Employer Legal Advocate

New EEOC advice on use of criminal records in employment

Miriam L. Rosen — Thu, 03 May 2012 10:35:39 -0600

On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) issued updated Enforcement Guidance for employers regarding the use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964. The guidance tightens the criminal background screening process, but does not prohibit employers from retaining the right to consider criminal reports.

The use of criminal background checks has been a hot button issue with the EEOC over the last several years. The Agency’s concern is that the use of arrest and conviction records in the hiring process and for other employment decisions has a disparate impact in screening out minorities. http://www.eeoc.gov/eeoc/newsroom/release/10-1-09b.cfm

The Agency has long taken the position that a “policy or practice that excludes everyone with a criminal record from employment will not be job related and consistent with business necessity and therefore will violate Title VII, unless it is required by federal law.” In issuing the new guidance, the EEOC noted it is not changing its fundamental position on the use of criminal records. Rather, the EEOC views the Enforcement Guidance as a more in-depth analysis of the issues, in light of recent technological and other changes in hiring and employment. http://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm

The new Enforcement Guidance provides key takeaways for employers who use criminal records in hiring and in other employment decisions.

Targeted Screening Process. To establish that use of arrest and conviction records is “job related and consistent with business necessity,” employers should develop a screening process that considers “at least the nature of the crime, the time elapsed, and the nature of the job.”
- The screening process should then provide 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.” The EEOC envisions the “individualized assessment" would consist of:
  - Notice to the individual that he/she was screened out because of a criminal conviction;
  - An opportunity for the individual to demonstrate that the exclusion should not be applied; and
  - Consideration by the employer as to whether the additional information warrants an exception and shows that the policy as applied is not "job related and consistent with business necessity."
Federal Law Restrictions. The Enforcement Guidance states that federal laws and regulations that restrict or prohibit employing individuals with certain criminal records provide a defense to a Title VII claim.
State and Local Law Restrictions. On the other hand, state and local laws or regulations prohibiting employment of individuals with certain types of criminal convictions are preempted or “trumped” by Title VII if those laws require conduct that would be an “unlawful employment practice” under the federal law.
Employer Best Practices. The EEOC’s guidance provides some practical examples of steps employers can take to implement “best practices” when considering criminal record information in hiring and employment decision making. The EEOC’s advice includes:
- Develop a written policy and procedures for screening applicants and employees regarding criminal conduct.
- Train managers, hiring officials, and decision makers on how to implement the policy and procedures.
- Limit inquires regarding criminal records to those that are “job related for the position in question and consistent with business necessity.”
- Keep information regarding applicant and employee criminal records confidential.

What’s the bottom-line for employers? The new Enforcement Guidance does not prohibit the use of criminal records in hiring or employment decision making. It does make clear, however, that employers should be able to show how the use of criminal records is “job related and consistent with business necessity.” To do that, employers should:

Review their criminal background check processes to evaluate whether those processes are consistent with the EEOC guidance.
Develop a written hiring policy and a targeted screening process that considers job-related factors.
Use an individualized assessment when criminal background information is discovered to ensure the screening process is job-related and consistent with business necessity for the specific situation.
Review job applications to ensure inquiries regarding criminal activity are “job-related and consistent with business necessity.”
Train managers, recruiters, and others on the applicable federal and state law and EEOC guidance.

Hold the NLRB Posting

Miriam L. Rosen — Wed, 18 Apr 2012 10:12:40 -0600

The fate of the NLRB’s employee rights poster is delayed -- yet again. The Court of Appeals for the District of Columbia issued an order on April 17, 2012 delaying the posting until after it hears an appeal on its legality in September 2012.

The history of the NLRB poster is, at this point, somewhat tortured. Through rulemaking, the NLRB imposed a broad requirement that virtually all private sector employers—union and non-union—post a workplace notice advising employees of their rights--such as the right to organize--under the National Labor Relations Act. Originally scheduled for posting in November 2011, the NLRB first delayed the notice until January 31, 2012 to give private sector employers more time to understand and comply with the requirement. Then facing legal challenges from various industry groups, the NLRB again delayed the poster until April 30, 2012. Click here to view our post, NLRB again delays union rights posting requirement.

It looked like the posting requirement would be implemented when the federal District Court for the District of Columbia upheld the poster’s validity in March 2012. However, on April 13, 2012, the federal district court in South Carolina came to a different conclusion. That court ruled that the NLRB did not have authority to require private sector employers to post the employee rights notice. These conflicting outcomes created uncertainty for employers about how to proceed with posting.

