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Legal Briefs for HR

Posted on November 19, 2012

Welcome to Legal Briefs for HR, an update on employment issues sent to over 5000 individual HR professionals, in-house counsel and business owners and many HR and legal professional organizations (who have asked and been permitted to republish via their newsletters and websites) 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.comunder Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” 

I’ve combined the red states and the blue states to make LB4HR a purple state (and to celebrate K-State’s #1 BCS ranking . . .Woo Hoo!).  Hope you voted and that you elect to read this edition:

1.  Lessons From Sandy – As our east coast friends continue to pull their workplaces and homes back together, the super storm provided not-so-gentle reminders about how to plan for and respond to certain HR related issues:

1.  Telecommuting – Assuming one’s workplace was impacted while one’s home was not, the ability to work from home becomes more than a lifestyle choice or a mere convenience.  Have you assessed the ability of key employees to do this and made plans to equip them?

2.  Employer Financial Assistance – Generous employers who want to provide a quick cash infusion to affected employees should check out section 139 of the Internal Revenue Code, to read about the conditions which allow them to provide both tax-free disaster relief to their workers AND take a tax deduction for these payments.  This requires declaration of a “qualified disaster” by the President of the U.S. or the Secretary of the Treasury.

3.  Leave Sharing – Good hearted co-workers who were not affected also want to help by donating accrued paid time off to co-workers who can’t work due to displacement, injury or related reasons.  Before you set this up, check out IRS Notice 2006-59 to understand the tax consequences of these gifts to both the donor and the recipient, and to properly account for them.

4.  FMLA and Analogous State Law – While FMLA would not provide job-protected leave to attend to damaged personal property, it would come into play if the employee incurs a “serious health condition” or is needed to tend to a parent, spouse or child who has one.

5.  Volunteer Emergency Responders – Many states, including NJ, prohibit termination or dismissal of employees who fail to report to work because they are serving as volunteer emergency responders during a state of emergency declared by the President of the U.S. or a State governor.  Most statutes do not require pay continuation but often allow use of available paid time off.

6.  Call-In//Reporting Pay Laws – Some states, including NJ, require employers to pay employees who report to work a nominal amount (e.g., one hour of pay) whether they actually perform work or not, where the employer called them in or the employer failed to notify them that they should not come in and they showed up for work.

7.  Unemployment Benefits – Upon request from the Governor of affected states, the Federal Disaster Unemployment Assistance program of the U.S. Department of Labor can authorize payment of unemployment compensation to those who become unemployed as a result of a natural disaster, in qualifying counties.  The benefits are available to those who work for an organization as well as the self-employed.

8.  Safety – If employees are pressed into service to help with workplace clean-up, don’t forget to minimize exposure to dangerous substances or situations, provide personal protective equipment where required (OSHA, anyone?) and use third parties with needed knowledge and training, where hazards exist.

9.  Destroyed Form I-9s – If a natural disaster or other unforeseen circumstance destroys a company’s stored Forms I-9, the USCIS suggests that new ones should be completed to the extent reasonably possible for those employees and attach a memo stating the reason they were redone.

10.  Cloud Computing – If your primary computer system and back-up system are both within the swath of a storm or other catastrophic event, it might be useful to have your data “in the cloud” instead.

2.  Bad Moon Rising – Employment and severance agreements often condition the grant of certain benefits on the subject employee not being fired for “cause,” followed by a laundry list of offenses deemed to be “cause.”  A common example of “cause” is engaging in misconduct that injures the Company and one court had to determine if mooning one’s supervisors met this definition.  The fired employee who was denied severance argued that the Company had not been economically injured by his, ahem, display.  The Court disagreed, finding that there was no requirement of financial injury and that undercutting the authority of managers via an act that is insubordinate, disruptive, unruly and abusive is the kind of injury contemplated by the Agreement’s language.  Selch v. Columbia Management (IL App Aug. 2012)

3.  Board Backing Off (a Bit) – The NLRB’s Acting General Counsel gave employers some relief, by pointing out two at-will employment clauses that do not violate the NLRA by being overbroad and jeopardizing employees’ section 7 rights.  The two policies at issue both stated, in so many words, that no manager, supervisor or employee had the authority to make an agreement for employment other than one that was at-will AND only the president of the company had such authority and then only in writing.  The NLRB pointed out that these policies concede that the employment relationship could be changed and simply highlighted the fact that persons other than the president had no authority to make that change.  Also, the policies did not require employees to refrain from seeking a change in their status, such as via union membership, nor did it seek acknowledgement that their status would never change.  In contrast, a policy from the American Red Cross Arizona Blood Services Region handbook required employees to sign a statement that said “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.”  An ALJ in the Red Cross case found the statement was essentially a waiver of section 7 rights and the case was settled before the NLRB ruled on it.

4.  Rocky Mountain High – You heard right.  Both CO and WA voters passed initiatives to decriminalize  possession of marijuana.  And CO does have a lawful conduct statute which prohibits employers from taking adverse employment based on employees’ off duty and off premises lawful conduct.  However, the new CO law also says “Nothing in this Section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace.”   The law also preserves employers’ rights to restrict drug use via its policies and to prohibit possession of pot on its property.  Existing case law in many states (e.g., CA, MT, OR, WA) holds that so long as marijuana remains illegal under federal law, states cannot make it legal or force employers to accommodate such use.  Even so, revisit and tighten up your drug policy by replacing references to “illegal drugs” (which may cause confusion in certain states that allow recreational and/or medical marijuana) with “drugs which are illegal under any federal, state or local law, including marijuana.”

