Labor & Employment Archives - Page 114 of 155

Department of State Releases August 2014 Visa Bulletin

The bulletin shows minor advancement in the EB-2 category for applicants chargeable to India and China as well as significant advancement in the EB-3 category for applicants chargeable to China and the Philippines, minor advancement for applicants chargeable to India, and no change for applicants chargeable to Mexico or the Rest of the World.

The U.S. Department of State (DOS) has released its August 2014 Visa Bulletin. The Visa Bulletin sets out per country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the respective cutoff dates specified by the DOS.

What Does the August 2014 Visa Bulletin Say?

In August, the cutoff date for applicants in the EB-2 India category will advance by a little more than four months, while the cutoff date for applicants in the EB-2 China category will advance by a little more than three months. Meanwhile, the cutoff date in the EB-3 China category will advance by slightly more than two years, while the cutoff date in the EB-3 Philippines category will advance by 17 months. The EB-3 India category will advance by one week, while the cutoff date for EB-3 Mexico and the Rest of the World will remain unchanged. The cutoff date in the F2A category for applicants from all countries will also remain unchanged.

EB-1: All EB-1 categories will remain current.

EB-2: The cutoff date for applicants in the EB-2 category chargeable to India will advance by a little more than four months to January 22, 2009. The cutoff date for applicants in the EB-2 category chargeable to China will advance by slightly more than three months to October 8, 2009. The EB-2 category for all other countries will remain current.

EB-3: The cutoff date for applicants in the EB-3 category chargeable to India will advance by one week to November 8, 2003. The cutoff date for applicants in the EB-3 category chargeable to China will advance by a little more than two years to November 1, 2008. The cutoff date for applicants in the EB-3 category chargeable to the Philippines will advance by one year and five months to June 1, 2010. The cutoff date for applicants chargeable to Mexico and all other countries will remain unchanged at April 1, 2011.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: November 1, 2008 (forward movement of two years and one month)
India: November 8, 2003 (forward movement of one week)
Mexico: April 1, 2011 (no movement)
Philippines: June 1, 2010 (forward movement of one year and five months)
Rest of the World: April 1, 2011 (no movement)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The EB-2 category for applicants chargeable to all countries other than China and India has been current since November 2012. The August Visa Bulletin indicates no change, meaning that applicants in the EB-2 category chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through August 2014.

China

The July Visa Bulletin indicated a cutoff date of July 1, 2009 for EB-2 applicants chargeable to China. The August Visa Bulletin indicates a cutoff date of October 8, 2009, reflecting forward movement of three months and one week. This means that applicants in the EB-2 category chargeable to China with a priority date prior to October 8, 2009 may file AOS applications or have applications approved in August 2014.

India

In December 2013, the cutoff date for EB-2 applicants chargeable to India retrogressed significantly to November 15, 2004 because of unprecedented demand in this category. This cutoff date remained constant through June. There was significant movement forward of nearly four years in the July Visa Bulletin. The August Visa Bulletin indicates a cutoff date of January 22, 2009, reflecting forward movement of another four months and three weeks. This means that applicants in the EB-2 category chargeable to India with a priority date prior to January 22, 2009 may file AOS applications or have applications approved in August 2014.

Developments Affecting the EB-3 Employment-Based Category

China

In late 2013 and early 2014, the cutoff date for EB-3 applicants chargeable to China advanced significantly to generate demand in this category. In June, to regulate demand, this cutoff date retrogressed by six years to October 1, 2006 and remained the same for July. The August Visa Bulletin indicates a cutoff date of November 1, 2008, reflecting forward movement of two years and one month. This means that only applicants in the EB-3 category chargeable to China with a priority date prior to November 1, 2008 may continue to file AOS applications or have applications approved in August 2014.

India

The July Visa Bulletin indicated a cutoff date of November 1, 2003 for EB-3 applicants chargeable to India. The August Visa Bulletin indicates a cutoff date of November 8, 2003, reflecting forward movement of one week. This means that only EB-3 applicants chargeable to India with a priority date prior to November 8, 2003 may file AOS applications or have applications approved in August 2014.

