On April 16, 2015, the New York City Council overwhelmingly passed an amendment to the New York City Human Rights Law that would bar most city employers from using credit checks as part of their hiring process. Supporters of the bill argue that in most cases, an applicant’s consumer credit history has no direct correlation to their job performance, and an employer’s use of credit checks in hiring could have an adverse impact on minority job applicants, who are more likely to have poor credit histories. Continue Reading
On March 27, 2015, the U.S. District Court for the Southern District of New York granted the plaintiffs’ motion to compel disclosure of a report prepared by a Human Resources (“HR”) consultant in class action litigation under the Fair Labor Standards Act (“FLSA”) and state wage and hour laws.
In Scott v. Chipotle Mexican Grill, Inc., Chipotle claimed that a number of documents sought by the plaintiffs during discovery were privileged communications that were protected from disclosure. One such document was a report from an HR consultant examining the activities of four employees holding Chipotle’s apprentice position. Chipotle claimed that the report was subject to the attorney-client privilege because one of its attorneys retained the HR consultant to help him assess whether the apprentice position should be classified as an exempt or non-exempt position. The Court disagreed with Chipotle and ordered that the report be turned over to the plaintiffs. Continue Reading
On April 6, the National Labor Relations Board (“NLRB”) General Counsel issued a guidance memorandum to explain the changes in the procedures for processing union representation petitions under the NLRB’s final rule on “quickie” elections that was adopted on December 15, 2014. Although a resolution was passed by Congress to block the NLRB from implementing the quickie election rule, President Obama vetoed the resolution, paving the way for the NLRB’s final rule to take effect on April 14, 2015.
Although the practical effect of the NLRB’s final rule will likely be a shorter time period between the date when a representation petition is filed and the date when the election is held, the General Counsel noted in the guidance memorandum that “neither the final rule, nor this memorandum, establishes new timeframes for conducting elections or issuing decisions.” The guidance memorandum supersedes any provisions contained in the NLRB’s manuals and other guidance to the extent that those provisions are inconsistent with the guidance memorandum.
For a summary of the NLRB’s final rule, see our December 15, 2014 blog post.
As the social media phenomenon continues to dominate our culture and its use has become second-nature, it is worthwhile to revisit some of the issues presented by an employer’s use of social media, particularly in the context of hiring.
Social media presents a unique workplace conundrum. On one hand, employees generally believe that their use of social media outside of work is none of their employer’s business. However, employers need to make employment decisions based on the best available information, which sometimes includes information an employee or potential employee shares on social media. In the context of hiring, a candidate’s social media page can provide invaluable insight into the candidate’s character. Generally, people tend to be much more candid on social media than they would be during a job interview, and, as the saying goes, “a picture is worth a thousand words.” Continue Reading
On March 25, the U.S. Supreme Court issued its much anticipated decision in Young v. United Parcel Service, Inc., which centered on whether UPS unlawfully discriminated against a pregnant employee by denying her a light-duty accommodation for her lifting restriction. The Court vacated a Fourth Circuit Court of Appeals decision, which granted summary judgment in favor of UPS. Continue Reading
Employers are likely well aware of the conditions that must be satisfied before an employee can be deemed eligible for leave pursuant to the Family and Medical Leave Act (“FMLA”):
- the employee has worked for the employer for at least 12 months;
- the employee has worked 1,250 hours in the 12 months preceding the leave request; and
- the employer has 50 or more employees at, or within 75 miles of, the employee’s workplace — the so-called “50/75” requirement
If one of these conditions is not satisfied, an employer cannot later be held liable for any FMLA-related claims brought by an employee, right? Not so fast! Although determining whether these conditions are met is typically the simplest step in the FMLA certification process, the United States Court of Appeals for the Sixth Circuit recently reminded employers of the headaches they may face if they are not careful in notifying their employees of these conditions. Continue Reading
The General Counsel for the National Labor Relations Board (“NLRB”) recently published a guidance memorandum that provides specific examples of lawful and unlawful employee handbook rules in the areas of confidentiality, professionalism and employee conduct, use of company logos, copyrights and trademarks, conflicts of interest, photography and recording, and interaction with the media and other third parties. The memorandum also includes General Counsel-approved handbook rules that were adopted as part of an unfair labor practice settlement with the fast-food chain, Wendy’s.
