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S. HRO. 103-150

THE PRIVACY FOR CONSUMERS AND WORKERS

ACT cgj

f SEP - 3 1993

HEAW]^^'

BEFORE THE

SUBCOMMITTEE ON

EMPLOYMENT AND PRODUCTIVITY

OP THE

COMMITTEE ON

LABOR AND HUMAN RESOURCES

UNITED STATES SENATE

ONE HUNDRED THIRD CONGRESS

FIRST SESSION

ON

S. 984

TO PREVENT ABUSES OF ELECTRONIC MONITORING IN THE

WORKPLACE, AND FOR OTHER PURPOSES.

JUNE 22, 1993

Printed for the use of the Committee on Labor and Human Resources

U.8. GOVERNMENT PRINTING OFFICE

69-804cc WASHINGTON : 1993

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-041308-7 J
COMMITTEE ON LABOR AND HUMAN RESOURCES

EDWARD M KENNEDY, Massachusetts, Chairman

CLAIBORNE PELL, Rhode Island NANCY LANDON KASSEBAUM, Kanaaa

HOWARD M. METZENBAUM, Ohio JAMES M. JEFFORDS, Vermont

CHRISTOPHER J. DODD, Connecticut DAN COATS, Indiana

PAUL SIMON, Illinois JUDD CRECG, New Hampshire

TOM HARKIN, Iowa STROM THURMOND, South Carolina

BARBARA A. MIKULSKI, Maryland ORRIN G. HATCH, Utah

JEFF BINGAMAN, New Mexico DAVE DURENBERGER, Minnesota

PAUL D. WELLSTONE, Minnesota

HARRIS WOFFORD, Pennsylvania

NICK UTTLEFIELD, Staff Director and Chief Countel

SUSAN K. HATTAN, Minority Staff Director

SUBCOMMITTEE ON EMPLOYMENT AND PRODUCTIVITY

PAUL SIMON, Illinois, Chairman

TOM HARKIN, Iowa STROM THURMOND, South Carolina

BARBARA A. MIKULSKI, Maryland DAN COATS, Indiana

JEFF BINGAMAN, New Mexico JUDD GREGG, New Hampshire

HARRIS WOFFORD, Pennsylvania ORRIN G. HATCH, Utah

EDWARD M. KENNEDY, Massachusetts NANCY LANDON KASSEBAUM, Kansas

(Ex Officio) (Ex Offirio)

BRIAN KENNEDY, Chief Countel and Staff Director

TODD ATWATBR, Minority Counsel

(II)

9'(-||'?-J3;
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CONTENTS

STATEMENTS

TUESDAY, JUNE 22, 1993

PM«

Simon, Hon Paul, a U.S. Senator from the State of Illinois, prepared statement 2

Ettienne, Franklin, room service busscr. Boston, MA, and Charles Piller,

senior associate editor, Macworld, San Francisco, CA 3

Piller, Charles, prepared statement 6

Johnson, Gwendylon, board of directors, American Nurses Association, Washington, DC; Barbara J. Easterling, secretary-treasurer, Communications

Workers of America, Washington, DC, and Lewis L. Maltby, director, National Task Force on Civil Liberties in the Workplace, American Civil

Liberties Union, New York, NY 12

Prepared statements of:

Ms. Johnson 14

Ms. Easterling 18

Mr. Maltby

3

Thurmond. Hon. Strom, a U.S. Senator from the State of South Carolina,

prepared statement 26

Gerdelman, John, senior vice president, customer markets, MCI, Arlington,

VA; Michael J. Tamer, president, Teknekron Infoswitch Corporation, Fort

Worth, TX, and Richard J. Barry, member, Security Companies Organized

for Legislative Action, Boston, MA 27

Prepared statements of:

Mr. Gerdelman 30

Mr. Tamer 34

Mr. Barry 38

Bowers, Diane K., president, Council for Marketing and Opinion Research 43

APPENDDC

Articles, publications, letters, etc.:

Bosses with X-ray Eyes, by Charles Piller, a special report from

Macworld 46

Vasco, Sarah Ann, Southern California Gas Company, letter from, dated

June 16 1993 57

Letter to Senator Paul Simon, from Richard A Barton, senior vice president, government affairs, Direct Marketing Association, Inc., Washington, DC, dated June 25, 1993 (with attachments) 60

am

THE PRIVACY FOR CONSUMERS AND

WORKERS ACT

TUESDAY, JUNE 22, 1993

U.S. SENATE,

SUBCOMMITTEE ON EMPLOYMENT AND PRODUCTIVITY, OF THE

COMMITTEE ON LABOR AND HUMAN RESOURCES,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:35 a.m., in room

SD-430

Dirksen Senate Office Building, Senator Paul Simon (chairman

of the subcommittee) presiding.

Present: Senators Simon and Thurmond.

OPENING STATEMENT OF SENATOR SIMON

Senator SIMON. The subcommittee hearing will come to order.

We are having a hearing today on S. 984, the Privacy for Consumers and Workers Act. What we aim to do is to protect the privacy of people at workplaces, as well as consumers, and do it in a

way that will not inhibit and harm businesses. And we think that

can be done.

We have had a number of constructive recommendations related

to the bill as it was originally introduced in the last session of Congress. They have been included in this legislation. It is very easy

in a world of increasing technology to give away basic rights of privacy that are implied in the Constitution. The phrase, "the right

of privacy," is not used in the Constitution, but when the Constitution was written, they said, as they wrote it in 1787, that you

couldn't be forced to have troops quartered in your home. They said

you couldn't invade your home unless you had a very specific

search warrant.

And then the Ninth Amendment was written by James Madison

when he wrote the Bill of Rights. He sent a rough draft of the Bill

of Rights around to a few people, and Alexander Hamilton wrote

back and said if you spell out these rights in the Bill of Rights,

there will be some people who will say these are the only rights

people have.

So James Madison wrote the little-noted Ninth Amendment,

which is extremely important to our basic liberties, and in that

Ninth Amendment, he says other rights not spelled out here are reserved to the people.

So when you combine that with the provisions on quartering

troops, and you have to have a specific search warrant, there is

clearly an implied right of privacy that is there in the Constitution.

(l)
2

But those who wrote it did not imagine telephones and computers

and television screens and all the things we have today.

How do we apply those basic principles to the technology of

today? That is the fundamental question we are asking here today,

and we have a fairly long list of witnesses. We will abide by the

5-minute rule, and we will enter all statements in the record, but

we will be fairly strict in the enforcement of the 5-minute rule.

Let me also apologize to witnesses in advance. At 10:30, the Senate is scheduled to have a vote, and I will have to go over, so we

will have at that point a 10- or 15-minute recess and then resume

the hearing.

[The prepared statement of Senator Simon follows:]

PREPARED STATEMENT OF SENATOR SIMON

Today the Subcommittee on Employment and Productivity will

hear testimony regarding S. 984, the Privacy for Consumers and

Workers Act, which would prevent abuses of electronic monitoring

in the workplace.

I believe the legislation before us today reflects a number of constructive recommendations, some of which were suggested at a

hearing held before this subcommittee last Congress.

As I have said before, the Privacy for Consumers and Workers

Act does not prohibit electronic monitoring from ever being used;

it does say it should not be abused. S. 984 is simply a right-to-know

bill, and strikes a careful balance between the demands for technological change and the need to protect an individual's privacy.

Just over the horizon are more technology breakthroughs and refinements that we can't even envision today. Unless we begin now

to define privacy•and in particular workplace privacy•as a value

worth protecting, these new technologies will be upon us before we

are ready for them. Weighing these issues will allow us to be the

masters of the technology, instead-of its slaves.

Employees should not be forced to give up their freedom, dignity,

or sacrifice their health when they go to work.

Given rising health care costs and our nation's health care crisis,

employees' health should not be over looked. Workplace stress is

one of our country's leading health problems. The stress that employees face due to electronic monitoring is costly. According to a

1993 International Labor Union report, American business loses

$200 billion annually in health care costs and lost productivity. The

American Civil Liberties Union (ACLU), reports that stress is the

symptom of potentially serious medical problems most frequently

reported by employees who are subjected to covert telephone and

computer surveillance. The ACLU also reported that workplace

stress alone is costing more than $50 billion annually. This is a

cost we cannot afford.

Moreover, current electronic monitoring practices operate as a

form of de facto discrimination. Women are disproportionately represented in the types of jobs that are subjected to electronic monitoring; such as clerical workers, telephone operators, and customer

services representatives.

Countries such as Japan, Germany, Sweden, Norway, Austria,

Britain, and France seriously limit or regulate the electronic monitoring practices of business because of strong beliefs of workers'
3

right-to-privacy, and concerns for worker health and productivity.

These strong competitor countries go much farther than S. 984.

Moreover, in Japan, laws to regulate or limit electronic monitoring

aren't needed. Japanese employers on the whole do not electronically monitor their employees, except for some limited personal

data such as payroll records, employee qualifications, and service

records. The practice of not engaging in electronic monitoring stems

from a general reverence for privacy in Japanese society. One

would think that given our own history, our reverence would be as

great.

I look forward to the testimony being presented today.

Our first witnesses are Franklin Ettienne, a room service busser

from Boston, MA, and Charles Filler, senior associate editor of

Macworld, from San Francisco.

We are very pleased to have both of you with us. Mr. Ettienne,

well start with you.

STATEMENTS OF FRANKLIN ETTIENNE, ROOM SERVICE

BUSSER, BOSTON, MA, AND CHARLES PULLER, SENIOR ASSOCIATE EDITOR MACWORLD, SAN FRANCISCO, CA

Mr. ETTIENNE. Good morning, ladies and gentlemen.

Senator Simon, my name is Franklin Ettienne. I am honored by

the invitation to address this committee.

I have lived in the United States of America for 7 years. My

country of birth is Haiti. It was not easy for me to leave my home

and family, but I wanted to come to America to study and have a

better life.

In October 1986, I landed in America. I was very happy and excited. I no longer had to be scared of the military or secret police.

In America, no one is persecuted, everybody is welcome. It is the

country of freedom.

My first job in America was at a restaurant washing dishes. At

the same time, I went to school to learn English.

In 1987, I started to work at the Sheraton Boston Hotel. I knew

I was expected to work hard and be honest. After 6 months, my reward was being promoted to room service busser. I was proud to

work at the Sheraton, and I believed they respected me and my

work.

My new job gave me the opportunity to support my wife and two

children, as well as go to school full-time. I am a junior at Bunker

Hill Community College and have made the national deans' list.

I am a member of Local 26 of the Hotel Employees Restaurant

Employees International Union. In August of 1992, the union

asked me to look at some videos that had been secretly taped in

the men's locker room of the Sheraton Boston Hotel. I was shocked

at what I saw; shocked and upset. The video showed me on break,

studying and doing homework in the locker room. Coworkers were

shown, dressing and undressing.

I could not believe what I saw. I was very angry. I felt that the

Sheraton Hotel had taken something away from me. Instead of the

anticipation that my work and school were giving me, the opportunity to build a better life for myself and my family, I began to

feel nervous and under stress.
I was very proud to get this invitation to address the U.S. Senate. I thought it was important to come to this hearing so that

what happened to me will not happen to other people who come to

America with the same hopes for freedom.

I want to bring up my three children with the expectation that

they can have their privacy and freedom. In America, sometimes

you take freedom for granted. People in other countries are fighting

and dying for it. Yet the Sheraton Hotel, without hesitation, has

denied this to their workers. I hope this committee acts to protect

our rights.

I know the Sheraton is concerned about their regulations. Yet

they must find a way to enforce rules without sacrificing our individuality or the personal freedom this country is based on.

I have applied to become a U.S. citizen and have studied with

my union education program. I have read the history of many

Americans who built the foundations of dignity and respect for individual freedoms. It is those values that make me and my family

strong.

I respectfully suggest you keep in mind protecting these liberties

when you put your bill together.

Thank you.

Senator SIMON. We thank you. We wish you the best, and we

hope you'll raise that right hand and become an American citizen

very soon; you are going to be a good one.

Mr. Piller.

Mr. PlLLER. Thank you very much, Senator Simon.

As a consumer and business magazine, Macworld is naturally interested in the role computers play in the workplace, and we have

closely followed the growing concern expressed by many computer

users that computer-based surveillance undermines personal privacy on the job.

Drawing on our expertise about the way in which computers operate, we recently published a wide-ranging investigation into the

effects of electronic technologies on workplace privacy.

We have known for some time that electronic monitoring has become pervasive in occupations involving highly repetitive tasks.

But as we began our study, we found little hard data regarding

how easily electronic surveillance could be applied to professional

or technical jobs. We also noticed that employers themselves have

not been polled about their use of electronic surveillance tools.

Therefore, Macworld conducted a three-tiered investigation. We

looked at software products that manage the workplace computing

environment, conducted a nationwide survey of employers to determine their electronic eavesdropping practices, and spoke to employers and workers about their views on this subject.

To save time, I will concentrate on the survey, but I would be

happy to answer questions on any aspect of the report.

Before I explain the survey results, however, I should note that

our software tests show that in an office environment using a fullfeatured network operating system, and operated by a competent

network administrator, every computer and all data transferred

within that network is an open book.
Employees who assume that their jobs are too varied or complex

to evaluate by machine fail to grasp the nearly unlimited electronic

monitoring potential available to any employer.

So the capacity to snoop is there, but is it used? Macworld asked

top corporate managers at 301 businesses of all sizes and in a wide

range of industries how much they peer at their employees' work

on their computers and why. Two of the charts up there explain

some of our results.

The survey confirmed that electronic eavesdropping is popular

among American employers. Some 22 percent of respondents have

engaged in searches of employee computer files, voice mail, electronic mail, or other networking communications. In large companies, that figure actually rises to 30 percent.

Our survey sample directly represents conditions experienced by

about one million workers. Extrapolated to all similarly sized companies, these data suggest that some 20 million Americans may be

monitored on the job through their computers.

I should add, however, that relatively few employers use electronic surveillance on an everyday basis. While nearly half of the

managers in our survey endorsed the concept of electronic surveillance, only about 6 percent of respondents conducted electronic

searches 50 or more times in the preceding 2 years. Most employers conducted such searches very few times during that period.

These data strongly suggest, however, that advances in computer-based surveillance technology have outpaced the minimal

legal protections for workplace privacy. Some companies argue that

self-regulation better serves both employer and employee interests

on this issue. But only 18 percent of respondents had a written policy regarding electronic privacy.

Moreover, among executives who acknowledge using electronic

surveillance methods, secret monitoring is the norm.

I would like to touch briefly on one other aspect of our investigation which is privacy for individuals in their financial, consumer

and legal transactions, and in their efforts to secure a new job.

In recent years, home addresses and phone numbers, marital,

salary and employment histories, Social Security numbers, buying

habits, business affiliations, vehicle and real estate holdings, civil

and criminal court records, and much of the rest of the information

trail left by all of us had become readily available from scores of

commercial or governmental on-line databases. To explore the impact of those databases, Macworld conducted an on-line experiment.

First, we selected 18 prominent individuals, including Office of

Management and Budget Director Leon Panetta; Hollywood producer and friend of President Clinton, Harry Thomason; football

star Joe Montana; and Bank of America CEO Richard Rosenberg.

We tried to find out everything we could about them with these restrictions. We did not seek legally protected data, and all the information we looked for had to be obtained on-line.

For this modest search, we spent only about $100 per subject and

about an hour per subject. Even so, we unearthed the essential financial, business, legal, marital and residential histories of most of

our subjects. In short, we compiled electronic dossiers.

i
There are good reasons for many records to remain public documents, of course, but easy access has blurred the borders of private

life. Our on-line experiment and our survey highlight a daunting

challenge: How can society protect the right to personal privacy

while preserving the legitimate prerogatives of employers and the

vital checks and balances of an open society?

Clearly, Government should take a fresh look at the invasive

electronic technologies that offer unprecedented opportunities to

pry into private moments or private lives.

I applaud your efforts to tackle this difficult subject. Thank you.

[The prepared statement of Mr. Piller follows, and the extraneous material appears in the appendix:]

PREPARED STATEMENT OF CHARLES PILLER

My name is Charles Piller and I am a senior associate editor at Macworld magazine. I am also the author of two books concerning the social and political implications of technology. Macworld is a consumer and business magazine that helps readers make buying decisions regarding computer products; we also cover issues that

pertain to the social impact of computers.

Macworld is naturally interested in the role computers play in the workplace, and

we have closely followed the growing concern expressed by many computer users

that computer-based surveillance by managers has undermined personal privacy on

the job. Our expertise about the way in which workplace technologies operate gives

us a strong basis on which to evaluate those concerns. We recently conducted an

wide-ranging investigation into the effects of electronic technologies on employee

frivacy. Before I explain our findings, which appear in the July issue of Macworld,

d like to offer some context.

HOW AGE IS THE ISSUE?

The 1986 Electronic Communications Privacy Act prohibits phone and data-line

taps with two exceptions: law-enforcement agencies and employers. The police or

FBI can tap lines•but only as a last resort under court order•to gather evidence

on criminal conspirators, drug traffickers, and other serious-crime suspects. The

courts permit fewer than 1000 such taps each year, nationwide. Employers suffer

from no such limits. They may view employees on closed-circuit TV; tap their

phones, e-mail, and network communications; and rummage through their computer

files with or without employee knowledge or consent 24 hours a day if they so

desire.

We've known for some time that electronic monitoring has become a pervasive employer practice for occupations involving highly repetitive tasks. Millions of times

per year telephone operators, airline sales agents, mail sorters, word processors,

data-entry clerks, insurance claims adjusters, and even computer technical-support

specialists, often working on terminals connected to a mainframe, may be monitored

constantly or intermittently for speed, errors, and time spent working.

Numerous national polls have indicated that the general public is extremely concerned about personal privacy. Many people believe that the computers have made

their lives less private. Anecdotal reports from individual workers and from a newly

established privacy information service in California, as well as informal polls sponsored by labor advocates all suggest that American workers are deeply concerned

about workplace privacy.

But as we began our investigation, we found little hard data regarding how easily

employers can spy on the various aspects of an employee's computing environment.

We also found little information on whether electronic surveillance methods could

be used effectively in regard to professional and technical jobs. We also noticed that

employers themselves had not been asked how widely or frequently they eavesdrop

on employees through their computers.

HOW WE SOUGHT ANSWERS

Macworld then conducted a three-tiered investigation: We looked at the software

products that manage the workplace computing environment, conducted a nationwide survey of employers to determine their electronic eavesdropping practices, and

spoke to employers about their views of electronic surveillance.
Macworld examined 25 popular network-management, integrated groupware, electronic-mail, and remote-access products to see if they could be used to invade employee privacy, and if so, how easily. The study used only computer software designed for the Apple Macintosh, but similar tools are available for any desktop personal computer, as well as mainframe- and mini-computer based systems.

If an office network uses a full-featured network operating system and is run by

a technically sophisticated network manager, then every computer and all data

transferred within that network is an open book. Working from a computer across

the room or across the country, a network manager•particularly in server-based

local area networks (systems that use a dedicated central computer to store and distribute network communications)•-can view virtually every aspect of a networked

computing environment with or without the approval or knowledge of end users.

The manager can see the contents of data files and electronic-mail messages,

overwrite private passwords, and audit any employee's time and activities on the

network.

All the major groupware products that combine messaging, file management, and

scheduling allow network administrators to change passwords at any time, then

read, delete, or alter any messages on the server. With few exceptions, network-administration programs allow astute managers to read files transmitted over the net.

In short, these tools are only slightly less invasive than others specifically designed

for surveillance and used primarily on mainframe systems.

The implications of our tests are clear: Employees who assume that their jobs are

too varied or complex to evaluate by machine fail to grasp the nearly unlimited electronic monitoring capability available to any employer.

ACTUAL EMPLOYER PRACTICES

The capacity to snoop is there, but is it used? Old surveys and anecdotal accounts

suggest that in some industries telecommunications, insurance, and banking, for

example•telephone or computer-based monitoring runs as high as 80 percent of employees. Such estimates may be inflated, but there is little dispute that many employers monitor routinely. And if the rapid growth of snooping tools is an indication,

monitoring is on the rise.

But virtually no rigorous research had been done about how much electronic

eavesdropping takes place on the job. Therefore Macworld conducted a survey of top

corporate managers at 301 businesses of all sizes and in a wide range of industries

to find out how much they peer into their employees' work on their computers, and

why (see the chart, "Electronic Eavesdropping At Work ").

Nearly 22 percent of our survey sample has "engaged in searches of employee

computer files, voice mail, electronic mail, or other networking communications. In

large companies with 1000 or more employees, the figure rises to 30 percent. Nearly

16 percent of respondents reported having checked computerized employee work

files.

The average company in our study employs more than 3,200 people, so the total

sample directly represents conditions experienced by about 1 million workers. When

extrapolated to all similarly sized companies, these data suggest that some 20 million Americans may be subject to electronic monitoring through their computers (not

including telephones) on the job. Moreover, among executives who acknowledge

using electronic surveillance methods, fewer than one-third warn employees that

such methods are in use.

Our findings about electronic mail were particularly interesting in light of a common myth. Most people believe that electronic-mail messages are secured by their

personal password-as private as a letter in the U.S. mail. E-mail is actually more

like a postcard. The Electronic Communications Privacy Act treats internal workplace communications as company property. And the Macworld survey suggests that

many employers agree. About 9 percent of respondents•representing some 375,000

employers•indicated that they sometimes search employee e-mail files.

I should add, however, that relatively few employers use these types of electronic

surveillance on an everyday basis. While nearly half of the managers in our survey

endorse the concept of electronic surveillance, and more than a fifth actually use

such techniques, only about 6 percent of respondents who had searched employee

work files, voice mail, electronic mail, or networking communications did so 50 or

more times in the preceding two years. About 71 percent of those who conducted

such searches did so only live or fewer times during that period.

EMPLOYER PRIVACY POLICIES

For the third piece of our investigation I spoke directly with employers about their

policies and practices. Managers who endorse electronic surveillance say that it
helps them gauge productivity and chart the work flow of employees. It can generate statistics on individual or departmental accomplishments and plot future

workloads. Computer monitoring can even be used to give employees feedback and

reduce the need for personal attention from supervisors, some employers argue.

Twelve percent of our survey respondents endorsed monitoring for evaluating performance or productivity.

Monitoring can also increase employee safety or adherence to company rules, according to other employers. Some trucking companies, for example, set on-board

monitors to record speed, engine-idling time, and length of stops. Such systems ostensibly ensure that truckers drive safely and take adequate rest breaks.

And companies that deal in sensitive information may understandably feel compelled to protect valuable data against disloyal or merely careless employees who

might divulge it to competitors. Four percent of our survey respondents endorsed

electronic monitoring "tor routinely verifying employee honesty." A much higher

number•2 3 percent•called electronic monitoring a good tool where reasonable evidence of wrongdoing•such as theft or negligence•comes to light.

Many companies recognize growing consumer demand for privacy protections, and

they have stepped forward with pioneering consumer privacy policies that go far beyond limited legal requirements. But few company policies go as far to protect employee privacy as the Privacy for Consumers and Workers Act would mandate.

Companies that have led the way on consumer-privacy concerns, such as American Express, Citibank, and Equifax, describe their electronic monitoring of employees as strictly limited. But they would not release internal policies on employee privacy, and they acknowledged surveillance practices beyond what would be allowed

by some features of the proposed legislation.

