Technology Employment Law

Technology Employment Law

Legal Insight for Technology, Media, and Telecommunications Employers

Igniting a Firestorm at Tinder with Flammable Allegations

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By: Christopher M. Farella, Jennifer L. Nutter, and Margaret C. Thering

Whitney Wolfe, former marketing vice president and co-founder of the company responsible for the popular mobile dating app, Tinder®, recently filed suit in California state court alleging sexual harassment and discrimination surrounding her experience and eventual departure from the company.  Tinder Inc.’s parent companies, IAC and Match.com, are also named as defendants.  While the complaint is only one side of the story, the exhibits attached to the complaint, which contain text messages between Wolfe, Chief Marketing Officer Justin Mateen (Wolfe’s supervisor and alleged harasser), and Chief Executive Officer Sean Rad suggest where there is smoke, there may actually be fire.  While Tinder Inc. is not the first burgeoning tech company to be involved in a salacious lawsuit, it does provide a cautionary tale on important legal issues for start-ups.

Wolfe alleges that she began experiencing discriminatory behavior as Tinder® became more popular and it only escalated after a failed romantic relationship with Mateen.  For example, despite being considered a co-founder of the company, she was left out of business articles appearing in more traditional business outlets because she was a “girl” and her male counterparts did not want people to think the company was “an accident.”  After Wolfe officially ended her relationship with Mateen, Mateen allegedly stripped Wolfe of her co-founder title, reportedly telling her that having a “24‐year-old girl” as a co-founder made the company “seem like a joke.”

As support for her claims of a harassing and hostile environment, Wolfe also alleges Mateen called her a “whore” in front of CEO Rad. Many of Mateen’s other expletive-filled text rants contain inappropriate comments.  Further, Mateen also appear to threaten Wolfe’s job in a text, writing, “[I]f I can not get along with you and it starts to effect [sic] my work too much not bc of me but the effect will be that ur gone.”  Wolfe claims to have asked Mateen to stop this behavior, claiming, “Please don’t do this during work hours” and she said she would ask the CEO to intervene to stop the harassment.

When she tried to complain to Rad, she alleges, the CEO stated that she was being “dramatic” and “annoying.”  Eventually, Wolfe claims, she was forced to leave, and although she wished to do so with just her vested equity and a severance package, her offer was rejected, leading to the filing of this suit.

Once the lawsuit went public, Tinder Inc. took action.  Mateen was suspended pending an ongoing internal investigation and there was a condemnation of the language in the publicized texts.  Nevertheless, the company stated that the allegations were unfounded.  (The company has not yet filed an Answer to the Complaint.)

The allegations present several legal touchpoints that all companies, but especially tech start-ups, should follow:

