Terminating an employee’s employment without cause in Canada comes at a price. The various employment acts and codes set out the requirements for termination notice or pay in lieu of notice (and in Ontario and federal workplaces, severance pay in addition to termination pay). The required termination period will range from 1 to 8 weeks, depending on the length of service of the employee, and depending on the province (plus severance pay, if applicable).

But what are an employer’s obligations during the notice period besides payment of wages?

The Statutory Requirements

Employment statutes in Canada require an employer to payPhoto by Striatic at http://flic.kr/p/mhpdd wages/salary for the notice period, as well as to continue benefit contributions. In Ontario, the Employment Standards Act requires an employer to continue the employee’s wages and terms of employment, and to:

“continue to make whatever benefit contributions would be required to be made in order to maintain the employee’s benefits under the plan until the end of the notice period.”

Notice period obligations, therefore, include the payment of whatever benefits the employee was otherwise entitled to, including benefits such as group health care and dental premiums, life insurance, LTD, STD and travel insurance. When crafting a termination package for an employee who has been terminated without cause, the package must include the continuation of benefits throughout the statutory notice period.

The problem employers run up against is to what extent will the insurance companies continue to insure benefits after an employee is no longer “actively” employed. Most seem to recognize the statutory obligations for general benefits like health care and dental, but some do refuse to insure the bigger ticket items like LTD or life insurance after an employee’s last day of active employment.

At the end of the day, it is the employer who is obligated to provide benefits during a notice period, not the insurer. The insurer is simply obligated to satisfy the terms of the contract between it and the employer.

And then there’s the Common Law

The gap between what is required and what is actually insured during the notice period becomes even greater for the common law notice period. The employment statutes set out minimum employment standards. The courts will almost always award significantly more damages than the statutory minimum for a wrongful dismissal (i.e. a termination without cause without notice).

For example, a judge would award a 62 year old supervisor with 15 years service at the company damages of many more weeks than the 8 weeks of termination pay and 15 weeks of severance pay required under the Ontario statute. Assuming no other issues such as age discrimination (unlikely!), the notice period would probably be in the range of at least a year, and possibly more given the age of our hypothetical employee.

Assuming that the notice period is a year in this example, the case law makes it clear an employer is required to make the employee whole for the entire year’s notice period. In other words, the employee will be entitled to whatever she would have earned had the termination not occurred. This includes for example, any regularly scheduled wage increases, any non-discretionary bonus tied to company performance, and the continuation of all benefits.

The Insurance Gap in the Case Law

If the insurance company refuses to continue to insure the terminated employee beyond the 8 weeks statutory notice period, the employer is on the hook if our hypothetical terminated employee needs to access the benefits in weeks 9-52, after the statutory termination notice period expires.

As an example, in Alcatel Canada Inc v Mary Egan, the Ontario Court of Appeal upheld the notice period of 9 months awarded to a director-level, senior management employee with 21 months service (she was induced from prior employment). The employee was terminated without cause on July 3 as part of a mass termination, and on November 27, she was diagnosed with a major depressive disorder, which the court held had commenced on October 1. The statutory notice period was long over when the disability arose, and all benefits, including the STD and LTD benefits were canceled at the end of the statutory notice period. The employee was denied disability benefits when she applied during the common law notice period because the coverage had already been canceled.

In that case, a particular problem for the employer was that the STD and LTD policies provided that the employer, not the insurer, determined when coverage was to be terminated. The Court of Appeal upheld the trial judge’s finding that because the disability arose during the notice period, and because the employer “wrongfully discontinued her coverage prior to the onset of disability”, the employer was therefore liable for any resulting loss. The employer was liable for the value of the disability benefits that would otherwise have been paid – not just the benefit premiums.

Also important to note in this case was that the employer’s obligations actually exceeded the awarded notice period. The court held that the employee was entitled to recover damages for the entire period of disability, regardless of when the notice period ended. In this case, the disability ended when the employee recovered 6 months after the notice period ended. The end result was that the employer was found liable for $146,825.98, plus costs of $25,000 to the plaintiff employee.

The employer got lucky here. Had the employee not recovered from her disability, the amount would continue for that length of time the insurance policy would have covered her, had the policy not been terminated during the notice period. This employee was 40 years old – there could have been another 25 years of liability.

