The swiped computer contained the names, addresses and social security numbers of about 97,000 Starbucks employees.

A group of workers sued the company for negligence. One of the employees claimed a bank told him someone had tried to open a bank account using his name and SSN. The account was immediately closed. None of the other employees experienced any other signs of fraud.

Starbucks argued it couldn’t be held liable, because the employees didn’t suffer any actual consequences. The judge agreed and dismissed the case — without suffering any actual damages, the employees had no reason to sue.

The key to keeping the employees’ info from being misused and escaping liability: The company acted quickly. Shortly after the theft, Starbucks:

1. reported the crime to police
2. notified all affected employees and advised them to take steps to protect themselves, and
3. offered to pay for a year of credit monitoring services for all interested employees.

Cite: Kottner v. Starbucks

Here’s the typical dangerous scenario:

Two employees have company-issued cell phones. One employee uses the company phone to send harassing text messages to the other employee’s company-issued phone. The receiving employee files a harassment complaint.

What’s the employer’s responsibility?

The various state laws indicate that electronic messages, such as e-mail, are considered evidence in harassment cases, and must be retained by the employer — to support or refute the charge. Following that ruling, most legal observers agree the term “electronic messages” also covers text messages, meaning an employer could be responsible for storing and producing such messages when they go from company phone to company phone.

That’s another headache no employer or HR department needs, so what’s the solution? Ban texting altogether? That seems extreme and impractical, althought least one employer in Florida has done that.

But the more practical option is to develop a policy about employee-to-employee texting, especially during work hours. Employees should understand, via the policy, that such texting should be done only as a business necessity, and that employees will be held responsible for offensive or harassing text messaages.

Accessibility problems can stir up legal trouble, as well as limit the field of applicants available for open positions. To avoid those problems, talk with your IT department to see if your company’s recruiting site follows these guidelines laid out by the Job Accommodation Network:

1. Use text descriptions for images – Hold your mouse cursor over an image on your site, and a block of text should appear. That’s what special screen reader software used by the visually impaired will read to the viewer. Make sure the text is something descriptive and concise.
2. Caption audio and video – If your site includes audio or files, it should offer the option of a written transcript or closed captioning. Audio descriptions of video files should also be provided, if necessary.
3. Minimize reliance on color – View the site in a black and white display to make sure everything is clear to color blind viewers. Also, avoid using just color to convey information. For example, if an applicant skips a section of a form, don’t just highlight that area in red — also include text that says “required field.”
4. Allow easy keyboard navigation – Some viewers may need to navigate the site using only their keyboard. Therefore, it should be easy to scroll through links and fill out forms using the TAB key.
5. Give more options for applying – Forms may be difficult for some people to complete, so allow them to apply through e-mail, fax, mail or over the telephone. Also, include an easy-to-find EEO statement that also provides contact info to get help applying.

ICs generally mean a good deal for employers, including savings on:

• federal and state income tax withholdings,
• unemployment insurance
• workers compensation
• benefits,
• overtime, vacation and sick pay, and
• no union eligibility.

A budget-squeezed employer has to love the idea. Here’s the problem: Federal and state governments are getting squeezed, too, in today’s economy, and they see questionable use of ICs as one of the sources of the squeeze, since the practice generally results in lower tax revenue.

One study by the General Accountability Office, says misuse of ICs lowers income tax revenues by about $4.7 billion annually. And the  University of Missouri–Kansas City Department of Economics estimates that from 2001 through 2005, Illinois lost $124.7 million a year in income taxes as a result of IC misclassification by employers.

You probably can figure out what’s coming.

In August, Congress began reviewing several bills that tighten restrictions on the use of ICs and exact tougher penalties on employers who bend the rules.

Further, states such as Illinois, Massachusetts, New Hampshire, New Jersey and New Mexico already have enacted new laws targeting IC misclassification. The IRS recently announced plans to audit more than 6,000 randomly selected businesses in the next three years to, among other goals, curtail IC abuse and its effect on tax revenues.

