1. Social Media and the Workplace: Hidden Dangers for Employers David B. Kern 414.277.5653 david.kern@quarles.com November 28, 2012

2. Social and Other Media Networks Are Pervasive Social networking (e.g., Facebook, Friendster, MySpace, LinkedIn) Blogging (e.g., Blogger, Twitter) Media Sharing (e.g., YouTube, Flickr)

3. Social and Other Media Networks Are Pervasive *1 billion active monthly Facebook users *175 million Twitter users *160 million registered LinkedIn users

4. Positive Implications Advertising Networking Recruiting Enhanced Communications Reference and Reputation Checking

5. The Problems Breadth of Distribution –Information posted through internet social media broadly distributed and easily accessible to significant audience and difficult if not impossible to retract Harassment –Sexual harassment and other forms of workplace discrimination can give rise to liability even when the acts occur in cyberspace Invasion of privacy –Employees misperceive level of privacy –Employer access to employee social media can result in an invasion of privacy claim Defamation –Potential claims by employees in connection with negative comments by others

6. The Problems Deceptive or unfair advertising claims –Federal Trade Commission guidelines regarding advertising by employee endorsement Loss of Trade Secret Information –E.g., premature announcement of competitive strategies Using social media to screen applicants creates legal risks

7. The Problems E-Discovery nightmares –Mobile devices and social media accounts may contain relevant information that may need to be produced Lost productivity –Studies suggest social media use at work is costing employers millions of dollars per year in lost productivity

8. Social Media & Recruiting Pros: Enables verification of positive attributes reflected in application or interview such as applicants’ judgment, professionalism, common sense, etc:

9. Social Media & Recruiting Background check laws: Fair Credit Reporting Act does not apply to social media searches performed exclusively in-house by the employer Does apply if the agency conducting the search reviews social media –Federal Trade Commission issued letter in 2011 stating that internet social media background screening entity, “Social Intelligence,” was a credit reporting agency subject to FCRA requirements

10. Social Media & Recruiting Considerations in turning to social media to research candidates: Discrimination, NLRA, Whistleblower and similar federal and state laws OFCCP compliance issues Laws protecting lawful off-duty activities (e.g., use of lawful products) Privacy concerns and restrictions on using personally identifying information Reliability of the information obtained from social media sources may be suspect

11. Social Media & Recruiting Discrimination and related implications: social media frequently contains demographic information regarding applicants that, particularly in the initial screening process, would not otherwise be apparent (and cannot be considered) and can support failure to hire discrimination claims need to ensure consistent treatment in terms of information reviewed –EEOC recently advised employers to set clear guidelines on using social media to research potential job applicants OFCCP issues: regulations regarding “internet applicants” require retention of data regarding applicant flow and search records (including social media searches)

12. Social Media & Recruiting Off-duty conduct protections:

13. Social Media & Recruiting Off-duty conduct protections: many states have laws protecting off-duty conduct –e.g., Wisconsin law prohibits discrimination based on lawful use of products (and therefore employer could not reject candidate because Facebook reveals she drinks and/or smokes) –e.g., New York also protects use of legally consumable products, as well as “lawful, leisure-time activity... Including but not limited to sports, games, hobbies, exercise, reading and the viewing of television, movies and similar material.”

14. Social Media & Recruiting Privacy concerns: avoid non-public information (e.g., do not gain access to social media under false pretenses) Lack of reliability of information in social media: information may not be accurate information may not have been posted by the candidate (it may have been posted by someone claiming to be the candidate) consider verifying information obtained through social media

15. Social Media & Recruiting Summary of Recommendations: Develop written policy and explain to hiring personnel. Ensure consistent treatment of applicants. If social media is reviewed, retain records (e.g., screenshots of information on websites). Attempt to verify information. Expand application release to expressly include review of social media.

16. Social Media and Harassment Employers have a duty to take effective measures to stop co-employee harassment when the employer knows or has reason to know that a pattern of harassment is taking place in the workplace and in a setting related to the workplace. Courts have held that employers have duty when harassing comments are posted on electronic media not controlled by employer, but used by employees.

17. Social Media and Harassment Recommendations: –Immediately take action to address harassing posts or communications between employees upon notice of such posts or communications –Remind supervisors to proceed with caution, given how posts may be perceived by subordinates –Recommend that managers avoid “friending” subordinates

18. What If Employee Makes Negative Posts About Work In Social Media?

19. Manager reports that subordinate has been posting negative comments about the Company, as well as the manager, on her Facebook page. Specifically, she refers to the manager as a psychiatric patient and a “scumbag” Co-workers who were friends on Facebook posted supportive replies Manager wants to terminate – any risk??

20. Social Media and the NLRA On November 2, 2010, the National Labor Relations Board filed a complaint against a company who fired an employee involving the foregoing facts. The Board claimed the employer’s policy prohibiting employees from making disparaging remarks about the company or its supervisors or in any way depicting the company over the internet violated the National Labor Relations Act. The Board also claimed that application of the policy interfered with the employee’s rights under Section 7 of the National Labor Relations Act to engage in “concerted, protected activity.” On February 7, 2011, the case was settled with the employer agreeing with the Board to revise its “overly-broad” policy (to ensure it would not improperly restrict employee from discussing wages, hours and working conditions with co-workers and others while not at work) and with the employer reaching a private settlement with the employee impacted.

