Legally Speaking

Legally Speaking, March 2012

In this issue:

  • Social Media And Protected Concerted Activity – Where Do Employers Draw The Line? by Thomas L. McCally, Esq. and Tina M. Maiolo, Esq.
  • Virginia Supreme Court Continues to Make News on Climate Change by William J. Carter, Esq. and Zachary G. Williams, Esq.
  • The Electronic Process Server – Your Facebook Inbox? by Sarah Bagley, Esq.

Social Media And Protected Concerted Activity – Where Do Employers Draw The Line?

By: Thomas L. McCally, Esq. and Tina M. Maiolo, Esq

No employer wants its employees telling the world through Facebook, Twitter, or any other social medium, how low they think their salary is, how awful they think their supervisors are or how unfair they think their work environment is, right? Right. The problem, however, is that in light of a flurry of recent rulings by the National Labor Relations Board, those very comments – posted for the world to see – may, in fact, be protected concerted activity. 29 U.S.C. §157. If so, the employer (whether currently unionized or not) cannot take disciplinary action against the employee for his/her postings.

As a preemptive strike, many employers have drafted personnel policies to discourage – or outright prohibit – such social postings about the workplace. The NLRB, however, has also attacked these policies and found that, if they can be reasonably interpreted to “interfere with, restrain or coerce employees” in the exercise of their right to communicate for the purpose of collective bargaining or to affect the terms and conditions of employment (their “Section 7 rights”), the policies are unlawful. 29 U.S.C. § 158(a)(“Section 8(a)(1)”).

The questions then become: What can an employee say about his/her employer in these social media outlets; what types of comments can an employer prohibit; and when can the employer discipline an employee for such public comments? Unfortunately, there is no clear answer to any of these questions.

In fact, how to identify protected concerted activity in social media is such a hot topic for employers that the Acting General Counsel for the NLRB has released two separate reports over the last six (6) months describing over a dozen social media cases reviewed by his office over the last year. The reports provided some guidance as to when policies are unlawfully over broad, as well as what type of social media postings by employees are considered protected concerted activity.

First, the Acting General Counsel discussed when an employer’s policy prohibiting “[m]aking disparaging comments about the company through any media, including online blogs, other electronic media or through the media” is unlawful. The General Counsel explained that “An employer violates [the NLRA] through the maintenance of a work rule if that rule “would reasonably tend to chill employees in the exercise of their Section 7 rights” citing Lafayette Park Hotel, 326 NLRB 824, 825 (1998), enfd. 203 F.3d 52 (D.C. Cir. 1999). The Acting General Counsel further explained that the NLRB uses a two-step inquiry to determine if a work rule would have such an effect. First, a rule is clearly unlawful if it explicitly restricts Section 7 protected activities. If the rule does not explicitly restrict protected activities, it will only violate the NLRA upon a showing that: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.

In the leading case on this issue, the Employer’s rule prohibited employees from disparaging the employer on any social media site. The employee in that case was disgruntled after the employer moved her from one position to another, which she believed would negatively affect her earning capacity. In response, the employee posted a status update on Facebook in which, using expletives, she updated her status to state that her employer had “messed up,” and that she was no longer going to be a good employee. The employee was “friends” with approximately 10 coworkers, including a direct supervisor. Several of her coworkers commented on her post in agreement with her frustration. The employer then terminated the employee as a direct result of her Facebook postings. The NLRB found that the employer’s policy violated the NLRA, and its termination of the posting employee was unlawful.

On the other hand, in a similar case, the NLRB found that, while the employer’s social media policy and non-solicitation rules were unlawful, the actual termination of the employee did not violate the NLRA. The NLRB found that, in this case, the employee’s postings did not constitute concerted activity. The difference between the termination in this case and the one above was that, while some coworkers “liked” the posting, the terminated employee’s coworkers did not express their agreement with the employee’s concerns. Instead, the NLRB found that the postings represented an expression of an individual’s gripe, not the concerns of a group. Specifically, the former employee had no particular audience in mind when she made that post, the post contained no language suggesting that she sought to initiate or induce coworkers to engage in group action, and the post did not grow out of a prior discussion about terms and conditions of employment with her coworkers. Finally, there was no evidence that she was seeking to induce or prepare for group action or to solicit group support for her individual complaint.

