Category: Labor & Employment

United Airlines to Pay over $1 Million To Settle EEOC Disability Lawsuit

In a case that garnered nationwide attention, air transportation giant United Airlines Inc. has agreed to pay more than $1 million and implement changes to settle a federal disability lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.U.S. Equal Employment Opportunity Commission Seal

The EEOC’s lawsuit charged that United’s competitive transfer policy violated the Americans with Disabilities Act (ADA). The law requires an employer to provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would impose an undue hardship for the employer. By requiring workers with disabilities to compete for vacant positions for which they were qualified and which they needed in order to continue working, the company’s practice frequently prevented employees with disabilities from continuing employment with United, the EEOC said.

The consent decree settling the suit, signed by Hon. Judge Harry Leinenweber and entered today, requires United to pay $1,000,040 to a small class of former United employees with disabilities and to make changes nationally. United will revise its ADA reassignment policy, train employees with supervisory or human resource responsibilities regarding the policy changes, and provide reports to the EEOC regarding disabled employees who were denied a position as part of the ADA reassignment process.

This resolution concludes a lengthy and complicated lawsuit. Although the EEOC originally filed the lawsuit on June 3, 2009 in U.S. District Court for the Northern District of California – San Francisco, United successfully moved for a change of venue to the Northern District of Illinois. Bound by an earlier precedent which held that a competitive transfer policy similar to United’s policy did not violate the ADA, the lower court dismissed the EEOC’s case in February 2011.  However, in a decision reviewed by the full court, the Seventh Circuit agreed with the EEOC that EEOC v. Humiston Keeling, 227 F.3d 1024 (7th Cir. 2000) “did not survive” an intervening Supreme Court decision, U.S. Airways v. Barnett, 535 U.S. 391 (2002).  The Seventh Circuit reversed the lower court’s dismissal and found that “the ADA does indeed mandate that an employer assign employees with disabilities to vacant positions for which they are qualified, provided that such accommodations would be ordinarily reasonable and would not present an undue hardship to the employer.” The Supreme Court refused United’s subsequent request for review on May 28, 2013. EEOC Appellate Attorney Barbara Sloan handled the appeal and Supreme Court briefing for the agency.

“The appellate court’s decision provided an important clarification regarding an employer’s responsibility under the ADA to provide a reasonable accommodation so qualified employees may lead economically independent lives,” said EEOC General Counsel David Lopez. “I am pleased this major decision also served as a springboard for the strong monetary and non-monetary remedies in today’s resolution.”

EEOC Regional Attorney William Tamayo said, “If a disability prevents an employee from returning to work in his or her current position, an employer must consider reassignment. As the Seventh Circuit’s decision highlights, requiring the employee to compete for positions falls short of the ADA’s requirements. Employers should take note: When all other accommodations fail, consider whether your employee can fill a vacant position for which he or she is qualified.”

EEOC San Francisco Acting District Director Michael Connolly noted, “We commend United for agreeing to make these important companywide changes that will enable employees with disabilities to stay employed at jobs they are qualified to do, as was intended under the ADA’s protections.”

According to the company website, United Airlines has almost 84,000 employees in every U.S. state and in many countries around the world. The air carrier has the world’s most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York / Newark, San Francisco and Washington, D.C. and operates an average of nearly 5,000 flights a day to 373 airports across six continents.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

ARTICLE BY U.S. Equal Employment Opportunity Commission
© Copyright U.S. Equal Employment Opportunity Commission

New York City Council Passes Ban-the-Box Legislation

Joining many other jurisdictions, the New York City Council has passed the Fair Chance Act, an ordinance restricting when employer inquiries about applicants’ criminal histories may be made during the application process and imposing significant obligations on employers who intend to take action based on such information.

The Council passed the ordinance on June 10, 2015. The ordinance will become effective 120 days after receiving Mayor Bill de Blasio’s signature, which is expected shortly, as the Mayor has expressed support for the legislation.

Like other ban-the-box laws, the ordinance generally prohibits an employer with at least four employees from making an inquiry about an applicant’s pending arrest or criminal conviction record until after a conditional offer of employment has been extended. Limited exceptions are provided.

Under the ordinance’s definition of inquiry, employers are prohibited not only from asking an applicant prohibited questions — verbally or in writing — but also are prohibited from searching publicly available sources to obtain information about an applicant’s criminal history.

Exceptions

The main exception applies when an employer, under applicable federal, state, or local law, is required to conduct criminal background checks for employment purposes or to bar employment in a particular position based on criminal history.

