A growing area of concern regarding employee compensation is the use of smartphones or tablets by hourly or nonexempt employees after hours and on weekends.  Employers provide these electronic devices to employees to allow them to stay connected with the office, co-workers, and clients.  This may include answering and reading emails or texts or making and taking telephone calls.  With this increase in productivity for businesses has come some challenges for employers under the Fair Labor Standards Act (FLSA).  Nonexempt employees must be paid for all hours worked – including any hours for work performed on a smartphone or tablet outside the office.  Just as an employee who eats lunch at his/her desk and regularly answers the telephone and refers callers is working and entitled to compensation for that time so too is an employee who does this after hours and on the weekend via a smartphone.

Employers have a legal obligation to track all hours worked so employees can be properly paid.  Even if those hours were not approved by the company, employees working over 40 hours in a workweek are entitled to overtime pay.  Problems arise in our growing technological world when work time creeps into personal time and when employers fail to recognize and count certain hours worked as compensable hours.

To address this growing area of wage disputes, more companies are putting in place written policies covering the expectation of the use of smartphones or tablets after hours and beyond the workday by nonexempt (or hourly) employees.  Employers considering such policies should include a notice as to the company’s expectation of use of such devices during these off hours and a process for the employee to obtain required approval for work conducted during off hours as well as a process for tracking that time spent by employees on the device.  Other companies are choosing to limit such devices to exempt employees only.  With the boundaries of work and free time blurring, cases in this area are expected to increase.  Employers should be prepared.

 

The Equal Employment Opportunity Commission (“EEOC”) announced on May 7, 2013 the settlement of the first case it filed under the Genetic Information Non-Discrimination Act (“GINA”).  The case was brought against Fabricut, one of the world’s largest distributors of decorative fabrics.  The suit alleged that Fabricut violated both the Americans with Disabilities Act (“ADA”) and GINA when it refused to hire a woman who was believed by the Company to have carpal tunnel syndrome.

The applicant had worked for Fabricut as a temporary employee for ninety days and then applied for a regular position with the Company.  After an offer of employment was extended, the applicant was sent to the Company’s designated medical clinic for a pre-employment drug screen and physical.  When she appeared for the examination, she was required to provide a complete medical history which sought information concerning her family’s history of exposure to a laundry list of medical conditions ranging from high blood  pressure and heart disease to “mental disorders”.

In addition to seeking the medical history, the examiner expressed a concern  that the applicant was suffering from carpal tunnel syndrome and needed further evaluation.  The applicant was sent  to her own physician who concluded after administering several tests that she did not have the condition.  Nevertheless, Fabricut rescinded the offer of employment.

The EEOC alleged that requesting the family medical history was in and of itself a violation of GINA even in the absence of evidence that the answers contributed to the decision to rescind the offer.  The ADA was also violated because the applicant was “regarded as” suffering from carpal tunnel syndrome,  and an adverse employment decision was made as a result.

Employers should make certain that those to whom they delegate responsibility for pre-employment screening are not  asking unpermitted questions about the applicant’s family medical history.  Simply seeking this information will be considered by the EEOC at least, to be actionable discrimination.

During a public meeting on May 8, 2013, the U.S. Equal Employment Opportunity Commission (EEOC) heard testimony from a panel of witnesses representing business and employee advocates and providers regarding the importance of developing guidance under the various federal statutes that are implicated by wellness programs.

Notwithstanding the widespread use of wellness programs, there are numerous open issues for which definitive federal guidance has not yet been issued.  The most important open issue involves wellness programs that require medical exams or ask disability-related questions, both of which would ordinarily give rise to a violation of the Americans with Disabilities Act (ADA).  Although the ADA allows employers to ask for medical information in connection with voluntary wellness programs, the EEOC has not issued definitive guidance on the meaning of “voluntary” in the context of wellness programs.  Panelists also suggested that EEOC’s regulations under the Genetic Information Nondiscrimination Act (GINA)-which prohibits acquiring genetic information including family medical history–should provide guidance on whether spouses of employees may be asked for health information in the context of wellness programs.

The EEOC also heard testimony about wellness programs and potential violations of Title VII of the Civil Rights Act’s prohibitions on race, sex, and national origin discrimination, and the Age Discrimination in Employment Act’s (ADEA) prohibitions on discrimination against people 40 and older. One panelist noted that women tend to have more health problems than men and older people tend to have more problems than the young.  The speaker suggested that punitive measures for failing to meet certain biometric markers therefore could have an unjustified disparate impact on certain groups, in violation of both Title VII and the ADEA.

