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The guys kick off the week by discussing the lawsuit in Hawaii where an employee posted a defamatory remark about a customer and tried to holdthe employer liable. They also discuss the new anti-discrimination and anti-harassment policy posting requirements for California.
Full Podcast Transcript
NASIR: Welcome to our podcast where we cover business in the news and add our legal twist.
My name is Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: And, today, we are covering… actually, I don’t think we’ve had a case out of Hawaii yet – except maybe that time we covered that surfer that was eaten by a shark.
MATT: We’ve done so many episodes, I don’t even know if that was even… I would believe that that’s something we’ve talked about but I really have no idea.
NASIR: I don’t know. I just made that up. I don’t know if it sounds like I have something in my mouth or not, does it?
MATT: Uh…
NASIR: I have a cough drop in my mouth because I’m still coughing. I’ve been having a cough for like a few weeks but I was having these Halls soothers which are basically just like candy. Apparently, they don’t do anything to the cough. They just soothe your throat which I just thought they didn’t work and I was having them anyway. Apparently, I got the cough suppressant ones now and it’s actually working.
MATT: The point of it is, I guess, if you have been coughing.
NASIR: Yeah, something like that. But I was just picking the one that tasted the best so that was a mistake.
MATT: I was probably all those Red Bulls you had last week.
NASIR: Oh, I’m having trouble giving them away. I’m down to one actually, I think. That’s not bad. I’ve given away two.
MATT: I still have all four so my fridge is going to explode in a week, probably, when they sit in there.
NASIR: Next lawsuit.
MATT: See, this Hawaii thing – well, not Hawaii thing – this happened in Hawaii and I guess the end result was there was a motion for summary judgment granted and it’s specific to Hawaii obviously but we’ll talk about the general end of things for employers to look out for in this but let me get to the facts. This was at a Hertz Rent-a-Car and there was a customer that showed up. I’m not sure what the capacity was of their interaction with the business but basically what happened was this person left and one of the employees for Hertz I guess knew who this person was and went on their Facebook page and started writing stuff about them that – I’m not going to say what it was but it wasn’t – well, I’m not going to say what it was partially because I don’t know what some of this stuff means.
NASIR: Yeah.
MATT: And, partially, because it’s not appropriate for this podcast. Anyway, they wrote these comments on there which apparently the customer was not happy with. That customer went and then complained to Hertz Rent-a-Car. I guess they fired this employee and I think a couple of other employees as well. The customer then turned around and sued Hertz for negligent supervision, negligent retention, and negligent training because this employee apparently – or not apparently – this employee wrote these things on this customer’s Facebook page while they were an employee or while they were working for Hertz. We’ll get to the reasons why the result ended up being what it was but, long story short, there’s a motion for summary judgment that Hertz filed and it was granted meaning that the case was then dismissed and, I mean, in the easiest terms so we can put it for these purposes.
NASIR: He mentioned the actual post. I mean, I read this maybe at least two times now and I still don’t understand what exactly they were saying. Somehow there was some defamatory statements in there and what’s interesting, in order for a statement to be defamatory, it needs to be understood to somehow be damaging or defaming in itself, right? So, apparently, someone understood it to be defamatory. I would have read and I would be like, “I have no idea what’s going on,” mostly because it’s just – I don’t know – it’s just not even English or slang or something.
MATT: It’s Hawaiian I think is the language.
NASIR: I don’t think so. In fact, I was going to try to ask what this means but I have no idea if this word is a word or not but “faka”?
MATT: I think it’s like “fake.”
NASIR: Like “faker”? Faka?
MATT: Yeah, faker.
NASIR: Okay. Run the faka over – that’s basically how it is.
MATT: I think basically, if I had to guess, it is this person saying this person is fake. They act like they have money and they don’t. I think that’s what I’m getting.
NASIR: I think you’re right because there is a “it’s too bad his CC declines all the time” and I think that may be the basis for the defamatory comment.
MATT: Yeah. Well, that and there’s one part here, I mean, he insinuates that he’s going to hit him with his car. That probably wasn’t great either.
NASIR: Yeah, that’s true. They had this employee that obviously does something really dumb. I mean, he doesn’t seem to be the best employee anyway but, just to judge here a little bit based upon the writing. And so, why doesn’t this Hertz customer just sue the employee?
MATT: Well, it’s obvious. I’m assuming the employee probably doesn’t have any money.
NASIR: Which is ironic because that’s what he or she – it’s a she, right?
MATT: The plaintiff’s Maurice. I would assume that’s a guy.
NASIR: They did sue the employees it looks like.
MATT: Yeah, it looks like it is Hertz and its employees – it lists one, two, three, four, five.
