Employees have no reasonable expectation to privacy for materials viewed or stored on employer-owned computers or servers
November 24th, 2011 | Ron Miller | Add a Comment
Apparently, it bears repeating that employees have no reasonable expectation to privacy to materials they consider confidential if those items are viewed or stored on a company-owned computer or server. Recent court rulings have reiterated that employees have no privacy right to view sexually explicit photos on private email using an employer’s computer; there is no attorney-client privilege for e-mail sent from employer’s computer or files created or received on a company laptop; and employees cannot maintain the confidentiality of privileged documents stored on an employer-owned computer.
While the impropriety of viewing sexually explicit on company-owned computers may be an easy concept for even the average employee to grasp, even individuals who might otherwise be regarded as sophisticated, have difficulty with the privacy concept as it relates to legal documents.
Sexually explicit photographs. An employee who was terminated for using his employer’s computer to show coworkers sexually explicit photographs of a female coworker could not prevail in his wrongful termination lawsuit alleging, among other claims, violation of a privacy right, ruled a federal district court in Ohio (Moore v Univ Hosps Cleveland Med Ctr, November 15, 2011, Gwin, J). The employee had no right to privacy when he used the employer’s computer, ruled the court in granting the employer’s motion for summary judgment.
After his romantic relationship with the coworker ended, the employee’s ex-girlfriend filed a criminal complaint of phone harassment against him. Apparently to retaliate, he showed two male coworkers sexually explicit photos of her on a computer in one of the employer’s hospital units. The woman’s complaints to management were substantiated by the male coworkers and the computer was identified. A search of the computer revealed that on the date in question, 23 photos had been viewed within a three-minute time span. Some of the photos contained the employee’s name in the file name and included sexually explicit images of women, including his ex-girlfriend. The employee admitted to using the computer to access his personal email account; that he had a folder in his account that contained sexually explicit pictures; and that the pictures on the hospital’s computer were identical to those in his folder. However, he denied sharing the photos with coworkers. Nonetheless, the hospital fired him.
Invasion of privacy. Because the employee claimed that the employer had “broken into” his email account, the court concluded that the only cause of action that might fit was intrusion of seclusion. In the Ohio Supreme Court decision, in Sustin v Fee, the court explained that for an intentional intrusion into another’s private affairs or concerns, “[t]he key language is that the affairs or concerns must be private to rise to be actionable as an invasion of privacy.”
In this instance, the employee failed to understand modern technology and how files are saved to computer hard drives. He did not understand that investigating his “illicit activity” did not involve the hospital accessing or hacking into his personal email account. Because the employee had accessed his personal email account on the hospital’s computer, the images he viewed were automatically stored on the computer’s hard drive.
The hospital’s code of conduct stated that there was no right to privacy for any employee who used the hospital’s computers to access personal email accounts, the Intranet, or the Internet. Furthermore, the hospital “‘reserve[d] the right to access, monitor and disclose the contents of Internet, email and voice mail messages or other communications made through [hospital] Communication systems, consistent with [hospital] policies.’”
In ruling for the employer, the court stated that there is no expectation of privacy when a hospital employee accesses “a hospital-owned computer sitting in the middle of a hospital floor within the easy view of both patients and other staff-members.”
Attorney-client privilege. A California appeals court ruled that e-mails sent by an employee to her attorney on an employer’s computer were not “confidential communications between a client and lawyer,” for purposes of the state evidence code (Holmes v Petrovich Dev Co, January 13, 2011, Scotland, A). The appeals court explained that the employee used a computer belonging to her employer to send the e-mail, despite having been advised — and agreeing — that communications using electronic means were not private, might be monitored, and could only be used for business. Thus, the employee’s argument that her e-mail would be private was contrary to the employer’s firmly entrenched policy that employees had no right to privacy in information sent over company computers.
Similarly, an employer was granted a protective order declaring that emails and other allegedly privileged communications on an employee’s company-owned laptop were not subject to the attorney-client privilege where the employee relinquished the computer without asserting the privilege or taking any precautions to protect the privacy of the materials saved (Aventa Learning, Inc v K12, Inc, November 8, 2011, Robart, J). Despite a second employee’s attempt to protect the privacy of communications on his laptop prior to relinquishing it, the court determined that the attorney-client privilege did not attach to documents created and sent or received after he began his employment. Further, the court concluded that the employee waived the privilege with respect to documents created before his employment, but stored on the company laptop.
After the employees began their employment they were issued company laptop computers, and each transferred privileged attorney-client communications that had been created prior to their employment onto the computers. Moreover, both men continued to produce attorney-client privileged communications in the form of emails on these laptops during their employment.
