Social Media and the Workplace

  • March 19, 2015

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These days, social media is everywhere. The options are truly limitless. While platforms such as Facebook have been around for more than a decade, the law on the matter is just beginning to catch up. Employers must be aware of the developing legal landscape surrounding new technologies, especially as they relate to social media.

Numerous concerns and red flags should be considered before using social media for various purposes. For example, by now it is common knowledge that many employers will look to social media to learn whatever they can about an employee or a potential job candidate. While many people have realized this and, in turn, have updated their privacy settings accordingly, many haven’t caught on and have very inappropriate information on social media sites for all to see which could end up costing them a job. On the other hand, even though many people have set their social media pages to “private,” many employers still want to know what is on these mostly public forums. While this is tempting and may be a great source of information, business owners need to realize that they could face severe penalties if they pursue access to these social media pages too aggressively.

In California, “an employer shall not require or request an employee or applicant to: (1) disclose a username or password for the purpose of accessing personal social media; (2) access personal social media in the presence of the employer; or (3) divulge any personal social media” (with limited exceptions).  Cal Labor Code §980.

Similarly, in Nevada, “it is unlawful for any employer to (1) directly or indirectly, require, request, suggest or cause any employee or prospective employee to disclose the user name, password or any other information that provides access to his or her personal social media account; or (2) discharge, discipline, discriminate against in any manner or deny employment or promotion to, or threaten to take any such action against any employee or prospective employee who refuses, declines or fails to disclose the user name, password or any other information that provides access to his or her personal social media account.”  NRS §613.135

While some employers may believe that social media portrays a more real picture of their current employee or applicant for employment, both California and Nevada have drawn a line that an employer must not cross. This is just one example of how social media can affect businesses. Employers need to realize that social media offers great opportunities for advertisement and branding, but also creates a number of traps that can hurt businesses.  It is important for every business to take the continually evolving legal landscape into consideration when writing their social media policies into marketing plans and employee handbooks.

 

Absolute Privilege in Commenting to the Media About Pending Litigation

  • March 19, 2015

In litigation, normally any statements made during the litigation process are considered to be absolutely privileged. That means such statements are not actionable as libel or slander (often referred to as defamation).

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However, what if a litigant comments to a newspaper (or other media outlet) about the pending litigation or another party?

The Nevada Supreme Court recently held in Jacobs v. Adelson (325 P.3rd 1282, 130 Nev. Adv. Op. #44, May 2014) that a litigant’s comments to a newspaper about another party in the case are not absolutely privileged. The court allowed a claim for defamation to proceed against the party making statements to a newspaper that could be considered false or malicious.

The court adopted the majority rule that the absolute privilege does not apply to a “mere observer” (the newspaper). The privilege is only in place to protect and encourage free flowing communication during the litigation. The court distinguished between “bona fide litigation activities and a public relations campaign.”

The case suggests that comments made in social media are also not protected as privileged statements. Social media may be the ultimate “observer” of our day. So, be careful what you say or post.

Asset Protection, Common Misconceptions and the Bucket Theory

  • March 19, 2015

It is quite common for clients to tell us that they thought their standard family revocable grantor trust would serve to protect assets from creditors. This is a very common misconception. Your standard revocable family trust does not in fact provide any asset protection. There are certain types of trusts that can provide asset protection, such as Nevada irrevocable asset protection trusts. However, it is not always necessary to utilize these very advanced estate planning techniques for the average person to protect assets from creditors.

When seeking to protect assets we seek to achieve two goals. The first is to separate your business assets from your personal assets. The second is to separate your business assets from other business assets. For example, if you own a primary residence and two office buildings, your first consideration might be putting the office buildings into an entity (LLC, Series LLC, Corporation or the like) and removing them from being titled under your individual name. The second consideration would be to separate the assets from each other by putting each office building into separate entities.

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Why do we recommend this type of structure? Because if everything is in your individual name and one of the tenants sues for a slip and fall, and obtains a judgment against you, it will be a personal judgment and your personal assets may be subject to that judgment, including your home. If all of your assets are in your name, you have created one big bucket of aggregated value for a judgment creditor to dip into.  However, if the business assets are held in an entity structure, you are starting to create multiple buckets which hold fewer assets and less value. The tenant, in this case will be limited to seeking a judgment against the business at which s/he fell and recover only against its assets, which will no longer include your home. Further, if we have taken the extra step of separating the business assets from each other, then we are again creating more buckets and minimizing the value that is available for satisfaction of the judgment in each bucket.

Every client’s needs, level of risk and level of risk tolerance are different. Additionally there may be tax and other considerations when looking at entity structures. Corporate formalities and relevant laws must be adhered to in any entity structure to maintain the protections they can afford. All of these issues should be discussed with your legal counsel and CPA before forming new entities and moving assets.