A recent blog post by Susan Fowler, a former software engineer at Uber, and the author of two books regarding software engineering, has once again drawn national attention to the issue of the underrepresentation of women in the technology industry. Her story has received extensive media coverage, and Uber has retained former U.S. Attorney General Eric Holder to investigate Ms. Fowler’s allegations. Further, the allegations appear to have reinvigorated the #DeleteUber social media campaign.

Ms. Fowler’s account describes a plethora of employment law issues, in particular the risks employers face when employees lose confidence in management and HR as partners to combat workplace harassment and discrimination and take it upon themselves to police antidiscrimination compliance issues.

To summarize the allegations, shortly after joining Uber, Ms. Fowler alleges she was sexually harassed by her manager and reported the incident to HR. She found HR’s response inadequate, alleging that rather than address her concerns, HR defended the alleged harasser’s conduct saying that it was the “man’s first offense” that it was “probably just an innocent mistake” and that because he was a “high performer” they “wouldn’t feel comfortable punishing him.” Ms. Fowler also alleges that she was given the option to switch teams, and that she risked being subject to retaliation if she chose not to switch. The alleged incident appears to have destroyed Ms. Fowler’s confidence in her employer’s commitment to protecting women from discrimination. She explains in her blog post that “[e]very time something ridiculous happened, every time a sexist email was sent, I’d sent a short report to HR just to keep a record going.” Ms. Fowler explains that the last straw leading to her resignation was a dispute over alleged iniquities in which employees received company branded merchandise.

As a best practices matter, employers are well-served from having employees who have been educated as to how to identify and report incidents of improper behavior. However, employees committed to carrying on unauthorized personal investigations can be problematic. By appropriately handling an employee’s first credible complaint, employers have an opportunity to build trust and allow the employee who raised the complaint to continue focusing on his or her job duties. On the other hand, if employees perceive that the investigations are not conducted appropriately, there is a risk they will take the task upon themselves. This distracts employees from their actual job functions and risks creating a more confrontational and acrimonious workplace atmosphere. Employees actively searching for evidence of workplace discrimination may interpret legitimate constructive criticism as retaliation and file further complaints to that effect. This increases the litigation risk associated with taking adverse employment actions against such employees. In short, employees who decide to conduct unauthorized investigations will likely be difficult to manage and expensive to terminate.

Employers can take steps to avoid this situation by both (1) maintaining appropriate workplace policies; and (2) adequately investigating credible complaints that these policies have been violated. These investigations must not only effectively discover the truth, they need to be viewed as fair and credible by employees. Key components of a credible investigation are:

  • Assign an objective fact-finder to lead the investigation: best practice is to assign someone to investigate who will not come in with preconceptions about the persons involved. For example, retaining outside counsel or assigning a HR representative ordinarily assigned to a different business unit demonstrates that the investigation is being undertaken with an open mind.
  • Conduct formal witness interviews: make it clear to employees that they are being asked questions in connection to a formal investigation, rather than casual or informal information gathering.
  • Provide updates regarding the progress of the investigation through a single point person: there should be a single point person the complaining employee can contact who is knowledgeable about the status of the investigation. Avoid a situation where the complaining employee feels the need to investigate the status of the investigation.
  • Proceed with reasonable speed: by conducting an expeditious investigation, employers demonstrate that they care about employee concerns and can be trusted to handle the investigation. The complaining employee should not feel responsible for prompting HR to move forward.
  • Conclude the investigation with a close-out meeting: (1) apprise the complaining employee that the investigation has been concluded and whether disciplinary action has been taken; (2) advise as to what if any steps the employer is taking to prevent improper conduct in the future; and (3) regardless of the final outcome of the investigation, reiterate the employer’s commitment to its policies prohibiting retaliation. Employers should avoid equivocating or offering excuses for misconduct or otherwise suggesting that any disciplinary actions taken as a result of the investigation reflect factors other than the gravity of the misconduct such as an employee’s status as a high performer or the employee’s large book of business.

Employers in the technology industry should take note of last week’s decision by the U.S. Court of Appeals for the Sixth Circuit in EEOC v. New Breed Logistics (PDF).  The court declined to reconsider a panel holding that, in the context of a retaliation claim, “a demand that a supervisor cease his/her harassing conduct constitutes protected activity under Title VII.”

Three former employees of New Breed Logistics, a supply-chain logistics company, asserted that they had engaged in protected activity by telling their supervisor to stop making advances and sexual comments.  The district court agreed, holding that protected conduct “can be as simple as telling a supervisor to stop.” The Sixth Circuit (PDF) affirmed, relying on the EEOC’s interpretation of Title VII’s opposition clause and finding that an oral complaint to a harassing supervisor – even if no other manager or supervisor ever learns of the complaint – constitutes protected activity.

The employer moved for a rehearing en banc, arguing that the Sixth Circuit’s decision created a split with the Fifth Circuit, which in 2004 had held that a single express rejection to a harassing supervisor did not constitute protected activity.  The employer also argued that an employer should not have to face a retaliation claim if the only person to have received the complaint was the alleged harasser.  In denying the motion for rehearing, however, the Sixth Circuit found that these issues were fully considered in the court’s original decision.

