BREAKING NEWS!

In a follow-up to our blog posting from this morning, the United States Court of Appeals for the District of Columbia  just issued an injunction preventing the NLRB from enforcing its poster rule while the Court considers an appeal of the prior D.C. District Court case which upheld a portion of the rule.   The Court found that the “uncertainty surrounding enforcement” of the rule should lead to preserving the status quo, for now.

The meaning of this ruling is that employers do not have to post the notice by April 30, 2012.

Two points worth noting – two of the three judges appointed to the panel that will decide this case, Judges Janice Rogers Brown and Brett Kavanaugh, are two of the more conservative members of the DC Circuit and might be less inclined to uphold the Board’s rule.   Also, oral argument will not take place until September 2012, which means that it will be some time, if ever, before employers will be required to post the notice.

As we blogged over the weekend, a federal District Court in South Carolina on Friday struck down the NLRB poster rule, on the grounds that the NLRB exceeded its authority in promulgating the rule.  This ruling directly conflicts with an earlier decision from a federal District Court in Washington, DC which upheld the NLRB’s authority to issue the rule, but struck down the unfair labor practice provisions related to the poster.   Thus far, the NLRB has not taken a position on the rule in light of these decisions.  So, the question is – should employers post or not post the poster by April 30, 2012?

Cautious employers can choose to err on the side of caution and post the NLRB notice by the original April 30, 2012 deadline.  However, it is a reasonable position to hold off on posting the notice (given that even the DC Court found that there is no penalty for failure to post in the absence of some other labor law violation) and wait to see how the appellate courts rule.

BREAKING NEWS!

The United States District Court for the District of South Carolina just struck down the NLRB poster requirement set to go into effect on April 30, 2012.  Contrary to the District Court for the District of Columbia ruling, the federal court in South Carolina found that the NLRB exceeded its authority in promulgating the rule.  Thus, according to the South Carolina court, the poster requirement is invalid.

Judge Norton concluded that there was nothing in the National Labor Relations Act to support a posting requirement.  Early into the opinion, the Court foreshadowed its ultimate conclusion with a chart listing all of the other labor and employment laws and their specific statutory citations for poster requirements—noting “None” for the labor law.   The Judge returned to this point several times in his opinion — for instance, finding that:

           Congress clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires.  “Where Congress has consistently made express its delegation of a particular power, its silence is strong evidence that it did not intend to grant the power.”  Alcoa S.S. Co. v. Fed.Mar. Comm’n, 348 F.2d 756, 758 (D.C. Cir. 1965). Less than eight years ago, Congress amended the Uniformed Services Employment and     Reemployment Rights Act of 1994 (“USERRA”) to impose a new requirement:  “Each employer shall provide to persons entitled to rights and benefits under [USERRA] a notice of the rights, benefits, and obligations of such persons and such employers under [USERRA].”  Veterans’ Benefits Improvements Act of 2004, 33 U.S.C. § 4344(a).   Congress’s continued silence in the NLRA is indicative of its intent.

Based on the foregoing, the Court did not even find it necessary to consider the other issues from the DC Court’s ruling – whether failing to post was its own unfair labor practice and whether failing to post could toll other unfair labor practice charges.

Shawe Rosenthal attorneys are digesting this decision and will have a fuller analysis tomorrow.

Last week I wrote about the EEOC’s new Final Rule on the Reasonable Factors other than Age (RFOA) defense in disparate impact claims brought under the Age Discrimination in Employment Act (ADEA).  The EEOC has just published a Q&A explaining the new Rule.

In explaining the purpose of the Final Rule, the Q&A provides:

“The rule does two things:

  • It makes the existing regulation consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA, and not business necessity; and
  • It explains the meaning of the RFOA defense to employees, employers, and those who enforce and implement the ADEA.”

The Q&A explains what factors determine whether an employment practice is based on RFOA and provides examples demonstrating those factors that may be taken into account in making this determination.  According to the Q&A, “[a]n employment practice is based on an RFOA when it was reasonably designed and administered to achieve a legitimate business purpose in light of the circumstances, including its potential harm to older workers.”  After listing the considerations that are relevant to determining the reasonableness of the employer’s practice, the Q&A points out that the RFOA defense “could be established absent one or more of the considerations, and that there could even be a situation in which the defense is met absent any of the considerations.  Similarly, the defense is not automatically established merely because one or more of the considerations are present.”  Among other things, the Q&A clarifies that, while not required to do so, maintaining documentation that proves that the employer reasonably designed and administered the practice to achieve a legitimate business purpose in light of potential harm to older workers can help the employer establish an RFOA defense.

