To Facebook Or Not To Facebook? That Is the Question For Investigators.

Lessons I learned from attending the LACBA’s program “Brave New Web: Social Network's Challenges to Copyright, Privacy and Legal Ethics.”

Last night I attended a program presented by the Los Angeles County Bar Association on social media. The program was presented by and for the Entertainment Law and Intellectual Property section so it wasn’t unusual that I was the only employment lawyer in the room. I expected to get a general overview of legal issues inherent in social media, from the perspective of the entertainment law experts on the panel, so that I could glean new policies or procedures to recommend to my own clients -in-house counsel and human resource professionals, - for their company’s social media policies. As the panel’s discussion/debate turned to legal ethics, however, I was reminded of something Bill Vaughan said, “People learn something every day, and a lot of times it's that what they learned the day before was wrong.”

That is, before I attended the program, I believed that anything a person posted on their social media website page or profile was “public” information. That is, that a person could not expect to keep their age a secret if they posted on their Myspace page the year they were born. I am not alone in that thinking. One of the panelists, Adam Clayton Powell, III, Vice Provost for Globalization at USC stated his comparable opinion, “Anything on Facebook is as public as if it was published in the LA Times.” Although this specific circumstance has not arisen for me in my own investigations, I did not up until this point find any legal or ethical dilemma in looking at an employee’s Facebook page during an investigation into that employee’s wrongdoing. For example, if an investigator must discern whether an employee made sexually offensive comments about a coworker on their Facebook Wall, it made common sense that the investigator would go onto Facebook and look at the posting to verify the accuracy of the alleged misconduct.

But, to my surprise, another member of the panel, Chris Kelly, Chief Privacy Officer for Facebook (and candidate for California Attorney General),pictured with me above, pointed out that Facebook is unlike other social media websites (MySpace, Twitter, etc.) in that Facebook has selective privacy settings which allow the Facebook member to decide which of their “friends” can view certain posted comments, thereby creating an expectation of privacy over the “private” information. (MySpace and other social networking sites have a binary privacy setting, which is less selective.) Other sites have no privacy settings at all.) Moreover, Facebook’s Terms of Use prohibits the unauthorized sharing of information. That is, your Facebook “friend”, whom you have allowed to see your birthday, cannot then go tell all of his friends that you are 35 (but you don’t look a day over 30.) This was a point that even panelist, Ben Sheffner, Counsel for Legal Affairs at NBC Universal, found surprising. Last, it is unethical for an attorney/investigator to use deceit to obtain access to the Facebook page of someone they are investigating. Presumably, the alleged wrongdoer would not “friend” the investigator or their company’s human resources if they knew that that person through subterfuge was actually seeking access to information or pictures that might impeach the alleged wrongdoer’s version of events, a point made by the fourth panelist, Roland Trope of Trope & Schramm.

Yet, despite Mr. Kelly’s argument that users have a selective expectation of privacy on Facebook, the issue of whether a person has a right to privacy on their Facebook profile is not set in stone, even in California. Facebook is currently being sued in a class action lawsuit that challenges its “privacy settings” as misleading and alleges that the settings actually expose users’ private information without permission.

That being said, as an attorney /investigator, I have been persuaded that it is not prudent, whether it is 1) a question of ethics, 2) a concern for violating the Terms of Use or 3) an invasion of privacy, to look at a person’s Facebook profile without the users express permission during an investigation. I will, however, take a party or witnesses’ statements on the content of a Facebook page and, in all fairness, I will also seek permission from the “accused” to see their Facebook information in order to disprove the alleged behavior. In any other circumstance, however, pending an investigation, Facebook is off limits. Do you agree? Is this going too far? What should an attorney/investigator do when the alleged misconduct is a social media profile/page that’s purpose is to “badmouth” the employer, as was the case in Pietrylo v. Hillstone Restaurant Group?,

Is the invasion of privacy justified? Do non-attorney investigators have to consider the ethical issues also? Leave your comments.

