Employer Law Report

Court Tells NLRB Not So Fast On "Quickie" Election Rule Changes

Franck Wobst — Tue, 15 May 2012 14:29:05 -0500

The NLRB was issued a stunning rebuke yesterday by U.S. District Court Judge James Boasberg (an Obama appointee) when he ruled that the NLRB's controversial union election rule changes were invalid because they were enacted without the required three-member quorum. The NLRB may appeal Judge Boasberg's decision. However, at least for the present, the Court's decision in Chamber of Commerce, et al. v. NLRB renders the union election rule changes, which took effect April 30, 2012, null and void.

The election rule changes have been the source of considerable tension between employer and union groups for the past year. They were predicted to shorten the period for union elections from the current average of approximately 40 days to as few as 10 to 21 days after a union election petition is filed. The NLRB and pro-labor groups contended the rule changes were desirable because they would streamline the election process and cut down on litigation costs. Employer groups came out strongly against the election rule changes, contending that they gave unions an unfair advantage.

The employer group's strong opposition to the rule changes was shared by NLRB Member Brian Hayes, the lone "Republican" appointee on the Board when the NLRB took its final vote on the rule changes in December, 2011. In fact, Member Hayes was so strongly opposed to the election rule changes that he threatened to resign prior to the vote being taken to prevent the NLRB from having the three-member quorum necessary to approve the rule changes. Ultimately, Member Hayes decided not to resign. However, when the NLRB used its electronic case management system to circulate the final rule among the NLRB's three Members, Member Hayes did not cast a vote or enter an appearance. The other two NLRB Members, both Democratic appointees, did cast votes to adopt the rule changes. The NLRB proceeded with implementing the rule based on those two favorable votes.

The U.S. Chamber of Commerce filed suit seeking to enjoin enactment of the rule changes within days of NLRB's December vote. The Chamber's lawsuit raised multiple substantive and procedural challenges to the election rule changes. However, Judge Boasberg found that it was unnecessary to rule on any but one of the Chamber's arguments because he agreed that the NLRB lacked the authority to issue the rule changes. In what will likely be an oft quoted passage from the decision, the first paragraph of Judge Boasberg presaged the outcome: "According to Woody Allen, eighty percent of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that. Indeed, it is the only thing that matters – even when the quorum is constituted electronically."

The NLRB may appeal Judge Boasberg's decision. Or, it may go back and take another vote on the election rule changes. However, any vote now taken also will be taken with the backdrop that federal litigation is now pending that challenges the three recess appointments that President Obama made to the NLRB on January 4, 2012.

Button, Button, Who's Got The Button?

Mike Underwood — Tue, 15 May 2012 10:08:35 -0500

Starbucks recently won a limited victory in a case involving employees wearing pro-union buttons at work. National Labor Relations Board v. Starbucks Corp. Court of Appeals Second Circuit, Case No. 10-3511. A common union organizing tactic is to have pro-union employees wear union buttons at work. Employers often have the mistaken impression that they can ban union buttons at work as part of their dress code or uniform policy. But, the NLRB and courts have consistently held that expressing support for unions by wearing buttons on clothing is a protected means of expression about union organizing. Even if the company policy is to ban other sorts of buttons, like political campaign buttons or sports team buttons, union support buttons cannot be prohibited because wearing them is a special protected form of expression. Employers can restrict wearing union-support buttons only in very limited circumstances, such as when the buttons may scratch or otherwise damage products.

Even though Starbucks prevailed ultimately, the case illustrates how aggressively the NLRB enforces the rights of employees to wear union buttons at work. Starbucks was actually allowing employees to wear one pro-union button while working. The problem came when some employees insisted on wearing multiple union buttons at the same time. In fact, one worker was wearing eight union buttons. Starbucks argued that multiple union buttons detracted from the the impact of certain company-issued buttons and badges relating to the business. The NLRB held that Starbucks could not limit employees to wearing only one pro-union button. Starbucks appealed and the Second Circuit Court of Appeals reversed the NLRB and held that Starbucks could limit employees to wearing just one pro-union button at a time. The Court also reversed an NLRB finding that Starbucks had fired an employee for union activity and sent a similar claim regarding another worker back to the NLRB for further consideration.

The lesson: If you are faced with employees wearing pro-union buttons, pins, hats, t-shirts, etc., do not presume you have the right to ban or limit those actions. It is not enough to argue that you enforce restrictions consistently. The right to express support for unionization by wearing the message is one protected under the National Labor Relations Act. You should contact legal counsel before deciding how to handle the issue.

Texas Federal Court Decision Addresses ADA and FMLA Issues Arising From Employee's Return From Alcohol Rehab

Brian Hall — Mon, 14 May 2012 13:58:52 -0500

The recent decision out of Texas in Sechler v. Modular Space Corporation highlights a recurring issue for employers -- managing employees who return to work following rehabilitation for substance abuse. In Sechler, the plaintiff, a recovering alcoholic, was by all accounts an excellent employee for approximately 10 years until he experienced a relapse. He requested EAP services and, as a result received outpatient treatment for about a month.

Upon returning to work, he was asked to sign a "Return-to-Work” agreement, outlining the requirements with which he had to comply as a condition of his return to work. The Agreement specified that Sechler was to attend weekly Alcoholics Anonymous meetings and provide proof of attendance, as well as submit to at-will drug and alcohol screenings. He also agreed that a positive result on any screening would result in his termination.

Upon his return to work, Sechler asked that he be given permission to leave work early to attend his AA meetings, but was told he needed to schedule them on his own time. He then was scheduled for and passed a drug screening. A few weeks later, he then began exhibiting what his coworkers described as unusual behavior; that his speech was slurred and that he smelled of alcohol. One co-worker said that he thought he had seen Sechler go to the passenger side of his car and take a drink.

