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Avoiding Social Media’s Legal Pitfalls

Social media is now a standard communications tool for businesses, with many companies regularly using Facebook, Twitter and other social networks to engage with the public. More and more businesses are hiring social media specialists whose sole responsibility is to be the company’s “voice” on these platforms. But this activity comes with risk for both the organization and the individual. The potential for any posting to be retweeted, shared or even go viral underscores the need to be aware of the rising legal risks associated with your business’s social media accounts.

Potential Defamation Lawsuits

The first tip for anyone engaged in social media on behalf of their business or employer is obvious, but not always followed—think before you post. Even if the tweet or post contains an unintended error and is deleted immediately, postings can still be pulled and reposted or retweeted by others. Once something is out there on social media, however, you’ll need to deal with the consequences. Although the laws surrounding social media are still developing, it is possible for a business to be hit with an expensive defamation suit based on a single posting or comment.

Since most posts on social media pages are generally shorter than what a business normally has the space to say in a traditional publication, sales pitch or marketing brochure, the lack of context can present a greater risk of defaming someone or another business. Think about it like this: If a customer comments on a business’s Facebook page asking about one of their competitors, an employee might reply that the competitor provides “untrustworthy service” without much context or explanation to back up that claim. Just those two words have the potential to spiral into a defamation suit if the competitor feels the comment was untrue and harmed their reputation. Since most online statements are brief, it would be more difficult in court for the person posting the comment to prove that he or she is entitled to the same legal defenses available to a traditional publication, even if the post was true or was an opinion rather than a statement. To minimize defamation lawsuit potential, every comment, posting, tweet or retweet should be completely factual and have a positive tone. It is not always possible to check every post before it is published, but anything potentially controversial should be read by another pair of eyes before clicking ”submit.”

Personal versus Professional

Another still-developing area of social media regulation is the distinction between personal and professional profiles or accounts. Businesses are legally accountable for anything tweeted, blogged, or posted on the company’s social media accounts. But this is where it gets complicated; it is possible for a company to also be held responsible for what an employee posts on their personal accounts, especially if it’s not clear to the reader whether they are speaking on behalf of the company or only for themselves. Here’s an example: An employee who works in the food industry posts a photo to his Twitter account of himself handling food in an unsanitary way. Even though the employee may have meant it as a private joke for his followers, any customer who sees the photo could sue that business for lack of training and unsanitary conditions.

To proactively prevent this type of situation, it is important for employers to have a social media policy outlined in their employee handbook. Depending on the business and applicable law, it may also be beneficial to establish upfront that employees’ public social media accounts may be monitored. It is also worth considering a handbook policy stating that any work-related posts on an employee’s private social media accounts are not allowed, and the violation of this policy could result in termination. Some organizations require employees who have personal Twitter or Facebook accounts to post a disclaimer in their “about me” section saying something along the lines of, “I work for X Company, but all posts reflect my personal views only.” This can potentially protect both the employee and employer should a lawsuit arise, but it is not a failsafe.

The rise of social media is bringing significant benefits to businesses, but they also need to be aware of potential legal pitfalls. As the laws regulating social media continue to develop, smart business owners and managers should be prepared to implement appropriate safeguards and policies to ensure that their business can sustain a 140 character mishap, should one occur.

To protect themselves from any potential lawsuits, companies should have adequate insurance coverage in place to address social media activities. Since most commercial general liability policies do not cover online content, it’s important to truly understand what activities your policy covers.

 

Employers Anxiously Await Supreme Court’s Mach Mining Decision

As we previously blogged, most recently here, the U.S. Supreme Court’s decision to grant certiorari in Mach Mining, LLC v. EEOC could be a game changer in EEOC-related litigation. In Mach Mining, the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit and that it will not scrutinize the EEOC’s pre-suit obligations, so long as the EEOC’s complaint pleads it has complied with all procedures required under Title VII, and the relevant documents are facially sufficient. By granting certiorari, the Supreme Court is set to weigh in during its next term relative to conflicting rulings amongst the circuit courts about judicial authority and standards for reviewing the EEOC’s pre-suit conduct.

In the meantime, however, the show must go on! To that end, a recent decision out of the U.

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S. District Court for the Western District of Missouri highlights why the Supreme Court’s eventual ruling in Mach Mining is important. In EEOC v. New Prime, Inc., Judge Douglas Harpool granted, in part, the EEOC’s motion for summary judgment, finding that it satisfied its pre-suit investigation and conciliation obligation despite noting that the court was “underwhelmed by the EEOC’s attempt at conciliation.”

