In California, a court has ruled that postings so social networking sites are not private (click here for post).  So while it would be difficult for an employee to have a claim for violation of privacy, employers should consider what they can and cannot do regarding information they learn about employees on the internet as well as conducting background checks on the internet. Some employers have even gone as far as asking prospective employees for their login information for social networking sites as part of the interview process. 

The lesson:

Social networking sites are here to stay.  It is time for employers to manage this issue by learning what they can legally do to protect the company's interest on the Internet.  Employees and individuals have to realize that the information posted on the Internet is usually discoverable by everyone - it is not only a conversation between friends. 

While I do not think lawyers need to be IT experts, we all should have a working knowledge of technology, the Internet, social networking sites, and new developing technologies. Technology and the law are becoming so intertwined that I imagine that this will be a component of the MCLE requirement for lawyers within the next 10 years.

Lawyers need to have a working knowledge of technology for a number of reasons. First, IT issues predominate many discovery issues in litigation – and there is a wealth of IT information available through discovery if the attorney has an understanding of what type of information is recorded and how to refer to that information to get it. Second, if a lawyer is advising clients on social networking policies, the lawyer needs to be familiar with the different web sites available and generally how they work. It would, needless to say, be embarrassing to not at least be familiar with some of the more common technical terms, so when advising a client the lawyer does not refer to a “website number”.

Finally, there is no excuse to at least create an account and look around Twitter, Facebook, or LinkedIn – its free and it could be a good excuse to have your son or daughter teach you something. Here is a great list of some of the most used social networking sites one could start with.
 

In April 2010, the Department of Labor Standards Enforcement (DLSE) issued an opinion letter setting for the analysis it would conduct in making a determination regarding whether an intern is properly classified.  In its opinion letter, the DLSE set forth that it would examine the following factors:

1. The training, even though it includes actual operation o the employer’s facilities, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainees or students;
3. The trainees or students do not displace regular employees, but work under their close observations;
4. The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded;
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

While these factors are a fairly loose test, an intern attempting to challenge the classification as an intern would probably have at least a few good facts to support their position. This is why California employers need to approach the intern classification with caution.

Parties to lawsuits have not realized this new phenomenon either.  In almost every case I have litigated in over the last two years the parties' emails have played a critical role.  Why is that?  First, almost all communications are done through email.  Email drafted three years ago, and produced in the course of litigation has a lot of credibility because it recorded the facts as they existed at the time the writer sent the email.  It is is very hard to dispute those facts. 

Is This Good Or Bad?

It is good because it is that much easier to catch a lair these days.  It is also bad, because if you do not take the time to accurately draft an email - and your words could have two meanings - it could come back to bite you.  Seth Godin had some good advice today, and provided 8 tips that are well worth a review:

1. Change your settings so that email from you has a name, your name, not a blank or some unusual characters, in the from field. (ask a geek or IT person for help if you don't know how).
2. Change your settings so that the bottom of every email includes a signature (often called a sig) that includes your name and your organization.
3. Change your settings so that when you reply to a note, the note you're replying to is included below what you write (this is called quoting).
4. Don't hit reply all. Just don't. Okay, you can, but read this first.
5. You can't recall an email you didn't mean to send. Some software makes you think you can, but you can't. Not reliably.
6. Email lives forever, is easy to spread and can easily show up in discovery for a lawsuit.
7. Please don't ask me to save a tree by not printing your email. It doesn't work, it just annoys the trees.
8. Send yourself some email at a friend's computer. Read it. Are the fonts too big or too small? Does it look like a standard email? If it doesn't look like a standard, does this deviation help you or hurt you? Sometimes, fitting in makes sense, no?

It is also worth remembering how useful email can be as a tool to record facts as they exist on a certain day and time.  It is very easy to send yourself an email to record a discussion that took place - and this email will have a lot of credibility should that discussion ever be the center of lawsuit.

