Tag Archives: privacy

Newest Privacy Lawsuit? Employers Starting To Demand Employee Facebook Passwords

Stories about the need for social media policies abound across the Internet. Whether it’s to protect lawyers from accidental jury tampering or to protect firms from their own associates’ blogs, social media policies—comprehensive and in writing—are crucial for the modern company.

Especially when you consider, for example, online murmuring about recent requests by employers for the username and password information of all their potential employees.

The idea of violating a job applicant’s privacy seems so blatantly wrong, you’d think these stories must be false, right?

Unfortunately, no. The Associated Press published this piece, which serves—in the least—as a warning to professionals about a scary new employment trend:

“Back in 2010, Robert Collins was returning to his job as a security guard at the Maryland Department of Public Safety and Correctional Services after taking a leave following his mother’s death. During a reinstatement interview, he was asked for his log-in and password, purportedly so the agency could check for any gang affiliations. He was stunned by the request but complied. ‘I needed my job to feed my family. I had to,’ he recalled.”

The risk of privacy violations in this manner proved so real that even Facebook, through its chief privacy officer Erin Egan, issued a statement regarding the practice.

“In recent months, we’ve seen a distressing increase in reports of employers or others seeking to gain inappropriate access to people’s Facebook profiles or private information. This practice undermines the privacy expectations and the security of both the user and the user’s friends. It also potentially exposes the employer who seeks this access to unanticipated legal liability.”

The most alarming of these practices is the reported incidences of employers asking prospective or actual employees to reveal their passwords. If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends. We have worked really hard at Facebook to give you the tools to control who sees your information.”

Obviously, Egan is not amused. And, if employers are not careful with their social media policy, Facebook might even throw a few lawsuits their way.

The tech community as a whole is also up in arms against this recent, unfortunate trend.

Charles Cooper for CNET recently wrote an article titled, “Fork over your Facebook log-on or you don’t get hired. What?” in which he states:

“Especially in the current economy, it’s the ultimate nightmare scenario: Choose principle, or choose your ability to put food on the family table. You can’t have both. That’s the sort of enraging choice politicians, technologists, and free-speech advocates find easy to rally against. Remove this from the Facebook context and it simply looks like an unfair (and counterproductive) hiring practice. Something along the lines of: ‘Gee, we’d like to offer you this job, but before we do, we need you to fill out a few forms so that we can look at your tax records for the last three years.’ Or some such absurd quid pro quo. Lawsuit, anybody?”

Congressmen and lawyers are cleverly harnessing this trend as an opportunity for increased action.

Maryland State Senator Ronald N. Young has already proposed a couple of social-network privacy bills, including one targeted at employers and another at colleges and universities.

“We’ve even heard that some universities hired people to friend (student athletes) to follow what they read and write on Facebook,” Young said to Cooper for CNET. “It’s unconstitutional. It’s like me applying for a job, and the employer saying, ‘I’d like to tap your phone and listen to all your calls and monitor your mail.’”

Lawyers, for their part, should become equally proactive.

Because the issue is so contentious and, apparently, widespread, it’s important that law firm managers advise their clients to create a social media policy and then review its content. Law firms should ensure this policy includes appropriate hiring and firing provisos.

This advice could be circulated through a memorandum or even via casual conversation. But, law firms should feel ethically responsible for the legal actions of their clients concerning social media.

In addition, law firms should revise their own social media policies to target hiring and firing practices. No associate should feel as though he is being monitored or his activity restricted on the Internet.

Nevertheless, law firms should guard themselves from overexposure on the Web. Social media can be an asset to business development, as well as a liability.

The American Bar Association recently published, “How to Create a Law Firm Social Media Policy,” on its website here. More specifically, your firm should learn the rules for disciplining and terminating employees for their social media posts.

In fact, even in non-unionized workplaces the National Labor Relations Board’s (NLRB) recently decided that disciplining or terminating an employee who engages in concerted, protected activity on sites such as Facebook or Twitter is unlawful.

What does this mean for employers? Even the most well-drafted social media policies may violate the NLRA if not kept up-to-date.