Background

In EEOC v. New Prime, a trucking company maintained a company-wide “same-sex training policy” which required all applicants who did not meet Prime’s experience requirements to receive over-the-road training by an instructor and/or trainer who is the same gender as the applicant unless there is some pre-existing relationship between the female applicant and male instructor/trainer. The effect of this policy was that when a female applicant was ready to be assigned to a trainer or instructor in order to receive the necessary “over the road” training, a female driver had to be available.

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However, based on the number of female drivers available to train, Prime would place female applicants on a “female waiting list” when drivers were not available.

Prime implemented this policy after it was involved in a sexual harassment case brought by three female truck driver trainees.

A female job applicant brought a charge with the Missouri Commission on Human Rights (MCHR) and alleged that Prime told her that her application had been accepted, but she could not be hired because she was female and that no female trainers were available then or in the near future.

After the MCHR issued a Probable Cause finding, it transferred the case to the EEOC for further investigation. On April 1, 2010, the EEOC sent Prime a letter stating “the EEOC’s investigation of this charge is nation-wide in scope.” One year later the EEOC issued its Letter of Determination, which stated “[b]ased on the foregoing, there is reasonable cause to believe that Respondent has subjected Charging Party and a class of female trainees to unlawful discrimination by adopting a policy that denies female trainees training and employment opportunities that are not denied to similarly-situated male trainees.” On this same date, the EEOC sent its letter regarding conciliation that focused on relief not only for the party who brought the charge, but also “all identified and still-to-be identified victims.”

On June 7, 2011, Prime submitted its response to the conciliation proposal, which indicated that it was “not interested” in engaging in class-wide conciliation and would only negotiate concerning the individual who filed the EEOC charge. One week later the EEOC informed Prime that conciliation failed and subsequently brought suit in federal court.

The Decision

Both the EEOC and Prime argued that they were entitled to summary judgment on the merits as well as on several evidentiary (e.g. spoliation) and damage (punitive damages) issues. However, especially relevant with Mach Mining on the horizon is the fact that the EEOC decided to move for summary judgment on whether all conditions precedent to the filing of the lawsuit were met. Prime filed its own motion on this point, arguing that the EEOC failed to adequately investigate and conciliation the matter before filing suit.

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The court acknowledged that the EEOC is obligated to conciliate in good faith, and that in order to satisfy the statutory requirement of good faith conciliation, the EEOC must “(1) outline to the employer the reasonable cause for its belief that the law has been violated; (2) offer an opportunity for voluntary compliance; and (3) respond in a reasonable and flexible manner to the reasonable attitudes of the employer.” Furthermore, the court held that whether the EEOC adequately fulfilled its obligation to conciliate is dependent upon the “reasonableness and responsiveness of the [EEOC’s] conduct under all the circumstances.”

With respect to its investigatory function, the court held that the EEOC’s initial letters put Prime on notice that it was investigating on behalf of “similarly situated individuals with regard to the same-sex training policy.” Furthermore, Prime was put on notice through the initial charge and the subsequent investigation that any females who were subject to the policy, or more specifically put on the waiting list, were part of the EEOC’s investigation. Since it held that “the EEOC’s scope of the investigation in this matter was clear – it pertained to the same-sex training policy implemented by Prime, including the female waiting list for potential applicants, trainees and potential employees,” the court held that the EEOC adequately investigated the matter with respect to its class-wide claims prior to filing suit.

With respect to conciliation, the court found that the EEOC met the “low hurdle of attempting a reasonable and responsive conciliation process” despite shutting down conciliation one week after Prime submitted its initial response to the EEOC. The court was “not persuaded that this is enough to prevent the case from meeting the requirements for the filing of the instant lawsuit” given that Prime expressed no interest in considering compensation for any women affected by the policy – which is something the EEOC informed Prime it sought as a result of the company-wide alleged discriminatory policy. Accordingly, the court granted the EEOC’s motion for summary judgment, finding that it satisfied all conditions precedent to filing this lawsuit.

Implication for Employers

As this case demonstrates, the eventual ruling by the Supreme Court in Mach Mining has the potential to be a game changer for any employer dealing with the EEOC. If federal courts cannot review its pre-lawsuit conciliation efforts, the EEOC, in effect, will have free reign to pay mere lip service to its conciliation obligations and approach any negotiations in a “take-it-or-leave-it” manner. We will continue to follow developments as the parties and amicus groups file their briefs, and keep our readers informed.

