A copy of the Employment Law presentation given at the Kansas City CFO Breakfast Series event. Topics in this presentation include:
- Social Media As Company “Property”
- Legal Issues Affecting Ability to Protect
- Whistleblowers—Current Trends
“- Hot Issues”-A speedy checklist
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
Employment Law and the Bottom Line
1. Polsinelli PC. In California, Polsinelli LLP
Employment Law and the Bottom
Line
June 25, 2015
Karen R. Glickstein
Polsinelli PC
2. real challenges. real answers.
SM
Today’s Presentation
Social Media As Company “Property”
Legal Issues Affecting Ability to Protect
Whistleblowers—Current Trends
“Hot Issues”-A speedy checklist
5. real challenges. real answers.
SM
What are the issues?
Growing use of social media
Employers Rely on Social Media to
Promote Business and for Employees to
Perform Job
Who “owns” social media?
NLRB issues
BYOD issues
6. real challenges. real answers. sm
People on Facebook
More than 1.28 billion monthly active users (15% increase from prior
year)
Five new profiles created every second (83 million fake profiles)
50% of our active users log on to Facebook in any given day
Average user has 338 friends; median is 200 friends
People spend over 700 billion minutes per month on Facebook
There are over 900 million objects that people interact with (pages,
groups, events and community pages)
Average user is connected to 80 community pages, groups and
events
Average user creates 90 pieces of content each month
More than 30 billion pieces of content (web links, news stories, blog
posts, notes, photo albums, etc.) shared each month.
Facebook Facts from Pew (Feb. 2014) and Zephoria, Internet
Marketing (June 2014) and other sources
7. real challenges. real answers. sm
If Facebook Were a Country
1. China
2. India
3. FACEBOOK
4. United States
5. Indonesia
6. Brazil
7. Pakistan
8. Bangladesh
8. real challenges. real answers. sm
Linked In Facts (from the internet of course)
Born on May 5, 2003
332 million members
2 new users join
every second
25 million profiles
viewed every day
1 in 3 professionals
on the planet use it
Average connections:
913
39 million students
and recent grads
41% of millionaires
use
13% of users don’t
use FB
59% of users don’t
visit Twitter
– Source:
http://www.jeffbullas.com/2014/12/02/25-
linkedin-facts-and-statistics-you-need-to-
share/
9. real challenges. real answers. sm
More Linked In Trends (as reported by
www.forbes.com)
41 percent of people
report over 500
connections; but
increasing numbers
report over 1000;
Increased numbers
spending more than 2
hours a week;
25% do not know about
settings that allow to hide
connections
Groups are falling
somewhat, but people still
using
Company page usage
jumped from 24% to 57%
10. real challenges. real answers. sm
Twitter By The Numbers
554, 750,000 users
on Twitter
Close to 500K people
sign up every day
400 million tweets a
day
9100 tweets per
second
Most companies large
and small use Twitter
33% of users follow a
brand
Increase in use for
business
recommendations
11. real challenges. real answers. sm
What are the Issues?
Branding/Marketing
Trade Secrets and
Proprietary
Information
Clarify expectations
at the beginning
Treat as all other
company property or
“creations”
Duty of employees
to update/change
information?
12. real challenges. real answers. sm
In re CTI, Inc., LLC, 528 BR 359 (S.D.
Bankr. Tex. 2015)
Chapter 11 reorganization
Owner claimed all social media accounts
belonged to him personally, not to Debtor
Question: are the pages “property of the
estate?”
Court holds that social media accounts
are property (like subscriber lists)
– Personal page v. company page?
13. real challenges. real answers. sm
Phone Dog v. Kravitz, 2011 WL 5415612
(N.D. Calif.)
Employee maintained Twitter handle for
use with marketing business
Account had about 17,000 followers
Employee leaves, company requests
password and handle. Employee refuses
Lawsuit filed alleging trade secrets,
interference with business relationship,
and conversion
14. real challenges. real answers. sm
Case Ultimately Settles before Trial
But not before court
finds that claim plead
for misappropriation
of trade secrets
Rejects employee’s
claim that followers
were public
information
15. real challenges. real answers. sm
See also, AR2 LLC v.
Rudnick, (SD. Fla. 2014)
CEO engaged in
misconduct and
refused to turn over
access to web
domains and social
media platforms;
Also contends he
directed defamatory
reviews to Yelp.
16. real challenges. real answers. sm
Eagle v. Morgan, 2013 WL 943350 (E.D.
Pa.)
