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Archive for the ‘Employment Law’ Category

The FLSA continues to strike fear in the hearts of many employers. And for good reason. The law is difficult to understand and not always easy to apply. Moreover, the penalties for failure to comply are steep and litigation of an FLSA claim–particularly one brought as a class (collective) action–is costly.

The U.S. Supreme Court’s recent opinion in Kasten v. Saint-Gobain Performance Plastics Corporation gives employers yet another reason to worry about the FLSA. In Kasten, the Supreme Court ruled that an employee who complains to his employer about unpaid wages has engaged in “protected activity” under the FLSA. If the employee is subject to some adverse action (i.e., termination), in retaliation for his complaint (protected activity), the employer can be held liable. The critical holding in Kasten is the Court’s finding that, to qualify as a protected activity, the complaint need not be written; oral complaints are covered under the anti-relation provision of the FLSA.

The U.S. District Court for the Middle District of Florida (Tampa), is one of the first courts to apply the Kasten decision and may be the very first to decide a retaliation claim in the context of social media. In Morse v. JP Morgan Chase & Co., the plaintiff, Lilli Morse, alleged that her former employer failed to pay her overtime wages. She also alleged that she was terminated in violation of the FLSA’s anti-retaliation provision when she complained on her Facebook page.

The employer moved to dismiss both counts. The court ruled that the plaintiff had pleaded sufficient facts on her unpaid-overtime claim but dismissed the retaliation claim. The question before the court on the motion to dismiss was:

Whether a posting on an employee’s Facebook page constitutes the filing of a complaint within the meaning of the FLSA.

In answering this question in the negative, the court explained:

Morse does not allege that she made anything close to a serious complaint to her employer. In fact, she never complained to her employer at all. She simply voiced her disagreement with her employer’s payment practices on her Facebook page. This “letting off steam” falls far short of the activity protected by [the FLSA's anti-retaliation provision].

This decision is an important one for employers struggling to manage the complexities of social media and its impact on workplace laws and policies.

Morse v. JP Morgan Chase & Co., No. 8:11-CV-779-T-27EAJ (M.D. Fla. June 23, 2011).

So far in this series, we’ve seen how an employee’s LinkedIn profile can (at least arguably) constitute evidence of the following:

• the existence of an integrated enterprise or successor-entity status;
• the existence of an agency relationship;
• misappropriation of trade secrets. 

In this post, we’ll look at the potential implications of a former employee’s inaccurate LinkedIn profile.

In Asanov v. Legeido, a former employee posted, inaccurately, on his LinkedIn profile that he was the owner of the company by which he was previously employed.  The company alleged that the employee posted the inaccurate information in his profile to help his job search.  The company filed suit against the former employee alleging trademark infringement and intentional interference with its prospective business relations.

No. 3:07-1288, 2008 WL 481426, at *3 (M.D. Tenn. Oct. 31, 2008).

Now comes the really important question–what’s an employer to do?  There are two different problems to address.  First, the current employee who inaccurately states his job title on his LinkedIn profile (i.e., VP of Sales, instead of Inside Sales Manager).  Second, there’s the former employee whose LinkedIn profile describes his job duties and/or title held while employed by you as different (and, presumably, "better"), than they actually were.  Here are some thoughts on both problems.

The Current Employee

In the event that you discover that a current employee has slightly "enhanced" his job title or responsibilities in his LinkedIn profile, handle it in exactly the same way you would handle a "offline" problem (as opposed to an online one).

In other words, put aside for a minute the context–a professional social-networking site.  And turn, instead, to the real problem.  The real problem is that you’ve got an employee telling lies.  It’s irrelevant that the lie is being told in cyberspace. 

So what would you do if he spoke the lie instead of posting it?  It almost certainly depends.  You may not care one bit.  Fine.  You may care a lot, particularly because it relates to his employment and, as we’ve seen in the past several posts–your employee’s LinkedIn posts can be used against you.

The answer, then, is simple–deal with it in exactly the same way you would deal with it had you been told that he made the misstatement at a local ball game or at lunch with clients. 

The Former Employee

This is more difficult to deal with only because the employee is no longer within your "control;" in other words, you no longer have the leverage of termination or discipline since he no longer works with you.

The first step probably is to contact the employee directly and ask that he correct the inaccuracy.  If he refuses or fails to comply, you may want to involve legal counsel, depending on the nature of the misrepresentation.

One preventative step to consider is whether you want to address the issue at the exit interview or in a post-termination letter.  In other words, it may be wise to "gently remind" your recently separated employees to change their online social-networking profiles to reflect the change. 

The next question, then, is whether you should be monitoring the profiles of those individuals.  For employees who worked in sales or other direct-client positions, it may not be a bad idea.  Of course, it means one more commitment of your valuable time but, for certain positions, it could help to prevent a number of potential problems.

See also these prior, related posts:

LinkedIn Lessons for Employers: Part 1 (Integrated-Enterprise Status)

LinkedIn Lessons for Employers: Part 2 (Successor Liability)

LinkedIn Lessons for Employers: Part 3 (Agency Liability)

LinkedIn Lessons for Employers: Part 4 (Trade Secrets)

In this post, I continue my review of employment-law cases in which LinkedIn played a substantive role in the outcome of the parties’ dispute.