Other exceptions remove prospective police officers, peace officers, and law enforcement agency and other law-enforcement-related employees from coverage. Therefore, these are unlikely to affect positions and employers in the private sector.

Notification Process

Employers who make inquiries into an applicant’s criminal history after a conditional offer of employment has been extended and determine that the information warrants an adverse employment action must follow a rigorous process. Specifically, employers must:

  1. Provide the applicant with a “written copy of the inquiry” which complies with the City’s Commission on Human Right’s required (but not-yet-issued) format;

  2. Perform the analysis required by Article 23(a) of the New York Correction Law, “Licensure and Employment of Persons Previously Convicted of One or More Criminal Offenses”;

  3. Provide the applicant with a copy of its analysis, also in a manner which complies with the Commission’s required format, which includes supporting documents and an explanation of the employer’s decision to take an adverse employment action; and

  4. Allow the applicant at least three business days to respond to the written analysis by holding the position open during this time.

Of course, for employers who conduct background checks through consumer reporting agencies, if such information is obtained from a background check, the above process must be integrated with the Fair Credit Reporting Act (FCRA) pre-adverse action requirements.

Supporters view the ordinance as ending discrimination against applicants with low-level arrests and providing assurance that applicants will be considered solely based on their qualifications. Critics see the ordinance as adding to the already-onerous mandates imposed on employers in New York City by favoring ideology over practicality, sending a bad message to employers doing business — or desiring to do business — in New York City.

The one undeniable fact is that all covered New York City employers must develop measures to ensure compliance with the ordinance.

ARTICLE BY Richard Greenberg, Daniel J. Jacobs, Susan M. Corcoran, Christopher M. Valentino & Ellen Bandel of Jackson Lewis P.C.
Jackson Lewis P.C. © 2015

Proposed Labor Violation Reporting Rules Target Government Contractors

Proposal makes agency allegations of employment law violations reportable events that could result in denial of federal contracts or termination of existing contracts.

Executive Order 13673 (the Order), signed by US President Barack Obama in July 2014, imposed three new requirements addressing the labor and employment practices of federal contractors and subcontractors: (1) an obligation to report employment law violations, which would be used by contracting officers to determine whether to award a new federal contract or terminate an existing contract; (2) a requirement to provide notices to workers about their Fair Labor Standards Act (FLSA) exemption or independent contractor status; and (3) a requirement that federal contractors agree that claims arising under Title VII or any tort related to or arising out of sexual assault or harassment by their employees and independent contractors will not be arbitrated without the voluntary postdispute consent of an employee or independent contractor, with certain limited exceptions.

E.O. 13673 directed the Federal Acquisition Regulatory Council (FAR Council)—which consists of the Administrator for Federal Procurement Policy, the Secretary of Defense, the Administrator of National Aeronautics and Space, and the Administrator of General Services—to publish implementing regulations through the Federal Acquisition Regulation (FAR) system. The Order also directed the Department of Labor (DOL) to publish guidelines that address transactions deemed to be reportable employment law violations, as well as how contracting officials should use such reported information to determine whether to award a federal contract (or terminate an existing contract). The Order, while effective upon issuance, expressly applies to all solicitations for contracts only as set forth in any final rule issued by the FAR Council.

On May 28, 2015, the FAR Council published a Notice of Proposed Rulemaking implementing E.O 13673.[1] On the same day, the DOL published proposed guidance.[2] The proposed rule and guidelines contain many potentially alarming provisions for employers seeking federal contracts, some of which appear to violate contractors’ due process and Fourth Amendment rights. If adopted, the proposals would impose administrative burdens on contractors, increase the complexity of obtaining and keeping federal contracts, and likely lead to an increase in bid protests and litigation.

The proposals offer employers a 60-day period to submit comments in opposition to these provisions. We strongly encourage employers that have or may seek federal contracts to take advantage of this comment opportunity. If you are interested in sponsoring comments, please contact us in the near future; the period for filing comments only runs through July 27, 2015.

Proposed Implementation of the Employment Violation Reporting Obligations

E.O. 13673 requires employers who are prospective awardees of federal contracts to report certain labor law violations that occurred within the prior three years. Awardees of federal contracts must submit reports of labor law violations every six months during the performance of the contract. The reportable violations include “administrative merits determinations,” “arbitral awards or decisions,” and “civil judgments” involving claims or enforcement actions under many federal employment laws.[3]

The proposed guidelines define “administrative merits determinations” by reference to the specific types of determinations made by a federal enforcement agency, such as the Wage and Hour Division (WHD), Office of Federal Contract Compliance Programs (OFCCP), Occupational Safety and Health Administration (OSHA), Equal Employment Opportunity Commission (EEOC), and National Labor Relations Board (NLRB). Reportable determinations also include, broadly, complaints that a federal enforcement agency files and administrative orders issued through agency adjudication. However, complaints that private parties file with enforcement agencies or in court alleging employment law violations would not trigger a reporting obligation.