The Sixth Circuit’s decision highlights the need for an employer to train its workforce on its complaint procedures.  Although employees may engage in protected activity by orally rejecting a harassing supervisor’s advances – at least in the Sixth Circuit and in the eyes of the EEOC – they should be made aware of all avenues of complaint so that the employer has an opportunity to learn of and address the complaint.  Importantly, supervisors must be trained on how to handle any such complaints and to report them to human resources.

With the ever-increasing amount of information available on social media, employers should remember to exercise caution when utilizing social media as a part of their Human Resources/ Recruitment related activities.  As we have discussed in a prior blog post, “Should Employers and Facebook Be Friends?” we live in a digital-age, and how people choose to define themselves is often readily showcased on social networking sites.  Whether – and how – employers choose to interact with the online presence of their workforce will continue to develop as the relevant legal standards try to catch up.

A recent federal court filing in the Northern District of California against LinkedIn Corp. provides yet another example of the growing interaction between online personas and real-world employment law implications.  There, in Sweet, et al v. LinkedIn Corp., the plaintiffs sought to expand the application of the Fair Credit Reporting Act (“FCRA”) by alleging that LinkedIn’s practice of providing “reference reports” to members that subscribe to LinkedIn’s program for a fee, brought LinkedIn within the coverage of the FCRA as a Credit Reporting Agency (“CRA”).  Briefly, the FCRA (and relevant state statutes like it) imposes specific requirements on an employer when working with “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” In other words, there are rules – such as providing requisite disclosures and obtaining prior authorization – that apply when an employer engages a CRA to perform background checks, reference checks and related inquiries.

In the lawsuit, the plaintiffs alleged that LinkedIn was a CRA – and that these various rules should apply – because LinkedIn collected and distributed consumer information to third parties and the resulting reference reports “bear on a consumer’s character, general reputation, mode of living, or personal characteristics, and/or other factors listed in 15 U.S.C. § 1681a(d).”  Further, according to the complaint, LinkedIn violated the FCRA because it should have provided FCRA compliant disclosure and followed the reporting obligations applicable to CRAs.

LinkedIn, which is touted as the “world’s largest professional network,” does not portray itself as a CRA and moved to dismiss the complaint.  LinkedIn argued that the plaintiffs’ interpretation of the statute was too broad and, moreover, was inconsistent with the facts.  A federal judge agreed and dismissed the complaint (although the plaintiffs have the opportunity to file another complaint).  The Court ruled that these reference searches could not be considered “consumer reports” under the law – and LinkedIn was not acting as a CRA – because, in part, the plaintiffs had voluntarily provided their information to LinkedIn with the intention of it being published online.  (The FCRA excludes from the definition of a consumer report a report that contains “information solely as to transactions or experiences between the consumer and the person making the report.”) The Court also noted that the allegations suggested that LinkedIn “gathers the information about the employment histories of the subjects of the Reference Searches not to make consumer reports but to ‘carry out consumers’ information-sharing objectives.’”

The LinkedIn case should still serve as a reminder of several important and interrelated trends.  First, as it concerns the FCRA, the statute is broadly worded to cover “any written, oral or other communication of any information by a consumer reporting agency . . .” and the equally expansive definition of a CRA can apply in numerous situations that extend beyond the traditional notion of a consumer reporting agency.  If applicable, the requirements of the FCRA must be followed.  Second, employers need to continue to be mindful of the fact that their online activity can have real-world employment law implications.  Third, as the law governing traditional employment law continues to evolve in response to online developments, the challenges to that activity will evolve as well.

As these trends continue to develop, it is important to confer with legal representation to ensure compliance.

We were recently interviewed in Corporate Counsel, in “Employment Law Risks Abound for Startup Companies,” by Rebekah Mintzer. (Read the full version — subscription required.)

Following is an excerpt:

“We think they should be focused on it from day one,” Ian Carleton Schaefer, a member in Epstein Becker & Green’s labor and employment practice and co-leader of the firm’s technology, media and telecommunications strategic industry group, told CorpCounsel.com. “Oftentimes it takes a triggering event, whether it’s a lawsuit or a government audit to get them focused—and we think that’s a little late.”

The risks of putting employment law considerations off until later or ignoring them entirely are very real. The last thing a startup fighting to survive and thrive wants to deal with is a lawsuit. No matter how great the organization, a black mark of litigation or noncompliance can hurt its reputation and chances to secure more investment. “Getting it wrong can cripple an otherwise brilliant idea and a very sound business plan,” said Schaefer. …

Those trying to hire more employees for a startup have to think about employee benefit issues, including the Affordable Care Act. “We have a whole new legal scheme with the ACA,” Michelle Capezza, a member of Epstein Becker in the employee benefits and health care and life sciences practices, as well as co-leader of the firm’s technology, media and telecommunications strategic industry group, told CorpCounsel.com.