Labor & Employment Newsletter - Summer 2010
Social Media in the Workplace
Part 1
by Eileen Johnson
This is the first of two articles on the potential legal issues that can arise from the use of social media in the workplace. The articles will cover the use of social media in pre-employment, employment and post-employment situations.
Pre-employment screening
Employers are taking advantage of the free information on social media websites and communication tools to screen applicants or to perform pre-offer due diligence on successful applicants. It's not just people in their 20's and 30's who have online profiles and the use of social media by human resource professionals is not a passing fad.
There are a variety of resources that can be consulted such as LinkedIn®, MySpace™ and Facebook. Users of these three sites create an individual profile that can include information about their work history, extracurricular activities, and contacts. Other sites such as Twitter™ and YouTube can also yield information on applicants that might be valuable in making a decision to extend or withhold an offer of employment. For those employers who are unsure about using social media sites, a simple search using Google™ or some other search engine can also yield potentially interesting information.
What are employers looking for? Social media profiles can provide a lot of valuable information. While an employer should not rely solely on these sites to verify information on employment applications, they can be used to discredit applicants or to provide another view of the person behind the resume or online application. Online profiles can provide information on the person's:
- Professional credentials
- Career objectives
- Maturity and judgment
- Abuse of drugs or alcohol
- Current employment status
- Red flags
A June 2009 CareerBuilder survey of 2,600 hiring managers found that 45% of them use social media in the hiring process. That was double the number of hiring managers that reported such use in 2008. What's more, 11% planned to start using social media for prescreening. Eighteen percent or almost one in five hiring managers surveyed reported finding information online that encouraged them to hire candidates:
- Profile - good feel for personality and "fit"- 50%
- Profile supported professional qualifications - 39%
- Candidate was creative - 38%
- Solid communication skills - 35%
- Candidate well rounded - 33%
- Good references posted by others - 19%
- Candidate received awards - 15%
However, twice as many (35%) hiring managers reported finding information that led them to not hire a candidate, including:
- Inappropriate photos or postings - 53%
- Postings on drinking or drug use - 44%
- Bad-mouthing previous employer, co-workers or clients - 35%
- Poor communication skills - 29%
- Discriminatory comments - 26%
- Lied about qualifications - 24%
- Shared confidential information from previous employer - 20%
Potential pitfalls of screening
Screening with social media has some drawbacks. It can provide too much information about job applicants, including some information that cannot be considered in the employment decision. Some online content can be questionable in terms of its origin or truthfulness. Moreover, some employers are concerned about invading applicants' privacy.
Too much information
Certain information that can be found in an applicant's online profile cannot be used as the basis for an employment decision. These include information on the applicant's race, religion, national origin, age, pregnancy status, marital status, disability, sexual orientation (some state and local jurisdictions), gender expression or identity (some state and local jurisdictions) and genetic information. While it is best to avoid obtaining or even seeing this information, it is often prominently displayed on social networking profiles.
A potential solution is to assign one person to review the social media sites who is not part of the decision making process. That person should filter out any information regarding membership in a protected class and only pass on information that may be considered in the hiring process. The most fundamental way to protect against discrimination claims in using information gleaned from social media sites in the employment decision process is consistency. Employers should keep records of information reviewed and used in any employment decision.
Quality of information
Online information is not always reliable. The first rule is to make sure that the person whose profile you are viewing is actually your job applicant. It is not unusual for people to have similar names or even the same name. If you have confirmed the identity of the applicant, keep in mind that there is a possibility that not all of the information in the profile is correct. Profile information might have been deliberately falsified by the applicant or a friend or significant other with access to the profile login information.
Employers should also recognize that any site provides a limited picture of the individual. Remember the intended audience. On sites like LinkedIn, the intended audience is other professionals. However, on Facebook and MySpace, profiles are often developed for close friends and family. And some people enjoy creating a new persona for their online life, one that has no relationship to who they are in real life.
Invasion of privacy
Employers have little risk that viewing applicants' profiles, blogs or other online postings will give rise to invasion of privacy claims. Users of social networking sites usually have the option to set privacy settings on their personal pages. Their personal pages can be available to any user of the network, or can be restricted to only individuals authorized by the user. A critical question to ask in evaluating an invasion of privacy claim is whether there was a reasonable expectation of privacy. To avoid the potential for liability, employers should avoid attempts at circumventing the privacy settings put in place by users. Only view information that is readily accessible and intended for public viewing.
Google™ and other search engines
In a recent Monster.com report, 77% of employers surveyed reported performing a "Google" search on job applicants. Google is popular for the amount of information that can be discovered and the ease of use. In addition to the concern noted above that a Google search might return too much information, there are additional concerns about the quality of the information retrieved. The breadth of information that a Google search can produce has its own drawbacks including difficulty in identifying sources of search results.
