Scare tactics for compliance: teaching managers that they could be personally liable for employment law violations could encourage compliance
February 3rd, 2012 | Lorene Park | Add a Comment
Ideally all of an employer’s managers and supervisors would do everything in their power to encourage company-wide compliance with applicable employment laws. However, given the recent rise in employment litigation, it is apparent that compliance continues to be problematic, and employers would be well advised to provide additional incentives for compliance. Personal financial concern can be a powerful motivator. With that in mind, one incentive is simply educating supervisors, managers, and other decision-makers that they can be held personally liable for certain violations of employment laws within the company. Thus, in the minds of these managers, compliance is not just important for the company, but also for their own well-being. Some cases that could be used to illustrate this principle include the following:
FLSA violations: Liability for wage and hour violations under the FLSA can extend “any person acting directly or indirectly in the interest of the employer in relation to an employee.” This has been interpreted to include individuals who have significant control over the employment relationship and particularly those who made decisions leading to the FLSA violation. For example, a federal district court in Florida allowed a hotel employees’ wage claims to proceed against a hotel manager while the action against the hotel itself was stayed in bankruptcy (Bullock v LVN Prop Mgmt, LLC (D. Fla. 2012)). Despite the manager’s protestations that employees were hired and managed by a third party who contracted with the hotel, the court found questions of fact on the extent to which the manager, who was also part owner of the hotel, controlled the employment relationship. Employees testified that she directed some of their daily activities; signed payroll checks; was at the hotel daily to observe work that was being done; and commented and criticized such work.
FMLA violations: Under the FMLA and its implementing regulations, any person “acting in the interest of the employer” (e.g., a supervisor) may be individually liable for violations of the FMLA. Some courts have ruled that liability turns on whether the individual exercised sufficient control over the conditions of the employment. In 2012 for example, the Third Circuit ruled that an employee, who had Type II diabetes, could sue her supervisor individually under the FMLA. The appellate court reasoned that he acted in the employer’s interest while carrying out his role as supervisor; he exercised control over her employment situation; and exercised substantial authority over the termination decision, even if he lacked final authority to fire her (Haybarger v Lawrence County (3rd Cir. 2012)).
OSHA safety violations: In a St. Louis case against Andre Stone & Mason Work, Inc., the Eighth Circuit ordered the arrest of the original owner of a company and the owner of the successor company for repeatedly failing to comply with court sanctions regarding OSHA violations. The owners failed to pay fines and correct worker safety violations related to fall hazards, scaffolding deficiencies, power tool guarding, and other hazards associated with multiple construction projects (Case Nos. 06-2609 and 07-2304).
Payroll taxes: I.R.C. Sec. 6672(a) makes “any person” having the responsibility to collect and pay over the employment taxes liable for a trust fund recovery penalty. In one case, an officer of a corporation, who was also a shareholder, was held liable in connection with the corporation’s unpaid withholding taxes. He was a responsible person with respect to the payroll taxes because he owned company stock, served as its director, signed loan documents on its behalf, approved business sites, reviewed sales data, directed payments to certain creditors to reduce debt the he had personally guaranteed, and had the authority to hire and fire senior employees and accountants involved in payroll operations (Erwinv. United States, (4th Cir. 2010)).
State discrimination laws: Although individuals are generally not held personally liable under federal anti-discrimination laws such as the ADA, Title VII, and ADEA, they may be personally liable under a state’s laws. For example, the Supreme Court of Arkansas ruled that a nurse who was fired after complaining of sexual harassment by a doctor could proceed, under Arkansas Civil Rights Act, on an individual sexual harassment and retaliation claim against the doctor who supervised (Calaway v Practice Mgmt Servs, Inc (Ark. 2010)). Similarly, an employee who worked in a county jail was allowed to proceed on her individual claims, under California’s Fair Employment and Housing Act, against two officers who allegedly aided and abetted her employer’s racial harassment against her by making offensive and threatening comments to her (Davis v Prison Health Servs (N.D. Cal. 2011)).
