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The exponential growth in the use of social media is well documented and is inexorably invading the workplace. No electric or physical barrier can stop this species. Enterprising companies are constructively utilizing Facebook, blogs, Twitter, and other online vehicles to recruit employees, communicate with consumers, and issue press releases. Employees are increasingly utilizing social media, both inside and outside the workplace, to criticize employers, interact with co-workers, and, inevitably, to view and share material that is inappropriate and sometimes destructive in the employment setting.

The Federal Trade Commission recently issued new Guidelines that potentially govern employee comments about company products (see sidebar article, page 2), and now the U.S. Supreme Court is about to weigh in on the electronic workplace this Term in a case, Quon v. Arch Wireless, et al., involving the privacy rights of employees who use employer-issued pagers to text personal messages.

The growing prevalence — both use and misuse — of social media presents new challenges for employers, and suggests that prudent employers should review their written policies, and their unwritten practices as well, to protect their interests.

Workplace Misconduct. News reports and publicized lawsuits from around the country demonstrate that employees are often utilizing social media in ways that are contrary to their employers’ interests. Typical problem areas are the use of social media during paid work time, to harass co-workers, to disclose trade secrets or confidential information, to blog off-duty negatively about an employer or its products, to publish inappropriate materials linked to the employer, and to create embarrassing corporate and public relations issues.

One recent and highly publicized incident involved Domino’s Pizza employees in North Carolina who made a video of food preparation so grotesque that it violated health code standards and disgusted viewers. The video was posted on YouTube, and Domino’s had an instant public relations crisis on its hands. Growing numbers of lawsuits are being filed by employees in which the underlying facts center on social media. These cases typically balance employee privacy rights against employer concerns related to productivity, harassment, confidentiality, and monitoring.

Quon v. Arch Wireless. The U.S. Supreme Court may soon furnish a measure of guidance regarding the intersection between employee privacy interests and the world of modern electronic communication. At this writing, we can only speculate about how far-reaching the decision will be.

The Quon case arose from the personal use of text message pagers issued to employees of the Ontario, California Police SWAT Team. The city promulgated a written policy prohibiting the personal use of city computers and emails. The policy expressly stated that employees should have no expectation of privacy in utilizing such devices. But, importantly, the policy did not by its terms extend to pagers or text messaging. Although officers were told that the policy applied to pagers, the SWAT team lieutenant also told his team members that he would not audit their use of pagers if they paid for any charges that exceeded a monthly character limit on each pager. So the facts pertaining to the policy and actual practice were somewhat murky.

As time passed, the lieutenant tired of chasing his officers to pay their excess charges, and, as a result, he began scrutinizing the texts. In doing so, he found sexually explicit messages being exchanged between officer Quon and his wife, and also between Quon and a coworker dispatcher who turned out to be Quon’s mistress. You can imagine what happened when this became public.

Quon, his wife, the dispatcher, and another officer then filed a civil rights action alleging that the city and police officials had violated their Fourth Amendment rights against unreasonable searches; and they simultaneously sued Arch Wireless alleging that it had violated the federal Stored Communications Act (SCA), by disclosing the text messages to the police department.

The U.S. District Court ruled in favor of Arch Wireless on the SCA claim, finding that it was acting as a remote computing service (RCS) by storing the text messages “for purposes of backup protection,” rather than as an electronic communications service (ECS), which stores the messages temporarily for purposes of transmission. For the former, consent of the service subscriber (the city) would be sufficient for disclosure, whereas for the latter the originator, addressee, or recipient must consent.

The U.S. Court of Appeals for the Ninth Circuit disagreed with the trial court, concluding that Arch Wireless actually provided ECS service to the city, and that the SCA prohibited Arch Wireless from knowingly divulging the contents of communications other than to the originator, addressee, or intended recipient, without consent. Because Quon and the other plaintiffs had not consented, and Arch Wireless had knowingly divulged the contents, it was found liable notwithstanding that the pagers and associated phone numbers belonged to the city. Rehearing en banc was denied over an animated dissent.

In assessing the plaintiffs’ Fourth Amendment claims against the city and police officials, the Ninth Circuit held that the plaintiffs had a reasonable expectation of privacy in their text messages and, as a result, they enjoyed protection from unreasonable searches. Critical to this finding was the informal practice that text messages would not be audited if employees paid the excess charges. Although the court found it was reasonable to conduct a search to determine if the character limit was adequate to meet the SWAT team’s needs, the search in question was deemed excessively intrusive.

