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Legally Sound | Smart Business


The Podcast Where Nasir Pasha and Matt Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to

Nasir and Matt discuss the new iPhone updatethat employees should pay attention to. They also talk about the pitfalls of employers issuing wearable technology to their employees.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist to the business news.
My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: Welcome to our podcast.

MATT: Let’s first talk about…

NASIR: I had another sip of this Red Bull.

MATT: Yeah, that’s what I wanted to talk about. This is an update. We finally both got our class action Red Bulls.

NASIR: I mean, it’s literally like cough syrup. It’s possible there might be another class action settlement because it might be considered poison. I’ve been drinking this thing for the last – I don’t know – almost an hour I’ve been sipping it.

MATT: You don’t have to. It’s not required.

NASIR: That’s true. But I want it. I deserve it. I worked so hard for it.

MATT: Yeah, by going online and filling out your name and address.

NASIR: Which I did during the recording of the podcast, if I recall correctly.

MATT: So, yeah, I haven’t had any of mine yet but we at least got it.

NASIR: I would just throw it away.

MATT: I’ll probably have mine at some point but they might be in my fridge for a while.

NASIR: Okay.

MATT: I can’t imagine they go bad.

NASIR: Yeah, like, they’re already bad. In fact, it may even actually get better.

MATT: It ages well.
Well, we’ve got a lot of security issues to talk about today. We’ll relate all these to how it relates to employers but apparently there’s this new iOS update and I was trying to look at it on my phone. I wasn’t able to figure this out.

NASIR: This is 9.3 so I don’t know.

MATT: Yeah, I don’t know what I even have. I imagine I have the most recent one.

NASIR: You don’t even have an iPhone, Matt. In fact, you’re holding a brick right now. It’s not even a phone.

MATT: Yeah, but anyway, this 9.3 update, I guess in the past there’s ways to do some sort of mobile device management by employers with employees.

NASIR: I didn’t know about this but apparently Apple provides some kind of software. I don’t know if they provide it or they give access to some kind of software where you can monitor everything from GPS location to god knows what else, I don’t know.

MATT: Yeah, I wasn’t aware of that either – probably because I don’t have an employer that has issued me a phone to have that on there – but with this new update, employees will now be able to see and know about employers are tracking them. I guess once on the lock screen where it says “this phone is managed by your organization” and, of course, if you go in the settings too, you can see it that way. Obviously, the lock screen makes it a little bit more obvious but I guess this is going to be a situation where, like you and I and many employees probably didn’t know that their employers were monitoring what they do and it’s not going to change the fact that they’re being monitored but they’re just going to know about it now which they possibly didn’t know about in the past.

NASIR: And so, there’s different types of monitoring, right? I mean, there’s the cellphone and then there’s your computers – you know, that’s been going on for a while. I mean, maybe cellphones are a little bit new. Internet activity, key strokes can easily be tracked, cellphones, also GPS tracking on vehicles is pretty old as well – everything from truck drivers to delivery persons. And then, there’s also video and audio recording within the office. So, there are lots of different types of monitoring but each are a little bit different. But let’s put the law aside for a second – which we like to do 99 percent of the time – giving notification to the employee, specifically with the cellphone, is it morally good to do it? Is it required? Do you think the law should give notice to the employee? What do you think?

MATT: If I was an employee, I would expect that almost. If I wasn’t told about it, if I wasn’t given notice, I would expect that there was some sort of monitoring, especially if you go in the office and you’re using an employer’s computer or phone or whatever sort of technology, I would expect that, if they’re not monitoring, they have the capability of doing it. I don’t know if that’s a reasonable thought or a common thought.

NASIR: Do you think it matters what kind of monitoring? I think computers, for example, it’s pretty fair game. If it’s a company computer, everyone kind of understands, right? But, I don’t know, if it’s a company-issued cellphone and let’s say the person’s not a delivery person or on the road a lot but I can track the GPS of the cellphone, I can see where they’re going, what do you think about that?

MATT: I mean, that obviously is a little bit different or there’s a line drawn there of company-related work and personal work but, even then, I’m just trying to put myself in that position. If any employer would issue me a cellphone, I would still expect that they’re going to have the ability to track where I go or possibly what I do on that and I would just think, you know, if I’m going to do something stupid, I would think to be smart enough to not do it with whatever phone or whatever piece of technology they gave me. I don’t know if everyone thinks that way.

