E-Discovery Law Review : Electronic Discovery Lawyers & Attorneys : Cozen O'Connor Law Firm : Data Preservation & E-Discovery Disputes

One of the more difficult things for employers, human resources professionals, and lawyers to do in the employment law field is keep up with all the acronyms.   One of the latest is “GINA”, or the federal Genetic Information Nondiscrimination Act, that first took effect in November 2009.   However, last week, the United States Equal Employment Opportunity Commission (“EEOC”) issued final regulations interpreting GINA, which will become effective in January 2011. The new regulations will have far-reaching implications for social media activities.

At its heart, the EEOC recognized that “GINA is intended to prevent discrimination based on concerns that genetic information about an individual suggests an increased risk of, or predisposition to, acquiring a condition in the future.” Title II of GINA, thus, makes it illegal for employers with 15 or more employees to harass, or discriminate or retaliate against, an applicant or employee because of his or her genetic information.   The new regulations contain a plethora of defined terms, including “genetic information”, which is defined to include (among other things) genetic tests of the individual or his or her family member, the individual’s family medical history, and genetic information of a fetus carried by the individual or a family member of the individual.

Critically, the new GINA regulations do not solely address what you can or cannot do once covered information is obtained; rather, the regulations also speak to how you may or may not “acquire” such information, thus effectively instilling a social media element to the dialogue.   For example, Section 1635.8 of the new regulations (“Acquisition of Genetic Information”) expressly provides that an employer:

“may not request, require, or purchase genetic information of an individual or family member of the individual[.]    ‘Request’ includes conducting an Internet search on an individual in a way that is likely to result in a covered entity obtaining genetic information; . . . and making requests for information about an individual’s current health status in a way that is likely to result in a covered entity obtaining genetic information.”

There are certain exceptions to the prohibition on acquiring genetic information, including “inadvertent acquisition” under certain circumstances.   However, the exceptions are stated narrowly, and obviously there has not yet been a full development of the rules and exceptions contained in the new GINA regulations, which will undoubtedly come through further agency action and lawsuits.  

Employer Take Away:   What should you as an employer take away from this development?    As is the case in the new GINA regulations, we expect that technology and social media will continue to be expressly accounted for in new employment legislation enacted on a going forward basis. It is important for you to develop a good grasp of the rules and prohibitions contained in the new GINA regulations as the New Year’s effective date quickly approaches.

Would you be violating GINA’s acquisition ban merely by “friending” an applicant or employee on Facebook and being exposed to that individual’s entire profile, which may include postings about covered “genetic information”?   Have you violated GINA by doing a Google search to find the typical background information about an applicant or employee, or by reading a personal blog of that individual that you discover through your search, and that reveals certain “genetic information”?   What about expressing sympathy or inquiring during a social networking chat with an employee about a revealed illness that the employee states is “not surprising because both of my grandparents had it”?   The regulations arguably limit the reach of the prohibition by only banning searches that are themselves “likely to result in a covered entity obtaining genetic information.”   Yet, the regulations also refer to Internet searches as only one example of a prohibited “Request”, again leaving the development of the full scope and nature of GINA’s provisions for another day.

You have, hopefully, become sensitive by now to some of the caveats inherent with the use of social media information for employment-related decisions.   Now, you should also understand the potential dangers in simply acquiring certain information about an employee or his or her family member, and make sure that your policies and practices relating to any processes for learning about an applicant or employee are fully compliant with GINA’s new regulations.

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The government is seeing the benefits of social media too.    Recently, the Department of Homeland Security revealed that United States immigration agents were being trained on how to use social networking sites to detect visa and other immigration fraud.   The government is also using the force of its search warrant power to explore the social media dealings of its targets.   For example, this year in the case of State v. Gurney, the defendant had surrendered to police after the apparent strangulation, decapitation and burning of his girlfriend’s body in his apartment, yet objected to police search warrants issued for his Facebook profile.  