I have yet to complain about a client involved in an employment lawsuit that the client took too many notes.  The employment lawyer's mantra is document, document, document.  Why?  Just as the article suggests, if you have a conversation, but do not record the conversation in some manner, it never happened. 

The author suggests a lot different technologies that can help with recording events.  However, I prefer the pen and paper - but I force myself to PDF my notes as soon as possible so that I will never misplace them.  Just had a conversation while you are driving and have another 30 minutes of rush hour traffic to contend with?  In this case, I've been using Dragon, a free iPhone app, that transcribes your speech into text that you can either text or email to yourself.  This is a great way to create a time stamped document reflecting what was said.  

Photo by e walk. 

A general rule for Courts is found in Civil Code section 3513, which provides: “Any one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.” California courts have found that many of the Labor Code provisions are for the public good, and therefore cannot be waived by an employee.  

Labor Code Provisions An Employee Cannot Waive:

• Minimum Wage & Overtime

Labor Code Section 1194 provides a private right of action to enforce violations of minimum wage and overtime laws. That statute clearly voids any agreement between an employer and employee to work for less than minimum wage or not to receive overtime:

Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.

In Gentry v. Superior Court, the Supreme Court further explained:

[Labor Code] Section 510 provides that nonexempt employees will be paid one and one-half their wages for hours worked in excess of eight per day and 40 per week and twice their wages for work in excess of 12 hours a day or eight hours on the seventh day of work. Section 1194 provides a private right of action to enforce violations of minimum wage and overtime laws.
…
By its terms, the rights to the legal minimum wage and legal overtime compensation conferred by the statute are unwaivable. “Labor Code section 1194 confirms ‘a clear public policy . . . that is specifically directed at the enforcement of California’s minimum wage and overtime laws for the benefit of workers.’”

• Expense Reimbursement

Labor Code section 2802 requires employers to reimburse its employees for “necessary expenditures or losses incurred by the employee” while performing his or her job duties. Labor Code section 2804, clearly provides that an employee cannot waive this right to be reimbursed for or liable for the cost of doing business. Section 2804 provides, “Any contract or agreement, express or implied, made by any employee to waive the benefits of this article or any part thereof, is null and void….”

Labor Code Provisions An Employee May Be Able To Waive:

While it is unclear, the following items could possibly be waived by an employee. However, these areas are very unsettled, and employers should approach with caution when seeking waivers from employees on these issues.

• Meal Breaks

The California Supreme Court is currently reviewing the case Brinker v. Superior Court, that should address, among other issues, the standard regarding how employers need to provide meals breaks. At issue is whether employers need to simply “provide” employees with meal breaks, or on the other hand, “ensure” that employees take meal breaks. If the Supreme Court rules that employers only need to provide meal breaks, then if the employee chooses not to take the meal break, then arguably there would be no violation. The Supreme Court will hopefully issue a ruling on this case in 2010.

• Waiver To Participate In A Class Action

Given the increase in wage and hour class actions, employers began seeking agreements from their employees that if a dispute would arise about any wage and hour issue, the employee would agree to only seek remedies on an individual basis, not through a class action. The California Supreme Court reviewed the issue if an employee could enter into such an agreement and found that, “at least in some cases, the prohibition of classwide relief would undermine the vindication of the employees’ unwaivable statutory rights and would pose a serious obstacle to the enforcement of the state’s overtime laws.” The Court therefore set out a number of factors that a trial court must look at to determine whether the class action waiver is enforceable or not. As of February 2010, there has not been a class action waiver that has been upheld by an appellate court in California. So while there is the possibility of enforcing such waivers, this possibility is very slight.
 

As defenses, RHI argued that Plaintiffs’ claims were barred because they all entered into agreements that shortened their statute of limitations down from four years to six months. RHI also argued that the Plaintiffs were exempt from wage and hour laws because the employees qualified for the administrative exemption. The appellate court, in agreeing with the lower trial court, dismissed RHI’s defense that the Plaintiffs’ agreed to a shorter statute of limitation on the grounds that this agreement violated public policy and is unenforceable.

