In November, we attempted to look into the crystal ball to see what potential impact the new Trump administration could have on the Occupational Health and Safety Administration (OSHA). Here are some of results so far, which on the whole, are favorable to employers who suffered under the “regulation by shaming” mantra of past Assistant Secretary of Labor David Michaels.
Budget Cuts – As predicted, on May 5, President Trump signed a spending bill that cuts the labor department’s discretionary spending budget by $83 million. This could limit some of OSHA’s enforcement efforts.
Recordkeeping as a Continuing Violation – The Volks rule, which was enacted by OSHA last December as a last minute rule in response to a loss, suffered through an adverse decision in the federal courts. The new rule established that an employer has a continuing duty to create accurate records of work-related employee injuries and illnesses. This effectively changed the statute of limitations for recordkeeping violations from six months to five years and six months. On April 3, President Trump signed a joint congressional resolution under the Congressional Review Act that overturned this rule. The law is now back to the original intent of Congress that the statute of limitations for all OSHA citations is six months. This is a significant win for employers who can focus their time on current substantive safety issues instead of reviewing documents for accuracy from up to five years ago.
Union Representatives in OSHA Inspections of Non-union Facilities – As mentioned in the prior post, I predicted that interpretation letters could change with the new appointment of the secretary of labor. One of the most controversial of these letters was the 2013 Fairfax memo regarding walkaround rights during an OSHA inspection. The memo stated that during an OSHA inspection of a non-union facility, a union representative could be designated as the employees’ “personal representative” even without representation election or voluntary recognition of the union as the exclusive representative of the employees. This was being challenged in court and then OSHA rescinded the Fairfax memo and agreed to revise the Field Operations Manual (FOM) for its inspectors to reflect the same change on April 25, 2017. The lawsuit was then dismissed as moot since OSHA rescinded the controversial memo. The letter was viewed as an overstep by OSHA into the area of labor relations covered by the NLRB, since it appeared to be motivated by giving unions more access to non-union employers for organization efforts rather than to assist in a safety inspection. This is another win for employers.
So far, the progress has been good for employers. We will just have to wait and see how other issues develop, including the electronic recordkeeping rule and non-discrimination standard (which limits blanket post-accident drug tests), which is being challenged in two separate lawsuits, as well as the silica standard, which is being challenged in court. The DOL has to decide how strongly it will defend these rules in court which will have a significant impact on how the courts may rule. Stay tuned for updates.
The American Bar Association and AARP have partnered to bring you the book Get the Most Out of Retirement: Checklist for Happiness, Health, Purpose and Financial Security. As our population continues to age, more Americans are retiring. These Americans will need help with all the aspects of retirement. This book provides an easy step-by-step approach to making decisions that are tailored for this growing segment of the populace.
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Automated vehicle technology is accelerating, and regulators are racing to keep up. On June 28, 2017, the Federal Trade Commission and the National Highway Traffic Safety Administration (“NHTSA”) will hold a workshop to examine the consumer privacy and security issues posed by automated and connected vehicles. The workshop comes several months after the Department of Transportation and NHTSA promulgated a Notice of Proposed Rulemaking (“NPRM”) that would require all new passenger vehicles to be capable of vehicle-to-vehicle (“V2V”) communications by the early 2020s.
The FTC and NHTSA have raised several questions to be addressed at the workshop, including:
What data do vehicles with wireless interfaces collect, store, and transmit, and how is that data used and shared?
What are vehicle manufacturers’ privacy and security policies and how are those policies communicated to consumers?
What choices are consumers given about how their data is collected, stored, and used?
What are the roles of the FTC, NHTSA, and other federal agencies with regard to the privacy and security issues raised by connected vehicles?
What self-regulatory standards apply to privacy and security issues relating to connected vehicles?