As of now, employers are unlikely to incur liability based on Google searches of job applicants. To further protect against liability, employers should be consistent in their search practices, recognize the limits of online searches, and be sure the information they find actually relates to their applicants.
Current law on reviewing social media sites
There are no court decisions yet imposing liability for an employer's review of a social networking site in the pre-employment context. This is not a guarantee that such liability will not be imposed in the future. For now, the potential for liability is minimal in the absence of misconduct or discrimination by the employer. The potential for liability can be further reduced by:
- Being consistent in prescreening all applicants for certain positions or only those already selected for interviews
- Having someone other than the decision maker filter out protected class information if possible
- Keeping records of the basis for each employment decision
- Not circumventing privacy settings established on applicants' networking sites
If employers have any questions about whether information found through pre-employment screening should be used in the decision making process, they should consult employment counsel before using that information.
Department of Labor Broadly Interprets "Son or Daughter" For Purposes of FMLA Leave
by Melissa M. McGuire
The Department of Labor recently announced that the Family and Medical Leave Act's ("FMLA") leave provisions for the birth, placement or care of a "son or daughter" extends to employees with no legal or biological relationship to the child. In a press release, the DOL heralded the interpretation as a "victory for many non-traditional families."
The FMLA defines "son or daughter" to include a "biological, adopted, or foster child, a stepchild, a legal ward, or a person standing in loco parentis." The regulations further state that in loco parentis includes those with "day-to-day responsibilities to care for and financially support a child." On June 22, 2010, DOL issued an Administrator's Interpretation which clarified that "in loco parentis" regulations do not require an employee to establish that he or she provides both day-to-day care and financial support in order to be found to stand in loco parentis to a child. Thus, when an employee shares in the day-to-day care of an unmarried partner's biological child, but does not financially support the child, the employee would stand in loco parentis to the child and be entitled to leave. The Interpretation does not apply to the newly-enacted military leave provisions, which include their own definitions.
The Interpretation also provides that the fact that a child has a biological parent in the home or both a mother and a father, does not prevent the finding that another stands in loco parentis to the child. According to the Interpretation, nothing in the FMLA or its regulations limits the number of parents a child may have under the FMLA. As a result, grandparents and others may stand in loco parentis even though the child has two biological parents who provide care or support.
To establish an in loco parentis relationship, the Interpretation provides that "[a] simple statement asserting that the requisite family relationship exists is all that is needed in situations such as in loco parentis where there is no legal or biological relationship." This minimal standard appears to be open to abuse by unscrupulous employees. It also remains to be seen whether courts will agree with DOL's position that an employee need not provide both day-to-day care and financial support to establish in loco parentis status, despite the regulation's language to the contrary.
As a result of the DOL's Interpretation, employers should be aware the individuals who stand in any relationship of daily care or financial support of a child may be entitled to leave under the FMLA and grant leave accordingly.
Supreme Court Ruling Against NLRB Results in Remand of Almost 100 NLRB Decisions
by Peter D. Guattery
On June 17th, the U.S. Supreme Court ruled that the National Labor Relations Board was not authorized to issue decisions in pending cases during a twenty-seven month period in which three of its five seats were vacant. The ruling was a victory for the employer in the case, New Process Steel, which had challenged an adverse ruling by the Board. But more significantly, the ruling of the Supreme Court puts into question almost 600 decisions issued by the two-member Board during a period of more than two years.
The central issue in the case was over the interpretation of a provision in the National Labor Relations Act, which provides the Board with authority to delegate its powers to a quorum of at least three members. The Board made such a designation in late 2007 while there were still four members on the Board. Within a short time period, however, the Board was reduced to only two members when the terms of the two other members expired. From there, the Board took the position that once a three member group was designated to handle cases, two of its members could constitute a proper quorum.
From January 2008 until late March 2010, therefore, the two-member Board continued to issue decisions in those cases where those two members could agree on the outcome. No decisions issued in those cases where the members could not agree. Still, over this two plus year time period, the Board issued almost 600 decisions, one of which was the New Process Steel case which made its way to the Supreme Court.
In a 5-4 decision, the Supreme Court held that under Section 3(b) of the National Labor Relations Act, a delegated group must have at least three members in order to exercise the delegated authority of the Board. In a single decision, the Supreme Court called into question the almost 600 decisions issued during the period in which only two members sat on the Board.
In response to the Court's decision, the Board issued a press release which noted that
- [t]he same question [in New Process Steel] has been raised in five more cases pending before the Supreme Court, and 69 that are pending before the Courts of Appeals. It is expected that those cases will be remanded to the Board, and the now-four member Board will decide the appropriate means for further considering and resolving them.
