New Jersey May Soon Prohibit Employers From Tracking Employees' Vehicles Without Warning

Porzio Employment Law Monthly

Currently pending before  Governor Phil Murphy is  Assembly Bill No. 3950 to prohibit employers from using a tracking device in an employee's or company's vehicle without providing prior written notice to employees.  

The intent behind this piece of legislation appears to be to protect workers’ privacy rights. However, the Legislature clearly recognized that employers have a legitimate interest in knowing where their employees are and, under certain circumstances, knowing where they have been.  This legislation provides a compromise between the legitimate interests of both employers and employees.  It allows employers to track their employees while, at the same time, allowing employees to make informed decisions based on the notice required by the statute, including whether they want to work for an employer who tracks their whereabouts.  

The legislation would apply to all employers operating in the State of New Jersey and their agents or representatives, except the Department of Corrections, State Parole Board, county correctional facilities,  State or local law enforcement agencies, or any public transportation system. 

While the bill's intent appears to relate to tracking employees, the definitions are broader and employers should pay careful attention.  Employers are not permitted to "make use of" devices, including "tracking devices" and "electronic communications devices," in a vehicle used by an employee unless they provide advance notice.  The statute defines a "tracking device" as an electronic or mechanical device which permits the tracking of movement of a vehicle, person, or device. "Electronic communications devices" broadly include computers, telephones, personal digital assistants, or other similar devices which use electronic signals to create, transmit, or receive information. The statutory definition of "electronic communications devices" is not limited to a device transmitting "location information" or one that may be "used by the employer for tracking an employee's location."  For this reason, the language "make use of" in conjunction with the definition is broad and could apply to a company-issued cellphone that an employer may 'knowingly' use to contact an employee while travelling during the workday, even when the employer is not contacting the employee for the purpose of tracking his or her whereabouts or using the phone's GPS to surreptitiously track the employee.  

As relates to any "tracking device," when an employer is using the tracking device solely to document employee expense reimbursement, the proposed law would not apply and, therefore, would not require advance notice to the employee.  For example, an employer would theoretically have the right to install a mileage tracker on an employee's personal vehicle to log the distances travelled for business purposes if used solely for expense reimbursement purposes (and not, for example, for checking on the employee's whereabouts). 

Employers have many legitimate reasons for tracking employees when they are off the employer's premises and current technology offers a convenient solution. Tracking employee travel can help employers to implement more efficient routes or better enforce company policies.  It also can provide employers access to real-time location information to better communicate with customers, such as those expecting deliveries or service appointments.   

The proposed law permits employers to use these devices, including to track their employees, whether they are in personal or company-issued vehicles. However, under both circumstances the employer is obligated to provide the employee with notice that the employer may use these devices, including for purposes of tracking their whereabouts. The criminal penalty for failing to provide the notice is different depending on whether it is a company-issued vehicle or the employee's personal vehicle.  When it is a personal vehicle, it would be a crime in the fourth degree for an employer knowingly to make use of a tracking device or electronic communications device, without providing written notice to the employee. In the case of a company-issued vehicle, it is a disorderly persons offense for the first and second violations and a crime in the fourth degree for each subsequent violation. A crime of the fourth degree includes potential imprisonment up to 18 months, a fine up to $10,000, or a combination of the two penalties. It is important for employers to note that the law may impose civil penalties of up to $1,000 for the first violation and up to $2,500 for each subsequent violation for employers who violate the law unknowingly.

While there are no Federal laws that prevent a business from monitoring employees with the aid of a tracking device, some states already have laws limiting tracking. In New York it is legal to use GPS to track a vehicle's location when the vehicle is company-owned. But, when a vehicle is owned by an employee, as in the case of Cunningham v. New York State Dept. of Labor, 21 N.Y.3d 515 (NY Ct. App., 2013), the employee must give consent and tracking is limited only to business hours. In Cunningham, the court held that installing a GPS device on a vehicle personally owned by a state employee suspected of falsifying time records is considered a "search" and therefore the employee was entitled to Fourth Amendment protection.  

Cunningham only applies to a public employer, and the Fourth Amendment does not limit a private employer's ability to search its employee's vehicle. However, the case offers guidance to private employers who want to track an employee's personal vehicle. In general, the tracking must be reasonable and not excessive. It would be reasonable for a New York employer to utilize a GPS tracker within an employee's work hours. On the other hand, tracking an employee's location with a smartphone or laptop presents more potential for a search to be deemed excessive because those devices are likely to be taken into private places regardless of the time of day.  New York employers who wish to track their employees using such devices should consult with legal counsel and take care to craft specific policies.

Likewise, in Massachusetts an employer has a right to install a GPS tracker on a company-owned vehicle.  However, if an employer is considering tracking the location of an employee in his/her personal vehicle, care should be taken to craft reasonable policies.  It is recommended that notice be provided to the employee as well.  

Key Takeaways:

The COVID-19 health crisis has caused many organizations to change the way they operate. Monitoring and surveillance have become more important particularly when managers and supervisors do not physically occupy the same space as employees. If an employer allows employees to operate company vehicles or wishes to track employees' movements, it is imperative that it checks the laws in each state where it operates. The company policy should then be updated to be compliant with applicable state law. 

For New Jersey employers, it is important to keep abreast of any changes to the bill subsequent to the Governor's review. The next step is to draft written notices which will be provided to all current and new employees.  It is recommended that employees sign an acknowledgement of receipt of the policy with the notice, to ensure employers have complied fully with the new requirement that written notice be provided to employees. Employers should keep a record of this documentation in the employees' personnel file.   

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