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When Coyote Posts Get Ugly

Why social media posts about current and former employees from saloon franchise Coyote Ugly's management opened the door to lawsuits.

October 13, 2013

Stewart v. CUS Nashville LLC is a cautionary tale for employers about the collision of social media and employee relations.

The case started out as a tip-pooling collective action under the Fair Labor Standards Act against CUS Nashville, the owner of Coyote Ugly Saloon franchises. Two executives with the company separately decided to vent their frustrations about the litigation via social media, transforming the case into one of the best examples of social media gone wrong.

The first incident involved an ex-employee, Misty Blu Stewart, one of the class representative plaintiffs. Liliana Lovell, the founder of the original Coyote Ugly Saloon, who still owns a controlling interest in all of the branded bars, wrote the following post about the litigation on her blog on the corporation’s website:

“ ‘By the way, Lil, you should be getting served with a lawsuit. No worries just sign for it.’ This particular case will end up pissing me off ’cause it is coming from someone we terminated for theft. I have to believe in my heart that, somewhere down the road, bad people end up facing bad circumstances!

“I have been reading the basics of Buddhism and am going to a class on Monday. The Buddhist way would be to find beauty in the situation and release anger knowing that peace will come.”

Stewart — the “someone … terminated for theft” noted in Lovell’s blog post — amended her complaint to add an individual claim for retaliation under the FLSA, alleging that the blog post “humiliated and embarrassed” her.

The second incident involved Sarah Stone, another class member working as a bartender in a different Coyote Ugly bar. Daniel Huckaby, the director of operations, visited the bar. He posted the following to his personal Facebook page:

“Dear God, please don’t let me kill the girl that is suing me … that is all.”

Stone, who was Facebook friends with Huckaby, saw the post. She assumed that he had directed his comment at her and quit her job. She then amended the lawsuit to add an individual claim of constructive charge, saying that the post forced her resignation.

The employees’ individual claims proceeded to trial, during which the district court dismissed the individual claims, holding that the blog post was insufficient to constitute an “adverse action,” and that the Facebook post failed to rise to the level of a “constructive discharge.”

The court dismissed Stewart’s retaliation claim because she admitted at trial that she had not suffered any damage or harm because of the blog post.

The court dismissed Stone’s constructive discharge claim because it was not objectively reasonable for her to perceive that a drunken and ambiguous comment was made with the intention of forcing her to resign

Despite the employer’s victory in this case, it nevertheless illustrates the dangers that can persist when managers or supervisors vent about employees on social media.

The threshold for an employee to establish an adverse action to support a retaliation claim is low. Because of the 2006 ruling in Burlington Northern & Santa Fe Ry. v. White, all an employee needs to show is that the action “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” It is not difficult to imagine a scenario under which an employee could meet this standard via a social media post, i.e., a targeted trashing via social media or a digital shunning whereby an employee’s co-workers “unfriend” her on Facebook.

Thus, here are two practical tips to limit your company’s risk and exposure to these types of retaliation claims — the employer’s victory in Stewart v. CUS Nashville notwithstanding.

1) Discuss with your employees the risk and dangers of friending, following or connecting with managers and supervisors online. I am not going to tell you that you should ban the practice in your workplace. Each business is different, and some thrive on the connectivity and openness presented by social media. If, however, you are going to permit your employees to connect with management online, you must train your employees on the potential risks presented.

2) Train executives, managers and supervisors to keep sensitive matters in-house. Topics such as pending litigation should play out in the courts, not via blogs and Facebook posts.

In other words, teach your employees to take to heart my four-word social media policy: Think Before You Click.

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Hyman at (216) 736-7226 or jth@kjk.com. You can also follow Hyman on Twitter at @jonhyman.