NASIR: So, I guess my question is why did it include Hertz and, of course, Matt answers the question. You know, if you’re going to have to go through a lawsuit, some clients want to sue on principle which, of course, is the most expensive. But, if you’re going to sue, you’re going to want to be able to recover and being able to recover a judgment against an assuming low-level employee is going to be difficult. It doesn’t matter how big or how small the judgment, it’s just going to be more difficult. If you’re going to be able to get Hertz Corporation on the hook – which is, of course, a large business – then it’s going to be easier.
Just the takeaway from that from business owners is that you are going to be a target as you grow. It’s just the natural course of things. A lot of businesses, when they do grow rapidly, end up going through these growing pains because, all of a sudden, they have a target on their back and they have to deal with legal issues that they never would have had to deal with before – everything from the employees or vendors or customers or what-have-you. You know, it’s a real struggle for rapid-growing companies.
MATT: I’ll point out one thing, too. We’re specifically talking about the claims against Hertz. So, all I have here is this order granting motion for summary judgment. There might have been other – and the claims that got dismissed were three different forms of negligent claims against Hertz. So, if there was some sort of defamation claim or something like that, that might have been as well but that would have been against the individuals and not the company.
NASIR: And that might be continuing so Hertz is out of the lawsuit.
MATT: Right.
NASIR: We may have talked before about employers being responsible for employees, right? And that’s the general nature. If your employees are working within the scope of their employment, you’re responsible and you’re generally liable for what they do. That’s why, a lot of times, you want your employees to be classified as independent contractor correctly because, generally, an independent contractor relationship as the person that’s paying them to provide that service is not generally responsible. Usually, it’s the independent contractor that’s responsible for their actions.
Now, to add a caveat to that, the employer is responsible for the employee’s actions within their scope for things that are not intentional acts. If, obviously, your employee commits a crime – theft, murder, or whatever – you can’t imagine the employer would be responsible for that, and they’re not. But, of course, if the employer orders them to steal something or kill somebody, then that’s a different issue, of course. But, here, we’re talking about someone that went on their Facebook page and put up a Facebook post that may have been defamatory or harassing or what-have-you. What’s the legal theory and how can the employer be responsible there?
MATT: I think what would help in answering that question is just to run through kind of the timeline real quick. The employee posted on this person’s Facebook wall. The customer came in the next day, made the company aware of this. At that point, they immediately terminated or these employees all resigned. The company itself did not know that this employee had posted these things on the customer’s Facebook wall and what it kind of boils down to is the duty of care and whether they should have known that this person posted something on there and whether they were negligent and supervising them or training them in doing so. That’s really what it comes down to. The reason I wanted to tell those facts is I think that plays an important piece in here because how Hertz handled this I think is about as well as you can handle it.
NASIR: Yeah, and the whole negligent supervision, it’s almost a throwaway – I mean, in the sense that it’s very hard to really prove that. The plaintiffs in this action were very clever. They basically hung their hats so to speak on the fact that this employee had a previous post that was – I don’t know how you describe it – “not proper” and so they argue, “Well, that should have given notice to the employer that this employee is susceptible to that kind of action and so, therefore, they needed to correct it and they didn’t do that.” But what was that previous post? It was something weird like they were making fun of someone running into a tree.
MATT: A tree, yeah.
NASIR: Which is funny. I mean, just to be fair, if someone runs into a tree, you may want to put that in your Facebook status so that may be understandable. But how that leads to this other post and how it’s foreseeable that this other post is going to have defamatory comments in there or harassing comments, it’s a little bit of a leap, right? I mean, I don’t think that’s foreseeable.
MATT: I think the only thing you can say about that from the company’s perspective is, you know, if you’re going to run into a tree, that probably “Hertz.”
NASIR: Just to explain to everyone, it’s the name of the company is Hertz.
MATT: I’ve said it a bunch of times.
NASIR: And, when you run into something, it Hertz.
MATT: But, yeah, I mean as the employer, are you going to have to monitor every single thing that every one of your employees posts on all of their social media or on the internet? It’s not possible. You know, maybe the plaintiff would argue, “Well, they shouldn’t be able to access the internet or social media during work,” but they could have easily just done it on a break or something, I suppose.
NASIR: Yeah.
MATT: Maybe that changes the facts or changes the result but the correlation is not that great between what they’d done previously and this.
