Jan 16

Know the Law When Taping Telephone Conversations

This article appeared in the January 16, 2008 issue of Real Estate Weekly

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Ever since Richard Nixon and Rose Mary Woods gave taping conversations a bad name, many business people have been reluctant to tape telephone conversations without the knowledge of the other party.

Putting aside the moral issue of not disclosing the taping of conversations (if it did not bother Richard Nixon, how wrong could it be?), there are certain situations where such a tape could be very useful. In situations where parties have an oral agreement, it is a way to confirm the terms of that agreement. Oral agreements happen on a regular basis in all aspects of the real estate industry particularly in the brokerage area where many brokerage agreements are not in writing.

Let me say at the onset that anyone should speak to his attorney before taping conversations in order to have the most up-to-date information as to their specific circumstance. Federal law only applies if the taping is done through telephones. If two or more people meet and one person records the conversation by use of a recording device on his person, federal law does not apply. There may be state laws regarding in-person taping of conversations that should be reviewed.

Under federal law, telephone calls and other electronic communications can be recorded with the consent of at Know the law when taping telephone conversations least one party to the call. Unless state law prohibits the practice, any party to a conversation can tape that conversation without the knowledge of the other party.

This is known as the one party consent rule. There are 38 states that follow federal law and permit one party consent, as does the District of Columbia . Therefore, the general rule is that in most states, a person can tape his own conversation without notifying or obtaining the consent of the other party or parties.

Most states have a unique nuance in its law regarding taping conversations that should be referred to before making any decisions. However, 12 states require, under most circumstances, the consent of all parties to a conversation are: California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington.

There should be no confusion, however: If a non-party to a conversation tapes that conversation, it is illegal in all jurisdictions. Only a law enforcement agency with a valid subpoena can tape conversations of third parties.

Federal law provides criminal penalties for unlawful interception of telephone conversations, including up to five years’ imprisonment or a maximum of $10,000 in fines. That statute also allow for civil remedies, by which private parties are entitled to recover actual and punitive damages, together with fees and costs.

When the parties to the conversation are in different states, federal law should apply although it is not clear that a court would hold in a given case that federal law preempts state law and a state may choose to enforce its own laws. Therefore, it is prudent not to record interstate telephone calls where the party who is unaware of the taping is in a state that does not permit one party consent. Individuals in businesses that make surreptitious recordings often do so with the expectation that the recordings will be useful as evidence. In many cases, this is true. However, such recordings may be in certain instances excluded for use as evidence. If made in violation of state or federal law, they are clearly inadmissable. Even if lawfully recorded, the tapes may be exempt from the hearsay rule although they could be admitted as a declaration against interest. It is important to determine the evidentiary rules in your state by consultation with an attorney.

New York is a one party consent state, but some courts will not admit a conversation if the other party was not informed they were recorded. Apparently, the issue is left to judicial discretion. In such a situation, recording a conversation with one party consent carries no penalty and therefore can be done without violating federal or state law. The “business telephone” exception generally allows monitoring calls and taping over an extension phone which is both provided to a subscriber in the ordinary course of the telephone company’s business and is being used by that subscriber in the ordinary course of its business.

This provision generally permits to monitor the conversations of their employees, including personal conversations. It is preferable, however, to notify employees either as a provision in the employee handbook or a separate memo, as to the company’s rights to monitor and record such telephone calls. While a taped conversation made in compliance with federal and state Law can be a useful devise, it can result in liability if not done in compliance with the law.

- Howard Rubin, Esq.

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