 A significant number, if not the majority, of employees in the United States use company owned computers to access the Internet for personal purposes. With the recent controversy surrounding the misuse of Pentagon computers used to access, and in some cases purchase, child pornography, there is a renewed interest in how employers should regulate workplace Internet Access and their potential liability for failure to prevent their more egregious misuse.
1. The Need for Clear Internet Use Policies
It is essential for employers to have clearly spelled out, and clearly communicated, policies regarding Internet Use and the right of the employer to monitor such use. Prohibited uses need to be specifically articulated, including those that may appear obvious to management. No matter who the employer, the policy needs to provide notice of the employer's right to monitor and audit an employee's use of the Internet and make clear that there is no expectation of privacy in an employee’s use of the Internet when doing so through a company owned computer issued for business purposes.
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 Maybe I should have titled this: How I Learned to Stop Worrying and Love My Exorbitant Expert Fees.
Because as much as employers like to complain about the cost of employment litigation, including the often substantial expert fees, those very same expert fees might just be the ticket to discouraging future employment lawsuits.
Or at least that’s one way to interpret the California appellate court’s opinion in Holman v. Altana Pharma Us, Inc., (June 30, 2010, Cal. App. Ct.).
But to understand how this works, it helps to take a step back for a minute and look at how California’s legislature and courts have altered the fee-shifting landscape in two potentially-conflicting ways.
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It is not often a case hits upon two of our favorite topics: Trade secrets and pie. But when it does, mmmmmmmm, it’s good to be an attorney.
And for this reason, we are grateful to Justice Rushing who provided us with a little of both in his recent opinion in Silvaco Data Systems v. Intel Corp. (Calif 6th App. Dist., April 29, 2010), Case No. H032895.
Silvaco is a relatively standard trade secret case in the computer software world … with a twist.
It starts with the alleged theft of source code – that’s the computer language that mere humans can understand and write. This human-drafted source code is later fed into a machine (a compiler) to produce “object code” (or “target code”), which is the nearly indecipherable gobbledygook that can be executed by the computer itself. (Yes, I know this is a slight oversimplification, but I’m a lawyer dammit.)
SOURCE CODE THEFT
Silvaco, the plaintiff in the case, alleged that a competitor (CSI) stole its human-drafted source code and used it to create a competitive software product. Silvaco eventually obtained an injunction against the competitor. But that’s not the interesting part. The good part – the pie – comes next.
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 It’s been a while since we’ve last posted here on Who’s The Boss, and to all our Faithful Followers (yes, Mom, I’m talking to you), we apologize. It’s amazing how billable hours and sunny weekends at the beach can mess up an otherwise perfect day for blogging. But I digress. We’re back, we’re happy, and we have things to say.
Let’s start with California’s special take on trade secrets, one of our favorite subjects. In particular, recall the state statute requiring plaintiffs to identify their trade secrets “with reasonable particularity” before discovery can be commenced. (California Code of Civil Procedure Section 2019.210.) We blogged about this earlier when Sylvester Stallone’s low carb chocolate pudding kindly added to our understanding of the parameters of the trade secret designation statute. Well, the statute is in the legal news again.
This time, the question is whether CCP 2019.210 applies to trade secret cases in federal court. One would think this would be a relatively easy issue – pick one, yes or no, and let’s get on with it. But apparently that would take the fun out of it. Instead, California’s district courts have had a tough time making up their minds on this one…and it’s causing we trade secret practitioners some consternation.
The latest to try his hand at this one is Judge Moskowitz in the Southern District of California, who believes he has sorted it all out for us in his recent opinion in Hilderman v. Enea Teksci, Inc. (USDC SD CA 2010) No. 05cv1049, 2010 WL 143440.
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Welcome to the Alston & Bird Labor and Employment Blog.
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 FIRM ADVISORY ON HIRING INCENTIVES FOR EMPLOYERS
On Thursday, March 18, 2010, President Obama signed into law the “Hiring Incentives to Restore Employment Act” (“the HIRE Act”).
(A video of the President's press conference announcing his signing of the HIRE Act can be found here.)
The measure represents a slimmed-down version of the $85 billion “Jobs Bill” drafted in the Senate in February. The President and congressional leaders indicated that the HIRE Act is the first of a series of legislative measures aimed at fostering job growth.
