Privacy vs. Productivity: Risks That Come to Employers

May 31, 2023

By: Christopher A. Iacono , Megan E. Young

Takeaway: On both a federal and state level, there has been a concerted push to protect employee privacy more thoroughly. As the law continues to develop or, as in the case of the NLRB, new methods of enforcement come into play, employers must balance the desire to monitor employee activity with the legal risk it may pose. It is in the best interest of employers to keep pace with the evolving body of law and ensure appropriate employee monitoring policies are in place.

Since the beginning of the COVID-19 pandemic, there have been many changes to employee privacy laws as more and more employees work remotely. As more technology is developed that allows for new forms of employee productivity monitoring, employers must be aware potential legal exposures.

Recently, at the end of 2022, the National Labor Relations Board (“NLRB”) issued Memorandum GC 23-02 signaling a new initiative to protect the privacy of employees from employer methods of monitoring and tracking. As background, Section 7 of the National Labor Relations Act (“NLRA”) guarantees employees the right to unionize and advance their interests, while Section 8(a)(1) makes it unlawful for an employer to interfere with an employee’s Section 7 rights. Of the utmost concern for NLRB General Counsel was the possibility that such oversight by employers would impede the Section 7 rights of employees who engage in protected activity.

Shortly thereafter, on April 11, 2023, the NLRB issued a decision in Stern Produce Company and United Food and Commercial Workers, Local 99. The employer, Stern, had installed cameras in their trucks meant to monitor different delivery activities. The employee had covered the camera during his lunch, claiming there was no such policy against doing so in the employee handbook. The employee was subsequently told to uncover his camera by a supervisor. The NLRB ruled this constituted a violation of “Section 8(a)(1) [of the NLRA] by creating the impression of surveillance by accessing the inside-facing camera…and requesting that [the employee] uncover it.”

While Stern dealt with physical cameras recording employees, it is not hard to imagine that the same analysis could apply to monitoring of an employee’s computer, laptop, or email. Under the Electronic Communications Privacy Act (“ECPA”), an employer can monitor all employee communication so long as there is a legitimate business reason for doing so. But, despite the ECPA, Stern along with the NLRB’s 2022 Memorandum opens the door to the possibility that the NLRA will be used to protect an employee’s privacy from additional forms of monitoring.

In addition to the NLRB, states have also promulgated new laws and regulations related to employee privacy in the past few years. Notably, employers must also keep in mind that the employment and privacy laws of the state where an employee is physically working is generally controlling. This adds a layer of complexity and risk for employers offering completely remote and hybrid options, especially those in certain geographical areas. For example, a Philadelphia-based employer can reasonably expect their employees to be working remotely in Pennsylvania, New Jersey, or Delaware at any given time with each state having their own various monitoring laws in place that must be considered. For example, Delaware requires employers give notice to employees of monitoring or intercepting policies of any telephone or electronic transmission or internet usage. Meanwhile, in New Jersey, the privacy tort of intrusion upon seclusion can be raised when monitoring an employee’s activity within their own home.

As employers continue to face pressure to offer fully remote and hybrid positions, they must balance the desire to monitor an employee’s productivity against the accompanying legal risks at the federal and state level. It is in the employer’s best interest to set out explicit employee policies and continually monitor changes in the landscape of federal and state employee privacy laws.

* This blog is available for informational purposes only and is not considered legal advice on any subject matter. By viewing blog posts, the reader understands there is no attorney-client relationship between the reader and the blog publisher. The blog should not be used as a substitute for legal advice from a licensed professional attorney. Readers are urged to consult their own legal counsel or reach out to any of Pietragallo’s attorneys on any legal questions concerning a specific situation.

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