In Brito v Canac Kitchens, the employee became permanently disabled and did not recover. After 24 years of service, the employee was diagnosed with cancer at age 55, deemed totally disabled by his doctors, and was awarded the LTD benefits he should have received had the benefits not been canceled at the end of the statutory notice period. The court awarded the employee damages for lost income for 22 months, STD benefits for 17 weeks, and LTD benefits thereafter to age 65, plus costs of $20,000. Again, the employee was awarded not just the benefit premiums, but the cost of the benefits themselves for over 10 years.

Penny Wise Pound Foolish

I find some employers are reluctant to continue the “expensive” premiums during a notice period and are willing to gamble that their otherwise healthy and vibrant employee will stay well. But should anything happen to your terminated employee during the common law notice period, as the above cases indicate, those premiums all of a sudden look like a bargain.

Contracting out of the Statute

A proactive way to avoid the above scenarios is to enter into an employment contract when the employee starts. While this doesn’t solve the problem with your 20 year employee who started at the company before you started using employment contracts, it does provide clarity for new and future employees. The vast majority of employment law cases are a dispute around termination entitlements, and a reasonable and clearly drafted termination provision can usually avoid the problem upfront.

Provided the parties exceed the minimum statutory standards (i.e. provide more than the termination and severance payments set out in the statute), the termination provision can carve out and contain the entitlements on termination. For example, if the contract provides three weeks of salary for every year of service, it is permissible for the contract to then provide that benefits will cease two months after the last day of active employment.

But should you contract out of providing benefits during the notice period?

As long as the provision in the employment contract exceeds the statutory minimum, freedom of contract prevails. From a practical point of view, however, if the insurance company permits, providing benefits during the full contractual notice period is often highly desirable for the employee, especially if he or she has a family or is older and has some health issues.

Continuing to pay monthly premiums may be a small price to pay for a cooperative former employee who doesn’t try to challenge the contract on some other basis, who is able to leave the workplace with certainty around their family’s benefit coverage, and is able to deal with a medical emergency that may arise following termination while looking for a new position. This will particularly be a big selling point for older employees given the end of mandatory retirement in Canada.

Ultimately, it will be a matter of choice and market demands when entering into the employment contract upfront, well before the parties are contemplating any health issues.

How does your workplace deal with benefits during the notice period?  Is it standard to offer, or do employees have to bargain for it?  

[As with all of my posts, the above is not legal advice, but rather, legal information.  As soon as benefit insurance issues are involved, there are many caveats, contractual exceptions and contextual variations to many situations.  If benefits coverage is a specific issue for you, before making any decisions regarding termination, I would contact your workplace insurance company to clarify what are the policy’s terms and conditions.]

Disclaimer: This material is being kept online for historical purposes. Though accurate at the time of publication, it is no longer being updated. The page may contain outdated information.

Many Ontario employees will be surprised to learn that the Civic Holiday on the first Monday of August is not a statutory holiday in Ontario.  If your private sector workplace offers the day off, it is a perk, not a requirement.  The Ontario Employment Standards Act is silent on this holiday, and while many collective agreements and employment contracts may recognize the day, it is a negotiated extra day, not one of the 9 statutory holidays set out in the Ontario ESA.

Having said that, Ontario seems to widely recognize the Civic Holiday, but that is more of a collective desire to have a long weekend between Canada Day on July 1 and Labour Day at the beginning of September.

For the other provinces and territories, only British Columbia, New Brunswick, Saskatchewan, the North West Territories and Nunavut officially recognize the Civic Holiday as a statutory holiday.

Not Just A Camping Holiday

While I have always considered this Monday one of the more important Camping Holidays of the season, according to Wikipedia (the source of all wisdom), the Civic Holiday in fact has a long history, tracing back to a holiday to mark the abolition of slavery in the British Empire in 1834.  In Toronto, “Simcoe Day” traces back to a municipal holiday in honour of Lord Simcoe, the first Lieutenant-Governor of Upper Canada, the colonial governor who is credited for ending slavery before Queen Victoria did, setting up our judicial system, creating Yonge Street, and setting up the Royal Agricultural Fair.  (What have you done lately?)

These are rather notable roots that make the Civic Holiday that much more gratifying in the middle of our particularly hot and sunny Canadian summer.

Last week, the Human Rights Tribunal released a very interesting decision in which discriminatory comments made by a union president on the union’s blog raised the issue of competing human rights – namely the right to be free from discrimination in the workplace vs the right to freedom of expression and association: Taylor-Baptiste v. Ontario Public Service Employees Union

The case turned on two issues:

(i)               whether the union president’s blog posts were work-related and captured by the Human Rights Code’s right to be free from discrimination “in the workplace” and/or “in respect of employment” (they were not); and

(ii)             whether the union’s right to freedom of expression and association trumped the manager’s right to freedom from discrimination (yes, it did in this context).

