Stoel Rives World of Employment

Legislature Adds Two-Week Bereavement Leave To Oregon Family Leave Act

Karen L. O'Connor — Mon, 17 Jun 2013 15:43:55 -0800

Governor Kitzhaber last week signed House Bill 2950 ("HB 2950"), which expands the Oregon Family Leave Act ("OFLA") to include bereavement leave. The change will become effective on January 1, 2014.

Under the new law, an OFLA-eligible employee (who works for OFLA-covered employer) may take up to two weeks of leave for three death-related purposes: attending the funeral or alternative to a funeral of a family member; making arrangements necessitated by the death of the family member; or grieving the death of the family member. The law incorporates the existing definition of “family member,” meaning that an employee make take the leave for the death of a spouse, same sex domestic partner, parent, parents-in-law (including the parents of same-sex domestic partners), grandparent, grandchild, child, stepchild, or child of the employee’s same sex domestic partner.

The eligible employee must provide notice of the leave, but unlike other kinds of OFLA leave, the employer may not reduce the 2-week leave entitlement for failure to timely provide notice. The leave must be completed within 60 days of the date on which the employee receives notice of the death.

There are a couple of additional quirks in the new law. An employer may not require the eligible employee to take multiple periods of leave concurrently if more than one family member dies during the one-year leave period. In other words, if an employee has the misfortune to lose two family members in rapid succession, the employer cannot require that the employee take bereavement leave for multiple deaths concurrently. In addition, the general prohibitions against family members who work for the same employer taking concurrent leave does not apply to bereavement leave; spouses or same sex domestic partners who work for the same employer may take concurrent bereavement leave.

Employers should start preparing now by reviewing and updating their handbooks and leave policies to be ready to comply with the new law when it becomes effective in January.

Fifth Circuit Sides With EEOC In Finding Lactation Discrimination Constitutes Title VII Violation

Lauren Shurman — Fri, 31 May 2013 15:50:09 -0800

Last year, we posted about a decision from the Southern District of Texas in which the court ruled that firing a woman because she was lactating or breast-pumping did not amount to sex discrimination under Title VII or the Pregnancy Discrimination Act (PDA). The Fifth Circuit Court of Appeals recently reversed the district court’s decision. In a none-too-surprising opinion, the Fifth Circuit ruled that taking an adverse employment action against a woman because she is lactating or expressing breast milk is a cognizable sex discrimination claim because (1) it imposes upon women a burden that male employees do not suffer, and (2) lactation is a medical condition of pregnancy under the PDA.

Is this earth-shattering news? Probably not. To most of us, it probably seems like common sense. But the opinion likely does represent a significant victory for the EEOC, which now has another tool in its belt to pursue pregnancy discrimination claims. Employers should be wise to know that pregnancy discrimination claims may now be viable for a longer period of time after childbirth than was the case prior to this ruling. The district court essentially took the position that a woman does not fall within the protections of the PDA after she gives birth to her child. Now, under the Fifth Circuit’s ruling, mothers could fall under the protections of PDA for as long as they are breastfeeding.

The Fifth Circuit was careful to note, however, the Title VII and the PDA do not require employers to provide special accommodations for nursing mothers to pump breast milk. Title VII and the PDA only prohibit an employer from taking an adverse employment action against a mother for lactating. Although the Fifth Circuit was careful to note this distinction, employers should remember that under the recent amendments to the FLSA imposed by the Affordable Care Act, employers must provide breaks and a room for nursing mothers to pump. Nursing mothers who are exempt under the FLSA are not afforded rights to pump in the workplace under either federal statute, but may be covered under applicable state statutes, which are summarized here.

Oregon Legislature Passes HB 2654 Prohibiting Employers From Requiring Access To Employee Social Media Accounts

Ryan Gibson — Mon, 20 May 2013 14:34:31 -0800

Coming as no big surprise since other states, like Utah and California, have been passing similar laws, the President of the Oregon Senate recently signed the final version of HB 2654, which will prohibit Oregon employers from compelling employees or applicants to provide access to personal social media accounts, like FaceBook or Twitter. The law will also keep off limit to employers other sites that allow users to create, share or view user-generated content (like videos, still photos, blogs, videos, podcasts or instant messaging, email or website profiles), and also prohibits requiring that employees allow the boss to join or "friend" them on social media sites. It also prohibits retaliation against any employee or applicant who refuses to provide access to accounts or to add the employer to his or her contacts list. The law becomes effective in January 2014.

Specifically, under the new law Oregon employers will not be allowed to:

Require or ask an employee or applicant to share a username or password allowing access to a personal social media account;
Require employees or applicants to add their employers to their contacts or friends lists;
Compel employees or applicants to access the accounts themselves to allow the employer to view the contents of a personal social media account;
Take or threaten to take any action to discharge, discipline or otherwise penalize an employee who refuses to share their account access information, allow their employer to view content, or add the employer to their contact or friends list (or fail or refuse to hire an applicant for the same things).

On the other hand, under the new law Oregon employers may still:

Require employees to share usernames and passwords for social media accounts that are provided by the employer or are used on behalf of the employer;
Conduct investigations to ensure compliance with applicable laws, regulatory requirements or work-related employee misconduct rules if they receive specific information about employee activity on a personal social networking site, so long as the employer does not compel the employee to provide access to personal social media accounts;
Require an employee, as a part of an investigation, to share content that has been reported to the employer and is necessary to making a factual determination about the matter being investigated;
Continue to view any information online about employees or applicants that employees or applicants leave public.
Employers will not be liable for inadvertent access to personal social media accounts of employees.

HB 2654 is off to the Governor for signature, and there is little doubt Gov. Kitzhaber will sign it into law. We’ll keep you posted on further developments. In the meantime, now may be a good time to review your social networking policies and application materials to make sure they don’t run afoul of the new law.

D.C. Circuit Nixes Board Notice Posting Rule In National Association of Manufacturers v. NLRB

Tim O'Connell — Thu, 09 May 2013 07:27:17 -0800

Once again, federal courts have halted efforts by the current National Labor Relations Board ("the Board") to expand its regulatory reach. Earlier this week, in National Association of Manufacturers v. NLRB, the Court of Appeals for the District of Columbia Circuit struck down the Board’s controversial attempt to require virtually all employers to post a notice advising employees about the requirements of the National Labor Relations Act ("the Act") and the sixty years of interpretations of the federal labor laws.

The Board’s notice-posting rule has had a long and contentious history. The original petition was filed in 1993, but it was not until 2010 when the Board, by then with a majority of members appointed by President Obama, issued a proposed rule. The final rule was published in August, 2011, and litigation challenging the Board’s authority began almost immediately. As we have reported before, the Board had only mixed success. One district court upheld the rule only in part, and another struck down the rule completely. While those cases were on appeal, the posting requirement was stayed pending completion of judicial review.

In this week's opinion the D.C. Circuit court rejected the rule in its entirety. The unanimous ruling concluded that the rule interfered with employers’ free speech rights, by requiring them to offer a Board-mandated message with which they might not agree. Section 8(c) of the Act bars the Board from considering non-coercive employer speech as evidence of an unfair labor practice, but the Board’s rule would treat the failure to post its notice as an unfair labor practice.