Training for compliance: As these cases indicate, managers and supervisors have more than their jobs to lose by failing to comply with employment laws. Educating such high-level employees on the potential for them to be held personally liable could serve as a powerful incentive not only for their own compliance, but also the compliance of workers over whom they have supervision. By way of illustration, employers should include real cases, like the above, when training supervisors and managers on the importance of complying with employment laws.
Déjà vu All Over Again
February 2nd, 2012 | Matt Pavich | Add a Comment
Following the 2010 midterm elections, organized labor knew it was in for the fight of its life. The elections had swept in a crop of state governors who blamed unions, specifically public sector unions, for the sorry financial states they inherited. Those governors, who included Scott Walker of Wisconsin and John Kasich of Ohio, were ready to do battle.
Overall, 2010 wasn’t terrible for labor on the state level. They saw anti-collective bargaining laws pass in Ohio and Wisconsin, but they overturned the former in a referendum and have forced a recall election for Walker. In New Hampshire, a right-to-work bill was unable to defeat a gubernatorial veto and Indiana’s Mitch Daniels shot down similar legislation in his own state. By the time the New Year’s confetti was ready to drop, organized labor could have been forgiven for thinking that the worst was behind it.
Not so fast, fellas.
2012 has seen a rush of anti-union legislation and labor seems a bit taken aback. Indiana, on Wednesday, February 1, became the first state in a decade to enact right-to-work legislation, after Daniels signed a bill that passed the state Senate only hours earlier. The Senate voted 28-22 to pass the legislation. House Bill 1001 was passed by the Indiana House one week earlier and similar legislation was a point of contention for the last year. In 2011, Democratic representatives left the state in order to deny a quorum on the bill. At that time, Daniels said that he did not support bringing the bill forward, because the voters had not been prepared for the push. Beginning at the end of 2011, however, Daniels signaled that he was ready to sign right-to-work legislation. Oklahoma was the last state to enact such legislation, and Indiana is the first state in the rust belt to make the switch.
In response, Richard Trumka of the AFL-CIO could barely muster a snort of protest, calling it a “shame.” Trumka seemed dazed by the swiftness of the passage of a bill that seemed deader than Marley’s ghost last year.
Meanwhile, Arizona may soon follow Wisconsin and Ohio in barring collective bargaining by public employees. The state senate’s Committee on Government Reform voted to pass a bill that would prohibit all state and local governments and school districts from bargaining with public employee unions.
Under S.B. 1485, state and local governmental entities would be barred from recognizing or negotiating with a union representing its employees. It would not affect current contracts, but unions would be unable to negotiate a successor contract.
The committee also voted to pass three other bills. S.B.1484 would bar employers from deducting union dues from employee paychecks without their authorization. S.B.1486 bars cities and counties from paying release time to workers who are actually doing union business. S.B.1487 bars government entities from withholding union dues from employee paychecks.
Not to be outsdone, the Michigan House of Representatives, on Wednesday, February 1, passed a package of labor reform bills sharply criticized as blatant anti-union measures. The legislation was introduced last week in the House Oversight, Reform and Ethics Committee and must now be passed by the state Senate before being sent to Governor Rick Snyder.
House Bill 5023 states that public employees shall neither go on strike nor initiate a lockout. Employees who violate the prohibition would be fined either one day’s wages for each day they engaged in the work action, or $500 for each day; unions would be fined $5,000 for each day that public employee members went on strike.
House Bill 5024 would allow employers to sue striking workers who get in the way of their businesses. Workers found in violation would be subjected to daily $1,000 fines and unions would face daily $10,000 fines.
Lastly, House Bill 5025 would make it illegal for employers to deduct union dues and contributions from employee paychecks without the express, written consent of the employee.
If Michigan follows Indiana and Ohio down the path of tough anti-union legislation, organized labor better watch out. The pitchforks are out and the budget cutting axes are sharp.
Social media policies: the NLRB chimes in again
January 30th, 2012 | Lisa Milam-Perez | Add a Comment
As if grappling with the rapid proliferation of social media in the employment context weren’t challenging enough, the National Labor Relations Act complicates matters further. Even nonunion employers can run afoul of the NLRA with a social media policy that, in the view of the National Labor Relations Board, could dissuade employees from exercising their rights to engage in protected, concerted activity via Facebook, Twitter, or similar sites.