With regard to the employer’s social media policy, the NLRB found that language in the policy violated the NLRA. The policy precluded employees from identifying themselves as employees of the company unless “discussing terms and conditions of employment in an appropriate manner.” The NLRB found that the policy did not define “appropriate manner” and, therefore, employees would reasonably interpret the policy to prohibit protected activity. The policy also contained a “savings clause” that stated the policy would not be “interpreted or applied so as to interfere with employee rights to self-organize, form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, or to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from engaging in such activities.” The NLRB, however, determined that the “savings clause” was insufficient to cure the ambiguities in the policy and remove its chilling effect on an employee’s Section 7 rights.

The NLRB also interpreted a “no-solicitation rule” by the same employer to be unlawfully overbroad. That policy stated that “employees may not solicit others on company time or in work areas.” The NLRB interpreted this policy as potentially prohibiting the solicitation of coworkers in non-work areas and/or during non-work (e.g. break) times. Such policies, according to the NLRB, are presumed to be unlawfully overbroad unless there is evidence of special circumstances that make the rule necessary to maintain production or discipline.

In another case, an employer’s policies provided that “insubordination or other disrespectful conduct” and “inappropriate conversation” are subject to disciplinary action. In that case, an employee who was Facebook “friends” with coworkers, former coworkers and customers posted that another employee was “screwing over” customers. The same employee later posted that “dishonest employees along with management that looks the other way will be the death of a business.” Some coworkers expressed concern to management about the postings and, specifically, their fear that the customers would see them. The employee was fired for violating work rules – specifically, using “unprofessional communication on Facebook to fellow employees.” The NLRB found that, while the employer’s policy was unlawfully overbroad, the termination of the employee for her Facebook postings was not unlawful. The Board held that employee protests over the quality of service provided by an employer are not protected where such concerns have only a tangential relationship to employee terms and conditions of employment. On the other hand, when employees engage in conduct to address the job performance of their coworkers or supervisor that adversely impacts their working conditions, their activity is protected. In this case, the NLRB found that the employee’s posts “had only a very attenuated connection with terms and conditions of employment…She did not reasonably fear that her failure to publicize her coworker’s dishonesty could lead to her own termination.”

These few cases alone demonstrate the complexity of the issues surrounding an employer’s determination of what policies and/or job actions may violate the NLRA. The NLRB has already determined dozens of other similar cases, and more cases are certain to follow.

So, what is the employer to do?

To determine whether a policy is potentially unlawfully overbroad under the NLRA, the employer must examine all reasonable interpretations of the policy, in the broadest manner possible, and determine whether the policy can be viewed as “interfering with, restraining, or coercing employees in the exercise of their Section 7 rights.” If so, the policy is unlawfully overbroad and can be deemed in violation of the NLRA. The unlawful policy must be eliminated in its entirety or redrafted to narrowly meet the needs of the employer without infringing on the employees’ Section 7 rights. Employers should also insert limiting language in their social media or similar employee conduct policies to assure that the policies do not prohibit protected concerted activities.

With regard to adverse job actions resulting from social media postings, the employer must examine the actions of the employee and determine whether the postings represented a single individual’s personal gripe or whether that individual was speaking on behalf of him/herself and other employees. Individual gripes do not rise to the level of protected concerted activity, while complaints on behalf of a group do. Furthermore, the employer must not automatically assume that trash talking, sarcasm, vulgarity or profanity is unprotected. Instead, employers must examine the comments or postings, while sifting through the inappropriate comments, and see if there is protected concerted activity involved before terminating an employee for postings.

Finally, employers should employ the protections of a third party opinion and have legal counsel review its policies and procedures to ensure they do not run afoul of the NLRA. Similarly, all employers should always consult legal counsel before terminating any employee based the employee’s conduct involving other employees and the terms of conditions of employment – regardless of whether through social media venues.

Virginia Supreme Court Continues to Make News on Climate Change

By: William J. Carter, Esq. and Zachary G. Williams, Esq.

The Virginia Supreme Court has been making waves in the climate change arena over the last several months. Last fall, the court decided a nationally-recognized case, AES Corporation v. Steadfast Insurance Company, dealing with insurance coverage in the context of climate change. But the written opinion, published in September, was just the beginning of a momentous string of developments for the high court. Early this year, the court reversed itself in that same case, and granted AES’s petition for rehearing. Then, in a different case, the court in March 2012 rejected Virginia attorney general Ken Cuccinelli’s very public attempt to obtain the controversial climate research of a former University of Virginia professor. Given the politically-charged climate change debate ongoing in this country, both cases have garnered attention in the national news, as well as the legal field.

