New Jersey Employment Law Blog

As someone who has not yet ventured in any significant way into the world of social media (except for this blog, of course!), I missed the buzz about the recent launch of Google Buzz.  As explained in this post from Mark McCreary  at the Privacy Compliance & Data Security Blog, Buzz raises significant problems for employers in connection with their computer and electronic device policies and practices.  If you are a manager or HR professional, the post is well worth a few minutes of your time.

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Postings.  (Not the blog kind.)  You know them.  They're the things in inscrutably fine print that hang on the lunch room bulletin board and nobody reads.  While often hidden, they're easy to find if you'll just look under the softball team's schedule and the reminders about the who's supposed to bring the potato salad to the company picnic.

The law says that they have to be there (the postings, that is, not the softball schedule).  But if truth be told, this subject is too boring for even an employment lawyer to dwell on for long.  Fortunately,it's not too boring for the government, so this employment lawyer is pushing the substance of this post onto those who spend our tax dollars.  Our dauntless federal and state public servants have compiled lists of the required postings.  The US Department of Labor's list is here, and NJ's counterpart is here.

And yes, there can be consequences if an employer fails to post as required.

But as for me, I confess to being so bored by this subject that I'm ending this post.

Next: paying the price.

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This second installment in our August series on HR basics deals with the subject of employee handbooks.

Here are questions about handbooks that you should be asking yourself during your late summer HR self-evaluation.

• If I have one, when was it last reviewed for currency?
• If I don't have one, do I need one?
• How much should the handbook cover?  Does mine cover everything it should?
• Does it cover too much?
• Have I published a sexual harassment policy?  If not, should I?
• Do I need an internet use policy?
• How about a personal e-mail policy?
• Does our handbook reflect our company's culture and way of doing business?  Or have we jammed our requirements into someone else's template for reasons of cost or convenience?

The short answers, with links back to some of our prior posts:

1. Employment law changes fast.  You should have your handbook reviewed annually.
2. Yes, if you don't have one, you probably should.
3. As for coverage, the "3 bears theory" applies.  Not too much, not too little, but just right.
4. A sexual harassment policy, properly implemented, is some of the cheapest lawsuit insurance you can buy.  Yes, you need it.
5. An internet use policy?  Probably, depending upon the nature of your business.
6. A personal e-mail policy?  Unless you want to allow your employees free access, yes, you need a policy.
7. Work off of someone else's form?  We don't recommend it.  Your handbook is a tool to help your business run better.  It should reflect your way of doing business.

We end with this warning from a prior post.  I know that it seems self-serving, but ignore it at your peril.

As with most things related to employment law in NJ, we offer this advice: don't try to create a policy [or handbook!] by yourself.  Find a NJ lawyer who knows employment law and get some help.  There's simply too much at stake for your business to run the risk of a homemade job.  And canned forms are dangerous because a good policy needs to fit the requirements of your particular business as much as it needs to fit the law.

One final caution: don't think that because you have just a few employees that you don't need this protection.  Even if you're too small to be covered by the federal anti-discrimination laws, you are subject to the New Jersey Law Against Discrimination [LAD]. 

Next: those pesky posting requirements.

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Stengart v. Loving Care Agency, Inc. is a new decision from the NJ Appellate Division that will reverberate among employment and business practitioners for a long time.  While primarily concerned with the confidentiality of employee communications made through a business-owned computer system, it also addresses the enforceability of business policies as published in employee handbooks and the attorney-client privilege.  Note that the opinion has been approved for publication, which makes it binding precedent unless reversed by the NJ Supreme Court or overturned by legislation.

The plaintiff Stengart sued Loving Care, her former employer, for discrimination in employment.  Stengart communicated with her attorneys about the case using a laptop computer that had been issued to her by Loving Care.  The e-mails went through a personal, web-based, password-protected Yahoo account.

Loving Care accessed the e-mails, which should have been protected by the attorney-client privilege,  through the laptop.  For the attorneys reading this, you will want to study the procedural details of how this happened.  For those of you in HR or other positions of management responsibility, it's enough for now that you just know what happened.

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Employers: if you want your arbitration agreements to hold up, two things are crucial.  First, you must be able to point to a clear and unambiguous policy to arbitrate discrimination claims. Second, you must be able to prove that the employee actually knows about it.  This formula has been recited ad nauseum by the courts, but employers still find creative ways to screw things up.