Over the past few years, the NLRB and its General Counsel have aggressively scrutinized many frequently used employee handbook provisions. The basis for this scrutiny is the alleged infringement of the right of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA”). Section 7 activity includes the right to discuss, challenge, question, and advocate changes in wages, hours, and other terms and conditions of employment in both unionized and non-unionized work environments. Of course, it also includes the right to engage in union organizing. A majority of the current NLRB will deem an employee handbook provision to violate the NLRA if it specifically prohibits Section 7 activity or if “employees would reasonably construe” the rule as prohibiting such activity. It is this “reasonably construe” language that has resulted in many common employee handbook provisions being declared unlawful by the majority of the current NLRB.
While one could editorialize at length regarding the razor-thin distinctions drawn between the provisions found lawful and unlawful, the usefulness of the guidance for employers lies in its concrete examples, some of which are highlighted below.
A confidentiality policy will be deemed by the current NLRB to violate the NLRA if it specifically prohibits employee discussions regarding terms and conditions of employment, such as wages or workplace conditions, or if employees would reasonably construe the policy to prohibit such discussions.
- Do not discuss customer or employee information outside of work, including phone numbers and addresses.
- Never publish or disclose the employer’s or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to the employer.
- No unauthorized disclosure of business secrets or other confidential information.
- Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors, or customers.
Employee Conduct/Professionalism Rules
The memorandum reinforces that employees have the right to criticize their employer’s policies and actions toward its employees, and therefore, any policies prohibiting disrespectful, inappropriate, or rude conduct toward the employer have been deemed unlawfully overbroad. In contrast, rules requiring employees to be respectful to co-workers, clients, and customers have generally been found to be lawful.
- Be respectful of the company, other employees, customers, partners, and competitors.
- No defamatory, libelous, slanderous, or discriminatory comments about the company, its customers and/or competitors, its employees, or management.
- No rudeness or unprofessional behavior toward a customer or anyone in contact with the company.
- Being insubordinate, threatening, intimidating, disrespectful, or assaulting a manager/supervisor, co-worker, customer, or vendor will result in discipline.
Use of Company Logos, Copyrights, and Trademarks
The NLRB has found that a broad ban on use of an employer’s name, logo, or other trademark is unlawful because it may restrict the use of the company name and logo on picket signs, leaflets, and other protest material.
- Do not use any company logos, trademarks, graphics, or advertising materials in social media.
- Respect all copyright and other intellectual property laws. For the employer’s protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks, and other intellectual property, including the employer’s own copyrights, trademarks, and brands.
The release of this guidance suggests the NLRB will continue to aggressively enforce and scrutinize the employment policies of union and non-union employers. An unlawful policy is itself a violation of the NLRA, and if an employee is disciplined or terminated for violating an unlawful policy, the discipline could be rescinded and the employer could be ordered to restore the employee to his/her position with back pay.
As seen in the examples above, tweaking one or two words or adding additional context and clarification to what would be an otherwise overbroad policy can mean the difference between an unlawful or lawful policy. Employers should, therefore, use this memorandum as a guide in reviewing and revising their handbooks and other employee rules.
In prior blog articles, we’ve visited the battle field with Sun Tzu to learn the art of defending employment litigation, Santa’s Workshop for a holiday reminder that we can be sued for just about anything, and the major league baseball diamond with A-Rod for a lesson in swinging for the fences with the faithless servant doctrine. Our next stop on the Employment Law Express is to confer with one of the foremost Zen-masters on a more peaceful approach to our day-to-day employment matters. That master is none other than the venerable Winnie the Pooh.
Often thought of only as a cuddly focal point in children’s fiction, Pooh Corner offers a host of spiritual wisdom that has broad applications as to how we can best manage our day-to-day strife in the world of human resources. So let’s take a careful look at some of the more astute Pooh-isms and what they tell us about how best to minimize the agita in our work. Continue Reading
On March 9, 2015, the United States Supreme Court ruled unanimously in two consolidated cases that a federal agency does not have to go through the formal rulemaking process, which includes providing public notice and an opportunity for comment, “when it wishes to issue a new interpretation of a regulation that deviates significantly from one the agency has previously adopted.”
