Telephone Conversations Across States

E-Mail Privacy in the Workplace Mark Rasch, 2006-07-31

Different states, different lawsThe legal issues around e-mail monitoring all began with the telecommunications giant WorldCom – remember them? Kelly Kearney and Mark Levy lived in California and worked for a company that was acquired by WorldCom. Their valuable WorldCom stock options were handled by the Atlanta branch of Salomon Smith Barney (SSB). When their options went underwater, they sued SSB, and learned that their phone calls from California to Atlanta had been routinely tape recorded in Atlanta.

That's where the trouble started. You see, Kearney and Levy didn't know they were being recorded. Under California law, you can't record someone's conversation without telling them. Of course, no such law exists in Georgia where the recordings were actually made. You see, Georgia law only requires that one of the parties to the conversation consent to the recording to make it legal. Thus, you can record your own conversations, or, if your boss has obtained your consent (they say it's "my way or the highway"), your boss may record your conversation with others. California, on the other hand, requires that everyone on the call consent to the monitoring. When Kearney and Levy learned they were recorded in Atlanta, they went to court in California and sued under California law. On July 17, the California court ruled that California's interest in promoting privacy outweighed Georgia's interest in not having its residents spend time in California jails. The case, Kearny v. Salomon Smith Barney, really focused on the concept of "conflict of laws" – or what to do when one state permits conduct that another state prohibits. Essentially, you balance the competing interests, and in this case, California's court said California's interests prevailed. Recognizing that it was a close case, the court did not apply its finding retroactively, and did not fine SSB for its actions.