That uncertainty was cleared up—at least for the time being--when the DC Circuit issued an order enjoining the posting requirement until after it hears an appeal in September 2012 on the earlier district court case.

What’s the bottom line for employers? The NLRB poster is once again delayed and no posting is required at this time.

Personal emails on work computers - Are they fair game for employers?

James J. Boutrous, II — Thu, 15 Mar 2012 08:11:50 -0600

In the continuing struggle between an employee’s privacy rights and the employer’s right to access company provided computers and other electronic devices, the Illinois Court of Appeals recently weighed in with regard to a matter involving the alleged violation of the Stored Communications Act (SCA), 18 USC 2701, et seq.

In Borchers v. Franciscan Tertiary Province of the Sacred Heart, Inc., 2011 Ill. App (2d) 101257, plaintiff, the employer’s former food director, sued her former employer and two of its employees for “intentionally” accessing her personal email account and reviewing personal emails despite the fact that the account was accessed from the employer’s computer. At the time in question, plaintiff was out on a disability leave related to sexual harassment claims she had previously made, and the employer, through its employees, accessed plaintiff’s computer and her emails to ensure that no work-related emails and orders were going unaddressed.

In reviewing plaintiff’s work computer, however, it was discovered she maintained a work-related account through Comcast, and a separate personal account through AOL, both of which were located on her work computer. The employee reviewing her emails admitted to reviewing both the work account and the personal account, and ended up printing out 36 emails that were personal in nature, and unrelated to work in any manner. She then shared these 36 emails with her supervisor. The deposition testimony of the employee defendant also revealed that no work emails were printed.

The employer, relying principally on its computer usage policy that clearly stated that employees had no expectation of privacy in its technology resources, argued that the employees at issue did not intentionally and without authorization access plaintiff’s personal email account because they innocently came upon the personal emails while conducting a legitimate business search.

The appellate court disagreed. It found the fact that employees knew plaintiff’s work account was Comcast and not AOL, the amount of time spent reviewing the personal emails, and the fact that personal emails were the only ones printed created a fact issue as to whether plaintiff’s personal email account was intentionally accessed without authorization.

Employer Takeaway

This case shows that despite robust computer usage policies and disclaimers regarding expectations of privacy, employers still need to be careful in accessing and reviewing employee email. Conferring with counsel beforehand is advised when there is a question as to whether communications are personal or business in nature irrespective of the policies in place.

EEOC reports provide insight for employers

Miriam L. Rosen — Wed, 22 Feb 2012 14:34:18 -0600

The Equal Employment Opportunity Commission (“EEOC”) had a busy month in January 2012 issuing two key reports about agency activity. Employers should take note of what the EEOC had to say in those reports for insight into where the Agency’s been and where it’s going.

Report on FY 2011 EEOC statistics

The EEOC released its FY 2011 enforcement and litigation statistics revealing that 2011 was a record year for charges of discrimination. EEOC charges hit an all-time high with 99,947 charges filed. Following FY 2010’s trend, the largest number of charges-- 37.4%--were based on claims of retaliation under all EEOC enforced statutes. Charges were also up for sex, disability, and age discrimination. The report also revealed that merit lawsuits brought by the EEOC under the Americans with Disabilities Act nearly doubled in 2011—the highest percent increase of any category.

EEOC Draft Strategic Plan

The EEOC also released its Draft Strategic Plan for Fiscal Years 2012 – 2016 (“Strategic Plan”) in January. The Strategic Plan provides insight for employers on what to expect from the EEOC in 2012 and beyond.

First, the Strategic Plan makes clear that the EEOC will intensify its focus on “systemic” discrimination—which, according to the EEOC, is a “pattern or practice, policy and/or class case where the alleged discrimination has a broad impact on an industry, profession, company, or geographic area.” Recent litigation suggests that the EEOC will focus on two areas: the systemic barriers to hiring, such as criminal history and credit reports, and disability discrimination, including inflexible leave of absence policies and other practices that do not consider the need for individualized assessment of accommodations.

Second, the EEOC plans to streamline the way it investigates and litigates complaints. This may mean requesting more documents and information earlier on in the charge investigation process.

Third, the EEOC says that it will focus on “targeted, equitable relief” for “all employees and job seekers,” not just individual charging parties. This means that the EEOC will likely look for resolutions that require more employer reporting to the EEOC following a charge and more employee training.

Takeaways for employers

Both the FY 2011 EEOC statistics and the Strategic Plan provide employers with insight on how to map out their own human resources strategy for 2012.

