Thursday, November 20, 2014

Don’t forget the photo authorizations for your holiday party

Are you having a holiday party for your company? Are you planning on sharing the cheer by posting photos of said party on your corporate Facebook page or other social media? If so, don’t forget to have your employees sign authorizations before you post those photos.

Like many states, Ohio has a statute that protects an individual’s name, voice, signature, photograph, image, or likeness. This “right of publicity” prohibits one from using another’s persona for a commercial purpose without written consent.

It may be sufficient to have statement in your employee handbook advising employees that, from time to time, the company may post pictures of employees on the company’s website, Facebook page, etc., and employees who wish to opt out should advise HR in writing. The overly cautious employer, though, will want this to be an opt-in process, with employees providing specific written consent for the use of their likeness in photos.

Regardless, employers should do something to ensure that they are not infringing on employees’ right of publicity with photos of employer-sponsored events. Otherwise, your holiday lump of coal might come in the form of a lawsuit by a shy, and overly litigious, employee.

Wednesday, November 19, 2014

Jury verdicts are just numbers on a paper

On Monday, a California jury awarded a former Autozone employee $185 million in punitive damages. She had sued the company for pregnancy discrimination, claiming that the district manager who fired her was promised a promotion if he fired all of the women in his stores. Last week, the same jury awarded the plaintiff $900,000 in compensatory damages for lost wages and emotional distress.

While $185 million is a staggeringly huge number, this plaintiff will only ever collect a tiny fraction of it, at best. Due process tells us that punitive damages must bear some reasonable relationship to the size of the compensatory award, typically not to exceed a ratio of 9:1.

Moreover, if this case was filed in Ohio, and not California, damage caps would kick in to severely restrict the verdict. Ohio’s tort reform law caps punitive damages in state-law employment discrimination claims to two-times the compensatory award. Thus, in Ohio, this plaintiff’s punitive award would cap at $1.8 million, still a large number, but out of the nine-figure stratosphere.

Jury verdicts are headline grabbers—big splashy numbers that grab everyone’s attention. Trust me, Autozone’s attention has been grabbed. It will file a motion to reduce the jury verdict, and it will appeal, while, at the same time, this plaintiff will file motions seeking her attorneys’ fees. Ultimately, this case will confidentially settle, and we will never know the final dollars exchanged.

More damaging than the amount of the award is the negative publicity associated with it. Because of the verdict’s inordinate size, the press has labeled Autozone as a company that discriminates against women in the worst way possible—systemically and intentionally. That damage is much worse than this employee punching a lotto ticket that she will never cash.

Tuesday, November 18, 2014

More on data security as an unfair labor practice

A few months ago, I wrote how the NLRB was exploring new areas of potential protected concerted activity to regulate. One such area is information and data security.

According to Employment Law 360, the NLRB potentially is looking to expand its reach in the area of cybersecurity, this time investigating whether an employer was required to bargain with its labor union over the impact of a data breach on its employees:

A postal workers union has lodged a charge with the National Labor Relations Board over the U.S. Postal Service’s handling of a recent data breach, a novel move that adds union negotiations to the already sprawling list of concerns companies must contend with in their race to mitigate cyberattacks.

In a Nov. 10 charge filed with the NLRB, the American Postal Workers Union accused USPS of engaging in unfair labor practices in violation of the National Labor Relations Act, by failing to give the union advance notice “that would enable it to negotiate the impacts and effects” on employees of the cyberattack….

The union specifically took issue with USPS’ offering employees affected by the incident one year of free credit-monitoring, a decision that the postal workers characterized as a unilateral change to wages, hours and working conditions that an employer is generally not permitted to make without first bargaining with the union.

Responding to a cyber-attack is complicated and complex. The federal FTC, along with a patchwork of divergent state laws, requires quick communication of various levels of detail and complexity to individuals and regulators following a data breach. If employers need to add communications to labor unions to this list of constituents (and this issue remains very much open), it will create additional burdens on employers, which could potentially slow down a company’s other response efforts.

To avoid these issues, employers should consider bargaining these issues into the terms of collective bargaining agreements, so that you have a game plan in place before you have to respond. Otherwise, when faced with a data breach, you could be faced with running your response programs through the filter of your labor unions, which could hamper your other response efforts, and subject your company to potential liability from the cyber breach.

Monday, November 17, 2014

6th Circuit rules in favor of nonprofit in discrimination claim brought by volunteers

In Bryson v. Middlefield Volunteer Fire Dep’t, the 6th Circuit held that a “volunteer” can qualify as an employee covered by Title VII under certain limited circumstances. In making that determination, a court must examine not only whether the volunteer is paid, but also the degree of control exercised by the employer over the manner and means by which the work is accomplished.

Last week, in Sister Michael Marie, et al. v. American Red Cross [pdf], the same court applied that test to uphold the dismissal of the Title VII religious discrimination, retaliation, and harassment claims filed by two nuns against the organization for which they had volunteered. In concluding that the two plaintiff-nuns were bona fide volunteers, and not employees, the court heavily relied on the lack of compensation paid by the Red Cross, coupled with its inability to control their performance via termination of employment or threat thereof.

