Tag: Social Media

Legal Issues Surrounding Social Media Background Checks

Posted in the National Law Review an article by Michelle Sherman of Sheppard Mullin Richter & Hampton LLP regarding establishing an internal procedure for using the Internet to make employment decisions is one more piece of a sound ethics and compliance program that addresses how your company is using social media.

Agatha Christie had a novel take on invention being the mother of necessity. She disagreed and said, “[I]nvention, in my opinion, arises directly from idleness, possibly also from laziness. To save oneself trouble.” She may have been onto something when you think about businesses that are turning to outside vendors to research employees and job candidates for them. Whether or not these outside vendors are the best solution, however, remains to be seen.

  1. Companies Should Have An Internal Procedure For Researching Job Candidates And Employees On The Internet

We recommended earlier this year that businesses establish an internal procedure for making employment decisions based on Internet research, so they would not run afoul of state and federal laws that prohibit job discrimination based on protected factors. The protected factors include, for example: (1) Race, color, national origin, religion and gender under Title VII of the Civil Rights Act of 1964; and (2) Sexual orientation, marital status, pregnancy, cancer, political affiliation, genetic characteristics, and gender identity under California law. Most states have their own list of protected factors, which should be considered depending on where your company has employees.

Not surprisingly, the legal risks of making employment decisions using the Internet have become a real concern for businesses, especially when you consider that 54% of employers surveyed in 2011 acknowledged using the Internet to research job candidates. The actual number of employers using the Internet is probably higher, and sometimes companies may not even be aware that their employees are researching job candidates and factoring that information into their evaluations. This is yet another reason to establish an internal procedure for researching job candidates, and communicating your procedure to employees who are participating in the employment process.

There is nothing wrong with researching people on the Internet so long as it is done properly. The Internet has a wealth of useful information, some of it intentionally posted by job applicants for employers to consider such as LinkedIn profiles.

With this “necessity” to do Internet searches properly, some businesses have turned to outside vendors to do the research for them, and, thereby, try to reduce their legal exposure and the administrative inconvenience of doing it themselves. At least one of these vendors has received letters concerning its business practices from the Federal Trade Commission (“FTC”) and, more recently, two U.S. Senators.

  1. The Business Practices Of Outside Vendors That Provide Social Media Background Checks Are Being Examined For Compliance With Privacy And Intellectual Property Laws

On May 9, 2011, the staff of the FTC’s Division of Privacy and Identity Protection sent a “no action” letter to Social Intelligence Corporation (“Social Intelligence”), “an Internet and social media background screening service used by employers in pre-employment background screening.” The FTC treated Social Intelligence as a consumer reporting agency “because it assembles or evaluates consumer report information that is furnished to third parties that use such information as a factor in establishing a consumer’s eligibility for employment.” The FTC stated that the same rules that apply to consumer reporting agencies (such as the Fair Credit Reporting Act (“FCRA”)) apply equally in the social networking context. These rules include the obligation to provide employees or applicants with notice of any adverse action taken on the basis of these reports. Businesses should also be mindful of similar state consumer protection laws that may be applicable (e.g. California Investigative Consumer Reporting Agencies Act).

The FTC concluded by stating that information provided by Social Intelligence about its policies and procedures for compliance with the FCRA appears not to warrant further action, but that its action “is not to be construed as a determination that a violation may not have occurred,” and that the FTC “reserves the right to take further action as the public interest may require.” This FTC “no action” letter was reported fairly widely, and probably increased the comfort level of businesses that wanted to use an outside service for Internet background checks.

On September 19, 2011, Senators Richard Blumenthal (D-Conn) and Al Franken (D-Minn) sent a letter to Social Intelligence with 13 questions regarding whether the company is taking steps to ensure that the information it is gathering from social networks is accurate, whether the company is respecting the guidelines for how the websites and their users want the content used, and whether the company is protecting consumers’ right to online privacy. The letter raises some legitimate concerns, and requests a prompt response from Social Intelligence to the questions presented.

  1. Legal Assurances That Your Company May Want To Seek If Using An Outside Vendor

Some of the questions also warrant due consideration on the part of businesses receiving reports from outside vendors about how much weight they want to give the information provided. Further, what the business may want in the form of legal assurances from the outside vendor that no laws (e.g. FCRA, privacy, copyright, or other intellectual property laws) have been violated in gathering the information or providing screenshot copies of pages from social networking sites.

Some of the questions from the Senators which raise these concerns include, for example:

1. “How does your company determine the accuracy of the information it provides to employers?” [Social Intelligence is reportedly collecting social networking activity dating back 7 years, and, therefore, may capture something that was later removed, or was a “tag” post through a picture that the job candidate was not responsible for making public, and may have removed once it came to his attention.]

