By Linda Liang and Li Ruowei King & Wood Mallesons’ Commercial & Regulatory group

梁燕玲Enterprises’ management over employees is by no means limitless, but is, to varying degrees in different circumstances, restricted by employees’ individual rights. For example, the law provides that an employer can ask an employee for information directly related to the employment contract, but if an employer requests information beyond this category, such as personal medical records or parent information, it may be considered a violation of the employee’s privacy. However, although privacy is a statutory right of citizens, its scope and content always vary with the changes of a person’s social roles. For instance, the scope of an individual’s privacy towards his or her family is narrower than that towards strangers. So, based on the personal dependency characteristics of employment relationships, to what degree should employees’ privacy rights be subject to employers’ management?

In practice, directors and officers of an enterprise usually do not have a clear understanding of this issue, in particular whether they can search the body of an employee or his or her belongings for management purposes, and if yes, how to perform such search. This article will study different cases to analyze and discuss how to draw a line between enterprises’ management and employees’ privacy.

Object of the Search Is Very Important

Existing judicial cases show that, if the object of a search is owned by the company and allocated to an employee, such as lockers or work computers, the search is much more likely to be permissible than that of the employee’s body or his or her personal items.

1. Searching working area or office items

In Feng Yi v. Sichuan Zhongda Lexus Automobile Co., Ltd ([2013] Gao Xin Min Chu Zi No. 3673), Feng Yi worked as the human resources manager of Sichuan Zhongda Company. In order to check whether Feng had browsed websites unrelated to her work during office hours, the company copied all the information from her work computer including her personal photos and logs for internal scrutiny without notifying her. The company then terminated the employment with Feng on the grounds that Feng seriously violated the company’s rules and procedures. Feng sued the company for violation of her privacy as an individual.

The Chengdu High-tech District People’s Court stated in the judgment: “First, the computer from which the defendant obtained information is a work computer rather than a private one, so it is subject to the ownership and management of the defendant. Second, copying the entire contents of the computer’s hard drive is necessary for internal scrutiny, and the work computer should not be used to store private photos or logs. Therefore, the Court holds that the search of the defendant’s work computer for internal scrutiny falls within the scope of the employer’s management. The plaintiff’s defense against the search on the grounds that her personal photos and documents were stored in the work computer should not be supported.”

In addition, in AA v. Shanghai BB Co., Ltd ([2013] Hu Yi Zhong Min San (Min) Zhong Zi No. 83, “Case A”)and Zhang v. Beijing Merchants Property Management Co., Ltd ([2016] Jing 03 Min Zhong No. 8138, “Case B”), both of the employers searched or cleaned up the lockers of their employees. In Case A, the company found that employee AA stole food products of the company when searching his locker and terminated the employment contract consequently. Actually, the company posted a notice in advance to inform the staff that their lockers would be checked, and the company searched the lockers at the notified time, and the search was not questioned by the Shanghai Intermediate People’s Court. In Case B, the company, for the purpose of work handover, cleaned up an employee’s locker without the employee at the spot and then returned the items to the employee. The employee sued the company for violation of privacy. Although the Third Intermediate People’s Court of Beijing in the judgment pointed out that it was improper for the company to clean the employee’s locker without the employee being on the scene, but given that it was necessary for the work handover, and there was no intent or damage of violating the employee’s privacy, the court finally held that no violation of privacy was concluded.

2. Searching employees or their private items

In contrast, with respect to direct search of employees’ bodies, or their private items such as bags, phones, the court was not that tolerant.

In Zhang Li v. Beijing Jinghui Golf Club Co., Ltd ([2001] Fang Min Chu Zi No. 4978), after an employee’s property was lost, the company’s manager ordered that all the other employees place their belongings on their palms for check, and then, the manager also searched employees’ bags and other items. The company claimed that the staff cooperated with the search at the moment, and it had certain management over employees regarding protecting their property from theft, but its claim was not supported by the court. The People’s Court of Fangshan District, Beijing stated that Zhang Li should enjoy the basic rights and bear the basic obligations of a citizen and an employee. Li Yiming, as a manager, however, after being told an employee’s items were stolen, should have resorted to proper authorities of law instead of requiring other employees, without any basis, to hand out their belongings for check in public. What he did was an abuse of power and a violation of employees’ individual rights.

