Category Archives: legal issues

Know When the ADA Trumps Your Policy

101390464 -- gavel and law booksBeware your urge to discipline.

That seems the best mantra for HR leaders in this new ADA day.

Two reminders of the mounting murkiness when it comes to drawing the line between your work policies and the amended Americans with Disabilities Act floated my way recently in this piece from the Society for Human Resource Management (registration required) and this from The Growth Co., headed up by Lynne Curry.

The SHRM piece highlights a $180,000 settlement Walgreens agreed to pay a cashier who the company fired after she took and ate a $1.39 bag of potato chips without paying for it. Turns out the cashier, Josefina Hernandez, was a diabetic who needed the chips during a hypoglycemic attack to stabilize her blood sugar.

Also turns out, in this age of heightened disability sensitivity and the need for employers to be sure they’re engaging in reasonable-accommodation discussions and the interactive process, Walgreens apparently did everything wrong. (Requests for comments from Walgreens have not been returned.)

According to the piece, when a loss-control supervisor asked for an explanation after finding the empty potato-chip bag under the counter at her cash register, Hernandez wrote in a statement, “My sugar low, not have time.” The supervisor didn’t know what she meant, so she was fired for violating Walgreens’ anti-grazing policy. On the contrary, the courts found, it was Walgreens that was in violation, of the ADA.

Had HR been involved throughout the investigation and pre-termination process, Walgreens would probably have been $180,000 richer. As Robin Shea, an attorney with Constangy, Brooks & Smith, says in the piece, “HR people are generally in the best position” to determine whether workplace discipline and/or termination is an overreaction.

“If it appears that the employer is using a nuclear weapon to kill a gnat, then maybe termination is not the answer,” she tells SHRM.

The other piece concerns alcohol. In it, Curry reminds us that, as much as an employee’s alcohol dependence brings everyone down — employee, co-workers and employer — and although you can establish policies prohibiting alcohol consumption at work or prior to work events, an alcoholic does have rights.

For the record, here’s Curry on that:

“According to the federal Equal Employment Opportunity Commission, an alcoholic who can perform the essential functions of his [or her] job may have a disability requiring employer accommodation under the Americans with Disabilities Act. The courts are fairly unanimous in ruling that an employer needs to grant at least one leave of absence so an alcohol-dependent employee can participate in a treatment program if the employee hasn’t misused alcohol on the job or engaged in misconduct.

“For example, in the landmark Schmidt v. Safeway Inc. case, the court ruled that the ADA may require an employer to provide a leave of absence to an employee with an alcohol problem if it is likely that the employee would be able safely to perform his duties following treatment. With an alcohol-dependent manager, a leave of absence for outpatient or inpatient treatment may be the logical accommodation.”

At the same time, she writes:

” … alcoholism doesn’t immunize managers or employees from the consequences of their actions. Employers can hold alcohol-dependent managers and employees to the same performance and behavior standards as non-alcoholics and discipline or discharge an alcoholic whose alcohol use adversely affects his job performance. As an example, if an alcoholic employee often arrives late to work or makes frequent errors, the employer can take disciplinary action based on the poor job performance and conduct. Furthermore, the 2nd U.S. Circuit Court of Appeals ruled that the ADA does not protect an employee from termination for alcohol-related absenteeism when reliable attendance at scheduled shifts is an essential job function.”

Where does this leave us? I guess with a simple “Be Careful.” And in today’s increasingly employee-supportive legal landscape, “Consult Counsel,” too.

As clear-cut as it may seem that certain activities — such as stealing company property and alcohol abuse — have no legitimate place in your organization, except as forbidden zones in your employee handbook, just remember to beware the law, where black-and-white mandates are far outweighed by shades of gray.

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Clearing the Haze Around Medical Marijuana

smokeEarlier this week, the Colorado Supreme Court handed down a ruling that one attorney says “may serve as a roadmap” for other courts—and employers—navigating the gray areas surrounding medical marijuana laws.

On Monday, the state high court’s 6-0 decision in Coats v. Dish Network determined that an organization can terminate an employee for using medical marijuana, even if said marijuana use occurs while off-duty.

Court documents indicate that former Dish Network employee Brandon Coats has been confined to a wheelchair since he was a teenager, as a result of injuries sustained in a car accident. Court records indicate that Coats registered for and obtained a state-issued license to use medical marijuana in 2009, as a way to treat leg spasms brought on by his quadriplegia.

