Mr. Schmidt

Hospitality Law

Employee Social Networking Sites: A Plethora of Information, But be Careful What You Wish For

By Michael C. Schmidt, Partner, Cozen O'Connor

How much information would you like to have about your employees before you make a decision about whether to hire or fire them? If you had access to all public and private information about them at the click of a mouse, would you seize the opportunity? Be careful what you wish for.

This fall season brings with it various employment-related decisions that will be made by hotel employers. For some, the end of the summer and the approach of a new calendar year will prompt the hiring of new employees. For others, the current economic climate will continue to result in corporate downsizing and layoffs. In either case, employers are turning with greater frequency to social networking Web sites as a means of obtaining information on potential and current employees; information beyond what can be readily gleaned from the application process, or from a current employee’s performance history.

However, with the benefits and ease of technology also comes the legal implications that employers must consider when deciding to use social networking sites in their decision-making processes. This article identifies the primary problems associated with the use of social networking sites by employers in the private sector (as opposed to government and other public employers), and offers some best practices to effectively address some of the potential pitfalls.

There is no denying the prevalence of social networking sites in society today. According to recent published statistics, MySpace and Facebook have approximately 100 million and 47 million registered users, respectively, all of whom post and share a wide array of information about their personal, social and professional lives. More recently, Twitter has entered the popular culture landscape, allowing users to post 140-character microblogs from a cell phone at the pace of an instant message. According to cnn.com, Twitter use has grown more than 1300 percent in the 12 months between February 2008 and February 2009.

Employers have caught on. A survey of employers has revealed, for example, that approximately 61 percent of professional service companies routinely conduct Google searches on job applicants, while more than 50 percent of companies use social networking sites as a portal to information about potential or current employees. To the extent that these networking sites provide such personal information as the individual’s interests, affiliations, blogs, and picture, it is easy to see why employers might want to get a “more complete” picture about an individual.

There are four primary legal concerns, however, with a private employer’s use of social networking sites for employment decisions.

Federal Prohibitions Related to Access to and Interception of Communications

Federal law prohibits certain access to and the interception of information that may be contained or transmitted through an individual’s Web site. For example, the federal Stored Communications Act prohibits intentional access, without authorization, of a Web site containing stored communication. The Act does not apply, however, when the person accessing the Web site controls the communication service, or when a user of the Web site accesses Web site communications intended for that user. Thus, an employer could face liability if it used another person’s user information to access profile information on an employee’s or job applicant’s Facebook page, particularly if the employer gained access to “private” areas under fraudulent means.

Similarly, the federal Wiretap Act prohibits the interception or attempt to intercept a wire, oral, or electronic communication. In order for information to be “intercepted” in violation of the Wiretap Act, it must be acquired during transmission, and not while it is in electronic storage. To be liable, therefore, an employer would have to intercept an electronic communication during the transfer of that communication to storage.

Under the federal Fair Credit Reporting Act, employers are required to provide certain disclosures and gain authorization when obtaining a consumer report from a consumer reporting agency in conjunction with an employment decision. Thus, utilizing third-party individuals or vendors to screen or access an individual’s social networking page could run afoul of the law, particularly if all obligations pertaining to disclosure and consent are not satisfied.

Prohibition Relating to Discrimination and Harassment

Utilizing social networking sites in the course of making employment-related decisions also has certain risks in terms of anti-discrimination and anti-harassment laws. For example, by accessing an employee’s or applicant’s social networking page, an employee might find out about information that it would not otherwise learn, such as particular organizations with which the individual is affiliated, as well as information concerning a disability, pregnancy, or other personal characteristic. An individual who suffers an adverse employment decision could more easily claim that a decision was based on an impermissible basis, such as protected class information learned from the social networking site.

Similarly, supervisors who “friend” subordinates not only run the risk that the informal discussions that tend to occur on social networking sites prompts a claim of harassment, but inappropriate conduct that a “friended” supervisor learns about from the site may put the supervisor, and therefore the employer, on notice of such inappropriate conduct and trigger a workplace investigation. Employers need to understand that the workplace extends beyond the traditional walls of the office, and could lead to potential liability for conduct occurring between employees relating to the use of social networking sites.

Defamation and Privacy Concerns

Defamation claims arise when a false statement is made and published to a third party with the intention and effect of causing harm to the subject of the statement. Relying on information obtained from a social networking site can lead to claims of defamation, particularly when the information is not verified by the employer, but is nevertheless published or used as the basis for an employment decision that itself becomes public. In addition, many states have privacy laws that prohibit employers from considering certain types of off-duty conduct in making employment decisions, as well as from accessing information in the first place that is treated as private by the particular individual.

Website Terms of Service

Each social networking site provides terms of service that must be followed by users of that site. Users generally must agree to the terms of service in order to activate an account, and one of the terms of service restricts any commercial use of the site. Thus, an employer’s use of social networking sites for arguably “commercial” reasons, such as to conduct background checks, or otherwise make employment-related decisions, may result in a finding that the employer has violated the contractual terms of service of the particular site.

Technology will continue to develop, and employers will continue to rely more heavily on social networking sites in the course of making employment-related decisions about current and potential employees. Potential liability could also flow from conduct on the part of a company’s employees in either accessing or utilizing social networking sites, and other forms of Internet-based communications such as blogs.

It is imperative that employers create appropriate policies relating to the use of social networking sites and Internet-based communications, and that employers ensure that information from these areas are sought in a consistent, non-discriminatory manner for legitimate business reasons.

Michael C. Schmidt is a member of Cozen O'Connor in the Labor & Employment Practice Group. A portion of his practice is devoted to advising large and small businesses how to avoid litigation and minimize exposure to claims. He has represented clients in the hospitality and restaurant industry in matters involving wage and hour, discrimination and employment contract disputes. Mr. Schmidt is an Adjunct Professor of Law at Touro Law School in Central Islip, N.Y., he teaches employment law. He lectures and conducts seminars for human resources professionals, corporate executives, and lawyers. Mr. Schmidt can be contacted at 212-453-3937 or mschmidt@cozen.com Extended Bio...

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