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International Labor and Employment Law

New Law Imposes Additional Requirements on NGOs Operating in China

flag for ChinaPosted in China

Until recently, there have been few formal regulations regarding the operation of foreign non-governmental organizations (NGOs) in China. While the Chinese government has expressed skepticism and, at times, hostility toward foreign NGOs, many NGOs – including many prominent U.S. based organizations – currently operate in China. Based on new legislation in China, however, the status of the more than 7,000 foreign NGOs operating in China – in addition to many other organizations wanting to expand into the country – now remains in question.

In late April 2016, the People’s Republic of China passed the Foreign Non-Governmental Organizations Management Law (the “Foreign NGO Law”), which provides considerable restrictions on the operations of NGOs in China. This article highlights a few of the key changes that NGOs should be aware of in light of the Foreign NGO Law, which will take effect on January 1, 2017.

NGOs Required to Register:

Under the Foreign NGO Law, all NGOs currently operating in China – as well as those who wish to operate in China – will be required to register with the government and partner with a Chinese entity. The foreign NGO must register either (1) a representative office if it plans to engage in long-term activities in China, or (2) a temporary event or activity in China. In either case, such registrations will be subject to review and approval by the local police department and Public Security Bureau (PSB).

Previously, foreign NGOs were overseen not by the PSB, but by the Ministry of Civil Affairs. The Ministry is considered by many to be less powerful within the government than the PSB, so this change may indicate that NGO registration is being taken more seriously by the Chinese government.

Eligibility to Register:

Under the new law, foreign NGOs that have a political or religious background are not permitted to register. Entities that have expressed criticism of the Chinese government may also be subjected to heightened scrutiny. Similarly, it is anticipated that NGOs focused on advocacy or preparatory work will be subject to a high level of scrutiny before registration.

The PSB will look to the NGO’s history when determining whether it should be permitted to register. A foreign NGO will be expected to have operated successfully for at least two years in its home country before attempting to register in China.

Requirements After Registration:

After the NGO has been accepted for registration by the PSB, the NGO must apply to another government department to obtain a “supervisor” for the work. The other departments (e.g., Health and Education) typically are controlled by the PSB, and may be reluctant to agree to supervise the work as doing so puts the other department at risk of incurring the wrath of the PSB.

Once registered, the foreign NGOs are not permitted to engage in fundraising or political activity. If the NGO is suspected of activity viewed as harmful to the Chinese government –including “spreading rumors” or obtaining state secrets – it may be shut down and penalized by the government, including by confiscation of properties or income, warnings, and potentially criminal detention of employees.

Penalties for Failing to Register:

An unregistered foreign NGO may not engage in any activity in China directly or indirectly, and may not authorize or fund any Chinese entity or individual to engage in activity on behalf of the unregistered NGO. If an entity violates the law by engaging in activity in China without having registered, the entity and those acting on its behalf may be subjected to penalties including: confiscation of illegal properties or income, warnings, and/or criminal detention up to 10 days.

More Information To Come:

Implementing rules, which may provide more guidance regarding enforcement, may be released by the State Council of the Ministry of Public Security to supplement the Foreign NGO law between now and the effective date of January 1, 2017. We will provide more information on this topic as it becomes available.

German Labor Court Allows Review of Employee’s Browsing History

flag for European Unionflag for GermanyPosted in European Union, Germany, Privacy, Terminations

European courts continue to clarify the right of employers to review their employees’ emails. As we discussed previously, the European Court of Human Rights and the National Labor Relations Board of the U.S. have recognized that employers have the right to monitor their employees’ internet communications in order to ensure productivity during work. (To review the holdings by the ECHR and NLRB, please click here and here, respectively.)

