With audio recording applications (“apps”) often standard issue on ubiquitous smart phones, employees are now armed with a relatively inconspicuous way to capture their supervisor’s every gaffe.  In September, a $280,000 jury verdict in favor of an employee on race and sex discrimination claims demonstrated just how damaging an audio recording can be in employment litigation.  In that case, the plaintiff, who is African American, caught her supervisor, who is Hispanic, using the “N” word on tape, and the judge admitted the recording into evidence.  Putting aside the risk of employees collecting damaging evidence for anticipated litigation, the ever-present specter of audio recording can undermine the type of corporate culture that so many employers are trying to encourage nowadays, one that thrives on collaboration and candid discussion among colleagues. 

In 13 states — California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington — anti-wiretap laws generally prohibit the recording of face-to-face communications without the consent of all parties to the communication.  However, in the remaining 37 states and under federal law, audio recordings, whether surreptitious or not, are legal so long as the person making the recording participates in the recorded conversation.  In these states, secret recordings by one of the participants not only are legal, but the former Acting General Counsel (“Acting GC”) of the National Labor Relations Board (NLRB) recently took the position that workers have a legally protected right to record their co-workers and managers.  In a decision published on October 30, 2013, an administrative law judge (ALJ) flatly rejected the Acting GC’s position and upheld the employer’s general prohibition on all audio recordings in the workplace without prior management approval.

The employer in that case, Whole Food Markets, promulgated the prohibition to thwart the “chilling effect” of workplace audio recording.  More specifically, Whole Foods’ policy explains that concern about audio recording “can inhibit spontaneous and honest dialogue especially when sensitive or confidential matters are being discussed.”  Although not stated in the policy, Whole Foods’ head of human resources testified that the policy applied to all employees, whether management or non-management; to all devices that captured voice; and in all areas of the store, including the store’s parking lot and entrance area; but only during working time.

For Whole Foods, candid discussion of company operations underpins the corporate culture.  As explained by the HR executive, regional management meets at least once each year with non-management employees of each of the region’s stores — without store management being present — to obtain candid feedback on store management.  In addition, store managers meet periodically with store employees to discuss a range of business matters, some of which are confidential.  Finally, in an effort to promote team harmony, each store’s departments, including the department’s leadership and team members, have regular team meetings to discuss whether a probationary employee should be permitted to join the team.  The HR executive testified that an employee’s audio recording of any of the meetings would undermine their purpose.

Before addressing Whole Foods’ business justification for its “no recording” policy, the ALJ found no authority supporting the Acting GC’s position that the company’s ban on recording was facially invalid because it interfered with employees’ rights under Section 7 of the National Labor Relations Act (NLRA) to discuss the terms and conditions of employment.  The ALJ could not have been clearer on this point: “Making recordings in the workplace is not a protected right, but is subject to an employer’s unquestioned right to make lawful rules regarding employee conduct in the workplace.”

The ALJ found the ban on recording to be lawful for two principal reasons.  First, the explanation of the policy’s purpose, embedded in the policy itself, was “a clear, logical and legitimate description of the reason for the rule,” and the policy “addresses legitimate business concerns.”  Second, the HR executive provided credible examples “of company meetings where candor and forthrightness in employee opinions [are] essential.”  Relatedly, the ALJ found that “[e]mployee comments would certainly be inhibited if employees believed that their remarks were recorded and possibly replayed for store management.”

While Whole Foods’ legitimate and supported business justification drove the ALJ’s decision, the absence of any evidence that the policy resulted from anti-union animus or was intended to squelch employees’ protected concerted activity also was important.  Nothing in the policy prohibited employees from discussing the terms or conditions of employment or from documenting matters related to them, such as workplace safety hazards, by writing a contemporaneous note.  In addition, there was no evidence that Whole Foods established the policy in response to union activity or that the company had applied the policy to restrict employees’ discussions about the terms or conditions of employment.

While this decision is not binding on the National Labor Relations Board and there is a fairly strong likelihood that the decision will be appealed to the Board, the decision provides the following important guidance for employers who are concerned about recording in the workplace:

• A legitimate ban on recording in the workplace without management approval is defensible under the NLRA;
• The employer should specify the legitimate business justification for the ban in its “no recording” policy;
• Preventing the “chilling effect” on internal company discussions can be a legitimate business justification for a “no recording” policy;
• An employer who does rely on the importance of frank workplace discussions to justify a “no recording” should be prepared to provide examples of specific situations where (a) recording in the workplace would inhibit frank discussions, and (b) that inhibition materially undermines the employer’s legitimate and important business objectives;
• Whatever the justification, apply the policy to all employees, not just to non-management employees;
• Avoid promulgating the policy in response to union activity; and
• When applying the policy by disciplining an employee for recording communications without management approval, carefully analyze whether the recording itself could be considered an exercise of the employee’s protected rights under the NLRA.