Under the proposed guidance, “administrative merits determinations are not limited to notices and findings issued following adversarial or adjudicative proceedings such as a hearing, nor are they limited to notices and findings that are final and unappealable.” Thus, contractors will be required to report mere agency allegations, such as OSHA citations, WHD investigation finding letters, OFCCP show cause notices, EEOC reasonable cause determinations, and NLRB complaints. These disclosures are required even if a contractor is challenging an allegation through formal proceedings. If, at the time of the required reporting, the enforcement agency allegation is withdrawn or reversed in its entirety through additional proceedings in the matter, then there is no reporting obligation.

The DOL will publish additional proposed guidelines that address administrative determinations that state enforcement agencies make under laws that DOL deems to be equivalent to the above-referenced federal laws.

The proposed DOL guidelines define “civil judgments” as any judgment or order entered by any federal or state court in which the court determined that an employer violated any provision of the above-referenced employment laws or enjoined the employer from committing a violation. Civil judgments include orders or judgments that are not final and are appealable, and the employer must report such judgments even if an appeal is pending. Consent judgments are subject to the reporting obligation if they contain a determination that an employment violation occurred or enjoin the employer from violating any provision of the employment laws. However, a private lawsuit that a court dismissed without a judgment would not be a reportable event.

The proposed DOL guidelines define “arbitral awards and decisions” as any award or order by an arbitrator or arbitral panel in which the arbitrator or panel determined that an employer violated any provision of the above-referenced employment laws or enjoined the employer from committing a violation. Arbitral awards include awards and orders that are not final and are appealable, and the employer must report such judgments even if an appeal is pending. Arbitral awards and orders must be reported even if they are subject to a confidentiality agreement.

Under the proposed DOL guidelines, the same alleged violation may trigger several successive reporting obligations. Each transaction must be reported even if the same alleged violation was the basis for a prior report. For example, where an initial agency allegation was reported, the same allegation must later be reported if it is sustained through an administrative order, and must be reported yet again if a federal court affirms it in a review action. However, if the initial reported transaction is reversed or vacated in its entirety through later proceedings, there is no obligation to continue to report the initial transaction in any future contract bid.

The proposed FAR regulations simply incorporate the DOL guidelines by reference and do not modify or expand on the definitions regarding reportable events.

Mechanics of the Contracting Process Under the Proposed FAR Rule

Prior to awarding a government contract, a contracting officer is required to make an affirmative responsibility determination that includes a determination that the apparent successful offeror or bidder has a satisfactory record of integrity and business ethics. The proposed rule requires that the contracting officer consider a prospective contractor’s labor violations in determining whether that contractor has a satisfactory record of integrity and business ethics. Under the proposed FAR rule, all employers bidding on a federal contract would initially provide a representation that there have been or have not been reportable employment law violations. Thereafter, once the contracting officer has initiated a responsibility determination for the prospective contractor, if the employer has indicated covered employment law violations, that employer would be required to enter detailed information describing the violations in the System for Award Management (SAM), including (1) the employment law that was allegedly violated; (2) the relevant matter or case number; (3) the date that the determination, judgment, award, or decision was rendered; and (4) the name of the court, arbitrator(s), or agency that rendered the decision. Further, the contracting officer would be required to solicit from the employer additional information that the prospective contractor views as necessary to establish affirmatively its responsibility, such as mitigating circumstances; remedial measures, including labor compliance agreements; and other steps taken to comply with labor laws.

The contracting officer would review the data provided, and, in consultation with agency Labor Contract Advisors, would determine whether the employer is a responsible source eligible to receive the federal contract. The proposals contemplate that most entities would not be deemed nonresponsible, but instead would be required to agree to a “labor compliance agreement” as a condition of award of the federal contract. The proposals provide little discussion or framework for labor compliance agreements, apparently vesting broad authority in enforcement agencies, the DOL, agency Labor Contract Advisors, and contracting officers to develop, negotiate, and monitor such agreements. Employers should pay particular attention to these proposals because they would place powers in the hands of federal regulators to extract extra-legal “remedial actions” by leveraging an award or continuation of federal contracts. The outlook for those prospective offerors found nonresponsible is equally grim; the likelihood of successfully challenging contracting officer responsibility determinations in the procurement process is very low given the high level of deference accorded such determinations by both the Government Accountability Office (GAO) and the Court of Federal Claims (COFC). Moreover, because the proposed regulation’s definition of “administrative merits determinations” effectively includes notices or findings that amount to little more than alleged violations, it is unclear whether GAO or the COFC could readily find a determination of nonresponsibility to be without a rational basis, even if that decision was predicated on alleged violations that, after contract award, may not be proven.

