Employment Law Alert : Gibbons P.C.: Labor Relations, Employment Contracts, Employee Benefits, & Wrongful Discharge Lawyers & Attorneys

On Monday, May 5, 2013, New Jersey Governor Chris Christie issued a conditional veto of Assembly Bill No. 2878, the controversial piece of proposed legislation that sought to bar most employers from requiring current or prospective employees to provide user names or passwords to social networking accounts and from inquiring as to whether current or prospective employees even had social networking accounts.

In his veto message, Governor Christie recognized the importance of protecting the privacy of job candidates and employees at the heart of the “well-intentioned” bill, but noted that such privacy concerns “must be balanced against an employer’s need to hire appropriate personnel, manage its operations, and safeguard its business assets and proprietary information.”

Accordingly, Governor Christie recommended several amendments to the bill. First, the conditional veto deleted the entire section of the bill prohibiting employers from requiring or requesting that an employee or prospective employee disclose whether he or she has a social networking account. The conditional veto also struck the section of the bill providing a private right of action to aggrieved employees and prospective candidates against employers. In an apparent effort to offer more protections to employers, the conditional veto added language granting employers the right to conduct investigations to ensure compliance with applicable laws, regulations or “prohibitions against work-related misconduct” based on specific information on an employee’s personal account and also the right to investigate employee’s actions regarding the transfer of certain proprietary information to an employee’s personal account. Finally, the conditional veto granted employers the right to view, access or utilize information about current or prospective employees that can be obtained in the public domain.

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A Family and Medical Leave Act (“FMLA”) plaintiff’s leave was proven fraudulent through her Facebook postings, resulting in summary judgment for her employer, dismissing her complaint. The Federal District Court for the Eastern District of Michigan concluded that the employer’s reason for her termination was legitimate and unrelated to her exercise of FMLA rights.

In Lineberry v. Richards, Plaintiff took a leave of absence based on excruciating pain she experienced in her lower back as certified by her physician. She applied for, and received approval from her employer to take, leave under the FMLA. During her leave, she went on vacation to Mexico. Plaintiff later posted on Facebook pictures of her vacation, including photographs showing her riding in a motorboat, lying on her side on a bed holding two bottles of beer in one hand, and holding her infant grandchildren, one in each arm, as she stood. She also posted details regarding certain activities she engaged in during her leave, including trips to Home Depot, watching her grandchildren and taking online classes. After Plaintiff’s co-workers revealed the Facebook postings to their employer, the employer questioned her in an investigation. The employer concluded that Plaintiff lied during the investigation about her use of a wheelchair while on leave.

Plaintiff sued her employer claiming its decision to terminate her employment interfered with her FMLA rights and retaliated against her for taking leave. On summary judgment, the Court reasoned that an employer’s interference with an employee’s FMLA rights does not violate the FMLA if it was motivated by a legitimate reason unrelated to the exercise of FMLA rights. In addition, the FMLA does not provide greater rights to an FMLA-eligible employee than to a non-FMLA-eligible employee. Here, Plaintiff was dishonest, and the employer terminated her employment after it uncovered the dishonesty. Accordingly, Plaintiff was not insulated from termination simply because she was on an FMLA-approved leave at the time.

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At the Gibbons Second Annual Employment & Labor Law Conference last week, one panel discussion addressed the National Labor Relation Board’s (“NLRB”) recent activity, and offered a list of topics to watch in 2013. This blog post contains the highlights from that discussion as related to employer policies.

Of prime interest in our predictions for 2013 is the “recess appointment” issue. Just three weeks ago, the District of Columbia Court of Appeals in Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013) held that three 2012 recess appointments of officers to the NLRB by President Obama were unconstitutional because they lacked the “Advice and Consent” of the Senate and were not authorized by the Constitution’s Recess Appointments Clause. As a result, the Court vacated the underlying Board decision, finding that the NLRB lacked the quorum necessary for it to take action. The Court’s decision could be viewed as invalidating hundreds of opinions rendered by the Board in 2012. But until either the Supreme Court rules on the “recess appointment” issue or other courts begin invalidating specific decisions, the NLRB is taking the position that its decisions are valid and enforceable. As such, employers must continue to scrutinize their policies and police enforcement in the wake of some of the most recent and controversial NLRB rulings.

Most recently, for example, the NLRB has concluded that language regularly found in employment policies unlawfully restrains workers’ rights under Sections 7 and 8 of the National Labor Relations Act (“NLRA”). By way of background, the NLRA promises employees the “right…to engage in…concerted activities for the purpose of … mutual aid or protection…” and deems it an unfair labor practice for an employer to interfere with such rights. The law encompasses the type of activity employees participate in when they are considering whether to act in concert with regard to terms and conditions of employment such as salary, work hours, and the like. Typically employees share and compare information about wages and workplace conditions, often accompanied by some griping about, and perhaps even disparagement of, their employer. Whether such exchange occur in the vicinity of the water cooler or on social media, the NLRB deems them protected for all workers, not just those in union workplaces, and will target policies that discourage or prohibit such discussions.