The Administrative Exemption

Employers bear the burden to prove that the employee does not qualify for overtime of one and a half times the employee’s regular hourly rate for all work performed over eight hours in one day and/or all hours over 40 in one week. Employees can qualify for a number of different exemptions, and in this case RHI argued that the Plaintiffs were administrative employees.

In order to qualify for the administrative exemption, the court noted that the employer must prove that the employee must:

(1) perform office or non manual work directly related to management policies or general business operations’ of the employer or its customers,

(2) customarily and regularly exercise discretion and independent judgment,

(3) perform under only general supervision work along specialized or technical lines requiring special training or execute under only general supervision special assignments and tasks,

(4) be engaged in the activities meeting the test for the exemption at least 50 percent of the time, and

(5) earn twice the state’s minimum wage.

The employee must meet all five elements in order to be an exempt administrative employee.

The court explained, by quoting the applicable regulations, that:

“The phrase ‘directly related to management policies or general business operations of his employer or his employer’s customers’ describes those types of activities relating to the administrative operations of a business as distinguished from ‘production’ or, in a retail or service establishment, ‘sales’ work. In addition to describing the types of activities, the phrase limits the exemption to persons who perform work of substantial importance to the management or operation of the business of his employer or his employer’s customers.”

The court found that the evidence did not support RHI’s argument that the Plaintiffs were administrative employees. The court explained that the account executives were trained in sales and evaluated on how well they met sales production numbers – which are not exempt duties. The account executives were also primarily responsible for selling the services of RHI’s temporary employees to its clients. And when they were not selling, they were recruiting more candidates for RHI’s “inventory.” The account executives also followed a “recipe” established by the company which required the employees to rotate their duties ever week between a “sales week,” “desk week,” and recruiting week.” The employees did not develop any policy, but simply followed the company’s system of performing their job. The court finally noted that the Division of Labor Standards Enforcement (DLSE) previously opined that recruiters who worked in a recruiting company did not qualify for the administrative exemption (which can be read at the DLSE’s website here (PDF)). All of these facts supported the trial court’s finding that the employer failed to meet its burden that the account executives were administrative employees.

This case is a good reminder to employers that they must be careful about how employees are classified. Simply because the employee has a high-level title, or every employer in the particular industry has always treated this type of employee as an exempt employee does not mean that the employees are properly classified. Courts will strictly apply the applicable exemption element-by-element to determine whether or not the employer must pay the employee overtime and provide meal and rest breaks. Finally, employers must remember that they will bear the burden of proof when asserting in court that the employee is properly classified as an exempt employee.

The case, Pellegrino v. Robert Half International, Inc. can be downloaded here (PDF).

I just finished reading an advance copy of Linchpin, and have to recommend the book to anyone who either manages people at work or for anyone who has to work for a living. I have read many of Seth’s other books which provide prophetic insight how the Internet and technology have changed marketing and business forever. Linchpin similarly argues that technology is changing the business world dramatically, but the book focuses more on what these changes mean for individuals, and the new opportunities and rewards for those who chose to be linchpins.

What is a linchpin?

The term is defined by the Merriam Webster dictionary as: “(1) a locking pin inserted crosswise (as through the end of an axle or shaft); (2) one that serves to hold together parts or elements that exist or function as a unit <the linchpin in the defense's case>.” Seth’s theme throughout the book is that a linchpin is an artist who challenges the status quo, and in doing so creates value, and in doing this become indispensible. An artist is not necessarily someone who creates a painting, but Seth says a lawyer, engineer, salesman, politician or a mid-level manager in a large company can all create art. Seth argues that “art is the ability to change people with your work, to see thing as they are and then create stories, images, and interactions that change the marketplace.”

Is it hard to be a linchpin?

Definitely. As Seth observes, “Nothing about becoming indispensable is easy. If it’s easy, it’s already been done and it’s no longer valuable.” But as Seth argues, in today’s world to be “successful” you have no choice but to be a linchpin. Not being a linchpin relegates a worker’s work into a commodity, which makes the worker easily replaceable by the next person who will do the work cheaper.