Electronic communications policy. As part of its employee handbook, the employer had an electronic communications policy which provided that such communications were not private. The company regularly enforced this policy, and employee laptops had been reviewed and employees disciplined for violations. Following his termination, one of the employees returned his laptop, but made no claim with regard to any privileged documents until nearly 18 months later. The second employee initially refused to return his laptop because he asserted that he had saved years’ worth of privileged communications. Ultimately, he returned the laptop after the defendant agreed to “review protocol” that would require it to sequester the asserted privileged material prior to reviewing the remainder of the laptop’s contents.
The employees had the burden of proving that the attorney-client privilege attached to the communications at issue, and that they did not waive the privilege with regard to materials that they saved on their company laptops.
Expectation of privacy. With respect to the first employee who returned his laptop without asserting privilege or taking any precautions to protect the privacy of materials he had saved, he no longer had any reasonable expectation of confidentiality with regard to those materials. Any privilege that may have existed was extinguished by his unconditional relinquishment of the laptop and could not be resurrected. Thus, the employee waived any privilege that may have been applicable and the waiver encompassed all of the materials placed or saved from any source on his company-owned laptop.
Even though the second employee took steps to preserve the privileged status of documents stored on his computer before he relinquished it back to the company, those efforts failed. Because the company’s electronic communications policy clearly stated that communications were not private, the employee could not have had a reasonable expectation of confidentiality with respect to communications created or received on his company laptop following the acquisition of his company. Thus, the court found that the attorney-client privilege never attached to communications created or stored on the laptop or company servers.
Moreover, the court held that the employee waived any privilege that may have previously attached to materials that were transferred to the company laptop. In evaluating whether the employee waived the attorney-client privilege, the court applied the four-factor test initially set forth in In re Asia Global. Although company policy did not place an outright ban on personal use of electronic resources, it warned that communications are not private. The company, in fact, monitored communications, and the policy expressly allowed the company to access information and to disclose it. Finally, the employee had both actual and constructive notice of the company’s policies. Because the employer met the Asia Global factors, the court concluded that the employee waived any privilege to any files or communications when he stored them on his company laptop.
Criminal matters. A former bank president who was being sued along with the bank for various claims, including fraud and conspiracy, could not rely on the attorney-client privilege to protect emails exchanged with his attorney, ruled a federal court in West Virginia, in ordering the bank to produce the communications (Hanson v First Nat’l Bank, October 31, 2011, VanDervort R). As a general matter, stated the court, when an employee emails his or her attorney from a workplace computer, the employee may be deemed to have impliedly waived the confidentiality afforded by the attorney-client privilege if the employer had a policy that eliminated any expectation of privacy.
A business owner sued the bank, as well as the former president in their individual capacities, alleging fraud and conspiracy, among other claims. The bank president had pled guilty in separate criminal proceedings. During discovery, the business owner sought to discover from the bank electronic communications pertaining to another co-conspirator in the criminal case. The business owner filed a motion to compel disclosure of emails exchanged between the president and his criminal attorney. The attorney objected to disclosure of the content of the emails based on the attorney-client privilege.
Waiver of privilege. Although the court observed that the former president’s email communications with his attorney passed the “classic test” for privilege because they were communications between an attorney and his client about matters that were the subject of the attorney’s representation, it found that the privilege was subject to waiver under the four-factor test of Asia Global.
Here, the bank had a policy concerning employees’ use of its computer system that provided occasional personal use of company computers and electronic mail systems was permitted but information would be treated no differently than other business-related information. The policy also provided that the bank maintained the right to enter any of the computers or electronic mail systems to inspect and review any and all data recorded on those systems, and that “employees should not assume that such messages are private and confidential.”
The court did not require evidence that the bank actually monitored employees’ use of the computer system, finding that the reservation of the right to do so was sufficient to conclude there was no reasonable expectation of privacy. It also put employees on notice that third parties, including bank representatives, might access their communications. Further, the president’s acknowledgement that he was aware of the bank’s monitoring policy satisfied the fourth factor. For these reasons, he waived the attorney-client privilege by using bank’s computer system to communicate with his criminal attorney and the motion to compel was granted.
Protective order. In one final case, a discharged executive was denied his motion for a protective order that would compel his former employer to return privileged and confidential documents, such as emails with his attorneys, that the employer acquired after it suspended and terminated him and then seized his work computer (Pacific Coast Steel v Leany, September 29, 2011, Leen, P). A federal magistrate judge in Nevada ruled the former executive had waived the privilege by making no effort to protect the documents after they were initially acquired, by the employer in an acquisition of his company, or at any time thereafter. Thus, the magistrate refused to compel the employer to return the executive’s emails, and other electronic documents, or to bar his former employer from using those documents in its fraud action against him.
