Category Archives: legal issues

A Hot Issue Reaches The High Court

As lawyers prepared to argue before the U.S. Supreme Court today over the legality of mandatory arbitration clauses in employment contracts, a new study came out that underscores what’s at stake, estimating that more than 60 million workers are now covered by them.

The Economic Policy Institute, which says its mission is “to inform and empower individuals to seek solutions that ensure broadly shared prosperity and opportunity” carefully timed the release of results to come as before a widely-watched case reaches the high court.

The case is actually three cases involving different employers: Epic Systems Corp., a Wisconsin-based maker of software for health care systems and medical groups, Ernst &Young U.S. and Arkansas-based Murphy Oil USA Inc. All invoked arbitration clauses in disputes with individual workers over overtime and other issues.

The Supreme Court like will take months to decide the issue. And employers will be watching carefully.

To  gauge the potential impact of that ruling, the Economic Policy Institute surveyed 627 private employers with 50 workers or more nationwide, focusing questions on their nonunion workers. Author of the study was Alexander J.S. Colvin., a professor at Cornell University’s ILR School.

Based on this sample, researchers estimate 53.9 percent of private employers require workers to sign arbitration clauses. Researchers estimate 60.1 million U.S. workers are subject to mandatory arbitration with waiver of class-action rights. The practice appears to be more common in large businesses, the study said.

 

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A Tricky Legal Question for HR

The Aug. 11 march by white-supremacists in Charlottesville, Virginia, ended after a car plowed into a crowd of counter-demonstrators the next day, killing a 32-year-old woman.

Authorities have charged an Ohio man in the case, starting what could be years of legal repercussions.

For HR executives, the incident raises a legal question that is at least as complex: How can employers protect themselves when a worker participates in extremist political conduct that puts the business at risk?

That risk is painfully clear to the owners of two restaurants on opposite sides of the country. Both employed men who were publicly identified as participants in the Charlottesville rally. Both companies found themselves in the glare of unfavorable publicity as a result.

Boston-based Uno Pizzeria and Grill quickly fired a cook in a Burlington, Vermont outlet after he was identified in a news video and in social-media posts as a march participant and ardent white supremacist.

Owners of Top Dog, a small chain of hot-dog restaurants based in Berkeley, California, did not fire an employee who also was linked to the Charlottesville rally in social-media accounts. Instead, they told local news outlets, he chose to resign.

What about the First Amendment? Does it protect employees  from punishment by employers for exercising their constitutional right to free speech?

Not if they are employed in the private sector, lawyers say. The First Amendment only limits government control of a person’s speech or writing, writes employment attorney Robin Shea of Constangy, Brooks, Smith & Prophete LLP in Winston-Salem, North Carolina. “The First Amendment doesn’t prohibit limits on speech that are imposed by private individuals, or private-sector employers.”

State or local laws may apply in some cases, “but those jurisdictions are the exception, not the rule,” she writes.

Public employers take special care, Shea notes. And employers with a collective bargaining agreement should check to see if it limits their options, Shea writes.

In any case,“Employers must also be careful not to run afoul of the National Labor Relations Act by punishing employees who may be commenting about the terms and conditions of their employment,” writes Kimberly A. Ross, a partner with Ford Harrison in Chicago.

Ross recommends that employers tread carefully no matter what. “Because of all of the complex issues to be considered, employers are encouraged to consult with their employment counsel before making any significant decisions based on their employees’ off-duty conduct,” she writes.

Shea also urges employers to be cautious: “Never take action against any employee based on ‘politics’ unless you have consulted with counsel first,” she writes.

Is One Watchdog Better Than Two?

The Trump administration wants to combine the Equal Employment Opportunity Commission with another federal watchdog agency—and both worker and business groups are worried.

The issue got attention on Wednesday as new Secretary of Labor Alexander Acosta testified before a House subcommittee about how President Trump’s proposed budget will affect his department.

Among other proposals that would cut Labor department spending by 20 percent overall, Trump’s budget also proposes merging the department’s Office of Federal Contract Compliance Programs into the EEOC, an independent agency.

Acosta told skeptical Democrats on the panel that the merger made “common sense” and would not hurt workers, the Associated Press and other news organizations reported.

Off Capitol Hill, the merger idea has drawn fire from communities that often disagree—business leaders and worker-rights advocates. The Leadership Conference on Civil and Human Rights, a coalition that includes labor unions, the ACLU and others, wrote the administration and Congress on May 26 that the merger would effectively shutter the OFCCP by folding it into the EEOC.

“Both OFCCP and EEOC help advance and protect equal employment opportunity, but they are distinct in their enforcement approaches and expertise, and they should remain separate,” said Leadership Conference CEO Wade Henderson in a prepared statement. “We strongly urge Congress to reject this proposal, which would lead to an erosion of key civil-rights protections for working people.”

Though the merger idea got an early boost from the business-friendly Heritage Foundation, some corporate leaders agree with critics that the agencies should remain separate. Some, including the U.S. Chamber of Commerce, fear the merger would create a mega-regulator with too much power.