  • Have Clear and Effective Policies in Place.  There are no factual allegations in Wolfe’s lawsuit suggesting that Tinder Inc. had policies in place to prevent this type of discrimination and harassment in the workplace.  While Tinder Inc. may have had such policies, it is also important that such policies be well-publicized.  All employers should have and publicize such policies as a way to set the proper tone in the office and to serve as a first line of defense to situations such as this.  California, where Plaintiff was employed, requires employers to prevent sexual harassment. California employers are required by law to display a government posting entitled “California Law Prohibits Workplace Discrimination and Harassment” and to give all employees information sheets on sexual harassment.  One bedrock policy is an anti-harassment/discrimination policy with clear pathways for employees to come forward with complaints. Employees should be given multiple choices of persons to whom to complain so that they are not forced to complain about sexual harassment to the harasser.
  • Train Employees About Your Policies That Prohibit Sexual Harassment.  Employees should be trained about the employer’s policies prohibiting sexual harassment, and employees should be trained about how they can report harassment and what to do if the person to whom they report harassment ignores their complaints. This training should occur on a regular basis, not just when one begins employment. California law requires all employers with 50 or more employees to provide such training to supervisors every two years.
  • Romantic Relationships Should Be Managed.  Wolfe contends that when the relationship began to turn downward, Mateen stepped up his harassing behavior.  The text messages attached to the complaint arguably show that Mateen was using his position to subject Wolfe to continued harassment.  Indeed, in the text mentioned above, Mateen could be said to threaten Wolfe’s employment.  Given his position in the company, this threat could be seen as carrying real weight.  Besides insulting Wolfe, Mateen seems to have insulted others with whom she associated.  After one particularly intense exchange, Wolfe writes, “I need to be more clear.  We are not together.  You have no right to my personal life.  I answered your question, yet you continue to ask the same thing 100 times over.  Then you threaten me.   Unacceptable.”   Relationships at work are sometimes unavoidable, but ones between supervisors and subordinates are fraught with potential difficulties thus demanding immediate attention.  Companies may want to consider mandating that romantic relationships have to be disclosed to management to assist in preventing the all-too-familiar scene Wolfe describes in her complaint. Some companies implement policies that prohibit or discourage workplace romances, but the problem with such policies is that if an employer would not enforce the policy against its two best employees who entered into an office romance (which few employers would), then it is possible that the policy could lead to discrimination complaints. Upon learning of an intra-company romantic relationship, companies need to take action to avoid what has played out here.  Among the steps to take are to appoint a different supervisor to the subordinate.  This way, the romantically involved supervisor does not have the power to affect the subordinate’s working conditions negatively should the relationship sour.
  •  Take Employee Complaints Seriously.  Wolfe alleges that when she complained to Sean Rad, Tinder Inc.’s CEO, and then post-separation, to IAC’s CEO, neither of them took her complaints seriously.  In fact, Rad allegedly responded by calling her “dramatic” and “annoying.”  When an employee is reaching out to others in management to complain about the behavior of another executive, steps should be taken immediately to investigate the complaints. Blaming or belittling the person who makes the complaint only serves to increase feelings of alienation, persecution, and retaliation; and it also almost guarantees a lawsuit.  Investigations can go far in both restoring confidence in the affected employee and addressing a situation before it gets well out of hand. Legal defenses to lawsuits of this nature, in some jurisdictions, can be asserted where prompt steps were taken to remediate the harm allegedly being caused.  If nothing is done, this defense is unavailable. In contrast to federal law, California law requires employers to take reasonable steps to prevent harassment, and it requires employers to investigate complaints of harassment. Additionally, unlike federal law, California law does not provide an affirmative defense for employers who take reasonable steps to prevent harassment and were unaware that the employee was being harassed. California law does allow employers who show this, however, to reduce their damages.
  •  The “Permanent Record”.  A long time ago, school children were threatened to behave or else a report would go into their “permanent record” which would seemingly follow you the rest of your life.  That threat was probably hollow then, but has never been more real than it is today.  Texting and email have become the preferred methods of communication, especially in the business setting.  While texts and emails may be helpful as reminders to negotiations or agreements, companies need to be vigilant with employees about the content of these communications.  As is seen from the texts attached to Wolfe’s complaint, a “permanent record” of a conversation is created each time a text or email is sent.  These “permanent records” will become the inevitable focal point for discovery and trial.  Effective policies and training need to be implemented to minimize the risks associated with the unfiltered use of today’s communication tools.
  • Don’t Let Ego Control.   Wolfe alleges that at some point, she felt beaten down and offered to resign.  She tried to work out a resolution where she would retain her equity and also receive severance.  In a text, Rad agreed to the equity, but called the request for severance a “ridiculous ask” since she was quitting.  From a business perspective, what is more ridiculous – paying a departing co-founder a sum of money that can be made contingent upon waiving any legal claims against the company and keeping the matter confidential, or allowing things to fester, become a public lawsuit, and expose the company to embarrassment and loss of market confidence?  In a world where allegations, whether true, false or somewhere in between, can live permanently in the searchable public archives, public airings (and the subsequent debates and dialogues that proliferate online) of potentially embarrassing personal exchanges can spook investors and damage an emerging (or even established) brand.  Better to swallow pride and get past an unfortunate situation in private.

Tinder Inc. will have its chance to rebut these allegations and explain certain decisions it made with respect to Wolfe.  Nevertheless, the facts as alleged should send a message to companies that this situation could occur within their walls and steps should be taken today to minimize the risks.

OSHA and NLRB Agreement Opens New Door To Whistleblower Claims

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On Epstein Becker Green’s OSHA Law Update blog, Eric Conn reviews the agreement between the NLRB and OSHA, which allows employees to file out-of-date safety related whistleblower claims to be filed with the NLRB.

Following is an excerpt from the blog post:

On May 21, 2014, the National Labor Relations Board (NLRB) published a memorandum discussing a new agreement between NLRB and OSHA regarding a backdoor route for employees to file safety related whistleblower claims that are too stale to be filed with OSHA. The NLRB memo directs OSHA representatives to “notify all complainants who file an untimely [OSHA] whistleblower charge of their right to file a charge with the NLRB.” As a result of this agreement, employers should expect an increase in the number of unfair labor practice claims filed by employees alleging retaliation for protected safety related whistleblower activity.