The book covers the shift in economics that the Internet has developed, which has opened up so much more opportunity. In the past, the bourgeoisie controlled the capital to invest in factories. The proletariat workers had little leverage in the equation because they do not possess the capital to create their own factories. Today, however, “the proletariat own the means of production.”   With the new economy, we have to unlearn the factory mind-set that we have been programmed to live by over the last 100 years – which rewarded showing up for work and following the rules. The Internet has changed this.

While technology has changed the rules of the game, individuals need to make a choice. Society does not reward blind rule-following, but instead requires linchpins who do not have maps telling them what to do next. This is difficult, as we are conditioned by society to follow the status quo and to fit in. Linchpins understand this, and must continually fight off the tendency to give-up, conform and to take the easy path by simply following the rules (Seth refers to this tendency as the resistance).

What does this have to do with employment law?

Well, as a blogger, I have read Seth's blog for a couple of years.  Before I read the book, I thought it would have no relationship to employment law what-so-ever.  But, only a few pages into the book I realized that this book is a must read for managers and human resource professionals. Companies need to realize they now need linchpins within their organizations, and they need to allow employees room to be linchpins, instead of drowning out these productive individuals by forcing them to conform. Seth notes that “Great bosses and world-class organizations hire motivated people, set high expectations, and give their people room to become remarkable.”  This book is not only a wake-up call to managers about what type of employee is needed in today's workplace. 
 

The arbitration agreement at issue in the case provided:

I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules of the American Arbitration Association. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.

Id. at 1467 (citation omitted). The agreement was contained in an employment application and clearly provided: “Please Read Carefully, Initial Each Paragraph and Sign Below.” Plaintiff also initialed next to the paragraph that contained the arbitration agreement. The court found that simply because the agreement in that case was an adhesion contract (or on a “take-it-or-leave-it” basis), it still did not render the agreement unenforceable because the agreement was fair. Even though the agreement contained the words “I agree”, this did not render the arbitration agreement to only bind the employee and not the employer to the arbitration agreement.

The Roman court also noted that even if the agreement “were somehow ambiguous on this point, given the public policy favoring arbitration [citation] and the requirement we interpret the provision in a manner that renders it legal rather than void [citation], we would necessarily construe the arbitration agreement as imposing a valid, mutual obligation to arbitrate.” Roman, supra, 172 Cal.App.4th at p. 1473.  Employers should consider the pros and cons of having employees enter into arbitration agreements, and as this case illustrates, courts are likely to enforce the agreement if it is properly drafted. 

Kris’ analysis is right on for a number of reasons. First, lawyers are trained to point out the risks of any situation to properly advise their clients. Second, lawyers are notoriously behind the technology curve. Most do not know what “new” technologies are being used or how to use them, and this creates concern as anyone is scared about what they do not know about.

Employment lawyers need to take heed of this critique. HR professionals have jobs to perform and companies to run. They need legal advice that helps them perform their jobs better – not scare them into failing to change and keeping up with the times.

Employment lawyers need to recognize that change entails risk. However, companies always have to change, and lawyers need to help companies navigate this risk, not prevent them from doing anything new.

Note to HR professionals

As you know, the HR profession is changing a lot given today’s new technologies. New issues are creating a lot of uncertainty. Issues such as how to use social networking sites to conduct background checks, monitoring employee’s internet use, and determining "hours worked" when employees always have a smart device on them.

When looking for legal advice about these issues, you need to be certain that your lawyer is familiar and up-to-date with the technology available. Does the lawyer who you are seeking legal advice from have a Twitter, Facebook, or LinkedIn account? Do they use an iPhone or Blackberry? If the answer to these questions are ‘no’ – don't be surprised if their advice is to avoid these “new” technologies.