On June 7, 2010, however, Coats was fired from his job as a telephone customer service representative with the Dish Network, after testing positive for tetrahydrocannabinol—a component of medical marijuana—the previous month.

At the time, Coats informed the company that he was a registered medical marijuana patient, and planned to continue using medical marijuana, according to court records. After being fired for violating the organization’s drug policy, Coats filed a wrongful termination claim against Dish, alleging the company was prohibited from firing an employee based on his or her engagement in “lawful activities” off the employer’s premises during non-working hours. Coats argued that his off-the-clock and away-from-work medical marijuana use was lawful under the Medical Marijuana Amendment and its implementing legislation.

In affirming lower court rulings, the Colorado Supreme Court found the term “lawful” applies only to those activities that are legal under both state and federal law. Ergo, employees engaging in activities such as medical marijuana use that are permitted by state law but forbidden by federal law are not protected by the statute.

While not binding in other states, this Colorado ruling could hold lessons for employers elsewhere, John DiNome, a Philadelphia-based labor and employment attorney and partner at Reed Smith, told HRE this week.

“The short takeaway,” says DiNome, “is that Federal law trumps state law. The Federal Controlled Substance Act lists marijuana as an illegal substance. As such, use of marijuana is not a lawful activity in Colorado.”

For employers, “this seems to confirm that, if they choose to have a ‘zero-tolerance’ policy with respect to drug use, they are on fairly solid ground in doing so.”

As such, “even if an employer is operating in a state where marijuana is either legal for medical or recreational use, the employer may ban use of illegal drugs and take the position that marijuana is not legal at the federal level,” he says.

DiNome notes that, while the Justice Department has said it will not prosecute certain marijuana use offenses, “the fact remains that Congress has not addressed the topic, and marijuana is still an illegal substance under federal law.”

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Drug Use, Addiction at Work Continues to Rise

The use and abuse of drugs in the workplace isn’t slowing down at all. Latest reports indicate the percentage of American workers 73267092 -- drugs at worktesting positive for illicit drugs such as marijuana, cocaine and methamphetamines has increased for the second consecutive year in the general U.S. workforce — putting an end to the decades-long decline.

Indeed, this article references a government report that finds nearly one in 10 full-time workers now has a substance-abuse problem. And the latest Quest Diagnostics Drug Testing Index shows an upsurge in the positivity rate of drug tests by 9.3 percent — from 4.3 percent in 2013 to 4.7 percent in 2014. (Here is an additional link to the actual tables/stats within the index.)

“American workers are increasingly testing positive for workforce drug use across almost all workforce categories and drug-test-specimen types,” says Dr. Barry Sample, director of science and technology for Quest Diagnostics Employer Solutions. “In the past, we have noted increases in prescription-drug-positivity rates, but now, it seems, illicit drug use may be on the rise, according to our data.

“These findings,” says Sample, “are especially concerning because they suggest that the recent focus on illicit marijuana use may be too narrow, and that other dangerous drugs are potentially making a comeback.”

Dr. Robert DuPont, former director of the National Institute on Drug Abuse, says this latest analysis by Quest not only “suggests that illicit drug use among workers is increasing broadly for the first time in years in the United States [but that] public and private employers might want to consider revisiting existing substance-abuse policies to ensure that they are taking the necessary precautions to protect their workplace, employees and businesses.”

Equally concerning is the fact that abuse of legal drugs is also going up, as this news analysis by Andrew McIlvaine addresses. Drugs taken for attention-deficit-hyperactivity disorder — such as Ritalin, Adderall and Focalin — are now being abused by employees looking to add some sparks to concentration and alertness.

Will Wesch, Novus Medical Detox Center director of admissions, says many organizations are now updating their language in drug-free workplace policies to include potential impairment from a prescription drug. He urges HR practitioners to coach managers in how to engage employees suspected of such abuse and offer reasonable accommodations, up to or including modifying job responsibilities should an employee inform him or her that the medication he or she is on may impair job performance.

