In a June 18, 2008 decision, the United States Court of Appeals for the Ninth Circuit indicated that employers may have fewer rights in monitoring employees’ electronic communications than they were previously thought to have. The decision clarifies the scope of an employer’s rights to monitor company-issued electronic communication devices. Although only binding in the Ninth Circuit, which covers the states of Washington, Oregon, Idaho, Nevada, Alaska, Hawaii, Northern Mariana Islands, Guam, California, and Arizona, the ruling may lay the groundwork for future cases across the country. In any case, it serves to remind employers of the importance of introducing and following an electronic communication monitoring policy.

The case, Quon v. Arch Wireless Operating Co. Inc., concerned the Ontario Police Department’s decision to audit text messages sent from the department-issued pager of one of its police officers, Jeff Quon. In response to overage charges, the department requested that Arch Wireless, the text service provider, release Quon’s account transcripts. Arch Wireless did so with no notice to Quon. In response, Quon, together with his wife and other department employees, filed a complaint alleging that Arch Wireless had violated the federal Stored Communication Act (SCA). They further alleged that the city of Ontario, California and the Ontario Police Department had violated both their Fourth Amendment right to be free from unreasonable searches and seizures and their privacy rights under California’s Constitution. 

On appeal, the Ninth Circuit held that the police department’s employees had a reasonable expectation of privacy in the content of their text messages and that the search was unreasonable in scope. The Ninth Circuit also held that Arch Wireless is an electronic communication service as defined by the SCA. Under that law, electronic communication services are barred from disclosing communication content without the consent of either the sender or the recipient of that communication. Consequently, Arch Wireless was prohibited from releasing the communication transcripts requested by the police department. 

The Quon decision highlights the importance of adopting a formal policy on electronic communication monitoring as consent to monitoring negates an employee’s expectation of privacy. Employers should require their employees to sign the policy along with a release acknowledging that electronic communications may be monitored. Both the policy and the release should clearly define the electronic communications subject to monitoring as blanket policies may no longer be sufficient to protect employers from liability. Particular attention should be paid to communications provided by a service for which the employee is paying in whole or in part. Employers should also consider requiring employees to sign releases allowing them to receive electronic communication information from third party providers.

In addition to having a policy, employers need to follow their policy. While the Ninth Circuit acknowledged that Quon’s department had verbally informed its employees that text messages sent on its pagers were subject to monitoring, it deemed this unwritten policy insufficient because it was not followed in practice. In reality, the court said, the policy was to agree not to audit text messages provided, as in Quon’s case, that the employee paid any applicable overage charges.  Employers must therefore monitor communications as set forth in their formal policy. Employers should not make exceptions to that policy on a case-by case basis and, more importantly, should avoid allowing alternative unwritten practices to supersede written ones.

Laws concerning employer rights in electronic communication monitoring are evolving. The Ninth Circuit’s ruling in Quon may foreshadow similar rulings across the country, making it prudent for all employers to take appropriate precautions now.

Darrell S. Gay
darrell.gay@arentfox.com
212.457.5465