Since Facebook recently modified its privacy settings, the lines between what is public and what is private in the workplace have become blurred. As a result, it is more important than ever that employers and employees understand where the lines are drawn.
Many Facebook users (your employees included) face a risk of having private details of lives exposed if they opted for settings Facebook recommended back in December 2009. Users may not have understood what they agreed to when opting for the recommended settings.
Moreover, privacy settings have real-world consequences, as Arnstein & Lehr attorney Misha Kerr, an associate in our West Palm Beach, Florida office recently observed in an interview with e-Commerce Times. Misha and I saw this first hand in a case we worked on last year where a client’s private information was exposed to world, including the opposing party in our litigation.
Privacy settings and how you use them are becoming the subject of litigation more and more. In our case, Misha and I represented a client who inadvertently attended a film shoot for an adult (i.e. porn) website staged to look like a “wild party.” Our client never signed a release for her images but ended up on the adult site anyway.
After we filed suit the defendant responded by showing photos our client had posted on Facebook which were risqué at best. Taking the photos out of context our opponent argued that our client’s reputation could not be damaged. Meanwhile, if our client had simply corrected her privacy settings this issue could have been avoided.
Last winter, a dispute in Canada over Facebook photos also brought this emerging privacy issue to light. According to news reports, Nathalie Blanchard’s insurance company cut her disability benefits after an agent found photos of her on vacation through Facebook. When she was diagnosed with severe depression her psychiatrist told her to go on vacation. Until the payments ended last fall, she had been receiving monthly sick-leave benefits.
Manulife told Blanchard that her Facebook photos showed that she was able to work. According to Blanchard’s attorney, Manulife claimed that pictures of Blanchard having a good time at a Chippendales bar show, at her birthday party and on a vacation were enough proof to show that she was no longer depressed. Her attorney says she had the right to go on a vacation and claims that she was wrongfully dismissed from her benefits.
Manulife has reportedly said in a statement that the company would not deny or terminate a valid claim simply because of published information on social networking sites like Facebook. Blanchard responded by suing Manulife claiming that Manulife terminated her disability benefits without proper medical recommendations, relying instead on Blanchard’s Facebook photos, even after her doctor had recommended she go on vacation.
Employees need to treat information posted on social networking sites such as Facebook or Twitter like public information, not a private diary. Employees should also make sure that their Facebook privacy settings are appropriately set.
The recommended settings on Facebook give Facebook the right to publicize your own Facebook page’s private information, including your photos, status updates and other items you’ve posted. Everyone should consider changing the settings for (1) things you share, such as your status updates, photos, videos and other posted items; (2) who your personal information can be viewed by; and (3) whether your account is accessible to search engines like Google.
Fortunately, all of these settings, as well as other settings, may be modified to make your account more private.
News reports say that House Speaker Nancy Pelosi expects the House will soon consider the Senate-passed $15 billion jobs bill (H.R. 2847), known as the Hiring Incentives to Restore Employment (HIRE) Act, that passed the Senate by a 70-28 vote on Feb. 24. The bill passed by the Senate and presently before the House includes tax incentives for businesses to hire unemployed workers in 2010, an extension of federal aid for highway programs, an extension of a small business expensing tax break, and the establishment of a Build America Bonds program.
The tax incentives for hiring in the proposal presently before the House includes a new program that would exempt employers that hire unemployed workers from paying Social Security taxes on the new hires for the remainder of 2010. The proposal would also offer employers an additional $1,000 tax credit for any new hire who stays on the job for one year.
The HIRE Act significantly pared down the House’s original bill that it passed Dec. 16 by a narrow 217-212 vote. The original House bill was a much larger $150 billion package that also included six-month extensions of the emergency unemployment insurance benefits program and the COBRA subsidies to help those who have lost their jobs to continue their health insurance.
Short extensions of unemployment benefits (until April 5) and COBRA subsidies (for those involuntarily terminated between March 1 and March 31) were signed into law on March 2.
Even if the HIRE Act is enacted in its present form (and odds are that it will not be since 3 caucuses within the Democrats in the House are already on record that they have problems with the bill), it is expected to create a quarter of a million new jobs. That is not much when compared with the 8 million jobs lost in the US since 2007, but proponents are calling the HIRE Act a “good first step.”
The legal landscape regarding the use of independent contractors has dramatically changed over the past several years. For decades, employers’ use of independent contractors was not only rarely challenged, but it was also a way they could save significantly on labor and other costs associated with hiring employees. In this tough economy, employers may be tempted to use the services of independent contractors instead of employees in order to reduce their bottom-line costs. However, now more than ever, employers need to be extra careful in this area since both state and federal agencies are cracking down on what they believe is the widespread and improper use of independent contractors.
By way of example, the U.S. Department of Labor (DOL) has recently made the misclassification of workers one of its top priorities. President Obama’s proposed 2011 budget for the DOL includes an additional $25 Million for what he characterizes as the “Misclassification Initiative.” In this regard, it is expected that the DOL will hire an additional 100 enforcement personnel to investigate claims of misclassifying workers as independent contractors.