So, sign up your firm for The Center For Competitive Management (C4CM)’s social media courses, including this one: Social Media, Workplace Policies, and Violations Under Section 7 of the NLRA.

Or, this one: Developing a Social Media Policy: Clear Guidelines to Prevent or Reduce Employment-Related Problems.

However you decide to broach the issue, the time to do so is now. The reports of abuse—and subsequent legal action—are both real and plentiful.

In an uncertain economy, this is a lawsuit that no employer can afford. And one that no employee can afford to ignore.

-WB

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Why To Set Aside Reserves For Risk & The Accounting CLE Groupon Should Have Signed-Up For

“Flame-kissed steaks, chipotle-brushed crab cakes & fried pickles load tables beneath wall-mounted moose head with big grin & blue fur,” entices a Kansas City Groupon.

Deals on the Blue Moose Bar & Grill are not the only Groupons gaining popularity today. Casual dinners for two or four exist for a few local restaurants today, but expiring May 23, 2012, limit 1 per person, may buy 1 additional as a gift, limit 1 per table, 2 per table of 4 or more, and valid only for option purchased, according to the fine print.

 And, it’s Groupon’s fine print that’s getting them in trouble with the SEC. Yesterday, Groupon Inc.—the world’s largest online coupon site—agreed to settle a national lawsuit for $8.5 million, which alleges the expiration dates on Groupon’s coupons are illegal.

The settlement resolves 17 lawsuits—combined in a federal court in San Diego—each accusing Groupon of violating federal and state consumer protection laws.

News of the settlement came to light after the company revised its fourth-quarter results due to a pending SEC probe into their finances. The fourth quarter was Groupon’s first as a public company, which admitted it had a “material weakness” in its internal controls because of a failure to set aside enough money for customer refunds, reports Reuters.

Groupon initially reported a loss of $37 million for its fourth quarter, but after accounting changes, the company reduced its revenue for the quarter by $14.3 million and also increased its loss by another $22.6 million, reports the Wall Street Journal.

Although a spokesperson for the SEC declined to comment, the WSJ reports that a person familiar with the situation said the SEC regulator is still in preliminary stages and a formal investigation has not yet been launched.

“I view this as growing pains,” said one Groupon investor who declined to be named (via WSJ).

“This is like a high school kid who is a five-foot sophomore and becomes seven feet by the time he’s a senior.”

It’s hard to deny—especially in already successful business practices—that change can be difficult to embrace.

It’s why a recent Section of Business Law sponsored the CLE program, “Privacy and Anti-Money Laundering (AML):  An Oxymoron?” describing the challenges of navigating the conflicting guidance and legal requirements relating to current anti-money laundering rules and privacy requirements.

“Andrew Smith—a partner at Morrison & Foerster LLP—urged that an organization take a holistic view of high-risk customers, across the enterprise, when it comes to AML efforts and suspicious activity reporting, and also spoke about sharing restrictions on consumer information that are in place in the United States,” reports the ABA Now.

These days, regulators are taking a closer look at the financials of large, multi-million dollar companies. For Groupon, the ABA’s advice to establish a strong risk management program within your company sounds more like “preaching to the choir.”

But, more established businesses, like law firms, could always use the reminder to obtain a commitment from partners and senior management to ensure that a financial institution closely scrutinizes its efforts in terms of AML and risk management.

It’s also part of a law firm’s due diligence to ensure its corporate clients are maintaining the same internal responsibility and accountability.

An accounting question that perhaps should have been posed by Groupon’s corporate counsel to the company.

Groupon’s fourth-quarter results opened up another question, of “whether there is any real corporate governance at Groupon whatsoever,” write professors Anthony Catanach of Villanova University and Ed Ketz of Penn State University on their Grumpy Old Accountants blog (via WSJ).

Around the bar, the message is clear. For all those professionals—legal or otherwise—that need a brush up on the basics, take Managing Director at Treliant Risk Advisors, Catherine Brown’s sage advice:

“Appropriate resources should be designated, a culture of responsibility and accountability should be maintained, and adequate skills and expertise for the managers involved, are critical to success.”

