Employees should be warned that surreptitious recordings have consequences

Many employees believe that they can “legally” tape record workplace conversations with their managers and coworkers. After all, unlike in the U.S., recording conversations is not a crime under Canada’s Criminal Code, provided the person doing the recording is part of the conversation.

But, except in rare instances, as we have written, recording workplace conversations, while not criminal, is still cause for discharge. This has often arisen in our own practice while acting for employers when an employee, in a “got you” moment, produces tapes of their workplace conversations. Our general reaction is to immediately amend the defence to plead cause for that employee’s discharge.

Termination with cause, especially for misconduct discovered post-termination, is rare and difficult. But the Supreme Court of British Columbia just affirmed our view in deciding that Roman Shalagin, a Certified Chartered Accountant and Mercer employee of 12 years, was properly terminated for cause because he had surreptitiously recorded numerous conversations with colleagues since 2010, especially since he acknowledged that he well knew that these recordings would make “people feel uncomfortable if they knew.”

Shalagin worked for Mercer as senior financial analyst. Although he had no employment contract, he was bound by Mercer’s Code of Business Conduct and Ethics, Confidentiality Policy, as well as the CPA Code as a professional Certified Chartered Accountant. The CPA Code ”imposes a duty of confidentiality as a professional obligation, which is in addition to the member’s or student’s legal obligation to the employer.”

In 2020, Shalagin learned about sensitive bonus payments information and voiced his concerns to Mercer’s managers. He said he was willing to “resolve this disagreement timely and internally, without litigation.” Alarmed, Mercer dismissed him on a without cause basis.

He should have left well enough alone. Instead, Shalagin brought a claim for wrongful dismissal and discrimination under the Human Rights Code against Mercer. During the ensuing legal proceedings, Mercer discovered that Shalagin surreptitiously possessed over 135 recordings of conversations during one-on-one training sessions, over 100 meetings in which he personally presented, and at least 30 one-on-one meetings with Mercer personnel about compensation and recruitment. These recordings included confidential company information, information about an ex-employee and sensitive family issues about Shalagin’s supervisor.

Mercer changed its defence strategy and changed the without cause dismissal to a “with cause” one. And they succeeded. The court decided that “surreptitious recordings can cause material damage to the relationship of trust between employee and employer.”

We might add that that is rather obvious. How can one work comfortably, in an environment of trust, if your workplace chatter was being surreptitiously recorded by a co-worker?

While Shalagin attempted to justify the recordings to learn English, track compensation discussions and address alleged workplace discrimination, he acknowledged that his colleagues would have felt uncomfortable about these recordings. Yet he continued to make them for years.

His justifications fell short because the recordings included personal and sensitive information. Some had no connection to the workplace. Any trust between Shalagin and his colleagues was irreparably damaged.

This court accepted that Shalagin’s actions were not malicious and there was no evidence that they were ever shared outside of the court process. But they were mostly made “for the advantage of the (employee)” contrary to Mercer’s workplace policies, and the CPA Code, which holds Shalagin to a higher standard of accountability to Mercer.

Preventatively, employees should be warned that surreptitious recordings have consequences. You can still lose your job or potentially even be sued for violating confidentiality.

Shalagin knew that, while it was not illegal to surreptitiously record, it was morally and ethically wrong. The sheer volume and many years of recording of his colleagues established to the court that his actions were not a “momentary lapse of judgement.” Shalagin knew what he was doing.

Especially when recording conversations is so easy with phones, laptops and apps, such as Zoom or Microsoft Teams, there is a real risk of being surreptitiously recorded which employees and employers should be wary of. That is why employers should enact policies specifically prohibiting it, without consent, so that there can be no misapprehension.

Can recording workplace conversations ever be justified? Let us assume an employee was a victim of racist or gender-based taunts, complains to management or HR, is not believed and no action is taken. In such a circumstance, a court may consider the recording reasonable: not continuous recording but recording a particular interaction or session when the racist remark is likely to be repeated. But, short of such egregious instances, recording in the workplace irreparably breaches trust and goodwill and can result in dismissal for cause without severance.