All posts by Michael J. O'Brien

A Paid Sick Days Law Dies (Again)

In case you missed it last week, the Pennsylvania Commonwealth Court upheld a 2015 trial court ruling that the City of Pittsburgh did not have the authority under state law to enact the Paid Sick Days Ordinance.

After the City of Pittsburgh passed the Paid Sick Days Ordinance, which would require employers to provide employees with a minimum of one hour of paid sick leave for every 35 hours an employee works in the city limits, a group that included the Pennsylvania Restaurant & Lodging Association and several local restaurants and businesses challenged the city’s authority to enact such legislation, according to a press release from Littler.

The challenge was based on the fact that under the laws of the Commonwealth of Pennsylvania, Pittsburgh is a home rule charter municipality.

Under state law, “a municipality which adopts a home rule charter shall not determine duties, responsibilities or requirements placed upon businesses, occupations and employers      . . .  except as expressly provided by the statutes which are applicable in every part of this Commonwealth or which are applicable to all municipalities or to a class or classes of municipalities.”

Citing an earlier Pennsylvania Supreme Court ruling and its own precedent, the Commonwealth Court found that the Paid Sick Days Ordinance imposed “numerous affirmative duties” on employers and therefore was invalid and unenforceable.

The City of Pittsburgh had argued that state law permits cities to pass ordinances relating to disease prevention and control, but the Commonwealth Court noted that the provision of state law that the city relied upon applies only to municipalities that have boards of health or a department of health.  Pittsburgh has neither.

It is unclear whether the City will appeal.  While Pittsburgh’s ordinance has been invalidated, employers should remember that Philadelphia’s paid sick leave ordinance remains in effect, Littler notes.

‘HR May Not Be Looking Out For You’

“Is human resources really the right place to go?”

That’s the rhetorical question Gretchen Carlson asked an audience last night while talking about the topic of sexual harassment in the workplace, according to a report on Fortune‘s website.

Carlson — the former Fox News host who sued her network’s chairman, Roger Ailes, for sexual harassment last July — was addressing the 2017 class of the Fortune/U.S. State Department Global Women’s Mentoring Partnership,  when she made her HR-averse remarks.

After posing the rhetorical question, Carlson  continued: “Because what I always equate it to is: Who’s giving them the paycheck?”

From the Fortune post:

“In the end,” Carlson pointed out, “if the culture’s being set from the top and it’s trickling down to the lower levels, human resources may not be looking out for you.”

Carlson’s hot take on HR may have something to do with her upcoming book, which Fortune quoted Carlson as saying contains “some new ways in which we might look” at sexual harassment, including different kinds of reporting mechanisms. The book, called Be Fierce, was inspired by the “thousands” of women who reached out to her in the wake of her suit, sharing their own stories of harassment and other abuse.

Personally speaking, I have no idea how well her book will sell, but I can well imagine a fierce — and negative — response by HR leaders at Carlson’s remarks last night.

FTC Background-Check Primer

In case you missed it, the Federal Trade Commission issued a blog article on Apr. 28 titled “Background checks on prospective employees: Keep required disclosures simple.”

According to the FTC’s blog post:

Background screening reports are “consumer reports” under the Fair Credit Reporting Act when they serve as a factor in determining a person’s eligibility for employment, housing, credit, insurance or other purposes and they include information “bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”

If your company uses background screening reports to make hiring decisions, here are some steps the FCRA requires you to take:

  1. Before you get a background screening report about a prospective employee, disclose to the person that you intend to get the report and then get their written authorization allowing you to do that.

  2. If the background screening report reveals something that may cause you to decide not to hire the person, you must notify them of the results of the report and provide them with a copy. Next, you have to give them sufficient time to review the report so they can challenge any elements that might be incorrect.

  3. If you ultimately decide not to hire someone based in whole or in part on the contents of a background screening report, you must provide a notice to that person that states they weren’t hired due at least in part to the result of the background screening report.

The FTC blog post says one issue employers struggle with making the required initial disclosure before they obtain the background screening report and get the prospective employee’s authorization.

