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Legal Briefs for HR

Posted on May 2, 2012

Welcome to Legal Briefs for HR, an update on employment issues sent to over 5000 HR professionals, in-house counsel and business owners all over the U.S. to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in!  Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” 

If you enjoy live presentations, mark your calendar for May 17-18 and the UT School of Law 19th Annual Labor and Employment Law Conference  to be held at the AT&T Center in Austin, TX.  Yours truly will present an updated “Handbook Helper:  Recipe for a Better Book” and serve as presiding officer for the HR Track.   Go to http://utcle.org/conference_overview.php?conferenceid=1017for agenda and registration info.  Hope to see you  there!

School’s almost out, but your education never ends:

1.  The Post is Toast (For Now) – In the continuing saga of the NLRB’s attempt to mandate a poster listing employee’s rights under the NLRA, it is “off again” for now.  The deadline to display the workplace poster was to be April 30, but a SC district court invalidated the Board’s rule and enjoined them from enforcing the poster mandate in their state, on April 13.  NLRB typically enforces its rules in any jurisdiction  that has not ruled against it, so the D.C. Circuit wisely noted that this would cause a problem for employers (especially those in multiple states) and on April 17 temporarily enjoined the NLRB from enforcing the poster mandate anywhere.  Other factors favoring the delay are pending appeals filed by employers’ organizations and an earlier D.C. district court ruling that the poster mandate was OK, but the Board lacked the authority to automatically treat a failure to post as an unfair labor practice or to toll the limitations period for filing an ULP. Oral argument in the National Association of Manufacturers case is set for September, so it’s likely that the posting deadline will be later than that, if it survives the Court’s scrutiny.  Stay tuned!

2.  Arrested Development – On April 25, EEOC issued an enforcement guidance named “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”  Proponents for the guidance claim it is merely a consolidation of existing guidance that is meant to incorporate “technological changes” in hiring methods and contains “nothing new.”  Employer representatives are more critical, pointing out that the guidance was released without any opportunity for public comment, contains a new requirement to conduct an individualized assessment before refusing to hire/firing based on an arrest/criminal record and recommends that employers “ban the box” which means removing any query relating to arrests and/or convictions from employment application forms. The 32-page guidance took effect immediately and can be found on the EEOC’s website at www.eeoc.gov.

3.  EEOC Expands Reach of Title VII – In a claim of discrimination involving a trans-gendered federal worker, the EEOC declared that such claims are cognizable under Title VII by explaining that sex discrimination can happen in cases involving one’s biological gender, as well in those involving gender stereotypes.  The EEOC cited to the U.S. Supreme Court’s decision in Price Waterhouse v. Hopkins, where a female partner candidate claimed she was denied partnership because her male colleagues felt she did not act like a woman and the Court agreed that “sex stereotyping” was a cognizable claim under Title VII.  The EEOC analogized a person going through the trans-gender process to a person who is converting from one religion to another, noting the latter would be protected from adverse employment action arising from that conversion.  Although this case involved a public sector employee, it should tip off all covered employers of the direction the EEOC is heading on this issue.  On a related note, the White House announced on April 11 that it will not issue an executive order to prohibit federal contractors/subcontractors from engaging in employment discrimination based on gender identity, saying it prefers that Congress enact a wider ban via the Employment Non-Discrimination Act,

4.  Face-Off Over Facebook – Maryland is the first state to enact legislation which prohibits employers from requesting or requiring an applicant or employee to disclose any user name, password or other means for accessing a personal account or service through an electronic communications device.  The law provides that employers may not discharge, discipline or otherwise penalize (or threaten to do these things) to an employee who refuses to give up his or her private info, and there is a corresponding prohibition against refusing to hire applicants for the same reason.  The law does have some protection for employers, in that it prohibits employees from downloading the employer’s proprietary info to a personal website or web-based account and allows for investigation into employee web-based misconduct which violates the law (e.g., securities law, financial law) or the employer’s ban on downloading and sharing its proprietary info.  The law will take effect October 1, 2012 and a number of other states (e.g., CA, IL, MA, MI, MN, NJ, NY, WA) are contemplating similar measures.  A proposed ban via federal law was discussed in LB4HR #3-2012, item 3 (which is posted on the firm website at www.munckwilson.com under Media Center).  The genesis of the MD bill was a complaint filed by the ACLU because the MD Dep’t of Public Safety and Correctional Services asked job applicants for their Facebook user name and password and seven applicants were rejected based on what was seen.  The ACLU argued that the Dept’s request violated the federal Stored Communications Act. Lesson?  Info that a person puts in a public space is fair game, so long as used in compliance with employment laws such as Title VII and the ADEA, but when employers demand or coerce disclosure of password to access private communications, there may be trouble ahead.  If unsure of your current methods, talk to your counsel.

5.  I Hope You Never Need This – OSHA issued new guidance on April 17 for its inspectors in dealing with the deceased’s family members following a workplace fatality, to “ensure[] that OSHA representatives speak to the victim’s family early in the inspection process, establish a point of contact, and maintain a working relationship with the family.”  The 25-page guidance can be found at www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-153.pdf.

