The only recourse for the employees - truck drivers, dock workers and office staff - is to file complaints under their Teamsters Union contract with the fleet, the 9th U.S. Circuit Court of Appeals ruled Wednesday.
The court said the company installed cameras and microphones behind two-way mirrors in restrooms at its terminal in Mira Loma, Riverside County, to detect drug use. The surveillance ran from 1995 to September 1997, when a mirror fell off the wall and revealed the equipment. About 15 cameras were used, including some in the ceiling.
Sheriff's officers seized the equipment, but no criminal charges were filed.
Damage suits from Consolidated Freightways employees were dismissed by two Los Angeles federal judges, Linda McLaughlin and the late Irving Hill. The appeals court overturned part of McLaughlin's ruling and allowed a suit by one person who said she was fired, and by another who said he was denied a job because of her complaints.
Federal law bars unionized workers from suing for damages over disputes that require interpretation of their contracts. The court said the Teamsters contract contained provisions on video surveillance and might be interpreted to narrow employees' privacy protections at work.
The dissenter in the 2-1 ruling, Judge Raymond Fisher, said no contract interpretation was needed because the "bathroom spying" was clearly illegal. He noted that California law makes it a crime to install two-way mirrors in restrooms or to use cameras to look through openings into restrooms.
The court majority also cited state laws against electronic eavesdropping and said the company's conduct was "arguably criminal."
The ruling means that "union employers in the state of California have complete impunity to engage in any sort of criminal surveillance activity they want and the state's not able to prohibit them," said Matthew L. Taylor, a lawyer for the employees. He said no decision has been made on a further appeal.
But the court said the main portion of both suits had to be dismissed because the privacy issues were addressed in the union contract. Its provisions include a ban on using video cameras to discipline employees, except for theft or dishonesty, and procedures for drug testing.
To win their case, the employees would have to prove that "they reasonably expected to be free from video surveillance," said the opinion by Judge Pamela Rymer.
She said their expectation "will depend upon the level of management oversight allowed in the collective bargaining agreement," which requires an interpretation of the contract.
Judge Diarmuid O'Scannlain joined Rymer's opinion.
Fisher, in dissent, accused the majority of interfering with a state's ability to protect its citizens from crimes. He said no union contract can eliminate a worker's right to sue over the employer's criminal conduct.
"Although it is certainly true that surveillance is a common, appropriate subject for collective bargaining, the illegal, clandestine surveillance of restrooms through holes hidden behind two-way mirrors is most definitely not," Fisher said.
The case is Cramer vs. Consolidated Freightways, 98-55657, and the ruling can be read online at www.ce9.uscourts.gov.