As a result, ModSpace scheduled Sechler for another screening and, out of a concern for his and others' safety, insisted that he not drive there himself. He refused to go unless he could drive himself to the screening. ModSpace's chief human resources officer, Sean McManus, then offered to pay for a taxi to take Sechler to the testing facility, which Sechler also refused. Because Sechler refused to allow someone to drive him to the facility, he could not produce a complying test result, and McManus made the decision to terminate his employment.

Sechler's lawsuit against ModSpace alleged violations of both the ADA and the FMLA, and ModSpace moved for summary judgment. The court had little difficulty disposing of the ADA and FMLA retaliation claims. Specifically, the court found that ModSpace reasonably accommodated any disability Sechler might have by giving him time off work to obtain treatment and by keeping his treatment confidential. In addition, regardless of whether he was disabled under the ADA or took FMLA leave, Sechler violated the terms of his return-to-work agreement (as well as the company's drug-free workplace policy) by refusing to be screened for drugs or alcohol.

With respect to the FMLA interference claim, however, the court found sufficient material issues of fact to go to trial as to whether ModSpace complied with the FMLA-notice requirements. In fact, the court noted that ModSpace's employee handbook did not contain the general notice, and Sechler testified without rebuttal from ModSpace that the FMLA was never discussed at the time he took his leave. He testified that, had he known about FMLA leave, he would have participated in an aftercare program that had been recommended to him, which would have taken about four hours of his time each week. According to Sechler, he did not believe he was entitled to take this further time off. The court concluded that Sechler's belief that ModSpace would not allow him to take further time off was reasonable, in light of the fact that his request to attend the mandatory AA meetings during work hours was denied. Finally, Sechler testified that his participation in the aftercare program “would have made a difference” in whether he relapsed. Based on all of this evidence, the Court denied ModSpace's motion for summary judgment on the FMLA interference claim (pending reconsideration if ModSpace was able to establish that it was not a covered employer under the FMLA.)

Interestingly, after it filed its summary judgment motion, ModSpace claimed that Sechler was not an eligible employee under the FMLA because ModSpace did not have the requisite 50 employees within 75 miles of his workplace at the time Sechler requested his leave. This might help explain why FMLA leave might not have been discussed with Sechler (though it of course would not explain the lack of a general notice unless of course ModSpace did not have 50 employees in total.)

From my perspective, other than the potential FMLA notice failings, the employer really seemed to have done everything right in responding to the employee's need for rehab and managing his return to work. But, the case also highlights the need for employers that hover around the thresholds for FMLA coverage and eligibility to make sure they stay on top of their employee counts to ensure they offer FMLA leave when appropriate and provide all necessary notices.

Sixth Circuit Rejects FMLA Retaliation Claim Based On Employer's Honest Belief That Employee Had Committed Fraud

Brian Hall — Fri, 11 May 2012 12:40:15 -0500

Employers often defend against discrimination and retaliation claims by arguing that courts should not act like super human resources managers who second guess their employment decisions. A panel of the Sixth Circuit took that argument to heart in its May 8th decision in Seeger v. Cincinnati Bell Telephone Co., in which the court upheld summary judgment in favor of the employer on the ground that the employer had an "honest belief" that the plaintiff had engaged in disability fraud.

Tom Seeger was on FMLA leave for aback injury when he was spotted at the Cincinnati Oktoterfest by several of his co-workers. One of the employees contacted human resources to say at Seeger was able to walk 50 to 75 feet, seemingly unimpaired. During the employer's investigation, however, others remarked that Seeger seemed to to be in pain. The employer's investigation investigation also included an interview of Seeger and a review of his medical records, disability file and employment history. Seeger was suspended and was given an opportunity to submit a statement as well as a statement from his physician. After considering all of this information, the employer decided that Seeger's activity at Oktoberfest was inconsistent with his claimed disability and terminated him for disability fraud.

Seeger filed suit for interference with his FMLA rights and for retaliation in violation of the FMLA. With respect to the interference claim, the court concluded that Seeger had been given all of the FMLA leave he had requested since he had actually returned to full duty during the course of the investigation. With respect to the retaliation claim, the court noted the closeness in time between the FMLA leave and the termination, but concluded that CBT made a “reasonably informed and considered decision” before it terminated Seeger, and that Seeger has failed to show that CBT's decision-making process was unworthy of credence.

In reaching this conclusion, the court noted that the determinative question was not whether Seeger actually committed fraud, but whether CBT reasonably and honestly believed that he did. The court also noted that in order to take advantage of this "honest belief" defense, the employer's investigation need not leave no stone unturned. An employer's invocation of the honest belief rule, however, does not automatically shield it, because the employee must be afforded the opportunity to produce evidence to the contrary, such as an error on the part of the employer that is “too obvious to be unintentional.”

The dissent argued that the summary judgment order for the employer should be overturned because the employer focused on what it described as "flimsy evidence while ignoring strong contrary evidence." In addition, the dissent faulted the employer for not obtaining an independent medical expert opinion to process all of the information in its possession. At a minimum, the dissent contended that Seeger had presented sufficient evidence to permit a reasonable jury to conclude that the employer's investigation was so one-sided that it was unworthy of credence.

Employers should welcome the Sixth Circuit's Seeger decision, but should not get carried away. As noted, courts will not automatically rubber stamp an employer's decision unless it is supported by a thorough, well thought out investigation. In FMLA and ADA cases, I should note that human resources professionals and lawyers are particularly ill suited to make medical judgments and appropriate medical advice should be sought.

Fourth Circuit Rejects EEOC Position That Supreme Court Cleveland Decision Does Not Apply To Enforcement Actions

Brian Hall — Wed, 02 May 2012 15:01:24 -0500

In 1999, in Cleveland v. Policy Mgmt. Sys. Corp., the U.S. Supreme Court held that in order to avoid summary judgment in a disability discrimination case brought under the ADA, a plaintiff must provide a "sufficient" explanation regarding any conflicting statements made in a Social Security disability application. According to the Supreme Court, that explanation must be "sufficient to warrant a reasonable juror's concluding that, assuming the truth of, or the plaintiff's good-faith belief in, the earlier statement, the plaintiff could nonetheless 'perform the essential functions' of her job, with or without 'reasonable accommodation.'"