Shortly after the ECHR opinion, the German Regional Labor Court in Berlin-Brandenburg held that an employer was entitled to check an employee’s internet use without consent and that the employee’s excessive personal use of the internet during company time justified immediate termination. In the case, the employee had a work computer that, according to company policy, was only allowed to be used for work-related purposes. The employer was told that the employee often used his computer for non-work activities, such as surfing the internet. The employer first checked and saw that the employee’s volume of data for his internet usage was surprisingly high, and then decided to actively monitor the employee’s internet use for 30 days. Over that month, which would constitute approximately 160 working hours, the employee logged almost 40 hours of private internet usage. The employer immediately terminated the employee for good cause. The employee challenged the termination on the grounds that his browsing history could not be monitored without consent, and that therefore the browsing history should be excluded from trial. The Regional Labor Court ruled for the employer on each claim. The court held that:

  1. The employee’s actions were a valid reason for an immediate good cause termination.
  2. Under the Federal Data Protection Act, the employer was allowed to gather the information from the employee’s computer even without consent, and the browsing history was therefore admissible. The court held that data can be gathered when it relates to the working relationship, and that consent was not necessary because it would not have altered the nature of the review and there was no other way for the employer to monitor this misuse of company time.
  3. Finally, the court ruled that the employer was not a service provider under the more stringent German Telecommunications Act. This is important because it allowed the company to access the data following only the less restrictive provisions of the Data Protection Act.

Notably, the employee has appealed this decision to the national German labor court, which may decide whether employers are service providers under the stricter Telecommunications Act. This would limit the ability of German employers to monitor internet usage.

The decision is consistent with the decision of the ECHR in Barbulescu: that employers are allowed to monitor employee use of work computers to ensure productivity during working-hours. The decision also affirms prior German labor court rulings that have held that extensive unauthorized private use of the internet can justify termination. Employers should be aware that this case is currently under review, and that the national court’s decision may impose stricter monitoring and consent requirements on employers.

However, the decision illustrates a promising uniformity across jurisdictions. Namely, there is a growing acceptance of the right of employers to monitor employees’ use of company computers when used to ensure productivity, provided that the company’s policies and rules clearly detail the employer’s right to monitor internet usage on company equipment.

Trade Secrets Directive

flag for European UnionPosted in European Union, Whistleblowing

The protection afforded to trade secrets is disparate across the EU. In order to protect trade secrets as potential drivers for economic growth and jobs and to create a level-playing field within Europe, the European Parliament has now approved the Trade Secrets Directive.

This Directive aims to provide a minimum, uniform level of protection in respect of undisclosed know-how and business information (trade secrets) against unlawful acquisition, use and disclosure. The intent is for this protection work in parallel with the existing uniform EU law protecting intellectual property.

The Directive provides a minimum standard framework, with common definitions, procedures and sanctions. Higher levels of protection are permitted. Accordingly, countries which already enjoy higher levels of protection (e.g. UK and Germany) will not necessarily need to take any steps to implement the requirements. Nonetheless, decisions of the ECJ interpreting the Directive may well have a bearing on the existing national law of Member States in relation to trade secrets.

The following is a list of the notable aspects of the Directive:

Recitals 27(a) – Post termination restrictions

There are no requirements to harmonise the laws in relation to post-termination restrictions, including non-compete clauses.

Article 1.2a – Subject matter and scope

The Directive does not seek to limit an employee’s use of their experience and skills honestly acquired through the normal course of their employment. This means that what amounts to a trade secret must be above and beyond something that is mere skill and experience. Additional restrictions cannot be put on employees to reduce their mobility because of the Directive.

Article 2 – Definition of “trade secret”

Under the Directive, a “trade secret” is information that (i) “is secret in the sense that it is not….generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (ii) has “commercial value because it is secret”; and (iii) “has been subject to reasonable steps under the circumstances, by the person in control of the information, to keep it secret” (emphasis added).

This broad definition reflects the wording of article 39(2) of international TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights), an agreement administered by the World Trade Organisation. It is also similar to the definition of trade secrets under the U.S. Uniform Trade Secrets Act.

This will be a definition that is ripe for judicial interpretation by the ECJ, especially those parts emphasised in italics.

Article 4(b) – Exception for whistleblowers

One exception to the general prohibition against disclosing trade secrets is for whistleblowers. Article 4(b) explicitly permits the disclosure of trade secrets by whistleblowers, where such disclosure involves raising “misconduct, wrongdoing or illegal activity, provided that the [whistleblower] acted for the purpose of protecting the general public interest”. We anticipate that the scope of this exception will be an area of controversy.