2. “Is your company able to differentiate among applicants with common names? How?” [e.g. Have they researched the correct “Jane Smith” of the hundreds on Facebook since social security numbers or other specific identifying information is not useful on social networking sites as it is with the standard background check.]

3. “Is the information that your company collects from social media websites like Facebook limited to information that can be seen by everyone, or does your company endeavor to access restricted information.”

4. “The reports that your company prepares for employers contain screenshots of the sources of the information your company compiles…These websites are typically governed by terms of service agreements that prohibit the collection, dissemination, or sale of users’ content without the consent of the user and/or the website….. Your company’s business model seems to necessitate violating these agreements. does your company operate in compliance with the agreements found on sites whose content your company compiles and sells?”

5. There appears “to be significant violations of user’s intellectual property rights to control the use of the content that your company collects and sells. …. These pictures [of the users], taken from sites like Flickr and Picasa, are often licensed by the owner for a narrow set of uses, such as noncommercial use only or a prohibition on derivative works. Does your company obtain permission from the owners of these pictures to use, sell, or modify them?”

  1. Conclusion

Establishing an internal procedure for using the Internet to make employment decisions is one more piece of a sound ethics and compliance program that addresses how your company is using social media. If using an outside vendor to perform social media background checks is part of that policy, you should assure yourself that the company is acting in compliance with the relevant laws.  

Copyright © 2011, Sheppard Mullin Richter & Hampton LLP.

Administrative Law Judge Finds Employer Unlawfully Discharged Employees Based on Facebook Posts

Recently posted  in the National Law Review an article by Stephen D. Erf, Heather Egan Sussman and Sabrina E. Dunlap  of McDermott Will & Emery regarding the NLRB found that an employer unlawfully terminated five employees because they posted comments on Facebook:

In a first of its kind ruling, a National Labor Relations Board (NLRB) Administrative Law Judge (ALJ) found that an employer unlawfully terminated five employees because they posted comments on Facebook related to working conditions.  This is a landmark decision because, up to this point, employers have only been able to rely on the prosecution trends of the General Counsel’s office, including a recently issued report on the topic, and not actual decisions by the adjudicative body of the NLRB.

This landmark case involved an employee of Hispanics United of Buffalo (HUB) (a nonunionized organization), who posted a message on Facebook sharing critical comments made by a coworker concerning employees’ poor job performance and asking for the employees’ reactions.  Five employees commented on the post, defending their job performance and criticizing the critical employee and their working conditions, including work load and staffing problems.  HUB later discharged the Facebook poster and the employees who responded to the post, stating that their comments constituted harassment of the critical coworker.

Based on an unfair labor practice charge filed by one of the employees, the NLRB’s Buffalo Regional Director issued a complaint in May 2011. The ALJ heard the case in July and, on September 2, issued a written decision finding that the employees’ Facebook posts were protected concerted activity under Section 7 of the National Labor Relations Act (NLRA) because they concerned a conversation among coworkers about the terms and conditions of employment and the employees’ conduct was not sufficiently inappropriate as to lose the protection of the NLRA.  The ALJ awarded the employees back pay and ordered HUB to reinstate the five employees.  The ALJ also ordered HUB to post a notice at its Buffalo facility explaining to employees their rights under the NLRA and committing not to violate those rights in the future.

While NLRB complaints related to social media have been on the rise, this is the first ALJ decision specifically addressing employees’ use of Facebook.  As a result, employers are wise to consider the ALJ’s decision when disciplining employees based on social media activity.

© 2011 McDermott Will & Emery

Facebook & Extramarital Affairs: Beware!

Posted on Wednesday, August 3, 2011 in the National Law Review an  article by Rebecca L. Palmer  Timothy C. Haughee of Lowndes, Drosdick, Doster, Kantor & Reed, P.A. regarding a growing number of married people are using Facebook to reunite with old flames or to connect with those with whom they seek a romantic relationship.

With the advent of social networking sites such as Facebook, people are now able to reconnect with long-lost friends with just the click of a mouse. While many take advantage of Facebook’s added convenience to make innocent connections with others, a growing number of people are using Facebook to reunite with old flames or to connect with those with whom they seek a romantic relationship. For a married person, this can be a real marriage disaster.

According to a 2008 report by the Pew Internet and American Life Project, one in five adults, many of whom are married, use Facebook for flirting. A British divorce website, Divorce-Online, recently reported that the term “Facebook” appeared in nearly 20% of the petitions it was handling last year, out of a case load of 7,000. Indeed, in one recent survey conducted by the American Academy of Matrimonial Lawyers, two-thirds of lawyers said Facebook was the “primary source” of evidence in divorce proceedings.

