The California Supreme Court Comments on Workplace Privacy Rights: Employers May Invade Employee Privacy at Work...Sometimes

The California Supreme Court has issued a unanimous workplace privacy decision which serves to remind all employers that surveillance policies must be carefully drafted and surveillance activities must be thoughtfully limited.  In Hernandez v. Hillsides, the Court concluded that while employees may have reasonable privacy rights at work, the installation of a hidden surveillance camera in an employee’s office for the purpose of investigating improper after-hours use of an office computer was not sufficiently serious or offensive to constitute an actionable invasion of privacy.  Whether this fact-specific opinion changes the privacy-rights landscape for employers, however, is yet to be determined.

Defendant Hillsides, Inc. was suspicious (based upon its use of internet tracking software) that someone was accessing pornographic websites on company computers after hours – a violation of company policy.  The employer had particular reason to be concerned as they ran Hillsides Children’s Center, a facility for abused children.  Hillsides placed a surveillance camera with a motion sensor on the bookshelf of an office shared by the Plaintiffs, Abigail Hernandez and Maria Jose-Lopez, without telling them.  (Neither of the women was suspected of accessing the inappropriate websites; the web activity was occurring in the evenings.)  They discovered the camera when they noticed a red light flashing on the bookshelf.

Once they became aware of the camera, they immediately challenged its use.  The employer explained why it was installed and that it was deactivated during work hours when Plaintiffs were in the office.  The camera was in place for a total of three weeks and was operated only three times.  Both Plaintiffs asked to view the tapes which, they admitted, contained “not much to see.”
Nonetheless, Plaintiffs sued Hillsides alleging privacy rights violations.  The trial court granted summary judgment for the employer but the Court of Appeal reversed, finding that Hillsides’ conduct was highly offensive and that there were questions of fact to be resolved at trial.  The California Supreme Court unanimously agreed with the trial court and reinstated summary judgment for Hillsides.

In employee privacy rights cases, courts perform “balancing tests” between an employee’s reasonable expectations of privacy and the legitimacy of the employer’s interests in invading those privacy rights.  In this case, the Court posed a series of questions, including: whether Hernandez and Jose-Lopez had a reasonable expectation of privacy in their shared office?  If they did, did Hillsides intrude upon that reasonable expectation by installing the hidden camera?  If so, was the intrusion (as balanced against the privacy expectation) sufficiently serious or offensive (considering Hillsides’ motives and justifications) to constitute a remediable violation?
As to the first and second questions, the Court concluded that Plaintiffs did have a reasonable expectation of privacy in their shared office and Hillsides did intrude upon it.  The Court explained that “while privacy expectations may be significantly diminished in the workplace,” providing Plaintiffs with an enclosed office with a door that could be shut and locked, and windows with blinds that could be drawn, generated a legitimate expectation of privacy.  Furthermore, the Court pointed out that the Plaintiffs would not reasonably expect to be potentially the subject of secret filming (they were not given notice) and Hillsides had gone to some lengths to camouflage the camera and motion sensor behind bookshelf decorations in an attempt to avoid detection.  The Court found these facts sufficient to state a prima facie case of privacy rights violation.

Although the Court found that the employees could state a privacy claim, the Court held Hillsides’ intrusion was not so “highly offensive” to a reasonable person or “sufficiently serious” as to constitute an “egregious breach of social norms.”  Therefore, Plaintiffs could have no recovery.  The Court noted that the surveillance efforts were confined only to the area where unauthorized activity occurred (Lopez’s desk, not Hernandez’s), a very limited number of people knew of the surveillance and recording equipment, and the equipment was operational for a very limited time.  The Court also found the employer’s “motives and objectives” were not “socially repugnant.”  The undisputed reason for the surveillance was to catch an unauthorized and inappropriate after-hours computer user.  The Court also noted Hillsides’ efforts to assuage Plaintiffs concerns by explaining the purpose of the surveillance and voluntarily showing them the tapes.  The intrusion was limited and no information about Plaintiffs was accessed, gathered or disclosed.

Employers, however, shouldn’t take this as an open invitation to begin employee surveillance.  The result is very fact-specific, and the Court notably concluded that “[n]othing we say here is meant to encourage such surveillance measures, particularly in the absence of adequate notice to persons within camera range that their actions may be viewed and taped.”  Based on the Court’s language, any one of several subtle factual differences might have led to a different holding.

The takeaway message for employers is to be deliberate and exercise caution in workplace surveillance.  Employers who monitor their employees should keep in mind what they are trying to accomplish.  In most cases, open and notorious monitoring – i.e., with notice - prevents employee transgressions.  Employers must also tailor their “notice” provisions accordingly.  Had Hillsides provided notice of possible surveillance or obtained consent to such a possibility from its employees, the Court may have ended its analysis at step one by concluding the employer’s notice had sufficiently diminished the employees’ reasonable expectation of privacy.  Hillsides, however, neither obtained consent nor gave notice that such video surveillance at employee desks was possible or likely.

This case is may not change the fundamentals of workplace privacy standards, but it does serve as a reminder to periodically review employee search, surveillance and/or internet tracking policies and notices.  Employers that are considering “active” surveillance should ensure that such activities are appropriately tailored to accomplish the task.