THE MEANING OF OUR DATA

What conclusion can be drawn from our electronic privacy investigation? One can

hardly fault employers for trying to guard against ineptitude or criminality. But

should they be free to search at will any and all employee computer files, electronicmail, voice-mail, and data transmissions over a company's local area network?

For about one-third of our survey respondents, the answer is no. They reject electronic surveillance under any circumstances. Many employers recognize that excessive monitoring may have negative side effects•such as increases stress related illness, lowered morale, and ironically, lowered productivity•defeating an often-expressed purpose of electronic surveillance.

We certainly can conclude that technological change in the realm of computer

monitoring has outpaced, by a wide margin, the development of laws that protect

personal privacy on the job. Some companies argue that self-regulation would better

serve both employer and employee interests on this issue. But according to our survey, only 18 percent of respondents' companies had written policies regarding electronic privacy•fewer than the number that actually uses electronic surveillance

tools. In effect, many employers have become spies who covertly target their own

employees.

A MODEL APPROACH TO EMPLOYEE PRIVACY

After completing my research on electronic privacy I outlined basic features for

a good electronic-privacy policy for employers. These principles•which overlap with

some basic features of S. 984 are designed to safeguard employee privacy without sacrificing important management interests:

Employees are entitled to reasonable expectations of personal privacy on the job.

Employees know what electronic surveillance tools are used, and how management uses the collected data.

Management uses electronic monitoring or searches of data files, network communications, or electronic mail to the minimum extent possible. Continuous monitoring

is not permitted.

Employees participate in decisions about how and when management conducts

electronic monitoring or searches.

Data is gathered and used only for clearly defined work-related purposes.

Management will not engage in secret monitoring or searches, except when credible evidence of criminal activity or other serious wrongdoing comes to light.

Monitoring data will not be the sole factor in evaluating employee performance.

Employees can inspect, challenge, and correct electronic records kept on their activities or files captured through electronic means.

Records that have become irrelevant to the purposes they were collected for will

be destroyed.
9

Monitoring data that Identifies individual employees will not be released to any

third party, except to comply with legal requirements.

Employees or prospective employees cannot waive privacy rights.

Managers who violate these privacy principles are subject to discipline or termination.

MONITORING OF JOB APPLICANTS

I would also like to draw attention briefly to a closely related issue•the growing

use of online databases for pre-employment checks ofjob applicants or to investigate

new employees. Managers have become some of the biggest users of online

databases. They turn to these tools to investigate job seekers or recent hires. Such

managers check online credit and criminal records in a matter of minutes; they

often reject applicants whose records show a large debt burden, or who were once

convicted of a crime, however old the conviction.

This practice sometimes screens out individuals who may be inappropriate for a

given jot). But it casts a wide net. Should, for example, a single 10-year-old drunkdriving conviction forever ban a person from work involving precision equipment or

the operation of heavy machinery?

When data is not available in electronic form•such as with school transcripts•

employers often hire research services to obtain transcripts and deliver their contents to the client's on-line account in a day or two.

And until last summer, many employers searched online data banks to find out

whether a job seeker had ever filed a workers-compensation claim•an insurance

claim for an on-the-job injury. Some employers refused to hire anyone who had ever

filed a comp claim. The Americans with Disabilities Act, signed into law last year,

limits the use of such data banks before a firm offer of employment has been made.

But if an employer finds a history of compensation claims after making a job offer,

the employer can shift the prospective employee to a job classification that reduces

risk of reinjury. If in the employer's opinion no appropriately safe job is available,

the job offer can be rescinded.

Employers have a responsibility to protect themselves from potential liability. But

the increasing use of electronic research tools has the effect o( opening all job applicants to a kind of scrutiny that many people consider unwarranted, or even antithetical to basic principles of fairness. It begs the question: Is society well served

by a business culture that can blacklist people with the cool efficiency of a highspeed modem?

THE LARGER REALM OP PRIVACY

Finally, Macworld looked another closely related issue•privacy for individuals in

their financial, consumer, and legal transactions. In recent years, gathering and

sharing personal information has become a way of life for business ana government.

People have kept track of each other for millennia, of course. But vast, accessible

computerized databases have made personal data easily available to anyone for a

modest price.

Home addresses and phone numbers; marital, salary, and employment histories;

social security numbers, buying habits, corporate affiliations; names, addresses and

income estimates of neighbors or relatives; vehicle and real estate holdings; civil and

criminal court records, and much of the rest of the information trail left by all of

us are now available from scores of commercial or governmental sources. Even legally shielded or difficult-to-obtain data•such as credit, medical, and phone records,

as well as arrests that do not result in convictions•are routinely revealed to a wide

range of qualified or merely determined and savvy requesters. These include private

investigators, the press, FBI agents, lawyers, insurance companies, corporate spies,

and vindictive ex-spouses.

From a personal computer anywhere in the world, data can be gathered from

limitlessly broad and diverse sources. The ability to capture, sort, and analyze that

data is often nearly instantaneous. The force of such tools has overwhelmed the capacity of laws and social mores to protect privacy. New records kept by government,

corporations, and employers come online all the time. Nearly every quantifiable aspect of our lives•and many a judgment call•finds its way into data banks where

it is exchanged, sold and resold, again and again. Easy access to such records has

blurred the borders of private life.

The new standards of electronic intrusion upset the balance between two distinctly American values: an open and accountable society, and the right to be left

alone. In order to explore the significance and impact of new electronic research

tools, Macworld conducted an online experiment.
10

First we selected 18 prominent individuals, including Office of Management and

Budget Director Leon Panetta; President Clinton's friend, Hollywood producer Harry

Thomason; football star Joe Montana; and Bank of America CEO Richard Rosenberg. Then we tried to find out everything we could about them, with these restrictions: We did not look for legally protected data, and all the information had to be

obtained online.

For this modest search we spent a little over $100 and about one hour per subject.

Even so, we unearthed the essential financial, legal, marital, and residential histories of most of our subjects (see the chart, "Shattering the Illusion of Privacy ").

In short, we compiled electronic dossiers. As on-line services become increasingly

interconnected, affordable, and fast, the ability to build electronic dossiers may become the hottest privacy issue of the next century.

Our online experiment, combined with the rest of Macworld's investigation, highlights a daunting challenge: How can our society protect the right to personal privacy while preserving the legitimate prerogatives of employers and the vital checks

and balances of an open society? The answer, in part, is that government must take

a fresh look at invasive electronic technologies that offer unprecedented opportunities to pry unnecessarily into our private moments or private lives. Experience has

shown that the wholesale erosion of personal privacy in the marketplace and the

workplace will continue unabated without such intervention.

Senator SlMON. Thank you.

If I may ask you, Mr. Piller, when we ask are privacy policies

known to employees, and roughly two-thirds respond no

Mr. PlLLER. That's correct, Senator.

Senator SIMON. •as you view business practices•and you are in

the private sector•would it hurt those businesses if, when they

have surveys, they could let employees know in advance that they

are going to have them? What is your ofF-the-top-of-the-head reaction?

Mr. PlLLER. In my discussions with employers in researching this

report, I noticed that in the vast majority of cases, employers did

not really object to having a stated policy on privacy, but I think

the case is more that the technological capabilities that they have

obtained have gone faster than their internal ability to regulate

those technologies.

Senator SIMON. And if we had some guidelines and rules in the

law, this would not impede unnecessarily things that employers

need to do from time to time.

Mr. PlLLER. I don't think so, sir. I would just point out that I

think two of the major criticisms that are made by employers regarding the legislation are, one, that they feel that self-regulation

would actually be a more effective means of achieving the same

goals. In response to that, I wanted to point out that if indeed

that's the case, there is not very much evidence of it out in the private sector right now because so few companies have privacy policies, and of those privacy policies themselves among the few companies who are willing to release them to us•and I might add that

it was very few companies who were willing to do so•those policies

were very mild and actually went only a short distance along the

path that you are travelling with your legislation.

Of course, the other aspect is the question of employee productivity. Many employers feel that it is essential to have the ability to

survey employees in order to verify productivity and to monitor

work progress. But I might point out that the concerns are based

on fear of competition from countries that actually have much more

protective privacy policies for employees.
11

Senator SIMON. And under this legislation, we would not prohibit

employers from monitoring productivity. We simply say these are

the rules you have to follow as you monitor productivity.

And isn't it also true that there are studies that show that employees who are satisfied are more productive employees, and there

is an element of dissatisfaction and unhappiness, as Mr. Ettienne

has indicated, when employees discover that they have been monitored without their knowledge?

Mr. PILLER. Yes, sir, and as a matter of fact, there has been some

fairly good research recently done on this subject that has identified excessive monitoring to be connected with undue stress in the

workplace, which of course leads to both low morale and reduced

productivity. And I think many enlightened employers understand

that.

As a matter of fact, one of the findings of our survey was that

about a third of all employers believe that electronic monitoring is

never an acceptable management practice, and I think that speaks

strongly toward the enlightened perspective that employees are actually not seeking to be dishonest or otherwise sloughing off on the

job.

Senator SIMON. Mr. Ettienne, under this legislation, the video

camera that was in your locker room and took pictures of employees dressing and undressing and so forth would be prohibited. If

you prohibited that for the Sheraton Hotel where you work, would

that in any way do harm to the Sheraton Hotel? Do you understand my question?

Mr. ETTIENNE. Can you repeat that again for me, please?

Senator Simon Under this proposal that we have right now, the

Sheraton Hotel could not take the kind of video that you viewed;

they would be prohibited from taking videos in a bathroom or in

a dressing room.

Do you feel that if we were to make this the law, that would hurt

the Sheraton Hotel?

Mr. ETTIENNE. The Sheraton Hotel is wrong; it should be illegal.

When you work someplace, the reason they give you that 30-

minute break or 45-minute break is to have somewhere that you

can rest and mentally be free. So what they did to us is really

wrong, and that is why all the workers at Sheraton are very upset,

because Sheraton has taken something away from them.

So I believe they are wrong, and the reason that we have come

forward is in order to send a clear message to the American people

so that they can see that at Sheraton, they don't respect workers'

privacy.

Senator SIMON. And under this legislation, if law enforcement officials felt someone was exchanging drugs in a bathroom, then law

enforcement officials, with court approval, could monitor, but otherwise you can't take pictures in bathrooms and dressing rooms.

Would that be a good thing?

Mr. ETTIENNE. I believe that is why they have security working

at the hotel, so that if they know someone is dealing drugs in the

hotel, what they are supposed to do is send the security officials

to the locker room in order to catch the person who is doing that.

When they put the hidden cameras, and did not tell us, we believe

that should be illegal. They did not tell anybody, even the union
12

president, about it. So they know that they have taken something

away from us, which is our privacy. They are supposed to have the

security who work at that place check often in order to see who is

dealing the drugs, because not everybody is dealing drugs at the

Sheraton•also, I have never heard of anybody dealing drugs there.

Senator SIMON. All right. We thank you botn.

Mr. Piller, I would be interested in receiving copies of any articles you have written in this field, because I think you are onto

something that is really very basic in our society.

We thank you both very much for your testimony.

Mr. PILLER. Thank you, Senator Simon.

Mr. ETTEENNE. Thank you, sir.

Senator SIMON. Our next witnesses are Lewis Maltby, director of

the National Task Force on Civil Liberties in the Workplace of the

American Civil Liberties Union; Barbara Easterling, secretarytreasurer of the Communications Workers of America, and

Gwendylon Johnson, a member of the board of directors of the

American Nurses Association.

Unless you have any other personal preferences, we'll start with

you, Ms. tJohnson.

STATEMENTS OF GWENDYLON JOHNSON, BOARD OF DIRECTORS, AMERICAN NURSES ASSOCIATION, WASHINGTON, DC;

BARBARA J. EASTERLING, SECRETARY-TREASURER, COMMUNICATIONS WORKERS OF AMERICA WASHINGTON, DC,

AND LEWIS L. MALTBY, DIRECTOR, NATIONAL TASK FORCE

ON CIVIL LIBERTIES IN THE WORKPLACE, AMERICAN CIVLL

LIBERTIES UNION, NEW YORK, NY

Ms. JOHNSON. Thank you, Senator. Good morning.

I am Gwendylon Johnson, former president of the DC. Nurses

Association and member of the board of directors of the American

Nurses Association. I appreciate the opportunity to testify today

representing American Nurses Association and its 53 State and

Territorial nurses associations, on behalf of the Nation's 2 million

registered nurses.

ANA supports passage of S. 984, the Privacy for Workers and

Consumers Act, with its emphasis on providing protections against

electronic monitoring. The bill addresses three factors of particular

concern to nurses: the intrusive and basic nature of electronic monitoring; the growth in technology which will continue to make new

forms of monitoring available, and the added stress to employees

who are subjected to electronic monitoring.

Finally, as consumers of services which could be monitored, and

as patient advocates, we support the provisions of the bill which

are designed to protect the privacy of consumers.

From childhood, most of us are taught the basic tenets of respect

for the privacy of others. We learn not to listen at closed doors, and

to immediately put down a telephone if we pick it up and hear

voices. We learn that eavesdropping is wrong. We certainly learn

not to peek through other people's curtains or observe our friends

through cracked doors. Yet the sophisticated technology and workplace production demands have made such practices commonplace,

even acceptable, in too many workplaces across the country.
13

In recent years, we have seen troubling examples of electronic

monitoring which unnecessarily invades the privacy of nurses. This

committee is aware of the case of nurses at a hospital in Maryland

who discovered a hidden video camera in their dressing room,

broadcasting their activities to an in-house cable channel.

This is unfortunately not an isolated incident. Nurses at other facilities have found video cameras in their locker rooms. No doubt

many other monitoring devices have gone undetected. This practice

is discriminatory, invades privacy, raises sexual harassment concerns and is clearly unacceptable.

We fully support the provision that S. 984, which would prohibit

the monitoring of locker rooms, bathrooms or dressing rooms. We

do not believe such a blatantly intrusive practice should be legal.

ANA believes that workplace privacy issues must be vigilantly

monitored. To many times, employees and enforcement officials attempt to use medical testing or technology to address criminal,

safety and compliance activities related to employee behavior.

Employers have a responsibility to provide employees adequate

orientation to their jobs, education and retraining to maintain competency and appropriate supervision and evaluation. In addition,

inappropriate behavior should be properly documented and addressed according to relevant employee/employer procedures.

It is imperative that Federal law protect workers' rights to privacy. Currently, protection for an individual's right to privacy is

unevenly reflected in our laws, and sadly absent from laws governing workplace policies and practices. Senator Simon's floor statement upon introduction of S. 984 cites a troubling irony. The Federal Bureau of Investigation cannot wiretap a phone conversation

to protect the national security without a court order. Yet employers are permitted to listen to the conversations of their employees

at will.

We believe that S. 984 strikes a critical balance in recognizing

the employer's need for data and systems to improve productivity

and a worker's right to privacy and dignity. We believe it gives employers the latitude needed to manage workplace concerns while

protecting workers.

Our Nation has witnessed a tremendous growth in technology.

Nurses provide 24-hour health care in a wide range of settings and

see daily incredible advances in health care technology. We use

equipment that did not exist when we were in nursing school. We

work with machines which were unimaginable a few short years

ago. We can only begin to imagine what technology will bring tomorrow. These Orwellian technological advances have given rise to

the need for regulations and systems to protect the health and

safety of health care workers.

Likewise, the ability of employers to monitor the workplace

through electronic means will continue to increase with technological advances and computerization. Already, the ability of employers to monitor productivity through computers has raised serious concerns in some work environments.

As information systems are adapted more widely into clinical

nursing practice, the temptation to use them for employee monitoring will also spread. Will we soon measure the productivity of

nurses through computerized measurements of time spent at the

69-804 0-93
14

bedside? Who among us wants our time with a health care provider

doled out in computer-measured increments?

ANA supports progress and technological advancement. We also

support a workplace which protects the health, safety and privacy

of nurses and other workers. Rapid technological advances make it

increasingly important to ensure that the ability to monitor is not

abused.

We are very troubled by the link between electronic monitoring

and increased stress. ANA has long been concerned with the high

level of stress associated with nursing. The National Institute for

Occupational Safety and Health has found a high level of occupational stress among nurses and other hospital workers. Hospital

work requires coping with some of the most stressful situations

found anywhere.

Hospital workers must deal with life-threatening injuries and illnesses, and all of this is complicated by overwork, understating,

tight schedules, paperwork, and intricate or malfunctioning equipment, complex hierarchies of authority and skills, dependent and

demanding patients, and patient deaths. All of these contribute to

stress.

Senator SIMON. If you could conclude your statement, please.

Ms. JOHNSON. Yes. ANA fully supports the provisions which require that consumers be notified that they are being electronically

monitored. Nurses are first and foremost patient advocates, governed by a code of ethics which includes respect for confidentiality.

We believe that consumers have a right to know which conversations are private.

We appreciate this opportunity to share our views on electronic

monitoring. We look forward to working with you to develop policies to strike a balance between employers' need to know and the

workers' need for dignity and privacy. We think S. 984 is a critical

step in the right direction.

Thank you.

[The prepared statement of Ms. Johnson follows:]

PREPARED STATEMENT OF GWENDYLON JOHNSON, RN

Good morning, I am Gwendylon Johnson, former president of the DC Nurses Association, and member of the board of directors of the American Nurses Association.

I appreciate the opportunity to testify today representing the American Nurses Association (ANA) and its 53 State and territorial nurses associations, on behalf of the

Nation's two million registered nurses. ANA is both the largest professional organization of registered nurses and a labor organization, representing nurses for collective bargaining purposes through State Nurses Associations. We commend the committee for holding hearings on workplace privacy and applaud Senator Simon's long

commitment to protecting the rights of our nation's workers.

ANA supports passage of S. 984, the Privacy for Workers and Consumers Act with

its emphasis on providing protections against electronic monitoring. The bill addresses three factors of particular concern to nurses: 1) the intrusive, invasive nature of electronic monitoring; 2) the growth in technology which will continue to

make new forms of monitoring available; and 3) the added stress to employees who

are subjected to electronic monitoring. Finally; as consumers of services which could

be monitored and as patient advocates, we support the provisions of the bill which

are designed to protect the privacy of consumers.

INVASION OF PRIVACY

From childhood most of us are taught the basic tenets of respect for the privacy

of others. We learn not to listen at closed doors, and to immediately put down a

telephone if we pick it up and hear voices. We learn that eavesdropping is wrong.
15

We certainly learn not to peek through other peoples' curtains or observe our friends

through cracked doors. Yet sophisticated technology and workplace production demands have made such practices commonplace, even acceptable, in too many workplaces across the country.

In recent years we have seen troubling examples of electronic monitoring which

unnecessarily invades the privacy of nurses. This committee is aware of the case of

nurses at a hospital in Maryland who discovered a hidden video camera in their

dressing room•broadcasting their activities to an inhouse cable channel.

This is unfortunately not an isolated incident. Nurses at other facilities have

found video cameras in their locker rooms. Nurses in Virginia are considering legal

action in a similar case. No doubt many other monitoring devices have gone undetected. Although, the employers defended their actions, citing concerns about illegal

behavior, such intrusions are unwarranted.

This practice is discriminatory, invades privacy, raises sexual harassment concerns and is clearly unacceptable.

We fully support the provision in S. 984 which would prohibit the monitoring of

locker rooms, Dathrooms or dressing rooms. We do not believe such a blatantly intrusive practice should be legal. ANA believes that workplace privacy issues must

be vigilantly monitored. Too many times employees and enforcement officials attempt to use medical testing or technology to address criminal, safety and compliance activities related to employee behavior.

ANA has opposed the use of truth testing in long term care and child care settings

proposed previously in Congress. ANA submitted extensive comments on the use of

truth testing as regulated by the Department of Labor for employees involved in the

manufacture and distribution of pharmaceutical agents. As we stated in those instances the use of technology should not be used as a substitute for long established

management principles.

Employers nave a responsibility to provide employees adequate orientation to

their jobs, education and retraining to maintain competency and appropriate supervision and evaluation. In addition, inappropriate behavior should be properly documented and addressed according to relevant employee/employer procedures.

ANA firmly believes that employers have a responsibility to provide appropriate

notice to employees regarding workplace environment. This notice should include information on electronic monitoring policies expectations and policies. Without such

notice employees cannot be viewed as accepting employment with informed consent.

It is imperative that federal law protect workers' rights to privacy. Currently, protection for an individual's right to privacy is unevenly reflected in our laws, and

sadly absent from laws governing workplace policies and practices. Senator Simon's

floor statement upon introduction of S. 984 cites a troubling irony. The Federal Bureau of Investigation cannot wiretap a phone conversation to protect the national

security without a court order, yet employers are permitted to listen to the conversations of their employees at will.

We believe that S. 984 strikes a critical balance in recognizing the employer's

need for data and systems to improve productivity and a worker's rights to privacy

and dignity. The bill would not completely prohibit electronic monitoring. However,

it protects workers by requiring employers to post a notice advising employees that

they may be electronically monitored and to provide written notice describing the

forms of monitoring to be used, the data to be collected and similar information.

We believe these provisions give employers the latitude needed to manage workplace concerns while protecting workers.

TECHNOLOGICAL GROWTH

Our Nation has witnessed a tremendous growth in technology. Nurses provide 24

hour health care in a wide range of settings and see daily incredible advances in

health care technology. We use equipment that did not exist when we were in nursing school. We work with machines which were unimaginable a few short years ago.

We can only begin to imagine what technology will bring tomorrow. These Orwellian

technological advances have given rise to the need for regulations and systems to

protect the health and safety of health care workers.

Likewise, the ability of employers to monitor the workplace through electronic

means will continue to increase with technological advances and computerization•

in ways we can only imagine. Already, the ability of employers to monitor productivity through computers has raised serious concerns in some work environments.

As information systems are adapted more widely into clinical nursing practice, the

temptation to use them for employee monitoring will also spread. Will we soon

measure the productivity of nurses through computerized measurements of time

spent at the bedside? Who among us wants our time with a health care provider
16

doled out in computer measured increments? Unfortunately, consumers already

complain about poor bedside manner and insufficient time with their primary providers. Patient contact quotas have resulted in a conveyor belt like provision of care

in some facilities.

ANA supports progress and technological advancement. We also support a workplace which protects the health, safety, and privacy of nurses and other workers.

Rapid technological advances make it increasing important to ensure that the ability to monitor is not abused.

n hospital care there are many examples of electronic monitoring which are productive. For example, monitoring in emergency areas and critical care units can

greatly enhance patient care and safety. We obviously support such uses of electronic monitoring. Our concern lies only with that which is invasive.

S. 984 maintains a balance, protecting; the rights of workers, and acknowledging

the demand for and advantages of technological advancement.

ELECTRONIC MONITORING AND STRESS

We are very troubled by the link between electronic monitoring and increased

stress. ANA has long been concerned with the high level of stress associated with

nursing. The National Institute for Occupational Safety and Health (NIOSH) has

found a high level of occupational stress among nurses and other hospital workers.

Hospital work requires coping with some of the most stressful situations found in

any workplace.

In its 1988 publication, Guidelines for Protecting the Health and Safety of Health

Care Workers, NIOSH states: "Hospital workers must deal with life-threatening injuries and illnesses complicated by overwork, under-staffing, tight schedules, paperwork, intricate or malfunctioning equipment, complex hierarchies of authority and

skills, dependent and demanding patients, and patient deaths; all of these contribute to stress."