Facts

In this case, a female manager claimed that the union’s president was posting discriminatory comments about her on the union’s blog. There was no dispute in the decision that the comments were discriminatory:  references to her sleeping to the top, having “intimate knowledge of another deputy”, suggestions that the manager had only obtained her position through sex, and that if she didn’t know the answer to something so simple, she should call her “boyfriend” over at his office.

The comments were made on the blog during heated collective bargaining in the fall of 2008. The union president states that the purpose of the blog was to communicate to the union membership, particularly in light of the ongoing negotiations. It was apparently a widely read blog in the workplace.

The union argued that the comments on the blog were not “in the workplace”, while the manager argued that the blog was an extension of the workplace, and that social media are integrally woven into the fabric of the modern workplace.

Competing Rights

The Ontario Human Rights Code prohibits discrimination “with respect to employment” and “in the workplace” as follows:

Employment

5(1)  Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability

Harassment in Employment

(2)  Every person who is an employee has a right to freedom from harassment in the workplace by the employer or agent of the employer or by another employee because of race, ancestry, place of origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.

[emphasis added; provisions are as amended since the case was heard]

It is important to note that the manager filed the claim against the union and the union president only. The employer was not named. This impacted the analysis as to whether discrimination occurred “with respect to employment” and/or “in the workplace”.

Were the Blog Posts “In the Workplace”?

In deciding upon the application of section 5(2), the adjudicator, David Wright, concluded that the blog posts were not conduct “in the workplace”:

[25]  I agree with the applicant that employers can discipline employees for actions they take in cyberspace, and that the Code may apply to workplace-related postings on the internet.  It is not open to serious doubt, in my view, that in 2012 postings on blogs and other electronic media may be part of or an extension of the workplace and that the Code may apply to them.

[26]  However, I agree with the respondents that in the circumstances of this case, the blog comments themselves were not harassment “in the workplace” under s. 5(2). They were made on a blog identified with the union that, although open to the public, was directed at communication between union members and their leadership. There is no evidence that Mr. Dvorak made the postings while at work for the employer. There may be circumstances in which postings in cyberspace are sufficiently connected that they are “in the workplace”. However, even giving them a broad interpretation, the words of s. 5(2) cannot apply to this blog, given the context.

There are plenty of examples where online conduct, such as comments on Facebook or a blog, gets pulled into the workplace as a disciplinary offence. In this case, however, the adjudicator allowed the employee to wear two different hats, and contextualized the comments accordingly.

Thus, while wearing his union president hat, the respondent could post on the union blog comments that were directed to union members. Whether or not the comments were discriminatory or harassing, the comments were not made “in the workplace” and so not captured by section 5(2) of the Code. This was so, despite the union president being an employee in the same workplace as the manager about whom he was blogging discriminatory comments.

Were the Blog Posts “In Respect of Employment”?

Section 5(1) of the Code has a broader application. It will capture issues around a generally poisoned workplace, not just specifically targeted conduct. In this case, because the manager did not name the employer (i.e. the party who had the primary power to address a poisoned workplace), the analysis became limited to the union and its president’s responsibility and liability.

Ultimately, the adjudicator held that the comments were made in the course of the blogger’s duties as the local union president, and that his comments on management were protected by the Charter of Rights and Freedoms:

Fundamental Freedoms

2. Everyone has the following fundamental freedoms:

(a)

freedom of conscience and religion;

(b)

freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

(c)

freedom of peaceful assembly; and

(d)

freedom of association.

            [emphasis added]

The comments were limited to a couple of posts within one month, in the midst of a large volume of other posts about the ongoing bargaining. The manager was unable to prove that the online comments had specific reverberations in the workplace, although the manager pointed out her resulting stress and use of the employee assistance plan.

This case pits the manager’s right to freedom from discrimination against the union president’s right to freedom of expression.

In resolving these competing interests, the adjudicator looked to the nature of the comments themselves, finding that they focused on labour-management issues such as genuine concerns around nepotism and updates on the contract negotiations in play at the time, albeit using sexist language while doing so. The adjudicator held that the comments were:

“analogous to comments on labour-management issues made at a union meeting or a union newsletter. Comments on such issues are at the core of the constitutional protections of freedom of association and expression and the union’s right to operate independently of the employer.”