As for specific policies, concerns and approaches HR leaders should be considering right now when it comes to all workplace drug use, DuPont has this to offer:

“First, look at the big picture in workplace drug testing. There is much more to workplace drug testing than just testing for marijuana. An effective drug-free program includes testing for many widely used drugs [including prescription]. Second, consider the legal complications of workplace marijuana testing.  For example, several states allowing medical use of marijuana are now requiring an employer to show impairment before taking action against an applicant or employee who tests positive for marijuana. These provisions pose a significant limitation to workplace drug-testing programs for marijuana.

“I also recommend you provide clarity in your drug-free policies. … Every employee must be informed of the company’s substance-use policy and the reasons for the policy. Drug testing needs to be described in a written statement of the employer’s substance-use policy. This policy statement must clearly lay out the elements of the drug-testing program, including who is subject to testing, how testing is administered, how positive results are confirmed and what the consequences are for positive drug-test results. Supervisors and human resource staff should be trained in the employers’ substance-use policies and procedures, and be able to explain them to all employees and job applicants.”

And, again, when it comes to marijuana, DuPont says, “pay close attention to the specifics of state and local law,” obviously and especially in those states where it’s medically or recreationally legal. And make sure your drug-testing policies are being reviewed by attorneys “who are familiar with federal, state and local laws … particularly related to marijuana.”

Yes, folks, it’s a whole new world when it comes to drugs at work. DuPont says it’s time to consider “going beyond the urine cup and … the typical five-drug tests” and embrace the bigger picture now upon us.

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Staples Settles After FMLA Fail

Let’s put this next story in the “Why It’s Important to Make Sure Your Employees Know Their Family and Medical Leave Act Rights” file:

Late last week, the U.S. Department of Labor announced a settlement that was reached in a consent decree and approved by a federal court with Staples Inc., with the company agreeing to pay fired employee Jeffrey Angstadt $275,000 in wages, benefits and damages after failing to inform him of job protections to care for his ailing wife.

(A request for comment from Staples has yet to be returned.)

According to the DOL’s investigation, the furniture sales executive told his employer, Staples Contract and Commercial, Inc., a South Carolina-based subsidiary of Staples, Inc., that he needed to take leave to care for his critically ill wife in September 2010. But, the DOL notes:

While Angstadt was eligible for federal workplace protections for those coping with the illness of a family member, no one at Staples notified him as the law requires.

So, for the next two years, Angstadt used his personal, sick and vacation days, and worked remotely as needed to balance his work obligations and to care for his wife.

In January 2012, the DOL says, his supervisors decided Angstadt wasn’t meeting his job responsibilities, and the company fired him. Two months later, an investigation began by the U.S. Department of Labor’s Wage and Hour Division district office in Columbia, South Carolina. Following the investigation, the department then sued Staples in June 2013 for violating the Family and Medical Leave Act.

Said Wage and Hour Division Administrator Dr. David Weil in announcing the settlement:

“For more than 20 years, the Family and Medical Leave Act has been a critical safety net for working families. It ensures that no one should have to choose between the job they need and the family they love.”

As a part of the settlement, the company will also promote an enterprise-wide policy for compliance with the FMLA by providing training for human resources and other managerial personnel with respect to FMLA notice and eligibility requirements; post FMLA enforcement posters in the workplace; and investigate and respond to complaints of potential FMLA violations concerning an employee’s notice of FMLA rights, including correcting violations when discovered.

Unfortunately, Angstadt’s wife died in 2014 and did not live long enough to see justice served in her husband’s case.

Indeed, “when an employee must be away from work to care for a loved one, there are no second chances to get it right,” said Wage and Hour Division Administrator Dr. David Weil.

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With Union Petitions Up, Get Your Message Out … NOW!

Since sharing this blog post the day before the National Labor Relations Board’s “quickie-election rules” went into effect on April Union14, I’ve been waiting to see if the predictions shared therein would come to pass.

More specifically, would there be — as predicted by various employment attorneys I talked to — a surge in the number of representation petitions filed with the NLRB by unions just waiting for those rules to help them hurry up their process?

Well, I just got confirmation from NLRB spokesperson Jessica Kahanek that there’s been a 32-percent spike in union petitions lodged with her agency in one month since the rule’s enactment. Broken down, that’s 212 petitions from March 13 to April 13 and 280 from April 14 to May 14. An impressive and additional 104 petitions were filed between May 14 and May 27, she tells me. Spike indeed!

Kahanek also notes that elections are now taking place — on average — 23 days from the date of the petition. This duration is a dramatic shift from the 38-day average that existed under the previous rule.