For nurses, who are working daily under the pressure of providing care in life and

death situations, the added stress of wondering who is watching them change

clothes, or similar invasions of privacy and is unnecessarily burdensome. We believe

that those practices should be illegal.

PROTECTIONS FOR CONSUMERS

ANA fully supports the provisions which require that consumers be notified that

they are being electronically monitored. Nurses are aware of the range of health

care information which could be divulged in a phone conversation. Nurses in insurance offices and other settings where there may be phone monitoring must know

if they are being monitored and should be able to advise their patients and clients.

Nurses are first and foremost patient advocates, governed by a code of ethics

which includes respect for confidentiality. We know that the consequences, for consumers, of misuse of information could range from embarrassment to discrimination.

Senator Simon cites an example of a caller discussing a sensitive health care

issue, such as an AIDS insurance claim. Given the widespread discrimination

against people with AIDS and the complexities of the illness, the conversation might

be very different if the consumer is aware the call is being monitored. The same

is true of discussions of other health conditions•even though they may be less devastating.

ANA believes that consumers should have the right to choose the information they

will divulge in conversations in such situations. They have a right to know which

conversations are truly private. We all have a right to know that our conversations

are not listened to secretly.

CONCLUSION

The American Nurses Association, appreciates this opportunity to share our views

on electronic monitoring. We look forward to working with Senator Simon and other

members of this committee as we strive to strike a balance between employers' need

to know and workers' need for dignity and privacy. We believe S. 984 is a critical

step in the right direction. Thank you.

Senator SIMON. Thank you for an excellent statement.

Barbara Easterling, no stranger to this committee.

Ms. EASTERLING. Good morning, Senator. I am Barbara

Easterling, secretary-treasurer of the Communications Workers of

America.
17

In recent years, employers have dramatically expanded their use

of concealed electronic surveillance. It has been estimated that

each work day, 20 million wage earners are subjected to secret

electronic monitoring at job sites across America. Supervisors spy

annually on hundreds of millions of telephone calls between workers and the public. A stress epidemic exists at many American

workplaces due in part to the marked increase in the use of electronic monitoring.

Thousands of service workers are strung out, bugged, and coming

unplugged.

Mr. Chairman, a study issued 2 years ago by the University of

Wisconsin and CWA contains striking evidence that workers employed by the American Telephone and Telegraph Company and

the seven regional Bell operating companies in jobs that were monitored electronically experienced higher levels of psychological

stress and more physical problems than did workers employed by

those eight companies in jobs that were not monitored.

With regard to stress, the study revealed that monitored workers

suffered more depression, higher levels of extreme anxiety, and

more severe fatigue than did nonmonitored workers employed by

the same companies.

Looking at physical health, one of the most disturbing findings

of the study is that telephone workers who were electronically monitored were more than twice as likely to be plagued by wrist pain

as were nonmonitored workers. Of special concern, a recent report

disclosed that workplace stress costs employers $200 billion a year.

This is an enormous financial burden that the United States cannot afford if it is to compete successfully in the global marketplace.

Ironically, the stress that is derived from electronic monitoring

may diminish the productivity that such surveillance is intended to

enhance. Employers claim that secret electronic surveillance is necessary to ensure quality of service, but evidence demonstrates that

the absence of concealed electronic surveillance may actually improve the quality of service.

Twelve years ago, legislation prohibiting secret telephone monitoring was signed into law in West Virginia by then Governor Jay

Rockefeller. Despite the absence of such surveillance, the Chesapeake and Potomac Telephone Company of West Virginia ranked

first in America among Bell System companies in six of 12 customer satisfaction categories. The West Virginia law was overturned during the tenure of the successor to Governor Rockefeller,

and this occurred in part because, at a time when West Virginia

was enduring a severe recession, and its unemployment rate was

then amongst the highest in the Nation, AT&T threatened not to

locate a major manufacturing facility in that State unless the monitoring law was changed.

As Ms. Johnson has said, it is disturbing irony that the Federal

Bureau of Investigation is required by law to obtain a court order

to wiretap a telephone, even in cases that pose a threat to our national security, but that employers are permitted to spy at will on

their own personnel and on the public through electronic eavesdropping on their telephone calls.

In order to stop the invasion of privacy, erosion of dignity, and

expansion of stress-related illness caused by secret electronic mon-
18

itoring, CWA supports the enactment of the Privacy for Consumers

and Workers Act, S. 984, which you have introduced. The legislation would provide wage earners with the right to know when and

under what conditions monitoring will take place. Under the bill,

an employer's use of electronic monitoring would diminish as an

employee's period of service with the employer increases.

But even under this bill, no matter how long a worker had performed his or her duties in an exemplary manner, the employer

would always retain the right to use secret electronic monitoring

should management suspect that the worker was engaged in conduct which violated criminal or civil law, or which constituted willful gross misconduct. The legislation would prohibit the abuse of

secret electronic monitoring by employers, but it would not stop the

legitimate use of secret electronic monitoring by them.

Mr. Chairman, approval of the Privacy for Consumers and Workers Act would permit workers to earn their living without being

subjugated to the environment of an electronic sweatshop. Equally

significant, enactment of the legislation would strengthen the right

to privacy at a time when the growing use of surveillance technologies at the workplace has endangered this most fundamental

of American values.

Thank you.

[The prepared statement of Ms. Easterling follows:]

PREPARED STATEMENT OF BARBARA J. EASTERLING

The Communications Workers of America (CWA) appreciates the opportunity to

provide testimony in support of legislation that would restrict secret electronic monitoring in the workplace.

By way of background, CWA represents more than 600,000 workers employed in

the telecommunications, printing, publishing and broadcasting industries, as well as

in the health care field and in State and local government.

Secret electronic monitoring is the merciless whip that drives the rapid pace for

workers in the service sector of the economy.

In recent years, employers have dramatically expanded their use of concealed electronic surveillance. It has been estimated that each workday 20 million wage earners are subjected to secret electronic monitoring at jobsites across America. Supervisors spy annually on hundreds of millions of telephone calls between workers and

the public businesses covertly count the number of keystrokes employees produce

each minute on video display terminals. Management stealthily photographs workers who are honorably carrying out their duties at offices and plants.

A stress epidemic exists at many American workplaces due, in part, to the

marked increase in the use of electronic monitoring.

Thousands of service workers are strung out, bugged and coming unplugged!

Unremitting job pressure derived from electronic surveillance has corroded their employment environment.

To illustrate the abusive nature of secret electronic monitoring, consider these

true labor relations cases.

•A young woman employed as a travel reservation agent was threatened with

discipline for not achieving the office productivity standard. She explained that she

had been trying to cope with morning sickness (her first pregnancy) and the sudden

death of her mother. These reasons were not acceptable to management.

•A middle-age man whose work was subject to telephone service observation was

admitted to a hospital after taking a drug overdose. He said that he needed one

more "upper" to face the' start of another day.

•A computer operator discovered several months after she was hired that a computer was keeping track of her workday activities, including her time in the bathroom. The employee was not 'notified before she was hired that her employer monitored the workforce in this insidious way.

•A travel reservationist spoke with a co-worker between calls on a matter that

had no bearing on her capacity to perform her job duties. The reservationist was

unaware that the headset she wore contained a hidden device which communicated
19

her comments to a supervisor. She was punished for the content of her private conversation.

•A newspaper kept a secret record of every time that the telephone number of

the union at represented its workers was dialed and from what extension.

•Nurses in a hospital discovered that management had installed a concealed

camera in their locker room. The camera was monitored by male security guards

who watched the nurses change clothes into their hospital uniforms and later

change back to their non-work attire. The nurses were kept in the dark about this

"peeping Tom" invasion of their privacy.

•During contract negotiations in Cleveland, Ohio between the United Auto Workers and Midland Steel Products, members' of the union's bargaining committee became aware that the company was using a video camera to spy on the workers as

they planned strategy to discuss wages and working practices.

These and many other examples demonstrate that electronic monitoring is an inhuman system based on lack oftrust.

Prom a related standpoint, concealed electronic surveillance has even invaded the

offices of leaders of the Federal Government. The Washington Post reported last November that former Secretary of State James A. Baker III avoided having his telephone calls placed through the Operations Center at the State Department because

the Operations Center made a standard practice of eavesdropping illegally on the

telephone conversations of Department officials.

When he became secretary of State in 1989, Mr. Baker said, "No way am I going

to have my phone conversations routinely monitored," according to one source close

to Baker, the Post recounted. Mr. Baker's emphatic statement reflects the desire of

thousands of workers whose telephone conversations have been subject to secret surveillance.

The effort to monitor the telephone calls of the former Secretary of State•who

was, perhaps, the closest political advisor of President Bush•underscores the need

for Congress to take action to restrain this abusive practice.

ELECTRONIC MONITORING AND WORKERS' HEALTH

Management's use of electronic surveillance is taking a devastating toll on the occupational safety and health of wage earners in the form of heightened psychological

stress and increased physical strain.

A study issued 2 years ago by the University of Wisconsin and CWA contains

striking evidence that electronic monitoring of telephone workers has, at a minimum, the potential to influence conditions that produce ill health.

The study revealed that workers employed by the American Telephone and Telegraph Company (AT&T) and the seven regional Bell operating companies in jobs

that were monitored electronically experienced higher levels of psychological and

physical problems than did workers employed by those eight companies in jobs that

were not monitored electronically.

The research is significant because it is the first major investigation into the relationship between health symptoms and telephone workers who are monitored electronically.

With regard to stress, the University of Wisconsin study disclosed that monitored

workers at AT&T and the seven regional Bell operating companies suffered more

depression, higher levels of extreme anxiety and more severe fatigue or exhaustion

than did nonmonitored workers employed by the same companies.

Specifically, 81 percent of monitored workers who were surveyed complained of

depression as compared with 69 percent of workers who were not monitored. Similarly, 72 percent of monitored workers stated that they endured extreme anxiety as

contrasted with 67 percent of telephone workers who were not monitored. Also, 79

percent of monitored wage earners reported problems with severe fatigue or exhaustion as compared with 63 percent of nonmonitored wage earners.

Looking at physical health, SI percent of monitored employees at AT&T and the

seven regional Bell operating companies declared that they were plagued by sore

wrists. This means that electronically monitored telephone workers were more than

twice as likely to suffer wrist pain as were nonmonitored workers! In addition, 81

percent of monitored employees cited problems with neck pressure as contrasted

with 60 percent of nonmonitored employees.

Of special concern, it has been estimated that workplace stress costs American

employers $200 billion a year through increased absenteeism, diminished productivity, higher compensation claims, rising health insurance fees and additional medical

expenses.* This is an enormous cost that the United States cannot afford if it is to

compete successfully in the global marketplace. The portion of the $200 billion cost

of stress that is attributable to electronic monitoring is uncertain. Ironically, the
20

stress that is derived from electronic monitoring may reduce the productivity that

such surveillance is intended to increase.

DISTORTED EMPHASIS ON QUANTITATIVE MEASUREMENTS

Many employers in the service sector are using high-tech monitoring to transform

their workplaces into electronic assembly lines, reminiscent of 19th century factories.

•World Labor Report 1993, page 7

Just as manufacturers in industrial plants accelerate the pace of production for

blue-collar workers, employers of office workers use computers to compress the time

allowed for employees to complete their tasks. As a result, unwinking computers

have become surrogate supervisors at thousands of jobsites, pushing wage earners

to work at top speed.

A graphic illustration of the way in which computers are used to control work

routines is seen in the telephone industry. A typical operator handles more than

1,100 calls in a 7Vi hour shift. The operator has absolutely no control over when

the next call will be routed to her. A central computer determines if the operator

receives three calls in a row or 300 in a row.

The operator is required to complete each call in about 30 seconds or less. If the

operator fails to handle her calls within the prescribed 30 second average work time

(AWT), then the operator can be disciplined or dismissed.

The emphasis on quantitative measurement places operators in the anxiety-producing dilemma of having to choose between performing their duties in a manner

that satisfies the needs of the public or attaining the average work time dictated

by the company computer.

If an operator receives a call from a customer who suffers from a speech impediment, a hearing problem, a learning handicap, a language barrier, an illiteracy hindrance or any other disability which requires additional time, the operator may be

placed in an especially stressful situation.

In such a circumstance, the operator is well aware that it is her duty to provide

auality service to the customer. At the same time, the operator is highly cognizant

Tat the clock is running and that the average work time for completing the call

forms an integral part of her performance evaluation. In addition to confronting the

difficult choice between serving the customer or preserving her employment, the operator may fear that the call is subject to telephone service observation by Ma Bell's

intrusive sibling, Big Brother.

All of this can combine to produce a cauldron of stress for the operator that boils

over.

To illustrate the distorted priorities that management's emphasis on quantitative

standards can engender, I am including an account from a CWA member of an instance in which a telephone company manager willfully disconnected a call from a

person who had dialed the company and was telling an operator the caller was considering committing s-icide. The manager disconnected the call after 15 minutes because the manager claimed that the length of the call was "ruining" the average

work time (AWT) of the operators under the manager's supervision. As mentioned

earlier, telephone company operators are expected to complete calls from the public

in about 30 seconds.

The account of this case in which a telephone company manager decided that curtailing the length of the call was more important than saving the life of the wouldbe suicide follows:

Dear CWA,

The article I just read on monitoring in the workplace touched my heart. The

memories of my TSPS operator job, and of my slight business-office job, are not good

ones.

I see you know all about the operators' AWT's, [sic] but you don't know how important that number is to the managers. The AWT is their rating, they will do anything to improve it. What sticks in my mind year after year (since 1982) is the time

my supervisor cut-off a life and death situation from my TSPS position. I was doing

my best with a very sad person thinking of committing suicide. This was around

the holiday season 4 or 5 years ago. My service-assistant at the beginning of the

call was advised by me (I slipped her a note, not giving myself away to the wouldbe-suicide) of the phone number and nature of the call within the first few minutes.

I did my best to reason and talk with this person, while I hoped my supervisor was

doing her job by getting police to that person's location. About 15 minutes later,

while I was still talking with this person, and making progress, one of the managers

came over, who was alerted to this long call I was on, and just disconnected the

call. I was stunned, then a collect caller popped in on my position. I sat there dumb-
21

founded for a few seconds, thinking what this poor suicide person did next. To this

day, I never found out. The manager said, and I quote 'You're ruining my worktime.' There is no need for me to say anymore.

Feel free to call me anytime. The TSl'S world is a jungle. The managers have no

dignity. I know, I had dozens of them in my 4+ years as an operator. Thank God,

I'm away from that.

Sincerely,

THE FALSE CLAIM THAT MONITORING ENSURES SERVICE QUALITY

Employers claim that the use of secret electronic monitoring is necessary to ensure quality of service. Evidence demonstrates, however, that the absence of concealed electronic surveillance may actually improve quality of service.

Twelve years ago, legislation that prohibited secret telephone monitoring was

signed into law in West Virginia by then-Governor Jay Rockefeller. Despite the absence of such surveillance, the Chesapeake and Potomac Telephone Company of

West Virginia ranked first in America among Bell System companies in 6 of 12 ''customer satisfaction" categories, according to the company's official journal C and P

Mountain Lines. A company vice president was quoted in the publication as stating

proudly, "Customers told us we do an outstanding job."

Of special interest, the Bell System transferred some of its directory assistance

operators from Washington, DC, where monitoring was permissible, to West Virginia after monitoring there was prevented.

The West Virginia law was subsequently overturned during the tenure of the successor to Governor Rockefeller. This occurred in part because•at a time when West

Virginia was enduring a severe recession and its unemployment rate was among the

highest in the Nation•AT&T threatened not to locate a major manufacturing facility in that state unless the monitoring law was changed.

More recently, secret electronic monitoring has been eliminated in several telephone company worksites without any reported diminution in quality of service. In

such cases, the absence of monitoring reduced accompanying financial costs for supervisory personnel and for monitoring equipment, allowing the potential for higher

profits.

LEGISLATIVE REMEDY

More than two centuries ago•before our Founding Fathers took up arms to fight

the American Revolution•invasion ofprivacy meant forced entry into private homes

by British soldiers and mercenaries. The framers of the Constitution aid not foresee

the onrush of technology that would foster the use of electronic eavesdropping devices more insidious than any enemy sol-'ier they faced on the battlefield.

Today, protecting citizens from concealed electronic surveillance is increasingly

becoming one of the leading concerns of the Information Age.

Congress must take steps to ensure that employers do not destroy our nation's

basic freedoms through the abusive practice of secret electronic monitoring.

It is a disturbing irony that the Federal Bureau of Investigation (FBI) is required

by law to obtain a court order to wiretap a telephone•even in cases that pose a

threat to our national security•but that employers are free to spy at will on their

own personnel and on the public through electronic eavesdropping on their telephone calls.

In order to stop the invasion of privacy, erosion of dignity and expansion of stressrelated illnesses caused by secret electronic monitoring, CWA supports enactment

of the Privacy for Consumers and Workers Act, S. 984, introduced by Senator Paul

Simon (D-IL).

The legislation would provide wage earners for the first time with the "right to

know" when and under what conditions monitoring will take place. The bill would

require employers to give workers advance notice of the types of electronic surveillance that will be used and the purposes for which they will oe used.

Under the bill, an employer's use of electronic monitoring would diminish as an

employee's period of service with the employer increases.

But no matter how long an employee had performed his or her job duties in an

exemplary manner, the employer would always retain the right to use secret electronic monitoring should management suspect that the employee is engaged in conduct which violated criminal or civil law or constituted willful gross misconduct.

Therefore, the legislation would prohibit the abuse of secret electronic monitoring

by employers but it would not stop the legitimate use of secret electronic monitoring

by employers.

Enactment of the Privacy for Consumers and Workers Act would permit workers

to earn their living without being subjugated to the environment of an electronic
22

sweatshop. Equally significant, passage of the legislation would strengthen the right

to privacy of every citizen at a time when the growing use of surveillance technologies at the workplace has endangered this most fundamental of American values.

Senator SIMON. Thank you very much.

Mr. Maltby.

Mr. MALTBY. Good morning, Mr. Chairman.

Our first response to stories like Mr. Ettienne's and the nurses

that Ms. Johnson described is shock. The second is confusion. Isn't

there a right to privacy in this country, we ask. The answer in this

situation, unfortunately, is no.

When most people think about the right to privacy, what they

really have in mind is the right to privacy found in the Federal

Constitution. This right is real and very important. But like all

constitutional rights, it applies only to the Government. The Constitution and Bill of Rights do not apply in any way to any private

corporation in this country.

When most workers go to work in the morning, they might just

as well be going into a foreign country. They are equally beyond

the reach ofthe Constitution in both cases.

Unfortunately, Federal law does very little to fill the void here.

When it comes to electronic surveillance on the job, we have only

the Electronic Communications Privacy Act of 1986 to protect us.

ECPA is an amendment to the old 1968 Omnibus Crime Control

Act.

From the standpoint of consumers and employees, ECPA is a lot

like many consumer contracts. The big print gives it to you, and

the small print takes it away.

Section 2511 of ECPA does generally prohibit the interception of

electronic communications. However, the section also contains an

exception for interceptions "in the ordinary course of business."

What this has come to mean through the defining process of Federal litigation is that employers cannot deliberately monitor personal communications that someone might make at work. If an employer has separate telephone phones that employees can use for

personal calls, those phones cannot be monitored. When there is

only one set of phones, and an employer is monitoring for quality

control purposes and accidentally picks up a personal call, under

ECPA, they are obliged to hang up as soon as they realize the call

is personal

But if the communication is work-related in any way at all, the

employer can do anything it wants. Your employer can intercept

your electronic mail without your knowledge, tap your telephone,

watch you with a hidden video camera, and bug your office, all

without violating any Federal or State law.

Where business-related communication is concerned, the employer has all the rights; the employee has none.

State law is no better. No State legislature in this country has

ever passed a law protecting people's privacy from electronic surveillance at work, and to the best of our knowledge, not State legislature is even contemplating doing it now.

The end result is that we have no real right to privacy on the

job. The Federal Constitution does not apply. The only Federal

statute is a very limited application, and there is no State law at

all.
If we are to have a meaningful right to privacy on thejob in this

country, we must have a new law to create it. Senator Simon, you

and your subcommittee and the staff have done an excellent job of

creating a bill that will protect the right of workers and consumers

to privacy and do it in a way that does not impede the legitimate

needs and interests of employers. The American Civil Liberties

Union supports S. 984, and we hope the committee will as well.

Thank you.

[The prepared statement of Mr. Maltby follows:]

PREPARED STATEMENT OF LEWIS L. MALTBY

Mr. Chairman and members of the subcommittee, thank you for inviting the

American Civil Liberties Union (ACLU) to testify before you today in support of S.

984, The Privacy for Consumers and Workers Act. The ACLU is a private, non-profit

organization of over 275,000 members dedicated to the protection of civil rights and

civil liberties. I direct the ACLU's National Task Force on Civil Liberties in the

Workplace.

We believe that S. 984, if enacted, will be an important step forward in protecting

the privacy of Americans at work.

The ACLU is deeply concerned about the state of privacy in the workplace today.

The use of computers and other electronic equipment is exploding. It is estimated

that almost so million Americans will use computers at work by the turn of the century.

While this holds the promise of multiplying our productivity, it also poses threats

to our privacy. Computer screens can be read without the user's knowledge. Telephone calls can be secretly monitored and recorded. Electronic mail can be covertly

intercepted. Hidden microphones and video cameras can record our every move

without our knowledge. Not only are these practices technically feasible, but the

rapidly declining cost of electronic technology also makes them very affordable. Unfortunately, many companies are taking advantage of these conditions to violate the

privacy of their employees. The ACLU receives over 60,000 complaints every year.

The majority of those complaints do not involve any government agency; they are

complaints about the workplace. Privacy violations are the most common workplace

complaint. We have had nurses discover hidden video cameras in their shower room.

We nave had employees whose offices have been bugged. We have had employees

whose phones have been tapped.

Despite this the ACLU is not opposed to electronic surveillance. We recognize that

managers need to monitor the quality and quantity of employees' work; and that,

in an electronic age, some of that monitoring will be electronic.

A balance needs to be struck, however. Employees are human beings. They have•

or at least ought to have•a right to privacy. That right should not disappear when

people go to work. Employers need information about job performance, but that need

must be balanced against employees' reasonable expectations of privacy.

Unfortunately, current law does not strike such a balance. In fact, it does not even

attempt to strike a balance. The ACLU supports S. 984 because it provides needed

protection for personal privacy that current law does not provide.

The principal law in this area is the Electronic Communications Privacy Act

(ECPA), a 1986 amendment to the 1968 Wiretap Law. Section 2511 of the ECPA

prohibits the interception or disclosure of electronic communications. However, the

section creates an exception for interception done in "the ordinary course of business."

What this has come to mean, through the defining process of federal litigation,

is that employers cannot deliberately monitor an employee's personal communications which are made at work. For example, if an employer provides separate telephones for employees to make personal telephone calls, those telephones may not

be monitored. Where separate telephones do not exist, and employees must make

their personal calls on their business phones, the employer must hang up once it

realizes it is monitoring a personal call. But if the electronic communication is work

related, the employer can do anything it wants. While the ECPA takes the valuable

step of protecting personal communications from employer monitoring, it does not

even attempt to balance the rights of employers and employees where business communications are concerned. For business communications, the employer has all the

rights, the employee has none.