The Act offers employers two tax breaks for new workers who are hired in 2010 and meet certain qualifying criteria.
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 We here at Who’s The Boss? just looove being right.
However, in this case, being right may not be good news for those California businesses who provide their employees with vehicles. Being right may instead prove to be very costly to these otherwise generous employers. (Sorry, we don't make the law, we just try to understand it.)
For those of you following the Commute Wars, you will remember last October's opinion by the 9th Circuit in Rutti v. Lojack, holding that commute time in a company vehicle was not a compensable event, even though the employer imposed certain restrictions on the employee’s use of the vehicle (such as no passengers, no personal errands, no use of cell phones other than calls from the office, must travel directly from home to first job and from last job to home without detours). (I'm sure "no pizza" was in there too.)
This was good news to employers. Who wants to pay their employees to sit in traffic for hours a day going to or from work? Indeed, it could lead to Geographic Discrimination (don’t hire anyone from the ‘burbs who have longer commutes). (Suburbanites, the new protected class?)
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What's good for the goose is good for the gander...at least that's what plaintiff's attorneys are squawking about with respect to the new stricter "plausibility standard" that has been ushered in by the Supreme Court in fellow blogger Martha Doty's new favorite cases, Bell Atlantic v. Twombly and Ashcroft v. Iqbal. After all, if the Supreme Court is going to have the temerity to require plaintiffs to actually assert "plausible" claims for relief in order to survive a motion to dismiss, shouldn't defendants be required to meet that same standard for their affirmative defenses? This is the question our employment law colleague in Atlanta, Jon Roth, ponders in the following short blog article.
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 There are people out there who believe the rules are stacked in favor of employees when it comes to employment lawsuits here in the Generally Sunny State. Why? Look no further than the rules on the recovery of attorney’s fees.
Despite a very neutral sounding statute that allows for “the prevailing party” in FEHA cases to recover his, her, or its attorney’s fees from the non-prevailing party, the reality is (as interpreted by our Courts of Infinite Wisdom) that prevailing employees “ordinarily” recover their fees, whereas prevailing employers are only entitled to their fees if they can show the plaintiff’s case was frivolous or brought in bad faith.
In other words, prevailing employees get damages and their attorney’s fees; prevailing employers get ... nothing.
This has had quite an impact on how employment cases, especially small ones, are filed and litigated in the state. The value of a $10,000 case becomes $10,000 plus attorney’s fees. How much in attorney’s fees? Well, that depends, does it not, on how much work the employee’s attorney puts into the case? Do you see the incentives here? If the attorney works the case up more and more and more, then the employee can recover more and more and more...even if the actual damages to the employee are pretty small.
Could you turn an $11,500 employee verdict into an attorney’s fee application for $870,000?
The employee in Chavez v. City of Los Angeles thought so. In fact, so did the appellate court, which ordered the trial court to grant the plaintiff’s fee application, thereby obligating the employer to pay over $1 million (if you count its own attorney’s fees) to cover an $11,500 verdict for the employee.
In its infinite wisdom, the Supremes reversed. (Here is the Supreme Court's decision.) And in the process, the Court may have swung the Giant Employment Law Pendulum (the GELP for short) just a wee bit back in the employer’s direction.
Here’s what happened....
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 Good news for California employers in sexual harassment cases arrived recently in the 4th District Court of Appeal's opinion in Haberman v. Cengage Learning, Inc., 2009 DJDAR 17689 (12/18/09). In Haberman, the court held that a plaintiff who alleges upwards of 10-20 "incidents" of so-called sexual harassment comprised of comments like, "You look really hot today" or "My customer says he really wants to date you" or asking plaintiff if she has any friends "who just want to have sex" - failed to establish a hostile environment sexual harassment claim and summary judgment was proper.
In Haberman, the plaintiff alleged sexual harassment against two individuals, based on six incidents against one and 13 against the other. As to the first individual, the court held that most of the incidents alleged against him were not sexual in nature and the few that were were not sufficiently severe or pervasive to constitute sexual harassment. As to the other individual, the court determined two of the 13 alleged incidents were not sexual in nature and the remaining 11 incidents, while possibly vulgar, were brief and isolated and insufficient to constitute a hostile environment.
Haberman is important for defendants/employers....