1. Assuming everyone can be paid a salary, and not paying overtime for hours over 8 in one day or 40 in one week. For a company to not pay overtime, it has the burden of proof to establish that the employee meets an exemption to California’s overtime laws. The exemptions are based on the amount of pay the employee receives and the duties the employee performs.
2. Not researching particular laws that apply to the industry or city. For example, businesses in San Francisco have to provide for paid sick leave.
3. Not having a meal and rest break policy. It goes without saying, every company in California needs a meal and rest break policy – and evidence that this policy is regularly communicated to employees.
4. Not recording meal breaks. Employers are required to not only provide meal breaks, but also keep records of when the employee started and stopped the meal break.
5. Not paying accrued vacation when employment is severed. Accrued and unused vacation is considered wages under California law, and needs to be paid out at the end of employment regardless of whether the employee is fired or quits.
6. Overestimating the enforceability of covenants not to compete. Nine times out of ten, covenants not to compete are unenforceable in California.
7. Underestimating the importance of an employee handbook.
8. Assuming any worker can be classified as an independent contractor. Just like exempt employees, employers will bear the burden of proof when it comes to classifying independent contractors. Generally, the test is how much control the employer has over the worker.
9. Withholding the money necessary to hire an HR manager knowledgeable with California law.
10. Not reimbursing employees for business related expenses, such as travel expenses. Under Labor Code section 2802, employers are required to repay employees who pay for business related items out of their own pocket.

denied review of a lower appellate court decision in the class action of Chau v. Starbucks

However, on appeal, this award was reversed. In a favorable ruling for employers, the appellate court took a more common sense reading of Labor Code section 351, explaining:

There is no decisional or statutory authority prohibiting an employer from allowing a service employee to keep a portion of the collective tip, in proportion to the amount of hours worked, merely because the employee also has limited supervisory duties. Accordingly, we reverse the judgment and order the trial court to enter judgment in Starbucks's favor.

The Supreme Court’s decision not to review the appellate court’s decision establishes that decision as precedent and binding in California. Click here for a more detailed analysis of the appellate court's decision. 

However, employers are cautioned to review the appellate decision (and obtain legal advice) before allowing managers to share in tip sharing arrangements. For example, the Starbucks ruling involved the situation where there was a "collective tip box" that "a customer would necessarily understand the tip will be shared among the employees who provide the service” and that the managerial employee is part of the team that provided the service.

However, there are two basic problems now: (1) there are too many sites to search, and (2) if someone has a common name it is impossible to narrow the search to that particular person.  

Spokeo.com is a new company that basically makes these on-line background checks easier. Guy Kawasaki points out that this service can be very beneficial to an HR manager who is tasked with checking out applicants’ backgrounds by searching social networking sites. The key break through for the website is that it searches for an individual’s email address. This makes it very helpful to find particular information about an applicant that has a common name.

What is the cost?

It is $2.95 per month for one year, or $4.95 per month for three months. This seems well worth the cost to save hours searching social networking sites.

To try the service, click here.

Related articles:

Job Applicants Asked To Provide Their Passwords To Social Networking Sites

1. Not drafting job descriptions because the employer believes that they are either useless or are not needed in small to medium sized companies. 
2. Not listing the essential functions of the job (i.e., the primary purpose the job exists).
3. Listing functions that are not the essential functions of the job as essential functions. Employers should separate these “other” functions as just that. Employers should also have language that specifies that the job may change, and employees may be required to perform other duties as required.
4. Using legalese. Employers should use concrete terms that everyone can understand.
5. Making the description too long.
6. Using terms and/or abbreviations that only others in the company understand what they mean.
7. Not updating job descriptions and simply use the ones drafted in 1990. Times are changing very fast, and an employer’s expectations of its employees in 1990 are probably vastly different than compared to 2009.
8. Containing typos and poor grammar. A job description may be the critical document in employment litigation, a judge and/or jury may have to interpret the meaning of the job description, and therefore it is important to take time and care in drafting the language of the job description.
9. Not referring to the job descriptions when conducting employee performance reviews or when addressing its liability against a potential ADA lawsuit.
10. Not having outside legal counsel review the job descriptions (come on, you knew I had to put this one in).

