The headlines proclaiming the end of employer monitoring have vastly overstated the impact on the workplace of the Ninth Circuit Court of Appeal's ruling in Quon v. Arch Wireless Operating Company. To be sure, the case holds that the Stored Communications Act prohibits third-party service providers, such as text message services and Internet service providers, from disclosing stored electronic communications without the consent of the employee who sends or receives the communication, even if the employee is using employer-provided equipment and the employer pays for the service. As explained more fully below, employers can easily and lawfully navigate this restriction.
Factual Background:
The City of Ontario Police Department issued two-way pagers to its SWAT team members and paid for the text message service through Arch Wireless Operating Company. Arch billed the city a fixed monthly charge for the first 25,000 characters per officer and an overage charge for each character exceeding the limit.
The city's "Computer Usage, Internet and E-mail Policy" contained the types of warnings frequently seen in such policies. The city reserved the right to monitor and log all network activity without notice. The city warned that employees "should have no expectation of privacy or confidentiality when using these resources." The city explained that all communications using the network were the city's property. The city admonished that its electronic resources should not be used for personal reasons. The city also banned communications containing "inappropriate, derogatory, obscene, suggestive, defamatory, or harassing language" when using the city's electronic resources.
Because the city implemented this policy before purchasing the pagers, the policy did not explicitly reference text messages. When the city first issued the pagers, Lt. Duke, who was responsible for overseeing the pager program, informed all SWAT team members that text messages would be treated like e-mail under the city's policy. As a matter of practice, however, Lt. Duke did not routinely monitor text messages, or discipline employees for personal use, as permitted by the policy. Instead, he communicated and followed a practice that permitted officers to avoid scrutiny of their text messages for personal use if the officer paid any overage charge.
Sgt. Jeff Quon exceeded the 25,000-character limit on several occasions, in part, because he was using the city's two-way pager for salacious chats with his former wife and mistress. Each time, he paid the overage charge, and the content of his text messages were not audited.
In response to Lt. Duke's complaints about officers routinely exceeding the character limit, Police Chief Scharf ordered Lt. Duke to audit some of the text messages to determine whether the officers were using the pagers for personal reasons. Lt. Duke obtained the transcripts of Sgt. Quon's text messages from Arch without Sgt. Quon's consent. Word of the transcripts' sexually charged content filtered through the
Department and to Sgt. Quon who, joined by his ex-wife and mistress, sued Arch for violating the Stored
Communications Act and the city, for violating his right to privacy under the Fourth Amendment of the U.S.
Constitution and the California Constitution.
The Ninth Circuit Court held that Sgt. Quon had a reasonable expectation of privacy in the content of his text messages notwithstanding the city's policy to the contrary. The court found that Lt. Duke had orally modified the policy by telling Sgt. Quon that the city would review text messages only if he refused to pay the overage charges, and Sgt. Quon reasonably relied on that oral modification to expect that the city would not review his text messages because Lt. Duke had followed the unwritten policy in practice.
The court also held that the city's review of all of Sgt. Quon's text messages was an unreasonable search.
The court reasoned that there were less intrusive means to accomplish the city's goal of determining whether the pagers were being used appropriately, such as asking the officers for their consent or warning them that their messages would be monitored.
The Ninth Circuit's decision is far narrower than the initial press coverage suggests. To begin with, the decision imposes no restrictions on an employer's enforcement of an electronic communications policy similar to the city's policy with respect to electronic communications stored on the corporate network.
Thus, the decision does not restrict an employer's ability to monitor e-mail sent over the corporate network via a company-issued personal digital assistant, such as a Blackberry.
The Ninth Circuit's ruling is, however, a warning for employers. To ensure that an electronic resources policy can be enforced without creating exposure to privacy-based claims, employers should avoid making representations to employees, or following practices, that give rise to a reasonable expectation of privacy in employee communications transmitted through the corporate network. An employer should be able to avoid this by creating an express and fully integrated electronic resources policy that can be modified only
in a writing signed by a senior executive and by training managers and information technology personnel to avoid making statements, or engaging in conduct, that countermands the policy. For employees who are or will be employed under contract, employers should consider adding an electronic resource usage section to the contract or incorporating the existing policy by reference.
Employers should also expressly impose all of the restrictions in their electronic resources policy on employee communications, during business hours, through third-party service providers. To enforce those restrictions, an employer need only condition receipt of company-issued communications devices and/or the company's payment for communications services on the employee's providing prior, written consent for disclosure by the third-party service provider of all stored communications for which the employee is the sender or the intended recipient.
Finally, nothing in the Ninth Circuit's decision restricts the right of employers to search any cell phones themselves whether company-issued or not for stored communications. To reduce the risk of privacy-based claims, employers who anticipate conducting such searches should unambiguously describe the search policy to their employees.
Karyn M. Taylor is a shareholder in Reno with Littler Mendelson, P.C., a law firm that represents management in employment and labor law.