Two of the panel’s three judges would have gone further, specifically rejecting the claim that the notice posting rule – never required in the previous sixty-four years of the Act – was authorized by Section 6 of the Act, which permits the Board to carry out the Act. The court readily concluded that while the notice-posting rule may be seen as “prophylactic,” there was nothing about it that was necessary to carry out the Act’s substantive provisions.

The Board has not yet reacted to this defeat, and what its next steps are remain unclear. Given the breadth of the Circuit court’s ruling, it appears doubtful that the Board could revise its rule to comply with the court’s analysis. Equally unknown is whether the Board will seek review by the United States Supreme Court.

For employers, at least one reaction does seem clear: it is unlikely that employers will be required to post the NLRB’s notice any time soon, if ever. The court vacated the rule, so the rule is simply without effect unless the court’s decision is reversed. (Federal contractors should remember, however, that they face an independent obligation to post a similar notice, as we reported. That obligation remains in full force. Moreover, the implications of the court’s opinion are potentially far-reaching, and the court’s analysis may call into question numerous posting requirements under other federal statutes.

If you have questions concerning the requirements to post federal labor law advice, or any other posting requirement, please contact your Stoel Rives labor & employment attorney.

Ninth Circuit's Standing Committee on Federal Public Defenders Finds DOMA and Oregon's Measure 36 to be Unconstitutional

Karin Jones — Wed, 01 May 2013 16:14:39 -0800

A single Ninth Circuit judge, in his capacity as chair of the Circuit’s Standing Committee on Federal Public Defenders (“the Standing Committee”), recently ruled in the unpublished decision of In the Matter of Alison Clark that the federal Defense of Marriage Act (“DOMA”) and Oregon’s Measure 36 violate the United States and Oregon Constitutions by unlawfully discriminating against same-sex couples.

Alison Clark, a federal public defender in Oregon, married Anna Campbell in Canada in 2012. Clark’s marriage was not recognized in Oregon, due to Measure 36, a ballot initiative passed in 2004 that defined marriage as between only a man and a woman. In addition, the federal government did not recognize Clark’s marriage, as DOMA similarly defines marriage as a legal union between one man and one woman.

Shortly after her marriage, Clark applied for benefits for Campbell under the Federal Employees Health Care Benefits (“FEHB”) program. After Clark’s application was denied, Clark filed suit, alleging discrimination on the basis of her sexual orientation.

The Standing Committee ruled that Clark was entitled to receive benefits for Campbell under FEHB. First, the Standing Committee found that Clark’s rights under the Employment Dispute Resolution Plan for federal public defenders were violated, because the Plan prohibits discrimination against employees based on sexual orientation. Second, the Standing Committee held that Measure 36 violates the Equal Protection and Due Process Clauses of the Oregon Constitution, concluding that Oregon’s prohibition of same-sex marriage bears no rational relation to any legitimate governmental purpose. Finally, the Standing Committee held that DOMA violates the U.S. Constitution for similar reasons. The Standing Committee rejected proffered justifications for Measure 36 and DOMA such as “encourag[ing] responsible procreation,” “ensur[ing] that children will be raised in stable and enduring families,” and “defending heterosexual marriage,” stating “I can see no objective that is rationally related to banning same-sex marriages, other than the objective of denigrating homosexual relationships. This objective amounts to a desire to harm a minority group and is therefore impermissible . . ..”

While this unpublished decision of the Standing Committee does not have precedential value, its reasoning is particularly interesting in light of the U.S. Supreme Court’s current consideration of the constitutionality of DOMA. The decision may also signal movement in the federal courts towards greater recognition of issues associated with sexual orientation in the workplace.

Does Appointment of Plaintiffs' Class Action Attorney Jenny Yang to EEOC Signal Continued Focus On "Systemic" Cases?

Ryan Gibson — Mon, 29 Apr 2013 08:01:14 -0800

Last Friday, the U.S. Senate confirmed President Obama's nomination of Plaintiffs' class action attorney Jenny Yang to serve as one of the Democratic Commissioners on the U.S. Equal Employment Opportunity Commission ("EEOC"). On the one hand, Ms Yang's confirmation likely does not herald a big change in the EEOC's philosophy or priorities; Ms Yang's appointment was of the relatively routine type that the President must make to fill many top positions at federal agencies. Further, Ms Yang replaces another Democratic Commissioner, Stuart Ishimaru, who resigned last year, so the five-person Commission will continue to consist of three Democrats (who tend to be more employee friendly) and two Republicans (who tend to be more employer friendly).

On another hand, though, Ms Yang's background may signal a renewed focus by the Obama Administration on aggressive EEOC enforcement, including through EEOC-initiated litigation. Ms. Yang is currently a partner at the plaintiff class action litigation law firm Cohen Milstein Sellers & Toll, which has represented plaintiffs in some of the biggest employment discrimination class action cases of recent years. For example, Ms. Yang represented plaintiffs in a large sex discrimination class action case against Boeing in Washington state, which reportedly settled for $72 million in 2005. Her firm also represented members of the putative class of 1.5 million female Wal-Mart employees in the blockbuster case Dukes v. Wal-Mart. While the U.S. Supreme Court ruled in 2011 that the Dukes plaintiffs were too numerous and different to be certified as a single, nation-wide class, the litigation has since continued as numerous "smaller" class action lawsuits in courts around the country.

Fewer Bigger Cases In The Future?

Ms Yang's background probably fits nicely with some of the EEOC's stated enforcement priorities. As we blogged about last year, a key priority of the EEOC's current "Strategic Enforcement Plan" (SEP) focuses on eliminating "systemic" employment practices that the EEOC believes may disproportionately impact protected classes, especially women or racial minorities, under anti-discrimination statutes such as Title VII or the Equal Pay Act. It doesn't take an employment lawyer to know that, when it comes to litigation "systemic" is usually synonymous with "class action."

In fact, perhaps due to budget constraints (and the as yet unknown impact of the budget "sequestration") the EEOC may be specifically looking to double-down on its systemic strategy by focusing more on class action cases to maximize the bang it can get out of its diminished buck. Despite the popular perception among employment lawyers that the current EEOC is actively engaging in enforcement actions, according to its website it in fact filed far fewer lawsuits in 2012 (150) than in 2011 (300), and the total number of lawsuits has steadily declined over the past decade. But while the total number of cases is down, more of the EEOC's cases in recent years have been class action lawsuits. Because the EEOC is filing fewer cases, Ms. Yang's appointment and confirmation suggests it may be looking to make each one count more by sending a message.

It is true that some courts have recently taken a dim view of the EEOC's aggressive litigation strategy by dismissing claims or refusing to certify classes in recent cases; in some cases courts have even awarded employers attorney fees and expert fees and costs (ranging from $200,000 to several million in various cases) when the EEOC over-zealously pursued cases that lacked merit. EEOC v. Peoplemark, Inc., 2011 U.S. Dist. LEXIS 154429 (W.D. Mich. Oct. 17, 2011).