The blog comments were characterized as advocacy on behalf of union members by a local union president, and as such, held to be protected by the Charter right to freedom of expression and association (see Ontario (AG) v Fraser, 2011 SCC 20).

In this circumstance, core Charter rights and freedoms trumped over the Code’s rights to freedom from discrimination.

Context Does Matter

People often describe online comments as having the same exposure as an employee shouting out comments in the hallways of the workplace. A public comment is a public comment. This is apparently not the case, and context really will matter.

While post-modern Gen-Yers who continue to carve out their online rights will no doubt roll their eyes and sigh, “Duh!”, the rest of us over 35 will be a little surprised that discriminatory comment about a manager posted on a public blog is okay.

Social media continues to push the envelope on what is appropriate “public” commentary, what is workplace conduct, and what is personal vs professional. This decision moves the discussion forward on what is protected online free speech for unions.

Disclaimer: This material is being kept online for historical purposes. Though accurate at the time of publication, it is no longer being updated. The page may contain broken links or outdated information.

Over the last few months, I have been working with a colleague from our IP practice group (Stephanie Vaccari) and from our Competition & Technology practice group (Arlan Gates) to develop a cross-disciplinary social media team at my office.  Together, we have been able to tackle social media issues from all angles, and to walk through client issues in a way that reflects business reality, namely that social media issues cut across all departments of an organization, requiring a wholistic approach to the problem.

And so, we have recently launched our Toronto office initiative, Social Media in Your Business.  We have put together a brochure outlining the broad ways that social media can impact your business, are hosting our first client webinar today (I’ll post the link when it becomes available), and will continue to collaborate to learn from each other and expand our collective wisdom on social media issues.  I’m looking forward to sharing more details as we continue to grow the initiative.

Disclaimer: This material is being kept online for historical purposes. Though accurate at the time of publication, it is no longer being updated. The page may contain broken links or outdated information.

 

Over the last couple of months, there has been an interesting debate in Canada and the US about whether an employer can ask for a social media password. For some of the highlights of the conversation in Ontario, see:

South of the Border

The issue originally hit the headlines when the American Civil Liberties Union complained on behalf of a Maryland correctional officer.  The ACLU uploaded a video on YouTube and asserted that the employee’s privacy rights had been violated when his employer turned to the employee during a re-certification interview and demanded his Facebook password. Maryland has since passed the first US law prohibiting employers from demanding social media login information.

California, Illinois, Texas, Washington and New York have also introduced social media privacy bills, and earlier this week, the Password Protection Act of 2012 was introduced at the federal level to prohibit employers from demanding social media login information as a condition for employment.

So Should Canadian Employers Ask for Social Media Passwords?

At this point, only Nova Scotia has introduced a bill banning employers from asking for social media passwords.  The first reading was in April, so it is only in at the beginning of the process.

Last week, the Ontario Office of the Information and Privacy Commissioner introduced a guideline recommending against employers asking for social media passwords.  Other provincial privacy commissioners have published similar guidelines about social media background checks.

At this point, however, there is no specific law on the issue in Canada.

I personally come down on the side of those who see this as a very, very bad idea for employers to consider, and yet if an employer merely gathers the data and does nothing with it in Ontario, it probably isn’t a technical legal violation.  (See my blogs posts here and here on the privacy law gap for Ontario employee information.)

For provinces such as British Columbia, Alberta and Quebec with provincial privacy legislation, employee personal information has greater protections and asking for such information will likely cross the legal line.

Even in Ontario without specific protections for employee personal information, the problem is, of course, that for most employers, it will be very tempting to quietly pass on the candidate whose online profile indicates she is 4 months pregnant, highly politically charged, controversial, clearly a bit of a drunk (while pregnant!!), has sued her last 10 employers and believes working Friday afternoons should be banned in Canada. If the employer were conducting a regular interview, most of this information – some protected under the Human Rights Code, some not – would remain unknown until she starts running amuck in the workplace. I get why an employer would want to avoid the situation, but there are just too many landmines to worry about when demanding a social media password during an interview.

Terms of Service

The focus of the debate has been correctly centred on the discrimination and privacy concerns. Another issue receiving some, but not enough, attention is the extent to which the social media platforms themselves permit this use. Users enter into a contract with the social media in order to use their service. The services may be free, but no less legally binding.