What’s also interesting to note is that the petitions didn’t come flooding in starting on April 14. On the contrary, says Steve Bernstein, a Tampa, Fla.-based labor attorney with Fisher & Phillips, “in the first two weeks after the rule, the numbers of petitions filed were flat, maybe even down some; only in the last two to three weeks have we been seeing them really climbing.”

So what does that mean? It means even the unions needed some time to figure out all the new procedures contained in the new rules. “It’s been a learning curve for everyone,” Bernstein says.

What it all really means — to employers — is now’s the time to talk up your company and make no bones about stressing with employees that it’s a better place to work communicating directly with management than through third-party representation.

Bernstein calls this “front-loading the message.”

Employers, he says, “have the opportunity to use this [albeit shorter] period of time to take the initiative away from the union.”

Some companies, in fact, are getting ready for the NLRB before the NLRB even comes knocking. They’re getting all the new data being asked for — employee emails, phone numbers, work histories, job classifications, etc. — collected and collated now “so they’re positioned to be standing on ‘Go’ when the petition arrives and can use all their time getting their message out,” says Bernstein. He recommends that you:

“start from the standpoint that, with the new rules, comes a new petition form giving unions the opportunity to request the earliest election dates possible, usually two weeks out. So you, the employer, can posit the question, ‘Why is this union trying to move so fast on something so important to your lives and the lives of your families as this?’ “

In terms of the new administrative and disclosure requirements contained in the rules, he says, rather than focusing only on scrambling around trying to meet them all, think about taking this approach:

“In many circles, the kind of employee data they’re now demanding from employers would look like an invasion of privacy. So you can put out the immediate message, ‘They’re not even here yet and look at the personal information they already want on you. Why do they want all this from us?’ “

In other words, the NLRB has changed the rules, so you can too. (FYI, my earlier post, linked above, contains the NLRB’s position and purpose in the rule changes.)

You don’t even have to wait for a petition to start the conversation. In addition to getting all your data ducks lined up, you can join with the many companies Bernstein is already seeing “embracing the notion that it’s OK to talk about this, now, with employees,” sooner than later, he says.

Nothing wrong with telling your employees, “Let’s have this union dialogue now,” he says, especially in businesses and industries where unions are dominant. Some companies are even fashioning tailored, customized videos along these lines to go with their orientation processes, i.e., why no union is better than representation.

“You’re really trying to establish this line of communication, getting them used to hearing about this, so it doesn’t just sound like a defensive move after the petition has arrived,” Bernstein says.

So, to recap, your message to them: “Hey, it’s OK to talk about this now, folks!”

And my message to you: Ditto.

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Here’s an Overnight Cure for Bias?

Here’s a question you might want to ponder … or maybe even sleep on. Can we snooze our gender and racial biases away?

ThinkstockPhotos-163819282Well, apparently researchers at Northwestern University, the University of Texas at Austin and Princeton University thought enough about that question to conduct a study. And guess what? They found that biases can indeed be counteracted while people sleep.

In the study, posted this week on the Science magazine website, researchers found that information recently stored in the brain can be integrated with other information during sleep and transformed into stable representations through a process known as systems-level consolidation.

“Taking into consideration the role of sleep in memory consolidation, we adapted procedures for reducing implicit social biases and reactivating this training during sleep,” the researchers said.

You can read more about how the study was conducted at Science. But cutting to the chase, the researchers “reactivated counterbias information during sleep using subtle auditory cues that had been associated with counterbias training.”

In the study, electrodes recorded the brain activity of participants as they napped. Then, during periods of deep sleep, one of the sound cues from the association test was repeatedly played.

As Xiaoqing Hu — postdoctoral fellow at University of Texas at Austin and one of the study’s researchers — writes in a piece appearing on The Conversation: “Prior research on prejudice and stereotyping shows that extensive counter-bias training can lessen automatic stereotyping. Building on this bias reduction and sleep-based memory consolidation research, we aimed to test whether people can further process such counter-bias memories during sleep. Can such learning reduce long-lasting stereotypes and social biases?