Article 9 – Provisional and precautionary measures

This gives judicial authorities the power to take certain interim actions and precautionary measures against an alleged infringer before a decision has been made. These would include: the cessation or prohibition of the use or disclosure of the trade secret on a provisional basis; a prohibition on producing, offering or placing on the market or using infringing goods or importing or exporting infringing goods; and seizing or delivering up suspected infringing goods. The Article is silent on other interim measures that judicial authorities may have the power to do e.g. search orders, freezing orders and pre-action disclosure.

Article 11 – Injunction and corrective measures

Once the case has been decided, the Directive gives judicial authorities to  grant final remedies in addition to or as an alternative to an award of damages, such as orders prohibiting the use or disclosure of the trade secret; prohibiting the production, offering or placing on the market or use of the infringing goods, or importing or exporting or storing infringing goods; adopting appropriate corrective measures with regard to the infringing goods; and destroying or delivering up of relevant documents, objects, materials, electronic files. These remedies will be familiar to UK lawyers.

Article 13 – Damages

This gives judicial authorities the power to award damages for misuse of trade secrets. Interestingly, the legislation expressly provides Member States with the option of limiting the liability for damages of employees where the misuse was unintentional.

Next Steps

The European Parliament has formally approved the Directive. It will now need to be endorsed by the Council of the European Union, which we expect to occur in May. Member States will then have two years to ensure that the national law is in accordance with the Directive, or implement it.



Further Insights: How the Recent Barbulescu Decision Impacts Employers in Europe and the United States

flag for European Unionflag for United StatesPosted in European Union, Privacy, Terminations, United States

Last month, we blogged about the much discussed ECHR Barbulescu opinion. (To review the implications of the case, please click here.) As a follow up, we wanted to provide further insights to multi-national employers about how this European decision compares to the position in the United States.

Purple Communications, Inc.: the United States’ approach to Email Monitoring

In the U.S., an employee’s freedom of expression, even when using an employer-provided email, has been closely guarded in recent years by the National Labor Relations Board (“NLRB”) under Section 7 of the National Labor Relations Act. Section 7 protects any employee when they engage in “concerted activities for…mutual aid or protection.” The NLRB has made clear that certain company policies that seek to limit social media and electronic communications could infringe on these rights, or “chill” concerted activities, and are therefore prohibited (for a full review of prohibited social media policies, see here, here, or here).

In December 2014, the NLRB encountered a similar policy to the one in Barbulescu. The case, Purple Communications, Inc., asked the Board to decide whether a newly introduced policy that required company electronic systems and equipment to “be used for business purposes only” violated Section 7. The Board held that introducing a blanket prohibition against employees using company electronic systems and equipment for private purposes violated Section 7.  The Board held that introducing such a blanket prohibition would chill the rights of employees to engage in concerted activities. Importantly, this decision was limited to employees who already had access to an employer’s email for business purposes, and noted that employee use can still be subject to “reasonable” restrictions (e.g., prohibiting work-time use of equipment for personal purposes, or sending oversized attachments).  The decision did not address the issue of whether a new policy which imposed a blanket ban on using company electronic systems and equipment would violate Section 7. The Board also noted (similarly to Barbulescu) that employers are permitted to monitor employee use of company electronic systems to ensure productivity during work-time, so long as the monitoring is not used to impede protected activity.  (You can read more analysis about the NLRB’s Purple Communications, Inc. decision here.)

Accordingly, based on Purple Communications and Barbulescu, employers in both the United States and Europe have the right to monitor an employee’s communications on company electronic systems and equipment to ensure that the employee is using work-time productively. However, in order to do so, employers should make it explicit to employees that they may monitor these systems for that purpose as part of their electronic communications and social media policies. A failure to have an express written policy creates a significant risk that any such monitoring would be unlawful: in Barbulescu, the absence of such a policy may well have led to a different decision that would have prohibited the review of personal material; the implication from  Purple Communications and other decisions under the NLRB is that absent a clear policy which sets out the scope and purpose of any monitoring, it will be far more difficult for a company to satisfy the NLRB that the monitoring does not violate Section 7.