The government is playing an increasing role in corporate operations, and one day your company may answer the door at reception to find an investigator looking to look into your little piece of heaven.   It could be the Department of Labor, or the IRS, or investigators looking into potential OSHA violations.   And no longer are the investigations constrained by what is on the written page, as we know that companies are using social media for virtually all aspects of their business.  

Online applications are being solicited and stored, employment policies and procedures are distributed and maintained on intranet portals, employee complaints are lodged on electronic forums that may or may not be sponsored by the company, and the company itself may even be discussing its business (and inadvertently violating some law) on its own blogs and web sites.   Social media is here to stay, and government investigators know that. You need to be ready for an agency audit by making sure your document files and online/social media practices are compliant.

Employer Take Away:   What should you as an employer take away from this development?

(1)        What generally triggers an agency audit of your company?   Government agencies may commence an audit of your company based on a complaint by a disgruntled former or current employee.   Or, the audit may be random, based on an agency’s policy initiative to target a particular industry or type of business.   An audit may even arise based on a prior investigation or inquiry into your company.   One of the reasons it is important not to act in a manner that raises the risk of a red flag being pinned to your company’s dossier.

(2)        What hot issues are catching the eyes of investigators?    Agencies are showing up to look into your employee versus independent contractor classifications.   They are also inquiring as to whether your employees are being properly compensated for the work actually performed in areas such as pre- and post-shift activities (setting up computers and work stations, changing into and out of required clothing, performing security checks and other “closing” rituals after clocking out).  Are required meal breaks continuous and uninterrupted, or are your non-exempt employees eating a sandwich at their desk?  Have you properly identified and managed potential OSHA violations?  Investigators are also looking for compliance with record-keeping and posting requirements contained in the myriad of employment laws.

(3)        What do you do when you are the subject of a government audit?   The first step should be before you are the subject.   That is, through coordination between inside and outside counsel, you are best served to conduct an internal audit of your policies and practices to determine whether you could ultimately pass an agency checklist on today’s hot-button issues.  

            But once the investigator has already arrived, it is important to represent your company appropriately, even while you are properly and vigorously defending your position and maintaining all defenses to the scope of the investigation.   Designate one company contact person for all dealings with the investigator, and have a discussion early on to determine the source and scope of any complaint and the investigation itself.     Keep your own record of what documents and online materials are being requested, and of which employees are being questioned.   There are certain limits to what the agency can seek, and when they can seek it.    In the end, finding the proper balance between defending your company and cooperating with the investigator will often expedite the time before the investigator walks back out your door for good.

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When you think about the obligation to make a “place of public accommodation” accessible to individuals with disabilities, it is likely that you primarily think about access to physical, concrete structures such as ramp access for ingress and egress, changes to restroom facilities, and access to aisles, counters or other office spaces.    However, a quickly emerging issue under the Americans With Disabilities Act (“ADA”) is whether virtual spaces such as your company’s website will now be held to the same accessibility standards.

Most of you provide information about your company to your employees through an internal web-based portal, and may even offer information, goods and services to the general consuming public through an Internet web site.   While you must ensure that your internal postings (ranging from policy announcements, summaries of benefits, and job/position opportunities) do not unintentionally create a disparate impact on disabled employees, the focus of this post is on the latter situation when the general public’s access to your website is involved.   That is, Title III of the ADA governs “places of accommodation”, and requires that such places provide equal access for disabled individuals.  

In the ever burgeoning world of social media, courts have started to consider a company’s website to be a “place of accommodation” in increasing numbers.   As a result, your company could be held liable for violating the ADA if your website does not provide equal access for the disabled.    In an attempt to help bridge the gap between current regulation of physical structures, on the one hand, and virtual spaces such as websites on the other, the United States Department of Justice (“DOJ”) has solicited the public’s comments to its notice of proposed rulemaking.   The proposed rules attempt to “establish requirements for making the goods, services, facilities, privileges, accommodations, or advantages offered by public accommodations via the Internet, specifically at sites on the World Wide Web, accessible to individuals with disabilities.”  