”There is a fear in the business community that this newly formed grouping might result in the worst of all worlds from both agencies,” said Randy Johnson, a chamber senior vice president, in a prepared statement. He noted that the EEOC has legal powers the OFCCP does not.

Ready for More Immigration Audits?

With tougher immigration rules on the front burner in Washington, nearly every employer should be prepared for a visit from ICE agents sooner or later, warns an immigration lawyer who defends employers.
With President Trump’s “Buy American, Hire American” policy increasing scrutiny of employer-sponsored work visas like the H-1B, “I do believe we’ll see increased enforcement with respect to audits and site visits,” says Montserrat Miller, a n employment attorney partner at Arnall Golden Gregory LLP in Washington who specializes in helping employers with immigration issues.

Immigration and Customs Enforcement agents aren’t just targeting packing houses and other businesses with a history of hiring undocumented workers, Miller says. And they’re no longer just looking for “criminal aliens” and gang members, common targets of ICE workplace enforcement operations under previous administrations.

Any business with workers who have “H” or “L “visas—commonly issued to let foreign citizens work in the U.S. for a sponsoring employer—should be prepared for a sudden visit by ICE agents looking to see that all the paperwork is in order, Miller says.

“Everybody has the potential to be detained if they’re not authorized to be in the United States,” she says. (Watch for more coverage of changes in immigration law, including a Human Resource Executive® magazine cover story to be published this month that looks at how employers are affected.)

Miller says it’s key to be prepared for these visits. First, she says, make sure people on the front lines, such as receptionists, know what to do when an agent arrives. They also should know what documentation ICE agents are required to present when they arrive, she adds, and whom to summon for help, including HR leaders and legal counsel.

Employers, Miller says, should also determine before any site visit where agents may and may not go to inspect company records.

Employees with work visas should be familiar with details provided on their visa applications “so they don’t accidentally say something [to agents] that raises questions” during a site visit, according to Miller.

The bottom line:”You need to have a plan in place.”

Biometrics and New Privacy Concerns

A recently filed class action suit in Illinois could be the signpost for “a new employment law frontier,” according to at least one law firm.

As recently reported by Holland & Knight, a class action suit pending in the U.S. District Court for the Northern District of Illinois centers around the state’s Biometric Information Privacy Act, which was passed in 2008 to prohibit the gathering and keeping of individuals’ biometric information without his or her prior notification and written permission.

In Baron v. Roundy’s Supermarkets Inc., et al., the plaintiff alleges that the supermarket chain violated BIPA by failing to meet the legal requirements to obtain and retain employee fingerprints the company used for timekeeping purposes.

Holland & Knight attorneys called biometrics an “emerging area” of employment law, as more employers begin to use the technology to log employees’ hours. Damages available under laws such as BIPA make this fertile ground for class actions as well. For each violation of BIPA, a prevailing party may recover the greater of actual damages or $1,000 for negligent violations of the Act, the attorneys note, adding that plaintiffs may recover the greater of actual damages or $5,000 for “reckless or intentional violations.”

With legislation comparable to BIPA already on the books in Texas, and states including Alaska, Montana, New Hampshire and Washington considering similar bills, employers would be wise to tread carefully when and if they introduce biometrics to their places of business.

“Laws like BIPA will become more relevant to employers and of increasing interest to the plaintiffs’ bar as the use of biometric data, such as the use of fingerprints or thumbprints for timekeeping purposes, becomes more prevalent in the workplace,” according to Holland & Knight.

“With the increasing awareness of such laws by the plaintiffs’ bar, it is important that employers using or considering the use of biometric data in the workplace ensure compliance with any state or local laws governing the use, retention and destruction of that data.”

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 lessons from Trump’s FBI Firing

Some employment lawyers couldn’t help themselves last week after President Trump fired FBI director James Comey in a political incident that quickly spun out of control: They found lessons for their corporate clients from the high-profile inside-the-Beltway affair.

“I wanted to go on CNN or MSNBC,there was so much to say,” laughed Ellen R. Storch, a partner with Kaufman Dolowich Voluck LLP in Woodbury, N.Y.

The comparison to corporate HR is plausible, Storch notes, since any large company may have regional or divisional leaders whom the CEO might target for”showboating,” to use the president’s term about Comey.

But any CEO who fired a high-profile subordinate as Trump fired Comey would be exposing the company to legal risks, says Storch, whose practice includes both litigation and counseling employers on best practices.

“After doing this for 20 years, II firmly believe the optics” of a termination are critical,Storch says — is there a clearly legitimate  business reason for termination? The tone and content of public messages about the firing also matters, Storch says.To start with, a high-profile employee likely has a big ego that must be managed, she says. If they are considering legal action over their termination, that employeewill be balancing pragmatic considerations — possible harm to their career for battling an employer in court — with anger stemming from damage to that big ego. So how an employer handles the termination can  influence the employee’s willingness to sue, Storch says.

How a firing plays out also will affect employees who remain and how they feel about their employer, she notes. Much of this depends on what leaders say about the termination, Storch says. “You can manage a separation in a way so it sends a message.”

Ideally that message is “We care about you guys, but we need to go in a different direction.”So wWhat was wrong with how Comey’s firing was handled?

