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Drafting Employee Handbooks: Minimizing Exposure Risks Responding to Latest NLRB Enforcement, Preserving At-Will Employment, and Avoiding Inadvertent Employee Contract Rights
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Lindsey M. Hogan, Esq., Faegre Baker Daniels, Chicago
Mona M. Stone, Of Counsel, Greenberg Traurig, Phoenix
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GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM ©2011. All rights reserved.
FAEGRE BAKER DANIELS, LLP WWW.FAEGREBD.COM
Drafting Employee Handbooks: Minimizing Exposure Risks
Strafford CLE - November 19, 2014
Mona M. Stone Lindsey M. Hogan
Greenberg Traurig LLP Faegre Baker Daniels
stonem@gtlaw.com lindsey.hogan@faegrebd.com
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What Will You Learn Today?
Introduction
□ Importance of carefully drafting handbooks
□ Advantages and disadvantages of handbooks
□ Format of handbooks
□ Key provisions in employee handbooks and special
issues for multi-state employers
Legal considerations
NLRB issues
□ Wage and hour considerations
□ Contractual rights and contractual liability
□ Social media policy considerations
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Importance of Carefully Drafted Handbooks
Important communication tool between you and
your employees
□ Designates company objective, core values,
policies, procedures, benefits
□ Helps orient new employees
□ Creates standard of fairness and compliance
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Importance of Carefully Drafted Handbooks
Proactive business approach
□ Instruct employees about
ethical standards and code of
conduct
□ Make HR and Legal happy!
Increase productivity
Lower absenteeism
Reduce turnover
Less business disruption
Fewer claims and legal
headaches
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Importance of Carefully Drafted Handbooks
Important communication tool
between you and your employees
□ Explains applicable laws
For profit/non-profit
Multi-state/international companies
□ Eliminates conflicting policies and
practices
Be sure to cross-reference employee
handbook to other company documents
(personnel policies, bulletins, benefit
plans, insurance documents, etc.)
Union considerations
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Importance of Carefully Drafted Handbooks
Protects your information and assets!
□ Generally identify confidential business information
and trade secrets
Tailor according to your industry/needs (e.g., HIPAA,
FERPA, compensation information)
Information and equipment belong to company
□ Explain importance of protecting this information and
how it can be shared
□ Instruct employees that equipment and information
must be returned at conclusion of employment
□ What happens if information or equipment is lost or
mishandled?
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Importance of Carefully Drafted Handbooks
Gives employer flexibility in setting
policies and procedures
□ Only an “overview”
□ Not a rigid system of discipline or
comprehensive list of offenses
□ Does not cover every scenario imaginable
Overly voluminous may cause confusion
Put your handbook on a diet if it is too fat!
□ Right to amend and modify
□ Disclaims any employee rights or benefits
□ Disclaims contractual rights
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Importance of Carefully Drafted Handbooks
Do your homework
Need buy-in from senior management
□ Worth the $$$$ investment
□ Requires support from all business units
Train HR administrators and managers – before
rollout - regarding enforceability and
documentation
Obtain sign off from Legal
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Advantages and Disadvantages of Handbooks
Advantages:
□ Well-drafted handbook should minimize chance for
misunderstandings
□ Chance for employees to participate
Involve select staff and management
Solicit feedback regarding “actual” operations
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Advantages and Disadvantages of Handbooks
Advantages:
Set forth your
expectations for your
employees
Describe what they can
expect from your company
Identify your legal
obligations as an employer
Explain employees' rights
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Advantages and Disadvantages of Handbooks
Advantages:
□ Minimize or eliminate potential legal
liability
Ensure consistency and fairness to
minimize risk of discrimination and
wrongful discharge claims
□ Act as a first line of defense against
potential claims
E.g., unemployment claims, EEOC Position
Statement
□ Identify and explain applicable laws
□ Retain corporate identities (e.g.,
franchisor/franchisee)
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Advantages and Disadvantages of Handbooks
Disadvantages:
□ One size does not fit all (or even most!)
□ Forms are readily available, but
Current?
Relevant?
Illegal?
