Are electronic signatures valid in the employment setting?

Generally, yes, and surprisingly this is one area that legislation is well ahead of the general adoption of the technical capabilities available in the marketplace. For example, in 1999 the California Legislature enacted the Uniform Electronic Transactions Act (the “UETA”), Civ. Code, §§ 1633.1 et seq., which provides that when a law requires a record to be in writing or requires a signature, an electronic record or signature satisfies the law. The law requires that any contract entered into between two parties may not be denied legal enforceability simply because of the use of an electronic signature. In 2000, the U.S. Congress passed the Electronic Signatures in Global and National Commerce Act (“ESIGN”), 15 U.S.C. § 7001 et seq., which provides for the enforceability of electronic signatures on the federal level. In addition, most states have also passed their version of the UETA. Taken together, these laws provide authority that electronic signatures are legally binding, just as if the contract was signed in the traditional “wet” manner.

The enforceability of electronic signatures in the employment context was confirmed in recently by a California Federal District Court in Chau v. EMC Corp. (2014). In Chau, the plaintiff sued EMC alleging she was discriminated against because of her pregnancy. The company made a motion to compel arbitration. The plaintiff opposed defendant’s motion to compel arbitration on various grounds, but in particular argued that the arbitration agreement was never signed by the plaintiff. The court rejected plaintiff’s argument, and upheld the electronic signature in this case:

Defendants have also established that Chau signed the Key Employee Agreement, including accepting the arbitration provision. [citations omitted] Chau agreed that “an electronic signature by me (checking Yes) is valid as if I had signed the documents referred to below by hand.” See also Cal. Civ.Code § 1633.2(h) (defining “electronic signature” to include a process [i.e. checking Yes] executed by a person with the intent to sign the electronic record). Accordingly, defendants have established that a valid, signed, arbitration agreement exists between plaintiff and defendants. Neither party disputes that the agreement encompasses the issues in this case.

For the electronic signature to be binding, the ESIGN and UETA require that the signer of the agreement must have intended to sign the agreement, and that the parties consented to complete the agreement electronically. However, as the court in EMC recognized, the laws do not require a traditional signature, but rather “an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.” Therefore, someone can electronically sign a document by checking a box indicating that they are “signing” the document as was done in the EMC case.

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Interviewed for KTLA news story about employers' use of social media in the workplace

I was interviewed for a news story that aired on KTLA here in Los Angeles about employer’s use of social media in evaluating applicants and employees. I’ve been writing and speaking about this topic for at least five years now, but given the pervasiveness of social media, the topic is only becoming more relevant with the increased use of social media today.

 Employers need to remember to keep a few items in mind regarding social media and the workplace. California passed a law, Labor Code section 980, effective January 1, 2013 that prohibits employers from “requiring or requesting” employees and applicants to provide their passwords to social media accounts. Can California employers monitor employees' internet usage under new Labor Code section 980?

Also, employers need to be aware of employee’s privacy rights. Can employers use employee's posts to social media as basis for employment decisions or would this violate an employee's right to privacy?

Finally, when a company encourages employees to use social media for work, there are some considerations the employer should take into account regarding the ownership of the social media accounts.

Generally speaking, employers may utilize social networking sites to conduct background checks on employees if:

  1. The employer and/or its agents conduct the background check themselves;
  2. The site is readily accessible to the public;
  3. The employer does not need to create a false alias to access the site;
  4. The employer does not have to provide any false information to gain access to the site; and
  5. The employer does not use the information learned from the site in a discriminatory manner or otherwise prohibited by law.
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Can employers use employee's posts to social media as basis for employment decisions or would this violate an employee's right to privacy?

Generally, employees have a privacy expectation in their personnel files, contact information, and work related information. However, this expectation of privacy is not limitless, especially when the employee publically airs his or her work experiences on social media sites for the public to see. Courts have held that employees can waive this right to privacy once they make disclosures in public for everyone else to read via social media networks.

For example, in a case not in the employment context, a California court reviewed the issue of whether an author who posts an article on myspace.com can state a cause of action for invasion of privacy and for intentional infliction of emotional distress against a person who submits that article to a newspaper for republication. The case, Moreno v. Hanford Sentinel, Inc. involved a college student who had moved away from her home town of Coalinga, California. She wrote “An ode to Coalinga” and posted it on her site on MySpace.com. The ode badmouthed her hometown. Six days after publishing it on MySpace, she took the writing off of the site, but the town’s high school principal submitted the writing to the local newspaper for publication. The newspaper republished the ode in the letters to the editor section and listed Moreno’s full name even though she only used her first name on her MySpace page. The ode must have contained some serious dirt on the city, as it resulted in death threats against Moreno’s family, and eventually forced her family to close a 20 year old business and move out of town.

Moreno sued for invasion of her privacy alleging that her post on MySpace was only supposed to be viewed by a few of her friends, and because she removed the post six days after publishing the article. The court rejected Moreno’s theory that the newspaper’s publication violated her right to privacy because her post to MySpace was made virtually to everyone with an Internet connection. The Court reasoned that, “[Moreno’s] affirmative act made her article available to any person with a computer and thus opened it to the public eye. Under these circumstances, no reasonable person would have had an expectation of privacy regarding the published material. As pointed out by appellants, to be a private fact, the expectation of privacy need not be absolute.” Therefore, the court held that “the fact [Moreno] expected a limited audience does not change the above analysis. By posting the article on myspace.com, [Moreno] opened the article to the public at large. Her potential audience was vast.” The court concluded that Moreno therefore could not asserted a cause of action for invasion of her right to privacy against the newspaper.

Even though this case is not involving employment information, a similar analysis would apply to an employee who posts information on social media about workplace issues. Once the employee places the information about his or her work circumstances on social media, this greatly reduces the employee’s privacy in the subject matter. However, an employer should be cautious, and use common sense in responding to such posts. For example, if an employee posts negative information about the company on social media, it would obviously not give the employer a right to disclose the employee’s health information and documents from the employee’s personnel file. Alternatively, if the employee posts about how bad an employer treated him or her, the employer would have the right to publically set the record straight with facts specific to rebut the allegations made by the employee.

Employers should use common sense in responding publically to an employee’s or former employee’s posts on social media and keep any discussions limited to the facts and issues raised by the employee. Furthermore, employers should approach situations with caution when an employee’s posts on social media are password protected and only friends of the employee can view the post. Hacking or gaining access to social media posts under false pretenses is most likely illegal, and would tilt the analysis back into the employee’s favor that the information was not disclosed to everyone and, therefore, would be considered private. In addition, employers may never retaliate against employees for making complaints via the internet or otherwise, and should be careful in making employment decisions based on employees’ complaints about workplace issues even if made on the Internet.

