Approach With Caution: Conducting Background Checks Using Facebook, MySpace or the Internet

Employers are becoming more and more aware of the information obtainable via the internet about their current employees as well as applicants.  Many are looking up prospective and current employees' Facebook and MySpace pages to glean more information about the individual.  As the the Fox News video below shows, current employees need to be careful what they tell their bosses to get the day off of work, versus the information posted on their Facebook page.

While the information posted on the Internet on social networking sites is usually public for everyone to see, employers need to be aware of potential claims against them.  The law is behind in the times and there are many uncertainties in this area.  Listed below are some potential pitfalls that employers need to be aware of when using the Internet to conduct background checks.

Federal and State Discrimination Claims

Because people are becoming so comfortable in sharing private information on social networking sites, employers may learn too much information about an applicant that would not and could not have been discovered through an interview. Discovery of this personal information is not unlawful – it is likely that the employer would find out many of these traits at the first in-person interview with the applicant anyway. However, employers cannot base its employment decisions upon a protected category, such as race or gender.   By learning about this type of information of an applicant via their on-line profile, the employer may have to explain that the information did not enter into the hiring decision. 

Invasion of Privacy Claims

Though one might argue that members of social networking sites have no expectation of privacy (since they’re posting information to the world) some applicants or employees might argue that the employer overstepped its legal bounds by using profile data in employment decisions. Arguably, the terms of service agreement may create expectation of privacy for users of site.
State Law Privacy Claims
Employees could potentially argue that using Facebook, MySpace or similar site to conduct background checks violate state statutory law. For example, California and New York have statutes that prohibit employers from interfering with employee’s off-duty private lives. Employees may attempt to argue a public policy violation has occurred in violating a state statute that protects off-duty conduct from employer’s control.

State common law could also create liability. Generally, there are four common law torts for invasion of privacy:
  1. intrusion upon seclusion,
  2. public disclosure of private facts causing injury to one's reputation,
  3. publicly placing an individual in a false light, and
  4. appropriation of another's name or likeness for one's own use or benefit.
As explained by one court, the tort of unreasonable intrusion upon the seclusion of another, "depends upon some type of highly offensive prying into the physical boundaries or affairs of another person. The basis of the tort is not publication or publicity. Rather, the core of this tort is the offensive prying into the private domain of another." (citing Restatement (Second) of Torts § 652B, comments a, b, at 378-79 (1977)). Generally, the invasion of privacy must consist of (1) highly offensive intrusion (deceitful means to obtain information); and (2) prying into private information (information placed on the web is most likely not private).

Fair Credit Reporting Act

An employer’s use of social networking sites may implicate the FCRA, which places additional disclosures and authorization requirements on employers. In enacting the FCRA, Congress stated its underlying purpose was to ensure that decisions affecting extension of credit, insurance, and employment, among other things, were based on fair, accurate, and relevant information about consumers. The FCRA is intended to provide employee with notice of the background check, authorization to conduct the check in certain circumstances, and disclosure to the employee if the information is used in the employment context.

FCRA Definitions:
  • A “consumer report” is defined at as information (oral, written, or other communication) provided by a “consumer reporting agency” about credit matters as well as about a person’s “character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for…employment purposes.”
  • Another kind of “consumer report,” called an “investigative consumer report” contains information on a consumer’s character, general reputation, personal characteristics, or mode of living that is obtained through personal interviews with friends, neighbors, and associates of the consumer.
  • A “consumer reporting agency,” is defined as “any person who 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.”
Employers who conduct the background checks internally do not qualify as a “consumer reporting agency” and therefore the FCRA does not apply. Employers still need to be careful, however, because state law may apply. For example, California Investigative Consumer Reporting Agencies Act is more restrictive than the FCRA.

Terms of Service Violations

Facebook, MySpace, and similar sites have terms of service posted on their pages that generally prohibit use of their content for “commercial purposes.” Violation of the terms of service would not automatically create a cause of action in and of itself. However, as discussed above, it may be a way for a plaintiff to argue that there is an expectation of privacy in using the site and everyone who signs up to use the site is agreeing to abide by those terms.

The Electronic Communications Privacy Act of 1986

The ECPA was intended to expand wiretapping protections to electronic communications.

Title I of the ECPA provides that “any person who intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication ... shall be punished ... or shall be subject to suit ...."

Title II, known as the Stored Communications Act (SCA), focuses on communications in storage (e-mails, blogs, electronic bulletin or similar message boards) and most likely social networking sites. The Store Communications Act provides that "whoever (1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system shall be punished ...."

However, the SCA exempts from liability, ``conduct authorized ... by a user of that service with respect to a communication of or intended for that user.´´ A virtual community that has some type of privacy protection can create liability for an employer who provides false information or assumes an identity to gain access to the site.

Therefore, employers need to stay away from pretexting in order to gain access to an applicant's or employee's on-line profile. Also, websites and social networking sites open to the public are not covered by the SCA. Courts have indicated that a terms of service agreement, and nothing more, would not be enough to create a private webpage. There needs to be more protections taken by the publisher of the on-line content in order for the individual to prevail in asserting the site was “private” under the ECPA.  