Plaintiff co-founded
banking education
company and
estyablished LinnkedIn
account when she was
CEO
Ownership changes; new
company’s social media
policy requires
employees to create and
maintain LInkedIn
Accounts
Plaintiff’s employment
terminated and she is
no longer able to
access account
Company replaces
Eagle’s name with
that of her Successor
Many theories
advanced, including
“conversion”
17. real challenges. real answers. sm
Many Interesting Legal Questions
Court finds that
LinkedIn account is
not tangible chattel,
therefore cannot be
converted
Tortious Interference
alleged; all elements
but damages proven
May have
ramifications with
regard to non-
solicitation and non-
competition
18. real challenges. real answers. sm
Cellular Accessories for Less, Inc. v. Trinitas, LLC,
2014 WL 4627090 (C.D. Calif.)
Companies are
competitors selling
mobile phone
accessories to
businesses
Oaks works for
Cellular until
discharged; starts
own business
(Trinitas)
Issue: are the linked in
contacts retained by
Oakes “trade secrets”
Analysis is traditional
trade secret law (like non-
compete/non-solicit)
How difficult to collect?
What about fact that
LInkedIn “suggests”?
Are contacts “Public”?
19. real challenges. real answers. sm
Jefferson Audio Visual Systems, Inc. v.
Gunnar Light, 2013 WL 1947625 (W.D. Ky)
At base level, it’s a
defamation/business
dispute case
Ultimately sue for
fraudulent
misrepresentation
because former
employee doesn’t
change LinkedIn page
Ultimately, no reliance
20. real challenges. real answers. sm
Related Questions
Non-Competes and Non-Solicits? (BTS USA
v. Executive Perspectives, LLC, (Conn. Sup.
Ct. 2014) and Pre-Paid Legal Services, Inc.
v. Cahill (E.D. Okla. 2013)
Use of Passwords? Maremont v. Susan
Fredman Design Group, Ltd (N.D. Ill. 2014).
22. real challenges. real answers. sm
As Technology Becomes More
Accessible . . .
Recent Study by Cornerstone OnDemand:
37 percent of employees who use apps
for work would spend own money on
worke related apps in the next 12 months
if they felt the app would help with job
Even among those who don’t use aps for
work; 20 percent said they would spend
own money for apps that would help them
increase productivity
23. real challenges. real answers. sm
But the Same Study Notes
When employees
asked if employers
had policies on using
apps for work that are
not provided by
company, 43% said
no and 21% did not
know
When asked about
company policies on
use of personal
devices, 45% said no
policies; 15 % said
did not know
24. real challenges. real answers. sm
What are the Issues?
Less expensive for
company if
employees use own
device
But how do you
protect confidential
information?
When can employer
access personal
device of employee?
25. real challenges. real answers. sm
Factors to Consider
How many devices will you support?
Security policy
How will IT support problems?
Make clear who owns what data and apps (in
other words, how do you keep personal
personal?)]
What will you allow? Tie to Social Media or
Electronic Use Policies?
What happens when employee leaves?
26. real challenges. real answers. sm
Like Many HR Issues, Goes to Culture
Require Separate
Phones?
Require easier
access?
Don’t forget issues
with exempt v. non-
exempt employees
28. real challenges. real answers. sm
What is Section 7?
Section 7 provides that
“employees shall have the
right to self-organization, to
form, join, or assist labor
organizations, to bargain
collectively . . . And to
engage in other concerted
activities for the purpose of
collective bargaining or
other mutual aid or
protection.”
30. real challenges. real answers. sm
Decisions are Fact Specific; Not Consistent
Hispanics United of
Buffalo, Inc. (Sept. 2,
2011)
Employees could not be
fired for posting on wall of
co-worker who
complained about her co-
workers’ performance
Posts by co-workers
protected because deal
with job performance
Same result where
employees posted
concerns about
employers tax-
withholding procedures
Because all relate to
shared concerns of
employee re: terms and
conditions of employment
31. real challenges. real answers. sm
But, hot dogs?
Auto dealership employees
complain online and post
pictures where owners
serve hot dogs, cookies
and snacks from a
warehouse club
Sarcastic comments re:
owner going all-out
Vocalizing sentiments of
co-workers, so concerted
activity
32. real challenges. real answers. sm
Another Example of Overly Broad
Prohibition on micro-
blogging to discuss
company business on
personal accounts
Prohibition on discussing
anything wouldn’t want
manager to see
Prohibition on anything
“inappropriate” re company
or managers
33. real challenges. real answers. sm
Triple D, LLC, 361 NLRB No. 31 (August
2014)
NLRB Decision where Board unanimously
finds that Company unlawfully discharged
two employees for participating in
Facebook discussion regarding perceived
errors in employers tax withholding
calculations
34. real challenges. real answers. sm
Triple Play Sports Bar
and Grille fires two
workers after learning of
a discussion on
Facebook regarding tax
withholdings between
several employees
“They can’t do
calculations” “Now I owe
money . . . Wtf”
One employee “likes” the
status
Employer argues that
they are “defamatory and
disparaging remarks” so
lose NLRA protection
NLRB says comments
(including “like”) are
concerted activity and
policy was effort to chill
speech
What the Board Said
35. real challenges. real answers. sm
The Newest Report from the GC- March
2015
Lawful and Unlawful Handbook Policies
– “Do not discuss ‘customer or employee
information’ outside of work” v. “No
unauthorized disclosure of ‘business secrets’
or other confidential information”
– “Be respectful of others and the Company” v.
