Friday, February 25, 2011

Technology, Law, and the Workplace: Week in Review

The news of the last week has been a particularly interesting illustration of the promise and perils of technology, particularly related to social media. On the one hand, Facebook and other social media outlets continue to be used as tools to organize protests and spur on the cause of revolution in countries where citizens have long been oppressed and felt powerless. On the other hand, there are several stories from the last week about employees sharing confidential information (including pictures of medical patients), complaining about workplace conditions, or even Tweeting about labor disputes.

Earlier this week, I had the opportunity to present with my colleague, Abigail Crouse, at the Minnesota Council of Nonprofits’ annual technology and communications conference. The conference was packed with great sessions about the nuts and bolts of using social media and other technology effectively, which made me a little scared that the audience might not be interested in hearing us talk about risks and how to manage those risks. Much to my surprise, the audience was not only receptive but excited to hear about ways that they could address the risks that they knew lay beneath the surface of the exciting developments in technology.

The ability to disseminate information rapidly and with little cost is certainly a two-sided coin. But as a baseball fan, I can’t help but think of the quote attributed to Frederick B. Wilcox: “Progress always involves risks. You can't steal second base and keep your foot on first.”

Technology in the Workplace
Technology and the Law More Generally
Technology News
  • Libya, YouTube, and the Internet (Fast Company)
  • China Blocks Access to LinkedIn (Fast Company)
  • Robot Skin Can Feel Touch, Sense Chemicals, and Soak Up Solar Power (Fast Company)
  • Social Media Lure Academics Frustrated by Journals (Chronicle of Higher Education)
  • Twitter Co-Founder Pushes New Effort to Use Technology for Social Good (Chronicle of Philanthropy)
  • Cellphone Use Tied to Changes in Brain Activity (Well)
  • What Did Watson the Computer Do? (NY Times Op-Ed by Stanley Fish)
  • Friends’ Without a Personal Touch (NY Times review of “Alone Together: Why we Expect More From Technology and Less From Each Other”)
  • Blogs Wane as the Young Drift to Sites Like Twitter (NY Times)
  • Internet is next battle front, retired general says (Star Tribune)
  • Cellphones Become the World’s Eyes and Ears on Protests (NY Times)
  • My Puny Human Brain: Jeopardy! genius Ken Jennings on what it’s like to play against a supercomputer (Slate)
  • China Assails New U.S. Policy on Internet Freedom (NY Times)
  • Internet Use in Bahrain Restricted, Data Shows (NY Times)
  • Canada Hit by Cyberattack from China (NY Times)

Tuesday, February 22, 2011

Employment Practices Liability Insurance: Answers, but Questions

Employment Practices Liability Insurance (EPLI) has been around for about 20 years now, and for some employers it has been a good investment. For others, it has been a disappointment, and for still others it remains a mystery. My own view is that every employer should consider adding EPLI to its insurance coverage, but should do so with a clear understanding of EPLI's limitations and cost.

So, what should employers expect and what should they watch out for when they shop for EPLI? That's the focus of today's post.

Employers should first understand what, if any, coverage they have for employment claims under existing policies. Most organizations have some form of Comprehensive General Liability (CGL) insurance, and some have Directors' and Officers' Liability (DOL) insurance. Those policies sometimes include coverage of employment-related claims, but that's more the exception than the rule. Individuals who own businesses may even have personal insurance that covers employment-related claims. Most of the time, however, such coverage will be minimal or non-existent. EPLI is likely to be an addition to existing business insurance.

EPLI can be very expensive. Like any form of insurance, its cost will depend on how much it covers, how good or bad a risk the insured is, and how much of a deductible ("retention") the insured is willing to live with. It is always a good idea to insist on a detailed understanding of what premiums will be, how and when they will be paid, how and when they can increase, and whether the employer has the option to accept a larger retention but pay lower premiums. EPLI providers generally do some sort of risk assessment to determine how likely the employer seeking coverage is to be the target of claims, and that assessment can have a significant impact on premiums. It is important to understand the risk assessment process and to make sure that the insurer gets a full and realistic picture of the employer's employment practices, policies, and claims history.

I have seen situations in which incomplete information provided to a prospective insurer resulted in the insurer quoting prohibitively high premiums. When the insurer finally got a complete picture of the employer's situation, the quoted premiums went down. The reverse can happen too, of course.

Employers should also understand that EPLI is not a perfect shield against employment claims. Some kinds of claims are not covered at all. Exclusions-uncovered claims-include WARN Act, FLSA wage and hour, COBRA, OSHA, and ERISA claims. Workers' compensation and unemployment claims are not covered. Some policies also exclude coverage for punitive damages or claims that allege "intentional acts" (whatever that means). Usually, though, discrimination, retaliation, whistleblower, defamation, invasion of privacy, misrepresentation, employment-related negligence, and "wrongful termination," "wrongful discipline," or "wrongful demotion" claims are covered. It also may matter when the claim arises, when it's reported to the insurance carrier, and who's being accused of wrongful acts.

The good news is that if a claim is covered, the insurance company pays the cost of defending the claim, pays the cost of settling it if settlement is possible, and pays any judgment awarded against the employer.

It is absolutely critical, whether an employer is shopping for insurance or is already covered, to understand the limits of coverage and the requirements for reporting claims. There is often no leeway in EPLI policies. If an employer misunderstands the protection it has purchased, reports a potential claim too late, misses a premium, or disagrees with the insurance company's handling of the claim, the result can be surprising and expensive.