The researchers found that pre-existing stereotypes associated with the sound cue replayed during sleep were significantly reduced when the participant woke up …

 “We were surprised that this sleep-based intervention was so powerful when participants woke up: the biases were reduced by at least 50 percent relative to the pre-sleep bias level. But we were also surprised at how long the effect lasted. At the one-week follow-up test, the sleep-based intervention was still effective: bias reduction was stabilized and was significantly smaller (approximately 20 percent) than its baseline level established at the beginning of the experiment.”

As you might expect, those involved in the research acknowledge more work is needed. So, at least for the time being, you might want to hold off retrofitting your nap room—for the few of you who  have one—to include this kind of intervention or adding a sleep component to next year’s bias-training program.

Let’s hope your bias-training efforts don’t already induce said sleep.

 

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Jawbone vs. Fitbit: A Wearables Drama

ThinkstockPhotos-155172325Wellness and wearables increasingly go together like cream and sugar (or oatmeal and blueberries, for health’s sake), as devices like the Apple Watch and the FitBit Surge make it not only easy but hip for employees to track their movements throughout the day. But there’s a bit of trouble in Wellness City: Wearables-maker Jawbone has just filed suit against arch-competitor FitBit for what Jawbone says is “systematically plundering” its confidential information by hiring away employees who improperly downloaded sensitive information from Jawbone before leaving, reports the New York Times.

The suit, filed in California State Court, comes at an inopportune time for Fitbit, which has just announced its Initial Public Offering. Fitbit says it’s the No. 1 player in the activity tracker market, with an 85 percent market share (according to NPD Group).

The complaint says Fitbit recruiters contacted nearly one-third of Jawbone employees earlier this year. The employees who decided to leave downloaded information on Jawbone’s products and future business plans onto thumb drives and used programs and deleted system logs to cover their tracks, according to Jawbone.

Some of the employees hired by Fitbit didn’t disclose they were leaving until after they had attended meetings where future plans were discussed or had sent confidential information to their personal email addresses, according to Jawbone’s complaint.

According to the Times, Marty Reaume, Fitbit’s chief people officer, acknowledged in a phone call to Jawbone that her company had been poaching its employees. She did not, however, say anything about the taking of sensitive information, the suit alleges.

Fitbit denies the allegations via a statement: “We are unaware of any confidential or proprietary information of Jawbone in our possession and we intend to vigorously defend against these allegations.”

The New York Times notes that Jawbone itself is facing some financial scrutiny over its failure to achieve profitability after 16 years in business and production issues related to its Up3 fitness band. However, a Jawbone representative told the Times that “demand for Jawbone’s products are extremely strong, as is the company’s financial health.”

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Message to GE Capital Bidders: Hands Off!

It’s no secret General Electric is in the process of getting out of banking.

ThinkstockPhotos-180797634As the Washington Post reported on April 10, General Electric announced that day “it will sell most of its GE Capital assets over the next two years, shedding businesses in a sector where it has had a tough time generating acceptable returns.”

Investors immediately applauded the move, as well as GE’s announcement of a share buyback, by bidding up GE shares to their highest level in roughly two years. (They’ve since retreated slightly.)

It’s anyone’s guess, of course, who ultimately will acquire these businesses, but, apparently, according a story featured in today’s print edition of the Wall Street Journal (and posted online yesterday; subscription required), GE officials aren’t taking any chances as far as losing key talent in advance of any deal.

“General Electric Co. may be getting out of finance but, until then, it is trying to keep its bankers,” the WSJ piece leads off.

According to the report, GE has offered retention bonuses to select executives, as most companies commonly do, but is also requiring bidders interested in purchasing its $16 billion leveraged-finance operation to agree not to hire GE’s employees for 12 months.

The story continues …

“GE is in the difficult position of trying to keep people in the finance businesses it has said could take as long as two years to sell. Losing its top deal makers would erode the value of the operations that once contributed half of GE’s annual profits, and could result in lower offers. Unlike GE’s industrial businesses that sell sophisticated machinery like jet engines, locomotives and gas power turbines, much of the strength of the finance operation rests on its bankers.

Those terms, considered restrictive for a deal of this type, have caused some suitors to balk, according to people familiar with the matter.”  [The Journal article quotes one source saying bids for GE Capital’s private-equity arm, known as Antares, were due Thursday.]

The WSJ article goes on to note that the “restriction that GE asked prospective buyers of the Antares unit to sign is unusual because it is a ‘nonhire agreement,’ meaning bidders would be prevented from hiring a GE employee, even if they didn’t initiate the approach. That prohibition applies to any ‘officer or key employee’ of the leveraged finance business.”

