August 4, 2016

Mobile Devices in the Workplace: Increased Productivity Presents Risks for Unprepared Employer

By Terrence O’Connor

Smartphones, laptops, and other portable devices are ubiquitous among today’s workforce.  The use of such devices for work-related tasks presents potential issues for employers, including wage and hour problems, compensation problems, confidentiality and possible trade secret issues.  Employers clearly benefit from employee use of mobile devices.  Employees can be contacted at any time and have access to the “office” through their computers.

However, the use of mobile devices raises a variety of issues for the employer.

Employers need to develop policies to protect their data and ensure that employees are compensated for all hours worked and even the expense of the mobile device itself.


Compensation Issues

An employer must reimburse employees for the reasonable expense of a personal cell phone when the use of a phone is required by the job.  In agriculture, construction and trucking, employees are only reachable by cell phones since the demise of radio systems.  Many supervisors and crew forepersons use cell phones exclusively to contact their subordinates.  If the employer does not provide a cell phone for work purposes, it should reimburse the supervisory employees for the use of these personal phones.

Like many other compensation issues, the failure to reimburse employees for the use of personal phones has been the subject of class action litigation.  In a recent case, the employer fought class certification by arguing that in order to assert that the cell phone use was for a business expense would require individual inquiry into each putative class member’s cell plan.  The need for such individual examination of class members is usually fatal to class treatment of a claim.  The court disagreed, holding that under Labor Code § 2802 the employer must pay each employee who used personal phones for business purposes a reasonable percentage of the cost.

Employers should also develop policies to avoid off-the-clock work on mobile devices or personal computers.  Hourly non-exempt employees must be compensated for all hours worked.  If supervisors routinely call such employees at home, during meal breaks, or rest periods, they create liability for missed meal or rest periods and uncompensated off-the-clock work.

Companies should devise rules that prohibit after-hours use of phones and computers for business purposes, as well as require employees to report all time worked including such after-hours business communications.



The advent of personal devices with the confluence of social media sites has greatly increased the potential for the improper disclosure of confidential business information.  What was once a whispered comment at the watercooler, now can be tweeted and retweeted to hundreds of employees’ social media “friends.”

Such information can be useful to a competitor as he might learn that a key employee is disaffected and thus available to be lured away.

Polices which prohibit the disclosure of confidential information are crucial as well as management monitoring of social media postings.  Restrictions on social media use and content must take into account the National Labor Relations Act protections as well as other laws which protect the off-duty conduct of employee.

Employers’ social media policies, even policies which seek to prevent abusive and discriminatory posts, have been consistently rejected by the NLRB.  Citing employees’ right to participate in concerted activities, the board has consistently struck down policies and discipline for violation of policies to the extent that they prohibit “disparaging” comments about the company, disclose payroll information, or reveal sensitive internal information which may be remotely connected to “concerted activities.”

The chances of the average employer’s confidentiality and mutual respect policies coming to the attention of the NLRB are somewhat remote.  However, the Agricultural Labor Relations Board, which covers agricultural employers, has begun to issue complaints regarding such policies.  Recently, a handbook provision that encouraged employees to bring problems to management for resolution and discouraged employees from discussing work problems “with a customer, guest, visitor, vendor or non-employee” resulted in an ALRB Unfair Labor Practice complaint requiring the employer to revise its handbook and allowing the ALRB to read a notice to all employees at the company’s expense.

Labor board scrutiny of confidentiality provisions is not limited to situations where an employee is disciplined or terminated for disclosing confidential information.  These boards sanction handbook language if it can be construed to discourage discourse because it will have a “chilling effect” on employees’ rights.


Trade Secrets

Information which an employer would like to keep confidential because its disclosure may be damaging to its public image is considered a trade secret whose protection is vital to the economic success of the business.  Mobile devices which allow remote access to computer systems make such vital trade secrets vulnerable to intentional as well as inadvertent disclosures.

To protect trade secrets from disclosure or use by rival businesses, an employer must have a policy that clearly defines trade secrets.  As important are procedures to protect the information.  If such information is not protected from disclosure by rules and procedures, it may lose its status as a trade secret.

In order to protect customer lists or employee lists, companies must limit access to the information.  When a company sues a rival for unlawful use of its trade secrets, the court may not grant protected trade secret status to information unless the holder has made reasonable efforts to protect the information.

When portable devices have access to such secrets, employers should consider encrypting the information.  To protect in the situation where a device is lost or stolen, companies should have software which allows the remote wipe of data.

In addition to procedures which restrict or at least monitor access to important data, employers should constantly train employees in the importance of guarding trade secrets, using strong passwords and other device safeguards.

Smartphones, laptops and tablets have revolutionized the way employees and employers communicate and provide instant access to information in remote locations.  However, use of such devices presents a number of issues for protecting trade secrets, compensating employees correctly, and for creating confidentiality and harassment policies which are effective but do not “chill” employee protected speech.  With up-to-date procedures and policies employers should be able to reap the benefits of mobile devices both in efficiency and communication and avoid the legal issues they present.