The employee began working for the employer, as an executive vice president, after it acquired his business pursuant to an asset purchase agreement (APA). He was given his own private office and used the same computer he had been using before the acquisition. After the employee was terminated, the employer confiscated his computer and uncovered the documents at issue which, the employer alleged, showed that the former executive misappropriated company funds.
Here, the executive claimed that certain privileged communications on his work computer involved his personal property and assets, including tax records. He also asserted that he had sent and received emails from his attorneys, his accountants, his wife, and members of his church congregation. Further, he alleged that, when he was terminated, he was not given an opportunity to remove the confidential and privileged information from his computer emails or from his office. Consequently, he sought a protective order prohibiting the employer from inquiring into matters that involved privileged and confidential documents that it obtained when it seized his computer. The executive also sought an order requiring the employer to return any documents that were privileged and confidential, and precluding the employer from using those documents in this litigation.
Reasonable expectation of privacy. The magistrate denied the motion, finding that the executive simply could not have a reasonable expectation of privacy in the emails that he failed to remove, or otherwise protect from disclosure, after the acquisition of his company’s assets by the employer. The court noted that the executive did not attempt to segregate or password-protect any of the communications. The emails in question were migrated to the company’s server and were not maintained solely on the executive’s office PC.
Again, the employer had a stringent, written corporate policy allowing the company to monitor the use of its employees’ computers or emails — a policy that the executive in fact was involved in implementing, and had been adopted from a policy that was in place at the time of the acquisition. Because the executive failed to take reasonable steps to preserve the confidentiality of the allegedly privileged matter, the court denied his motion for a protective order and for the return of the privileged documents was denied. , the magistrate found the executive had waived any expectation of privacy and privilege he might otherwise have had.
Transgender bill passes Massachusetts House and Senate
November 22nd, 2011 | Deborah Hammonds | Add a Comment
Massachusetts has joined the growing list of states that have passed anti-discrimination protections for individuals based on their sexual orientation and gender identity and expression. Earlier this month, state legislators passed H.48, An Act Relative to Transgender Equal Rights. The legislation, sponsored by Rep. Jennifer E. Benson, will amend Chapter 19A of the General Laws to prevent and eliminate discrimination based on sexual orientation and gender identity and expression. The Act is also intended to improve access to services for lesbian, gay, bisexual and transgender elders and caregivers.
“This legislation is the next step in our forward path of extending equal protections to all citizens and eradicating discrimination in our Commonwealth,” said Massachusetts Attorney General Martha Coakley, commending legislators for their action. “For too long, transgender people have suffered in silence in seeking employment, safe housing and educational opportunities. This legislation puts Massachusetts on a course for ensuring a better, and fairer, future for our residents and makes clear that people are entitled to equal protection regardless of their gender identity or expression.”
“There are opponents who have attempted to stoke fears about the implications of this bill. In doing so, they grossly mischaracterize what this bill does and who it protects. This bill only increases our ability to prosecute criminal conduct and protect the civil rights of all, and does nothing to restrict our ability to protect victims of any crime,” she concluded.
Court rejects NASA contractor’s challenge to OFCCP’s request for compensation data beyond that required in audit scheduling letter
November 18th, 2011 | Cynthia L. Hackerott | Add a Comment
In a rare court decision regarding OFCCP audit and investigative procedures, the federal district court for the District of Columbia ruled against United Space Alliance, LLC in the contractor’s attempt to seek relief from an April 11, 2011, order of the DOL’s Administrative Review Board (ARB) adopting an earlier ALJ order requiring the contractor to submit to the OFCCP additional data for analyses beyond that which the contractor had submitted in response to the OFCCP’s standard scheduling letter. (United Space Alliance, LLC v Solis, No 11-746 (RCL), November 14, 2011). Rejecting the contractor’s assertions that the OFCCP’s actions violated the Fourth Amendment, the Administrative Procedure Act (APA), the Paperwork Reduction Act (PDA) and other laws, the court wrote, “[s]ubmission to such lawful investigations is the price of working as a federal contractor.”
This decision addresses several issues that have long been simmering within the area of OFCCP compliance, and its holdings will surely hearten, to say the least, the OFCCP in its aggressive enforcement agenda. Conversely, United Space has been no less aggressive in asserting its positions. No doubt, United Space will appeal to the DC Circuit. So, whether the holdings of the district court will stand remains to be seen.
