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One Hot Summer, Three Key Decisions for Labor & Employment Law – Part I

Across the country, many people have been enjoying, or in some cases simply surviving, summer heat waves. The United States Supreme Court, on the other hand, was busy in the early days of the Summer of 2010 and issued several notable labor and employment law decisions. With the ink now dry on those decisions and vacation season coming to an end, employers need to consider these decisions and what they mean for their workplaces. In this first of a three-part series, we have summarized the first of three of those decisions. The second and third parts to the series will follow later this week. Stay tuned!

CITY OF ONTARIO v. QUON

On June 17, 2010, the U.S. Supreme Court issued its long awaited decision in City of Ontario v. Quon. It was anticipated the decision would provide definitive guidance to public employers, and some insight to private employers as well, regarding the privacy rights of employees in the use of employer-provided electronic communication devices.

The facts of the case are fairly straightforward. The City of Ontario police department issued pagers to its S.W.A.T. team members. The pagers were capable of sending and receiving text messages, and the City’s contract with the provider allowed a specified number of characters on each pager per month. At the time the pagers were issued, the City had a computer usage policy in place that made it clear the City reserved the right to monitor any and all computer network activity, including e-mail. When the S.W.A.T. members received their pagers, they were informed both verbally and in writing that any text messages would be treated as e-mails, and would be subject to audit.

When Sgt. Jeff Quon exceeded his character limit soon after the pagers were issued, he was reminded by his supervisor that the messages could be audited. At the same time, Quon and several of his fellow officers were told they could avoid having messages audited if they agreed to reimburse the City for any overage fees. Within a few months, this “payment plan” became an accounting nightmare. The Chief of Police ordered an audit of pager usage to determine if the City needed to make an adjustment to the number of characters in order to prevent overage fees. The audit revealed that Sgt. Quon was using his pager predominantly to send personal messages while on duty, including numerous sexually explicit messages to both his wife and his girlfriend. The City disciplined Sgt. Quon. Predictably, Quon protested that he had an expectation of privacy in his text messages alleged that the City therefore violated his Fourth Amendment rights by reading his messages. It is this question that ultimately landed before the Supreme Court.

Perhaps most significant in the Court’s opinion is what they did not decide, namely whether Sgt. Quon had an expectation of privacy in his text messages. The Court declined to take up this question, preferring instead to “dispose of this case on narrower grounds.” Justice Kennedy observed that electronic communication devices are an emerging and rapidly changing technology. He stated the Court should exercise “caution before the facts of [this] case are used to establish far-reaching premises that define the existence, and extent, of privacy expectations enjoyed by employees when using employer-provided communication devices.” Thus, the Court presumed for purposes of the opinion the Sgt. Quon had an expectation of privacy in his pager messages. And just that swiftly, the long-waited guidance employers had hoped for was punted to another day.

Instead, the Court’s analysis focused on whether the City’s viewing of Quon’s text messages was reasonable, even assuming he had an expectation of privacy. The Court found that under the specific facts of this case, the City’s auditing of Quon’s pager communications was reasonable. For public employers, such a search is reasonable under the Fourth Amendment if it is (1) justified for a legitimate work-related objective, (2) reasonably related to the objective, and (3) not excessively intrusive. For private employers , the Court noted that because “the employer had a legitimate reason for the search, and [because] the search was not excessively intrusive in light of that justification” the search would also be “‘regarded as reasonable and normal in the private-employer context . . . .'”

In addition, the Court did offer some insight for employers to take note of when considering whether their employees have an expectation of privacy in their employer-provided communication devices. Justice Kennedy observed that while Quon’s expectation of privacy was not decided in this case, some factors contemplated by the Court that might be considered in the event such an inquiry were made would be: (1) whether the employer has a policy in place regarding the expectation of privacy in such devices; (2) whether the policy specifically covers the device in question, keeping in mind that devices channeled through the employer’s data servers are not necessarily the same as devices through third party networks; and (3) whether the employer has some legitimate work-related purpose for monitoring employees’ communications.

In light of these suggestions, employers should ensure they have written policies that govern an employee’s expectation of privacy in any electronic communication device. The policy should be comprehensive and not limited to desktop computer usage and e-mail. It should address employer-provided computers; employer-provided communication devices such as pagers, smartphones, and cellular phones; employee-owned devices that are subsidized by the employer through reimbursement plans; and employee internet communication on any such devices, including use of business and personal e-mail and/or business and personal social networking accounts. Whether public or private, the provisions of an employer’s policy, and its adherence to that policy, will likely be the paramount consideration by any court considering such issues in the future.

In the second part of this series, we will provide a summary of Rent-A-Center v. Jackson, where the U.S. Supreme Court clarified when disputes between parties to an arbitration agreement will be decided by the courts, and when they will be decided by an arbitrator.