Car manufacturers, tech organizations, privacy organizations, and other parties filed comments in advance of the workshop, responding to these questions and more:
The Association of Global Automakers, a group that includes Aston Martin, Ferrari, Honda, Toyota, and others, said that V2V and vehicle-to-infrastructure (“V2I”) communications do not present a significant privacy risk to individuals because they do not collect or store PII or information that can be linked to a particular vehicle. The organization stated that the method of communicating between cars—dedicated short range communications (“DSRC”)—“already has layers of security established into its design.” The group did acknowledge that privacy and security issues “may be exacerbated” by wireless-enabled aftermarket products connected to on-board diagnostics ports, and said that developers and third parties should therefore take appropriate steps to design and manufacture secure products.
CTIA praised the safety benefits that connected vehicle technologies could provide, highlighting how 5G network speed, capacity, and location can improve autonomous vehicle safety and efficiency. The wireless group spoke to both its sector’s experience in addressing data privacy and security across the Internet of Things, and urged the agencies to refrain from imposing vehicle-specific privacy or security regulations which “could be redundant to or conflict with existing privacy and data security protections enforced by the FTC and the Department of Homeland Security.” CTIA instead said the agencies should promote and expand industry-led initiatives like the NIST Cybersecurity Framework and self-regulatory principles like the auto industry privacy principles.
In contrast, EPIC said that “meaningful oversight and enforcement mechanisms” would be necessary to protect consumer privacy. In its discussion of federal policies, the organization stated that enforcement would “require a private right of action against companies who misuse and fail to secure personal information.” The organization also opposed the NPRM’s proposal to create a new Federal Motor Vehicle Safety Standard (“FMVSS”) which would preempt state regulations, arguing that historically, while the federal government has enacted privacy laws, more robust privacy legislation has been implemented at the state level.
The Future of Privacy Forum, which runs a Connected Cars Working Group whose members include Fiat Chrysler, Ford, General Motors, Hyundai, Lyft, Toyota, and Uber, urged the agencies to focus on transparency around consumer data use, including the provision of resources that are publicly available, accessible before purchase, and reviewable throughout the life of a vehicle as well as the incorporation of consumer privacy controls when appropriate. The group urged the agencies to encourage industry self-regulatory efforts, saying that they can be enforceable when companies publicly commit.
A federal appellate court ruled yesterday that a Muslim employee of Astoria Bank who was allegedly subjected to a “steady barrage” of shameful racist and anti-Muslim statements should be allowed to present her hostile work environment claim to a jury. Ahmed v Astoria Bank, No. 16-1389 (2d. Cir. May 9, 2017).
Among other things, a senior supervisor reportedly told the employee (Ahmed) to remove her hijab (a headscarf traditionally worn by Muslim women), which the supervisor referred to as a “rag.”
What is a “hostile work environment”?
To prove a hostile work environment claim, an employee must show that the underlying acts were severe or pervasive. A single act of severe harassment, such as a sexual assault, is actionable under Title VII of the Civil Rights Act. The acts, however, must be based the employee’s protected characteristic (for example, gender, race, national origin, religion, disability).
Petty slights and generally rude behavior will not rise to the level of an unlawful hostile work environment.
To determine whether harassment violates Title VII, courts consider the following factors:
- the frequency of the discriminatory conduct;
- its severity;
- whether it is physically threatening or humiliating, or a mere offensive utterance; and
- whether it unreasonably interferes with an employee’s work performance.
The employer may automatically be liable if a supervisor harasses an employee that causes an adverse action like termination, lost wages, or a suspension.
If a supervisor creates a hostile work environment for an employee, then the employer will escape liability only if it can prove:
- it reasonably tried to prevent and promptly correct the harassing behavior; and
- the employee unreasonably failed to take advantage of any preventive or corrective opportunities offered by the employer
If a non-supervisory employee harasses another employee, then the employer will be liable for the harassment if the employer knew, or should have known, about the hostile work environment and failed to promptly correct it.