Post-Award Implications of Labor Violations

Employers awarded contracts would be required to enter current information regarding labor violations in SAM on a semi-annual basis. If, based on this information, the Labor Contract Advisor determines that further consideration or action is warranted… click to continue reading Proposed Labor Violation Reporting Rules Target Government Contractors

ARTICLE BY

William E. Doyle, Jr. & E. Ruscus of Morgan, Lewis & Bockius LLP
Copyright © 2015 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

WTF? NLRB’s OK with “Cut the Crap?” – Protected Speech Under the NLRA

The National Labor Relations Board (NLRB) has yet again undercut employers’ efforts to limit profane and vulgar language by workers finding vulgar buttons and stickers to be protected speech under the National Labor Relations Act (NLRA).

NLRB

In Pacific Bell Telephone Company and Nevada Bell Telephone Company d/b/a AT&T and Communication Workers of America, Case # 20–CA–080400, the board ruled that the two companies violated the NLRA when they attempted to block workers from wearing buttons and stickers containing the phrase “Cut the Crap” and the abbreviation “WTF.”

The buttons and stickers read “WTF Where’s the Fairness,” “FTW Fight to Win” and “Cut the Crap! Not My Healthcare.” In overturning an administrative law judge’s (ALJ) prior ruling and holding 2-1 that the buttons and stickers were protected speech, the board majority found the language not to be so profane as to lose protection of the Act, particularly where the “WTF” and “FTW” buttons and stickers “provided a nonprofane, nonoffensive interpretation on their face.”

The board’s final order in the case barred the two companies from maintaining and enforcing an overbroad rule which banned these employees from wearing the union-provided pins and stickers. The companies were further ordered to cease and desist from refusing to let employees work unless they removed this union insignia.

The case is the latest in a series of cases in which the board is making it very clear that a wide variety of foul, vulgar and otherwise offensive language remains protected speech and does not lose its protection under the Act when the language is used in the context of concerted activity. In the Plaza Auto Center, Inc., Hooters, and Starbucks cases, the Board also condoned extremely offensive language and overturned decisions to terminate employees.

Employers who are considering discipline or termination of employees for foul, vulgar and/or offensive language must step carefully given this series of decisions. You must first make certain that the language used could not be considered to have been part of a discussion or interchange with the employee that could be viewed as concerted activity.

ARTICLE BY Gerald F. Lutkus of Barnes & Thornburg LLP
© 2015 BARNES & THORNBURG LLP

U.S. Supreme Court: Request for Religious Accommodation Not Necessary to Trigger Discrimination Liability

The U.S. Supreme Court decided the widely publicized case filed by the Equal Employment Opportunity Commission (EEOC) against Abercrombie & Fitch (Abercrombie), in which a Muslim female applicant who wore a headscarf was denied employment with Abercrombie based on the company’s dress code policy. EEOC v. Abercrombie & Fitch, U.S. Supreme Court, No.14-86 (June 1, 2015).

Samantha Elauf, a practicing Muslim, applied for employment with Abercrombie. She came to the interview wearing a headscarf. The assistant store manager rated Elauf as qualified for the position, but expressed concern to her superiors that Elauf’s headscarf would violate Abercrombie’s Look Policy, which prohibits the wearing of “caps.” The term “caps” is not defined in the policy. The assistant manager also informed her superiors that she believed Elauf’s headscarf was worn pursuant to her religion. The district manager directed that Elauf be denied employment, because the headscarf would violate the Look Policy, just as any other headgear would, whether worn for religious reasons or not.

The EEOC filed suit against Abercrombie. The district court entered judgment in favor of Elauf, and a trial on damages resulted in a $20,000 award to Elauf. Abercrombie appealed to the Tenth Circuit, which reversed the district court and entered summary judgment in favor of Abercrombie. Elauf appealed to the U.S. Supreme Court.