NASIR: That’s true.

MATT: This is a deposition, by the way.

NASIR: Yeah, what about video monitoring? You know, if it’s clearly shown, then everyone knows that they’re being monitored. But what if it’s a hidden video? What do you think about that?

MATT: In the workplace?

NASIR: Yeah, let’s say it’s just in the office and there was a hidden camera.

MATT: In my house?

NASIR: Yeah, exactly, in your house.

MATT: If it was at my house, I think I’d have a reasonable expectation of privacy but, yeah, I mean, at work, again, I would think that’s fine. I mean, putting the law aside, I think that’s a reasonable thing for an employer to do. Well, I guess I shouldn’t say I’m fine with that. If there’s a reason to do it – like, there’s been employee theft or there’s reason that you need to do that, then, yeah. I mean, at restaurants I think would make sense. There’s probably a lot of things that go on there. I’m generally okay with it.

NASIR: Okay. What if the video can pick up audio? Strange for you?

MATT: I mean, if it’s all in the workplace, I still think that’s fine. I think the one spot or everything in the workplace, I’m generally fine with. The things I wouldn’t be necessarily okay with would be if you’re checking something – like your personal email maybe – on that computer but, even then, I mean, you’re still using the company’s computer and you probably have your own cellphone where you can do it. Or if you’re in the break room or something and you’re having a conversation with somebody on your phone, it has nothing to do with work, then, you know, I could draw the line there. But, generally speaking, in the workplace, as an employee, you have to have that expectation that your employer might be monitoring you in all these different ways we’ve talked about.

NASIR: Okay. So, Apple has their new software update. By the way, I guarantee you that you can monitor iPhones using some other software that doesn’t give notice to the user, right? So, I’m sure employers can find a way around this, right? I assume.

MATT: For sure.

NASIR: Not everyone has iPhones and all that. So, this is actually a state-by-state issue. And so, it can get a little complicated because, like I’m asking all these questions to Matt, it depends upon what exactly the monitoring is. Just take one example of GPS monitoring. GPS could be on the vehicle, it could be through the cellphone. Some states – for example, Illinois – has a specific law that says that you cannot GPS track a person’s vehicle without their consent. How you resolve that with employee monitoring and so forth, it seems pretty obvious that you need to give notice, if you’re in Illinois, notice to your employee that, “Okay, I’m going to be monitoring your GPS location.”
Frankly, when it comes to GPS, why not just give notice anyway despite whatever the law is. In fact, if anything, if you’re concerned about your employees not doing what they’re supposed to, telling them that they’re being monitored, you know what it reminds me of, like, when people put an alarm sticker outside their door saying that we have an alarm system by some company or whatever, that in itself is almost as effective as having an alarm itself because, if you don’t have an alarm and a robber comes into your home, they don’t find out you have an alarm until they trigger it. But then, of course, you have people that just put a sticker on and they don’t actually have the alarm.

MATT: See, I have the opposite. I have no warning but I have an alarm system. But, you’re right, you make a great point. Why not let them know or why not disclose that to them? Why not? Let’s say they do something they aren’t supposed to and you say, “Ah, I got you!” but you’re in a situation where you have to discipline them or terminate them. If you would have just let them know that you’re legally monitoring them or what-have-you, I think that is going to prevent a lot of problems, from the employer’s perspective.

NASIR: Definitely.
So, let’s talk about other things. I mean, California is classic. I mean, California actually has privacy or a right to privacy in the Constitution and its state constitution and I’m just mentioning that because a lot of people think privacy is a right in our federal constitution and that’s actually not true. There’s no explicit right to privacy in the US Constitution. I mean, there’s some laws and so forth like that but from that level. But just to kind of understand the severity of how California approaches it, it’s in their state constitution. So, in general, without even getting to specifics of laws here, you can assume that, if there’s any expectation of privacy and somehow you violate that privacy, then most likely, you’re not doing the correct thing and that’s probably the easiest approach from an employer of how you should look at things.
And so, we can just look at very closely the recording laws for audio. We mentioned you have a video in your office monitoring and it also records audio. The law in California is very specific. If you’re recording audio, you need to have the consent of both parties.

