1. MILLER & MARTIN PLLC Atlanta, Chattanooga, Nashville Social Networking: The Intersection of Ethics and Workplace Law Social Networking in the Modern Workplace Tennessee Valley Public Power Association Accounting and Finance Conference Chattanooga, Tennessee – October 19, 2011 William G. Trumpeter Carlos C. Smith E-Mail: btrumpeter@millermartin.com E-Mail: ccsmith@millermartin.com Telephone (423) 785-8318 Telephone (423) 785-8359

2. © Miller & Martin PLLC 2011 This presentation is an educational discussion of legal and ethical issues in the workplace, some of which have arisen in or relate only to specific and now- concluded cases in state and federal courts and agencies and to no other future, pending or threatened case or controversy. The views and opinions in this presentation are for educational purposes only, are sometimes based upon hypothetical or assumed facts, and do not necessarily represent the views of the Tennessee Valley Public Power Association (“TVPPA”) nor Miller & Martin PLLC or any client or legal opinion of Miller & Martin PLLC. The discussions in this presentation are very general in nature and not fact-specific to any particular fact or circumstance. Legal advice with respect to the application of law to facts and circumstances discussed in this presentation may not apply to situations believed similar by an attendee or reader because of either variations in state laws or some one or more facts not fully considered that could change an opinion. Attendees at the conference and readers of this presentation are encouraged to seek specific legal advice as to specific circumstances affecting any particular workplace situation on which the general principles discussed in this presentation may or may not apply. All rights are reserved in, and the copyrights to, the logos of “TVPPA” and “Miller & Martin PLLC” as the property of the Tennessee Valley Public Power Association and Miller & Martin PLLC respectively. Reproductions and distribution of this presentation is authorized if limited to internal use by personnel of TVPPA member systems. All other reproductions and use is to be granted by permission only.

3. © Miller & Martin PLLC 2011 Munis and Coops Considerations of Legal Structure and Relevant Legal Considerations in Law and Ethics as to Social Networking Forms of Employee Bargaining Groups –IBEW – Agreements With Coops –IBEW – Memoranda “Agreements” –Employee Associations –Unrepresented

4. © Miller & Martin PLLC 2011 Unique Issues For Munis United States Constitution Due Process Clause Employment Status – “Property Right?” –Termination –Discipline –Process Used

5. © Miller & Martin PLLC 2011 Issues to Consider Government Property: Employer-provided Desktop Computers, PDAs, Cell Phones, Laptops Public Records Statutes - Scope Does a government employee have privacy rights as to emails, other digital data, “things” in desks and lockers? Cooperatives – Comparable Issues

6. © Miller & Martin PLLC 2011 Muni/Coop Parallels NLRA The Bargaining Unit Contract Constitutional and State Law Protections For Governmental Employees City Ordinances Civil Service Employers

7. © Miller & Martin PLLC 2011 The Social Networking Wave (Tsunami?) Cell Phones Web Sites Chat Rooms Blogs Texting (SMS) Wikis

8. © Miller & Martin PLLC 2011 How Employers are Surfing the Web Recruiting Background checks Investigations Marketing Efforts Other Consumer-based Uses

9. © Miller & Martin PLLC 2011 Benefits of Social Networking Immediate Access Relatively Cheap Able to Contact Large Masses Able to Target Others?

10. © Miller & Martin PLLC 2011 So, What’s the Downside? Loss in employee productivity Potential discrimination claims Fair credit reporting laws Privacy concerns/off-duty conduct statutes Employee postings that are harmful to the company

11. © Miller & Martin PLLC 2011 So, What’s the Downside? Bath in Burger King Sink

12. © Miller & Martin PLLC 2011 Employee Posting Pitfalls Divulgence of trade secrets or other confidential information Divulgence of future business plans or products Comments on legal matters/pending litigation Discussions that may violate company policy Anti-harassment policies Non-solicit agreements Others?

