Legal Briefs for HR - May 2013 - The Blytheco Blog

Legal Briefs for HR – May 2013

School is almost out, but your education never ends:

1. Fresh Form – Don’t forget that employers are to begin using the new Form I-9, beginning on May 7. The bulked-up, nine-page form can be found at

2. Heads’ Up, Wheeler Dealers – When purchasing corporate assets (as opposed to stock), most buyers take comfort in the belief that they are acquiring the assets and not the liabilities of the seller. This belief comes from state law which may limit buyers’ liability, coupled with express language in the agreement stating that the asset is bought “free and clear of all liabilities” and perhaps even disclaiming specific, known liabilities. Such careful drafting was not enough to avoid successor liability for the seller’s employees’ Fair Labor Standards Act collective action for overtime in Teed v. Thomas & Betts Power Solutions LLC (7th Cir. 3-26-13). The district court found and the appellate court affirmed that where liability is based on violation of a federal statute relating to labor relations or employment, a federal common law standard of successor liability (which is more favorable to plaintiffs than most state-law standards) will apply in most cases. This protects the employees’ claims from being eviscerated by the sale of the business and, presumably, the buyer paid less for a business saddled with an imminent debt to pay.

3. More Fun With the FLSA – The Working Families Flexibility Act of 2013 (H.R. 1406) was filed in Congress on April 9. If passed, the bill would amend the Fair Labor Standards Act and allow private sector employers to offer nonexempt workers a choice between “comp time” or overtime pay. Comp time accruals would be capped at 160 hours, employers could cash out amounts over 80 hours at any time after giving 30 days’ notice to the employee and unused comp time would be cashed out annually. SHRM sent reps to testify in favor of the bill and a vote in the House is expected in early May. The bill has 168 co-sponsors. Go to for full text and to follow the bill’s progress.

4. Board Offers Breathing Room – Many employers remain dumbfounded that the NLRB declared, in Banner Health Systems, that imposition of a blanket confidentiality requirement on employees who are part of a workplace internal investigation may be interference with their section 7 rights. On April 16, 2013, the NLRB’s Division of Advice issued a memorandum that evaluated one such offending policy statement and offered a “fix.” The original policy said “Verso has a compelling interest in protecting the integrity of its investigation. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.” Way too broad, said the Division of Advice. The fix is to replace the underlined sentences with the following: “Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.” See the difference? The first version imposes a “gag order” in every instance. The second version says strict confidence may not be required in every instance and will only be imposed when reasonably necessary. Advice memorandums are not on a par with Board decisions, so this is an argument but not a guarantee that you will prevail if you follow the suggested fix and a charge is filed based on this type of scenario. If you intend to demand strict confidentiality from investigation participants, identify and document the business reason(s) specific to the matter being investigated.

5. Brand Loyalty – An employee of a real estate brokerage, Rapid Realty NYC, gets a tattoo featuring his employer’s logo, to show his loyalty to the firm. Employer decides this is very cool and wants to encourage more, um, advertising by offering a 15% increase on commissions earned for employees who ink the logo on their body. I’m just waiting for the person who claims a severe allergy to ink but will allege an ADA violation if denied the pay raise. Reasonable accommodation is that he/she can just wear the logo on a lapel pin, right?

6. Recess Appointment Update – In the continuing saga of the pseudo recess appointments to the NLRB, the Board filed a petition on April 25 for the U.S. Supreme Court to hear and (they hope) overturn the D.C. Circuit’s opinion in Noel Canning which found that three of President Obama’s appointments to the Board were unconstitutional. H.R. 1120, which would require the NLRB to stop all activities which require a three-person quorum and prohibit enforcement of any rulings handed down by past invalid panels, passed the House (219-209 vote) and was referred to a Senate committee on April 15. President Obama has re-nominated the Chair, Mark Gaston Pearce, and put up two new nominees, but members Block and Griffin remain in limbo as unconstitutional appointees. Stay tuned!

7. I Fought the Law and the Law Won – Legal and legislative wonks finally have their answer (at least in Colorado) about the apparent tension between some states’ so-called medical marijuana laws and laws which prohibit employers from taking adverse employment action based on an employee’s lawful conduct. The brain teaser became more interesting late last year, when Colorado and Washington enacted state laws legalizing recreational use of marijuana. Inquiring minds wanted to know . . . if the pot use was legal under state law, did that mean an employer could not fire an employee for use of the drug? The first round of cases clearly upheld an employer’s right to impose workplace drug use policies and discharge anyone who was under the influence while at work. The next question became whether the individual could be fired for pot use, if not under the influence while at work? Those are the facts alleged in Coats v. Dish Network LLC (Colo. App. 4-25-13). Brandon Coats, a quadriplegic, claimed he had a license to use medical marijuana and never “used” or was under the influence at work. He tested positive and was discharged for violating the employer’s drug policy. Coats challenged the discharge under Colorado’s “lawful conduct” statute. While he agreed that pot use remains unlawful under federal law, he argued that his conduct was lawful under state law, making the discharge from employment unlawful. The court disagreed saying that the phrase “lawful activity” was not defined within the state statute and should be interpreted to mean lawful under state and federal law, not just state law.