It is likely that the statutes and regulations prohibiting disability discrimination will ultimately be applied to acts and statements in social media.   It is not a stretch, therefore, to believe that courts will continue to apply accessibility obligations to virtual places of public accommodation. In that vein, you should not neglect to consider ADA accommodation issues in the context of your company’s website.   The public comment period for the DOJ’s notice will expire early next year, after which the DOJ will likely issue its new regulations.

Employer Take Away:   What should you as an employer take away from this development?   

(1)        Conduct an effective impact audit of any internal web-based portals or intranet sites that your company currently uses to post information to your employees, to ensure that the site does not disparately impact disabled employees.

(2)        Make sure that online applications and other hiring-related descriptions, information and processes meet acceptable accessibility standards, including the elimination of any language barriers and improvement of document accessibility.

(3)        Consider whether other changes should be made to your website to comport with accessibility standards, such as text aides for graphic and visual material, the ability of users to engage in keyboard navigation, rather than being required to use a mouse, and making your website compatible with software such as “screen reader” that will allow users to convert graphic and textual information into speech that a synthesized “voice” reads out through a user’s computer speakers.

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The situation is not terribly uncommon.   You terminate an employee for failing to meet performance standards, and the employee sues the company for discrimination or wrongful discharge, claiming that the reason given by the company was truly a pretext for an otherwise unlawful motive.    

To bring this situation into 2010, suppose your CFO is roaming the Internet one night after your former employee’s lawsuit was filed, and discovers evidence that that employee had engaged in some form of misconduct that clearly would have resulted in his termination regardless of his poor performance.    Can you rely on that evidence as a basis for the termination of your former employee even after he is already gone and the lawsuit has started?

Depending on your jurisdiction and the facts in your particular situation, you may be able to use the “after-acquired evidence” doctrine as a defense to your former employee’s claims. The defense was first created by the United States Supreme Court in 1995 to limit or altogether preclude an employee from obtaining remedies due to a claimed unlawful termination if the employer later acquired evidence of wrongdoing that would have led to the termination of the employee anyway.

This summer, courts have continued to apply the “after-acquired evidence” defense to benefit employers.   For example, on July 16, 2010, a federal court in North Carolina applied the defense when an employer learned during discovery in a lawsuit that an employee may have violated expense reimbursement policies.   The court in Rinaldi v. CCX, Inc. ruled that the following elements must be established for the defense: (1) the employee was guilty of some misconduct about which the employer was unaware, (2) the misconduct constituted an act of dishonesty, gross neglect of the employee’s obligations, or an illegal act, and (3) the employer would have discharged the employee for cause if it had known about the misconduct.

On August 17^th, a federal court in California in the case of First v. Kia of El Cajon permitted an employer to serve subpoenas on a former employee’s former employers on the ground that “[f]ormer employment records are relevant to the after-acquired evidence defense available in Title VII employment discrimination cases.” And on that same day, a federal court in Texas in the case of Garza v. Mary Kay, Inc. allowed the employer to proceed to a jury on its defense that evidence that the employee “collected and removed confidential documents” while previously employed, but about which the employer learned after termination, could be relied upon after the fact to justify the termination.   The jury was, however, entitled to also determine the employee’s response to that defense that the employer “had never before terminated an employee for the same behavior.”

Employer Take Away:   What should you as an employer take away from this development?   We have already suggested to you in prior posts that social media can be a valuable tool when defending a lawsuit brought by a former employee.   One significant way is to look for evidence through social media that would support an otherwise legitimate reason for terminating the employee, even if that reason was not known and articulated at the time of termination.

For example, perhaps a LinkedIn profile demonstrates that the individual did not work for an entity identified on an application for employment with your company, or did not have the experience represented on your application.   Perhaps other posts by the individual boast about, or demonstrate the existence of, theft of trade secrets or competition during the prior employment with your company, or otherwise reflect that the individual violated a policy of your company while employed. Or maybe evidence found through social media can belie the reason given to you for the employee’s separation from a prior employer.

