Benjamin Franklin once said: “It takes many good deeds to build a good reputation, and only one bad one to lose it.” In the age of social media, wokeness, and cancel culture, the ease and speed with which a business’ good will can be compromised is demonstrated by two recent events involving off-duty conduct by employees.
In May 2020, Amy Cooper, who is white, dialed 911 during a verbal confrontation in New York City’s Central Park with Christian Cooper, who is black. Mr. Cooper recorded and posted the encounter on Facebook. The video quickly went viral on social media, with many posters criticizing Ms. Cooper’s behavior as racist.
Social media sleuths did not take long to learn Ms. Cooper was employed by Franklin Templeton as Vice President and Head of Investment Solutions. Soon, Franklin Templeton was targeted on social media with accusations of abetting racism and threats to take business elsewhere. Franklin Templeton terminated Ms. Cooper.
On January 6, 2021, Leah Snyder was a participant in the protests at the U.S. Capitol. Upon returning home, she posted selfies of her at the Capitol on social media.
Critics of the selfies shared them along with negative comments on the Facebook page of Ms. Snyder’s employer, Alight Solutions. Alight Solutions’ Facebook page was soon overwhelmed with negative comments about Ms. Snyder’s selfies. Alight Solutions also terminated Ms. Snyder.
So, were the responses of Franklin Templeton and Alight Solutions to the threats posed to their business reputations appropriate? According to lawsuits filed by Ms. Cooper and Ms. Snyder, the answer is no. On January 26, 2021, Ms. Snyder filed a federal suit against Alight Solutions alleging her termination violated California law. On May 25, 2021, Ms. Cooper filed a federal suit against Franklin Templeton alleging her termination was discriminatory and in violation of New York Law.
These lawsuits pose unique questions which all employers should be asking. What is the proper response to off-duty conduct by an employee which, through a social media storm orchestrated by third parties, risks irreparable harm to the employer? How can an employer mitigate beforehand the risks of such a conundrum?
I. Conduct Which Has Direct Impact on Workplace
Historically, the law has recognized businesses have legitimate interests regulating certain conduct away from work by employees that can have a direct impact on the workplace. Such conduct includes (a) off-duty interactions with other employees, and business vendors and customers, (b) social media posts directed at the business, or its employees, vendors or customers, (c) activities which present an actual or apparent conflict of interest with the business, and (d) actions which affect the ability of an employee to perform work for the business.
On the specific issue of harassment involving employees away from work, it has been said: “’Whether specific acts of harassment or discrimination [take] place outside the workplace … is of no consequence because such conduct nevertheless would have arisen out of the employment relationship’ and therefore may be actionable against the employer.” Ferguson v. Deptford Township, No. 06-2112, 2008 WL 5401630 (D.N.J., December 22, 2008). “That harassment occurs away from the workplace ‘does not mean that an employer [has] no duty to correct off-site harassment by co-employees.’” Id. “Conduct that takes place outside of the workplace has a tendency to permeate the workplace.” Id.
Even as to off-duty conduct which can have an impact on the workplace, however, there are limits to a business’ authority. For instance, the National Labor Relations Act (“NLRA”) safeguards concerted activities by employees for mutual aid or protection even if these activities take place away from work.
II. Conduct Which Does Not Have Direct Impact on Workplace
But what about off-duty conduct which does not have a direct impact on the workplace? As to such conduct, the law is split.
Some jurisdictions have found lawful off-duty conduct which does not have a direct impact on the workplace is beyond the scope of a private employer’s legitimate interests. In Colorado, a state statute outlaws the termination of an employee for any lawful off-duty conduct unless the termination: (a) relates to a bona fide occupational qualification (“BFOQ”) or is reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees, rather than to all employees of the employer; or (b) is necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest.
Some laws protect certain specific types of off-duty conduct and associations from interference by private employers. The Americans With Disabilities Act protects employees from discrimination based on their associations with disabled individuals. In California, New York and several other states, off-duty political activities are protected. In Connecticut, off-duty speech is protected.
Other jurisdictions focus on questions unrelated to the location of the employee’s conduct. These questions include (a) whether the employee was at-will, (b) whether the off-duty conduct was a legitimate non-discriminatory reason for the employer’s decision, and (c) whether the off-duty conduct was a pretext for discrimination.
As to off-duty conduct which does not have a direct impact on the workplace, therefore, the ability of an employer to respond depends upon multiple issues which will vary by jurisdiction and fact pattern.
III. Conduct Which Impacts Customer Preference
Employment discrimination jurisprudence has long differentiated customer preference from a BFOQ. A BFOQ is a rare exception to laws prohibiting employment discrimination which recognizes that a person’s sex, religion, or national origin may be reasonably necessary to carrying out a particular job function in the normal operation of a business or enterprise. For instance, in an institutional setting, gender may be determinative of the qualifications for a job which requires physical contact with inmates or patients.
