Freedom of Speech and Employee Disclosure

Abstract

We examine how freedom of speech protections affect the nature and extent of employee disclosure. To identify the effect of freedom of speech protections, we use anti-strategic lawsuit against public participation (anti-SLAPP) laws, which punish lawsuits that censor or silence critics. We examine the effect of anti-SLAPP laws using a within firm-year design that compares employee disclosures for the same firm at the same point in time. Employee disclosures protected by anti-SLAPP laws are more negative, provide lower ratings, and are more likely to discuss issues with discrimination, ethics and fraud, safety, and management. Consistent with these discussions credibly revealing underlying issues, anti-SLAPP laws create a strong relation between safety and fraud violations and employee discussions of the same issues. Consistent with an employee behavior mechanism for the results, the relation between anti-SLAPP laws and negative discussions is greater for reviews left by individuals that are more likely aware of the anti-SLAPP laws, such as attorneys. Consistent with a protection from censorship mechanism, negative discussions protected by anti-SLAPP laws are less likely to be removed from a popular employee disclosure website. Finally, anti-SLAPP laws appear to improve employee sorting by decreasing the time it takes to fill jobs when there are no disclosures discussing sensitive topics. The results highlight how free speech protections shape employee disclosure and job search.

Keywords: Employee disclosure, labor markets, social media, freedom of speech JEL classification: E24, G34, G41, M41

JEL Classification: E24, G34, G41, M41