Take retaliation seriously. Train supervisors and HR professionals to understand and handle this very real employment risk.
Review hiring practices. Ensure that hiring practices are job-related and do not have a disparate impact on a particular protected group.
Ensure ADA compliance. Review policies and practices related to ADA accommodations and ensure that the interactive process is used in evaluating accommodations requests.
Train front-line supervisors and managers. The nuances of employment laws can be tricky—especially for supervisory personnel who have many other responsibilities. Ensure that front-line supervisors and managers have proper training so that they understand the law and know when to ask questions.

Court provides FMLA guidance in termination case

Miriam L. Rosen — Wed, 01 Feb 2012 13:11:55 -0600

Not surprisingly, the Family and Medical Leave Act (“FMLA”) often creates frustrating situations for employers. Perhaps one of the most frustrating is when an employer discovers an employee’s misconduct just before or while the employee is on a FMLA leave. These situations leave employers perplexed about how to proceed—will taking appropriate disciplinary action appear to be interference with or retaliation for the employee’s FMLA leave?

The Sixth Circuit Court of Appeals recently provided some legal--and practical—guidance for employers in Donald v. Sybra, Inc., Case No. 10-2153 (6th Cir. January 17, 2012).

What happened?

Plaintiff Gwendolyn Donald worked for the Defendant Employer, Sybra, an Arby’s restaurant franchise. In mid-February 2008, Donald’s supervisor, Kyle Plum, discovered discrepancies in her drive-in window receipts. Plum believed that Donald was receiving payment at full price, then modifying the receipts to show a discount—and pocketing the difference. Plum notified his supervisors and then investigated by observing Donald take drive-in window orders for several days. After confirming his suspicions, Plum notified his supervisor, who decided to confront Donald.

Before that meeting could occur, however, Donald notified Plum on February 26^th that she would be off work until February 29^th because of pain from kidney stones.

On Donald’s first day back to work on February 29^th, Plum and his supervisors confronted her regarding the shortages and the investigation. When Donald denied any wrongdoing and refused to concede the theft, the Employer terminated her employment.

What happened next?

Donald sued the Employer alleging, among other claims, that her termination interfered with and was in retaliation for taking FMLA leave. The district court for the Eastern District of Michigan applied the McDonnell Douglas framework—typically used in Title VII discrimination and retaliation cases--to analyze Donald’s FMLA claims. Courts have been split over whether use of that standard is appropriate in FMLA cases.

Applying the McDonnell Douglas framework, the district court assumed Donald could establish a prima facie case of FMLA interference and retaliation. The Employer met its burden of showing a legitimate, nondiscriminatory reason for terminating Donald by providing her cash register receipts and order irregularities. The last step in the analysis required Donald to show that the Employer’s explanation was not the true reason for the termination, but rather a pretext for its unlawful interference and retaliation. To show pretext, Donald pointed to the timing of the termination—which occurred on the day that she returned from a medical-related absence.

In dismissing the case, the district court concluded that Donald could not establish pretext based on the timing alone.

Donald appealed.

What happened on appeal?

The Sixth Circuit Court of Appeals agreed that the McDonnell Douglas standard was appropriate for analyzing both FMLA interference and retaliation claims. The Circuit Court further agreed that the timing of the termination did not establish that the Employer’s explanation was a pretext. Although the Circuit Court conceded that the timing did give it “pause,” the court noted that February 29^th was Donald’s first day back at work after the investigation concluded. Affirming the dismissal, the court concluded that temporal proximity cannot be the only basis for finding pretext.

Guidance for employers

This case provides some important legal--and practical--FMLA guidance for employers.

First, from the legal perspective, the case clarifies that in the Sixth Circuit (Michigan, Ohio, and Kentucky) the well-known McDonnell Douglas standard is the appropriate framework for analyzing FMLA interference and retaliation claims.

Second, from a practical perspective, this case demonstrates that employers must be aware that taking disciplinary action after a medical-related absence or leave can be risky—even when a legitimate reason exists. Employers that discipline or terminate in such circumstances should have solid evidence, like the employer in Donald v. Sybra, that its actions were related to the employee’s conduct and not the medical condition or leave of absence. Timely documentation of misconduct and investigations is one way for an employer to establish the legitimate, non-discriminatory reasons for its actions.

Beware potential liabilities of multiemployer pension plans

John M. Wirtshafter — Wed, 25 Jan 2012 07:04:26 -0600

It’s no secret that defined-benefit pension plans have struggled with funding issues over the past several years. Lower-than-anticipated investment returns and extremely low interest rates, combined with demographic shifts resulting from retirees living longer and workers holding off on retirement, have left many defined-benefit pension plans with fewer assets than are needed to meet their accrued obligations. Perhaps no group of benefit plans has suffered more from these issues than multiemployer pension plans.

