Houston CFO Fired for Social Media Activity


The Houston Chronicle reported today the CFO of Francesca’s was canned because he posted information about the company on Twitter and Facebook.

Francesca's CollectionsWe have discussed the legality of firing employees for their social media conduct in detail (part one and part two).  In short, in at will state like Texas, you can fire someone for a good reason, a bad reason or no reason at all except generally in three circumstances: (1) in violation of a contract; (2) in a discriminatory fashion against a protected class; or (3) in retaliation of an employee discussing their work activities with other employees. 

It was not clear in the article if the CFO had a contract.  It does appear, however, he was not engaging in protected activity.  Instead the company claimed in a release the CFO was terminated because he “improperly communicated company information through social media.”

The article sites the following:

On March 7, six days before Francesca’s announced its quarterly earnings, he wrote: “Board meeting. Good numbers=Happy Board.”

. . .

Before an earnings call last December, Morphis posted on Facebook: “Cramming for earnings call like a final. I thought I had outgrown that.” In January, he boasted to his friends: “Roadshow completed. Sold $275 million of secondary shares. Earned my pay this week.”

Francesca’s, a women’s clothing and accessory retailer, is a publicly-traded company which means the CFO does not have free reign to say whatever he wants. 

“The rules generally in regards to sharing of material, nonpublic information have not changed even in the age of social media,” Looper Reed & McGraw, P.C. securities lawyer Jeff Hopkins said.  “If a public company hasn’t filed information with the Securities and Exchange Commission to make it generally available, its management and employees should recognize that any disclosure to a select audience (even if that audience is a large Twitter following) is in violation of the rules.”

You can read more from the Wall Street Journal here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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