Evidence supporting Ahmed’s hostile work environment claim
The Second Circuit Court of Appeals decision in Ahmed v. Astoria Bank overruled the District Court’s ruling that Ahmed had not produced sufficient evidence to establish a hostile work environment. The evidence in this case was “right on the knife’s edge of either granting [summary judgment] or allowing [the case] to go to the jury[,]” according to the Second Circuit Court of Appeals. It nonetheless found that the following alleged conduct by Ahmed’s supervisor was “severe or pervasive” enough for a jury to conclude that an “abusive working environment” existed:
- “constantly” telling Ahmed to remove her hijab, which he referred to as a “rag,”
- demeaning Ahmed’s race, ethnicity, and religion “[o]n several occasions,” and
- making a comment during Ahmed’s interview on September 11, 2013 that Ahmed and two other Muslim employees were “suspicious” and that he was thankful he was “in the other side of the building in case you guys do anything.”
The case will now return to the federal district court for a jury trial on the hostile work environment claim.
Remedies available in hostile work environment claims
A variety of potential remedies will be available under Title VII of the 1964 Civil Rights Act if you win your hostile work environment case.
Assuming that your case is an individual, Title VII case against a private company, then a court may award you any combination of the following remedies:Compensatory damages, including emotional distress damages, as well as out of pocket expenses for job searches, medical expenses, etc.;
- Back pay;
- Punitive damages; and/or
- Attorney’s fees, expert witness fees, and litigation costs
Other remedies may be available in hostile work environment cases against the federal, state, or local government, as well as cases under different anti-discrimination laws.
A company can recover damages from its former employee in connection with his hacking into its payroll system to inflate his pay, accessing its proprietary files without authorization and hijacking its website, a federal court ruled. Tyan, Inc. v. Yovan Garcia, Case No. CV 15-05443- MWF (JPRx) (C.D. Cali. May 2, 2017).
The Defendant worked as a patrol officer for a security company. The company noticed that its payroll system indicated that the Defendant was working substantial overtime hours that were inconsistent with his scheduled hours. Upon further investigation, the company learned that that the Defendant accessed the payroll system without authorization from the laptop in his patrol car. When the company confronted him, the Defendant claimed a competitor hacked the payroll system as a means to pay him to keep quiet about his discovery that the competitor had taken confidential information from the company. A few months later, shortly after the Defendant left the company, the company’s computer system was hacked and its website was hijacked. The company later filed suit against the Defendant alleging he was responsible for the hack and the hijacking.
Following a bench trial, the court concluded the Defendant had used an administrative password the company had not given him to inflate his hours in its payroll system. The court also found the Defendant hijacked the company’s website and posted an unflattering image of the company’s owner on the website. In addition, the court found the Defendant engaged in a conspiracy to steal confidential files from the company’s computer system by accessing it remotely without authorization and destroyed some of the company’s computer files and servers.
The court concluded that the aim of the conspiracy in which the Defendant was engaged was twofold: first, to damage his former employer in an effort to reduce its competitive advantage; and second, to obtain access to those files that gave his former employer its business advantage, and use them to solicit its clients on behalf of a company he started. The court also found that by accessing the company’s protected network to artificially inflate his hours and by participating in the conspiracy to hack the company’s systems, the Defendant was liable for violations of the Computer Fraud Abuse Act, the Stored Communications Act, the California Computer Data Access and Fraud Act, and the California Uniform Trade Secrets Act.
As a result of Defendant’s misconduct, the court awarded the company $318,661.70 in actual damages, including damages for the inflated wages the company paid the Defendant, the cost of consultant services to repair the damage from the hack, increased payroll costs for time spent by employees rebuilding records and databases destroyed in the hack, the resale value of the company’s proprietary files, and lost profits caused by the hack. The court declined to award punitive damages under the California Uniform Trade Secrets Act, but left open the possibility that the Plaintiff may recover its attorneys’ fees at a later date.
Companies are reminded that malicious insiders, in particular disgruntled former employees, with access to areas of the system external hackers generally can’t easily access, often result in the most costly data breaches.