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Reminder: Webinar On Social Media Under California Law Tomorrow

This will be one of our most attended webinars, and there is still time to sign up. The webinar will cover legal issues facing California employers under the new Labor Code section prohibiting employers from asking applicants and employees for social media passwords, privacy issues when conducting background checks, alternatives to social media policies, and when policies addressing these issues are necessary. It is taking place at 10:00 a.m. PST January 15. Visit our website for registration information.

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Can California employers monitor employees' internet usage under new Labor Code section 980?

California passed a new law taking effect January 1, 2013 that prohibits employers from “requiring or requesting” employees and applicants to provide their passwords to social media accounts. This law was passed after a few cases made the news where employers were actually asking for this information. As I argued before, this law was probably not necessary as California law probably already prohibited this type of conduct to begin with.

However, now that the law is taking effect, there are also new questions that employers are facing under the law. For example, if an employer has the right policies in place that limit an employee’s expectation of privacy, it is pretty well established that the employer may monitor the employee’s internet use and record this. However, under the new law, what if an employee accesses their social media accounts during work? Or on a break? Can employers still monitor employees and record the employee’s login and password information?

I would argue that employers can still monitor employees’ internet use as long as they have made the proper disclosures through a handbook or policies that limit the employees’ expectation of privacy in using the company network or computers. The new law only prohibits employers from requiring employees to divulge their passwords. If the employer notifies the employees that it is recording all activity by the employees on the company network or computers, then the employees have made a voluntary decision to continue to access their account knowing that their employer is monitoring and/or recording the activity. Granted, the law is just going into effect next week, so obviously there is no case law to rely upon in making this argument, so employer will have to wait to see how the law is ultimately interpreted by the courts. 

[image: topgold]

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Zuckerberg's lesson in online privacy - does it exist?

There was a good reminder to everyone over Christmas about online “privacy.” Randi Zuckerberg, the sister of Facebook co-founder and CEO Mark Zuckerberg posted a picture of her and her family on FB, and it was shared by another person on twitter. The photo was one of the Zuckerberg family using Facebook’s new Poke functionality (which by the way, is a way to send pictures through Facebook that are deleted from the recipient’s machine after a set period of time). A third party posted Randi’s photo online, and Randi’s apparently did not like the fact that the photo was reposted. Randi did not know how the third party got a copy of the picture, but it became apparent that the third party was connect to Randi through a mutual friend and saw the picture posted in her newsfeed. After the issue of how the picture was shared and it was not the result of some underhanded means to gain access to the picture, Randi still commented that people should “always ask permission before posting a friend’s photo publicly.”

I think there is another lesson here that I’ve preached about before: everything you post on the internet is public – even if you think you are only sharing it with your “friends.” However, there is a dichotomy of views that is becoming more apparent. Even though posting items on the internet makes them public to a lot of people to see – maybe even more people than you imagine as Randi’s case shows – there is still an increasing sense that people have a privacy interest in their information posted on the internet. For example, California’s new law (Labor Code section 980) making it illegal in a couple of days for employers to ask applicants or employees for their social media passwords in order to conduct a background check on the applicant/employee. This is also apparent in Randi’s comment that her picture, posted on Facebook and which her “friends” could see, still thought she has some privacy expectation in the photo. Mathew Ingram at Gigaom believes that privacy online is becoming more complicated. I have to agree – with laws being passed like California’s law prohibiting employers from asking for social media passwords, what could be considered private online is becoming more complex.

[image: marsmet481]

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Everything Employers Need To Know About Social Media In the Workplace In 2013

I will be conducting a webinar on January 15, 2013 on legal issues of social media in the workplace. The presentation will cover everything a California employer needs to know about social media in the modern workplace of 2013:

  • Discussion on the new law (Labor Code section 960) that prohibits employers from asking applicants and employees for their social media passwords taking effect on January 1, 2013.
  • How to avoid invading employees’ privacy rights when using social media for background checks.
  • Developments on how the NLRB held that some social media policies restrict an employee’s right to “engage in concerted activities.”
  • How to use the Internet to properly conduct a background check for applicant.
  • Discussion on whether your company needs a social media policy.
  • Evaluating whether an employer may be held liable for failing to use social media and the Internet to conduct a background check.
  • Alternatives to social media policies.

The cost is $150 (this is waived for clients). You may register below, or send me an email if you are a client.

This webinar has been preapproved by HRCI for 1 recertification credit hour. 

"The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means that this program has met the HR Certification Institute's criteria to be pre-approved for recertification credit."

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Surprise - Employers Face New Employee Personnel Records Obligations in 2013, But The Term "Personnel Records" Is Not Defined

California employers face a law (AB 2674) taking effect on January 1, 2013 (click here for a list of other new employment laws effective in 2013), which changes their duties to maintain and provide personnel records to current and former employees.  The law amends Labor Code section 1198.5 pertaining to "personnel records".  When discussing this new law, I am getting the question of what documents should be included in an employee’s personnel file, and what exactly are "personnel records" under this Labor Code provision. To many employers' surprise, although the term “personnel file” or “personnel records” is used throughout the Labor Code, the term is never explicitly defined.

The Labor Code provides some guidance for employers by setting for what employees are not entitled to inspect. Labor Code section 1198.5, which provides the employee with certain rights regarding inspection of “personnel records”, does exclude certain records from this right to inspection. Under this section, employees do not have the right to inspect (1) records relating to the investigation of a possible criminal offense; (2) letters of reference; (3) ratings, reports, or records that were: obtained prior to the employee’s employment, prepared by identifiable examination committee members, or obtained in connection with a promotional examination.

Without the terms “personnel records” or “personnel file” ever being defined, there is considerable ambiguity about what documents should be keep in an employee’s personnel file.