8. Expansion of Title VII and FMLA – Two bills were filed in Congress on April 25 to expand nondiscrimination protection to members of the lesbian and gay community, and to broaden the definition of seriously ill family members who can trigger job-protected FMLA leave. The Employment Non-Discrimination Act (ENDA)(H.R.1755 & S.815), if passed, will prohibit employers of 15 or more employees from failing or refusing to hire, or to discharge or to otherwise discriminate with respect to pay, terms, conditions or privileges of employment because of an individual’s actual or perceived sexual orientation or gender identity; or to limit, segregate or classify employees or applicants because of such actual or perceived sexual orientation or gender identity. Upon filing, the House version had 161 co-sponsors. The Family and Medical Leave Inclusion Act (H.R. 1751), if passed, would modify the list of family members that an employee could take time off to care for, when they have a serious health condition. Currently, eligible employees can take FMLA to care for the employee’s spouse, parent (no in-laws) or child. The list would be expanded to add the employee’s same-sex spouse or partner, parent-in-law, adult child, sibling, grandchild or grandparent. This bill has 18 co-sponsors. If you are in the oil biz and want to follow progress of these bills and read full text, go to and insert the bill numbers.

9. Whistle While You Work – The Offshore Oil and Gas Worker Whistleblower Protection Act (H.R. 1649), if passed, will prohibit employers from discharging or otherwise discriminating against any employee who [1] has or is about to provide info to the employer or government officials about a perceived violation of the Outer Continental Shelf Lands Act; [2] has or is about to testify before Congress or another proceeding about such perceived violation; [3] has or is about to participate in a hearing before Congress about such perceived violations; [4] objected to or refused to participate in any activity that is a perceived violation; [5] reported an unsafe condition, illness, injury or information regarding the adequacy of any oil spill plan response to the employer or government official; or [6] refused to perform duties if the employee had a good faith belief that the duties could cause injury, illness or an oil spill. Prior versions of this bill have been unsuccessful. If you want to follow progress of the bill and read full text, go to and insert the bill number.

10. Save the Date – If you like to immerse yourself in two days of labor and employment presentations, please join me in Austin on May 16 & 17 for the 20th Annual University of Texas School of Law Labor and Employment Law Conference. The program and registration info is now posted at Click on the link for “Labor and Employment Law.” I will speak on May 16 and my topic is Hire Power: Developments in Hiring Practices. Hope to see you there! Stay tuned for details on a second conference I will speak at, the Texas SHRM State Council/Texas Association of Business Employment Relations Symposium, to be held in San Antonio in mid-July.

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

1. Arkansas – The governor signed a bill (H.B. 1901) on April 22, enacting a law that prohibits employers from requiring a current or prospective employee to disclose a username or password for a personal social media account; add an employee, supervisor or administrator to the list of contacts for that account; or change privacy settings of the account.

2. California (San Jose) – Effective March 11, 2013, the local minimum wage is $10.00/hour. This applies to employers within the city limits and there is a required posted notice.

3. Colorado – Employers of four or more employees are prohibited from requesting or using an applicant’s or employee’s consumer credit information in evaluating a person for employment, hiring, promotion, demotion, reassignment, adjustment in pay or retention as an employee, unless one of three exceptions apply. The exceptions are [1] banks or financial institutions; [2] employers who are required by law to procure consumer credit information; and [3] where the consumer credit information is “substantially related” to the employee’s current or potential job. Even where there is a substantial relation, the employer must have and disclose a “bona fide purpose” for the request and use of credit information. Where use of the consumer credit info is allowed, and if the employer plans to take adverse employment action based on the report, the employer must make written disclosure to the applicant or employee of its reliance on the report in making the decision and must identify the specific information upon which it relied. This goes farther than the similar disclosure requirement under the federal Fair Credit Recording Act.

4. New Mexico – The governor signed a bill on April 5 which is similar to the AR law, but is limited to job applicants and does not apply to current employees.

5. New York – State minimum wage will rise to $8.00/hour on December 31, 2013; $8.75/hour on December 31, 2014; and $9.00/hour on December 31, 2015.

6. Pennsylvania (Philly) – The City Council failed to garner sufficient votes to override a mayoral veto of an ordinance that would have mandated employer-provided paid sick leave.

7. Tennessee – The Department of Labor now has exclusive authority to enforce state wage/hour laws. Private suits have been eliminated unless brought under federal law or TN common law. The legislature was prompted to act by the perceived glut of lawsuits in California over working off the clock, donning and doffing and similar claims for unpaid wages.

8. Virginia – Effective July 1, 2013, it is unlawful to require an employer to release certain personal identifying information about current or former employees to third parties. Protected information includes home phone number, cell phone number, email address, shift times or work schedule.

12. 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.

Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP

Legal Briefs for HR (“LB4HR”) is provided to alert recipients to new developments in the law and with the understanding that it is guidance and not a legal or professional opinion on specific facts or matters. For answers to your specific questions, please consult with counsel.

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