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Legal Clinic

Seizing Employee Property

This month, the Legal Clinic will provide some guidance to HR leaders by addressing the issues of cell phones in the workplace and whether it's OK to discharge an employee who has filed for, or is receiving, workers' compensation benefits.

Monday, April 19, 2010
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Question: Can an employer take away employee cell phones or make workers give them up when they come to work? Our company recently instituted such a policy because of inappropriate use of a cell phone by one employee. Are there legal issues HR should be aware of pursuant to such a policy?

Answer: Neither legislatures nor federal or state courts have specifically addressed whether an employer can confiscate personal cell phones when employees bring them to into the workplace.

However, one can ascertain the legality of such policies by considering the general laws on employer property rights and employee privacy interests as they relate to other personal items that courts have allowed or refused to allow employers to seize from employees.

Different sources of law pertain to employer searches and seizures of items owned or possessed by employees in the workplace.

If the employer is a public entity, the Fourth Amendment of the U.S. Constitution controls. If the employer is a private business, then various federal and state laws may apply.

The reader's question relates to seizures, not searches -- and courts have addressed issues arising from employer searches more frequently than seizures. However, the analysis that courts apply to employer searches can provide insight into the way courts may look at employer seizures of an employee's personal belongings such as a cell phone.

The seminal search-and-seizure case in the context of public employment is the U.S. Supreme Court decision in O'Connor v. Ortega, 480 U.S. 709 (1987). To determine whether an employee has a reasonable expectation of privacy is a challenging task for courts, because, according to Ortega, the inquiry "must be addressed on a case-by-case basis." Id. at 718.

From the opinion, it appears that employees may enjoy a heightened privacy interest when bringing personal property items into the workplace. Justice Sandra Day O'Connor wrote that "[n]ot everything that passes through the confines of the business address can be considered part of the workplace context ... . The appropriate standard for a workplace search does not necessarily apply to a piece of closed personal luggage, a handbag, or a briefcase that happens to be within the employer's business address." Id. at 716.

Private employers are generally more able to perform searches in the workplace than government employers. However, even in the context of private employment, some states have recognized either by statute or judge-made law the privacy rights that adhere in the personal items of employees.

The U.S. Court of Appeals for the Third Circuit in Borse v. Piece Goods Shop, Inc. 963 F.2d 611 (3d Dep't 1992) acknowledged that an employee terminated for refusing to let her employer search her personal property in the workplace might create a cause of action under Pennsylvania law for wrongful discharge in violation of the public policy protecting employee privacy.

On the other hand, courts have held that employers have the right to monitor employee behavior and search employee items in the workplace under certain guidelines.

One court in North Dakota has held that it is permissible for employers to search an employee's desk, for example, which likely contains personal items belonging to the employee, if they provide advance notice and furnish a legitimate business purpose. See Johnson v. Menlo Park, No. C-98-2858 VRW, 1999 WL 551241 (N.D. Cal. July 23, 1999), aff'd in part, rev'd in part, 7 Fed. Appx. 712 (9th Cir. 2001)

With respect to seizures, employers have implemented policies that range from disallowing guns, drugs or alcohol into the workplace to mandating how employees should dress. Disobeying such orders can result in confiscation of the banned objects and lead to disciplinary action.

Within the last few years, lawsuits have centered on the issue of firearms in the workplace, see, e.g., Bastible v. Weyerhaeuser, 437 F.3d 999 (10th Cir. 2006), with many state legislatures passing laws to roll back court decisions favoring the employer's prerogative.

The right to bear arms, a guarantee under the Second Amendment of the U.S. Constitution, is not necessarily analogous to an employee's right to carry or use a cell phone on the premises of the employer. However, cell phones present similar issues, albeit on a lesser scale, for worker safety and productivity as weaponry and illicit substances.

Although no court cases have directly addressed the issue, a recent arbitration decision provides useful guidance. In In re Ozinga Illinois RMC Inc., 123 LA 198 (2006) (Simon, Arb.), the employer, a ready-mix-concrete company, imposed a rule prohibiting its delivery drivers from using cell phones while on duty.

According to the arbitrator's decision, the employer had not violated the collective-bargaining agreement, but acted properly pursuant to the provision allowing employers to execute "reasonable safety and work rules." The purpose of the employer policy was to ensure employee and customer safety, while its scope was comprehensive, applying to all company commercial-vehicle drivers.

The policy covered not only non-company cell phones but pagers, CBs and other personal communication devices. In the event of a personal emergency, the policy provided that the main office, the dispatch office or the plant must relay the message to the driver immediately. The employer also made exceptions for the pregnancy of a driver's wife and illnesses of family members. The penalty for violation of the rule was disciplinary action up to and including termination of the employee.

Although Ozinga involved a unionized workplace, it may portend the direction of state and federal rulings on the rights of employers and employees with respect to cell phones in all workplaces.

If an employer can forbid employees on the road from using cell phones, then that same prohibition would logically apply to employees working in the office, who by dint of their location, have more options to communicate.

As the arbitrator's opinion attests, a clear and comprehensive company policy is imperative. For example, in United States v. Speights, 557 F.2d 362 (3d Cir. 1977), the Third Circuit held that a police officer had a reasonable expectation of privacy in a locker because the company had not issued regulations on personal locks or on what could be stored inside the locker.

In sum, if the employer provides advance notice through a carefully drafted policy, which allows employees to make calls in case of an emergency and, in the instance of confiscation, institutes sufficient safeguards to prevent unlawful searches in violation of the employee's privacy rights, then such a policy is likely lawful.

Question: A full-time salaried employee who anticipated being terminated following numerous complaints from parents, co-workers, etc., recently claimed that she was injured by jamming her finger in a standard door. She has since filed a workers' compensation claim. Can the employer still terminate this employee for her actions even though she has filed such a claim? What about the ability of employers to terminate workers who are receiving workers' comp?