State law also fails to protect our privacy. There are no State statutes regulating

the use of electronic surveillance on the job. There is a common law right to privacy
24

in virtually every State, which frequently applies to employees. This right, however,

coven only the Few indefensible abuses that no sensible employer would engage in

anyway•such as strip searches. It offers no protection in the more common cases

where the rights of employers and employees must be balanced.

We believe the current state of the law is unconstitutional and unfair. As members of Congress, you need to know what your staffs are doing. You might sit in

on an important meeting to see how your staff handled it. But you would not bug

the room, so you could listen in without their knowledge.

"Knowledge" is the essence of S. 984. The bill does not restrict an employer's ability to monitor the work of its employees, but it requires that the employer tell the

employees when they are being watched or listened to.

Eliminating covert surveillance is not only fair, but it improves employee performance in the long run. The technocrats who design these workplace surveillance systems have forgotten that employees are people. You can slice them up into tmy

pieces and scrutinize them under a microscope, but in the process their spirit is destroyed. An employee who does not care is not a productive employee.

The report on electronic surveillance by the Congressional Office of Technology

Assessment discusses several real world situations that illustrate this. The most

well-known is the Hotel Billing Information System (HOBIS) office in Tempe, AZ.

Under an arrangement worked out by AT&T and the Communications Workers of

America (CWA), all 100 operators were organized into an autonomous work group.

Covert monitoring was eliminated. The results are eye-opening. Quality of service

improved. Customer complaints went down. Absenteeism decreased. Grievances declined. Management costs went down. Training costs went down. From everyone's

perspective: employees', managements', and the customers', the office worked better

without covert surveillance.

The same lesson emerges from the West Virginia experience. For several years,

West Virginia had a statute forbidding covert 5 electronic surveillance at work. During that time, West Virginia Bell's operators were rated better that most of their

secretly monitored counterparts in other States.

Most Americans cherish deeply their right to privacy. No one should have to

spend years of their working life never knowing when they are being secretly photographed or when their employer is listening to their telephone conversations. S. 984

is a modest step towards constructing a balanced law of workplace privacy. We urge

you to support it. We look forward to working with you on this important matter.

Senator SIMON. We thank you for your testimony.

Ms. Johnson, you are a nurse. When you mentioned instances in

Maryland and Virginia of nurses being monitored in their dressing

rooms, if an individual does that, we have a name for that, don't

we? What do we call that?

Ms. JOHNSON. Voyeurism.

Senator SIMON. Yes, voyeurism, but I was looking for another

phrase•"peeping Tom." We do not permit an individual to do that.

We call that person a "peeping Tom," and that person can be arrested and prosecuted, and properly so.

Does there seem to be some analogy between a camera•incidentally, we are being videotaped here today•does there seem to be

some analogy between the "peeping Tom and a hospital or a corporation doing the same thing?

Ms. JOHNSON. Senator, every nurse that I have spoken with feels

exactly that way. They feel that it is absolutely unallowable, unacceptable for that kind of behavior to take place, and they have referred to it in terms from "peeping Tom" to voyeurism, in terms of

the observation of nurses.

I as an obstetrical nurse have to change clothes every day when

I go to work. I would find it terribly offensive to think that someone would be monitoring the dressing or undressing of anyone, particularly of nurses.

Senator SIMON. Ms. Easterling, you talked about the West Virginia company that received high marks. What is your overall observation, not just in West Virginia, but overall? How many of the
25

Bell companies do you know follow policies of monitoring with

warning their employees, and how many do it in a way that is offensive without warning?

Ms. EASTEKLING. We do have some agreements with the Bell Operating Companies as well as with AT&T on monitoring procedures. I would like to tell you that they are adhering to those policies, but at the same time I must tell you that we have several incidents in the grievance procedure that they are not abiding by the

policies.

I would say probably 50 percent have some type of agreement

with us on the issue. However, we are not at a point where we can

say to you that the agreement is there to treat the employees fairly, to notify them in advance, and then to live up to that agreement. There is always the feeling somehow, some way, that the employee is going to try to do something that they should not be doing

and that the easiest way for the company to handle it is by monitoring them. The employees do indeed suffer a great deal of stress

because of this, and I can personally speak to that, having been a

telephone operator, that the very thought that you never knew

when or at what time someone was going to be monitoring you kept

you under a great deal of stress for 8 hours a day.

Also, something that you might say to a coworker and would be

picked up by the monitoring on them at the time was often used

against you. So even though that was what you might call a personal comment, those comments were entered in your record and

held against you just as well.

Senator SIMON. And in terms of productivity, those who enter

into agreement and those who don't enter into agreement with you,

is there any difference in productivity in these companies?

Ms. EASTERLING. Our contracts were just renegotiated last year,

and we have not had an opportunity to track that, but we intend

to do so.

Senator SIMON. And what about•I mentioned the Bell companies, but you have GTE and a lot of smaller companies.

Ms. EASTERLING. I don't believe we have any agreements in any

of the smaller companies or in GTE.

Senator SIMON. And the reality is that the employees who are

not covered by any kind of union agreement, there is just virtually

unlimited access, then?

Ms. EASTERLING. That is one of our major reasons for being here.

We find, for example, that in the telemarketing areas, or in small

companies, that the employees who are using the telephone, working on the telephone, are usually very low paid women. So consequently, it is a very abusive activity, we feel, against those individuals, and as always, we are concerned about people we represent, but also those who don't have anybody to represent them

as well.

Senator SIMON. Mr. Maltby, if I could ask you to put on a different hat, and imagine that you are an employer. What harm

comes to the employer if we pass this and we require notification,

with rare exceptions, when we think the law may be violated?

Mr. MALTBY. Senator, it is really not such a hard hat to put on,

because for most of my adult life, I was a senior manager in the

private sector.
26

Senator SIMON. In what field? What did you do?

Mr. MALTBY. DO you remember the horrible tragedy on Bhopal,

India several years ago, Senator, when a toxic chemical tank overflowed and killed and entire town? It is not well-known, but Union

Carbide has the same sorts of tanks with the same sorts of chemicals in the United States. And the reason that those chemical

tanks and many others do not overflow is because the company to

which I was formerly executive vice president made very reliable

electronic control systems to keep those tanks under control. So I

was in a very, very safety-sensitive business where the quality of

the product literally was protecting many people's lives. And we did

not do electronic surveillance of this type. Our feeling was that it

would have made the products much more dangerous.

There was an interesting Harris poll that was done several years

ago that showed that a majority of American employees consciously

and deliberately do less than their best work, and it is clearly related to the way they feel about their companies and the way they

feel their companies are treating them.

If we are going to have the kind of competitiveness and productivity we need in the future, we have to get employees more committed to their companies and more committed to their jobs than

they are right now. There may be many things we have to do to

create that, but clearly, treating people with dignity and respect on

the job is an absolutely indispensable part of that solution.

Senator SIMON. I could not agree more. I think we have to improve labor-management relations in this country, and we have to

improve productivity•but that means the small gestures on both

sides that can be so meaningful both to labor and to management.

We are pleased to be joined by Senator Thurmond.

OPENING STATEMENT OF SENATOR THURMOND

Senator THURMOND. Thank you very much, Mr. Chairman.

I regret I had to be in another committee meeting this morning

and could not be here sooner, but I will take pleasure in reading

the record.

To save time, Mr. Chairman, I ask unanimous consent that my

opening statement appear in the record following your statement.

Senator SIMON. It will be entered in the record.

Senator THURMOND. Thank you.

[The prepared statement of Senator Thurmond follows:]

PREPARED STATEMENT OF SENATOR THURMOND

Mr. Chairman, it is a pleasure to be here this morning to receive

testimony concerning S. 984, the "Privacy for Consumers and

Workers Act of 1993'. I would like to join you and the other members of the committee in welcoming our witnesses here today.

Mr. Chairman, businesses are constantly seeking ways to increase the quality and efficiency of their services and work product

by using the advances in electronic and telecommunication technology. As the volume and value of these services and work products increases, businesses are finding it essential to use electronic

monitoring as a means of staying competitive in the 1990's and into

the next century.
27

The bill before us todayl S. 984, would substantially limit the

ability of companies to maintain a quality workplace. It does this

by placing strict limitations on the use of cameras, telephones, computers, and other electronic devices to monitor employees. While

employee privacy should be protected in certain situations, that

privacy must be balanced against the need of businesses to maintain quality services in a competitive market.

On the whole, I believe that most employers use monitoring to

increase their productivity and to ensure a quality product and a

quality workplace. I realize that these are a few who have been

abusive in their actions. However, I must question whether a Federal mandate in this area fully takes into account the varying

needs and circumstances of the employers involved with this issue.

I am also concerned that the definitions in this legislation are so

broad and ambiguous that businesses will have difficulty applying

them.

In addition, I have concerns about the breadth of section 10(c) of

the bill and its practical meaning. That section prohibits the collection or use of data "obtained by electronic monitoring of an employee when the employee is exercising First Amendment Rights."

Mr. Chairman, some type of notice or restrictions may be reasonable. However, we should question whether to mandate these actions, and if so, exactly what form and manner that should take.

Again, I would like to welcome our witnesses here today and I

look forward to reviewing their testimony.

Senator SIMON. DO you have any questions of this panel, Senator

Thurmond?

Senator THURMOND. We are going to have a vote in just a

minute. If you don't mind, I'll submit some written questions.

Senator SIMON. Yes, we will have written questions, and we may

have written questions for other witnesses, also.

We thank all of you very, very much for your testimony.

Our next panel includes Richard J. Barry, a member of Security

Companies Organized for Legislative Action•and my staff tells me

that in 1988 when I was on the presidential campaign, he was one

of those who provided security at that point. John Gerdelman is

senior vice president of customer markets for MCI, in Arlington,

VA And Michael Tamer is president of Teknekron Infoswitch Corporation of Fort Worth, TX.

We are very pleased to have all three of you here, and unless you

have any special wishes, we will just start with you, Mr.

Gerdelman.

STATEMENTS OF JOHN GERDELMAN, SENIOR VICE PRESIDENT, CUSTOMER MARKETS, MCI, ARLINGTON, VAj MICHAEL

J. TAMER, PRESIDENT, TEKNEKRON INFOSWITCH CORPORATION, FORT WORTH, TX, AND RICHARD J. BARRY, MEMBER,

SECURITY COMPANIES ORGANIZED FOR LEGISLATP7E ACTION, BOSTON, MA

Mr. GERDELMAN. Thank you, Mr. Chairman. I want to thank you

for inviting me to appear here today on behalf of MCI Communications Corporation to discuss S. 984.

I am responsible for all customer service and sales operations for

MCI consumer markets, serving residential customers.
28

In its broad scope, this legislation addresses many different

forms of electronic monitoring of employees in the workplace, including "telephone service observation. This kind of monitoring,

which involves listening to calls being made or received by an employee to monitor the quality of service provided by the employee,

is an essential part of MCI's customer service program.

For that reason, we would like Congress to understand why and

how such activities serve our customer interests. We would also

like Congress to understand what it would mean to our customers

and to our employees if our present telephone service monitoring

practices were restricted or prohibited, as S. 984 currently proposes.

Unlike other marketplaces, our marketplace was not competitive.

It was controlled by an entrenched monopoly which for years was

the only available source of the services we wanted to offer.

MCI knew that there was a demand for an alternative source for

such services. But we also understood that just being an alternative source would not be enough to make it a successful competitor. In order to overcome the inertia and numerous other advantages which favored the incumbent, we would have to fight for

market share, which we did on all fronts, such as price, innovation,

and the one factor which directly touches consumers, quality of customer service.

MCI's commitment to assuring quality customer service is one of

the things new employees learn about their new employer. Employees are well-trained and given ample time to gain experience in fulfilling their own responsibilities toward attaining this quality commitment. It is clear they understand and support this commitment

not only as a sound competitive corporate policy, but also as an employment policy that offers personal challenges and opportunities

for advancement.

Our customer service professionals who handle inbound calls

from MCI customers constitute the front-line testing ground for the

sincerity of MCI's commitment to customer service. These employees understand that the telephone service monitoring process is a

key practical ingredient of their training and evaluation and that

these programs are designed to directly benefit them as well as the

company i guiding and improving their workplace.

New service trainees are monitored periodically during a 5 to 7-

week training period by trainers, supervisors, and managers who

use the monitoring to coach them in developing their call-handling

performance levels. The frequency and amount of monitoring will

vary according to the trainee's learning and performance capabilities. Typically, a trainee is monitored five to ten times a month.

The feedback is immediate and promptly applied by the employee

in subsequent calls to the customers.

Experienced customer service professionals are monitored periodically to assess the quality of their interactions with customers.

This practice results in the completion of a "quality monitoring

summary." This standardized form evaluates the employee's performance and includes observations concerning the employee's handling of the call. Completed summaries are shared with employees

so they better understand how to improve their skills.
29

Let me emphasize, please, that our employees are neither disciplined nor penalized on the basis of the monitoring. But they do

receive rewards for positive actions, such as awards for savings accounts that would have canceled, or demonstrating high quality or

other productive call abilities.

Apart from customer service, telephone monitoring also plays

several important roles in our sales activities. Although we don't

formally use monitoring information as marketing information,

monitoring in both sales and customer service allows us to quickly

discern trends and developments in the concerns and interests of

our customers. The more we learn about the ways people respond

to our sales call, the more sensitive our people will be in responding to the concerns of our prospective customers.

An important point is MCI's monitoring of its telephone sales

personnel is also designed to help ensure compliance with the "do

not call" requirements of the Telephone Consumer Protection Act

The company's monitoring practices are not designed or implemented to play games of "Gotcha" with employees. We do not monitor to trap unwary employees in misdeeds or in personal matters,

and we do not use monitoring as a whip or a prod for punishment.

So we are greatly troubled by the current provisions of S. 984, because they seem to reflect these very worst assumptions about how

and why telephone service observation is performed by companies

like MCI.

In its present form, the bill puts telephone service observation on

the same restrictive footing with video surveillance and other very

different forms of electronic monitoring, despite the complete lack

of evidence of comparable abuse. It simply does not acknowledge

that telephone monitoring does benefit employees and consumers.

By virtually banning unannounced monitoring for all but new

employees, it has lost sight of two very fundamental facts. First, it

must be remembered that telephone service monitoring is limited

to calls which are conducted by the employee acting on behalf of

the employer, within the scope of performing his or her job responsibilities. MCI employees are provided with unmonitored phones to

make personal calls, both inbound and outbound, and there are no

personal privacy interests of the employee at stake in monitoring

the business calls.

Second, to a large extent, the benefits of telephone monitoring for

purposes I described earlier will only be obtained if the monitoring

is unannounced, that is, performed without letting the employee

know when it will occur.

So in conclusion, MCI strongly believes that responsible telephone monitoring of customer service and sales representatives is

an essential part of our training and performance evaluation programs. S. 984 fails to give adequate consideration to the experience

of companies like MCI in proposing to place unreasonable restrictions on monitoring and thereby threatening to eliminate our ability to live up to our commitment to our customers.

Thank you very much, Mr. Chairman.

[The prepared statement of Mr. Gerdelman follows:]

69-804 0-93
PREPARED STATEMENT OF JOHN GERDELMAN

Mr. Chairman and members of the subcommittee, I want to thank you for inviting

me to appear here today on behalf of the MCI Communications Corporation to discuss S. 984, the proposed "Protection for Consumers and Workers Act." I am John

Gerdelman and am responsible for the management of all customer service and

sales operations for MCI Consumer Markets, which serve residential customers.

In its broad scope, S. 984 addresses many different forms of "electronic monitoring" of employees in the workplace, including "telephone service observation." This

kind of monitoring, which involves listening to calls being made or received by an

employee to monitor the quality of service provided by the employee, is an essential

part of MCI's customer service program.

For that reason, we want Congress to understand why and how such activities

serve our customer's interests. We also want Congress to understand what it would

mean to our customers and our employees if our present telephone service monitoring practices were restricted or prohibited as S. 984 currently proposes.

MCI'S FOCUS ON CUSTOMER SERVICE

Unlike other marketplaces, our marketplace was not competitive. It was controlled by an entrenched monopoly which for years was the only available source

of the services we wanted to offer.

MCI knew that there was a demand for an alternative source for these services.

But MCI understood that just being an alternative source would not be enough to

make it a formidable and successful competitor. In order to overcome the familiarity, inertia, and numerous other advantages which favored the incumbent in this

market, MCI would have to fight for its market share on all fronts: price, innovation, and the one factor which directly touches consumers, quality of customer service.

For 26 years, MCI has worked and thrived on its commitment to provide its customers with the finest quality service available. As the global telecommunications

marketplace has rapidly opened to ever-increasing competition over a continuallyexpanding range of services, our commitment to customer service has helped us not

only to attract new customers but to hold onto our old ones as well.

TELEPHONE SERVICE MONITORING AND "CONSISTENT CALL HANDLING

MCI's commitment to assuring quality customer service is one of the First things

new employees learn about their new employer. Employees are well trained and

given ample time to gain experience in fulfilling their own responsibilities toward

attaining this quality commitment. It is clear they understand and support this

commitment not only as a sound competitive corporate policy but also as an employment policy that offers personal challenges and opportunities for advancement.

Our customer service professionals who handle in-bound calls from MCI customers constitute the front-line testing ground for the sincerity of MCI's commitment to customer service. These employees understand that the telephone service

monitoring process is a key practical ingredient of their training and evaluation.

These programs are designed and implemented to directly benefit them as well as

the company in guiding and improving their work.

MCI's telephone monitoring practices for customer service can best be understood

in the context of its "Consistent Call Handling" program. The call handling program

provides service professionals guidelines and procedures to follow in responding to

certain types of customer calls, such as those involving billing, credit card accounts,

or other service arrangements.

New customer service professional are monitored periodically through a 5-7 week

training period by supervisors, managers and trainers who use the monitoring to

"coach them in developing their call handling performance level. The frequency and

amount of monitoring will vary according to the learning and performance capabilities and responses demonstrated by the new employees. Typically, this involves 5

to 10 instances of monitoring per month, performed on the oasis of 1 to 3 call intervals which are interspersed with "coaching" feedback. For this kind of monitoring,

the feedback is immediate and promptly applied by the employee in subsequent

calls.

Even experienced customer service professionals are monitored periodically to assess the quality of their interactions with MCI customers. Such monitoring results

in the completion of a "quality monitoring Summary" which evaluates the employee's performance by reference to the call handling guidelines and procedure and

"customer care" categories. The latter include observations concerning the employee's handling of the monitored call, including how the employee initially responds
31

to the call, verifies account information, and offers assistance, as well as whether

the employee identifies and satisfies customer needs. In addition, observations are

made about the employee's communications skills and use of systems and resources.

The completed summaries are shown to and discussed with monitored employees.

Employees are not disciplined or penal?ed in any way on the basis of such monitoring, but they may receive rewards for Positive actions, such as "saving" accounts,

or for demonstrating high quality or other productive call abilities. Sometimes, the

customer with whom the employee was speaking will subsequently be called by MCI

Quality Management and asked to participate in a brief "customer satisfaction survey" regarding their earlier call to MCI customer service.

TELEPHONE MONITORING AND TELEPHONE SALES

Apart from customer service, telephone monitoring also plays several important

roles in MCI's telephone sales activities.

As with customer service personnel, monitoring of telephone sales personnel is an

important training and evaluation tool. MCI uses certain quantitative measures for

sales and productivity. In sales, as in customer service, it is the nonquantifiable

quality of the interaction between the MCI employee and the customer that is the

key to success. This is the most revealing element in assessing the effort and skill

in the employee's performance.

Although MCI does not formally use any monitoring information as marketing information, monitoring in both the sales and customer service areas allows us to

quickly discern trends and development in the concerns and interests of our customers The more we know about why people call us, the more able we are to provide

precisely the customer service they need. Similarly, the more we learn about the

ways in which people respond to our sales calls, the more agile and sensitive will

our people be in gauging the receptivity of the prospective customers we contact by

telephone. With regard to the latter interest, MCI's monitoring of its telephone sales

personnel is also designed to help ensure their compliance with the "Do-Not-CalT

requirements of the Telephone Consumer Protection Act.

TELEPHONE SERVICE OBSERVATION AND S. 984

MCI's monitoring practices are not designed or implemented to be games of

"Gotcha!" with our employees. We do not monitor to trap unwary employees in misdeeds or personal matters, and we do not use monitoring as a whip or prod for punishment, production or control.

But we are greatly troubled by the current provisions of S. 984 because they seem

to reflect these very worst assumptions about why and how "telephone service observation" is performed by companies like MCI.

In its present form. S. 984 puts telephone service observation on the same restricted footing as video surveillance and other very different forms of "electronic

monitoring," despite the complete absence of evidence of abuse. There is no recognition that telephone monitoring greatly benefits employees and consumers as well as

employers.

Under the bill's provisio, MCI would no longer be able to engage in its current

practice of unannounced telephone monitoring with respect to any customer service

or telephone sales personnel who has been a company employee for more than 60

working days. It would be prohibited from doing even announced telephone monitoring in connection with such employees once they have been with MCI for a cumulative period of 5 years. For personnel who have been MCI employees for more than

60 working days but less than 5 years, we would be permitted to conduct monitoring

for up to 2 hours per week, but only if we give the individual employee 24 hours

advance written notice of the date and hours during which the monitoring will

occur.

Restricting or, worse yet, prohibiting monitoring solely on the basis of how long

an employee has worked for the employer is wholly irrational. This standard fails

to consider that the person who has been an employee for 10 years may only have

been a customer service representative for 10 days. Even if the provision were rewritten in terms of more than 5 years performing a specific kind ofjob, there simply

is no reliable correlation between how long a person has spent doing a particular

job and how well the job is being done.

On the other hand, even if you could prove a reliable correlation between length

of service and current quality of service, this would not justify exempting veteran

employees from monitoring for customer service and consumer protection purposes.

Experienced employees may still require monitoring for training purposes, since

they are the ones most likely to be given new or more complex assignments. In addition, the justification for monitoring as a performance evaluation tool does not di-
32

mirush, especially with respect to customer service and consumer protection concerns, based on how long the employee has been on the job.

In virtually banning unannounced monitoring for all but new employees, the bill

has lost sight oftwo very fundamental facts about telephone monitoring:

First, it must be remembered that telephone service monitoring is limited to telephone calls which are conducted by the employee acting on behalf of the employer

and within the scope of performing his or her job responsibilities. MCI and others

who responsibly use telephone monitoring for training and evaluation in the context

of customer service and consumer protection interests fully recognize that employees

should have access to unmonitored phones for the purpose of making or receiving

personal calls. S. 984 fails to address the issue that there are no personal privacy

interests of the employee at stake in the monitoring of business calls.

Second, it must be understood that, to a large extent, the benefits of telephone

monitoring for the purposes described above will only be obtained if the monitoring

is unannounced; that is, performed without letting the employee know when it will

occur. The monitoring must be unannounced because this is the only way to ensure

that the employer obtains a representative sampling of the employee's typical telephone performance, rather than one which has been affected by knowledge of the

monitoring.

MCI fully explains its telephone monitoring practices to its employees and prospective employees before monitoring occurs, so that they will understand the reasons for such monitoring. We also share the results of monitoring promptly with the

employee, so that an evaluation and discussion of the results can help the employee

to improve his or her performance.

CONCLUSION

MCI strongly believes that responsible monitoring of telephone service representatives is an essential part of any training or performance evaluation program where

customer service ana consumer protection are important interests to be served. S.