“No rudeness or unprofessional behavior
toward a customer or anyone in contact with
the company”
36. real challenges. real answers. sm
Same Issues with Press Communication
Can’t prohibit all
contact or refer to
certain office or legal;
Can note that the
company will speak
through one person
so long as emphasis
on crisis or something
else that would not
implicate Section 7
37. real challenges. real answers. sm
Yet More Examples
Copyrights,
trademarks or logos;
Prohibitions on
photography,
recording or personal
devices;
“walking off the job” v.
“leaving without
permission
39. real challenges. real answers. sm
Watch it Grow
Originally a common
law claim
Fueled by post-
Enron world
Now, almost all-
encompassing
40. real challenges. real answers. sm
Headlines are Happening
Miami based nurisng home to pay $17 Million to settle a FCA suit
brought by former CFO who alleged kickback scheme (June 2015)
Whistleblower to receive over $600K after providing information that
led to SEC Enforcement Action (May 2015—Paradigm Capital
Management)
VA Settles Three Whistleblower Claims (data manipulation,
questionable medical practice and sexual harassment) (April 2015)
OSHA safety complaint results in $85K award (April 2015)
$38 Million settlement in Health Care Fraud suit under FCA (this
was not the whistleblower’s claim)(October 2014)
– Multi-million dollar awards not uncommon under FCA Whistleblower provision
41. real challenges. real answers. sm
A Virtual ABC of Statutes
Affordable Care Act
Commercial Motor Vehicle Safety Act
Dodd Frank Act
Environmental Statutes (Clean Air, CERCLA, Surface Mining, etc.)
False Claims Act
FDA Food Safety Modernization Act
IRS Whistleblower Law
Military Whistleblower Protections
OSHA
Sarbanes Oxley Act
SEC
42. real challenges. real answers. sm
What are the Elements?
Most Whistleblower claims are fairly
simple on their face:
– Engage in “protected activity”;
– “adverse action”
– causation
43. real challenges. real answers. sm
“Engage in Protected Activity”
Providing information
or participation in
investigation
“reasonable belief”
Part of job duties?
44. real challenges. real answers. sm
Adverse Action
Something “bad” has to happen
Test may differ depending on statute
Would conduct discourage others from
making complaint?
45. real challenges. real answers. sm
Common law issues
What is violation of “public policy”
Is subject preempted by statute? State or
federal?
Workers’ compensation retaliation
– No longer “sole” cause in Missouri
46. real challenges. real answers. sm
You May Not Be Safe
Privately held not
always a protection
Do you work with or
have contact with
publicly traded
companies?
(i.e., do employees of
private companies do
work for public
companies)
47. real challenges. real answers. sm
The Whistleblower in Your Midst
Recognize the
possibility of litigation
Follow procedures
Document
performance
Treat “fairly”
48. real challenges. real answers. sm
Best Practices
Document performance of employees contemporaneously
Provide supervisors/managers with training on both performance
issues and reporting issues
Have policies in place; train all employees
Consider hotlines or outside reporting mechanism
Consistent source for reports to be made/investigated
Involve in-house or outside counsel appropriately
Review employment/severance agreements to insure language
cannot be interpreted to prevent reporting
Assess whether additional reporting mechanisms warranted
49. real challenges. real answers. sm
Listen to the Podcast
http://www.polsinelli.com/intelligence/podcast-g
50. real challenges. real answers. sm
Other “Hot” Topics
Pregnancy discrimination: Is it a
disability?
Religious Discrimination: Abercrombie
Suit
EEOC Position on Wellness Programs
51. real challenges. real answers. sm
About the Presenter
Karen R. Glickstein is a
Shareholder at Polsinelli P.C.
She has an extensive trial
practice focusing on
management side employment
law matters (both counseling
and trial work), social media law,
and business litigation.
For more information, you can also
visit our website at www.polsinelli.com.
Karen R. Glickstein
Polsinelli P.C.
900 W. 47th
Place
Suite 900
Kansas City, Missouri
64112
816.753.1000
816.395.0638 (direct)
816.817.0162 (direct fax)
kglickstein@polsinelli.com