The employer, citing its mission to protect abused children and to protect itself from any legal liability, installed a video camera in Plaintiffs’ office to identify the perpetrator. Because the websites were only being access at night, the video camera did not record any of Plaintiffs’ activities during the day, and was only turned on at night. The perpetrator was not caught.  But Plaintiffs’ discovered the video camera in the office, and filed this lawsuit for violation of their privacy rights.

The California Supreme Court noted that to succeed on their privacy claims, Plaintiffs would need to prove that:

1. The plaintiff must possess a legally protected privacy interest,
2. The plaintiff’s expectations of privacy must be reasonable, and
3. The plaintiff must show that the intrusion is so serious in nature, scope, and actual or potential impact as to constitute an egregious breach of social norms.

The Court noted that Plaintiffs were able to establish violation of the first two elements in this case– that the employer intentionally intruded into the Plaintiffs’ office in which they had a reasonable expectation of privacy.

Offensiveness of the employer’s action

However, the Court held that Plaintiffs did not meet their burden of proof for the third element. First, the Court held that the degree and setting of the intrusion into Plaintiffs’ privacy was not very high. The Court noted that the “place, time, and scope” of defendant’s surveillance was not highly offensive. Second, the Court looked at the employers motive and justifications for conducting the surveillance – which had no element of being improper in this case. Given nature Hillsides’ business of helping abused children, it was taking proper action to prevent any possible harm to them. Given these factors, the Court found that the Plaintiffs could not, as a matter of law, prove that a reasonable person would find the intrusion into their privacy offensive.

Take away for employers

• Do not assume that you have the right to monitor employees during working hours. As the case establishes, employees still have reasonable expectations of privacy at work.
• Do not assume a computer monitoring policy applies to video and audio surveillance. The employer in this case tried to argue that the computer monitoring policy diminished Plaintiffs’ expectation of privacy at work, but the Court disagreed because the policy never mentioned the possibility that employees could be videotaped at work.

The case, Hernandez v. Hillsides, Inc. can be read here (PDF).
 

The Ninth Circuit Court of Appeals in Owens v. Local No. 169, Association of Western Pulp and Paper Workers (9th Cir. 1992) 971 F.2d 347, 350-355, provided a nonexclusive list of factors courts would examining in determining whether the employee was free to engage in personal activities (note that none of the factors is determinative by itself):

1. whether there was an on premises living requirement;
2. whether there were excessive geographical restrictions on employee’s movements;
3. whether the frequency of calls was unduly restrictive;
4. whether a fixed time limit for response was unduly restrictive;
5. whether the on-call employee could easily trade on-call responsibilities;
6. whether use of a pager could ease restrictions; and
7. whether the employee had actually engaged in personal activities during call-in time.

In addition, the California Division of Labor Standards Enforcement published this guideline on call back time and stand by time. Employers need to conduct a review of each case when on-call time may be an issue in order to determine whether pay is owed.
 

The story gets even better. The mayor of Brooksville cast the only opposing vote to implementing the new dress code, citing that a mandate to wear underwear “takes away freedom of choice.” This gives a new meaning to the term “pro-choice."

So is the city’s “pro-underwear” position legal?

Probably. Employers can generally set dress code standards for their employees as long as the policies do not discriminate on the basis of gender, race, religion, disability, or any other protected status.

If the dress code conflicts with an employee’s religion, an employer may have to analyze whether there is a reasonable accommodation that it can provide to the employee. In the context of providing an employee a reasonable accommodation for dress issues, the US Supreme Court noted that in the context of religion accommodations, employers do not have to provide accommodations that are more than a “de minimis” cost. See TWA v. Hardison 432 U.S. 63 (1977).

Employers also have to be aware of obscure state and local laws that may also prohibit employers from implementing other prohibitions. For example, here in California, the Government Code specifically addresses employees' right to wear pants to work. Section 12947.5 states:

(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.
 