Testimony noted that it was important for the EEOC to issue guidance consistent with the regulations and guidance under the Health Information Portability and Accountability Act (HIPPA) non-discrimination rules and the Affordable Care Act (ACA) which set forth the permissible rewards for achieving a health related status factor.

It is important for employers to understand that the EEOC has just begun its analysis of the interplay between employer wellness programs and the federal laws the EEOC administers, so wellness programs should be carefully reviewed before implementation.

More information about the EEOC, including panelists’ statements, biographies and a transcript of this meeting, can be found at www.eeoc.gov.

On May 7, 2013 the United States District Court for the District of Columbia Circuit ruled that the poster designated by the NLRB as a required method of notifying both union and non-union employees of their rights under the National Labor Relations Act (“NLRA” or the “Act”)  is inconsistent  with employers’ rights to free speech under Section 8(c) of the Act.   The case,  National Association of Manufacturers v. NLRB,  is the first decided by a circuit court and pretty much signals the death knell for the poster whose effective date has been  repeatedly postponed as a result of numerous legal challenges. The original rule on the notice was put in place on August 25, 2011.  The rule required that the poster  had to be put in a conspicuous place in all workplaces subject to the Act and had to explain employees’ rights to collectively bargain, to discuss the terms and conditions of employment and to go on strike.

The court  ruled that the Notice Rule conflicted with section 8(c) of the NLRA,  known as the employer “free speech” provision.  The order stated that Congress  intended for employer free speech rights in the labor context to be equivalent to First Amendment protections. The D.C. Circuit concluded that creating a new unfair labor practice or finding unlawful motivation in an unfair labor practice case, based on the failure to post the notice, amounted to an impermissible restriction on employer free speech.  In doing so the court stated the following:

“[T]he Board’s rule requires employers to disseminate such information, upon pain of being held to have committed an unfair labor practice. But that difference hardly ends the matter. The right to disseminate another’s speech necessarily includes the right to decide not to disseminate it.”

The Court also ruled that the provision of the Rule which tolled the period of time for bringing an unfair labor relations action was inappropriate in that it was inconsistent with the Act’s general six month statute of limitations.

For all intents and purposes this decision means that employers  can put aside the posters they purchased in 2011 as it is unlikely that the Notice Rule will resurface in the foreseeable future.

 

Summer is just around the corner, and with it will come the usual legions of teenage job-seekers looking to earn money for college and cars.  A new study by The Boston Globe [subscription required] found a sharp decrease in recent years of child labor violations pursued by the Massachusetts Attorney General’s Office.  Even so, employers must still ensure that they are following the law when it comes to employing minors.

According to the Globe, Massachusetts child labor laws were bolstered in 2007 after several fatal on-the-job accidents involving teenagers.  These laws regulate the number of hours and times of day that minors can work, and also prohibit minors from working in certain high-risk jobs or using dangerous equipment.  With the tightening of the laws came an initial burst of increased enforcement activity.  Of the more than 3,500 citations issued since 2007, the Globe study found that two-thirds were issued between 2007 and 2009.  By contrast, less than 200 citations were issued last year.

Some have attributed the decrease in violations to greater awareness among employers about child labor laws.  Also, the poor economy has resulted in fewer minors in the workforce in recent years as more out-of-work adults take jobs traditionally held by teens.  Others have pointed to decreased enforcement activity by the AG’s office, noting that there hasn’t been a statewide sweep of shopping centers since 2008.  Also, about a quarter of the AG’s Fair Labor Division’s inspector positions (5 out of 19) were eliminated in 2011.

Even so, the AG’s office maintains that it continues to actively enforce child labor laws, including a recent $158,000 settlement with the Ruby Tuesday’s restaurant chain cited in the Globe’s story.  Also the AG’s office says that it plans to hire additional fair labor division inspectors this year.

Massachusetts employers planning on hiring minors this summer should consult with an attorney now to ensure that their policies comply with the state’s child labor laws.

Summer internships provide employers the valuable opportunity to evaluate individuals  for potential future employment positions without having to pay wages.   The internship process also has been a rewarding  way for students to gain real life experience in a field of their interest.  A win- win for everyone, right?   Not so fast – certain requirements must be met to reap the benefits of a valid internship program.

The Fair Labor Standards Act (FLSA) defines the term “employ” broadly as including to “suffer or permit to work.”   Individuals considered employed must be compensated for services performed for the employer, including payment of minimum wage and overtime.

