Welcome to Legal Briefs for HR, the November 2014 edition.
Class Action Filed To School LinkedIn? – A handful of named plaintiffs are claiming their Fair Credit Reporting Act rights were violated by LinkedIn, when it provided information bearing on their “general reputation, mode of living or personal characteristics” to prospective employers for a fee, via the company’s Reference Reports. It remains to be seen if LinkedIn will be found to be a “consumer reporting agency” which is subject to the FCRA, but if it is, the lack of compliance with the law’s certification, notice and written authorization procedures (which are designed to ensure both accuracy and proper use of the info) could be a problem for the defendant. Sweet v LinkedIn Corporation (N.D. Cal. Oct. 2014).
That’s a Lot of Groceries – The FCRA strikes again! This time, a large grocery chain has agreed to pay $6.8 million to settle a class action lawsuit over a single sentence in the disclosure given to job applicants . . . “I release Publix Super Markets, Inc., its employees, its authorized agents and representatives from any liability in connection with any decisions made concerning my employment based on information reported.” Problem? The FCRA expressly requires that the notice given and written authorization obtained prior to seeking a consumer report (or investigative consumer report) on an individual for employment purposes be in a document that consists solely of the disclosure and it cannot contain a release. Subsequent advice from the FTC allowed the signed authorization to be added to the document containing the disclosure, but adding a release is still a no-no. Knights v. Publix Super Markets Inc. (M.D. Tenn. July 2014)
Three Strikes? – Last month, I wrote about a second lawsuit filed by the EEOC challenging an employer’s wellness program as violating the ADA. Since then, a third lawsuit has been filed by the EEOC but it’s attempt to stop the employer’s program immediately, via a temporary restraining order and preliminary injunction, failed. The judge ruled she was not ready to make a preliminary decision and the company was well positioned to refund penalties that had been improperly collected if she decides in the EEOC’s favor, later. This wellness program fines employees (and their spouses, if they have family coverage) for failing to take biometric tests. The costs per employee include a loss of HSA contributions up to $1500, a $500 surcharge, a $1000 tobacco surcharge and a second $1000 tobacco surcharge for the spouse, if applicable. The EEOC argues that the size of the fine means the program isn’t voluntary and therefore violates the ADA, as well as GINA. The employer counters that the incentives are sanctioned by two other federal statutes, including the Affordable Care Act, and that employees who work to lead healthier life-styles should not have to subsidize the healthcare premiums of those who do not. EEOC v. Honeywell International Inc. (D. Minn. Oct. 2014). This is getting good!
Going to Pot? – First, the states of Washington and Colorado OK’d recreational use of marijuana. Now, three more jurisdictions (Alaska, District of Columbia, Oregon) have joined the pot party and OK’d recreational use. So far, employers have been able to enforce their “no drugs” workplace policies and discharge those who refuse to be tested or who fail testing, but a conflict between these policies and lawful, off-duty use may be in the wind. Proponents of these laws are targeting California as the next state to OK recreational marijuana during the 2016 election cycle. A few of the particulars about the new laws:
Alaska – Takes effect 90 days after the vote is certified plus a nine-month period to write the regulations.
District of Columbia – Not so fast, my friend! Even though voters said “yes” by a 64% to 28% margin, D.C. is a federal enclave. Congress and the President of the U.S. can nullify any D.C. act via joint resolution and the appropriations process can be used to stall enactment for a very long time.
Oregon – Technically takes effect December 4, but the regs OK’g residents to legally grow and use marijuana will not take effect until July 1, 2015.
That’s Sick – Voters OK’d mandatory paid sick leave for employees in several jurisdictions:
Massachusetts – Effective July 1, 2015, employers or 11 or more employees must provide up to 40 hours of paid sick leave per year; employers of ten or less employees must provide up to 40 hours of unpaid sick leave per year. The law applies to full-time, part-time and temporary employees. Time off is accrued at the rate of one hour for each 30 hours worked. The time off can be used for (a) physical or mental injury or illness of the employee or the employee’s child, spouse, parent or parent of spouse; (b) routine medical appointments of same persons identified in (a); and (c) to address effects of domestic violence on the employee or the employee’s dependent child. Up to 40 hours of unused time can be carried over to the next year.
Montclair, NJ and Trenton, NJ – Employers of ten or more employees will provide up to 40 hours of paid sick time annually while employers with less than ten employees will provide up to 24 hours of paid sick time annually. Covered employees will begin accruing the benefit on March 4, 2015 or when employment begins, whichever is later.
Oakland, CA – Employers of ten or more employees will provide up to 72 hours of paid time sick annually while employers with less than ten employees will provide up to 40 hours of paid sick time annually. Accruals will begin on March 2, 2015 at the rate of one hour for every 30 hours worked.