A GE spokeswoman told the Journal that the terms are appropriate and that the company continues to have a large pool of potential suitors. But experts point out that a formalized agreement like this is somewhat unorthodox.

“While this is not an uncommon practice, especially in private-equity deals and bidding, it is more typically in the form of a gentleman’s agreement and rarely pursued for enforcement,” Jason Hanold, CEO of Hanold Associates, a Chicago-based search firm, told me yesterday. “It is questionable whether the courts would enforce this, and it’s reasonable for employees to consider a departure from a company that is offering itself up for bid.”

Hanold suggested that GE needs to be cautious of the negative impact on engagement for their existing employees, including those who have no intention of considering another employer. “Employment at will means something and implies departure at will. A company that sends the message about employee growth and development is bringing more specificity to that message with this stand: ‘We care about your growth, development, future financial success and hope you thrive … as long as it is within the confines of our organization [and] unless we sell the business in which you are employed.’ ”

That creates an emotional detachment that’s difficult to heal, he added.

Guess we’ll have to wait and see if GE suffers any repercussions. But in the meantime, on an entirely unrelated and non-HR topic, to each and every mother out there reading this, a heartfelt Happy Mother’s Day! (My apologies for not coming up with a better segue.)

 

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Mixed Interpretations of Mach Mining Decision

Reactions to last week’s U.S. Supreme Court ruling in Mach Mining v. EEOC are plentiful, and mixed. The decision essentially came down 78805354 -- Supreme Court for left sidein favor of employers and against the U.S. Equal Employment Opportunity Commission, but just who the real winner is — and by how much — is subject to interpretation.

In the case, Mach Mining was accused by the EEOC of discriminating against women who applied for jobs at its Johnson City, Ill., coal mine. The EEOC filed suit in 2008 after an unsuccessful job applicant complained to the agency that the company never hired a female miner.

In response, Mach argued for an intensive federal-court review of conciliation efforts the EEOC should have engaged in, but Mach argued were not carried out — as required under Title VII of the Civil Rights Act — prior to the company being sued.

“In language that is sure to be repeated back to the EEOC for years to come, the Supreme Court held that ‘[a]bsent such review, the commission’s compliance with the law would rest in the commission’s hands alone,’ ” say Seyfarth Shaw attorneys Gerald L. Maatman Jr., Christopher Cascino and Matthew Gagnon in this blog post. “This, the Supreme Court said, would be contrary to ‘the court’s strong presumption in favor of judicial review of administrative action.’ ” They go on:

“While the Supreme Court did not rule that the intensive review that Mach Mining argued for was required, the case nevertheless represents a significant win for employers and resounding defeat for the EEOC. The EEOC will no longer be able to file suit against employers after paying mere lip-service to its conciliation efforts, and to give them the back of the hand in response to requests for fulsome information about liability and exposure in a threatened lawsuit. And employers will, as a result, be in a better position to settle meritorious claims  on reasonable terms before the EEOC files suit, thus saving employers from unnecessary litigation expense.”

But not so fast. According to points raised by Jon Nadler, a Philadelphia-based employment attorney with Eckert Seamans Cherin & Mellott, the ruling is actually a win for the EEOC, despite the prevailing commentary and headlines. Though the court ruled the EEOC’s conciliation efforts are subject to some judicial review, “that review is extremely limited (‘relatively barebones,’ in the court’s words,” his notification says.

On the contrary, it goes on, the “EEOC will merely need to show it provided the employer with notice of the allegations — the specific alleged unlawful practices, and identification of those allegedly harmed — and to engage in some bilateral communication with the employer in an attempt to resolve the matter.”

Nevertheless, Nadler points out, though employers have complained in some instances that the EEOC “failed even to provide this basic information, now [it’s] clearly required.”

Further, in points raised by Don Lewis, shareholder with Nilan Johnson Lewis, the Supreme Court also chose not to adopt a “good faith” standard of review previously adopted by the Fourth, Sixth and Tenth Circuits. “Employers,” his notice reads, “will be pleased that the high court has recognized that the EEOC’s obligation to conciliate is enforceable in court, and that its obligation includes a requirement to disclose and discuss the essential elements of its claims and identify the parties for which it seeks relief.”

