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Presentation on theme: "ENERGY AUDIT & RETROFIT CONTRACT LEGALITIES & PITTFALLS HYATT & WEBER, P.A. By: Stephen B. Stern (410) 260-6585"— Presentation transcript:


2 Merriam – Webster defines social media as: Forms of electronic communication (as websites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos) What is Social Media?

3 FacebookYouTube TwitterLinkedIn MySpaceGoogle+ SpotifyPhotobucket Over 1,000 social networks Blogs – e.g., Examples of Social Media

4 Damage reputation Liability Disclosure of confidential information Disputes/uncertainty regarding ownership Cost of monitoring, updating Lost productivity Risks With Social Media

5 Recent survey (October 2011) of 300 hiring professional/managers conducted by social media monitoring service Reppler revealed that 91% of employers used social networking sites to screen applicants 69% of respondents claimed to have rejected a candidate because of something seen on a social networking site 47% of employers said they check social networking sites upon receiving job application 76% check Facebook 53% check Twitter 48% check LinkedIn 68% of employers said they hired a candidate based on something seen on a social networking site Risks With Social Media - Hiring

6 Fair Credit Reporting Act (FCRA) compliance required when a credit reporting agency is involved Risks With Social Media - Hiring Potential discrimination claims Federal, state, and local law

7 Sexual harassment Discrimination based on race, sex, age, other protected characteristic Even if use of social media alone does not constitute actionable discrimination, social media may contain evidence that is relevant to discrimination claim Potential benefit when defending claims (e.g., disability, workers compensation) Risks With Social Media - Discrimination A trial court in New York recently held that Facebook and MySpace content posted by the claimant had to be produced in a case where the plaintiff claimed that she suffered an injury that confined her to her home and she had posted pictures of her smiling and outside her home – Romano v. Steelcase, Inc.

8 Electronic Communications Privacy Act Stored Communicators Act Similar wire tapping statutes Common law invasion of privacy Computer Fraud and Abuse Act State statutes may protect off-duty conduct – e.g., New York statute protects legal recreational activities Pietrylo v. Hillstone Restaurant Group d/b/a Houstons, Civil No (FSH), 2009 WL (D.N.J. Sept. 25, 2009) Risks With Social Media – Privacy Concerns May an employer require an employee to provide passwords/access to a member only website/chat group where membership is by invitation only?

9 Examples of protected concerted activity Examples that are not protected concerted activity Risks With Social Media – NLRA Issues Working conditions Compensation issues Criticizing management/company Disclosing confidential information False statements/defamation Unlawful harassment/discrimination Not limited to union environments – standard is protected concerted activity

10 American Medical Response of Connecticut, Inc. Employer policy prohibited employees from engaging in lude or discourteous behavior and offensive conduct among other things Employee posted negative comments about her supervisor on Facebook (including calling her supervisor a scumbag); many employees responded favorably and with additional negative comments Employee was suspended and later terminated Policy found overbroad and interfered with Section 7 rights Employee found to engage in protected concerted activity because comment was in the context of supervisors request for an incident report regarding a customer complaint and subsequent refusal to grant employees request for a union representative Risks With Social Media – NLRA Issues

11 Hispanics United of Buffalo, Inc. Nonprofit organization provides social services to low-income clients Employee posted following on Facebook: Lydia Cruz, a coworker feels that we dont help our clients enough at HUB. I about had it! My fellow coworkers how do you feel? One employee responded: What the f*** Try doing my job I have 5 programs Another employee responded: What the Hell, we dont have a life as is, What else can we do??? Another employee responded: Tell her to come do my f***ing job n c if I dont do enough, this is just dum There were many other responses Employees (five total) were terminated for the posts three days later on the grounds that the posts constituted bullying and harassment in violation of HUBs policy on harassment. One employee (the supervisors secretary) was not terminated, even though she participated in the posts. ALJ found that the Facebook postings constituted protective concerted activity because the posts discussed the terms and conditions of employment in that they responded to criticism by a coworker regarding the manner in which the employees performed their jobs. Risks With Social Media – NLRA Issues

12 Defamation Consumer protection claims (e.g., false advertising) Copyright infringement Trademark infringement Violation of regulation (varies by industry) Bad press (not necessarily claim) Risks With Social Media – Other Claims

13 Preserving evidence Risks With Social Media – Document Retention Issues When the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) Duty to preserve evidence, including electronically stored information (ESI), arises