While not legally binding on employers, there is some guidance from the Division of Labor Standards Enforcement’s (“DLSE”) website (caution: at the time of this writing, the DLSE has not updated its website to reflect the new changes in the law):

Categories of records that are generally considered to be "personnel records" are those that are used or have been used to determine an employee’s qualifications for promotion, additional compensation, or disciplinary action, including termination. The following are some examples of "personnel records" (this list is not all inclusive):

  1. Application for employment
  2. Payroll authorization form
  3. Notices of commendation, warning, discipline, and/or termination
  4. Notices of layoff, leave of absence, and vacation
  5. Notices of wage attachment or garnishment
  6. Education and training notices and records
  7. Performance appraisals/reviews
  8. Attendance records

It is important to keep in mind why an employer would ever have to produce a personnel file – to support its employment based decisions. Therefore, employers should typically maintain personnel files with the following documents:

  • Signed arbitration agreements
  • Sexual harassment compliance records for supervisors
  • Sign acknowledgements of policy by employee (for example, confidentiality/proprietary information agreements, meal and rest break acknowledgments, handbook acknowledgments)
  • Wage Theft Protection Act notice
  • If commissioned employee, written commission agreement signed by both the employer and employee beginning January 1, 2013.
  • Warnings and disciplinary action documents.
  • Performance reviews
  • Documents of any grievance concerning the employee
  • Documents pertaining to when the employee was hired
  • Records pertaining to last day of work and documenting reason for departure from employment

Employers typically should not keep the following information in an employee’s personal file:

  • Form I-9s
  • EEOC and DFEH charges of discrimination
  • Workers’ compensation information
  • Private medical information
  • Any information obtained prior to offering the employee a position

Given the ambiguity about the definition of personnel file, employers should take time to consider their operations and industry to develop a system ensures the same documents for each employee are maintained in their personnel files, and what other files need to be established for employees. Also, employers need to design and implement a personnel file retention policy that will maintain the critical documents that would be relevant should the need to defend an employment claim arise. It is important that this process be established in order to survive any potential change in management and/or the human resource functions in the company.

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Proposed Bill Gives NLRB And OSHA Right To Review Emails And Other Electronic Information Without Search Warrant

There is concern about a bill making its way through the Senate that would drastically change individuals’ privacy interest in their internet communications and “cloud” information. The bill, named the Electronic Communications Privacy Act Amendments Act of 2011, originally started out as offering more protection to individuals, but after law enforcement expressed its concerns about the bill, it was rewritten to allow more than 22 governmental agencies to search e-mail, Google Docs files, Facebook posts, and direct messages through Twitter. 

Other than lowering everyone’s privacy rights in this information, why would employers have any concern about the bill? The National Labor Relations Board (NLRB) is one of the governmental agencies expressly listed as having the power to search this electronic information without a search warrant. In addition the Occupational Safety and Health Administration (OSHA) would also have the warrantless subpoena power should the bill pass.  This would give the NLRB and OSHA unprecedented access into a private employer's e-mails and any other information stored in the cloud. 

Under the bill, anyone who sends email or stores information in the cloud would be given less privacy than if the information was stored on a hard drive kept in the office or home. Many companies, such as Google and Apple, who are touting new cloud services are fighting hard to protect the information individuals store in the cloud because a decrease in privacy of cloud based information would likely reduce the consumer demand for the services.

Further diminishing companies’ and individuals’ privacy rights, there has been an argument which was upheld by a federal district court in Oregon in 2009, that the government does not have to give notice to the individual or company to search e-mails or other electronic information, even when the agency has a search warrant. The court held that the notice requirements under the Electronic Communications Privacy Act (ECPA) and the Fourth Amendment is satisfied when the only the internet service provider who is storing the information is served with a search warrant.

The vote on the proposed bill is scheduled for Thursday, November 29, 2012.

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NLRB Issues New Memo On Validity of Social Media Policies

In October 2012 the National Labor Relations Board issued an advice memorandum regarding whether an employer’s social media policy violated the National Labor Relations Act (“NLRA”). This memorandum is of importance because the NLRB has issued findings recently that employer’s seemingly neutral social media policies violated employees’ rights under the NLRA. Section 7 of the NLRA provides that employees have the right to self-organize, form, join or assist labor organizations, and generally “engage in other concerted activities.” Section 8 of the NLRA makes it unlawful for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” This prohibits applies to all employers, even if the employees are not unionized.

In the memorandum the NLRB sets forth its two step analysis in determining whether a “work rule” “would reasonably tend to chill employees in the exercise of their Section 7 rights.” First, the NLRB examine whether the rule “is clearly unlawful if it explicitly restricts Section 7 protected activities.” Second, the rule is examined to determine if “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” While the Board said that a rule “that could conceivably be read to restrict Section 7 activity” would does not automatically violate the NLRA, but if the rule is ambiguous and contains no limiting language or context to clarify that it does not restrict their Section 7 rights would be in violation.

The case at issue in the memorandum involved Cox Communications. The company had a standard social media policy:

Nothing in Cox’s social media policy is designed to interfere with, restrain, or prevent employee communications regarding wages, hours, or other terms and conditions of employment. Cox Employees have the right to engage in or refrain from such activities. . . .

DO NOT make comments or otherwise communicate about customers, coworkers, supervisors, the Company, or Cox vendors or suppliers in a manner that is vulgar, obscene, threatening, intimidating, harassing, libelous, or discriminatory on the basis of age, race, religion, sex, sexual orientation, gender identity or expression, genetic information, disability, national origin, ethnicity, citizenship, marital status, or any other legally recognized protected basis under federal, state, or local laws, regulations, or ordinances. Those communications are disrespectful and unprofessional and will not be tolerated by the Company. . .

DO respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of information you use and accurately cite copyrighted works you identify in your online communications. Do not infringe on Cox logos, brand names, taglines, slogans, or other trademarks.

An employee was fired for violating this policy by posting an offensive and derogatory comment on his Google+ account via his cell phone. The company suspended the employee and conducted a further investigation, which revealed that the employee made numerous other posts “containing lewd language which disparaged customers.” The company terminated the employee.

Applying the analysis above to Cox Communication’s social media policy, the NLRB found that the policy did not violate the NLRA. The Board said that the examples of egregious conduct listed in Cox Communication’s policy established a context that “clearly would not be reasonably understood to restrict Section 7 activity.” Also, the policy’s savings clause that specifically set forth that it was not designed to violate any communications employees had the legal right to make, also supported the finding that it did not violate Section 7.

The NLRB memorandum can be read here (PDF)

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Chris Sacca - Bold Humility

I had the opportunity to attend an event with Chris Sacca last night.  He is a venture capitalist who has been living part-time in Los Angeles recently. He spoke about how he grew up in the investment scene in Silicon Valley. He got his feet wet in investing when he started day trading law school student loan money. By day trading, he was able to grow his net worth to $12 million. Then the bubble burst and he lost his friends’ and family’s money, and owed $4 million himself. Given that he wanted to be in the investment scene and possibly run a publicly traded company, bankruptcy was not an option. Chris began working as a corporate lawyer in Silicon Valley and worked odd jobs at night to pay back the money he owed (which he was able to negotiate down to a little more than $2 million). When he was laid off as a lawyer, he quickly had to adapt, and realized that no one wanted to work with a young guy working out of his house. He formed the Salinger Group (I use the term “formed” loosely - he just made up the name and thought it sounded good and that people would trust the name). He successfully worked his way through a number of companies, including Google and eventually became a venture capitalist. He now runs Lowercase Capital.