The ability to raise and rely upon the “after-acquired evidence” defense may presuppose the existence of a policy (or statement on the application itself) that clearly identifies your company’s right to terminate for the after-acquired reason.    You should also determine whether you can demonstrate to the Court that others in the past had in fact been terminated on similar grounds. Just another reason why it is important for you to maintain policies that say what you want them to say, and that are enforced effectively and consistently.

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It is, by now, axiomatic that our new social media world has increased the risk of disclosure (intended or inadvertent) of information and documents that are not meant for public consumption.  As an employer, you must understand these risks and take pro-active measures to protect the private and confidential information of your company, your clients, and your employees. And you must act swiftly when you determine that a breach has occurred.

According to a CNN report this week, Google did just that, announcing that it had fired one of its employees for violating privacy policies by accessing user accounts.   CNN reported that the employee “used his position as a key engineer evaluating the health of Google’s services to break into the Gmail and Google Voice accounts of several children.”    The conclusion reached there: “The incident highlights how easy it can be for anyone with access to confidential information stored online to abuse it, regardless of any systems that are in place.”  

Some, many, or all of your employees have access to certain private and confidential information, and those employees are blogging, tweeting, and otherwise actively engaging in social networking sites.   What types of potentially harmful disclosures are we talking about?    For one, the potential disclosure of your own company trade secrets or confidential information. An employee may be violating a contractual commitment or duty of loyalty by disclosing certain information through social media, but perhaps more importantly, that disclosure to competitors or the general public will cause irreparable harm to your business.    You can’t un-ring that bell.

There is also the potential disclosure of trade secrets belonging to your clients or customers.   The disclosure of sensitive information with which you have been entrusted could lead to a damaged business relationship, and a possible lawsuit against your company for failing to adequately maintain privacy controls.   In a similar vein, is the potential disclosure of your employees’ information, such as medical-related information and an employee's social security number or other banking or financial-related information.

The Google firing highlights the cataclysmic result that could come when the ease of employee access to social media collides with the ease of employee access to private and confidential information.

Employer Take Away:   What should you as an employer take away from this development? 

(1)        It is not enough to maintain and communicate policies dealing with the unauthorized access to and disclosure of confidential information. It is critical that your policies refer expressly to social media and, specifically, bans on inappropriate disclosure of information and documents through the various forms of social media.    Moreover, your policies should not only apply when the employee has departed from the company, but also while he or she is employed and has access to the information.

(2)        You should consider establishing a “trade secret program” that will allow the company to defend against a position taken prior to or during a lawsuit that the disclosed information does not rise to the level of a trade secret because the company did not treat it as such. The manner in which certain information must be treated and accessed internally (as distinguished from other non-sensitive information), an identification of those employees who may have access to that information, and what monitoring controls are in place to avoid unauthorized disclosure, are among the components of an effective program. 

(3)        You should consider the current state of the law as it relates to employer obligations to properly maintain certain types of information.   For example, certain obligations to segregate medical and benefits information from the contents of a “normal” personnel file, and the requirements enacted legislatively in states such as New York for the use and disposal of documents containing personal information such as employee social security numbers.

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Social media offers a valuable opportunity to employers who become involved (or who may become involved) in litigation with a former employee.   A recent survey of court personnel confirms that the use of social media among judges and jurors continues to increase. So what about the parties to those lawsuits?

On August 26^th, the New Media Committee of the Conference of Court Public Information Officers released a report entitled “New Media and the Courts: The Current Status and a Look at the Future.” (www.ccpio.org/documents/newmediaproject/new-media-and-the-courts-report.pdf.)     According to the report, approximately 1,500 members of the court community (federal and state) responded to an online survey inquiring into the use of various forms of social media.   Among the interesting results are that “more than one-third of state court judges and magistrates responding to the survey use social media profile sites like Facebook[.]” In addition, 56% of judges create jury instructions during actual trials that specifically address some component of juror use of social media during the trial proceedings, and more than 97% of those responding believe that judges and court employees should be educated in proper uses and practices of social media.