We will watch for reported RFOA cases and let you know what courts have to say about the Rule.

 

 

MYOB about my Facebook Page!!  That is what the Maryland General Assembly said when it recently passed legislation barring employers from requiring employees or applicants to turn over passwords needed to access social media and other private websites.  Governor Martin O’Malley is expected to sign the bill, which will take effect on October 1, 2012.  As the Gazette and Baltimore Sun both point out, this law is the first of its kind to be enacted in the country.

The law bars employers from requiring or even requesting that an applicant or employee divulge his/her “user name, password, or other means for accessing a personal account or service through an electronic communication device.”  Employers may, however, require employees to divulge passwords for “nonpersonal accounts or services that provide access to the employer’s internal computer or information systems.”  The law does not define what is a “nonpersonal” account nor does it make any exception to allow employers to demand access to personal accounts that are used to access work accounts.

Employers regulated by the U.S. Financial Industry Regulatory Authority (FINRA) were able to obtain an amendment that permits them to conduct investigations to ensure compliance with securities laws when the employer has information that personal web based accounts have been used for business purposes.  Another amendment prohibits employees from downloading company financial and proprietary data to personal web accounts and permits employers to investigate suspected downloading of such information.

But neither of the above exceptions expressly permits an employer to demand that employees disclose their passwords as part of such investigations (although we would hope that any court would find this to be implied by the amendments)!

Savvy employers already understand that employees and applicants are entitled to privacy and do not seek access to personal websites willy-nilly.  Indeed, Facebook has made clear in a blog posting that demands by employers to access non-public sites of applicants and employees violate the Company’s terms of use agreement.  As Facebook’s blog post states:

 

“We don’t think employers should be asking prospective employees to provide their passwords because we don’t think it’s the right thing to do.  But it also may cause problems for the employers that they are not anticipating.  For example, if an employer sees on Facebook that someone is a member of a protected group (e.g. over a certain age, etc.) that employer may open themselves up to claims of discrimination if they don’t hire that person.”

 

The Maryland legislation fails to consider certain limited and legitimate reasons that employers might have that would require access to an employee’s personal web account.

  • For example, an employer that received a complaint that a supervisor was making racist remarks about subordinates on his Facebook page could not demand (or even request) access to that site as part of an investigation.

 

  • It is unclear whether an employer is permitted to monitor or have access to a Linkedin or Facebook account of an employee when he/she has been authorized by the company to use it for recruiting applicants or for marketing purposes.  This is because the law does not define what constitutes a “personal” account vs. a “nonpersonal” one.

 

These and other ambiguities in the legislation are why, as reported by the Gazette, Shawe Rosenthal lawyers worked with the Maryland Chamber of Commerce to oppose this bill.  However, now that the legislation has passed and will surely be signed by the Governor, employers will have to comply or face the consequences – hardly a LOL matter.

The EEOC recently issued another information discussion letter regarding pre-employment criminal background checks.  Many employers conduct criminal background checks, and the EEOC has long-held that such screenings do not violate Title VII per se because Title VII does not regulate inquiries by employers.  The discussion letter, however, reminds employers that the use of criminal records by an employer may violate Title VII if it is done in a discriminatory way.

An employer must not use criminal history information to engage in unlawful disparate treatment (e.g., excluding African American applicants with certain criminal charges while accepting white applicants with the same charges).  In addition, because a disproportionate numbers of African Americans and Hispanics are convicted of crimes, the use of a criminal background check may have a disparate impact on certain groups of people.  In order to limit that disparate impact, the EEOC’s position is that an employer may use criminal history information to make employment decisions only when it is job related for the position in question and consistent with business necessity.  To meet this standard, a criminal conduct must be recent enough and sufficiently job-related to be predictive of performance in the position sought.  The EEOC’s guidance identifies three factors to consider in making this assessment:

1.  The nature and gravity of the offense or offenses;

2.  The time that has passed since the conviction and/or completion of the sentence; and

3.  The nature of the job held or sought.

Employers should conduct a review their policies to ensure that they take into consideration these factors.  No policy should impose an absolute ban on hiring applicants with criminal convictions.  The policy should allow discretion to determine the nature of the offense, the nature of the job for which the applicant has applied, and the length of time that has passed since the conviction.  For example, a criminal conviction for public drunkness that happened 15 years ago may not be considered a preclusion for an individual seeking a position in the accounting department.