More Money – Voters OK’d increases to the minimum wage in the following jurisdictions:
Alaska – $8.75/hour effective January 1, 2015; $9.75/hour effective January 1, 2016; after that, the rate will be the higher of $1 more than the federal minimum wage or the rate indexed to inflation
Arkansas – $7.50/hour effective January 1, 2015; $8.00/hour effective January 1, 2016; $8.50/hour effective January 1, 2017
Illinois – $10.00/hour effective January 1, 2015 (but this is a nonbinding, advisory vote)
Nebraska – $8.00/hour effective January 1, 2015; $9.00/hour effective January 1, 2016
Oakland, CA – $12.25/hour effective March 2, 2015
San Francisco, CA – $14.00/hour effective May 1, 2015; $13.00/hour effective July 1, 2016; $14.00/hour effective July 1, 2017; $15.00/hour effective July 1, 2018 (would be tied with Seattle, WA for the highest minimum wage in the U.S., assuming another jurisdiction doesn’t raise it even higher before the effective date)
South Dakota – $8.50/hour effective January 1, 2015; after that, the rate will indexed to inflation
Ebola Response – At least two federal agencies have posted advice intended to address issues arising from Ebola making its first appearance on U.S. soil. The IRS has posted two guidance offerings, to (1) facilitate employee donation of accrued paid time off in exchange for their employers’ cash donations to the cause; and (2) exclusion from taxable income of certain qualified relief payments Africa-based U.S. employees may receive from their employers. Both are posted at http://www.irs.gov/uac/Newsroom/IRS-Announces-Tax-Guidance-Related-to-Ebola-Outbreak-in-Guinea,-Liberia-and-Sierra-Leone. The Department of Health and Human Services seized upon this opportunity to remind healthcare providers of their HIPAA privacy duties, even during an emergency, at http://www.hhs.gov/ocr/privacy/hipaa/understanding/special/emergency/emergencysituations.pdf.
No Fishing on the Cruise Line – Employers responding to charges with heavy-handed Requests for Information attached and/or engaged in litigation with the agency have often questioned the scope of the EEOC’s subpoena power. While it is very broad, it is not without limits as shown in a recent employer win. Royal Caribbean ended the employment of an assistant waiter who was an Argentine national after learning he was diagnosed with HIV and Kaposi’s Sarcoma. The employee filed an EEOC charge, alleging an ADA violation. The cruise company defended that (1) the ADA did not apply to an Argentine working for a Bahamas-based ship; and (2) the Bahamas Maritime Authority’s medical standards required the discharge of the infected employee. The EEOC countered by using an administrative subpoena asking for info on all employees who had been discharged or not hired for a medical reason, among other things. When the employer balked, the EEOC sued. Both a magistrate judge and the U.S. District Court (S.D. Fla.) refused to enforce the subpoena, as overbroad. The 11th Circuit agreed, finding the EEOC was attempting to discover “a potential class of employees or applicants who suffered from a pattern or practice of discrimination rather than fleshing out” the instant charge. The Court noted that the EEOC has the ability to file a Commissioner’s Charge alleging a pattern or practice of discrimination, but cautioned against short-circuiting that process as it appeared to be doing in this case. EEOC v. Royal Caribbean Cruises, Ltd. (11th Cir. Nov. 2014).
Marriage and Splitsville – It seems the question of state law same-sex marriage bans may be headed to the Supreme Court. The Supreme Court refused to hear challenges to rulings in the Fourth, Seventh and Tenth Circuits which struck down state law bans on same-sex marriage. But now the Sixth Circuit has upheld similar bans in Ohio, Kentucky, Michigan and Tennessee, teeing up the Circuit split that will likely lead to a throwdown in the U.S. Supreme Court. DeBoer v. Snyder (6th Cir. Nov. 2014) For now, same-sex couple workers in those states are entitled to the same federally governed leaves and benefits as other married couples, so long as they were married in one of the 19 states and D.C. (which recognize same-sex marriages) or the five states bound by federal courts of appeals decisions striking down same-sex bans in those states.
Stated Differently – Here are some hot topics for you multi-state employers:
Alabama – Alabama is the 16th state to sign a Memorandum of Understanding with the U.S. Department of Labor, agreeing to share data and otherwise working together to identify and punish employers who misclassify employees as independent contractors.
District of Columbia – The Protecting Pregnant Workers Fairness Act of 2014 will take effect following a 30-day period for Congressional review and publication in the District of Columbia Register. It will be unlawful for employers to refuse to accommodate the known limitations related to pregnancy, childbirth, related medical conditions and breast-feeding; to take adverse action against an employee who asks for or uses an accommodation; deny employment opportunities if based on such request for reasonable accommodation and more. There is also a mandatory poster, in English and Spanish.
Michigan – Three workers who were certified medical marijuana users and who were discharged by their employers for testing positive are eligible to collect unemployment compensation from the State. Although a positive drug test normally results in disqualification for such benefits, Michigan’s Medical Marijuana Act says that a qualifying patient shall not be subject to a “penalty in any manner” for medical marijuana used in accordance with the Act. The Court decided that denial of UI benefits would be a prohibited penalty. The employers did not allege that these individuals were intoxicated at work or “using” at work, which would’ve violated the Act and likely resulted in a different outcome.
Missouri – A MO appeals court refused to enforce a noncompete agreement against a former employee where the covenant lacked a geographic limitation and put no limit on the class of competitors with whom contact was to be limited after he left employment. The court also decided that the information the former employer tried to protect via the agreement was both widely known in the industry and not subject to any effort by the employer to protect its secrecy, so the nondisclosure covenant was also unenforceable. Sigma-Aldrich Corp. v. Vikin (Mo. Ct. App. Oct. 2014).
New Jersey – The new minimum wage poster can be found at http://lwd.state.nj.us/labor/lwdhome/content/employerpacketforms.html and should be put on display on January 1, 2015. A federal court determined that, unlike the minimum wage and overtime provisions of NJ wage and hour law which are governed by a two-year statute of limitations, the remaining provisions (e.g., timing and method of payment, record-keeping, lawful deductions) are governed by a six-year statute of limitations. Meyers v. Hefferman (D.N.J. July 2014).
Texas (Dallas) – Voters OK’d an amendment to the City of Dallas Charter which adds sexual orientation and gender identity and expression as protected categories for City employees. This prohibition was already part of the City’s EEO policy.
Used with permission by:
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.