What are the legal reasons that an employer needs a social-media policy? That’s a question that I get a lot when discussing social media with clients and others. And, maybe more often, “Are there any reasons that I need a social-media policy?”  This is a complicated question, really. And there are lots of possible answers. But there’s at least one new legal reason for employers to stop procrastinating, get the idea out of committee, and get to work on such a policy.

Recently, the Federal Trade Commission (FTC), issued regulations that affect nearly every business–at least every business with a workforce that has access to a computer (either on or off working time). The FTC is the government agency charged with the responsibility of protecting consumers against false and deceptive advertisements, among other things.  The FTC’s newest regulations, called the Guides Concerning the Use of Endorsements and Testimonials in Advertising (PDF), sets fairly strict restrictions on employees’ use of social media to talk about a product or service offered by their employers.

Section 255.1(d) of the Guides provides that:

Fortune’s Best Companies to Work For list is back. And the results are as fascinating as ever.

Software giant SAS landed top honors this year, jumping into first place from 13th in 2009. Although the top slot may be a new position for SAS, it’s very familiar with the list–it’s been named a “Best Company” for each of the 13 years the honor has been awarded. image

As the largest privately held software business, SAS employs more than 4,000 people in its headquarters outside Raleigh, North Carolina. The company hired 246 new employees in 2009. This statistic is notable not just because of the dismal economy and job market as a whole but also because of the company’s incredibly low turn-over rate (2% compared to the industry average of 22%). For every available position, the company received 100 resumes.

It now appears the Conan and NBC saga is coming to the end. It is being reported that Conan will leave NBC with a boat load of cash and will be free to have a new show on another network in the Fall. The specific terms of the deal have not yet been released, but they will definitely be detailed in a contract between Conan and NBC. Such a contract, often called a severance agreement, is used in high risk terminations as a means of avoiding costly and distracting litigation.

The key elements of a severance agreement include:contractguy

  • A provision detailing the nature of the separation. Employees usually want it characterized as a resignation. This allows the employee to search for new work without the stigma of a termination on his or her record. This provision should, of course, describe the last day of work.
  • A discussion of how much money is going to be paid to the employee and how it is going to be paid. This is obviously a key provision for both the employee and employer. While it is unlikely that an employee will be receiving $33 million like Conan, it is likely that some payment will be made. Such a payment may be in a lump sum or paid on some schedule agreed to by the parties.
  • A release of all claims the employees may have against the employer. This release must be broad enough to ensure that the settlement is truly the end of the matter. As a result, it should be drafted in a way that covers all entities and people who may be the target of a lawsuit. It should also cover any particular state or federal statute or claim that can be brought by an employee against a former employer. Special care must be given when drafting a release involving a claim under the Age Discrimination in Employment Act (ADEA). A federal law, the Older Workers Benefits Protection Act (OWBPA), requires that the employee: be provided notice that ADEA claims are being released ; allowed at least 21 days to consider the release; be given 7 days to rescind the release; and be advised that they should consult an attorney.
  • A provision detailing payments for any accrued but unused sick or vacation pay.
  • Provisions detailing the treatment of confidential and proprietary information. It is crucial that the obligations of the employee be spelled in a way that both parties know what is expected of them. For example, it is reported that Conan will be required to leave behind the various characters he and his team developed through their years at NBC. All employees should be required to return any company papers, computers, and the like.
  • Terms describing when and how the departing employee can compete with his old employer. Key employees, like Conan, often have an employment agreement containing a restrictive covenant limiting their ability to work in the future. The scope of such a covenant is often modified during the negotiations involving the employee’s departure. In Conan’s case it appears that he will be able to launch a new show sometime in September. You can bet, however, that there was a lot of discussion over what Conan could do in the interim.
  • A term discussing whether the employer will oppose the employee’s unemployment compensation claim
  • A discussion as to whether the employer will continue the employee’s health care coverage and for how long. Such continuation may be for a number of months or until the employee obtains new coverage from an new employer.
  • A discussion of how the employer will respond to requests for references from potential new employers. Consideration should be given requiring the employee to direct all such inquiries to a specific person who will respond in an agreed upon way.
  • The agreement should require that the terms of the agreement remain confidential or, at a minimum, provide what will be provided to the press or public. Such a provision is especially important in high profile terminations in which each party will need to “save face.”

To catch up on the Conan/NBC saga, see my previous posts, Why NBC Should Have Used Delaware Law In Conan O’Brien’s Employment Contract, and What Can Employers Learn From Conan O’Brien and NBC?

