In the wake of actions taken by the National Labor Relations Board in 2012, employers face a Hobson’s choice between taking advantage of longstanding protections against Title VII litigation and violating Section 7 of the National Labor Relations Act.

It has become standard practice for employers to create and maintain robust internal reporting procedures and policies in order to handle employee complaints under Title VII. In the wake of two seminal U.S. Supreme Court sexual harassment decisions in the late 1990s establishing a new employer affirmative defense (Faragher v. City of Boca Raton, 524 U.S. 775 [1998], and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 [1998]), employers routinely began to incorporate such reporting requirements in employee handbooks, codes of conduct, and social media policies. One major component of the affirmative defense would shield an employer from liability if the employer can show that it had a readily accessible and effective policy for reporting and resolving complaints of sexual harassment available to its employees, and that the employee unreasonably failed to avail himself or herself of the employer’s resolution process.

However, more recent actions by the NLRB have called these policies into question.

On February 29, 2012, the NLRB issued a complaint against Hyatt Hotels Corporation. The complaint alleges that Hyatt’s corporate-wide Code of Business Conduct and Ethics is overly broad and discriminatory and, as such, violates employees’ National Labor Relations Act rights to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection

Specifically, the complaint alleges that requiring employees to report “any known or suspected violations of this Code, including any violation of the laws, rules, regulations, or policies that apply to Hyatt” violates the NLRA. This case has not yet been litigated, but the issuance of the complaint reveals the general counsel’s view that such a policy is unlawful.

In addition, on May 30, 2012, the NLRB’s acting general counsel (AGC) issued the third in a series of reports on cases involving social media policies. The AGC analyzed seven employer policies relating to social media, including a social media policy that encouraged employees to resolve concerns about work by speaking with co-workers, supervisors, or managers, rather than using social media or other online forums. Although the AGC recognized that “an employer may reasonably suggest that employees try to work out concerns over working conditions through internal procedures,” the AGC determined that the rule would have the probable effect of precluding or inhibiting employees from seeking redress through alternative forums—a protected activity under the NLRA.

The recent Hyatt complaint and the AGC’s report on social media beg the question: Can an employer craft a policy that contains internal reporting procedures that will allow an employer to successfully invoke the Faragher-Ellerth defense without running afoul of the protections afforded by the NLRA?

Specifically, employers may want to:

  • Ensure that their social media policies do not proscribe the use of social media to discuss or attempt to resolve concerns about working conditions;
  • Revise their social media policies and/or non-discrimination/non-harassment policies to emphasize that, if an employee is seeking prompt remedial action for alleged harassment, discrimination, and/or retaliation, he/she is encouraged to utilize the employer’s internal mechanisms for reporting such complaints;
  • Revise their social media policies and/or non-discrimination/non-harassment policies to state that, should harassment or discrimination complaints come to the attention of management through any source—including social media—the company will respond promptly as if the company had learned of such complaints through the company’s internal reporting procedures;
  • Advise company supervisors that they should be extremely cautious about “friending” or engaging in social media connections with non-management employees;
  • Update their internal training and management guidelines to advise supervisors that if a supervisor has “friended” a subordinate, he/she has an obligation to report to Human Resources any complaints or evidence of violations of workplace non-discrimination and non-harassment policies that the supervisor learns of through social media; and
  • Update their management training on workplace harassment, discrimination, and retaliation to note social media as a source of information and to remind supervisors of their obligation to immediately report complaints of, or information about, possible harassment, discrimination, and/or retaliation flowing from social media.

In sum, employers should ensure that, in the process of modifying their social media policies to address the Board’s Section 7 concerns, they do not weaken existing internal policies for the reporting of possible discrimination, harassment, and/or retaliation in the workplace and foreclose the options not only of prompt remediation but also of the assertion of the important and valuable Faragher/Ellerth defense.

Doreen S. Davis is co-chair of the traditional labor practice group at Morgan, Lewis & Bockius. She splits her time between the firm’s Philadelphia and New York offices and can be reached at [email protected]. Ann Marie Painter is a partner in the firm’s labor and employment practice group in Dallas and leads Morgan Lewis’s firm-wide initiative on “Web 2.0” issues in the workplace. She can be reached at [email protected].