6.  A Different Kind of Medical Malpractice – Employers in the 6th Circuit (KY, MI, OH and TN) will want to make sure that relations with all persons and entities involved in a workers’ comp claim are conducted fairly and at arm’s length, or risk a claim under the Racketeer Influenced and Corrupt Organizations (RICO) Act on top of the workers’ comp appeal for wrongful denial of benefits.  The back story involves transportation workers who alleged that their employer and its TPA were in cahoots with a physician who issued questionable if not fraudulent medical reports on the workers, toward denial of their WC claims.  The trial court dismissed their claim but the 6th Circuit reversed and remanded for further proceedings in the trial court, observing that Michigan’s nondiscretionary WC scheme creates a property interest in the expectation of statutory benefits after notice to the employer of a workplace injury.  Going further, the 6th Circuit said that even if the state law creates no such property interest, each worker’s claim for WC benefits is an independent property interest and the devaluation of that interest creates the kind of injury RICO was meant to address.  To win, each worker must prove he or she would’ve won the WC claim or obtained a better outcome, if it were not for the alleged fraud and conspiracy.  Brown v. Cassens Transport Co. (6th Cir. April 2012).

7.  Help For Hospitals – Hospitals who do not want to be classified as federal contractors/subcontractors (and all the work that entails) received good news in two pieces.  The first shoe to drop came in the form of the Dec. 2011 NDAA amendment which stated that a “TRICARE managed care support contract that includes the requirement to establish, manage, or maintain a network of providers may not be considered to be a contract for the performance of health care services or supplies” for the purpose of determining “whether network providers are subcontractors for purposes of the [FAR] or any other law.”  The other shoe dropped last month, when the DOL OFCCP rescinded a December 2010 enforcement directive on the same issue which is at odds with the NDAA. More recently, an attorney in the DOL’s Office of the Solicitor said the office would put on hold scheduled compliance reviews where the only nexus for jurisdiction is the employer’s participation in TRICARE.

8.  A Testy Situation – Pre-employment tests are often viewed as an objective and consistent method for evaluating prospective hires, but woe be to the employer who relies on a test that has a disparate impact on women or minorities AND cannot prove that its test is valid.  The latest employer to learn this lesson the hard way was tagged by an OFCCP complaint.  In a press release, the OFCCP said the test screened out 49% of otherwise qualified minority applicants and only 72% of nonminority applicants and that the employer has not shown that it actually and accurately measures job-related skills (for on-call laborers in a cheese producing facility).  A common misstep for employers is to rely on the test vendor’s validity studies, where those general studies are not sufficiently related to the skills needed for the particular jobs being offered by discrete employers.  And the UGESP standards for job-relatedness apply to claims investigated under Title VII by the EEOC as well as E.O. 11246 and the OFCCP.  EEOC has warned employers that they are ultimately responsible for proving validity and relying on a vendor’s representations is not enough.

9.  Gimme a Break – CA employers breathed a sigh of relief as the CA Supreme Court clarified that employers are to offer meal periods, but are not required to police them and ensure that no work is being done.  The duty is to relieve employees of all duty, relinquish control over their activities and permit them a reasonable opportunity to take an uninterrupted 30-minute break without impeding or discouraging them from doing so.  Brinker Restaurant Corp v. Superior Court (Super. Ct. Cal. April 2012).

10.  Stated Differently – Here are some hot topics for you multi-state employers:

1.  California – In response to employers’ struggles with the new Wage Theft Protection Act (eff. 1-1-12), the DLSE has posted an updated template and revised the FAQs to help make sense of the new law. The template is posted at www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html and the revised FAQs are posted at www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html.

2.  Delaware – The state’s medical marijuana law has gone up in smoke, after the Governor suspended the regulation-writing and licensing process for dispensaries.

3.  Maryland – Eff. Oct. 1, employers may not require an employee who served four or more hours on jury duty, including travel time, to work a shift that begins [a] on or after 5 p.m. on the day or jury service; or [b] before 3 a.m. on the day following jury service.  The employee may return to work if he or she chooses to do so, but be careful that the return to work is not coerced in any way by the employer’s representatives.

4.  New Jersey – An employer incorporated in DE and HQ’d in Maryland is required to pay NJ corporate business tax, based on one telecommuting employee in NJ who worked out of her home.  The employer properly withheld NJ income tax on the worker and remitted to the state, which prompted the demand for additional tax under the NJ Corporation Business Tax Act.  The Tax Court held for NJ and the employer appealed, agreeing that it was “doing business” in NJ based on the sole worker, but arguing that taxing such limited activity violated both the Due Process and Commerce clauses of the U.S. Constitution.  Both arguments failed and the appellate division upheld the Tax Court’s decision.  Telebright Corporation Inc. v. Director, New Jersey Division of Taxation.

5.  Ohio – An employer who has refused to pay workers’ comp premiums since 2006 has been hit with the court’s equivalent of the “death penalty” and ordered to go out of business.  The OH Bureau of Workers’ Compensation (OBWC) has ensured employee coverage of the employer’s injured workers (22 of them, including a death claim) in the interim and the owner pled no contest to the felony of failing to provide WC benefits to its workers.  After the owner failed to satisfy the terms of his sentence (i.e., one year of probation, 80 hours of community service, 90-day suspended jail sentence and lump sum restitution of almost $700,000), a judge ordered the business closed.  The owner has appealed.

6.  Utah – Employers are encouraged, but not required, to provide unpaid break time and appropriate space for breastfeeding mothers/employees to express breast milk at work.

11.For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State), follow me on Twitter.  I’m at @amross.

Until next time,
Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP
600 Banner Place
12770 Coit Road
Dallas, TX  75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckwilson.com
www.munckwilson.com

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