“Just about everything,”Storch says. A corporate employer who issued as many conflicting statements as did the White House in the hours after Comey was fired would have undercut its legal defenses, Storch says. In such a situation, “the employer has unnecessarily created a credibility issue for themselves,” she says.

 

 
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Employers Take Care — It’s May Day

Today is May Day, a.k.a. International Workers Day, an occasion that in the United States once was mainly observed by labor unions. In 2017, reflecting the rise of more informal worker  organizations, civil-rights groups with names like “Rise Up” are behind hundreds of planned strikes, rallies and marches demonstrations around the country in support of labor-related causes like higher minimum wages and relaxed federal immigration policies.

 

Welcome to the future, saysAndrew B. Prescott, an employer-side labor lawyer with Nixon Peabody in Providence, Rhode Island. With Donld J. Trump firmly installed in the White House, Prescott sees the beginning of an era of more  antagonistic relations between employers and worker groups. And political groups dedicated to causes like fast-food-worker rights, not traditional labor unions, will likely set the tone, Prescott says.

Though May 1 demonstrations may be organized by groups not involved in collective bargaining, lawyers warn employers that today’s activities may still be protected under the National Labor Relations Act.

Writing in Crain’s Detroit Business, employment attorney Nick Huguelet ofDetroit-based Nemeth Law PC notes that the law doesn’t give workers the right to simply skip work on a day like today. But section 7 of the NLRA “protects an employee’s right to engage in concerted activities concerning the terms and conditions of employment or for other mutual aid or protection…this right applies equally in both union and nonunion workplaces and may protect employees from being disciplined for engaging in a strike.”

Though the law”does not protect purely political demonstrations, it can be difficult to show that a job action is purely political,” Huguelet writes. “For example, immigration reform has been found to be sufficiently connected to the terms and conditions of employment, and therefore protected. Because the NLRB for the time being continues to be sympathetic to employee rights, employers should be cautious about imposing disciplinary action on striking employees.”

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.”

 

Limiting Subpoena Power

As you might have heard, the Supreme Court issued a ruling this week in the case of McLane Co. Inc. v. Equal Employment Opportunity Commission.

Monday’s ruling addressed the standard of review for a district court in determining whether to enforce or quash an EEOC-issued subpoena, with the Court reversing the Ninth Circuit’s judgment and holding that federal appellate courts must review a district court’s decision whether to enforce an EEOC subpoena for abuse of discretion, and not de novo.

The case centered on a former McLane Co. employee’s claim that the Temple, Texas-based supply chain services provider discriminated against her on the basis of her gender.

In 2007, Damiana Ochoa took three months of maternity leave from her job at McLane, which requires new employees and workers returning from medical leave to undergo a physical evaluation if their job is physically demanding—which Ochoa’s was, according to court documents. Ochoa attempted the evaluation on three separate occasions, and failed to pass each time. She was subsequently fired, which led to her filing a charge of gender discrimination with the EEOC.

As part of its investigation, the EEOC issued subpoenas to McLane, requesting the names, Social Security numbers and contact information for other employees that had been required to take the same evaluation. The EEOC filed actions to enforce the subpoenas after McLane refused to comply with that request.

Finding that the aforementioned information was not relevant to the charges, a federal district court refused to enforce the subpoenas. The Ninth Circuit reversed that decision, determining that the district court had erred in characterizing the information as irrelevant.

The Supreme Court’s decision to overturn that Ninth Circuit ruling offers “a good reminder that there are limits to the EEOC’s subpoena power,” says Melissa Raphan, a Minneapolis-based partner at Dorsey & Whitney.

“The practical effect of this decision for employers is twofold,” says Raphan, who is also chair of the firm’s labor and employment group. “First, it is a good reminder that the EEOC does not enjoy unfettered discretion to obtain information about other current and former employees. Second, the battleground to push back on the EEOC’s subpoena is in the district court.”

The EEOC’s subpoena power “does not allow the agency to bypass the burden of showing that the material is relevant, and, even if relevant, the employer can still show that the request is unduly burdensome.”

Ultimately, the decision’s impact on employers figures to be “somewhat limited in scope,” says John Alan Doran, a Scottsdale, Ariz.-based partner at Sherman & Howard.

Noting that only the Ninth Circuit took the position that it could review these trial court decisions “from scratch,” Doran adds that “every other jurisdiction has held that a trial court’s decision to quash or modify the scope of an EEOC opinion is subject to searching review by the appellate courts.”

As such, the decision directly affects only those employers doing business within the Ninth Circuit, continues Doran.

That said, “there is useful language for all courts to consider with respect to the scope of the EEOC’s subpoena power that employers will likely use in future run-ins with the EEOC throughout the country.”

The case is “largely about whose ox is getting gored, so it is hard to describe the decision as pro- or anti-employer,” says Doran. “In cases where an employer fails to convince a trial court to modify or quash an EEOC subpoena, this decision makes it that much harder to reverse the trial court’s decision on appeal. But where an employer successfully convinces a trial court to modify or quash a subpoena, its likelihood of success on appeal of that issue is considerably better.”