Just a short announcement that I’ve started a second blog, which is now live, called Going Paperless.  There, I’ll be posting about the ways we can put technology to use for improved productivity and efficiency at work.  There are so many times that I come across helpful tips or tutorials but, until now, haven’t had a forum through which I could share them.  Some of the content will be legal-centric, with an eye to productivity for lawyers and legal professionals, but most of the tips will be equally applicable for anyone who wants to make work easier. 

I hope you’ll join me in the exciting conversation at my new blog.  And, of course, you can keep up to speed on what’s happening at Going Paperless and at DELB via my Twitter feed by following me at @MollyDiBi.

The Ragan video featuring Mayo Clinic, which I described in the last post, is well timed.  Earlier this week, Cisco announced the findings of a study on social networking and its adoption in the enterprise.  Based on interviews with more than 100 companies , the study explores the primary tools being used, which areas of business are adopting them and how they’re putting them to use, and some of the challenges that are arising.

One of the lead researchers, Neil Hair of the Rochester Institute of Technology, discusses two of the study’s most interesting findings:  the proliferation of social media tools to new areas of the business and the growing need for governance models.  Both are issues facing the modern employer.


For more examples of great social-media ideas, see these related posts:

If your organization is considering putting social media to use but is struggling with innovative ways to use these new tools, there’s no need to reinvent the wheel.  Instead, look to others who have come up with these ideas and implemented them in their workplace.  In a short video On My Ragan TV.com, Mayo Clinic’s Linda Donlin discusses how the hospital uses video, enewsletters, blogs, and other tools to keep staff informed about strategic initiatives and to keep personnel engaged at work. 



For more examples of great social-media ideas, see these related posts:

Learn by Example: Top Social Brands of 2009

The U.S. Department of Labor (DOL), has been conducting an interesting online initiative designed to identify the best online job search and career advancement tools. They currently have 610 tools (!) posted on their site and are seeking input from people who have used the tools.

The tools fall into categories such as general job boards, niche job boards, career tools, career exploration guides, and web 2.0 / social-media sites that specialize in job searches or postings. Visitors to the site are encouraged to try the tools, comment on them, and recommend the ones they like. In a YouTube video on the website, Secretary of Labor Hilda Solis explains the initiative. The DOL promises to publish the tools that rank the highest on its website and also to encourage the creation of a nationwide network of “One-Stop Career Centers.” Voting ends on January 15.

Anything that the DOL can do to help job seekers is a good thing.

Yesterday, I wrote that NBC’s dispute with Conan O’Brien might turn on an interpretation of his employment contract. If NBC’s actions were in breach of its agreement, any restrictive covenant preventing Conan from moving to Fox would likely be unenforceable.

Since that post, several commentators have opined that any such restrictive covenant would be unenforceable under either New York or California law-both states have passed statutes prohibiting restrictive covenants in employment contracts.

NBC’s legal position would probably be much stronger if it had included both “choice-of-law” and “choice-of-forum” provisions requiring that Delaware law be used to interpret the agreement and that Delaware courts interpret the agreement. Teresa Cheek’s recent post on this topic details the real advantages of using Delaware law in employment contracts involving executives or key employees.

Just a few days ago, NBC announced that it was moving the Jay Leno Show from its current 10 p.m. starting time to 11:35 p.m. This move was prompted by complaints from NBC affiliate stations that the Show’s poor performance was damaging the ratings of their local news programs and their profits. The move of Leno’s show, however, will require moving the start of the Tonight Show to 12:05 a.m. Yesterday, Conan O’Brien released a statement objecting to the changes and threatened to leave the show. What can employers learn from this high profile, high-stakes predicament?

Conan and Leno are employees of NBC and their rights and obligations are governed by employment agreements. As a result, the options of all three parties will be determined by the terms of these agreements.

Conan’s threat to bolt from NBC is likely based on a basic tenet of contract law: a party to a contract is relieved of the duty to perform (no pun intended) if the other party to the contract materially breached the contract first. While I have not seen the terms of Conan’s agreement with NBC, the final resolution of this highly public squabble may well turn on whether NBC’s actions are in breach of its agreement with Conan.

I had the pleasure of speaking to the Delaware SHRM membership last night on the topic of GINA, the new federal law protecting against discrimination based on genetic information.  It was a great audience, and a topic of considerable interest.  My handout is below.

Having gone into effect in November 2009, but without any regulations issued yet to help us interpret this brand new protected category, there are many good questions left unanswered.  We will keep you posted on when the final regulations are put into place.

In the meantime, there are some interesting issues and potential scenarios that are worthy of greater discussion.  My plan is to address some additional questions on  GINA issues here in this blog.  Until then, you can read more about GINA in this previous post: Genetic Information Nondiscrimination Act Update.

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