In McCann v. Iroquois Mem. Hosp., No. 08-3420 (7th Cir. September 12, 2010), the Seventh Circuit Court of Appeals addressed Plaintiffs’ allegations that the Hospital, its Board and CEO violated the Federal Wiretap Act, 18 U.S.C. § 2511, 2520, and various state laws. According to the Hospital, a doctor inadvertently left his dictation machine running after he left the office, resulting in the clandestine recording of a conversation between two individuals: (1) a radiologist with Hospital privileges; and (2) the Hospital’s former director of physicians’ services. During this “secretly” or accidentally recorded conversation, the two individuals criticized the Hospital’s administration. The recording made its way to the transcription staff and the transcription made its way to the hospital’s Chief Executive Officer. After reading the transcript and listening to the recording, the CEO informed the Board of Trustees about the conversation. Shortly thereafter, the former director of physicians’ services was banned from entering the Hospital for anything other than healthcare. Similarly, the radiologist’s privileges were terminated. Together, they filed suit alleging that the recording of the conversation violated the Federal Wiretap Act and various state laws.
The Hospital, its Board and CEO moved for summary judgment, arguing that the recording was not made intentionally – which is necessary to establish a violation of the Federal Wiretap Act. The District Court granted summary judgment on the Wiretap Act claim and declined to exercise supplemental jurisdiction over the remaining state law claims. After denial of Plaintiffs’ motion for reconsideration, the Seventh Circuit Court of Appeals reversed, finding a genuine issue of material fact as to whether the recording was made intentionally, and thus in violation of federal law.
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Before taking an adverse employment action, employers must consider not only the basis for their decision, but the manner of collecting the information that led to the decision. Although not all states recognize a cause of action for privacy violations, Federal legislation, such as the Federal Wiretap Act, may prevent information from being collected in a certain manner. Further, while there generally is nothing unlawful about discharging or taking other adverse action against employees because they have been critical of management, local whistleblower statutes must first be considered. In New York, for example, prior to taking adverse action against an employee who has openly criticized management, an employer must consider whether the criticism alleged an actual violation of a law, rule or regulation and whether such violation presents a “substantial and specific danger to the public health or safety.” If so, the employee may be subject to protection under Section 740 of the New York Labor Law. Moreover, in the healthcare setting, New York’s whistleblower law is altered to protect from retaliation persons who “perform health care services” and who disclose violations of “improper quality of patient care” “Improper quality of patient care” is defined in Section 741 of the New York Labor Law as “any practice, procedure, action or failure to act” in violation of any law, rule or regulation where such violation may present a “substantial and specific danger to public health or safety or a significant threat to the health of a specific patient.” Also, unlike section 740, an employee may prevail on a section 741 claim if the employee reasonably believes, in good faith, that the employer’s action constitutes improper quality of patient care; this belief does not need to prove correct. Other states may have protections for employees who voice concerns, no matter how the employer learns of them.
 The former director of physicians’ services continued to work for Independent Physicians Association (“IPA”) and was at the Hospital to garner a signature from a doctor in connection with the IPA.
 The radiologist laws able to remain at the Hospital solely by virtue of an injunction entered in a separate lawsuit. However, it was alleged that patients rarely were referred to him.