Employers have a lot to think about when it comes to deciding whether EPLI is a worthwhile investment. In my next post, I'll talk about some of the other issues that surround EPLI, like choice of counsel, control over settlement, and what happens when a covered lawsuit includes uncovered claims.

Friday, February 18, 2011

Technology, Law, and the Workplace: Week in Review

The Gray Plant Mooty attorneys behind The Modern Workplace are devoted to exploring current issues in employment and labor law. We are particularly interested in “The Next Big Thing,” our shorthand for the many ways that technology is revolutionizing both the world we live in and the workplace. Each week, we will provide a summary of interesting news and blogs involving technology and law, especially the law of the workplace. This week marks the first of our “TNBT: Week in Review” features on The Modern Workplace.
The buzz this week in the world of technology is “Watson,” the IBM computer that competed on ‘Jeopardy!’ this week. He mopped the floor with his human competition, generating quite a stir about the amazing advances that have been made in the field of artificial intelligence. While autonomous robots are not replacing humans in the workplace just yet, the General Counsel of IBM reports that Watson could do legal research. I for one welcome our new computer overlords.
Technology in the Workplace
Technology and the Law More Generally
Technology News
  • Digital Age Is Slow to Arrive in Rural America (NY Times)
  • Google Search Results Get More Social (Bits, Fast Company)
  • Computer Wins ‘Jeopardy!’: Trivial, It’s Not (NY Times)
  • Imagining a World of Total Connectedness, and Its Consequences (NY Times)
  • Twitter, Translations, and the New Geopolitics (Fast Company)
  • Exactly What Role Did Social Media Play in the Egyptian Revolution? (Fast Company)
  • Google’s E-Valentine Suits Geeks in Love and Creeps Alike (Fast Company)
  • Progress in Artificial Intelligence Brings Wonders and Fears (NY Times)
  • Hackers Go After the Smartphone (NY Times)
  • Prime Times for Smartphone Use (NY Times)

Tuesday, February 15, 2011

Twitter Gets Another Employee in Trouble

I’m not normally one to read advice columns in newspapers. However, Monday’s Ask Amy column in the Star Tribune was right up my alley. The column tells the story of a customer service employee who was fired because an angry customer tweeted about her experience with the employee and got the attention of corporate headquarters.

This story comes on the heels of the news last week that a settlement was reached in the nationally publicized “Facebook firing” case. In that case, the NLRB filed a complaint against an ambulance service company that fired an employee for venting about her supervisor on Facebook. (We previously wrote about the case in our firm’s Employment Edge newsletter.)

These two examples show just how much social media has revolutionized the workplace. Sure, customer service employees were fired before the Internet for treating customers poorly. And of course employees were fired for publicly venting about their dislike of co-workers or supervisors. But a direct line to corporate headquarters for every customer? A regional office of the NLRB issuing a complaint based on an employer’s decision to fire an employee for participating in a public venting session about a supervisor? These events seem all but impossible in the pre-Internet world.

Social media can give employers access to seemingly unlimited information in the blink of an eye. Employers should take care to prevent the speed of electronic communications from dictating the pace or scope of the employer’s response. Employers should also make sure that they are not acting on unreliable information. Even if the information an employer discovers turns out to be true, employers still must stop to consider their response. Is the complaint justified? Is the proposed response proportionate? Does the situation involve protected activity, such as talking to co-workers about the terms and conditions of employment?

In the Ask Amy column, the fired letter-writer asks Amy to tell her readers to count to ten before tweeting, posting or otherwise taking action. Come to think of it, employers can benefit from the same advice!

Monday, February 14, 2011

Valentine’s Day and Harassment in the Electronic Workplace

Today we celebrate Saint Valentine’s Day, the annual commemoration of the martyrdom of Saint Valentine at the hands of the Roman Emperor Claudius II. Of course, we now celebrate this holiday by giving our loved ones heart-shaped candy and greeting cards! Although this may seem a strange cause for celebrating love, there is a romantic legend behind this otherwise morbid holiday. According to legend, the Christian priest Valentine was executed because he was performing marriage ceremonies for young men and women in violation of Roman law. Although this legend is now widely questioned—even by the Catholic Church—the romantic holiday lives on.

Valentine’s Day can be especially tricky for employers. Romance in the workplace can create a variety of headaches for employers, including liability for harassment. While employers can keep watch for inappropriate relationships in the workplace, it can be much more difficult to monitor the electronic exploits of employees on Valentine’s Day. Employees can send each other messages and images that are harassing, unwelcome, or sexually explicit instantaneously via text, email, or social media messages. Even if the communications are sent using the employer’s technology, many employers lack the time and ability to monitor employees’ electronic communications.

So what can an employer do to fulfill its obligations to prevent and promptly respond to inappropriate or harassing behavior this Valentine’s Day? In short, the same things it has always done. Employers should have and clearly communicate a policy defining and prohibiting harassment, including sexual harassment. The employer’s technology and social media policies should make clear that harassment through electronic means is not tolerated. When made aware of any harassing behavior, employers should take complaints seriously and act promptly to investigate the conduct. Although these strategies may seem like old news, employers know well that the more things change, the more they stay the same.

As we commemorate another Valentine’s Day, pause and reflect on a few truths. Office romances happen. Candy hearts still taste like chalk, even if they now say “TEXT ME.” And harassment is harassment, no matter the means of the communication.