The Internal Revenue Service is also taking the misclassification of employees seriously. The U.S. Government Accountability Office (GAO) recently concluded that employee misclassification is a “significant problem” because it reduces tax revenues flowing to the federal government. In fact, the GAO estimates that over $7 Billion in payroll taxes will be lost over the next ten years. Needless to say, the IRS does not take this loss in revenue lightly and has notified the public that, commencing in 2010, it will increase its employer tax audits with the specific purpose of determining whether employers are misclassifying workers as independent contractors.
States around the country have also seen this as a significant issue. Illinois, New York, Maryland, Colorado and Delaware, to name a few, have either increased penalties for improperly classifying workers as independent contractors or have passed laws specifically designed to penalize employers for misclassifying workers. There has even been legislation pending in Congress, which was sponsored a former Illinois Senator named Barack Obama, called the Independent Contractors Proper Classification Act, that would restrict an employer’s ability to classify a worker as an independent contractor. Specifically, it would grant workers the right to petition the Secretary of Treasury for a determination of their status as employees or independent contractors and obligate employers to provide notice to workers of their right to seek a determination. Simply put, the issue of misclassifying workers is not going away anytime soon.
Unfortunately for employers, there is no single test to ascertain whether a worker should be classified as an employee or an independent contractor. And, to make matters worse, different state and federal agencies utilize different tests and standards in this regard. However, common scenarios that raise red flags to governmental agencies are:
Individuals classified as independent contractors who perform the same kind of work or duties that employees also perform for the business;
Individuals classified as independent contractors who perform work that is essential to the services or work of the business;
Arrangement where the independent contractor either dedicates all his or her time to the business or is restricted from performing services for other businesses;
Individuals designated as independent contractors who perform work for which other businesses in the same industry use employees.
In light of the foregoing, all employers must properly evaluate whether any current workers are appropriately classified as independent contractors and, if necessary, change the classification to comply with current federal and state law. For a more detailed discussion of the benefits, risks and other issues related to the use of independent contractors, please contact E. Jason Tremblay and/or request a copy of the Employment Law Toolkitthat he recently authored.
The Employment Law Toolkit is a comprehensive resource highlighting the significant employment and labor issues facing Illinois employers in today’s business environment. It focuses on providing practical and cost-effective suggestions on how to avoid employment and labor-related liability and comply with many state and federal laws facing employers.
Arnstein & Lehr Partner and member of
The Employment Non-Discrimination Act (ENDA) would create federal protections against workplace discrimination based on sexual orientation and gender identity. The first version of the bill was introduced in 1994. The latest version, introduced in June 2009, is currently in committee. The House Education and Labor Committee held a full committee hearing on the bill in September, and the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing on ENDA in November.
The Act, as proposed, would make it illegal to fire, refuse to hire, refuse to promote, or refuse to compensate an employee based on sexual orientation or gender identity. If passed, it would not apply to the military or to religious organizations and would exempt businesses with fewer than 15 employees. Further, the law doesn’t require employers to provide benefits to the same-sex partners of their workers. And law would not allow a “disparate impact” claim like the one available under Title VII of the Civil Rights Act of 1964 – which means an employer wouldn’t have to justify a neutral practice, even though it might have a statistically disparate impact on individuals because of their sexual orientation or gender identity.
In 29 states, employees can still be fired because of their sexual orientation, and discrimination against transgender people is legal in 38 states. Illinois law provides protection for both sexual orientation and gender identity discrimination. Florida state law provides none.
According to the Human Rights Campaign, 87 percent of Fortune 500 companies have adopted polices barring discrimination based on sexual orientation.
The Obama Administration, in tandem with the President’s support for the bill, recently added language to the federal jobs Web site that explicitly bans gender identity-based employment discrimination under the federal Equal Employment Opportunity (EEO) policy. This is the first time that employment discrimination on the basis of gender identity has been explicitly banned by the federal government.
A New Law Prevents Defense Contractors from Arbitrating Employment Disputes with Employees and Subcontractors
On December 19, 2009, President Obama signed into law the Fiscal Year 2010 Department of Defense Appropriations Act. In this $63 billion spending measure is a provision, known as the “Franken Amendment” because it was originally introduced by Senator Al Franken of Minnesota, that prohibits federal defense contractors and subcontractors with contracts in excess of $1 million from enforcing existing employment arbitration agreements or entering into new ones with their employees or independent contractors.
Under Section 8816 of the Act, in order to receive funds appropriated under the Defense Appropriations Act on contracts in excess of $1,000,000, a defense contractor or sub-contractor must agree not to enter into or take any action to enforce any agreement that requires, as a “condition of employment,” that an employee or independent contractor agree to resolve through arbitration any claim under Title VII of the Civil Rights Act of 1964 (e.g., claims of race, sex, national origin and religious discrimination, harassment and retaliation), or any tort claim related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.
