Court Watch Spring 2002 Are you listening to me? Recording employees’ personal calls could lead to employer liability. Do you regularly monitor your employees’ phone calls as part of an ongoing quality assurance program? Depending on the approach you take, you could be exposing your company to not only civil damages, but criminal liability as well. So says a United States District Court in the Middle District of Alabama (Smith v. Devers). The Facts In August of 2000, Felicia Lee Smith began working as an administrative sales assistant for Mike Devers Insurance Agency, Inc., an independent contractor for State Farm Insurance Company. In January of 2001, upon learning that Mike Devers was intercepting, recording and listening to her personal phone calls, Smith left the insurance agency. Smith became suspicious that Devers was listening to her personal phone calls after he appeared to have more information about her personal life than she had ever revealed to him. Particularly suspicious to Smith was the fact that Devers indicated he was aware that she suspected her husband was having an affair, information which she claims never to have revealed to Devers. Devers denied monitoring any of Smith’s calls. He admitted, however, that the nature of his business required him to monitor some phone calls for quality assurance purposes. Smith, on the other hand, claimed to have a tape on which her calls had been recorded by Devers and the agency. The Law The Federal Wiretapping Act prohibits the intentional interception of wire, oral or electronic communication. 18 U.S.C. § 2511. An "interception" is defined as "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical or other devise." 18 U.S.C. § 2510(4). There are, however, several statutory exemptions. One such exemption is known as the "business extension" exemption. The business-extension exemption authorizes the use of additional extensions on business phones to intercept or monitor calls if that interception is performed in the ordinary course of business. A second, and more obvious exemption, is the consent exemption. It is not unlawful for a person or employer to intercept a phone conversation so long as one of the parties to the conversation has given his or her consent to the interception. Violations of the Federal Wiretapping Act expose an employer to both civil and criminal liability. As such, it is imperative that employers have a basic understanding of the underlying legal issues, and, more importantly, how to avoid liability. Applicability Of The Business-Extension Exemption The district court found that Devers and the insurance agency had intercepted and recorded every conversation on certain phone lines within certain time periods, and preserved those conversations on tape. The district court then set out to determine whether Devers’s actions fell within the business-extension exemption. Even under the business-extension exemption, if the call is personal in nature, no interception is allowed beyond that needed to determine whether the call is business-related or personal. As stated by the Eleventh Circuit Court of Appeals, under the business-extension exemption a personal call may be intercepted "to determine its nature but never its content." (Watkins v. L.M. Berry & Co.). This rule allows employers to crack down on the unauthorized use of business phones without infringing the employees’ privacy rights. Applying the foregoing, the district court found that by intercepting entire personal calls, Devers and the agency had intercepted more than was necessary to determine if the calls were personal or business-related. Whether Devers or anyone at the agency had actually listened to more of the calls than was necessary to determine if they were personal or business-related was not relevant. An employer violates the Federal Wiretapping Statute simply by intercepting more of a call than is necessary to determine if it is personal or business-related. Because Devers and the insurance agency had recorded entire personal calls, the court found that summary judgment was not appropriate on the basis of the business-extension exemption. Applicability Of The Consent Exemption Devers argued that Smith had received an agent handbook that detailed the agency’s use of phone monitoring equipment for quality-assurance purposes, and that her receipt of the handbook operated as an implied consent to the practice of monitoring her calls, both personal and business-related. Smith, however, denied ever receiving the agent handbook and argued that she was never put on notice that her phone conversations might be recorded. Because these issues were before the court on the defendants’ motion for summary judgment, the court had to view the evidence in the light most favorable to the plaintiff. Therefore, the court determined that the consent issue would have to be determined at trial. Minimizing Liability If you monitor employees’ telephone calls for quality assurances purposes, the simplest and most effective way to avoid liability is to have the employees’ consent. As the instant case demonstrates, it is essential that this consent be documented and archived, so that there is no question that the employee gave his or her consent. Remember, it is never a good idea to engage in the wholesale recording of an employee’s calls unless you are certain that the employee has given his or her consent. If an employee has not consented to having his or her phone calls monitored, you may still monitor the calls so long as the monitoring is done in the ordinary course of business. When monitoring such calls, never continue to monitor the call once it becomes evident that the call is personal in nature, and never engage in the wholesale tape recording of such calls. By following these simple guidelines, you will greatly reduce or eliminate the potential liability involved in the monitoring of employees’ phone calls.