The AES v. Steadfast case has been closely followed as it was one of the first in which a court examined whether a CGL insurance policy, issued by Steadfast, included coverage for erosion damage allegedly caused by AES, the insured energy company, through its contribution to climate change. The dispute essentially comes down to whether erosion to an Alaska shoreline, allegedly caused or precipitated by AES’s emissions of carbon dioxide into the atmosphere, deserves coverage under the policy. In September of 2011, the Virginia Supreme Court affirmed a lower court’s declaratory judgment ruling that the erosion allegations, which had been brought in a federal suit by a small village in Alaska against AES, could not be classified as an “occurrence” under AES’s CGL policy. AES Corp. v. Steadfast Ins. Co., 282 Va. 252, 715 S.E.2d 28 (2011). Thus, according to the Supreme Court, Steadfast was not required to defend or indemnify AES in the underlying suit against the Alaska village.

In a rare move, on January 17, 2012, the Virginia Supreme Court granted AES’s motion for reconsideration, and held a rehearing on February 27, 2012. The crux of AES’s argument for reconsideration is that the Supreme Court’s opinion could be broadly read to deny insurance coverage in most negligence actions altogether. In its opinion in 2011, the court held that because the village’s allegations are that AES knew or should have known that its emissions would cause the erosion, the alleged erosion was not “fortuitous” or an “accident,” and thus not covered by the policy. On reconsideration, AES argues that the court should instead focus on whether AES knew or should have known that there was a “substantial probability” that its releases of carbon dioxide into the atmosphere would cause the erosion. On this point, AES argues that the subjective nature of climate change theories precluded AES from having any reason to know with “substantial probability” that its emissions would cause the erosion.

A second and even more recent climate change decision by the Virginia Supreme Court was borne out of a political effort by attorney general Ken Cuccinelli to uncover alleged fraud on the part of a climate scientist, Dr. Michael Mann, who had been accused of falsifying data in an effort to bolster climate change theories. Cuccinelli issued a civil investigative demand (CID) to the University of Virginia, where Mann had formerly taught, to obtain materials and data that Mann generated or used in connection with certain grants or awards. After a circuit court judge denied Cuccinelli’s efforts, the Virginia Supreme Court reviewed the case in Cuccinelli v. Rector, Visitors of University of Virginia, Record No. 102359 (March 2, 2012) and affirmed the lower court, except that it held that the lower court’s ruling should be with prejudice.

While many media outlets reported the Supreme Court’s decision as a rejection of Cuccinelli’s overzealous attempt to undermine climate change research, the substance of the opinion was mainly an exercise in statutory interpretation. The court evaluated whether the word “person” in the Virginia Fraud Against Taxpayers Act (FATA), Virginia Code Annotated Sections 8.01–216.1–216.19, included agencies of the Commonwealth, such as UVA. The definition of “person” was critical because Cuccinelli had served the CIDs on UVA pursuant to FATA. The court affirmed the long-held tenet of statutory interpretation that Commonwealth agencies should not be included in a statutory definition unless specifically mentioned. In this case, the definition of “person” in the statute did not specifically include Virginia agencies, such as UVA. Having found that the university should not be considered a “person” under FATA, the court ruled that Cuccinelli lacked the authority to issue the CIDs to UVA.

While the Supreme Court did not directly address the merits of climate change in either the Steadfast or UVA case, it is clear that this politically volatile issue is already making an impact on the legal world. The dramatic, and yet subjective nature of climate science is sure to continue to befuddle courts facing these issues for the first time. Furthermore, the controversial climate change debate will likely continue to lead to battles between the courts and politicians, given that the issue has become a benchmark of partisan rancor in the country today.

The Electronic Process Server – Your Facebook Inbox?

By: Sarah Bagley, Esq.

In February, 2012 in a first for the United Kingdom, the High Court allowed service of a Complaint via Facebook. The case involved a securities broker who could not otherwise be located. Other countries, such as Australia and New Zealand have similarly allowed service via Facebook and the High Court in the U.K. has also allowed service via Twitter. In 2010, a Judge in Ontario granted an Order allowing for service via Facebook. These developments, though occurring in jurisdictions outside the United States, signal an important shift in the role of social media in our lives and in the legal process.