Last week, in EEOC v. Greater Baltimore Medical Center, Inc., the Fourth Circuit federal appeals court rejected the EEOC's position that Cleveland does not apply in enforcement actions brought by the EEOC on behalf of an individual claimant. While acknowledging that the EEOC has a governmental interest in an enforcement action that is not merely derivative of the individual claimant's interest, the court concluded that "this does not mean that a claimant's statements to other government agencies are somehow less relevant to an enforcement action on behalf of the claimant than they are for an action pursued by the claimant himself."

In concluding that the EEOC and the claimant in GBMC did not meet this burden, the Court noted multiple comments from the claimant indicating his total inability to work and his failure to notify the Social Security Administration of his agreement to notify it if his condition improved to the point where he would be able to return to work. While noting that it "did not condone" and was "deeply concerned" about the employer's failure to reinstate the individual claimant when the medical evidence demonstrated he was capable of working, the court granted the employer's motion for summary judgment stating that it was constrained to do so based on the plain language of the ADA and relevant case law.

GBMC found that reliance on the Cleveland decision was a great litigation strategy to avoid potential ADA liability, but there may be another lesson for employers to take from the GBMC case prior to litigation. When an employee is seeking reinstatement from a lengthy leave of absence, employers should make sure they know whether the employee has applied for benefits that may be inconsistent with the request to return to work. Doing so will help inform any reasonable accommodation process and will help employers ensure that they do not return employees to work who may not be able to work safely.

Federal Court: FCRA Does Not Apply To Independent Contractor Relationships

Brian Hall — Wed, 02 May 2012 09:30:33 -0500

Here is one more potential advantage of using independent contractors rather than employers that so far has flown below the radar screen. According to a federal district court in Wisconsin, the Fair Credit Reporting Act's disclosure obligations do not apply to independent contractor relationships.

When EMS Energy Marketing Service, Inc., terminated Phillip Lamson based on the results of a background check, it failed to provide him with a copy of the report or the written description of his rights under the FCRA as required by the Federal Trade Commission. Lamson sued, alleging that his termination violated FCRA. The Court concluded, however, that FCRA did not apply because Lamson was hired as an independent contractor. In reaching this conclusion, the court stated that the unambiguous language of the authorization and disclosure sections of FCRA applies to use of a consumer report for the purpose of “evaluating a consumer for employment, promotion, reassignment or retention as an employee.” (emphasis added).

Because EMS did not obtain the consumer report to evaluate Lamson for a position as an employee of EMS, the court granted EMS's summary judgment motion-- but not before evaluating whether Lamson's relationship with EMS actually met the criteria for independent contractor status. The court evaluated the applicability of three different tests before settling on a common law test that the court concluded was met by EMS.

So where does this decision leave businesses? Among the many reasons why a business may choose to use independent contractors, avoiding FCRA liability is probably way down the list. Nevertheless, the court's decision in Lamson vs. EMS Energy Marketing Service, Inc., adds an interesting new wrinkle to the analysis.

EEOC Permits Title VII Sex Discrimination Claim Based On Transgender Status To Proceed

Jamie LaPlante — Mon, 30 Apr 2012 15:41:45 -0500

The Equal Employment Opportunity Commission (EEOC) decided on April 20, 2012 that discrimination against an employee on the basis that they are transgender was the equivalent of sex discrimination under Title VII of the Civil Rights Act of 1964. Macy v. Holder, EEOC Case No. 0120120821. Title VII protects employees against discrimination on the basis of a several protected classes, including sex. While many states and municipalities include transgender and sexual orientation as protected classes, Title VII has not been interpreted to protect these individuals on this basis alone. Individuals must show that the discrimination was based on their sex, which is often shown by arguing that stereotypes about genders played a role in the decision making.

The claimant in this case, Mia Macy, was a police detective in the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Macy, then male, applied for a transfer within ATF. During the background check for the transfer, Macy informed the investigator that he was transitioning to a female. Five days after ATF learned this information, Macy was informed that the position was no longer available due to budgetary restrictions. Macy later learned that someone else had been hired for the position. Macy was later told that the other individual was hired because the individual was further along in the background check process. Macy believed that the other individual was chosen because of discrimination against Macy as a transgender person.

Macy filed a complaint with the EEOC alleging discrimination on the basis of “gender identity, change of sex, and/or transgender status.” ATF argued that this was not a recognizable claim under Title VII. Macy appealed to the EEOC for a determination. Initially, Macy also claimed sex discrimination on the basis of stereotyping, but that claim later was withdrawn. Courts have long-held that sex stereotyping—that an individual does not conform to the stereotypes for the male or female gender—is actionable.

The EEOC concluded that discriminating on the basis of transgender status was discrimination on the basis of sex by definition. The EEOC likened it to religious discrimination by discriminating against a person for recently converting to a particular religion. What is significant about the EEOC’s decision is that transgender persons are protected, according to the EEOC, whether the discrimination is based on stereotyping, hostility, a desire to protect people of a certain gender, assumptions that disadvantage one sex, or the desire to accommodate other people’s prejudices or discomfort. The EEOC, however, was quick to point out that the EEOC does not believe that this view of Title VII creates a new protected class for transgender persons.

It is important to note that this decision is a decision of the EEOC only. It does not bind courts in any jurisdiction, and it remains to be seen whether courts, particularly federal courts of appeal, will agree or disagree with the EEOC’s decision and rationale. In any event, employers should be mindful of the EEOC’s expansive reading of Title VII with regard to sex discrimination because the EEOC is the federal government agency that handles employment discrimination charges.