Another Reason to Shop at Costco

California Supreme Court Helps Keep the Lid on Pandora’s Box Investigations

I don’t need another reason to shop at Costco. I love the discounts, buying in bulk for my large family and the bin candy licorice. But, thanks to the California Supreme Court, I now have another reason to love Costco. According to the holding in Costco Wholesale Corporation v. Superior Court of Los Angeles County, (November 2009), a lawyer’s communications with clients, made for the purpose of giving advice, are absolutely protected from disclosure to adversaries, regardless of whether the communication contains factual or legal content. By upholding the sanctity of the attorney-client privilege, even when the attorney is conducting a fact-finding investigation in order to render a legal opinion, the California Supreme Court gave neutral attorney-investigators and their clients the ability to keep a lid on “Pandora’s Box Investigations.”

Yes, I made up that term. I made up the term “Pandora’s Box Investigation” based on my experience as a neutral attorney/investigator that has first-hand experience in conducting this type of investigation. A “Pandora’s Box Investigation” - named after the Greek mythological Goddess, Pandora who released all of God’s evils into the world by lifting the lid off her mythical box - is an investigation that through interviews and review of evidence reveals misdeeds well beyond the initial misconduct which instigated the investigation. The misdeeds are so egregious and create so much additional liability for the client if revealed, that the client, upon advice from her litigator, chooses to keep the investigation and the attorney/investigator’s conclusions or recommendations privileged. That is, an impartial investigation is often used as an employer’s defense in claims of harassment or wrongful termination so many employers opt to present the investigation in order to demonstrate that they acted reasonably with respect to the employee. In this instance, the employer is waiving its privilege. But, in the case of a Pandora’s Box Investigation, the employer chooses to keep the investigation under wraps so as not to expose itself to further liability and rely on the merits of the case or other available defenses in order to prevail.

For example, in Costco Wholesale Corporation v. Superior Court of Los Angeles County, Costco became aware that plaintiff’s attorneys were challenging the classification of retail industry managers as “exempt” from overtime and other wage laws. Anticipating a claim, Costco hired a wage and hour specialist, an attorney, to “investigate” Costco and provide an opinion as to whether Costco was properly classifying its own managers. For example, a company can call an employee Vice-President of Waste Management, but if the employee spends his day cleaning toilets, he will not be considered exempt. After interviewing Costco’s employees and analyzing their duties under the law, the attorney provided Costco with a legal opinion which contained a recitation of applicable facts, legal standards and analysis. A year after the receipt of the opinion letter, Costco reclassified many of its warehouse managers to non-exempt employees, making them eligible for overtime and other benefits. Presumably, the investigator found that Costco had misclassified the employees and Costco rectified this by making the appropriate changes.

A year and a half after that, Costco was sued in a class action lawsuit for misclassifying its employees and violating the wage and hour laws. The plaintiff’s attorneys wanted to see the content of that attorney’s report, assuming that it had evidence and an opinion that stated Costco was violating wage and hour laws – they wanted to open the Pandora’s Box, so to speak. Not surprisingly, Costco wanted to keep the lid on it. Costco’s counsel argued that the investigator/attorney’s factual findings and opinion should not be revealed to their adversaries or the court, i.e. it was protected by the attorney-client privilege, pursuant to Evidence Code 954. In November, 2009, the California Supreme Court agreed that the report was protected by the attorney-client privilege, even if the outside counsel gathered facts in the process of rendering legal advice, summaries of those facts were included in the written communications she prepared and those facts were otherwise discoverable in litigation.

Therefore, consistent with Costco Wholesale Corporation v. Superior Court of Los Angeles County, employers should feel reassured when using a neutral attorney/ investigator to investigate employee wrongdoing, in that the investigation will most likely be privileged in the event that the investigation reveals unanticipated potential employer liabilities. In order to ensure the investigation is deemed privileged until the employer/client decides to waive that privilege during litigation, the following Proactive Strategies should be implemented.

• Make sure, when retaining your neutral attorney/investigator to put the request for “legal advice” in writing and that the retainer agreement includes a reference or provision which states that a “privileged” legal opinion, not just a fact-finding will be provided at the conclusion of the investigation.

• Make sure all communications between the client and the attorney/investigator are marked “CONFIDENTIAL.” Make sure that the final work product from the attorney/investigator is marked “ATTORNEY WORK PRODUCT” and that it is not disseminated to third parties.