Steps should be taken to mitigate insider threats including:
- Limiting remote access to company systems
- Increased monitoring of company systems following a negative workplace event such as the departure of a disgruntled employee
- Changing passwords and deactivating accounts during the termination process
The National Law Review is one of the highest volume online-legal publications in the country. Founded in 1888, the National Law Review revolutionize publishing and this cutting-edge tradition continues today. We’re looking for an executive assistant project coordinator and a web content specialist to join our team. Below is a brief summary of the positions. For more information and to apply, go to the career page on our website.
Executive Assistant Project Coordinator (part-time – Western Springs, IL – partially remote)
The National Law Review publishes articles and regulatory alerts from the nation’s premier law firms, law schools, regulatory agencies and professional associations and we also cross promote several legal and other professional events per month. We are one of the highest volume legal websites in the United States and we are looking for an office coordinator to help keep all the things we have going on moving forward and to provide exceptional client-focused and proactive service for both internal and external clients.
- We work with very large law firms so you must have an incredible eye for detail and be a consummate professional.
- We’re a website – so excellent computer skills are non-negotiable. Need demonstrable proficiency in Word, Excel, PowerPoint, Microsoft Office 365, Google Drive, Quick Books and Constant Contact and a CRM system. You MUST have these skills coming in the door and have used them recently.
- Strong organizational skills, self-motivation, resourcefulness and a positive, can-do attitude. Wonderful communication skills, both written and oral with both team members and clients.
- Capacity to manage multiple concurrent projects and work well under pressure, adapt quickly, to changing requests, have pride in your work and get along with others.
Web Content Specialist (part-time – Western Springs, IL – mostly remote)
The National Law Review publishes articles and regulatory alerts from the nation’s premier law firms, law schools, regulatory agencies and professional associations and we also cross promote several legal and other professional events per month. We are one of the highest volume legal websites in the United States and we are looking for an additional publication specialist who will format, classify and upload articles, videos and events, relating to business legal news. We publish around the clock, so we have flexibility in scheduling but require a minimum of a three day a week commitment.
Duties and Responsibilities:
- Upload, format and classify legal news articles, videos and events and create new author profiles as needed.
- Develop and send daily subject area email newsletters.
- Maintain and update contacts in bulk email system.
- Work with other team members to further develop website and add additional features and content to website.
- Other duties as may be assigned.
Last month, the New York City Council approved legislation that bars employers from asking prospective hires to disclose their past salary. In passing the measure, New York City joins Massachusetts (see our post here), Puerto Rico and the city of Philadelphia in banning the question from job interviews and on applications. (Also see our post here regarding a recent Ninth Circuit decision addressing pay history.) The law, known as Introduction 1253-A, makes it illegal for any employer or employment agency in New York City to ask about an applicant’s salary history, including benefits, or search any publicly available records to obtain any such information. The measure, aimed at tackling pay inequity, is intended to stop perpetuating any discrimination that women or people of color may have faced in the past and to end wage disparities between men and women. A study released earlier this month by the National Partnership for Women & Families, a Washington, DC-based advocacy group, shows that women in New York State earn 89 cents for every dollar that men are paid. The pay gap is wider among minority women, the study found. African American women in New York earn 66 cents for every dollar paid to non-Hispanic white men. Latina women earn 56 cents for every dollar.
The measure only applies to new hires, not to internal job candidates applying for a transfer or promotion given that their salary information may already be on file. It also excludes public employees whose salaries are determined by collective bargaining agreements. There are certain exceptions built into the bill whereby employers can consider salary history, including the hiring of internal candidates for different positions, workers who are covered by a collective bargaining agreement or employees who voluntarily give their salary history during an interview.
New York City Public Advocate Letitia James, who co-sponsored the bill last year, said the primary focus of the bill is to promote greater transparency in the hiring process. Although it doesn’t require employers to do so, James said the bill suggests to businesses that they post salaries for jobs instead of relying on workers’ past salary.