Factual background. United Space, a joint venture between the Boeing Co. and Lockheed Martin Corp., works with NASA to operate human space operations, including the Space Shuttle and the International Space Station. According to the OFCCP, United Space’s contracts with NASA are worth at least $8 billion dollars.
In August 2009, the OFCCP informed the contractor, via the agency’s standard scheduling letter, that it had been selected for a compliance review at its Cape Canaveral, Florida facility under Executive Order (E.O.) 11246, Sec. 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act. Via the itemized listing that accompanies every scheduling letter, the OFCCP requested the contractor to provide the agency with its affirmative action programs (AAPs) and specified supporting documents and records, and the contractor did so. The scheduling letter, corresponding itemized listing, and the contractor’s response to these documents are known collectively as the “desk audit” phase of a compliance review. Under certain circumstances specified by OFCCP policy and regulations, compliance reviews can be completed at the desk audit stage without an on-site visit by the agency.
An OFCCP compliance officer took the compensation data submitted in response to the scheduling letter (at Item 11 of the standard “itemized listing” that accompanies every scheduling letter) and did an initial desk audit analysis. The initial test performed was a threshold indicator test. The results turned up no indicators of possible pattern of pay disparity between men and women. In other words, the data passed the threshold indicator test. Nevertheless, the compliance officer performed two additional tests (neither of which employed thresholds) which showed indicators of possible pay disparities between men and women, in favor of men. Based upon these results, the OFCCP requested additional data from the contractor, eventually seeking 18 items of information regarding all employees in contractor’s work force.
The contractor did not submit the data, and the Assistant District Director for the OFCCP’s Orlando District Office then requested an on-site compliance review, for the purpose of continuing the compliance evaluation to resolve the unresolved issues involving possible compensation discrimination against women. After the contractor refused to continue with the desk audit and refused to allow the OFCCP to continue the compliance evaluation on-site, the agency filed its administrative complaint with the DOL.
Administrative proceedings. After the ALJ granted, over the contractor’s objection, the OFCCP’s request for expedited hearing procedures and following a hearing on the merits, the ALJ issued his “Recommended Decision and Order” on February 28, 2011 (ALJ Case No 2011-OFC-2). The ALJ concluded that, as part of the desk audit portion of an OFCCP compliance review, the agency was entitled to seek additional data for analyses beyond that which the contractor had submitted in response to the OFCCP’s standard scheduling letter.
Accordingly, the ALJ recommend that the ARB order the contractor to comply with the desk audit within thirty days of the ARB’s final decision. In addition, the ALJ recommended that, if the contractor failed to comply with the desk audit and/or on-site compliance review, the ARB cancel all of the contractor’s current federal contracts and debar all future federal contracts until such time as contractor is in compliance with the ARB’s order.
Exceptions by the parties to the order were due within 14 days after it was issued. United Space Alliance filed it’s exceptions on March 10, 2011. Because the ARB did not issue a “Final Decision and Order” within 30 days after the time for filing exceptions, on April 11, the ARB issued a “Notice of Case Closing” and, by operation of the expedited hearing procedures, the ALJ’s February 28 order became the ARB’s the “Final Administrative Order.”
United Space’s aggressive stance escalates to court action. On April 19, United Space petitioned the federal district court in D.C. for relief from the ARB’s order. In its complaint, the contractor sought a preliminary injunction and stay of enforcement of the ARB order pending final review. It also asked the court to enjoin the OFCCP “from sending letters to government agencies or contractors requesting that United Space be effectively debarred from future contracts or subcontracts or requesting effective suspension of United Space’s existing contracts.”
United Space assembled an impressive legal team for the case that includes former Solicitor of Labor and former Deputy Secretary of Labor Howard M. Radzely and former OFCCP Deputy Director William E. Doyle; both Radzely and Doyle served during the George W. Bush administration. Radzely also served as Acting Secretary of Labor under President Obama from January 20 through February 2, 2009.
Both parties moved for summary judgment.
Administrative Procedure Act. The contractor argued that the ARB’s order violated the APA because the regulations governing OFCCP investigations only permit the agency to require the production of additional documents for off-site review in conjunction with an on-site inspection. In contrast, the OFCCP asserted that its regulations give it broad authority to request supporting documentation during the desk audit stage. Because the OFCCP’s interpretation of its own regulations was not plainly erroneous, the court concluded that the OFCCP had the authority (under 41 C.F.R. Sec. 60-1.20(a)(1)) to make the challenged data request.