While there are some laughs at the Florida city's expense, employers do need to pay close attention to their dress code policies to ensure that they are compliant.  Employers also need to ensure that HR is properly trained to deal with complaints and requests for reasonable accommodations when they arise.

job applicants to provide their user names and login information to common social networking sites on their job applications

Just over one-year ago, I was asked by employers about what legalities were involved in Googling a job applicant, or looking at their on-line presence before making a hiring decision. It seems now, however, that once employees realized that their on-line presence is not so private, they began to restrict who could view this information on the Internet.

The city of Bozeman apparently was not happy with the increasing sophistication of people posting information on the Internet, resulting in it being shutout of viewing job applicants’ Facebook pages. So the city simply started to ask job applicants to provide their user names and passwords to social networking sites. The application provides:

Please list any and all current personal or business Web sites, web pages or memberships on any Internet-based chat rooms, social clubs or forums, to include, but not limited to: Facebook, Google, Yahoo, YouTube.com, MySpace, etc.

Many people and groups, such as the ACLU, have objected to this request arguing that it violates the job applicants’ privacy rights. As a result of the criticism it received, the city said that it will likely remove the request for user names and passwords, but may still require job applicants to “friend” the city in Facebook so that the city could still see what is posted.

I think this policy goes too far. Irrespective of the legal privacy questions raised, I do not think it would be a good hiring practice for an employer. I, for one, (and I think a lot of other people) would simply refuse to provide this information. If the city disqualifies job applicants who do not provide the information (which is claims it does not do), it is limiting its potential workforce of qualified people. Employees using these technologies are computer savy and are at least motivated enough to learn and try new technology. The job applicants who most likely will not have a problem in providing this information are those who do not know how to use a computer or the Internet and do not have any social networking accounts. Are these really the best qualified employees? In today’s workforce, a working knowledge of the Internet and social networking sites is almost a necessity. Businesses are learning about these new mediums and are discovering new ways of advertising and conducting business. It would be a detriment to not have employees who at least know what technology is available and is commonly used.

I also think that this incident will begin the discussion about people’s privacy interest in this type of information. The more and more people begin to “live” on the Internet, state legislatures will probably begin to define specifically what employers can and cannot ask for from employees.

Other articles of interest I’ve written related to employee's on-line privacy in the workplace:

California Appellate Court Holds Postings On MySpace.com Are Not Private

Can An Employer Be Liable For Not Googling A Job Applicant?

Google Latitude In The Workplace

California courts have clearly established that noncompetition agreements are very difficult to enforce under California law, as explained further below. Therefore, once Donatelli left employment with EMC, the company raced to file a lawsuit against the former employee to prevent him from working with HP in Massachusetts. HP also raced to file a lawsuit in California barring EMC from enforcing the noncompetition agreement.

The Massachusetts court ruled first, finding that the agreement was enforceable under Massachusetts law, and that California law does cannot affect the court’s ruling. The court allowed Donatelli to present evidence establishing that his duties and job at HP did not directly compete with his former position at EMC. The court allowed Donatelli to work for HP in California given the fact that he proved there is minimal overlap between his new HP position and his former position at EMC.

Noncompetition Agreements In California

In California, noncompetition agreements are governed by Business & Professions Code section 16600, which states: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The statute permits noncompetition agreements in the context of sale or dissolution of corporations (§ 16601), partnerships (§ 16602), and limited liability corporations (§ 16602.5).

Under the common law, as still recognized by many states today, contractual restraints on the practice of a profession, business, or trade, were considered valid, as long as they were reasonably imposed.

In 2008, the California Supreme Court ruled on the enforceability of noncompetition agreements under California in Edwards v. Arthur Andersen LLP. Arthur Andersen argued that California courts have held that section 16600 embrace the rule of reasonableness in evaluating competitive restraints.

