Court of Appeal (Cal.) Affirms Judgment Against Call Center Worker Whose Employer Recorded Workers’ Personal Calls with Her Daughter

In Rojas v. HSBC Card Servs. Inc., No. D077931, 2023 WL 4635056, at *1–2 (Cal. Ct. App. July 20, 2023), the Court of Appeal waded into an employer’s recording of all calls of its employees whose job it is to communicate with the employers’ customers.

Rojas received hundreds of personal calls from her daughter Alejandra, an employee at an HSBC call center, which were recorded by HSBC’s full-time recording system. Rojas alleges HSBC intentionally recorded confidential calls without her consent, in violation of section 632, subdivision (a). She also alleges HSBC intentionally recorded calls to her cellular and cordless phones without her consent, in violation of section 632.7, subdivision (a). The trial court granted summary judgment to HSBC, and Rojas appealed. (Rojas v. HSBC Card Services Inc. (2018) 20 Cal.App.5th 427, 431, 228 Cal.Rptr.3d 640 (Rojas I).) We reversed, concluding HSBC had not met its initial burden to show there was no triable issue of material fact on intent. (Id., at pp. 429, 432, 228 Cal.Rptr.3d 640.)  . . . The case proceeded to a bench trial, where HSBC relied, in part, on workplace policies that purportedly barred call center agents from making personal calls at their desks to show it did not intend to record the calls. HSBC also presented evidence that Rojas received recording disclosures in connection with her HSBC credit card, through the cardmember agreement and her monthly payment calls to HSBC. Rojas elicited testimony that HSBC managers knew personal calls were being made by call center agents, including by Alejandra, and denied she consented to recording. The trial court entered judgment for HSBC. Pertinent here, the court found Rojas did not prove HSBC’s intent to record. The court also found Rojas impliedly consented to being recorded, and did not prove lack of consent. . . . Rojas appeals from the judgment, contending the trial court made several errors in determining she did not prove her Privacy Act claims and that the evidence did not support its findings. Rojas also appeals from the denial of her motion to strike or tax costs, arguing the section 998 offer was invalid and the court erred in awarding HSBC expert costs, failing to consider her limited resources in awarding those costs, and awarding costs for unused trial exhibits. We conclude the trial court applied correct legal standards in assessing lack of consent and substantial evidence supports its finding that Rojas impliedly consented to being recorded. We are compelled to affirm the judgment under these circumstances. Although we determine the record does not support the court’s finding that HSBC did not intend to record the calls between Rojas and her daughter, that determination does not require reversal. What it underscores, however, is that a business’s full-time recording of calls without adequate notice creates conditions ripe for potential liability under the Privacy Act, and workplace policies prohibiting personal calls may not mitigate that risk.

The Court of Appeal found that the Employer did intend to record the calls at issue because it had a policy against its employees taking/making personal calls.