The City’s Commission on Human Rights will investigate and enforce the measure, imposing a civil penalty of no more than $125 for an unintentional violation or up to $250,000 for an intentional malicious violation. Those figures are in line with other forms of discrimination — including race, disability and sexual orientation bias — for which the commission issues fines.
Fatima Goss Graves, president-elect of the National Women’s Law Center, said in an email that the measure “stands to transform the way that companies operate around the country,” she said. “So many companies operate in multiple jurisdictions. If a company changes its practices in New York, it is likely to also make changes around the country.” I think what we’ll see is companies that do business in New York City just eliminate that from their applications entirely,” she said. “This will have wide-ranging influence.” Meanwhile, nearly 20 states, the District of Columbia and two cities (San Francisco and Pittsburgh) have introduced legislation that includes a provision against salary history information, according to data from the NWLC.
The new legislation is expected to go into effect later this year, or 180 days after Mayor de Blasio signs the bill. Employers in New York City need to review their applications and standard job questions to ensure they remove any questions about past salaries.
On April 29, a Special European Council, meeting as 27 member states (as opposed to the full 28 member states, as would usually be present), adopted the Article 50 guidelines (Guidelines) to formally define the EU’s position in Brexit negotiations with the United Kingdom. This follows the resolution of the European Parliament on key principles and conditions for the negotiations, adopted on April 5 (for further information, see the April 7 issue of Corporate & Financial Weekly Digest).
The Guidelines are set out under six headings covering:
- core principles;
- a phased approach to the negotiations;
- agreement on arrangements for an orderly withdrawal;
- preliminary and preparatory discussions on a framework for the EU-UK future relationship;
- the principle of sincere cooperation; and
- the procedural arrangements for negotiations under Article 50.
On May 22, the EU General Affairs Council is expected to authorize the opening of the negotiations, nominate the European Commission as the EU negotiator and adopt negotiating directives.
The Guidelines are available here.
Employers victimized by trade secret misappropriation appropriately express righteous outrage, both at the offending ex-employee and sometimes at the new employer. However, on another day the roles can reverse: That same employer may unwittingly — or worse, intentionally — have hired someone who has stolen trade secrets or confidential information. Failure to take appropriate precautions or implement sufficient remedial measures can expose the hiring employer to a variety of civil, and even potentially criminal, claims. Burying your head in the sand is not a winning strategy, especially given how easy technology has made it to copy and take confidential information.
The following tips can eliminate or minimize this risk and/or mitigate the consequences of having hired an individual who has misappropriated trade secrets. Prospective prevention steps include:
asking all potential hires if they are subject to a non-compete or restrictive covenant that could impact their duties in the proposed position, and potentially restructuring their job duties or whom they interact with, depending upon the circumstances;
reminding new hires, preferably in writing, that they are not to take, disclose, or use another company’s confidential and proprietary information — this should occur before they leave their current employer and before they start with you; and
educating employees, and especially hiring managers, on the company’s policy to respect the trade secrets rights of others.
What if despite these preventative measures, you discover that a new hire, who is now on your payroll, has taken the confidential information of a prior employer? The following steps can help mitigate the consequences to your company in such a circumstance.
Act immediately to preclude the use or disclosure of the information, including the quarantining of such information. Work with your information technology department or outside consultants to ensure that the steps you take are thorough and effective.
Investigate and assess what happened, the sensitivity of the information taken, and the culpability of the employee and others, especially when the matter involves a high-level employee, and consider retaining an attorney to conduct the investigation, to foster independence and obtain the benefits of attorney-client privilege.
Discipline or terminate the offending employee, depending on the circumstances.
Generally cooperate with the previous employer when confronted. Such cooperation could include anything from information sharing to a computer forensic review and agreed-upon deletion; this cooperation must be carefully managed to protect your trade secrets and bring closure to the situation.
All of this can be tremendously complex, nuanced, and important. Therefore, carefully consider each action and involve a multidisciplinary team, including Management, Human Resources, Information Technology and, Legal.
© 2017 Foley & Lardner LLP