□ May become a “crutch” for employer and employees
Does not eliminate need for ongoing communications
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Advantages and Disadvantages of Handbooks
Disadvantages:
□ Need to make sure policies
reflect reality
Consider industry
standards and best
practices
Ease of implementation
and consistent
enforcement
Impacts your credibility
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Advantages and Disadvantages of Handbooks
Disadvantages:
□ Need to train employees and ensure understanding of
policies
Multiple trainings may be necessary (offices, anti-
harassment)
□ Need to enforce policies, and enforce them consistently
□ Need to update policies periodically and obtain employee
acknowledgement
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Format of Handbooks
Must be easy to read and understand
□ Draft policies that are reasonable and can be
equitably applied
□ Think of “least common denominator”
□ Solicit and use employee feedback
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Format of Handbooks
Make sure policies are drafted to ensure
understanding by all levels of workforce
□ Keep it short and sweet – no legal jargon
Use titles, rather than individual names
□ E.g., “Human Resources [instead of “HR Director Betty
Smith] will retain copies of employee badges.”
Use language that permits flexibility and
discretion
□ E.g., “All employees are reviewed at the end of the
fiscal year” versus
□ “The Company will attempt to conduct performance
reviews on an annual basis”
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Format of Handbooks
Use to Promote Company
□ List “perks” company provides
□ Tell employees how to avoid
disciplinary action, but also tell them
how to succeed
□ Use upbeat language:
“Visitors are strictly prohibited in
the workplace”, or
“To protect the security of our
workforce and confidential
information, all visitors must check
in with security”
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Format of Handbooks
Organize material with table of
contents
□ Use links in electronic copies
□ Consider order and
organization of material
Use headings and section breaks
Be mindful of spacing and visual
appeal
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Format of Handbooks
Consider target audience
Company culture
Tone of content
Language translations
Potential claims or
“Exhibit A” in courtroom
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Format of Handbooks
Content
□ What would jury think?
□ Customize policies according to business needs
□ Size of organization
E.g., Title VI (15+ employees), ADEA (20+ employees),
FMLA (50+ employees)
□ Type of industry
E.g., customer service company should provide
examples of importance of greeting clients when
entering retail establishment
Is company subject to licensing requirements, federal
compliance standards, rules of ethics, etc.?
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Format of Handbooks
Proofread! Proofread! Proofread!
Hard copy, electronic, or both?
□ Timing and tactfulness is important
Distribution of handbook and messaging
□ Message from CEO/President
Who will deliver? HR, legal, outside counsel?
□ Consider “test” group to review and provide input
□ Highlight changes and explain basis for revisions as
necessary
□ In person trainings
□ New hire orientation
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Key Provisions
Privacy Protections
□ Union considerations
□ Privacy concerns
Disclaimer (multiple places)
□ At-will relationship
□ Know your state’s requirements
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Key Provisions
General Disclaimer
□ Avoid language that promises or guarantees
condition of employment
“Welcome to the company! My goal is to
provide you the tools you need to succeed.”
□ Dispel employees of implied contract
□ Use bold/highlighting
□ Use separate non-compete, non-solicitation
and confidentiality agreements and
compensation packets
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Key Provisions
Acknowledgement of Receipt
□ Handbook does not constitute a contract or
implied contract
□ Remind employees handbook is subject to
change at any time, with or without notice
□ Reserve right to unilaterally revoke, change or
issue revised or new policies
□ Obtain new acknowledgements when handbook
is updated
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Key Provisions
Acknowledgement of Receipt
□ Signed and dated by employee (e-signature)
Employee aware of rules and agrees to follow
Maintain signed copy in personnel file
Give employee adequate time to review
Identify who to turn to with questions
□ Employer copy and employee copy
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Key Provisions
Acknowledgement of Receipt
□ What if employee refuses to sign?
□ Try to ascertain why
Explain it is routine party of handbook distribution
process
Make clear all employees are asked to acknowledge
receipt
Describe importance of handbook in setting guidelines
for efficient, daily operation of business
Explain handbook identifies employer’s and
employee’s rights and obligations
Ask employee about reservations in signing and address
concerns
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Key Provisions
Acknowledgement of Receipt
□ What if employee refuses to even read
handbook?
