Category: Labor & Employment

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.

New York Implements Medical Marijuana Rules

The New York State Department of Health has issued regulations implementing the State’s medical marijuana law, enacted last July.

Published April 15 in the State Register, the regulations allow the use of marijuana for patients with cancer, AIDS, Lou Gehrig’s disease, Parkinson’s disease, multiple sclerosis, certain spinal cord injuries, epilepsy, inflammatory bowel disease, neuropathies, and Huntington’s Disease, and symptoms including severe or chronic pain, surgeries, severe nausea, persistent muscle spasms and wasting syndrome, who comply with the rules. The Commissioner of Health may add other conditions, symptoms or complications, under the regulations.

In accordance with the law, those patients will be able to use only non-smokable forms or marijuana, to be ingested or vaporized. “Smoking is not an approved route of administration.” However, even vaporization is banned in public places, and in no case may approved medical marijuana be consumed through vaporization in locations where smoking would be prohibited by the State’s Public Health Law, including places of employment. Products authorized by the regulations are restricted to liquids, oils or capsules. Unless the Commissioner approves, approved marijuana products may not be incorporated into edible food products by a registered organization.

Only five businesses or non-profits in the State may be licensed to grow, process of distribute approved marijuana. Each such enterprise may have four dispensing facilities. The Commissioner can consider permitting more dispensing facilities.

While implementation will not be immediate, employers should prepare for responding to employees taking marijuana under the law and regulations.

Authored by:  Roger S. Kaplan of Jackson Lewis P.C.

Australian Federal Government Implements Changes to 457 Visa

Squire Patton Boggs (US) LLP law firm

Following the publication of the independent review into the Temporary Skilled (Subclass 457) visa program, the federal government announced on 18 March 2015 its intention to implement a number of the proposed changes to ‘increase flexibility and reduce restrictions on 457 programme users while maintaining integrity in the programme’.

Despite growing suspicions that this would be another ‘broken promise’, the government has now implemented the following changes from 18 April 2015.

English language

An applicant can now satisfy the English language requirement by obtaining an average score of five across all components of the International English Language Testing System (IELTS), rather than a score of five in each component (reading, writing, speaking and listening).  The number of English language tests has also been increased to include the following in addition to IELTS:

  • Occupational English Test (OET)

  • Test of English as a Foreign Language internet-based test (TOEFL iBT)

  • Pearson Test of English (PTE) Academic test

  • Cambridge English: Advanced (CAE) test

Exemptions to the English language requirement will also be granted when an applicant can provide evidence of five cumulative (rather than consecutive) years of study in English at the secondary or tertiary level.

Standard Business Sponsorship term

The term of a standard business sponsorship has been extended from 3 years to 5 years.

Start-up businesses will also benefit from an increase in the term of their standard business sponsorship from 12 months to 18 months, giving start-up businesses a greater grace period to establish lawful operations in Australia.  457 visas granted to employees of start-up businesses will also now be granted for 18 rather than 12 months.

Market salary exemption threshold

Employers will no longer be required to demonstrate that highly paid 457 applicants will be paid in line with the Australian market in cases where the visa holder will be paid in excess of $180,000 (down from the existing threshold of $250,000).  This brings the threshold in line with the marginal tax rate.  The Temporary Skilled Migration Income Threshold (TSMIT) has also been frozen at $53,900.

MARN 1460940

ARTICLE BY

Jillian R. Howard
Adriana Bedon
Squire Patton Boggs (US) LLP
Employment Law Worldview

Workers Abuse A.D.H.D. Drugs To Be More Productive At Work

Jackson Lewis P.C.

The New York Times reported on April 18, 2015 that employees increasingly are abusing stimulants used to treat attention deficit hyperactivity disorder to be more productive at work.

Prescription stimulants have a calming and “focusing” effect on individuals with A.D.H.D., a disorder marked by severe impulsivity and inattention. The Times article stated that while reliable data quantifying how many Americans misuse stimulants does not exist, dozens of people in many different professions admitted in interviews that they misuse A.D.H.D. drugs such as Adderall, Ritalin, Vyvanse and Concerta to improve work performance. Stimulants generally suppress appetite, increase wakefulness, and increase focus and attention.

