Employers Should Be Careful When Recording Or Monitoring Telephone Conversations

Thanks to Monica Lewinsky’s not-so-confidential discussions with Linda Tripp, the issue of recording telephone conversations has made national headlines. Tripp now faces charges under Maryland law for recording those conversations without Lewinsky’s consent. California has similar statutes prohibiting recording and eavesdropping on telephone conversations. Employers need to be aware that these statutes apply to business conducted over the telephone.

Many companies issue this statement at the onset of any customer calls: "This call may be monitored for quality assurance." What does that really mean? Usually the company is simply trying to ensure that its employees are complying with company policy. But, even with the best intentions, employers could be violating state and federal wiretapping and eavesdropping laws if any part of a conversation is monitored or recorded.

Most state laws on the subject are based on the Federal Wiretapping Act.¹ The federal act prohibits the interception of a wire, oral or electronic communication unless one party to the communication has given consent to the interception. The act provides for criminal penalties including fines and prison time. An individual may also bring a civil action against an interceptor and recover damages.² But, as long as the interceptor is one of the parties to the conversation, the federal act does not apply.

If your company monitors or records a telephone call for review later, you may be violating the federal law. One party to the conversation must consent to the monitoring or recording. Simply telling your employees that their calls are subject to monitoring or recording is not enough. To be safe, you should develop a company policy regarding monitoring and recording of phone conversations. Next, obtain each employee's written consent that he or she is aware of the policy, and agree to have their calls monitored/recorded. You, as supervisor, cannot provide the necessary consent because the employees are the actual parties to the conversations.

But, what about employee personal calls? Is there a chance that these calls could be intercepted as well? Employees do not like having supervisors looking over their shoulder. Again, you can minimize your exposure under the federal statute if you have informed your employees of the monitoring procedure and obtained their consent to intercept their calls. If you obtain your employees’ consent you need not worry about the federal law. Again, the federal act only requires the consent of one party and you will have it in writing from each of your employees.

Potential criminal and civil liability may seem unjustly harsh when your company is simply trying to ensure that its employees are courteous on the telephone. But, if your business is placing or receiving calls in California, the regulations regarding wire communications are even more strict.³

In California, the Privacy Act contains two sections regarding interception of wire communications. First, Penal Code section 631 forbids the wiretapping or secret monitoring of a conversation by a third party without the consent of all parties. This includes listening to or monitoring a conversation by picking up a telephone extension,⁴ or when a third person is listening on your speaker phone without the other party’s knowledge and consent.

Penal Code section 632 prohibits the eavesdropping on or the recording of any confidential communication without the consent of all parties.⁵ Both sections carry criminal penalties and the ability to bring a civil action for damages.⁶ Clearly, recording of customer calls without their consent would fall under section 632.

But, California’s statutes only apply if the conversation involves a "confidential communication," defined as "any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto."⁷ It is not hard to imagine many situations where the callers have a reasonable expectation of privacy in their communications. Speaking to a collection company may be one such situation.

Recently, the standard for confidentiality has lessened. Now, the relevant test seems to be whether the speaker reasonably expects anyone else to be listening to or recording the conversation.⁸ Thus, even the most sterile of business conversations could be considered confidential if the speaker expects that no one else is listening to or recording the call.

Because you will have already obtained the consent of your employees, you are well on your way to minimizing your risk. But, you must also obtain the consent of the customer. Will a warning that the call is being recorded or monitored adequately elicit the necessary consent? If done properly, it should!

First, the warning should be placed at the very beginning of any incoming or outgoing calls. If there is a chance that the person whom you are calling could miss the message, the warning should be repeated. Obtaining the consent of the customer’s child or receptionist is not enough if the customer later objects that the conversation was recorded.

Also, the customer should have a chance to decide if he or she wants the conversation recorded or monitored. If your warning states that the call may be monitored or recorded but does not give the caller an option other than terminating the call, is that really consent? It would seem as if the caller had no choice but to submit to the recording or monitoring. Why not give the caller an option in the initial message such as: "This call may be monitored or recorded. If you do not wish to have the call monitored, please press 1." With this warning, an upset customer would not be able to argue that he or she did not give consent.

Arguably, any warning that the call could be monitored would place the caller on notice that the conversation will not remain confidential. The issues of "confidentiality" and "consent" would ultimately be decided by a court. If at all feasible for your company, the more cautious approach would be to obtain the necessary consent and avoid the courtroom altogether.

In conclusion, the Federal Wiretapping Act and California’s Invasion of Privacy Act present many challenges to businesses which monitor or record telephone conversations. Careful review of your policies to ensure compliance with these laws is necessary. Most importantly, you should obtain explicit consent from all parties to the conversation. Your company can minimize the risk of being prosecuted or sued civilly for the unauthorized interception of telephone conversations only by taking the necessary precautions.

1. The Federal Wiretapping Act, Title II of the Omnibus Crime Control and Safe Streets Acts of 1968, 18 U.S.C.A. §  2510 et seq. This act also applies to eavesdropping. However, any interceptions by law enforcement officers is beyond the scope of this article.

2. See 18 U.S.C.A. §  2520.

3. Most likely the law of the state where the interception occurs (as well as federal law) would govern.

4. See Ribas v. Clark, (1985) 38 Cal. 3d 355.

5. Currently 38 states allow a person involved in the telephone call to record it without the other parties consent. Like Maryland, California and Illinois are in the minority of states which require the consent of all parties to the conversation. New York, for example, requires the consent of only one party.

6. See Cal. Penal Code §§  631(a); 632(a) and Cal. Penal Code § 637.2 (civil action for damages). Additionally, any statements obtained in violation of these provisions will not be available for any future use including in litigation between the parties to the conversation.

7. Cal. Penal Code §  632(c).

8. See Shulman v. Group W Producs., Inc., (1998) 18 Cal.App.4th 200, 235 (finding reasonable expectation that statements to rescue nurse at accident scene would not be recorded by news crew).