13. © Miller & Martin PLLC 2011 Employee Posting Pitfalls An assistant walks into the office and finds an explicit picture lying on the printer next to her desk. Your IT department determines that the picture was sent from her boss’ computer. Come to find out, he likes to surf internet porn sites at work because his wife won’t let him do it at home. What do you do? Does it matter whether you have a policy addressing an employee’s expectation of privacy with respect to emails and computer usage? What if some of the sites surfed are child pornography?

14. © Miller & Martin PLLC 2011 Employee Posting Pitfalls An employee has a MySpace page on which he talks poorly about his supervisor, calls the supervisor some profane names, and threatens to get him one day after work. What can you do? Does it matter what computer the employee uses to access the MySpace page? What if the employee is talking poorly about company policies, like pay or vacation time? What if the employee blogs his “message” and other employees join in?

15. © Miller & Martin PLLC 2011 Employee Posting Pitfalls An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. What if the poster made claims about the product that turned out to be untrue? And cost the message board community money?

16. © Miller & Martin PLLC 2011 FTC Guidelines October 5, 2009 – FTC released its Final Guides Concerning the Use of Endorsements and Testimonials in Advertising. Requires endorsers, including employees, to disclose “material connections” that exist between endorsers and the product/company about whom they comment. “Material connections” include an employment relationship. Designed to protect consumers from deceptive endorsements or advertisers. But, goes well beyond what some expect.

17. © Miller & Martin PLLC 2011 FTC Guidelines Holds companies accountable for actions of its employees. Any online recommendation or other endorsement of clients, customers, suppliers, or other third parties based on the express or implied promise of compensation, kickbacks or continued business may result in potential liability for employers under these new guides. Company can be held liable for unsubstantiated or false claims made by employees even if they are not authorized to make such comments.

18. © Miller & Martin PLLC 2011 Ethical Guidelines Honesty: State only what you know to be true – and be clear about opinion or conjecture vs. fact. Transparency: Be straightforward about who you are – and who you’re representing online. Respect: Respect for yourself, your peers, and even your adversaries. Privacy: Treat the intimate details of others as you would your own personal information. Relevance: Ensure that the content you’re posting is relevant to the audience and the venue where it’s being posted. Responsibility: Take ownership of your online activities, the content you’ve created, and any missteps you’ve made along the way.

19. © Miller & Martin PLLC 2011

20. So, Can’t I Just “Dooce” Them? Doocing – terminating an employee for inappropriate, off-duty online communications related to employment. Heather Armstrong created a blog, www.dooce.com, where she posted gripes about her employer and made unflattering comments about her supervisors and co-workers. www.dooce.com Armstrong was terminated from her web design position for violating the company’s zero-tolerance policy regarding negativity.

21. © Miller & Martin PLLC 2011 So, Can’t I Just “Dooce” Them? Laws to consider National Labor Relations Act Electronic Communications Privacy Act (ECPA) First Amendment Whistleblowers Invasion of Privacy

22. © Miller & Martin PLLC 2011 Wal-Mart Is an Evil Empire* Description: I think the title of our group is pretty self- explanatory, but here is some extra information in case you need it. Wal-Mart Heiress Returns Degree: http://www.cnn.com/2005/US/10/19/walmart.chea ting.ap/ They are on the Top 20 list of traders with China; the rest of the U.S. as a whole is on that same list. Over 80% of their stuff is from China, yet they claim that they're trying to help the everyday Americans. The people that shop at Wal-Mart the most are the union workers that are losing their jobs when the companies move their factories to China, and Wal-Mart is only supporting it. So much for supporting the people they claim to support.... * Not necessarily the view of the presenters.

23. © Miller & Martin PLLC 2011 National Labor Relations Act You do not have to be unionized for the NLRA to apply! Section 7 of the NLRA gives employees the right to engage in “concerted activity for the purpose of collective bargaining or other mutual aid and protection.”

24. © Miller & Martin PLLC 2011 National Labor Relations Act Examples of protected concerted activities: 2 or more employees address their employer about improving their working conditions and pay. 1 employee speaks to his/her employer on behalf of him/herself and one or more co-workers about improving workplace conditions. 2 or more employees discussing pay or other work-related issues with each other.