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Over the past two years, the National Labor Relations Board (the “Board”) has attacked various employment policies of union and non-union employers alike, ranging from social media policies to policies that establish protocol for employees to follow when responding to media inquiries. The Board also has been critical of at-will language commonly found in employee handbooks and policies used by employers throughout the country. In light of the Board’s recent actions, some employers—particularly non-union employers that have not historically focused on Board developments—have begun to reassess policy language that has long existed in their handbooks. Due to a recent administrative law judge (“ALJ”) decision, employers should add employment agreements to their list of employment practices to review and Board developments to watch in 2013.

Last week, in Quicken Loans, Inc., No. 28-CA-75857 (N.L.R.B. A.L.J. Jan. 8, 2013), an ALJ upheld a challenge to confidentiality and non-disparagement provisions in an employment agreement distributed by an employer to its workers (mortgage bankers) nationwide. The ALJ concluded that the language “chilled” employees’ rights to engage in protected concerted activities in violation of the NLRA, despite the employer’s argument that the provisions were necessary to protect its investment in educating and training workers.

Language at Issue

The “Proprietary/Confidential Information” provision in the employment agreement prohibited employees from disclosing, among other things, “non-public information relating to . . . the Company’s business, personnel[,] . . . all personnel lists, [and] personal information of co-workers . . . such as home phone numbers, cell phone numbers, addresses and e-mail addresses” to “any person, business or entity.”

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In a recent decision, a NLRB administrative law judge (the “ALJ”) found three policies in the Dish Network’s nationally-distributed handbook unlawful: a social media policy, a policy that restricts contact with the media, and a policy that restricts contact with government agencies. While the challenge to the social media policy is nothing new, the decision serves as a reminder for union and non-union employers alike that no policy is safe from scrutiny by the National Labor Relations Board (the “Board” or the “NLRB”).

Following recent Board guidance, the judge initially found the social media policy unlawful for two reasons: first, it banned "disparaging or defamatory comments about DISH Network," which the ALJ concluded could interfere with employee rights to engage in protected concerted activity, such as making collective complaints about terms and conditions of employment; and second, it banned employees from communicating electronically during "Company time," which the judge concluded was unlawful because "Company time" did not clearly exclude breaks and other non-working hours.

The ALJ then critiqued the other two policies with similar scrutiny.

The Contact with the Media Policy read:

The Corporate Communications Department is responsible for any disclosure of information, to the media regarding DISH Network . . . . Unless you receive prior authorization . . . you must direct inquiries to the Corporate Communications Department. Similarly, you have the obligation to obtain the written authorization of the Corporate Communications Department before engaging in public communications regarding DISH Network or its business activities. . . .

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As we near the end of the year, now may be a good time to dust off your employee manual and training programs! An annual review of policies is a good best practice that can save your company both time and money in the long run.

For instance, have you considered revising your policies or offering trainings in areas that have been the focus of recent legal activity such as:

• social media
• confidentiality
• reasonable accommodations, or
• bullying

Kelly Ann Bird expands on the policies that employers should review today in an article recently published by the Association of Corporate Counsel entitled Employment Policies and Training: Why They Make Sense Now. Click here to read the full article.

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In light of recent guidance by the National Labor Relations Board (the “Board”), non-union employers should review the “at-will” language found in their handbooks (and many standalone policies) to make sure it does not constitute an unlawful waiver of an employee’s right to engage in union activity.

By now, it should come as no surprise that the Board has an interest in non-union workplaces. From promoting a mandatory workplace posting requirement to challenging seemingly innocuous social media policies, the Board should be on the radar screen for all employers. Most recently, the Board has weighed in on at-will disclaimers found in most handbooks or manuals. Such disclaimers typically explain that the employment relationship is not a contractual one, and the employer or employee can end employment at any time for any reason so long as that reason is not unlawful.

Earlier this year, an administrative law judge (“ALJ”) in an unfair labor practice case found the following at-will acknowledgement unlawful: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The ALJ decided the statement would lead employees to believe they could not unionize, thereby, “chilling” their rights under the National Labor Relations Act (the “NLRA”). The case settled before the Board had an opportunity to address this language.

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A Pennsylvania Federal District Court has decided that an employer did not violate the Federal Computer Fraud and Abuse Act (“CFAA”) or the Federal Lanham Act, when it took control of a departed employee’s LinkedIn account. The Court ruled that (1) the CFAA, which in part prohibits unauthorized access to a computer with the intent to defraud, did not come into play and (2) no trademark infringement in violation of the Lanham Act had occurred.