And, regardless of past missteps, there’s no doubt that such reserves are being set aside at Groupon as we speak.

-WB

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Just Say No: Drug Testing in the Workplace Reduces Productivity

This week, a federal judge issued a temporary injunction against the enforcement of a divisive Florida law that requires “suspicionless drug testing” for all welfare applicants before distributing benefits.

The American Civil Liberties Union (ACLU) filed on behalf of a single father in Orlando a lawsuit that alleges Florida’s law violates Fourth Amendment rights for safeguard against unreasonable search and seizure.

Enacted in May 2011, the new law applies to any adult applying to the federal Temporary Assistance for Needy Families program. Those who qualify for assistance are reimbursed for the test in their welfare benefits.

Florida Gov. Rick Scott was one of the law’s biggest advocates, claiming the law would evoke “personal accountability.” Scott also said it would be “unfair for Florida taxpayers to subsidize drug addiction,” quotes John Couwels in an article for CNN.

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Governments are not alone in believing individuals should be held personally accountable for abusing illicit drugs, which is why polls show over half of employers in America (57%) still conduct drug tests.

Obviously, law firms, like all businesses, aspire for a drug-free workplace. But they also aspire for a productive one. And, it turns out, whether because they represent a level of distrust on the part of the firm or because employees dislike the violation of their privacy, drug testing decreases productivity in the workplace.

A recent study investigated 63 “hightech” firms in the computer equipment and data processing and found that drug testing had “reduced rather than enhanced productivity,” reports the ACLU. Firms with pre-employment testing, versus those with no drug testing at all, scored 16 percent lower on productivity measures. Firms with both pre-employment and random testing were 29 percent less productive than those companies without drug tests.

In addition, drug testing is expensive.

In 1990, the federal government spent $11.7 million to test selected workers in 38 federal agencies. However, of the roughly 29,000 tests taken, only 153 (.5%) were positive for illicit substances. The cost of finding a single drug user—and in this case, over half were moderate, occasional users of marijuana—amounted to $77,000, according to the ACLU. Not to mention, among these employees, there’s always a risk of a false positive.

These reasons might explain why the percentage of employers with testing programs has dropped steadily over time, from 81 percent in 1996 to 62 percent in 2004, according to the American Management Association, cited by TIME. The trend is expected to continue.

Drug testing is no guarantee that you’ll actually catch a drug user.

If your firm has concerns, there are myriad other more effective and less invasive means to encourage a drug-free workplace:

Substance Abuse Programs And Counseling. Make sure substance abuse, mental health, and counseling programs programs are covered by employer-paid medical insurance. When an employee requests a mental health holiday, accept it.

Preventative and remedial measures to permanently eliminate addiction is far better for the firm and its associate than just identifying such a person, and putting them out on the street.

Comprehensive Reference Checks. In-depth reference checks of potential future employees are equally effective as drug testing. It’s more than likely that a previous employer has noticed patterns of abuse, or has an opinion regarding that employee’s professional conduct. Ask to speak with the employee’s former supervisor, as opposed to the Human Resources representative. Don’t be afraid to ask blunt (but not discriminatory) questions.

Workplace Training and Employee Investment. Enroll your law firm partners and administrators in programs geared toward the identification of drug users in the workplace. These programs also teach remedial actions to confront and appropriately advise these users.

In addition, instead of corporate retreats or costly drug tests, spend money on employee wellness programs—including fitness programs, healthy meals, or in-house massages.

Reducing stress in the office will keep your employees from self-medicating during those long work hours and client meetings. Plus, it sends the opposite message, from mistrust, as with drug tests, to one of support and advocacy.

-WB

Learn how to transform your tired, disengaged workforce into a motivated team of top-notch employees — in any economic climate.  By participating in C4CM’s in-depth audio conference “10 Critical Methods to Increase Employee Engagement and Improve Job Satisfaction.


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Legal Upsets Regarding Fourth Amendment Rights, And Three Ways To Prepare Your Firm For Change

The Constitution’s Fourth Amendment is certainly receiving a lot of recent attention.