Ontario’s Sexual Harassment Protections Passed

flag for CanadaPosted in Canada, Discrimination

Ontario’s Sexual Violence and Harassment Action Plan Act was passed and received Royal Assent on March 8, 2016. The Act will go into effect in six months on September 8, 2016. The Act creates new duties for employers to prevent and investigate sexual harassment in the workplace. To fully review the changes coming in the next six months, see our blog post from last month (here). Employers should be aware of these new requirements and should reach out to counsel to ensure that they are in compliance.

Termination for Offensive Social Media Posts May Be a “Reasonable Response” in the UK

flag for United KingdomPosted in Code of Conducts, Terminations, United Kingdom

The UK Employment Appeal Tribunal (EAT) recently considered two unfair dismissal cases in which an employer terminated an employee for inappropriately posting on personal Twitter or Facebook accounts. In both cases the EAT overturned the tribunal judge’s ruling for the employee; remanding one case for failure to apply the reasonable responses test and declaring the termination in the other case to be a fair and lawful response to the employee’s action.

It is well established in the UK that a dismissal will be deemed unfair unless the employer’s action falls within the “band of reasonable responses.” Simply, for a termination not to be unfair, the tribunal must decide if the action was within the range of reasonable responses that a reasonable employer may have taken in the same situation.

In the first case, Game Retail Limited v. Laws (UKEAT0188/14/DA, 3 November 2014), the employer terminated the employee for making numerous offensive tweets on his personal Twitter account.  The employee, Mr. Laws, was a loss and prevention officer in charge of monitoring fraud at numerous Game stores across the country.  In furtherance of his position, Mr. Laws began to follow a number of these stores on Twitter through his personal Twitter account.  Despite the fact that Mr. Laws did not identify himself as a Game employee, he was aware that many of the Game store managers knew of his role within the company and became followers of his Twitter account.  His account was also publicly available for anyone who chose to follow him on Twitter.

One of the Game store managers reported that Mr. Laws was posting offensive and derogatory tweets about numerous groups including dentists, Newcastle fans, and the disabled. Accordingly, Game dismissed Mr. Laws for gross misconduct.  Mr. Laws alleged unfair dismissal, and the Employment Tribunal concurred.  However the EAT disagreed, ruling the tribunal judge substituted his own views of reasonableness into the reasonable response test.  The EAT also noted the tribunal judge failed to take the public nature of the Twitter account into consideration.  In remanding the case to a new tribunal, the EAT made clear that employees’ right to freedom of expression must be balanced with the employer’s desire to remove or reduce reputational risk from its employees’ social media communications.

In the second case, British Waterways Board v. Smith (UKEATS0014/15/SM, 3 August 2015), Mr. Smith was dismissed for gross misconduct relating to offensive and derogatory Facebook posts about his employer.  British Waterways had a policy prohibiting employees in Mr. Smith’s position from drinking while they were on standby.  It also had a social media policy prohibiting postings which may embarrass the company.  Violating both of those provisions, Mr. Smith posted numerous offensive comments on Facebook ranging from the fact that he was drinking while on standby to his severe distaste for his employer and fellow employees.  British Waterways terminated Mr. Smith two years later upon discovering these Facebook posts.

Similar to Game Retail Limited, the Employment Tribunal found that Mr. Smith had been unfairly dismissed.  However, the EAT overturned the decision finding that the tribunal substituted its own views for the reasonable views of the employer.  The EAT held that British Waterways was clearly within the band of reasonable responses when it decided to terminate Mr. Smith.

These decisions should provide UK employers with some reassurance that terminating an employee for offensive social media postings is not unfair (and therefore lawful), depending on the facts of the case. Indeed, the British Waterways Board decision indicates that termination may still be reasonable despite the offensive postings occurring many years in the past.  The Game Retail Limited decision also demonstrates that an employee does not have to identify herself as a company employee in order for the postings to be considered damaging to the company’s reputation.

UK employers should continue to enact detailed social media policies and effectively communicate these policies to employees. The violation of a sensible social media policy will only enhance the likelihood that a termination decision based on that violation will be found within the band of reasonable responses.