Interns are not employees and not subject to those FLSA requirements.  The U.S. Department of Labor has warned employers that the internship exclusion is narrow.  The test for determining whether individuals are interns includes meeting the following six criteria:

  1. Internship is similar to training which would be given in an educational environment
  2. Internship experience is for the intern’s benefit;
  3. Intern does not displace regular employees, but works under close supervision of existing staff;
  4. Employer that provides the training derives no immediate advantage from the activities of the intern (and on occasion its operations may actually be impeded);
  5. Intern is not necessarily entitled to a job at the conclusion; and
  6. Employer and intern understand that the intern is not entitled to wages for the time spent in the internship.

New Hampshire state law is similar to federal law in the restrictions it places on unpaid internships at for-profit businesses.

Before considering a summer intern, employers should carefully review the internship program to determine whether it complies with federal and state laws.  Recent lawsuits and government monitoring present potential wage and hour risks for employers.

Systemic discrimination involves a pattern or practice, policy, or class case where the alleged  discrimination has a broad impact on an industry, profession, company or geographic area.   The Equal Employment Opportunity Commission (“ EEOC”)  usually files 200-300 lawsuits per year, and it is expected that these numbers will hold steady or increase into the future.  Given the limitations on its resources, the EEOC has always taken the position that it should file suit in cases with an opportunity to make the biggest impact on the largest number of employees or to address and focus on new and emerging theories of liability.

The case of  EEOC v. Dillard’s is an example.   Dillard’s Inc., a national retail chain, agreed to pay $2 million and committed to extensive, company-wide injunctive relief to settle a class action disability discrimination lawsuit.  At issue was Dillard’s longstanding national policy and practice of requiring all employees to disclose personal and confidential medical information in order to be approved for sick leave.  The policy at issue required employees to disclose the exact nature of their medical conditions in order to be approved for sick leave rather than simply providing a doctor’s note confirming that the absence was due to a documented medical concern.  According to the allegations in the suit, the employee representing the class was terminated after missing only four days of work.  She and her co-workers were allegedly fired in retaliation for refusing to provide further details of their medical conditions.  The court ruled that Dillard’s policy was facially discriminatory under the Americans with Disabilities Act (“ADA”).

The EEOC also took great issue with other aspects of Dillard’s handling of employee medical leave, specifically a policy limiting the amount of leave an employee could take without engaging in an assessment of whether additional leave might be a reasonable accommodation under the ADA.   The  claim was that Dillard’s terminated a class of employees nationwide for taking sick leave beyond the maximum amount of time allowed by the company policy in violation of the ADA.

Previously, in the case of EEOC v. AutoZone from the Central District of Illinois the EEOC was successful in winning significant damages for an employee with a disability claiming that the employer discriminated against him by forcing him to perform work that was outside of his medical restrictions and causing an exacerbation of his medical problems.  Following the verdict, the EEOC sought an injunction against the employer precluding it from engaging in similar behavior in the future.  The court issued this injunction and also required all of the AutoZone locations in central Illinois to report all requests for accommodation by employees to the EEOC for a period of three years and to maintain records concerning how the company responded to each request.  This judgment was affirmed by the Seventh Circuit Court of Appeals on February 15, 2013.

Employers are well advised to consider the interplay between all aspects of disability and leave law including FMLA, ADA and worker’s compensation and pay particular attention to whether the company policies and practices might have a disparate impact on disabled employees.  The EEOC’s Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act is a very useful tool for human resource directors and other managers to keep close at hand.   The risks of failing to have clear policies which are actually followed by all who might make decisions about employee leave and restricted duty are significant and there are many traps for the unwary.

In our evolving technological world, more and more people are using social media for building both work and personal connections. This has presented a conflict in the workplace between a company’s need to protect its business interests and an employee’s concern with privacy.  States have been wading into these waters with legislation limiting or prohibiting an employer’s request for employee social media user names, passwords, and other personal account information.

In New Hampshire, a bill that would prohibit an employer from requiring an employee or prospective employee to disclose his or her social media passwords passed the House, with amendment, and is before the Senate Commerce Committee.  HB414 proposes a new “Use of Social Media” subdivision under the state’s protective legislation. This proposed law would prohibit a New Hampshire employer from requesting or requiring an employee or prospective employee to disclose a user name or password for any account primarily used for personal communications unrelated to any business purposes of the employer or to require an employee to add the employer to a list of contacts associated with the account.  The proposed law would not limit an employer from adopting and enforcing workplace policies on the proper use of company equipment, monitoring the company’s systems, or obtaining information about an employee or prospective employee that is in the public domain.