On Wednesday, a Judge announced he will rule on whether to dismiss a lawsuit filed by Aron Tobey, 21, of Charlottesville, who was detained by federal Transportation Security Administration officers December 30 at a Richmond International Airport.

Tobey, a college student, was arrested after he stripped down to his running shorts to reveal the text of the Constitution’s Fourth Amendment written on his chest in protest of airport security measures.

And, last week, Judge Susan K. Gauvey, a magistrate judge in Maryland, issued an opinion regarding the Fourth Amendment legal rights (under Smith v. Maryland) of persons subject of an arrest and whether warrants can be issued authorizing the disclosure of location information via GPS technology on cell phones. 

“In light of legitimate privacy concerns and the absence of any emergency or extraordinary considerations here, the Court concludes that approval of use of location data for this purpose is best considered deliberately in the legislature, or in the appellate courts. Accordingly, the Court DENIES the underlying warrant applications, but sets forth its guidance on the showing necessary for law enforcement access to prospective location data to aid in the execution of an arrest warrant.”

IN THE MATTER OF AN APPLICATION OF THE UNITED STATES OF AMERICA FOR AN ORDER AUTHORIZING DISCLOSURE OF LOCATION INFORMATION OF A SPECIFIED WIRELESS TELEPHONE, 2011 U.S. Dist. LEXIS 85638 (D.Md. 2011), the Judge concludes:

“The government’s arguments, if credited, would allow law enforcement to obtain location data on any subject of an arrest warrant. This would be the result whether the defendant was charged with a misdemeanor or a felony, without any demonstration of any attempt on the part of the subject to avoid prosecution, so long as law enforcement had reason to believe that the source of the location data – here a cell phone – was in the possession of the subject.

“Some might say that this is an appropriate use of a new technology in the service of more efficient and effective law enforcement. Others might say it is an unnecessary use of a new technology in a society already subjected to pervasive surveillance. The Court understands the tension. Regardless of individual views, the law does not currently sanction the requested acquisition of location data in these circumstances.”

The Volokh Conspiracy blog has an analysis of the judge’s opinion, and also an interesting rebuttal.

Whatever your side of the courtroom, however, these two cases are indicative of a trend regarding Fourth Amendment rights and technology. 

Full body scanners, computers, social media, EMV chips, every bit of this technology has changed the way lawyers manage the security of their firms, advise clients, and handle cases. To ensure your law firm is adequately equipped, try these three simple steps:

  1. Keep associates informed. CLEs are not just a requirement, but they’re necessary for your firm’s associates to provide the best, most up-to-date services to your clients. Ask paralegals to update the lead attorney of each case on any applicable legislative or legal changes. With their own chains of communication, staff is often the first abreast of new developments in the legal world.
  2. Invest in technology. Technology is the number one way your firm can become more innovative and efficient at the office and in the courtroom. Send your IT staff to technology conferences to stay on top of e-discovery trends, case management software, and other online legal resources.
  3. Embrace change. The industry of law, historically, tends to err on the conservative and traditional side. But change doesn’t have to be a thing to fear. Instead, get your team on board with change. Ensure your accounts have sufficient liquidity, your accountants maintain recession-proof bookkeeping, your portfolio of clients is diversified, and your associates thrive in unpredictable environments. It’s important to train associates, especially first years, how accept and adapt to the unexpected. Consider team-building retreats and other activities that will ensure big decisions in legislation don’t stymie quick action by your lawyers.

Judge Gauvey is correct in her statement, “There is no precedent for what the government seeks.” But certainly, sometime soon, there will be. How will you prepare?

 -WB

To discover whether or not your firm is prepared for changes in its field of law, sign up for C4CM’s Industry eNews. You’ll gain:

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Is Getting Your Firm To Implement A Social Media Policy Like Pulling Teeth? Tell Them This: Facebook, MySpace, Twitter Now Permisable In Court.

It doesn’t matter how routine the act of teeth brushing should be, parents are still forced to ask their children the same question every night.

As firm administrator, it may be uncomfortable to continually remind office employees to refrain from certain ill-begotten behaviors, but, according to recent legal developments, repetitive advice on social media policies and privacy is still necessary.  

