With New Record and Transcribe Tools, Should Employers Be Concerned?

Quick Hits

• Employers have legitimate and substantial business interests in restricting employee use of recording devices in the workplace to protect privacy and trade secrets.
• Employers may want to consider policies that prohibit or restrict making recordings in the workplace.
• Such policies may need to account for potential issues under the NLRA and may need to include exceptions for recording conversations as part of protected activity and be narrowly tailored to address the employer’s concerns.

Imagine finishing a phone call on your smartphone and instantly accessing a transcript and summary of the call or having an outline of notes automatically generated following a work meeting. Such a tool would likely prove a valuable resource, which could both increase efficiency and improve performance. New features, some leveraging artificial intelligence (AI), built into smartphones and other applications, are making that a reality.

While the upsides of such technology are significant, there are major pitfalls that await those who rush out such technology to employees without due consideration. Importantly, some states require both or all parties to a conversation to consent to be recorded, and violations can bring civil and sometimes criminal penalties. Moreover, the recording and transcribing of workplace communications could put at risk the confidential nature of sensitive and proprietary information or trade secrets. Furthermore, employers may be concerned with potential negative publicity from the release of such recordings or transcriptions, notably if the release does not include proper context.

The reality is that some employees may have unknowingly activated such technologies. For those who have knowingly engaged the technology, they may lack full understanding of the extent to which generative tools are recording conversations and be unaware of the full scope of risk presented.

As such, many employers may choose to implement restrictions on making recordings in the workplace, such as recording calls or meetings, or adopting a “no-recording policy” that prohibits all unauthorized recordings. Because broad “no-recording” policies are potentially unlawful, employers may want to explore potential exceptions and other qualifying language to give their policies a better chance of surviving scrutiny by administrative agencies, such as the National Labor Relations Board (NLRB).

Consent and Legal Concerns

In most states, recording is not illegal as long as at least one party in a conversation consents to it. Thus, consent by the one making the recording is sufficient even if the others are unaware they are being recorded. However, leaving a recording device on in the room when the person making the recording is not in the room—for example, if the person left to take a break—may be considered an unlawful recording.

At least ten states and the District of Columbia have “two-party consent” or “all-party consent” laws that require all parties in a conversation to give their consent to be recorded. These states are California, Delaware, Florida, Illinois, Maryland, Massachusetts, Montana, New Hampshire, Pennsylvania, and Washington. An employee’s failure to obtain consent—even on a work-related call—may make recording a conversation a crime.

Additionally, the Federal Wiretap Act (FWA) imposes civil and potential criminal penalties on the interception of communications using a device and makes such unlawful recordings inadmissible in legal proceedings. The FWA was amended in 1986 to cover electronic communications beyond phone and in-person conversations, such as email or other messages sent over the internet.

Taken together, these laws mean employees may break the law if they make a surreptitious recording, especially if they are not a participant in the conversation or meeting being recorded. Practically, when an employee makes an illegal recording, and not just in violation of an employer policy, employers may have more disciplinary options to address the issue with that employee. Courts are less likely to side with an employee in a wrongful discharge case if the employee has engaged in criminal activity.

Protected Activity

While employers generally may implement policies restricting recordings in the workplace, there are certain situations in which they may have to allow such recordings. State and federal protections for whistleblowers, meaning those who report evidence of misconduct, are expanding and could apply to employees who make recordings to gather evidence to include in a report to regulators. Similarly, employers could further be found to violate antiretaliation statutes if they are seen to restrict employees from reporting discrimination or harassment.

Additionally, the National Labor Relations Act (NLRA) protects employees who engage in concerted activities to improve the terms and conditions of their employment. NLRB precedent has held that employees making recordings, even covertly, are engaged in a protected activity if it pertains to their rights under the NLRA. Furthermore, the NLRA supersedes or preempts state laws. That means an employer’s “no-recording” rule that has the potential effect of chilling employees’ participation in protected concerted activities could be found unlawful under the NLRA.

Recent NLRB decisions and policy pronouncements by the NLRB general counsel suggest that the NLRB will scrutinize such workplace rules very closely. Most notably, the NLRB adopted a standard in its August 2023 decision in Stericycle, Inc., whereby facially neutral work rules will be interpreted “from the perspective of an employee who is subject to the rule and economically dependent on the employer.” If that burden is met, then there is a presumption of unlawfulness that employers can rebut by showing that the rule furthers a “legitimate and substantial business interest” and that the rule cannot be more narrowly drafted to avoid potentially interfering with protected concerted activity.

Employers reluctant to draw the NLRB’s ire may want to avoid “no-recording” policies or narrowly limit such policies to the protection of trade secrets, proprietary information, or confidential client or customer data.

Enforcing Recording Restrictions

Still, employers have legitimate business interests in regulating the workplace environment and the use of smartphones and other devices, particularly employer-owned and -provided devices, and in protecting sensitive, proprietary information and trade secrets that they may wish to safeguard with a no-recording policy. Employers may also have an interest in maintaining and protecting employee privacy within the workplace and between employees.

Moreover, even though a no-recording policy may not legally prohibit employees from recording at work in all cases, having such a policy may be important evidence in a wrongful discharge lawsuit if a discharge is related to an employee’s unauthorized recording.

In crafting a recording policy, employers may want to consider provisions in the policy that:

• inform employees of their obligations to obtain consent for making recordings, including phone calls, meetings, or workplace conversations;
• communicate the employer’s substantial legitimate business interests the policy is meant to safeguard; and
• narrowly limit the policy to avoid interfering with protected activities under NLRA and other whistleblower laws.

Employers may also want to consider holding training sessions to inform employees on properly using recording features on their devices and their legal obligations. Additionally, regarding employer-owned and -provided devices, employers may want to consider disabling certain recording features or requiring that any recording features embedded in the devices or applications clearly notify the user when the recording is engaged.

Key Takeaways

In certain situations, it is lawful for employers to implement policies that restrict employees from making recordings at work, but such policies must account for situations where employees engage in protected activities in which they may have a legal right to make recordings. Employers may want to consider the underlying reasons for adopting a “no-recording” policy and narrowly tailor policies to address those specific concerns, as overreach could (and likely will) lead to legal scrutiny.

Ogletree Deakins will continue to monitor developments and will provide updates on the Cybersecurity and Privacy, Technology, and Traditional Labor Relations blogs.

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