While consideration must be given by jurists to applicable opinions on judicial ethics, it is clear that judges are using social media, including social networking sites and blogs, for both personal and professional reasons.   Recent news publications have also described jurors using social media during trials to “friend” or obtain information about lawyers, parties and witnesses. One should not, however, ignore the parties themselves to these lawsuits. And while social media use is not without its limitations, social media can be a valuable tool for employers who become embroiled in litigation with a former employee.

Employer Take Away:   What should every employer take away from this development? 

(1)        Restrictive covenant and trade secret lawsuits continue to be filed in state and federal court.   In those cases, it is mostly the employer suing a former employee (and, often, the former employee’s new employer) for breaching an agreement not to compete with the former employer or not to solicit the former employer’s customers or current employees.   Once an employee separates from the company, obtaining information through social media may provide valuable information about: the nature of the former employee’s current business endeavors; any solicitations in which the former employee may be engaged; posted announcements of the former employee’s current location, affiliation, or experience; inappropriate disclosure of your company’s trade secrets or proprietary information; and any potentially disparaging comments about your company.   Such information may prove valuable prior to, and even during, any lawsuit involving that employee.

(2)        Social media can also be useful in other lawsuits involving a former employee.   For example, an employer being sued for disability discrimination may find information and postings that suggest an employee may not truly suffer from the condition alleged. Or, the information derived from social media may demonstrate that a former employee’s claim of “mental pain and suffering” is in fact belied by the activities or relationships exposed by the employee’s own words or pictures.   Or, perhaps, information reveals some basis to utilize the “after-acquired evidence” doctrine to support an employment-related decision such as termination, or reveals some inappropriate motive behind the former employee’s commencement of the lawsuit in the first place.

(3)        Employers should, however, exercise caution when attempting to utilize social media in litigation involving current employees. As mentioned in prior Social Media Advisor blog posts, social media inquiries may reveal information about current employees that you did not necessarily seek to obtain, but now could contaminate any legitimate employment-related decision and lead to a claim by the current employee that a decision was based on an impermissible purpose as a result of the employer learning certain information about the employee.   In those circumstances, employers may want to limit the scope of any search, as well as create a “Chinese Wall” between those performing any search and those who have decision making or supervisory responsibilities over the particular employee.

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Just last week, Mary Madden, Senior Research Specialist of the Pew Research Center in Washington, D.C., issued a very insightful report entitled “Older Adults and Social Media: Social Networking Use Among Those Ages 50 and Older Nearly Doubled Over the Past Year” (http://pewinternet.org/Reports/2010/Older-Adults-and-Social-Media.aspx).   The report offers a look into a significant trend, as well as a timely reminder for employers to make sure that age is properly addressed in their employment-related policies and decisions.

We begin with two axioms: First, the number of potential and current employees using some form of social media continues to increase dramatically.   Second, whether due to the state of our economy, or the fact that members of our society are both staying healthy and living longer, the current workforce is getting older.    Madden’s report for the Pew Research Center ties together these two assertions, with remarkable data and conclusions. For example:

·                     “Social networking use among Internet users ages 50 and older has nearly doubled – from 22% to 42% over the past year.”

·                     “Half (47%) of Internet users ages 50-64 and one in four (26%) users ages 65 and older now use social networking sites.”

·                     “One in ten (11%) online adults ages 50-64 and one in twenty (5%) online adults ages 65 and older now say they use Twitter or another service to share updates about themselves or see updates about others.”

·                     Among the implications of rising social media use by older adults is the increased use of social media for those who are looking to “embark on a new career”, and, more particularly, for those older adults looking to social media “for professional networking, continuing education, and political participation.”

Employer Take Away:   What should every employer take away from this development? No longer can the older generation of employees be ignored, or summarily dismissed as either being “technology illiterate” or too “old school” for new social media. It is, therefore, critical for employers to understand the extent to which there is an aging workforce, and that the rules pertaining to the use of social media in employment-related decisions apply equally to all employees, regardless of their age.