Rest of the World

From September 2013 through April 2014, the cutoff date for EB-3 applicants in the worldwide category advanced by 3.75 years. In June, to regulate high demand, the cutoff date in this category retrogressed by 549 days to April 1, 2011. The August Visa Bulletin indicates no change to this cutoff date. This means that only applicants in the EB-3 category chargeable to the Rest of the World with a priority date prior to April 1, 2011 may file AOS applications or have applications approved in August 2014.

Developments Affecting the F2A Family-Sponsored Category

In March, as a result of heavy demand in the F2A category from applicants chargeable to Mexico, the cutoff date in this category retrogressed significantly to April 15, 2012. In June, this cutoff date retrogressed again to March 15, 2011 and remained the same in July. The August Visa Bulletin indicates no change to this cutoff date. This means that only those applicants from Mexico with a priority date prior toMarch 15, 2011 will be able to file AOS applications or have applications approved in August 2014.

During fiscal year 2013, in an effort to generate demand in the F2A category from applicants from all countries other than Mexico, the cutoff date in this category advanced significantly. This advance resulted in a dramatic increase in demand, followed in June by a further retrogression of the cutoff date to May 1, 2012. The August Visa Bulletin indicates no change to this cutoff date. This means that only those F2A applicants from countries other than Mexico with a priority date prior to May 1, 2012will be able to file AOS applications or have applications approved in August 2014. Further retrogression of the worldwide F2A category should not be ruled out.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the August 2014 Visa Bulletin in its entirety, please visit the DOS website.

Article By:

Eric S. Bord

Lisa Stephanian Burton

Tracy Evlogidis

Malcolm K. Goeschl

Eleanor Pelta

A. James Vázquez-Azpiri

Of:

Morgan, Lewis & Bockius LLP

Paid Sick Leave: Connecticut Tweaks and Newark Speaks

The Connecticut Paid Sick Leave Law has been tweaked in three respects: (1) to allow employers to determine the 50-employee applicability threshold in the same manner as under the state’s Family and Medical Leave Act, i.e., by determining whether the employer has at least 50 employees on its payroll for the week containing October 1; (2) to allow accrual of paid sick leave hours on any annual basis, not just a calendar year, and (3) to add one additional job title—radiologic technologists—to the list of “service worker” titles that are eligible for paid sick leave. The law adopting the tweaks— An Act Creating Parity between Paid Sick Leave Benefits and Other Employer-Provided Benefits (Public Act 14-128)—is effective January 1, 2015.

Newark, N,J. whose Paid Sick Leave Ordinance became effective on June 21, 2014, has issued FAQs about the ordinance. There are 24 FAQs–a dozen directed to employers and a dozen directed to employees. The FAQs address a myriad of questions on topics such as employee eligibility, accrual of paid sick leave, employer notice obligations, appropriate uses of paid sick leave and the law’s integration with collective bargaining agreements.

Also on the paid sick leave issue, the Massachusetts Secretary of State announced last week that voters in November will be asked whether to approve a mandatory earned sick time law. If the issue passes, Massachusetts would become the second state and ninth jurisdiction to adopt a paid sick time law.

Article By:

Michael J. Soltis

Of:

Jackson Lewis P.C.

The Supreme Court of the United States Holds that ESOP Fiduciaries are not Entitled to a Presumption of Prudence, Clarifies Standards for Stock Drop Claims

On June 25, 2014, the Supreme Court of the United States unanimously held that there is no special presumption of prudence for fiduciaries of employee stock ownership plans (“ESOPs”). Fifth Third Bancorp v. Dudenhoeffer, No. 12-751, 573 U.S. ___ (June 25, 2014) (slip op.).

