When Companies Allow Their Employees to Use Cell Phones for Both Business and Personal Use?

There is nothing more difficult then switching phone numbers.  People move across the country yet keep their out of state cell phone number.  It is a pain to update your new phone number with friends, family, businesses, schools, doctors’ offices, childcare, magazines, etc.   But the same problem holds true in a business.  Your company has valuable customers and it worked hard to obtain those customers.  Your customers have been working with your employees to receive your services and goods.  What could happen to your business if an employee left for your competitor but was able to keep their phone number?

Bring Your Own Device (BYOD) is becoming more and more popular.  A BYOD policy allows employees to pick a phone compatible with their personal life and the company’s infrastructure. The employees can then use this phone for both business and personal reasons.  A BYOD policy provides greater convenience for employees to combine their personal and business life.

A BYOD policy presents a company many potential legal issues.  There are countless questions surrounding trade secret, personal identifiable information, and confidential company issues.  However, this article approaches the specific question surrounding that golden phone number.  What happens when an employee wants to leave, retire, quit, work for the competitor, or fired… they are not going to want to lose their personal phone number.  So, who gets to keep it?

A Company Owns a Phone Number When it Created and Provided it to the Employee

California law provides anything an employee acquires in the scope of their employment belongs to the employer, especially when the employer gives it to the employee.  Therefore, if a company provides an employee a new phone number and pays for the phone service, the phone number belongs to the company. When the employee leaves, the company should be able to keep the number if it wants.  Cal. Labor Code 2860.

Its More Questionable if Employer Assumes the Employees Prior Phone Number

What if the employer assumes the employee’s prior, personal, cell phone number to be used for both business and personal use?  In this situation, the major factor will depend on who the phone provider (AT&T, Verizon, T-Mobile, etc.) considers its customer, and who is physically paying the bill.

In Rotstein v. Cable & Wireless, Inc, 2002 WL 691458 (2002), an unpublished opinion, the employer agreed to pay for Mr. Rotstein’s home phone number.  The company paid the Rotstein family’s phone bill since Mr. Rotstein primarily worked from home.  The Rotsteins had this number for four years before the company started paying the bill.  The company transferred Mr. Rotstein’s number to the company’s phone carrier and his phone bills were sent straight to the company for payment.  After one year Mr. Rotstein was terminated, the company instructed the telephone carrier to forward all calls made to the Rotstein’s home phone number to the company.

The appellate court, in dicta, explained the courts should perform an analysis to determine who the phone provider’s customer is.  But the court also determined a telephone number cannot be subject to any conversion actions, after all telephone numbers are not tangible property.  A Tenth Circuit decision also stated, “The right to telephone service is not … personal property, which is capable of being converted, the right is not a vested right but in reality a privilege.” Teleco, Inc. v. Southwestern Bell Telephone Co., 392 F.Supp. 692, 697 (1974).

Ensuring a Phone Number Belongs to the Company

Since a phone number is not tangible property, then whoever receives the cell phone bill will own the phone number.  The ownership is based on who has the authority to cancel or forward the phone number.

Prepare a Company Policy

The most important thing to do with a BYOD policy is setting expectations in a company policy.  When the employee is issued a company phone and phone number, a policy should clearly discuss who owns the number.  While the policy will allow personal use on the phone it must be clear the employer owns the phone number.  To make the policy even safer place an initial line next to this section making it unambiguous this provision is understood.

Factual Questions Used to Evaluate the Service Provider’s Customer

Courts have not yet established factors to determine who a phone service customer is.  However, the court implied certain questions could be used.

  • Who made payments and how were the payments made?
  • Documents identifying legal authority.
  • Documentary evidence reflecting a sole customer.
  • How does the service provider refer to the user of the phone number in the cell phone contract?
  • Is the user of the phone number classifying a “customer” of the phone provider in the legal documents?
  • Can the user call the phone provider when there are problems?
  • Can the user add additional services onto their phone’s plan?

Ultimately this is an issue of first impression and no court or legislature has provided a clear answer to who owns this number. If the employee had the phone number for a long period of time, expect them to litigate over it.  The cheapest solution is to call your attorney and develop a policy tailored to your business needs.  If forced to litigate this after the fact, litigation and injunctions will be costly both in attorney and court costs.  Additionally, it is unlikely your insurance would cover you in these areas, especially if you are the one seeking the injunction.  While there are many advantages for combining an employee’s personal and business phone there are also serious concerns which need to be evaluated.

For more information about this topic, please contact one of our business and employment attorneys at 619.238.1712.