9/24/09 finding talent seminar legal issues: background checks & electronic communications

9/24/09 FINDING TALENT SEMINAR

LEGAL ISSUES: BACKGROUND CHECKS & ELECTRONIC COMMUNICATIONS

www.charlesakrugel.com

Format of This Presentation

• This PowerPoint has 20 slides, & my presentation handout has 13 pages.

• Because some of this information is so dense, I’ll take questions & entertain discussion at ANY TIME, EVEN NOW. So, I’ll use this PowerPoint as a launch point for discussion, but not to lecture.

© 2009 All Rights Reserved, Charles A. Krugel; # 2

Why Background Screening?

• To systematize the hiring process

• It could be legally required

• To avoid negligent hiring

• As part of due diligence to ensure public safety, avoid scrutiny, or if buying, selling or merging the business

• Your business was burned once before


Laws to Consider in Background CheckingMy 14-page Handout Goes Into Greater Depth

• Federal Trade Commission Act • Fair Credit Reporting Act (FCRA)• Fair & Accurate Credit Transactions Act of 2003 (FACTA)• Federal, state & local civil rights acts which establish

protected classes such as race, gender, disability, pregnancy, etc.

• Employee Polygraph Protection Act • Health Insurance Portability and Accountability Act of 1996

(HIPPA) • Stored Communications Act • Electronic Communications Privacy Act of 1986• Federal, State & Local Labor Relations Laws (prediction:

these will become much more important if the EFCA/Card Check Bill is passed)


3rd Party Background Checking Companies Versus Doing-It-Yourself

• Federal background checking laws GENERALLY apply when a company uses a 3rd party provider; not when it conducts the check itself using the web or other means which don’t involve the use of an aggregator.

• However, a company that does DIY checks might be held liable for negligence, or to a greater level of liability for disparate impact or treatment, whereas it may not be liable for acts of the 3rd party provider, so long as the provider is qualified & competent.


Online Reviews & References in Background Screening

• The onset of social & business networking websites has made internal/DIY screening cheaper & easier.

• However, consider this: If an employer writes a positive review or reference for an employee or ex-employee, who’s later fired or “loses it,” the reference or review could be used as evidence for wrongful termination or negligence.


Online Recommendations & References

• The National Law Journal, 7/6/09, by Tresa Baldas; Lawyers warn employers against giving glowing reviews on LinkedIn.

“Employers risk having the recommendations used against them in a discrimination or harassment suit.”

• Online postings pose serious litigation issues due to discovery & evidence.

• Context of the posting is important.


Some Statistics Regarding Online Networking Sites

• According to a survey of 100 hiring managers, from companies of all sizes, 66% “visit” LinkedIn, 23% “visit” Facebook & 16% use Twitter. From Jump Start Social Media, Digital Brand Expressions & InternetBizNet survey; results released 7/9/09.

• ExecuNet, www.execunet.com, in 2007, 83% of 131 executive & corporate recruiters surveyed said that they use search engines to learn about candidates. 43% eliminated a candidate based on online information. This is up from 77% & 35% respectively in 2006.

© 2009, All Rights Reserved, Charles A. Krugel; # 8

http://www.execunet.com/

More Statistics• Reported 8/19/09: Of 2,667 hiring managers participating in a

Career-Builder survey completed in 6/09 (with 95% probability of results have a +/- 1.9% sampling error (from http://news.prnewswire.com)

– 45% use social networking sites to research candidates (22% in ’08)– Of that 45%, 29% use Facebook, 26% use LinkedIn & 21% use

MySpace. 11% search blogs & 7% Twitter to follow candidates

35% of employers didn’t hire based on what they learned of the candidates.– 29% of candidates showed poor communication skills– 26% of candidates made discriminatory comments– 24% of candidates lied about qualifications– 20% shared confidential information from previous employer

14%-16% eliminated candidates due to using emoticons or texting language (e.g., “gr8”) in job application documents.

18% of employers said the online content caused them to hire a candidate. 50% said online profile indicated company fit.


Possible Legal Causes of Action in Workplace Online Communications

• 4th Amendment personal privacy rights

• 1st Amendment freedom of speech

• Discrimination/harassment

• Copyrights, patents, trademarks, secrets, confidentiality

• Defamation, libel, slander

• Contract (employment, union, etc.)


True Stories About Online Communications

Krugel’s Client Story from 2006:

From client: “I have an issue to discuss with you pertaining to a candidate we interviewed . . . referred . . . by a headhunter. We interviewed the candidate. He did not interview well & he did not pass a test he was given during the interview. The candidate is now saying he believes our decision not to hire him is related to his age & that he intends to file a formal complaint . . . alleging discrimination . . . .