Germany Adopts EU’s Pension Directive, and May Place Burdens on Employers’ Use of Temporary Workers

flag for GermanyPosted in Germany

Pension Law

On December 18, 2015, the German legislature approved a law that adopted the pension provisions of the EU Mobility Directive. The Directive was passed to enhance worker mobility between EU countries by requiring stronger pension protections, yet some EU member countries have yet to adopt the pension provisions of the Directive. The new German law adopts two major provisions for employers:

  1. Pensions will now fully vest in three years instead of five years, and employees can participate in the plan starting at age 21 instead of age 25.
  2. The value of a vested pension for former employees (inactive plan members) must now be adjusted to remain commensurate with the vested rights of active members.

These new requirements make it easier for employees to transfer jobs and move between EU countries by protecting pensions after moving to a job in Germany. However, the law now provides fully vested pensions to employees as young as age 24, and the required adjustments to final-pay pension plans may significantly increase an employer’s pension expenses. The law will go into effect on January 1, 2018.

Temporary Employees

The German cabinet also is considering a law that would provide further protections to temporary employees. The law would make 18 months the maximum length for temporary employment. If the position continues past 18 months, an employment relationship with the hiring business is presumed. While the law would create a bright line at 18 months, the time period is subject to deviations through a collective agreement. The law also would require equal pay for temporary employees after the ninth month, and would prohibit the employment of temporary employees as strike breakers. If approved this year, the law would go into effect on January 1, 2017.

Full Disclosure: An Overview of Global Supply Chain Regulations

flag for United KingdomPosted in Code of Conducts, United Kingdom

You may have read our recent client alert on the UK Modern Slavery Act and Global Supply Chain Transparency, where we highlighted the extraterritorial safeguards against human trafficking and slavery as well as the corresponding implications for US-based employers.

What you may not know, however, is that although the UK Modern Slavery Act is the latest legislative effort to combat human trafficking and related global supply chains concerns, it is actually one of four regulations that have been proposed and/or enacted in recent years, in the wake of the 2010 California Transparency Supply Chains Act (SB 657).

Local governments are becoming increasingly concerned about the practices and reputations of third-parties that source, manufacture, transport and distribute products that are both used and generated by multinational employers.  As such, they are beginning to hold multinational employers accountable not just for their own actions, but also for those of the vendors and contractors they enlist.

In light of these developments, global companies should think critically about the ethical and strategic implications of their internal policies governing supply chain management. Furthermore, when reviewing their internal compliance programs, employers should take careful steps to ensure that the proper controls are in place for assessing, managing and (in some cases) disclosing third-party risks.

A brief overview of the California Transparency Supply Chains Act, as well as the three additional regulations that emerged shortly thereafter can be found below:

California Transparency Supply Chains Act (SB 657)

The California Transparency Supply Chains Act, which was enacted in October 2010 and became effective in January 2012, requires certain employers doing business in California who have annual gross receipts of more than $100 million to disclose on their websites their “efforts to eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale.” Cal. Civ. Code, § 1714.43, subd. (a)(1). The disclosures, which relate to verification, audits, certification, internal accountability, and training, can be posted in the company’s discretion but must be “conspicuous” and “easily understood”. The California Department of Justice released a resource guide outlining best practices for compliance, including model disclosures. Notably, the Act only applies to businesses that identify themselves as a retail seller or manufacturer on their California tax return and it does not technically require companies to enhance their compliance programs and/or supply chain practices.

That being said, the practical implications of the Act and the California DOJ’s emphasis on providing “depth and context” to customers suggests that the disclosure of any global supply chain practices that present risks related to human trafficking and slavery could potentially result in both reputational and economic consequences for the reporting company.

US Executive Order (13627)

Published on September 25, 2012, US Executive Order 13627 requires government contractors to adhere to specific policies set out by the Federal Acquisition Regulation as part of the long-standing zero-tolerance policy in the US “regarding Government employees and contractor personnel engaging in any form of . . .criminal behavior” related to severe forms of “trafficking of persons”.  Human trafficking, which is defined in Section 1, includes “sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained 18 years of age, or the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion, for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.”