25. © Miller & Martin PLLC 2011 NLRB and Social Media The Social Media has replaced the office water cooler.

26. © Miller & Martin PLLC 2011 Case Study Non-profit social service agency. One employee criticized the work performance of several co- workers. Stated that she was going to complain to her boss. Co-worker posted remarks critical of the employee. Four others posted remarks supportive of the original post. The non-profit fired the 5 employees who posted remarks on basis that they were engaged in “cyber- bullying” or “harassment” of their fellow worker.

27. © Miller & Martin PLLC 2011 Case Study NLRB: Postings were protected, concerted activity. Clearly a call to group action, purpose was mutual aid and protection, involved working conditions. Was not equal to legal harassment, so, therefore, did not lose its protection.

28. © Miller & Martin PLLC 2011 Case Study Employee had a dispute at work with her supervisor. That night, at home, she posted negative comments about the supervisor which drew supportive responses from her co- workers, which led her to write additional negative remarks. Company fired her for posting negative remarks.

29. © Miller & Martin PLLC 2011 Case Study NLRB: Protest of supervisory actions is protected conduct. Did not lose protection since it was not severe enough – calling supervisor “scumbag” apparently okay.

30. © Miller & Martin PLLC 2011 Case Study Employee worked for a car dealer that sold BMWs. Next door, employer had Land Rover dealership. Employee posted negative comments about the Company’s “cheap” selection of food at a special sales event to roll-out the new, BMW 5 Series. Employees had discussed how the food selection was not in line with BMW’s image, how customers might react, and how it might cost salesmen commissions.

31. © Miller & Martin PLLC 2011 Case Study One of the salesmen posted the following, complete with mocking pictures: –“I was happy to see that the employer went all out for the important car launch by providing small bags of chips, inexpensive cookies from the warehouse, semi-fresh fruit, and a hot dog cart where clients could get over-cooked hot dogs and stale buns.”

32. © Miller & Martin PLLC 2011 Case Study Also posted pictures of an accident at Land Rover dealership next door in which a 13-year- old child of a customer drove a vehicle in a pond. Made “funny” remarks. Employer fired employee for the Land Rover postings.

33. © Miller & Martin PLLC 2011 Case Study NLRB: Contended the Company fired him because of the criticism of the food selection. That was alleged to be illegal because it was protected, concerted activity. ALJ agreed with NLRB that posting about food was protected and concerted but held: Sole motive for discharge was Land Rover postings which were “individual” actions not related to work conditions.

34. © Miller & Martin PLLC 2011 Case Study Reporter posted offensive tweets. Got in trouble the first time for criticizing the paper’s copy editors. No violation as no evidence he was acting on behalf of or with support of other employees. Continued to tweet about events occurring in the city. Tweeted information critical of an area TV station. Fired.

35. © Miller & Martin PLLC 2011 Case Study NLRB declined to issue complaint because he was fired for tweeting about items that did not involve protected, concerted activity. Conduct did not relate to working conditions.

36. © Miller & Martin PLLC 2011 Case Study Employer gets word that its employees are talking to a union organizer about forming a union. Being tech savvy, Employer goes to Facebook to see what employees are saying. 1.Can employer do that? 2.What if the posting is password protected? 3.Can Employer ask another employee with access to look at site for it? 4.What if Employer puts out notice that it is reviewing Facebook accounts of employees?

37. © Miller & Martin PLLC 2011 Test for Determining When Concerted Conduct Loses Its Protection Where does activity occur? Work Outside work Disrupt work? What is the subject matter? Nature of the Outburst Verbal threats Physical threats Battery Provocation

38. © Miller & Martin PLLC 2011 Test for Determining if Conduct Loses Protection Due to Disloyalty, Disparagement, Defamation Is communication related to ongoing labor dispute? Is it so disloyal, reckless, or maliciously untrue?