• In the memorandum (or letter) to the complainant or accused at the end of the investigation (which I recommend to inform the parties that the investigation is concluded and its results), provide a brief “summary” of the investigator’s conclusion, not the entirety of the factual findings and conclusions or recommendations. That way, a court will not deem the privileged “waived” by disclosure to third parties.

One last caveat, remember that ultimately, the investigator’s conversations, the investigation’s factual findings, the conclusions and recommendations will most likely be used as a defense in litigation and that the attorney-client privilege, in that instance, is waived by the company. That was the case in Wellpoint Health Networks v. Superior Court where the attorney/investigator was hired to determine whether misconduct occurred and demonstrate the employer made reasonable efforts to protect its employees from harassment. Therefore, an employer should anticipate this inevitability and only discuss confidential information with its company’s litigator, not with the neutral attorney-investigator. Once the privilege is waived, anything said to the investigator is discoverable and can be used against the employer.

Have you experienced a Pandora’s Box Investigation? What lessons did you learn?

Elvis Has Left The Building

How to Protect Your Company from the Legal Hazards of Social Media Abuse



I am often asked the question by clients, counsel and Human Resource professionals, “Do I think their company should ban employees from using social media while at work?” Often those concerned will complain that their employees spend too much time on Facebook rather than work. Or that they can’t make their employees “think” before they “tweet” something (in 140 characters or less) that another employee finds offensive. Or, they heard a rumor that there is an anonymous company blog that badmouths the bosses. These are valid concerns for employers and those who must manage employee’s behaviors and productivity. According to recent studies, the average worker admits to spending more than 2 hours per 8 hour workday on the internet. Employees surfing the internet, including social networking sites and blogs, account for nearly 45% of that wasted time.

Yet despite the drawbacks, social media sites (such as Facebook, Linkedin, Twitter and Myspace) have many business benefits. Social media sites can help employees augment their computer skills, hone communication skills, connect them with colleagues and mentors, and can be used to promote the values, goals and marketing interests of their employer. The challenge for a company now is to allow for the innovation of technology, including access to social media, while protecting itself and its employees from abuses. Therefore, my response to the question of whether a company should ban employees from using social media at work is always, “Elvis has left the building.” The social media train is moving too fast now for employers to stop it. According to Andrew S. Grove, chairman of Intel, “There are two companies – one that operates (with technology) and one that doesn’t…you’re either going to do it or you disappear.” In other words, social media is here to stay. Banning it is no longer an innovative, competitive, forward-thinking company’s best option.

Employers must accept the inevitability of social media’s presence in the workplace as much as they have accepted email, the fax machine and the intranet. Rather the best practice now for employers is to proactively plan for their employee’s abuse of social media and implement an iron clad policy which protects the employer from liability in the event of social media abuse. Certainly, there are no one-size-fits all policies that I can draft that would satisfy the needs of each and every company. Industry, company size, social media use and many other factors must be taken into consideration when designing these innovative policies. Fortunately, the internet is riddled with example social media policies. In case you do not believe me, here are 200 Sample Social Media Policies. I do not recommend or endorse any of these.

Nevertheless, in drafting or evaluating a social media policy make sure you include the following provisions that will deter employees from abusing social media and will allow your company cause for discipline or termination in the event that an employee does not comply with it:

1) State that an employee is permitted to access social media sites while at work as long as the use does not interfere with the optimum performance of their job. The company’s primary interest is in its employee’s productivity and the use of social media at the cost of this productivity undermines the Company’s business objectives.

2) State that the Company’s internet and email policies apply to employee’s accessing social media sites from company computers. That is, the company owns the computers and technology and can and does monitor this usage. Employees should not have an expectation of privacy while using social media.

3) State that the Company’s discrimination and harassment policies apply to employee’s accessing social media sites. Employees should be considerate of visual content displayed on their computer screens. Moreover, accessing sites that are pornographic, violent or have sexual or discriminatory content is prohibited. Finally, writing harassing, bullying or discriminatory statements about coworkers or management may also violate the harassment policy and is prohibited.

4) State that the Company has an expectation of loyalty from its employees that the employee will not make statements on behalf of the company or use the Company logo without express, written permission. Moreover, the Company expects that employees will not disparage or defame the company, its employees or its products on any social media site. The Company does not want its employees to respond to negative comments about the company, its employees or products without express, written consent.

