The use of big data in employment decisions—a practice often referred to as “people analytics”—has exploded in recent years. Lately, however, the concept is gaining more and more attention not only for its appeal of faster and more efficient hiring, but also for the significant risks it can pose. One key risk is the potential for a disparate impact claim, particularly on a class-wide basis. So while proponents of using software tools and algorithms to identify and select job candidates claim people analytics is more efficient and effective than traditional recruiting and selection procedures, employers should take care when choosing tools and vendors, and should proactively monitor their implementation to avoid big liability.
The federal Fair Credit Reporting Act (FCRA) has recently spawned an unprecedented number of class action complaints against employers for allegedly failing to comply with FCRA’s hyper-technical disclosure and consent requirements before conducting background checks or proceeding with “adverse actions.” As these cases have evolved, plaintiffs have expanded their focus beyond traditional background checks and have started attacking employers’ use of ever-evolving technologies, like social media accounts, that are often accessible and searchable through just a few clicks of a mouse.
In the recent case of Game Retail Limited v Laws, the UK Employment Appeal Tribunal (or “EAT“) considered the fairness of an employee’s dismissal for offensive tweets. This is the first time this issue has been considered at EAT level. The EAT found that the dismissal was fair, even though the Twitter account was not linked to Mr Laws’ employment, and his posts were made in his own time.
With the increasing prominence of social media, employers have been rightfully concerned about the impact of employees’ out-of-work statements on the work place—particularly when it comes to the reputation of the employer. In the last few years, the National Labor Relations Board has held that even offensive language can be protected concerted activity [See previous Orrick blog postings on this topic from September 25, 2012 and May 16, 2013]. However, apparently there is a limit: an administrative law judge held last week that the expletive-laden Facebook posts of two youth center employees crossed a line. READ MORE
As reported in prior blogs, the National Labor Relations Board (NLRB) has become increasingly active in attacking employer policies on the grounds that those policies chill employees’ rights to engage in concerted activity. In particular, the NLRB has been scrutinizing social media policies. READ MORE
Effective July 28, 2013, Washington became the eleventh state to have a law prohibiting employers from, among other things, asking its personnel for the user names and passwords to employee social media accounts. The law does have some limited exceptions, including allowing employers to retrieve content from an employee’s personal social media account in the context of an investigation into an employee’s misconduct, or if an employee is accused of making unauthorized transfers of proprietary information. Even then, however, employers can only access the information if it’s provided by the employee voluntarily. READ MORE
Providing yet another example of how online social networking can amount to protected conduct under the National Labor Relations Act, the NLRB ruled earlier this month in New York Party Shuttle, LLC and Fred Pflantzer, CN: 02-CA-073340 that a New York City tour guide’s Facebook postings constituted protected union organizing activities. The board held that New York Party Shuttle LLC unlawfully discharged Fred Pflantzer when it refused to give him new assignments after he posted Facebook messages criticizing the company’s employment practices. READ MORE
So far in 2013, three states (Arkansas, New Mexico and Utah) have passed new social media legislation restricting employer access to employees and job applicants’ personal social media accounts. We previously posted about social media legislation in California and other states here and here. READ MORE
In the recent UK case of Smith v. Trafford, the Claimant was awarded just £98 (approx. $150) by the English High Court for a successful breach of contract claim against his housing trust employer (the “Trust”). The Claimant, Mr. Smith, had posted two comments on his Facebook wall expressing his views on gay marriage. One comment stated “equality too far” and the other comment elaborated on his reasons for opposing gay marriage. In the Trust’s view, Mr. Smith’s comments amounted to a serious breach of its Code of Conduct and Equal Opportunities Policy. He had a significant number of colleagues as his Facebook friends and the Trust was concerned that his personal views would be interpreted as its own. Consequently, the Trust found Mr. Smith guilty of gross misconduct but rather than dismissing him, demoted Mr. Smith to a non-managerial position with a resulting 40 percent reduction in his pay. READ MORE
In its first ruling on an employer’s social media policy, the National Labor Relations Board found that Costco Wholesale Corporation’s social media policy in its employee handbook violated the National Labor Relations Act. Among the policy provisions reviewed, the Board analyzed Costco’s policy prohibiting employees from posting electronically statements that damage the company or any person’s reputation.
In its September 7, 2012 opinion, the Board stated that the “appropriate inquiry” is whether the policy would “reasonably tend to chill employees in their exercise of their Section 7 rights[,]” which provides employees with the right to engage in concerted activity. While the Board acknowledged that Costco’s policy did not explicitly reference Section 7 activity, the Board did find that the policy’s broad prohibition on statements “clearly encompasses concerted communications protesting [Costco’s] treatment of its employees.” The Board specifically noted that there was nothing in Costco’s policy that even suggested the exclusion of protected communications. Accordingly, the Board concluded that Costco’s policy had a reasonable tendency to inhibit employees’ protected activity and thus violated the National Labor Relations Act.