21. Social Media and the NLRA Lessons learned from “Facebook” case: the NLRA applies even to non-union employees some negative comments by employees are protected by the NLRA

22. Social Media and the NLRA NLRA: Applies to almost all private sector employers Does not apply to supervisors (other than if refusing to violate the NLRA) or independent contractors Protects the right of employees to engage in “concerted activities for the purpose of mutual aid or protection”

23. Social Media and the NLRA “Protected” activity is activity focused on wages, hours, and other terms and conditions of employment. “Concerted” activity usually involves two or more employees acting together, or one employee seeking to incite group action or acting on behalf of fellow employees. Employees are prohibited from taking adverse action against employees for engaging in protected concerted activity, even if it is conducted in public forum such as social media.

24. Social Media and the NLRA NLRB has posted examples of fact scenarios depicting various forms of protected concerted activity, most of which arise in a non-union setting. Several examples include employee use of social media. See www.nlrb.gov/concerted-activity.

25. Social Media and the NLRA NLRB has 130+ cases involving social media, only a fraction of which involve unionized workplaces An employee who blogs about or discusses his or her pay, benefits or related matters on a social networking site and receives responses from follow employees on the issues is almost certainly engaged in protected concerted activity Chicago NLRB issued Unfair Labor Practice Charge against a car dealer where terminated salesman complained on Facebook that dealership was cheap because it only offered hot dogs and bottled water at customer event –Administrative Law Judge held sarcastic posts were protected as he was voicing concerns of several employees regarding dealership’s handling of sales event which could impact earnings

26. Social Media and the NLRA Types of of conduct found protected: Disparaging or embarrassing comments regarding employer and its management. Use of profane or disrespectful language while engaging in protected activity. Disclosure of confidential or sensitive information not deemed legally “confidential.” Use of trademarks or logos that does not violate intellectual property laws.

27. Social Media and the NLRA Types of of conduct not protected: Purely personal complaints. Violent comments. Comments disparaging of customers or general business activities unrelated to work conditions. Conduct intended to harm the employer. Defamatory comments or comments that implicate unlawful harassment or discrimination. Violation of legal protections involving confidential information or intellectual property.

28. Social Media and the NLRA Examples: Purely personal complaints –individual “gripes” and venting, not a call to action by others Violent comments Comments disparaging of customers or general business activities unrelated to work conditions

29. Social Media and the NLRA Examples cont’d: Conduct intended to harm the employer. Defamatory comments or comments that implicate unlawful harassment or discrimination. Violation of legal protections involving confidential information or intellectual property.

30. Social Media and the NLRA As reflected in the Facebook case, the NLRB is going after employer policies that: Prohibit employees from making disparaging or defamatory comments when discussing the employer or its managers Prohibit disclosure or discussion of “confidential” information such as compensation information

31. Social Media and the NLRA Examples of policy language found to interfere with NLRA rights in Acting General Counsel memo issued on May 30, 2012: “Employees are prohibited from using social media to engage in unprofessional communication that could negatively impact the Employer’s reputation or interfered with the Employer’s mission or unprofessional/inappropriate communications regarding members of the Employer’s community.” “Don’t release confidential guest, team member or company information...” “Offensive, demeaning, abusive or inappropriate remarks are out of place online as they are offline, even if they are unintentional. We expect you to abide by the same standards of behavior both in the workplace and in your social media communications.” “[A]void harming the image and integrity of the company...” “Get permission before reusing others’ content or images.”

32. Social Media and the NLRA Electronic Communication, Confidentiality and Social Media Policy Considerations Based on General Counsel’s Memo: Employers must be specific, shouldn’t generalize and need to draft policies as narrowly as possible and consistent with business purpose of policy Provide examples of permissible/prohibited conduct where possible Use disclaimer that makes clear policy does not limit NLRA rights (this alone will not save an overbroad policy, however) Example of compliant policy provided as part of memo: http://mynlrb.nlrb.gov/link/document.aspx/09031d4580a375cd

33. Social Media and the NLRA Very recently, an NLRB decision in Costco Wholesale Corp. struck down several employer rules, prohibiting: –electronically posting statements “that damage the employer or anyone’s reputation;” –sharing “sensitive information” such as payroll data, social security or health information; or –Disclosing “confidential information” including employees’ names, addresses, phone numbers and e-mail addresses.

34. Why “Acceptable Use” and “Social Media & Blogging” Policies Are Important Federal Trade Commission guidelines subject an employer to liability for false or unsubstantiated statements made through endorsement, or for failing to disclose material connections between themselves and endorsers. If an employee’s online statements on his or her blog or other social media site relate to the employer’s products or services and the employment relationship is not disclosed, the employer may be held liable for false or unsubstantiated statements.

35. What “Acceptable Use” and “Social Media & Blogging” Should Include Prohibit employees from speaking on behalf of the company in social media and require disclaimer if there is the potential for identification with the company. Prohibit unauthorized product or service endorsements of the company or comments regarding the competitor. Remind employees of the need to comply with anti- harassment and anti-discrimination policies. Remind employees of prohibitions against disclosure of truly confidential, proprietary, trade secret and similar information.

36. Monitoring Cyberspace Limits on Monitoring –Invasion of Privacy courts have found violations where an employer examines an employee’s private social media content without the employee’s permission –The Federal Wire-Tap and Communications Privacy Act of 1986 prohibits interception of electronic communications without employee consent (can be obtained thought properly drafted electronic communications policy) courts have found violations where employer solicited employee to turn over passwords to employee gripe site or other employees’ sites Avoid temptation to access employee’s restricted social networking sites. Legislation introduced prohibiting employers from asking applicants and employees for their passwords.

37. Final Recommendations Review hiring practices and ensure consistency. Consider whether conduct at issue in discipline constitutes protected activity under the NLRA and avoid applying policies in a way that may implicate employee’s rights under the NLRA. Institute training on policies and related practices.

38. Social Media and the Workplace: Hidden Dangers for Employers David B. Kern 414.277.5653 david.kern@quarles.com November 28, 2012