Are your company recording policies compliant with federal and state wiretap acts?

On Jan. 12, a tech employee uploaded a TikTok video of herself being laid off from her job. In less than 24 hours, the nine-minute video had more than 25 million views across multiple social media platforms. While this employee’s disastrous layoff video garnered more views than most, she is not the first to secretly record a workplace conversation and upload it to social media. Her video is part of a growing trend of employees filming conversations with coworkers.¹

While employees and employers have legitimate reasons to want to record work-related conversations, potential employees or even clients, they should be aware of the potential legal repercussions for doing so secretly. Federal and state wiretapping laws seek to protect parties in a conversation from being secretly recorded and to keep non-participants from “listening in.” Especially after COVID-19, more and more workplace conversations take place online and over the phone, with the parties often located in different states from one another. The legality of recording phone and video chat conversations, the consequences of doing so without proper consent and best practices for companies who do business in more than one state are on the minds of many employers.

Federal Law

Under the Federal Wiretap Act (FWA), it is against the law to secretly record a telephone conversation, use the information from the illegal recording or disclose information from a secret recording.² However, those actions are only illegal if none of the parties to the conversation consents to the recording. If even one participant consents, the FWA does not prohibit recording the conversation, so long as the recording will not be used to commit a crime or tort.³

Violations of the FWA may result in up to five years in prison and up to $10,000 in civil fines for the violator, per violation. The FWA allows the people whose conversations were illegally recorded to sue the person who illegally recorded, used or disseminated them. This “private right of action” means that, in addition to being open to criminal penalties, a person who violates the FWA may have to pay compensatory and punitive money damages, as well as attorney’s fees and costs. The person suing may also obtain injunctive relief to prevent further use of the recording and further recording.

State Laws

One-Party Consent States

In addition to the FWA, 49 states have laws aimed at protecting the privacy of telephone or videochat communications. Most of those state laws are like the FWA: they permit call recording if there is consent of at least one party. Those states are called “one-party consent states.” Generally, in a two-person conversation, the consenting party is also the party who wishes to record. Like the FWA, one-party consent states require that the purpose of the recording must be a lawful one, rather than to commit a crime or tort.

All-Party Consent States

The general rule is that if a party to a conversation wants to record it, they can. However, there is a big caveat: “all-party consent states.” Sometimes referred to as “two-party consent states,” they require that every person who is part of a conversation give consent to be recorded. Otherwise, the recording is illegal, and the party who makes, uses or distributes the details of the recording may be subject to both criminal penalties and civil damages.

Despite nearly every state enacting a wiretap law, not everyone agrees about whether some states are one or all-party consent states. What makes this area of law murky is that courts interpret the language of state law, so a law on the books may have different interpretations in practice. At least 10 states are all-party consent states.⁵ But, because of court interpretation, some attorneys and legal scholars argue that as many as 15 states are all-party consent states. The tables above show the latter approach, with 15 states as all-party consent states.

Which Law Applies?

Tennessee is a one-party consent state.⁷ The law provides that it is a felony to record an in-person or phone conversation without the consent of at least one party, or with criminal or tortious intent. In addition to the criminal felony penalty, violators are subject to civil damages, an injunction and/or a restraining order. Because the law requires only the consent of one party, the participant who consents can also be the one who records, and she does not have to notify or get consent from the other parties involved. For participants who are all located inside the bounds of the state of Tennessee when the conversation takes place, this Tennessee statute generally applies.

The question for Tennessee companies who conduct business outside Tennessee, then, is whether Tennessee’s law applies to conversations with participants outside the state, especially when the other participants are located in an all-party consent state. In those situations, to avoid criminal and civil liability, a business and its employees should adhere to the law of the all-party consent state.

That said, determining what law applies is not as straightforward as it might first appear. If a company takes the position that it will only adhere to all-party consent when speaking with parties in an all-party consent state, and otherwise will adhere to a one-party consent approach, it should proceed with caution.