But it’s easier than you might imagine:

Under the FCRA, you must provide the prospective employee with a clear and conspicuous written disclosure that you plan to get a background screening report about them and you must get the person’s written authorization that gives you their permission to compile the report. It’s OK to put the required disclosure and your request for their authorization in one document. Just be sure to use clear wording that the prospective employee will understand.

Some companies trip themselves up by using complicated legal jargon or adding extra acknowledgements or waivers, the FTC notes. Here are some examples of the kind of things that shouldn’t be in this simple document:

  • Don’t include language that claims to release you from liability for conducting, obtaining, or using the background screening report.
  • Don’t include a certification by the prospective employee that all information in his or her job application is accurate.
  • Delete any wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.
  • Get rid of overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than 10 years old.

That extra stuff not only makes it harder for the prospective employee to understand the main purpose of the document, but it also may violate the FCRA. Adding other acknowledgements or releases of liability is beyond the scope of what the FCRA permits in this document. If you have additional waivers, authorizations, or disclosures you want to give to prospective employees, do it in a separate document. Don’t include them in the FCRA disclosure and authorization document.

The FTC says the matter is as simple as this: “Complying with the FCRA’s disclosure requirement for the use of background screening reports is easy. You can do it in a few sentences. Just include a simple, easy-to-understand notification that you will obtain a background screening report, perhaps with a simple explanation of what information will be included in the report. The request for the prospective employee’s authorization should be in plain language, too.”

A National Ban on Salary History?

U.S. Congresswoman Eleanor Holmes Norton (D-DC) today introduced the Pay Equity for All Act of 2017 with original cosponsors Representatives Rosa DeLauro (D-CT), Jerrold Nadler (D-NY), and Jackie Speier (D-CA) to prohibit employers from asking job applicants for their salary history before making a job or salary offer, according to a press release.

The bill — which was first introduced last Sept. — seeks to reduce the wage gap that women and people of color often encounter.  The bill is particularly vital after the U.S. Court of Appeals for the 9th Circuit overturned a lower court ruling that determined that pay disparity based exclusively on past salaries was discriminatory under the Equal Pay Act.

As you may recall from our coverage on the topic, Massachusetts, New York City, the District of Columbia and Philadelphia have passed similar legislation banning employers from seeking past salary history.  Because many employers set wages based on an applicant’s previous salary, workers from historically disadvantaged groups often start out behind their white male counterparts in salary negotiations and never catch up.

“After last week’s disappointing 9th Circuit ruling, it is critical that Congress take legislative action to ban the practice of asking for an employee’s salary history, which disadvantages women and minorities, who disproportionately carry lower salaries through their entire careers simply because of wages at previous jobs that were set unfairly,” said Congresswoman Norton.  “Our bill will help reduce the wage gap by requiring employers to offer salaries to prospective employees based on merit, not gender, race, or ethnicity.”

“The 9th Circuit’s ruling represents a step backward in the fight for equal pay and only serves to reinforce the salary gap that has persisted for generations,” said Congressman Nadler (D-NY).  “To end this cycle of gender and racial pay inequality, states and localities—including New York City—have recently passed laws banning employers from asking about salary history. Congress should follow New York’s lead and ensure that people all around the country are afforded the same opportunity to break the cycle of pay inequity.”

“Forcing employees and potential employees to disclose their salary history sabotages our efforts to combat the wage gap for women and minorities,” said Congresswoman Speier. “The Pay Equity for All Act protects applicants from being frozen in pay scales unrelated to their experience, skills, and merit.”

Trumps Appoints NLRB’s Miscimarra

In case you missed it, late last week President Donald Trump  appointed Philip Miscimarra as the permanent head of the National Labor Relations Board, a role the Republican had been holding since Trump nominated him to temporarily fill the position shortly after his inauguration.

According to Reuters, Miscimarra, a former partner at Morgan Lewis & Bockius, was first appointed to the Board in 2013 by then-President Barack Obama “and has routinely broken with his Democratic colleagues on key labor issues.”