That’s a double-whammy, since state and federal governments share info on violations: Get caught by one and you’ll probably pay both.

Are your managers concerned employees are wasting too much time on Facebook and Twitter? Well, they might have something bigger to worry about.

The popularity of social-networking sites is growing more rapidly than ever. According to the latest figures, about half of adults have a Facebook and/or Myspace account, and the number of Twitter users has grown by 1,300% in the past year.

So odds are a good amount of people in your company are logging on to those sites fairly often. Though some employees probably waste part of the work day checking their accounts, most experts say those situations should be dealt with like any other performance problem — on a case-by-case basis.

The real problem, they warn, is the potential damage to the company’s reputation and its bottom line.

According to a recent Deloitte survey, 74% of workers admitted that social networking sites make it “easier” to hurt an employer’s reputation. That’s a fact several companies already know. For example:

• Last year, British Airways fired a group of employees who used Facebook to call the airline’s passengers “fat and smelly”
• A Pennsylvania high school recently fired a teacher for, among other things, bragging about her alcohol use on Myspace. She sued for freedom of speech, but her case was tossed because she had no right to speech that made the school look bad.

To keep the risk at bay, attorney Keisha-Ann Gray, writing in Human Resource Executive, recommends drafting a policy that:

• Reminds employees they have no expectation of privacy when they use the Internet at work
• Prohibits employees from using the Web in any way that’s contrary to the company’s interests, whether done at work or at home, and
• Establishes that other company policies (anti-harassment, confidentiality, etc.) apply to what employees do online.

What you can’t do

Some states have laws that can limit the reach of a company’s social networking policy. For example, states like New York, Colorado and North Dakota have laws prohibiting companies from firing employees for legal activities they partake in outside of work.

However, most of laws make an exception when the employer is directly affected by the employee’s actions. Check your state laws to be safe before drafting a policy.

An oil field operator was fired for allegedly looking at pornography while at work. According to the company, he did the browsing on a computer located in the break room that about 200 employees shared.

Workers each had their own username and password, and were required to sign in to use the machine and sign out when they were finished finished.

While running a virus scan, an IT staffer discovered porn sites had been accessed under the employee’s username –  including “hundreds of prohibited websites” over the period of two days. The staffer told the employee’s manager, who verified the employee was scheduled to work on those two days.

He was fired for violating the company’s computer use policy, which strictly prohibited the downloading of any offensive content.

The employee, 57 years old at the time, was replaced by a 43-year-old employee. He sued for age discrimination.

He claimed there was no proof he’d actually downloaded the porn — he saw the company’s log of his alleged Web activity and pointed out that many of the sites were visited outside of the times he was scheduled to work.

The judge didn’t buy his argument and ruled in favor of the company. Why? Two reasons:

First was the way the computer policy was written. It forbid users from sharing or even writing down their passwords and said that “System Users are responsible for all transactions made using their passwords.”

Second, there was no evidence the company was discriminating. Even if they were wrong, the manager and the IT department reasonably believed the employee had been viewing pornography at work and fired him for that, not because of his age.

The lesson: When employees share computers, it can be tough to monitor improper usage. But one good way to make it easier is to write a policy prohibiting password sharing and often behaviors that make them easy to steal.

Cite: Cervantez v. KMGP Services Company, Inc.

It’s the later, says attorney Michael Schmidt in the National Law Journal.

A few reasons he and other lawyers recommend against it:

1. Many employees think its creepy — in a recent survey by Office Team, 47% of employees said they don’t like seeing a friend request from their boss. Sure, that’s less than half, but it’s probably not worth the risk of really bothering a good performer.
2. It smacks of favoritism — If anyone doesn’t get a friend request from the boss, that’s not going to look good.
3. Managers could learn too much about their employees — which could come back to haunt the company.

Say an employee lists membership in a religious organization on her Facebook page and is friended by her boss. Later, she’s fired for poor performance. Now, she could have a chance to argue her boss fired her because he learned about her religious affiliation.