Here are a few points Chris made that stood out from his interview:

  • The startup scene in Los Angeles is alive and well. In fact Chris has raised a fund to invest in companies in Los Angeles.
  • Chris spoke about the sense of entitlement the younger generation has. This has turned him off of seed funding, as the entrepreneurs were insisting on a very high valuation of the company and requiring an investment decision on the spot.
  • Everyone needs to believe in themselves and that everyone has one thing they are good at. Chris encouraged everyone that when they are good at something, to not apologize about it, but still keep in mind that everyone can still use some help every now and then. He described his theory as “bold humility.”
  • Good entrepreneurs recognized they need money, and it is an important aspect of working, but more fundamentally, good entrepreneurs keep working because they like solving problems. That is why he is still working.
  • Successful leaders do not surround themselves with “yes men.” He learned this lesson when he made $12 million day trading. Everyone around him was telling him what a genius he was, and he said he actually started to believe it. Then the market corrected, and he realized that much of the success he had was due to his timing of the market.
  • He buys his trademark cowboy shirts from www.vintagewesternwear.com

It was a great event hosted by Zefr, who provided the room, beer and pizza. More about it can be read at PandoDaily. It was great to see the startup scene in Los Angeles alive and well.

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Inside Litigation Over Social Media Accounts - Why Employers Should Have Social Media Policies - Part I

As previously written about on this blog, the case PhoneDog v. Kravtiz is one of the first cases in the country to deal with substantive ownership issues arising out of social media accounts used in the workplace. As companies are moving more and more away from traditional marketing and advertising towards the use of social media, it is critical that companies have an agreement with employees about a few key items regarding social media accounts, such as ownership of the social media accounts.

On the other hand, the rise social media has given individuals the ability to create a brand for themselves and establish a large following for their expertise. These individuals are hired by companies not only for their expertise on the subject matter, but also for the large group of followers they developed via social media. The followers the individuals have through Twitter, Facebook or a blog is a valuable advertising and marketing resource for a company that wishes to gain the follower’s attention. Because of this shift from traditional advertising and PR, employers and employees have to be vigilant in approaching this issue given the potentially large value social media contacts can now have in the marketplace. An employee being hired who agrees to use their social media accounts to promote the company’s business should also clearly set out at least a few issues in a written agreement.

For example, a social media agreement between and employer and employee could address at the following issues:

  • Ownership of the employee’s social media accounts that will be used for business purposes. Clearly spell out who owns the accounts (or license to use the accounts).
  • Ownership and use of the company’s social media accounts. Who retains the right to change the passwords? Who retains the right to edit and approve content? What is the process to approve content prior to publishing?
  • Any restrictive terms of use of the employee’s social media accounts during employment. For example, does the employer have the right to edit and review the content prior to publication?
  • What control, if any, the company will have after the termination of the employment relationship over the employee’s or the company’s social media accounts. Is there a time frame after employment that the employee cannot use his or her own social media accounts for competitive business uses? Employers need to be careful here, however, as limiting an employee’s use of their social media accounts may be tantamount to a prohibited non-competition agreement or in violation of other state laws. I expect that this will be another hot area of the law that will be addressed by the courts within the next few years.
  • It may also be useful to set a monetary value on the social media accounts. This is probably easier to negotiate among the parties prior to any dispute over the value should litigation arise later.

My next article, Part II of this series, will address what claims employers and employees would likely use during litigation over social media accounts.

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Does the Company or the Employee Own a Twitter Account?

Imagine you are an employer and your employee in charge of your social media accounts leaves, keeps the accounts, and begins using the accounts while working for a competitor. Conversely, imagine you are an employee, leave employment to work for a competitor and your former employer sues you for $350,000 because you refuse to stop using your social media accounts. These issues are at play in PhoneDog v. Kravitz. The case illustrates the complicated issues surrounding exactly who owns social media accounts that are used for work. Noah Kravitz worked for PhoneDog as a product reviewer and video blogger. He had a Twitter account “@PhoneDog_Noah” he used as one way to publish product reviews as part of his job at PhoneDog. PhoneDog asserts in the lawsuit that it issues its employees Twitter accounts in the form of “@PhoneDog_[name]”. PhoneDog alleges that all of these Twitter accounts are proprietary, confidential information. Kravitz used the account while he was employed at PhoneDog, and garnered 17,000 Twitter followers.

When Kravitz left employment with PhoneDog to join a competitor, PhoneDog asked him to stop using the Twitter account. It is alleged in the lawsuit that Kravitz refused, changed the Twitter account handle to “@noahkravitz” and then continued to use the account and maintain the Twitter followers.

In response, PhoneDog filed a lawsuit against Kravitz for (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion. Currently, the Court has ruled that PhoneDog’s lawsuit may proceed at this point, but Kravitz has raised some valid points that may be a defense, but still need to be developed further in litigation. 

Kravitz maintains that there cannot be a claim against him for misappropriation of trade secrets because the Twitter account followers are not a secret, as anyone on Twitter can see who the followers are. Kravitz also argues that the password to the Twitter account is not a trade secret, as PhoneDog does not derive any economic benefit from the password itself – it simply allows the user to see public information. Kravitz was also the person who created the password, not PhoneDog, so there is no PhoneDog secret at issue here. Most interestingly, Kravitz argues that PhoneDog does not have a claim against him for misappropriating the account because the Twitter account is not owed by PhoneDog. Twitter’s Terms of Service specifies that all accounts are the exclusive property of Twitter, that Twitter has the right to “reclaim usernames without liability” to the users, and Twitter retains the right to terminate accounts.

The employer is not without its share of arguments as well. While Kravitz raises some interesting technical issues about who owns the Twitter account, PhoneDog would have a strong argument that the license issued by Twitter is really the property at issue. PhoneDog could argue that because the license granted by Twitter to Kravitz was done during Kravitz’ employment and he set up the account at the request of PhoneDog, this license actually belongs to PhoneDog. Some not so well known California Labor Code provisions strongly support PhoneDog’s argument.  For example, Labor Code section 2860, states:

Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.

Furthermore, Labor Code section 2863 provides:

An employee who has any business to transact on his own account, similar to that entrusted to him by his employer, shall always give the preference to the business of the employer.

This fascinating case raises many interesting issues, and will not be the last time I blog about the issues it raises.  It is a good reminder that the creation and maintenance of social media accounts is a critical factor in the employment context today and needs to be addressed from both the employer's and employee's perspectives.

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Employees Need To Take Control Of Their Online Identities

The recent (and not too recent) flurry of attention that has been given to the issue regarding whether employers can ask applicants and employees for their Facebook passwords is a good review of what is appropriate conduct for employers, but it is also a good reminder to employees that what they do online is of critical importance to their employment. Asking employees for passwords to social media account may cross the line. But how about Googling an applicant’s or employee’s name to find out more about them? This is not even an issue – or should not be one – given that this information is open to the public. I’ve even argued in the past that it could be negligent for an employer not to do this basic background internet check.