□ Consider whether individual is good fit for
organization
Ability to follow rules, abide by guidelines,
respect superiors and company culture?
□ Creating exception for one may create
problems for all
□ Document employee’s refusal to read
handbook and/or sign acknowledgement
Sign and date by HR or company
representative responsible for maintaining
acknowledgement forms
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Special Issues for Multi-State Employers
Conforming to multi-state laws can present
challenges
□ Medical marijuana
□ Access to personnel records
□ FMLA/ADA
Use addendums or multiple versions if necessary
Use flexible language
□ “… unless otherwise required by state law.”
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Legal considerations
□ EEO Policy
□ FMLA/ADA/Workers’ Compensation/PTO
□ HIPAA and medical privacy
□ Confidential business information
□ Computer/internet/technology
□ Employee searches
□ Company equipment and return of company property
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Legal considerations
Non-Disclosure Agreements (NDAs) and Conflict of
Interest Statements
Anti-Discrimination Policies
Leave Policies
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NLRB & Social Media Issues
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The NLRB and Employer Policies
The NLRB’s website describes the agency as “an
independent federal agency vested with the
power to safeguard employees' rights to organize
and to determine whether to have unions as their
bargaining representative. The agency also acts
to prevent and remedy unfair labor practices
committed by private sector employers and
unions.”
Enforces the National Labor Relations Act (NLRA)
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The NLRA
§ 7 – “Employees shall have the right…to
engage in other concerted activities for
the purpose of collective bargaining or
other mutual aid or protection”
§ 8(a)(1) – “It shall be an unfair labor
practice for an employer to interfere with,
restrain or coerce employees in the
exercise of rights guaranteed in §7 of this
act”
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NLRB – Expanding Its Enforcement Footprint
The statutory requirements have
not changed for decades…it is
the NLRB’s enforcement
activities and protocols that have
changed in recent years.
Focusing on Policies and
Practices in the NON-UNION
workplace
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Focus On Non-Union Workplace
Confidentiality
□ Wages/Discipline/Investigations
Electronic Communications
Complaint Policies
Class Action Waivers
Dress Codes
Access Rules
At-Will Disclaimers
Social Media Restrictions
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Office of the General Counsel
NLRB’s General Counsel has issued a dozen
memoranda on social media:
□ Allegations of overbroad employer social
media policies
□ Unlawful discipline or discharge over
contents of social media posts
Area of heightened interest for
the NLRB
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Social Media Landscape
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Over 1.15 billion
Facebook users
Over 500 million Twitter
users
More than 225 million
LinkedIn users
Today
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SOCIAL MEDIA – STATUTORY ISSUES
Potentially hundreds of federal and state laws
could affect the use of social media in the
workplace.
The ones getting the most attention are:
□ The Fair Credit Reporting Act
□ Anti-discrimination statutes such at Title VII, the Age
Discrimination in Employment Act and the Americans
with Disabilities Act
□ General privacy rights under the First Amendment,
Stored Communications Act or Federal Wiretap Act
□ Uniform Trade Secrets Act (and non-compete/breach of
confidentiality cases)
□ The National Labor Relations Act
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NLRA – The Big One
National Labor Relations Act (“NLRA”): Section 7
of the NLRA prohibits employers from enacting
policies that stifle or prevent employees from
engaging in “concerted activity” for “mutual aid
and protection.”
According to the NLRB, there are two main points
to consider:
□ Employer policies should not be so sweeping that they
prohibit the kinds of activity protected by federal labor
law, such as the discussion of wages or working
conditions among employees.
□ An employee’s comments on social media are generally
not protected if they are mere gripes not made in
relation to group activity among employees.
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Protected Activity & Social Media
An employee is protected under the NLRA when
engaging in a discussion of work conditions with
other coworkers on social media. Examples
Include:
□ Facebook post with comments.
□ Twitter discussion and retweets.
□ Blogs with comments.