By demanding that a candidate hand over his or her social media password information, an employer is asking that candidate to breach the terms of service with the social media provider.  Facebook itself issued a statement in March condemning the practice and advising users they should not reveal their login information.

The Facebook Statement of Rights and Responsibilities includes the following statements:

  • 3(5) – You [User] will not solicit login information or access an account belonging to someone else.
  • 3(10) – You [User] will not use Facebook to do anything unlawful, misleading, malicious, or discriminatory.
  • 4(8) – You [User] will not share your password, (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account.

Not only is the candidate prohibited from sharing his or her password, but should the HR Manager conducting the interview happen to have a Facebook account, he or she would be violating the Terms of Service of his or her own account by soliciting the login information of someone else. Arguably he or she is doing so on behalf of the employer, so vicarious liability arguments could come into play. Should there be clear company policy prohibiting the practice, however, an employer could argue that the rogue HR Manager was acting beyond his or her duties.

Either way, it all gets so messy. Why ask for the hassle for information that is frequently inaccurate, dated and irrelevant, particularly when you usually cannot legally use the more juicy information in the first place?

Dan Michaluk’s Best Practices

If you do intend on asking for social media passwords, I suggest you review Dan Michaluk’s useful “employer-friendly” post on his All About Information blog, which includes the following best practices in managing the legal risks associated with conducting social media background checks:

  1. Check at the end of the hiring process. This is a background check, not an evaluative process. It should come as the next to last step in the hiring process.
  2. Check only when there is a demonstrable need. What’s the need? What are the alternatives? Why is this the better alternative? Document your needs analysis.
  3. Search based on objective criteria. It will be very hard to establish the validity of a profiling exercise – i.e., an exercise in which you attempt to draw broad inferences about job performance or trustworthiness based on social media activity. Unless you have a qualified expert prepare a defensible predictive model, don’t profile. Look for objective behaviors that raise legitimate concerns in light of job responsibilities. For example, you may look for statements that a candidate for a sales or marketing position has made critical comments about your company or industry that are incompatible with becoming a representative of the company.
  4. Have someone other than the decision-maker search. This is a means of ensuring that the decision-maker does not see irrelevant information that may be related to a personal characteristic that is protected by anti-discrimination legislation.
  5. Direct a written report to the decision-maker. The report (which contains only feedback on the objective search criteria) goes in the hiring file and is part of the formal record upon which the hiring decision is made. This record is designed to assist in the defence of discrimination claims and is a record of due diligence. It makes the actual (forensic) record of the internet search irrelevant to a discrimination claim, which should minimize e-discovery risks.
  6. Validate negative information. Positively identifying the author of internet publications can be difficult. Validate authorship and seek an explanation.

This Too Shall Pass

Given the number of legal and practical risks, employers should be careful what they wish for. Should you feel it essential to wade into this dodgy, dangerous water, be prepared for the potential consequences.

From what I can tell anecdotally, few employers actually ask for social passwords so let’s hope this pseudo-storm will pass over as we figure out how to integrate social media into the workplace in a manner that works for both employers and employees.

Are you an employer that finds it necessary to ask for your employee’s social media passwords?  I’d love to hear your perspective, given the prevalence of the anti-password and login information voice.

Last Thursday, the Ontario Office of the Information and Privacy Commissioner released its new guide for online reference checks.  In the face of the recent debates about whether an employer can request personal social media passwords during job interviews, the release of this document is quite timely.

The guideline is entitled, Reference Check:  Is Your Boss Watching?  The New World of Social Media:  Privacy and Your Facebook Profile.  The guideline reviews the various issues around online background checks, and provides a number of suggestions on how a candidate or employee can protect him or herself.

I attended the event last Thursday at which the Privacy Commissioner, Dr. Anne Cavoukian, unveiled the new guideline and discussed the various risks and problems associated with employers asking for social media passwords.  It will be a surprise to no one that she firmly opposes requiring a candidate or employee to provide their personal social media passwords, although her reasoning was based more on privacy principles than legal prohibitions, given the ongoing gap in privacy law for provincially regulated employees in Ontario.

In her speech, Dr. Cavoukian summarized five unintended consequences of requesting and obtaining a candidate or employees’ personal social media passwords:

  1. Accessing a candidate’s personal social media profile may lead to uncontrolled secondary use of personal data, such as data regarding a candidate’s friends and family.
  2. Once the employer is in the possession of the data, the employer becomes responsible for that data and assumes liability for the privacy issues regarding the data.
  3. An employer may lose out on qualified candidates who are deterred from applying for a position because of the employer’s practice.
  4. Possible loss of reputation of the employer.
  5. Costs of legal liability should a claim arise regarding the use of the information gathered during the social media background check.