“Do you have any posts on Facebook, Twitter, or MySpace, for example, that could serve as incriminating evidence?”

Once again, attorneys should remember to warn their clients that privacy settings do not necessarily reflect privacy law.

For example, personal Injury suits are especially vulnerable to invasive discovery requests for social media information.

In Romano v. Steelcase, Inc., the court granted the defendant’s request for full access to the plaintiff’s “current and historical Facebook and MySpace pages and accounts, including all deleted pages and related information.” The defense aimed to use photographs, wall posts, and other pages to prove the defendant lived a happy, active lifestyle despite her injuries and her claims.

The Wall Street Journal Law Blog and The Daily Business Review pointed out that, in April, Facebook and MySpace account information was used to deny a divorcee alimony payments after she claimed a car accident physically prevented her from working (online photos and posts proved this was, in fact, not true).

Firm employees should be equally cognizant that personal blog sites and online networking mediums can make up—in legal disputes—a discoverable, public profile.

Just this year a court case was settled between a Connecticut ambulance company, and The National Labor Relations Board and Dawnmarie Souza, who was fired for making derogatory remarks about her employer on Facebook.

The financial terms of the settlement were not disclosed. However, surprisingly, the ambulance company voluntarily revised its Internet use policies regarding blogging and social media to make them more lenient. The company now has an Internet policy that permits its employees to make candid remarks and even disparaging ones about their work.

Law firms, of all places, should respect the privacy and first amendment rights of its employees.

Nevertheless, there are ways your firm can try to hire tactful and, say, more non-controversial associates. But, to do this, firms must focus investigations on the social media postings and online public profiles of its employees during the interview process, instead of first-year performance reviews.

Once associates are hired, it’s difficult (and illegal) to deny them their first amendment rights. So, implement a social media policy that clearly explains your expectations for digitally public, post-work discussions.

Finally, survey your employees—get feedback. If your employees feel they have no secure medium at the firm for constructive criticism, they will certainly seek an outlet elsewhere, likely a more public and litigious one. 

From your Twitter feed, it’s evident you’ve brushed your teeth. Now, how bright, shiny, and sensitive is your new social media policy?

-WB

For more information, attend C4CM’s course, “Social Media Policy Dos and Don’ts: Employees, Networking Sites and the Law.”

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Private Dispute Resolution Profitable, But Not So Private

Oil and gas has rarely been an industry to suffer, even in downturn economies. Oil and gas law is no exception.

So, if you’re a firm who represents various on and offshore moguls, chances are you’ve been attempting to fly under the radar with your multiple multi-billion dollar awards. Turns out, whether high-stakes litigation or high-stakes arbitration, both trial and private dispute resolutions are difficult to achieve anonymously.

The AmLaw Daily just announced their Arbitration Scorecard 2011. Unsurprisingly, there was big money exchanged (and big law to exchange it) despite bleak legal outlooks and projections this past year.

Among the 113 billion-dollar cases involved in the survey, 65 cases involved “old-fashioned contracts” and 48 cases involved, in part, “investment treaties or legislation.”

“The full survey, available at americanlawyer.com/focuseurope, captures a total of 261 eligible disputes active during 2009-2010: treaty cases with stakes of at least $100 million and contract cases with stakes of at least half a billion. Information on these often-confidential cases is drawn from attorney questionnaires, supplemented by reporting and the harvesting of public sources.”

Oil and gas account for over one third of the survey’s billion-dollar cases. Eight of eleven involved private dispute resolution awards of over $350 million since January 2009. However, no oil and gas litigation verdicts of a similar amount were awarded in U.S. courts, despite producing 11 verdicts of at least $350 million during that time, according to ALM Media, LLC VerdictSearch.

It seems as though, this year, oil and gas is trying to keep their multiple multi-million dollar disputes out of court and out of the news.

 This trend toward private international arbitration by oil and gas is understandable, considering the widespread negative impact that the Deepwater Horizon incident placed on the industry as a whole.

Instead of public fights about contracts and fees that can only further soil the industry’s reputation, oil and gas companies are seeking more subtle methods of negotiation.