The Internet affords employers the ability to see beyond a resume to make better informed hiring decisions. If fact, Dorie Clark of the HBR Blog Network makes the point that everyone’s online presence is critically important to their professional careers. Dorie notes:

Sure, they probably have a Facebook account, and they may even be on Twitter. But they don't recognize that these are no longer personal communication tools, or a means of strengthening weak ties across their networks. Instead, they are the criteria by which you will be evaluated in the future. Just as Michael Deaver ensured that Ronald Reagan always stood in front of a perfect, picturesque backdrop — and set the standard for all subsequent leaders — you're now responsible for curating your image.

Dorie makes the observations that with the Internet: (1) your reputation always precedes you, (2) if you’re invisible online, you’re probably a fraud, (3) you progress or you stagnate (i.e., you create a valuable source of content through your twitter feed, blogging, etc…).

My interview with Guy Kawasaki last year discussed many of the same points. Guy noted that if you don’t have a Facebook page, or any other online presence, it will raise some questions about you. Are you not technical enough to get onto social media platforms? Are you hiding something?

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Everyone Needs To Calm Down About Social Media And The Law

I would love to be able to tell my clients that the Internet and social media has created a very complex set of legal issues that requires them to hire me in order to help develop all new handbook policies, change the way they conduct background checks on applicants, and monitor their employees. However, unfortunately, this is not the case. Employers and employees need to calm down a bit. I cringe when I hear employment lawyers (and Facebook’s Chief Privacy Officer recent comments about employers asking to have employee’s Facebook passwords) advising people to refrain from using the Internet to do background checks on applicants because it may reveal that they are in a protected category, and then this could (possibly) be grounds for a discrimination case. Are these same lawyers advising their clients not to conduct interviews because during a face to face interview the employer will learn the same information? And just because the employer knows that an applicant or employee is in a protect class does not mean that discrimination occurred if it takes an adverse employment action against the applicant or employee. Sure, all employers are subject to frivolous legal actions. But, as I tell my clients, there are only two things my clients and I can control: (1) the advice I give them about how to act according to the law, and (2) whether my clients listen to my advice and act accordingly. The one thing we cannot control, no matter how hard we wish we could, is being able to stop people from filing a baseless lawsuit.

We’ve had the Internet since the 1970’s, and it became mainstream in the 1990’s. I would argue that most people (at least in the U.S.) have had experience on the Internet for at least a decade now. There has not been a lot of case law that has changed the way employment lawyers advise their clients on new human resources policies given the advent of the Internet and social media.

Have the courts simply not caught up with these "new" developments?

As typical lawyers always suggests at this point - courts are slow to deal with emerging technology issues, but I don’t think that is a play here. Courts are slow, but we’ve been actively using the Internet for a decade now. They are not that slow, and I think rather that the rules that were already in place and governed employer’s and employee’s activities were and still are sufficient in addressing the vast majority of the employment issues involving the Internet and social media. Sure, on the fringes there are a few technical items that may be the exception to this, but for the vast majority of employers the Internet and social media does not change much about how HR should conduct itself. The basic analysis regarding monitoring and employee’s off work conduct and right to privacy – the issues usually at play in these types of cases – is the same if the conduct at issue was done off the Internet. I would even argue that privacy cases usually are easier when it involves a posting on the Internet, as no one has any reasonable expectation of privacy in such a public disclosure.

What about social media policies?

That usually leads to the next question, “What about social media policies?” Again, most employers probably don’t need a specific social media policy.  And a basic policy (if you really think a social media policy is necessary) that the employer may terminate or discipline an employee for anything they do on the Internet if the employer could terminate or discipline the employee if the conduct at issue did not occur on the Internet would normally be sufficient.

Employers, lawyers, and employees need to take a step back and realize that even though we have these great new technological advances, the law developed before this technology does a pretty good job at resolving these issues in the employment context.

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Employers Requiring Employees To Provide Facebook Passwords

There are more reports of employers requiring applicants and employees to provide their passwords to their Facebook pages so that the employers can get a more accurate view of the employee’s character. I wrote about this issue a couple of years ago regarding the City of Bozeman requiring passwords from applicants. Apart from being a bad recruiting move, I believe it could arguably run afoul of California law as well.

Legality aside, employers that require this information will simply not get qualified applicants. I expect that most applicants or employees would simply refuse to provide this information. In addition, only people that don’t use social media much would have no problems with turning over their passwords. But companies need employees who understand social media these days, not someone who lacks initiative and some basic curiosity to at least log on to Facebook to see what the rest of the world is talking about.

In addition, there may be some real challenges against employers in California who require this information. First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. A person’s privacy expectation in their Facebook posts is very low since it is on the Internet. But one could argue that off-work conduct (which includes Facebook activity) is part of the employee’s privacy right recognized in the California Constitution.

Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

For example, in Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an independent public policy that provides employees with any substantive rights, but, rather, merely establishes a procedure by which the Labor Commissioner may assert, on behalf of employees, recognized constitutional rights. Therefore, in order to prevail on his wrongful termination claim, Barbee must establish that his employment was terminated because he asserted civil rights guaranteed by
article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer, and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee ... because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….”
Unfortunately, there are not many reported cases dealing with these issues. However, with the ubiquity of Facebook and other social medial sites, legislatures and courts will undoubtedly need to weight into these issues.

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Top iPad Apps For Human Resources

Apple is announcing the iPad 3 today, and given that it’s probably going to dominate the news cycle, I decided I should join in the hype. Don't get me wrong, the iPad is great, and I use mine very day. People use iPads to fly airplanes, play instruments, avoid getting lost by using the sun as a compass, helps doctors care for patients. Did I mention that you can use it to fly an airplane?

The iPad can also lend the HR professional a helping hand. Here are some apps I recommend for HR professionals to assist them in their day-to-day jobs:

1. Evernote [Free (upgrade to premium account for $5.00 per month or $45 per year)]

This is a very popular app generally speaking. It is a great app to organize all types of data - notes, documents, even business cards. For HR managers, I could easily see this app being used to set up a folder for each employee, and uploading information regarding employees' personnel file, disciplinary actions, and notes for day-to-day employee counseling. All content on Evernote is searchable - even PDFs. I use it to help me keep my personal items organized as well.  In fact, I'm using Evernote to write this article. All data is stored on the cloud, and can be synced with your computer also.

2. Sugar Sync [5GB free, additional storage plans start at $4.99 per month or $49.99 per year]

This app is great for syncing various work computers so that a document you created on your laptop is accessible on your desktop. It also stores your documents in the cloud, so if you are at a remote location or at home, you can still access your documents.