In the first post in this series, I discussed Freire v. Keystone Title Settlement Services, in which the LinkedIn profile of the plaintiff’s manager was argued to constitute evidence that two entities should be considered a single, integrated enterprise. In the second post, I discussed Steinberg v. Young, in which the court found that the LinkedIn profiles of 5 employees constituted evidence that the defendant was the successor entity of the company that previously had employed the plaintiff.

In this post, I discuss a case involving the LinkedIn profile as the basis for holding an employer liable for online comments of another party.

3. Agency Relationship

In Park W. Galleries, Inc. v. Hochman, the defendant filed a counter-claim against the plaintiff-art gallery, alleging that an individual, acting on behalf of the gallery, posted defamatory statements about the gallery on his blog.  In response, the art gallery argued that there was no evidence to show that the individuals who made the statements were acting on the gallery’s behalf.  The gallery’s CEO testified that individual was not and had never been an agent or employee of the gallery and that the gallery had never authorized the individual to speak on its behalf. 

The test to determine whether there is an agency relationship such that an entity may be held liable for an individual’s actions or statements is whether the principal has a right to control the actions of the agent.  Under Michigan law, if there is any evidence to support the existence of an agency relationship, the question cannot be decided by the court but, instead, must be presented to the jury. 

The court determined that there was sufficient evidence to support the existence of an agency relationship between one of the individuals when he made the allegedly defamatory statement.  The evidence cited by the court was a posting on the individual’s LinkedIn profile, on which he had identified himself as a "Consultant/Writer at Park West Gallery."  In the "Experience" section of his profile, his profile included experience as a "Public Relations/Blogger/Writer" for the gallery.  And, according to the gallery’s website, the individual was editing a book to celebrate the gallery’s 40th anniversary. 

Based on this evidence, the court concluded that the individual could have been speaking on behalf at the behest of the gallery when he posted the allegedly defamatory statements on his blog.

No. 08-122471, 2010 U.S. Dist. LEXIS 12488, at *15 (E.D. Mich. Feb. 12, 2010).

See also:

LinkedIn Lessons for Employers: Part 1 (Integrated-Enterprise Status)

LinkedIn Lessons for Employers: Part 2 (Successor Liability)

A new decision from the Third Circuit Court of Appeals provides public employers with some additional guidance regarding employee internet activity. In the case of Beyer v. Duncannon Borough, police officer Eric Beyer was terminated from his position after he posted anonymous online comments, critical of the Duncannon Borough Council. More specifically, Beyer criticized the Council for its opposition to the purchase of new AR-15 rifles for the police department.

Upon his termination, Beyer filed a lawsuit against the Borough, alleging violation of his  First Amendment rights. Pursuant to the U.S. Supreme Courts decision in Garcetti v. Ceballos, a public employees speech is only protected by the First Amendment if the employee (1) speaks as a citizen (2) on a matter of public concern. Applying this standard, the District Court dismissed Beyers claim, holding that he was speaking in his official capacity as a police officer, not in his private capacity as a citizen. Beyer appealed the dismissal to the Third Circuit.

In reviewing Beyers appeal, the Third Circuit placed significant emphasis on the nature of Beyers speechanonymous internet posts. The Court found that anonymous posting supported both prongs of the Garcetti analysis. First, the Court indicated that anonymous online postings are inconsistent with conduct performed in an official capacity. As a result, the Court found that it was more likely that Beyer was speaking as a private citizen. Second, the Court found that the broad dissemination of Beyers statements over the internet supported the argument that he was speaking on a matter of public concern. Based on the foregoing, the Court reversed the District Courts dismissal.

So, whats a public employer to do? The Third Circuits decision does not prohibit monitoring of employee internet activity pursuant to a reasonable policy. It does, however, limit a public employers ability to discipline its employees for anonymous online activity critical of the employer. Going forward, public employers should be particularly careful of any disciplinary action taken in response to such conduct, and when in doubt consult an attorney.

The Third Circuit has upheld a ruling in April 2010 by Judge Sue L. Robinson of the U.S. District Court for the District of Delaware that the state’s failure to recognize out-of-state registered apprentices under Delaware’s Prevailing Wage Law violates the commerce clause of the U.S. Constitution. The court ruled that Delaware discriminated against out-of-state contractors by effectively forcing them to pay higher wages to apprentices than in-state competitors were required to pay.

The Third Circuit ruled that the lower court correctly found that Delaware’s refusal to recognize out-of-state registered apprentices facially discriminated against out-of-state contractors without advancing a legitimate state interest. The case is Tri-M Group LLC v. Sharp.

Tri-M filed suit in September 2006 alleging the Delaware Department of Labor had put it at a competitive disadvantage for public works projects by allowing in-state contractors “to pay reduced wages to their apprentices while denying out-of-state contractors the same right.” Tri-M was registered with Pennsylvania’s federally approved apprenticeship council but was not eligible for Delaware’s program, which requires sponsors to maintain a permanent place of business in Delaware.

In the summer of 2006, while Tri-M was performing electrical work at a construction project in Milford, Del., officials with the Delaware Department of Labor found the company had violated labor laws by failing to pay its apprentices their full wages.

Tri-M made adjustments, and the DDOL determined it was in compliance. Soon after, the company launched a legal challenge to the measures.

On appeal, the DDOL argued unsuccessfully that the challenged procurement scheme — including the permanent place of business requirement — does not discriminate against interstate commerce, and that the contested apprentice program regulations were explicitly authorized by Congress and approved by the U.S. Department of Labor. The Third Circuit disagreed and affirmed the District Court’s decision.