Users who were interviewed said that they got pills by feigning symptoms of A.D.H.D. to physicians who casually write prescriptions without proper evaluations. Others got them from friends or dealers. Most interviewees spoke on the condition of anonymity for fear of losing their jobs or access to the medication. Obtaining stimulants without a prescription is a federal crime.

Many young workers insist that using prescription stimulants to increase productivity is required in order to get hired and to be competitive in the marketplace. One woman interviewed stated that use of prescription stimulants is “necessary for the survival of the best and the smartest and the highest-achieving people.”

According to the National Institute on Drug Abuse, prescription stimulants do not enhance learning or thinking ability when taken by people who do not actually have A.D.H.D., although they do promote wakefulness.  Addiction to stimulants is also a potential consequence for anyone taking them without medical supervision.  Addiction most likely occurs because stimulants, when taken in doses and routes other than those prescribed by a doctor, can induce a rapid rise in dopamine in the brain. Furthermore, if stimulants are abused chronically, withdrawal symptoms—including fatigue, depression, and disturbed sleep patterns—can result when a person stops taking them.

ARTICLE BY

Kathryn J. Russo
Jackson Lewis P.C.
Drug and Alcohol Testing Law Advisor Blog

Protect Workers From The Number One Cause of Workplace Deaths – Distracted Driving

Epstein Becker & Green, P.C.

Distracted driving is the number one cause of workplace deaths in the United States.  OSHA has partnered with the National Safety Council to call employers’ attention to this issue and urge the adoption of safe driving policies.  Failure to adopt and enforce such policies in the workplace leads to tragic results and OSHA has made it perfectly clear that employers who do not take this issue seriously should expect OSHA citations.  On its distracted driving webpage, the agency has stated that employers “have a responsibility and legal obligation to have a clear, unequivocal, and enforced policy against texting while driving.”

But to truly protect your employees from the hazards of distracted driving, your policy should cover more than just texting.  A comprehensive policy should cover all employees, both handheld and hands-free devices, company vehicles, company cell phones and all work-related communications.  All employees should be forbidden to use cell phones, hands-free devices, and any other mobile electronics while operating a vehicle when:

  • the vehicle is owned, leased, or rented by the employer

  • a personal motor vehicle is used in connection with company business

  • the motor vehicle is on the employer’s property

  • the cell phone or mobile electronic device is owned or leased by the employer

  • the cell phone or mobile electronic device is used to conduct company business

Employers should strongly discourage distracted driving by incorporating written safe driving policies into employee handbooks, providing training on these policies during worker orientation, and providing annual refresher training.  Safe communication practices should be put in place such as established procedures, times, and places for drivers’ safe use of cell phones and other electronic devices for communicating with supervisors, customers, and others.  To the extent that the employer has any programs in place that could incentivize employees to use cell phones or other electronic devices while driving, they should be eliminated.

Finally, safe driving policies must be enforced – it is not enough simply to write a policy and provide employee training.  As we have all become so dependent on our cell phones and other mobile electronic devices, it is likely that some employees will resist or simply ignore these policies, but enforcement is necessary to truly improve employee safety.  Accordingly, employers should reprimand employees who violate safe driving policies and those reprimands should involve serious penalties, including, where appropriate, termination.  There is no way to protect employees from every hazard they may encounter on the road, but implementing a strong safe driving program will go a long way towards decreasing the likelihood of a workplace tragedy on the road.

ARTICLE BY

Valerie Butera
Epstein Becker & Green, P.C.

UK Employment Tribunal Awards £3.2m To Woman Called “Crazy Miss Cokehead” By Colleagues

Squire Patton Boggs (US) LLP law firm

The woman who was called “Crazy Miss Cokehead” by her manager has been awarded nearly £3.2m by an Employment Tribunal for sexual harassment, reportedly including £44,000 for injury to feelings and a further £15,000 in aggravated damages.

We originally posted a blog on this story in November 2013 http://www.employmentlawworldview.com/crazy-miss-cokehead-when-banter-goes-too-far/.  Following the liability hearing, the Tribunal found in favour of Svetlana Lokhova who worked for the London branch of the Russian bank Sberbank CIB (UK) Ltd.