This proposed bill raises issues for businesses who may be seeking this type of information from employees or prospective employees.  For example, some employees use their personal accounts to promote a company product or business.  In those situations, it may be difficult to categorize or determine if the accounts are “primarily used for personal communications” and beyond an employer’s reach.  The broad definition of “social media” further adds to this dynamic.  If enacted this year, the law would take effect 60 days after its passage.

In July 2012 the National Labor Relations Board (“NLRB” or the “Board”) issued its decision in Banner Health System and James A. Navarro essentially instructing those of us who conduct workplace investigations to avoid our standard “please keep what we discussed confidential”  admonition to witnesses lest we find ourselves and our clients in violation of Section 8(a)(1) of the National Labor Relations Act (“NLRA”).  We responded to that decision with a collective, “Huh?”.   The request for confidentiality is so routine that most of us say it without even thinking about it.  The need for confidentiality also seems incredibly obvious to those of us who are hired to come in and conduct independent  evaluations of sensitive workplace issues.  Our very appearance in the parking lot generally gets the rumor mill started, after all.

In Banner Health the Board  indicated that to justify a prohibition on employee discussion of ongoing investigations, an employer must show that it has a legitimate business justification that outweighs employees’ rights to engaged in concerted activity.  The Board decided that the proffered justification, to protect the integrity of the investigation, was insufficient.  Once again, “Huh?”.

Rather, the employer  must first determine whether 1) any investigation witnesses needed protection; 2) evidence was in danger of being destroyed;  3) testimony was in danger of being fabricated; or 4) there was a need to prevent a cover-up.

The Office of the General Counsel of the NLRB issued an Advice Memorandum on January 29, 2013 on a case submitted for advice regarding whether an employer’s confidentiality rule unlawfully interferes with employees Section 7 rights by precluding them from disclosing information about ongoing investigations into employee misconduct.  The employer, Verso Paper, has a Code of Conduct which includes a provision which says:

Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

The General Counsel found this rule overbroad because an employer, in the eyes of the NLRB cannot have a blanket prohibition; rather it must assess the need for confidentiality on a case-by-case basis.

What does this mean for employers who conduct their own investigations in house and for those of us employers hire to do them in extraordinary cases?   See my prior post on when a company should hire and outside investigator HERE.

Although an Advice Memorandum does not have the authority of a Board decision or even a decision issued by a single Administrative Law Judge, we do need to pay attention to this one.  It is consistent with Banner Health and tells us not only that we need to do an individual assessment before issuing warnings in our pre-interview discussion with witnesses but also that a blanket confidentiality rule will not pass muster with the NLRB.

A dilemma for certain for employers…internal investigations can be time-consuming, intrusive and costly; and if done incorrectly, the company can be exposed to considerable liability.  So when is it appropriate to bring someone in from the outside to look into allegations of improper behavior in the workplace?

Seasoned human resource professionals are more than qualified to conduct the lion’s share of internal investigations. They review documents, emails and policies, interview witnesses and routinely get to the bottom of whatever may be going on efficiently and in short order.  Based on their findings and knowledge of the inner workings of the company, they make recommendations to management and close the loop with the complaining employee and the accused.  An outside investigator will be the exception for the company with an experienced HR Department or Manager.

An experienced neutral outside investigator is a necessity, however, when

1)      The allegations involve as either complaining party or target of the investigation a member of the HR Department or upper management (officer, director, member of the board of directors).

2)      The accusations have been made public.  If the allegations have been reported in the press or are even widely known within the company, an outside presence is a must  to preserve the integrity of the investigative process and insure that the process is viewed externally as having been fair.

3)      An attorney should be involved in order to at least partially maintain the attorney/client privilege.  This may be the case when the employer’s own employment counsel conducts the investigation.

4)      The situation is highly confidential or sensitive.

5)      There are allegations of criminal behavior and cooperation with law enforcement is necessary.

6)      There are other reasons to question whether the in house team is sufficiently experienced or will be viewed as unbiased and objective.

 

When deciding whether to hire an outside investigator, whether that investigator is the company’s own attorney or someone completely independent, management and HR should consider the individuals and issues to be investigated and determine whether outside guidance will assist the company to avoid risk of future litigation or provide important defenses if litigation occurs.