SALEM, Ore. (Legal Newsline) - Banana Republic can be sued for hiring a worker who placed a secret camera in an employee restroom, an Oregon appeals court ruled, reversing a trial court’s decision that damages for emotional distress are available only if there was physical contact with the plaintiff.
Women identified only as I.K. and C.K. sued the clothing retailer after they discovered they’d been recorded at Banana Republic’s Cascade Station store by Johnny Tuck Chee Chan. Chan, a pharmacist, had been fired by Kaiser Permanente in November 2017 for secretly filming employees. He took a job as a sales associate with Banana Republic in May 2018.
Chan was arrested in November 2018 after a year-long investigation and charged with recording more than 50 people at Kaiser. Soon after, he was charged with recording 27 Banana Republic employees.
Plaintiff I.K., an 18-year-old Banana Republic employee, sued Chan, the store and the store manager when she learned of the illicit recording, claiming “significant mental and emotional pain and suffering.” Her colleague C.K. filed a separate lawsuit with similar allegations.
Banana Republic moved to dismiss both lawsuits, citing the general Oregon rule against recovering for emotional distress without any allegations of physical impact. The trial court granted Banana Republic’s motion, but the Oregon Court of Appeals reversed in a January 26 decision.
The rule requiring physical contact has an exception for violations of a “legally protected interest,” the appeals court ruled. The Oregon Supreme Court defines “legally protected interest” as “an independent basis of liability separate from the general duty to avoid foreseeable risk of harm.” Invasion of privacy is one example, the court has found, although it depends upon the circumstances and it must have been foreseeable.
In this case Banana Republic should have known that hiring Chan, with his history of secretly filming his fellow employees, raised the risk of him doing it again, the court said.
The facts in this case appear “to be a novel issue under the law of nearly every other state,” the appeals court said, although New York courts have allowed emotional distress claims over cameras in a marina’s restrooms and a peephole in a state park shower facility.
“We conclude that it entails no great stretch in the law …to say that, when an employer knows or has reason to know that an employee in the past has placed a video recording device in the employee restroom, employees have a legally protected interest in being free from the emotional trauma of being secretly recorded as a result of the employer taking no steps to prevent it from continuing to occur,” the appeals court concluded.
The court rejected Banana Republic’s argument Chan was liable for filming the employees, not the store, citing another Oregon Supreme Court decision in which a phone company was held liable for the emotional distress a customer suffered when his phone number was mistakenly listed for a florist shop. The phone company was liable for his damages, the court observed, not the people who mistakenly called.
“In our view, the interest in avoiding the emotional trauma from being secretly video recorded in a state of undress while using a private employee restroom is at least as societally important as being free from the distress of being awakened in the night with unwanted telephone calls,” the court said.