Most of the consequences are focused on potential risk or reputational damage.  The reality is, given the privacy law gap in Ontario for non-medical employee personal information, any direct legal consequences are more likely to flow from the breach of a workplace policy, collective agreement, or contract (assuming one exists that speaks to the issue of privacy), than any specific law at this point.

I discuss the Ontario privacy law gap in an earlier post here.  Until the landmark Ontario Court of Appeal decision, Jones v Tsige, was released in January, there was no employee recourse, so it will be interesting to see how the new Guidelines will be used by adjudicators as a thought-piece and articulation by the Ontario Privacy Commissioner of what the law should be for Ontario employers.

 

As a nod to the increasing frequency and complexity of social media issues in the workplace, this year’s Law Society of Upper Canada’s Special Lectures is “Employment Law and the New Workplace in the Social Media Age”. As a two day presentation on April 25 and 26, 2012, the schedule presents a broad array of speakers and panelists, including several high profile speakers from Canada and the US.  This will no doubt be a comprehensive look at social media in the workplace.

I have the honour of joining Stuart Rudner and Ari Blicker on a panel chaired by Janice Rubin, taking place both on days to discuss the issue of “Professionalism Issues for Lawyers as Employees and Employers Using Social Media”.  

As we all start to jump into social media as a legal marketing tool, it raises many questions about client-solicitor privilege, inadvertently creating client relationships, disseminating legal advice vs information, how communications on an internal social media platform should be treated, and more.  In fact, in one of our prep calls, we had difficulties confining the broad range of professionalism issues into the two half hour sessions.  

Am looking forward to the discussions, and to meet many of my virtual colleagues in real life!   

More Info

In addition to the below info from an LSUC email, check out the LSUC link, and the uber-modern Law Society sources of information at the Facebook page, and follow the Twitter hash at #lsuclecture. The LSUC also has an app (!!) by going to http://m.guidebook.com/1654 on your mobile phone browser.

LSUC Email Info:

“The Game Has Changed. Are You Ready?  You can no longer afford to play by the old rules.
Register Today for the Special Lectures presentation of:

Employment Law and the New Workplace in the Social Media Age
April 25 & 26, 2012
Live in Toronto/Live Webcast

 

Law practitioners have long recognized the dangers that social media presents in the office. The safe move, in the early days, was to avoid it. That’s no longer an option. Social media is becoming as fundamental to the workplace as e-mail.

  • Do you have a social media policy?
  • Can you confidently advise your clients on their social media concerns?
  • Do you understand the issues raised by gaps in the law?

As part of our Special Lectures series, we’ve assembled lawyers, human resources professionals, as well as technology, security, and social media experts, to get you up to speed on employment law in the context of the social media age.

REGISTER TODAY (http://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE12-0040899)

“LIKE US” on FACEBOOK for all the EVENT DETAILS AND INFORMATION OUR FREE SMARTPHONE APP http://www.facebook.com/pages/LSUC-Presents-Special-Lectures-2012/147382122047640

Follow the conversation about SPECIAL LECTURES 2012 on Twitter (#lsuclecture)

Follow us on TWITTER @LSUCCPD for the most up-to-date information on CPD events and resources. https://twitter.com/#!/LSUCCPD

To register for a program by phone please call 416-947-3315 or 1-800-668-7380 ext. 3315″

 

Disclaimer: This material is being kept online for historical purposes. Though accurate at the time of publication, it is no longer being updated. The page may contain broken links or outdated information.

Businesses do not experience the impact of social media in fragmented departmental silos. Rather, social media is an inherently cross-department, internal and external experience for most organizations. Employees, clients, third party providers, experts, consumers, journalists and competitors all participate in social media about your organization, whether or not invited to do so. And regardless of whether you are at a multi-national company, social media ignores borders and engages users from around the globe.

Depending on the business, the whole point is to broadcast your message as widely as possible. For others, it is an ongoing attempt to limit exposure and to retain confidentiality about products, developments or strategies.

Social Media is a People Issue

Addressing the legal implications requires the same sort of cross-discipline, cross-practice and cross-jurisdictional approach. But if social media doesn’t recognize departments, borders or realms of authority, why does it seem to be such a prevalent issue for employment lawyers in particular?