The underlying issue in the two cases — Perez v. Mortgage Bankers Association and Nickols et al. v. Mortgage Bankers Association — began when the United States Department of Labor (“DOL”) changed its opinion regarding whether mortgage-loan officers are covered by the so-called “administrative exemption” of the Fair Labor Standards Act. Prior to 2004, DOL’s Wage and Hour Division issued written advisory opinions that mortgage-loan officers are not eligible for the administrative exemption, and are entitled to payment of overtime for hours worked over 40 in a work week. In 2004, DOL revised its white collar exemption regulations, but there was some ambiguity regarding whether mortgage-loan officers fell within the revised administrative exemption. In 2006, DOL’s Wage and Hour Division issued a written advisory opinion that mortgage-loan officers qualify for the administrative exemption as revised in 2004. However, in 2010, DOL’s Wage and Hour Division changed its mind and issued a written advisory opinion that mortgage-loan officers do not qualify for the administrative exemption.
The Mortgage Bankers Association challenged this 2010 administrative interpretation in federal court, alleging, among other things, that DOL’s interpretation was procedurally invalid in light of a previous decision by the U.S. Court of Appeals for the D.C. Circuit (Paralyzed Veterans v. D.C. Arena L.P.). Under the so-called “Paralyzed Veterans doctrine,” an agency may not significantly revise its interpretation of a regulation without providing public notice and an opportunity for comment pursuant to the Administrative Procedure Act (“APA”). The D.C. Circuit re-affirmed the doctrine in the Mortgage Bankers Association cases, holding that the 2010 administrative interpretation had to be vacated because DOL did not hold a notice-and-comment period.
The Supreme Court reversed the D.C. Circuit’s decision. In an opinion penned by Justice Sonia Sotomayor, the Court held that the “Paralyzed Veterans doctrine” is contrary to the clear text of the APA’s rulemaking provisions, and it improperly imposes on agencies an obligation beyond the ‘maximum procedural requirements’ specified in the APA.” Justice Sotomayor stated that although the D.C. Circuit was correct that the APA requires agencies to follow the notice-and-comment requirements when amending or repealing a substantive rule — in the same manner as issuing a substantive rule in the first instance — the D.C. Circuit “went wrong” when it applied the same reasoning to interpretations of rules. In sum, “[b]ecause an agency is not required to use notice-and-comment procedures to issue an initial interpretive rule, it is also not required to use those procedures when it amends or repeals that interpretive rule,” unless “notice or hearing is required by statute.”
The implications of the Supreme Court’s decision reach far beyond the FLSA status of mortgage-loan officers. The Supreme Court’s ruling paves the way for federal agencies to make significant changes to its interpretations of rules without notice to the public and an opportunity for public comment. Although employers can still look to administrative interpretations (such as opinion letters issued by DOL’s Wage and Hour Division) for some guidance in complying with employment laws and regulations, employers should be diligent about keeping up with any changes to those administrative interpretations.
Jennifer Brand, Associate Solicitor of Labor, spoke at the American Bar Association Federal Labor Standards Legislation Committee’s Mid-Winter Meeting on February 26. Ms. Brand provided an update on important USDOL initiatives and activities. Ms. Brand discussed recent litigation involving interns and confirmed that the USDOL still believes the six factors outlined in its Fact Sheet #71 is the proper test to determine whether an unpaid internship is lawful. Ms. Brand did acknowledge that as the workplace evolves, it may, in unusual situations, be appropriate to consider other factors.
Ms. Brand also discussed the USDOL’s appeal of the U.S. District Court for the District of Columbia’s order vacating two major provisions in the USDOL’s Home Care Rule originally intended to be effective January 1, 2015. The new rule would have excluded third-party employers from relying on the companionship and live-in domestic worker exemptions and would have significantly narrowed the definition of companionship services. It is anticipated the case will be heard in the May term.
Finally, Ms. Brand acknowledged that the highly anticipated proposed changes to the white-collar exemptions would not be published this month as the USDOL had previously suggested. She further stated that they are “not imminent.” Although she would not comment on specifics, she stated that the USDOL is examining the appropriate salary level test and whether the duties test needs to be revised. Practitioners believe that the proposals will include, among other things, raising the salary level test and narrowing the duties test of the exemptions to make it more difficult to classify employees as exempt. Some of the expected changes may include implementing a strict percentage of exempt and non-exempt duties and the possible elimination of the “concurrent” duties test whereby an employee may perform exempt and non-exempt duties at the same time.