14 Risks With Social Media – Document Retention Issues Scope of the Duty to Preserve Evidence When the duty to preserve is triggered, a company must suspend its routine document retention/destruction policy and put in place a litigation hold This does NOT mean the company must retain EVERY and other DOCUMENT in its possession Only those documents (including electronic versions) that the company knows or reasonably should know are relevant to the (anticipated) litigation Those documents that are reasonably calculated to lead to the discovery of admissible evidence and that are reasonably likely to be requested during discovery

15 Risks With Social Media – Document Retention Issues Litigation Hold Company sponsored social media sites Social media accounts updated by employees (whether at work or on personal time – both could be relevant)

16 Risks With Social Media – Document Retention Issues Industry Regulations Financial Industry Regulatory Authority (FINRA) Notice What if employee recommends a security through social media? Does that trigger compliance with suitability requirements under NASD Rule 2310? FIINRA recommends prohibiting employees from recommending specific investment products or posting a link to such a recommendation through any interactive electronic communication unless a registered principal has approved the content Other FINRA issues concerning interactive electronic communication Requires member firms to monitor and archive business-related communications made on social media

17 Customer list concerns Sasqua Group, Inc. v. Courtney, CV (ADS) (AKT), 2010 WL (E.D.N.Y. Aug. 2, 2010) Risks With Social Media – Trade Secret and Other Intellectual Property Issues Employer executive search firm contended customer list is a trade secret Former employee demonstrated how the information was easily ascertained through LinkedIn, Facebook, and Bloomberg Employee obtained profession, position/title, contact information, even resumes/bios of individuals

18 One recent lawsuit alleged an employee sent LinkedIn invites to employee of former firm in violation of a non- solicitation provision Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies, Inc. 951 N.E. 2d 265 (Ind. Ct. App. 2011) – court found company that posted job with a LinkedIn Group where employee of other company was a member did not constitute soliciting or inducing in violation of parties no-hire agreement; rather the employee solicited the hiring company after seeing the job post Risks With Social Media – Trade Secret and Other Intellectual Property Issues Can an employee violate a non-compete or non- solicitation agreement via LinkedIn?

19 Who owns Twitter or LinkedIn accounts? Phonedog v. Kravitz (N.D. Cal.) - Phonedog claims former employee converted and misappropriated trade secret (a Twitter account and its password) and tortiously interfered with existing and potential followers and advertisers when employee changed Twitter account he used while employed to an account with his name Eagle v. Morgan (E.D. Pa.) – co-founder of company was terminated; new executives of company changed her LinkedIn password so she could not access account; new CEO continued to use her bio as her own and used her contacts; former employee alleges violations of CFAA, Lanham Act, identity theft, misappropriation of identity, conversion, tortious interference, and other claims and company has asserted counterclaims (many of which were dismissed) based on its claim that it invested resources to develop and maintain the account Risks With Social Media – Trade Secret and Other Intellectual Property Issues

20 Some Specific Items To Consider: Do you want to limit the time or place that employees can use social media? Do you want to prohibit certain content – e.g., trade secrets and other confidential information, content/postings that would violate any applicable law? Do you want to review all business-related content before it is posted? Do you want to claim an ownership interest in employee pages (e.g., LinkedIn accounts/contacts)? Do you want to train employees on appropriate content and on policies and practices? Who at the company will be responsible for monitoring/policing? Department specific? Particular employee? No one? Do you want to prohibit employees from linking a personal blog or networking site to the company site? Risks With Social Media – Practice Pointers

21 Some Specific Items To Consider (cont.): Do you want to prohibit employees from promoting/selling company products on personal blogs or networking sites? Do you want to prohibit employees from posting on personal blogs or networking sites photos of company employees, vendors, customers, or company events? Do you want to limit instances in which employees can identify themselves as company employees? Do you want to get signed acknowledgement forms from employees regarding social media policies? Policies that prohibit any disparaging comments about the company or co-workers may be found overbroad under the NLRA Risks With Social Media – Practice Pointers If employees identify with the company, do they need to give disclaimers when posting certain content on personal blogs or networking sites?