3. UPad  [$4.99]

I use this app to take notes on PDFs. It has great functionality. It can also be used as a memo pad to take hand written notes. If you are giving presentations through your iPad (see #10 below) it could also be incorporated into your presentation to highlight relevant portions of policies or documents you are discussing.

4. Holiday Plus [$0.99]

List of US holidays. Provides week number and number of days until the next holiday. 

5. Calendar Card [Free]

List of holidays in 123 countries for HR managers with an international workforce.

6. LinkedIn [Free]

Manage your LinkedIn account on your iPad.  By the way, you also need to join the California HR Network group.

7. Interview Questions Pro [Free]

This is primarily for employees preparing for an interview. However, it provides some good questions to use in interviews. Has sample questions for: candidate issues, behavior issues, work history, and critical thinking. Oh, did I mention the price - free.

8. Employee Tracker Pro [$5.99]

I always tell my clients to document, document, document. When facing the business of the workday, documenting employees' accomplishments and infractions often goes undone. This app can be used to solve that issue. Enter employees' names, and then the app allows the user to document good or bad behavior, date and time, supervisor on duty, and a description. The records can then be sent by email.

9. Direct Report: Employee Feedback Tracker for iPad [$4.99]

Another app to record employee feedback. Now there are no excuses for failing to document employee conduct!

10. Keynote [$9.99]

Apple's alternative to PowerPoint. Great app for presentations. Connect your iPad to an external display or projector, and you can leave your laptop in the office.

Bonus: 11.  GoToMeeting [Free]

Keep up with your continuing education credits by attending webinars and meetings through GoToMeeting.com on your iPad.  Interested in testing this app out?  Drop me an email to attend my next webinar on policies California employers need to have in their handbooks.

So what are you waiting for? Get your company to buy you that new iPad3.

Have any additional recommendations for apps you like to use?  Add them to the comments section.

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Use of Ships To Skirt California Laws?

The Wall Street Journal is reporting about the plans of Silicon Valley entrepreneurs who would like to anchor a ship 12 miles off the San Francisco coast in order to skirt U.S. Immigration laws. They project that the ships could hold 1,000 people at a cost for a room roughly equivalent (if not cheaper) to an apartment in San Francisco. The entrepreneurs view this as a viable option for tech start-ups to have access to skilled workers, who are having a difficult time obtaining H1-B visas to live and work in the U.S. Since it is simpler to obtain a B-1 visa that permits the worker to travel to the U.S. for meetings, seminars, and training, the ship would act as a staging area for the workers outside of the U.S., but still allow them to work in close proximity to the start-up company. The article mentions that the legal ramifications of immigration law may not permit this, but it made me wonder if the employer would effectively not have to comply with the California Labor Code as well. 

I believe it would be hard for the California Courts to establish that the Labor Code would apply to the workers stationed in a ship outside of the U.S. boarders for work completed outside of the state. Recently, the California Supreme Court held in Sullivan v. Oracle Corporation that California Corporations that employ non-resident workers in the state of California are subject to California’s Labor Code provisions, such as requirements for overtime pay which are vastly different than other states’ law and federal law (click here for a more detailed analysis of the Oracle decision). The Court in Oracle explained that states have broad authority under their police powers to regulate employment matters within their boundaries (such as child labor laws, minimum and other wage laws, and workers compensation laws). The Court stated, “To exclude nonresidents from the overtime laws’ protection would tend to defeat their purpose by encouraging employers to import unprotected workers from other states.”

However, that case was limited to work performed in California. The scenario proposed by the Silicon Valley entrepreneurs is vastly different, where non-citizens perform work outside of the U.S. and California boarders, and only travel into the State for meetings. It is analogous to the situation where employees living in China, but working for a California corporation, routinely travel to California for work.  Under Oracle, the argument could be made that the employees may have to be paid according to California law for the work done while in California, but it is unlikely this requirement would extend to the work done outside the state while on the ship.  These types of issues will be more and more common given how technology is changing the traditional concepts that workers have to be in a certain building, or even country, while performing work. 

 

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Oral Arguments In Brinker Restaurant Corp. v. Superior Court

What can I say, technology is awesome.  The oral arguments in Brinker v. Superior Court that took place on November 8 are already on Youtube:

The Supreme Court has 90 days from oral argument to issue its decision.

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Is The Jury Still Out On Social Media Background Checks?

Mat Honan at Gizmodo wrote recently about a new company that helps employers search applicant’s “internet background” to assist in the hiring process. As Mat rightly points out, much of the concern over this “new technology” is overblown, and as he puts it, "[e]mployers would have to be stupid not to Google job candidates."  As I have pointed out before, much of the unduly concern is that lawyers don’t understand the technology, and therefore if they don’t understand it, their client’s use of the technology can only lead to bad things.

I think Guy Kawasaki had a great perspective on this issue when I recently interviewed him. He said he would be worried about a job applicant who did not have a Facebook page: what is wrong with this person? Is he anti-social? Is he not with the times or just simply does not understand simple technology? As Mat points out as well, with some common sense a job applicant can easily manage the results of an online search by being careful about which information he or she provides to the employer. For example, an internet search for the job applicant’s private email address might turn up more personal information than if the applicant has a separate email they only use for work purposes and lists on their c.v.

From the employer’s perspective I don’t think the analysis changes much for searching employees background on the Internet:

Generally, under Federal law, employers may utilize social networking sites to conduct background checks on employees if:

  1. The employer and/or its agents conduct the background check themselves;
  2. The site is readily accessible to the public;
  3. The employer does not need to create a false alias to access the site;
  4. The employer does not have to provide any false information to gain access to the site; and
  5. The employer does not use the information learned from the site in a discriminatory manner or otherwise prohibited by law.
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UFC's Social Networking Policy - Something All Employers Should Consider

I like the UFC’s approach to social media – reward its fighters with bonuses (totaling $240,000 per year) for having the most twitter followers and the most creative tweets. Is this a model a lot of employers could use in their workplace? Absolutely. Unless you find yourself with the few who are still wondering what Twitter is, it is obvious that social networking is here to stay and companies need to figure out a way to make it a productive part of their business. The model also gives the right message to employees – that they are responsible individuals who will use social media appropriately to help the company build its brand. This is a much better approach than telling employees about they cannot do with social media, which is what most companies’ policies do. By warning employees about all of the negative implications for them in using social media, it stifles potential branding opportunities that could exist for the company. And it is already stating the obvious.