In an effort to craft a consistent agency approach to resolving this burgeoning litigation, NLRB Acting General Counsel Lafe Solomon has instructed regional offices to forward social media cases directly to the Board’s Division of Advice. About 75 cases have made their way to the office to date and, they are “extremely fact-specific,” making it even tougher for employers to glean hard and fast rules for compliance. In an ongoing effort to offer “further guidance to practitioners and human resource professionals,” the General Counsel has issued two memoranda: one (OM 11-74) on August 18, 2011, discussing the NLRB’s resolution of 14 social media cases; a second (OM-12-31) on January 25, outlining more recent cases reviewed by his office.
An employer’s policies “should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees,” according to Solomon. Distilled to its essence: standard labor law principles apply here. That means that even if it does not expressly bar NLRA-protected activity, the NLRB would still find fault with a policy that:
- “chills” employees from exercising their protected Section 7 rights;
- significantly burdens an employee’s exercise of those rights;
- was enacted in direct response to union activity; or
- is applied in such a manner that it restricts the exercise of protected rights.
The good, the bad, and the iffy. The most recent memo covers seven cases that addressed whether an employer’s social media policy passes muster under Section 8(a)(1) of the Act. In five instances, the policies were found to be unlawful; one survived Board scrutiny; and one policy was deemed lawful after it was revised. These provisions — several of which are no doubt a regular fixture in employee handbooks these days — violate the Act:
- A collection agency’s rule prohibiting employees from making disparaging comments about the company through any media, including blogs or other electronic media;
- A home improvement chain’s directive that employees not identify themselves as company employees in social networking situations except when discussing terms and conditions of employment “in an appropriate matter”;
- A restaurant chain’s proscription against using “disrespectful conduct” and having “inappropriate conversations” on Facebook with fellow employees;
- A health care employer’s ban on “using social media to engage in unprofessional communication” that could negatively impact the employer’s reputation or interfere with its mission, or “unprofessional/inappropriate” communication regarding members of the employer’s community;
- A testing lab’s policy against disclosure of confidential, sensitive, or nonpublic company information with outside parties without prior company approval;
- A requirement that employees obtain prior approval to identify themselves as company employees on social media sites and expressly state that their comments are their personal opinions and not the employer’s;
- A provision barring employees from making statements to the media or on electronic bulletin boards or blogs without prior approval;
- A rule that employees must first discuss work-related concerns with their manager or supervisor before posting communications, or face discipline or discharge.
These rules earned the NLRB’s seal of approval:
- A drugstore chain’s policy that stated employees could be asked to confine their social networking to matters unrelated to the company if necessary to ensure compliance with securities regulations or other laws; barred disclosure of confidential and/or proprietary information, including customers’ personal health information; and prohibited social media posts about “embargoed” corporate information such as launch and release dates or reorganizations;
- A provision that employees engaged in social networking activities must indicate that their views were their own and not those of the employer; in this case, the rule appeared in a separate section entitled “Promotional Content,” applied only to communications designed to endorse, promote, or advertise the employer’s products or services, and included a reference to relevant FTC regulations.
One employer redeemed its policy in the Board’s eyes with a bit of reworking:
- A restriction on using social media to post “vulgar, obscene, threatening, intimidating, [or] harassing” comments about the company, coworkers, or supervisors, or comments that would violate the employer’s antidiscrimination or anti-harassment policies was permissible. The employer had salvaged its policy with this revised language after disposing of an overbroad prohibition on “discriminatory, defamatory, or harassing web entries about specific employees, work environment, or work-related issues on social media sites.”
Drafting tips. These hits and misses offer a few useful pointers for employers that want to implement a social media policy that squares with the NLRB’s directives:
- Flesh out vague references to “defamatory,” “inflammatory,” “inappropriate,” or “disrespectful” communications with specific examples of plainly egregious or clearly unprotected conduct (i.e., posting sexually inappropriate content).
- Avoid using examples that may implicate NLRAü rights. Case in point: broadly stating that “sharing confidential information” is unprotected conduct could impermissibly restrict employees from discussing wages. Instead, prohibit the disclosure of” trade secrets” specifically or, in the case of a healthcare employer, “confidential patient information.”