HSBC’s trial theory was that because its workplace policies banned personal calls, it did not intend to record those calls. This theory rests on the premise that the ban worked, such that HSBC did not know personal calls were being made and thus recorded. The trial court accepted HSBC’s theory, finding Rojas failed to prove intent because HSBC barred agents from making personal calls at their desks and the calls at issue were “made … without HSBC’s knowledge.” The court also disagreed HSBC knew confidential calls were being recorded, citing its recording disclosures and reasonable privacy expectations. But the record negates HSBC’s theory, and the court’s findings. Not only did HSBC policies not prevent personal calls, but HSBC managers knew they were happening and Alejandra’s manager even permitted them. These facts, coupled with HSBC’s full-time recording system, meant HSBC knew personal calls were being recorded—including any such calls that were confidential (for § 632) or received on a cellular or cordless phone (for § 632.7). The record also does not support the court’s further finding that HSBC lacked substantially certain knowledge that confidential calls were being recorded. We explain. First, to the extent HSBC had a policy barring personal calls from agents’ desk phones, that does not establish such calls actually were prevented—particularly in the absence of a single, clear policy governing personal calls and uniform enforcement of those policies. HSBC managers Ivey, Garcia, and Escamilla did testify there was a written policy prohibiting such calls, but Ivey and Garcia indicated it was a Scout policy which could no longer be found, while Escamilla thought it was a company-wide HR policy that addressed cell phones as well. Ivey also testified the Call Avoidance Policy was part of the personal call ban, but acknowledged it only applied to some agents: those receiving inbound calls. And HSBC still had in effect its global, companywide Electronic Monitoring policy, an HR policy that stated employees “may use” telephones “for occasional non-work purposes,” and “personal calls may be recorded.”
*9 That Scout policies are more specific than HR policies, as Ivey testified and HSBC urges here, does not necessarily minimize confusion for a manager trying to implement both. We also disagree with HSBC that the Electronic Monitoring policy instruction to avoid “listen[ing] to any personal calls” shows it “did not intend to record these calls in the first place.” The instruction implies HSBC anticipated personal calls would be recorded.  Second, and critically, there was undisputed evidence HSBC managers knew personal calls were being made, including by Alejandra, while HSBC concededly recorded all calls from agent’s desk phones at the Salinas facility. (Cf. Kight v. CashCall, Inc. (2011) 200 Cal.App.4th 1377, 133 Cal.Rptr.3d 450 (Kight I) [company was potentially liable under § 632 for supervisors’ secret, live monitoring of calls; “corporation is a legal fiction that cannot act except through its employees or agents”].) Ivey and Garcia were aware of employees who made personal calls (at least half a dozen in Ivey’s case). Regardless of whether those employees were subject to progressive discipline, HSBC’s policy did not prevent all personal calls from being made. And, some employees were simply allowed to make personal calls. Ramirez, Alejandra’s direct manager, let her agents make calls concerning children and emergencies. Further, and significantly, Ramirez knew Alejandra was making personal calls, including to her mother (Rojas) and on unknown topics, and did not try to limit this practice. Instead, Ramirez said she “did not feel [Alejandra] was making a large number” of calls.11 We thus disagree with HSBC that Ramirez “did not testify that she allowed [Alejandra] to make the hundreds of routine personal calls that are at issue” here. (Emphasis omitted.) That is the only reasonable inference from Ramirez’s testimony. Nor are we persuaded by HSBC’s contention that Ramirez’s “allowance of personal calls in limited circumstances was contrary to HSBC’s official policy for call center employees,” pursuant to which it notes Ramirez herself was trained to make personal calls from the lobby. Ramirez did not remember a written policy barring personal calls, and presumably viewed her management practices as acceptable. If anything, her apparent failure to implement HSBC’s desired personal call policy illustrates the significant risk in relying on corporate workplace policies to limit Privacy Act liability.   Third, and in turn, there is no support for the trial court’s finding that HSBC lacked “ ‘knowledge to a substantial certainty’ ” that confidential calls were being recorded (i.e., the standard under section 632). The court reasoned “occasional[ ]” recording of personal calls did not mean confidential calls would be recorded, citing HSBC’s disclosure practices (e.g., requiring agents to give third party disclosures) and stating “parties to a personal call should have reasonably expected” they could be recorded. But HSBC was recording all calls; HSBC manager Ivey and HSBC executive Marcy recognized there was a “risk” a disclosure would not be made; and Marcy said they “knew that not all agents” were making disclosures—meaning confidential calls without disclosures would be captured. And, as we note below, whether a party has reasonable privacy expectations for confidentiality purposes turns on the “surrounding circumstances,” which “may include the party’s own conduct and background ….” (Kight v. CashCall, Inc. (2014) 231 Cal.App.4th 112, 133, 179 Cal.Rptr.3d 439 (Kight II).)12
*10 In sum, notwithstanding HSBC’s personal call policies, HSBC knew personal calls were being made from call center agents’ desk phones, and was recording any such calls that were made—whether confidential, to a cellular or cordless phone, or otherwise. We conclude this undisputed evidence established HSBC had knowledge to a substantial certainty that its full-time recording system in Salinas would result in the recording of a confidential conversation under section 632, as well as a cellular or cordless conversation under section 632.7. Rojas therefore met her burden of proof on intent, and there was no substantial evidence for the trial court’s findings to the contrary.  However, as we explain next, substantial evidence does support the trial court’s finding that Rojas failed to prove lack of consent to record, meaning her Privacy Act claims fail.

But, the Court of Appeal found consent to be recorded under the circumstances of the calls.