MATT: Yeah, dual consent.

NASIR: Dual consent versus a one-party consent that is the federal law or in some states also – like Texas is classic – I can record a conversation in a meeting and, so long as I know about it and I’m part of that conversation, then it’s okay.

MATT: I mean, the California Penal Code has…

NASIR: Yeah, it’s actually a crime.

MATT: Yeah, which is pretty crazy. Obviously, like you said, it’s different state by state, but California is pretty strict in that aspect of it and that’s why I think you’ll hear a lot of times, “This may be recorded for training purposes,” things like that.
What about this issue of the employer issuing this phone and it being able to monitor what the employee does? I mean, I guess that’s part of their employment that these employees are going to agree to this.

NASIR: I’m sure there’s been case law regarding phones in particular but, to me, it’s the same thing as computer monitoring in California. I mean, I think the same kind of privacy rights would apply there, don’t you think? I’m not aware of any specific kind of statutes in California that are specific to cellphones necessarily.

MATT: I don’t know. There probably aren’t any since they’re pretty behind on updating any of the laws with newer technology.

NASIR: The general rule again is that, if the employee has an expectation of privacy, then it may be something that you may be violating some laws there. Just give them notice. It’s very simple. What’s difficult too is that, when you have the employee, in California, there’s been some strange instances where the employee has a computer that is monitored that is issued by the employer, but what happens when they start doing personal stuff or if they have a laptop that they bring home? Same with the cellphone. I don’t know if this software can monitor text messages and things like that but what if this work cellphone is used for both purposes, right? There’s been some different cases that have created different results because of this kind of blurred line between what’s personal and what’s for the business.

MATT: Yeah, that’s why I said at the beginning, you’ve just got to have to think about that if you’re going to take an employer-issued device or piece of equipment and use it for personal use at home. I mean, there’s that possibility that – legal or not – there is a possibility the employee might be monitoring it.
There’s another thing that had come up recently with this wearable technology – like Fitbit, things like that – employer-issued wearable technology which, you know, it’s just another thing along those lines. Your employer might issue a computer, might give you a cellphone and might do something like this Fitbit, too. Fitbit’s obviously way more limited. Fitbit by itself can be way more limited than what a cellphone or computer is going to do but it’s still a piece of technology that can track where the employee is, if they’re wearing it at all times and have it up and running.

NASIR: I think some of them have GPS but then I think also there’s weird things that can come into play. Again, when you’re issuing these devices to your employees, because these Fitbits have become pretty popular in health – what is it called? Health wellness programs and things like that, you literally get a discount on your health insurance if you use these and things like that, right? And so, when you’re issuing these devices – whether it’s a cellphone, your computers, and so forth – especially if you’re in California. But, even if you’re not in California where it has these kind of strict privacy laws, if you have a policy that kind of describes, “Look, we’re going to give you these devices and we’re going to monitor it,” it doesn’t even have to be that specific, by the way. You can craft it in a way that is broad and open but so long as you give them notice and it shows that they don’t have any expectation of privacy then it’s pretty much fair game. And so, it becomes interesting when you have a Fitbit that’s been issued and let’s say that, I think there was one case that was discussed where a person made a claim for workers’ compensation from some injury and yet the Fitbit was showing tremendous amount of activity that was conflicting with that kind of injury. Little things like that, it’s just amazing how new technology produces strange and new issues.

MATT: It’s the modern-day version of Daryl’s faked injury – or not faked – his work-related injury.

NASIR: Oh, yeah.

MATT: From what did he…?

NASIR: It was because he was misusing equipment, right? That’s what it was or something.

MATT: Well, yeah, I remember there was something with the railing on the stairs was broken. Or is that a different episode?

NASIR: No, no, that’s the same. Like, basically, he said he fell on the ladder but, in reality, they were using the lift for something – I don’t know – some entertainment purpose. I can’t remember what.

MATT: Yeah, and Dwight figured it out but then they agreed to do nothing about it because Dwight drove to Daryl’s house and heckled him but it ended up being his sister and there was a big issue with that. IT ended up being a win for both sides, I guess – or a loss, depending on how you look at it.