The Order requires that contractors and subcontractors maintain a compliance plan “that is appropriate for the size and complexity of the contract or subcontract and the nature and scope of the activities performed, including the risk that the contract or subcontract will involve services or supplies susceptible to trafficking”. Sec. 2 (a)(2)(A)(i) – (iv).  Relevant components of the compliance plan must be posted at the workplace and on the contractor or subcontractor’s website and shall include various components that mirror the general disclosure categories provided in the California Transparency Supply Chains Act (see above). For example, participants must publicize their efforts to maintain an awareness program for employees, a process for employees to report – without fear of retaliation – any activity that is inconsistent with the requirements of the order as well as procedures to prevent subcontractors form engaging in trafficking persons, among others.

Directive 2014/95/EU

On October 22, 2014, the European Parliament enacted Directive 2014/95/EU, which requires that public interest entities (including, e.g., credit institutions, insurance companies and companies that are publically traded on an EU member stock exchange) that have an average of 500 employees report information regarding efforts they are making to manage social, environmental and governance-related issues.  These “sustainability” disclosures include a non-financial statement on policies, outcomes and risks relating to social matters.

Article 1 of the Directive provides that the non-financial statement must provide information “to the extent necessary for an understanding of the [organization]’s development, performance, position and impact of its activity, relating to, as a minimum, environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters, including:

  1. a brief description of the [organization]’s business model;
  2. a description of the policies pursued by the [organization] in relation to those matters, including due diligence processes implemented;
  3. the outcome of those policies;
  4. the principal risks related to those matters linked to the [organization]’s operations including, where relevant and proportionate, its business relationships, products or services which are likely to cause adverse impacts in those areas, and how the [organization] manages those risks; [and]
  5. non-financial key performance indicators relevant to the particular business.”

Due to the similarities between the reporting requirements above and those contained in the Modern Slavery Act, employers should make every effort to ensure full compliance.

Business Transparency on Trafficking and Slavery Act (H.R. 3226)

On July 27, 2015, Representative Carolyn Maloney of New York introduced the Business Transparency on Trafficking and Slavery Act, which would amend the Securities and Exchange Act of 1934 to direct the SEC to promulgate regulations related to human trafficking and child labor. According to the Congressional Research Service, the bill would require “any covered issuer of a registered security to include in its mandatory annual report a disclosure of whether the issuer has taken any measures . . . to identify and address conditions of forced labor, slavery, human trafficking, and the worst forms of child labor within the issuer’s supply chains.”  If enacted, this legislation would provide consumers information on products that are free of child labor, forced labor and human trafficking and also would require public disclosures about the production and purchase of raw materials, goods and finished products that have been tainted in the supply chains. Similar to the California Act, the bill would cover those entities that have annual global receipts in excess of $100 million and disclosures would be required on the issuer’s website through a conspicuous link labeled “Global Supply Chain Transparency”.  As of July 2015, the bill has been referred to the House Committee on Financial Services.  No subsequent action has been taken at this time.

What Multinational Employers Need to Know about Ontario’s Proposed Sexual Harassment Protections

flag for CanadaPosted in Canada, Discrimination

After adopting an action plan to stop sexual violence and harassment in March 2015, Ontario’s legislature is taking steps to pass an act that would create new duties for employers to prevent and investigate sexual harassment in the workplace. If passed, the act would go into effect six months after it is signed.

The act, titled the Sexual Violence and Harassment Action Plan Act (the “Act”), amends Ontario’s Occupational Health and Safety Act to create new affirmative duties for employers to prevent workplace sexual violence and harassment. The Act would expand employers’ duties to:

  • Have a workplace harassment policy or program that includes and defines workplace sexual harassment;
  • Have measures and procedures that allow employees to report incidents of workplace harassment to a person other than their supervisor, if the supervisor is the harasser;
  • Investigate the alleged harassment;
  • Keep the incident or complaint of harassment confidential unless necessary for the purposes of the investigation or corrective action;
  • Inform the complainant and respondent of the results of the investigation;
  • Take corrective measures in light of the investigation;
  • Comply with Occupational Health and Safety inspectors’ requests for an investigation or a report at the employer’s expense.

The Act also provides that reasonable actions taken by an employer or supervisor relating to management of employees does not constitute workplace harassment. In addition to the workplace requirements, the Act includes proposed amendments to curb sexual violence and harassment in universities, colleges, and housing.

