Tag Archives: Fair Credit Reporting Act

No Peeking! Social Media in Hiring

Discrimination, Hiring, Privacy, , ,

Can the company recruiter review an applicant’s personal social media accounts before making a hiring decision? Yes, in Texas, an employer may look at any public postings, but there are enough legal risks that I would discourage you as an employer from peeking.

Why shouldn’t an employer take advantage of the wealth of information that may be available on an applicant’s Facebook page, even if the employer hasn’t “friended” the applicant? Because much of the information you could discover on an applicant’s social media is not job-related, and therefore becomes the basis for a discrimination claim.

Because many people are careless about the privacy controls on their social media profiles, you may find out that your applicant has a disability that was not obvious during the interview, but comes more clearly into view when you read the “I’m praying for you” messages on the applicant’s Facebook page. Are you going to violate the Americans with Disabilities Act by failing to hire the applicant now that you know this information?

You may discover that the applicant is pregnant when you see that she announced the exciting news on Twitter. “But I want to know if she is pregnant, so I don’t lose her for twelve weeks next year,” you will tell me.

In response, I’ll refer you to the recent case of United States Equal Employment Opportunity Commission, et al. v. Brown & Brown of Florida, Inc., in which an applicant was offered a $13.50 per hour job with an insurance brokerage that she joyfully accepted. She told her old employer she was leaving. She followed up with the new employer and asked about the company’s maternity policy, revealing that she was pregnant. Her job offer was revoked by the brokerage that same afternoon. That revocation decision cost the brokerage $100,000 because it violated the Pregnancy Discrimination Act.

So, do you really want to know what you may find out on social media? Three-quarters of all Human Resources professionals surveyed in 2013 by the Society for Human Resource Management said that they do not screen personal social media accounts because they fear what they will find. I advise my employer clients to exercise the same restraint.

But if you insist on peeking:

  • Screen all or none. Your electronic screening history will be subpoenaed in any discrimination claim and it will be apparent if you only screened women, for example, to see if they have young kids that might affect their attendance.
  • Don’t ask for the applicant’s passwords to their social media accounts. Many states have passed laws banning this practice and any jury that hears that you made that request will hate your guts.
  • Getting a third party to screen for you requires that you follow all of the complex requirements of the Fair Credit Reporting Act (prescreening notice, summary of rights, pre-adverse action notice, time to correct the record, post-adverse action notice).
  • Be careful what action you take once you have screened. If you determine that the applicant is transgender, Muslim, disabled or pregnant based on her FB page, are you going to risk a discrimination lawsuit by not hiring her? This is when you need to get your employment lawyer involved.
  • What if you see posts or pictures that cause you to believe that an applicant could be a threat to other employees? If you hire him anyway, you can be sued for negligent hiring if he ever becomes violent at work.
  • If you see a post reflecting union activity or protected concerted activities (discussing wages or terms and conditions of employment, such as complaining with a coworker at a former job), any adverse action you take involving that applicant could violate the National Labor Relations Act.

I don’t include LinkedIn when I am advising employers to stay away from an applicant’s social media pages. LinkedIn and similar industry sites are commonly used for business and not social purposes. Applicants are generally much more discrete about what they post on their LinkedIn pages.

In addition, posting company job openings on social media and using a service like LinkedIn to attract passive and active job applicants is common now and doesn’t run the same risks as peeking at an applicant’s personal social media pages.

Six Steps to Preventing and Reacting to Employee Embezzlement

Documentation, Hiring, Privacy, Termination, , , , , ,

This week’s local headlines involve the city manager of Sunray, formerly the police chief and city manager of Panhandle, being accused of employee embezzlement. Rob Roach was arrested this week after an investigation by the Texas Rangers for alleged theft by a public official of property between $30,000 and $150,000.

I have no idea about Mr. Roach’s guilt or innocence, but the news did remind me about one of the most disappointing things about my 30 years of law practice in Amarillo, Texas–the large number of times I have had to help an employer who has been ripped off by a trusted employee.

I have seen employees use company credit cards for personal purchases (how many law firms need to be buying diapers at Sam’s?), steal cash paid by a patient for a medical visit, forge signatures on checks made out to the employee (one trusted employee did this while her boss was undergoing chemotherapy), turn in fictitious business expenses, and create false company payrolls or bank accounts.