5.  Customer as Joint Employer – Security service assigns a Sudanese man and an Ethiopian woman (the guards), who speak Arabic and Amharic with English as their second language, to provide security services at a customer’s facility.  Customer says the guards are hard to understand on the radio due to their accents (after they had been on the job for more than nine months) and asks for replacements.  Security service sends replacements and has no open positions, so lets the two guards go.  The two guards sue the security service and the customer for national origin and race discrimination.  Court concedes security service and customer are neither a single employer nor an integrated enterprise, but they do find joint employment based on the customer’s right to reject anyone security service sends.  Further, the court finds security service was not liable for the Title VII violation but the customer was, since the discharge from employment was triggered by the customer’s demand.  Dafiah v. Guardsmark LLC (D. Colo. Oct. 2012).  This case appears to be a bit of an outlier, but you may want to revisit your services contracts, especially the indemnification section.

6.  Using the CFAA to Stop a Thief – Since 1986, there’s been a federal law called the Computer Fraud and Abuse Act (CFAA).  It provides both criminal and civil liability for individuals who obtain information, commit a fraud, or cause damage via access to a computer or info on a computer without authorization, or by exceeding the authorization he or she was given.  In the 2006 Citrin case, the 7th Circuit said the CFAA is violated where an employee accesses a computer to further interests that are adverse to his or her employer.  The reasoning was that the access violates a duty of loyalty, scraps the employee’s agency relationship with the employer and concurrently the prior authorization to access the computer info.  In short space, the 1st, 5th and 11th Circuits nodded their agreement with this decision.  But then the 9th Circuit, en banc, took an earlier pro-employer decision in Nosal and reversed it, by narrowly interpreting the statute’s  “without authorization” and “exceeds authorized access” language and essentially limited application of the CFAA by employers to instances where its system had been hacked.  Access by a departing employee who stole trade secret info would not violate the CFAA since the employee, at one point, had been provided access. In July of this year, the 4th Circuit agreed with the 9th Circuit, holding that mere violation of the employer’s computer use policies would not support a CFAA claim, but hold on because the employer in the case has requested that the U.S. Supreme Court take a look at the decision and resolve the split among the circuits.  If you want to follow this tennis match, keep an eye on WEC Carolina Energy Solutions LLC v. Miller (4th Cir. July 2012) and see if the Supremes take it up.

7.  Who’s the Boss? – The U.S. Supreme Court is about to address a question left unanswered by two 1996 decisions that dealt with workplace sexual harassment.  In both Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, the Court made clear that an employer could be liable for harassing conduct by one of its supervisors.  But just who, exactly, is a supervisor?  The answer will come when the Court takes up Vance v. Ball State University, where the 7th Circuit declined to hold the University liable for racial harassment by a supervisor because he lacked the authority to make employment decisions, such as hiring, promoting, demoting, transferring, disciplining or firing.  Oral argument is set for November 26.  Stay tuned!

8.  Tool Time – USCIS has a new E-Verify: Know Your Rights campaign, aimed at schooling your employees about E-Verify and the Self Check option.  The new tool can be found on the USCIS website (www.uscis.gov) under the Resources tab.

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

1.  Alabama – AL voters OK’d an amendment to the State’s Constitution, limiting unions to organizing new members via secret ballot and not by card check.

2.  Arizona – State minimum wage will rise from $7.65/hour to $7.80/hour effective January 1, 2013.  The rate is adjusted annually using the Consumer Price Index for All Urban Consumers.

3.  California – A CA district court held that an employment application that asks for applicants’ date of birth creates at least some suspicion of age discrimination and could form the basis of a disparate impact claim under the ADEA and analogous state law (FEHA).  Ernst v. Bank of America (S.D. Cal.  Oct. 2012).

4.  California – The CA Labor Code allows employers to pay computer professionals on an hourly basis, with no premium pay for overtime, so long as they pay the statutory minimum hourly rate.  The rate is adjusted annually and will increase from $38.89/hour to $39.90/hour effective January 1, 2013.  This is higher than the hourly computer professional minimum rate of $27.63 provided under the federal Fair Labor Standards Act. There is also a 1-1-13 increase for licensed physicians and surgeons, from $70.86/hour to $72.70/hour.

5.  California – Eff. January 1, 2013, CA employers may not require or request an employee or applicant to disclose a username or password for the purpose of accessing personal social media, access personal social media in the presence of the employer or divulge any personal social media.  The new law contains exceptions for investigation of alleged employee misconduct or violation of laws or regulations.

6.  Illinois – Eff. January 1, 2013, personal identity info must be redacted from documents or exhibits filed with the court in civil cases, per Supreme Court Rule 138.  The measure is intended to deter identity theft.

7.  Newark, New Jersey – Eff. November 18, 2012, a Newark city ordinance limits employers’ ability to acquire or use information about an applicant’s prior criminal activity in the hiring process, before a conditional offer of employment is made.  Employment is broadly defined to apply to both employees and independent contractors, as well as students, interns and volunteers.  If you employ individuals within the city limits, you will want to print out and read the ordinance (18 pages) at www.hireimage.com/_resources/common/userfiles/file11.

8.  Virginia – The VA Supreme Court held, in a split decision (three of seven justices dissenting) that an individual such as a manager or supervisor who participates in the firing of an employee can be held personally liable, in tort, for a wrongful discharge, along with the employer.  Like most states, VA recognizes employment at will but also certain limited exceptions to that doctrine where there is a violation of public policy.  In this case, the plaintiff (a nurse) alleged that she was fired because she refused to enter into an adulterous affair with her supervisor and the owner of the business (a doctor).  One of the VA public policy exceptions is where an employee is fired for refusing to engage in a criminal act, such as adultery and open and gross lewdness and lasciviousness.  VanBuren v. Grubb (Virginia Nov. 2012).

10.  For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State . . . Go Cats!), 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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