Employers operating in both New York and Ontario may recall a group of laws similar to the Act that went into effect in New York earlier this year. The laws, as part of the Women’s Equality Agenda (which you can read more about here) broadened the definition of employer for sexual harassment claims, and, like Ontario’s act, included stronger protections from housing discrimination for victims of domestic violence. However, the Act differs importantly from New York law as it creates an affirmative duty for employers to adopt and enforce sexual harassment policies and investigate complaints, which is not required by either New York or United States federal law (although all employers should have such policies in place).

The Act currently is being considered by the Social Policy committee of Ontario’s legislature. Employers operating in Ontario should be aware that these new requirements may be just around the corner, and should review their policies to ensure that they are in compliance and reach out to counsel with any concerns.

European Court of Human Rights Rules Employers Can Read Employees’ Emails

flag for European UnionPosted in European Union, Privacy, Terminations

Last month, the European Court of Human Rights (“ECHR”), in the case of Barbulescu v. Romania, issued a ruling about the rights of employers to monitor their employees’ online communications, including those via personal email and social media accounts.

The decision has attracted considerable publicity. Many headlines have implied that it gives employers carte blanche to review the private communications of employees. These headlines create a misleading impression. Closer scrutiny of the decision shows that employers must still exercise care before reviewing the communications of their employees, especially communications that are obviously private or which are through private email or social media sites. What the decision held is that although the right to privacy is engaged by an employer’s review of an employee’s private communications, an employee’s rights must be balanced against an employer’s interests in ensuring that their employees are using work time to perform job related tasks.

In this case, a Romanian company reviewed communications to ascertain whether or not their employee, Bogdan Mihai Barbulescu, had been spending too much of his working time engaged in non-work related activities. The ECHR decided that the employer’s legitimate interests in carrying out such a review outweighed the employee’s rights of privacy. As a result, Mr. Barbulescu was unable to rely on the private and personal nature of the material as a shield to prevent his employer from looking at his messages.

Mr. Barbulescu was terminated 2007 for breaching the company rule prohibiting the use of company resources for personal purposes. The employee had set up a Yahoo Messenger account at his employer’s request in order to respond to client inquiries. In July 2007 the company monitored the employee’s Yahoo Messenger account, accessing both his work account and a second personal account, and discovered that the employee had sent multiple messages regarding his health and sex life on company time. Mr. Barbulescu unsuccessfully challenged his termination in Romanian court, and appealed to the ECHR arguing that the company breached his right to privacy under the European Convention on Human Rights and was therefore prohibited from relying upon any of those private and personal communications when deciding to terminate him.

In reaching its decision, the ECHR accepted that Mr. Barbulescu’s rights to respect for his private and family life, his home, and his correspondence under Article 8 of the European Convention on Human Rights were engaged by his employer’s conduct. However, the Article 8 right is not an absolute right.  Accordingly, the ECHR went on to analyze whether the employer’s monitoring of his communications pursuant to workplace rules and regulations had been reasonable in the context of disciplinary proceedings, and whether the Romanian courts had acted appropriately in balancing the employee’s rights against the interests of his employer.

In holding for the company, the ECHR focused on the fact that the company only accessed Mr. Barbulescu’s private communications because it believed that they contained professional communications. Holding that the employer was within its rights to check his messages, the ECHR stated that “it is not unreasonable for an employer to want to verify that the employees are completing their professional tasks during working hours.” Yet, the court limited this possibly broad ruling by holding that in this case the monitoring was “limited in scope and proportionate.” In other words, the decision makes very clear that any monitoring of employee’s private and personal communications must be for a legitimate purpose and be a proportionate means of achieving that purpose. In this case, that meant that any monitoring of employee internet-use was focused on company resources, tied to a company policy, limited in scope, and proportionate.

In practical terms, employers should review their policies in light of this decision to ensure that the policies explicitly provide the right to monitor electronic communications on company devices. Indeed, this decision highlights that having clear policies on electronic communications and social media use is a necessary (although not sufficient) condition of ensuring that any monitoring is lawful.