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Oct 31, 2019

As we get ready to celebrate Halloween, it’s good to remember that the tradition we enjoy today started over a thousand years ago, with the Celtic festival of Samhain. People believed that on October 31st that spirits roamed the earth, causing people to wear masks either to scare them away, or at least, to conceal their identity from the possibly vengeful ghosts.

Granted, folks were a little misguided, but they meant well; and the concept of hiding one’s identity to avoid getting in trouble certainly has enjoyed a constant following over the centuries, all the way to our current internet age.

If you have a business, you are certainly aware of evil spirits, in the form of employment lawsuits, many of which arise because of things your employees are doing while hiding their identity or otherwise without your knowledge.

In homage to Halloween, here are some of the things your often well-intentioned employees are doing, that may visit evil spirits on your business if you are not careful — if you do not implement and consistently enforce proper human resources policies.

Social media activity done in the dark

If you do not already have a social media policy informing employees what they should be careful of when posting on blogs or social media, you should do so immediately. In some cases, the worst liability can come from your most well-meaning employees, and here is the part that employees will find the scariest – your policy absolutely must include potential off-duty behavior.

The policy should state that if an employee’s conduct on the web (blogging, social media posts, etc.) has an actual or potentially negative impact on the company, its employees, customers, products or branding, you may take disciplinary action, including possible termination of employment. A dedicated member of your staff should be routinely searching Google, YouTube, Instagram, Twitter, and similar sites for your company’s name, its brands, and likely, the names of its principal officers and owners. Here is a partial list of the things you may find employees doing:

  • Trying to help your business by trashing your competition online – this can lead to trade libel and defamation lawsuits for your business.
  • Posting positive reviews of the company, its products or services on review sites, but not disclosing they are an employee – this can lead to very large fines from the Federal Trade Commission, and unfair competition lawsuits from your competitors.
  • Posting violent, misogynistic, racist or otherwise offensive content on a social media site, where they also disclose they are an employee – all it takes is one viral re-post to damage your company’s reputation and branding for years.
  • Disclosing confidential information online – that can lead to liability ranging from invasion of privacy claims by employees to potential stock manipulation, if your company is publicly-traded.
  • Posting what they believe to be funny content, such as drunken antics at your company’s holiday party, or bathing in the sink in your restaurant’s kitchen – but your insurance company, customers or shareholders may not find it as amusing when they see it.

It is extremely important to point out that your policy and your search activities to find the foregoing need to be very specific and limited to protecting legitimate business interests. Employers need to be wary of the National Labor Relations Act, which permits employees to discuss their wages, hours and working conditions online (your policy should specifically state that it is not meant to discourage employees from exercising their rights to engage in concerted activity).

It is also important to perform the online searches consistently, and focused on the company, not targeted on an individual or group.

Finally, keep in mind that the whole idea of a social media policy that applies off duty sounds a little Orwellian, and may concern employees and applicants. A properly worded policy, however, can accomplish your goal of avoiding scary liability without scaring your employees instead.

Things done in the moonlight

Your employees are by far your most important asset, and most of them have the company’s best interests in mind the vast majority of the time. Sometimes, however, an employee may feel a pull from something other than loyalty to their job, which may create the appearance of a conflict, let alone an actual one, and hence, problems for your business.

A good way to avoid misunderstandings that can lead to problems for the employee and the business, is to have a good, comprehensive conflict of interest policy informing employees of the types of things that should be avoided – and most importantly, why they should be avoided.

Examples of conflicts of interest that should be described in the policy include:

  • Dating among co-workers (i.e. a non-fraternization policy) – not that you can or should prohibit this perennial bane of human resources, but employees need to be told that they absolutely cannot be romantically involved with someone they supervise, or are in a position to hire or bestow a benefit in the workplace.

If employees spark a personal relationship, it is important that they understand the potential risk (appearance of favoritism, sexual harassment liability, etc.), so they will hopefully understand the policy informing them that they need to let human resources know, so reporting relationships can be changed, or other measures can be taken that protect the employees involved, and the company, from future problems.

By the way, employees related by blood or marriage, that live in the same household, or are close friends, likely fall into this same category, and the policy should also address those issues (anti-nepotism) as they relate to hiring decisions, supervision and discipline.