Background

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”) imposes legal duties on fiduciaries of employee benefit plans, including ESOPs.^[1] Specifically, ERISA requires the fiduciary of an employee benefit plan to act prudently in managing the plan’s assets.^[2] In addition, ERISA requires the fiduciary to diversify plan assets.^[3]

ESOPs are designed to be invested primarily in employer securities.^[4] ERISA exempts ESOP fiduciaries from the duty of diversify plan assets and from the duty to prudently manage plan assets, but only to the extent that prudence requires diversification of plan assets.^[5]

The recent financial crisis generated a wave of ERISA “stock drop” cases, which were filed after a precipitous drop in the value of employer securities held in an ESOP. Generally, the plaintiff alleged that the ESOP fiduciary breached its duty of prudence by investing in employer securities or continuing to offer employer securities as an investment alternative. Defendant fiduciaries defended on the ground that the plaintiff failed to rebut the legal presumption that the fiduciary acted prudently by investing in employer securities or continuing to offer employer securities as an investment alternative.

The Federal Circuit Courts of Appeals that had considered the issue adopted the rebuttable presumption of prudence but split on the issues of (1) whether the legal presumption applied at the pleadings stage of litigation or whether the legal presumption was evidentiary in nature and did not apply at the pleadings stage of litigation and (2) the rebuttal standard that the plaintiff of a stock drop action must satisfy.^[6]

Dudenhoeffer held that ESOP fiduciaries are not entitled to a legal presumption that they acted prudently by investing in employer securities or continuing to offer employer securities as an investment alternative.^[7]

The Dudenhoeffer Case

Fifth Third Bancorp maintained a defined contribution plan, which offered participants a number of investment alternatives, including the company’s ESOP. The terms of the ESOP required that its assets be “invested primarily in shares of common stock of Fifth Third [Bancorp].”^[8] The company offered a matching contribution that was initially invested in the ESOP. In addition, participants could make elective deferrals to the ESOP.

ESOP participants alleged that the ESOP fiduciaries knew or should have known on the basis of public information that the employer securities were overvalued and an excessively risky investment. In addition, the ESOP fiduciaries knew or should have known on the basis of non-public information that the employer securities were overvalued. Plaintiffs contended that a prudent ESOP fiduciary would have responded to this public and non-public information by (1) divesting the ESOP of employer securities, (2) refraining from investing in employer securities, (3) cancelling the ESOP investment alternative, and (4) disclosing non-public information to adjust the market price of the employer securities.

Procedural Posture

The United States District Court for the Southern District of Ohio dismissed the complaint for failure to state a claim, holding that ESOP fiduciaries were entitled to a presumption of prudence with respect to their collective decisions to invest in employer securities and continue to offer employer securities as an investment alternative.^[9] The District Court concluded that presumption of prudence applied at the pleadings stage of litigation and that the plaintiffs failed to rebut the presumption.^[10]

The United States Court of Appeals for the Sixth Circuit reversed the District Court judgment, holding that the presumption of prudence is evidentiary in nature and does not apply at the pleadings stage of litigation.^[11] The Sixth Circuit concluded that the complaint stated a claim for a breach of the fiduciary duty of prudence.^[12]

ESOP Fiduciaries Not Entitled to Presumption of Prudence

In a unanimous decision, the Supreme Court of the United States held that ESOP fiduciaries are not entitled to a presumption of prudence with regard to their decisions to invest in employer securities and continue to offer employer securities as an investment alternative; rather, ESOP fiduciaries are subject to the same duty of prudence that applies to other ERISA fiduciaries, except that ESOP fiduciaries need not diversify plan assets.^[13]

The Court began its analysis b
y acknowledging a tension within the statutory framework of ERISA. On the one hand, ERISA imposes a duty on all fiduciaries to discharge their duties prudently, which includes an obligation to diversify plan assets. On the other hand, ERISA recognizes that ESOPs are designed to invest primarily in employer securities and are not intended to hold diversified assets. The Court concluded that an ESOP fiduciary is not subject to the duty of prudence to the extent that the legal obligation requires the ESOP fiduciary to diversify plan assets. The Court found no special legal presumption favoring ESOP fiduciaries.