We first wrote about Miscimarra back in February, when legal experts weighed in on where they thought his appointment would take the board:

Michael Lotito, a partner and co-chair of the Workplace Policy Institute at Littler Mendelson, calls the appointment of Miscimarra the “first step” in a process of returning the board to balancing the rights of employees with the legitimate interests of employers as set forth in the National Labor Relations Act.

“Over the past five years, the NLRB has reversed over 4,500 years of precedent, often over the dissent of [new chair]  Miscimarra,” Lotito says. “Now, the new administration must appoint two new members to the Board to fill the vacancies that exist.  Hopefully, that will happen soon followed by quick confirmation. Only then, with the board at full strength, will it be able to tackle critical workplace issues needing a reasoned resolution.”

Steve Bernstein, a partner at Fisher Phillips in Tampa, Fla., says that, as the NLRB’s lone Republican for the past several months, Miscimarra  has authored some of the more vigorous and compelling dissents seen in some time:

“An examination of those dissents may offer a roadmap of what we might expect going forward, as the board moves toward a return to full strength,” he says.

A number of Miscimarra ‘s dissents call for greater clarity in the standards to be applied by his agency, Bernstein says, along with a more flexible approach to evaluating employer policies that takes into account the unique justifications for the policies themselves.

More recently, Miscimarra  has applied that “common-sense” approach to a number of NLRB doctrines, ranging from the employee status of graduate teaching assistants to the supervisory status of patient care coordinators, Bernstein says. Miscimarra, he adds, also has challenged controversial decisions invalidating binding arbitration provisions and limiting an employer’s right to insist upon confidentiality in workplace investigations.

“At the same time,” Berstein says, “he has openly questioned the NLRB’s apparent departure from long-standing precedent with respect to doctrine governing the use of permanent striker replacements, along with the test for joint-employer status.”

 

Trump Takes on H1-B Visas

President Trump is expected to sign a new executive order today “aimed at making it harder for technology companies to recruit low-wage workers from foreign countries and undercut Americans looking for jobs,” according to the New York Times.

The order is expected to be signed during the president’s visit to a Wisconsin toolmaker today, and is a continuation of Trump’s line of attack from his campaign.

From the Times:

As a candidate, Mr. Trump often assailed the government’s H-1B visa program, under which the government admits 85,000 immigrants each year, mostly to work in high-tech jobs. Mr. Trump pledged to end the program, which he said was allowing companies to fire Americans and replace them with lower-cost foreign employees.

The president’s order, according to officials who spoke to the newspaper on the condition of anonymity, seeks changes to the program that would require applicants and their potential employers to demonstrate that the visas are going only to “the most highly skilled workers” in their fields.

As a result,  the H-1B visa would no longer be a cheap way for companies to replace American workers. But technology executives, who have argued that the program is vital to their ability to recruit talent, are likely to be frustrated by the change:

Robert D. Atkinson, president of the Information Technology and Innovation Foundation, a research group sponsored by several tech companies, predicted in January that a crackdown on H-1B visas would be counterproductive.

“The effect would end up being exactly the opposite of what Trump wants,” he said. “Companies would go offshore, like Microsoft did with Vancouver, Canada,” to seek talent.

Earlier this week, Peter Cappelli, an HREonline.com columnist and Wharton professor, posted a column on the topic of H1-B visas and whom the program really benefits:

When we talk about programs like this one, the question of whether it is “good” or “bad” for the country is almost impossible to answer objectively. What we can answer is, good for whom and bad for whom? A new study by John Bound, Gaurav Khanna and Nicolas Morales  examines that question, and the results should be familiar to anyone who has studied supply and demand.

So who benefits?

The companies that employ them, leading to lower prices for the goods and services they produced and in turn benefits for consumers.

Who loses?

U.S. employees in computer science see their wages lower as a result. Here’s the finding that may be a surprise: College enrollment in IT programs declines when the H1-B visa program expands. Why should that be? Because there aren’t as many IT jobs available to U.S. workers, and wages for them are lower, so some students would otherwise pursue that field go elsewhere.