984 fails to give adequate consideration to the experience of companies like MCI in

proposing to place unreasonable restrictions on such monitoring and thereby threatening to eliminate the benefits of such programs for employees and consumers as

well as employers.

Senator SIMON. We thank you, Mr. Gerdelman.

Mr. Tamer.

Mr. TAMER. Mr. Chairman, Senator Thurmond, I appreciate the

opportunity to speak before this committee on legislation that may

have a profound effect on my company, Teknekron Infoswitch Corporation, and the industry it serves, the call center marketplace.

Teknekron has been in the call center marketplace in excess of

15 years as a provider of telecommunications technology and services to call centers. Call centers are integral parts of businesses

that provide customer service to predominantly inbound telephone

callers. Examples would be airline reservation centers, public utilities, and catalog companies. For these businesses, the ability to

evaluate the effectiveness and competitiveness of their call center

operations is largely dependent upon obtaining reliable, quantitative and qualitative data through electronic monitoring.

We believe S. 984, if not substantially revised, will not only harm

businesses, but ultimately and most importantly, their employees

and customers.

This is not to say portions of the legislation are not good. In fact,

some sections are very well-done. Specifically, Section 4 of the legislation detailing the contents of notice to employees is by and

large a needed element in the workplace.

However, we believe that the definitions in the legislation are too

broad and ambiguous and that Sections 5, 6, and 8 are largely unworkable. These sections construct artificial parameters without regard to the uniqueness of different industries and the complexities

involved.
33

First, this legislation impacts work products. In the call center

environment, an agent's handling of a customer's call for placing an

order or inquiring about service is that agent's work product. This

basic premise is disclosed upon hiring.

Second, a fundamental concept of business is the need to quantify and qualify an employee's work product.

And third, our industry has just begun to explore the potential

of quality measurement through statistical process control. This

legislation may impair the industry's initiatives focusing on true

total quality management.

We appreciate that an employee needs to be protected from excessive intrusive monitoring. We also believe employers need to be

protected from overzealous monitoring by supervisors, which ultimately contributes to a decline in morale and productivity.

The legislation as drafted protects neither. We suggest there are

alternative methods for providing this protection, developed by harnessing available technology to assure fair and objective treatment

of employees, while providing immensely improved data and information collection to employers.

Technology currently exists and is used by our customers to establish a process which enhances the work product and protects the

employee, the employer, and the customer. Examples are for accuracy and consistency in monitoring, parameters and constraints

may be automatically established, such as by length of call, time

of day, type of product. For more efficient evaluation, a supervisor

may pre-record a session and, together with an employee, review

it at a more convenient time with an opportunity for playback. For

use as an employee training tool, a supervisor's notes and comments may be input to be considered later by the employee. For accuracy in performance evaluations, an employee may review the results of monitoring in comparison to the supervisor's comments.

For self-training, an employee may pre-select and experiment with

self-selected parameters.

And, perhaps most importantly, the monitor may be monitored.

This means that any evaluation system used for an employee may

also include a similar system for the monitor. The monitors actual

scoring trends can be reviewed in relationship to their peers and

the company's standards. And the monitoring can also include the

ability to decipher any discriminatory practices of the reviewing supervisor, such as between the sexes, the aging, the disabled, or minorities. This can ensure not only fair recording of the data, but

strong confidence by the employee that the people monitoring cannot abuse their employees.

The telephone center for inbound calling is a rising area of employment in this country. There are estimated to be over 40,000

call centers in existence today. New job market opportunities, such

as telecommuting, which is the performance of the telephone service representative functions at home, have opened up tremendous

opportunities for the disabled, the elderly, and the working parent.

Telecommuting jobs are expected to increase dramatically for the

rest of this decade. Also benefited are those who, for one reason or

another, cannot physically go to a place of business and yet can receive virtually any service over the phone. This legislation, if not

significantly modified, will adversely affect these job markets.
34

We offer the following recommendations. First and most importantly, the monitors must be monitored. Second, monitoring may

only he used for business purposes. Third, data or information in

whatever form must be recorded, stored, and made available for

the protection of the employee and employer for a reasonable period of time.

Four, all similarly situated employees must be monitored consistently. In other words, one group may not be monitored only in the

morning, while they are well-rested, and the other only late in the

day.

And five, monitoring must be disclosed, but restraints, especially

time restraints, if any, must be created with enough flexibility to

avoid destroying the accuracy and reliability of the information collected.

Finally, Mr. Chairman, I believe it would be enormously beneficial for this committee if the technology currently utilized by our

customers could be demonstrated. This could provide Senators and

their staff with an understanding of how technology protects workers from abuse while providing businesses with the information

vital to their competitiveness and successful service to their customers.

Mr. Chairman, I cannot overemphasize how proud you would be

of the impressive service America's leading companies provide to

the ultimate and most important customer•the American people.

Thank you for the opportunity to provide you with the information on this very important subject. We look forward to working

with the committee on this matter.

[The prepared statement of Mr. Tamer follows:]

PREPARED STATEMENT OF MICHAEL J. TAMER

Mr. Chairman and members of the subcommittee, I appreciate the opportunity to

speak before this committee on legislation that may have a profound affect on my

company, Teknekron Infoswitch Corporation, and the industry it serves, the CaD

Center marketplace.

Teknekron has been in the Call Center marketplace in excess of 15 years as a

provider of telecommunications technology and services to Call Centers. Call Centers are integral parts of businesses that provide customer service to predominantly

in-bound callers over the telephone. Businesses utilize Call Centers either for revenue generation such as airlines sales, insurance transactions, or catalogue sales; or

for revenue protection such as banking transactions (credit management), public

utility services or computer support activities. For these businesses, the ability to

evaluate the effectiveness and competitiveness of their Call Center operations is absolutely critical and this ability is largely dependent upon obtaining reliable (quantitative and qualitative data through electronic monitoring. We believe S. 984, if not

substantially revised, not only will harm businesses but ultimately, and most importantly, their employees, and customers.

This is not to say portions of the legislation are not good, in fact some Sections

are very well done. Specifically, section 4 of the legislation, detailing the contents

of notice to employees is by and large a needed element in the workplace. Nor, obviously, would we object to the legislation's privacy protections for locations such as

bathrooms and locker rooms. This type of intrusive monitoring is patently offensive.

But frankly, we believe that the definitions in the legislation are too broad and ambiguous, and that sections 5, 6, and 8 are largely unworkable. These Sections construct artificial parameters without regard to the uniqueness of different industries

and the complexities involved. While we may be submitting more specific legislative

comments later to the committee staff on these and other matters, let me address

our chief concerns now:

1. This legislation impacts work products. In the Call Center environment, an

agent's handling of a customer's call for placing an order, or inquiring about service,

is that agent's work product.
35

2. A fundamental concept of business is the need to quantify and qualify an employees' work product. The ability to manage a business depends on the ability to

review employees' work product (in the Call Center service business, this includes

such areas as verification that proper etiquette was followed, appropriate pricing

and product information was disclosed, and that an adequate number of transactions are processed).

3. Employees understand that their work product is serving the customer by telephone. Every employee, in whatever capacity, is subject to performance evaluation.

In the Call Center environment, it is simply that this evaluation involves successfully processing telephone related transactions.

4. This legislation will adversely affect industry initiatives focusing on the Total

Quality Management (TQM). U.S. companies have found it increasingly important

to perform qualitative and quantitative evaluations in their efforts to compete in a

global marketplace. While the legislation recognizes distinctions in continuous monitoring and random access monitoring, the restrictions contained in sections 5, 6 and

8, along with the broadly based definitions, may ultimately preclude initiatives in

TQM.

Monitoring inbound calls in a Call Center environment protects a company, its

employees and its customers, as it allows for an accurate and effective evaluation

of the quality or quantity of services provided by an employee to a company's customers. Quantitative measurements are not new (quantum measurements have frequently been an element of the workplace in job positions ranging from salespeople

to assembly line workers). Nor, obviously, are qualitative measurements. What is

new is the evolution of technology in making such measurements. We appreciate

that an employee needs to be protected from excessive intrusive monitoring. We also

believe employers need to be protected from over-zealous monitoring by supervisors,

which ultimately contributes to a decline in morale and productivity. The legislation, as drafted, protects neither. We suggest there are alternative methods for providing this protection other than that proposed in the legislation (specifically the

tenure caps, and notice windows). These methods are developed by harnessing available technology to assure fair and objective treatment of employees, while providing

immensely improved data and information collection to employers.

Technology currently exists and is used by our customers to establish a process

which enhances the work product and protects the employee, the employer, and the

customer. For instance, to assure accuracy and consistency in monitoring, parameters and constraints may be automatically established (by length of call, by time

of day, by type of product); for more efficient evaluation, a supervisor may prerecord

a session and review it at a more convenient time with an opportunity for playback;

for use as an employee training tool, a supervisor's notes and comments may be

input to be considered later by the employee; for accuracy in performance evaluations, an employee may review the results of monitoring in comparison to the supervisor's comments; for self-training, an employee may pre-select and experiment with

self-selected parameters; and perhaps most importantly, the monitor may be monitored. This means that any evaluation system used for an employee may also include a similar system for the monitor (the supervisor). The monitors' actual scoring

trends can be reviewed in relationship to their peers and the company's standards,

and the monitoring can also include the ability to decipher any discriminatory practices of the reviewing supervisor such as between the sexes, the aging, the disabled

or minorities. This can insure not only fair recording of the data but strong confidence by the employee that the people monitoring cannot abuse their employees.

The telephone center for in-bound calling is a rising area of employment in this

country. There are estimated to be over 40,008 Calf Centers in existence today.

Companies are increasingly recognizing that customers can be served over the

phone with high quality of service and at a reduced cost compared to face-to-face

communication. New job market opportunities such as telecommuting, which is the

performance of the telephone service representative functions at home, have opened

up tremendous opportunities for the disabled, the elderly and the working parent.

Telecommuting jobs are expected to increase dramatically for the rest of this decade.

Equally benefited are those who, for one reason or another, cannot physically go to

a place of business, and yet can receive virtually any service over the phone. The

legislation, if not significantly modified, will adversely affect these job-markets.

In conclusion, Teknekron Infoswitch believes that when used fairly and ethically,

monitoring in the Call Center environment can benefit the employer, the employee,

and the customer. As mentioned before, we believe that this protection cannot be

ensured by artificial constraints, but instead by an equitable process. In this regard

Teknekron Infoswitch has the following recommendations for any electronic monitoring legislation that this Committee and the Senate may consider

1. First and most importantly, the monitors must be monitored.
36

2. Monitoring may only be used for business purposes.

3. Data or information in whatever form (visual, audio, etc.) must be recorded,

stored, and made available for the protection of the employee and employer for a

reasonable period of time.

4. All similarly situated employees must be monitored consistently (in other

words, one group may not be monitored only in the morning when they are well

rested and another only late in the day).

6. Disclosure must be made to employees of the substance of the monitoring (in

other words, what quantitative and qualitative factors are being evaluated and how

are those factors interrelated).

6. Monitoring must be disclosed (but restraints, especially time restraints, if any,

must be created with enough flexibility to avoid destroying the accuracy and reliability of the information collected).

Finally, Mr. Chairman and members of the subcommittee, I believe it would be

enormously beneficial to this committee if the technology currently utilized by our

customers could be demonstrated. This could provide Senators and their staffs with

an understanding of how technology protects workers from abuse while providing

businesses with information vital to their competitiveness and successful service to

their customers. Mr. Chairman, I cannot overemphasize how proud you would be

of the impressive service America's leading companies provide to the ultimate and

most important customer, the American people.

Thank you for the opportunity to provide you with information on this very important subject. We look forward to working with the committee on this matter.

Senator SIMON. We thank you, Mr. Tamer.

Mr. Barry.

Mr. BARRY. Thank you, Mr. Chairman, Senator Thurmond.

My name is Richard J. Barry. I am the co-founder, owner and executive vice president of First Security Services Corporation in Boston, MA. We are a 22-year-old, privately-held company providing

security alarm, security officer and investigative services in the

Northeast. We presently employ approximately 3,000 people and

deliver over 80,000 hours of private security services weekly.

I am also speaking today on behalf of the Security Companies

Organized for Legislative Action, known as SCOLA, a coalition of

five trade associations representing the guard, alarm, armored car,

and investigative service industries. Together, our organization

represents more than 3,000 firms in the private security industry,

and more than one million employees. The firms represented by

our group range from small, family-owned concerns to major corporations with international operations.

We appreciate this opportunity to share our views on S. 984, the

Privacy for Consumers and Workers Act. As you know, Mr. Chairman, Mr. Vincent Ruffolo, of Blue Island, IL, SCOLA's chairman,

had the privilege of testifying before your subcommittee in 1991 on

this same subject, and I bring his thanks and appreciation for our

appearance here today.

We were concerned then by overly-broad language that would

have seriously impaired the ability of business to safeguard patrons, employees, personnel and business assets from criminal activity and other threats in and about the business premises.

5. 984 represents a significant response to many of the security

concerns presented by Mr. Ruffolo at that time. Nevertheless, our

industry still has serious reservations about the day-to-day impact

on employees who implement security programs.

S. 984 is administratively complex and burdensome for employers, and we have many questions about its application to specific

situations. We hope that its scope can be narrowed to address more

precisely the privacy interests of those in the workplace without
37

sacrificing the legitimate and needed electronic technology security

applications.

We also ask, since the bill was only recently introduced, that the

hearing record be kept open to allow additional statements to be

submitted.

We agree that protecting consumer and worker privacy in the

workplace is important. We also believe, however, that those interests must be in balance with the appropriate use of electronic security and safety systems to protect consumers' and workers' safety

and to preserve company assets.

The key word is "appropriate." We do not condone abusive or capricious use of security equipment or procedures. We know from

our own experience, however, that workers and the general public

expect and demand electronic security systems in many workplace

environments. An example that comes to my mind is a large, nationally-recognized hospital in Boston. The sheer size of that facility makes it impossible to provide a secure and safe environment

for workers, patients, visitors, without the use of electronic systems.

In hundreds of thousands of other workplaces, electronic technology is accepted as a key component in eliminating crime and

other unacceptable behavior by and toward employees and others

on the employer's premises.

Mr. Chairman, we recognize that striking the appropriate balance between an atmosphere of adequate safety and security on the

one hand and individuals' privacy rights on the other is quite a

challenge, and it deserves a thoughtful approach. It is impossible,

however, to contemplate all the situations which may be covered

under this bill and to be confident about how its provisions would

be applied.

A number of the concepts in the bill, such as continuous electronic monitoring, periodic inspection, random monitoring, and the

provisions concerning work groups and persons with cumulative

employment for 5 years, are extremely difficult to imagine in their

practical applications without wondering if they would effectively

prohibit commonly used types of safety and security systems.

It seems unlikely that this bill is intended to expose employers

to liability for using measures that make the workplace safer; yet

we are concerned that just such an unintended result may be dictated by S. 984.

It is important to note that many premises' protection systems

are activated by a person's entry into a secured area•for example,

hospital pharmacies. Department of Defense record rooms, or bank

money rooms. As we read S. 984, such systems would be random

or periodic and subject to Section 5. However, an employee or trespasser whose mission is to steal or tamper with information or materials, or to harass a coworker, may also enter a secured area

where he or she can today be electronically monitored, engaging in

whatever his or her nefarious mission may be.

Under S. 984, however, monitoring systems activated by the motion of a person's approach and entry into a secured area would become practically unusable until the employer had reasonable suspicion that an employee had broken or was about to break a law
38

and that the misconduct would involve significant economic loss to

the employer or other employees.

Even with this exception, there may be little an employer can do

as a practical matter, since mechanical systems do not distinguish

between authorized and unauthorized persons.

I would conclude, Mr. Chairman, by stating that with crime and

violence in the workplace an ever growing concern, we sincerely

hope that S. 984 and its companion bill in the House will be

amended to authorize legitimate security-focused monitoring in the

workplace to deter activities that diminish productivity. Such monitoring is important to deter both conduct that is actually criminal,

such as physical assaults and battery, pilferage, thefts against employees themselves, and inappropriate behavior by employees toward coworkers that impairs the psychological quality of the work

environment.

I conclude by thanking you again, Mr. Chairman.

[The prepared statement of Mr. Barry follows:]

PREPARED STATEMENT OF RICHARD J. BARRY

Mr. Chairman, my name is Richard J. Barry. I am the co-founder, owner, and executive vice president of First Security Services Corporation, headquartered in Boston, Massachusetts. We are a privately owned business, providing security alarm,

security officer, and investigative services in the Northeast. My firm currently employs 3,000 people and provides in excess of 80,000 hours of security services per

week.

I am also speaking today on behalf of Security Companies Organized for Legislative Action, known as SCOLA, a coalition of five trade associations representing the

guard, alarm, armored car, and investigative services industries. Together, our organization represents more than 3,000 firms in the private security industry, and

more than one million employees. The firms represented by our group range from

small, family-owned concerns to major corporations with international operations.

We appreciate this opportunity to share our views on S. 984, the Privacy for Consumers and Workers Act. As you know, Mr. Chairman, Mr. Vincent Ruffolo, of Blue

Island, Dlinois, had the privilege of testifying before your subcommittee in 1991 on

behalf of SCOLA concerning this same subject. You may recall our concern at that

time with what we believed to be overly broad language that would have seriously

impaired the ability of business to safeguard its patrons and employees, and to protect personal and business assets located in and about the business premises. We

believed the language in that bill would have also made it difficult to document offpremises fraud, theft, and sabotage.

Mr. Chairman, while S. 984 represents a significant response to many of the security concerns presented by Mr. Ruffolo at that time, our industry still has serious

reservations about the day-to-day application of this bill and its impact on the ability of an employer to implement security measures. I'm sure you would agree that

businesses shouldn't be placed in the position of having to consult a lawyer for every

specific use of legitimate security technology. As it stands now, S. 984 appears to

be administratively complex, with questionable interpretations on how it applies to

specific situations, and seems to be unnecessarily burdensome especially for small

business.

The security industry is understandably interested in this issue', Mr. Chairman,

and believes the committee would benefit from a thorough analysis by security professionals out in the field. Since the bill was only recently introduced, we hope the

hearing record will be kept open long enough to allow additional time for statements

to be submitted from businesses which will be affected by its provisions.

Mr. Chairman, we agree that protecting consumer and worker privacy in the

workplace is wholly appropriate and important. We also believe, however, that those

interests must be m balance with the appropriate use of security to protect consumer's and worker's safety and to safeguard company assets. The overriding word here,

Mr. Chairman, is the word "appropriate". SCOLA does not condone abusive or capricious use of security equipment or procedures, such as using cameras in a locker

room without legal cause. Yet both workers and the general public expect, even demand, reliable security in many workplace situations, such as cameras in elevators,

remote areas, or parking facilities.
39

Striking the appropriate balance between legitimate security and the right to privacy is the concern, of course, and deserving of a thoughtful approach. It is impossible, however, to contemplate all the business situations which may be covered

under this bill and be confident about the application of its provisions.

In our business, we ask a lot of questions; that's the nature of our work. For instance, if there is theft, how do you identify the perpetrator? If there are security

problems, how do you expose the situation? If drugs are being abused or deal transacted in the workplace, how can you document the activity? If there is industrial

espionage, how do you confirm your suspicions? If there is a charge of sexual harassment, how might you document the allegation? Mr. Chairman, we would ask those

same questions regarding the application of this bill. Technology in the security

business is advancing rapidly, and newer, more innovative ways are-being developed

to address the solution of those security questions. We need to know how those

methods could be applied under the provisions of this bill.

Imagine, for example, a large building with a bank of video monitors that continuously afford the opportunity to view each of the areas monitored for security purposes. If the images presented rotate from one area to another;in a sequence, with

a manual override that can be controlled from the control center, is this "continuous

monitoring", or is it "random", or "periodic"? The definition of "continuous electronic

monitoring" may contemplate such a situation, but "periodic inspection of continuous video monitoring from an off-site location ... to deter crime and provide

evidence to law enforcement personnel" [Section 1(1)] does not clearly answer this

question, as we read it.

This inquiry becomes particularly significant in light of the section 5(b) (3) prohibition on random or periodic monitoring of any employee who has a cumulative employment of 5 years, although it appears that random or periodic monitoring is permitted without restriction only within an employee's first 60 working days with an

employer. While we wonder about the practical applicability of the "working group"

concept to random or periodic monitoring, subject to notification of those employees,

we are greatly troubled by the prohibition against intermittent monitoring of 5-year

veteran employees. Random monitoring undertaken for security purposes•the multiple video monitoring system described previously 1 for example•would probably be

unable to avoid picking up the images of these veteran employees if they happened

to pass through any ofthe areas in which security cameras were in place. It seems

unlikely that the intent is to expose the employer to liability under this act for using

measures that make the workplace a safer environment, yet we are concerned that

just such an anomaly may be created by the current language of the bill.

There are other questions in our mind also, Mr. Chairman. For instance, could

a picket line be monitored if there is the threat of violence? Some retail establishments and or restaurants with bars, for example, have a high rate of employee turnover and a constant problem with theft. How would the provisions of this bill apply

in those workplaces? What effective methods of security could be utilized? Under

what conditions and subject to what prerequisites?

Mr. Chairman, as you know, a companion bill has been introduced in the House

by Mr. Williams, H.R. 1900, which addresses this same issue. In comparing the two

bills, we noticed some differences which need clarification. For instance, in the sections addressing the review of continuous electronic monitoring, H.R. 1900 provides

an exception for the review of electronic data obtained from video monitoring which

is used to deter crime by persons and to provide evidence to law enforcement personnel. The Senate bill does not seem to contain that direct exception. We would

like to know how that legitimate exception would be treated under the Senate bill.

In another example that needs clarification, the Privacy Protection sections of

both S. 984 and H.R. 1900 would not allow electronic monitoring in bathrooms, locker rooms, or dressing rooms. However, the House bill provides a exception in the

case of a reasonable suspicion of criminal activity. Again, S. 984 does not seem to

address this specific exemption.

In one last example concerning workers compensation, the Senate imposes a

threshold of $25,000, where no threshold exists in the House version. To a small

business, Mr. Chairman, a $5,000 claim can represent a truly significant level.

Mr. Chairman, given the challenges before your committee on this important

issue, we would respectfully urge that the use of legitimate security measures be

provided with a specific, but workable exemption regarding the application of S. 984.

All workers and citizens have a right to a safe, prosperous work environment, and

the legitimate use of security adds greatly to that goal. Employers are diligent and

sincere in their efforts to provide security and safety to employees; this is supported

by the Nation's cost figures for security and systems. We believe employees could

be protected from indiscriminate and unfair use of electronic security and safety sys-
40

terns by having the burden of proof on the employer to ensure that the system's use

was only for security and safety of the employees and the general public.

Thank you, Mr. dhairman.

Senator SIMON. I thank you. You used the word "balance," and

I think that is what we are trying to find. I think the evidence is

fairly clear from the first witness, Mr. Piller, that things have gotten out of balance.

You mentioned the hospital. You heard a representative of the

American Nurses Association testify about videos in dressing

rooms, wash rooms and bathrooms, and Mr. Ettienne testified to

the same. If there is no suspicion of the laws being violated and

under S. 984 if you had suspicion you then could get a court order,

and then there could be unannounced, secret monitoring, is there

any justification for just video tapping bathrooms?

Mr. BARRY. I would not say that there is any justification in

some of the examples that were used. However, in the case of the

situation in the hotel locker room, I believe that it had been published that the investigation was initiated by complaints from other

employees who were disturbed with some or the conditions that existed in the locker room.