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 Part 5 (The Final Entry): The California Courts In Action
This is where the action has been in 2009 employment law -- in the appellate courts. From commuting to class actions, tip pools to trade secrets, California’s courts were busy. In this, our final installment of the year in review, we look at just a few employment decisions we found particularly interesting.
On The Subject Of Commuting…:
A few commuting technicalities were cleared up for employees and employers in 2009, including a clarification of exactly what constitutes the commute. (And all this time I thought it was all that sitting in traffic I do twice a day, along with tens of thousands of my closest smog-spewing friends.)
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Part 4: The Legislative And Executive Bodies
As we continue our journey through some of the more noteworthy employment developments in 2009, we note that Congress and the California legislature each had its hands in the works, as did the Executive branch who, judging by the 750 pages of regulations it propounded in interpreting the FMLA, clearly needs more to do. While there were scores of new laws and regulations touching upon the minutiae of our daily worklife existence, a few stand out.
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December 18, 2009 | Posted by Young, Mike | Topic(s): Wage and Hour Laws , Wrongful Termination, Wage and Hour Litigation , Discrimination, Harassment, Retaliation, Employer Liability for Acts of Employees, FEHA and Other State Laws, Supervisor Liability, Employment Litigation
Part 3: The California Supremes Circa 2010
Pausing on our trip down memory lane, we take a quick peek around the corner at what the California Supreme Court will be soon be waxing so eloquently about. Here are this reporter’s favorites:
Shorten Those Pesky Statutes Of Limitations?: Why can’t employers simply impose an Armendariz-compliant arbitration requirement on their employees as a condition of employment, and (while they are at it) include a provision whereby the parties “agree” that the statute of limitations will be shortened to something less than that permitted by FEHA? Seems reasonable (if you are an employer), doesn’t it? The Supreme Court will help us with this when it rules in Pearson Dental Supplies, Inc. v. Superior Court (No. S167169.) The matter is fully briefed. (Check here for latest court update or to request automatic email notifications about the case.)
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 NOTE FROM THE EDITOR: We reported on the Quon v. Arch Wireless case many moons ago (see here for our summary). In that opinion, the Ninth Circuit held that -- in the case before it -- the employee police officers had a reasonable expectation of privacy in the text messages they sent and received on their employer-provided PDAs.
The media had a field day, proclaiming the end of employer monitoring of employee electronic communications. However, as we explained in our summary, the case didn't go that far. It was limited to situations where the electronic communication did not reside on the employer servers (contrary to the practice of most company email systems), and where there was an informal policy that the employer would not monitor the communications (contrary to most employers' express policy permitting monitoring).
Guess what? This may not be the end of the story. According to Alston & Bird employment and privacy specialist Jesse Jauregui, today the U.S. Supreme Court has just picked up the case for review (under the caption City of Ontario, California v. Jeff Quon, et al.). See here.
Based on how the Ninth Circuit usually gets treated by the U.S. Supremes, anyone want to bet how this one will come out?
Here's Jesse's take on the Supreme Court's action:
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 NOTE FROM THE EDITOR: I am soooo happy I have colleagues like Eileen Scofield who love immigration law...so I don't have to. I don't even have to like it very much. In fact (just between us), I don't even have to understand it. Eileen does. And boy does she ever. Understand it, that is.
Here's what I mean. Eileen is a member of the AILA's (American Immigration Lawyers Association) National Verification & Documentation Liaison Committee and chairperson of the E-Verify National Liaison Committee, and recently wrote up a summary of executive level meetings she and her Committee had with the Obama administration's Department of Homeland Security to discuss immigration and verification issues. I tried really hard to follow it, but it is simply over my head.
But it's right up the alley of fellow immigration specialists (affectionately known as Immigration Geeks, or IGs), and so it is for all you IGs out there that this post is dedicated.
For the rest of us mortals, well, when faced with an immigration issue, I recommend you do what I do (after plugging my ears, closing my eyes, and saying "nah nah I can't hear you"): Call Eileen.
INTRO: Way back in 1986, with the passage of the Immigration Reform and Control Act (IRCA), employers were officially deputized as pseudo-immigration officers in the battle against illegal immigration, charged with screening and enforcing various immigration laws. Initially, this was through the use of the I-9 Employment Verification Form, whereby every employer was to verify the identity and work authorization of every new employee hired. However, not surprisingly, in the last 24 years, this process, and the related liability, has expanded and now includes other employer tools such as social security number verification processes (SSNVS), E-Verify processes, and more.
