Smooth Transitions : Rob Radcliff : Texas Non-Compete Lawyer & Attorney : Gruber Hurst Johansen & Hail LLP Law Firm : Dallas Employment & Employee Departures : Smooth Transitions Law Blog

Social media sites can give an employer/recruiter information about potential hires that you can't ask in an interview.  Take Facebook for instance, you can learn the following about me from my profile and posts:

• Race/Ethnicity - just take a look at my picture;
• Age - set forth in my profile;
• Marital Status - set forth in my profile;
• Children - take a look at my pictures; and
• All the other information you can glean from pictures, status updates, etc.

The point is, there is an endless amount of information out there - much of which you cannot consider when making the decision to hire someone.  However, there is information that is not protected. 

What if there was a Facebook status update where the candidate stated they were fired from their last job for filing false reimbursement reports or the fact they have a non-compete agreement with their former employer?  These could be legitimate reasons not to hire someone.

So why shouldn't you incorporate social media searches as part of your company's hiring process?  A few reasons:

1. A lawsuit over discriminatory hiring practices will almost certainly delve into whether social media screening is used as part of the hiring process;
2. A Plaintiff could always allege, whether true or not, that information obtained from social media was used in the decision not to hire them;
3. How do you document you didn't use something - hard to prove a negative;
4. It's not possible to unlearn information obtained from social media - like the pregnancy status of a potential employee; and
5. Is it really even worth it considering the potential liability that could arise?

It's always easy to say no.  Next week I'll examine the other side of the coin.  The short of it is, there is no right or wrong answer and each company's conclusion will depend on what information they are looking for and how they implement such a process.  There is no one size fits all answer.

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This Friday I will be speaking at TalentNet Live regarding the implications of social media in the hiring process.  I hope you can join me.

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With the rise of social networks that permit us to update the world on the details of our lives and smart-phones that allow access to email, social networks, and the internet 24/7, there is always something to do. Take a look around. On my drive into work there is always someone on a phone texting, emailing, or talking. Same thing when I am in line at a store or even at my daughter’s soccer game. The worst is when I’m in meetings and the “constant emailer” can’t put down their blackberry for 5 minutes. (Sometimes I'm the constant emailer.)  There is no downtime.

I’ll leave the social commentary to those more qualified. But, from a legal perspective we are now creating a never-ending stream of written material that in many cases is archived a/k/a evidence. Email, social network posts, and other records can be used to recreate the details of a particular event or day. For example, if an employer has a general idea of when an employee began actively planning to establish a competing venture in violation of a non-compete, the discovery is endless. The employer now plaintiff can seek emails, Linked-in communications, Facebook posts and even phone records to trace the evolution of the competing business.

It seems as though we’re well past putting the brakes on 24/7 evidence creation through email and social media. But, everyone must be cognizant of what this means for business and employment disputes. Privacy, in many instances, is being abandoned by choice as we disclose our life's details on the web.

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A few months ago I profiled a non-compete/non-solicit lawsuit where the Plaintiff employer used LinkedIn communications as evidence to support their claims against several former employee recruiters.  The case was covered in a number of media outlets and blogs.

In the interim the Defendants answered the lawsuit and filed a counterclaim.  Here's what the counterclaim alleged:

• Representatives of the employer told one employee that he could continue to work in the recruiting industry as long as he didn't call on the Plaintiff's customers;
• The non-compete agreements are unenforceable; and
• The Plaintiff is tortiously interfering with their new employment agreements.

In their answer, the Defendants allege that what the Plaintiff claims is confidential customer information was publicly disclosed through social media and is no longer protected:

Plaintiff’s claims that relate in anyway to customer and/or client information fail to the extent that Plaintiff, or its employees, have thrust said information into the public domain through the use of sites such as, LinkedIn and Facebook, and/or to
the extent Plaintiff encouraged its employees to place said information into the public domain.

The case is set for trial in August 2011.  We'll keep you posted on any further developments.

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Here is a link to a presentation on the Top Ten Issues for Texas Employer and FINRA Social Media compliance. I hope you find it helpful.

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Back in April I addressed the Supreme Court's review of City of Ontario, California v. Quon et al and the implications it might have on employer access and review of employee electronic communications.  A few weeks ago the Court's opinion was delivered and did little to shed light on the Court's view of privacy rights in text messages for private employees.