Employers Should Batten Down The Hatches

But those victories may be of small consolation to employers; a visit to the EEOC's website shows it settles far more cases than it loses, and employer defendants in employment discrimination cases almost never recover attorney fees. What is more instructive about those cases is that they illustrate how expensive class action litigation can be, and employers should do what they can to avoid a lawsuit in the first place. Everyone knows that the chance of being struck by lightening is very low, but everyone also knows not to dance around in an open field with a metal rod during a thunder storm.

Employers should therefore continue to audit and re-audit their handbooks and hiring and pay practices for potential company-wide (i.e., "systemic") discriminatory impact, especially in the areas such as credit or criminal background checks of particular interest to the EEOC of late. And as always, employers should continue to implement good anti-discrimination policies and quickly and thoroughly investigate and remediate discrimination in the workplace. While the number of EEOC-filed cases may be down, the number of charges filed annually with the EEOC by individual employees (which is often how the EEOC litigation begins), has held steady at about 99,000 per year.

US Supreme Court Gives Green Light For Employers To Use Offers Of Judgment To Moot FLSA Collective Actions

Ryan Gibson — Tue, 16 Apr 2013 13:06:03 -0800

Today the US Supreme Court issued its long-awaited opinion in Genesis Healthcare v. Symczk. In the case, the Court held that employers could effectively end collective action lawsuits under the Fair Labor Standards Act (FLSA) by agreeing to pay the named plaintiffs in those lawsuits whatever they claim they are owed. The Court held that because the named plaintiff was made completely whole by the employer’s offer her individual claim was moot, and because the named plaintiff’s claim was moot the entire collective action litigation was dismissed. This decision provides a helpful tactical weapon for employers that face the prospect of long and expensive collective action litigation.

How To “Pick Off” A Big FLSA Collective Action Lawsuit
Laura Symczk was employed as a nurse for Genesis, and was non-exempt under wage laws like the FLSA. She filed an FLSA “collective action” against Genesis claiming that it unlawfully failed to pay her and other nurses for meal breaks in which she had to work (the FLSA requires that employers pay employees for all their work time, including during meal breaks when the employee is not relieved of all work duties). Very early in the litigation, Genesis Healthcare issued what is called an “offer of judgment” under Federal Rule of Civil Procedure (FRCP) 68, offering to pay Symczk everything she claimed she was owed for her own unpaid work time (about $7,500, plus her attorney fees to date). The trial court then dismissed her entire collective action lawsuit, finding that because Symczk was made completely whole by Genesis’ offer and no others had yet joined the collective action, the case was “moot.”

The case was eventually appealed up to the Supreme Court, where Symczk’s attorneys argued that it was unfair to allow employers to end FLSA collective actions by “picking off” at an early stage the individual named plaintiffs bringing the lawsuit. The U.S. Supreme Court rejected Symczk’s argument, holding that the issue was resolved by basic principles of “justiciability”; the U.S. Constitution limits cases that can be in federal courts to only those live cases in which the parties have a genuine dispute. Once the only named plaintiff’s claims in a FLSA collective action are moot, there is no current controversy before the court.

Why Genesis Healthcare Matters

As any employer knows, wage and hour class or collective action lawsuits, which have boomed in recent years, can be extremely expensive and difficult to defend. While the amounts of disputed wages for each individual employee in such cases are often quite small (so small that the pay practices at issue often go unnoticed), when those claims are aggregated among hundreds or even thousands of employees over a several year period, they can quickly add up to big money in back wages and penalties (judgments or settlements in the millions, tens of millions, or more are not uncommon for large cases). Further, because of their large size, the cases involve very complex discovery and often take years to resolve, resulting in big legal fees.

Faced with such daunting potential costs, many employers with their eyes on the bottom line might jump at the chance to simply pay the individual plaintiffs bringing the lawsuit whatever they wanted for themselves (usually a few thousand dollars; in Symczk’s case it was $7,500) to make the whole thing go away. That is exactly what Genesis Healthcare did by issuing what’s called an “offer of judgment” under FRCP 68. An offer of judgment is a familiar tool to civil litigators in all types of cases—the offer stops the plaintiff from accruing attorney fees beyond the date of the offer unless the plaintiff wins more than the offer amount at trial.

Possible Limited Reach Of Genesis Healthcare

Obviously, Genesis Healthcare provides a powerful weapon for employers to use to potentially nip in the bud expensive wage and hour collective litigation under the FLSA at an early stage. The decision comes with caveats, however, and employers must be mindful of its possible limitations when considering using this litigation tactic:

Smyczk's collective action only became moot because no other plaintiffs had yet joined. Under the FLSA, other employees must specifically choose to “opt in” to the collective action; that usually happens relatively early in the litigation during the “conditional certification” stage. Employers wishing to take advantage of the tactic approved in Genesis Healthcare must therefore do so early in the litigation.

The dismissal of the FLSA collective action does not end it forever with respect to other employees not “picked off” by the offer of judgment. Those other employees are still free to file their own individual or collective lawsuits. Depending on the particular case, however, that may be a risk worth taking. Wage and hour class or collective actions are often driven by one or a few (often disgruntled) employees and, even more so, plaintiffs’ attorneys. When a lawsuit is dismissed, it can be difficult for the plaintiffs’ attorneys to find others willing to file additional lawsuits.

The holding only applies to collective actions under the FLSA; the Court specifically stated it may not work with class actions governed by FRCP 23. In states with their own wage and hour laws (like Washington, Oregon and California), plaintiffs often bring “hybrid” lawsuits alleging both collective actions under FLSA and class actions under state law pursuant to FRCP 23. In fact, because some state wage laws are so much more favorable to employees, such as in California and Washington, it is not uncommon for plaintiffs to raise only state law claims, and bring class action lawsuits, rather than bring the FLSA claim at all. Because of the procedural differences between collective and class claims (most notably, other employees must affirmatively “opt in” to FLSA collective claims, but state law class actions will usually include all affected employees except those who specifically “opt out”), employers facing such a “hybrid” claims may only succeed in ending the FLSA claims, but a (larger) law class action under state law could go on. Indeed, just several days ago in Busk v. Integrity Staffing Solutions, the Ninth Circuit Court of Appeals became the latest Circuit Court to allow these "hybrid" claims, despite the conflict between the FLSA collective "opt in" and FRCP 23 class action "opt out" procedures (blog post coming...).

Somewhat strangely, the Court specifically declined to decide whether the offer of judgment actually rendered Smyczk's individual claim moot and simply assumed that it did because the parties did not dispute that point. In going out of its way to state this curious caveat the Court may have left the door open for arguments that class claims should survive because offers of judgment or settlement do not, in fact, moot a particular named plaintiff's individual claims.

Still, for the time being Genesis Healthcare represents a win for employers facing FLSA claims. We’ll have to continue to watch this very hot area of law as it continues to develop.

Utah Passes Internet Employment Privacy Act

Matt Durham — Mon, 18 Mar 2013 12:52:39 -0800

You have probably seen news accounts of employers requesting or requiring employees or applicants to disclose their usernames or passwords for their online accounts at services like Facebook and Twitter. Employers ostensibly request this information to learn more about job applicants and to monitor employee compliance with workplace requirements. Many employees and observers, however, see such requests as overly intrusive. The resulting controversy has led some states to pass laws restricting employers’ rights to make such requests. On March 7, 2013, the Utah State Legislature joined these states and passed the Internet Employment Privacy Act (the “Act”).

