Not being a computer aficionado, I cannot understand why anyone would list his or her comings and goings, likes and dislikes, private practices, pictures and relationships on the computer. In my opinion, this personal information is interesting only to the person who publishes it. I also thought that such information was private until I read about some companies requesting/demanding Facebook usernames and passwords from potential employees. This tactic hit home recently when my daughter was faced with this issue while applying for a job.

My first thought when she told me about the “request” was that the company had no right to pry into her personal life. But then I realized that perhaps the company had sound reasons to seek as much information as possible about a potential employee. And finally, I started to think about this from an insurance perspective; specifically, can the company be sued for violating a person's privacy, and would a liability policy apply to such a lawsuit?

Accepting the fact that people can sue over anything these days, the question becomes: How would the insurer respond to a claim against its insured for violation of privacy? Using the Commercial General Liability (CGL) policy as a starting point, the insurer has a duty to defend its insured against any lawsuit seeking damages unless it is absolutely clear and unmistakable that the insurance coverage does not apply to the claim. When it comes to a violation of privacy claim, coverage B in the CGL form is the section to review.

Coverage B applies only to damages because of personal and advertising injury, which is a defined term. The definition includes an “oral or written publication, in any manner, of material that violates a person's right of privacy.” So, if a company gets a person's Facebook password, reviews the personal information contained therein and then allegedly publishes that information, a claim made against the insured company would warrant a defense by the insurer (at least until an applicable exclusion can be utilized).

But would the insured employer become legally obligated to pay damages—and thus, be eligible for indemnity—because of this privacy violation? Without expressing a legal opinion, there seems to be at least two issues to be raised: First, was there a publication? Second, since the Facebook password was given voluntarily, is the employer guilty of anything?

Without a publication, the definition is not met and there is no personal and advertising injury. “Publication” in the CGL form requires data being made known to the public in general. Most probably, the information gleaned from a person's Facebook by a potential employer is going to be shared only by those with the ability to hire someone, and this is not the general public. Of course, if embarrassing personal information about the Facebook user is leaked to others outside the human resources circle, that can be troublesome. The lawyers would have to fight it out over whether the leak was a publication.

As for the potential employee voluntarily giving up the Facebook data, if a person really needs a job and being hired depends on volunteering that information, doesn't this actually smack of coercion on the part of the employer? Again, a battle for lawyers to settle.

As far as I know, there have been no high-profile lawsuits and insurance-coverage disputes over an insured employer asking for (demanding) Facebook passwords and then being sued by the Facebook users. Some states are looking into this practice in order to decide if any laws are being violated or if public policy needs to be set. As for insurers and insureds, the question of defense and indemnity over this issue will have to be addressed and clarified sooner or later.

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