The Tribunal found that 19 out of her 22 allegations were not well founded.  However, on the main issues, it was found that Ms Lokhova’s former manager, David Longmuir, had bullied and harassed her on grounds of sex (even in emails), reportedly suggesting that she needed to visit a Nigerian tribesman for sex to “calm her down”.  Other such put-downs included saying that she had only been hired “because of her t***” and poking fun at her perceived privileged background.

In a stinging attack on the Bank, the Tribunal heavily criticised its conduct of the proceedings and said that there had been a “deliberate” attempt to bully her at the liability hearing in relation to an allegation that Ms Lokhova took drugs.  It said, “That allegation is completely without foundation and should never have been put to her in cross examination”.  In a Jeremy Kyle-style twist, Ms Lokhova was so “incensed and appalled” by the allegation that she took a drug test during the hearing, which was negative.

There were a number of other aggravating factors in this case.  Mr Longmuir was not disciplined at all despite the strength of the evidence and carried on working for the Bank for a further year after the bullying, receiving a £168,000 pay-off when he eventually did leave.  While I am sure that this of course had no bearing at all on the Tribunal’s ruling, you might be aware that with the benefit of the tax breaks applicable to severance payments, this is the equivalent of an Employment Judge’s salary for some 20 months.  No reason at all why thatpay-off should have irritated the Tribunal.

The Tribunal further criticised Paolo Zaniboni (who is still the CEO of the London office) who took no action against Mr Longmuir despite the evidence against him and whom the Tribunal also found to be guilty of unlawful victimisation.

The Tribunal’s attitude towards the Bank and its view of the aggravating features of this case is, perhaps, reflected in the reported awards of £44,000 and £15,000 for injury to feelings and aggravated damages respectively, which (if those reports are right) are very high awards indeed compared to previous cases.   The £44,000 figure would represent nearly a 50% uplift on the previously-understood ceiling for such awards.

The Tribunal in this case found that Ms Lokhova, who earned £750,000 a year in salary and bonuses working in Equity Sales, “will never work in financial services again, on the basis of the medical evidence”.  They found that she was suffering from a moderately severe psychiatric illness and had been suffering from such since January 2012.  The bulk of her compensation therefore represented future loss of earnings.

Lessons for employers

An interesting point for employers arising out of this case is how to deal with a case like this to limit the potential financial sanctions.  In this case there were emails containing the abuse and therefore written evidence of it (however, in most cases there will not be).  It should have been obvious to the Bank that it was going to lose in relation to those allegations.  So what can you do by way of mitigation?

1.  In circumstances where internal investigations reveal that it is likely that the allegations of harassment are true, we suggest issuing an immediate apology to the complainant in relation to those allegations (and in extreme circumstances consider paying some money as compensation to the victim).

2.  If an individual brings a claim, give serious consideration also to conceding liability when it is obvious that the allegation is true (however, take legal advice before doing this). Continuing to defend allegations that are indefensible will increase your costs and could lead to the Tribunal finding that the complainant’s injury (either medical and/or to feelings) has been aggravated.  An early apology can improve your prospects of limiting the damage and you will be able to focus on the allegations that are, perhaps, capable of a defence.  A swift apology could limit the complainant’s ability to claim that stress and/or publicity had done fatal damage to his/her career path (especially in a small world like the City of London)  and so prevent such significant loss of earnings claims also.

3.  Further, think carefully what is put to a witness in Tribunal. There was no relevance of Ms Lokhova’s alleged drug habits to the main issues in this case (which was whether or not she had been bullied and harassed).  It is difficult to see how baiting her on the witness stand to try and “prove” that she was a drug addict was going to achieve anything and, in this case, the Bank scored a comprehensive own goal when she conclusively proved that she was not.

4.  Last, give visible consideration to the handling of any employee who is clearly guilty of inappropriate behaviours. It did not take the Tribunal decision to show the Bank that Mr Longmuir’s conduct should be regarded as unacceptable.  If an employer in those circumstances takes the decision not to act against an employee (for example because he/she is a real money-spinner or related to someone in senior management or a major client) then that is a judgment it is entitled to make but only once it has weighed that option against the additional compensation the harassed individual is likely to receive as a result.  A really scorching final warning would now seem to have been a better compromise.