NASIR: No, not at all, and the person that this post was about, the plaintiffs also argued that the CEO of Hertz had one time, in some letter – I don’t know if it was a public letter or what – basically said that they’re going to try and train their employees to adhere to their policies or something to that effect. I don’t remember but, as mundane as that is, they reference that as, “See, they had a duty to train and they failed that duty. They didn’t train them well enough to know what to post.” Again, can you imagine that a simple statement like that is used against you to now all of a sudden you’re responsible for your employees’ personal Facebook page of them making fun of one of your customers. I mean, don’t get me wrong, that employee should be reprimanded. But whether the employer should be responsible for that, I mean, you’ve got to draw the line somewhere. And so, obviously, I’m suggesting this is the right decision.
MATT: Yeah, I don’t see how you could find that was negligent training. They even had a handbook, too.
NASIR: Yeah, Hertz had a handbook that addressed safeguarding customer information. The court also, again, rightfully pointed out that an employer is not strictly liable – strictly liable meaning like a speeding ticket strictly liable – it doesn’t matter if you didn’t mean to go past a speed limit, if you’re speeding, you’re liable. Same with this case. Just because the employee doesn’t mean you’re automatically liable for anything.
MATT: Yeah, and they reference what I said a little bit ago that there’s no way they can oversee every single thing or every single time an employee steps out of line on something so that’s what it boils down to. I mean, go back to what I said before when we discussed the facts in this, they handled it about as well as I think that you can in this situation.
NASIR: Absolutely. I mean, it’s a big company. That handbook thing is actually good to note because having those policies, it’s strange because it’s made fun of a lot in pop culture. You have all these rules in the handbook and HR and HR gets a pretty bad name but there’s a rhyme and reason for all these different laws and also these rules and regulations that are actually put into writing in the handbook and though lawyers would prefer that these rules are followed in the handbook but it’s also more important that they’re also put in writing because then you can reference it. In fact, you know, we were going to talk about, in California, they’re having new requirements in April for anti-harassment policies. In April, you have anti-harassment policies that are required now to be put into handbooks in California, right?
MATT: Yeah. Well, let’s just jump into that right now. Starting April 1st of this year, a couple weeks after this episode will come out, employers in California with five employees or more have to put this anti-harassment, anti-discrimination policy in place in writing to its employees. The kind of the details of this, the first thing, it has to be in writing. It has to list out all the protected classes under California law that would be protected – obviously, race, religion, nationality, sex, gender, age, sexual orientation – all of those. There’s different ways which they can deliver the policy. You mentioned the handbook, that would be one way to go about it.
NASIR: Yeah, that’s probably the easiest because most employers with five or more have – or they should have – a handbook already.
MATT: You know, one thing I picked up on that was pretty interesting and I don’t know if all employers will notice this – this policy has to be written out and given to people in English but any additional language that is spoken by at least ten percent of the workforce, it has to be in that language as well which, you know, especially in California, obviously, that’s a very diverse state. Southern California, I mean, I’m here in San Diego, there’s quite a few people here that speak Spanish. It’s something you might not think about necessarily especially if, while they’re working, a lot of the employees speak English but maybe there’s ten percent that don’t.
NASIR: Yeah, and that actually works well with some other statutes in California where, if you negotiate a contract within certain languages, including Spanish among many other popular languages in California other than English, the contracts actually have to be translated in those languages as well if they’re negotiated that way. It also does say “primarily spoken” so just because ten percent of your workforce knows a second language may not necessarily mean that that’s the case but if you’re kind of susceptible to that kind of issue, it’s something you need to focus on.
MATT: Yeah, I would think it would mean if they can’t understand it in English and can only understand another language, I would think that would be the case. But, yeah, in addition to that, there’s a whole list of items that need to be included in this – things about management can’t retaliate and this applies to independent contractors, this applies to interns that they have to give it to.
NASIR: Yeah.
MATT: I think the big thing with this is, you know, for maybe smaller employers or smaller businesses that might not have put this in writing in the past, I mean, obviously, they have to do it now. That’s the big thing and I think that, obviously, with these bigger companies with the handbooks, I would hope or at least think that a lot of the handbooks already have these policies in place.
NASIR: Yeah, I would hope so and, again, a lot of HR companies or third-party sources will be able to have updated handbooks for your state – whether it’s law firms or others – and it’s very accessible nowadays. There’s really no excuse anymore.
MATT: Right.
NASIR: All righty, Hawaii. Have you ever been to Hawaii?
MATT: No, I have not
NASIR: Neither have I. That’s strange, you would think.
MATT: It seems close to here.
NASIR: It’s like four or five hours, right?
MATT: Yeah, pretty good length flight from about as close as you can get. Probably LA is a little bit closer.
NASIR: Very good. All right. Well, thanks for joining us.
MATT: Yeah, keep it sound and keep it smart.
