Today’s employment landscape has been dramatically altered by the advent of new social networking and communication technologies. Employees are now using computers, laptops and various hand held devices such as “smart phones” to call, text message, e-mail, instant message and otherwise communicate with others. Moreover, employees are often using employer-issued equipment to communicate with others while at work. The Supreme Court’s decision in City of Ontario, California, et al., v. Quon, et al. sheds much-needed light on what employers can do to combat employee abuse of employer-provided communication devices.

A Look At The Facts: Quon’s Violation Of The City’s Communication Policy

The City of Ontario Police Department maintained and disseminated a “Computer Usage, Internet and E-Mail Policy” that reserved the City’s right to monitor and review all e-mail and Internet usage, with or without notice, and that warned employees they had no expectation of privacy in such communications. After the Policy went into effect, the City issued pagers with the capacity to send and receive text messages to its police officers. Its service contract contained a monthly limit on the number of characters each pager could send or receive and provided for an additional fee should any employee exceed the limit. Although the Policy did not explicitly apply to text messages on pagers, the City made it clear to its police officers that text messages would be treated the same way as e-mails. During a staff meeting, the City informed its police officers that text messages sent or received using the pagers would fall under the Policy. The City later confirmed this announcement in a memorandum to its police officers.

Quon received a pager and immediately began exceeding the monthly character limit. A police Lieutenant informed Quon about the overage and reminded him that text messages were subject to the Computer Policy. He assured Quon, however, that his text messages would not be audited if he reimbursed the City for any overage fees. Quon agreed to this arrangement. Nevertheless, after Quon exceeded the monthly character limit for several consecutive months, the City decided to determine whether the existing character limit was too low and officers were paying for work-related overage fees, or whether the character limit was proper and officers were exceeding the limit because of personal text messages. The City requested transcripts of the text messages sent in the preceding two months by Quon. A review of the transcripts revealed that most of the messages sent and received on Quon’s pager were not work-related and were often sexually explicit. The Police Department’s Internal Affairs Division became involved in the investigation. The Division redacted all text messages sent or received by Quon while off duty. After reviewing only the text messages sent or received by Quon while on duty, the Division learned that, on an average work day, only 3 out of the 28 text messages sent or received by Quon were work related. Quon was disciplined for violating the City’s policies.

Employee’s Privacy Rights Not Violated: Understanding The Quon Decisions

Quon sued the City, alleging that his right to privacy was violated under various laws, including the Fourth Amendment, which prohibits unreasonable search and seizure. The district court held that Quon had a reasonable expectation of privacy in the content of his text messages. It also held, however, that the City’s actions were reasonable because the purpose of the audit was to determine whether Quon was being made to pay overage fees for work-related text messages as opposed to whether Quon was incurring overage fees because he was wasting work time on personal text messages. The Ninth Circuit reversed the district court’s ruling because, while it agreed that the purpose of the audit was reasonable, the scope of the search was not. The Court reasoned that the City should have used less intrusive means such as having Quon redact the transcripts himself. Consequently, the City’s search was unreasonably broad and unlawful.

On June 17, 2010, the Supreme Court reversed the Ninth Circuit’s decision. The Supreme Court noted that whether Quon had a reasonable expectation of privacy in his text messages was a fact-specific question. It held that the City had made clear to its police officers that any text messages sent or received using the City-issued pagers were subject to review. The Court considered, but declined to rule on, whether the Lieutenant’s statements to Quon that his text messages would not be reviewed if he reimbursed the City for overage fees had modified the City’s stated policies. The Court did, however, suggest that whether the Lieutenant had or appeared to have the authority to modify the City’s policies would be a determining factor.

The Court explained that the applicable standard was whether the audit was reasonable under the circumstances. The audit would be considered reasonable if it was justified from its inception and if the measures adopted were reasonably related to the objectives of the search and not excessively intrusive in light of the circumstances. Although the Court was hesitant to label what society views as reasonable in light of rapid changes in technology and communications, it held that the City’s audit was indeed reasonable. The audit was justified from its inception because it was initiated for a legitimate purpose - - either to assess the adequacy of the character limits or to investigate employee misconduct. Further, reviewing the transcripts was an efficient way to identify the cause of Quon’s overages. Similarly, the City’s review of the transcripts was not excessively intrusive because it only reviewed transcripts for a two month period and redacted the transcripts to show only text messages sent or received by Quon while on duty. Furthermore, the Court held that the City’s audit was lawful, even under the broader standard articulated by Justice Scalia in his dissent, i.e., whether the audit would be regarded as reasonable and normal in the private sector employment context.

Lessons From Quon: Dealing With Employee Abuse Of Employer-Issued Devices

Private sector employers should take away three key lessons from the Supreme Court’s decision in Quon. First, broad, carefully drafted and detailed communication policies are imperative. Employees generally presume they have a reasonable expectation of privacy in their personal communications (even on employer-issued devices). Thus, employers must draft policies that effectively limit their employees’ expectation of privacy. Second, communication policies are only effective if they are clearly communicated and consistently implemented. It is important for employees to be fully aware of existing communication policies and their applicability to their personal and work-related communications. Further, employers should ensure that their communication policies are updated and that any changes are promptly communicated. Lastly, employers should keep in mind that the reasonableness of their actions can get them into or out of hot water. Accordingly, any review of employee communications should be limited, reasonable and conducted in accordance with existing policies. Diligently applying these lessons will help employers avoid costly privacy litigation.

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If you have any questions regarding this Alert, please contact Chad W. Moeller (312-269-5370), a partner in the Neal Gerber Eisenberg Labor & Employment Practice Group, or any other member of the Group for more information.

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