Problems Predicting Which Law Applies

Adhering to the rules of different states requires the business and every employee to keep up with the rules in every state. That starts with memorizing the list of states that are all-party consent states, but it doesn’t end there. As noted above, the list of all-party consent states is disputed, and nuanced differences state-to-state make adhering to the requirements challenging, even for other one-party consent states.8

Court Interpretations

Determining which states are all-consent states means looking for more than just the law as written in the state statute. A business and its employees would also need to be aware of court decisions in each state interpreting the statute. For instance, Nevada has what appears to be a one-party consent law “on the books,” but the Nevada Supreme Court interpreted Nevada to be an all-party consent state for recordings between private parties.⁹ Meanwhile, Michigan’s law reads as if it is an all-party consent law, but the state Supreme Court has interpreted it as a one-party consent law when applied to private individuals.10

Privacy Expectation Determinations

Some states build a “privacy expectation” into their wiretap statute, meaning that before a court considers whether the recording was made with the proper consent, it must determine whether the parties had a reasonable expectation of privacy during the conversation. In Maryland, for example, all parties must consent to a recording of both in-person and phone conversations, but only if the conversation is taking place in an area where the parties have a “reasonable expectation of privacy.” If the person on the other end of the line is at home, a court might consider that a reasonable expectation of privacy. If they are working from the local coffee shop? Probably not, but that is up to the court to decide, long after the recording would have been made.¹¹

Definition of Consent

In the same way that “reasonable expectation of privacy” is subject to interpretation, “consent” may be defined differently from state to state. For instance, Washington is an all-party consent state where consent is obtained via a reasonably clear announcement made to all parties during the recording.¹² California requires affirmative consent from all parties, or an audible beep intermittently throughout the recording.¹³ But in states like Illinois, “knowledge and consent are not synonyms,” so explicit consent to be recorded is usually required. Meanwhile, courts in Connecticut allow implied consent, but whether consent is implied depends on the surrounding circumstances of each case.¹⁴

Choice of Law Analysis

Predicting what law applies to a recording is especially risky considering that a subsequent lawsuit may be filed in federal court but include state law wiretap claims. The parties involved, the court and jurisdiction where a party files suit, the claims alleged, and the circumstances of the case all determine what law the court might apply. The determination sometimes depends on a “choice of law” analysis. Depending on the parties, rules, claims and facts involved, a court in one state might find that it is bound to apply the law of another state. So, it could turn out that a federal court in Tennessee finds it should apply California law to a particular situation. Since the two states have different consent requirements, the fact that Tennessee only requires one party to consent would have no weight in a case where the court has determined it should apply California’s all-party consent laws.

Risks of Miscalculating

Those who wish to record conversations with only one party’s consent when the law allows might think it worth the risk of making an educated guess about what law will apply to which participants. While it is unlikely that most recordings will be discovered and then disputed in court, the risks of miscalculating the applicable law are serious. The FWA, as well as all states with wiretap statutes, provides for criminal penalties for violators, ranging from felony charges to misdemeanor charges and heavy monetary fines. Federal law and most states also make provision for private lawsuits, so participants whose conversations were illegally recorded may sue the violator for compensatory and punitive money damages, attorneys’ fees and expenses, and injunctive relief.¹⁵ Notwithstanding the legal peril, companies in 2024 must also be cognizant of the effect social media has on brand reputation and professional relationships. A business or its employees that gain a reputation for secretly recording risk more than legal penalties. Avoiding reputational harm and financial loss provides further incentive for businesses and employees to follow best practices when seeking to record conversations.

Best Practices for Employers

Though the ins and outs of the various privacy and wiretap acts can be confusing, businesses and their employees can avoid breaking the law by following a policy that favors disclosure and consent.