The monitoring of the locker room was done, according to the reports that we read in the paper, under legitimate and legal procedures.

Senator SIMON. Under what are now legitimate and legal procedures.

Mr. BARRY. Correct, and the letter of the law, according to those

who did it, was followed. They have no way of knowing if they are

accurate or right in their assumption.

However, usually, they are initiated by complaints from coworkers who are disturbed by some type of conduct that is taking place

in these areas that we speak about.

Very seldom is the video that is taken in that type of an atmosphere subjected to the public viewing that this particular film did.

And it is generally, in the times that I am familiar with, restricted

to use for the strict evidence for the purpose that it was installed.

Senator SIMON. But if there is no suspicion that the law is being

violated, is there any justification for that kind of video?

Mr. BARRY. I would say no.

Senator SIMON. All right. Mr. Gerdelman, in your business at

MCI, you mentioned first of all people who are starting out, that

they need to be monitored.

Mr. GERDELMAN. Yes.

Senator SIMON. Can't they be notified that they are going to be

monitored, and you live within the law?

Mr. GERDELMAN. All our employees are notified at the time they

start employment that we do randomly monitor. In fact, they do

sign a statement acknowledging that we monitor. We feel that the

highest quality that we can achieve is via unannounced, so that we

truly see an average call. And actually, some employees prefer not

to know when because they don't feel the stress when it is routine

and random.

Senator SIMON. What if the CEO of MCI were to say to you, "You

had a phone conversation with Senator Simon, and you should

have handled it better. You said this and this, and you should have
41

said something else." Would you welcome such a phone call from

your CEO and that kind of monitoring?

Mr. GERDELMAN. Well, actually, most of our calls are not personal in nature. They are between a customer for business reasons.

Senator SIMON. Well, this is for business reasons. You are calling

me about this legislation.

Mr. GERDELMAN. Well, telephone service observations are

healthy, and it does improve the quality, if that would help my

quality. But most of the time, when we listen to employees, it is

for coaching, and it helps them, and they appreciate the feedback.

And I learn from my CEO. He helps me in presentations.

Senator SIMON. And if your CEO wants to coach you, you would

not resent that?

Mr. GERDELMAN. I don't resent coaching, no. Coaching is good. It

helps you be a winning team. And in fact, recently, we were notified that Fortune Magazine mentioned that we are rated one of the

best in the telecommunications industry, which is part of the quality monitoring that we do.

Senator SIMON. Mr. Tamer, how would what your company does

violate S. 984 right now? I am not real clear.

Mr. TAMER. Our company provides technologies that allow call

centers to run their businesses, and our technology covers two

areas. It covers continuous electronic monitoring of the telephone

system and the statistics that come from the technology. Then we

also provide software products that allow companies to analyze and

evaluate the productivity and quality of their call centers, which allows them to chart and plot the distinction between the two so that

the companies can address both of those issues, because it is very

difficult for them, because they have go to make a decision between

how many, how often, and how well do I do it.

So we bring technology forward and solutions forward that allow

companies to get a better understanding of what their employees

are doing, what sort of service levels they want to provide to their

customers, and finally, how efficiently and how cost-effectively can

they do it for them.

Senator SIMON. OK Let's just say Mrs. Smith is disabled and is

taking care of telephone business. You mentioned that this is one

of the things, that people who are disabled can do this in their

homes. And she is notified that she is going to be monitored for the

next week on how she handles things. And that complies with this

law. What, beyond that, should be necessary for Mrs. Smith in that

situation?

Mr. TAMER. Under the law as I understand it, Mr. Chairman, she

would only be monitored if she were under 5 years. If Mrs. Smith

were working out of her home in a telecommuting environment,

and she was over 5 years, you would not be able to get any sort

of data whatsoever on her performance of her work out of her

home. So under 5 years, you could get the data associated with her,

and it could be used, but over 5 years, as I understand the legislation, she would not be able to be monitored.

Senator SIMON. And let me just add, this legislation is not written in stone; we want to be fair to business.

Mr. TAMER. I understand.
42

Senator SIMON. And as you mentioned, Mr. Barry, we have made

modifications. But generally, after 5 years, you know whether you

have a good employee or whether you don't have a good employee,

and it seems to me it would be rare that you would need to monitor

someone after 5 years. And then there can be•unless my staff corrects me•if there is notification, that employee, Mrs. Smith, could

be monitored.

Mr. TAMER. Mr. Chairman, I have two responses to that. First,

for the most part, monitoring in our industry is used for training,

and the number of years that you are employed may directly affect

your knowledge of that particular application or it may not. Actually, the more years you are employed, you may find that your

tasks switch from handling this type of service call to that type of

service call to that type of service call, so your requirement for

training would continue above and beyond the 5 years. And as you

move more and more people out into the home, which we want to

occur, because it provides tremendous opportunity, we have to be

able to get to that person to provide extensive training, probably,

and monitoring is an excellent way to do that.

Senator SIMON. And the bill permits that at-home monitoring. In

fact, it says that it permits the discharge of an employee solely on

the basis of monitoring•of course, which happens now, anyway, if

it is at an at-home facility.

Mr. TAMER. Mr. Chairman, parts of the bill, I do not know the

correct interpretation. If I have taken that section wrong•my understanding of that section was that it only discussed the reviewing

of the material and that you could review continuous monitoring of

someone who was outside the standard billing. I did not see the

connection between reviewing continuous monitoring and the exemption from anybody over 5 years being able to be monitored at

all. I did not, and if that is so, then you could monitor them out

of their home.

Senator SIMON. Let me ask all three of you to do this•because

frankly, I don't want to have another hearing 2 years from now; I

want to move this legislation and get something done. I would be

interested if in the next 30 days, you could get me specific language

suggestions for changing the legislation that you think would be

helpful. Obviously, some, I am likely to accept, some I am not likely

to accept. But we want this to be a practical bill. We also believe

there should be greater protection for employees than there is

now•in terms of their basic civil liberties and the ability to communicate without fear. We think that is in the interest of employers, and we think it is in the interest of employees. We don't want

to hurt MCI; we don't want to hurt your business, Mr. Tamer; we

don't want to hurt your business, Mr. Barry. We do want to protect

people. We are interested in security, but we are also interested in

civil liberties.

It does seem to me that people of good will ought to be able to

fashion something that is constructive in this area.

Mr. BARRY. Mr. Chairman, I would like to speak to a point that

you made, if I might, in regard to the suspicion by law enforcement

that would support the initiation of electronic monitoring.

Senator SIMON. Yes.
43

Mr. BARRY. That ties into a portion of the statement that I did

not get to, and it deals with directly how private security firms

interface with law enforcement. And today, unfortunately, we are

all familiar with the cutbacks in public law enforcement, both at

the Federal and State levels. And the private businesses that we

serve find themselves unable to obtain the services of public law

enforcement because of the constraints on their manpower. So most

of the investigations that companies begin are initiated by private

investigative services, who then at some point work with the law

enforcement to provide them whatever evidence they have to support law enforcement procedure.

So quite often, the evidence that is gained is gained by a private

investigative firm before it goes to the police department, and the

interface with police departments is very good in the public and

private security. And it became very apparent recently in the electronic surveillance of the garage at the World Trade Center, when

hours and hours of surveillance of vehicles coming and going from

that garage, unknown to those people that were in it, be they employees, delivery, or whatever. However, with the advent of the ex-

{dosion that videotape was reviewed, and miles and miles of useess videotape happened to contain some evidence that became significant as an investigative tool to assist in the solving of that

bombing.

So quite often the evidence that is gathered by electronic surveillance cameras is not known to be valuable until some time, as in

that example.

So there is a good working relationship between law enforcement

and private investigators. However, much of the work that is done

is done by private investigators before the law enforcement has the

time to commit manpower to a criminal or sexual harassment or

whatever the investigation might be. I would just want the committee to be aware of that.

Senator SIMON. Well, we understand there is that cooperation,

and we want that cooperation to continue. The bill does differentiate, however, between a dressing room, a bathroom, and a garage.

And I am not ready, frankly, to say •and meaning no disrespect

to your company•that a private security agency can go in and videotape a bathroom or a dressing room in any private business.

Mr. BARRY. Nor do we ask for that.

Senator SIMON. This legislation says if that is going to be done,

then it has to be not your company, but it has to be law enforcement people who do that.

We thank you for your testimony here today, and we thank all

the witnesses. Again, not just the witnesses, but any others who

have any suggestions for changes in the legislation if you can get

that to us within the next 30 days, frankly, I want to get this bill

moving. Thank you very much.

[The following prepared statement was submitted for the record:]

PREPARED STATEMENT OF DIANE K. BOWERS, PRESIDENT, COUNCIL FOR MARKETING

AND OPINION RESEARCH

Mr. Chairman and members of the subcommittee, my name is Diane K. Bowers.

I am president of the Council for Marketing and Opinion Research (CMOR). We appreciate the opportunity to submit this statement addressing S. 984, the "Privacy

for Consumers and Workers Act." I
44

CMOR is a coalition of research associations, survey and polling organizations,

and manufacturers representing all segments of the research industry from research

providers to research buyers. CMOR was established in the fall of 1992 to speak

on behalf of the entire marketing and opinion research industry on issues of respondent cooperation and government

affairs.

Mr. Chairman, we applaud you for addressing workplace privacy issues. You and

Representative Williams have identified problems that clearly warrant attention. As

drafted, however, S. 984 would undermine the ability of government, university and

private researchers to ensure the accuracy and quality of survey research data. We

strongly oppose the bill in its current form.

Public opinion polling and other survey research relies heavily on telephone interviews. Supervisory monitoring of telephone interviews enables the companies conducting the research to ensure the accuracy and quality of their data. This function

cannot be served if supervisory monitoring must be limited to a few hours a week,

if interviewers must be told when their calls will be monitored, and if respondents

must be told that the interviews are being monitored.

This is precisely what S. 984, in its current form, would do:

Section 5 would prohibit a research organization from monitoring interviewers

(other than the newest employees) through "telephone service observation" or other

electronic monitoring for more than 2 hours per week, and long-time employees

could not be monitored at all.

Section 4 would require that interviewers be given advance notice of the hours

and days that any monitoring would occur. Sec. 4(b). It also would require that respondents be informed that the call is being monitored. Sec. 4(e). Additionally, anyone conducting telephone research for a Federal agency would have to offer respondents the opportunity not to participate in view of the fact that the call might be

monitored. Sec. 4(f).

Dr. J. Ann Selzer, the former Director of the Iowa Poll, has stated that these requirements would make it impossible for researchers to maintain the "stringent

quality control" that is indispensable to "first-rate survey research." Frank Brown,

the president of MarketSearch Corporation in Columbia, SC, spoke for survey research organizations around the country when he stated that S. 984 "would seriously jeopardize telephone survey research." The reasons are obvious:

If survey research organizations are unable to monitor interviewers whenever

they are conducting research, they cannot ensure that questions are being asked

properly and that answers are being properly recorded, or evaluate the study as a

whole, including the general tone of the responses to the questionnaire.

If interviewers must be told when monitoring is being conducted, they inevitably

will be more cautious and conscientious at those times than at others, thus defeating the control function of the monitoring. We are aware of no comparable requirement that employees in other contexts be given such specific notice that they are

being observed.

If respondents are told that the calls are being monitored, this information•

which is wholly gratuitous and amounts to "static"•is bound to make at least some

respondents less willing to participate and thereby compromise the quality of the

population sample.

The additional requirement that Federal agencies affirmatively invite respondents

to "opt out" of a survey would cripple the ability of the Labor Department, the Commerce Department, the Federal Trade Commission and other agencies to collect important research.

Eminent academic researchers also have expressed their strong opposition to S.

984. Dr. Stanley Presser of the University of Maryland, who is the President of the

American Association for Public Opinion Research, has stated that S. 984 would

"impair the ability of both public and private decisionmakers to obtain high-quality

information" about public attitudes and opinions "on a wide range of subjects.

Dr. Norman N. Bradburn, the director of research for the National Opinion Research Center at the University of Chicago, and Dr. John M. Kennedy, director of

the Center for Survey Research at the University of Indiana, have expressed similar

concerns. Dr. Bradburn has warned that S. 984 threatens many government surveys

and "would do great harm to the fundamental statistics upon which the Congress

and the Administration rely for policy information."

Four leading public opinion researchers•Field Research Corporation, The Gallup

Organization, Louis Harris & Associates, Inc., and The Roper Organization•have

sent each Member of this subcommittee a joint communication stating their strong

opposition to the bill as drafted. (See Attachment A). Indeed, letters opposing the

bill have been sent to individual members of the subcommittee by a wide variety
45

of public opinion polling and survey research organizations and professionals, including some identified above. (See Attachment B).

Mr. Chairman, survey research organizations and other employers should provide

their employees with general notice that they may be subject to electronic monitoring, and they should describe the purposes for which the monitoring may be conducted. But it is unreasonable to address the privacy concerns that underlie S. 984

in a manner that would severely impair government and private survey research,

which the bill as currently drafted would do.

Thank you.

ATTACHMENT A

TEXT OF WESTERN UNION OPINIONGRAM BY LEADING PUBLIC OPINION RESEARCHERS

OPPOSING S. 984

June 21, 1993

To the members of the Subcommittee on Employment and Productivity:

As leading public opinion researchers in the United States, we strongly oppose S.

984, the "Privacy for Consumers and Workers Act," scheduled to be heard by the

subcommittee on June 22. As drafted, S. 984 would impose restrictions on supervisory monitoring of telephone interviews that would cripple our ability to ensure

the accuracy and quality of polling and other survey data relied upon by government

and private decisionmakers alike. S. 984 should be rejected unless these unnecessary and unwarranted restrictions are eliminated.

Field Research Corporation, Mervin D. Field, chairman The Gallup Organization,

James K. Clifton, President Louis Harris & Associates, Inc., Humphrey Taylor,

President, COO The Roper Organization, Harry W. O'Neill, Vice Chairman

ATTACHMENT B

Illinois

Dr. Norman M. Bradburn, Director of Research, National Opinion Research Center (NORC) at the University of Chicago

John A. Bunge, President, LEGAL MARKETING RESEARCH INC.

Veme B. Churchill, Chairman and CEO, MARKET FACTS

Wesley R. Peters, President, DIMENSION RESEARCH, INC.

Indiana

Dr. John M. Kennedy, Director of the Center for Survey Research at the University of Indiana

Iowa

Dr. J. Ann Selzer, SELZER BODDY, INC., formerly Director of the Iowa Poll

Maryland

Dr. Stanley Presser, Director of the University of Maryland Survey Research Center and the Joint University of Maryland/University of Michigan Program in Survey

Methodology, and President of the American Association lor Public Opinion Research

Joseph A. Hunt, President, WESTAT

New Hampshire

Michael Kenyon, President, PROJECTIONS INC.

Pennsylvania

John Berrigan, President, National Analysts, Inc.

Paul A. Frattaroll, President, JRP Marketing Research Services, Inc.

BJ. McKenzie, President, Market Dimensions Inc.

Fred B. Soulas, President, ICR Survey Research Group

South Carolina

Frank K. Brown, President, MarketSearch Corporation

Utah

Ron Lindorf, President, Western Wats Center

Senator SIMON. The hearing stands adjourned.

[The appendix follows:]
46

APPENDIX

iPftUL RIMH

on electronic pri I c y

WITH X-RAY

Your employer

may be using

computers to keep

tabs on you

Each and every day, Gayle Grant and her colleagues

were electronically monitored down to the second as

they did their jobs. Unplugging themselves from

their job monitors could lead to dismissal. "We

punch in and out of three units; the time clock, the

VDT |computer terminal], and the telephone keypad

known as Collins. We plug a phone jack into Collins

that b attached to our headset and |we) receive telephone calls. The VDT and Collins track every second of our day," says Grant (a pseudonym), an airline reservations agent in California. She and her

colleagues were allowed 11 seconds between calls and

12 minutes of personal breaks daily. Two episodes of

unauthorised unplugged time in a week were cause

for disciplinary action. She eventually cracktd under

the pressure. Grant suffered a nervous breakdown.

Grant s reaction may have been extreme, but her

employer merely followed standard practice in many

industries, and acted consistently with both the letter and intent of U.S. federal law. The 1986 Electronic Communications Privacy Act (ECPA) prohibits phone and data line taps with two exceptions:

law-enforcement agencies and employers.

The police or FBI can tap lines•but only as • last

resort under court order•to crack criminal conspirators, drug traffickers, and other serious-crime suspects. The courts permit fewer than 1000 such taps

each year, nationwideEmployers have no such limits. They may view

employees on closed-circuit TV; tap their phones,

E-mail, and network communications; and rummage

through their computer Piles with or without employee knowledge or consent•24 hours a day.

The most pervasive use of monitoring takes place

In occupations where tasks are highly repetitive, so

productivity can be easily measured. The Communications Workers of America, the union that represents most telecommunications workers, estimates

that employers eavesdrop on phone calls between

workers and consumers 400 million times per year•

more than 750 calls every minute. Mail sorters, word

processors, data entry clerks, insurance adjusters, and

even computer tech-supftort s|iecialists, often working on terminals connected to a mainframe, may IK

monitored constantly or intermittently for speed,

errors, and time spent working.

Wording In Glass Office*

MOST PROFESSIONAL AND TECHNICAL EMPLOYEES

assume that they have nothing to fear. Their privacy

is protected by the nature of their jolw•too complex to evaluate by machine, right? To test that

assumption, Maaiortd examined 25 popular networkmanagement, integrated groupware, electronic-mail,

and remote-access products to see if they could be

used to invade employee privacy, and if so, how easily. The study used only Macintosh software, hut

similar tools are available on other platforms.

If your office network runs on a full-featured network operating system, like Novell NetWare or

Microsoft LAN Manager, and is run by a technically astute manager, then your Macintosh and all data

transferred from it is an open book. Working from

an office across the room or across the country, a network manager•particularly in server-based local

area networks•can eavesdrop on virtually every

aspect of your networked computing environment

with or without your approval or even knowledge.

The manager can view the contents of data files and

electronic-mail messages, overwrite private paw-
47

• OSSII WITH X-RAY IVIS

Tom ONil, t N»w tortcy business

centulUnl and onetime chairperson

of the Perot campaign In his state,

claims he wu confronted by representatives of Perot'1 Dallas headquarten who had obtained error-ridden

versions of hh personal data.

Job Seeker Beware:

Electronic Hurdles lo Employment

Ron Perot'! eager campaign volunteer* were stunned

Uit year when they discovered that agents of the billionaire poUtfdan may have looked kito tome of their

backgrounds. The newt stimulated an FIJI probe Into

allegations that the Perot campaign organization Hie'

gafly obtained volunteer*' confidential credit report!.

The alegatjani made Perot teem paranoid and steaiy.

Actually, he may Just have been foRowing the standard

practice of many prudent managen. who have become

tome of the btggeit users of electronic tools to Investigate fob seeken or recent hires

Thei* managen verify prior-employment rialms

carefully, of course. Nothing new there. Then they

check credit and criminal records online In a matter of

minutes If data h not available In electronic form•for

example, college transcripts•they hire research services to get transcripts and deliver their contents to the

dent's online account In a day or so.

These efforts fit right mto a corporate culture that

leads a growing number of employers to require drug leits and, leaving nothing to chance, socalled personality profiles. Such profllet may contain hundreds of true-false questions, such u

these typical e*amples "I have read little or none of the llble,* "My tea life Is satisfactory,"

and "I am very seldom troubled by constipation." They may be used to predkt laziness, poor

work habits, or psychological problems, or merely to verify whether the fob seeker has mainstream values or an outlook consistent with company goals

"Management h very pragmatic." tays Alan F WesUn. a professor at Columbia University who h an esperl on electronic privacy Issues and an industry consultant. "Management wit

do whatever the social system and the legal system says, with a special emphasis on whether

R helps get the work done to make a better product"

This pragmatic approach derives, In part, from skyrocketing health-Insurance and legal

bills. The cost of medka) care has led many employers to screen out applicants who smoke or

•re overweight.

And until tast summer, many employers searched online data banks to find out whether

a Job seeker had ever fled a workers'* compensation datm•an Insurance claim for an on-the-

|ob Injury. Some employen refused to offer a Job to anyone who had ever filed a comp daim.

The Americans With CHiabfflUei Act, signed Into law tail year, limits the use of such data banks

before a firm offer ol employment has been made. But If *n employer finds a history of compensation claims after making a fob offer. Ihe employer can shift the prospective employee to

a fob classification that reduces risk of reinfury H In the employer's opinion no appropriately

safe fob h available, the offer can be rescinded

And a rash of lawsuits In the 1980s accusing employers of "negligent hiring" has also

pushed employer vigilance to a new standard You hire a man to do maintenance at your hotel,

giving him a passkey to al the rooms, of course. That man rapes a guest lecause you failed

to check hh criminal history onlne. you didn't know that he served time for assault six yean

earler. Welcome to court Employen are caught In a dilemma, tays Wettln. 'Do they stay with

the hinds off. retpect-the-privacy, that's-not-our-buslness view, or do they respond to thek

lawyen' warnings to protect themselves against liability, and their bean-counlen' warnings

that health-benefit costs are going to be out of sight 7"

Employen have a responsibility to protect themselves from potential liability and their customers from undue danger. Rut privacy advocates ask whether society Is well served by a business culture that can blacklist people with the cool efficiency of a 9600-bps modem.

words, and audit your tune and activities

on the network.

All the major electronic-mail and

•roupware products that combine messaging, Tile management, and scheduling

(such as WordPerfect Office) allow the

network administrator to change passwords at any time, then read, delete, or

alter any messages on the server. With

few exceptions, network-monitor programs, such as AG Group's LocalPeek,

Faratton Computing's Traffic Watch II,

and Neon Software's NetMtnder, allow

astute managers to read files transmitted

over the net. tn short, these tools are only

slightly less invasive than others specifically designed for surveillance and used

primarily on mainframe systems.

That; LIU la Watch

NETWORK ADMINISTRATION AND COMmunication tools were designed for valid

reasons, not to invade employees' privacy.

Like any technology, they are value-neutral. Some vendors even include strongly

worded privacy warnings and a few offer

options that allow a client Mac to shut out

network managers.

The capacity to snoop is there, but is

It used? Old surveys and anecdotal

accounts suggest that in some industries•telecommunications, insurance,

and banking, for example•as many is 80

percent of employees are the subjects of

telephone or computer-based monitoring. Such estimates may he inflated, hut

there is little dispute that many employers monitor routinely. And if the rapid

sales and market growth of snooping toob

b an indication, monitoring is on the rise.

But virtually no rigorous research has

been done about how much electronic

eavesdropping takes place on the job.

Until now. Mtewcrfd conducted a

survey of CEOs and MIS directors at Jf»l

large, medium, and smalt businesses in a

wide range of industries to find out how

much they peek at their employees' work

on their computers, and why (see the

"Electronic Eavesdropping at Work"

charts), AIKHH 22 percent of our sample

have engaged in searches of employee

computer files, voice mail, electronic

mail, or other networking communications. In companies with 1IHHI or more

employees, the figure rises to 30 percent

Nearly IA percent of res|>ondents report

that they have checked employees' computerized work files.

The average company in our study

employs 3240 people, so the total sample

represents the conditions experienced by

nearly I million workers. This data sugfjests that some 20 million Americans may

ie subject to electronic monitoring

through their computers (not including

telephones) on the fob. Meanwhile, only

18 percent of respondents' companies

have a written policy regarding electronic privacy for employees.