Under the Act, Utah employers may not request that an employee or job applicant disclose a username and password allowing access to a personal internet account. It also prohibits employers from taking an adverse employment action (like refusing to hire, demoting or firing) against an employee who fails or refuses to disclose a username or password for a personal internet account. A “personal internet account” is defined under the Act as an online account used by the employee or applicant for purely personal reasons unrelated to work.

Although the Act prohibits requests for employee usernames and passwords, it does allow employers to do other things, such as:

Request usernames and passwords to access a device provided or paid for by the employer or to access internet accounts used by an employee for business purposes.
Discipline or discharge employees who transfer proprietary information of the employer to a personal internet account without permission.
Investigate certain types of misconduct and require employees to participate in those investigations.
Restrict employee access to certain websites while using a device provided or paid for by the employer.
Monitor, review access or block electronic data stored on a device provided or paid for by the employer.
View, access or use information about an employee or applicant that is in the public domain or can be accessed without a username or password.

The Act provides a private right of action for any person aggrieved by such an action, but limits any potential award to $500. Even with this limited exposure, the Utah Internet Employment Privacy Act requires that employers proceed with caution when accessing or requesting access to employee information on the internet.

Now in Effect: New FMLA Poster and I-9 Form!

Renea Saade — Mon, 18 Mar 2013 06:00:00 -0800

As a friendly reminder, employers must update two key employment forms this month. As of March 8th, employers must begin using the most recent FMLA poster issued by the Department of Labor. The updated poster reflects the DOL’s final rule concerning military related leave available under FMLA. The DOL has also issued new FMLA forms to reflect these changes. Also as of March 8th, employers must begin using the new I-9 Form issued by the U.S. Department of Homeland Security, Department of U.S. Citizenship and Immigration Services. Unlike other recent versions of the form, this form has a three year shelf life as it will not expire until March 2016. New instructions for the I-9 form have also been published to help guide employers.

The new FMLA poster can be downloaded here:

http://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf or http://www.dol.gov/whd/regs/compliance/posters/fmla.htm

Info & links to the updated FMLA forms are found here: http://www.dol.gov/whd/fmla/index.htm, http://www.dol.gov/whd/fmla/2013rule/, and http://www.dol.gov/whd/fmla/2013rule/militaryDate.htm

The new I-9 Form and instructions can be downloaded here:

http://www.uscis.gov/files/form/i-9.pdf

If you have any questions regarding the new forms or the changes to the FMLA, feel free to contact any member of the Stoel Rives LLP Labor and Employment Group.

Portland City Council Approves Sick Leave Ordinance

Melissa Healy — Fri, 15 Mar 2013 12:15:09 -0800

We previously advised you that the Portland City Council was considering an ordinance that would require Portland employers to provide sick leave to employees. The Council voted unanimously to approve the ordinance on Wednesday, meaning that Portland will now join a handful of jurisdictions (including Connecticut, San Francisco, Seattle, and Washington, D.C.) that require employers to give employees time off for illness. Similar bills have also been introduced in the state legislature, although it is too soon to predict whether they will pass.

The Portland ordinance, which takes effect on January 1, 2014, generally requires private employers to provide 40 hours of sick leave per year to eligible employees. For employers with six or more employees, the time must be paid; for smaller businesses, leave may be unpaid. Employers that already provide sick leave equivalent to or in excess of what the ordinance requires do not need to make any changes.

The ordinance exempts federal, state and local governments (except the City of Portland), and applies only to employees that work within city limits for at least 240 hours per calendar year. These employees must accrue at least one hour of paid sick time for every 30 hours worked, and must be permitted to use any accrued leave after 90 calendar days of employment. Employees are also entitled to carry over up to 40 hours of unused leave into subsequent years.

The ordinance contains posting and record-keeping requirements for employers, and delegates enforcement powers to the Oregon Bureau of Labor and Industries. The City is expected to draft rules providing further guidance prior to implementation, for which there will be a public review process. In the meantime, employers looking ahead to next year should assess their current sick leave policies and determine whether any changes will be needed.

We will continue to keep you apprised as the implementation date draws closer.

Oregon Supreme Court Takes Another Big Bite Out of the At-Will Employment Doctrine in Cocchiara v. Lithia Motors

Amy Joseph Pedersen — Wed, 13 Mar 2013 06:00:00 -0800

Most people understand that employment in Oregon, as in most states, is at will, meaning that either the employer or the employee can end the relationship at any time for any reason or no reason at all, absent a contractual, statutory, or constitutional requirement to the contrary. Of course, that last clause provides that there are limits on at-will employment. An employer can’t end the relationship because the employee becomes disabled, needs to fulfill duty obligations in the armed forces reserves, files a complaint against the employer, or a myriad of other unlawful reasons. Some plaintiff’s lawyers would argue that the at-will employment doctrine is so riddled with exceptions that it doesn’t really exist. And good employer defense attorneys will advise their clients that, while the doctrine still exists, every termination should be supported by clear, legitimate business reasons – and ideally with good documentation. But it is clear that no employee can have a reasonable expectation of continued employment, since he or she could be fired at any time. But what about an applicant?

Suppose an applicant meets with a hiring manager and, after the interview, the manager shakes the applicant’s hand and says “You’re hired! Come in tomorrow to sign the paperwork.” The applicant has another offer and the hiring manager encourages him to turn it down. The applicant does so and, the next day, shows up at his new employer’s offices. There he is told that they have changed their minds and don’t need him after all. The applicant is devastated because not only does he not have this job, but the other offer he turned down has already been filled. The employer, on the other hand, reasons that it could have fired the applicant anyway on his first day on the job under the at-will doctrine, so where is the harm? The employer argues that if the applicant has a claim, how long does an employer have to employ new hires?

The Oregon Supreme Court's Opinion in Cocchiara v. Lithia Motors

Those are the facts presented in Cocchiara v. Lithia Motors, which the Oregon Supreme Court decided on March 7, 2013. In a departure from prior state court cases, the Oregon Supreme Court ruled that an applicant in that situation (who in the case was actually already a long-time employee seeking a transfer to a different job within the company, and therefore an internal "applicant") does have a valid claim and can pursue damages for the lost opportunity.

The technical claims at issue in Cocchiara are promissory estoppel and fraudulent misrepresentation. Promissory estoppel provides a remedy when a person makes a promise that he reasonably should have anticipated would cause the other person to do (or not do) something in reliance on the promise. Enforcement of the promise must be necessary to avoid injustice and the beneficiary of the promise must have reasonably relied on the promise. The Oregon Supreme Court held that the fact that the position was at-will “does not carry with it a conclusive presumption that the employer will exercise that right.” It may therefore be reasonable for an applicant to rely on a promise of employment, depending on the circumstances.