In Kirleis v. Dickey, McCamey & Chilcote, P.C., decided March 24, 2009 by the 3rd Circuit Court of Appeals, the plaintiff was a female partner (and long time employee) in the defendant law firm.  She sued for sexual harassment.  Her firm tried to force her out of court and into arbitration.  They failed. 

The arbitration "agreement" was contained in the partnership's by-laws.   Kirleis swore that she had never seen the by-laws before the litigation was started.  The firm couldn't prove otherwise, so the case stayed in court.

While I generally disagree that arbitration is the superior alternative to litigation that some attorneys claim, if you decide that you prefer arbitration, pay attention to the details so you can actually get there, for heaven's sake.  On this one there was just no excuse.  The plaintiff was an attorney, highly educated, and a long-term employee.  She was certainly capable of understanding an arbitration agreement if it had been shown to her.  The fact that it wasn't is just mind-bogglingly sloppy on the part of the firm.

Sloppy or not, many professional practices and small businesses are loosely managed.  Kirleis is a warning to all of us to pay attention to the details.

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If you own or run a business, they really do think you're crazy.  If, that is, you don't have an effective sexual harassment policy to protect you from respondeat superior liability. 

Coincidentally, we blogged on this subject on October 3 in the context of the NJ Appellate Division's opinion in Cerdeira v. Martindale-Hubbell.

Here's a snippet of the transcript of yesterday's oral argument in Crawford v. Metropolitan Government of Nashville.  We've edited it a bit and highlighted for emphasis.

JUSTICE GINSBURG: And how about taking our decisions in the Faragher and Ellerth case which in a sense made the employer's internal investigation part of the EEO process because it says to the employer, if you don't have that kind of effective internal complaint and investigation procedure, then you're going to be stuck on respondeat superior liability. If you do, then you will be shielded.  So this Court's decision in those two cases seemed to me to say to every employer, as part of your EEO compliance you had better have this internal complaint procedure and investigation.

MR. YOUNG: I agree. . . . However, such a policy and such a mechanism is not made mandatory by Faragher and Ellerth.

JUSTICE SOUTER: Well, you say it's not made mandatory. Any employer who doesn't go through it is crazy.

So there you have it.  Free legal advice straight from the top.  'Nuf said?

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It must be "Crawford Day" around here.

Here's a good analysis of the transcript of the argument courtesy of the Workplace Prof Blog.

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A hat tip to Professor Mitchell Rubenstein at the Adjunct Law Prof Blog, who twice this week has blogged on important recent court decisions in our backyard, first from the 3rd Circuit, and now from the NJ Appellate Division.

The case is Cerdeira v. Martindale-Hubbell.  We'll be paying more attention to this over the next week.  For now, here's our initial impression.

The case involves four significant factors.  First, it involves harassment by a co-worker rather than a supervisor.  Second, the defendant had a "Code of Conduct" that spoke generally about the impropriety of harassing conduct but went no further.  Third, the defendant claimed that memos about harassment were circulated in the past, but plaintiff said that she did not receive them and defendant could not prove otherwise.  And fourth, plaintiff delayed for two years before reporting the harassing conduct to management.

The trial court threw out plaintiff's complaint, but the Appellate Division reversed.  Significantly, the App. Div. confirmed that plaintiff may have a valid claim based upon the notion that Martindale-Hubbell (ironic aside: a publisher of legal directories) was negligent in failing to provide its employees with a protective mechanism through an "effective" sexual harassment policy.  Although it did not decide the issue directly, it seems clear that the "Code of Conduct" did not cut it.  The case now returns to the trial court.

Employers, there's a message for you in this decision.  If you don't have an effective sexual harassment policy, you need to get one.  Now.  

What's an "effective" policy?  That's a subject for another post.  For the moment, as with most things related to employment law in NJ, we offer this advice: don't try to create a policy by yourself.  Find a NJ lawyer who knows employment law and get some help.  There's simply too much at stake for your business to run the risk of a homemade job.  And canned forms are dangerous because a good policy needs to fit the requirements of your particular business as much as it needs to fit the law.

One final caution: don't think that because you have just a few employees that you don't need this protection.  Even if you're too small to be covered by the federal anti-discrimination laws, you are subject to the New Jersey Law Against Discrimination [LAD]. 

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In our employment law practice, our business clients often ask about how to structure their employee handbooks.  Our core advice is to tailor the handbook to the way that the client does business, and to follow the KISS rule: Keep It Simple, Stupid.  Employee handbooks that are improperly constructed are legal minefields for employers, especially in New Jersey, so simpler is usually better.