39. © Miller & Martin PLLC 2011 National Labor Relations Act Under the Social Media Policy, employees couldn’t post: Utility confidential or proprietary information Confidential or proprietary information of clients, partners, vendors, and suppliers Embargoed information such as launch dates, release dates, and pending reorganizations

40. © Miller & Martin PLLC 2011 National Labor Relations Act Under the Social Media Policy, employees couldn’t post: Explicit sexual references Reference to illegal drugs Obscenity or profanity Disparagement of any race, religion, gender, sexual orientation, disability or national origin

41. © Miller & Martin PLLC 2011 National Labor Relations Act Under the Social Media Policy, employees couldn’t post: Company intellectual property such as drawings, designs, software, ideas and innovation Disparagement of Utility’s or competitors’ products, services, executive leadership, employees, strategy, and business prospects

42. © Miller & Martin PLLC 2011 National Labor Relations Act Test for whether a work rule is valid: Obvious prohibition of Section 7 activities (e.g., “employees who discuss a union will be fired”)? Would employees reasonably construe the rule to prohibit Section 7 activities? Was the rule promulgated in response to union organizing? Has the rule has been applied to restrict the exercise of Section 7 rights?

43. © Miller & Martin PLLC 2011 Electronic Communications Privacy Act (ECPA) Makes it unlawful to: Listen to or observe the contents of a private communication without the permission of at least one party to the communication. Intentionally intercept, access, disclose, or use one’s electronic communications, which has been interpreted to include email.

44. © Miller & Martin PLLC 2011 Electronic Communications Privacy Act (ECPA) Exceptions that are helpful to employers: The Provider Exception – available to employers who provide their employees with email through a company- owned system. Ordinary Course of Business Exception a.Content Approach – permits employers to monitor business-related communications but not personal ones. b.Context Approach – must be a legitimate business reason for monitoring. Consent Exception – employees either impliedly or actually consent to monitoring.

45. © Miller & Martin PLLC 2011 First Amendment Rights This is a free country – I can say what I want – can’t I? Well, maybe not. Just because you have a personal website or like to blog in your free time, what you say is not necessarily protected by the First Amendment. The First Amendment offers no protection from termination by private employers.

46. © Miller & Martin PLLC 2011 Whistleblower/Retaliation Federal (Sarbanes-Oxley, Title VII) State Statute (e.g. Tennessee Public Protection Act) State Common Law

47. © Miller & Martin PLLC 2011 So What Is A Utility To Do? Anticipate the Pitfalls Even if your employees do not use computers at work, they probably do at home – and they may be talking about you. Every employer in every work environment should consider how social media could impact its workforce or company. What steps should you take now to avoid problems down the road?

48. © Miller & Martin PLLC 2011 So What Is A Utility To Do? Establish Clear Policies Hardware, software & systems Harassment Trade Secrets Confidentiality, non-compete, and non-solicitation Use of Electronic Communication on Non- Working Time Social Networking & FTC requirements

49. © Miller & Martin PLLC 2011 What Should the Policy Include? Prohibited Subjects: In order to maintain the Utility’s reputation and legal standing, the following subjects may not be discussed by associates in any form of social media: Utility confidential or proprietary information Confidential or proprietary information of customers, partners, vendors, and suppliers Embargoed information such as launch dates, release dates, and pending reorganizations

50. © Miller & Martin PLLC 2011 What Should the Policy Include? Utility intellectual property such as drawings, designs, software, ideas and innovation Disparagement of company’s or competitors’ products, services, executive leadership, employees, strategy, and business prospects Explicit sexual references Reference to illegal drugs Obscenity or profanity Disparagement of any race, religion, gender, age, sexual orientation, disability or national origin

51. © Miller & Martin PLLC 2011 What Should the Policy Include? “Violation of policy will subject employee to discipline up to and including termination.” “The provisions of this policy will not be construed or applied in a way that interferes with employees’ rights under the law.”

52. © Miller & Martin PLLC 2011 So What Is A Utility To Do? Whose job will it be to monitor violations? Who will monitor your social media activity? Automated resources available such as Google Alerts How will you discipline violators?