Title VII makes it unlawful for an employer to deny employment to an applicant because the employer desires to avoid extending reasonable accommodation based on the applicant’s religious beliefs. In this case, Abercrombie argued that this prohibition applies only when the applicant requests a religious accommodation or otherwise notifies the employer of the need for an accommodation. In this case, Elauf did not at any time make a request for reasonable accommodation, and therefore, argued Abercrombie, she cannot prove that Abercrombie had knowledge of the need for accommodation, which should be a prerequisite to proving religious discrimination.

The Supreme Court disagreed. The Court held that an applicant or employee need not necessarily show that the employer had actual knowledge of the need for an accommodation, only that the need for an accommodation was a “motivating factor” in the employment decision. The Court drew a distinction between the statutory language of the Americans with Disabilities Act’s accommodation provisions, which discusses an employer’s obligations with respect to “known physical or mental limitations” (emphasis added), and with the language of Title VII’s religious accommodation provision, which is silent on the knowledge requirement. According to the Court, the rule for a failure to accommodate claim under Title VII’s religious discrimination provision is “straightforward”: an employer may not consider an applicant’s religious practice, confirmed or otherwise, as a factor in employment decisions. The Court’s opinion offers an example of an employer who assumes that an orthodox Jew who applies for employment will need Saturdays off for the Sabbath. If the employer acts on this assumption and denies the applicant employment because of it, Title VII would be violated, regardless of whether the applicant ever make a request for Saturdays off or otherwise stated a request for accommodation.

While the Court noted that an employee’s request for religious accommodation may make it easier to prove it was a motivating factor in the employer’s decision, it is not a necessary component to the claim. Thus, the Supreme Court reversed the Tenth Circuit’s decision awarding summary judgment to Abercrombie, despite the fact that Elauf never made a request for an accommodation.

Speculation About Accommodation May Be Enough

This decision has potentially far reaching effects. The Supreme Court has made clear that an individual need not use specific words or terminology relating to the need for religious accommodation, or even make a request at all, in order for liability for failure to accommodate to arise. Whether the need for accommodation is actually known, or merely speculated, assumed, or otherwise factored into an adverse employment decision, liability can arise — even if the need has not been expressed or substantiated at the time of the employment decision.

ARTICLE BY Julie Furer Stahr of Schiff Hardin LLP
© 2015 Schiff Hardin LLP

Employer’s Use of DNA Test to Catch Employee Engaging in Inappropriate Workplace Behavior Violates Federal Law

If someone continually, yet anonymously, defecated on the floor of your workplace, you’d probably want to use any and all legal means at your disposal to identify and discipline the perpetrator.  Your methods might include surveillance or perhaps some form of forensic or other testing to link the offensive conduct to a specific individual.  You would probably not be overly concerned that your efforts to rid the workplace of this malefactor might give rise to a discrimination claim, but is that really a safe assumption?

Background

In a case exemplifying the gentility of labor-management relations, a Georgia federal court grappled with how far an employer may go in this situation.  In Lowe v. Atlas Logistics Group Retail Services, LLC, (N.D.Ga. May 5, 2015), the employer, Atlas Logistics Group Retail Services (Atlanta), LLC, which provides long-haul transportation and storage services for the grocery industry, discovered in 2012 that one or more employees had been using a common area in one of its warehouses as a lavatory.  As part of its investigation into this matter, the company retained the services of a DNA testing lab and requested cheek swabs from two employees it considered suspects so that it could compare their DNA with that of the mystery defecator.  After Atlas determined that neither employee was responsible for the unwelcome contributions to its workplace, the employees filed a lawsuit alleging that the company violated the Genetic Information Nondiscrimination Act (GINA) by requesting and requiring them to provide genetic information.

GINA prohibits discrimination on the basis of genetic characteristics and makes it unlawful for an employer to request, require or purchase genetic information with respect to an employee.

The Court Finds Atlas Violated GINA

The court held that Atlas’ argument that GINA only prohibited genetic testing that revealed an individual’s propensity for disease – which the test in this case did not do – was inconsistent with the statute’s text and legislative history as well as the applicable EEOC regulation.  In the court’s view, this argument “render[ed] other language in GINA superfluous.”  In particular, the court noted that the statute contained specific exceptions permitting certain testing that did not involve an individual’s propensity for disease, and if testing revealing a propensity for disease were the only prohibited testing, then those exceptions would not have been necessary.  The court further rejected Atlas’ argument that GINA’s legislative history demonstrated an intent to limit violations to testing that revealed a propensity for disease, explaining that although a group of senators favored this interpretation during the legislative debate, all of the evidence indicated that Congress chose to reject this view in favor of a broad construction.  Finally, the court held that an EEOC regulation listing eight examples of “genetic tests” did not support Atlas’ narrow definition of that term because the list included testing that also did not relate to one’s propensity for disease and, therefore, “would go beyond the scope of the statute” if the law were as narrow as Atlas claimed.