5) State that the Company expects employees to act with high ethical standards when accessing social media websites. An employee must never represent him or herself or the Company in a false or misleading way. All statements must be true and not misleading. All claims must be substantiated. Finally, using social media for unlawful purposes is prohibited.

6) State that the Company’s trade secret and confidential communications policies apply to employee’s accessing social media sites. The Company expects that employees will not share company secrets, confidential information or discuss company litigation on social media sites. In the event that an employee inadvertently reveals such information, he or she should inform management immediately.

7) State that an employee who violates this Social Media Policy may be subject to discipline up to and including termination.

As important as the policy is to a company in protecting against abuse, so is its enforcement. Training management and staff is integral to Katz Consulting & Associates Proactive Lawsuit Prevention Strategies. Do not bury the policy in your handbooks. Train employees on the content of the policy. Train your management to treat employees consistently in the event that they determine employees are abusing social media. Inconsistent discipline may give rise to a claim of discrimination.

Finally, remind managers not to make promises or assurances that could amend the Company’s written policy. Once case, presently before the California Supreme Court, Quon v. Arch Wireless Operating Co, involves a sergeant on the Ontario, California SWAT team who sued his employer for violating his right to privacy because it monitored his sexual-text messaging (or “sexting”) from his department issued pager. Even though the department had a policy that expressly informed employees of its right to monitor their pagers, the sergeant’s supervisor promised him he would not monitor it. Appropriately training supervisory staff on the pitfalls of making these verbal assurances would have prevented this lawsuit.

Did I miss something? Is your policy consistent with my recommendations or do you have something to add? I’d love to hear your opinion.

Anyone Crying for Conan?

Feeling the rain pour down on the Golden Globes’ red carpet, Tina Fey commented “It’s not rain, it’s just God crying for NBC.” Though few are rushing to defend the network, not many human resource professionals or their employees these days are crying for Conan either. It seems that in this current economic climate, the conditions under which Conan is losing his job as host of The Tonight Show are not relatable for many employees.

As the harbinger of corporate change, HR professionals know all too well that, unlike Conan, employees do not have the expectation of job security anymore. Whether it was promised at the onset or not, no one outside of Team Conan, still relies on promises made in “happier times” from their employer. Economic circumstances have drastically changed. Corporate America has been forced to accommodate the strife. Layoffs are a grim reality. Gone are the days when one complained about one’s job or employer. No one can afford to be caught kvetching at the water cooler or, in the case of Conan, to an audience that one's employer “is headed downhill faster than a fat guy chasing a runaway cheese-wheel.” If a non-celebrity employee similarly disparaged his current employer, he or she would find themselves jobless without hope for new employment from another company sans positive references.

Moreover, HR knows that recently laid off employees are sadly grateful for the modest severance and COBRA benefits they receive upon losing their job. “Golden parachutes” are virtually extinct in corporate America these days. The $30-40 million that Conan will reap when negotiations are over do not resonate with the jobless. Certainly, no one is feeling bad for the person who stands to be financially rewarded as a multimillionaire from NBC’s misjudgment. Conan may know what time it is, but he doesn’t know that it is 2010. Times are tough for workers and the unemployed now. No one seems too invested in Conan’s plight.

Sorry he did not get to go on at 11:35 on NBC. The rest of the job market is not shedding a tear for Conan, especially since it will probably be laughing with him at 11:35 on another network soon.

Direct From the PIHRA Legal Update 2010

As a Breakout session speaker for the 23rd Annual PIHRA Legal Update, I am smack in the middle of Day 2 in what is a three day marathon conference designed to educate and update the human resource professionals of Southern California on recent laws and trends. Today I walked into the Ontario Hilton with my head full of the case law and statutes pertaining to my own presentation: “How HR Can Protect the Company Assets” - an update on unfair competition cases. Suddenly, I was struck by a sense of déjà vu. I realized that I had been in this exact hotel, in this exact foyer thirteen years prior for the exact same conference, at the very beginning of my career but I was younger, less experienced and my business, Katz Consulting & Associates, was in its fledging state. I was brand new to PIHRA and only just meeting the HR professionals that have since become my most faithful clients.

