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Watching the detectives: A cautionary tale on employee privacy

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in Employment Law,Hiring,Human Resources

by Sonya Rosenberg, Esq.

When it comes to work-related matters, many private-sector employers think that employees’ rights to privacy are limited, if they exist at all. A recent $1.8 million jury verdict should help dispel that myth.

Kathy Lawlor worked as a salesperson at North American Corp. of Illinois, a Chicago-based provider of specialized business services. As Lawlor was negotiating a highly profitable account, North American began to suspect that she was planning to leave the company and take the new account with her. North American initiated an investigation and hired a private detective agency it had used in other matters.

Hollywood on Lake Michigan

What happened next reads like a plot of a Hollywood movie. The detective agency obtained Lawlor’s phone records by having someone call her telephone carriers without her knowledge and pretend to be her. Meanwhile, the detective assigned to Lawlor’s case spent considerable time parked outside her home and following her car. He did this so much that Lawlor actually noticed she was being watched.

One day, Lawlor’s neighbor watched from his window as an unknown man got out of a car, walked over to the garbage can outside his house and threw out some papers. The neighbor told Lawlor’s father about the incident, and the father retrieved the papers from the garbage. Lawlor’s father found an envelope that stated “Probe” and had a picture of an eye in the return address field.

Cue the lawyers

Lawlor took the envelope to an attorney, who confirmed that it came from a private detective agency. After subpoenaing the records, the attorney uncovered the subterfuge to access Lawlor’s phone records.

Lawlor sued, and the case proceeded to a jury trial in an Illinois state court. In his closing argument, Lawlor’s attorney argued that North American, as the company that hired the detective agency, exhibited a complete indifference to Lawlor’s privacy expectations, and that it should be ordered to pay punitive damages.

The jury agreed—to the tune of $1.8 million.

As is often the case with contentious, extensive litigation, the win was not a slam-dunk for Lawlor. North American had countersued her for her alleged competitive activities, and within a few weeks after the jury’s verdict, the judge who presided over the case found merit to the company’s allegations. Lawlor was ordered to pay back some of her commissions and additional damages, totaling approximately $630,250.

Even with this order, the huge jury award means Lawlor came out ahead, and North American has suffered a significant loss, paying for defense of the protracted suit, attorneys’ fees and the jury’s ultimate award.

Although North American is fighting to reverse the jury verdict, as of today the verdict stands and serves as an important wake-up call to employers.

The moral of the story

Just because an employer can access employees’ sensitive information—by hiring a private investigator or obtaining access to employees’ personal information—that doesn’t mean that it should.

Employers should be particularly cautious and seek legal advice whenever they feel the need to investigate employee behavior or action. That doesn’t mean employers can’t monitor their workplaces. It does mean employers should be prudent in deciding how, what and whom to monitor.

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Author: Sonya Rosenberg is a member of Neal Gerber Eisenberg’s Labor & Employment Practice Group. She counsels and represents employers in various labor and employment-related matters. She can be reached at (312) 827-1076 or srosenberg@ngelaw.com.

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