I had an interesting lunch with a partner in my firm’s Information Technology and Communications practice group last week. We agreed that legal issues involving social media tends to arise in the employment context more than any other area of law. I suggest that this is because the underlying purpose of social media is to connect people, not computers, issues, products, regulations or governments, making employment law the natural centre of gravity for social media issues.

While social media takes place on computers, it is not a computer issue. It is a people issue that flows from individuals communicating with each other about everything from what one had for breakfast to how to overthrow a government.

In the business context, problems arising because of social media use will eventually involve the HR manager who must deal with the human being that posted, tweeted or blogged out of line – or more optimistically, to reward the human being that created an exciting new opportunity for the company.

More than Messing Around at Work

In any event, we’ve moved past the basic time theft issue of people wasting hours looking at high school friends’ photos on Facebook during work hours (just discipline them as you would discipline the guy chatting at the water cooler too much).

The legal risks and opportunities of social media that impact businesses in all corners of the organization continue to grow in sophistication and diversity, notwithstanding that HR will inevitably deal with the aftermath.

Issues that businesses face include:

  • revealing business and trade secrets through social media
  • breaching privacy law
  • dealing with negative consumer comments that verge on defamation
  • meeting corporate social responsibility and stakeholder expectations through social media
  • breaching anti-spam legislation through enthusiastic social media
  • breaching professional regulations through social media information that has become relied upon advice
  • breaching advertising and competition regulations with online communications and contests
  • determining how and when evidence from social media can be preserved and used in litigation, and
  • how to ensure your third party providers comply with your social media policies and strategies.

The employment issues are similarly broad:

  • balancing the private and public, personal and work realms (about which opinions will widely vary depending on how old the employee is)
  • balancing employee freedom of speech vs the employer’s right to manage
  • ensuring workplace policies that touch on social media consider workplace culture, the organization’s branding and marketing strategies, any research and development employee agreements, general computer use policies, human rights and harassment policies, etc
  • director and officer liability issues around who is authorized to represent the company through personal or company social media
  • ownership of any Twitter lists, LinkedIn contacts, Facebook friends and other social media connections after an employee leaves the organization (see my post on Phonedog Noah)
  • online recruitment and what to do with the juicy Facebook dirt about prospective candidates
  • and at least 1,000 other issues that have come up in the social media context…

It is the cross-discipline, cross-jurisdictional nature of social media legal issues that makes the area so personally interesting. It gives me the opportunity to interact with the intellectual property, litigation and IT lawyers in the Toronto office of my firm, as well others in my firms’ offices around the globe (including participating on a panel on social media in our Tokyo office in April with lawyers from Chicago and Sydney).

If there was ever a truly global area of law, social media is it.

For anyone interested in an around-the-world overview of social media and employment law, feel free to check out the two articles I co-wrote last fall:

If you have encouraged your employees to set up a Twitter account to tweet information about the company’s business, who owns the followers if they leave? This is the question in Phonedog v Noah Kavitz, a California case that will no doubt have an impact in Canada.

Phonedog Noah

In that case, Phonedog encouraged its employees to use social media for marketing its cell phone products. One employee, Noah Kavitz, set up a Twitter account with the user name @Phonedog_Noah. He proceeded to amass over 17,000 followers.

After four years, the employee resigned, apparently on good terms, changed the username to his own name, and continued to send tweets to the followers. As of today, he has an impressive following of 24,398, an increase no doubt due to the publicity of this case.

[CASE UPDATE AS OF DECEMBER 2012:  The parties settled out of court and the terms remain confidential.  Unfortunately, we’ll have to wait for another case to make its way through the courts for a final decision.  The issues raised in the case, however, remain unsolved and of great interest to many workplaces.]

Employer Sues Noah

The employer then sued its former employee for continuing to use the Twitter account. The employer allocated a value of $2.50 to each Twitter follower and claimed damages of $340,000 for (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion.

In November 2011, the employee lost his attempt to have the matter summarily dismissed, so there is still no final decision on the issue. We’ll have to wait for the case to make its way through the court systems.

For Noah’s side of the story, see Samantha Collier’s blog “Social Media for Law Firms” for an interesting interview with him, as well as a link to his CNN interview.