But what damages is the applicant entitled to? Does he get future lost pay and benefits equal to what he would have earned on the job he accepted? Or the job he turned down? For how long, given that he could have been terminated at any time? The Oregon Supreme Court held that the applicant was entitled to try to prove what he would have earned in the job that was offered to him and how long he likely would have remained in that job had he been hired as promised and allowed to start work, although “at-will employment may be a factor that bears on whether the proof is sufficient in a particular case.”

The fraudulent misrepresentation claim turned on the elements of justifiable reliance and damages. The Court’s analysis was the same as for the promissory estoppel claim. The applicant was entitled to put on proof that he reasonably relied on the hiring manager’s representation (for example, by showing that he had been planning to accept the other offer until he was offered the new job). The claim serves an important public policy: “If employers could make misleading statements to prospective at-will employees without liability, business judgments regarding employment would not be protected from deceit. Business judgments regarding at-will employment inherently involve some risk, and a prospective employee (or employer) should be able to evaluate that risk without the interference of fraud.”

What Should Employers Do?

First, if you are not absolutely positive that the job will be available if the applicant accepts the offer, make sure the offer is conditional. Put language in the offer making it clear that even if the offer is accepted, eventual employment is dependent upon an order being placed, a background check being cleared, a contract being awarded, or whatever else may be motivating the new hire. If you make an offer for the same job to more than one candidate, be sure to tell both of them that there is another person in the running and only after you find out who has accepted your offers will you decide who the successful candidate is. Your offer of employment may be conditioned on anything – just make sure the condition is clear.

Second, make sure that your offers are time-limited and subject to withdrawal at any time. Include language like: “This offer will remain open through _____ and is automatically withdrawn if not accepted by that date and time. In addition, this offer may be withdrawn at any time prior to it being accepted.”

Third, train your hiring managers. A promise is a promise, and it doesn’t have to be in writing. Hiring managers should make it clear to an applicant that an offer of employment is subject to approval by a superior or HR, or whatever other conditions may exist before a new hire actually comes on board.

OSHA Issues Interim Final Rules on Whistleblower Protection Provisions Under ACA

Keelin Curran — Tue, 12 Mar 2013 06:00:00 -0800

The Occupational Safety and Health Administration (OSHA) issued an interim final rule and request for comments regarding procedures for handling employee whistleblower complaints under the Affordable Care Act (ACA), Section 1558. This part of the ACA added a new Section 18c to the Fair Labor Standards Act (FLSA), which protects employees from retaliation for exercising certain rights under the ACA, including (1) receiving a federal tax credit or subsidy to purchase insurance through the employer or a future health insurance exchange, (2) reporting a violation of consumer protection rules under the ACA (which, for instance, prohibit denial of health coverage based on preexisting conditions and lifetime limits on coverage), and (3) assisting or participating in a proceeding under Section 1558.

The interim final rule states the time frames and procedures for bringing a whistleblower complaint under Section 18c and covers the investigation, hearing, and appeals processes. An employee has 180 days from the date of the alleged retaliation to bring a whistleblower complaint to the Secretary of Labor. Where a violation is found, remedies can include reinstatement, compensatory damages, back pay, and reasonable costs and expenses (including attorneys’ fees). If the employee brought the complaint in bad faith, an employer may recover up to $1,000 in reasonable attorneys’ fees.

The bar for an employee bringing such a complaint is relatively low, and the bar for an employer defending against the complaint is relatively high. The employee must only have a subjective, good-faith, reasonable belief that the conduct alleged in the complaint violates the whistleblower protections; the employee need not prove that the conduct was an actual violation of law. The conduct complained of must only be a contributing factor in an adverse employment decision for the employee to make his or her case. The employer must then demonstrate through clear and convincing evidence that it would have taken the same adverse action without the protected activity.

Each party has 20 days after filing the complaint to submit a position statement and supporting documents, and can also request a meeting to present its position to OSHA. OSHA has 60 days from the filing of the complaint to investigate and issue written findings and, if a violation is found, a preliminary order providing relief to the employee. There is a process to challenge and appeal OSHA’s written findings and order. There is also a process for an employee to file a complaint in federal court either within 90 days after the employee receives OSHA’s findings, or if no final agency order is issued within 210 days of the filing of the complaint.

For more information, see the DOL fact sheet, which describes how to file a complaint. If you have comments on this interim final rule, they must be submitted within 60 days of the rule’s publication in the Federal Register (Feb. 27, 2013). Comments may be submitted electronically at the eRulemaking portal.

Proposed Utah Bill To Prohibit Discrimination Based On Sexual Orientation or Gender Identity

Lauren Shurman — Mon, 04 Mar 2013 00:05:59 -0800

Utah State Senator Steve Urquhart (R-St. George) is sponsoring a bill that would amend Utah’s employment and housing antidiscrimination statutes to address discrimination on the basis of sexual orientation and gender identity. Urquhart introduced Senate Bill 262 to the Utah Senate Rules Committee on March 1, 2013. Currently, several municipalities in Utah have ordinances prohibiting employment or housing discrimination against LGBT individuals, but there is no state-wide protection against such discrimination, nor is the state’s Labor Commission empowered to investigate or remedy any such discrimination.

S.B. 262 would amend the Utah Antidiscrimination Act to make it unlawful for an employer to discriminate against or harass an otherwise qualified person because of that person’s sexual orientation or gender identity. The bill defines “sexual orientation” as “an individual’s actual or perceived orientation as heterosexual, homosexual, or bisexual.” The bill defines “gender identity” as “an individual’s internal sense of gender, without regard to the individual’s designated sex at birth.” Utah’s Antidiscrimination Act applies to employers employing 15 or more employees but does not apply to religious organizations or associations. S.B. 262 would also exempt organizations “engaged in public or private expression if employing an individual would affect in a significant way the organization’s ability to advocate public or private viewpoints protected” by the First Amendment from the definition of “employer.” Thus, certain advocacy groups would not be required to employ LGBT individuals under S.B. 262 if doing so was inconsistent with their mission and would significantly affect their ability to advocate their viewpoints.

S.B. 262 also contains provisions aimed at dress codes for transgendered employees and whether an employer can require proof that an individual is legitimately seeking protection as a transgendered individual. The bill specifies that an employer may require an employee undergoing gender transition to adhere to the same dress or grooming standards for the gender to which the employee has transitioned or is transitioning. If an employer has reason to believe that an applicant’s or employee’s gender identity is not “sincerely held,” S.B. 262 specifies that the employer may require the person to provide evidence of his or her gender identity, such as medical or counseling records. With respect to restroom use at the workplace, S.B. 262 provides that the employer must provide access to a restroom that is consistent with the employee’s gender identity, though an employee undergoing gender transition has the burden to provide notice to the employer of his or her gender transition in order to receive protection under this provision.

S.B. 262 also empowers the Utah Antidiscrimination and Labor Division to investigate and address violations of the Utah Antidiscrimination Act based on sexual orientation or gender identity.

Whether or not S.B. 262 will make it out of committee and eventually become law remains to be seen. Stay tuned for updates on the bill’s progress.