Managers who endorse electronic

surveillance argue that it helps them

gauge productivity and chart the work

flow of a group of employees. It can generate statistics on individual or departmental accomplishments and plot future

work loads. Computer monitoring can

even be used to give employees managerial feedback and reduce the need for personal attention from supervisors, tn the
48

frhret* a«Sf»<ata Mart ReAanberg: Contrary to

what many people believe, "l>nuH h more the *

packaed «wn * waled tetter."

leoetof Paul $ I moot Tmptoytn should not be

forced to five tip their freedom, dignity, or MotVe

oSe* health when they go ID word."

Privacy oapart Alart P. Woatlni "Monitoring

that aeatei teeftngs ol survHIance and streis k anttthettcW to the new eufturet of management."

MamrrrU survey, 12 percent of responding employer* endorse monitoring for

evaluating performance or productivity.

Monitoring can also increase safety or

•dherence to compi ny rules, some

emplo>'ers contend. Some trucking companies, for example, set on-hoard monitors to record speed, engine-idling time,

and length of stops. The system ostensibly tries to ensure that truckers drive safely and take adequate rest breaks.

Companies that deal in sensitive data

may feel compelled to guard against disloyal or merely careless employees who

might divulge it to competitors (see the

sidebar "To Catch a Spy: Is Workplace

E-Mail Private?"). And 4 percent of our

survey respondents endorse electronic

monitoring "for routinely verifying employee honesty." A much higher number•23 percent•feel electronic monitoring is a good tool where reasonable

evidence of wrongdoing, such as theft or

negligence, comes to light.

While nearly half of the managers in

our survey endorse the concept of electronic monitoring, and nearly a fourth

actually conduct electronic monitoring,

most of those don't do it often. About 71

percent of those who conducted such

searches did so only five or fewer times in

the preceding two years. Only two companies had searched employees' work

files, voice mail, electronic mail, or networking communications more than 100

times during that period.

From Watching to Intruding

THE MACUVMJ) SURVEY INDICATES THAT

many employers may recognUe that

excesrive monitoring has possible negative side effects. "Technology now allows

employers to cross the line from monitoring the work to monitoring the worker," Cindia Cameron, a field organiter

for 9 to 5, National Association of Work

A Model Employment-Privacy Policy

Mscwofltf1 privacy survey suggests that leii than one-fifth of U.S. employers have electronic privacy policies. So In most cases, employees may have no Idea whether or how employers

monitor their everyday activities and work IHes The following points represent what many privacy advocates consklet basic features for a good electronic-privacy policy for employers:

• Employees arc entitled to reasonable eipectaUons of personal privacy on the fob.

• Employees know what electronic surveillance tools are used, and how management uses the

collected data.

• Management uses electronic monitoring or searches of data files, network communications,

or electronic maR to the minimum extent possible. Continuous monitoring Is not permitted

• Employees participate In decisions about how and whan electronic monrtoring or searches

take place.

• Data Is gathered and used only for ctearly defined work-related purposes.

• Management wfH not engage In secret monitoring or searches, except when credible evidence of criminal activity or other serious wrongdoing comes to Ugh!. •

• Monitoring data wifl not be the sole factor In evaluating employee performance.

• Employees can Inspect, chalenge, and correct electronic records kept on their activities or

files captured through electronic means.

• Records no bnger relevant to the purposes they were collected '<" wM be destroyed

• Monitoring data thai Identifies Individual employees wtl not be released to tny thkd party.

e«ept to eomply with legal requirements.

• Employees or prospective employees cannot waive privacy rights.

• Managers who violate these privacy principles are subject to discipline or termination

tng Women, told a Senate committee.

Shecites the case of an eipress-mail company employee whose computer logs the

length and frequency of her trips to the

bathroom. The woman was reprimanded

for using the bathroom four times in a

single day.

Some employers use monitoring data

In efforts to boost productivity through

competition•by posting data publicly.

One enterprising Florida company,

Thomas Powell Associates, found a way

to automate the process. "1 got the idea

watching the {Miami] Dolphins (football

team]," says a company founder. "Those

athletes play their hearts out. Why? Certainly the money helps, but it's not the

real reason. They play at 100 percent

because everything they do is seen by

hundreds of thousands of peopleinstantly." The company produces and

sells software that instantaneously puts

every telephone operator or tetemarketer's productivity statistics on a computer screen, visible to all employees.

Do such schemes pay off? "Monitoring that creates feelings of surveillance

and stress is antithetical to the new cut.

tures of management that our society is

moving toward," says Alan F. Westin, a

professor at Columbia University and

consultant to the data-gathering giant

Equifax. Westin practically invented the

idea of "electronic privacy" and has written on the subject for three decades. "(If

management] doesn't motivate employ-
49

To Catch a Spy:

Is Workplace E-Mail Private?

Symantec's Eugtni Wang, who

stinds accused of theft of tnde

»otlv b it the center of • bitter

debit* over the privacy of commercial E-mail services that »*

used (or company business.

Mott people believe that electronic-mall messages are

secured by a personal password•ai private as a letter In

the U.S. mat). "They are finding out." says Marc Rolenberg, Washington, D.C., director o( Computer Professionals for Social Responsibility, "that E-mal Is more like a

postcard than a sealed letter."

Tort cat* (or privacy Employers have ready means to

read E-mal messages, and many do fust that, ai computer executive Eugen* Wang found out recently. Hh case.

Involving two Silicon Valley companies, could break new

ground In electronic-privacy law.

Wang, who was Borland International's vice president

for computer languages, defected to a direct competitor,

Symantec Corporation, tast September. Court documents

Wed by Borland attorneys state that shortly after Wang

announced his departure, Borland execs found E-mail

addressed from Wang to Symantec CEO Cordon Eubanks.

The messages allegedly revealed top-secret corporate data,

Including marketing plans, product-release dates, and

detailed Information on Borland's game plan against Symantec The police and FBI were called

In shortly thereafter, and seized other documents at Eubanks' and Wang's homes.

Because Wang used MCI Mail•a commercial E-mail service•allegedly to transfer data

to Eubanks. electronic privacy has become a key Issue In the case. Wang and Eubanks, who

have been Indicted on criminal felony charges Involving theft of trade secrets, deny that they

violated trade secrecy taws. They also argue that when Borland viewed Wang's MCI Mall messages, the company may have violated federal law. If so. the confiscated E-mail messages

might not be admissible In court The 1986 Elect'onic Communications Privacy Act (ECPA)

protects messages sent on commercial E-malt, such as MCI Mai, from outside or unauthoriied

users. "Even If Borland had gathered evidence m a legitimate and legal way regarding privacy. (Eubanks and Wang) vsouH ibl! be Innocent," says Symantec attorney James McManls.

"But K after reviewing all the data. It appears to ui that there has been a violation of the

(ECPA) statute we wlB raise that."

Borland counters that It paid for Wang's MCI Mall account, and therefore had every right

to Inspect the messages "New employees at Borland are given an MCI (Mail) password that

Is on fie with a Borland administrator,' says Borland ipokesperson Steve Crady. "You do not

have • reasonable expectation of privacy In an E-mail system that Is given to you for company business by your employer.' If the privacy Issue is litigated. II could set new standards on

the privacy of commercial E-mail

California challenges Federal rules regarding In-house electronic mail are less ambiguous

than those governing commercial E-mail. ECPA treats Internal company communications as

company property And a Macworld survey suggests that some 37S.OOO employers agree

About 9 percent of respondents•CEOs and MtS directors of U.S. companies of all slrei•indicate that they sometimes search employee E-mail files. This prerogative Is being challenged In

California, where the state constitution specifically protects privacy, unlike the U.S. Constitution. Court documents Indicate that Alana Shoars, formerly E-mail director of Epson America,

claims she was fired in 1990 tor questioning her boss's right to read hundreds of E-mail messages sent between other employees Shoars filed wrongful-termination and class-action lawsuits against Epson. Her attorney, Noel Shfpman. claims that by reading employee E-mail messages, Epson violated both the state constitution's privacy provision at wel as a California

eavesdropping statute.

Shlpman also represents two employees of Nissan Motor Corporation embroiled In an

E-mal controversy Rhonda Hall and Bonlta Bourke were allegedly fired from their fobs

Installing software and training other employees. A legal brief tiled by Shlpman claims that the

two were fired or forced to resign alter complaining about managers printing and reviewing

printouts of personal messages from the company's E-mail system•meitages they assumed

were private. The two sued for Invasion of privacy and wrongful termination

Both the Nlfs-in and Epson cases were dismissed by lower courts, but are now on appeal.

If the plaintiffs prevail ki either situation, the legal status of personal E-mail messages on internal company systems wlfl be thrown open, perhaps resulting in greater privacy rights.

eea to be more participative, to be more

committed to the workplace, then the

chances of producing the kind of quality

work that will compete with the Japanese

•nd the Germans are very low."

And managers concerned with both

productivity and containing health-insurance costs may find electronic monitoring

to be self-defeating. Electronic monitoring increases employee "boredom, tension, anxiety, depression, anger, and fatigue," according to a recent study of 745

employees of telecommunications companies, jointly conducted by researchers

from the University of Wisconsin and the

Communications Workers of America.

These findings confirm earlier studies

that implicate electronic monitoring as a

major workplace stress factor•linked, in

part, to the sense of powerlessness that

monitored emptoyees feel.

FoislfaU UgUlatrv* Rallof

SUCH CONCERNS HAVE STIMULATED

some members of Congress to ask what

constitutes fair and appropriate monitoring. The proposed Privacy for Consumers

and Workers Act failed in the last Congress, but Capitol insiders have high

hopes for it in this session. The proposed

law would limit how monitoring could

take place in these ways:

• Employers would have to tell new hires

how they might he monitored and how

the collected data would be used.

• Employers would be required to give

advance warning that monitoring will

take place (except for employees on probation)•possibly including a signal light

or beep tone during monitoring.

• The total time that an employee could

be monitored would be capped at two

hours per week.

• Secret, periodic, or random monitoring of long-term employees would be

prohibited.

Mucu-orfJ'-i survey shows that the law

would force policy changes for many businesses. We found that only .* I percent of

companies that conduct electronic monitoring or searches of employee computers, voice mail, electronic mail, or networking communications give employees

advance warning.

Many companies recognize consumer

demand for privacy protections, and they

have stepped forward with pioneering

consumer-privacy policies that go far

heyond the limited legal requirements.

But few companies have |>olicies in place

that go as far to protect employee privacy

as the Privacy for Consumers and Workers Act would mandate.

Companies that have led the way on

consumer-privacy concerns, such as

American Express, Citibank, and Equifax,
50

describe their electronic monitoring of

employees as strictly limited. But they

would not release intern*! policies on

employee privacy, and they acknowledged

surveillance practices beyond what would

be allowed by some features of the congressional proposal.

One reason that employers may give

less weight to employee privacy is that

they feel countervailing pressure: legal

requirements to monitor or audit employee activities, particularly in informationintensive industries. So most employers

comply with employee-monitoring laws

and regulations as the)-see fit, rather than

breaking new ground by minimising

monitoring and using the least-Invasive

approach, says privacy eipert Westin.

Industry groups also castigate the Privacy for Consumers and Workers Act.

"An employer would be put in the absurd

position of having to advise suspected

thieves when they are being observed,"

Vincent Ruffolo. president of Security

Companies Organired for Legislative

Action, told a Senate hearing.

If the proposal is enacted, says

Lawrence Fineran of the National Association of Manufacturers (NAM), customer service will erode, and manufacturers might have to abandon certain

kinds of computer-aided manufacturing.

"NAM opposes any legislation that will

interfere with the ability- of modern and

future equipment that can awist domestic

companies in their Tight to remain competitive," Fineran says. "Otherwise the

United States may as well let the information age pass it by." Yet Japan and most

of Europe already impose much tighter

restrictions on employee surveillance

than the U.S. proposal would mandate.

Few privacy advocates argue that

monitoring should be eliminated. But

they say industry ignores a critical factor:

most employees are hardworking and

honest. "The problem with the business

community,'* says Louis Maltbe, director

of the American Civil Liberties Union's

Workers Rights Project, "is that they are

trying to make the rules with the assumption that every employee is a goldbrick."

Maltbe and other advocates see reasonable privacy protection going far

beyond the provisions of the proposed

law, to the point where employees have

some control over monitoring practices

•nd data collected (see the sidebar "A

Model Employment-Privacy Policy").

"There has been kind of a reflet reaction, automatically resisting things that

ultimately have been very helpful to

industry," says Senator Paul Simon, DIII., principal sponsor of the Senate version of the privacy bill. "The banking

Industry resisted having•believe it or

MA•»VOKLD POIL

Electronic Eavesdropping at Work

Worker, am routinely monRprod h some hdusrrtes, but how pervaslva k tie prattle*? lb

find out. Mtcwof'd conducted Iht (Vat national

survey designed to find out how and why

butfnesoM monitor employee*, top corporate

rnanagert from 301 businesses of al efaee and M

a wide ranga of todustrle* pa/ttcbated.

Mo*« than 21 percent of mspondonts•30

percent In Urr* axnponlea•haw 'engaged h

aoardies of empfey** computer fltos, Vok» mat

tlector* mat. or ot>er nttworUi| <ommunfcabonf." Nearly IS percent report havtog

msmmmm

Woe imrtit*4? ©

cs#< t*d compwt#*tt*d mihm ***** **•*•tnA

9 peroenl hiving snerched employ** [-run.

These dale suggest that some 20 mfBon

Americans are tubjact to electronic monitoring.

IS your hard drive or otikm network searched?

tetter ask your beta dWoly, Only 11 percent of

nHpondartta' companies had a written poJky

regardrur •tectronfc privacy. And only II par*

cent of companies that conduct electronic

monitoring or aaarrfws of employ• computers,

voice ma", E-mif, or Mtworkfesg eommunlca>

tJcni rtv* fusAiyea. advanca warning.

tscoBEmmm

Do yon bevs a

apolky

Which ntei7

Electronic work files

E-mail

rfetwork mouagof

VbkemaJI

On whose airtherityl

EvecuUvef

Middle managm

Ptoonnaf manager.

MB ctr*rtcn

Whyl

BESS woiii fk**

Mi rotHeata IU rn

kiveftlgate esptonagt

Review performance

Prevent harassment

Se*k mitring daU

S*» k. IVgil aoftwaie

rit

27 7

15.4

662

16 9

101

*4«

242

29 2

315

92

«2

31

31

31

Do yon ksve a

policy a* elee*

•Mail privacy7

Are privacy

polldti know* ©

l?T!r??naTHTOl!!TT.dihrii

At penonnel

racordikapf

•Utfronlcally? ©

© How often' flail 2 yea/il

Mere »vi 100 11

SOU tOO II

29 to 49 oo

10 to 74 1 "

«•>« 1 «

!•! PS1KHHM lull

None 1 ««

Do employees

hava acoaii te

NKordi On any

aa*dluni}T

Who has

unreetncled access?

Eieojltve,

Middle managers

Personnd managers

Payrol manafeo

Are employ•i wtnad?

K»

M3

Ewecuthre.

Middle manager.

Personnel managers

Payroll manafers

511

14 0

661

20

61 1

41 9

53 2

23

•JJUIJI'fl.llJAII!^

Never acceptable

UtuaHy or always counterproductive

Good loot lo verity rrideoc* of wrongdoing

Coed tool to muBnely monitor performance

Good tool to enhance performance

Good tool to rouBnely verify honesty

«fc may n«( atptaf tOOpSVfWt «SW to nofl-r.

rjei at any tor reutonie. h t 2.9 percent.

not•federal insurance for banks. Now no

bank would want to do without it," he

tdds. "Seme companies are (giving prior

notice of monitoring) right now and having no difficulties. I think it improves

employee -elationships," Simon says. In

| 3* 6

1C3

22*

12 0

73

40

any ca«e, he argues, "employees should

not be forced to give up their freedom,

dignity, or sacrifice their health when

they go to work.'* an

Research assistance by IIM CAM.
51

UfM)!!. ft f V a ti +

I

PRIVACY

PERIL

How computers

are making

private life a

thing ofthe past

In recent years, gathering and sharing personal information has become a way of life for business and government. People have kept track of one another for

millennia, of course. But the advent of telecommunications, the growth of centralized government, and

the rise of massive credit and insurance industries

that manage vast computerized databases have turned

the modest records of an insular society Into a batasr

of data available to nearly anyone for a price.

The U.S. Constitution carries no explicit guarantee of personal privacy. But most Americans consider the ability to conduct one's personal affairs relatively free from unwanted intrusions to be an

inherent human right. A year-long MttU'orU investigation shows that such a right stands little chance

Against new electronic technologies that make most

people's live* as clear u glass.

From a personal computer anywhere In the

world, data can he gathered from limitlessly broad

and diverse sources. The ability to capture, sort, and

Analyze that data is often nearly instantaneous. The

force of such tools has overwhelmed the capacity of

laws and social mores to protect privacy.

Until the last few yean, if you wanted to find out.

say, if any-rie had sued Roger Hcinen, the former

Apple vice president who defected to Microsoft in

January, you had to laboriously check, in person, at

various county courthouses. 1 spent about two minutes doing the same thing online.

"As technology becomes ever more penetrating

and intrusive, it becomes possible to gather information with laserlike specificity and spongetike

absorbency," says Gary T. Man, a privacy expert

who teaches at the University of Colorado. "Information leakage becomes rampant; indeed, it is hemorrhaging. Barriers and boundaries•be they distance, darkness, time, watts, windows, even skin•

that have been fundamental to our conceptions of

privacy, liberty, and individuality give way. Actions,

feelings, thoughts, acts, even furures arc increasingly visible." Easy access has blurred the borders of

private life.

The public views these developments with growing alarm. In a 1992 poll conducted by Louis Harris

and Associates, 7R percent of Americans expressed

concern about their personal privacy, up from al>out

s third of those polled in 1970, and up from 64 percent in 1978. Perceived threat? to personal privacy

from computers rose from 38 percent in 1974 to

68 percent last year.

In a 1991 7iMf/CNN poll, 93 percent of respondents asserted that companies that sell personal data

should be required to ask permission from individuals in advance. The 1990 census showed the highest

rates of noncooperation ever•the result of fears that

participation could place personal information in

jeopardy, contend some privacy advocates. And California's Privacy Rights Clearinghouse•the first privacy hotline in the nation•logged more than 5400

calls within three months of its inception last

November.

What Th«y Mivt on You

PUBLIC CONCERNS HAVE RISEN IN TANDEM WITH

the proliferation of personal records kept Ity government, corporations, and employers. New forms ol

data are coming online all the time. Nearly every

quantifiable aspect of our lives•and many a judgment catt•finds its way into data banks where it is

exchanged, sold, and resold, again and again.

The sheer volume of available data i* stunning.

In 1990, the U.S. General Accounting Office, an

arm of Congress, conducted a survey of federal data

bants that contain health, financial. Social Security,

and a wide range of other personal data. That incomplete tatty included 910 major data banks with billions of individual records. Much of the information
52

A Model Consumer-Privacy Code

Feeling the sting of consumer anger at the deluge of deed-marketing (ofldtaUom and creditreport pmblftni. many companies have voluntarily established privacy codes of conduct The

following model code combines high porib from corporate and bade-aisodatton policies with

the viewi of privacy advocate!. This modet h bated on reasonable expectations for business

practices In today't world. Therefore, It doet not address three Ideas that could prove critical

to protecting privacy In the long term:

• An opt-In tyitem for direct marketing. In which the personal data would be collected only

on consumers who request that their names be placed on marketing ftsb.

• Mandatory updates, audib, and conection of public records data.

• The option to replace oeo*/f cards that leave an electronic trail for every consumer transacVon with anonymous debit cards, as some nations now do (see photo below). But lor now,

the following measures would go a long way toward protecting consumer privacy In electronic

trans actions.

Data Collection

• fully disclose to consumers the nature of the data collected.

• Collect only data necessary to your business purpose.

• Contact consumers yearly to disclose current and anticipated secondary uses of their personal data, and to offer an opt-out option.

Direct Marketing

• For small companies: Don't self detailed personal data that can be tracked to spectfk tndlvtduah Do require customers to certify that list data will not be resold.

• For large companies Don't sell personal data at aH. Instead, charge customers to distribute

marketing materials relevant to their Inleresb.

Data Accuracy

• Conduct systematic and regular audib to catch data entry enors.

• Disclose the source of data on request from Individual consumers.

• Provide easy and free methods for consumers to challenge records that concern them and

If needed, to correct those records.

Data Security

• Umlt access 'o personal data on a "need to know" basis•available only for legitimate business purposes.

• Train employees to prevent unauthorized disclosure, and audit their compliance at regular Intervals

Credit and Medical Data Bureaus

• Provide free yearly cempltlt reportj

to consumers.

• Create a speedy appeal process for

consumers to challenge their data

Sunset Provisions

• Follow all laws In expunging Incriminating records such as criminal convictions or bankruptcies.

• Periodically check for and purge alt

obsolete data

rftAwcettxixou

•SOOAGmtTS •

rHJertMrr

ttrmunre

Phone debit cards, such is this one from France,

work Ike corrt^uter transit tickets Each cal s cost h

deducted from tie prepaid card, obviating detailed

bllkig records

from these computerised system* is open

to other government agencies and coq»orations, or sold to thousands of commercial data hanks that trade on records about

your home, possessions, stock transactions, family characteristics, and buying

habits.

And once created, a record rarely disappears. "In our society, there is a tendency to collect data without a clear purpose. And it stan amund for years," says

Alan Brill, head of the information-security practice for Kroll Associates, the

largest and most successful private-investigation firm in the country. "It's like

vampire data. It rises up from the dead to

bite you," he says.

Obsolete information can mislead.

Out of context, a single incriminating element in someone's personal history can

become a defining characteristic. Suppose

you were guilty of possessing a smalt

quantity of marijuana in I9R5, but haven't

taken a toke since 1986. Should that conviction affect your employment prospects

in 1993'

The problems grow when the data is

wrong. If data banks contain millions or

billions of records, it's hardly surprising

that they sometimes slip a digit or two.

Consider the Big Three credit

bureaus•TRW, Equifax, and Trans

Union•which are among the largest and

most closely monitored purveyors of personal data. These agencies compile snd

sell the records of key economic transactions for a large majority of American

consumers.

Early this year, TRW agreed to pay

$1000 each to about 1200 residents of

Norwich, Vermont, whom the company

erroneous))' designated as deadbeats due

to a coding error. A 198fl survey of 1500

credit reports found that 43 percent contained errors. And a 1991 survey by Consumers Union found errors in 4R percent

of reports requested from the Big Three,

including 19 percent with inaccuracies

that could cause a denial of credit, such as

s delinquent debt. The Federal Trade

Commission receives more complaints

about credit bureaus than about any other

industry.

Errors are not always the fault of the

credit bureau•it might he from one of its

sources. "In many cases the [credit

bureaus'] responsibility to their customers

is to give an accurate reflection of what's

in the public record, and thst public

record may itself be inaccurate," explains

Steve Metalitt, general counsel of the

Information Industries Association,

which represents about 500 companies

that gather and resell data.

Regardless of the origin of such

errors, there are no clear lines of responsibility for correcting the record. Meanwhile, the victim's life may descend into a

Ksfka-esque nightmare.