To access the full blog post, please click here.

 

Stuart Gerson on the Supreme Court’s Harris and Hobby Lobby Decisions

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Our colleague Stuart Gerson of Epstein Becker Green has a new post on the Supreme Court’s recent decisions: “Divided Supreme Court Issues Decisions on Harris and Hobby Lobby.”

Following is an excerpt:

As expected, the last day of the Supreme Court’s term proved to be an incendiary one with the recent spirit of Court unanimity broken by two 5-4 decisions in highly-controversial cases. The media and various interest groups already are reporting the results and, as often is the case in cause-oriented litigation, they are not entirely accurate in their analyses of either opinion.

In Harris v. Quinn, the conservative majority of the Court, in an opinion written by Justice Alito, held that an Illinois regulatory program that required quasi-public health care workers to pay fees to a labor union to cover the costs of wage bargaining violated the First Amendment. The union entered into collective-bargaining agreements with the State that contained an agency-fee provision, which requires all bargaining unit members who do not wish to join the union to pay the union a fee for the cost of certain activities, including those tied to the collective-bargaining process. …

An even more controversial decision is the long-awaited holding in Burwell v. Hobby Lobby Stores, Inc. Headlines already are blasting out the breaking news that “Justices Say For-Profits Can Avoid ACA Contraception Mandate.” Well, not exactly. …

Both sides of the discussion are hailing Hobby Lobby as a landmark in the long standing public debate over abortion rights. It is not EBG’s role to enter that debate or here to render legal advice, but we respectfully suggest that the decision’s reach is already being overstated by both sides. In the first place, the decision does not allow very many employers to opt out of birth control coverage – only closely-held for-profit companies that have a good-faith ideological core, as clearly was the case for Hobby Lobby. That renders such companies functionally the same as non-profits that are exempted from the mandate by the government. Publicly-held companies are not affected by the decision (though some are likely to argue that Citizens United might require such an extension. Nor are privately-held companies that can’t demonstrate an ingrained belief system.

Read the full post here.

California Supreme Court Opens the Door to Class Action Waivers, Shuts Door to Waiver of Representative Actions

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By Marisa S. Ratinoff and Amy B. Messigian

One of the main battlegrounds between employers and employees relates to the ability of employers to preclude class actions by way of arbitration agreements containing class action waivers. In California, the seminal case of Gentry v. Superior Court (“Gentry”) has had the practical effect of invalidating class action waivers in employment arbitration agreements since 2007. Gentry held that an employment class action waiver was unenforceable as a matter of California public policy if the class action waiver would “undermine the vindication of the employees’ unwaivable statutory rights” under the Labor Code. Thus, California technology, media and telecommunications industry employers and national technology, media and telecommunications industry employers with a business presence in California have found it extremely difficult, if not impossible, to enforce class action waivers in their employment arbitration agreements over the past seven years and have seen scores of California wage and hour cases proceed in court under the harsh hand of Gentry.

The landscape changed drastically in 2010 when the United States Supreme Court issued its decision in AT&T Mobility, LLC v. Concepcion (“Concepcion”). There, the Supreme Court held that the Federal Arbitration Act (“FAA”) preempts state laws or policies that deem arbitration agreements unconscionable and unenforceable on the basis that they preclude class actions. While the Concepcion case related to a consumer arbitration agreement, many have questioned whether its impact extended to employment arbitration agreements, such as the ones invalidated on public policy grounds under Gentry.

Iskanian v. CLS Transportation Los Angeles, LLC is the first case to test this issue before the California Supreme Court. The decision takes one step forward and one step back. First, the Court held that Gentry has been abrogated by Concepcion. As such, courts may not refuse to enforce an employment arbitration agreement simply because it contains a class action waiver. The Court further rejected the argument that a class action waiver is unlawful under the National Labor Relations Act.