Cappelli says that, while the notion of bringing in foreign workers to make up for worker shortfalls makes sense in smaller countries, it doesn’t work in the U.S.:

Young people in particular are constantly trying to figure out where the jobs will be, colleges hunt for job-market niches where they can attract students and workers move thousands of miles if there are good jobs available. What we know from this study — which parallels what we learned years ago in fields such as nursing — is that bringing in foreign workers slows down the process through which the U.S. labor market adjusts to new demands.

That seems to be the case for the H1-B program and the IT industry.

Cappelli says the fact that so many U.S. IT companies seem so reliant on these foreign temp workers points to a definite problem here. It remains to be seen how Trump’s anticipated order will solve that problem.

 

Wells Fargo Shows Its Claws

Months after the revelations that Wells Fargo had engaged in highly questionable (some say illegal) practices, including creating fraudulent accounts, its board of directors has taken action to recoup some of the compensation from the bank’s leaders during the time the nefarious schemes were ongoing.

According to the New York Times, an additional $75 million in compensation will be “clawed back” from the two executives the company’s says bear the majority of the blame for the scandal over fraudulent accounts: the bank’s former chief executive, John G. Stumpf, and its former head of community banking, Carrie L. Tolstedt:

The clawbacks — or forced return of pay and stock grants — are the largest in banking history and among the largest in corporate America. A four-person committee of Wells Fargo’s directors investigated the extensive fraud.

The Times says that while the amount of money customers lost was relatively small — the company has refunded $3.2 million — the scope of the fraud was huge: 5,300 bankers were fired for creating as many as two million unwanted bank and credit card accounts:

In one detail revealed by the board’s report, a branch manager had a teenage daughter with 24 accounts and a husband with 21.

According to Time magazine, Wells has instituted several corporate and business changes since the problems became known nationwide. Wells has changed its sales practices, and called tens of millions of customers to check on whether they truly opened the accounts in question.

Wells Fargo board Chairman Stephen Sanger also acknowledged in a Monday conference call with reporters that board members “could have pushed more forcefully to change leadership at the community bank,” according to USA Today.

While conceding he could not “promise perfection” in the efforts to regain trust from customers and regulators, Sloan said, “I’m very confident we’re on the right track.”

 

Getting Under Employees’ Skin

No, this story isn’t about a new and unpopular workplace policy sweeping through the nation’s workplaces.

At least not yet.

The Associated Press is reporting today on a Swedish company that turns its willing employees into “cyborgs” by inserting microchips into them:

What could pass for a dystopian vision of the workplace is almost routine at the Swedish startup hub Epicenter. The company offers to implant its workers and startup members with microchips the size of grains of rice that function as swipe cards: to open doors, operate printers, or buy smoothies with a wave of the hand.

Epicenter’s co-founder and CEO Patrick Mesterton told the AP the move will bring a heightened sense of ease for workers:

“The biggest benefit I think is convenience,” he said. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”

According to the AP, the small implants use Near Field Communication technology, the same as in contactless credit cards or mobile payments: “When activated by a reader a few centimeters (inches) away, a small amount of data flows between the two devices via electromagnetic waves. The implants are ‘passive,’ meaning they contain information that other devices can read, but cannot read information themselves.”

The technology is not new, of course, but it has never been used to tag employees on a broad scale before, and the AP says Epicenter and a handful of other companies “are the first to make chip implants broadly available.”
Way back in 2006, however, colleague Mark McGraw tackled the topic of tagging workers:

Cincinnati-based private video-surveillance company CityWatcher.com recently embedded silicon chips in four of its employees, as the company tested the technology in an effort to control access to a room where it holds security video footage for government agencies and police.

The dime-sized chips, manufactured by Delray Beach, Fla.-based VeriChip Corp., were implanted into the employees’ arms, says Sean Darks, CityWatcher CEO, after the company explored various types of biometric applications such as fingerprint and handprint identification systems. CityWatcher turned to radio-frequency identification chips, a less costly alternative to typical biometric systems, to “make security improvements,” he says, and eliminate the possibility of employees losing or misplacing proximity cards or other forms of identification.