So, does Facebook cause extramarital affairs? While the statistics referenced above may lead one to conclude that Facebook can cause extramarital affairs, there has yet to be evidence of such a causal link. In fact, the divorce rate has generally been stable during the last decade, and infidelity’s role as the primary cause of around 25% of divorces has also remained stable, despite advances in the digital age. However, while there may not be a direct causal link between Facebook and extramarital affairs, it is abundantly clear that Facebook enables married individuals to cheat on their spouses in a manner that is easier than previous methods. No longer do you have to write a letter to your old flame, or obtain their phone number and place a call, hoping that an irritated spouse does not answer. Instead, an online Facebook account allows easy connectivity, fast replies, mail accounts that can be easily deleted, advanced privacy settings, and the seamless sharing of pictures and other information, at any hour of the day or night. Simply stated, Facebook can tempt a married individual to pursue an extramarital relationship that they otherwise would not have pursued. If that temptation is acted upon, the married individual can maintain the extramarital relationship online and delete the evidence at their convenience, all without the knowledge of their spouse.

Facebook’s prevalence in extramarital affairs has, in turn, also led it to become a favorite evidence tool for divorce attorneys. The American Academy of Matrimonial Lawyers recently reported that 81% of its members have used or faced evidence taken from Facebook or other social networking sites over the last five years. Such evidence can have dramatic consequences for a party in a divorce case. For instance, a mother’s alienation of affliction claim may be bolstered by evidence of the father forcing the couple’s son to “de-friend” his mother on Facebook. A parent going through a divorce may have their request for additional timesharing with their child denied if the court is presented with pictures from Facebook depicting the parent drinking or doing drugs when the child is in their care. A divorcing spouse seeking alimony based on a lack of earning capacity may have their request denied by the court if the requesting spouse’s Facebook account is littered with pictures of the spouse spending their free time and money at restaurants and bars.

The law is currently unsettled regarding the use of information obtained from Facebook during a family law proceeding. However, recent case law should leave Facebook users, and their family law attorneys, wary. For instance, a judge in Pennsylvania recently found that the husband in a divorce case had to provide his wife’s attorneys with his Facebook username and password, despite the husband’s objection that his Facebook information was private and thus deserving of an evidentiary privilege. The judge rejected the husband’s arguments, noting that the husband had no expectation of privacy because Facebook’s End User License Agreement (“EULA”) notes that all user accounts are subject to, and are at any time accessible by, third party administrators. Since the husband accepted Facebook’s EULA when he signed up for Facebook, the court found an implicit waiver of confidentiality regarding the information contained on his Facebook page. While the Pennsylvania decision is not binding on Florida courts, it is most assuredly instructive.

Accordingly, a person should be extremely cautious with their Facebook account when going through a divorce. Among other things, a divorcing individual should refrain from denigrating their spouse on Facebook, and should generally avoid posting comments on their Facebook accounts that they would not want a judge to read in open court. Additionally, a divorcing spouse should abstain from posting pictures or videos that may be damaging to their divorce case, including pictures or videos that are sexually explicit or show the divorcing spouse binge drinking or doing drugs and exposing their children to the same. Similarly, a divorcing spouse should take note of the information posted by their Facebook “friends,” such as pictures or videos that “tag” the divorcing spouse, and should ask such “friends” to remove the damaging information from their Facebook page. Finally, a divorcing spouse should consider changing their Facebook privacy settings so that they can limit the information that they share, and if that is not enough, a divorcing spouse should consider deleting their Facebook account during their family law case.

We continue to find technology changing human relationships. From readily accessible pornography to explicit social networking websites (including at least one aimed at assisting married individuals to enter into extramarital affairs) to Facebook, family life is no longer made up of the innocence of Ward and June Cleaver. Consequently, using good judgment and carefully monitoring your Facebook account during a family law proceeding can have a significant impact on your case.

© Lowndes, Drosdick, Doster, Kantor & Reed, PA, 2011. All rights reserved.

Why Companies Want Arbitrators Who Have A Public Profile On LinkedIn And The Internet

Recently posted on the National Law Review by Michelle Sherman of Sheppard Mullin Richter & Hampton LLP – some things to think about involving social media and arbitrators: 

Your company has a dispute with a vendor or customer, and the terms of the agreement between the company and the person you are about to sue provide for binding arbitration. It is common for contracts to have arbitration provisions. Arbitration is viewed as less expensive and more expeditious than litigating a dispute in court. Arbitration provisions also allow the parties to agree that consequential (e.g. down time, finance fees, lost profits) and/or punitive damages cannot be awarded. Arbitration also gives the parties more control in deciding who will adjudicate their dispute, rather than having a judge randomly assigned to your case. There are many positives to arbitrating a dispute.

