The Federal Court issued a very significant judgement on the scope of PIPEDA application today. Mainville J. held that PIPEDA does not apply to a collection, use or disclosure of personal information merely because it is collected, used or disclosed by an agent on behalf of a principal with whom it is in a commercial relationship.

PIPEDA applies to personal information that is “collected, used or disclosed in the course of commercial activity.” Since PIPEDA came into force in the provinces, people have questioned whether it applies merely because personal information is processed by an agent that is in a commercial relationship with a principal that is engaged in provincially-regulated activity. For example, provincially-regulated employers retain a range of agents who collect, use and disclose employee personal information on their behalves for the purpose of employment administration – e.g. private investigators, payroll processing agents, benefit administrators and others.

In the matter addressed in today’s decision, State Farm retained a private investigator on behalf of an insured person who was ultimately sued by a motor vehicle accident plaintiff. The private investigator conducted video surveillance on the plaintiff, and the plaintiff sought access to the surveillance footage under PIPEDA.  Mainville J. held that PIPEDA did not apply. He said:

I conclude that, on a proper construction of PIPEDA, if the primary activity or conduct at hand, in this case the collection of evidence on a plaintiff by an individual defendant in order to mount a defence to a civil tort action, is not a commercial activity contemplated by PIPEDA, then that activity or conduct remains exempt from PIPEDA even if third parties are retained by an individual to carry out that activity or conduct on his or her behalf. The primary characterization of the activity or conduct under PIPEDA is thus the dominant factor in assessing the commercial character of that activity or conduct under PIPEDA, not the incidental relationship between the one who seeks to carry out the activity or conduct and third parties. In this case, the insurer-insured and attorney-client relationships are simply incidental to the primary non-commercial activity or conduct at issue, namely the collection of evidence by the defendant Ms. Vetter in order to defend herself in the civil tort action brought against her by Mr. Gaudet.

This is a broad and principled finding on the scope of PIPEDA application. It is not limited to any particular kind of agency relationship and will no doubt cause lawyers, insurers and provincially-regulated employers to be pleased.

Note that State Farm backed its successful interpretation ground with a ground that rested on a very broad challenge to PIPEDA’s constitutional validity. Mainville J. did not decide on this second ground. His decision also contains some findings on points of judicial review procedure and administrative law that I have not summarized.

[Hat tip to David Fraser, and a big congrats!]

State Farm v. Privacy Commissioner of Canada, [2010] FC 736.

On June 23rd, Mosely J. of the Federal Court dismissed a PIPEDA application because the applicant failed to establish a need for a compliance order (with or without notice to the public) and failed to prove his damages. In doing so, Mosely J. made the following conservative statement about the PIPEDA’s remedial provision:

Pursuant to section 16 of PIPEDA, an award of damages is not be made lightly. Such an award should only be made in the most egregious situations. I do not find the instant case to be an egregious situation.

The OPC issued a report in May 2009 in which it concluded that the respondent – a fitness club – breached the consent rule in PIPEDA by disclosing information about the applicant’s membership usage to his employer as part a corporate membership program. It recommended a change in practice, and the respondent complied.

Mosely J. held that the applicant had established a breach of the consent rule but had not established justification for a remedy. He rejected the applicant’s argument that he suffered employment-related consequences because of the breach for wont of evidence. His reasoning suggests that individuals who apply for a PIPEDA remedy must prove damages, and based on the statement quoted above, something significantly more.

Randall v. Nubodys Fitness Centres, 2010 FC 681 (CanLII).

On May 14th, Arbitrator Wayne Moore endorsed the general reasonableness of a City of Vancouver policy that requires current employees in designated positions to submit police record checks every five years but also held that it ought not apply based on fire suppression duties.

Arbitrator Moore assessed whether the policy was reasonable light of the necessity standard in section 26(c) of the British Columbia FIPPA. He started by rejecting the Union’s argument that the City needed to demonstrate an “existing problem” to justify checks on current employees:

The Union argues that in order to implement the Policy, the Employer must show evidence of an existing problem in the workplace. I find that it is not inherently unreasonable to enact a policy in anticipation of a problem so that the organization can be in a position to identify the problem and to address it. To the extent that the Union argues that actual evidence of a problem in the workplace is a pre-requsite for the establishment of a reasonable policy, I disagree. In my view, the Employer is entitled to act proactively, so long as it does so reasonably. That said, the absence of evidence of a problem can impact on both the reasonableness of a policy and the reasonableness of its application.

Then, Arbitrator Moore held that the City ought to narrow its criteria for designation to conform with the reasonableness requirement, in essence requiring a relatively strong correspondence between position duties and risk. In the result, he held that it was reasonable to designate members of the City’s fire unit as subject to the police check requirement based one or more of the following criteria:

• they have ongoing or significant unsupervised access to vulnerable people in the ordinary course of employment (where “unsupervised” means unsupervised by management or other employees)
• they are responsible for the security of people and/or material assets in “some significant way”
• they exercise significant discretion and have independent power to make decisions, such that they may be susceptible to corruption

Based on these narrowed criteria, Arbitrator Moore held that the City had improperly designated a number of positions. He held that fire suppression and the provision of emergency medical services involves insignificant contact with vulnerable persons (as distinct from the role of a paramedic who responds to a fire call) and involves an insignificant responsibility for the security of people and material assets (as distinct from the role of a site security guard). By this finding, he held that the policy ought not apply to firefighters and other positions that the City designated on the basis of fire suppression duties. Conversely, he held that the City properly designated a number of positions based on an assigned responsibility for fire safety enforcement.