Factual Background

In Eagle v. Moran et al. plaintiff Eagle was employed as the CEO of Edcomm, Inc., a company that provided training services. In accordance with company practice, Eagle set up a LinkedIn account and gave another employee the password to her account. Edcomm followed a policy of asserting “ownership” over the account when an employee departed the Company; it would extract data and incoming information from the LinkedIn account, but took steps to avoid stealing the former employee’s identity. After Eagle’s involuntary termination, Edcomm used her password to change Eagle’s LinkedIn profile to that of the incoming CEO, and it replaced the photographs and information to reflect that of the new employee. Plaintiff claimed that when searches were done for her, the name and photograph of her replacement was displayed, yet Eagle’s awards, recommendations and contacts remained unchanged. In her lawsuit, Plaintiff claimed violations of the CFAA, the Lanham Act and state common law arising from the loss of business opportunities, relationships, reputation and trust caused by the change to her LinkedIn profile.

Court’s Ruling

In order to prove a violation of the CFAA, a federal statute that prohibits unauthorized access and use of computers, a plaintiff must show actual damages. As the Court held, potential loss of future business -- particularly as plaintiff speculatively claimed -- is insufficient. Similarly, a loss to one’s reputation or relationship with clients does not arise to the level of a CFAA violation. The District Court dismissed Eagle’s CFAA claim, finding that Eagle’s simply claiming a loss of business opportunities by her lack of access to and control of her LinkedIn account for four months, failed as a matter of law to establish a CFAA violation. In addition, plaintiff was not claiming a monetary loss because her computer was inoperable or she expended money to repair damage to it (typical of a CFAA claim).

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On May 30, 2012, the National Labor Relations Board's Acting General Counsel issued a third report on social media cases. This report follows the Board’s August 2011 and January 2012 reports on the subject, which we previously discussed. The guidance contained in the three social media reports is applicable to most private sector employers, unionized or not.

The third report discusses seven social media cases handled by the Board’s General Counsel in recent months, all of them focused on employer policies that restrict employee social media postings or communications. In six of the seven cases, the General Counsel’s office found that some provisions of the employers’ social media policies were unlawfully broad, interfering with the rights of employees under Section 7 of the National Labor Relations Act (NLRA) to engage in “protected concerted activities.”

Significantly, the General Counsel’s office concluded that the entire social media policy in the seventh case was lawful under the NLRA. The third report includes the full text of the lawful policy, providing the most helpful guidance for employers to date regarding what social media policy provisions will pass muster with the Board. In its discussion of the lawful policy, the report stressed that the policy avoided ambiguity regarding its coverage by providing sufficient examples of “plainly egregious conduct” so that employees would not reasonably construe the policy to bar Section 7 activities, such as discussion of wages and working conditions with co-workers.

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If passed into law, two bills currently pending before the New Jersey General Assembly will place significant limitations on the categories of information that New Jersey employers may use and rely upon in connection with the hiring, promotion, and termination of employees.

Credit Reports & Related Information

Bill A2840, introduced in the Assembly on May 10, 2012, proposes legislation that would prohibit an employer from obtaining, requiring or otherwise basing employment decisions, such as hiring, promotion, and discipline on reports containing information about an applicant’s or current employee’s credit history, credit score, credit account balances, payment history, and savings or checking account balances or numbers.

The bill creates exceptions to the above restrictions for: (1) those employers who are required by law to obtain a credit report, or (2) when a credit inquiry is related to a bona fide occupational qualification. The bill provides guidance by stating that credit history may be considered a bona fide occupational qualification if the position in question involves setting the financial direction or control of the business, or otherwise involves access to customers’, employees’, or the employers’ personal belongings, financial assets, or financial information (excluding financial information that is customarily provided in a retail transaction). The bill prohibits employers from compelling employees to waive the protections granted under the bill.

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The National Labor Relations Board’s Acting General Counsel recently issued a report and press release summarizing the outcomes of recent NLRB cases involving employees’ use of social media and the legality of employers’ social media policies. Among the cases discussed in the report are several in which the Board found that provisions of employers’ social media policies violated Section 8(a)(1) of the National Labor Relations Act, which prohibits work rules that would “reasonably tend to chill employees in the exercise of their Section 7 rights” to engage in “concerted activities” for the purpose of “mutual aid or protection.”

Although the NLRB report does not pronounce any new or specific rules for employers to follow in drafting social media policies, it suggests that to avoid running afoul of Section 8(a)(1), social media policies should be narrowly tailored so as not to prohibit “concerted activity” via social media, such as online discussion among coworkers regarding terms and conditions of employment. Employers should be mindful that union and non-union employees alike are covered by the NLRA, and thus the Board’s recent rulings on social media policies are applicable to virtually all employers.