Customer preference, on the other hand, is routinely rejected as a justification for otherwise unlawful discrimination. That men prefer to be waited on by female flight attendants thus does not justify a policy which denies employment to male applicants. See Wilson v. Southwest Airlines, 517 F.Supp. 292 (N.D.Tex. 1981).
Recently, a federal court went one step further and highlighted the problems inherent in terminating an employee for off-duty conduct in response to public outcries by existing or potential customers. In Goza v. Memphis Light Gas & Water Division, No. 2:17-cv-2873-JPM-dkv, 2019 WL 11706044 (W.D. Tenn., Jan. 29, 2019), an employee of MLGW expressed support for Confederate monuments to a reporter at a rally advocating the removal of a statute of Jefferson Davis. His remarks were reported on television and in print media. The employee was called out for his behavior on Facebook and responded with controversial statements. Members of the public began to contact MLGW by e-mail and through Facebook expressing concern about the employee.
MLGW opted to move the employee to a position which would not require customer interaction. The employee declined this move and was terminated. His suit alleged the termination constituted race discrimination under the Civil Rights Act of 1996 and Tennessee law.
In defending the termination decision, MLGW argued the employee was terminated based on a “reasonable prediction that [his] racist Facebook posts would interfere with its operations, create safety issues, and violate the trust MLGW shares with its customers for equal service regardless of race.” The court accepted this explanation but highlighted its inherent problems:
“To allow a termination based only on public complaints would seem to open the door to racist motivations for discharge, so long as those racist opinions were held by the public. That is not to say that public complaints are never a valid reason for firing, or that employers should always investigate public complaints to ascertain their bona fides. Instead, the Court finds that the particular circumstances of this case present a dispute as to whether [the employee’s] race was a factor in the decision to demote and then terminate him.”
For these reasons, the court denied MLGW’s motion for summary judgment as to the claims of race discrimination.
That an employee was terminated in response to public pressure by existing or potential customers is thus insufficient to avoid potential liability under employment discrimination laws. The business must also examine the motivation behind the public pressure.
IV. Conduct Which Risks Business Reputation
Most businesses understand the importance and vulnerability of their reputations. As noted in a February 2007 article by Harvard Business Review:
“Firms with strong positive reputations attract better people. They are perceived as providing more value, which often allows them to charge a premium. Their customers are more loyal and buy broader ranges of products and services. Because the market believes that such companies will deliver sustained earnings and future growth, they have higher price-earnings multiples and market values and lower costs of capital. Moreover, in an economy where 70% to 80% of market value comes from intangible assets such as brand equity, intellectual capital, and good will, organizations are especially vulnerable to anything that damages their reputations.”
Reputation and Its Risks, Robert G. Eccles, Scott C. Newquist, and Roland Schatz, Harvard Bus. Review (Feb. 2007). The article continues: “Effectively managing reputational risk begins with recognizing that reputation is a matter of perception.” Id.
The vulnerability of business reputation is even more pronounced in the age of social media and cancel culture. “Corporations now operate in a landscape rife with new threats to their reputations.” Reputation Warfare, Leslie Gaines-Ross, Harvard Bus. Review (Dec. 2010):
“…the rules of engagement have changed. Critics no longer need the resources of an institution. The internet has leveled the playing field between large corporations and individual activists. Although some antagonists are truthful, not all of them are. Often their diatribes are only partly true; sometimes they are entirely, demonstrably false. Attackers are probably not levelheaded. Those who take on large companies single-handedly are almost always highly emotional, if not irrational. And business leaders have no advance notice or time to reflect [emphasis in original].”
Most of the cases which have addressed the risk to business reputation of off-duty conduct have done so only as to perceived threats to reputation. In Panis v. Mission Hills Bank, 60 F.3d 1486 (10th Cir. 1995), for instance, the Tenth Circuit found a bank had a legitimate non-discriminatory reason for discharging a bank employee after her husband was indicted for embezzling funds from another bank. The court accepted the reason tendered by the employer that it feared “a loss of customer confidence” if the employee was somehow linked with her husband’s indicted actions.” Id. at 1491.
In contrast, the court in Lizotte v. Dacotah Bank, 677 F.Supp.2d 1155 (N.D. 2010), was more dismissive of a bank’s claim that the continued employment of an employee after a suicide attempt away from work would cause “potential damage to the bank’s business or reputation in the community.” The court noted that, in the period after the suicide attempt, “[n]o customers pulled their accounts from the bank nor asked to be transferred to another loan officer.” Id. at 1165.
