While most employment lawyers, myself included, have been focusing lately on the opportunities and risks associated with monitoring new technologies such as social media and GPS devices, the Seventh Circuit reminds us that employers also need to remember that "low-tech" monitoring of employees can result in unexpected liability as well. 

In McCann v. Iroquois Memorial Hospital, which was issued on September 13, 2010, a doctor and a former employee at an Illinois hospital had a closed-door conversation in which they criticized the hospital administration. Without their knowledge, their conversation was recorded by a dictation machine, transcribed, and handed by a third hospital employee to the hospital’s CEO. As a result, the hospital revoked the doctor’s hospital privileges and banned the former employee from coming on hospital premises for any reason other than to obtain her own or a loved one’s healthcare. Both individuals sued the third employee, the hospital, the CEO and the Board of Trustees, alleging that the hospital’s use of the tape recorded conversation without either of their knowledge violated the federal Wiretap Act. The plaintiffs contended that the third employee had entered the office during the conversation and, while they were talking, she surreptitiously and deliberately turned on the dictation machine to record their conversation. The defendant employee responded that she interrupted a conversation of theirs once but not on the date of the taped conversation, and suggested that the dictation machine simply was left on by mistake by the doctor who had earlier been dictating medical reports.

The Seventh Circuit held that the dispute between the parties as to how the dictating machine got turned on precluded the hospital and the defendant employee from obtaining summary judgment because, under the Wiretap Act, the plaintiffs have to prove that the interception of the conversation was intentional. On the other hand, the Seventh Circuit held that there was no evidence that either the CEO or the Board knew that the tape recording had been obtained illegally — in fact, the defendant employee suggested that the doctor had accidentally left the dictating machine on — and therefore upheld summary judgment in their favor.


Though this fact pattern is certainly an unusual one which might only arise in a healthcare setting, employers must understand the boundaries of the federal Wiretap Act. Under the federal act, it is illegal (and there are potential criminal penalties) to use a device to intentionally intercept an oral communication. It also is illegal to intentionally disclose or use the contents of such a conversation while having reason to know that it was unlawfully intercepted. 


Under federal law and most state laws, an exception exists if one of the parties to the conversation (including the party that intercepts it) consents to the tape recording. In many states, however, all parties to the conversation must consent to the recording for the exception to apply (but Ohio is not one of them). 


Therefore, in Ohio and under federal law, it would be illegal to walk into a room in which a conversation were taking place and leave a tape recorder running in the room. On the other hand, except in those states requiring two-party consent, it would not violate wiretap laws for a disgruntled employee to secretly tape record conversations in order to prove some kind of mistreatment or misconduct. Some states, however, may permit invasion of privacy claims to be brought depending on the circumstances. 


At the same time, employers must be careful that managers and supervisors do not violate wiretap laws while seeking to uncover employee misconduct. In addition, employers also should not act upon tape recordings made by rank and file employees before satisfying themselves that the tape recording was legally obtained. Finally, terminating an employee for secret taping of conversations may prompt a retaliation claim by the employee if the taping was being done in an effort to prove unlawful discrimination.  


Employers can avoid these most of these messy situations by implementing policies that prohibit secret tape recording and by notifying employees about those situations in which their communications will be recorded.