Unfortunately, employee embezzlement is not unusual in our area, but it is often preventable. We Texans tend to be trusting people, but you wouldn’t just leave the front door to your house open with a sign pointing out where you keep the good jewelry. As a business owner or manager, you should be just as wise about protecting your business and your livelihood from thieves.

Here are six steps that you can take to help curb any embezzlement by your staff:

  1. Set the tone. Do you as a business owner or manager demonstrate integrity in how you do business? Your employees are taking their cues from you. If you cheat on your taxes, overcharge your customers or rip off your suppliers, don’t be surprised if your employees begin to feel that they are entitled to cheat you as well.
  2. Hire well. If an employee is going to be handling money in your business or given a company credit card, be sure to do a criminal background check (following all the Fair Credit Reporting Act requirements for doing so). Check all of the applicant’s references and past employers, asking specific questions about the potential employee’s integrity.
  3. Reduce the opportunity for theft. Guard which ones of your employees will have access to company goods and cash. Protect your keys, passwords, and access to your checks, your online banking and all accounting records. Use the built-in protections of your software. Quick Books, for example, will allow you to set up limited access for certain functions so that no employee has free rein with all of your bookkeeping. Require weekly or monthly balance sheets, budgets and profit and loss reports and study them carefully. In addition, train yourself to use your accounting program so you can randomly double-check things yourself.
  4. Utilize more than one person for the bookkeeping. You should have checks and balances in place, such as having a different person sign the checks than the one who printed them. If your customers pay in cash, your system for receiving the deposits, writing receipts, and reconciling the cash to the accounts must be clear and followed religiously. Cross-train more than one person for each job so that there is someone always available to audit the other’s handling of the money. Take a cue from banks, which often require their financial personnel to take vacations lasting at least one week so that another person can review the absent employee’s money-handling and lending procedures during that break.
  5. Watch employees who are at risk. Triggers such as gambling, addiction and family stressors often proceed employee theft. You must be aware of what is going on in your employee’s lives outside of work if you want to prevent misconduct inside of work. Also, keep in mind that many of your employees have financial problems every day, even without specific triggers. It is just a fact that Americans tend to live beyond their means. Providing free financial education and guidance may not seem like your job, but it could prevent an employee’s desperate attempt to embezzle from you.
  6. Consider surveillance of your workplace. While audio recordings create potential federal wiretapping issues, you can always install video surveillance of your workplace. You can also search employee emails and physical surroundings, like desks. Of course, you need to talk to your employment lawyer before starting these activities to get the proper consents and notices and make sure you are not violating privacy rules, but if you believe some surveillance or searching is the best way for you to protect your property, you should explore this option.

Despite all precautions, you may someday suspect that an employee has embezzled from you. If you are unfortunate enough to be ripped off by an employee, here are the six steps to reacting to the theft:

  1. Internal investigation. You can put an employee you suspect of embezzlement on a suspension while you investigate. Get help from your employment attorney as you gather documents and talk to coworkers so that you understand exactly what happened and how much was stolen.
  2. Confront the employee. Before you fire the suspect, have a face-to-face meeting with the employee to allow the employee to explain, if possible. If the evidence still demonstrates that the employee is guilty, then talk to the employee about a confession (in writing) and repayment of the debt. Once caught, some employees are ashamed and cooperative. However, do not block the employee from walking out (you will be accused of false imprisonment) or defame the employee by sharing information about the theft with those who have no pressing business need to know.
  3. Fire the employee. Don’t worry about a wrongful termination suit or unemployment claim. Clear evidence of theft by the employee is one of the strongest defenses to any kind of legal complaint by a former employee. However, be very careful about deducting your losses from the employee’s final paycheck. The employer has the burden to demonstrate that the employee is personally and directly responsible for the theft before the deduction can be taken, so make sure your evidence is solid.
  4. Alert your insurance company. Most business insurance policies include an employee theft provision. You may be able to recoup some of your losses with insurance. File a claim with the insurance company and provide it with the evidence. Just understand that often the insurance company will insist that you also involve the police.
  5. Prosecute the theft. Your insurance company may require this before reimbursing you for your losses. More importantly, you need to prosecute to prevent the employee from doing this to another employer. Getting away with a theft once makes it more likely the employee will steal again.
  6. Analyze and correct your procedures. Do a deep dive into your security vulnerabilities that led to the embezzlement. Did you allow one person too much access? Were you sloppy with your checks and balances? Did you fail to review your credit card statements? You need to understand why this happened and how to prevent it in the future.