New Standards for Stock Drop Claims

Although the Court rejected the presumption of prudence, it vacated the judgment of the Sixth Circuit Court of Appeals (which held that the complaint properly stated a claim) and announced new standards for lower courts to observe in evaluating whether a complaint properly pleads a claim that an ESOP fiduciary breached its fiduciary duty of prudence by investing in employer securities or continuing to offer employer securities as an investment alternative.

Public Information

First, the Court concluded that “where a stock is publicly traded, allegations that a fiduciary should have recognized from publicly available information alone that the market was over- or undervaluing the stock are implausible as a general rule, at least in the absence of special circumstances.”^[14] In other words, a plaintiff generally cannot state a plausible claim of imprudence based solely on publicly available information. An ESOP fiduciary does not necessarily act imprudently by observing the efficient market theory, which holds that a major stock market provides the best estimate of the value of employer securities. To be clear, the Court did not rule out the possibility that a plaintiff could properly plead imprudence based on publicly available information indicating special circumstances affecting the reliability of the market price.

Non-Public Information

Second, the Court concluded that “[t]o state a claim for breach of the duty of prudence on the basis of inside information, a plaintiff must plausibly allege an alternative action that the [fiduciary] could have taken that would have been consistent with [applicable Federal and state securities laws] and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the [ESOP] than to help it.”^[15]

The Court reasoned that where a complaint alleges imprudence based on an ESOP fiduciary’s failure to act on non-public information, a lower court’s analysis should be guided by three considerations. First, ERISA does not require a fiduciary to violate applicable Federal and state securities laws. In other words, an ESOP fiduciary does not act imprudently by declining to divest the ESOP of employer securities or by prohibiting investments in employer securities on the basis of non-public information. Second, where a complaint faults fiduciaries for failing to decide, on the basis of non-public information, to refrain from making additional investments in employer securities or for failing to disclose non-public information to correct the valuation of the employer securities, lower courts should consider the extent to which the duty of prudence conflicts with complex insider trading and corporate disclosure requirements imposed by Federal securities laws or the objectives of such laws. Third, lower courts should consider whether the complaint has plausibly alleged that a prudent fiduciary could not have concluded that discontinuing investments in employer securities or disclosing adverse, non-public information to the public, or taking any other action suggested by the plaintiff would result in more harm than good to the ESOP by causing a drop in the value of the employer securities.

Quantifying the Unknowns

Fifth Third Bancorp v. Dudenhoeffer will undoubtedly reshape the landscape of ERISA litigation and, specifically, stock drop litigation. To fully understand the decision’s impact, a number of questions must still be answered, including the correct application of the standards espoused by the Court. In addition, Dudenhoeffer involved a publicly-traded company; it is unclear what application, if any, the decision will have in the context of employer securities of a privately held company.

Article By:

Christopher T. Horner

Eric W. Gregory

Of:

Dickinson Wright PLLC

_{^[1] See generally, ERISA § 404(a).}

_{^[2] ERISA § 404(a)(1)(B).}

_{^[3] ERISA § 404(a)(1)(C).}

_{^[4] Code § 4975(e)(7)(A).}

_{^[5] ERISA § 404(a)(2).}

_{^[6] See e.g. Moench v. Robertson, 62 F.3d 553, 571 (3d Cir. 1995); In re Citigroup ERISA Litig., 662 F.3d 128, 138 (2d Cir. 2011); Kirschbaum v. Reliant Energy, Inc., 526 F.3d 243, 254 (5^th Cir. 2008); Kuper v. Iovenko, 66 F.3d 1447 (6^th Cir. 1995); White v. Marshall & Ilsley Corp., Case No. 11-2660, 2013 WL 1688918 (7^th Cir. Apr. 19, 2013); Quan v. Computer Sciences Corp., 623 F.3d 870, 881 (9^th Cir. 2010);Lanfear v. Home Depot, Inc., 679 F.3d 1267 (11^th Cir. 2012).}

_{^[7] No. 12-751, 573 U.S. ____ at 1-2.}

_^[8] Id.

