Freedom of Speech and Employee Disclosure

Abstract

We examine how freedom of speech protections affect the nature and extent of employee disclosure. We examine anti-strategic lawsuit against public participation (anti-SLAPP) laws, which punish lawsuits that censor 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. These discussions appear to credibly reveal underlying issues, as anti-SLAPP laws create a strong relation between safety and fraud violations and employee discussions of the same types of 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 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 an 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.

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

JEL Classification: E24, G34, G41, M41