As you may recall, the opinion dealt with a police department that decided to review the personal text messages of one of its officers that were made with a police owned phone.  Justice Stevens upheld the search of the phone noting that Quon:

should have understood that all of his work-related actions–including all of his communications on his official pager — were likely to be subject to public and legal scrutiny

He also wrote:

The Court must proceed with care when considering the whole concept of privacy expectations in communications made on electronic equipment owned by a government employer.  Moreover, agencies and officers should explore whether state privacy laws might create a different standard. Some states have statutes that require an employer to notify an employee when electronic communications are being monitored.

So the Court was unwilling to go beyond the public employee domain, not surprising.  So questions remain:  Is the employee that uses a company owned phone subject to having his text messages reviewed?  What if there are personal emails on the company owned phone through a yahoo or gmail account?  What if the phone is owned by the employee but the service is paid for by the company?  These questions remain unanswered but employers should have policies in place that address these situations. 

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Today Bridget Blinn of my firm and I had the privilege of speaking to the FPA of Dallas/Fort Worth.  Below are some helpful links I referenced during the presentation:

• FINRA Regulatory Notice 10-06 - http://tinyurl.com/22np4vt
• CFP/FPA Memo on the Financial Stability Act - http://tinyurl.com/292abw
• Equal Unemployment Opportunity Commission - www.eeoc.gov
• Texas Workforce Commission - www.twc.state.tx.us
• Department of Labor - www.dol.gov
• FINRA - www.finra.org

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In cases with significant email traffic lawyers often use applications that sift through emails and documents using specific search phrases and terms.  Usually, the search terms and phrases tie to significant issues to the case or dispute.  Recently, the search terms used by the lawyers investigating the Lehman Brothers debacle were published. Those lawyers were charged with going through approximately 700,000 plus documents which totaled somewhere around 8 million pages.  They used a variety of search terms/phrases but the search that stood out was this one:

Shocked or speechless or stupid* or “huge mistake” or“big mistake” or dumb or “can’t believe” or “cannot believe” or “serious trouble” or “big trouble” or
unsalvageable or “too late” or ((breach or violat*) w/5 (duty or duties or obligation*)) or “nothing we can do” or uncomfortable or “not comfortable” or “I don’t
think we should” or “very sensitive” or “highly sensitive” or “very confidential” or “highly confidential” or “strongly disagree” or “do not share this” or “don’t share this” or “between you and me” or “just between us” or ((can’t or cannot or shouldn’t
or “should not” or won’t or “will not”) w/5 (discuss or “talk about”) w/5 (email or e-mail or computer)) or should w/5 (discuss or talk) w/5 (phone or “in person))

There are countless examples in the report.  As discussed here before, common sense is usually the best approach to determining whether your email is environment appropriate, but there is also a second level of screening.  I'll call it the "smoking gun" screen. How would you feel if the email you just sent was put up in front of a jury and you were cross-examined on its contents?  A far stretch in most circumstances but an issue that should always be in the back of the author's mind. 

Consideration of what is placed in an email should go beyond avoiding foul language and crude humor.  There are simply some issues that should not be addressed in electronic communications.  It ultimately goes back to common sense - there is no written policy that can provide sufficient guidelines.  Sometimes a phone call or even face-to-face meeting makes more sense than an email that lacks context and fails to adequately convey the issue.

(h/t Jacob Goldstein with National Public Radio)

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A recent survey by Boston-based Alite Group found the following:

• 11,000 wirehouse reps may be on the move;
• 15% are satisfied with their employer;
• 20% are ready to move and would like to do so in the next 2 years;
• 2/3's of those with retention plans in place say there is a chance they'll leave;
• most advisors think they can take half of their existing book of business; and
• only 23% would go independent. 

Brokers with retention plans in place will have to consider the economic impact walking on a retention plan would have in addition to the amount of business they could potentially lose.  Also, making the move from a large wirehouse, which in most instances is a member of the Protocol, to go independent could result in a non-compete or non-solicit lawsuit that could tie up the departing broker in Court or Arbitration and be a financial drain. 

With more and more advisors unhappy with their current wirehouse employer it will be interesting to see if there is actually a significant migration to become independent and what the wirehouse reaction is.  As it stands, wirehouse to wirehouse migration is down but whether advisors are that "unhappy" remains to be seen.

(h/t Howard Stock of the Bank Investment Consultant)

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