Rojas does not establish the trial court failed to apply the foregoing implied consent standards. The court’s analysis reflects it focused on specific circumstances that showed Rojas knew HSBC recorded calls (e.g., disclosures in the cardmember agreement and her monthly payment calls), and found “[b]oth forms of disclosure would have placed [her] on notice of recording,” such that her continued participation in calls from HSBC established her implied consent to recording of the calls. (See Griggs-Ryan, supra, 904 F.2d at pp. 117–118; Negro, supra, 230 Cal.App.4th at p. 892, 179 Cal.Rptr.3d 215; see Berry, supra, 146 F.3d 1003, at p. 1011 [“key question” is “whether parties were given sufficient notice”].) Accordingly, although the court used the terms “inquiry notice” and “should have been aware,” its analysis shows it properly considered implied-in-fact consent. (Civ. Code, § 3528 [“The law respects form less than substance”]; see Boysaw v. Superior Court (2000) 23 Cal.4th 215, 220, 96 Cal.Rptr.2d 531, 999 P.2d 748 [rejecting interpretation of order that would “exalt form over substance”].) Indeed, the court cited Negro’s discussion of implied-in-fact consent and there is nothing to suggest it based its findings on Rojas’s hypothetical, rather than actual, knowledge of HSBC’s recording practices. (Compare Kearney, supra, 39 Cal.4th at p. 118, fn. 10, 45 Cal.Rptr.3d 730, 137 P.3d 914 [Court of Appeal “did not cite anything in the record” for its finding that clients “ ‘know or have reason to know’ ” broker calls were recorded].) Further, while we conclude there was no legal error, any such error (assuming it occurred) would have been harmless, because substantial evidence still supports the court’s consent findings, as we discuss in the next section. (Soule, supra, 8 Cal.4th at pp. 573–574, 34 Cal.Rptr.2d 607, 882 P.2d 298 [only prejudicial error supports reversal]; cf. Am. Federation of State etc. Employees v. County of Los Angeles (1983) 146 Cal.App.3d 879, 887, 194 Cal.Rptr. 540 [affirming trial court despite erroneous collateral estoppel ruling, where record supported judgment, and deeming the error harmless].) . . .First, the record supports the trial court’s finding that Rojas was “placed … on notice”—that is, she was notified—that the calls at issue were subject to recording. Rojas testified she had an HSBC credit card, and knew Alejandra worked for HSBC at a call center. Thus, Rojas knew the same company both issued her credit card and ran the call center from which Alejandra called her. And, as the trial court found, Rojas’s cardmember agreement for her HSBC credit card and her monthly payment calls disclosed that HSBC records calls. On these facts, the court could find Rojas was notified that, and therefore knew, the calls from Alejandra at HSBC were subject to recording.  We reject Rojas’s claim that the disclosures did not provide meaningful notice of recording. We do not reweigh the evidence (Thompson, supra, 6 Cal.App.5th at p. 981, 212 Cal.Rptr.3d 158), and Rojas’s specific objections lack merit. On the cardmember agreement, she contends it states, “You agree that we may listen to and record phone calls between you and our representatives,” and “we” is defined only as HSBC Bank Nevada, N.A., not HSBC Card Services or HSBC Tech Services. But the agreement includes consent for “representatives,” which encompasses employees of HSBC Card Services, like Alejandra—and places no limit on the types of “phone calls” with such representatives being recorded. Further, the issue is not whether HSBC Card Services or HSBC Tech Services are parties to the agreement. It is whether this HSBC document made Rojas aware Alejandra’s calls to her from HSBC were recorded, and the trial court could find that it did. (See Maghen I, supra, 94 F.Supp.3d at p. 1145 and fn. 3 [disagreeing “Lending Tree’s Terms of Use [were] vague and ambiguous because [it] does not list Quicken”; plaintiff’s “argument that he did not connect his agreement to Lending Tree’s Terms of Use and Quicken’s phone call is unavailing”]; cf. White, 2013 WL 756292, at pp. *3,*5 [agreement stating defendant “may monitor and record” and referring to defendant’s “affiliates, or its marketing associates” sufficiently disclosed calls would be recorded]; cf. id. at p. *6 [rejecting argument that agreement did not state “every telephone call will be recorded”; whether it stated defendant “will record every … call or may record any … call ha[d] no effect,” as plaintiff “consented to the possibility that her telephone calls will be recorded in either circumstance”].) As for the payment calls, Rojas argues the message only said “may be recorded,” and did not address future or personal calls. Rojas testified she understood “may be recorded” meant the particular call was being recorded, and that she made payment calls once per month—meaning she was being reminded about HSBC’s recording practices on a continuing basis. (Cf., e.g., Torres, supra, 289 F.R.D. at p. 594 [contrasting caller who heard disclosure “several months prior,” from caller who heard disclosure on preceding call].) The fact that the recording disclosure on her monthly calls to HSBC did not address personal calls does not help Rojas, either. By stating the call “may be recorded,” the disclosure warns all calls may be recorded, regardless of content. (Cf. White, supra, 2013 WL 756292, at pp. *5–*6.)  Second, Rojas participated in numerous calls with Alejandra made from an HSBC call center phone, after receiving the prior recording disclosures. (See Griggs-Ryan, supra, 904 F.2d at p. 114 [tenant continued to receive calls after being advised of recording by landlady]; cf. Kearney, supra, 39 Cal.4th at p. 118, 45 Cal.Rptr.3d 730, 137 P.3d 914 [if a “party does not wish to participate … he or she simply may decline to continue the communication”].) Indeed, as the trial court found, the record shows Rojas effectively solicited such calls. Although Alejandra could receive inbound calls, did receive them from her boyfriend, and agreed such calls had automatic recording disclosures, Rojas would call Alejandra’s cell phone and Alejandra would call her back from her HSBC line—with no automatic recording disclosure. Regardless of why Rojas called Alejandra in this manner, the trial court could find she was aware of HSBC’s recording practices from the prior disclosures, and chose to receive calls from an employee at HSBC (Alejandra).  Finally, we recognize Rojas testified she did not know she was being recorded, and would not have continued the calls had she known. But the trial court could impliedly reject this testimony as not credible, or weigh the evidence regarding the prior disclosures more heavily than these denials. We do not revisit credibility findings, or, as noted, reweigh the evidence. (Thompson, supra, 6 Cal.App.5th at p. 981, 212 Cal.Rptr.3d 158.)
We conclude substantial evidence amply supports the trial court’s finding that Rojas impliedly consented to HSBC’s recording, and thus did not prove lack of consent. Because lack of consent is a required element under both section 632 and section 632.7, we must affirm the judgment for HSBC. As a result, we need not reach Rojas’s remaining arguments for reversal of the judgment.