This anti-arbitration provision currently applies only to large defense contractors and sub-contractors and it only precludes arbitration of employment claims, but not others. It is unclear if the Act also precludes the arbitration of common law claims unrelated to sexual harassment or sexual assault, state law employment claims, or claims under other federal employment statutes besides Title VII, such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, or the Family Medical Leave Act.
It is unclear whether failing to comply with the Act will merely invalidate the arbitration agreement, jeopardize the defense contract, or both. The Franken Amendment is the first time Congress has ever precluded any employers from using mandatory pre-dispute arbitration agreements.
A More Comprehensive Anti-Arbitration Bill Is Pending In Congress.
Although the anti-arbitration provision of the Defense Appropriations Act affects only large defense contractors and sub-contractors, there is a bill pending in Congress that could prohibit virtually all U.S. companies from entering into or enforcing pre-dispute agreements to arbitrate employment, civil rights and consumer disputes. Reintroduced in early 2009, the Arbitration Fairness Act of 2009 would bar all pre-dispute arbitration clauses in employment contracts (except collective bargaining agreements), consumer transactions, franchise agreements, and agreements to arbitrate disputes arising under any civil rights statute. If passed, the Arbitration Fairness Act would force most employment and consumer disputes currently resolved by private arbitration into the courts. The Arbitration Fairness Act remains in committee for now, but it is expected that Congress will consider the bill later this year once health care reform legislation is resolved.
Where Is Employment Arbitration Headed?
These congressional initiatives against employment arbitration come at a time of turmoil in this area of the law. Concerns about the unfairness of some companies’ arbitration procedures have caused private arbitration organizations (such as the National Arbitration Forum, JAMS and the American Arbitration Association) to change their rules or stop conducting certain kinds of arbitrations. State courts and legislatures are often hostile to arbitration, but the U.S. Supreme Court and most federal courts have endorsed arbitration as a quicker, cheaper, and less formal alternative to litigation. However, this Congress has shown little hesitancy in legislatively overruling other Supreme Court precedent. Only one thing is clear: the future of employment arbitration is up for grabs.
Please tell us what you think: Is this the beginning of the end of employment arbitration?
Blogging, twittering, and use of other social networking media, such as Facebook, Flickr, MySpace, etc., are all becoming more popular each day, as is posting videos on YouTube, and otherwise posting information and images on the Internet. As such, employers are increasingly becoming interested in monitoring employees’ off-duty Internet activity. But what are the risks
While the Employee Free Choice Act (“EFCA”) received front page treatment immediately after the November ’08 elections and through the spring, 2009, it has slowly lost its life force, so as to become moribund. While quickly introduced into the House, it rapidly lost support among key Democratic Senators, including Sen. Arlen Specter (D – Pa.) and Sen. Dianne Feinstein (D – Ca.). By June, the Senate Democrats and labor were at least six votes short of that needed for cloture and to end debate. Since then, the bill has been comatose, on a deathbed. While the bill is labor’s priority, it has received much less attention from President Obama, who has focused his energy on health care, climate change, and the great recession.
Many commentators have speculated that labor has a fighting chance to revive and pass EFCA if it pushes hard in 2010 before the mid-term elections, with compromises in mind. Such compromises would include super majority card checks, quickie elections, or some combination of both; elimination or modification of mandatory interest arbitration for first time labor agreements, and implementing financial penalties and fines for employers who fail to bargain in good faith, or engage in surface bargaining; guaranteeing unions access to employees at the workplace, and limiting or restricting the employer’s right to engage in captive audience speeches; and imposing civil monetary penalties for unfair labor practices.
The chances of passage could be enhanced if a compromise version was tacked on as an amendment to a job creation or other large bill. But the compromise would have to be just that, and not hand either management or labor a lopsided win. Such an effort will have to begin now, as the midterm elections are only 10 months away, and all indications are that Democrats in both Houses will lose a significant number of seats. One can imagine the frustration of SEIU President Andrew Stern as he reviews union expenditures after his weekly visits to the White House.
This next two quarters, Arnstein & Lehr will be conducting several seminars to educate employers on how to remain union free, no matter what happens with card check at the end of the day. We will keep you informed of developments, and look forward to seeing you there. Happy New Year to all.
Mark A. Spognardi is a partner in Arnstein & Lehr’s Labor and Employment Law Department. His practice is devoted exclusively to representing management in traditional and non-traditional labor and employment law litigation and counseling.
For the past several months, Chicago Partner and Chair of Arnstein & Lehr’s Labor & Employment Practice Group, Paul Starkman, has been utilized as an expert source for four articles on a variety of employment law related topics. He has been quoted in Business Insurance, CFO.com and Inside Counsel.
Paul Starkman 2009 Media Coverage Summary
Chicago Partner Mark Spognardi discusses union contribution audits in the November 2009 issue of The Builder.
Dealing With Union Contribution Audits from Builder Volume 13, Issue 4
Since Facebook recently modified its privacy settings, the lines between what is public and what is private in the workplace have become blurred. As a result, it is more important than ever that employers and employees understand where the lines are drawn._108th_xl.jpg "U.S. Senate")
