Six years ago, the Sheraton Boston Hotel and Tower agreed to pay more than $200,000 to settle a lawsuit brought by the Boston Hotel Workers Union, Local 26, and the Hotel, Restaurant and Institutional Bartenders Union, AFL/CIO Local 26. The locals alleged that the hotel violated Massachusetts' privacy law when it videotaped workers without their knowledge in its employee locker room seven years earlier (Clement v. ITT Sheraton Boston Corp., Mass.Super.Ct., Suffolk Cty, Case No. 93-0909-F).

But lawsuits like that one haven't stopped companies from using video equipment to monitor their employees' activities. According to a 2004 survey conducted by the American Management Association, most of the U.S. companies surveyed engage in one or more monitoring or surveillance activities. Most midsize and larger companies now videotape employees, record employees' phone calls or voice mail, or review computer files and E-mail. What's shocking, given the potentially high cost of having to defend against privacy-violation claims, is that so many employers fail to prepare and get employees to acknowledge their electronic surveillance and monitoring policies.

Most of employers' monitoring and surveillance is designed to curtail theft and drug and alcohol use, identify potential workplace risks, and measure and improve employee performance. It has been reported that three-quarters of all drug users admit to using drugs at work, and 60% of them admit to dealing drugs at work. Given these statistics, it's not surprising that 20% of the drug users reported drug-impairment-related accidents on the job. Employers and their insurers have to take some kind of action to control this situation, and more and more often, they're resorting to workplace monitoring and surveillance tactics.

Advances in technology have increasingly made it easier for them to do so, too: A decent closed-circuit TV (video surveillance) equipment costs less than $3,000, and the cameras, using fiber-optic technology, can acquire a good image from a hole the size of a pencil point.

But companies that go down this track have to ponder how they conduct their surveillance operations, and how much surveillance is legal. The answers often lie with the jurisdiction in which the surveillance occurs, whether the camera is hidden or in open view, whether the area is open to public view, and, interestingly enough in many cases, whether the video includes sound.

The prime federal statutory law in this area is the Electronic Communications Privacy Act of 1986, an amendment to Title III of the Omnibus Crime Control and Safe Streets Act of 1968 commonly known as the "wiretap law." The ECPA was adopted initially to govern third-party interceptions of electronic communications, not to govern employers' rights to monitor their workers.

The ECPA provides civil and criminal penalties for any person who intentionally intercepts, uses, or discloses "any wire, oral, or electronic communication." "Electronic communication" is defined as "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photo-electronic, or photo optical system that affects interstate or foreign commerce." The ECPA also affords recourse for the use or recitations of information obtained from an intercepted communication.

Most of the cases developed under the ECPA involve criminal-justice and investigatory wiretaps of telephone and E-mail communications. In the civil application, most of the case law, until recently, involved telephone communication and E-mail monitoring. In these cases, the courts have looked to whether a reasonable business justification existed for the monitoring, whether the employee was notified of the employer's right to monitor, and whether the employer acted consistently in connection with its monitoring. In addition to covering E-mail and telephone interceptions, the ECPA also governs the sound portion of any videotape recording. But silent videos are exempted from the act. (Many state laws now cover video with or without sound as a privacy criminal violation.)

In order to monitor audio as part of the video, an employer has to jump through the hoops of the ECPA. The two prime exceptions to the ECPA afford employers broad rights to monitor their employees, providing that the employer strictly satisfies these exceptions. An employer may monitor employee conversations if the monitoring occurs (1) in the ordinary course of business, or (2) with the employee's express or implied consent.

Given the lack of protection afforded by the ECPA against employee video surveillance, many employees are seeking recourse under common law rights of action, federal and state constitutional protections, and state privacy laws. They're also filing grievances with their unions, and their unions are seeking redress under the National Labor Relations Act.