Well, aside from recognizing that my business mission to teach Proactive Lawsuit Prevention Strategies has come to fruition in the past decade, I grasped how much I owed to the PIHRA organization for providing me the access to clientele who (in exchange for one hour legal updates) have enabled me to build a viable, rewarding career as an outsourced investigator, seminar leader and HR consultant. Certainly, I am one of the lucky California attorneys who get to use her law degree in a unique manner.

So, what else has changed in the decade since I last spoke at a PIHRA Legal Update? When I began Katz Consulting & Associates, very few employers advocated sexual harassment prevention training to their employees. AB1825 required training was unfathomable. The common perception was that it would be a huge mistake - telling employees that they had a right to sue their companies or managers. This was to remain a secret -something they would not know intuitively from being groped in a private conference room (or watching “Ally McBeal”.) Employers did not want to risk teaching the employees about harassment and discrimination laws. It was difficult for me to convince potential clients to be proactive about harassment prevention and to train their employees about their grievance procedures in order to prevent revenge litigation. In fact, my “Unlawful Harassment Prevention” seminar was the first “Proactive Strategy” that I recommended to clients – and a tough sell it was. Now, sexual harassment prevention training is mandatory for managers and introducing clients to other awareness raising seminars is welcomed.

Another change that has occurred in the last ten years is that I have competition in the marketplace. When I began my “niche” business to educate and train employers about lawsuit prevention, very few attorneys did the same. Law firms did not want their partners and associates counseling their clients in a way that undermined the likelihood of employment litigation – their bread and butter. Now, almost every employment law firm in the city incorporates some aspect of lawsuit prevention counseling into their client services, especially in the past year when the economy has forced employers to reduce legal fees and law firms are looking to provide alternative services to their clients. Albeit, few lawyers have the “flair” for entertaining while educating that I bring to my programs. (I also do my own PR.) Did I mention that prizes are given out in my training programs too?

The last major upheaval that I have noticed in my own business is the “flip-flop” that has occurred as a result of the recessionary economy. For the majority of the decade, my business was primarily a training company and occasionally, I conducted investigations. Or more often, I taught HR professionals how to do so themselves, in-house. Now, the training budgets and training departments of companies are diminished, but the occasion for an impartial investigator has risen. Terminations are more frequent, terminating for cause requires an investigation (see Blog Post, Dec. 31, 2009) and more executives and contract employees are being held accountable for their misconduct. Moreover, HR has been downsized so the few who remain are overworked and without the time to conduct consuming investigations. My business flip-flopped and now I am focusing primarily on building up the investigations arm of it. I’m not complaining -refocusing my own business strategy has been revitalizing. Certainly, instantly updating my website and blog is far easier than redesigning, reprinting and redistributing a laminated brochure. Times have changed.

And they are still changing. Based on what I have seen and heard at this PIHRA Legal Update, the issue that most of the PIHRA professionals are still intrigued and stumped by is social media, internet policies, performance and misconduct concerns as a result of the misuse or abuse of technologies and usage. PIHRA members are once again paving the way for future “Proactive Lawsuit Prevention” seminars and topics. As I have done for the past decade plus, I will let the PIHRA members lead my business direction. Look for the next post on HR’s Proactive Strategies related to these issues. In the meantime, leave your comments on what changes you've experienced that altered your own perspective in the last decade.

Looking forward to another day at the PIHRA Legal Update in Universal City tomorrow!

How HR Can Protect the Company’s Assets at a Time When Unfair Competition is on the Rise.

“Every Battle Is Won Before it is Ever Fought. Think about it.” -
Gordon Gecko in Wall Street (quoting Sun Tzu)

When economic times are tough, when job security is undermined, when unemployment is on the rise, business behaves, for lack of a better term, “unfairly.” Perhaps it is because laid off employees who cannot find employment begin their own competing businesses and want to hit the ground running by soliciting their previous employer’s customers. Or, it is because businesses can not afford expensive and time consuming R&D so they “steal” it in the form of hiring away valuable and trained employees seeking the “secrets” they have access to or stored in their memories. That is to say, in these difficult economic times, corporations are experiencing unfair competition in the form of (a) unlawful pilfering and/or poaching employees, (b) misappropriation and destruction of trade secrets, and (c) fraudulent inducement of customers to leave. I know because in recent months, I have been asked to investigate these alleged activities -seeing firsthand the intense emotional backdrop that accompanies these conflicts.