At a minimum, err on the side of caution:

Because the applicable law depends so highly on the facts of each situation, the best way for businesses and executives to avoid legal repercussions is to, at a minimum, follow the law of an all-party consent state when speaking with anyone in a different state. For instance, if a Tennessee company representative is speaking to an employee, vendor, client or potential employee in California, the company rep should disclose to the parties on the call that the call is being recorded. Guessing at what law will apply leaves the company and its representative in legal jeopardy. When weighing the risk of disclosing against the risk of criminal and civil penalties, the best practice is always to use the law of the more restrictive state.

Be transparent:

Alternatively, a business might decide as part of its company policy to disclose recording no matter what state the participants are in. A policy of disclosure and consent for all recorded conversations may be beneficial for the following reasons:

1. becomes habit-forming: if employees always ask for consent to record, the business lowers the risk of the employee forgetting to do so when an all-consent law applies;
2. encourages transparency between management levels, a corporate trait highly valued by employees;
3. may “lower the temperature” of potentially contentious conversations by removing distrust from the outset;
4. protects employees from later accusations of illegality: if proper consent has been acquired before recording, a recorded conversation may sometimes be used to refute accusations of discrimination or other workplace violations.

Note, acquiring consent does not have to be adversarial. The following examples may be instructive:

Ensure the business has a written recording policy in place:

Even when one-party consent recordings are legal in the state, the better practice is to implement a written “no-recording” policy in the workplace. Such policies benefit employees and employers because they dissuade employees from secretly recording conversations, encourage trust and candid conversation amongst coworkers and managers, and help protect company information.

Additionally, a no-recording policy provides grounds for termination if an employee violates the policy.

Note, however, that some federal laws require employees to be allowed to make recordings in certain situations. For example, the National Labor Relations Act requires an employee be allowed to record discussions related to “concerted activity” such as unionization. So, employers should avoid “blanket” or overly broad policies that might illegally prohibit protected activity. And of course, the “no-recording” policy must be neutral in its language and application.

Bear in mind, even if a “no-recording” policy is in place, employees secretly recording meetings or conversations is common. Avoid negative recordings by ensuring all employees receive harassment and discrimination training to avoid inappropriate workplace conversations.

Best Practices:
Disclose and Obtain Consent

There are certainly legitimate reasons why a business might wish to record phone calls and video chats. However, the business and its representatives must comply with state and federal law when doing so. Given the complexity and intersection of various state and federal laws, coupled with an increasingly remote workforce and customer base, a business should adopt practices that place its representatives in the best legal position to avoid the serious criminal penalties and civil damages that result from violations of wiretap acts. Even where a representative is certain that the applicable law in a particular situation requires only one-party consent, it is important to consider the other ramifications of secret recordings: loss of employee trust, public image and a reputation for a lack of transparency. Considering the risks in an increasingly digital age, most businesses and representatives would do well to disclose and get consent any time a recording takes place.

“The lesson to be learned is that one should be wary of surreptitiously taping a telephone conversation because this practice can easily subject the person taping to civil penalties and criminal charges.”¹⁶  |||

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KATELYN BARHAM graduated in the top 20% of her Belmont University College of Law class where she won numerous awards and was an active member of the Belmont Law Review, the Moot Court Team and a member of the Dean’s Scholars Program. She used her summers to learn as much as possible through clerkships, summer associate positions, research positions and a fellowship. Barham is an associate at Meridian Law in Brentwood.