EEOC Issues Enforcement Guidance On Criminal Background Checks

Brian Hall — Fri, 27 Apr 2012 14:20:20 -0500

On April 25, 2012, the EEOC issued a new Enforcement Guidance memorandum focusing on potential race and national origin discrimination arising out of employer use of criminal background checks in making employment decisions. The Guidance discusses disparate treatment and disparate impact analysis under Title VII and concludes that the use of criminal background information may result in a violation of Title VII under either theory of discrimination. Specifically, the Guidance notes that a disparate treatment violation may occur when an employer treats criminal history information differently based on an applicant's or employee's race or national origin. Or, an employer's neutral policy (e.g., excluding applicants from employment based on certain criminal conduct) that disproportionately impacts individuals based on their race or national origin would violate Title VII if the policy is not job related and consistent with business necessity.

The Guidance addresses the differences between arrest and conviction records. With respect to arrest records, the Guidance states that the fact of an arrest does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with business necessity. However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question. By contrast, a conviction record will usually serve as sufficient evidence that a person engaged in particular conduct, but according to the EEOC, under certain circumstances, there may be reasons for an employer not to rely on the conviction record alone when making an employment decision.

The Guidance spends the most time discussing the potential disparate impact arising out of criminal background checks. According to the Guidance, national data generally supports a finding that criminal record exclusions have a disparate impact based on race and national origin. As a result, the EEOC will scrutinize a criminal record exclusions. This does not mean that employers cannot demonstrate that the particular exclusion it utilizes will automatically be found to have a disparate impact based on race or national origin. Instead, the EEOC will assess relevant evidence in determining whether a disparate impact exists. For instance, the EEOC will look at applicant flow information, workforce data, criminal history background check data, demographic availability statistics and incarceration/conviction and other similar data for the relevant labor market. Therefore, the employer may demonstrate the lack of any disparate impact by showing that local statistics show that African Americans and/or Hispanics are not arrested or convicted at disproportionately higher rates in the geographic area from which it does its hiring.

If the EEOC's investigation establishes the existence of a disparate impact, the employer can still defend the criminal record exclusion by demonstrating that it is job related for the position in question and consistent with business necessity. In its Guidance, the EEOC identifies two circumstances in which it believes employers will consistently meet this standard:

The employer validates the criminal conduct screen for the position in question per the Uniform Guidelines on Employee Selection Procedures (Uniform Guidelines) standards (if data about criminal conduct as related to subsequent work performance is available and such validation is possible); or
The employer develops a targeted screen considering at least the nature of the crime, the time elapsed, and the nature of the job, and then provides an opportunity for an individualized assessment for people excluded by the screen to determine whether the policy as applied is job related and consistent with business necessity.

By the Commission's own admission, the existence of social science studies that would permit validation of a criminal conduct screens are "rare at the time of this drafting."

Absent such a validation study, the EEOC Guidance suggests therefore that the employer should develop a targeted screen followed by an individualized assessment. The targeted screen should consider:

The nature and gravity of the offense or conduct;
The time that has passed since the offense, conduct and/or completion of the sentence; and
The nature of the job held or sought

The individualized assessment would consist of notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity. The individual's showing may include information that he was not correctly identified in the criminal record, or that the record is otherwise inaccurate. Other relevant individualized evidence includes, for example:

The facts or circumstances surrounding the offense or conduct;
The number of offenses for which the individual was convicted;
Older age at the time of conviction, or release from prison;
Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incidents of criminal conduct;
The length and consistency of employment history before and after the offense or conduct;
Rehabilitation efforts, e.g., education/training;
Employment or character references and any other information regarding fitness for the particular position; and
Whether the individual is bonded under a federal, state, or local bonding program.

The EEOC concedes that the individualized assessment may not be necessary in all circumstances. However, the use of individualized assessments can help employers avoid Title VII liability by allowing them to consider more complete information on individual applicants or employees, as part of a policy that is job related and consistent with business necessity.

The Guidance then goes on to note, that where an employer successfully demonstrates that its policy or practice is job related for the position in question and consistent with business necessity, a Title VII plaintiff may still prevail by demonstrating that there is a less discriminatory ―alternative employment practice that serves the employer's legitimate goals as effectively as the challenged practice but that the employer refused to adopt. In this regard, however, the Guidance provides that employers can still avoid Title VII liability by showing:

Compliance with federal laws and/or regulations that prohibit individuals with certain criminal records from holding particular positions or engaging in certain occupations is a defense to a charge of discrimination, but any exclusion that goes beyond the scope of a federally imposed restriction will need to withstand scrutiny under the job relatedness and business necessity standards;
Compliance with federal statutes and regulations that govern eligibility for occupational licenses and registrations; however, while Title VII does not mandate that an employer seek such waivers, where an employer does seek waivers it must do so in a nondiscriminatory manner;
The individual or employee has not fulfilled or has ceased to fulfill federal national security requirements to hold the position in question;
Compliance with states and local laws and/or regulations that restrict or prohibit the employment of individuals with records of certain criminal conduct; however, if an employer‘s exclusionary policy or practice is not job related and consistent with business necessity, the fact that it was adopted to comply with a state or local law or regulation does not shield the employer from Title VII liability.

The Guidance concludes with a list of its examples of best practices for employers who are considering criminal record information when making employment decisions. Interestingly, the list does not include another recommendation that was included in the body of the Guidance; that is, eliminate any inquiry about criminal convictions on the employment application itself consistent with some state "ban the box" statutes. In any event, here is the list:

Eliminate policies or practices that exclude people from employment based on having any criminal record.
Train managers, hiring officials, and decisionmakers about Title VII and its prohibition on employment discrimination.
Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
Identify essential job requirements and the actual circumstances under which the jobs are performed.
Determine the specific offenses that may demonstrate unfitness for performing such jobs.
Determine the duration of exclusions for criminal conduct based on all available evidence.
Record the justification for the policy and procedures.
Note and keep a record of consultations and research considered in crafting the policy and procedures.
Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII.
When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.
Keep information about applicants‘ and employees‘ criminal records confidential. Only use it for the purpose for which it was intended.

Supreme Court Says States Can't Be Sued Over FMLA "Self-Care" Provision

Lisa Whittaker — Thu, 26 Apr 2012 16:30:23 -0500

On March 20, 2012, in a 5-4 decision, the Supreme Court of the United States ruled that states cannot be sued for denying workers sick leave under the FMLA.