Arbitrator Moore also held that they City must compensate employees for time spent, including travel time, at overtime rates and must reimburse employees for the expenses incurred in obtaining their records.

Vancouver (City) v. Vancouver Firefighters’ Union, Local 18 (Police Records Checks Grievance), [2010] B.C.C.A.A.A. No. 81 (Moore).

This is a short note on last Thursday’s Supreme Court of the United States decision in Doe v. Reed.

An 8-1 majority held that, as a general matter, the First Amendment does not grant signatories to state referendum petitions a right to remain anonymous that prevails over state open records laws. In the five separate concurring opinions the justices expressed a range of views on how the First Amendment ought to apply to a specific claim to anonymity, from the privacy-protective opinion of Justice Alito to the very pro-openness opinion of Justice Scalia. Justice Thomas dissented on his own, arguing that compelled disclosure of signed referendum and initiative petitions would impose a significant chilling effect on participation and that procedural integrity can generally be assured through less restrictive means than exposing petitioners’ identities.

For full commentary, see the ScotusWiki entry here.

[Qualification. I practice law in Ontario, Canada. This is a comment and not a legal opinion and I am not holding myself out as qualified to practice in matters related to American law.]

Here are some recent tweets within the domain.

• RT @slaw_dot_ca Hot News, Hot Legal Topic http://bit.ly/bPogUJ
• RT @slaw_dot_ca Social media risks — Slaw http://bit.ly/d4A8vz Agree with these sentiments.
• RT @marciahofmann: New paper on the myths and fallacies of “personally identifiable information” in consumer privacy. http://bit.ly/aHZQew
• RT @slaw_dot_ca What’s intrusive? — Slaw http://bit.ly/drR5zP by@privacylawyer
• Exxon Valdez changed game on drug, alcohol testing http://tgam.ca/PuY (via @globeandmail)
• Article on cloud based services adoption in Cdn higher ed http://tinyurl.com/26x2voj via @complexed [Strange comment on PQ, but helpful.]
• NYTimes: Mind Over Mass Media http://nyti.ms/dgu3Qg
• …and published this C-29 – PIPEDA update http://bit.ly/aCMLN5 Need to get back to work!
• RT @slaw_dot_ca @DavidCanton on LSUC new file retention and destruction guide — Slaw http://bit.ly/a8wgkX
• RT @stevewerby: Should selection process for public university presidents be private? I think so. http://bit.ly/ap4kWQ (via @sectorprivate)
• RT @AntoninPribetic: The Trial Warrior Blog: Selected Internet Law Bibliography http://bit.ly/cdMS9f [Bro in law on the list.]
• RT @BIHigherEdNews: How anxious parents affect colleges, students’ experience – USA Today http://bit.ly/a8mExP
• RT @bccla: CBC on Access to Information Act s. 69 – Where information goes to die: http://bit.ly/bwUlCb
• Reforming search & seizure http://bit.ly/bxQe4t
• RT @slaw_dot_ca Should accountants have ‘privilege’? — Slaw http://bit.ly/cjf1yB
• Ontario government to consider Anti-SLAPP legislation http://bit.ly/agRsZr
• RT @wiselaw Legal battle erupts over black box http://bit.ly/c7j5Fr [Cool case. My blog post here http://wp.me/p6aAc-XY]
• The dangers of hearing matters in chambers http://bit.ly/cGdXVu

If you are an HR practitioner, please follow Hicks Morley’s new legislative updates blog. It’s quite a smart niche for a blog in my (non-objective) view – focusing on statutory changes related to human resources law.

Cheers!

Dan

Last Friday, June 17th, the Supreme Court of the United States allowed an appeal of a much discussed workplace privacy case – Quon v. Arch Wireless.

The Court’s decision is of limited authority because it assumed that the employee had a reasonable expectation of privacy in text messages sent and received from his employer-issued device. Having made this assumption, the Court held that the employer’s search was lawful because it was motivated by a legitimate work-related purpose and was not excessive in scope.

I’ll leave the commentary on this American case to the American commentators and have included some links below. For Canadian employers, my view is much like that of Philip Gordon of Littler Mendelson, who uses Quon to warn employers about heavy reliance on the “no expectation of privacy” view. See this article for my rationale.

• No Question about Quon: U.S. Supreme Court Unanimous in Overturning Ninth Circuit (Proskauer Rose)
• Quon Decision Provides Useful Guidance for Private Employers While Skirting Broad Pronouncements on Employee Privacy Rights (Littler Mendelson)
• Government Employer’s Search of Employee’s Text Messages on Employer-Issued Pager Did Not Violate Fourth Amendment (K&L Gates)
• Hopeful Signs in Supreme Court’s New Text Messaging Privacy Decision, City of Ontario v. Quon (Electronic Frontier Foundation)