Washington Court Affirms That Anti-Retaliation Laws Protect HR Employees

Nate Bailey — Thu, 14 Feb 2013 12:58:40 -0800

The Washington Court of Appeals recently determined that state anti-discrimination laws prohibit retaliation against human resources and legal professionals who oppose discrimination as part of their normal job duties. The court also declined to extend the same actor inference, a defense against discrimination claims, to retaliation claims.

Lodis worked at Corbis Holdings as a vice president of human resources. As part of his normal job duties, he warned Corbis’s CEO, Shenk, that Shenk’s age-related comments could give rise to liability for age discrimination. Around the same time, Shenk promoted Lodis but almost immediately gave him a negative performance review, placed him on probation, and then ultimately fired him.

Lodis sued under the Washington Law Against Discrimination (WLAD), claiming that Corbis retaliated against him for opposing Shenk’s comments. The trial court concluded that Lodis was not engaged in protected activity “because he was simply performing his job duties by warning Shenk” about potential discrimination. The court of appeals disagreed.

Step Outside Rule

Corbis urged the court to adopt the “step outside” rule, which governs federal cases under the Fair Labor Standards Act (FLSA). The rule requires an employee to step outside her normal job duties before receiving the FLSA’s protection against retaliation.

The court declined to adopt the rule for two reasons. First, the court believed that the language of the WLAD could not support a step outside rule. Second, the court concluded that policy considerations favored rejecting the rule. “[A]dopting the step outside rule,” the court said, “would strip human resources, management, and legal employees of WLAD protection.” The court noted the importance of protecting these employees because they are often the most able to oppose workplace discrimination.

Same Actor Inference

Corbis also argued that the court should apply the same actor inference to dismiss Lodis's retaliation claim. The same actor inference arises when an employee is both hired and fired by the same decision-makers in a short period of time. Courts may then infer that the employee was not fired for any attribute that the decision-makers were aware of when they hired her. Corbis contended that Shenk promoting Lodis despite the warning about potential discrimination proved that he did not retaliate when he later fired Lodis.

The court, however, refused to extend the same actor inference to retaliation claims. The court was concerned that extending the defense would allow employers to simply promote employees before terminating them to avoid valid retaliation claims.

Thus, Lodis v. Corbis Holdings, Inc. limits the same actor defense to traditional discrimination cases. And perhaps more importantly, the case reaffirms that the WLAD protects all employees from retaliation.

New Pregnancy Disability Leave Regulations Take Effect in California

Tony DeCristoforo — Thu, 07 Feb 2013 06:00:00 -0800

California law requires employers with five or more employees to provide pregnancy disability leave (PDL) to employees who are disabled by pregnancy, childbirth or related medical conditions. New revisions to the PDL regulations have taken effect and include some notable substantive changes, including the following:

Expansion of definition of “disabled by pregnancy.” The regulations now define the term “disabled by pregnancy” to include needing time off for prenatal or postnatal care, gestational diabetes, pregnancy-induced hypertension, preeclampsia, post-partum depression, and loss or end of pregnancy. The regulations indicate that the list of conditions is intended to be non-exclusive and illustrative only, so employers should take a broad view of the term “disabled by pregnancy.”

Prohibition of discrimination based on “perceived pregnancy.” It is now unlawful to discriminate or harass an employee based on “perceived pregnancy,” which the regulations define as being regarded or treated by an employer as being pregnant or having a related medical condition.

Clarification of definition of “four months.” An employer must grant up to four months of leave to an employee disabled by pregnancy. The new regulations specify that “four months” means one-third of a year, equaling 17 and one-third weeks.

Expanded accommodation and reinstatement rights. The revised regulations provide examples of how an employer can reasonably accommodate employees affected by pregnancy, including modifying work schedules to permit earlier or later hours, providing furniture such as stools or chairs, acquiring or modifying equipment or devices, and providing a reasonable amount of break time for lactation or trips to the restroom. Additionally, the regulations expand the right of an employee to reinstatement to the same or comparable position. An employer can now be liable for transferring an employee over her objection to another position, unless the transfer is for legitimate operational needs unrelated to the employee’s pregnancy or perceived pregnancy, for requiring an employee to take a leave of absence because of pregnancy or perceived pregnancy when the employee has not requested leave, and for retaliating, discharging or otherwise discriminating against an employee for opposing employment practices forbidden by law.

New forms and notices. The PDL law has always required employers to provide written notice to employees about their rights and responsibilities relating to PDL. The state has provided sample form notices for employers with less than 50 employees (Notice A) and employers with 50 or more employees (Notice B). These notices have been revised and updated in the new regulations.

The revisions to the California’s PDL regulations should compel employers to review their handbooks, policies and practices to ensure compliance with the law.

Portland, OR May Soon Follow Seattle In Requiring Employers To Provide Paid Sick Leave

Ryan Gibson — Tue, 29 Jan 2013 06:00:00 -0800

Last fall we told you about the new Paid Sick and Safe Time (PSST) ordinance passed by the city of Seattle that requires certain employers within that city to provide paid time off to employees. The Portland City Council is now considering a similar ordinance for employers with employees in Portland. The Council will consider the proposal on Thursday this week, and will likely vote on it in February.

The ordinance would require employers that have employees within the city with more than six employees to provide 40 hours, or five work days, of paid sick time per year to employees who work more than 240 hours per year. Employers with five or fewer employees must also provide sick leave, but it can be unpaid. Employees will be able to bank one hour of sick time for every 30 hours worked. Employers that already have a paid time off policy that provides the same or better benefits will already comply with the new ordinance, and would not be required to provide additional paid time off.

The law would prohibit covered employers from denying employees leave, or retaliating against them for requesting and taking it. Aggrieved employees can file a charge with the Oregon Bureau of Labor and Industry (BOLI) or file a lawsuit "for damages and such other remedies as may be appropriate."

We'll continue to monitor this proposal and keep you updated, especially of course if it passes. If that happens, it would become effective in January 2014.

D.C. Circuit Invalidates Obama's 2012 "Recess" Appointments to NLRB

Dan Mueller — Fri, 25 Jan 2013 10:24:32 -0800

The U.S. Court of Appeals for the District of Columbia today invalidated President Obama's 2012 "recess" appointments of several members of the National Labor Relations Board ("NLRB" or "Board"). Today's decision creates even more uncertainty in federal labor law, an area that has been subject to intense political battles and resulting in tremendous flux over the past few years.

About The Board And Recess Appointments

The Board consists of five Members, each appointed by the President and subject to Senate confirmation. Historically, the President fills three of the five seats with members from his party, giving his party majority control.

But since 2007, the appointment process has been broken. In late 2007, the appointments of three Members expired, and political wrangling left those seats unfilled for 27 months. The remaining two Members (one from each party) continued the Board’s business. In 2010, however, the United States Supreme Court ruled in New Process Steel v. NLRB that the Board must have a quorum of 3 to take action, invalidating hundreds of decisions issued by the 2-Member Board.

The Supreme Court’s decision did not break the logjam in the appointment process. As a result, on January 4, 2012, President Obama bypassed the Senate by making three “Recess” appointments to the Board. We blogged about the politics of those appointments here.