The contractor then argued that even if the regulations permitted the data request, agency policy — evidenced by a notice published in the Federal Register (“Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination”; 71 FR 35124-35141) in June 2006, an FAQ published on the OFCCP’s website, and a 2007 internal agency directive — barred the OFCCP from requesting additional compensation data under the circumstances presented.
Under the 2007 directive, after the OFCCP received a contractor’s response to Item 11 of the itemized listing, it used an algorithm for an initial assessment of the data to see if indicators of potential discrimination were present — the algorithm did not lead to a finding of unlawful discrimination, but rather was a means to trip the OFCCP’s alert system for further investigation. The algorithm has evolved over time, and the OFCCP has never officially announced or otherwise explicitly communicated to the public the precise algorithm. United Space argued that the agency documents to which it cited bound the OFCCP to the use of the threshold analysis described in the 2007 directive and only that analysis as the basis for its decisions to request additional compensation information.
The court, however, agreed with the OFCCP’s assertion that the statements contained in the documents at issue preserved the agency’s discretion to use other modes of analysis. The mandatory language on which United Space relied could not overcome the agency’s clear reservations of authority in its internal documents, the court found. Except in unusual circumstances, the internal procedures manual of an executive agency, such as the directive at issue here, does not create due process rights in the public, the court explained. Moreover, the court noted that threshold analysis was never issued in any formal, public pronouncement that evidenced an intent to bind the agency.
Even if the agency intended to be bound to the 2007 directive, the language contained therein only required that OFCCP perform the threshold analysis. Nowhere did it forbid the agency from also performing other analyses, the court found. Thus, the OFCCP’s reliance on analyses other than the threshold test did not violate the APA.
What’s good for the goose? Employers have long argued, and courts have almost universally agreed, that an employer’s policy and procedures manual does not create a binding contract between an employer and its employee, particularly if the manual contains a disclaimer stating that it does not constitute a contract. By contrast, when it comes to whether a federal enforcement agency should be bound by its own policy manual, the employer here, as other employers presumably would, argued that the agency should be bound to the procedures contained in its Federal Contract Compliance Manual (FCCM). Although the court in this case sided with the OFCCP, the issue brings to mind an interesting query. To discourage future legal challenges, should the FCCM include a disclaimer stating that its contents do not create Due Process rights under the U.S. Constitution?
Fourth Amendment. The contractor charged that the OFCCP’s request for additional data violated the Fourth Amendment prohibition against unreasonable searches and seizures. Different standards apply to administrative warrants and subpoenas under the Fourth Amendment, the court explained. For an administrative warrant to issue, the government must have either specific evidence of an existing violation or the ability to show that reasonable legislative or administrative standards such as a general administrative plan derived from neutral sources justify the warrant (i.e. a showing of “probable cause”). A lower standard applies to administrative subpoenas; to be enforceable, the Fourth Amendment requires that the subpoena be sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome.
After examining the applicable case law, the court determined the ARB’s order should be evaluated under the Fourth Amendment standard for administrative subpoenas because the order did not authorize entry onto private areas of United Space’s property. Applying this standard, the court held that the ARB’s order that United Space produce 18 items of individualized compensation data for a single facility was sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance would not be unreasonably burdensome.
Paperwork Reduction Act. The PRA requires that requests for information using identical questions posed to, or reporting or recordkeeping requirements imposed on, ten or more members of the public be approved by the Office of Management and Budget (OMB). United Space argued that because the Orlando OFCCP office regularly requested additional data when conducting desk audits, and often requested the same additional information, its request for additional compensation data beyond those items included in the OMB-approved scheduling letter violated the PRA because it was a general investigation undertaken with reference to a category of entities, rather than a specific investigation against specific individuals or entities.
The court disagreed. The OFCCP’s request for additional data was triggered by its analysis of the contractor’s initial submission, and thus, it was not part of a request made to an entire category of entities. To say that the relevant category of entities was federal contractors with pay disparities in their initial data submissions would render the PRA’s exception for investigations against individuals nearly meaningless, because all individual investigations are triggered by some standard that can be expressed in general terms, the court reasoned. To hold otherwise would seriously curtail the OFCCP’s investigative efforts in a way that Congress never intended in passing the PRA.
