This article was originally published in the Winter 2011 issue of ICPAS INSIGHT Magazine.
Just how public is your social media-savvy accounting staff?
Every new auditor is told this cautionary tale: Two first-years are out of town for a client audit. After the first day’s fieldwork, they retire to a local watering hole. Well-intentioned first-year A tells well-intentioned first-year B, “Hey, did you get a chance to look over the bank recs? They are unbelievably bad. I have no idea who’s in charge of reviewing them, but they must be incompetent!” From there, fueled by strong spirits and weak judgment, the two accountants spend the next 20 minutes discussing their unfavorable opinions of the client. Unbeknownst to them, the client’s CFO (who they didn’t meet) is sitting at the next table and overhears the entire conversation.
Nowadays, this tale is so dated that trying to share it with Millennial accountants would be futile. The new spin would read more like this: A staff auditor arrives at the client site for fieldwork. After a brief tour of the facility, she prepares to get to work. But first, armed with her smart phone, she tweets (@beancounter), “Client has NO SoBe Cherimoya Punch! Mr. Coffee??? Get real.” To add flavor to her insights, she takes a quick snapshot of the client’s Mr. Coffee machine in the break room (client’s name prominently displayed in the background) and posts it along with the tweet. Her BFF, a cost accountant at a private firm, loves this and posts the text and picture to her Facebook account. One of the BFF’s 578 Facebook friends sees the picture and adds some dynamic video effects and music, and suddenly “Mr. Coffee sings I Hate This Place” is on YouTube and going viral.
Now, those of you who need help interpreting this last paragraph should just stop reading. For the rest of you, this is as likely to happen as the example referencing staff in the bar.
The client’s grandson spends all day running continuous feeds on YouTube, including tracking mentions of grandpa’s business. He thinks that “Mr. Coffee sings I Hate This Place” is the bomb and can’t believe how cool grandpa has suddenly become. Grandson texts mom, sending the video along with “G-pa is way cuul!!” Eventually, someone shows the client (aka grandpa) the video and after a very brief investigation, the culprit is identified. The accounting firm acts swiftly and within its legal bounds (as any employer would) to summarily terminate the staff member in question for causing the organization and the client untold embarrassment and potentially bad public relations.
Seems straightforward enough, right? Not so fast.
Kenneth A. Jenero, Esq., partner in Holland & Knight's Labor, Employment & Benefits Practice Group, leader of the practice group's national Healthcare & Life Sciences Team, and co-leader of the group in the firm's Chicago Office, offers this insight into the legal ramifications: “One area in which social media is rapidly emerging as a major source of litigation is under the National Labor Relations Act (the "NLRA"). Many employers—union and non-union alike—have been hit with unfair labor practice charges filed by employees who were disciplined or discharged for social media communications about the employer's employment policies, supervisors or business practices. In most cases, the communications are considered by the employer to be derogatory, defamatory, disloyal or otherwise inappropriate. Several of the cases involve the use of profanity or highly unflattering comments when describing the employer or its supervisors. To the employer's great surprise and dismay, many of these comments are considered ‘protected activity’ under the NLRA. And the affected employees are entitled to reinstatement to employment with full back pay.”
Perhaps you’re ahead of the curve on social media and have instituted a progressive workplace social media policy. However, the National Labor Review Board’s (NLRB) general counsel has stated that, "Most of the social media policies that we've been presented are very, very overbroad. They say you can't disparage or criticize the company in a n y way on social media, and that is not true under the law."
Jenero explains that, “Examples of overly restrictive rules include those prohibiting the posting or discussion of wages or benefits; ‘gossip’ about the company; ‘disparaging, ‘derogatory,’ ‘inappropriate,’ ‘harmful,’ or ‘untrue’ statements about the employer or its supervisors or managers; disrespectful, rude or offensive conduct; discussions about ‘company business;’ and pictures in any media which depict the company in any way.”
According to Jenero, another growing area of concern in social media is the use of background information gathered during the hiring process. The Equal Employment Opportunity Commission (EEOC) is now focusing on employer use of social media in all types of employment decisions. And, in fact, employers may run the risk of trampling an employee’s rights by using social media as an investigative or monitoring tool.
James F. Hendricks, Of Counsel at SmithAmundsen and member of the Labor & Employment Practice Group there, focuses on assisting management with labor matters before the NLRB. He also defends employers in charges before the EEOC, the US Department of Labor and various state agencies. He puts the social media issue in these terms: “With the explosion of social media websites (Facebook, Twitter, LinkedIn, etc.), both employers and employees need to be alert to the ever-changing landscape of what is and isn't allowable as jeopardizing employment relationships. Employers may not want employees griping or trashing the company about terms of employment, but the NLRB is scrutinizing discipline by employers for employee postings on their individual accounts. There have only been two decisions by administrative law judges on discipline of employees for such postings, one against the employer and one upholding the termination of an employee. Employers need to recognize the issues and be aware of this government’s review of company policies, rules and discipline in the social media arena, particularly nonunion employers who are not aware of the NLRB's jurisdiction.“
One thing everyone agrees on is the rapid growth of social media, for both personal and professional use. Social media is the place to share your “message;” the critical issue is how to manage that message and the people in your organization.
Step carefully through this virtual minefield. Consult your attorney if you have specific questions and embrace the “public” face of your accounting staff; don’t ignore this reality until it’s too late.
Note: Every effort has been made to update pertinent employment information and relevant details since the date of the original publication.