(1)        Employers should remember that sexual harassment is not the only form of proscribed harassment.   Harassment based on other protected statuses, such as age, may also expose a company to liability. Therefore, a company should ensure that social networking sites and other social media outlets are not being used to inappropriately harass or discriminate against older individuals on the basis of their age, with the same vigilance that most companies now take toward sexual harassment issues.   Employment policies (including electronic and social media policies) should be effectively written, and managers effectively trained, to encompass conduct that could lead to an age harassment claim by an employee.

(2)        In a similar vein, the increased use of social media by older employees necessarily puts certain personal information in the public domain, about which an employer could not otherwise inquire in a personal interview – most obviously, the age of the potential or current employee. Care should be taken to insulate decision makers involved with hiring or firing, as well as direct supervisors, from age-related information so as not to contaminate an otherwise legitimate business decision.

(3)        There is a legal irony whereby the law prohibits employers from treating employees differently because of their age, yet requires employers to treat employees differently because of their age when it comes to written release and waiver agreements entered into with departing employees.   The federal Older Workers Benefit Protection Act of 1990 (“OWBPA”) imposes very specific requirements in order to have a valid release and waiver of rights executed by an employee who is 40 years of age or older.    Among the OWBPA’s requirements are that the release and waiver must expressly refer to claims and rights under the federal Age Discrimination in Employment Act, must only be given in exchange for consideration to which the individual is not otherwise entitled, must expressly advise the individual to consult with an attorney, and must contain a set period of time for the individual to consider the agreement and to revoke the agreement even after its execution. To the extent an employer engages in a RIF or other mass layoff, it would also be wise to ensure that any age-related impacts are thoroughly considered.

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Are you tired of the press surrounding the Steven Slater incident with his employer, Jet Blue?   The coverage of Mr. Slater’s airplane exit due to apparent stress, and becoming fed up with an airline passenger, has been nothing short of remarkable.   Even his employer acknowledged the craziness of the situation through a blog post on its own web site: “It wouldn’t be fair for us to point out the absurdities in other corners of the industry without acknowledging when it’s about us.” And clearly, the final stanza of that employment sonata was never really in doubt.

However, the challenging cases are the ones that are not so extreme. It is unlikely that one of your employees will be opening the cabin door to your office at 30,000 feet.   One can dismiss the Slater story as just the latest introduction to America’s new reality show star, and be thankful that no one really got hurt.   Or, it can be a good lesson for those interested in social media and employment law. 

In other words, it is just as possible that an employee will express some acute stress or anger in a different way than Mr. Slater did.   For example, an employee can express anger or outrage generally or toward a particular co-worker in a blog post, on a social networking site, or a company’s intranet.   The stress caused by the troubled economy, or even a discrete tragic event such as 9/11, may lead to an increase in the number of employees whose productivity diminishes, and who may find social media as an easy and available outlet.   Additionally, increased stress coupled with the significant time spent in the office could provide an inappropriate portal to harassment or violence in the workplace.   If and when an employer becomes aware of an employee’s expression through social media, some measure of care should be taken before the employee’s words (and, perhaps the employee) are summarily dismissed.

It is readily acknowledged that employers do not have to provide a stress-free work environment.   Moreover, claims that one suffers from stress due to the personality of a particular supervisor have not been well-received by courts. However, under statutes such as the Family and Medical Leave Act (“FMLA”) and the Americans With Disabilities Act (“ADA”) (and their state and local counterparts), stress-related conditions and their manifestations may be protected either as a “serious health condition” or a “disability”, depending on their nature and severity, thereby thrusting the employer into a necessary course of action. 

Indeed, effective January 1, 2009, the ADA Amendments Act requires that the term disability “be construed broadly,” thus potentially affording greater rights to a greater number of employees.   This year alone saw an increase in stress-related claims. For example, in Pacenza v. IBM Corp., a terminated employee claimed he had a disability (post traumatic stress disorder) which manifested itself in, among other things, a compulsion to look at sexually explicit pictures on the Internet at work.   In Millea v. Metro-North Railroad Co., a court held that a jury properly found that an employee with a history of post traumatic stress disorder was entitled to rights under the FMLA after suffering an intense panic attack from a threatening call received from a supervisor.