The Court disagreed with Arthur Andersen, and noted:

We conclude that Andersen’s noncompetition agreement was invalid. As the Court of Appeal observed, “The first challenged clause prohibited Edwards, for an 18-month period, from performing professional services of the type he had provided while at Andersen, for any client on whose account he had worked during 18 months prior to his termination. The second challenged clause prohibited Edwards, for a year after termination, from ‘soliciting,’ defined by the agreement as providing professional services to any client of Andersen’s Los Angeles office.” The agreement restricted Edwards from performing work for Andersen’s Los Angeles clients and therefore restricted his ability to practice his accounting profession.

The Court found that this agreement was invalid because it restrained Edwards’ ability to practice his profession.

However, Arthur Andersen argued that section 16600 has a “narrow-restraint” exception and that its agreement with Edwards survives under this exception. Andersen pointed out that a federal court in International Business Machines Corp. v. Bajorek (9th Cir. 1999) upheld an agreement mandating that an employee forfeits stock options if employed by a competitor within six months of leaving employment. Andersen also noted that a Ninth Circuit federal court in General Commercial Packaging v. TPS Package (9th Cir. 1997) held that a contractual provision barring one party from courting a specific customer was not an illegal restraint of trade prohibited by section 16600, because it did not “entirely preclude[]” the party from pursuing its trade or business.

In refusing to accept the “narrow-restraint” exception for noncompetition agreements in California, the Court stated:

Contrary to Andersen’s belief, however, California courts have not embraced the Ninth Circuit’s narrow-restraint exception. Indeed, no reported California state court decision has endorsed the Ninth Circuit’s reasoning, and we are of the view that California courts “have been clear in their expression that section 16600 represents a strong public policy of the state which should not be diluted by judicial fiat.” [citation] Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect. We reject Andersen’s contention that we should adopt a narrow-restraint exception to section 16600 and leave it to the Legislature, if it chooses, either to relax the statutory restrictions or adopt additional exceptions to the prohibition-against-restraint rule under section 16600.

The Court’s ruling basically eliminated the validity of non-competition agreements under California that are not expressly provided for in Section 16600.

As layoffs sweep across industries, employees' personal information is winding up in the dustbin, as well. Most workers know better than to store personal files on their office computer. But employees who spend the majority of their time at the office often treat the company PC as their personal gadget, filling it with music, photos, personal contacts -- even using the computer's calendar to track a child's soccer schedule. That makes it all the more distressing when a newly laid-off worker learns that his digital belongings are company property.

The author correctly notes that what information is the employee’s as opposed to the employers is probably going to be set forth in and governed by the employer’s policies. Often times these policies will be provided to the employee when he or she first starts:

Employees worried about their job security should review the forms they signed when they were hired. They should look at the company's electronic communications policy, employee guidelines and non-compete agreements to make sure they understand everything properly. When employees sign these agreements, they should also make copies to save at home, too, Ms. Yancey says. Those that break these agreements risk being fired or sued by their employer, she adds.

It is important to note that in California, it is extremely difficult for employers to enforce non-competition agreements due to a California Supreme Court ruling in Edwards v. Arthur Andersen last year. California employers can still protect company information through other means, such as establishing that the information is a trade secret, or is proprietary information.

Steps California Employers Should Take To Avoid Litigation Over Electronic Data

• California employers need to establish a clear policy that establishes that the employee does not have any privacy expectation in any data stored on company owned computers or devises.
• The policy should establish that all aspects of an employee’s use of company equipment can be monitored.
• Employers need to have the employees sign an acknowledgment of electronic data and monitoring policy.
• The employer should remind employees of the electronic data policy at least every year.
• If employers do have trade secrets, they need to maintain strict protocols to ensure that only employees with a “need to know” have access to the information and take steps to ensure that the information is protected.
• If an employee who has been laid off requests personal information from his or her computer such as family pictures, an employer’s accommodation of this request will be somewhat of a step towards minimizing the employee’s ill-will towards the company (and less likely to pursue litigation against the company).