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Protected Concerted Activities
• Sharing information about wages
• Complaining about policies or managers
• Displaying union-related insignias/ logos
• Expressing union support
• Attempting to organize a union
• Otherwise discussing employment terms
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Employers Headaches from Social Media…
“Like” button may be enough to trigger NLRA
rights
□ Three D LLC d/b/a Triple Play Sports (8/22/14 NLRB )
required the NLRB to determine whether the NLRA
protected an employee whose only involvement in an
online employee discussion of a payroll tax withholding
was to click the “Like” button on a Facebook page.
Looking at the Facebook "wall” the NLRB found the
employee engaged in concerted activity because the
employee used the “Like” button to express approval of
other employee complaints concerning payroll tax issues.
□ Bobby Bland v. B.J. Roberts (9/18/13 4th Circuit):
“liking” a Facebook post may be protected by the First
Amendment.
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Employers Headaches from Social Media…
New York Party Shuttle, 02-CA-073340 (May 13,
2013) (Facebook posts directed at non-employees
of the Employer that criticized the Employer’s
employment practices were deemed to be union
activity).
Design Technology Group, 02-CA-35511 (October
31, 2014) (Facebook posts criticizing the
employees’ supervisor and resembling “griping”
were an extension of the employees’ earlier
conversation based on safety concerns and
constituted concerted activity).
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Employers Headaches from Social Media – Cont.
Ade v. Kidspeace Corp., 698 F. Supp. 2d 501 (E.D. Pa. 2010)
(fired employee sued employer for failing to discipline
another employee for sending sexually explicit messages to
a co-worker through MySpace).
But see Tasker Healthcare Group, CA-094222 (May 8, 2013)
(employee’s comment on Facebook that she told her
supervisor to “back the freak off” was not protected
speech).
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GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM ©2011. All rights reserved.
FAEGRE BAKER DANIELS, LLP WWW.FAEGREBD.COM
Avoiding the Headaches: Drafting Enforceable Social Media Policies
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A Social Media Policy Should:
Clarify scope by including examples of
impermissible or unprotected conduct (i.e.,
use “limiting language”)
Avoid ambiguity as to application to Section
7 activity
Utilize quotes from policies deemed lawful
Require employees to maintain
confidentiality of trade secrets and
confidential information
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Be Specific
• Target specific behaviors violating policy
• Less is more
• Don’t require advance permission
• Narrowly focus on unprotected behavior
□ Flawed policy: Costco’s policy barring
statements harming Company reputation –
employees could read as a ban on protesting
employee treatment.
□ Acceptable policy: Wal-Mart’s policy limited its
prohibition to malicious or obscene comments.
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Give Examples
• Broad categories of prohibited or required
conduct will draw scrutiny
• Avoid ambiguities and be specific
• Give concrete examples related to business
products, trade secrets, etc.
• Reserve right to take disciplinary action
• Acceptable policy: Cox Communications’ policy
containing “list of plainly egregious conduct”
such as vulgar, obscene, harassing, libelous or
discriminatory comments
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Egregious Misconduct Can Be Prohibited
Discriminatory or disparaging remarks
Bullying, harassment or retaliation
Threats of violence
Representing an opinion as official policy
Disclosing confidential trade secrets
□ Development of systems, processes, products,
know-how and technology
Disclosing secret, privileged information
Copyright infringement
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But Not All Unwanted Conduct Can Be…
Making “misleading” or “inaccurate” posts
Revealing “non-public company information”
Non-commercial use of logo
“Offensive” or “disparaging” comments
“Friending” co-workers without permission
Commenting on “legal matters”
Use of improper “tone”
Refusal to resolve concerns internally
Contacting government without authorization
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Consider A Disclaimer
• GC says a “savings” clause will not fix an
otherwise overbroad policy, but…
• Board decisions suggest such clauses could
still make a difference
• Effective if well-written, but will not cure
otherwise unlawful policy
• Use understandable terms (plain English)
• Identify the activity that is being “saved”
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Unlawful Policies
The NLRB found to be unlawful:
□ A social media policy that prohibited: (1) unauthorized
posting or distribution of papers and (2) using social
networking sites in a manner that could discrete or
damage the employer. The NLRB felt that this allowed
employees to reasonably interpret the rule to prohibit
protected concerted activities and any rule that requires
employees to secure permission from their employer
before engaging in protected concerted activity at an
appropriate time and place is unlawful.