_{^[9] Dudenhoeffer v. Fifth Third Bancorp, Inc., 757 F. Supp. 2d 753, 759 (S.D. Ohio 2010).}

_{^[10] Id. At 762.}

_{^[11] Dudenhoeffer v. Fifth Third Bancorp, 692 F. 3d 410, 418-19 (2012).}

_{^[12] Id. At 423.}

_{^[13] Fifth Third Bancorp v. Dudenhoeffer, No. 12-751, 573 U.S. ___ at 1-2.}

_{^[14] Id. At 16.}

_{^[15] Id. At 18.}

EEOC Sues Wal-Mart for Disability Discrimination – Equal Employment Opportunity Commission

Retailer Rescinded Accommodation, Then Fired Intellectually Disabled Employee, Federal Agency Charges

The U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit here yesterday against Wal-Mart Stores, Inc., alleging that the giant retailer fired an intellectually disabled employee at a Rockford Walmart store after it rescinded his workplace accommodation.

“What our investigation indicated,” said John Rowe, the EEOC district director in Chicago, who managed the federal agency’s pre-suit administrative investigation, “is that Wal-Mart rescinded a long-standing practice of giving written job assignments to the employee, William Clark. That accommodation had been the key to permitting Clark to successfully perform his job during an 18 year career at Wal-Mart and to his meeting the company’s performance expectations. We determined that shortly after rescinding the accommodation, Wal-Mart began disciplining Mr. Clark for supposed performance issues, and that ultimately lead to his termination.”

The Wal-Mart where Clark was working at the time of his termination is located at 7219 Walton in Rockford, on the south side of the East State Street commercial corridor and between Interstate 90 and South Perryville Road.

The EEOC brought the suit under the Americans with Disabilities Act (ADA), which prohibits disability discrimination in employment, after first attempting to reach a pre-litigation settlement through its conciliation process. The case (EEOC v. Wal-Mart Stores, Inc., Civil Action No. 14-cv-50145) was filed in U.S. District Court for the Northern District of Illinois, Western Division on July 1, 2014. It has been assigned to U.S. District Judge Philip G. Reinhard.

John Hendrickson, regional attorney of the EEOC’s Chicago District Office, said, “The EEOC’s position in this case is that Wal-Mart just took away — with no good reason — an effective workplace accommodation of an intellectually disabled employee. That reversal fatally compromised the employee’s ability to continue doing a job he had done so well for many, many years, and ended up with him being fired.”

Hendrickson added, “It’s hard to fathom what drove Wal-Mart to this course of action, but the EEOC response will definitely not be a mystery. We intend to show that the company’s action was a particularly senseless violation of the Americans with Disabilities Act — an especially hurtful injustice — that Mr. Clark is entitled to full make whole relief and to punitive damages, and that the public interest requires strong injunctive measures to correct Wal-Mart’s practices.”

In March of this year, Wal-Mart Stores East, L.P. agreed to pay $363,419 to settle an EEOC sexual harassment and retaliation lawsuit. According to that suit, Wal-Mart violated federal law by allowing a co-worker to sexually harass an intellectually disabled employee at an Akron, Ohio Walmart store.

The EEOC’s Chicago District Office is responsible for processing charges of employment discrimination, administrative enforcement, and the conduct of agency litigation in Illinois, Wisconsin, Minnesota, Iowa and North and South Dakota, with Area Offices in Milwaukee and Minneapolis.

Supreme Court Gives Second Win in Two Days to Caregivers Challenging Compulsory Union Dues

The United States Supreme Court acted today in another case involving a scheme to siphon millions of dollars in compulsory union dues from home caregivers assisting public aid recipients. On June 30, 2014, the Court decided Harris v. Quinn and held that the First Amendment to the United States Constitution prohibits the collection of a compulsory agency fee from rehabilitation program personal assistants who do not want to join or support the union. Today, the Court applied Harris to Schlaud v. Snyder, vacating the judgment, and remanding the case to the United States Court of Appeals for the Sixth Circuit for further consideration in light of Harris v. Quinn. As the Schlaud case continues, look for another blow to the forced-dues arrangment perpretrated by various union officials and their friends in government.

