{"id":31683,"date":"2016-03-31T19:21:50","date_gmt":"2016-04-01T00:21:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/walking-the-workplace-privacy-tightrope-seizing-your-rights-as.html"},"modified":"2017-11-07T10:41:52","modified_gmt":"2017-11-07T15:41:52","slug":"walking-the-workplace-privacy-tightrope-seizing-your-rights-as","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/business-operations\/walking-the-workplace-privacy-tightrope-seizing-your-rights-as.html","title":{"rendered":"Walking the Workplace Privacy Tightrope: Seizing Your Rights as an Employer: Without Violating Those of Your Employees"},"content":{"rendered":"
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Employers’ concerns in today’s workplace cannot be limited to production, profits and competition. Prudent employers must accept responsibilities and must also be guardians of employees’ rights, one of which is the right to privacy.<\/p>\n

Since 1990, the number of employees subjected to electronic surveillance has increased from approximately 8 million to more than 20 million. Privacy Rights Endangered According to ACLU Report, Individual Employment Rights<\/a><\/i> (Bureau of National Affairs, Labor Relations Reporter), September 24, 1996 at 2. One-third of mid-sized and large companies monitor employees’ telephone calls, voice mail, computer files and e-mail or videotape employees. Most Large Employers Engage in Monitoring, Survey Says, Individual Employment Rights<\/i> (Bureau of National Affairs, Labor Relations Reporter), June 3, 1997 at 3. "Overall, 63% engage in one or more monitoring and surveillance practices." Id. Most companies inform employees of the surveillance and monitoring<\/a>, but it is estimated that 23 percent do not. Id. Additionally, 50 percent of Fortune 500 companies have implemented employee drug testing. Note, Workers, Drinks and Drugs: Can Employers Test<\/i>? 55 U.Cin. L. Rev. 127 (1986).<\/p>\n

There are many reasons why employers monitor the activities of their employees. Employers may be liable for the misconduct of employees. Additionally, theft is a costly and continuing problem. Causes of low productivity may be uncovered by surveillance, open or surreptitious; and prevention of workplace violence may justify employer intrusion on workplace privacy. For these and other reasons, employers are closely monitoring employees. The law of workplace privacy has developed in recent years in response to increased employer surveillance, monitoring and testing. This paper will discuss employees’ right to privacy and suggest methods by which employers can protect their legitimate interests without violating these employees’ rights.<\/p>\n

Stopping Leaks to the Competition: How to Discourage Employee Non-Disclosure of Trade Secrets, Financial Data, Future Plans and Compensation<\/b><\/p>\n

In the course of their work, some employees become privy to important information about their employer. Trade secrets, customer lists, vendor and financial information, compensation received by management or other employees and future strategy, may qualify as proprietary and therefore confidential.<\/p>\n

Agreements ("Covenants") not to compete are one way to attempt to control disclosure of confidential information. Such agreements prohibit the employee from working for a company which competes with the employer or competing directly on his or her own behalf. NRS \u00a7 613.200(2)(a).<\/a><\/p>\n

Covenants not to compete must be reasonable in their scope and duration. Id<\/i>. In Hansen v. Edwards<\/a><\/i>, 83 Nev. 189, 426 P.2d 792 (1967), the Nevada Supreme court developed a test for use in determining reasonableness. The court held the dispositive issue was whether the covenant imposed upon the employee any greater restraint than was reasonably necessary to protect the business and good will of the employer. Id<\/i>. The Hansen court stated:<\/p>\n

An agreement on the part of an employee not to compete with his employer after termination of the employment is in restraint of trade and will not be enforced in accordance with its terms unless the same are reasonable. Where the public interest is not directly involved, the test usually stated for determining the validity of the covenant as written is whether it imposes upon the employee any greater restraint than is reasonably necessary to protect the business and good will of the employer. A restraint of trade is unreasonable, in the absence of statutory authorization or dominant social or economic justification, if it is greater than is required for the protection of the person for whose benefit the restraint is imposed or imposes undue hardship upon the person restricted. The period of time during which the restraint is to last and the territory that is included are important factors to be considered in determining the reasonableness of the agreement.<\/p>\n<\/blockquote>\n