Commodification of Followers

This commodification of followers has led to a couple of interesting developments:

  • First, it generated a lot of funny tweets out there about striking it rich overnight because of Twitter follower numbers (as of today, I personally have another $1,430 to add to my kids’ RESP! Oxford here they come!);
  • It introduced a so-called “industry standard” of how much a Twitter follower is worth, although it remains unclear how the “industry standard” was arrived at, upon what research it is based and whether, in fact, their marketing folks just made it up; and
  • It has generated a lot of philosophical blog posts about whether we are all widgets to be traded electronically, or whether we are human beings with human relationships that should not come with a price tag.

Personal or Business?

One of the reasons attaching a price tag to people is distasteful in this context is that we all want to believe that social media is always about personal relationships, not deliberate, targeted marketing.

Social media is all about the individual voice. The marketing gurus have known this for a while, and deliberately get into the social media space to sell/place/plug a product by an individual. The Millennials are far too sophisticated to put up with blatant advertising at them. They want someone to share with them his or her individual opinion about a product or service, enabling the consumer to make decisions based on whatever level of trust or influence exists between the parties.

And so, Phonedog_Noah chirped to his followers about himself (to build trust) and about the product (to sell, as part of his job).

It is precisely the blending of personal and business that sells to Millennials and beyond, but it’s a pain in the neck for employment lawyers. Had Phonedog required its employees to set up an account for business purposes only, it would have a stronger argument that the followers were no different than a Rolodex or customer list, which an employee is not entitled to take with them when they leave a job.

On the other hand, social media is not as engaging, interesting or successful if it is a generic mantra from a company with no personal voice. The mix of personal and business may sell, but it creates a lot of ambiguity about who owns the results of the employee’s efforts.

Take-Away for Employers

Yes, I know I say this in virtually every blog post, but a good policy is key. If you have a workplace social media policy that clearly articulates where that line is between personal and business, then as an employer, you will be in a much better position to lay claim to the followers, friends, or connections that are generated for work purposes only.

The policy should require employees to separate the business and personal wherever possible. If you’re requiring your employee to participate on Twitter or Facebook, then have them set up both a personal and a professional account to keep the lines clear.

Among other things, the policy should also cover the standard provisions about whether the employee can engage in personal social media during work hours and what the employee is permitted to express about the company on any personal accounts.

It is also worthwhile for employers to think about the content of the employment agreement itself. If you know up front that social media will be a required part of a candidate’s job, laying it out expectations in a contract can save you some headaches down the road.

I have no doubt that a case like Phonedog will come to Canada at some point. Until then, we have no clear line about who owns the work product of social media. All you can do is remove as much ambiguity as possible through policies and communications.

And while you’re at it, have your marketing people talk to your HR people once in a while.

My thanks to my colleagues Maartin Vestering (in our Amsterdam office) and Justine Phillips (in our San Diego office) for bringing this case to my attention.

As of today, individuals can now sue for the tort of privacy in Ontario.   (Thanks to Professor Doorey for the heads up in a tweet and blog post this afternoon).

The new tort is based on the following statement:

One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his or her private affairs or concerns, is subject to liability to the other for invasion of his or her privacy, if the invasion would be highly offensive to a reasonable person.

Jones v Tsige

Today the Court of Appeal of Ontario released its highly anticipated decision in Jones v Tsige, which finds that an individual can now file an action with the court based on the tort of “intrusion upon seclusion”.

In this case, one bank employee named Tsige looked into the bank account of another employee named Jones (who became involved with Tsige’s ex-husband) at least 174 times over 4 years.  Jones sued, lost at trial and appealed.  The Ontario Court of Appeal awarded her $10,000 for the tort of intrusion upon seclusion.

Important Development in the Law

Previously, courts held that there was no right to an independent claim based on privacy, and that any privacy claims must be part of another claim, such as breach of an employment contract that contained a privacy provision.  Plaintiffs, therefore, required another underlying action in order to also address any privacy claims.

Furthermore, given that no privacy legislation applies to non-health related personal information in most private sector workplaces in Ontario, there has been a gap in the legislation that prevented employees from filing a complaint with the Privacy Commissioner.

See my post on Privacy in the Workplace 101 from last summer for more details on the gap.

Take-Away for Employers

Employees can now take their claims of invasion of privacy directly to court. While the Jones v Tsigecase involves two employees, there is nothing that prevents an employee from taking his or her employer to court over privacy issues.

In light of this very important development in the law, employers will want to consider whether their workplace policies, procedures and processes sufficiently address protection of privacy, now that employees have direct recourse in the courts.