Daniel Coleman, an African-American male, was employed with the Maryland State Court of Appeals from March 2001- August 2007 and served most recently as executive director of procurement and contract administration. Coleman requested a 10-day medical leave under the "self-care" provision of the Family and Medical Leave Act ("FMLA") to deal with his hypertension and diabetes. Coleman claims he was forced to resign or be terminated because he was African-American and had requested sick leave.

Coleman filed a lawsuit in the District Court alleging the State violated Title VII and the FMLA. He was seeking $1.1 million in monetary damages. The State of Maryland moved to dismiss the complaint based on the grounds that Coleman failed to state a claim for which relief could be granted and that his FMLA claim was barred by Eleventh Amendment immunity.

The State argued Congress did not enact the FMLA "self-care" provision to remedy a pattern of sex-based discrimination found in states' sick leave policies. The "self-care" provision of the FMLA was passed pursuant to the Commerce Clause, which cannot be used to pierce a states' sovereign immunity. The District Court and the Fourth Circuit Court of Appeals agreed.

This decision only denies employees of state agencies, state universities, and their political subdivisions (cities, counties, public boards, etc.), the right to sue state employers under the "self-care" provision of the FMLA. Public employers are reminded that all other forms of FMLA leave remain protected, so to avoid liability under other employment laws, public employers should continue enforcing medical leave policies consistently.

EEOC Issues Revised Publication on Employment of Veterans with Disabilities

Jamie LaPlante — Wed, 25 Apr 2012 08:40:39 -0500

The EEOC recently issued a revised publication on the employment of veterans with disabilities. According to the EEOC, the publication reflects changes in the law made by the ADA Amendments Act of 2008 (ADAAA), which made it easier for persons, including veterans, to establish they meet the definition of “disability.” The wide range of impairments covered by the ADAAA include those that are often not well understood, including post-traumatic stress disorder (PTSD), major depressive disorder, and traumatic brain injuries, as well as deafness, blindness, partial or missing limbs, and mobility impairments. This is an issue that will become of increasing relevance as large numbers of veterans return from Iraq and Afghanistan.

Employers should be aware that the ADAAA and the Uniformed Services Employment Reemployment Rights Act (USERRA) protect disabled veterans from discrimination in different ways. USERRA requires employers to go further than the ADA by making reasonable efforts to assist a veteran who is returning to employment to become qualified for a job, whether or not the veteran has a service-connected disability, often through training or retraining. Veterans may have up to two years from the date of completion of service to return to their jobs or apply for reemployment under USERRA. USERRA also applies to all employers, regardless of size, whereas the ADA applies to employers with 15 or more employees. Employers may be required to accommodate a disabled veteran under USERRA where they would not otherwise be required under the ADAAA.

The link to the updated guide on employment of disabled veterans is: http://www.eeoc.gov/eeoc/publications/ada_veterans_employers.cfm

Highlighting some of the guidance provided by the EEOC:

Employers may not make assumptions about the veteran’s ability to do the job based on the fact that the veteran has a disability rating from the U.S. Department of Veterans Affairs (VA).
Employers may, for affirmative action purposes (in accordance with rules regarding applicant self-identification for federal contractors and subcontractors), ask applicants to voluntarily identify as a disabled veteran prior to making an offer. This is an exception to the ordinary rule prohibiting employers from asking for medical information prior to making an offer.
Employers may also ask for suitable candidates from organizations that help veterans or veterans with disabilities find employment. Federal contractors and subcontractors are required to take affirmative action to employ and advance qualified disabled veterans.
The ADAAA does not prohibit employers from giving special preference to veterans with disabilities, but employers may not discriminate against individuals with disabilities, including disabled veterans.
Employers should keep in mind that some veterans with service-related disabilities may require reasonable accommodations during the application process.

One Week Left to Comment on Proposed Regulations to the FMLA

Lisa Whittaker — Tue, 24 Apr 2012 14:30:58 -0500

The Department of Labor ("DOL") published proposed regulations to the Family and Medical Leave Act ("FMLA") on February 15, 2012, and the deadline for public comments has been extended through Monday, April 30, 2012.

The DOL introduced the proposed regulations to implement and interpret the 2009 amendments to the federal FMLA. They address three specific areas: 1) Military Family Leave; 2) Flight Crew FMLA Eligibility; and 3) the manner in which employers calculate increments of FMLA leave.

The proposed regulations include several changes in regards to Military Family Leave. First, military caregiver leave has been expanded to cover eligible employees whose family members are recent veterans (active within the past 5 years) with serious injuries or illnesses incurred in the line of active duty, where the veteran is undergoing medical treatment, recuperation or therapy. Previously, only current service members were covered.

Secondly, the definition of a serious injury or illness has been expanded to include serious injuries or illnesses that existed prior to service and were aggravated in the line of active duty.

Thirdly, private health care providers not affiliated with the Department of Defense ("DOD") or Veteran's Affairs ("VA") have been added as authorized health care providers that may provide the necessary "serious illness or injury" certification for military caregiver leave.

Lastly, qualifying exigency leave has now been expanded to provide leave time to attend legal, financial, family, and other matters related to a family member's military deployment, for an employee with a family member serving in Regular Armed Forces. Previously, only families of Reserve and National Guard service members were covered.

For all qualifying exigency leave the military member must now be deployed to a foreign country. Also, the amount of time an employee may take for qualifying rest and recuperation exigency leave has been increased from five (5) days to an amount of time equal to that provided to the military member, not to exceed fifteen (15) days.

The second major change states an airline flight crew employee will now meet the FMLA service eligibility requirement if he or she: 1) has worked or been paid for not less than 60% of the applicable total monthly guarantee; and 2) has worked or been paid for not less than 504 hours during the previous 12 months.

The third major change impacts the way employers calculate FMLA leave. The amendment would require employers to use the smallest increment an employer uses to track any kind of leave at any time of day. In essence employers are prohibited from requiring an employee to take more FMLA time than needed.