Though there are laws that protect against this type of unethical, ultra competitive misconduct, the case law is riddled with the difficulty of proof and pleadings. Not to mention, the considerable expense. Consequently, in line with Katz Consulting & Associates’ mission to proactively prevent lawsuits, such as those of unfair competition or violations of the Uniform Trade Secrets Act, it is imperative that a company implement Proactive Strategies to prevent this type of behavior before it undermines a company’s financial prosperity or germinates into an ugly lawsuit. In the words of Gordon Gecko, “Every battle is won before it’s ever fought. Think about it.”

When one “thinks about it,” the realization occurs that the people within a company best positioned to prepare and prevent this unfair behavior are in human resources, working in conjunction with in-counsel. Why? First, human resources are invested in the employees. There is no one who works harder for a company to make sure they hire and train the right people for the job than the people in human resources. Often, the role of finding the “right” person, fairly compensating them, making sure they are trained, satisfied, recognized and rewarded falls on the human resource department. We all know the commonly quoted statistic that it costs a company one and half times an employee’s salary to replace him or her. But, that is more than a statistic to people in human resources, because it is often, your time, effort and expertise that go into “starting over” when a valuable employee leaves. Moreover, it’s not just the number of employees placed, but also the value they bring to the company in what they know, in what they learn on the job or how they contribute to the company. This information, knowledge or expertise, which is valuable to the company as trade secrets or confidential information, is often the result of training orchestrated or designed by human resources. Last, human resources are at the beginning, middle and end of the employee’s career with the company. When an employee is oriented they are given policies and handbooks (sometimes drafted by HR) and when many employees abruptly engage in an exodus, refusing to give notice, leave laptops, destroy files, or steal customer lists, the human resource personnel will know long before the damage shows on a spreadsheet.

The Proactive Lawsuit Prevention Strategies that HR can implement to protect employees, trade secrets and confidential information include reviewing the company Handbook to ensure it includes provisions that clearly spell out: the employee’s duty of loyalty to the employer, it’s duty to keep proprietary information confidential, categories of information which are deemed trade secrets or intellectual property and that the company is the owner of company property including tangible and intangible assets. HR should ensure that confidential information is demonstrably kept confidential with passwords restricting access, “confidential “stamps, and evidence of the cost of developing this information and keeping it from competitors.

Upon hiring the employee should be asked about contracts it had with a previous employer, and reminded not to use a previous employer’s secrets, including a customer list. Upon exit, the employee should be reminded that it is unlawful for her to solicit company customers from a confidential customer list or to take secret information with her, whether it is in the form of downloaded files, emails or memorized information. Also, upon exit, HR should be careful to document any misconduct on the behalf of the employee, including refusal to give notice, ringleading behavior, refusal to turn in equipment, destruction of files, and evidence of downloaded files to memory sticks or emails sent to offsite servers. In the event that the company will need to stop a competitor from stealing trade secrets or valuable employees, it is the “misconduct” that is key in seeking a TRO or injunctive relief when the company has to show the likelihood of success on the merits.

Last, when an employee does abruptly resign, HR should consider it a 911 emergency if there is evidence of soliciting employees, multiple simultaneous employee resignations, any missing or destroyed files or equipment, sabotaged technology and any missing confidential information or leaked trade secrets. Once this occurs, HR should immediately seek legal counsel and discuss available options to protect the company. Moreover, HR should protect what will be evidence in the event of litigation. HR should secure the employee’s computer and protect it from overwriting or backups, and document the financial cost of replacing the employee or damage to the company of the loss.

Although this is a great deal of pressure to put on the professionals in human resources and even to put on in-house counsel , the ultimate satisfaction received for preventing this costly, emotional and extensive litigation should be a job well-done - or at least, a latte. Add a muffin, you are going to battle. Think about it.