Now that the Board has four members, the cases may be properly reviewed upon remand. A July 1 press release from the Board stated just that, noting that each remanded case will be reviewed by a three member panel.
A more interesting question is the fate of approximately 500 cases that are final, meaning no appeal was taken or the process had concluded. At the time of the Supreme Court decision, only 96 of the two-member cases were on appeal. Res judicata principles would ordinarily preclude reopening a final judgment. However, where the body issuing the decision lacked the jurisdiction to issue the decision in the first place, the decision may still be subject to attack. From a practical standpoint, even if the cases were successfully reopened, the parties may find themselves back where they started even with a decision from a three-member panel. So the practical effect of the decision remains to be seen.
COBRA Health Continuation Coverage Subsidy Extension
Frequently Asked Questions
by Mary Claire Chesshire
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009, referred to in the press as the Economic Stimulus Act. One provision in this Act that had an immediate impact on employers who provide health benefits to employees was a 65% subsidy for former employees and their dependents who have elected, or were offered the opportunity to elect, to continue health insurance coverage following involuntary termination of employment. The Department of Defense Appropriations Act signed by the President in December of 2009 extended the duration of the subsidy and the eligibility period. The subsidy was further extended by the Temporary Extension Act of 2010. The Unemployment Compensation Extension Act signed by President Obama on July 22, 2010 did not further extend the subsidy.
Following are some frequently asked questions about the new requirements and the extension of the subsidy. As of this writing, the subsidy applies only to involuntary terminations of employment that occurred prior to June 1, 2010. However, it is never too late to review COBRA administration for any issues.
Who is eligible for the subsidy?
Generally, a former employee or dependent of the former employee (collectively, "qualified beneficiaries") who lost coverage or loses coverage under a group health plan as a result of an involuntary termination of employment between September 1, 2008 and May 31, 2010 with the employer sponsoring the group health plan is eligible for the subsidy.
What does "involuntary termination of employment" mean for eligibility for the subsidy?
The subsidy is available to employees and their dependents if the termination of employment arose out of the exercise of the employer's authority to sever the employment relationship. It includes firing, layoff (even with a right of recall), or a change in the requirements of a job that justify an employee's voluntary resignation. The Internal Revenue Service imposes a "facts and circumstances" test to determine whether the termination is involuntary.
Does a reduction of hours resulting in a loss of employer-provided coverage entitle an employee to the subsidy?
Generally, no. However, if the reduction in hours is followed by an involuntary termination of employment that occurred between March 2, 2010 and May 31, 2010, the employee will be entitled to COBRA coverage retroactively to the date of the loss of coverage, with the subsidy beginning effective after the termination of employment.
To which group plans does the subsidy apply?
The subsidy applies only to group health plans, including health reimbursement accounts. COBRA premium payments for flexible spending plans are not eligible for the subsidy.
What is the amount of the subsidy?
Qualified beneficiaries who are eligible for the subsidy are required to pay 35% of the required COBRA premium.
How long does the subsidy last?
The subsidy lasts for fifteen months. As originally enacted, the subsidy lasted only for nine months. However, the subsidy will end if the qualified beneficiary is eligible for coverage under another comparable group health plan or Medicare. For these purposes, the qualified beneficiary does not have to actually become covered under the other group health plan or Medicare - simply being eligible for coverage is sufficient to end the subsidy.
Does the subsidy extend the amount of time a qualified beneficiary will be eligible to continue coverage?
No. COBRA coverage still ends on the statutory termination date --18, 29 or 36 months following loss of coverage, depending on the event causing the loss of coverage.
Does the employer receive a tax credit for the subsidy?
Yes. The employer providing the subsidy will receive a credit against its payroll taxes for the amount of any subsidies provided to eligible individuals.
What notice requirements are imposed on employers?
An employer's general notice of COBRA continuation rights must be amended to reflect the extension of the subsidy for involuntary terminations of employment through May 31, 2010, and the extension of the duration of the subsidy from nine to fifteen months. In addition, if an employee who lost health insurance coverage following an involuntary termination of employment, or a dependent of such an employee, received a notice including outdated information, that individual must be provided with a supplemental notice noting the new extensions.
Are the election periods extended?
Generally, yes. If a terminated employee or dependent has to receive a supplemental notice, the election period is extended for 60 days from receipt of the supplemental notice.
Is the subsidy taxable to the recipient?
Generally, no, subject to income limits on the recipient of the subsidy.
Are there income limits on qualified beneficiaries on exclusion of the subsidy from gross income?
Yes. The tax free aspect of the subsidy phases out for individuals with adjusted gross income of $125,000 or more ($250,000 for joint filers) with a complete phase out for individuals earning $145,000 ($290,000 for joint filers). These individuals may make an election to waive the subsidy.