Did you know a NJ business can be vulnerable to wrongful discharge claims based upon what its employee manual says – or doesn’t say?

Employment in New Jersey defaults to “at will” meaning that an employee may generally be terminated anytime, for any reason – or lack thereof.  There are important exceptions, which is where the employee manual comes in.   Woolley is a watershed case on this topic.  The manual in Woolley was flawed because while it contained a multitude of provisions, it omitted a provision on termination without cause.  (See  Woolley v. Hoffmann-LaRoche, Inc., 99 N.J. 284, 290 (N.J. 1985), judgment modified 101 N.J. 10 (N.J. 1985)).

The following rules-of-thumb can be cherry-picked from Woolley so as to make an employee manual as bullet-proof as possible:

Read it through employee’s eyes.  If your manual is disseminated to a substantial portion of your workforce, you will want to read each provision from the perspective of the employee.  This means you should ask yourself what employees would reasonably expect each provision to mean.  But your analysis should not stop there.  You will need to dig deeper and identify and edit those provisions that represented an offer or employment terms and conditions.

Disclaimer.  Always include a disclaimer that the manual does not create legally binding obligations.  Leaving out this provision can expose the employer as courts have held that – absent the disclaimer – a manual provision such as a stated termination procedure is legally enforceable against the employer.  Be sure to set-off the disclaimer, giving it the attention it warrants, and prominently display it.  Additionally, it must clearly inform employees the employer can terminate employment “with or without cause.”

So, if an employee manual is a “must have” for your business, management will need to proceed with caution —  both as to what it says as well as where it is silent.

CEPA, or the Conscientious Employee Protection Act, sets the bar high for New Jersey businesses.  CEPA is a powerful New Jersey law that protects whistle-blower employees from employer retaliation.  Employers charged with a CEPA violation face extensive potential liability including punitive damages and those for emotional distress, including:

Reinstatement of the whistle-blower on par with former position;
All back-pay;
Reasonable costs and attorneys fees;
Civil fines of $10,000.00 for one conviction; if more than one, $20,000.00; and
Punitive damages, the greater of $350,000.00 or five times the compensatory award.

Here is a description of a case in point.  The threshold requirement is that the employee believes the employer has violated a law, rule, or regulation or public policy as to health, safety or welfare.  Courts do not expect the employee to actually know the law, rule, or regulations, but neither does it allow the supposed offense to be trivial.  Next the employee must have reported this to his/her supervisor or to a public body.  Note that reporting the conduct to one’s attorney suffices.  Rather than respond in a positive way to the notification, the employer then retaliates against the whistle-blower.  In order to be characterized as retaliatory, an act must cause “lasting prejudice”.  Beware:   lateral transfers that carry neither reduction in pay or grade can qualify as retaliation.

There are a number of regulatory procedures with which employers are required to  comply, in order to remain within the law.  The New Jersey Commissioner of Labor and Workforce Development requires three key notice-requirements of employers.  First, each employer must provide the name of the person designated as its agent to receive CEPA notices.  Second, employers must prominently post at all times in an appropriate place(s) a notice of CEPA protections.  Finally, the third requirement is that employers must distribute to each and every employee an annual notice of CEPA protections.   See N.J.S.A. 34:19-7 for details.

A key defense in mitigating employee-related risk are clearly-written and comprehensive workplace policies.  A well-written policy concisely communicates workplace rules to supervisors and employees alike.  It provides the foundation for training supervisors in applying these policies and documenting violations, as well as training for employees.   From a practical standpoint, it makes sense to explain expectations and consequences.  But there are also legal implications, and even the U.S. Supreme Court favors clearly-communicated rules (see City of Ontario v. Quon, No. 08-1332, 560 U.S. ____ (2010)).   Because of the important role of policies in mitigating business risk, this blawg will address several essential policies in the coming weeks.

This post addresses Social Media Policy.

Web 2.0 has revolutionized user interaction with the internet:  MySpace, Facebook, LinkedIn, and others provide affinity forae for individual and corporate users.   This technology has also given rise to serious employer concerns surrounding improper employee use of social media.  These concerns include release of confidential business information; and disparagement of other employees, product, or even clients.

So what should guide management in crafting a Social Media Policy?

STEP ONE – Reasonable Rules.  The first step begins with assessment of the risks inherent in your industry as well as the particular business.  This assessment allows the policy to be premised upon reasonableness, and the law favors workplace rules that are reasonable.  Your inquiry and analysis should include at a minimum the presence and scope of confidential business information, access of employees to this proprietary data, whether the business and/or industry is tightly-regulated, number of employees and whether the business is a union-shop, and more (examples of tightly-regulated industries include banks and medical providers).

STEP TWO – Training.  One your policy is crafted, your supervisory staff should receive training on how to even-handedly apply the policy to the workplace, as well as how best to meticulously document violations.  It is likewise key that the policy is clearly communicated to all employees.  This way, you ensure to the extent possible that each employee understands the policy, what’s acceptable and what’s not, as well fully comprehend the consequences for violating it.

If your business is a union shop, discussion of a policy with labor representatives is a permissive subject of communication (as opposed to mandatory subjects, such as wages and hours).  See Arbitrating Social Media Cases for more details.

So, the rule of thumb in crafting any workplace policy – including Social Media Policy – is reasonable rules commensurate with business risks in a well-written and clearly-communicated comprehensive policy, followed by appropriate supervisory and employee training.  Following these steps should go a long way toward mitigating business risks associated with improper social media use by employees.