RFID chips are inexpensive radio transmitters that emit a unique identifying signal. The chips are commonly used for tracking merchandise in transit, but they can also be implanted in pets to identify them in the event they’re separated from their owners and can be used in humans for medical purposes — to link patients to their medical records in emergency situations, for instance.

However, CityWatcher’s implementation of RFID is the first known case in which U.S. workers have been “tagged” electronically as a way of identifying them, and is likely to add to a growing controversy surrounding RFID , predicted as one of the next big growth industries.

Not everyone McGraw talked to for the piece was excited at the prospect of having more workers walking around with chips inserted under their skin.

“Whether or not implanting  … chips in humans becomes a common workplace security measure remains to be seen,” said Liz McIntyre, a critic of the technology and the communications director of Consumers Against Supermarket Privacy Invasion and Numbering, a nonprofit group focused on consumer privacy issues.  “This is just the beginning,” says McIntyre.
Eleven years later, though, that trend is apparently still in its beginning stages, as the only progress seems to be in the chip’s size shrinking from a dime to a grain of rice, not in expanding the number of companies using such technology.

 

Trump Nixes ‘Blacklisting’ Rule

The Trump regulation rollback parade rolled over a few more Obama-era rules on Monday, including the Fair Pay and Safe Workplaces rule.

(As colleague Mark McGraw noted in a previous post on the uncertain fate of the rule Obama signed in 2014, the regulation was put on hold by an October 2016 court order determining that it exceeded congressional limits.)

The rule had been aimed at forcing government contractors to disclose violations of federal labor laws as they sought more work, according to the Washington Post. The “blacklisting rule” required contractors to disclose violations of 14 federal labor laws, including those pertaining to workplace safety, wages and discrimination.

The White House argued the rule would “bog down” the federal procurement process, according to the Post report, while business groups said that it would increase compliance costs, adding that Republican lawmakers and the Trump administration have made curbing government regulation a top priority this year.

 

CNN reports the rollback was sponsored by Rep. Virginia Foxx, a North Carolina Republican who argued the rule had the potential to blacklist some government contractors. Foxx said that the rule allowed the Labor Department to deny business to contractors based on “alleged” violations.

“Under this rule, bureaucrats can determine employers are guilty until proven innocent and then deny them the ability to do business with the federal government,” Foxx said.
The White House said in a February statement that Trump intended to sign the bill.
“The administration strongly supports the actions taken by the House to begin to nullify unnecessary regulations imposed on America’s businesses,” read the statement of administration policy.

 

Dozens of resolutions pulling back various Obama-era rules have been introduced under an expedited process established through the Congressional Review Act, the Post notes. Under that process, a regulation is invalidated when a simple majority of both chambers pass a joint resolution of disapproval and the president signs it.

 

 

Supreme Court Rules on NLRB

The  Supreme Court decided 6-2 today to uphold a lower court’s ruling that then-President Barack Obama exceeded his legal authority with his temporary appointment of a National Labor Relations Board general counsel in 2011, meaning former NLRB Acting General Counsel Lafe Solomon improperly held that position for nearly three years while his nomination to assume the General Counsel role fulltime was pending.

The Court specifically found that Solomon’s service as the Acting General Counsel while his nomination was being considered violated the Federal Vacancies Reform Act.

“This ruling effectively invalidates Solomon’s three-year tenure as the Acting General Counsel from 2010 to 2013,” writes David J. Pryzbylski, a partner at Barnes and Thornburg in a post on the National Law Review.

The lawsuit arose when Southwest Ambulance challenged an unfair labor practice complaint that had been filed against it by Solomon when he was Acting General Counsel, Pryzbyiski says. The Court’s conclusion that Solomon was not appropriately in that role means that the complaint against Southwest Ambulance was invalid.

So what does this ruling mean for employers? According to a statement on Fisher Phillps’ web site, the only sure thing is that Southwest, the employer in this case, is off the hook for the unfair labor practice charge.

The Court’s opinion, the firm says, is a modest victory for employers “who are protected from overreaching presidential appointments, such as the long-term, temporary NLRB General Counsel designee in this case who served without the advice and consent of the Senate.”