The only real downside that comes to mind is that arbitration awards are extremely difficult to set aside. In California, an arbitration award will stand unless the party challenging the decision can show (1) “the award was procured by corruption, fraud, or other undue means”; (2) “the rights of the party were substantially prejudiced by the misconduct of a neutral arbitrator”; or (3) an arbitrator failed to make a timely disclosure of a conflict which would be a ground for disqualification. Cal. Civ. Proc. Code § 1286.2. The Federal Arbitration Act includes similar limited grounds for vacating an award, with “evident partiality or corruption in the arbitrators, or either of them,” being one ground. 9 U.S.C. § 10.

Consequently, companies assume a significant risk when choosing an arbitrator to decide their dispute. Arbitrators also charge rates ranging from $350 – $625 per hour. It behooves the company and its counsel to research the prospective arbitrators before settling on one or a panel of arbitrators. Before the Internet, legal counsel would rely on word of mouth, and seek input from attorneys at their firm. With the Internet and the professional networking site, LinkedIn, there is much more information available.

On LinkedIn, for example, the potential arbitrators can make their connections available to anyone who is connected to them, which is easy enough to do by accepting a request to connect. This is one way to disclose if they are affiliated with anyone who is a party, witness, or interested party in the action. And, it is an easy way to invite questions if anyone is concerned about a connection, which will not be a problem in most instances. Being “connected” on LinkedIn does not necessarily mean there is a relationship that would “cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial…” Cal. Civ. Proc. Code § 1281.9(a). It is also worth looking at what LinkedIn groups the prospective arbitrators have joined to see if there is anything that would indicate a potential bias in your case. LinkedIn profiles usually include the employment history of the person, and also websites if they have one.

Information from the Internet has resulted in one judge disqualifying himself when it became public. In the Ninth Circuit, a judge was in the middle of an obscenity trial when the Los Angeles Times broke a story that the judge had an extensive collection of suggestive or explicit images and videos on his personal computer server. It turned out that the server was connected to the Internet, and, through that connection, the images on his personal website had become publicly available. The judge, the Honorable Alex Kozinski, disqualified himself from hearing the obscenity case. Judge Kozinski also declared a mistrial in the case. The newspaper story had raised a suspicion that the court could be biased in favor of the defendants.

In another case, a motion to vacate an arbitration award was granted because the arbitrator Sean SeLegue did not disclose that his legal practice centered on representing law firms in disputes with their clients, and that he was currently involved in representing a law firm in a fee dispute with it former client. Benjamin, Weill & Mazer v. Kors. The perceived conflict could have been avoided if the arbitrator had disclosed the case. Alternatively, if the party moving to vacate the award had done her due diligence, she would have found numerous Google hits showing the nature of the arbitrator’s practice, including his profile on his law firm’s website, and his membership in the Association of Discipline Defense Counsel, an organization that describes itself as the “bar association for lawyers who represent lawyers and others in disciplinary, admissions and regulatory proceedings before the State Bar of California and the California Supreme Court.” Since Kors was in a fee dispute with her prior counsel, she would have probably asked SeLegue to withdraw as one of three arbitrators if she had known about his potential conflicts. A motion for rehearing has been granted in this case, so the case cannot be cited.

At a February 2011 conference for arbitrators in Los Angeles, one speaker reportedly told his audience that arbitrators should avoid social networking sites altogether, including LinkedIn because of the risk of perceived conflicts. This advice is misguided and shortsighted. The problem does not rest in having a presence on LinkedIn or the Internet. In fact, this may be one of the best ways for professionals to make themselves known and visible. This is especially true in fields where there is lots of competition, and a wide range of choices. It is unreasonable and unfair to discourage arbitrators, who are drawn from retired judges, law professors, litigators and trial attorneys, from having websites, participating in LinkedIn groups, or taking advantage of the resources on the Internet to market themselves. Also, information on the Internet benefits parties who are trying to find the most suitable arbitrator(s) for their dispute.

The better wisdom is for arbitrators to immediately disclose to parties who are considering their services where they appear on the Internet (websites, professional associations, blog articles), and invite the parties upfront to connect if they want to see a list of their LinkedIn connections.

When choosing an arbitrator, remember the Internet and LinkedIn are wonderful resources that can possibly provide more information than word of mouth, and second hand information. The upside is possibly avoiding an arbitration award that will be binding and final, if a better “neutral” had been selected with a little investment of time and knowledge of the Internet.

Copyright © 2011, Sheppard Mullin Richter & Hampton LLP.