Currently, there is little guidance from the courts as to viable and imminent threats to business reputation, such as that faced by Franklin Templeton in the wake of Ms. Cooper’s off-duty conduct. Considering the importance of business reputation to a company, it is unlikely the courts will be dismissive of such threats.
V. Conduct For Which Employees Should Be Culpable?
To be sure, there are jurisdictions which have historically maintained employees should not be responsible to their employers for off-duty conduct. This position, however, was formulated before the age of the internet and the 24-hour news cycle. In this age, the lines between work time and personal time have become increasingly blurry.
So, have we reached a time when the law should revisit the question of whether employees should bear at least some responsibility for their off-duty conduct? Several new realities support an affirmative answer to this question.
First, anonymity is rare in the age of the internet. The ease with which the FBI was able to identify participants in the January 6th insurrection is evidence of this reality.
Second, the internet and social media make it easy to learn the identity of a person’s employer. Employee biographies are posted on company websites. Employees list their employers on LinkedIn and Facebook.
Third, there are fewer and fewer activities which are safe from the eyes and ears of social media. Any activity in a public area is subject to being photographed or recorded and posted on social media. Even events in the home can find there way on to social media through photographs or recordings by family members or friends.
Fourth, social media can be infectious for both posters and readers alike. The lure of attention can result in questionable posts by employees and vitriolic responses by readers. In a world where attention is the primary aim, rationality and respect are often no where to be found.
Fifth, the woke movement or culture is very active on social media. Woke is a term that refers to awareness of issues that concern social and racial justice. Many businesses now practice woke capitalism to appeal to the woke movement. Such businesses are especially vulnerable to off-duty conduct which conflicts with their advertising and public messaging.
Sixth, cancel culture has become a weapon of choice for many on social media. Social media posters are all too willing to pressure a company to terminate and employee for controversial off-duty conduct. This pressure can be in the form of encouraging others to boycott the company, cease doing business with the company, or branding the company as an aider or abettor of the employee’s controversial off-duty conduct.
Finally, media reports of employees being terminated for off-duty conduct are now quite common. Even before the stories of Ms. Cooper and Ms. Snyder there was the story of Juli Briskman. In 2018, Ms. Briskman was photographed on her bicycle giving President Trump’s motorcade the middle finger. The photo was shared on social media and quickly received national attention. When her employer learned of the incident, Ms. Briskman was terminated.
Many well-informed individuals are already aware of these realities. When an employee engages in controversial off-duty conduct, therefore, it is legitimate to ask whether the employee knew or should have known of the risk to the employer’s business reputation. In this regard, it can certainly be argued that the higher the employee’s position, the greater care which must be exercised by the employee for the employer’s business reputation.
How the question of employee culpability for off-duty conduct will play in the courts is as yet an unanswered question. In today’s climate, courts will inevitably be presented with this question.
VI. Appropriate Remedial Action
Even if an employer is justified in responding to off-duty conduct by employee, many courts will likely scrutinize whether the actual response was appropriate. In this regard, they may ask several questions: (a) Was a less severe action available under the circumstances? (b) Was the response prohibited by law, as with termination under Colorado law? (c) Was the employer’s response rushed and ill-informed? (d) Was the response consistent with other responses by the employer to similar off duty conduct?
These questions, in fact, are raised by the allegations in the suits brought by Ms. Cooper and Ms. Snyder. Ms. Cooper alleges a former member of Franklin Templeton’s Board of Directors was hired despite a criminal record stemming from an assault of his wife which was covered in the media. Although unsatisfactory answers to these questions may not necessarily be determinative of their claims, they may affect the credibility of the employers’ defenses to such claims.
VII. Risk Mitigation
As outlined above, off-duty conduct by an employee can present two risks for a business. One risk is the potential damage to the business’ reputation. If the business is engaged in woke capitalism, the damage can be particularly severe.
The other risk is litigation by the employee challenging the business’ response to the off-duty conduct. Whether the lawsuits by Ms. Cooper and Ms. Snyder have any merit has yet to be determined. In the meantime, the costs of defense are undoubtedly substantial.
As with on-duty conduct, mitigation of the risks of off-duty conduct entails written policies, training, diligent and equal enforcement consistent with the laws of the applicable jurisdiction, as to which consultation with legal counsel is always recommended. Although no business should undertake to police off-duty conduct by employees, every business should take steps to (a) educate employees as to the importance of business reputation, (b) warn employees to avoid implicating the employer in off-duty conduct, and (c) inform employees of the potential consequences of off-duty conduct which imperils the business.
Robert G. Chadwick, Jr. frequently speaks to employers and non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at email@example.com.