Employers Beware: The Risk of Monitoring Employees’ Online Activity - 11/24/2009
CLIENT ALERT
In Pietrylo v. Hillstone Restaurant Group, a federal district court in New Jersey upheld a jury verdict finding the employer liable for both compensatory and punitive damages to two waiters who were terminated after managers of the employer accessed their private MySpace page. Case No. 06-5754 (D.N.J. Sept. 25, 2009). This case highlights one of the numerous issues concerning the growing trend of monitoring employee online activity.
Pietrylo and Marino, two employees of Hillstone, managed an online chat group on MySpace called “Spec-Tator.” The chat group was private, and an invitation from Pietrylo was required to access the site.
Pietrylo never invited a member of upper management to participate in the group. Nonetheless, a greeter at the restaurant became a member, and she provided a manager at Hillstone with the password. The greeter testified that she felt that she had to give her password to management and that she would have “gotten in trouble” if she had failed to cooperate.
The managers at Hillstone accessed Spec-Tator five times, and they discovered numerous sexual and offensive comments about the management and customers at Hillstone. Shortly thereafter, Pietrylo and Marino were terminated for this online activity.
Pietrylo and Marino filed suit, and a jury awarded them compensatory and punitive damages, finding that Hillstone had violated the federal Stored Communications Act (18 U.S.C. §§2701-11) and the parallel provision of the New Jersey Act (N.J.S.A. 2A: 156A-27). Hillstone then filed a
motion for judgment as a matter of law or, in the alternative, for a new trial.
The New Jersey district court denied Hillstone’s motion and upheld the jury verdict. The court ruled that to find a violation of the Stored Communications Act (“SCA”), the jury had to conclude that Hillstone’s managers had “knowingly, intentionally, or purposefully accessed the [Spec-Tator] without authorization.”
Hillstone tried to defend the actions of its managers by relying on an exception in the SCA, which states that there is no violation where access to the information is authorized “by a user of that service with respect to a communication of or intended for that user.” 18 U.S.C. § 2701(c)(2). The court was not persuaded by Hillstone’s defense. It concluded that the jury had reasonably inferred from the greeter’s testimony that her authorization was coerced or provided under pressure. The court also upheld the punitive damages assessed against Hillstone.
As Pietrylo illustrates, there are legal risks associated with monitoring employees’ online activity. For example, The National Labor Relations Act (“NLRA”) protects employees who engage in “concerted activities for the purpose of collective bargaining or other mutual aid and protection,” which could include protection for employees who use internet postings to communicate about the terms and conditions of their employment. NLRA §7, 29 U.S.C. §157. An employer’s monitoring of employee conduct, and taking action based on that conduct, may interfere with the employee’s right to engage in protected, concerted activity. For example, the Ninth Circuit Court of Appeals held that an employer violated the NLRA when it disciplined a pilot who criticized management on his restricted web site. Konop v. Hawaiian Airlines, Inc., 302 F.3d 868.
Numerous state and federal “whistleblower” laws, such as the federal Sarbanes-Oxley Act, protect employees who expose fraudulent or illegal workplace conduct. Under these laws, an employee who is acting to expose such illegal conduct could be protected. Also, some states, including New York and California, provide statutory protection against adverse employment action based on lawful non-work-related or off-duty conduct. These laws may be broad enough to encompass Internet conduct, especially conduct that occurs away from work.
For further information regarding the law and practical compliance tips, please contact one of the labor and employment attorneys at Frantz Ward LLP, 2500 Key Center, 127 Public Square, Cleveland, OH 44114, 216-515-1660, attorneys@ frantzward.com
This document is intended to provide general information about legal developments, not legal advice.
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