1. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 1 SOCIAL NETWORKING AND OFF-DUTY CONDUCT What is and is not permitted in response to information employers receive through social networking sites and about employees’ off-duty conduct? August 6, 2008 Presented by Jason A. Weiss, Esq. Allen Matkins Leck Gamble Mallory & Natsis LLP

2. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 2

3. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 3 Four Main Legal Issues Presented By Employers’ Use of Information Gleaned From Social Networking Sites: 1.BACKGROUND CHECK LAWS 2.PRIVACY 3.DISCRIMINATION 4.LEGAL OFF-DUTY CONDUCT

4. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 4 INITIAL CONCERN: FRCA/ICRA COMPLIANCE The Fair Credit Reporting Act (FCRA) requires an employer to obtain the applicant’s consent before conducting a background check. Thus, before conducting any form of background check on an applicant (including accessing a social networking site), make sure to obtain the applicant’s permission to do so. This will reduce an employer’s exposure to liability for invasion of privacy claims based on unauthorized background checks.

5. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 5 GENERAL RISKS OF USE: While employers can use these sites to obtain information about prospective and current employees with few limitations, there are risks: First, there is no guarantee as to the accuracy of the information. It is possible for a person to create a fake profile of another individual. Second, just as the old saying goes, "you can't believe everything you read," you can't believe everything you see. Just because an applicant has a picture of him/herself doing a shot of liquor with a group of friends does not mean that individual has a drinking problem or will be a terrible employee. Such profiles are clearly created for a social, and not professional, purpose. Third, it is likely that if you look at a person's profile, you will uncover a lot of personal information. Some of this information will serve no employment-related purpose or will provide information regarding an applicant or employee that would be better left unknown. For example, MySpace allows individuals to list their sexual orientation. If a person claims that he/she was not hired on the basis of his/her sexual orientation, it is far easier to defend such a claim if you can say you had no idea what the individual ’ s sexual orientation was.

6. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 6 Fourth, many of the sites have user agreements. Using the sites simply to check up on applicants or employees may violate the terms of agreement of the site if you are not truthful when creating your profile when you register as a user of the site. Fifth, the use of such sites could implicate federal and state laws governing background checks, including the federal Fair Credit Reporting Act. Sixth, certain states protect off-duty legal conduct such that you could not make an employment decision based on a photograph of an applicant of legal age consuming liquor. WARNING: If you do use social networking sites to check up on applicants, make sure you do so in a consistent manner, i.e., do not use it only for members of a protected class. This could subject you to a discrimination claim.

7. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 7 WHAT ABOUT AN EMPLOYEE’S RIGHT TO PRIVACY? Public v. Private As to information available on social networking sites, the individual ’ s right to privacy may be different depending on whether or not the profile is public or private. Arguably, an individual would have a greater expectation of privacy to the extent he/she took steps to limit access to the information on his/her profile. Use of Workplace Equipment With respect to conduct in the workplace, such as emails, voice mail messages, and documents created on the company ’ s computer system, one of the most important things to do as an employer is to eliminate your employees ’ expectation of privacy. Many employees believe that because they use a password to access their computer, all emails they send and receive are private. You want to dissuade them of this belief. You may want to take similar steps with respect to voice mail. Lastly, many employers have a policy permitting them to inspect all bags brought into the workplace and all work stations. While it may be beneficial to have such a policy, we would recommend using it only when necessary and not for random searches.

8. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 8 TIP: Ensure your employee handbook informs employees that despite the use of passwords to access voice mail or email, such items are the property of the employer and may be accessed at any time without any notice. Emphasize that employees should have no expectation of privacy in these items and that such items may be accessed by you with no additional prior warning.

9. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 9 Recognizing the problems inherent in employers being permitted essentially unfettered freedom to use such information, many states have instituted "lifestyle" statutes, which prohibit the employer from taking adverse action against an employee for lawful conduct outside of working hours and away from the employer's premises. Even if such a statute is not present, caution still should be exercised. First, you should examine the off-duty conduct and the job duties and responsibilities of the employee and determine if there is any connection between the two. Obviously, finding out that your bookkeeping employee stole money is far different from finding out that he/she had a number of outstanding traffic citations. Even if there is no apparent direct relationship between the conduct and the employee ’ s job duties, certain situations, such as those involving violence or dishonesty, may still warrant action. For example, if you find out that an employee engaged in violent behavior outside the workplace, you may be able to take action since there is a duty to provide a safe work environment. OFF-DUTY CONDUCT

10. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 10 SHOULD WE DISCIPLINE THE EMPLOYEE FOR THIS CONDUCT? 1. Is the conduct lawful or unlawful? The employer has far less freedom if the employee is engaged in lawful conduct. 2. Is the conduct protected? For example, in California, employees are protected from discrimination on the basis of gender identity. Thus, if you determined an employee was cross-dressing outside the workplace, no action could be taken on this basis. 3. Do you have a “ lifestyle ” statute in your state? Does it have any exceptions? 4. Is there are relationship between the conduct and the job? 5. Does the conduct cast your business in a negative light? 6. If disciplinary action is taken, ensure that all similar situations have similar disciplines imposed. For example, if you live in a state in which an employee could be terminated because you found out the employee was having an extramarital affair, do not terminate all women, but not all men. 7. Consult legal counsel.

11. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 11 TIP: Just because conduct occurs off-duty does not mean an employer cannot be held liable for such conduct. Even when off-duty, employees could engage in conduct that may open the door to liability. Imagine a group of colleagues that choose to go out socially, however, while out, one of the supervisors propositions his subordinate stating that a refusal will result in adverse employment action.

12. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 12 Keep in mind that the employee's conduct related to certain working conditions, whether or not the conduct occurs off-duty, may be limited. For example, under the National Labor Relations Act, you cannot monitor or conduct any surveillance of employee union activities, including off-the-job meetings or gatherings. This same rule also applies to any concerted activity (that is, activity undertaken by workers acting together, rather than individually) even if no union is involved, as long as employees are discussing their work conditions or terms of employment. In addition, certain states, such as California, permit employees to discuss working conditions, such as wages paid, without fear of repercussion from the employer. OFF-DUTY CONDUCT RELATED TO WORKING CONDITIONS

13. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 13 EMPLOYEE BLOGS WHAT TO PUT IN A BLOGGING POLICY  B logging should not be done during working hours or using company resources.  Employees are not permitted to disclose confidential company information in their blog.  Employees may not use the company logo or any other company copyrighted material on their blog.  Employees should be instructed to state on their blog that the opinions expressed about work-related matters are their own and not the company ’ s.  Employees should be reminded to treat others respectfully. Even though the blog is not work-related, they should not make disparaging remarks about colleagues.  Remind employees that blogging activities could result in disciplinary action, up to and including termination. TIP: Make sure employees know that their Internet activities are being monitored.

14. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 14 Drug Testing: If you utilize drug testing, whether pre-employment, or during the course of employment, confirm with legal counsel that such testing is permissible in your state. Moonlighting: While it is not illegal to have more than one full-time job, you should have a rule prohibiting employees from having another job that creates a conflict of interest, such as working for a competitor. Arrests and Convictions: One of the first questions you should ask is how does the crime affect the employee’s ability to do his job. A bank teller who is convicted of embezzlement is an easy call. A bank teller who is arrested for driving under the influence is not. While you can take action against an employee who is arrested, there is a possibility this employee could claim he/she was a victim of disparate impact discrimination as certain studies show that minorities are more likely to be arrested. MISCELLANEOUS OFF-DUTY CONDUCT ISSUES

15. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 15 Engaging in Political Protests: Some states have statutes which prohibit an employer from taking adverse action against an employee because of his/her political activities. Of course, if the employee took time off to participate in a demonstration, such time could count as an absence, provided it is counted pursuant to an attendance policy that is consistently imposed against all employees. Fraternization with Subordinates: Such policies may not be lawful to the extent they seek to regulate an employee’s behavior outside of work unless they directly pertain to avoiding certain conflicts of interest in the workplace, such as relationships between supervisors and subordinates.

16. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 16 STEPS TO TAKE WHEN YOU RECEIVE OFF-DUTY CONDUCT INFORMATION: 1.Verify the information, to the extent possible. 2.If the off-duty conduct has no bearing on the employee ’ s job, there is probably no need to discuss the situation with the employee. 3. Determine if you are permitted to act on the information. 4. Ensure you keep the information confidential on a need-to-know basis. 5. Be careful about what you say to customers and other employees. 6. Weigh your options: keep the employee, suspend the employee, or terminate the employee. 7. Consult legal counsel where appropriate.

17. Copyright © 2008 Allen Matkins Leck Gamble Mallory & Natsis LLP. All rights reserved 17 QUESTIONS AND ANSWERS