However, the Court also found that an employee’s right to bring a representative action under Private Attorney General Act (“PAGA”) is nonwaivable. Under PAGA, an employee may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. Of the civil penalties recovered, 75 percent goes to the State of California and the remaining 25 percent go to the “aggrieved employees.” The Court held that “an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy.” The Court also found that “the FAA’s goal of promoting arbitration as a means of private dispute resolution does not preclude [California’s] Legislature from deputizing employees to prosecute Labor Code violations on the state’s behalf.” The Court explained that PAGA waivers do not frustrate the FAA’s objectives because the FAA aims to ensure an efficient forum for the resolution of private disputes, whereas a PAGA action is a dispute between an employer and the State, which is being brought in a representative capacity by the employee. Because the State derives the majority of the benefit of the claim and any judgment is binding on the government, it is the “real party in interest,” making a PAGA claim more akin to a law enforcement action than a private dispute. Because of this, it is within California’s police powers to enact PAGA and prevent the waiver of representative PAGA claims.

The practical effect is that even if a class action waiver is enforceable, any purported waiver of a representative PAGA action will be unenforceable. As a result, a complaint filed in court that includes a PAGA cause of action will arguably remain with the court unless the claims are bifurcated. As for Iskanian and his former employer, the Court left these questions to the parties to resolve. While it is possible that Iskanian will be appealed to the United States Supreme Court for guidance, at least for the foreseeable future employers should expect plaintiffs’ counsel to include PAGA causes of action in order to frustrate employer efforts to move wage and hour claims to arbitration.

Going forward, technology, media and telecommunications industry employers may want to consider adopting agreements with their California employees that expressly permit representative PAGA claims to be brought in arbitration while waiving all other class claims to the extent allowed by law. Alternatively, employers may revise their agreements to allow for bifurcation of claims or expressly exclude PAGA claims from the scope of the agreement. In either case, employers should use this opportunity to review the terms of their arbitration agreements and put new agreements in place with California employees, if necessary.

Employee Antitrust Suits: The Latest Gold Rush in the Golden State?

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By Meg Thering

On May 27, 2014, employees of high-tech firms in the Silicon Valley filed a motion in the Northern District of California seeking approval of a settlement agreement releasing antitrust claims they had brought against Adobe Systems, Incorporated, Apple Inc., Google, Inc., and Intel Corporation.  In the complaint, the plaintiffs alleged that the defendants had agreed to refrain from hiring each other’s employees in an effort to drive down compensation levels in the Silicon Valley. Specifically, the complaint alleged that Defendants entered into “illegal agreements not to recruit each other’s employees; (2) illegal agreements to notify each other when making an offer to another company’s employee; and (3) illegal agreements that, when offering a position to another company’s employee, neither company would counteroffer above the initial offer” and that they entered into such agreements “to reduce employee compensation and mobility by eliminating competition for skilled labor” in violation of the Sherman Act, 15 U.S.C. § 1 and the Cartwright Act, Cal. Bus. & Prof. Code § 16720, et seq. See In Re High Tech Emp. Antitrust Litig., No. 5:11-cv-02509 (LHR) (N.D. Cal. May 22, 2014).

While the issue of liability was never reached, the cost to defendants was high.  As part of the proposed settlement, defendants would pay a total of $324,500,000 (not counting earlier settlements by other defendants).  Not only are the defendants paying now, the litigation has been costly and time intensive.  This proposed settlement has been agreed to only after three years of litigation which included “the completion of extensive fact discovery, including the taking of 107 depositions, the review of millions of pages of documents, and analysis of over 50 gigabytes of data consisting of approximately 80,000 different files produced by Defendants; two rounds of class certification briefing and argument, including the exchange of eight expert reports by four economists; completion of expert merits discovery (covering a total of 10 experts across the parties); and briefing, argument, and partial denial of Defendants’ motions for summary judgment and exclusion of expert testimony.” In their motion seeking approval of the settlement, Plaintiffs noted that eBay and Intuit had been sued by the Department of Justice and the California Attorney General “regarding an alleged agreement between eBay and Intuit not to poach each other’s employees, which later became a no-hire agreement between the companies.”

This proposed hefty settlement is a reminder to employers in California and nationwide that the overlap of antitrust laws and employment laws cannot be ignored.  Additionally, California employers, especially, should revisit how they are protecting their trade secrets as non-compete and non-solicitation agreements are generally not enforceable in the Golden State. Cal. Bus. & Prof. Code § 16600 makes many restrictive covenants unlawful.  That Section provides: “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The three exceptions to this rule provided for in the Business & Professions Code relate to professional partnerships, limited liability company members and the sale of a business (though see our recent blog posting about a California resident who was forced to litigate a non-compete dispute in Illinois).  California employers seeking to protect their trade secrets through contractual provisions should look to measures other than non-compete agreements, such as  return of property provisions, and confidentiality agreements. California employers will be hard pressed to keep information about employee compensation confidential though since California Labor Code § 232 prevents employers from prohibiting employees from disclosing the amount of their wages to others (or terminating them or disciplining them for doing so). 

