As employee social media conduct makes headlines, in-house counsel need to implement policies and procedure to lessen its risks
Teaching Canada’s first Internet law course in 1998, Martin Kratz often told students that when it comes to the things people say in emails, “it appears all higher brain function ceases until the second after you press send.”
The same, Kratz adds today, is true of social media, except we now have many more ways to hit send, post or tweet to express whatever might be better left in the subterranean depths of our minds. Today, with social networking platforms – Facebook, Twitter, Instagram and whatever trends next – people have numerous ways to embarrass themselves, their family and friends, and their employer, in front of millions. Here come the pink slips.
“People forget that they are leaving an indelible, discoverable record,” says Kratz, who leads the Intellectual Property Practice at Bennett Jones LLP in Calgary and wrote Canada’s first Internet law text, Internet Law: A Business and Professional Guide in 1998. “It’s a new world where concepts of privacy are fundamentally being reshaped.” Those concepts are often being reshaped by dim-witted behaviour and the employers and lawyers who must deal with it.
For corporations and in-house counsel, social media risk (SRM) is like a Claymore mine. It can explode unexpectedly at any time, sending viral fragments of reprobation in every direction — ripping through a company’s reputation, brand and profits. It can be tripped off by anything from an ill-conceived tweet to the booze-fuelled loutishness of an employee leaving a soccer game.
Which brings us to Shawn Simoes. Simoes is the former Hydro One employee who defended a buddy’s right to yell mysoginistic comments into the face of a female CityNews reporter doing a live television hit at a Toronto FC game last May. Confronted by the reporter, Simoes, an Assistant Network Management Engineer/Officer, said yelling lewd comments at reporters was “F-ing awesome” and “I respect it.” He added, smirking, that if his mom heard him blurt the phrase out, “she would die laughing, eventually.”
Hydro One didn’t laugh. One day later, as video of the incident went viral with more than four million views, the public utility fired Simoes from his $107,000-a-year job.
Simoes is just another example of the fact that, like it or not, employees carry the reputations of their employers on their shoulders more than ever before. Even off duty. When he beaked off on live television, Simoes said or wore nothing to identify himself as a Hydro One employee. Resourceful Internet crusaders did that for him. They also sent a flurry of messages to Hydro One demanding to know what the company planned to do about Simoes.
It’s not, as it might seem, an easy decision to make, says Lisa Stam, a founder and partner at Koldorf Stam LLP, a boutique Toronto employment and labour firm. Stam often gets asked by employer clients: Can I fire this employee for this stupid thing he was caught doing on social media?
“But ‘should I?’ is the next question I always want to talk about,” says Stam, who often advises companies on social media crisis management. “What I really love about this area is there is a lot of strategy involved. They are all legal issues, but then, strategically, does an employer want to deal with it? Because some comments are just plain stupid, but you can give them more fuel if you act on it.”
When asked last September, Hydro One general counsel Joseph Agostino declined comment on the Simoes case save to confirm by email it had gone to arbitration. Early last November, Hydro One confirmed, in fact, that after the arbitration hearing, Simoes was rehired.
Though Hydro One’s firing decision was reversed, and some condemned Simoes rehiring on social media, in one way, Stam suggests, the utility got its first decision right. Strategically, she says, “it was excellent press for them to fire this guy right away, regardless of whether or not they had cause. The good press they got on their quick decision would probably outweigh the cost of the legal fees to fight it.”
Plan and Policy
Such smart, quick, corporate decision-making typically doesn’t happen without good planning across various corporate departments such as legal, HR, IT, corporate, marketing and PR.
“Policy and training are absolutely key,” stresses Andrea York, a Toronto partner and employment and privacy lawyer at Blake, Cassels & Graydon LLP. Today, when it comes to off-duty conduct and social media, companies need a solid policy and appropriate training to drill acceptable behaviour into workforce minds. Those policies, York says, must “clearly set out expectations, rights and obligations” for all employees, as well as the potential consequence for breaching the policies.
Another step York says can protect corporations: Employees should be required to sign an employment and termination agreement confirming they’ve read and understand a company’s policies and will abide by them. Among other things, those agreements should include clear details about the ownership of social media (such as LinkedIn contacts) that employees develop as part of their job.
Ownership of social media contact lists is a growing area of concern, agrees Stam. “A generation ago you weren’t able to walk out with the Rolodex at the end of your employment with a company.” But sometimes employees continue to use, for example, LinkedIn contacts generated at one company after they’ve moved to another. Do the contacts or Twitter followers gathered through a company account constitute a traditional corporate client list, which could be considered company property?
So far, there hasn’t been a big Canadian case to clarify the matter. In a 2011 California case, PhoneDog v. Noah Kravitz, PhoneDog, an online cell-phone review and marketing website, encouraged employees to set up Twitter accounts to promote the business. Using the handle @PhoneDog_Noah, Kravitz amassed 17,000 followers. After four years he left and changed the user name to his own name, continuing to tweet to those followers. PhoneDog sued him for, among other things, misappropriation of trade secrets and interfering with prospective economic advantage. Valuing each Twitter follower at US$2.50, it sought US$340,000 in damages from Kravitz.
