EMPLOYEE PRIVACY

Employee privacy issues have surged to the forefront of the business press in recent years, spurred on by changing workplace dynamics and a litigation-conscious business environment. Observers say that advances in telecommunications—such as e-mail and the Internet—coupled with heightened concerns about vulnerability to litigation, have exacerbated management concerns about monitoring employee behavior. Indeed, employee privacy is already fairly restricted in many respects in many of America's large corporations. Studies indicate that small business owners have increased their monitoring practices as well, and many experts expect that trend to continue in the near future. But analysts note that the close owner-employee interaction that typifies many small business enterprises often makes monitoring a more delicate issue than it might be in a larger, more impersonal environment.

FUNDAMENTALS OF WORKPLACE PRIVACY

While stipulations on employee privacy parameters vary from state to state, legal experts state that private sector employees have fewer rights than they commonly believe. "There is no general federal or state law creating or protecting a zone of privacy in the workplace," wrote George Webster in Association Management. "The U.S. Constitution's First Amendment free-speech clause and the Fourth Amendment protection against unreasonable searches and seizures apply only to action by the government, not to private-sector employers…. By and large, employees leave their constitutional rights at the workplace door. A few state constitutions do extend speech and search protection to private-sector employees."

According to Webster, the central legal issue in the area of workplace privacy boils down to once question: "Did the employer, by what it did or failed to do, create a reasonable expectation of privacy by the employee? If the answer is yes and the employer did not meet that expectation, then it may be held liable for invasion of privacy." He went on to delineate basic employer and employee rights in a variety of areas:

SEARCHES AND SEIZURES An employer has the right to inspect personal belongings (bags, purses, briefcases, cars, lockers, desks, etc.), except when the employer has created a reasonable expectation of privacy. These expectations can be raised if the employee is given a key to a desk, or if the employer has disseminated a written policy explicitly stating that it will not make such inspections.

MONITORING COMPUTER, E-MAIL, INTERNET, AND FAX USE Businesses have some significant rights in this regard, since they own the equipment. But if these resources are knowingly made available for private employee use, then a reasonable expectation of privacy has been created and personal data placed and maintained on that equipment can be withheld from the employer.

MONITORING TELEPHONE CALLS Companies are allowed to monitor calls to make sure that they are business-related and to record them for training purposes.

SURVEILLANCE AND INVESTIGATION Many surveillance methods (cameras, ID checkpoints, etc.) are legal, as are investigations of employees, provided that they are reasonable and undertaken for work-related purposes.

DRUG TESTING These policies have been validated by the courts, although criticism of the practice remains intense in some quarters. Drug testing is a popular measure in many industries, and it is practiced by perhaps 70 percent of large American companies. Small businesses, however, are less likely to embrace this technology because of expense, nature of business activity, and concerns about workforce reaction.

TRENDS IN COMPANY MONITORING

Countless studies and reports indicate that monitoring of employee behavior, both in and out of the workplace, has undergone a dramatic increase in recent years. Such monitoring may range from checking on the business relevance of Internet sites that an employee visits to examinations of an employee's locker or cubicle to see if the person is stealing equipment or information from the company. For example, Dana Hawkins noted in U.S. News and World Report that according to a 1997 study, "more than one third of the members of the American Management Association, the nation's largest management development and training organization, tape phone conversations, videotape employees, review voice mail, and check computer files and E-mail…. Scrutiny of job applicants has intensified, and this has fueled a boom in companies that do database searches of applicants' credit reports, driving and court records, and even workers' compensation claims. Personal behavior is no longer off-limits: Some firms have adopted rules that limit co-workers' dating. Others ban off-the-clock smoking and drinking. Many companies regularly test for drugs. Much of this is done without the workers' knowledge." Indeed, according to the Labor Law Journal, in 1997 less than one-third of employers notified their employees when they engaged in electronic monitoring practices in the workplace.

This latter element of company monitoring has been a particular sore spot for employees and civil liberties advocates alike. They note that even if one were to set aside the ethical issues of such monitoring for the moment, errors in monitoring practice can have devastating repercussions on workers. "Careers may be damaged when investigators overreach, when mistakes are made, or when managers are too aggressive in enforcing company rules," said Hawkins.