Values In Conflict

THE NEW STANDARDS OF ELECTRONIC

Intrusion upset the balance between two

distinctly American values: an open and

accountable society, and the right to be

left alone.

There are many reasons to keep public records open and easily accessible.

Society has the responsibility, for example, to monitor illegal activities, to capture criminals, and to preserve public

safety. If electronic privacy rights were

absolute, we would never have learned

about Oliver North's E-mail messages,

which helped unravel the Iran-Contrs

scandal. And organized-crime kingpin

John Gotti might never have been convicted but for the tap on his phone.

Vet data collection has a dark side. In

the 1960s and 1970s, J. Edgar Hoover's

FBI gathered personal data by any means

possible and often used it to blackmail

innocent people, sometimes destroying

their lives.

Employers have a right to guard

against ineptitude, criminality, and cor-
53

HBB.s'»

Tr»d* iiifKljIlon ipoktimifi ft*** MotalKat

"In many cases, the (credit burcaut] respnnift>lltv h

to flw an tcajttlt reflection of what i In the public

rocord, and (hit record majr Huff be Inaocurata.'

Privacy advocate Evan Handrtctm 'To ma,

)unV mail B no! fr« moil bumrtf, privacy hsua, but I

can tee H annoyt the hel out of a lot of people." Ha

rer_eK.es hundred* of letter! th»t prove the poW.

Information tnduetry faaryor Ronald Pt*ii*n

"h th« UM el Information compatible with the purpose for which P. wn cohectedT' H not mtaailerpretatton or oasi e*j>WUtlon usual? folowt.

porate spies. Hut should employers lie free

to search at will any and all employee

computer files, E-mail, voice-mail, and

data transmissions over a company's local

irei network? (See "Bosses with X-Ray

Eyes," in this issue.)

Government investigators, members

of the press, and the public at large may

have a legitimate interest, for example, in

knowing whether U.S. Transportation

Secretary Federico Peria has ever hcen

tagged for drunk driving. (We have no

reason to believe he has.) But when the

driving records of millions of people are

sold to mass marketers of automobile

Insurance or alcohol-treatment programs,

has the public trust been violated?

•oyond Junk Malt

THE ISSUE TRANSCENDS ELECTRONIC

list sales and the invasive micro-marketing tactics they stimulate. Personal data

Itself has become a commodity for sate

on the open electronic market to anyone

who owns a personal computer.

Takethe case of Marketplace: Households, an ill-fated joint venture of Lotus

Development Corporation, a software

developer, and the Eqiiifax credit bureau.

Marketplace would have placed the

names, estimated incomes, purchasing

habits, marital status, and other data on

120 million consumers on s CD-ROM•

the nation on a disc for only $700. Few

consumers were persuaded by the profeet's privacy protections. And they let it

be known: 30,000 angry letters killed

Marketplace. Shortly thereafter, in the

face of mounting consumer pressure,

Equifax agreed to quit selling any consumer credit data to direct-marketing

vendors.

In the space of • year Equifai went

from promoting one of the most farreaching incursions into privacy ever contemplated to opting out of the credit-data

marketing business altogether. Early this

year, TRW (hut not Trans Union) followed suit.

But the personal-information market

hardly depends on Equjfax or TRW.

Thousands of other data resellers•A/artver/a* among them•offer lists of likely

buyers. This wealth of sources has

spawned a sprawling informationreselling industry The Bitrwell Directory of Information Brokers describes 1253

commercial services with names like Disclosure, Access Information, and Answer

Associates.

Many of those services provide only

data on companies, economic trends, or

sociopolitical issues. But personal information•address, marital, salary, driving,

and employment history; corporate affiliations; who your neighlwrs are; vehicle

and real estate holdings; civil and criminal

court records•and much of the rest of

the trail of bytes left by all of as is now

available from scores of commercial

sources. And to make their lives easier, the

data-hungry turn to supermarkets of

online information.

Down In tha Data Mlnaa

SO-CALLED SUPERIUREAUS BUY ACCESS

to the major credit bureaus, state and fedcral agencies, and just about any other

private or public-record repository they

can find. They provide one-stop shopping

for online data. The data-reselling trade

is the electronic equivalent of the gold

rush•few Icgil restrictions apply, and

there is lots of money to be made if you

own the mine.

Standards vary widely, hut some

information brokers are less than scrupulous in screening their clients. Even legally shielded data, such as credit and phone

records, as well as arrests that do not

result in convictions, frequently are

revealed to a wide range of qualified or

merely determined and savvy requesters.

These include private investigators, direct

marketers, the press, FBI agents, lawyers.

TMbhe U.S. is

a laughingstock among

privacy experts

because we protect videotape-rental records,

but not medical records

insurance companies, corporate spies, and

vindictive ex-spouses.

For data mining to be worthwhile, the

information has to he difficult or unpractical to obtain using conventional methods, hut worth the cost of electronic

extraction. It is.

Consider the results of an online

experiment my colteague Galen Crutnan

and I conducted during research for this

article. First we selected prominent individuals from the entertainment industry.
54

| Shattering the Illusion of Privacy

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business, politics, the Macintosh industry,

and sports, including I lollywood producer (inrl friend of President Bill Clinton)

Harry Thomason, former San Francisco

49ers quarterback Joe Montana, and Bank

of Ameriei CEO Richard Rosenberg.

Then we tried to find out everything we

could on them, with the following restrictions: we did not seek legally protected

data, and all the information had to be

obtained online.

For this mmlest search we spent an

average of only Si 12 and 7S minutes per

subject. Even so, we unearthed the essential financial, legal, marital, and residential histories "f nearly all of our subjects

(see the chart "Shattering the Illusion of

Privacy"). In short, we compiled electronic dossiers. And these were the efforts

of data-mining neophyte*.

As online services Itecome increasingly interconnected, affordable, and fast, the

ability to build electronic dossiers may

quickly become the hottest privacy issue

of the nett century. Then again, there are

so many pressing privacy issues and such

widely divergent sensibilities about personal privacy, even professional privacy

advocates have trouhle deciding what'*

most important.

A Quoallon of Priorftlot

•TO ME. JITJK MAIL IS NOT THE MOST

burning privacy issue," says Evan Hendricks, editor of the Privacy Timts

newsletter. "But I can see it annoys the

hell out of a lot of people." To illustrate

the point, he pulled out a boi of 3 (Hi

recent letters from consumers apoplectic

over a deluge of unwanted letters flowing

into their rmilhoie*. Financial interests

and personal sensibilities about electronic privacy cover an enormously broad

spectrum. This makes it hard to separate

trivial problems from real invasions that

damage people.

"You have to choose a certain bumlle

of records, prioritize those records, and

create a trustee situation around them,"

argues Jerry Berman, VVa<hington, D.C.,

director of the Electronic Frontier Foundation, an advocacy group for computer

users. "You cannot protect all data, hit try

bit, Iryte by byte."
55

What should be in the bundle? Medical records are a top priority "due to the

sensitivity of the data and the lack of any

Misting legislation to protect it," says

Ronald Plesser, a lawyer who represents

the information industry and headed

President Clinton's transition team for

the Federal Communications Commission. Tighter privacy controls for banking, tax, and credit records are also near

the top of every privacy advocate's list

"Around the world, the U.S. is a

laughingstock among privacy experts

because we have a law protecting videotape-rental records, but not medical

records," llendriclo sdds. (The release of

Individual video-rental records was

sharply restricted after • reporter finagled the details of Judge Robert Bork'a

viewing habit* during his confirmation

hearings for a seat on the U.S. Supreme

Court two years ago.)

Outcry over Craxftt Records

MALIC OUTCBV AND POLITICAL PRESsure have already reformed the major

credit bureaus: all three bureaus now permit consumers to view and correct credit

reports, although the reports released to

consumers may not be as detailed as those

ffiven to, say, prospective employers or

indlords. Whit's missing is usually information like an assessment of the person's

credit risk,

TRW makes reports available free to

individual consumers. Emiifax hat opened

a toll-free line (80076B5-1111) to respond

to consumer questions. Bad publicity has

prompted credit agencies•particularly

Equifax•to more strictly screen companies and information brokers who seek

access to credit reports. And in February,

federal legislation was introduced that

would force credit bureaus to correct

errors within If) days, and would hold

banks and retailers accountable for the

quality of the information they turn over

to credit bureaus.

But credit records represent only a

small fraction of online personal data.

The far broader category of publicrecords data•real estate ownership,

court records, tan liens, bankruptcy filing*, voter registration data, auto and driver records, marriage records, and the

like•should be on the table, arguesjanLori Goldman of the American Civil Liberties Union's Privacy Project.

"We're now asking a question that

hasn't been asked before What is the

public's interest in accessing this information?" she says. Should the price of t

driver's license be that you give up your

detailed personal description to anyone

who wants to buy it? Privacy advocates

call for a close look at online data mining

and they recommend limits on the collection of unduly detailed electronic

dossiers.

Plesser, the Clinton transition team

adviser, suggests using this test: Ms the

use of the information compatible with

the purpose for which it was collected?"

When the answer b no, the prospect of

misinterpretation or crass exploitation

usually follows.

Do Accatt and Privacy Conflict?

MANY LAWYERS, DIRECT MARKETERS,

and reporters say that radical restrictions

on public-records data would give them

electronic migraines, and could even

make their jobs impossible. But Marc

Rotenberg, Washington, D.C., director

of Computer Professionals for Social

Responsibility, warns against believing

arguments that access and privacy rights

ire inherently incompatible. Such conflicts are often promoted by those who

stand to profit by expanding access to private data, he argues.

Take the case of caller ID. Such systems instantly reveal a caller's number on

a display attached to the phone of the

party receiving the call. Caller ID has

often been portrayed in the media as a

simple case of competing consumer interests•some people advocate the system as

a way to apprehend heavy- breathers; others fear caller ID as an open invitation for

businesses to surreptitiously pad marketing lists and for bullies to find battered

spouses hiding in shelters.

But there is a third factor. "With the

advent of caller ID, the telephone companies stood at the fulcrum of this information transfer and stood tohencfit from

the proposed sale of personal telephone

numbers," Rotenberg says. How' They

can charge businesses for using the caller

ID service and then charge consumers for

being listed or not listed, depending on

the local laws' requirements.

Managing Electronic Privacy

HOW SHOULD SUCH CONFLICTS BE

resolved' In the U.S., a wide range of federal and state agencies grapple with privacy issues. Sometimes they have exemplary tools to work with, such as the

Electronic Communications Privacy Act,

which bans most electronic eavesdropping over phone or data lines.

More often, there is little or no legal

protection of personal data. Part of the

reason may l»e that no government agency

reviews privacy issues comprehensively or

tries to map a coherent overall policy on

the wide range of consumer, commercial,

and workplace privacy issues.

Canada and many European nations

use privacy commissions or data-protection agencies to advise their governments

on privacy policy, protect consumer

rights, or regulate corporations. Most privacy advocates in this country see some

kind of privacy board•staffed with specialists equipped to evaluate emerging

our society

collects and stores data

without a clear purpose.

Its like vampire

data. It rises upfrom the

dead to bite you.

privacy issues•as a key to timely and

effective regulation.

"The U.S. is an embarrassment to the

privacy movement overseas," says Simon

Davies, director of the Australian Privacy

Foundation. "The U.S. stands alone as

an example of what a superjtower should

not do in privacy."

A U.S. data-protection board with

advisory powers was proposed in Congress in l°9l. Proponents believe that

such a l»oard could sort out the privacy

implications of new services or technologies before they saturate the marketplace

or are unnecessarily quashed by consumer

outrage.

The developers of Lotus Marketplace

might have averted years of fruitless

development if a privacy board had

offered feedback on the idea in advance.

The National Research and Education

Network (NREN), promoted by the

Clinton administration, would be a prime

candidate for advance evaluation by a privacy hoard. This muttibillion -dollar "data

superhighway" would theoretically allow

tens of millions of Americans to communicate data, voice, video, and other forms

of media at many times the speed of current networks. Protecting personal information on NREN is "tbr privacy issue of

the twenty-first century," says the Elec-
56

Charles Hamet, • critk of *# A)y**«

Pipeline Ivrvkt Company, which

Operate* the tr*m Alaska oH pipeline.

was the sutytrt of an »Ubo»aU spying

operation Initiated by (h( company.

Atyetka. Viraugft a thlrd'party frwesflgator, gained access to Hame* S aedH

and phorw recent*, aa wel) at panon-

• I flrundal data

11 Easy Ways to Safeguard Your

Electronic Privacy

Other than a few hermits living on remote mountain

peaks, few of ui can realistically five up Insurance,

credit cards, and electronic banking. Sacrificing tome

penonal privacy b the price of admission to our conturner society, lut the following steps can curb some

of the wont Invasions of privacy In the Kves of today's

consumers.

Personal Id*ntlfleaBon

• Give only the minimum data required for commercial transactions. Leave all Soda) Security, home phone,

driver's license, and credit card numbers off checks

whenever possible. And don't five such numbers for

credit card purchases; In most cases they are not needed by merchants.

Credit

• Obtain your credit report yearly Irom one or more of

the big three credit bureaus (Equrta*. Trans Union, and

TRW: to contact these companies check for an office In

your area), and try to correct any errors you detect.

• When refected for credit, ask why; then verify the

accuracy of the data used to refect you.

Insurance

• Obtain I free copy of your medical record from the Medical Information Bureau (617/476-

3660), an agency used by more than 750 Insurance companies to calculate financial risk If (In

consultation with your doctor) you detect errors, contact the bureau and demand that the

record be corrected promptly.

• When refected lor Insurance, ask why; then verify the accuracy of the data used to reject

your policy application

Marketing

• When offered "free" premiums, rebates, or other Incentives In return for giving personal

data for a marketing Kit. And out who wRI use the data and for what purpose Ask If you can

participate by giving minimal Information, such as name and address.

• When you return warranty cards, provide only Information essential to the warranty service

Ignore personal questions used only lor marketing

• To pare back |unk malt, calls, and faxes, check the * opt-out' box many companies offer on

warranty forms and subscription cards Ask solicitors to take your name off their lists, and (jet

the Direct Marketing Association '212/6S9-4977. tut 369) to remove your name from Hs

members lists.

• If you participate In marketing or public opinion surveys, verify that answers will be used

only In conjunction with those ol other respondents, and that no personal information can be

traced back to you

Telecommunications

• Some stales allow caller ID services•a way to view a eater's phone number on a monitor

attached to your phone before answering In most such states, the phone company must provide caPen with an option to block viewing of their number. Ask your phone company to set

up that Mocking ability.

tanking

• Ask your bank to agree In writing to disclose your personal financial records only to legaly

authorized requesters, and to notify you when such requests are granted

tronic Frontier Foundation's Berman, yet

so fir the government ha* ignored the privacy implications of the project.

With powerful industry interests

arrayed against it, privacy-bond legislation hat gone nowhere. "American consumers have more choice than any other

consumers in the world. Part of the reason Is that we are an open information

society," sap Lorna Christi of the Direct

Marketing Association, echoing the

industry's general fear of government

regulation."Self-regulation is working."

John Baker, senior vice president of

Equifax, supports the idea of a hoard that

conducts research and gives confidential

advice to industry. But he objects to giving a privacy board the very investigative

and complaint-resolution responsibilities

that privacy advocates see as minimum

requirements to safeguard consumer and

svorker rights.

For now at least, the privacy implications of new technologies are likely to be

confronted by government on an ad hoc

basis, and only after the public has cried

out for relief.

Ttia) Rolst of Technology

PRIVACY ADVOCATES ARE FOND OF SAYIng that the United States is "first in technology, last in privacy protection." And

while technology has made our personal

lives more transparent, privacy and technology are not inherently antagonistic.

In the absence of a privacy board, new

technologies may prove one of the most

potent forces driving what Privmey Timtt'%

Hendricks calls "the right to informational self-determination."

Technology has already alleviated

many everyday intrusions: Airport X-ray

units have made hand searches of luggage

rare. With magnetic markers In books

and clothing, searches of purses or briefcases in libraries and stores are quickly

becoming obsolete. And encryption software makes computer files infinitely more

secure than paper documents in locked

cabinets.

A California company has even developed a "video game" to replace drug testing for truck drivers and other workers.

Before each shift, employees go through

s short hand-eye coordination exercise at

a computer terminal. If they fail this simple test, they skip the shift or ire moved

to less demanding work that day. The

technique not only screens out drug or

alcohol intoxication, but also seems to

identify workers who are excessively

fatigued or preoccupied. One trucking

company reports a dramatic decrease in

accidents and worker errors after a year

using the system.

Such stories are encouraging, but so

far they are rare. Industry and society face

a daunting challenge: to develop technologies that protect personal privacy

faster than those that threaten privacy.

The stakes are high. "Privacy allows

us to move freely between the public

world and private world, to form smaller

communities within the larger community, to share our concerns, dreams, and

beliefs with our close friends. To have

secrets," Rotenberg commented in an

online forum sponsored last yesr by the

Wall Strrrt Journal. "There is a close tie

between privacy and pluralism. . . .

This is what I suspect is at risk in the current rush to record and exchange personal tlata. Global Village in theory. Surveillance State in practice." ft
57

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DIRECT MARKTriN'. j ASSCXIIATION, INC.

25 June 1993

RICHARD A IIAUK1N

kiOn behair of the Direct Marketing Association (DMA), I submit this letter and attached DMA

Fact Sheet and request that they be included in the record of the hearing held by the

Subcommittee on June 22, 1993. regarding S. 984, the Proposed "Privacy Tor Consumers and

Workers Act."

As you may know, the DMA is a national trade association which represents more than 3,000

companies and organizations that use the telephone, mail and other electronic and print media

to communicate directly with consumers. DMA membership reflects a wide variety of

businesses that use inbound and outbound telephone calls as their primary means of contact

with customers and perspective customers for the advertisement and sale of goods and services.

In addition, DMA members include or provide telephone services for many of the charitable,

religious, educational, and political organizations that use the telephone for fund-raising,

membership and other non-profit support activities.

DMA members who use the telephone for these purposes share a desire and obligation to

maintain high standards of customer service and compliance with consumer protection

requirements. Telephone service monitoring is essential for achieving these goals, but would

prove unavailing if restricted as proposed in S. 984.
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Wc will continue to work wilh the Subcommittee and iis stair in an crrort lo produce a revised

bill which addresses abusive mandating practices without placing unjustified restrictions on

(he ability of DMA members to perform necessary telephone service monitoring.

Richard A. Barton

RAB:jwb

Enclosures

DMA Fact Sheet Concerning

Telephone Set-vice Monitoring and S.984

("Privacy for Consumers and Workers Act")

TSR Monitoring Benefits Customers and Protects Consumers

Businesses and nonprofit groups that primarily use the telephone

to advertise and sell goods and services, or to raise support for

charitable and political causes, monitor their telephone service

representatives ("TSRs") as an essential part of their effort to

provide quality customer service and comply with relevant consumer

protection laws and regulations.

TSR monitoring allows these employers to determine how well their

employees are communicating with current or prospective customers,

whether they are adequately responding to customer needs, concerns

or questions, and what. If any, problems are occurring that may be

remedied through discussion with the employees. Moreover, In light

of new laws and regulations that prohibit deceptive telemarketing

practices and certain kinds of unsolicited telephone calls, TSR

monitoring is an indispensable means for employers to promote and

comply with a variety of consumer protection requirements.

TSR Monitoring Benefits Employees As Well As Employers

Proper training, supervision and evaluation of employees whose work

consists primarily of handling inbound or outbound telephone calls

on behalf of their employer requires periodic monitoring of such

telephone calls by the employer. Hew TSRs receive helpful reviews

and coaching In post-monitoring discussions with supervisors, and

benefit from monitoring calls handled by their more experienced

colleagues. In addition, veteran TSRs who are chosen to handle new,

multiple, or more complex projects appreciate monitoring feedback,

and monitoring helps maintain the quality of scripts and other TSR

resources.

Monitoring helps employers make fair job performance evaluations

that acknowledgn the quality of a TSR's development and efforts,

as well the quantity of the TSR's sales, calls or other "bottom

line" figures. Such monitoring not only helps the employer to make

decisions regarding training and assignments, but provides the TSR

with better opportunities to obtain a raise, bonus or promotion.

TSR Monitoring Does Wot violate An Employee's Personal Privacy

The personal privacy Interests of TSRs should be protected by

ensuring that all employees have access to unmonltored telephones

for the purpose of making and receiving personal calls. Because TSR

monitoring is limited to telephone calls which are conducted by the

employee acting on behalf of the employer and within the scope of

performance of the employee's job responsibilities, such monitoring

need not raise personal privacy concerns for employees. .
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TSR Monitoring Should Be "Unannounced" to Achieve Its Objectives

To a large extent, the beneficial purposes of TSR monitoring will

be achieved only if the monitoring is performed without notica to

the employee that it Is occurring, since this is the only way to

ensure that the monitoring obtains a representative sampling of the

employee's usual performance, rather than one that is affected by

knowledge of the monitoring.

Although some TSRs apparently find it stressful to be subject to

"unannounced" monitoring, others prefer not to know when they are

being monitored for fear that their p»--->rmance will not be as good

as usual due to nervousness brought on by knowing that monitoring

is occurring.

In any event, all employers should fully explain their telephone

monitoring practices to employees and prospective employees before

any monitoring occurs, so that the employees will understand how

and why the monitoring is conducted. Moreover, monitored employees

should have a right of access to any information which the employer

obtains through monitoring and usts to make decisions affecting

them.

Why DMA Opposes S.984 As Introduced

1. The bill's "one size fits all" approach fails to distinguish

among different types of "electronic monitoring" in terras of their

purposes, benefits and susceptibility to abuse. It puts "telephone

service observation" under the same restrictions as other distinct

forms of "electronic monitoring," without evidence of comparable

abuse and without understanding how the restrictions would deny the

benefits of TSR monitoring to customers, employees and consumers.

2. The bill assumes that all forms of "electronic monitoring" are

oppressive and violate employees' personal privacy, despite the

fact that TSR monitoring only applies to calls which are handled

by employees acting on behalf of their employer and In the scope

of the performance of their Job responsibilities, rather than on

their own personal behalf.

3. The bill would bar or restrict TSR monitoring based solely on

how long an employee has worked for an employer. Banning monitoring

of employees who have worked for their employer for more than five

years, Imposing a 2-hour per week restriction on monitoring of all

employees who have worked for the employer for more than sixty days

but less than five years, and allowing unrestricted monitoring of

employees who have worked for their employer for less than sixty

working days, are wholly arbitrary policies because the length of

employment with the employer does not reliably determine the

quality of the employee's job performance.

4. Through enactment of the Telephone Consumer Protection Act of

1991 and its anticipated passage of the proposed "Telemarketing and

Consumer Fraud and Abuse Prevention Act" (S.568/H.R.868) sometime

this year. Congress is serving notice to TSRs that their telephone

conduct must conform to certain standards of federal law. The only

effective technique for ensuring full compliance with such laws and

their implementing regulations is TSR monitoring.

The bill's "consumer protection compliance" exemption permits TSR

monitoring "only to the extent necessary to ensure an employee

provides the notices required" by various consumer protection laws

and regulations. This standard is not adequate to ensure compliance

with requirements imposed by federal and State laws because many

of the requirements of such laws (e.g., those prohibiting deceptive

telemarketing practices) do not Involve qiving required notices.

[Whereupon, at 11:00 a.m., the subcommittee was adjourned.]

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