Wiretapping employees – let’s run the tape?

A sales adviser of an exclusive car dealer proved to be overly enthusiastic when he confided to a customer, in a phone call during working hours, that he was starting out for himself “in the background” and asked the customer whether they might be interested in his own Audi Rs6.

What the sales adviser didn’t know, however, was that his employer was secretly listening in on his phone calls with customers. The fact is that the car dealer suspected the sales adviser of using its customer file during working hours to compete with it, after it had issued the sales adviser with two official warnings for being late, in response to which the adviser told the dealer that he might look for work elsewhere. The sales adviser started taking more and more calls from customers outside the office premises and ignored instructions to take business calls inside the office.

Summary dismissal

After the aforementioned phone tapping, the sales adviser was summarily dismissed. The sales adviser principally asked the subdistrict court to set aside the dismissal and, alternatively, claimed fair compensation of almost EUR 30,000. He argued that the car dealer had acted culpably and had grossly breached his privacy by recording his phone calls in secret and without his consent. The car dealer, for its part, asked the subdistrict court  to terminate the employment contract should it set aside the dismissal.

Secret sound recordings – requirements under the GDPR

The subdistrict court (click here, Dutch only) found that an employer may only record the phone calls of his employees if it fulfils all the requirements under the GDPR. The recordings must be necessary and proportionate, and the employer has to be unable to safeguard its legitimate interest in the recordings in a less intrusive manner. Secret recordings are only permitted in exceptional circumstances, such as where there is a suspicion of criminal offences or malpractices having been committed within the company. In all other cases, the participants in the call:

  • should agree to the recording beforehand;
  • should know when the recording starts and ends; and
  • should be informed of the purpose of the recording, how it is secured, and be told that it will not be stored any longer than is necessary for that purpose.

According to the subdistrict court, the suspicion that the sales adviser was busy starting up competing activities during working hours did not justify making secret recordings of phone calls. This was not altered by the fact that the employee had registered himself as a car salesman with the Chamber of Commerce after he was dismissed.

Breach of privacy → exclusion of unlawfully obtained evidence?

The car dealer had to comply with the said GDPR requirements because it did not meet the high threshold for secret sound recordings. Given that it had failed to do so, it had unlawfully breached the sales adviser’s privacy. The evidence gleaned from the sound recordings had therefore been obtained unlawfully.

According to the subdistrict court, this did not automatically mean that the evidence had to be excluded. In principle, the general public interest in fact finding and the parties’ interest in being able to make a plausible argument for their submissions outweigh the interest in the exclusion of unlawfully obtained evidence. According to the Dutch Supreme Court (click here, Dutch only), the exclusion of such evidence is only justified if there are concomitant circumstances.

According to the subdistrict court, there were indeed such concomitant circumstances, given that:

  • the car dealer had based its suspicion of competing activities on facts that, at most, justified the suspicion that there might be competing activities (or their initiation);
  • there was no evidence that the sales adviser would have refused to enter into talks and put his cards on the table, meaning that the investigation using secret sound recordings was not (or not yet) necessary;
  • aside from the listing with the Chamber of Commerce, there was no evidence that the sales adviser had in fact started up a competing business.

The sound recording consequently had to be disregarded and it could not, therefore, be established that the sales adviser had been rightly summarily dismissed. Given that it was established, according to the subdistrict court, that the sales adviser had (in the meantime) started to make preparations for a competing business, the employment contract was dissolved due to an impaired working relationship and the car dealer was ordered to make a transition payment. The subdistrict court concluded that there was no cause to award fair compensation.

Recommendations

In a nutshell, there must be exceptional circumstances for an employer to be able to record phone calls of an employee in which it does not take part. If an employer suspects that an employee is busy starting up a competing business during their employment, it would be well advised to first enter into talks with the employee and voice its suspicions. Should such suspicions be justified, a suspension and dismissal would seem obvious. Although the employer was out of line by recording phone calls and summarily dismissing the employee, the financial consequences of doing so were limited to paying the employee’s salary until the new end date and making the transition payment. The employer would have owed the same payments even if it had adhered to the rules.

Eric van Dam (evd@clintlegal.com / +31 20 820 0330)