Be sure to submit public comments before Monday, April 30, 2012. The proposed regulations do not become effective until after the comment period, when the DOL issues a final rule.

For further discussion of the proposed regulations, please see our February 16, 2012 post: "DOL Publishes Its Proposed Rules on Military Family Leave and Flight Crews: FMLA Forms No Longer Expired."

Update: NLRB Postpones Posting Rule Indefinitely

Mike Underwood — Fri, 20 Apr 2012 14:54:11 -0500

The National Labor Relations Board has postponed indefinitely the effective date for its employee rights posting requirement. On its website, the NLRB states:

"The rule, which had been scheduled to take effect on April 30, 2012, will not take effect until the legal issues are resolved. There is no new deadline for the posting requirement at this time."

The NLRB's action is a result of the decision of the D.C. Circuit Court of Appeals earlier this week enjoining the posting rule while the appeal before that court is pending. (See our earlier post - NLRB Posting Rule Lifted: At Least For Now.)

NLRB Posting Rule Lifted - At Least For Now

Mike Underwood — Tue, 17 Apr 2012 13:51:34 -0500

In an order issued today, the Circuit Court of Appeals for the District of Columbia granted a temporary injunction, barring the NLRB from enforcing its posting rule, at least while the appeal before that Court is pending.

We reported yesterday about the decision by a federal District Court in South Carolina invalidating the NLRB posting rule. As we noted, that decision is in contrast with an earlier decision by a federal District Court for the District of Columbia upholding the NLRB's right to impose the rule. The D.C. District Court decision is currently on appeal to the Circuit Court of Appeals for the D.C. Circuit, which issued the injunction order today. The Court set a briefing schedule for hearing the appeal and directed that oral arguments be set for some time in September. That means the temporary injunction will stay in place at least until sometime this fall.

So, if you are keeping score: the NLRB's rule requiring posting was to take effect on April 30. Both cases filed in federal court challenging the rule have gone against the NLRB, at least for now. The dust will not have settled completely until these cases are decided on appeal. In fact, if there are conflicting decisions in the Courts of Appeal, the issue could reach the U.S. Supreme Court. But at least for now, employers will not be required to post the NLRB employee rights notice on April 30.

Ninth Circuit En Banc Decision in Nosal Creates Federal Appellate Court Split On Scope of Computer Fraud and Abuse Act's Reach to Protect Trade Secrets

Brian Hall — Mon, 16 Apr 2012 14:23:43 -0500

In a much anticipated decision, the Ninth Circuit Court of Appeals held in an en banc decision in United States v. Nosal that the Computer Fraud and Abuse Act ("CFAA") was not intended to cover employee misappropriation of trade secrets, violations of corporate computer use policies or violations of an employee duty of loyalty. The decision, which overrules a previous Ninth Circuit panel decision in Nosal, creates a conflict with the Fifth, Seventh and Eleventh Circuits, all of which have interpreted the CFAA broadly to include such employee misconduct. As a result, we can probably expect this issue to show up on the Supreme Court's docket sometime in the future.

In Nosal, a former employee of an executive search firm convinced some of his former colleagues who were still working for the firm to help him start a competing business. The employees used their log-in credentials to download confidential data from a company computer and then transferred it on to Nosal. Under the firm's computer use policy, the employees had authorization to access the data, but were prohibited from disclosing it outside the firm. When his involvement in the plot was discovered, Nosal was indicted on several criminal counts, including a count alleging that he had violated the CFAA by aiding and abetting the current firm employees in "exceed[ing] their authorized access" with intent to defraud.

Nosal filed a motion to dismiss the CFAA counts in the district court, arguing that the statute targets only hackers, not individuals who access a computer with authorization but then misuse information they obtain by means of such access. After initially denying the motion, the district court reconsidered when a panel of the Ninth Circuit in LVRC Holdings LLC v. Brekka held that an employee does not exceed authorized access to a computer by accessing information unless the employee has no authority to access the information under any circumstances. On the government's appeal, a panel of the Ninth Circuit agreed with the government and concluded that employees violate the CFAA when they obtain information from their employers' computer but then use it for a purpose that violates the employer's restrictions on the use of the information.

In the en banc decision, the Ninth Circuit held that the government's interpretation of the CFAA, as adopted by the panel decision, would expand the statute's scope far beyond computer hacking to criminalize any unauthorized use of information obtained from a computer. In rejecting this interpretation, Judge Kozinski, who wrote the majority decision, pondered how wide a net it would cast if exceeding the scope of an employer's computer use policy were criminalized. For instance, the court noted that employees who used their computers to chat with friends, play games, shop, or watch sports highlights In violation of their employer's policy would be violating federal criminal law. Judge Kozinski then went on to write:

"Employer-employee and company-consumer relationships are traditionally governed by tort and contract law; the government's proposed interpretation of the CFAA allows private parties to manipulate their computer-use and personnel policies so as to turn these relationships into ones policed by criminal law. Significant notice problems arise if we allow criminal liability to turn on the vagaries of private policies that are lengthy, opaque, subject to change and seldom read…..Basing criminal liability on violations of private computer use policies can transform whole categories of otherwise innocuous behavior into federal crimes simply because a computer is involved. Employees who call family members from their work phones will become criminals if they send an email instead. Employees can sneak in the sports section of the New York Times to read at work, but they'd better not visit ESPN.com. And sudoku enthusiasts should stick to printed puzzles, because visiting www.dailsudoku.com from their work computers might give them more than enough time to hone their sudoku skills behind bars."

The dissenting judges took issue with the majority's focus on what they described as "far-fetched hypotheticals involving neither theft nor intentional fraudulent conduct." In Nosal, the dissent argued, the indictment alleged that Nosal and his co-conspirators knew when they accessed the employer's computer system that they were only permitted to use it for legitimate business purposes and therefore they exceeded their authorized use of the computer when they accessed it with the intent to defraud. If true, according to the dissent, these allegations adequately state a crime under a commonsense reading of the CFAA. As for whether the CFAA can be interpreted as criminalizing the "laundry list of wacky hypotheticals" raised by the majority, the dissent urged that the court should wait for an actual case or controversy that poses those issues before deciding them.

