March 7, 2018

Key California Employment Law Cases: February 2018

This month’s key California employment law cases both involve privacy in the workplace.

Rojas v. HSBC Card Servs. Inc., 20 Cal. App. 5th 427, 228 Cal. Rptr. 3d 640 (2018)

Summary:  Installing recording device and recording calls on company phones renders actions intentional under California Invasion of Privacy Act. 

Facts:  Plaintiff sued her daughter’s former employer, HSBC Card Services, for recording over three hundred personal calls using her daughter’s work telephone line.  While defendant authorized its employees to use company telephones for personal calls, it told employees their calls would be recorded.  Plaintiff sued under California Penal Code sections 632(a), 632.7(a) and 637.2(a).  Section 632(a) prohibits one party to a telephone call from intentionally recording a confidential communication without the knowledge or consent of the other party.  Section 632.7(a) prohibits the intentional recording of a communication using a cellular or cordless telephone (without regard to whether the communication was confidential).  Defendant moved for summary judgment, arguing that it had not intentionally recorded any of the telephone calls.  The trial court agreed and granted the motion. 

Court’s Decision:  The California Court of Appeal reversed, holding that installing a recording device and using it to record calls on company phones satisfied the intentional requirement of Penal Code section 632.  The court relied on the California Supreme Court’s decision in People v. Superior Court, 70 Cal. 2d 123, 74 Cal. Rptr. 294 (1969), where the court held that the recording of a confidential conversation is intentional if the person using the recording equipment does so with the purpose or desire of recording a confidential conversation, or with the knowledge to a substantial certainty that his use of the equipment will result in the recordation of a confidential conversation.  In this case, defendant knew it was recording calls—it was not inadvertent or by chance.  Also, defendant never warned other personal phone call parties that calls were recorded.  The court thus rejected defendant’s arguments that it had no intention of recording personal calls, that all employees knew the recording system was in operation, and that they had no right of privacy if making personal calls.  

Practical Implications:  The fact that an employee is aware of phone recording is not enough to avoid privacy issues.  All parties to a call must be told the call is going to be recorded, and must consent.  Employers using recording systems should consider either disallowing personal calls, or ensuring that all parties on calls (personal or otherwise) are automatically informed that the call may be recorded.

Hurley v. Cal. Dep’t of Parks & Recreation, 20 Cal. App. 5th 634, 229 Cal. Rptr. 3d 219 (2018)

Summary:  Substantial evidence supported violation of Information Practices Act where supervisor shared sensitive personnel information with other, nonsupervisory employee. 

Facts:  Plaintiff was employed by defendant California Department of Parks and Recreation.  Plaintiff overheard her supervisor discussing details of her personnel file with a nonsupervisory employee.  The supervisor mentioned plaintiff’s probation at a prior job, a health insurance issue, and that her psychologist recommended that she take leave for one month.  The next day, plaintiff started medical leave and never returned to work.  Plaintiff then filed a formal discrimination complaint with the Department’s Human Rights Office (“HRO”).  During an investigation, plaintiff’s supervisor asked another employee to bring her one of plaintiff’s work files so she could review it in preparation for her interview.  Plaintiff’s supervisor was notified  she was going to be terminated.  The supervisor retired but never returned plaintiff’s file.  Plaintiff filed a complaint in state court alleging various causes of action against defendant and her supervisor for violations of the California Fair Employment and Housing Act (“FEHA”), and intentional and negligent infliction of emotional distress.  After learning that the supervisor never returned the file, plaintiff amended the complaint to include claims for invasion of privacy, violation of the California Information Practices Act (“IPA”), and breach of medical confidentiality.  The trial court granted in part the Department’s motion for summary adjudication and dismissed the causes of action for emotional distress, and negligent hiring, retention and supervision.  The court denied the supervisor’s motion for summary adjudication on the four privacy causes of action.  After a four-week trial, the jury returned verdicts in favor of defendants on the FEHA causes of action, against defendants on the IPA claim, and against the supervisor on the emotional distress causes of action.  

Court’s Decision:  The California Court of Appeal affirmed, but reversed one part of the jury’s award of economic damages.  First, there was sufficient evidence to support the jury’s verdicts finding defendants liable for violation of the IPA.  The court rejected defendants’ arguments that there was insufficient evidence the file the supervisor retained contained any personal information, so it was not a record under the IPA, and that the file was properly disclosed as relevant and necessary in the ordinary course of the performance of supervisory duties.  The disclosure of records covered by the IPA is not limited to personnel files, and the file at issue, called a supervisory drop file, qualified.  Further, there was evidence that the file identified plaintiff by name and was improperly disclosed on multiple occasions—including to the nonsupervisory employee, and when the supervisor asked for it to be delivered to her.  Plaintiff was adversely affected by this disclosure because she testified about suffering significant emotional distress after learning her personal information was disclosed.  However, there was insufficient evidence to support a finding of economic damages resulting from the disclosure.  Finally, there was no merit to defendants’ argument that the IPA cause of action was improperly asserted against the supervisor.  While individual liability and agency liability under the IPA fall under different sections, and the judge only instructed the jury as to the section for agency liability, the supervisor waived that objection on appeal by agreeing to the instruction and not timely objecting.

Practical Implications:  Disclosure of sensitive personnel information to nonsupervisory employees can lead to violations of statutes and privacy laws.  Employers should have uniform file maintenance procedures in place for all personnel materials, and dissuade supervisors from maintaining their own files outside of the personnel file.