Multiemployer pension plans (sometimes referred to as Taft-Hartley plans) cover collectively-bargained employees and are defined-benefit retirement plans jointly sponsored by representatives of the union and participating employers. Under federal rules passed in 2006, multiemployer pension plans experiencing funding issues or problems with liquidity must notify participants and companies of this status. If a multiemployer pension plan is in critical status under these rules, it may be forced to reduce benefits and discontinue lump-sum distributions (to the extent permitted under the plan). Plans in critical and endangered status must also adopt programs, which may include requiring employers to increase contributions, to restore financial health.

Underfunded multiemployer plans present a significant legal liability if the plan terminates (commonly referred to as a “mass withdrawal”) or a participating employer terminates or reduces its participation below a permitted level (resulting in a “partial withdrawal” or a “complete withdrawal”). This so-called withdrawal liability is based on a pro-rata portion of the plans’ unfunded liability. Many multiemployer plans are in such bad shape that the potential withdrawal liability can be significant. Further problems arise because the liability is jointly and severally shared by the participating company and its affiliates.

So, what can you do to protect your company? If your company or one of its affiliates participates in a multiemployer plan, you should immediately obtain information regarding the present funding status of the plan and your potential withdrawal liability so that you can consider your available options. Even if you have received notice from your multiemployer plan that it is in critical or endangered status, there may still be steps that you can take now before withdrawal liability is incurred to reduce your exposure.

NLRB forces employers to review arbitration agreements

Brendan Fitzgerald — Tue, 24 Jan 2012 08:32:47 -0600

Continuing its recent high-profile, pro-union agenda, the NLRB has now turned its attention to employer-employee arbitration agreements. Employers – even those whose employees are not represented by unions – must now review those agreements or risk an unfair labor practice charge.

In D.R. Horton, 37 NLRB No. 184, the Board held that an arbitration agreement that eliminates an employee’s ability to engage in a class or collective action is a per se violation of the National Labor Relations Act. D.R. Horton required that its employees sign arbitration agreements as a condition of employment. Among other things, these agreements required that all employment-related claims be arbitrated and also prohibited an arbitrator from joining the claims of one employee with the claims of another no matter how closely related they may be. The combination of these two provisions eliminated any chance that employees could participate in employment-related collective or class action lawsuits or arbitrations. This outcome, the NLRB concluded, was directly contrary to the NLRA’s staunch protection of employees’ rights to act in concert with one another to impact their terms and conditions of employment.

The NLRA is designed to cover the vast majority of employers in the United States regardless of whether their employees are unionized. As a result, D.R. Horton will likely be broadly applied by the Board – and by Plaintiffs’ attorneys seeking yet another inroad into class and collective claims. The Board’s position will also likely face scrutiny from federal judges, who will be forced to reconcile the Board’s interpretation of the NLRA with the Federal Arbitration Act, which requires significant deference to arbitration agreements and the decisions that result.

Until this issue is settled, employers with employee arbitration agreements must review the agreement to determine whether it affords employees the right to arbitrate or litigate a class or collective action. If not, the agreement could could spawn an unfair labor practice charge.

For more information on the D.R. Horton decision, click here.

The EEOC probably prefers Coke: Pepsi agrees to pay $3M to settle charges relating to discriminatory background checks

Brendan Fitzgerald — Mon, 23 Jan 2012 12:00:00 -0600

For further evidence that the EEOC is ramping up enforcement efforts related to job applicant background checks, one need look no further than Pepsi. Pepsi recently agreed to pay more than $3 million to settle EEOC charges alleging that Pepsi’s use of criminal background checks adversely affected more than 300 African American job applicants. Click here to read the EEOC’s press release on this subject.

According to the EEOC, Pepsi’s background check policy led to Pepsi’s rejection of job applicants who had been convicted of minor offenses even when those convictions were unrelated to the jobs applied for. Even more troubling, Pepsi relied on its background check policy to reject job applicants who had merely been arrested – but not convicted – of crimes.

The EEOC has long insisted that background check policies that deny employment based solely on arrests – whether they result in conviction or not – likely violate Title VII since these policies can disproportionately affect minorities. As to criminal convictions, the EEOC recommends that employers who rely on criminal background checks as part of their hiring process take the following factors into consideration:

The nature and gravity of the offense;
The time since conviction; and
The nature of the job applied for.