Although Nosal was a criminal case, there is no reason to expect that the interpretation of the CFAA would be any different in a civil context. Because the Sixth Circuit and, it appears, Ohio federal courts have yet to address this issue, Ohio employers do not know yet whether the CFAA will provide a viable tool to combat employee disloyalty. Nevertheless, employers would be wise to have explicit computer use policies, procedures and practices that clearly delineate which aspects of the company's computer system may be accessed by which employees. For instance, employers would be wise to create administrative, technical and physical safeguards that limit employees' access to only specific parts of the computer system (e.g., customer lists only for sales staff, financial information only to the finance department.) This may enhance the potential for establishing that employees exceeded their authorized access for purposes of pursuing a CFAA remedy, but it also is a component of any strong trade secret protection program.

NLRB Posting Rule Struck Down by South Carolina Court

Mike Underwood — Mon, 16 Apr 2012 09:56:48 -0500

Friday the 13th was unlucky for the National Labor Relations Board. A Federal District Court for South Carolina ruled on Friday that the NLRB overstepped its authority by issuing a rule requiring employers to post notices. In Chamber of Commerce of the United States v. NLRB, Case No. 2:11-CV-02516-DCN (D.S.C. April 13, 2012), Judge Norton considered the limits on the rights of federal agencies to impose obligations which are different from those Congress has imposed by law. The NLRB was created by Congress under the National Labor Relations Act (NLRA). Relying on the language of the NLRA, Judge Norton found that the NLRB was created to be reactive, not to create new obligations. The Judge found that the NLRB has two roles: conducting union representation elections; and deciding unfair labor practice charges. The Judge decided that because the NLRB has a purely reactive role, and because the NLRA does not establish any obligation for employers to post notices, the NLRB overstepped its authority by issuing the notice posting rule. The Judge noted the fact that in at least eight other federal workplace laws, Congress did include a posting requirement. The Judge reasoned that if Congress had intended a posting requirement under the NLRA, it would have been included in the statute.

The decision is in stark contrast with the earlier decision in National Association of Manufacturers v. NLRB, Case No. 11-CV-1629 (D.D.C. March 2, 2012). In that case, the Federal District Court for the District of Columbia upheld the Board's right to require posting. (For more discussion about this case, please see our previous post - Federal Court Upholds NLRB Posting Rule.) The D.C. District Court case is on appeal and it is likely the NLRB will appeal the decision of the South Carolina District Court.

So, with conflicting decisions by federal courts in two different parts of the country, what is an employer to do? It is possible the NLRB will postpone the current April 30, 2012 effective date for the posting rule. We will post a notice in this Blog if that happens. But, if the NLRB does not postpone the effective date, it will expect employers to post by April 30, with the possible exception of employers in the jurisdiction of the South Carolina District Court.

Recession Rebound Could Create Risks

Rebecca A. Kopp — Fri, 13 Apr 2012 13:42:56 -0500

In Ohio and nationally, experts are reporting that the unemployment rate is decreasing. Further, the number of job openings is increasing. With returning employees and hiring new employees, employers are at a risk for increased workers' compensation claims. Although we generally presume that workers who change employment are at a higher risk for injuries, re-hired employees may also pose safety concerns when returning to their former employers after an extended time away from the job. As a result, it is equally important for employers to pay attention to safety training for new employees as well as re-hired employees. Training not only on how to perform the job, but basic safety precautions may assist an employer in reducing its further workers' compensation claims.

Listen to Our Recent Webcast: "The Clock Is Ticking: Preparing for the New NLRB Posting Requirements Before the April 30, 2012 Deadline"

Erin Hawk — Thu, 12 Apr 2012 10:25:07 -0500

Mike Underwood and Franck Wobst presented a webcast this past Tuesday, April 10 on the New NLRB Posting requirements. If you missed this session, we invite you to watch the webcast on-demand through the link below.

The Clock is Ticking: Preparing for the New NLRB Posting Requirements Before the April 30, 2012 Deadline

View Recorded Webcast On-Demand:
http://w.on24.com/r.htm?e=449621&s=1&k=CC72359E18B6B09BB69C47C468DD5C4C

This webcast will be active until July 9, 2012.

We hope you have a chance to listen in for practical, useful tips for dealing with the new NLRB posting requirement. For more detail about the NLRB Posting, please read some of our recent blog posts: NLRB Posting Rule Set To Take Effect April 30, Update: Challenges to NLRB Posting Rule, and Federal Court Upholds NLRB Posting Rule.

Workers' Compensation Considerations When Purchasing a Company

Rebecca A. Kopp — Wed, 11 Apr 2012 09:11:52 -0500

When a purchase of a business takes place in Ohio, the purchaser often overlooks the fact that it will assume the sellers' workers' compensation claims experience either in part or in whole. The Bureau of Workers' Compensation ("BWC") has taken a fairly strict line in combining and transferring coverage to purchasers.

When a new owner wholly assumes the former employer's business, the BWC transfers all of the employer's claims experience to the purchaser. If the new owner purchases a portion of the business, only a part of the former employer's experience will be transferred. Even if the parties enter into asset purchase agreements, which demonstrate that the entities are not undergoing an acquisition or merger, the BWC frequently determines that the purchaser is a successor to the predecessor employer's risk. As a result, the Bureau of Workers' Compensation transfers any and all existing and future liabilities and/or credits of the predecessor employer. As a result, the purchaser may find themselves obtaining an undesirable claims experience. Further, should the predecessor business fail to report payroll, fail to pay its premiums and/or penalties, these liabilities are transferred to the successor. As a result, a purchaser may inherit significant workers' compensation costs.

The BWC transfers a predecessor's obligations regardless of whether the predecessor's transfer to the successor was voluntary, through an asset purchase agreement, or through an intermediary bank or receivership. This is contrary to the concept of successor liability arising out of other types of contracts.

