There are important caveats to the general "two-party" consent rule in the State of California; I will attempt to generally describe some of them.
"To violate the PC section 632 rule the communication must be "confidential" - this means that recordings taken in places where the other party should have reasonably expected the communication might be overheard or recorded are not covered." (Wilkins v. NBC, Inc. (1999) 71 Cal.App.4th 1066, 1079.)
"[A] conversation is confidential if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded." (Flanagan v. Flanagan, 27 Cal.4th 766, 768 (2002))
Accordingly, if one as a complaining party tries to prove that one had a reasonable expectation of privacy it is not enough that one proves that one reasonably thought it was possible or even probable that the conversation was not overheard, monitored or recorded; one must be able to establish that a reasonable person in the same circumstances as one would objectively, that is based on the sum of factual circumstances, assumed a conversation was confidential.
This shows well through the following authorities:
"A conversation is deemed “confidential” under § 632 of CIPA only if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded. Flanagan v. Flanagan(2002) 27 Cal.4th 766, 768, 774–776; Vera v. O'Keefe (S.D.Cal.2011) 791 F.Supp.2d 959; 1396;. Whether there exists a reasonable expectation that no one is secretly recording or listening to a phone conversation is generally a question of fact. (See Kight v. CashCall, Inc. (4th Dist. 2011) 200 Cal.App.4th 1377, 1396-97; Lieberman v. KCOP Television, Inc. (2003) 110 Cal.App.4th 156, 169.) However, where the facts are undisputed, the court may decide the issue as a matter of law. (See Weiner v. ARS Services, Inc. (S.D. Cal. 2012) 2012 WL 3632025 (finding circumstances of call, including its short duration, indicated no expectation of privacy).”
An important point is made here: No one assert an objectively reasonable exception if the time to evaluate the circumstances of a conversation or the intention, manner and other factors of the other party to engage in a conversation within an objectively insufficient time. Therefore, the duration, and even more so, the shortness of a conversation can very well be determinative of the reasonableness of a party to complain about their expectation to a part or the entirety (for e.g. in an extremely short exchange) of a conversation.
This should come as no surprise: If we ever wondered as to how one may overcome the catch 22 of being accused to have begun recording a conversation if one notifies the other party of the recording just prior to beginning the recording since the notice would not be recorded or being accused for invasion of privacy under California Penal Code § 632 for the part of the conversation recorded just before the lawful indication of the lack of objectively reasonable expectation towards confidentiality in the conversation (for e.g. announcing the fact it is not a confidential call or that it may be recorded), is resolved in this.
Again, it is, because the criminal threshold to be met, there must be an objectively reasonable expectation to privacy. If one by act or word calls that into question sufficiently that a reasonable person would not be able to objectively expect that the conversation is private or confidential, it no longer is: It implies that private conversations are the exception, and not the rule although the general perception may differ.
This, will now be clear through the definition of confidential communicate in the state, too:
“Penal Code § 632(c) defines “confidential communication” as including:
any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes a communication made . . . in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.
To me, through this excerpted quote of the statute, it does appear as to leave an in-between grey area since it does not exclude communications in any other circumstance where circumstances do not reasonably indicate that no party desires it to be confidential, but only in those circumstances in which the parties to the communication may reasonably expect that the communication may be overheard or recorded. Which indicates toward the general reading of the statute that confidentiality is the rule, and public communications are the exception. However, authority has consistently reenforced the more restrictive approach.
Returning to the previous point, due to the above standard test of confidentiality per, among others, Frio that requires a reasonably objective expectation to privacy, it will be clear as to why it is generally sufficient also to announce a call may be recorded or a call may be monitored — this latter announced solely is fairly rare. (See, e.g., Kight, supra, 200 Cal.App.4th at 1396-1397)
Since such announcements in themselves call anyone's reasonably objective expectation to privacy into question, that is, an average person at least contemplates the very real possibility of overhearing or monitoring.
Also another consequence which may seem obvious at this point is that since it is not really "consent" that is a prerequisite, but a reasonably objective expectation, and though a fairly low bar, it is effectively imposed on the complaining party, and not the party wishing to record therefore "for purposes of section 632, the privacy rights affected are the same regardless of whether a conversation is secretly recorded by a machine or monitored by a human being” (See, e.g., Kight, supra, 200 Cal.App.4th at 1396-1397) since the threshold is reasonably objective expectation to privacy and effectively not presence or absence of consent; however, if consent is express, than there is, clearly, no reasonably objective expectation to privacy.