What follows is Eileen's summary of her Committee's discussions with the Department of Homeland Security, particularly as to those issues with the greatest impact on employers, including DHS search tools, E-Verify changes, and fines for I-9 violations. (MDY)
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December 11, 2009 | Posted by Michael Young | Topic(s): Workplace Privacy Issues, Wrongful Termination, Discrimination, Harassment, Retaliation, Employer Liability for Acts of Employees, FEHA and Other State Laws, Supervisor Liability, Class Actions, Employment Litigation
Part 2: The California Supremes
As promised, we continue our trip down memory lane by looking at some of the more significant California Supreme Court employment decisions in 2009. Don’t bother putting on your shoes, it’s a really short trip. In fact, in this reporter’s humble opinion, the 2010 journey will be much more interesting as there are a number of novel issues fully briefed just waiting for that splash of Supreme Court brilliance. For now, we look at employer spying, supervisor harassment, punitive damages, and the infamous 17200 unfair competition law.
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 A jury found the California Unemployment Insurance Appeals Board, one of the most notoriously employee-friendly governmental bodies in the State, liable under FEHA for unlawful retaliation against one of its employees.
On appeal, the court affirmed the judgment, finding there to be sufficient evidence to support the jury's verdict. [George v. Cal. Unempl. Ins. Appeals Bd. (CA5 F055385 12/9/09)]
Am I the only one who finds this incredibly ironic???
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Part 1: The U.S. Supremes
We here at Alston & Bird’s Who’s The Boss? employment blog have taken a look in the rearview mirror to see what has happened in our insular world over the past 12 months or so. We looked at court cases, legislative enactments, and regulatory developments, particularly those impacting California. What we found was pretty interesting, even entertaining.
While the developments seem more along the lines of moderate refinements than any earth-shattering alterations in the basic power balance between employers and employees, their impact will nonetheless be felt in various degrees as we head into the next decade.
With no promises that these are the “most significant’ employment law developments of 2009, we nonetheless share what we think are some of the more interesting highlights of the year.
We’ll do this in stages.
• Today, we’ll highlight four U.S. Supreme Court opinions impacting employers.
• We’ll follow this with highlights from the California Supreme Court. Don’t blink, there aren’t many.
• Next, we’ll look at some of the more interesting issues still on the California Supreme Court’s docket for next year. There are a bunch.
• Then comes legislative and executive developments (were 750 pages of FMLA regulations really necessary?)
• Finally, we’ll take a look at some of the California appellate court employment opinions that made headlines or simply impacted employers, employees, or their attorneys.
[Our thanks to Employment Law 360, which ran a version of this article in two parts in its influential employment law publication.]
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Now what has the California Supreme Court done to employment law here in the Golden State?
In Roby v. McKesson (S149752), the latest masterpiece from the state’s top court, it looks as if both employees and employers can claim a modicum of victory.
The employees will find it easier to assert and prove harassment claims against individual supervisors, which will make it easier to (a) defeat removal to federal court based on diversity jurisdiction; and (b) defeat summary judgment of harassment claims by individual supervisor defendants.
For the employers? The Court may be signaling further disenchantment with high punitive damages, particularly in cases involving high non-economic (emotional distress) damages where there is little evidence that upper management knew about the bad conduct.
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If only I could be paid for my commute. See, I live in the South Bay (the Southern California version) and commute to downtown Los Angeles along the 405, 105 and 110 freeways. It's neither quick, nor particularly attractive. (I save a little time in my Natural Gas Honda Civic, which gets me in the carpool lane, but not nearly as much as I did P.H. (pre-hybrid). Now that those pesky Prius’ are allowed in the carpool lanes, I often go no faster than the carbon monoxide spewing Hummers two lanes over.)
So imagine if I could get paid for commuting. I’d be rich!... and wouldn’t need to commute to work anymore. Think of the incentives in car-happy California? I might even want to drive in the slow lanes (which is redundant, especially during “rush hour,” which isn’t an hour and no one rushes.)
But getting paid to sit in morning gridlock listening to NPR (fine, Mark & Brian) would be wrong, wouldn’t it?
Mike Rutti decided to find out (or perhaps his attorney did). Rutti v. Lojack Corp. is the result.
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