Legal Briefs Update for HR - April 2014 - The Blytheco Blog

Legal Briefs Update for HR – April 2014


1. College Coach Slam Dunked by Own Resume – First, learn to coach as an assistant under Rick Pitino at the University of Louisville. Second, land your first head coaching gig at Manhattan College and work your way into the national scene as a young coach with much promise. Third, lose to the defending NCAA champ in the opening round of the 2014 NCAA tourney but smile while your adversary and former mentor, Coach Pitino, tells the world that you have been hired as head basketball coach at the U of South FL. Fourth, tuck your tail and run as USF rescinds their job offer and Manhattan College puts you on leave because USF’s background check reveals that your alleged degree from the U of KY does not exist. Lesson to employment prospects . . . don’t puff, exaggerate or flat-out lie on your resume. Lesson to employers . . . don’t assume, trust or blindly accept what’s in a resume.

2. A Taxing Situation – The Supreme Court overturned the 6th Circuit opinion that found severance payments were not taxable wages, instead unanimously ruling that such payments are taxable wages under the Federal Insurance Contributions Act (FICA). U.S. v. Quality Stores, Inc. (U.S. 3-14). The defendant employer tried to argue that the severance payments were excluded from FICA taxes as a type of supplemental employment benefit (SUB), but the Court was not buying it. Before you try that path, check out 29 USC section 3121(a) for an explanation of what type of payment can qualify as a SUB.

3. It Pays to be Prompt and Effective – A lower court awarded more than $400,000 in damages arising from a race-based hostile environment claim under Title VII, where a black Assistant DA alleged that a white co-worker directed racial comments at her. The employer appealed the decision by arguing [1] the evidence was not sufficient to show that a hostile environment existed; and [2] even if the evidence was sufficient, the employer was insulated from liability due to its prompt and effective remedial response. The 5th Circuit chose to skip past the first question and found in favor of the employer on the second one. Williams-Boldware v. Denton County (5th Cir. 1-14). Here is the Court’s road map to what employers should do, when faced with a claim of co-worker harassment:

1. The supervisor who received the complaint promptly reported it to HR;
2. The employer immediately has a meeting with the complainant to learn what had happened;
3. The employee asked to confront her harasser and the employer arranged for that to happen;
4. The employer asked the employee for her input on what the employer’s response should be;
5. The employer verbally reprimanded the harasser;
6. The employer required the harasser to take diversity training;
7. The employer transferred the employee so that she could avoid contact with the harasser; and
8. The company made sure that the harassing conduct ceased

4. I’m Not Kidding – Employers should brief their IT departments on a Texas statute which took effect 9-1-13 that requires computer technicians who, in the course and scope of their employment or business, view an image on a computer that is or appears to be child pornography to report the image to a local or state law enforcement agency. The report may also be made to the Cyber Tipline at the National Center for Missing and Exploited Children. The definitions are broad . . . a “computer technician” is an individual who in the course and scope of employment or business installs, repairs or otherwise services a computer for a fee. And “child pornography” is an image of a child engaging in sexual conduct or sexual performance. A “child” is an individual under the age of 18, and it is a defense to a failure to report that the child in the image appeared to be at least 18. The failure to report is a Class B misdemeanor. See Texas Business and Commerce Code Chapter 109.

5. Let It Go – You may want to play your youngster’s favorite tune from “Frozen” while you read this item so that the lesson is forever stuck in your mind. OSHA ordered an employer to pay $257,000 ($157K in backpay and $100K in compensatory damages) plus attorneys’ fees to a former employee while enforcing section 806 of SOX, which prohibits whistleblower retaliation. The short story is that a marketing employee reported financial irregularities to his boss and his employment ended not long afterward. The employee later learned that his former employer was [1] giving a negative job reference on him; [2] refusing to do business with the employee’s next employer; and [3] refusing to do business with a satellite channel that the former employee was now representing. The employee alleged that he was being blacklisted in violation of section 806, and won. This is a great reminder that certain employee claims can be triggered even after the employee leaves. If you are really ticked off and thinking of ways to get even, let it go. The press release is at https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=25749.

6. Wait For It – Wage and hour claims are growing like kudzu in the deep South. They are attractive to plaintiffs’ counsel since a single error (e.g., misclassification, failure to pay overtime) can grow exponentially into a costly one where the mistake occurred regularly and involved a group of workers over an extended period of time. An issue that has caught the attention of the U.S. Supreme Court is whether employees who spend time at the beginning and end of the day waiting to go through security checks (e.g., going through metal detectors, having one’s backpack/purse checked) should be paid for that waiting time. So far, the 9th Circuit says “yes” while the 2nd and 11th Circuits say “no” and additional suits are teed up in WA, KY and TN. The Supreme Court issued cert, so they will decide what the rule will be, for all.

7. Noncompete Nuked – Prospective employee (we’ll call him Newbie) lives in AL and receives an offer from a MD-based employer to work remotely. The employment agreement, containing an noncompete, says MD law will apply and is signed by Newbie a few days before employment will begin. A few years later, Newbie resigns and tells employer he’s going to work for an employer they consider to be a competitor. Newbie’s employer tells him he can’t work the competitor because of the noncompete. Newbie files a declaratory action in AL state court, asking the court to declare the noncompete void. The employer takes counter measures and files for an injunction, to stop Newbie from going to work. Newbie wins at the injunction hearing because the judge rules that under AL law, a noncompete is only valid if signed by an employee and Newbie was not yet an employee when he signed. Prospective employment is not sufficient. This is a good reminder that each state has its own idea, whether by statute or common law, of what it takes to have an enforceable noncompete and the employer’s choice of law provision will not always prevail, especially where the law in the state of the employee’s residence is more favorable to the employee. Dawson v. Ameritox, Ltd. (S.D. Ala. 1-14).