22 S trategy - develop a comprehensive social media strategy O wnership - identify company material C ontrol – what do you need/want to control? I nitiate change – policies and practices likely will need changes I mplement policies and practice that meet your companys needs A ct on violations - discipline L imit time for employee use and content M onitor - ensure compliance and your interests are protected E ducate - train your employees D o not think one size fits all A cknowledgment and Authorization forms Risks With Social Media – Practice Pointers

23 Stephen B. Stern Hyatt & Weber, P.A., 200 Westgate Circle, Suite 500, Annapolis, MD phone: (410) ; fax: (410) ; Stephen Stern is a partner in the firms employment, insurance, and commercial litigation practices. In connection with his employment practice, Mr. Stern helps employers minimize exposure to liability by developing and implementing effective employment policies and practices. In this regard, he advises employers on strategic matters, such as trade secret protection programs, non-compete, non-solicitation, and confidentiality agreements, wage and hour practices, privacy issues, independent contractor arrangements, employee handbooks, and document retention practices. In addition, he advises employers on issues that arise on a day-to-day basis, such as leave requests, employee discipline, accommodations for individuals with disabilities, and termination decisions. Mr. Stern also conducts training seminars and investigations into allegations of misconduct. When litigation has been required, Mr. Stern has successfully represented clients in federal and state courts and before federal, state, and local administrative agencies, including the EEOC and Department of Labor. His cases have involved claims under Title VII, ADEA, ADA, FLSA, FMLA, SOX, and similar state statutes. In addition, he has litigated numerous trade secret claims and cases involving non-compete, non-solicitation, and confidentiality agreements, and related tort claims. Mr. Stern also litigates a variety of other contract, tort, and statutory claims. In this regard, Mr. Stern has litigated matters involving consumer protection claims, bank loans, real estate, ownership interests in privately-held companies, unfair competition, fraud, commercial contracts, mass torts, professional discipline, false imprisonment, and civil rights violations. In addition to his law practice, Mr. Stern is involved in community activities, such as Bnai Brith International, for which he serves on the Executive Committee and Board of Governors. Through Bnai Brith, Mr. Stern attends embassy events and policy conferences and he travels to foreign countries to meet with government leaders and members of various communities, among other things.

24 Publications "Strategies for Analyzing and Responding to Sarbanes- Oxley Whistleblower Claims," Chapter in "Complying With Sarbanes-Oxley's Whistleblower Provisions," Aspatore Books (2009) Pleading a Sarbanes-Oxley Act Whistleblower Claim: What is Required to Survive?, The Labor Lawyer (Fall 2007) Employers Need to Be Aware of the Various Laws, Regulations and Common Duties that Govern Apprenticeship Programs, Human Resource Executive, Legal Primer (January 25, 2006) Supreme Court Rules On Evidentiary Matters Involving Mixed-Motive Employment Discrimination Cases, FindLaw Corporate Counsel Center, (in summary) National Law Journal (September 2003), Corporate Counsel (October 2003) Legal Risks of Electronic Surveillance in the Workplace, Maryland Bar Journal (February 1, 2002) Revisiting the 8/80 Rule: Drawbacks and Perk, Baltimore Business Journal (April 1, 2000) Presentations and Speaking Engagements Guidelines for Conducting Effective Investigations, Anne Arundel Society for Human Resource Management (February 16, 2012) Top 5 Employment Issues That Keep HR Managers Awake at Night, Montgomery County SHRM Professional Development Seminar (May 5, 2011) Conducting Effective Investigations, Washington Metro Industry Liaison Group (April 28, 2011) Strategies and Legal Considerations When Conducting Investigations, Northern Virginia SHRM (February 15, 2011) Strategies for Wage & Hour Compliance: How to Avoid the Wave of Wage & Hour Litigation, Northern Virginia SHRM (June 15, 2010) Guidelines for Conducting Effective Workplace Investigations, Montgomery County SHRM (March 17, 2010) Navigating Compliance with the ADA, 6th Annual Maryland SHRM State Conference (December 7, 2009) "How to Protect Your Company in an Economic Downturn," Montgomery County SHRM Professional Development Seminar (May 13, 2009) HRs Role in Protecting Intellectual Property and Confidential Information, 5th Annual Maryland SHRM State Conference (December 4, 2008) Summary of Intellectual Property Law Basics and Expanded Seminar, Motorcycle Industry Councils Annual Meeting (February 15, 2008) Harassment Prevention, American Correctional Association Winter Conference 2008 (January 16, 2008) Compensation Plans: Identifying Potential Liability for Maryland Employers, 2007 Maryland SHRM State Conference (December 4, 2007) Protecting Trade Secrets and Other Confidential Information, 2007 Virginia State SHRM Conference (October 3, 2007) Stephen B. Stern Hyatt & Weber, P.A., 200 Westgate Circle, Suite 500, Annapolis, MD phone: (410) ; fax: (410) ;

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