Considerations for Technology Companies to Attract, Motivate and Retain Key Talent

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By Michelle Capezza

I recently authored an article in TechLifeSciNews: “Considerations for Technology Companies to Attract, Motivate and Retain Key Talent.”

The following is an excerpt:

As technology companies innovate and grow, the need for knowledgeable, experienced employees increases along with the competition for the most highly-skilled workers.  As a result of the competitive marketplace (as highlighted by the recent high-tech employee antitrust/anti-poaching class-action lawsuit settlement involving technology giants), one of the biggest challenges facing technology companies today concerns how well it can attract, motivate and retain top talent.  In addition to providing fair and competitive compensation and benefits packages, companies should not overlook developing employees so that they may grow professionally and be positioned for movement in the company to critical positions.  Further, review of company culture would also be beneficial to determine if changes should be made to address diversity, gender and/or multigenerational issues that can create a more inclusive, dynamic working environment.  Thus, a comprehensive approach can serve to attract, motivate, develop and retain the best employees while fostering a culture of growth, loyalty and innovation.  Consider the following in developing a comprehensive approach …

Download the full article in PDF format (see page 10).

Hot Topic for Summer: How to Handle Unpaid Internships

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By: Michelle Capezza and Ian Carleton Schaefer

Our colleagues have a new post on the Retail Labor and Employment Law blog that will help many of our readers at this time of year: “Summer’s Coming! How to Handle Unpaid Internships,” by Jeffrey Landes, Susan Gross Sholinsky, and Nancy L. Gunzenhauser.

Following is an excerpt:

A hot topic for every summer – but particularly this summer – is the status of unpaid interns. You are probably aware that several wage and hour lawsuits have been brought regarding the employment status of unpaid interns, particularly in the entertainment and publishing industries. The theory behind these cases is that the interns in question don’t fall within the “trainee” exception to the definition of “employee” under the federal Fair Labor Standards Act (“FLSA”), as well as applicable state laws. If the intern does fall within this exception, he or she is not subject to wage and hour laws (such as minimum wage or overtime) and the unpaid internship is thus permissible.

Read the full post here.

DHS Issues Proposed Rules to Attract and Retain Highly Skilled Foreign Workers

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Our colleagues in the Immigration Law Group at Epstein Becker Green (Robert Groban Jr., Pierre Georges Bonnefil, Patrick Brady, Jang Hyuk Im, and Greta Ravitsky) have prepared a client alert regarding two rules that the Department of Homeland Security proposed on May 12, 2014.  If enacted, these rules would help the United States to attract and retain highly skilled workers.  Topics include:

  • DHS Proposes to Issue Employment Authorization to Certain H-4 Spouses
  • DHS Proposes to Enhance Flexibility for Highly Skilled Specialty Occupation Professionals

Read the full alert here. 

 

Social Media Privacy Update: What Employers Need to Know About New State Legislation

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By Anna A. Cohen

As we previously reported, social media privacy has become the latest issue to be regulated by state legislation. Last week, Wisconsin jumped on the social media privacy bandwagon. On April 8, 2014, Wisconsin Governor Scott Walker signed legislation that in most cases prohibits employers, among others, from requesting or requiring passwords or other protected access to “Personal Internet Accounts” of current employees and applicants for employment.

What is a “Personal Internet Account”?

A “Personal Internet Account” is an Internet-based account that is created and used by an individual exclusively for purposes of personal communications. Examples of Personal Internet Accounts include Facebook and LinkedIn. The law, however, does not apply to a Personal Internet Account of an employee engaged in providing financial services who uses the account to conduct the business of an employer that is subject to requirements imposed by federal securities laws (e.g. content, supervision and retention requirements) or rules of a self-regulatory organization, such as FINRA.

What Type of Conduct is Prohibited by the Law?

The law prohibits employers from requesting or requiring an employee or applicant for employment, as a condition of employment, to disclose “access information” for a Personal Internet Account or to otherwise grant access to or allow observation of that account. “Access information” means a user name, password or any other security information that protects access to a Personal Internet Account.