In both of the aforementioned types of cases, the managers conducted searches of the employees on the grounds of managers’ authority and certain reasons of fact. But in the first type of cases, the object of search is a work computer or a locker used by the employee but owned by the company, and the searches are necessary for carrying out daily management or maintaining management order. In the second type of cases, however, the objects are employees’ personal items, and the reason for searching is to hold suspect of theft accountable, which is beyond the daily management of a company. Therefore, the object of and reason for searching are important for determining the legality of the search.

Company Regulations Are Not Excuse for Searching Employees

Companies often have some doubts: in the case that the company stipulates in its employee handbook that the staff must cooperate with the company’s searches, and the employee handbook has been recognized by employees, is the company still facing the legal risks of violating employees’ privacy?

1. Rong Xifeng v. Wuxi Garden City Plaza Hotel Co., Ltd Junle Hotel ([2014] Chong Min Chu Zi No. 0850)

In this case, the employee handbook of Junle Hotel provides that: employees should cooperate with the security staff to check their carry-on bags and other personal items when they enter and leave the hotel; employees should fully understand the purpose of the check, and fully cooperate with it; if employees think certain conduct of the security staff is unreasonable, they can report to the manager of security department; if an employee is seriously uncooperative, the hotel is entitled to terminate the employment contract on the grounds that the employee has serious violation of the hotel’s regulations.

One day, the hotel security staff checked Rong Xifeng’s carry-on bag when she was leaving the hotel. Rong cooperated with it at first, but when the security staff asked to further check the side bag inside the carry-on bag, Rong refused and left the hotel on her electric bike. Junle Hotel then terminated the employment contract with Rong on the grounds that Rong’s conduct seriously violated the rules and regulations of the hotel. Rong asserted that Junle Hotel violated her privacy and illegally terminated the employment contract.

The People’s Court of Chongan District, Wuxi stated that “the law does not entitle employers to search others’ bodies. Employers shall not illegally search employees, including employees’ bodies, carry-on items or bags. The stipulations concerned in the employee handbook of Junle Hotel were invalid.”

2. Zhu Yuanchun v. Chongqing Taishan Cable Co., Ltd ([2015] Yu Yi Zhong Fa Min Zhong Zi No. 04774)

The company’s Internal Security Management System, which has passed the prescribed democratic and publicized procedures, provides that: “serious violations of the rules and regulations of the company include but are not limited to: hindering or refusing searches, threatening security staff or other employees… the company can terminate the employment contract on the ground of serious violations.”

The moment Zhu Yuanchun left the working area after work, the metal detector set in the workshop exit rang, so the security staff asked for further check, but Zhu refused and returned to the workshop. The company then made a sanction decision with the consent of its labor union.

The First Intermediate People’s Court of Chongqing in the judgment stated that: “since the metal detector rang, Taishan Company had reasonable doubt to conduct further check on Zhu Yuanchun …”

In both of the two cases, the companies included “cooperation with the company’s searches” in their rules and regulations, but the judgments were quite different. It should be noted that internal rules and regulations are merely a description of the scope and content of business management, and in judicial cases courts also need to determine the legitimacy of the search itself. The differences between the two cases are whether the way of searching employees is appropriate and whether there is reasonable doubt.

In case 1, the company carried out routine searches of every employee without any valid reason. In case 2, the company set up a metal detector in the factory gate, and after the alarm of the detector rang, conducted further check over the employee based on reasonable doubt, which is more reasonable.

Therefore, to include employees’ acceptance of being searched by the company in the internal rules and regulations of the company will not ensure the legitimacy of the searches even when employees have recognized the rules and regulations. The court will consider and determine whether the search itself is legal. The cases above proved that searches based on reasonable doubt are more likely to be supported by the court. Of course, the court will also determine whether “reasonable doubt” is constituted based on facts. In practice, common “reasonable doubt” can be the alarm of certain detection equipment, surveillance videos, or other objective and reasonable proofs.

Our suggestions

In general, there are several factors that a company must take into account before making a search decision, including the ownership of the search object, the necessity of the search for company management, the reasonableness of the way of search and whether there is a reasonable doubt. When the company suspects an employee and decides to conduct a search, it should conduct the search taking the abovementioned elements into account, and the company is recommended to contact competent authorities in advance for help and support, and if necessary, ask them to help on site to minimize the company’s legal risks.