Recent proposed changes to the scheduling letter/itemized listing. Even if, on the presumptive appeal, the D.C. Circuit rules against the OFCCP on the PRA issue, the OFCCP is working another angle that would allow it, within the requirements of the PRA, to get more compensation data at the desk audit stage of future compliance reviews. Currently pending with the OMB is the OFCCP’s request to revise its scheduling letter and accompanying itemized listing to allow it to seek more, and more detailed, information from federal contractors during the desk audit phase of compliance evaluations, including more precise data for compensation analysis. Should the OMB approve this request (which appears likely), then deeper probes into federal contractors compensation data could occur at the desk audit stage without running afoul of the PRA.
Due process. In rejecting United Space’s argument that it was that it was denied due process by a number of the ALJ’s discovery and evidentiary rulings, which were made pursuant to the expedited hearing procedures, the court cited a decision issued in 2000 by another DC district judge in Beverly Enterprises v Herman (79 EPD ¶40,258). In Beverly, the contractor argued that the OFCCP’s use of expedited hearing procedures violated its Fifth Amendment Due Process rights by violating its privacy interest in protecting its property from an administrative document search and inspection of its facilities. The judge in Beverly found, however, that the contractor had a diminished expectation of privacy because: (1) the expectation of privacy in commercial property is lower than that in residential property; and (2) it made a voluntarily choice to do business with the federal government. The Beverly court concluded that, and the court in this case agreed, that because the expedited procedures provide contractors with the rights to counsel, to a neutral arbitrator, to present evidence and witnesses, and to rebut and cross-examine the evidence and witnesses put forward by the government, the expedited procedures satisfy the requirements of due process. Further, the court here found that none of United Space’s objections to the discovery rulings of the administrative law judge overcome the deference that the court had to accord to those rulings due to its finding that the overall administrative proceeding was constitutional.
Note that part of the OFCCP’s current enforcement strategy is to utilize expedited procedures in DOL administrative hearings, so the court’s backing of the use of these procedures bolsters yet another weapon in the agency’s enforcement arsenal.
United Space also argued that the OFCCP denied it due process of law by failing to provide notice of the “pattern analysis” that the agency performed upon the data that the contractor submitted in response to Item 11. In other words, the contractor asserted that the OFCCP violated due process by failing to give it notice of a newly proscribed activity. But the proscribed activity, employment discrimination by federal contractors, has remained unchanged for many years, the court pointed out. “Only the methods by which OFCCP investigates possible instances of such discrimination are at issue here,” the court wrote, adding that “[t]here is no constitutional requirement that United Space be given notice of the ways in which OFCCP will investigate potential instances of discrimination.”
Equal protection. According to United Space, the pay disparities observed by OFCCP are a characteristic of the entire American workforce, and basing information requests on small pay disparities rather than the larger disparities incorporated into the threshold test would cause federal contractors to pay women more than they otherwise would, so as to avoid the burden of OFCCP investigations. Thus, United Space asserted, the standard employed here violated the equal protection guarantee of the Fifth Amendment because it had a discriminatory effect. However, the Constitution only prohibits governmental actions undertaken with a discriminatory purpose, the court stated, and no such forbidden favoritism was explicit in the analysis employed here. Rather, the analytic method used by the OFCCP was neutral on its face. “United Space’s argument against it would suggest that some threshold disparity was constitutionally required,” the court concluded, rejecting what it called an “implausible result and the argument that stands behind it.”
Stay request. At oral argument, United Space requested that the court stay any adverse judgment pending appeal. The court noted that United Space is unlikely to prevail on the merits and the contractor failed to show that it would be irreparably injured by producing the data that OFCCP has requested. It added that “the public interest lies in the efficient enforcement of Executive Order 11246.” Nevertheless, the court granted a temporary stay of its judgment to allow the court of appeals to determine whether a permanent stay is warranted. Accordingly, the district court’s judgment will become enforceable on November 28, 2011.
Concluding statement. The court concluded with a statement that must have been music to the ears of the OFCCP:
“Despite the vigor with which United Space has litigated it, there is surprisingly little at stake in this case. The Department of Labor has not accused United Space of employment discrimination. It has not ordered United Space to permit agency investigators onto company premises. The Department has merely required United Space to submit data about its employee compensation. The Court understands that United Space and the entire community of federal contractors are keenly interested in how OFCCP decides whether to request additional data on a contractor’s compensation practices, but that interest does not allow those companies or this Court to interfere with the agency’s investigatory practices. Submission to such lawful investigations is the price of working as a federal contractor.”
Agency press release. Taking a victory lap, the OFCCP issued a press release on the court’s ruling, quoting some of the language in the decision’s concluding statement. In addition, OFCCP Director Patricia A. Shiu offered the following comment:
“At OFCCP, we are charged with identifying which federal contractors discriminate in their hiring and pay practices, and which are abiding by the law. We cannot serve our mission to protect workers if companies refuse to give us access to the records they promised to keep and share with us when they signed their contracts.”