Therefore, it is critical for purchasers to evaluate a predecessor business' workers' compensation rates as part of the due diligence in undertaking a purchase of another business in whole or in part.

NLRB Posting Rule Set To Take Effect April 30

Mike Underwood — Thu, 29 Mar 2012 13:04:02 -0500

None of the various legal challenges to the controversial NLRB posting rule have yet been effective. As things stand now, with only a few very narrow exceptions, all employers will be required as of April 30 to post a notice in the workplace advising employees of their rights regarding unions and their rights to discuss wages and other working conditions with co-workers (see our previous blog posts: "NLRB Issues Final Rule Requiring All Employers to Post Notice About Union Organizing Rights," and "NLRB Posting Requirement Delay - New Date January 31, 2012.") As we reported recently, the federal court for the District of Columbia upheld the NLRB's right to require the posting. The District Court Judge also rejected a request for a temporary delay (injunction) on the posting requirement while the case is appealed. That means that unless the Appellate Court either issues an injunction or issues a decision between now and April 30 reversing the lower court, the posting requirement will go into effect as scheduled. There is another legal challenge to the posting rule pending in a federal District Court in South Carolina, but no decision has been issued in that case and there is no reason to expect one will be issued before April 30.

The poster is available on the NLRB's web site at www.nlrb.gov. Also, various businesses which offer reproductions of government-required employment postings have already developed products that incorporate the new NLRB posting.

The poster is titled "Employee Rights Under the National Labor Relations Act." It must be posted at all workplaces in conspicuous locations and must be no smaller than 11" x 17". The NLRB also requires employers to include a link to the poster on internal or external web sites if other employment policies are posted there. The poster gives employees a detailed list of their rights under the National Labor Relations Act (NLRA). The rights highlighted in the poster include:

The right to join a union;
The right to bargain with the employer through representatives, such as a union, about wages, benefits, hours, and other working conditions;
The right to discuss wages and benefits and other working conditions with co-workers;
The right to take action with co-workers to improve working conditions by, among other things, making internal complaints to the employer or to a government agency or by asking for help from a union; and
The right to strike and picket;

The poster also notifies employees, in one bullet point, that they alternatively have the right to "choose not to do any of these activities."

The poster also advises employees that it is illegal for an employer to prohibit employees from talking about unions during non-work time, such as breaks or before or after work. It notes that it is illegal for an employer to question employees about their support for a union in a way that discourages them from supporting a union, and to make promises of benefits in order to discourage union support. The poster also notes certain things that unions are not permitted to do, such as threatening or coercing employees to get them to support the union. Finally, the poster advises employees of how to file charges if they feel their rights are being violated.

Employers are understandably wondering what effect will come from this required posting. Will employees not even notice it in the "sea" of already-required employment posters? Or, will this new poster cause employees to think about union organizing and other rights that they might not otherwise have considered? Will it generate questions among employees or questions directed to managers? What about the specific statement that employees have the right to discuss wages among themselves? Many employers make the mistaken presumption that they can ban discussion of wages and benefits among employees as "confidential" and have that prohibition stated in their employee handbooks. This NLRB posting might make it more likely for employees to challenge that rule, either with a complaint to the employer or by filing an unfair labor practice charge. Also take a look at Franck Wobst's posting on March 27 about plans by the NLRB to put up and publicize a website targeted to advise non-union workers of their NLRA rights.

All of these potential effects of the required posting are good reason for non-union employers to review their overall program for staying non-union. As we have noted in the past, the most effective method for staying non-union is to have workplace policies, benefits, and management/supervisor behavior of the sort that makes employees less likely to feel a need for union representation. Some specific things that should be considered include:

Does your employee handbook prevent discussion among employees of wages or have any other restrictions that run afoul of the NLRA?
It is legal to have handbook provisions which restrict certain employee conduct, such as solicitation during working time or limitations on the right to post or distribute materials. However, it is essential that those rules be tailored specifically so that they do not overreach the employer's rights and violate employee rights. The last thing an employer wants in the middle of a union organizing effort is to be required to rescind rules found to be illegal as a result of an unfair labor practice charge filed by the union.
Do you have a policy regarding employee communications or social media? If so, have you examined whether the restrictions might step over the line the NLRB has drawn for limiting what employees can say to each other about the Company and about wages and working conditions?
Are your managers aware of the NLRB posting and attuned to how best to respond to questions or concerns that might be raised by employees?
Most important, have your managers been trained in and are they committed to the kind of management behavior and communication with workers that makes employees less susceptible to union organizing efforts?

Our Labor & Employment Department will be conducting a complimentary one-hour webinar on Tuesday, April 10, 2012 to help employers sort through best practices concerning the NLRB posting and all of these related implications. We hope you will consider joining us. Watch for further details, which will be circulated soon on this Blog.

NLRB Activism Continues To Gain Steam

Franck Wobst — Tue, 27 Mar 2012 15:49:57 -0500

While the NLRB Posting Rule, which is scheduled to become effective April 30, 2012, has rightly received much attention from concerned employers and employer advocacy groups, it isn't the only thing non-union businesses should be concerned about in the coming weeks.

Last Friday, March 23, 2012, an NLRB spokesperson confirmed that the NLRB intends to also launch a website in April that will provide information to non-union workers about their rights under the National Labor Relations Act that includes information far beyond their rights with respect to forming a union. According to the spokesperson, the website will focus on educating workers about their rights to engage in protected concerted activity and will include specific examples based on real life cases. We would expect these examples to include that the NLRA gives employees the right to discuss their wage rates with one another, and that they have the right to express their views about employer policies and practices even in terms that the employer may consider to be disloyal or insubordinate.

This is an area of the law that has received relatively little national attention for decades. We suspect that many employers make disciplinary and termination decisions without properly assessing whether the employee's rule violation might actually be deemed by the NLRB to be protected concerted activity. Employers would be well-advised to educate themselves in this area before the NLRB educates their workforces.