Ever considered hidden cameras to monitor employee behavior or security? A recent California state court ruling offers some guidance on how you can do it without violating employee privacy rights.

The case involved two women who worked in the office of a privately run facility for neglected and abused children. The company had a written policy against inappropriate use of the firm’s computers, including accessing pornographic Web sites.

The company discovered that porn sites had been viewed from the office computers during late-night and early-morning hours. Without notifying the two women, the employer installed a hidden camera in the facility’s offices. The area was under surveillance after the women left at night; the camera was turned off before they arrived for work in the morning.

After they learned of the camera, the women sued, claiming invasion of privacy and emotional distress.

The California Supreme Court acknowledged that while employees’ rights to privacy are diminished in the workplace, they don’t disappear altogether. But the employer’s surveillance was tightly controlled and based on a legitimate business concern. The employees weren’t ever at risk of being taped, so their right to privacy wasn’t violated.

Bottom line: This ruling clarifies the kind of measured approach companies must take where employee surveillance is used to address legitimate business concerns. Although the decision is binding only in California, legal experts say the legal principles it’s based on are applicable in jurisdictions across the U.S.

Case cite: Hernandez v. Hillsides, Inc., California State Supreme Crt., No. S147552, 8/3/09.