Conclusion

This case’s distasteful facts, which will undoubtedly remind many human resource specialists how coarse employee relations challenges often are in practice, should not distract employers that currently perform DNA tests from the fact that GINA may apply more broadly than some initially believed.  Although the decision should not have a significant impact on the narrow range of situations where workplace DNA testing is a legitimate practice, such as those involving health and safety concerns, it should serve as notice to employers investigating misconduct that they should find methods other than DNA testing to identify culpable employees.

ARTICLE BY George M. Patterson of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
©1994-2015 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Supreme Court Calls Out the EEOC for Arguing It Alone Can Determine Whether It Followed the Law

We suggested last year that if you felt paranoid that the federal agencies seemed out to get employers, perhaps it was not paranoia at all. The Equal Employment Opportunity Commission’s (EEOC) spate of recent lawsuits — or at least its apparent haste to sue employers and make examples out of them over such things as wellness programs (even before issuing proposed guidance on what was permissible relative to such well-intentioned programs) — clearly did not help with this concern. However, a decision by the Supreme Court last week tightened the reins on the EEOC and reminded it that, in seeking to pursue litigation against employers for violations of law, the Commission must follow the law itself and answer to claims that it has failed to do so.

Pursuant to Title VII, the EEOC must attempt to eliminate unlawful employment practices through “informal methods of conference, conciliation, and persuasion” before suing an employer for employment discrimination. Employers may feel this does not always happen because the EEOC has lately seemed more intent on filing suit (and getting press attention for its agenda…) than working things out. Consequently, employers assert they receive insufficient information from the EEOC and are forced to make a decision on a take-it-or-leave-it basis which, if wrong, can have costly consequences. The Commission has stood firm on its use of federal muscle by asserting the courts cannot review whether it has fulfilled its pre-suit conciliation obligation; only the EEOC can review whether the EEOC can do what the EEOC is supposed to do (which seems imminently fair, right?). The Supreme Court has just said otherwise.

The case arose from litigation filed by the EEOC in 2011 on behalf of a class of female applicants not hired by the employer as miners. The employer raised as a defense the argument that the EEOC had failed to conciliate in good faith prior to filing suit, based on two letters sent by the Commission. The first informed the employer that a finding of reasonable cause had been made and “[a] representative of this office will be in contact with each party in the near future to begin the conciliation process.” The second letter declared that conciliation had “occurred” and failed, though it appears that the EEOC’s actual conciliation efforts were thin at best.

The EEOC argued that its conciliation efforts were immune from court review and that, if the courts had the power to review such efforts, it could only review its actions based on the two letters. In response, the court noted the obvious point that without court review, “the Commission’s compliance with the law would rest in the Commission’s hands alone.” Justice Elena Kagan, writing for the court, also rejected the EEOC’s second argument, stating that “[c]ontrary to its intimation, those letters do not themselves fulfill the conciliation condition: The first declares only that the process will start soon, and the second only that it has concluded. . . . to treat the letters as sufficient — to take them at face value, as the Government wants — is simply to accept the EEOC’s say-so that it complied with the law.”

The court then instructed the EEOC on what it must do to follow Title VII: 1) give the employer notice of the “specific allegation,” including “what the employer has done and which employees (or class of employees) have suffered as a result”; and 2) “try to engage the employer in some form of discussion (written or oral), to give the employer an opportunity to remedy the allegedly discriminatory practice.” Justice Kagan then asserted that while judicial review is limited exclusively to whether or not the EEOC has fulfilled these requirements, if the employer provides credible evidence that the EEOC did not fulfill the requirements then a court must conduct the fact finding necessary to decide that limited dispute. If the evidence shows a failure to properly conciliate, the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance. Accordingly, while stays of cases may be entered until the EEOC is given the opportunity to do what it was supposed to have done, it is unlikely that any case will be dismissed for failure to meet the pre-suit requirements.

This decision is absolutely a win for employers, as it calls the EEOC out for its improper use of federal muscle through litigation and make an example of an employer without first giving it a legitimate opportunity to assess its options. While the decision will not put employers in control, or even on equal standing, with the EEOC prior to suit, it does create leverage to insist the EEOC meet the minimum requirements. As a practical matter, this may cause the EEOC to be more forthcoming, and cooperative, at least when pressed. And employers should do exactly that if necessary and carefully document circumstances when it feels the EEOC has not done what it must.