- The old rules still apply. A policy that grants employees free rein to Tweet away on their own time but restricts such communications while at work or on (or via) company property would run afoul of the NLRA, which clearly allows employees to engage in protected activities on-site during nonwork time, in nonwork areas.
- Similarly, requiring that employees refrain from using the company name or service marks undermines employees’ protected right to use the name or logo on leaflets, pickets, and now blog posts while engaged in protected activity.
- Use prior restraint sparingly. Requiring company approval beforeü communicating via social media raises a red flag. Target such a mandate narrowly, to those circumstances when truly essential to protect reputation or intellectual property.
- Include limiting language to clarify that the socialü media policy does not restrict employees from exercising their protected Section 7 rights (bonus points if your policy articulates what those rights actually are). Keep in mind, however, that a generic disclaimer alone might not save you, particularly where ambiguities remain. In fact, one employer policy above was held unlawful despite a savings clause stating that the rule would not be applied to efforts to organize, bargain collectively, or engage in other concerted activity.
None of these strategies is foolproof. Much depends on the context in which an employer’s policies are applied, as well as the fact-specific nature of an employee’s online conduct.
Employee discipline. Challenges to employer policies don’t typically arise in a vacuum; these cases generally appear before the NLRB only after an employee has been discharged for posting a status update or Tweet that displeases an employer. Of course, disciplining an employee for an irksome social media posting may also find an employer responding to an unfair labor practice complaint. That’s a topic for another day.
Supreme Court’s GPS tracking opinion has implications for private employers
January 27th, 2012 | Pamela Wolf | Add a Comment
On Monday, a unanimous Supreme Court held that the attachment of a global positioning system (GPS) tracking device to an individual’s automobile and subsequent use of that device to monitor the vehicle’s movements on public streets constituted a search under the Fourth Amendment (United States v Jones, January 23, 2012, Scalia, A). By attaching the GPS device to the vehicle, law enforcement officers encroached on a protected area. Thus, the government’s physical intrusion on the “effect” at issue here constituted a Fourth Amendment search. Although the case was not one involving questions of employment law, it none the less has implications for employers.
Physical intrusion was a search. The High Court made clear that the government had physically occupied private property for the purpose of obtaining information. Thus, the Court concluded that it had no doubt that such a physical intrusion would have been considered a “search” within the meaning of the Fourth Amendment when it was adopted. The conclusion was based on a common law trespass theory. The High Court declined to analyze the challenged action in terms of whether the targeted individual had a reasonable expectation of privacy in the undercarriage of the vehicle, which was exposed to public view.
Reasonable expectation of privacy. While five Justices, Sotomayor, Alito, Ginsburg, Breyer and Kagan (in two concurring opinions), agreed with the majority that a Fourth Amendment search had occurred, they would have instead hung the analysis on the question of whether the long-term monitoring of the vehicle impinged on the targeted individual’s reasonable expectation of privacy. Finding that in this case it did, the concurring Justices rejected the prevailing view that GPS location tracking does not implicate a privacy interest because the location of the person or vehicle in public view is essentially not private, noting that a Fourth Amendment search also occurs “when the government violates a subjective expecta¬tion of privacy that society recognizes as reasonable.
The concurring opinions devote substantial discussion to tracking that would not require physical intrusion, such as cell phone location tracking, and the fact that such tracking can create a host of information about an individual’s public, familial, political, religious and sexual activities. Technological developments require a more current application of Fourth Amendment law, according to the concurring Justices. Observing that technology appears to have outpaced legislation that would protect individuals from government use of tracking that is merely electronic, rather than that which is physically intrusive, the Justices also noted that legislation may now begin to catch up. Finally, the Justices supported the notion that private information disclosed to a member of the public for a limited purpose should not be thereby rendered outside the protection of the Fourth Amendment.
What does it mean for employers? The reasoning of the five concurring Justices carries implications for private employers because lower courts may incorporate a similar analysis and be more willing to find that an employer’s location monitoring of an employee amounts to an invasion of that employee’s privacy interests.