Today's Decision

The problem, according to a decision issued by the D.C. Circuit today, Canning v. NLRB, is that the Senate was not in recess when those appointments were made, and the appointments were therefore “invalid from their inception.” Today’s decision, unless reversed, invalidates another year’s worth of Board decisions, requiring the next Board (whenever it comes into being) to revisit and reissue another large set of decisions. It of course also creates more uncertainty for employers trying to keep up with yet another potentially dramatic shift in interpretations of labor laws.

Importantly, it also prevents the current “Board” – comprised of 3 pro-labor Members, 2 of whom were invalidly given “Recess” appointments – from continuing to advance their decidedly pro-labor agenda, which we've blogged about recently here and here. Until the President and Senate come together to fill the vacancies, or until the next valid Recess, the Board will consist of a single Member (Chairman Mark Gaston Pearce), who cannot take action.

Countdown to Washington's New Hazardous Drugs Rule

Karin Jones — Mon, 14 Jan 2013 06:00:00 -0800

In 2014, Washington health care employers will be required to comply with the Department of Labor and Industries’ (“L&I’s”) new Hazardous Drugs Rule. While today that may seem like the distant future, savvy employers will take time in 2013 to implement measures in compliance with the new rule before the deadline to do so creeps up.

What is the Hazardous Drugs Rule?

The Hazardous Drugs Rule is designed to protect employees of health care facilities in Washington from occupational exposure to hazardous drugs. For purposes of the Rule, the term “health care facilities” includes not only hospitals and clinics, but also pharmacies, nursing homes, home health care agencies, veterinary practices, and some research laboratories. The Rule’s protections extend beyond medical providers, pharmacists, and the like to encompass all employees who may be exposed to hazardous drugs. For example, a janitorial employee’s duties may include disposal of discarded medications or similar exposure to hazardous drugs.

Hazardous drugs include any drug identified by the National Institute for Occupational Safety (“NIOSH”) in its list of antineoplastic and other hazardous drugs in health care settings, which can be found at: http://www.cdc.gov/niosh/docs/2012-150/. In addition, hazardous drugs can include any other drug that can damage DNA or cause cancer, birth defects, fertility problems, or organ toxicity at low doses. Common examples of drugs considered to be hazardous under the Rule are chemotherapy drugs, birth control pills, and certain anti-depressants.

What is Required Under the Rule?

The Rule requires affected employers to establish – with input from employees – a written hazardous drugs control program by January 1, 2014. The written program must contain three main elements: (1) an inventory of all hazardous drugs in the workplace; (2) a hazard assessment for those identified drugs; and (3) hazardous drugs policies and procedures. The policies and procedures are expected to cover issues such as use of personal protective equipment, safe handling practices, engineering controls, cleaning, waste handling, spill control, and employee training. The employee training must be implemented by no later than July 1, 2014.

In addition, employers are required to install ventilated cabinets for handling and preparation of hazardous drugs where appropriate. This requirement does not take effect until January 1, 2015.

Is Medical Surveillance Required?

As of now, medical surveillance of impacted employees is not required by the Hazardous Drugs Rule. There is a good chance, however, that a medical surveillance requirement will be added to the Rule.

L&I initially included medical surveillance in its proposed rule. While L&I removed that requirement from the final Hazardous Drugs Rule, it indicated its intent to revisit the issue once NIOSH updated its medical surveillance guidelines. On November 19, 2012, NIOSH issued its recommendation for medical surveillance of workers exposed to hazardous drugs. Specifically, NIOSH recommends that baseline clinical evaluations be provided to exposed employees, followed by periodic health questionnaires and follow-up evaluations for workers who experience health changes or who have acute exposure to hazardous drugs. L&I is currently evaluating whether to add similar requirements to its Hazardous Drugs Rule. If it does so, Washington will become the first state to require a medical surveillance program associated with exposure to hazardous drugs in the health care setting.

Circuit Split Remains As To Possible Employer Remedies Under Computer Fraud and Abuse Act (CFAA)

Jamie Kilberg — Fri, 11 Jan 2013 06:00:00 -0800

There is a growing divide in the federal circuit courts of appeal over whether the Computer Fraud and Abuse Act (the “CFAA”)—a criminal statute that permits victims to bring civil actions against violators—reaches certain conduct by departing employees. The U.S. Supreme Court was poised to potentially resolve the dispute when an employer filed a petition for writ of certiorari stemming from a decision in the U.S. Court of Appeals for the Fourth Circuit. But on January 2, 2013, the parties settled the case and filed a stipulation under the Supreme Court’s Rule 46 dismissing the petition. We will have to wait until another case comes along to see if the Supremes will resolve the split. Until then, employers need to pay attention to the decisions coming out of the circuits in which they operate to know whether they may have a claim under the CFAA against departing employees who take proprietary computer information with them upon their departure.

Courts Disagree About What The CFAA Says

The CFAA prohibits accessing and obtaining information from a “protected computer” (i.e., any computer used in or affecting interstate commerce or communication) “without authorization” or in a way that “exceeds authorized access.” 18 U.S.C. § 1030(a)(2)(C). Employers often face situations where employees, prior to their departure from employment, copy proprietary files for their own use or to benefit their new employer. Usually, these employees were technically authorized to access the computer system and its files, but certainly were not permitted under company policy to copy those files for the purpose of using them outside of their employment with the company. Besides other causes of action, employers have increasingly sought to bring civil claims under the CFAA, arguing that accessing the files for the purpose of copying them and using them to benefit a competitor was unauthorized in the first instance, or certainly exceeded otherwise authorized access.

Several courts have agreed to a broad reading of the CFAA, and have permitted employers to make CFAA claims against departing employees who attempt to pilfer the company’s files. Thus, in the First Circuit (covering Maine, Massachusetts, New Hampshire, and Rhode Island), Fifth Circuit (covering Louisiana, Mississippi, and Texas), Seventh Circuit (covering Illinois, Indiana, and Wisconsin), and Eleventh Circuit (covering Alabama, Florida, and Georgia), an employee who misuses information obtained from an employer’s computer system—that is, an employee who ordinarily is permitted access to the information, but accesses it for the purpose of harming the employer or in violation of the employer’s computer use and access policies—can be sued under the CFAA. The theory is that accessing the information in that manner is adverse to the employer’s interests, constitutes a serious breach of loyalty, and effectively converts the access into unauthorized access or access that “exceeds authorized access.” See, e.g., EF Cultural Travel BV v. Explorica, Inc., 274 F.3d 577, 583 (1st Cir. 2001); United States v. John, 597 F.3d 263, 272 (5th Cir. 2010); Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418, 420-21 (7th Cir. 2006); United States v. Rodriguez, 628 F.3d 1258, 1263 (11th Cir. 2010).