If the D.C. Circuit, like the ALJ and the district court, rules in favor of the OFCCP, will United Space’s aggressive stance continue to the point of seeking Supreme Court review?
NLRB’s Division of Advice–Employee’s can’t hide behind Facebook, LinkedIn posts
November 16th, 2011 | Sheryl Allenson | Add a Comment
Who’s watching? This is a question constantly at issue in the social media milieu. Recently the NLRB’s Division of Advice has issued memorandum concluding that, while the employer terminated an individual arising from social media posts, there was no issue of unlawful employer surveillance of protected activity (Public Service Credit Union, Nov. 1, 2011). In another recent case, the Division found that a LinkedIn post was a sufficient cause for termination, despite an employee’s recent unrelated protected concerted activity.
In the first case, a bank employee was reprimanded after a customer called to complain that he had been sent to a branch a long distance away to change a debit card PIN number. In response to his reprimand, during his lunch break the employee accessed his Facebook page from his cell phone and the following comment. “Some clown comes in today and asks if he can change his debit card PIN at the ATM. I tell him ours can’t, but the closest one that can is about 10 minutes away. He mentions the city of Ft. Collins. I tell him their machines can change the number. He calls an hour later and bitches about me saying I sent him to Ft. Collins and he is going to close his account.” In so doing, the employee said he was “venting” his frustration at the customer and at the way his supervisor handled the situation, while disclaiming any intent to induce other employees (some of whom were his Facebook “friends”) to act. The employee maintained privacy settings on his Facebook, such that only friends could see his posts. Thereafter, some coworkers commented on the post.
Two days later, the employee posted another comment on Facebook during his lunch break. That comment, which elicited responses from coworkers, read: “Today is Friday. Fridays are supposed to be good days. So then why am I irritated and bitchy? Oh, right. The person here jumping down my throat for really petty small crap. Let me see. I am doing my job, getting acclimated with our loan/new accounts system and doing part of your job too. Remember how shitty things were the four days I was in the hospital? You really don’t need me getting more pissed off.” Noting that he was referring to his supervisor, the employee indicated the purpose of his post was to vent his frustrations.
Thereafter, the employee initiated a meeting with the bank’s branch manager, to seek constructive coaching. Although the branch manager indicated that he would consult his supervisor, several days later, the employee was called into a meeting with the bank manager, and several executives. During that meeting, a vice president first pulled out the second Facebook post, and asked whether it referred to a particular officer, which the employee denied. Then he retrieved the post about the customer, chastised the employee for posting that material, indicated that derogatory comments about customers were unacceptable, and thereafter, terminated the employee. Initially, a bank employee who was the employee’s Facebook friend had informed the branch manager about the posts, but there was a dispute as to whether copies of the posts were supplied by coworkers at the request of the employer, or on their own volition. In reviewing the charge, the NLRB’s Department of Advice concluded that the employee was not discharged for protected concerted activity, nor did the employee engage in unlawful surveillance of protected activity or create the impression of surveillance.
Noting that the employee’s conceded purpose in posting both comments was to vent his frustrations, the Division of Advice concluded those comments did not constitute protected concerted activity.
“Employer surveillance or creation of the impression of surveillance constitutes unlawful interference with Section 7 rights because employees should feel free to participate in protected activity ‘without the feat that members of management are peering over their shoulders[.] ‘An employer creates an impression of surveillance when ‘the employee would reasonably assume from the [employer’s statement that their [sic] union activities had been placed under surveillance,’”wrote the NLRB
First, there was not protected concerted activity to servile, the NLRB noted. However, if there had been, the employer did not engage in any unlawful surveillance, because it received the Facebook posts from the employee’s Facebook friends. Nor did the employer engage in the impression of surveillance because it would not disclose which coworker had turned over the posts. Noting that the employee had restricted his Facebook page to his “Friends,” he could not reasonably have concluded that his employer was directly monitoring his Facebook page, the NLRB concluded.
In a second case, a post on LinkedIn led to an employee’s discharge nearly a year later (Schulte, Roth & Zabel, Oct. 13, 2011). In this case, the Division of Advice ruled that the charge should be dismissed because the employee’s conduct did not constitute protected activity, contrary to his assertion that his LinkedIn posting was protected concerted activity.
In early 2010, an IT supervisor in the employees’ department sent the employee an invitation to join his LinkedIn professional network. The invitation, which identified the employer’s name, asked for a job title. In response, the employee, who thought only his supervisor would be privy to the response, wrote “f**tard.”