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NOTES
1. See, for instance, Raiken, Amber: “Woman divides viewers by sharing nine-minute video of herself getting fired.” Jan. 13, 2024. Woman divides viewers by sharing nine-minute video of herself getting fired | The Independent; and Toress, Monica: “TikTokers Are Secretly Filming Their Layoffs. There’s A Major Risk With That. Jan 24, 2024, Is It Legal To Film Your Layoff? The TikTok Trend, Explained.” | HuffPost Life.
2. The Federal Act currently in place is called the Wiretap Act, as amended by the Electronic Communications Privacy Act of 1986. It is recorded as 18 U.S.C. §§ 2510 to 2523
3. An example of a criminal purpose might be recording the person to use the recording as extortion. An example of a tortious purpose might be to record the conversation for use in a defamatory article.
4. Since the District of Columbia is governed by federal law, the Federal Act applies, and it requires only the consent of one party.
5. The “at least” caveat here really highlights the risk for a party who wishes to record without getting consent from all parties. While some legal scholars state that only 10 states require all-party consent, others believe, based on court decisions and nuances in the various state statutes, that the number is as high as 15. Because of the disagreement about which states truly require consent from all parties, the best practice for companies that do business in more than one state is always to disclose that a call or videochat is being recorded.
6. Vermont is the only state with no law regarding recording of phone conversations. Some attorneys agree that, in the absence of a state law, the default should be the Federal Act, making Vermont a one-party consent state. However, others argue that, unless and until the state legislature affirmatively adopts the one-party consent rule, the safest practice is to get consent from all parties involved.
7. See Tenn. Code. Ann. § 39-13-601, § 39-13-604 (definitions), § 39-13-602 (penalty), § 39-13-603 (civil damages).
8. For instance, Oregon divides its consent requirements between in-person and phone communications, making it a one-party state when recording phone communications, but an all-party state when making in- person recordings. OR Rev. Stat. § 165.540, § 133.739.
9. NV Rev. Stat. § 200.620; Lane v. Allstate Ins. Co., 114 Nev. 1176 (1998).
10. Mich. Comp. Laws Ann. § 750.539(c); Sullivan v. Gray, 324 N.W.2d 58 (1982).
11. Consider Coulter v. Bank of Am., 28 Cal. App. 4th 923 (1994), where a California bank employee planning to sue his employer secretly recorded conversations with management. After filing his lawsuit, he presented tapes containing 160 conversations with various management employees. The management employees filed suit against the employee for violating California’s Privacy Act, which required all-party consent to recorded conversations, when the participants have a reasonable expectation of privacy. Even though the conversations took place one-on- one in a private office, the employee argued the managers had no expectation of privacy because the managers knew the details of the conversations would be passed on to other managers. The court rejected that argument, finding the managers had an expectation of privacy and did not give consent to be recorded. Not only did the bank employee lose his lawsuit, but he also had to pay $132,000 in damages to the managers: $3,000 each for his forty-four specific violations of the Act.
12. WA Rev. Code § 9.73.030, §9.73.080, §9.73.060.
13. CA Penal Code § 632, §637.2, Cal. Pub. Util. Code Gen. Order 107-B(II)(A). Flanagan v. Flanagan, 41 P.3d 575 (Cal. 2002).
14. See, for example, United States v. Daniels, 902 F2d 1238 (7th Cir. 1990), demonstrating that the 2nd Circuit Court of Appeals (which hears appeals from Connecticut) employs a wider and more generous interpretation of consent than the 7th Circuit Court of Appeals (appeals from Illinois). In Daniels, an inmate who signed a form stating he understood his calls “may” be recorded did not give consent to the recording of his phone calls. The court noted “knowledge and consent are not synonyms.” In Burrow v. Sybaris Clubs Int’l Inc., No. 13 C 2342, 2015 WL 1887930, *4 (N.D. Ill. Apr. 24, 2015) an Illinois federal district court applied the same logic from Daniels to the employee context, hinting that a “general awareness” among employees that the employer would record phone calls made at the reception desk probably would not amount to consent from every employee.
15. See, for instance, Coulter v. Bank of Am., 28 Cal. App. 4th 923 (1994), where a plaintiff was found to have violated the wiretap act. He lost his suit and had to pay the defendants $3,000 per violation, resulting in $132,000 in damages.
16. Carol M. Bast, Conflict of Law and Surreptitious Taping of Telephone Conversations, 54 N.Y.L. Sch. L. Rev. 147, 148 (2010).