Answer: Although federal statutes afford remedies to certain classes of employees injured from work-related incidents, most workers' compensation issues arise at the state level. All 50 states and the District of Columbia have workers' compensation laws to protect the interests of employees suffering from such injuries. In general, these laws are designed to provide an income substitute for employees who are injured in the workplace.

Workers' compensation statutes, by and large, contain provisions requiring employers to insure their employees and reimburse employee-medical costs and a portion of net wages if the injury arises out of or in the course of employment.

The remedy is typically exclusive, however, preventing employees from bringing tort actions against their employers for personal injury. Because workers' compensation laws vary from state to state and have been interpreted differently under various federal and state jurisdictions, the rights of employers and employees may diverge.

Since nearly all employees work not under contract, but at-will, employers have the prerogative to discharge their employees for any nondiscriminatory reason or no reason at all. Therefore, an employer can terminate an employee who has either filed for or is in receipt of workers' compensation, as long as it is not in retaliation for initiating the claim or receiving benefits.

Courts have recognized a cause of action for violations of the underlying public policy of a statute, in which no such cause of action expressly exists. In the landmark decision of Frampton v. Central Indiana Gas Co., 260 Ind. 249 (1973), the Indiana Supreme Court held that employer retaliation against an employee for filing a workers' compensation claim violated the public policy of Indiana's workers' compensation statute and is actionable in a court of law.

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In general, the cause of action for wrongful discharge in retaliation for exercising workers' compensation rights is based in tort, not contract, and states have either expressly provided for such a cause of action under workers' compensation statutes or the courts have implied that it exists in the statute or in common law.

There are a number of examples of express provisions forbidding retaliation for filing the workers' compensation claim. For instance, the West Virginia Code § 23-5A-1 provides: "No employer shall discriminate in any manner against any of his present or former employees because of such present or former employee's receipt of or attempt to receive benefits under this chapter."

Similarly, under § 25-5-11.1 of the 1975 Alabama Code: "No employee shall be terminated by an employer solely because the employee has instituted or maintained any action against the employer to recover workers' compensation benefits." For other examples, see O.R.C. § 4123.90 (Ohio); McKinney's Worker's Compensation Law § 120 (New York); and West's Ann. Cal. Labor Code § 132a (California).

Like Indiana, other states have created a cause of action for wrongful discharge for employer retaliation against an employee filing a workers' compensation claim or receiving such benefits. For example, in Colorado, the Supreme Court afforded such protection. See Crawford Rehab. Svcs., Inc. v. Weissman, 938 P.2d 540, 552 (Colo. 1997). For other cases finding a cause of action , see Nixon v. Waste Mgmt., Inc., 156 Fed. Appx. 784, 788 (6th Cir. 2005) (Tennessee); Harper v. AutoAlliance Int'l, Inc., 392 F.3d 195, 204 (6th Cir. 2004) (Michigan). Other states have acted similarly, including, but not limited to, Arizona, Illinois, Kansas, New Jersey, Oregon, Nevada and Pennsylvania.

To prove wrongful discharge based on retaliation for filing a workers' comp claim or receiving benefits, an employee generally must show that (1) he was an employee of the defendant employer before his work-related injury; (2) he filed a claim or the equivalent (discussed below); (3) he was discharged; and (4) the employer possessed a retaliatory motive that proves a causal connection between the discharge and the employee's exercise of his rights (discussed below). See, e.g., Hansome v. Northwestern Cooperage Co., 679 S.W.2d 273 (Mo. 1984).

Under the second element, courts have addressed the ways in which employees can satisfy the obligation of filing a claim, which include, but are not limited to, the receipt of benefits, hiring counsel or merely suffering a work injury.

An employer's mere knowledge of an employee's intent to file a workers' compensation claim can be enough to fulfill the requirement. See McBride v. Mutual Life Ins. Co. of New York, 693 N.Y.S.2d 732 (App. Div. 3d Dep't 1999). Even threatening to file a workers' compensation claim can lead to liability. See Worsham Steel Co. v. Arias, 831 S.W.2d 81 (Tex. App. El Paso 1992).

The fourth element, which requires a causal connection between the discharge and the employee's exercise of his rights to file for worker's compensation, has also been the subject of increasing scrutiny. This is largely due to the fact that there is no generally accepted definition of specifically what temporal proximity means for the purpose of identifying a causal connection.

Employers have various defenses to claims of retaliatory discharge of an employee who has filed for worker's compensation, including, but not limited to, the employee not performing the responsibilities of his job, see, e.g., McKiness v. Western Union Telegraph Co., 667 S.W.2d 738 (Mo. Ct. App. 1984); the employee's injury-related absences were excessive, see, e.g., Kern v. South Baltimore General Hospital, 66 Md. App. 441 (1986); the employee's discharge was part of a reduction-in-force or for legitimate business reasons, see, e.g., Michelson v. Exxon Research & Engineering Co., 808 F.2d 1005 (3d Cir. 1987); or the employee was guilty of misconduct, see e.g., DeFord Lumber Co. v. Roys, 615 S.W.2d 235 (Tex. Civ. App. Dallas 1981).

All in all, filing for workers' compensation benefits does not automatically mean that employers are barred from exercising their rights to terminate employees. Showing merely that an employee was discharged after having filed for workers' compensation benefits is not by itself enough to establish that the employer has violated the law.

That said, employers must appreciate the appearance of wrongdoing for terminating an employee injured on the job, and assure that any discipline of such an employee is for legitimate business purposes and unrelated to the employee's workers' compensation claim.

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer Rose in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.

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