Historically, personal service of process has been a bedrock of the legal process. Proper service has been grounded in the idea that Defendants must have actual notice of the claim and efforts by Plaintiffs must be reasonably calculated to provide for such notice. Even in those states, such as Maryland, where service can be accomplished through the mail, it must be completed through registered mail with delivery restricted to the person to be served or their authorized agent. In the age of social media though, where a person or a corporation’s online presence can be as well developed and perhaps even more traceable than their movements in the real world, the concept of personal service is being increasingly extended to include our online selves. Though the concept of service via social media (namely Facebook and Twitter) has been primarily addressed and approved of in foreign courts, it is likely to become an issue in the United States and has been peripherally addressed in some United States courts.

While personal service performed by the traditional process server is clearly the method best calculated to meet constitutional requirements and insure actual notice to the defendant, it is not always an available method. In situations where a defendant has left the jurisdiction and provided no forwarding information or where the defendant is intentionally evading efforts at being located, an online profile may represent the most reasonably calculated method to provide actual notice. In a 2002 9th Circuit opinion, a default judgment was upheld in a case where service of process was allowed via email when efforts to serve the defendant via traditional methods were exhausted. The Court acknowledged that there was little to no precedent regarding service via email but ultimately evaluated it using the same standard applied to typical methods, namely, was email reasonably calculated to apprise the defendant on the pendency of the action? Applying that logic, the Court held it was an appropriate method. They stated:

Courts … cannot be blind to changes and advances in technology. No longer do we live in a world where communications are conducted solely by mail carried by fast sailing clipper … ships. Electronic communication via satellite can and does provide instantaneous transmission of notice and information. No longer must process be mailed to a defendant’s door when he can receive complete notice at an electronic terminal inside his very office, even when the door is steel and bolted shut. Rio Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1017 (9th Cir. 2002)

In the Fourth Circuit, which encompasses the local jurisdictions including Maryland and Virginia, Courts have upheld service via email on similar grounds, evaluating whether it is reasonably calculated given all the circumstances of a case to give notice to the defendant.

Therefore, much like the fax machine before it, electronic delivery of legal notices is becoming increasingly accepted by the Courts in recognition of its pervasiveness in our lives and the growing belief that it is reasonably calculated to reach its intended receipt. As individuals and corporations continue to increase their dependence on social media to interact with the world around them and to both communicate with others and publicize their interests, it will likely follow that notice via those methods is reasonably calculated to provide actual notice. Typically, service on a corporation is accomplished through personal service on its designated resident agent and in lieu of a resident agent, on its officers, managers or directors. The case law to date suggests that Plaintiffs who encounter challenges achieving traditional personal service upon those persons have to first move the Court for service via an alternative method, such as electronic service. Those Plaintiffs must demonstrate both that they have made previous efforts though traditional methods and that their alternative method is reasonably designed to provide notice to the defendant.

In the context of a corporation, Plaintiffs may argue that a corporation’s Facebook page, where it interacts with its customer base and provides information about its business developments and product offerings, provides a suitable forum for service of process. Plaintiffs may argue that an electronic message posted to the corporation’s page is reasonably calculated to be seen by people who monitor the page on behalf of the company and would provide that information to the necessary legal parties at the corporation. Alternatively, if the Facebook page or company website provides email contact information for officers, directors or managers of the corporation, a Plaintiff may argue that an email sent to those addresses is reasonably designed to reach the recipient as they have held themselves out as being available to the public at those addresses.

Therefore, those Twitter feeds, corporate websites, and Facebook profiles intended to increase visibility and facilitate client communication, may in the future provide a method for initiating legal action, should traditional personal service methods fail. Individuals and corporations should consider that once created, an online presence should be continually monitored for any attempts by litigants to reach you. At present, Facebook service is without precedent in this country, but given the underlying intent of service of process, reasonable notice, it may only be a matter of time before the Court’s application of that principle extends to the reality of Internet communication. Currently, for any type of electronic service, Plaintiffs still need to seek judicial leave of Court for approval, however in the future, if a Court finds that the effort was reasonably calculated to provide notice, then you may one day find yourself Facebook served!

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