages.

Although the OPD disseminated to employees a computer use policy that included text message and e-mail auditing, thereby disclaiming any reasonable expectation of privacy in such communications, OPD officers were informed by supervisors that text messages sent from police-issued pagers would not be audited so long as OPD officers paid the overage fees.

When Quon and other officers exceeded their quotas several months in a row, the OPD requested that Arch provide to the OPD, qua employer, transcripts of those messages. OPD reviewed the transcripts and discovered that many of Quon’s messages consisted of personal and sensitive messages unrelated to work, contrary to OPD policy.

Quon and others whose text messages were audited sued Arch, based on violation of the Stored Communications Act, and Ontario, the OPD and various OPD officials for violation of the Fourth Amendment to the U.S. Constitution and the Privacy Clause contained in article 1, section 1 of the California Constitution. 

Arch is an “electronic computing service” under the Stored Communications Act

In a reversal of the trial court, the Ninth Circuit panel held that Arch violated the Stored Communications Act (SCA) when Arch turned over the contents of text messages in the absence of a court order or consent of addressees or intended recipients – in this case, Quon and third parties, including his co-plaintiffs. This determination turned on whether Arch was a “remote computing service” (RCS) or an “electronic communication service” (ECS) under the SCA. The court found that Arch was an ECS and that therefore Arch improperly surrendered the contents of plaintiff-appellants’ text messages without consent or court order. This holding applied to Arch as the service provider, not to Ontario or the OPD as employers.

Reasonable expectation of privacy

Further, the court held that as a public employer, the Fourth Amendment and California Privacy Clause applied to the OPD’s review of the text messages. The court engaged in the typical two-pronged Fourth Amendment analysis, under which a plaintiff must establish: (1) a reasonable expectation of privacy; and (2) an unreasonable search by a government actor.

The court squarely held that in the absence of other circumstances, users of text messaging “have a reasonable expectation of privacy in the content of their text messages vis-à-vis the service provider.” Slip Op. at 7020 (citing cases). However, the court noted that it “does not endorse a monolithic view of text message users’ reasonable expectation of privacy, as this is necessarily a context-sensitive inquiry.” Slip. Op. at 7021.

In Quon’s particular context, the court found that even though the OPD’s acceptable use policy covered text messages and disclaimed any reasonable expectation of employee privacy, the “operational reality” of the OPD was that officers were told their texts would not be audited so long as they paid text message overage fees. That operational reality distinguished Quon from other employment cases in which employees were informed that their communications were not private; in such cases, the court refused to find a reasonable expectation of privacy. Slip Op. at 7022-23.

Further, the Court found that the search was unreasonable because it was overbroad; the OPD need not have reviewed the contents of the text messages in order to assess whether OPD’s text messaging quota was too restrictive. See Slip Op. at 7025-7027.

Nothing in the case appears to restrict the ability of private employers with clear computer use policies disclaiming employee privacy to monitor employees’ e-mails (sent through the employer’s system) and text messages. However, Quon is an important reminder that employers should ensure their electronic communications policies and practices and statements to employees are consistent with formal employer policies.

In the first incident, an Aladdin human resources official informed two buffet workers that if they signed the cards and the union were formed, they would have to pay union dues and would not necessarily receive improved benefits. Op. at 1331. The official’s conversation, which involved the buffet workers and representatives of the prospective union, lasted approximately eight minutes. In the second incident, a different Aladdin official informed a housekeeper signing a union card that she “shouldn’t be signing things that she wasn’t sure about,” then departed the scene. Op. at 1332.

Section 7 of the NLRA accords employers the privilege to observe public union activities on company premises, so long as the employer does not take actions that are out of the ordinary. However, Section 8(a)(1) of the NLRA states that “[i]t shall be an unfair labor practice for an employer – (1) to interfere with, restrain, or coerce employees in the exercise of [the right to associate freely and engage in certain speech in order to form unions] guaranteed in section 157 of this title.” 29 U.S.C. § 158(a)(1) (quoted in Op. at 1333). Whether employer observation rises to the level of unlawful and coercive surveillance depends on the circumstances of each case. See Op. at 1333 (quoting The Broadway, 267 N.L.R.B. 385, 400 (1983).