Authored by: Gregory D Snell of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

LinkedIn, the Fair Credit Reporting Act, and the Real-World Implications of Online Activity

With the ever-increasing amount of information available on social media, employers should remember to exercise caution when utilizing social media as a part of their Human Resources/ Recruitment related activities. We live in a digital-age, and how people choose to define themselves is often readily showcased on social networking sites. Whether – and how – employers choose to interact with the online presence of their workforce will continue to develop as the relevant legal standards try to catch up.

A recent federal court filing in the Northern District of California against LinkedIn Corp. provides yet another example of the growing interaction between online personas and real-world employment law implications. There, in Sweet, et al v. LinkedIn Corp., the plaintiffs sought to expand the application of the Fair Credit Reporting Act (“FCRA”) by alleging that LinkedIn’s practice of providing “reference reports” to members that subscribe to LinkedIn’s program for a fee, brought LinkedIn within the coverage of the FCRA as a Credit Reporting Agency (“CRA”). Briefly, the FCRA (and relevant state statutes like it) imposes specific requirements on an employer when working with “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” In other words, there are rules – such as providing requisite disclosures and obtaining prior authorization – that apply when an employer engages a CRA to perform background checks, reference checks and related inquiries.

In the lawsuit, the plaintiffs alleged that LinkedIn was a CRA – and that these various rules should apply – because LinkedIn collected and distributed consumer information to third parties and the resulting reference reports “bear on a consumer’s character, general reputation, mode of living, or personal characteristics, and/or other factors listed in 15 U.S.C. § 1681a(d).” Further, according to the complaint, LinkedIn violated the FCRA because it should have provided FCRA compliant disclosure and followed the reporting obligations applicable to CRAs.

LinkedIn, which is touted as the “world’s largest professional network,” does not portray itself as a CRA and moved to dismiss the complaint. LinkedIn argued that the plaintiffs’ interpretation of the statute was too broad and, moreover, was inconsistent with the facts. A federal judge agreed and dismissed the complaint (although the plaintiffs have the opportunity to file another complaint). The Court ruled that these reference searches could not be considered “consumer reports” under the law – and LinkedIn was not acting as a CRA – because, in part, the plaintiffs had voluntarily provided their information to LinkedIn with the intention of it being published online. (The FCRA excludes from the definition of a consumer report a report that contains “information solely as to transactions or experiences between the consumer and the person making the report.”) The Court also noted that the allegations suggested that LinkedIn “gathers the information about the employment histories of the subjects of the Reference Searches not to make consumer reports but to ‘carry out consumers’ information-sharing objectives.’”

The LinkedIn case should still serve as a reminder of several important and interrelated trends. First, as it concerns the FCRA, the statute is broadly worded to cover “any written, oral or other communication of any information by a consumer reporting agency . . .” and the equally expansive definition of a CRA can apply in numerous situations that extend beyond the traditional notion of a consumer reporting agency. If applicable, the requirements of the FCRA must be followed. Second, employers need to continue to be mindful of the fact that their online activity can have real-world employment law implications. Third, as the law governing traditional employment law continues to evolve in response to online developments, the challenges to that activity will evolve as well.

Authored by: Ian Gabriel Nanos and Maxine Adams of Epstein Becker & Green, P.C.

©2015 Epstein Becker & Green, P.C. All rights reserved.

Reference Searches Through Social Media Do Not Create FCRA Claims

In their recruitment efforts, many employers will utilize social media to find suitable candidates for job openings. And, often employers will use the social media tools available to perform reference checks and/or verify a candidate’s employment history, experience and education history. Recently in California, a group of individuals challenged these social media background searches by suing the professional social media website, LinkedIn Corporation, because the information gleaned about these persons allegedly violated their rights under the Fair Credit Reporting Act (FCRA).

In Sweet v. LinkedIn Corp., Tracee Sweet, one of the named plaintiffs for the class, alleged she had applied for a position through LinkedIn. Sweet claimed the potential employer advised she had been hired following a telephone interview. A week after, the potential employer rescinded the offer and this decision was based on the employer’s review of Sweet’s references through LinkedIn.

The employer had used the Reference Searches function on LinkedIn, which allows employers to find people with whom an applicant may have worked previously. According to the class plaintiffs, this search engine allows employers to “[g]et the real story on any candidate” and to “[f]ind references who can give real, honest feedback” about job candidates. The Reference Searches function produces two types of information for paid subscribers: (1) the name and list of the search target’s current and former employers; and (2) a list of other LinkedIn members who are in the same professional network of the search initiator and “who may have worked at the same company during the same time period as the search target.” The Referencence Searches then produces results which include for each possible reference, “the name of the employer in common between the reference and the job applicant, and the reference’s position and years employed at that common employer.”