Top Five 2009 Celebrity Employer Mistakes (that could have been prevented with Proactive Lawsuit Prevention Strategies)

“It is said that only a fool learns from his own mistakes, a wise man from the mistakes of others.” (Anonymous)

As the year comes to a close, it is always educational, if not entertaining, to look back at the past and see the mistakes made by famed employers and how we can learn from them. Hopefully, we can gain wisdom in the process and avoid these mistakes ourselves. So, in honor of David Letterman, (see mistake #1) let's countdown the top five mistakes made by famous employers in 2009.

#5 Terminating A Protected Employee Without A Fair, Impartial Investigation
Dodgers’ owner Frank McCourt fired his estranged wife Jamie McCourt as CEO of the team citing “insubordination” only 3 weeks after Jamie McCourt filed a workplace harassment complaint with the general counsel of the Dodgers. Despite the McCourt’s underlying divorce proceedings which taint the employment decisions, Frank’s terminating an employee without a fair investigation, while she was pursuing a workplace harassment complaint against the company, effectively also opened the door for a workplace retaliation claim. In California, that makes the Dodgers vulnerable to unlimited punitive damages should Jamie decide to pursue employment litigation in addition to her alimony requests.

#4 Allowing Emotional or Irrational Behavior to Dictate Business Decisions

Convinced that some employees stole from him, Guess cofounder, Georges Marciano initiated lawsuits that backfired when a judge instead ordered him to pay the accused employees $260 million dollars in damages. With alleged evidence of drug use and mental instability on the part of Marciano, the accused employees countersued for libel and intentional infliction of emotional distress. Then Los Angeles County Superior Court Judge Elizabeth White ruled that Marciano had refused to follow court orders concerning pretrial proceedings, threw out his case and barred him from presenting a defense against the countersuits. The only question before the judge and jury at trial was how much financial compensation the employees deserved.

#3 Post Termination Negative Comments about Former Employees

K2 Productions, which produces the Miss California USA Pageant, terminated Carrie Prejean's contract, citing "continued breach of contract issues." The termination spawned a lawsuit and countersuit by the parties which was eventually settled in a settlement agreement, approved by Donald Trump and K2 Executive Director, Keith Lewis. Post termination, Prejean had an interview with Larry King and walked off the set. Trump and Lewis made negative comments publicly about Prejean’s interview. Lewis stated, "The public is finally getting a glimpse of the real Carrie Prejean who lives in her own delusional world. The childish behavior, her negative attitude, the sarcasm and condescending tone, the disrespect and continual lying she is demonstrating now is only a fraction of what we endured during her reign and after." Commenting post-termination on an employee makes an employer vulnerable to a post termination claim of defamation, interference with future contract and also, presumably, a breach of the confidentiality agreement which accompanied their existing settlement agreement. Trump should have stopped talking after “You’re Fired.”

#2 Treating Your Employees as Your Confidantes
Tiger Woods' caddie Steve Williams response to Tiger Wood’s infidelity scandal is that he supports his boss. Williams has been Woods' caddie the last 10 years. He refused to discuss Woods' private life, although he said the golfer had confided in him. "That's what friends are for," he told the New Zealand Herald. "You support them through good and bad. It's like marriage, really." Albeit unintentional, by treating his caddie/employee as his confidante, Tiger Woods inserted Williams as a witness to Woods’ own misdeeds. Although Williams may want to support his boss, under penalty of perjury pending litigation, Williams will ultimately be in the awkward position of providing damaging testimony against his own employer/friend if Woods ends up in a legal battle with his wife or sponsors. Many people spend more time with coworkers than family members, but there are times in a professional career where there must be a clear demarcation of roles, especially between a supervisor and subordinate. For example, if an employee wants to “complain” about the inappropriate behavior of another coworker, the manager’s role is to report the complaint to the person in the company designated to intake complaints and ensure they are investigated. Keeping the conversation “confidential” is not an option. Blurring the relationship lines in the employment setting can lead to deeply unsettling conflicts and increased employer liability.

#1 Undermining Company Policies With Inappropriate Behavior

David Letterman went on the air during is “Late Night” talk show and made jokes about his adulterous affair with a Late Night staff employee. Although he did this in order to deflate an expected extortion plot, his juvenile attitude not only undermined his show’s policy to maintain a workplace free of harassment, but also made him a target for other sexual harassment claims and sexual favoritism claims from his current and previous employees.

Looking forward to the wisdom of 2010! Happy New Year!