"Two-party consent" not all party consent?
This also leads to the hypothetical: What if in a group one asks another if one can record the conversation, and the other answers in the affirmative, and one begins recording: Would that allow for the recording when the other parties to the conversation haven’t answered?
My reading of these interpretations would be that if everyone else in the group made heard the question would no longer have an objectively reasonable expectation of privacy furthermore, their consent would also be implied by not objecting and/or proceeding with the communication. So multiple defenses could be used in a case like this — non-confidential communications as well as consent.
An even more extreme, and to many, hardly fathomable scenario would be if one party explicitly objects to recording — however, only after an announcement objectively defying any reasonably objective expectations of confidentiality — what would then happen?
Recording, absent any reasonable expectation to confidentiality, let alone one such that is objective, without a problem, should be able to be made.
An example of this is typical to situations of domestic violence and/or divorce attorneys where they teach a longer disclaimer something along the line: “I will begin recording hence if you continue you will be deemed to have consented to bring recorded” etc., where they typically proceed even against objections. Although this may be much more than what’s minimally required to lawfully record, these disclaimers will probably have a better deterring effect to stop an assault or other aggression than a beep-tone warning that another party may simply disregard.
An important, and fairly obscure and unknown consequence of the above espoused interpretations is the so-called beep-tone warnings for recordings or monitoring of calls.
In Air Transportation Association of America v. Public Utilities Common of State of California the California Appeal Court for the 9th Circuit found that if "[a] person wishing to listen in on a conversation without violating the regulation can provide notice by using a beep-tone warning device audible to all parties to the conversation[...]".
The rationale follows the previously analyses and is based on the following facts: A reasonable person would have an objective expectation that an ordinarily operating telephone or other customary audio-transmitting devices would cause no beep-tone in order to operate hence being made heard a beep-tone should call a reasonable persons expectation to the ordinary and/or customary operation of any such remote communication device to the extent that it could not maintain a reasonably objective expectation to his or her communication.
In a fresh, though unpublished opinion in Smith v. LoanMe, Inc. (2021), an Appeal Court did not vitiate this specific interpretation as it would likely have called the rationale behind it into question as well.
"Admissibility" of unlawfully obtained audio recordings
Generally, due to the "Right to Truth-in-Evidence" provisions of the California Constitution, a previous statute, Pen. Code § 632(d) was repealed and such evidence became admissible for the purposes of combatting perjury though the person creating such record would still face criminal prosecution for the unlawful recording under § 632; however, I'm less versed in this corner of the statute hence it is highly ill-advised.
“[E]vidence of confidential conversations obtained by eavesdropping or recording in violation of Penal Code Section 632 is generally inadmissible in any proceeding…but can be used to impeach inconsistent testimony by those seeking to exclude the evidence.” (People vs. Crow (1994) 28 Cal.App.4th 440; Frio vs. Superior Court (1988) 203 Cal.App.3d 1480.)
To answer your questions more specifically...
If you have a good faith duty as a result of a contractual relationship between yourself and those you wish to record, you could potentially be sued for damages for a breach of the covenant of good faith duty and fair dealing if you somehow manage to lawfully notify the other party, but he could prove that you had a bad faith intention and intentionally chose a manner to mislead them. It does not seem plausible to me how they could prove this, but it certainly is within the realm of possibilities.
As you can see: California's ban, as it is similar with probably other states, is not a ban for recording, per se, it is a ban of recording or monitoring of confidential conversations. Therefore, simply allowing someone else to eavesdrop on the conversation would implicate the same criminal consequences absent objective indications that would call the to-be-recorded party's reasonable expectation to privacy as you could probably thought so by now.
As you can see, many of the caveats to the statute are such that the general public would not know, and if you were to record someone, knowing that simply announcing that a call may be overheard or that someone may hear it who will not be part of the conversation or using a beep-tone warning device audible to all parties may each call the reasonably objective expectation of a to-be-recorded party into question which may be useful.