In February 2011, the employee was discussing a successful wage overtime suit with coworkers, which they analogized to their employer’s own overtime policy. However, none of the employee’s wanted to bring the possible conflict to management. Notwithstanding, the policy was rectified thereafter.
Several months later, while the employer was investigating setting up its own LinkedIn page, the employee’s post was discovered. After deciding that the post was a violation of the company’s electronic communication policy, the employer terminated the individual. In arguing that he was discharged for engaging in protected concerted activity of discussing overtime, the employee contended that the timing of the discharge was suspicious, because his post had been on LinkedIn for about a year, but his discharge occurred just two months after his protected activity. The Division of Advice rejected this position; however, noting that timing alone was insufficient to establish a prima facie case. While the General Counsel had the burden of proof of demonstrating knowledge and animus toward the protected activity, in this instance, there was no evidence that the employer was even aware that the activity took place, much less that any animus existed. Moreover, no one contended that the posting itself was a protected by Section 7, and therefore, the employer did not violate Section 8(a)(1) by dismissing the employee, the Division of Advice concluded.
Happy Days Are Here Again? Not for the NLRB
November 11th, 2011 | Matt Pavich | Add a Comment
As 2011 draws to a close, an observer could be forgiven for thinking that the worst was behind the National Labor Relations Act. After all, 2011 is the year in which the Board has been excoriated for daring to require employers to post notices of their employees’ rights, for attempting to make its election processes more efficient and for reversing some of the more controversial decisions of the Bush II Board. Over 20 bills have been introduced in the US House and Senate seeking to amend the NLRA to limit the Board’s powers and reach (one even goes so far as to propose eliminating the Board entirely) and at least four states have passed amendments allowing them to require secret ballot votes as the only path to union representation, territory that just happens to fall squarely within the Board’s exclusive jurisdiction. All in all, a tough year.
And that might not be the worst of it.
On December 31, 2011, the recess term of Member Craig Becker is due to expire. Becker, the former SEIU counsel, has been nominated for a full term, but only people interested in buying the Brooklyn Bridge would like his chances for confirmation. Thus, when his term ends, the Board will be down to two members, Chairman Mark Gaston Pearce and Republican Member Brian Hayes. Which means that unless Congress confirms either Becker, or Terence Flynn, on January 1, 2012, the Board will no longer be able to issue decisions, per the Supreme Court’s ruling in New Process Steel v. NLRB.
So, whither the Board? The last week has seen several hints as to how the Board might operate while it waits for the addition of a third Member.
On November 9, the Board published a notice in the Federal Register of an order it issued that contingently delegates full authority over court litigation matters that otherwise would require Board authorization to the general counsel, Lafe Solomon. In the order, the Board also delegates full authority to certify the results of any secret ballot election conducted under the national emergency provisions of the Labor Management Relations Act. The delegation will only go into effect when the Board has fewer than three members. This order is a key step to ensuring that the Board retains the power to seek 10(j) injunctions against employers and unions over unfair labor practices during any period in which the Board is unable to issue decisions.
In addition to its 10(j) injunctive relief powers, the Board also has delegated authority to initiate contempt proceedings pertaining to the enforcement of or compliance with any order of the Board, and to institute and conduct appeals to the Supreme Court by writ of error or on petition for certiorari. Additionally, the Board has delegated full and final authority to certify to the attorney general, on behalf of the Board, the results of any secret ballot elections held among employees on the question of whether they wish to accept the final offer of settlement made by their employer.
At the ABA’s Fifth Annual Labor and Employment Law Conference last week, Pearce also suggested that he and Hayes will take advantage of the inability to issue decisions to deal with pressing staffing issues. Seven more Regional Directors are expected to retire this year and Pearce said that he and Hayes will focus intensely on filling those roles. Pearce also said that although he and Hayes are precluded from issuing decisions, that does not mean that are precluded from contemplating the merits of any cases before them.
In a broadside leveled during the ABA Conference, Pearce also stated that it is “incumbent” upon Congress to ensure that the Board continues to operate. Referring to the Senate’s inability to confirm nominees due to Republican opposition, Pearce said that there are “decisions that should and ought to be made” to ensure that the nation’s labor landscape is not unduly affected.
He should be careful what he asks for. If the Board’s Congressional critics were savvier, they would confirm the nomination of Flynn in the hopes that he and Hayes would begin to operate as a de facto Republican-appointed Board. After all, the best way to change the direction of the Board is to dictate who is on it.
