Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Staffing companies and employers using all tools at their disposal to recruit workers may face increased risk following the Ninth Circuit’s recent opinion in Loyhayem v. Fraser Financial. In Loyhayem, the court found that calling potential workers’ cell phones with pre-recorded voice messages could violate the Telephone Consumer Protection Act (TCPA), unless the workers had previously consented to the calls. In light of Loyhayem, “cold-calling” prospects using this method may subject companies to class actions carrying risk of substantial statutory damages.
The TCPA is a federal statute that restricts artificial or pre-recorded voice messages, i.e. “robocalls,” to residential phone lines and cell phones, as well as calls made by an automatic telephone dialing system to cell phones.1
The TCPA specifically requires different rules for cell phones as compared to residential phone numbers. Further, for calls to cell phones, including text messages, the TCPA distinguishes the type of consent that is required prior to placing the call depending on whether the call is made for an informational purpose or for an advertising or telemarketing purpose.
Violation of the TCPA gives rise to high statutory damages of $500 per negligent violation, and $1,500 per willful or knowing violation. Thousands of TCPA cases are filed every year, though to date the vast majority have not concerned employment issues.
Lower Court Opinion
In Loyhayem, the plaintiff alleged that he received a pre-recorded call that left a voicemail message regarding job recruitment from the defendant company. The plaintiff alleged that the prerecorded call was sent using an automatic telephone dialing system.2 He further alleged that he did not expressly consent to receiving such a call and had not provided his telephone number to the defendant and claimed that the call violated the TCPA.
The district court dismissed the plaintiff’s action for failure to state a claim. The court held the TCPA did not prohibit making job-recruitment robocalls to a cell phone number. The court focused on the implementing regulations regarding advertising and telemarketing calls to interpret the TCPA as only prohibiting robocalls to cell phones when the calls are made without prior express written consent and include advertising or telemarketing. The plaintiff appealed.
The Ninth Circuit’s Opinion
The Ninth Circuit agreed with the plaintiff that the district court misread the TCPA’s prohibitions. The court found that the TCPA’s prohibition is broad and applies to “any call” to a cell phone, regardless of content, unless the call is made for emergency purposes or with the prior express consent of the person being called. The plaintiff alleged the call he received from the defendant was not made for emergency purposes, and he did not expressly consent to receiving it. Therefore, the plaintiff’s allegations that the defendant robocalled him without prior written or verbal authorization were enough to survive a motion to dismiss.
In reaching its holding, the Ninth Circuit explained that, with a few limited exceptions, robocalls—including job-recruitment calls—made to a cell phone require prior express consent, which may be provided orally or in writing.3 In contrast, robocalls to cell phones that contain advertising or telemarketing content require the additional hurdle of prior express written consent.
- As the Ninth Circuit noted, consent can provide a defense to TCPA claims. As a result, employers may be able to mitigate risk by obtaining consent at the point of collection of the cell phone number, preferably in writing so that there is a record of it that cannot be easily disputed later by a plaintiff. Consider having the consent language and procedure reviewed by an attorney for compliance with the TCPA.
- Be aware of the distinction between the type of consent: prior express consent (informational) vs. prior express written consent (telemarketing/advertising). Prior express consent is required for all prerecorded or artificial calls or text messages sent by an automatic telephone dialing system, including calls placed by employers or job recruiters. Courts have previously found prior express consent from the act of providing one’s cell phone number.
- Mere posting of an individual’s telephone number on a biographical webpage, career networks such as LinkedIn, or otherwise in publicly available online materials may not satisfy the requirement of prior express consent to receive calls or text messages to that number.
- Understand and manage vendors that place calls to cell phones on the company’s behalf. Plaintiffs have argued that businesses are liable under the TCPA for calls made on their behalf by a third party if the call is made using an automatic telephone dialing system or an artificial or prerecorded voice and without the proper consent.
In addition to the issues related to consent, there are further issues that employers need to consider for complying with the TCPA. If your company is using technology to place calls using an automatic telephone dialing system or an artificial or prerecorded voice, consider engaging an experienced attorney to review and evaluate the procedure for compliance with the TCPA.
1 47 U.S.C. §§ 227(b)(1)(A)(iii), and (b)(1)(B); see also In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961 (2015).
2 In Facebook, Inc. v. Duguid, the Supreme Court provided much-needed clarity as to what qualified as an “automatic telephone dialing system” (ATDS). Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021). The issue of whether the call to the plaintiff was made with an ATDS was not considered on a motion to dismiss in Loyhayem. Generally, determining whether a call or text was placed using such a system is a key component of analyzing TCPA liability, and may provide additional defenses to TCPA actions depending on the circumstances.
3 The FCC has created several narrow, content-based exemptions to this broad prohibition, but none of those exemptions applied in this case. See 47 C.F.R. § 64.1200(a)(1)(iv), (a)(9).