5.  If there is a pay-off, make it as small as possible!

ARTICLE BY

Louise Martin
Squire Patton Boggs (US) LLP

NLRB Issues Guidance Regarding Lawful Employee Handbook Policies

Gonzalez Saggio & Harlan LLP

Employers might know (or if they do not, they should) that the National Labor Relations Act (or “NLRA”) applies even to employers who do not have a unionized workforce. Due to the broad reach of the NLRA, the recent guidance issued by the General Counsel of the National Labor Relations Board (“NLRB”) regarding employee handbook policies is a must-read for human resources professionals and those charged with maintaining their company’s employee policies.

The focus of the General Counsel’s “Report” issued on March 18, 2015, arises out of Section 8(a)(1) of the NLRA, pursuant to which the mere maintenance of a rule that has a chilling effect on an employee’s Section 7 activity is unlawful. (“Section 7 activity” is any activity by an employee or group of employees by which they seek to improve their pay and working conditions, regardless of whether or not they are already unionized.) The most important obstacle for employers to consider when drafting and revising their policies, according to the General Counsel, is the fact that policies will be considered unlawful by the NLRB when they would bereasonably construed by employees as restricting Section 7 activity, even if the policies are not designed or intended to have that effect.

The primary recommendation from the General Counsel is that handbook policies include clear and specific language, precise examples, and explanatory context so that employees will not reasonably construe otherwise lawful policies as limiting their Section 7 activity.

An exhaustive recitation of the General Counsel’s extensive examples of lawful and unlawful handbook language goes beyond the scope of this article. However, as a general matter, the General Counsel found that language that provided sufficient context to employees, so as to avoid employees misconstruing the targeted conduct, was the most likely type of policy to meet with NLRB approval.

Again, as with other policies, the use of clarifying examples and context to avoid misinterpretation is highly recommended in the Report.

Regarding confidentiality, for example, handbook policies are considered unlawfully overbroad if they leave employees with the impression they cannot discuss wages, hours, and other terms and conditions of employment with fellow employees and with non-employees. Employers can minimize the risk of creating such an impression by defining terms such as “confidential information,” or by placing confidentiality policies within a context that clarifies their scope, such as within handbook sections addressing trade secrets or patient medical information.

As for employee conduct rules governing action that might include criticism of management (a protected Section 7 activity), the NLRB considers it unlawful for such rules to prohibit merely “rude” or “disrespectful” behavior toward managers or the “company” without sufficient clarification or context. Even false statements cannot be prohibited by a blanket rule (maliciousfalsehoods, however, may be lawfully prohibited). Businesses may nevertheless prohibit disrespectful or unprofessional behavior toward co-workers, clients, and other non-managers – as opposed to the company management – and may generally prohibitinsubordination toward management, as well.

Company media policies, in the meantime, need to be clear that any prohibition on speaking with the media is with respect to anyone purporting to speak on behalf of the employer without authorization. Employees should not be led to believe, whether intentionally or not, that they are in any way limited from speaking with the media regarding their employment in an individual capacity regarding wages, benefits, and other terms and conditions of employment. For example, the General Counsel found lawful a media policy that indicates one person only should speak for the company and that instructs any employee interviewed to state that he or she is not authorized to comment for the employer in response to any reporter inquiries.

The General Counsel looked unfavorably upon employee handbook policies that invoked anti-strike language within policies restricting employee movement to and from work. Such policies should not prohibit “walking off the job,” which can be misconstrued to refer to protected strike actions and walkouts. Phrases like “work stoppage” should also be avoided. The General Counsel, however, found acceptable a policy that simply stated, “Entering or leaving Company property without permission may result in discharge.” But employers must also be careful regarding a requirement of permission before employees can enter property, as employers may not deny off-duty employees access to non-work areas (such as parking lots) unless justified by legitimate business reasons.

As a final example, the General Counsel’s Report indicates that lawful employee policies may prohibit employee activity that amounts to competition against the company or to self-dealing, but a policy may not, under the broad label of a “conflict-of-interest” rule, prohibit any conduct that is not “in the best interest” of the employer because protected Section 7 activity can, of course, be against the interest of the company.

Employers with questions on a particular situation should consult with experienced labor and employment counsel regarding their handbook policies.