Still, it makes you wonder how many firms or markets, such as technology tycoons or environmentally unfriendly companies with image issues, will jump the arbitration bandwagon in order to ensure timely, cost-effective, fair, and sometimes-secret awards for their clients.

As an attorney—especially those out of work—the Arbitration Scorecard certainly highlights a legal niche that makes a lawyer’s expertise more valuable.

In those cases, best market your services to the four firms who have remained at the top of AmLaw’s charts for three consecutive scorecard years: Freshfields Bruckhaus Deringer LLP, White & Case LLP, King & Spalding and Shearman & Sterling LLP.

On the other hand, individuals are not alone in seizing international arbitration’s competitive advantage. Smaller firm, Curtis, Mallet-Prevost, Colt & Mosle snuck up the ranks at fifth in terms of number of arbitration cases handled this year, a stark contrast to their position as seventeenth in Arbitration Scorecard 2010.

It seems Curis, Mallet is refocusing its attention on the number of alternative dispute resolution cases it handles, and thus, high-yielding and fast-achieving awards.

There’s business to be had in terms of international arbitration. But, whether or not your firm participates in these private dispute resolutions, it’s important to note that technology today makes it nearly impossible to keep awards completely confidential.

-WB

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Cloud Computing Hitting Some Turbulence (But Fans Don’t Want To Come Down)

Cloud Computing—the use of and access to several multi-purpose computational resources via a digital network, as explained on Wikepedia—hasn’t been a clear favorite of law firms or of industry in general. One of the incidentals in its usage, the remote storage of data—in law firms, highly confidential data–may be a reason why cloud computing is dragging a bit.    

In cloud computing, one of the clear benefits is that users can access the server via any number of virtual devices: laptops, pad computer or netbook, smartphone…you name it.  And as most cloud computing services function independently of your operating system, you don’t need to worry about your OS preferences.  (Again, with most of these companies, as long as your device can access the internet, you’ll be fine.)   

However, there are a few stragglers; companies that require that you download software onto your computer as a means to gain access to data.  This means you’ll need to use an existing browser or OS each and every time you need data.

The pluses might still outweigh the minuses when all is said and done.  It depends on your needs.  

So how do you find out if cloud computing is for you, or if your head is just in the clouds over the whole issue?  For solo and small firms it seems simpler—less “stuff” to transition; in larger firms, satisfactory systems are already in place—but either way a law firm has to carefully consider the relevant privacy, security and ethical issues, per a technology blog (“Small Firm Innovation”) which came out earlier this month.   


If an administrator or attorney has had their interest piqued with regards to what cloud computing can do, it’s likely because it seems as if everyone is jumping on the bandwagon—or at least looking into it.  This flurry of activity may be deceiving, as per a survey conducted by informationweek.com’s TheInfoPro. In the report, we learn that “[w]hen it comes to cloud-based storage offerings, most enterprise-class companies are not interested, even for the lowest tier of data for archiving purposes, according to a survey of 247 Fortune 1000 corporations.”  

Attorneys and administrators might take issue with the fact that you “give up all privacy” to use it, per thoughtfullaw.com. Talking about the new Amazon consumer cloud service, he says that it works well, but that a glimpse at their Terms of Use, 5.2, or “Our Right To Access Your Files”, fully discloses that they can “look at your stuff”—that is, your account information and files. 

Granted, Amazon’s Cloud Drive does trade mostly in music, but the author notes that this is just an example of those read-through click and buy’s that people scroll through without much thought.  

On the other side of the coin, The Thoughful Law Blog notes that users are loyal..and there must be reasons for that. “I know that once people move to the cloud you don’t want to come down,” notes Bilinksy.  The author also cautions us that it is vitally important to take the time to examine all the issues regarding the potential problems of being in the cloud. 

To learn more about small firm transitioning, go here: http://www.smallfirminnovation.com/2011/06/transitioning-your-law-firm-to-the-cloud/ To read more generic thoughtful commentary on this topic, go here: http://thoughtfullaw.com/2011/05/02/turbulence-in-the-clouds/#more-1430  Graphic courtesy of Thoughtful Legal Management.

-EM

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