Other courts, however, disagree. In particular, the Fourth Circuit (covering Maryland, North Carolina, South Carolina, Virginia, and West Virginia) and the Ninth Circuit (covering the Western U.S. including Alaska, California, Hawaii, Oregon, and Washington)—as well as district courts in New York (the Second Circuit) and Ohio (the Sixth Circuit)—all have taken a narrow view of the CFAA. Those courts have found that the CFAA addresses only access to information, not misuse of information once accessed. Thus, if an employee during their employment is within their rights to access proprietary information, the CFAA does not apply even if that employee later misuses that information, or accessed the information in the first place with the intent to misuse it in a way that is detrimental to the employer. That is not to say that employers in those jurisdictions have no remedy for such breaches, but those courts have made clear that any such remedy cannot come from the CFAA. See, e.g., WEC Carolina Energy Sol’ns LLC v. Miller, 687 F.3d 199 (4th Cir. 2012); United States v. Nosal, 676 F.3d 854 (9th Cir. 2012) (en banc); LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009); Orbit One Commc’ns, Inc. v. Numerex Corp., 692 F. Supp. 2d 373, 385 (S.D.N.Y. 2010); Ajuba Int’l LLC v. Saharia, 871 F. Supp. 2d 671, 687 (E.D. Mich. 2012).

Clarification May Be On The Way...Or Not

Late last year, it looked as if the U.S. Supreme Court was going to have an opportunity to weigh in. The employer in the Fourth Circuit case filed a petition for writ of certiorari on October 24, 2012. The employer argued that the Court should resolve the circuit split. It also argued that the Fourth Circuit’s decision to narrowly construe the CFAA was wrong because “failure to recognize that the purpose for which an employer authorizes access to information is an inseparable component of the authorization itself.” The defendants’ brief in opposition was due at the end of 2012. Instead, on January 2, 2013, the parties filed a stipulation dismissing the case. We have confirmed that the dismissal was filed because the parties settled the litigation.

Thus, while we wait for the next CFAA case to come along, employers must be mindful of the law that governs their jurisdiction in assessing whether they have a viable CFAA claim against departing employees who take company-owned electronic documents with them.

Obama NLRB Presents Employers With Several Lumps Of Coal

Tim O'Connell — Wed, 09 Jan 2013 06:00:00 -0800

We continue our recent end-of-year postings (on new California employment laws and things every employer should resolve to do in 2013) with an update on recent cases by the National Labor Relations Board ("NLRB" or "Board"). In late December, 2012, the NLRB issued a series of controversial decisions which from an employer’s perspective cannot be considered Christmas presents. While some of these cases impact only narrow circumstances, each of the decisions dramatically changes the law, always in ways adverse to employers.

The Board's December 2012 Decisions

In Alan Ritchey, Inc., the Board created an entirely new obligation for employers operating a workplace where a union has been recognized or certified, but no collective bargaining agreement has yet been agreed to. In this setting, the Board concluded, an employer must notify the union and provide it with an opportunity to bargain over individual discretionary discipline before the discipline is imposed. The Board made clear that this obligation requires sufficient advance notice for meaningful bargaining. Moreover, the employer must respond to union requests for information regarding the discipline before such meaningful bargaining can occur. The Board dismissed concerns that the new obligation it had created would be unduly burdensome for employers, suggesting that there may be circumstances in which an employee could be removed from a job prior to bargaining, when leaving employee on the job might present “a serious imminent danger to the employer’s business or personnel.”

In WKYC-TV, Inc., the Board reversed fifty year old precedent and concluded that even after a collective bargaining agreement contract has expired, the employer remains obligated to collect union dues. The general rule has long been that when a collective bargaining agreement expires, the employer must continue to abide by the contract because its terms and conditions represent the status quo, and the employer is not entitled to change the status quo until the parties have reached a new agreement or have bargained to impasse. For fifty years, one of the few exceptions to that rule has been the so-called “dues check off,” which enables employees to pay their union dues through payroll deduction. Recognizing that under the National Labor Relations Act the underlying obligation for employees to be members of the union expired with the expiration of the collective bargaining agreement, the Board had long held that the obligation to collect dues for the union similarly expired. In WKYC-TV, the Board concluded that there was no relationship between the employees’ obligation to maintain union membership, and the employers’ act of collecting dues to pay for their membership. The Board then held that employers must continue to collect dues for the union.

The Board also issued decisions that will affect a more limited number of employers. In Chicago Mathematics & Science Academy, the Board concluded that it had jurisdiction over a “public charter school” operated by a non-profit corporation. In Latino Express, the Board changed various aspects of how it implements back pay awards. If these issues are of concern to you, please contact your Stoel Rives labor lawyer.

Finally, in American Baptist Homes of the West d/b/a Piedmont Gardens, the Board overruled a 35-year old precedent and concluded that employers were not entitled to keep witness statements confidential from a requesting union. Under the Act, employers have the obligation to furnish the union with information relevant to employees’ terms and conditions of employment. This includes information relevant to specific instances of discipline, including information pertaining to witnesses to the incident leading to discipline. Since the late 1970s, however, the Board had recognized that this obligation did not extend to formal witness statements collected by an employer, where an employee had been promised confidentiality and reviewed and approved the witness statement. In Piedmont Gardens, the Board rejected this rule, instead concluding that witness statements are merely another type of confidential information, about which employers must balance their confidentiality concerns with the union’s need to review the information. Even when the employer has legitimate confidentiality concerns, the employer must be willing to bargain with the union about a possible accommodation to address the union’s need for the information. The Board was unconcerned about the possibility for intimidation or coercion of witnesses, in the absence of clear proof.

What Do These Decisions Mean For 2013?

Each of these decisions is a radical departure from existing law, as the Board implicitly acknowledged. In all three, the Board expressly overruled prior case law. Moreover, the Board admitted that it would work an injustice to apply the decisions in Alan Ritchey, WKYC-TV and Piedmont Gardens retrospectively. Thus, the new obligations created in those cases will only be applied to cases occurring after the decisions were issued.

Prospective application is cold comfort to employers now attempting to deal with these cases on an ongoing basis. The Alan Ritchey decision provides little guidance as to what might amount to the “exigent circumstances” preventing removal of the employee prior to the bargaining the Board now requires. Moreover, the decision is unclear as to the extent and duration of that bargaining. The Board did not address, for example, the delay that could be caused by responding to union information requests prior to such bargaining. Perhaps even more troubling, the Board seemed unconcerned about the fundamental revision it was making to the terms and conditions of employment it ordered for affected employees. Even though never yet covered by any collective bargaining agreement, these at-will employees were no longer truly at-will employees.

WKYC-TV offers no offset for the bargaining leverage taken away from the employer, which must now continue to provide financial support to the union with which it is involved in contract negotiations, regardless how acrimonious those negotiations might be. In Piedmont Gardens, the Board appeared unwilling to give any credence to the notion that bargaining unit employees may face coercion or retribution from their union or their pro-union co-workers if their identity must be revealed to the union.

Finally, employers must carefully consider what the Board’s actions imply for what may be in the future. The Obama Board has demonstrated a complete willingness to reverse decades-old precedent, so long as overturning that precedent helps unions. The recent Board cases emphasize that employers dealing with unions are entering an era of unprecedented uncertainty. For example, Alan Ritchey arose only in the context of a newly certified union, bargaining for its first contract. Will the Board extend Alan Ritchey to cases arising after a collective bargaining agreement has expired, before a successor agreement has been finalized? Given the Obama Board’s willingness to change well-settled rules, employers should proceed continuously when determining their next steps. If you face any of the issues raised by these recent Board actions, you should your contact your Stoel Rives labor lawyer.