When considering the Aladdin case, the NLRB established a three-part test for determining whether employer observation is coercive: “[i]ndicia of coerciveness include the duration of the observation, the employer’s distance from its employees when observing them, and whether the employer engaged in other coercive behavior during its observation.” Aladdin Gaming, LLC, 345 N.L.R.B. No. 41 at *2. The Ninth Circuit found this test “rational and consistent” with the NLRA. Op. at 1334. Further, the Court found that the NLRB’s “findings of fact [were] supported by substantial evidence” and that “the agency correctly applied the law.” Op. at 1332. The Court therefore denied the petition for review of the NLRB decision.

The January 28, 2008 decision is the second recent decision related to the privacy of union organizers and members. In The Guard Publishing Company d/b/a The Register-Guard, 351 NLRB No. 70 (December 16, 2007), the NLRB determined that an employer may prevent employees from sending union-related communications over work e-mail, so long as such a ban on non-work related communications is equally applied.  For further details on this decision, see the Proskauer Rose Client Alert, located here.

Real parties in interest Sebastian Rodriguez and Jose Luis Mosqueda filed a putative wage and hour class action against their former employer, Belaire-West Landscaping. During precertification discovery, the trial court compelled Belaire-West to provide the names and contact information of all current and former employees and adopted the plaintiffs’ proposed notice to those individuals that required them to opt-out in writing to prevent their information from being disclosed. The court reviewed in detail the analysis applied in Pioneer, and determined that the opt-out notice adequately protected the privacy rights of the current and former employees.

The opt-out notice adopted by the trial court advised current and former employees “of the lawsuit and its core allegations, and explained who may be a member of the proposed class. It described the investigation plaintiffs’ attorneys were performing, and stated that ‘[t]o assist in the investigation, the attorneys for the Plaintiffs wish to gather information regarding the nature of the work you do (or used to do), while employed by Belaire-West, including the amount of any overtime you may have worked. They have sought to obtain your names, addresses and telephone numbers, so that they can communicate with you about the allegations made in the lawsuit.’” The notice further stated as follows:

By order of the Los Angeles Superior Court, Plaintiffs’ counsel has already been provided your names. The Court has ordered that a letter be sent to you to determine if you would object to Plaintiffs’ counsel receiving your address and telephone number. You may elect not to provide your address and/or telephone number to Plaintiffs’ counsel on the grounds of privacy. [] Plaintiffs’ counsel would like to have your address and telephone number to help in their investigation. The Plaintiffs’ lawyers would like to contact you to obtain your input as to whether the Plaintiffs’ allegations in their lawsuit are accurate. [] THEREFORE, IF YOU DO NOT WANT YOUR ADDRESS AND TELEPHONE NUMBER TO BE PROVIDED TO THE PLAINTIFFS’ ATTORNEYS, YOU MUST complete and return THE ENCLOSED POST CARD to the address listed on the postcard.

The notice included the names, addresses, and telephone numbers of plaintiffs’ counsel, with the information that recipients had the right to contact plaintiffs’ counsel and that they speak Spanish. Finally, the notice advised current and former employees that they were “under no obligation to provide information to or discuss this matter with the Plaintiffs’ attorneys or any person representing the former employees,” were “also under no obligation to provide information to or discuss this matter with Belaire-West or any of its agents or attorneys,” and that their “employer[s] may not retaliate against [them] in any way for providing or refusing to provide any information.”

As explained in a previous post, the Court in Pioneer held that, under the privacy provision of the California Constitution, a representative plaintiff in a class action may obtain from defendant company the personal identifying information of other complaining consumers, even when those consumers do not affirmatively grant permission for their personal identifying information to be used.

The Belaire-West court concluded that the opt-out notices in the instant matter sufficed under Pioneer. The court acknowledged that the privacy concerns in the Belaire-West case were more significant than those in Pioneer because the information was provided to Belaire-West as a condition of employment (as opposed to the voluntary disclosures of consumers in Pioneer), and that employees reasonably expected that their employer would not divulge the information except as required to governmental agencies or benefits providers, in light of employers’ usual confidentiality customs and practices. Nonetheless, the court found that this did not mean that current and former employees would wish their contract information to be withheld from a class action plaintiff seeking relief for violations of employment laws.

The court found reasonable the trial court’s implicit finding that “no serious invasion of privacy would result from the release of the [information] to the named plaintiffs in a putative class action filed against their employer following a written notice to each employee giving them the opportunity to object to the disclosure of that information.” As in Pioneer,

the information, while personal, was not particularly sensitive, as it was contact information, not medical or financial details. Disclosure of the contact information with an opt-out notice would not appear to unduly compromise either informational privacy or autonomy privacy in light of the opportunity to object to the disclosure, as the court specifically found that there was no evidence of any actual or threatened misuse of the information.