In light of Pepsi’s hefty settlement payment, employers should review their background check policies to ensure that they comply with the EEOC’s interpretation of Title VII in this regard. For instance, an employer would almost certainly be justified in denying an applicant with a burglary conviction from working as an in-home service technician. On the other hand, an employer that rejects a computer programmer applicant based on a DUI arrest 15 years ago may face unwelcome scrutiny. By taking the EEOC factors into account, employers can help ensure that exclusion of an applicant because of a background check is defensible.

More social media worries for employers

Brendan Fitzgerald — Mon, 16 Jan 2012 16:00:00 -0600

Whether through Facebook or Twitter, LinkedIn or GooglePlus, social networking is changing the way the world communicates and how business is conducted. Employers should already be aware of the benefits and pitfalls of employee social media use. For more information on social-media-related issues for employers, our previous social media blog posts are listed below:
NLRB GC outlines federal protections for employee social media activity
NLRB posts two complaints in May regarding employee activity on Facebook
Is Social Media On Your Mind? The top 5 questions you should be asking

A recent decision highlights yet another wrinkle.

In Maremont v. Susan Fredman Design Group, LTD, Jill Maremont, as SFDG’s marketing director, promoted SFDG on her personal social media accounts. Over time, Maremont became well-known in the Chicago design community and developed a 1,250-person Twitter following.

In September 2009, Maremont was seriously injured in a car accident. During her recovery, SFDG, without permission, used Maremont’s Facebook and Twitter accounts to promote itself. Maremont sued SFDG for false endorsement because SFDG falsely used her account to endorse its services. She also alleged violations of the Stored Communications Act, which prohibits unauthorized, intentional access to communications held in electronic storage, and violations of her right to privacy. The District Court for the Northern District of Illinois recently held that, if Maremont is able to demonstrate actual injury (i.e., money damages) or show that SFDG was unjustly enriched, she can maintain her false endorsement and Stored Communications Act claims.

Although Maremont may have a tough time demonstrating actual damages or unjust enrichment, the decision nonetheless muddies the waters for employers by creating another avenue for social media-based liability. It also reinforces that employers should not use an employee’s social media account without permission, regardless of whether these accounts have promoted or discussed the employer in the past. In fact, employers, to the extent they actively use or promote the use of social media, should consider creating their own pages, blogs and accounts rather than relying on employee accounts. Doing so can help avoid the fate already suffered by SFDG: hefty legal bills despite the fact that liability has yet to be determined.

Gaga about the FLSA

Miriam L. Rosen — Mon, 16 Jan 2012 10:00:55 -0600

Employment lawyers don’t often get a chance to write about pop superstars, but as it turns out the Fair Labor Standards Act is providing just such an opportunity.

In December 2011, Lady Gaga’s personal assistant, Jennifer O’Neill, filed a lawsuit against Lady Gaga’s touring company claiming that she is owed more that $350,000 in unpaid overtime under the Fair Labor Standards Act and New York State Labor Law.

What’s the crux of the dispute?

Well, really it’s not much different than those faced by many “more traditional” employers. The former personal assistant claims that she was misclassified as an “exempt” employee when she was actually non-exempt. As a result, she alleges that she is owed over 7,000 hours of overtime compensation for time that she spent attending to Lady Gaga at “stadiums, private jets, fine hotel suites, yachts, ferries, trains, and tour buses.”

The assistant further alleges that, under state law, she was denied breaks and even sleep time as she handled Lady Gaga’s every need, such as ensuring she had towels after showering and that her chosen outfits were available.

Could the personal assistant be exempt?

Possibly. The Fair Labor Standards Act does recognize that an executive assistant to a business owner or senior executive who is paid a salary and who customarily and regularly exercises discretion and independent judgment in matters of significance rather than adhering to prescribed procedures or specific instructions may be exempt as an “administrative” employee. This exemption generally applies only to the highest level of assistant who has significant autonomy making decisions about such things as responses to non-routine correspondence and handling meetings. The determination of whether Lady Gaga’s assistant fits this category will depend on what her duties actually entailed. In other words, was she involved in the decision to have Lady Gaga arrive at the 2011 Grammy Awards in an egg or did she just help Lady Gaga get into the egg?

So, what’s a poor pop superstar to do to avoid such claims?

Again, what any employer should do. Evaluate the actual job duties of each position and how the employee is paid to determine if the position falls within the one of the FLSA exempt categories or whether the position should be classified as non-exempt. Making such determinations isn’t always easy, so seek appropriate counsel if necessary.