If I were running a company, I would want my employees actively using their personal social media accounts to promote specials and new products. It is great that there are tools now available to track the success rate and to give incentives to employees who generate the most buzz. I can already hear other lawyers out there grumbling that this is a bad way to go, and that the company could find itself facing a lot of liability for what employees say on social networks. Every time an employee answers the phone they could create liability for a company, but companies still trust their employees to talk with vendors and customers. The game has changed, time to start communicating with customers where they are listening, and don’t let your policies hinder this.

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New Law Makes It Illegal To Impersonate Others On Social Networking Sites

Among the seven hundred or so new laws that took effect on January 1, 2011 is SB 1411 that makes it a misdemeanor for anyone to impersonate another on the internet “for the purposes of harming, intimidating, threatening, or defrauding another person.” The bill, which was signed into law by Governor Schwarzenegger, adds section 528.5 to the California Penal Code and makes the offense punishable up to $1,000 and one year imprisonment.

The law specifically makes it an offense to open an email account or social networking profile to impersonate another person:

For purposes of this section, "electronic means" shall include opening an e-mail account or an account or profile on a social networking Internet Web site in another person's name.

The law is intended to prevent cyberbullying that has occurred in schools and the workplace. This law will be an additional aid for employers to prevent any type of abuse at the workplace, and provide victims an additional avenue for protection. In addition to the criminal punishment set forth, it also provides that a victim may bring a civil lawsuit against the defendant for compensatory damages and injunctive relief.

For California employers, the new law stresses the need to keep current with the new obligations employers face in regards to social networking sites and and to review their policies about how they monitor employees' use of technology, as well as what is appropriate uses of the company's technology. Under the theory of respondeat superior, employers are vicariously liable for tortious acts committed by employees during the course and scope of their employment. Therefore, if an employee uses a company computer to violate the new law, the company could face joint liability in a civil lawsuit for compensatory damages.

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Waitress fired for Facebook post

This week the internet is buzzing about a waitress who was fired for making disparaging comments on Facebook about a customer.  It was inevitable, and if employers have not realized it yet, this story should bring the point home that social networking is yet another issue employers need to take a proactive step in managing.  This is also a wake up call for employment lawyers who have neglected to come up to speed on the new issues social networking present in the employment context. 

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. 

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Understanding Privacy Settings For Facebook

Yes, you are still reading the California Employment Law Report and not a tech blog.  But since social networking, privacy and how these issues are permeating the workplace, I wanted to pass this New York Times article along to readers that describes all of the different privacy settings in Facebook. 

If you think employers are having a difficult time trying to manage this "new" technology, the article notes that Facebook's privacy policy has increased from having 1,004 words in 2005 to over 5,800 words in 2010. 

It is an interesting read and can be helpful to discover the types of privacy issues that may arise in the employment context.  Likewise, courts are just beginning to rule on these issues, as a California court held last year that postings on MySpace.com are not confidential

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Self-imposed MCLE for lawyers: computers, Internet and the law

Daniel Schwartz at the Connecticut Employment Law Blog writes about whether or not employment lawyers who advise their clients on social networking policies need to use social networking. I’ve writing on this topic before, but as the Internet becomes more and more dominate in everyday life, Daniel prompted me to revisit the issue. 

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.
 

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Easier To Catch Liars

We are nearly at the point were everything we do is recorded.  Think no one knows where you are?  Wrong, your phone's GPS can be used to track your location without you knowing about it. 

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.

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"It didn't happen if you didn't write it down"

I came across an article recently by Design by Gravity (via Lifehacker) - Methods of Work: It Didn't Happen If You Didn't Write It Down - reminding designers and programmers to record their thoughts in some manner, or else lose it forever.  The lesson does not apply just to designers and programmers, but also to HR professionals or anyone else involved in managing employees. 

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

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HR professionals note to employment lawyers: stop working off of fear

The HR blog Fistfull of Talent raises a concern I think a lot of HR professionals feel. See article “Hey Employment Law ‘Experts’, You’re Killing My Profession.” Kris Dunn expresses the all too common sentiment that employment lawyers are not advising their clients – but are rather scaring them into inaction. Kris uses the example of advice some lawyers are providing about whether or not companies should use social networking sites and Google to conduct background checks on job applicants. Taking the conservative approach, many lawyers, as Kris notes, advise against using these new technologies out of concern that it could create potential discrimination claims. (Side note to Kris – I warned awhile ago that companies should be using the Internet to conduct background checks.)

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.

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When Do Employers Have To Pay For On-call Time?

The line between when employees are on or off the clock have become more and more grey with the advent of Blackberries, iPhones, and providing employees with remote login access from their homes. On-call time is considered compensable work time if it is spent primarily for the benefit of the employer and its business. In making this determination, the on call waiting time is spent predominantly for the employer’s benefit depends on two considerations: (1) the parties’ agreement, and (2) the degree to which the employee is free to engage in personal activities.

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.
 

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Job Applicants Asked To Provide Their Passwords To Social Networking Sites

The City of Bozeman, Montana asked job applicants to provide their user names and login information to common social networking sites on their job applications. As you may expect, this has caused a major uproar from privacy groups.

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

 

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Employee's Personal Data On Company Computers And Devices

The Wall Street Journal recently wrote about how employees are surprised after being given notice that they have been laid-off that they cannot retrieve personal (and business related) information from their computers. The author notes that with advances in technology that often times blur the boundaries between work and personal pursuits, many employees are hit really hard when they cannot retrieve their personal contacts from their work PDA or computer:

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

The issue in Moreno v. Hanford Sentinel, Inc., as stated by the court, is:

… whether an author who posts an article on myspace.com can state a cause of action for invasion of privacy and/or intentional infliction of emotional distress against a person who submits that article to a newspaper for republication.

The case arose out of a college student, Cynthia Moreno’s, return to her hometown of Coalinga, California (which is somewhere between Sacramento and Los Angeles). She wrote “An ode to Coalinga” and posted it on her site on MySpace.com. The ode badmouthed her hometown. Six days after publishing it on MySpace, she took the writing off of the site, but the town’s high school principal submitted the writing to the local newspaper for publication. The newspaper republished the ode in the letters to the editor section and listed Cynthia’s full name (she only used her first name on MySpace). 

This must have been some ode, as the town became furious:

The community reacted violently to the publication of the Ode. Appellants received death threats and a shot was fired at the family home, forcing the family to move out of Coalinga. Due to severe losses, David closed the 20-year-old family business.

Because the information was published on MySpace.com, there could not be a cause of action for invasion of privacy.