Schlaud and other plaintiffs in the case are home childcare providers in Michigan who sought class-action certification in their First Amendment challenge to the state’s compulsory deduction of union dues from subsidies paid to home childcare providers. In January 2009, the Michigan Department of Human Services (DHS) began deducting 1.15% from subsidy payments made to home childcare providers. The funds were forwarded to the union, which was a joint venture between the United Auto Workers union and the American Federation of State, County and Municipal Employees union. According to the opinion of the United States Court of Appeals for the Sixth Circuit, the union collected $2,000,019.09 in 2009 and at least $1,821,635.21 in 2010.

Schlaud and her co-plaintiffs sought the return of the compulsory union dues that were collected in violation of their First Amendment rights. The district court denied certification of the plaintiffs’ proposed class — all home childcare providers in Michigan — because it concluded a conflict of interest existed within the class: some members voted for union representation and others voted against union representation. The Sixth Circuit affirmed, and Schlaud sought review by the Supreme Court.

Attorneys at the National Right to Work Legal Defense Foundation filed and have litigated both Shlaud and Harris on behalf of personal assistants and home childcaregivers. In Harris, the Supreme Court did not reach the issue of the constitutionality generally of compelling public sector employees to pay union dues or agency fees, but it strongly signaled that the legal analysis of a 1977 Supreme Court decision, Abood v. Detroit Board of Education, which found compulsory agency-fee requirements to be constitutional, was “questionable.” The Harris opinion opens the door, cracked initially in Knox v. Service Employees, for the Court to revisit the constitutionality of compelling public employees to pay union dues or agency fees as a condition of employment.

Article By:

Timothy M. McConville

Of:

Odin, Feldman & Pittleman, P.C.

U.S. Supreme Court Gives Increased Protection to Government Employees

The Supreme Court recently ruled unanimously that government employees who testify about public corruption are protected by the First Amendment. The case, Lane v. Franks,^[1]centered on a public employee, Lane, who worked at an Alabama community college where he led the school’s program for at-risk youth.

While working for the community college, Lane discovered a state representative was on the program’s payroll, despite doing no work for the program. Lane terminated the representative’s employment, and subsequently, the representative was indicted by federal authorities on corruption-related charges. Lane testified, under subpoena, at the representative’s trial in 2008. In 2009, Lane was fired from the college. Lane sued the community college president individually and in his official capacity alleging that the official violated his First Amendment protections.

The college president argued that Lane’s sworn testimony was not protected by the First Amendment because it was based on information that he gathered from his role as a state employee, not as a private citizen. The lower courts agreed with the college president, determining that Lane acted in his official capacity when firing the state representative and had acted in the same capacity when testifying at her trial. The Supreme Court disagreed and stated that Lane testified “as a citizen on a matter of public concern.” According to Justice Sotomayor, “Truthful testimony under oath by a public employee outside the scope of his ordinary job duties is speech as a citizen for First Amendment purposes. That is so even when the testimony relates to his public employment or concerns information learned during that employment.”

The ruling means that government employees should feel more protected when stepping forward with whistleblower-type information. Both public and private employers should exercise caution when taking negative actions against an employee who has complained of or filed a charge of discrimination, or participated in some kind of investigation or proceeding, as the action could be considered retaliatory.

_{[1] No. 13-483 (2014).}

Article By:

Luke A. Wingfield

Of:

McBrayer, McGinnis, Leslie and Kirkland, PLLC

The Walls Shouldn’t Have Ears: Ruling on Eavesdropping Puts Burden of Prevention on Illinois Employers

Are your employees surreptitiously recording conversations? It’s a frightening thought. But based upon a new Illinois Supreme Court ruling, they are now free to do so. To discourage this behavior, Illinois employers should consider implementing a policy prohibiting such surreptitious recordings.