“But it settled out of court, an unsatisfying result for lawyers,” says Stam. Kravitz did keep the handle and followers and still tweets away. “So the company wasn’t able to establish that they had a proprietary right over this employee’s followers. But that’s in the US. We haven’t had a case like that in Canada.”
We have had, however, various cases about off-duty misconduct either generated or exposed widely through social media. Although clearly Simoes’ case wasn’t as open-and-shut as the public might have wanted, one of Hydro One’s best tools to handle off-duty misconduct is its Business Code of Conduct.
Introducing that code, CEO Carmine Marcello writes in the first line; “Each One of us must represent the very best of Hydro One every day.” Under the subject of Citizenship, the code states Hydro One “does not tolerate harassment or discrimination.” Elsewhere, it says employees are required to treat “everyone with respect and dignity.” Presumably, that even applies to television reporters.
Yet for Canadian businesses faced with whether they can fire an employee over some social media-related flub (or any other misbehaviour, for that matter), there’s this warning from lawyer Stuart Rudner of Rudner MacDonald LLP in Toronto: To fire for cause “is an incredibly complicated area of law.” He would know. Rudner penned You’re Fired! Just Cause for Dismissal in Canada. First released in 2011 and updated since, it’s 10 centimetres thick.
But ambiguity over firings is not because of recent changes to the law. Canadian common law has upheld for a long time that a company’s has the right to fire a worker who does “anything prejudicial to the interests or reputation of the employer.”
Rather, says Rudner, before we had an online world, off-duty conduct was rarely an issue for employers. If someone went to a pub with co-workers and dissed a boss, “you had a very limited audience and no owner record of what was said.”
Knuckle-dragging social media behaviour has exponentially multiplied the ways someone can get fired. And it’s forced Canadian courts and arbitrators to deliberate on what justifies such discipline. As employment lawyers know, a worker can be fired any time – with or without cause – as long as the reasons don’t contravene a ground protected by human rights legislation, such as a person’s age, religion, sex or race. When ending employment without cause, however, the employer must give reasonable notice and pay severance. If cause is established, the employee gets nothing but a swift escort out the door.
However, courts and arbitrators may see a dismissal as excessive and reinstate an employee or give damages. “One thing important to remember,” says Rudner “is you don’t only look at the misconduct in question. You have to look, as the courts have said, at all the relevant factors.”
The test for deciding those factors was first outlined in 1967. It’s since been reasserted many times, including last year in the arbitration Toronto (City) v. Toronto Professional Fire Fighters’ Association, Local 3888. In that case, firefighter Matt Bowman was terminated for inappropriate off-duty use of his personal Twitter account. Bowman, identifying himself as a Toronto Fire Service employee on the account, sent racist and misogynist tweets to 29 followers, including co-workers. Among his missives was: “I’d never let a woman kick my ass. If she tried I’d be like HEY! You get your bitch ass back in the kitchen and make me some pie.” That was a milder one.
To justify Bowman’s termination with cause, the arbitrator said the City of Toronto must show that either the conduct harms the company reputation or product; renders the employee unable to satisfactorily perform his duties; leads other employees to refuse to work with him; is a serious breach of the Criminal Code that is injurious to the company reputation, or makes it difficult for the company and employees to function efficiently.
Any one consequence might warrant discipline or discharge. The arbitrator in Bowman's case found firing was justified.
For in-house advisors, especially those working in small legal departments, the social media risks companies face can be harder to outpace than a pyroclastic flow. “I don’t have a team of six or seven lawyers,” says Harpreet Sidhu, who started as Pethealth Inc.’s first general counsel in 2012. “Looking after all the governance” for a company that operates in Canada, the US and UK “is a lot of work for starters. To maintain that,” says Sidhu, “you have to have certain strategies, plans and policies in force so you can actually keep all [the social media issues] on a tight leash. Otherwise, it’s going to go crazy.”
So what’s general counsel to do? Sidhu, in her early 30s and young enough to fully comprehend both social media’s opportunities and risks, has about a half-dozen tasks she undertook with various department managers to safeguard Pethealth’s reputation and business. For starters, there’s crafting that thorough social media policy. Initially Pethealth – operating in the highly customer-sensitive sector of pet insurance, pet health and pet recovery services – brought in Infinity Communication, an Oakville, Ontario media consulting and PR firm. “They helped us with our Facebook page, they helped us talk about Twitter, they helped us talk about our newsletter.”
Using a third-party vendor was a good kick starter and not particularly expensive, she says. But now Pethealth has an internal social media team that monitors, controls and posts online content through Facebook and Twitter accounts to promote Pethealth’s corporate values and products.
Pethealth’s policy governs employee use of a wide array of digital communication forms, including blogs, wikis, electronic newsletters and chat rooms. Along with common-sense prohibitions against exposing or sharing company trade secrets and private customer and employee data online, Pethealth’s social media policy restricts employee personal use of social media when referencing Pethealth Inc., its subsidiaries and affiliates. It also includes Bring Your Own Device (BYOD) restrictions and details about acceptable use of company tablets and computers. It warns: “Employees should be aware of the effect their actions may have on their images, as well as Pethealth Inc. and its subsidiaries’ and affiliates’ images. The information that employees post or publish may be public information for a long time.”