Employer Take Away: What should every employer take away from this development?  

            (1)        Be aware of signs that an employee may be engaging in behavior or expression that could be considered protected under the law.   Employers are not required to be mind readers, and the obligation will be on the employee in most cases to provide adequate notice to the employer of a particular condition and the need for some response or assistance from the employer. However, social media has afforded employees a greater microphone for expression and greater security “behind the computer”, when they might not have expressed similar feelings in a personal, one-on-one setting.   Employers should have adequate policies in place, and should effectively train supervisors and managers to understand the implications of certain employee expression and the need to consider how the company should respond.

            (2)        Do not quickly dismiss employee expression through social media as being that of a “rogue” employee, or an employee who may just be letting off harmless steam on that particular day.   Employers, and particularly their supervisors and managers, need to understand what to look for, what their legal obligations may be, and the consequences of not following the law. Notwithstanding what may appear at first blush to be someone looking for his or her 15 minutes in the spotlight.

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Can an employer lawfully monitor personal e-mail messages sent by an employee through the employee’s personal, password-protected web-based account if such messages are sent using the employer’s computer?    Court decisions over the past few months suggest problems for employers who attempt to do so, though the decisions do suggest a recommended course of action for employers to avoid potential exposure.

To be clear:  The issue at the moment is not whether an employer can monitor communications sent or received using the company’s e-mail over the company’s computer system.   At the moment, the discussion involves personal e-mails sent through a personal (non-company) e-mail account, albeit accessed or sent on a company’s computer system. Two cases this summer found that an employee does not automatically waive all rights in all cases simply because he or she communicates using an employer’s computer. 

On July 16, 2010, the Wisconsin Supreme Court decided the case of Schill v. Wisconsin Rapids School District, and held that a public school teacher’s personal e-mails are not necessarily deemed to be government “records” under the Public Records Law merely because they may have been sent and received on computer systems owned by the government, if the messages are not related to a governmental function.   Five days later, on July 21, 2010, a California appellate court held in Mimi Shanahan v. Superior Court that a bank executive did not waive his right to privacy of a confidential document when he e-mailed it to his personal secretary. The court there noted that the executive had given the document to his one assigned secretary in confidence to print or proofread, as opposed to sharing it generally and openly with a secretary pool or the secretary of another employee.

Critical to the outcome of these cases is the precise nature of an employer’s communicated policy, and the extent to which the employee had an expectation of privacy in the e-mail being sent.   Recent decisions in New Jersey and New York highlight the importance of the employer’s particular policy. For example, on March 30, 2010, the Supreme Court of New Jersey issued a decision in Stengart v. Loving Care Agency, Inc. that also landed on the side of the employee’s privacy rights. In Stengart, the employee sent e-mail messages to an attorney over a work-issued laptop computer, though using the employee’s personal web-based and password-protected account.   The court found that the employee did not waive the attorney-client privilege under those circumstances, relying on the employer’s policy:

[T]he policy does not address the use of personal, web-based e-mail accounts accessed through company equipment. It does not address personal accounts at all. Nor does it warn employees that the contents of e-mails sent via personal accounts can be forensically retrieved and read by the company. Indeed, in acknowledging that occasional personal use of e-mail is permitted, the policy created doubt about whether those e-mails are company or private property.

One can contrast that New Jersey opinion with the 2007 decision by the New York County Supreme Court in Scott v. Beth Israel Medical Center, Inc., where a physician exchanged e-mail with an attorney over the hospital’s computer system. The court held that the employee did waiver the attorney-client privilege, finding that the confidential nature of the communications no longer existed.   In stark contrast to the policy in Stengart, the employer’s policy in Scott apparently prohibited all personal use of e-mail and at the same time expressly provided for employer monitoring.