The U.S. Supreme Court agreed to review the Fourth Amendment privacy ruling, but denied Arch Wireless’ petition to review the ruling under the SCA. The lesson for third-party service providers, and for employers, is that they may want to obtain users’ advance permission for releasing stored electronic messages.

The Supreme Court’s expected ruling will be limited to expectation-of-privacy issues under the Fourth Amendment, which does not apply to private employers. But federal and state wiretap statutes, as well as common law tort theories, are often guided by privacy tests that are virtually identical to the Fourth Amendment test. Consequently, the ruling in Quon may provide guidance to private employers who wish to monitor electronic communications. The Court may also address whether persons who are not government employees, such as Quon’s wife, can have a reasonable expectation of privacy in text messages sent to a government employee. The Quon case offers an opportunity for the Court to address employee privacy principles that have not been considered since the advent of the digital age.

Some Local Flavor. Michigan readers (and likely many others) are familiar with the “sexting” scandal involving former Detroit Mayor Kwame Kilpatrick. The Kilpatrick text messages were obtained through a subpoena issued by an attorney in a lawsuit against the city and mayor. They were thereafter “leaked” to the press, which then led to perjury charges and eventual guilty pleas by Kilpatrick and his aide/mistress Christine Beatty. Former Mayor Kilpatrick has since filed suit against SkyTel in Mississippi for allegedly violating the SCA. That case is still pending.

Michigan readers are also familiar with a civil lawsuit filed by the family of Tamara Greene against Detroit and Kilpatrick relating to the mysterious homicide of the exotic dancer (known as “Strawberry”) who was rumored to have danced during a party at the mayor’s city-owned residence. In the discovery phase of the lawsuit, Greene’s attorneys have sought disclosure of text messages from SkyTel. In an extensive and informative decision interpreting the SCA, Flagg v. City of Detroit, Chief U.S. District Judge Gerald Rosen ordered limited discovery of the text messages, whereupon a number were produced after the court’s in camera inspection. Judge Rosen’s opinion criticized the Ninth Circuit’s analysis in Quon and instead followed the trial court judge’s reasoning in finding that SkyTel could disclose the text messages to its subscriber without consent of the device’s user.

Policy Implications For Employers. Although your long-standing policies may still apply to most situations arising through cyberspace (e.g., Domino’s did not need a new or special policy to fire the pizza miscreants), employers should make sure their policies keep up with technology. You should assess the proper level of accountability for social media use in your workplace, which will naturally depend on your industry and culture. At a minimum, you should review existing policies that govern information technology, issuance and use of electronic communication devices, confidentiality, expectation of privacy, general codes of conduct, and co-worker harassment, all with an eye toward how social networking sites, blogs, and other electronic media impact your workplace. Here are a few suggestions:

• Emphasize that all computers, electronic devices, and the systems that run them belong to the employer, not the employee, and that the employer sets the rules.
• Explicitly state that there is no expectation of privacy for either business or personal use, that communications may be monitored, and that they are subject to audit.
• Determine the range of what you want to cover by your policies, and define things in broad terms.
• Be aware that, unlike traditional emails, text messages customarily run through a third-party service provider and are not stored on the employer’s servers. Hence, traditional and possibly outdated email policies may be insufficient to monitor texts without consent.
• Prohibit any use that is violative of other policies or is contrary to the interests of your organization, customers, and the like.

Eric J. Pelton

 

FTC Issues New Guidelines On Advertising Endorsements By Employees

On December 1, 2009, the Federal Trade Commission issued new standards for endorsements or testimonials in product advertising that may impact some employers. The guidelines require that all persons promoting or endorsing a product or service regulated by the FTC disclose any factors that might cause a consumer to reassess or reevaluate the nature of the endorsement. The guidelines attempt to regulate artificial inflation of consumer ratings where, for example, company agents provide quality ratings on their own company’s products or services.

Under the guidelines, a well-intentioned employee who posts an online message endorsing her employer’s products or services may be considered a covered “endorser.” The FTC has stated that where an online blogger discusses product information of her employer, she “should clearly disclose her relationship to the manufacturer to members and readers of the message board” because public knowledge of an employment relationship “likely would affect the weight or credibility of her endorsement.” Failing to do so could create liability for an unfair or deceptive act or practice — even if the endorsement was not authorized or sponsored by the employer, and even if the endorsement itself is not misleading.

Although it seems improbable that the FTC would pursue enforcement against an employer for the online statements of a single employee, employers should consider protective measures, including informing employees through technology policies or otherwise whether they are permitted to discuss the employer’s products or services online, and, if so, how to do so properly.

Eric J. Pelton

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