A cautionary tale about workplace relationships comes out of Pittsburgh this week

The sordid story involves the – now former – CEO of Highmark, 58-year-old Dr. Ken Melani. A well-respected figure in the community, Dr. Melani was riding high – CEO of a major, national company, and a $4.3 million dollar salary to boot. But, all of that came crashing down last week when police arrested him for a physical altercation with . . . his 28-year old mistress’s husband at the mistress’s house. And to further complicate matters the mistress, Melissa Myler, is also a Highmark employee. The police report (see part 1 here and part 2 here) suggests that the affair did not begin until after the two started working together.

Needless to say, Highmark was not pleased about the negative attention directed towards it when its CEO became embroiled in an embarrassing scandal. Highmark fired Dr. Melani Sunday night.

Now, the Pittsburgh Post-Gazette reports that the criminal charges will probably be dismissed, but the labor and employment law angles loom large. Dr.Melani is alleging that he disclosed to the Highmark Board about his relationship with his younger colleague and that unnamed Board members wanted to get rid of her as a result. His attorney seems to be framing this as a possible gender discrimination case – or a retailiatory discharge claim that Dr. Melani was fired because he refused to take part in illegal discriminatory activity.  In a press release late yesterday,the Company claimed that it fired Melani for “gross misconduct.”

To be sure, Highmark has a HR disaster on its hands. But what if your company was faced with the CEO disclosing that he/she was having an extra-marital affair with somebody who is, at least, nominally a subordinate (not to mention 30 years younger)? Could Highmark have acted differently and avoided the associated fallout now?

One possible way that companies can avoid these sorts of problems is to institute a policy prohibiting relationships between employees, or at the very least, between subordinates and superiors. Nothing in the law prevents you from doing so and it might have solved Highmark’s problem here. Employers are often hesitant to police morality among their employees.  But, given the Melani drama, Highmark might now think that such a policy would have been especially wise.

Sitting on the news and then possibly asking or insinuating that the CEO should fire his mistress is a recipe for a lawsuit, as Highmark is discovering.

Employers are frequently frustrated by supervisors’ refusal or inability to comply with Family and Medical Leave Act requirements.  Lack of information from managers causes headaches when trying to determine if an employee should be receiving FMLA leave, and in tracking and managing such leave.

Many managers fail to notify HR when an employee may have an FMLA-triggering event – like being out of work for more than three days or an overnight hospital stay.  They may also fail to recognize a continuing condition requiring intermittent leave.  They may simply ignore “red flags” when an employee mentions ongoing doctor’s appointments or symptoms causing absences from work.

Do you think that managers would be more vigilant if they knew that they could be individually liable for FMLA violations?  Perhaps a cautionary example can be useful in getting their attention, such as the March 16, 2012 case of Ainsworth v. Loudon County School Board. 

In that case, involving public employees, the United States District Court for the Eastern District of Virginia found that an individual manager can be held individually liable under the FMLA.  The court noted that the FMLA defines an “employer” as including “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.”  The court further noted that this definition is similar to that under the Fair Labor Standards Act, and most courts have found individual liability for FLSA violations where the managers “have sufficient control over the conditions and terms of a plaintiff’s employment.”

In the private employer context, the courts have consistently held that individuals may be liable for FMLA violations.  Perhaps the possibility of individual liability will encourage managers to think more carefully about the FMLA.  No one wants to be a named defendant in a lawsuit.

Last Friday, the EEOC published its Final Regulations on Disparate Impact and Reasonable Factors other than Age under the ADEA.  The Final Regulation clarifies that an employment practice that has an adverse impact on individuals 40 and older is discriminatory unless the practice is justified by a “reasonable factor other than age” and that the individual challenging the allegedly unlawful employment practice bears the burden of isolating and identifying the specific employment practice responsible for the adverse impact.  The employer has the burden of establishing facts showing that a reasonable factor other than age (RFOA) exists.

