October - 1999 - issue > Legal Advice
Tele-Commuting Liabilities
Friday, October 1, 1999

Telecommuting is increasingly popular in today's fast-paced business world. Before allowing employees to telecommute, employers should develop a carefully considered employment policy that considers the legal and management issues to minimize liability.

How Close Is Too Close?
One of the chief difficulties in implementing a telecommuting plan is supervision of the employee. A company needs to know whether the employee is devoting the amount of time for which the employee is being compensated. Also, the employer must know whether an employee is engaging in misconduct, which could range from representing the company in a poor or false light, intercoursing with competitors, misappropriating trade secrets or simply using company time and property for personal advantage.

Ordinarily, working in proximity to an employee provides an adequate, if imperfect, means of monitoring. For the telecommuter, however, practical and legal concerns arise when the employer attempts to monitor the employee. Overly rigorous monitoring will adversely affect employee morale and productivity -- and possibly also employee retention rates. Perhaps more importantly, employers may expose themselves to legal action by the employee by violating employees' privacy rights.
Because telecommuting is relatively new, there are very few legal rules that guide companies in appropriate monitoring. Before the days of electronic connectivity, courts were presented with somewhat similar cases, such as the legality of inspecting employee lockers. When weighing an employee's right to privacy at work against the employer's right to conduct a reasonable search, courts consider whether the search was reasonable under the circumstances. Courts focus on whether a search was “justified at its inception” and whether the search was “permissible in scope.” A search is justified at its inception if the company believes the search will yield evidence that the employee is guilty of misconduct, or that the search was necessary for a legitimate business reason, such as searching for papers while the employee is absent.
For example, courts have held that an employer may briefly monitor a telephone call to ascertain whether the call is personal or business related. However, protracted eavesdropping on a personal conversation is considered intrusive. Thus, we may infer that an employer may occasionally peruse incoming or outgoing email messages, if for the purpose of determining whether the content is work-related. However, reading all electronic mail may violate the employee's rights.

Workers' Compensation:
A Safe Workplace
Workers' compensation laws generally provide that an employee may receive a standard financial compensation for injuries that arise out of and in the course of employment. When an employee is not working on company premises, it is difficult to determine whether the injury arose in the course of employment or in the course of some household act.
An injury may still be compensable irrespective of whether it occurred on the company's premises, provided the employee's duties necessitated being at the site of the injury. When a telecommuter is injured in his or her own home, the employee generally loses the benefit of this presumption. In such a case, it is the responsibility of the employee to prove that the injury was work related. An employee injured at work can sue the company if the injury was caused by a safety violation. Employers must provide a safe workplace under the Federal Occupational Safety and Health Act.

Americans With Disabilities Act
Employers must provide a reasonable accommodation at the request of an employee with a disability. Employers who refuse to make a reasonable accommodation to a disabled employee may be sued for violation of the Americans with Disabilities Act. In California, courts have embraced the notion that telecommuting is a reasonable accommodation in cases in which an employee's disability prevents him or her from commuting to work, but who is otherwise able to perform essential job functions. Courts in the rest of the United States will probably follow this.

Minimizing Employer Liability
Simply, the first way to minimize liability is to create a telecommuting agreement that clearly sets forth the terms of the arrangement. This agreement, which could be in the form of an internal office memorandum signed by both the employer and employee, should state the hours during which the employee is expected to work, it should make clear that the employer has a right to monitor work product, data, electronic mail, and other on-line activities, and it should address whether the employee waives any duty the telecommuting employee might have to provide a safe home workplace. The contract should also mention that the employee, not the employer, will control the home workplace, and it should make clear that the employee assumes responsibility for safety compliance by making the choice to work from home. The employer should document what types of expenses will be borne by the employee and employer, including the costs of space, furniture, equipment, connectivity software and hardware. The agreement should also identify who is responsible for insuring the equipment and work area. Another method of minimizing problems is by converting an employee to an independent contractor and signing and agreement. Employers should structure the relationship such that it is able to withstand scrutiny. For instance, an independent contractor is typically expected to provide his or her own tools, is not subject to close control and supervision over daily work, and has invested in his or her own business. Particularly cautious employers may prefer to retain independent contractors rather than to allow telecommuting among its employees. If the employee chooses to become an independent contractor, the independent contracting agreement must set forth a degree of autonomy, making clear that the employer is purchasing only the finished product rather than the worker's time.

Telecommuting is becoming increasingly common. The benefits are easily discernible. An employer's best option is to create a telecommuting agreement delineating the responsibilities of each party. By clearly setting forth each party's responsibilities, the employer reduces its legal risks, and allows for a more satisfactory arrangement.

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