I’ve attached all the email correspondence we’ve had pertaining to this candidate & I’d like your thoughts on the issue & your suggestion as to how we should proceed. The email in which he states his intent to file a complaint is the last attachment. The email titled Feedback contains the notes of a discussion our headhunter had with [him] earlier today.”

From headhunter in the same email chain: “Here is another person with very good experiences & strong C++. His is looking for $100K/year. He has some slight accent, but sounds pretty confident.”


True Facebook Story 8/9/09 – The Danger of “Friending” Your Boss from

http://thenextweb.com/2009/08/09/note-friend-boss-fb-bitch-job/


Quote from Patricia Vaccarino, PR Exec. in Seattle (from Reuters.com 8/6/09)

• “Many of her Facebook friends have posted ‘in great detail about their colonoscopies, dead teeth pulled, dead dogs, flatulence, adult acne, marital breakups, battles with mental illness & drinking problems.’”

• Why wouldn’t an employer or recruiter consult such free resources that might provide such valuable information?


Some Policy & Practice Recommendations

• Consider using a carefully worded communications policy that permits the monitoring of all communications on company premises that occur during work hours & that use company equipment.

– Intercepted vs. stored communications (case law distinction).

– Maybe a release/waiver for any liability for same?

• Consider an integrated & open/transparent online communications policy; all relevant personnel should have access to all candidate info.; restrict use of such info. Figure out a way to avoid the left hand not knowing what the right hand is doing problem.


Sample Policies Continued

• COMMUNICATING WITH CIVILITY

Civil behavior towards each other, customers & guests is a hallmark of a profitable customer-centered business. Civil behavior includes verbal, written & nonverbal forms of communication & gestures, body language, spoken word & written expressions.

Any instances of uncivil behavior towards guests, staff or the public, which negatively reflects back to our business, may be subject to disciplinary action up to or including discharge.

Moreover, profanity, rude or lewd references to customers, coworkers or any member of the public, while at work, is prohibited.

Initials _____


Sample Policies Continued

• COMMUNICATION WITH THE MEDIA, PROSPECTIVE & FORMER EMPLOYEES & OTHER ORGANIZATIONS

No employee is permitted to speak, on or off the record, with the media, prospective or former employees, & community or business associations, unless given prior & express permission from management.

The purpose of this policy isn’t to intimidate or censor employees. The purpose is to ensure that our branding & image remains consistent in the public’s eye, & that we’re not giving competitive information or secrets away.

So, if anyone is approached by any member of the media, the communications departments or personnel of any associations (neighborhood, community, professional, etc.), & is asked to comment on your employer, please do not speak with them (even off the record), until management has expressly approved such communication. If approached, feel free to inform any solicitor of this policy & direct them to management.

This is a very serious matter for us, so failure to comply with this policy may result in discipline or discharge.

Initials _______


Sample Policies Concluded

• USE OF Company EQUIPMENT (SAMPLE POLICY)

Use of our phones, computers, faxes, Internet, etc., for personal use (i.e., anything that doesn’t benefit us) is strictly prohibited, unless authorized by your supervisor or another member of management.

• COMMENT: Consider integrating the online communications policy into your references & recommendations policy or practices.


Then Again . . .

• The monitoring of all workplace communication, or the exclusion of one type over another, such as prohibiting Twitter but allowing LinkedIn, can be very difficult to administer.

• Perhaps starting out with a broad civility policy, that’s based on common sense, & dealing with issues on an ad hoc or case-by-case basis is an easier & more efficient way to start to address online communications.


Question for Thought

• An employer advertises a position online. It mainly posts the position on websites that are overwhelmingly visited by white people. Is this disparate impact or disparate treatment?

• Answer: Probably not disparate treatment, but could be disparate impact.


Last Slide: Questions for Thought

• Essentially, online social networking is a relatively new phenomenon in the public & legal realms.

• Although there are laws which address online conduct, we’re still e-infants & have a lot to figure out. – Therefore, should businesses & recruiters not discuss hiring

decisions online with candidates or the public in general? Should employers should be more secretive?

• Due to the immediacy of online communication, public expectations of commerce & protocol are changing. Businesses today are striving for greater transparency & intimacy with the public, in order to take advantage of the market place changes in expectations & protocol.

• How does an employer or recruiter engage in online activities, & the incumbent transparency & intimacy, while minimizing their legal exposure & liability?


9/24/09 finding talent seminar legal issues: background checks & electronic communications

Documents

online information

online recommendations

use linkedin

online postings

online content

online profile

use facebook

use twitter