  • Moonlighting – Long gone are the days where one person can work to support most families, and often, it is difficult to make ends meet with just one job. The rise of the gig economy has made alterative, part-time employment, easy and accessible. Employees have the legal right to moonlight, but they need to know that if they work for a competitor, customer, or have other employment that creates a possible conflict of interest, they need to disclose it to you so any possible issues can be resolved in advance. A conflict of interest can also arise if the employee’s time spent on the other employment carries over into their regular workday and interferes with their performance.

Your policy should therefore include reference to these potential concerns, to put the employees on notice, and to give management a policy upon which to rely when the employee is falling asleep at work or spending time on their cell phone handling their moonlighting gig.

  • Gifts and perceived payoffs – Your policy should caution employees from accepting any trips or gifts from a vendor, competitor, customer, applicant, or any third party that might create the appearance of a conflict of interest. Similarly, employees should be informed that the giving of gifts or anything of value to other employees, customers or third parties can create potential problems unless it is sanctioned by the company.

Similar to the social media policy above, employers should be mindful of the importance of how this policy is worded to reduce the impact on morale, and the possibility of claims by affected employees. Many states have enacted laws aimed at improper retaliation by employers taken as a result of legal activity performed by employees off duty (California, for example, has Labor Code Sections 96(k) and 98.6). It is therefore important to make the policy clear that you are absolutely not attempting to regulate off-duty conduct, but certain types of behaviors that create a real or perceived conflict of interest, need either to be avoided, or discussed with management in advance, to prevent misunderstandings and possible discipline.

The ghost in the machine will get you

Smartphones are pretty ubiquitous these days. So much so in fact, that many employers have opted to save money by not paying for cell phones for their employees, and instead, adopting a “Bring Your Own Device” or BYOD, policy. This can work out well, provided you understand and avoid some common liability traps stemming from the computer at the core of your employees’ phone:

  • Your nonexempt employees should not be included in any BYOD policy, because their phones record everything they do, including texting or emailing after hours (i.e. overtime work), phone calls (i.e. reimbursable expenses) and other things for which there is a four year statute of limitations and the possibility of class action liability. It is a far safer policy to tell nonexempt employees that they do not need to, and should not, use their personal cell phones for company business, unless it is specifically authorized in advance by management.
  • Your exempt employees need to be reimbursed for their business cell phone use. Given the fact that all your employees already have a smartphone, and are therefore paying for the monthly fees themselves, you just need to cover the cost of business use. You can do this by asking the employees to submit an expense report detailing all business calls each month, or, if you want to keep your employees, simply provide a monthly stipend that covers the anticipated use ($25.00 is reasonable), with a policy that says that it is their responsibility to inform you if the actual expense exceeds that in any month.
  • Your smartphone policy should be integrated with your social media policy and anti-harassment policies so that employees know that things done on their personal phones can get them disciplined or fired if they violate another of your company’s policies. For example, if an employee is using his personal smartphone to send offensive texts to a coworker, the policy should make it clear that the company may request to see those texts, or if he refuses, assume that they are offensive, and act accordingly.
  • Your policy should tell employees that if they are using the company’s Wi-Fi or servers to surf the internet or send emails, the company owns the hardware, and reserves the right to examine the traffic and/or the emails if there is a legitimate reason to do so (good examples to put in the policy to dissuade bad behavior include, downloading movies, music or porn, sending confidential information, streaming television or other content that can affect the performance of the company’s network).
  • ALL of your employees – whether they are in the BYOD group or not – should be informed that they are NEVER to use their smartphones while driving on company business, and consider even including a ban on hands-free use, but absolutely include texting, dialing or speaking on the phone in non-hands-free mode. There is a reason why so many states have made it illegal to text or talk on a cell phone while driving – it’s the equivalent of driving drunk.

Even though you know you have little to no way of enforcing this policy, you must have it in your employee handbook and train your employees to it. The issue is that smartphones record the exact time everything is done on them. Similarly, most modern cars record the exact time they get in an accident or the airbag deploys. Therefore, if an employee gets in an accident while driving on company-related business, it is very easy to see if they were using their phone, and if you do not have a policy telling them not to use their phone while driving, the jury gets to hear an expert opine on how the tragic accident could have been avoided if the big bad company had simply promulgated a three-sentence policy.

It is the time for Halloween, but just as the holiday has improved and evolved, so can your company’s policies, so as to maximize the treats from running your business, and minimize the tricks brought by the evil litigation spirits.