Employer Take Away: What should every employer take away from this development?  As these recent cases suggest, the mere fact that an employee communicates through a personal e-mail account using a company-owned system does not by itself eliminate all expectation of privacy to which the employee is entitled.    Thus, employers should at a minimum:

            (1)        Make sure to understand and consider the law in the particular jurisdiction in which the employer operates its business to determine whether, and to what extent, searching or monitoring employee electronic communications may expose the employer to liability; and

            (2)        Create effective policies that account for potential social media permutations that may occur, and reduce employee privacy expectations by obtaining appropriate employee acknowledgments that expressly recognize the employer’s right to monitor and retrieve even personal web sites and messages accessed through company-owned systems.

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We all spend a lot of time analyzing legal developments occurring in the recent past, as well as those that have just happened.   Often neglected is the anticipation of where the legal trend will be taking us in the months and years to come.   You are now in the right place.

Nostradamus stated not so recently, “I do but make bold to predict (not that I guarantee the slightest thing at all[.])” (Open letter to Privy Councillor (later Chancellor) Birague, 15 June 1566, from Lemesurier, Peter, The Unknown Nostradamus, 2003). With that same caveat, here are the Top 5 issues that are expected to have a greater impact on employers as we move forward and litigation begins to catch up to the increased use of social media:

            1.         Privacy claims and the ability to regulate off-duty activities. Employers will continue to have unprecedented access to information about what employees are doing on their own time – their weekend musings, organizational affiliations, recreational and political activities, and off-duty blog posts.   Yet, most states (like New York) have some form of “legal activities law” that prohibits employers from taking certain action based on many of those categories of information. A key inquiry will ultimately become whether there is a nexus between the employee’s activity and the employee’s ability to perform his or her job. 

Likewise, there will be an increase in privacy-related claims as employers continue to find ways and reasons to monitor employee communications on company systems. One such claim that will become more prevalent relates to employer monitoring of, and access to, private or attorney-client communications through a non-company source over a company-owned system.   For example, an employer gaining access to an employee’s e-mails sent through a private AOL account, albeit on the company’s computer system. Employers must ensure that they protect themselves, for example, through appropriate employee-signed documents.

            2.         Competition and trade secret disclosure. Employees will continue to use social media to the detriment of employers. Among the litigated questions that will likely increase are: Whether an informal web-based chat about a company’s development or expansion plans constitutes an improper disclosure of an employer’s trade secrets or other confidential information? Or, whether employees who post credentials, change of job notices, and job experiences on web sites such as LinkedIn or Facebook are violating non-compete or non-solicitation agreements?

            3.         Employer liability to third parties.   More third parties will become affected by employee use of social media and improved technology. This will lead to an increase in claims that an employer should be vicariously liable for an employee’s acts. For example, defamatory statements by an employee about another individual or company may expose an employer to litigation. Similarly, an employee who causes an accident by texting while driving, or engaging in other forms of social media expression while driving, when that employee is using a company-owned phone or device, may also prompt a claim against an employer. As in the other cases described above, employers should maintain appropriate policies.

            4.         Union avoidance.   The use of social media will not only increase on an individual basis, but will also become a greater outlet for collective expression. As groups form and employees have an easier way to organize, employers must be sensitive to the proscriptions contained in the law against taking certain action in some cases against employees who engage in concerted action.

            5.         Avatar.   No, not the James Cameron movie. Avatars are virtual characters that interact with each other online in virtual worlds, where the avatars sleep, eat, work and even have sexual relationships. As more employees spend more downtime in these virtual worlds (either transacting business or engaging in personal relationships), potential liability can exist for employers when the virtual becomes real, such as, for example, if supervisory and subordinate avatars are engaging in certain relationships and role playing that ultimately becomes a sexual harassment claim in the “real world.” 

Employer Take Away: What should every employer take away from this development? Employers should consider and understand the potential for liability exposure in these 5 areas moving forward, and consider the appropriate ways to be pro-active in order to remain ahead of the social media forecast.

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