According to the complaint, each member of the class had a similar experience as Sweet. Each plaintiff believed that LinkedIn’s Reference Searches function caused them to lose employment opportunities in violation of the FCRA. The U.S. District Court rejected the plaintiffs’ claims and dismissed the action. The court explained that FCRA did not apply to the social media site and, instead, only to “consumer reporting agencies” that provide “consumer reports.”

Under the FCRA, a “consumer report” is:

[A]ny written, oral or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part of the purpose of serving as a factor in establishing the consumer’s eligibility for . . . . (B) employment purposes.

The district court stated that the publication of the plaintiffs’ employment histories were not consumer reports because that information came solely from LinkedIn’s transactions or experiences with the plaintiffs as members of the social media website. In other words, the information that was subsequently shared to a third-party occurred solely as a result of the plaintiffs’ voluntary provision of such information. As a result, that information is excluded from the protections of the FCRA. As the district court noted, the subsequent information sharing is precisely the reason why consumers such as the plaintiffs provide such information to LinkedIn.

Additionally, the district court found that LinkedIn was not a consumer reporting agency, as defined under the FCRA. The court explained that LinkedIn did not become a consumer reporting agency “solely because it conveys, with the consumer’s consent, information about the consumer to a third party to provide a specific product or service that the consumer has requested.”

Finally, the district court rejected the plaintiffs’ argument that the list of names and information about the references included in the Reference Searches bear on the “character, general reputation, mode of living” and other relevant characteristics of the consumers who are the subjects of these searches. Instead, the court found that the results from Reference Searches are those in the search initiator’s network and not in the target’s network. Therefore, the results only communicate whether the search initiator (not the target) have the characteristics protected under the FCRA (e.g., character, general reputation, mode of living).

Written by Tina A. Syring of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

Breaking news: Continued employment is lawful consideration in Wisconsin

On April 30th,  the Wisconsin Supreme Court ruled that continued at-will employment constitutes lawful consideration to support an otherwise reasonably drafted restrictive covenant agreement signed by a current employee. No additional monetary payments or other consideration is necessary. As employers in Wisconsin are aware, this is an issue that previously was wrought with uncertainty. A copy of the Court’s decision is available here.

This case was successfully argued by Godfrey & Kahn, S.C. and represents a big win for employers.

In the underlying case, Runzheimer International v. Friedlen, the Circuit Court held that an employer’s offer of continued employment to support a noncompete agreement with an employee was “illusory” and thus invalidated the agreement. Recognizing that this issue has not been squarely addressed in Wisconsin and citing potentially conflicting case law, the Court of Appeals certified the case to the Supreme Court on the narrow issue of whether “consideration in addition to continued employment [is] required to support a covenant not to compete entered into by an existing at-will employee.”

Currently the states are split as to whether continued employment alone will support a restrictive covenant. The Court pointed out that the states that do not find continued employment to form sufficient consideration are in the “distinct minority.” In siding with the majority, the Court held that an employer’s promise to continue to employ an at-will employee is lawful consideration in Wisconsin. In reaching its decision, the Court emphasized that:

(1) An employer’s promise of continued at-will employment will create lawful consideration only when employer is truly exercising forbearance with respect to its right to terminate employment. In other words, employers must be prepared to then and there terminate a current employee who refuses to sign a restrictive covenant agreement; and

(2) Employers may not misrepresent their intention to continue to employ the employee. An agreement signed by an employee who is terminated by the employer shortly thereafter could constitute a breach and make the agreement unenforceable. The Court emphasized that employees are protected by traditional contract formation principals such as fraudulent inducement and the covenant of good faith and fair dealing.

In making these points, the Court clarified and explained past precedent. The Court stated that it was of no consequence that the duration of the continued employment was not specified in the agreement. The Court emphasized that with respect to contract formation, the consideration analysis is limited to the existence of “lawful consideration,” not its adequacy. On these and other points, the Court provided additional analysis and guidance that is helpful to employers and will be covered in a client alert coming shortly.

While this is not a green light to require all current employees to sign a noncompete, employers now have certainty that, in particular circumstances, otherwise reasonably drafted restrictive covenant agreements signed by current employees will not be invalidated solely on the basis of consideration.

Originally posted in the All in a Day’s Work Blog April 30, 2015 By Rebeca M. López and Margaret R. Kurlinski

Copyright © 2015 Godfrey & Kahn S.C.