It’s not enough, though, to just hand employees from top to bottom a policy. Employees, adds Sidhu, undergo regular training by an internal social media team. As well, every long weekend, whether it’s a bank holiday in the UK or July 4th in the US, Pethealth sends employees reminders that, while off work, they should not make any online remarks – positive or negative – about the company. That applies even if defending the company against an unfair online attack by someone. Leave that for the company social media professionals to deal with.
Should a SMR crisis erupt, Pethealth has a central management hub structure with a strict chain-of-command process to deal with it.
A crisis can geyser online in unexpected ways. When Minnesota dentist Walter Palmer killed Cecil the lion in Zimbabwe in July, few might have predicted that online petition campaigns via activist organizations such as Change.org would encourage millions to spurn various airlines, including WestJet and Air Canada. Those carriers legally transport the heads and body parts of animals shot for blood sport.
Nestlé S.A. has been the target of numerous online social media campaigns, especially against the Swiss giant’s bottled water division. This past summer, during a drought in BC, more than 228,000 people signed a petition circulating on SumOfUs.org against Nestlé Canada Inc. It demanded the BC government review access rates permitting Nestlé and other industrial users to draw unlimited amounts of water from aquifers for just $2.25 per million litres. In July, the petition prompted a promise from Premier Christy Clark to review BC’s Water Act and the pricing structure for big water bottlers.
Online campaigns against Nestlé water-bottling operations in California and Oregon have bubbled up all over the Internet.
“You cannot participate in social media without risk and you cannot control the message 100 per cent in social media,” says Daniel Holden, Vice President, General Counsel & Secretary at Nestlé Canada Inc. in Toronto.
From Holden’s perspective, it’s important for in-house counsel to understand social media risks are not just a legal or corporate affairs issue. “They are multifaceted. And we cannot exist in silos when dealing with them.” At Nestlé, collaboration within the worldwide organization when dealing with social media risk is key. An issue that surfaces in Asia can have an impact on the Canadian division, because all divisions operate under Nestlé’s brand equity.
“There is a huge element of planning for these types of things,” says Holden. “It’s important for us to anticipate risks and understand risks. And to know that if issues materialize on social media, we have a program in place for how we are going to respond to those types of crisis situations.”
To that end, Nestlé Canada regularly engages in crisis-planning exercises, conducting mock exercises to work through how to respond to any new social media risk. “Essentially,” explains Holden, “someone would create a draft problem that might occur. Then you would get all the key stakeholders in a room and you would treat it like it was an actual event that was occurring.” The exercises often reveal gaps that need to be addressed to effectively deal with events — for instance having people aboard with certain SMR skill sets.
As GC, Holden says he often has to remember to doff his legal hat and look more broadly at a business focus when considering solutions. “It’s obviously important to consider legal issues as part of these types of exercises. But the legal concerns won’t necessarily be driving our response.”
Legal plays an instrumental role at Nestlé in providing training and guidance to the external PR and social media agencies it hires “so they understand our perspective on legal risk. Those social media guard rails we developed,” explains Holden, “are essential for our agencies to understand.” Yet, he adds, in order to respond quickly and creatively to any new risk, Nestlé tries to open up space for those external agencies to act somewhat independently.
“If you are going to be truly engaged in [social media], you need to be comfortable with an element of risk. You need to be flexible and open to solutions that wouldn’t be, if looking from a purely legal perspective, your first solution. But [they] would still be valuable and deliver benefits.”
Defusing Social Media Risk
Social media presents a host of potential disruptions to Canadian corporations, including privacy breaches, activist campaigns and employees whose online antics can damage reputations. Experts suggest the following tips to decrease the level of social media risk:
- Collaborate across various departments. For instance, says Bennett Jones partner Martin Kratz, “Traditionally, marketing departments see the legal department as the enemy.” But when it comes to social media the two have important complementary roles and need a good working relationship to act together proactively. Marketing needs to get legal engaged very early before any new campaigns start.
- Don’t jump to conclusions. When it comes to potential misconduct by a worker, Stuart Rudner of Rudner MacDonald coaches employer clients they have a duty to investigate fairly and thoroughly. It shouldn’t be a lengthy process to determine if there’s cause to terminate, but it shouldn’t happen overnight either.
- Have a social media risk crisis plan. At Nestlé, General Counsel Daniel Holden says before an event happens, it’s important to connect with stakeholders and address beforehand how to – and who will – address problems in the social media space.
- Know your company values. Pethealth Inc. was acquired by Fairfax Financial last year. General Counsel Harpreet Sidhu says it was important for her to understand Fairfax’s values. “What we say to charities, customers, to the public or through social media has to be in line with Fairfax values, such as the customer is always right.”
- Align third-party vendors. Pethealth, like many companies, uses a variety of third-party vendors for services. Usually, during the non-disclosure agreement stage before signing a master services agreement, Sidhu likes to make sure their social media policy is in line with Pethealth’s. “Or we at least have some level of control or some level or prior notification of what is going to happen on their part.”