The court held that publishing the ode on MySpace.com defeated any theory that the newspaper’s republication of the ode was an invasion of privacy. The court explained:

Cynthia’s affirmative act made her article available to any person with a computer and thus opened it to the public eye. Under these circumstances, no reasonable person would have had an expectation of privacy regarding the published material. As pointed out by appellants, to be a private fact, the expectation of privacy need not be absolute. (Sanders v. American Broadcasting Companies (1999) 20 Cal.4th 907, 915.) Private is not equivalent to secret. (M.G. v. Time Warner, Inc. (2001) 89 Cal.App.4th 623, 632.) “[T]he claim of a right of privacy is not ‘“so much one of total secrecy as it is of the right to define one’s circle of intimacy -- to choose who shall see beneath the quotidian mask.”’ Information disclosed to a few people may remain private.” (Ibid., fns. omitted.) Nevertheless, the fact that Cynthia expected a limited audience does not change the above analysis. By posting the article on myspace.com, Cynthia opened the article to the public at large. Her potential audience was vast.

The court also held that the fact Cynthia removed the Ode from her online journal in six days does not change its analysis. “The publication was not so obscure or transient that it was not accessed by others.” The court also held that because Cynthia published the ode under only her first name on MySpace, but then the newspaper republished it under her first and last name is irrelevant. The court said her identity was readily ascertainable from the MySpace page – primarily because she posted her picture on the site.

While not directly an employment law case, the holding definitely has ramifications for employees who post information on the Internet. As discussed previously here and here, employers can view and possibly act upon information employees list on the Internet. This holding provides further support that employees (as everyone) should be very careful in what they post on the Internet.
 

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Jurors Using Twitter During Trials

Today is the first time I heard that courts have having problems with jurors using Twitter during trials. Am I surprised?  Not one bit. Is it concerning?  Yes.

The article mentions that most of the messages sent via this form of "microbloging" are innocuous, and are simply jurors saying that they are bored during trials.  There was one case in Philadelphia this week in which the juror twittered that a decision was reached in a high profile case and there would be an "announcement on Monday." 

Jurors are ignoring (or simply not listening to) the Court's instructions not to discuss the case with anyone. 

Should jury instructions be revised to include a non-twitter policy?

There is discussion now that jury instructions need to be updated to inform jurors that they cannot discuss the facts of the case on the Internet.  I think a judge should probably admonish the jurors about posting anything on the Internet about the case during proceedings is strictly forbidden given how pervasive Web 2.0 has become. As for jurors who think they can get away with this are mistaken, and it still amazes me about how many people seem to forget that everything they do on the Internet is recorded - forever

Take away for lawyers:

If you were the attorney presenting when the juror posted that he/she was bored - time to reevaluate your case theme and trial presentation skills. 

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Google Latitude In The Workplace

Google Latitude, a new Google application allows users to track the physical location of other people through a mobile phone or computer. While the GPS tracking technology is nothing new, the amazing aspect of this is how inexpensive tracking technology has become. Many employers have already implemented GPS tracking, but now with Google’s basically free service many more employers will look to this technology to help manage their workforce. However, there are already concerns about individual privacy rights being voiced about this technology, and employers should be aware of employee’s privacy rights before using this technology.

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace. Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

In Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an independent public policy that provides employees with any substantive rights, but, rather, merely establishes a procedure by which the Labor Commissioner may assert, on behalf of employees, recognized constitutional rights. Therefore, in order to prevail on his wrongful termination claim, Barbee must establish that his employment was terminated because he asserted civil rights guaranteed by article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer that are not applicable when dealing with privacy rights and GPS tracking.  Also and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee ... because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….”

Therefore, there are a few minimum steps employers should take when using tracking technology in the workplace:

  1. Develop a policy about how the company will use GPS tracking in the workplace.
  2. Disclose the policy in writing to the employees.
  3. Pay for the device or software that is required for the tracking (requiring employees to pay for business expenses violates Labor Code section 2802).
  4. Allow the employee to turn the GPS device off when not working during the day, such as during lunch breaks, on personal time, or after they have left for the day.
     
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Technology Revolution For The Legal Field

The talk around the Internet these days is all about how times are changing and how someone actually found a use for Twitter.  Technology has already changed the legal profession, but we have just barely taken full advantage of the gains that the legal profession can obtain.  I believe we are on the cusp of a major revolution in the legal field, and here are my predictions about how technology will change the legal profession within the next ten years:

Courts

  • New complaints will be published on the Internet, and companies (and individuals) can establish RSS feeds to allow them if they have been sued.
  • Google will index all case law.  This will directly compete with LexisNexis and Westlaw, allowing attorneys to conduct research at a fraction of the costs charged by these two companies. People will post comments about the opinions within the opinions themselves on the Internet. I am sure this would be more helpful than Westlaw’s Keycite.
  • Parties will be able to serve papers via email or through the Internet.  Sound far fetched?  A court in Australlia recently allowed a party to perform substitute service via Facebook.  Service by email is probably more secure than traditional mail anyway.
  • Attorneys will make routine court appearances via the Internet.
  • Voice recognition software will instantaneously transcribe court proceedings and depositions. This would eliminate a huge litigation cost – court reporters. I have nothing against court reporters, but they need to change their business model just like the music industry.
  • Attorneys will utilize technology in trials to make multi-media presentations to keep jurors’ attention and more persuasive cases for their clients. Trials, however, will not be conducted remotely over the Internet – attorneys need to be in the same room when presenting to the jurors.
  • The court system will become a paperless system. Parties will be required to file documents electronically. Courts will issue orders via email or posting on the Internet (attorneys will be able to subscribe via RSS feeds). Courts will not issue a single piece of paper, nor will they store a single piece of paper - saving a huge amount of money in terms of storage and labor in maintaining the files.  

Lawyers

  • Law firms will also move to paperless offices. It is necessary that the courts make this move first to give the lawyers opportunities to file documents electronically.
  • Law firms will make files available on-line for clients.
  • Lawyers will conduct webinars to train clients.
  • Small firms with specialized attorneys will come to dominate the legal field. Small firms can collaborate through the internet, and have equal (if not more) resources than large law firms. Large law firms are simply a group of various attorneys with different specializations using the same letterhead - and carrying a lot of overhead.

Clients

  • Will demand that their attorneys have a blog (or the newest way of publishing content on the Internet) in order to truly see that the lawyer understands the particular area of law the case involves and to see how the lawyer thinks.
  • Clients will demand that their lawyers understand how to use the internet to conduct background research on the opposition.
  • Clients will demand that their lawyers are utilizing technology to provide legal services more efficiently.

UPDATE:  The Complex Litigator just blogged about Alameda Court streaming a live feed for a jury trial in a complex personal injury case.  The case will be available through www.courtroomlive.com, and of course will be indexed for viewing at any time.  This leads me to another bullet point under how lawyers could use technology to improve their litigation skills: to review and improve their courtroom skills after a trial. 

 

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