The EEOC issued the Final Regulations in order to conform existing regulations to recent Supreme Court decisions and to provide guidance about the application of the RFOA defense.  The RFOA determination is a fact intensive analysis. Section 1625(e)(1) of the revised regulations provides that an RFOA is one that “is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.”  Moreover, the Regulations set forth a non-exhaustive list of factors relevant to whether an employment practice is reasonable and is based on factors other than age.  These factors include:

  • The extent to which the factor is related to the employer’s stated business purpose (i.e., the legitimate business purpose that the employer had at the time of the challenged employment practice);
  • The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which the employer gave managers and supervisors training about how to apply the factor in a way so as to avoid discrimination;
  • The extent to which the employer attempts to minimize subjectivity and avoid age-based stereotyping, particularly where the criteria being evaluated are known to be subject to negative age-based stereotypes;
  • The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
  • The degree of harm to individuals within the protected age group, in terms of both the scope of the injury to the individuals affected and the numbers of persons adversely affected, the availability of measures to reduce harm, and the extent to which the employer weighed the harm to older workers against both the costs and efficiencies of using other measures that will achieve the employer’s stated business purpose.

Significantly, the RFOA analysis does not adopt Title VII’s requirement that the employer must adopt a less discriminatory alternative.  However, the availability of less discriminatory options is manifestly relevant to the issue of reasonableness.  According to the EEOC, “[a] chosen practice might not be reasonable if an employer knew of and ignored an equally effective option that would have had a significantly less severe impact on older workers.  On the other hand, “an employer’s choice not to use an alternative that only marginally reduces the impact might be reasonable under the ADEA.”

The RFOA is an important defense for an employer in an ADEA case.  Employers should take into consideration the factors in the new regulations to properly utilize this defense.

A few weeks ago, I wrote about an important  10 (j) case in federal court in New York where the Defendant was challenging (1) the constitutionality of Obama’s recess appointments; (2) the Labor Board’s ability to delegate 10 (j) authority to the General Counsel’s office; and (3) if such a delegation survives once the Board’s membership falls below a quorum.

In a decision handed down this week, the NLRB prevailed, on all three counts.

First, the 10 (j) questions.   The Court looked to the plain meaning of the text and legislative history of the Act to find that the Board could delegate 10 (j) authority to the General Counsel.   Next, the Court found that the delegation of 10 (j) authority survives even if the Board’s quorum drops below the required number (3).   The Court distinguished that situation from the one that the Supreme Court faced in New Process Steel where the Board attempted to “perpetuate” its existence with 2 members.   The Court held that in delegating 10 (j) authority, the Board is not “perpetuating” any existence and is only delegating prosecutorial functions to the General Counsel.  This holding is consistent with cases from other Circuits — in fact, as Brennan Bolt at Labor Relations Today points out, the Supreme Court just rejected cert this week in a similiar case from the Ninth Circuit.  The only Circuit that has held to the contrary is the DC Circuit.

The last point — and the juicest of the three — was the constitutional issue of the President’s recess appointments.   Here, the Court declined to make any “pronouncements” because it found the constitutional issue did not change the outcome either way.  As the Court put it:

This is so because there are only two possible answers to the constitutional question and each answer leads to the conclusion that the § 10 (j) petition was validly brought. If the recess appointments were constitutional and the Board has a duly-constituted quorum, then the delegation to the General Counsel is presently inoperative and the Board itself had statutory authority to approve the instant petition.

If, on the other hand, the recess appointments were unconstitutional, then the Board lacks a quorum and the delegation to the General Counsel is operative. Since petitioner received authorization to initiate this § 10 (j) action from both the Board and the General Counsel, pursuant to the N.L.R.B. ‘s ordinary practice,4 one of these approvals must have been valid regardless of whether the President’s appointments to the Board were constitutional.

As I stated earlier, many employers cried foul over the recess appointments as a matter of principle.   There still might be merit to that argument, but it’s a complex question and will take time for the Courts to sort out — if ever.  As this case demonstrates, no employer should make any business decision on the hope that the recess appointments will be declared unconstitutional.