In People v. Clark, the Illinois Supreme Court ruled that the state eavesdropping statute, which had made it illegal to record conversations in Illinois without the consent of all parties, was unconstitutionally overbroad under the First Amendment. The state Supreme Court reasoned that audio and audiovisual recordings are “medias of expression commonly used for the preservation and dissemination of information and ideas and thus are included within the free speech and free press guarantee” of the First Amendment.

Consider for a moment how your employees might use secretly recorded conversations against you. An employee who has previously complained to your human resources department about another employee who made inappropriate sexist or racist comments, may now freely record all conversations with the colleague, and can use those recordings in a lawsuit against the company. Or, an employee might surreptitiously record everything said during an internal investigation of alleged wrongdoing by the company, and could then provide third parties with those recordings.

Given the removal of statutory barriers, Illinois employers are now forced to create their own systems for preventing this objectionable conduct. One such avenue would be to implement a policy prohibiting the recording of conversations absent the consent of all parties.

Under certain circumstances, employers may want to record workplace conversations. However, the employer, not each individual employee, should dictate when recording conversations is appropriate. Company policy should be unequivocal and forbid the recording of any conversations with colleagues or business conversations with third parties, regardless of where such conversations take place, without the consent of all parties to the conversation.

Note that such a policy would not prohibit an employee from using such surreptitious recordings in a lawsuit against the company, or from sharing such recordings with others, because Illinois law no longer requires the consent of all parties. But with clear guidelines in place, Illinois employers would at least have the option of taking disciplinary action against employees who violate the company’s policy. Employees generally don’t want to risk losing their jobs by violating such rules, and may therefore think twice before making secret recordings.

In response to the concerns of employers and others, the Illinois General Assembly is already considering new legislation that would limit the recording of conversations in a way that does not violate the Constitution. And while Illinois employers should monitor the progress of such prospective legislation, adoption of a company policy prohibiting the secret recording of conversations can help reduce the likelihood of such behavior in the interim.

Article By:

Robert K. Neiman

Of:

Much Shelist, P.C.

U.S. Supreme Court Upholds D.C. Circuit Decision in Noel Canning

In a lengthy opinion authored by Justice Stephen Breyer, and drawing heavily on historical practice of Presidents and the Senate, the United States Supreme Court has upheld the decision of the U.S. Court of Appeals for the D.C. Circuit in Noel Canning v. NLRB, concluding that President Obama’s three recess appointments to the National Labor Relations Board in January 2012 (Sharon Block, Richard Griffin, and Terence Flynn) were invalid. The Court upheld the right of the President to make recess appointments both inter- and intra-session, but held that it is the Senate that decides when it is in session by retaining the power to conduct business pursuant to its own rules. The Court also found that a recess of less than ten days “is presumptively too short” to permit the President to make a recess appointment, except in “unusual circumstances”, such as a “national catastrophe”. (The recess here was three days.) The Court also decided that the recess appointment power applies to appointments that first come into existence during a recess and to those that initially occur before a recess but continue to exist during a recess.

As a result of the decision, over 1,000 Board decisions likely are now invalid. According to the National Right to Work Foundation, 999 unpublished decisions and 719 published decisions (totaling 1,718) could be affected. The Chamber of Commerce estimates 1,302 decisions from August 27, 2011 through July 17, 2013 to be suspect.

Article By:

Howard M. Bloom

Of:

Jackson Lewis P.C

Wisconsin’s Password Protection Law Mandates Review of Policies and Practices

Wisconsin has joined the ranks of other states who have limited the circumstances under which employees or applicants can be required to provide access to his or her personal Internet account. The Social Media Protection Act (2013 Wisconsin Act 208) became effective April 16, 2014. The new law makes it illegal for an employer to request or require an employee or applicant to disclose personal Internet account access information. A parallel prohibition within the Act applies to educational institutions and landlords.