Generally, under Federal law, employers may utilize social networking sites to conduct background checks on employees if:
  1. The employer and/or its agents conduct the background check themselves;
  2. The site is readily accessible to the public;
  3. The employer does not need to create a false alias to access the site;
  4. The employer does not have to provide any false information to gain access to the site; and
  5. The employer does not use the information learned from the site in a discriminatory manner or otherwise prohibited by law.

Someone Must Be Reading This

To end the week, we wanted to give ourselves a pat-on-the-back due to our blog's first place ranking in popularity among employment law blogs (and ranked 32nd of out of all legal blogs) this week on

If you have not already checked it out, is a more technological version of Findlaw, and has some great resources.

The right ... to wear pants.

I am preparing for a press interview about how employers should approach dress code policies and it seems that it always is a surprise to people to learn that that the California Government Code specifically addresses employees' right to wear pants to work.  Section 12947.5 states:
(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.
Also, employers should note, dress standards or requirements for personal appearance need to be flexible enough to take into account religious practices.  While it is lawful for an employer to implement rules about employee physical appearance, grooming, or dress standards, the standards cannot discriminate based on a protected category, such as race or sex.  Also, click here to read a previous post about policies on tattoos, tongue rings, and body piercings in the workplace.

Court Rules Starbucks Owes $105 million In Tip Pooling Case

The award represents an estimated amount of cash from tip pools that shift supervisors received between October 2000 and February 2008. The plaintiffs maintained that the shift supervisors were considered managers under California law, and therefore improperly participated in sharing in the tips placed in the tip jar.  California law prohibits managers from participating in tip pooling arrangements. 

Plaintiff’s used experts to provide an estimated the hourly tip rate. Based on a sampling of 250 stores in California, the experts determined that amount due to the class members was $1.87, plus or minus 16 cents per hour worked by the shift supervisors. While this amount does not seem to be much, it adds up when dealing with 120,000 current and former baristas who worked for Starbucks during the eight years at issue.

While there was a rash of tip pooling class action filed in California about two years ago, it appeared that this type of case was losing the interest of the plaintiff’s attorneys. However, once this judgment becomes commonly known, business owners can be sure that tip pooling cases will continue, if not increase in the coming year or two. Now is a good time to ensure that that a company’s tip pooling policy complies with California law. Our prior posts on this case can be read here.

Chou v. Starbucks - Tip Pooling Case Continues In Trial

Yesterday, the second phase of trial started in Chou v. Starbucks.  The plaintiffs are asking the judge for restitution and interest to a class of about 120,000 Starbucks baristas who worked for the company since 2000.

Initially, plaintiffs in Chou v. Starbucks had alleged violations of Labor Code §351 and Business and Professions Code §17200, California's unfair competition law as a result of the managers taking portions of the tips left by patrons in the tips jars.  

Labor Code section 351 provides:

No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.

(emphasis added). Section 351 prohibits managers from participating in tip pooling arrangements.

In January the plaintiffs in Chou v. Starbucks voluntarily dismissed their Labor Code claim and decided to proceed only under their Business and Professions Code cause of action. This move could be for a number of reasons, primarily that the statute of limitations is one year longer (4 years) as opposed to the statute of limitations under the labor code (3 years). Also, by dropping the labor code violation, the case can only be heard by the judge, a trend which a lot of plaintiffs’ counsel prefer when the case involves technical violations of the labor code that may not draw a lot of sympathy from a jury. 

In the seminal 1990 case on tip-pooling, Leighton v. Old Heidelberg, Ltd., the court held that an employer’s practice of tip pooling among employees was not prohibited by section 351 because the employer did not “collect, take, or receive” any part of a gratuity left by a patron, and did not credit tips or deduct tip income from employee wages. The court relied upon the “industry practice” that 15% of the gratuity is tipped out to the busboy and 5% to the bartender, which was “a house rule and is with nearly all Restaurants.”

UPDATE:  Starbucks was held liable for over $100 million in damages, click here for updated post.

Not Posting Much Lately

I have not been posting as much as I would like recently, work has been very busy and I have been asked to speak in front of a few different employer groups recently.

Tomorrow, I will be conducting a telephonic presentation for new managers on practical tips on how to comply with California labor and employment law. The presentation is through Employer Resource Institute and is entitled “Suddenly a Supervisor: 11 Practical Training and Development Tips for Brand-New Front-Line Managers in California.” Click here for more information if you are interested in registering to listen in.

Also, due to the huge interest in my presentation about the legal risks associated with using, and other internet sites to conduct background checks on job applicants, I will be presenting this talk on a nationwide basis again, as well as providing the same seminar focusing on issues particular to California. These will likely be scheduled in April. Please e-mail me if you would like to receive notification about these presentations once I set the details.

CA Supreme Court Holds Individuals Not Liable For Retaliation In Jones v. The Lodge At Torrey Pines

The California Supreme Court issued its ruling today in Jones v. The Lodge At Torrey Pines.  The Court held:
In Reno v. Baird (1998) 18 Cal.4th 640 (Reno), we held that, although an employer may be held liable for discrimination under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), nonemployer individuals are not personally liable for that discrimination. In this case, we must decide whether the FEHA makes individuals personally liable for retaliation. We conclude that the same rule applies to actions for retaliation that applies to actions for discrimination: The employer, but not nonemployer individuals, may be held liable.
The opinion can be read here.