8. Not Persuaded – Add a posse of 14 state Attorneys General to the growing list of organizations firmly against the NLRB’s so-called “persuader rule” and it’s nebulous advice exemption. The AG’s sent a collective letter to the U.S. Secretary of Labor, raising concerns similar to those voiced by the American Bar Association about the effect the rule has on attorney-client privilege. The rule requires reporting to the U.S. DOL any agreement or arrangement with a labor relations consultant (read: attorney) or other independent contractor or organization under which the person is going to persuade employees to exercise or not exercise their right to organize and bargain collectively via reps of their own choosing. The rule was slated to take effect in March 2014 but remains in a holding pattern.

9. Background Checks – The EEOC and the Federal Trade Commission (FTC) jointly released guidance aimed at employers http://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm and prospective employees http://www1.eeoc.gov//eeoc/publications/background_checks_employees.cfm?renderforprint=1. The guidance for employers summarizes obligations under the Fair Credit Reporting Act (FCRA) and non-discrimination laws, including rules relating to record-keeping and proper disposal of documents containing personal information. The guidance for job prospects explains their rights, including the ADA and GINA limits on asking for medical information and the documents they must be provided if an employer offer is rescinded based on what was in the background check under the FCRA.

10. EEOC on Religious Garb and Grooming – There is a fact sheet at http://www.eeoc.gov/eeoc/publications/fs_religious_garb_grooming.cfm and a Q&A at http://www.eeoc.gov/eeoc/publications/qa_religious_garb_grooming.cfm. This material is good fodder for discussion during manager/supervisor training, as the position the EEOC takes may not be consistent with what your leaders assume is an acceptable response to applicant and employee requests to deviate from current policy or practice relating to dress and grooming. This is guidance, which lacks the force of law, but shows the direction the EEOC is headed when addressing religious discrimination and religious accommodation under Title VII. Your HR or Legal team’s input will be important to making the right call, since blanket rules are out and case-by-case analysis is in. The guidance mirrors recent EEOC victories, by emphasizing that customer preferences and the desire to present a certain “image” via dress/grooming mandates will generally fail as defenses to Title VII claims.

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

California (San Francisco) – The new mandatory notice for the “ban the box” ordinance is now available at http://sfgsa.org/modules/showdocument.aspx?documentid=11600. The ordinance takes effect 8-13-14 and requires that this notice be posted in the workplace, given to an applicant or employee before the employer inquires about criminal history and sent to the labor union rep, if applicable.

Connecticut – The governor signed legislation which will take the CT minimum wage to the highest in the nation, at $10.10/hour, effective January 1, 2017. Interim increases from the current rate of $8.70/hour will be to $9.15/hour (eff. January 1, 2015) and to $9.60/hour (eff. January 1, 2016).

Illinois – Last summer, an IL appellate court held that two years of employment is needed as consideration to enforce a noncompete, even where the employee resigns voluntarily. Fifeld v. Premier Dealer Services (Ill. App. 1 Dist. 6-13). In January, a federal court faced with a noncompete case involving an employee who resigned after 15 months on the job declined to apply the two-year requirement and upheld the noncompete, noting that other IL courts have divergent views on the subject and the IL Supreme Court has not provided guidance. Montel Aetnastak, Inc. and Montel Inc. v. Kristine Miessen et al (N.D. Ill. 1-14). In February an appellate court other than the one who issued the Fifeld decision decided a case involving a 19-month employee who resigned without mentioning the Fifeld decision, much less relying on the court’s holding in that case.

Indiana (Indianapolis) – Another city is prohibiting itself and its vendors with ten or more employees from inquiring into a job applicant’s criminal history until after the first interview. The prohibition extends to printed and on-line application forms and to verbal inquiries.

Maryland – Effective October 1, 2014, MD’s anti-discrimination law is amended to add “gender identity” as a protected category. Gender identity is defined as gender-related identity, appearance, expression, or behavior of an individual regardless of an individual’s assigned sex at birth.

Nevada – Effective April 1, 2014, NV authorizes the use of medical marijuana where the user has a valid registry ID card. The law tells employers they are not required to allow use of medical marijuana in the workplace, but it does contain a reasonable accommodation requirement where such accommodation would not [1] pose a threat of harm or danger to persons or property or impose an undue hardship on the employer; or [2] prohibit the employee from fulfilling any and all of his or her job responsibilities. This clear-as-mud distinction, coupled with the fact that marijuana remains illegal under federal law, means that the NV law is likely to be challenged and soon.

New York – The NY Attorney General signed agreements with four large background checking companies, documenting the companies’ agreement that they will no longer issue automatic rejection letters to job applicants with criminal convictions on behalf of their customers, the prospective employers. The decision to continue the prehire process or deny employment is now in the hands of the employers, who must comply with NY state law which requires that job applicants with criminal convictions should be evaluated for hire using a statutory test found in the corrections law at http://www.highered.nysed.gov/tcert/ospra/correctionslaw752-753.html.

Pennsylvania (Philadelphia) – Effective April 20, 2014, employers within the City of Philadelphia are subject to a new posting requirement relating to pregnancy discrimination. Employers may be expected to accommodate a pregnant employee with restroom breaks, periodic breaks if the job requires prolonged standing, help with manual labor work, leave of absence for disability arising from childbirth, reassignment to a vacant position and job restructuring. The law does not allow employers to require a doctor’s note . . . all that is needed is a verbal request for accommodation.

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