A “personal Internet account” is defined as an Internet-based account that is created and used by an individual exclusively for purposes of personal communications. With the passage of the Act, employers are now prohibited from:

Requesting or requiring an employee or applicant, as a condition of employment, to disclose access information to the individual’s personal Internet account or to ask the individual to grant access to or allow observation of that account.
Discharging or otherwise discriminating against an employee for exercising his/her right to refuse to disclose personal Internet account access information.
Refusing to hire an applicant because the individual did not disclose personal Internet account access information.

While the law primarily protects the privacy of employees and applicants, it also offers employers a limited degree of protection. Specifically, employers can:

Request or require an employee to disclose access information to the employer in order for the employer to gain access to or operate an employer-provided (or employer-paid) electronic communications device provided by virtue of the employee’s employment relationship or used for the employer’s business purposes.
Discharge or discipline employees for transferring proprietary or confidential information or financial data to the employee’s personal Internet account without the employer’s authorization.
If the employer has reasonable cause, conduct an investigation or require an employee to cooperate in an investigation of any alleged unauthorized transfer of the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account or to conduct an investigation of any other alleged employment-related misconduct, violation of the law or violation of the employer’s work rules. During the investigation, the employer can require the employee to grant access to or allow observation of the employee’s personal Internet account, but may not require the employee to disclose access information for that account.
Restrict or prohibit an employee’s access to certain Internet sites, while using an employer-provided (or paid for) electronic communications device, or while the employee is using the employer’s network or other resources.
View, access or use information about an employee or applicant that can be obtained without access information or that is available in the public domain.
Request or require an employee to disclose his or her personal electronic mail address.

A person who has been discharged, expelled, disciplined, or otherwise discriminated against for reasons provided under this law may file a complaint with Wisconsin’s Department of Workforce Development (the “DWD”).

Employers should make sure that their employment policies and practices conform to the requirements of 2013 Wisconsin Act 208. In particular, employers should make sure that employees using employer-provided or paid for electronic communication devices for business purposes do not have any expectation of privacy in such devices or the communications that flow from them.

In addition, employees should be informed that they are prohibited from disclosing proprietary or confidential information or financial data to anyone using personal Internet accounts and only for legitimate business reasons if using an employer-provided account. Lastly, employers should make sure that their employment policies are clear in reserving the right to conduct, and in expecting employees to cooperate in, investigations concerning the unauthorized transfer of proprietary, confidential or financial information.

Article By:

Jon E. Anderson

Of:

Godfrey & Kahn S.C.

Michigan Minimum Wage Increases Enacted

Michigan Governor Rick Snyder has signed the Workforce Opportunity Wage Act, mandating gradual increases in the state’s minimum wage to $9.25 an hour by January 1, 2018. The Act ties increases to the rate of inflation beginning 2019.

The first of four raises mandated by Senate Bill 934 (Public Act 138), to $8.15 an hour, occurs September 1, 2014. Michigan’s minimum wage since 2008 has been $7.40 an hour for workers who do not receive a tip and $2.65 an hour for workers earning tips, such as waiters.

Also beginning September 1, 2014, tipped employees would have a minimum rate that is 38 percent of the minimum for non-tipped workers, or about $3.51 an hour.

The state’s hourly minimum for non-tipped workers will increase as follows:

Beginning September 1, 2014, to $8.15.
Beginning January 1, 2016, to $8.50.
Beginning January 1, 2017, to $8.90.
Beginning January 1, 2018, to $9.25.

Starting in 2019, minimum wage increases will be tied to the rate of inflation, but any increase will be capped at 3.5 percent a year. The rate will adjust annually based on a five-year rolling average of inflation for the Midwest. Annual increases would take effect on April 1 of each year. No increase would occur if the state’s unemployment rate for the preceding year was 8.5 percent or higher.

Several other states, including Delaware and Minnesota, also have adopted increases this year, and the minimum wage for workers on new federal contracts has been raised to $10.10 per hour.

Article By:

Maurice G. Jenkins

Matthew Scott Disbrow

Of:

Jackson Lewis P.C.

Category: Labor & Employment