Meanwhile, in this posting, the EEOC calls the decision a “step forward for victims of discrimination” in its rejection of the “intrusive review proposed by the company and its supporters.”

The agency goes on to say that the “court recognized … the scope of review is narrow and a sworn affidavit is generally sufficient to meet the statutory requirements. If the employer has concrete evidence that such efforts were not made and the court finds in favor of the employer,” it says, “the remedy is [simply] further conciliation.”

This story on the Inside Counsel site, written in January after oral arguments were presented in the case, offers great background on the history, arguments and questions surrounding all this.

So what does it mean? Obviously, it depends on who you talk to … on whose glass is half full or otherwise. Yes, the scope of judicial review articulated in the decision “is a narrow one,” Maatman and company write, but bottom line, the court “vigorously upheld the fundamental principle that judicial review of administrative action [however slight] is [still] the norm in our legal system.”

Further, they state, “the EEOC now has to present its position in a federal court, and its litigation strategies are apt to be very different when it must justify and show the basis for its conciliation positions before a neutral fact-finder.” In their words,

“Suffice it to say, employers’ defense of ‘failure-to-conciliate’ is still alive and well, and the EEOC’s litigation strategies are now likely to be in need of rebooting.”

Or not …

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Confidentiality Agreement Crackdown, Revisited

If there was any question whether the Securities and Exchange Commission was serious in its efforts to clamp down on confidentiality statements, Office of the Whistleblower Chief Sean McKessy put it to rest during a recent American Bar Association webinar titled “New Developments in Whistleblower Claims and the SEC,” which took place on Wednesday.ThinkstockPhotos-155172325

Some of you may recall the story we published earlier this month titled “Cracking Down on Confidentiality Agreements,” in which I reported on the SEC’s first “enforcement action” against a company it said had used restrictive language in its confidentiality agreements.

More precisely, the SEC charged the Houston-based engineering firm KBR Inc. of violating whistleblower protection Rule 21F-17 by requiring witnesses in certain internal-investigation interviews to sign confidentiality statements saying violators could face discipline, including termination, if they discussed the matters with outside parties without KBR’s approval.

Most of the experts I spoke to for that story predicted that the SEC wasn’t likely to stop with KBR in pursuing such violations—and  McKessy’s remarks on Wednesday seemed to back up those claims.

On Thursday, Seyfarth Shaw attorney Ada W. Dolph, who was one of the sources for my original story, provided some commentary on McKessy’s remarks, writing in a memo that McKessy pointed out in the ABA webinar that the SEC rule is “very broad,” and “intentionally so.”

Dolph, based in her firm’s Chicago office, continued …

“McKessy stated that this initiative remains a ‘priority’ for him and his office. ‘To the extent that we have come across this language [restricting whistleblowers] in a Code of Conduct’ or other agreements, the SEC has taken the position that it ‘falls within our jurisdiction and we have the ability to enforce it.’ He noted that ‘KBR is a concrete case to demonstrate what I have been saying,’ referencing public remarks he has made in the past regarding SEC scrutiny of employment agreements. He stated that the agency is continuing to take affirmative steps to identify agreements that violate the Rule, including soliciting individuals to provide agreements for the SEC to review. Additionally, he reported that the SEC is reviewing executive severance agreements filed with Forms 8-K for any potential violations of the Rule.”

Dolph pointed out that McKessy also addressed the question of whether the SEC would apply the KBR order to private companies under the U.S. Supreme Court’s 2014 ruling in Lawson v. FMR LLC, 134 S.Ct. 1158 (2014)—which expanded Sarbanes-Oxley’s whistleblower protections to employees of private companies who contract with public companies. McKessy, she reported, “stated that the SEC has not officially taken a position on this issue, but in his personal opinion he ‘certainly can see a logical thread behind the logic of the Lawson decision’ to be ‘expanded into this space [private companies],’ and that ‘anyone who has read the Lawson decision can extrapolate from it the broader application.’ ”

In short, Dolph concluded, “it is clear that we can expect further SEC enforcement actions in this area.”

Granted, that’s pretty much been the expectation all along. But McKessy’s remarks should, at the very least, be considered a not-so-friendly reminder that you might not want to wait too long before reviewing your confidentiality agreements and policies in order to ensure they aren’t worded in a way that would catch the attention of SEC officials.

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