In recent years, employer GPS tracking of employees has become more common – perhaps for legitimate business reasons such as to confirm a suspicion that an employee is not working when he or she claims to be working, or to determine whether an employee is actually suffering an injury for which she has taken leave or is collecting workers’ compensation.
But employers should think twice about location monitoring that requires physical attachment of a devise to an employee-owned vehicle – engaging in such conduct may expose the employer to a common law action for trespass. However, such monitoring may be permissible in some circumstances when the device is attached to a company-owned vehicle.
Earlier this month, a federal district court in North Carolina found that a county employee who was discharged for falsifying time sheets and improper use of a county vehicle failed to show a Fourth Amendment unreasonable search violation resulting from his employer’s use of a GPS tracking device on his county-owned truck (Brookshire v Buncombe County, January 18, 2012, Howell, D). The location data garnered from the tracking device did not match the employee’s time sheets. The employee had also signed an MOU acknowledging that he did not have an expectation of privacy in items stored in the truck and that the vehicle could be searched at any time without notice. The decision, however, turned primarily on the prevailing view of the federal courts that there could be no reasonable expectation of privacy by a person traveling in a vehicle on a public roadway.
Taking a lesson from the Brookshire case, private employers that permit employees to use employer-owned vehicles should consider requiring those employees to sign an agreement acknowledging that the employee has no expectation of privacy in the vehicle or items located inside it, and that the employer has the right to access the vehicle without notice.
However, also incorporating a lesson from the concurring Justices in the Jones case, employers should avoid location monitoring during nonworking hours because such monitoring may impinge on the employee’s reasonable expectation of privacy, even though the employee may be using a company-owned vehicle, cell phone or other electronic device.
Finally, the employer should conduct location monitoring only when it has a legitimate business need for doing so.
Many states require employee leave for school activities, blood donation, volunteer emergency services, and other personal activities
January 23rd, 2012 | Lorene Park | Add a Comment
Unless they have been living under a rock, most employers know about the federal Family and Medical Leave Act (FMLA), and similar state laws, which require that covered employees be granted leave for certain family-related events (such as the birth of a child) and illnesses. However, there are a growing number of laws protecting the right of employees to take time off (either paid or unpaid) in other circumstances as well. Coverage usually depends on the number of employees that an employer has. Employers should be aware that they might be required to grant an employee leave under the following circumstances:
- Military Service – In addition to the federal FMLA, many states also have laws providing for employee leave to care for family members deployed or injured in military service. The leave could also apply to time spent addressing issues that arise due to the call to active duty, such as making childcare or financial arrangements. Many states have also enacted laws which, like USERRA, protect the employment rights of employees who themselves took time off for military service. Employers covered by both federal and state law must follow the provisions most beneficial to employees.
- Emergency Volunteer Services – Many states have laws providing leave for, or protecting the employment rights of, employees who are volunteer firefighters or emergency workers. Some states provide this type of leave only for public employees.
- Jury Duty – Federal law prohibits employers from firing, threatening to fire, intimidating or coercing an employee because of jury service in a federal court. Nearly every state has a similar law and some states extend protection to employees called as witnesses in court proceedings.
- Voting – Many states have laws allowing employees time off to vote.
- Organ and Blood Donation – Many states require covered employers to give employees time off to donate bone marrow, organs, or blood.
- Domestic Violence – A growing number of states are requiring that certain employers grant leave to victims of domestic violence for purposes such as obtaining medical care or counseling, and attending court proceedings or meetings with prosecutors.
- School Activities – Some states require that covered employers give employees leave to attend school-related activities and conferences concerning their children.
- Disability Accommodation – Granting leave may be considered a reasonable accommodation of an employee’s disability under the ADA or state discrimination laws. However, courts typically rule that an employer is not required to grant leave for an indefinite period of time, reasoning that this would either eliminate an essential job function or would cause an undue hardship.
- Religious Activities – The refusal to grant time off for an employee to observe his or her religion or attend a religious ceremony could be viewed as religious discrimination under federal and state law.
In addition to laws requiring that employers grant leave for certain activities, some states have “day of rest” laws requiring that employers give employees a certain amount of time off during each work week. Some of these laws apply only to certain industries. Employers that want additional information on their state leave laws should contact the state’s labor agency.