This blog previously appeared on the Seyfarth Shaw website on the EEOC Countdown blog here.

Top Ten Most Corrupt States in the U.S.

Most Corrupt States

A new study from researchers at Indiana University and City University of Hong Kong on the most and least corrupt states in America calculates that government corruption costs American taxpayers tens of billions of dollars a year. In the 10 most corrupt states, for example, simply reducing corruption to an average level would lower annual state spending by $1,308 per person, or 5.2 percent of state expenditures.

In “The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending,” Cheol Liu, assistant professor in the Department of Public Policy at City University of Hong Kong, and John Mikesell, Chancellor’s Professor in the School of Public and Environmental Affairs at Indiana University Bloomington, found that corruption is directly linked to excessive state spending, and noted that corrupt states particularly spend more on construction and capital projects and less on services, including education.

The researchers used data from more than 25,000 convictions for violations of federal anti-corruption laws between 1976 and 2008 to create a “corruption index,” then compared convictions with the number of government employees. This method, they explained, avoids the issue of state differences in police, prosecution and court resources, making the results a reflection of the extent of corruption, not of law enforcement effort.

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 Defining corruption as the “misuse of public office for private gain,” the authors found that public and private corruption can have a range of negative effects, including lower-quality work, reduced economic productivity and higher levels of income inequality and poverty.

According to the study, the top 10 most corrupt states are:

  1. Mississippi
  2. Louisiana
  3. Tennessee
  4. Illinois
  5. Pennsylvania
  6. Alabama
  7. Alaska
  8. South Dakota
  9. Kentucky
  10. Florida

“The results of this article suggest that preventing public officials’ corruption and restraining spending induced by public corruption should accompany other efforts at fiscal constraint. Increases in states’ expenditures on capital, construction, highways and borrowing are not problematic in themselves,” the researchers concluded.

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“However, policymakers should pay close attention that public resources are not used for private gains of the few, but rather distributed effectively and fairly.”

NY Granted Temporary Restraining Order to Stop Lyft

New York State Superintendent of Financial Services Benjamin M. Lawsky and Attorney General Eric T. Schneiderman announced on Friday that they had filed for a temporary restraining order against the scheduled New York City launch of car-sharing service Lyft.

The car sharing service, known for its pink mustache decorations, has been operating since April in Buffalo and Rochester and had announced it would begin operations in Brooklyn and Queens, without getting a green light from the state.

“After Lyft rejected a reasonable request by the state to delay its launch, we filed a motion for a temporary restraining order in State Supreme Court this morning,” Lawsky said in a statement. “As a result of that action, the court has granted the state a temporary restraining order preventing Lyft from launching this evening in New York City. We will return to court on Monday, to address issues pertaining to Buffalo and Rochester in addition to New York City.”

Lawsky continued that the action was pursued “only after repeatedly offering to work with Lyft in order to ensure that its business practices complied with the law. Instead of collaborating with the state to help square innovation with statute and protect the public, as other technology companies have done as recently as this week, Lyft decided to move ahead and simply ignore state and local laws.”

He said the company’s arguments are a “disingenuous attempt to disguise old-fashioned law-breaking that jeopardizes public safety.”

Lyft is a car-sharing service that allows a car’s owner to turn an auto into a personal Zipcar and rent it by the hour or the day. The owner sets a price, and an intermediary service lists the car online, connects the owner with people who want to it and takes a portion of the fee.

At issue is insurance for car share vehicles. While car-sharing has been sanctioned in California, Oregon and Washington, some insurers are cautioning against it. In the states that have passed laws, legislation prevents insurers from canceling the policy of an owner who rents a vehicle.

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Car-share programs are also required to provide liability insurance approved by the state.

The National Association of Mutual Insurance Companies (NAMIC) recently pointed out that the rise of formal car-sharing programs throughout the United States has uncovered numerous insurance-related challenges, especially over the role of the car owner’s personal insurer and what exposure it may have.

John Murphy, NAMIC’s state affairs director for the Northeast said, “With a car-sharing program, an insurer lacks important information for gauging the risk.

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Car sharing is essentially a commercial enterprise, and the personal auto carrier should not be required to cover a risk that it never intended to cover.”