Nonetheless, factors such as increased litigation have pushed many companies into increasingly proactive investigations into the activities of current and prospective employees, both in and out of the office. Rising medical expenses also have encouraged many businesses to check into the medical history of prospective employees, especially if the business is one that self-insures. "Technology now makes it possible to store medical records in electronic form in a central database, providing an easily accessible cradle-to-grave look at an individual's health history," reported Maureen Minehan in HR Magazine. "Medical information on approximately 15 million U.S. and Canadian citizens is already on file with the Medical Information Bureau (MIB), a database of medical information that more than 750 insurance firms subscribe to." Minehan also pointed out that recent developments in genetic testing have focused attention on medical privacy issues. Noting that tests can now determine whether an individual carries the gene mutation for certain illnesses, which indicates a greater risk for contracting a particular disease, Minehan stated that a number of employee advocacy groups have expressed concern that this technology could be used by employers to discriminate against both potential and current workers.

Finally, amazing advances in computer and other technological capabilities have dramatically increased the abilities of employers to monitor the activities of those workers. As Kathy Compton stated in HRMagazine, technological advances have provided employers with the ability to access information on current and potential employees to an unprecedented degree. Hawkins agreed, writing that "technology—particularly new software that can track and record everything workers do on their computers—is making it easier to peek over a worker's shoulder." Of course, this same technology has also complicated the privacy issue for many business owners and managers because it has enabled employees to gain access to a wide variety of non-business related material, from pornography to information on civil war reenactments or other hobbies, from their office desks.

BALANCING EMPLOYEE AND EMPLOYER RIGHTS

Given the threat of litigation, the impact of worker performance on bottom line financial performance, and the wide assortment of monitoring technology available, it is hardly surprising that employee privacy has been wittled away to some degree in recent years. But observers note that many companies are trying to strike a balance between self-protection and sensitivity to the feelings of their workers. This is particularly true in the small business world. Observers note that small business environments typically feature working arrangements where owners operate in close proximity to their employees. Friendships often blossom in such cases, but the likelihood of developing close personal relationships with an employer or employee is severely curtailed if the company insists on maintaining policies that are regarded as intrusive. Of course, many small businesses are family-owned businesses as well, another factor that can complicate employee monitoring efforts considerably. Some analysts would argue that family businesses that feel a need to implement monitoring strategies on family members within the business are already likely to be distressingly dysfunctional on several levels.

But even if friendships or family relations are not issues for a small business owner, he or she should still approach employee privacy issues with some care. Certainly, small business owners have every right to protect themselves and their businesses, and many of them encounter situations in which monitoring practices become a viable option. But some analysts think that small business owners who practice active monitoring of employees run a greater risk of undercutting morale. After all, whereas employee monitoring has become a recognized reality in many sectors of the often impersonal "Fortune 500" world, it is viewed as a practice that is at odds with the atmosphere at many small business establishments. And of course, some small businesses operate in niche industries in which the opportunity/need to engage in employee monitoring is less evident. The activities of employees in a small outdoor landscaping firm, for example, would probably be less likely to be monitored than those of employees in a small market research company or other firm that makes extensive use of computer technology. In addition, legal experts point out that small businesses that are found liable for excesses in this area are far more likely to be irrevocably crippled than are larger corporations with deeper pockets.

Finally, each business owner has to decide or his or her self how much privacy employees are entitled to on an ethical level. Writing in his essay "Discrimination and Privacy," Jack Mahoney argued that while companies naturally compose policies that are based on self-interest, they should recognize that "there are limits to the information a company is entitled to seek about its members in such areas as their personal lifestyle, sexual preferences, affiliations, use of alcohol, drugs, and so on. What is at stake here is the psychic as well as physical privacy of individuals and the respecting and safeguarding of their personal autonomy and freedom. This seems to imply that if a company wishes to acquire personal information about individual employees, then the burden of proof to justify such a wish is on the company." Still, Mahoney granted that in instances "when performance is adversely affected, then the company is ethically justified in enquiring into the reason for such behavior."

In his book, A Manager's Guide to Employee Privacy, Kurt H. Decker emphasized the importance of communication in the successful application of privacy policies. "To ensure that employee privacy procedures and policies are understood by managers, supervisors, and employees, communication is important," he wrote. "Through communication, employee privacy procedures and policies are disseminated within the employer's organization. Communication assures knowledge, understanding, and consistent application of privacy procedures and policies."

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