Sometimes a business will bring us a "draft handbook" with the request that we review it quickly, "just to make sure it's OK."  Usually these come from small start-up businesses with a handful of employees, and run to hundreds of pages in length.  A little inquiry usually leads to a predictable conclusion.  In an attempt to save on legal fees, the prospective client has managed to get hold of a copy of an old handbook from a large company.  And if it's good enough for General Electric, or Verizon, or Johnson & Johnson, by golly it's good enough for my little start-up.  Right?

Well, invariably not.  And we have to tell them that we're sorry about the time they've invested in cobbling together their homemade handbook, but it's really not right for them.

Against this background, I ran across this post from the Business Litigation Blog published by Rogers & Tartaro.  It tells of the decision by Sam Zell (a billionaire) to create a "plain language" employee handbook for the LA Times newspaper.  The handbook apparently utilized humor and contained "mistakes." 

The point of the post is that the Sam Zell's of the world, where the employer's resources are almost unlimited, can make a business decision to take some liberties with the content of a handbook, without risking a catastrophic loss.  Smaller businesses generally cannot take the same approach without risking a legal catastrophe. 

Read the post.  It's well-written, sensible, and on the money.

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We have written before about the Doe v. XYC Corp. case and the legal chaos that can result from employees using office computers to access child porn on the internet. Another case has come down from the Ninth Circuit Court of Appeals --- yes, the one that conservative pundits love to ridicule --- that emphasizes the risk of criminal liability to employees and the importance of the employer handling its investigation in the right way. The case is United States v. Ziegler, decided on August 8, 2006. The issue was whether the employee had a reasonable expectation of privacy in the contents of his office computer. Here the issue was not civil liability of the employer but criminal liability of the employee.

Here are the facts in a nutshell. The owner of a company found that one of his employees had accessed child porn. The owner tipped off the FBI, which began an investigation. Through the company's computer monitoring techniques, it was able to identify the specific office from which the material was viewed and identified its occupant to the FBI. The company also provided the FBI with a copy of the suspect employee's hard drive on which investigators found several images of pornography.

The employee was indicted . He struck a deal to plead to a relatively minor count, subject to his motion to suppress the evidence discovered on his computer. If he won the motion he would walk away from the plea. The employee argued, in essence, that the FBI had directed the employer to make the backup copy of the hard drive, that the employer thus acted as an agent of the government, and therefore argued that the search and seizure violated the 4th Amendment.

Cutting through the technical stuff, the case turned on the question whether the employee had an objectively reasonable expectation of privacy in the office computer. Following the trend in these cases, it found that he did not have a reasonable expectation of privacy. The evidence was not suppressed. Thus, the plea stood and the employee was convicted of the crime.

There are two lessons here. First, even the supposedly ultra-liberal 9th Circuit holds that office computers belong to the business, not the employee. Any employee who treats an office computer as his personal property is taking a risk.

Second, the employer in question had the capability to monitor the use of its computers, had policies that governed the monitoring, and made sure that its employees knew about both. When the company discovered that possibly illegal activity was taking place with its computers, its president treated the matter seriously, notified the authorities, and cooperated with the investigation. By acting responsibly, the employer avoided any potential legal entanglement of its own.

Handling these matters in the right way is crucial to New Jersey employers in particular. If you don't think so, go back to the top and review our post on the Doe v. XYC Corp. case, where the employer was held liable, not for failing to investigate, but for failing to investigate well enough.

Yes, it all happened on the left coast, but New Jersey employers and employees can take a lesson from this one.

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Blogging has hit the mainstream in corporate America. A recent article notes that Southwest Airlines, Google, Delta, and IBM have corporate blogs. And with them have come the predictable problems caused by employees who abuse them. Google and Delta, for instance, have terminated employees for misuse of corporate blogs.

The concern is not new. Many companies have policies related to internet and e-mail use in order to protect themselves from liability caused by employee misuse. Now that blogs are becoming widespread, that protection needs to be extended.

Blogs pose three major risks to companies:

The possibility of having people disclose company trade secrets.

Lack of control over negative information posted to blogs.

Potential for liability for a blog's content.

As with internet use and e-mail, inappropriate content on a blog could also create a hostile work environment, giving rise to liability for sexual harassment.

The remedy is for a company to implement a blogging policy that is appropriate to the nature of its business and its particular culture. Once the policy is implemented, it should be applied consistently. That's the best way to minimize the legal risks while maintaining the benefits of blogging.

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