Also see Jones v. Deeter<\/a><\/i>, 913 P.2d 1272 (Nev. 1996) (covenant not to compete unenforceable, as five year duration is not reasonably necessary to protect the business and placed too great of hardship on employee); Hansen v. Edwards, 83 Nev. 189, 426 P.2d 792 (1967) (circumstances of the case warranted a reduction of the area of restraint in a noncompetition covenant, from a territory included in a radius of 100 miles of a city to a smaller area confined to the limits of said city).<\/p>\n

Covenants not to compete do not provide full protection against disclosure of information. These agreements do not prevent an employee from disclosing confidential information to a non-competing employer or third parties in general. To provide further protection, Nevada has a statute allowing employers to enter into an agreement with employees to prohibit disclosure of trade secrets, customer lists and other confidential information. NRS 613.200(4)(b) states:<\/p>\n

The provisions of subsection 1 do not prohibit a person, association, company, corporation, agent or officer from negotiating, executing and enforcing an agreement with an employee of the person, association, company or corporation which, upon termination of the employment, prohibits the employee from:<\/p>\n

(b)Disclosing any trade secrets, business methods, lists of customers, secret formulas or processes or confidential information learned or obtained during the course of his employment with the person, association, company or corporation.<\/p>\n<\/blockquote>\n

The agreement must, again, be reasonable in its scope and duration. Id<\/i>. The validity of the agreement depends upon the peculiar facts in each case. However, an agreement may be invalid if it goes beyond the limits "necessary to protect the employer’s interests and constitutes an unreasonable restraint of trade." 27 Am.Jur.2d Employment Relationships \u00a7 225 (citing State Medical Oxygen Supply v. American Medical<\/a><\/i> Oxygen, 240 Mont. 70, 782 P.2d 1272 (1989)).<\/p>\n

Even without a non-disclosure agreement, confidential information obtained by an employee during employment by reason of his or her position, cannot be used or disclosed to the detriment of the employer. "An employee is obligated not to reveal employer’s confidential information during employment and after termination of employment." 27 Am.Jur.2d Employment Relationship \u00a7 224.<\/p>\n

At termination of employment, an employee who conceals confidential customer information or removes an employer’s books containing customer or other confidential information, is precluded from using the information and is required to return the materials to the employer. 27 Am.Jur.2d Employment Relationship \u00a7226 (citing NCH Corp. v. Broyles<\/a><\/i>, 749 F.2d 247 (5th Cir. 1985); Advanced Magnification Instruments, Ltd. v. Minutemen Optical Corp<\/a><\/i>., 522 N.Y.S.2d 287, 135 A.D.2d 889 (3d Dept. 1987); Gonzales v. Zamora<\/a><\/i>, 791 S.W.2d 258 (Tex. App. Corpus Christi 1990)).<\/p>\n

An employer, therefore, has some protection against disclosure of confidential information even without having a non-disclosure agreement. "However, an employee can use to his or her own advantage all the skills and knowledge commonly used in the trade that the employee acquired during the employee’s tenure of employment." (emphasis added) Id. (citing Service Center of Chicago, Inc. v. Minogue<\/a><\/i>, 180 Ill.App.3d 447, 535 N.E.2d 1132 (1989)).<\/p>\n

One significant prerequisite to the viability of non-disclosure of sensitive information is that the information be treated by the employer as proprietary or confidential and that it not be readily available to persons not affiliated with the employer. See 27 Am. Jur. 2d Employment Relationship \u00a7 224.<\/p>\n

Personnel Files: Who has Access<\/b><\/p>\n

Employees and former employees often request to see their personnel files. An employee might make such a request to see if the information is correct or current. A former employee might request to discover the stated reason for discharge, to assist an attorney evaluating a wrongful termination suit.<\/p>\n

Nevada has a statute concerning access to personnel files. NRS 613.075<\/a> provides:<\/p>\n