Employers May Be Held Liable For Secret Recording of Employee Conversations

By
October 27, 2010

The Federal Wiretap Act governs illegal recording of communications. A violation of the Federal Wiretap Act is when a person illegally intercepts an oral communication or intentionally uses or discloses the contents of an oral communication with knowledge that it was illegally intercepted. Recently, the Seventh Circuit Court of Appeals, whose jurisdiction covers Wisconsin, ruled on a case involving a conversation between two hospital employees that was secretly recorded by a third employee.
In McCann v. Iroquois Memorial, a physician at a hospital, Dr. Lindberg, was conducting medical dictation. A former employee of the Hospital, Ms. McCann, entered his office while he was dictating and they began to have a conversation that was very critical of the Hospital and its leadership. According to Dr. Lindberg and Ms. McCann, the dictation machine was turned off. However, another employee that oversaw the transcription process for the Hospital, Ms. Freed, entered during the conversation and allegedly turned the dictation machine back on. Ms. Freed denied the allegation.
 
Ms. Freed directed one of the transcriptionists to produce a transcript of the conversation. The transcript was then given to the Chief Executive Officer (CEO) of the Hospital. The CEO distributed the transcript to the Hospital’s Board of Trustees. As a result of the things that were said as shown by transcript, Dr. Lindberg’s privileges to the Hospital were terminated. Ms. McCann was barred from the Hospital except to receive medical care for herself or a loved one.
Dr. Lindberg and Ms. McCann filed a lawsuit under the Federal Wiretap Act against the Hospital, Ms. Freed, the Board of Trustees and the CEO. The Seventh Circuit Court had to determine whether the conversation was illegally intercepted. The Seventh Circuit ruled that there was evidence to suggest that the conversation may have been illegally intercepted, and allowed the case to continue against Ms. Freed, who was accused of intercepting the communication, and against the Hospital, because the Hospital, as her employer, could be held responsible for her actions.
Since they did not engage in the actual interception of the conversation, the CEO and the Board of Trustees could only be held liable if they had reason to know that the recording was made illegally prior to its use or disclosure of its contents. No evidence was presented to show that the CEO or the Board members had reason to know that the recording was illegally made. Therefore, the Seventh Circuit ruled that the CEO and the Board members could not be held liable under the Federal Wiretap Act.
Be aware that if an employee intentionally intercepts the oral communications of other persons, such an interception could be a violation of federal law. Also, if an employee violates the Federal Wiretap Act, the employer may be held liable for the actions of the employee. The liability can be substantial. A good practice would be development of a policy to address recording of employee communications with proper guidelines so liability can be avoided.
If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

Back to all News & Insights

This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.

© 2024 Ruder Ware, L.L.S.C. Accurate reproduction with acknowledgment granted. All rights reserved.