Other kinds of info managers could find out: sexual orientation, medical problems and political affiliation, all of which could theoretically form the basis for a lawsuit.

According to the Office Team survey, 48% of managers are uncomfortable being online friends with subordinates. Just as well, many lawyers say — they’re better off not doing it, anyway.

Yes — if the employer sponsors the activity, said a New York appellate court in a recent workers’ comp case.

What happened

Frank Torre worked for Logic Technology, a company that performed on-site contracting work for General Electric.

Torre suffered a spinal cord injury while participating in an exercise class at the General Electric fitness center during work hours. He claimed workers’ comp should pay for it.

The court agreed. Although it found that Torre’s employer didn’t require him to participate or compensate him for taking the class, it did pay a portion of his membership fee.

Also, Torre’s job required him to develop contacts with current and prospective clients. And Logic Technology’s president stated that participating in the class would help him develop those contacts.

Result: The court ruled that his injury arose out of, and in the course of, his employment.

What the law says

New York follows this general rule: Employees cannot collect workers’ comp benefits for injuries that result from their “voluntary participation in an off-duty athletic activity not constituting part of the employee’s work-related duties.”

However, there are exceptions to this rule — like if the employer sponsors the activity or requires workers to participate in it.

While this particular ruling only applies in New York, it’s something other employers should keep in mind when designing wellness programs.

Cite: Torre v. Logic Technology.

Any employer who sponsors a health plan with prescription drug coverage must provide the notice by Nov. 15.

If you sponsor such a plan, your notice must explain the benefits provided under your prescription drug plan and whether it’s at least equal to the benefits offered under Medicare Part D.

Reason: To help plan participants decide whether to enroll in Medicare Part D.

The notice must be provided:

• at least annually before Nov. 15
• whenever a Medicare-eligible employee enrolls in your health plan
• whenever there’s a change in the creditable or non-creditable status of your prescription drug coverage, and
• whenever an individual requests the notice.

Note: You do not have to provide the notice if your company has its own Medicare Part D-comparable plan.

Samples: Model notices are available on The Centers for Medicare and Medicaid Services’ Web site.

The facts:

An employee who was being treated for cancer suffered from dry mouth and throat as a side effect of the treatment, and had to consume large amounts of water throughout the day to combat the side effect.

As a result, she asked for two disability accommodations:

• Relaxing of a rule that prohibited drinks of any kind at workstations.
• Permission to leave the workstation often, and without asking, because of a frequent need to use the restroom.

She was granted both accommodations, and worked under those conditions for several months without incident except for one time:  A substitute boss who hadn’t been informed of the employee’s condition refused to all the employee to leave the workstation during an especially busy period. The employee wet her pants.

The employee sued for denial of a disability accommodation.

The employee said:
The temporary supervisor’s blunder caused extreme embarrassment, besides being an illegal breach of the agreement to grant her the accommodation.

The employer said:
The employee had worked under the accommodation conditions for several months without a hitch — in that the regular supervisor had never once denied the employee the accommodation. The incident in question was a simple mistake in communication, in that the temp supervisor wasn’t aware of the accommodation, and would have granted it had he been aware. Further, the employer maintained, the employee should have informed the boss of the accommodation or should have just left the workstation to use the restroom.

Who won the case?

Answer: The employee, who received $200,000 in damages from the employer.

Why: The court rejected the employer’s argument on two counts –

• The employee was under no obligation to inform the boss of the accommodation. The legal language for such an event is called continuing the “interactive process” — the back and forth between employee and supervisor to arrive at a reasonable accommodation. The court said the employee had already engaged in the interactive process and was under no obligation to continue it with another supervisor once the accommodation had been granted.
• Even a single incident of failure to accommodate can have more-than-trivial consequences. An employer must be vigilant about maintaining the accommodation at all times. In short, someone should have informed the temp supervisor about the situation.

Cite: A.M v. Albertsons LLC.