The General Counsel of the NLRB found to be unlawful:
□ A social media policy that provided no guidance on what
constituted the prohibited “inappropriate postings” on
social media sites. The NLRB felt that this allowed
employees to reasonably interpret the rule to prohibit
protected concerted activities 57
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Unlawful Policies – Cont.
□ A work rule prohibiting “inappropriate
conversation,” whether in person or online,
was unlawful when it provided no guidance on
what constituted the prohibited
“"inappropriate conversation.”
□ A company policy that prohibited employees
from disclosing or communicating information
of a confidential, sensitive, or non-public
nature using company resources to those
outside the company was unlawful when it
failed to give examples of such violations.
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Unlawful Policies – Cont.
□ Two policies prohibiting employees from making
disparaging comments about the company or from
engaging in unprofessional conduct online were found to
be unlawful when the NLRB felt such policies “would
reasonably tend to chill employees in the exercise of
their Section 7 rights.”
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Lawful Policies
The NLRB found lawful a policy that prohibited the
use of social media to post or display comments
about co-workers, supervisors, or the employer
that were vulgar, obscene, threatening,
intimidating, harassing, or in violation of the
employer’s anti-discrimination and anti-
harassment policies. The NLRB stated that
forbidding “statements which are slanderous or
detrimental to the company” that appeared on a
list of prohibited conduct including “sexual or
racial harassment” and “sabotage” would not be
reasonably understood to restrict Section 7
activity.
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Lawful Policies – Cont.
The NLRB also found lawful a policy that required
employees to confine their social networking to
matters unrelated to the company if necessary to
ensure compliance with securities regulations and
other laws. The NLRB stated that employees would
reasonably “interpret the rule to address only
those communications that could implicate
security regulations.”
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Lawful Policies – Cont.
The NLRB also found lawful that company’s policy
prohibiting employees from using or disclosing
confidential and/or proprietary information,
including personal health information about
customers and patients. The NLRB stated that
“employees would reasonably understand that this
rule was intended to protect the privacy interests
of the Employer’s customers and not to restrict
Section 7 protected communications.”
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Language To Avoid
Restricting wage/discipline discussions
Outright prohibition on use of company
name/logo
Mandatory advance “approval” language
Prohibiting general discussions with media
Using generic terms like “unprofessional,”
“inappropriate,” or “harassing” behavior
Requiring concerns to be raised with
management
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Implementing the Social Media Policy
While developing and drafting a social media
policy is a good start, a policy is not complete
without adequate training and education of
employees. Simply drafting a policy and inserting
it into an employee handbook is not enough. To
be effective, the policy should be communicated
directly to employees.
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Implementing the Social Media Policy
The most effective communication will be
through speaking directly with employees. Create
an open forum where social media issues are
discussed. Educate employees on the fact that
content posted on the Internet will remain on the
Internet for a long time. While many people may
understand the permanency of Internet posts,
some employees may not. Taking the time to
educate and discuss can go a long way toward
protecting the company.
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Summary - Policy Guidelines
Review social media policies for language needing
definitions or stricter language
Modify broad language prohibiting employees
from discussing wages, policies, schedules,
safety, dress and appearance codes, work
assignments, other employees, or management
Eliminate or adjust language prohibiting posting
of company logos, company name, identification
of employee with the company, etc.
You can still restrict use of intellectual property
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Summary - Policy Guidelines
Do not maintain policies requiring employees to
maintain strict confidentiality over wages,
bonuses, or commissions
Where legitimate confidentiality issues are
involved, define information deemed confidential
(Social Security numbers, the Coke formula,
strategic marketing plans, parent financial
information, employee medical information,
patient names or medical conditions, etc.)
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Summary - Policy Guidelines
Add a disclaimer at end of policy making
clear that it is not intended to restrict
employee section 7 rights under the NLRA
You can still bar social media use
during working hours
You can require disclosure as “personal
opinion”
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