An employer’s ability to terminate a non-compliant employee, which is perhaps an employer’s greatest source of control, is meaningful because the employee stands to lose not only her job, but also the source of income upon which she depends…. Though we make no attempt to resurrect the economic realities test from the grave, its  central teaching remains instructive…. The economic reality is that when volunteers work without traditional forms of remuneration like salary and benefits, employers are generally without leverage to control that volunteer’s performance.

While you might think it’s cold to conclude that two nuns could not pursue discrimination claims, this case makes a broader policy statement in favor of nonprofit organizations. The lifeblood of nonprofits is their volunteer base. Without the aid of volunteers, nonprofit organizations, which operate on limited budgets and scant resources, would not survive. If volunteers could easily sue these organizations for discrimination or other employment-related claims, nonprofits would be much more reluctant to use the services of volunteers to staff their needs, thus making it much more difficult for them  to carry out their missions and provide their essential services.

By relying heavily on the lack of payment to show lack of control, the 6th Circuit drew a line that will be difficult for most bona fide volunteers to cross to demonstrate employment status. And while no organization should discriminate against anyone providing services to it, this case decides that the public good done by nonprofit organizations outweighs the public policy against employment discrimination.

Friday, November 14, 2014

WIRTW #345 (the “earworm” edition)

Urban Dictionary : Earworm

Ever since my wife and I went to see Rhett Miller a couple of weeks ago, Lost Without You has been stuck in an unending loop in our collective head. Now, it is my gift to you.

For earworms, you could do a whole lot worse. At least Lost Without You is a good song. It could be It’s A Small World.

Here’s what I read this week:


Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

Thursday, November 13, 2014

Are you doing enough to protect your trade secrets from theft in the cloud?

Do your employees use Dropbox (or Google Drive, or Box, or iCloud, etc.) to store work documents? The appeal of these cloud services is easy to see. Because they provide the ability to store electronic files and access them across multiple devices linked to the same account (i.e., one’s office PC, home computer, iPhone, and iPad), they have exponentially increased the work-life balance of employees who need to work beyond the traditional 9-5. With that benefit, however, comes significant risk to employers.

You may think Dropbox and other cloud services don’t present a risk. After you, your employees are loyal and trustworthy. But, it only takes one layoff to turn a loyal employee into a desperate job seeker looking to provide value to turn a prospective employer into a new job. In that instance, the trade secret cat is out of the bag, and you are spending, and spending, and spending, to try to wrangle it back in.

I’ve seen two cases in which a company alleged that an employee absconded with trade secrets or other confidential information by storing them remotely on a cloud service.

  • In a lawsuit filed last week, Lyft accused its former COO of snatching thousands of sensitive documents when he left to work for its chief competitor, Uber. The mode of theft? The downloading of emails and documents to his personal Dropbox account in the months leading up to his defection.
  • Last year, Zynga settled a lawsuit it had filed against a former manager whom it alleged had used Dropbox to steal its trade secrets upon leaving for a rival startup.

What can an employer do to minimize risk of trade-secret misappropriation or other breach of confidentiality, short of filing expensive and protracted litigation? Consider these 8 steps, courtesy of the ABA Section of Litigation’s Intellectual Property Committee:

    1. Limit access to trade-secrets on a need-to-know basis. The fewer people with access to trade secrets, the more likely the information will remain secret.
    2. Limit access to cloud-based solutions on company computers and prohibit any use of personal cloud solutions for company materials. Consider installing software to limit access to any cloud solutions that are not approved by the company.
    3. Implement policies and train employees about the use (or non-use) of cloud solutions and, more generally, about the protection of confidential information. Employee handbooks, new-employee orientations, posted company policies, and annual employee training sessions all provide opportunities to address these issues.
    4. Monitor when files are accessed or downloaded, and by whom. This will allow the company to take immediate action in the event it discovers suspicious activity.
    5. Require employees to sign NDAs. All employees should sign NDAs prohibiting them from taking or using company information for any purpose other than their work for the company. These obligations should extend beyond termination.
    6. Conduct exit interviews. This will allow the company to explore whether the employee retained any confidential information and to instruct him or her that any such information should be immediately returned or destroyed.
    7. Collect and secure computers used by terminated employees. By examining the computer of a former employee, a company can often determine if any information was taken before the employee’s departure and what that information was.
    8. Label or name files containing trade secrets as “Confidential” or “Trade Secret.” While this probably will not prevent unauthorized use or access, it may help a company to persuade a court that any misappropriated information still qualifies for trade-secret protection. This is because confidentiality labels help show that the company took reasonable steps to maintain secrecy by notifying the employee as to the sensitivity of the information.

You cannot absolutely protect against the use of the cloud by your employees. All an employee has to do is email a file to a personal email account, and your control over that file is gone. Implementing these 8 measures, however, will place your business in the best position possible to limit your risk, and secure against theft of sensitive information by exiting or otherwise disgruntled employees.

Wednesday, November 12, 2014

Recap of #hrintelchat on pregnancy discrimination

Yesterday afternoon, Jeff Nowak and I had a lively tête-à-tête on Twitter—aka the #hrintelchat—on all things pregnancy discrimination. In case you missed it (and given the numbers of folks tweeting along, I’m going to guess that you did), below is a neat little summary of the hour-long tweetfest. The rights of pregnant workers is an important issue that will only get more important and dual-income families and single moms are the rule and not the exception.

Thanks to Thompson HR for the invitation and for hosting. I enjoyed my hour of tweeting (even if my wrists and fingers did not).

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