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A Pennsylvania trial court recently became one of a growing number of courts to rule that a plaintiff’s non-public Facebook and MySpace postings are discoverable. On May 19, 2011, in Zimmerman v. Weis Markets, Inc., No. CV-09-1535, 2011 WL 2065410 (Pa. Comm. Pl. May 19, 2011) the Court of Common Pleas of Pennsylvania granted the defendant’s motion to compel the plaintiff, a former employee of the defendant, to disclose his Facebook and MySpace passwords, user names and log in names. Notably, the Court reasoned that because the plaintiff voluntarily posted all of the pictures and information on his Facebook and MySpace sites, he had no reasonable expectation of privacy to the postings although the posts were on non-public pages.

Key to the Zimmerman Court’s decision was the fact that the defendant demonstrated that the public portions of the plaintiff’s Facebook and MySpace pages contained postings and pictures directly contrary to the plaintiff’s claim that a work related accident had caused his health to be seriously and permanently impaired. The Court held that: (1) because the plaintiff had put his physical condition at issue, the defendant was entitled to “discovery thereon” and (2) based on a review of the publicly accessible portions of the plaintiff’s Facebook and MySpace pages, there was a reasonable likelihood of additionally relevant information on the non-public portions of the social media sites. Specifically, despite the plaintiff’s deposition testimony that he never wore shorts due to his embarrassment of a scar on his leg from the accident, the public portions of his MySpace page contained pictures of the plaintiff in shorts with his scar visible, as well as recent pictures of the plaintiff with his motorcycle. In addition, the public portions of the plaintiff’s Facebook page stated his interests included “ridin” and “bike stunts.”

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The highly publicized “Facebook firing” case, brought by the National Labor Relations Board (NLRB) and discussed in a November 12, 2010 post in the Employment Law Alert, ended with a settlement announced on February 7, 2011. According to the Complaint, American Medical Response of Connecticut Inc. (“AMR”) terminated an employee for criticizing her boss on her Facebook account.

As announced by the NLRB in a news release, AMR will “revise its overly broad rules to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work,” and that they “would not discipline or discharge employees for engaging in such discussions.” AMR’s internet policy had prohibited online comments that “berate” and “slander” supervisors.

In addition, the company also promised that “employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation.” The allegations involving the former employee’s termination were resolved through a separate, private agreement between her and AMR.

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Employers wanting to prohibit damaging communications from being made about them by employees through blogging and rapidly evolving social media such as Facebook, Twitter, and LinkedIn should be aware of a recent National Labor Relations Board (NLRB) Complaint against American Medical Response of Connecticut, Inc. asserting that two of the more common employer restrictions on employee blogging and social media communications constitute unfair labor practices and are, therefore, unlawful. In its News Release, the NLRB pointed to two of the provisions in the company’s blogging and internet posting policies as being unlawful under Section 7 of the National Labor Relations Act (NLRA):

• “one that prohibited employees from making disparaging remarks when discussing the company or supervisors;”
• “and another that prohibited employees from depicting the company in any way over the internet without company permission.”

This position, which emanates from the NLRB’s Office of the General Counsel, seems to differ from a December 2009 Advisory Memorandum from the NLRB General Counsel’s Division of Advice that found lawful the social media policy of Sears, Roebuck and Co. prohibiting, among other things, “[d]isparagement of company’s . . . products, services, executive leadership, employees, strategy, and business products.”

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In this technology age, employees increasingly make personal use of workplace electronic communications applications. The legal ramifications of such personal use – and how employers can create policies that balance the right to monitor the workplace with employees’ expectations of privacy – were examined in an informative panel discussion, “Electronic Communications Policies in the Wake of Stengart and Quon” during Gibbons P.C.’s Fourth Annual E-Discovery Conference on October 28, 2010.

Discussion regarding Stengart

The panel kicked off with a discussion of the New Jersey Supreme Court’s March 30, 2010, ruling in Stengart v. Loving Care, which presented novel questions about the extent to which an employee could expect privacy and confidentiality in personal e-mails with her attorney that she accessed on a computer belonging to her employer. The Court held that an employee did not waive the attorney-client privilege when using a company computer to communicate with her attorney via a personal password-protected e-mail account, and that attorneys for the employer who failed to turn over the attorney-client communications found on the computer were subject to sanctions.

A panel member explained that Stengart does not prevent employers from implementing and enforcing unambiguous electronic communications policies or from monitoring employee communications pursuant to such policies. Nor does it prevent employers from imaging and reviewing the contents of an employee’s computer in conjunction with a lawsuit. Employers, however should refrain from reading any communications between an employee and her attorney uncovered as part of such reviews. For further discussion of the Stengart case, see the article co-authored by Richard Zackin and Kristin Sostowski.

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