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As part of Outten & Golden's collaboration with Labaton Sucharow on the Corporate Whistleblower Watch newsletter, Sage Counsel is an occasional feature addressing common issues at play in a wide range of whistleblower issues

As part of Outten & Golden's collaboration with Labaton Sucharow on the Corporate Whistleblower Watch newsletter, Sage Counsel is an occasional feature addressing common issues at play in a wide range of whistleblower issues

The Pitfalls of Surreptitious Recordings

Q Can an employee secretly record a coworker?

A It depends. And the advisability of doing so is an altogether different issue.

Generally, states fall into two categories when it comes to recordings. In a "one-party" consent state such as New York, the consent of only one party is necessary to record the conversation. Notably, the individual making the recording may also serve as the consenting party. Conversely, in an "all-party" or "two-party" consent state such as California, all parties to a conversation must consent to the recording. If an individual in an all-party consent state records a conversation without consent, he or she has likely violated state law. Telephone calls or videoconferences, which frequently occur across multiple states or countries, further complicate this issue and must be assessed with consideration of all the relevant states or countries' laws.

Whether or not an individual in a one-party consent state should record a coworker is a murkier question. Above and beyond the legal issue of consent, company policy will often prohibit employees from recording their coworkers. Firing an employee who violates the policy is generally a legitimate grounds for termination. However, some courts have developed case law making it protected activity to make a recording in support of a discrimination or retaliation claim. For example, the Second Circuit Court of Appeals held in 1989 that tape recordings of workplace conversations in support of an age discrimination claim, while "disloyal," were nevertheless protected activity. In our practice, we regularly come across these issues. Checking state or national law with respect to surreptitious recordings and determining the full reach and legality of company policies to bar such conduct are critical measures to support client claims.


Employment Protections and the Reporting of Misconduct

Q: Does a Dodd-Frank whistleblower need to prove the underlying violation in order to be protected from retaliation?

A: No. An employee need only have a reasonable belief that a violation occurred.

A common misconception held by employees- and employers- is that there must be an actual violation of law in order to receive protection under Dodd-Frank's anti-retaliation provision. Employees are often reluctant to come forward unless they can furnish "proof" of the illegal conduct. Employers sometimes think they are off the hook if their investigation clears them of any illegal conduct. Yet, these misconceptions miss the point. The alleged underlying violation is not the real issue when assessing these anti-retaliation matters. The question, in these cases, is whether the employee had a reasonable belief that a violation of the securities laws occurred. Courts will first assess whether the employee actually believed a violation of law occurred (i.e. the subjective part of the inquiry). Next, Courts will assess whether individuals with the same background, education, and experience as the complaining employee would have also believed that a violation of law occurred (i.e. the objective part of the inquiry).

Whether an employee is entitled to protection against retaliation is fact driven and cannot be examined in a vacuum. The same exact complaint by two separate individuals may trigger protection against retaliation for one employee but not the other. For example, an attorney will be held to a higher standard than a mid-level employee who may have less education and less knowledge of the law.

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