Employers are also prohibited from refusing to hire an applicant, terminating an employee’s employment or otherwise discriminating against an employee or applicant for refusing to disclose access information for, grant access to, or allow observation of the employee or applicant’s Personal Internet Account. Employers are also prohibited from retaliating against an applicant or employee who opposes an employer’s request for such information, files a complaint, or testifies or assists in any action or proceeding to enforce such privacy rights.

Are There Any Exceptions?

Among other exceptions, employers may request disclosure of access information in connection with an investigation of or discipline relating to an employee’s suspected transfer of the employer’s proprietary or confidential information or financial data to the employee’s Personal Internet Account or in connection with employment-related misconduct, violation of the law, or violation of the employer’s work rules as specified in an employee handbook. To avail themselves of this exception, however, employers must have reasonable cause to believe that the activity on the employee’s Personal Internet Account relating to the misconduct has occurred. The law also permits employers to request or require applicants and employees to disclose personal e-mail addresses and access employer-supplied equipment and accounts used for business purposes.

What Happens if an Employer Accidentally Accesses Protected Information?

If an employer inadvertently obtains access information for an employee’s Personal Internet Account, the employer will not be liable for possessing that access information, so long as the employer does not use that access information to access the employee’s Personal Internet Account.

Is There Any Obligation to Monitor Employee Personal Internet Accounts?

Notably, the law makes clear that it does not create a duty for an employer to search or monitor the activity of any Personal Internet Account.

What Should an Employer Do?

In light of this new legislation, and as we previously advised, employers should review application forms and interview scripts to ensure that all inquiries made to applicants are lawful with respect to social media and other areas as state laws continue to evolve. Additionally, before performing any investigation of workplace misconduct involving an employee’s Personal Internet Account, employers should ensure that they have reasonable suspicion to conduct the investigation and that the misconduct is specified in an employee handbook or other written policy.

Protect Your Start-Up from the Start

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By Dustin E. Stark

Do start-up tech companies need an HR professional or employment counsel from the start?  A recent highly publicized incident involving a former GitHub Inc. employee suggests the answer is yes. 

Earlier this month, a GitHub employee quit her job and immediately took to Twitter, tweeting multiple complaints accusing the company of illegal gender-based discrimination.  News outlets picked up on these tweets, and the story spread quickly.  The former employee also gave an interview with TechCrunch, the information technology website, further outlining her complaints of gender discrimination.  In response to the rapidly developing public scrutiny, GitHub was forced to place one of its co-founders on leave while it investigates the allegations.

The type of damage control GitHub is being forced to engage in is expensive.  It ties up resources that a young, developing company would prefer to channel towards growth.  Although GitHub launched in 2008, the company lacked an experienced human resources leader until January 2014.  It is often harder, and more costly, to remedy employment discrimination problems after they take place, rather than putting measures in place to prevent their occurrence. 

Companies similar to GitHub can reduce exposure to potential lawsuits or government agency investigations by instituting appropriate written policies and employee training from inception.  Start-ups focus on getting their business off the ground, and unfortunately legal compliance or human resources issues can fall through the cracks.  Guidance from appropriate legal counsel, and having a dedicated human resources professional working with your company, can help develop the required employment law safeguards to guide and protect your company as it grows.  Oftentimes, start-ups focusing on growth and capital campaigns can lose sight of the important role of an HR professional in managing its human capital.  The HR professional is more likely to be employee number 50 than employee number 5, which can create exposure and undercut the substantive value that the start-up is working to create in the market.

Some small start-ups may falsely believe that federal, state, and city laws and regulations do not apply to them, due to their small number of employees.  However, even if your company is not as large as GitHub, the threshold number of employees required to be subject to federal, state, and city employment laws is often very low (sometimes as few as one employee).  Also, as your company grows and expands, it may be subject to an increased number of laws and regulations, which can increase exposure to legal liability.  The best practice is to have the appropriate policies and training in place before this becomes an issue.  As demonstrated by the former GitHub employee, start-ups employ tech savvy individuals that know how to use social-media to spread complaints when things go wrong.  Having the proper policies and training in place can help prevent these incidents, and limit the amount of damage control that needs to be done if they occur.

The goal of any start-up is successful and sustained growth.  By building a solid foundation of written policies and implementing appropriate employee training guided either by an in-house HR professional, in-house employment counsel, or through external counsel serving in a quasi-in-house role (a service EBG offers to clients), a small amount of caution on the front end can avoid distractions from this goal, and prevent exposure to large legal liability and costs on the back end.  In this regard, an ounce of prevention can be worth a pound of cure.

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