NASIR: Win-win-win.

MATT: Win-win-win.

NASIR: I mean, if you want to monitor your employee – employees I should say – just have a policy. I would just notify them. I don’t think it hurts. I think some employers are inclined to – especially if you’re monitoring computers – some are inclined not to tell them because they want to catch them, right? They want to be able to have that kind of control or power over their employee. To me, it’s more of a culture thing and I just think, if you’re trying to really reach an objective where you have productivity and so forth, I mean, I know I’m like this. I mean, look, if you’re doing your work and finishing, I don’t care if you’re on Facebook, but just get your work done. That’s not a big deal. But some employers are a little bit more strict. They’re like, “No, I mean, 8 to 5, every single minute, you need to be working unless you’re on break or at lunch.”

MATT: You know, take that even further, there was a case or a hearing a couple of weeks ago – I’m trying to see, I think it was an appellate court. Basically, they suggested to go even further because it was a third party trying to get company emails through the discovery process but basically saying you need to have strong agreements in place – employers and employees. Any personal information or any company information that’s stored through personal email accounts – like it was in this case – you need to protect that, making it confidential. I don’t know if I’m making any sense with what I’m describing here but, like, I’m saying not even having employees understand and consent to this sort of arrangement but having a strong agreement in place so this information can’t be discovered in any sort of lawsuit by a third party.

NASIR: It’s a strange case. It’s a case out of California. But, generally, you also need to have a policy that company data should not be stored on personal devices and that’s probably the easiest way to do it. But, of course, in this day and age when people are working from everywhere, unless you’re going to be issuing computers and so forth everywhere, you know, some employees prefer like, I have a laptop I want to be able to work from home but I don’t want to have a second laptop. I know my wife has a work cellphone and a personal phone. Now, she has to drag around two phones. I mean, who wants to do that, right? There are practical reasons why you have both on there but, again, it can create some legal ambiguity or weird scenarios – like, you get sued and now the opposing party can’t get it off the personal computer which I think that was a good thing for the employer in that case, right?

MATT: Yeah, definitely. They were able to protect that but, yeah, it’s tough. When you have that employer-issued device, I mean, when you blur the lines of using it for personal use, it just makes things a lot bigger or a lot messier I guess I should say.

NASIR: You should say that. Honestly, this Red Bull, I’m almost done with it and I want to throw it out but I feel bad.

MATT: You got it for free so it’s not like it’s going to be a huge loss.

NASIR: Yeah, but, like, I don’t know, I encourage other people to do it and I don’t know. I feel like I’m setting a bad example if I just throw it away.

MATT: You could give it away to other people.

NASIR: That’s what I thought. But then, everybody I asked, they were like, “I haven’t drank Red Bull since the 1970’s.” I’m like, “Red Bull wasn’t around that time.” They’re like, “Well, yeah, I was lying because I don’t like Red Bull.”

MATT: I’m trying to remember was this all based off of the claim that Red Bull gives you wings?

NASIR: Yeah, I was thinking the same thing this morning. It was something like that. We have to listen to our episode again because I can’t remember the class action claim. It was a settlement, obviously.

MATT: To me, this is how I view it. There’s people like you and me who did drink Red Bull in the past and don’t – well, unless we got it for free. Maybe that’s what it is – putting it back there in the market and now we’re drinking it. Not me but maybe you drink it again – well, you won’t but other people might drink it and be like, “Oh, yeah, I do remember liking this,” and might buy it and then they’ll end up making more money on it.

NASIR: Exactly. The people that have grown up and have lost their taste buds for whatever reason and then they drink it, they’re like, “Oh, yeah, I remember I used to drink it,” and it becomes nostalgic and they’ll buy it again. I agree. I think you only got four cans, right?

MATT: Yeah.

NASIR: Not too much of a loss on Red Bull and I’m sure most people didn’t do it anyway.

MATT: Yeah, exactly.

NASIR: Except our listeners, of course.
So, all right, I think that’s our episode – employee privacy, coast to coast, state by state. Basically, if you comply with California law, you comply with everything else. That’s the general rule.

MATT: Yeah, it’s pretty accurate.

NASIR: I mean, it is, right?
All righty.

MATT: Keep it sound and keep it smart.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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