Category: Labor & Employment

The Ninth Circuit Asks the California Supreme Court to Weigh in on Bag Checks

On August 16, 2017, the Ninth Circuit Court of Appeals issued an order certifying a question regarding an important wage and hour issue to the California Supreme Court: Is time spent on an employer’s premises waiting for and undergoing required exit searches of bags or packages voluntarily brought to work for purely personal convenience by employees compensable as “hours worked” under California law?

The question arose in Frlekin v. Apple, Inc., an appeal in a wage and hour class action brought against Apple, Inc., by current and former nonexempt California retail store employees. In the suit, the plaintiffs sought compensation for time that they spent waiting for and undergoing exit searches whenever they left Apple’s retail store locations, pursuant to the company’s Employee Package and Bag Searches policy. The at-issue policy, which is similar to ones in place at many other large retailers, required that employees undergo unpaid, manager-performed bag/package checks before leaving the stores—at breaks or at the end of their shifts.

In July 2015, a district court certified the case as a class action. However, in November 2015, the district court granted Apple’s motion for summary judgment and denied the plaintiffs’ motion for summary judgment and ruled that time spent by class members waiting for and undergoing exit-related bag searches pursuant to Apple’s policy was not compensable as “hours worked” under California law because such time was neither “subject to the control” of the employer nor time during which the class members were “suffered or permitted” to work.

On appeal, the plaintiffs argued that employees are under the control of the employer while waiting for and undergoing the bag checks because they are required whenever entering or leaving the premises. Apple countered that the time is not compensable because employees are not required to bring bags to work, and may avoid the searches altogether by not bringing a bag or package to the workplace. In its order certifying the issue for the California Supreme Court, the Ninth Circuit noted that Apple’s position “finds strong support” in the seminal California Supreme Court decision Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000), in which the court held that time spent by employees using employer-mandated transportation to get to a worksite was compensable, while noting that time spent on “optional free transportation” would not be compensable. However, the Ninth Circuit expressed questions about whether differences in context—i.e., employer-provided transport to and from the workplace versus searches at the worksite—rendered Morillion distinguishable.

Although the U.S. Supreme Court previously determined that similar bag checks were not compensable in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014), the California Supreme Court has not addressed the compensability of bag checks under California’s wage and hour laws, which involve a somewhat different definition of compensable work time. As the Ninth Circuit noted in its order, the consequences of any interpretation of California law with respect to bag searches “will have significant legal, economic, and practical consequences for employers and employees” throughout California and will materially affect the outcome of many pending lawsuits. For the time being, employers should consult with qualified employment counsel to mitigate risk while we wait for the California Supreme Court to weigh in.

This post was written by Philippe A. Lebel of  Drinker Biddle & Reath LLP.
Read more on litigation of wage and hour issues at the National Law Review.

The Consequences of Hate Speech in the Aftermath of Charlottesville: An Employer’s Guide to Handling Rally-Attending Employees

In the aftermath of the events in Charlottesville, Virginia, over the weekend, a Twitter account with the handle @YesYoureRacist began soliciting the assistance of the general public to identify rally attendees based on photographs. “If you recognize any of the Nazis marching in #Charlottesville, send me their names/profiles and I’ll make them famous,” the Twitter-detective tweeted. Not surprisingly, many rally attendees were quickly identified, along with their educational institutions and/or places of employment. For employers this raises an interesting question: “Does my employee who participates in a white supremacist/neo-Nazi rally enjoy any job protections from said participation?” It depends.

In the days following the events in Charlottesville, we have already seen one rally participant resign his employment; three rally participants have been terminated by their respective employers; one university has publicly condemned white supremacy but informed the public they would not expel participating students; one family has publicly disavowed their son; two web-service providers removed a neo-Nazi-themed website from its servers; one Pennsylvania firefighter is under investigation for a distasteful Facebook post directed at an African-American colleague; and two police officers, one in Massachusetts and one in Kentucky, are under scrutiny for making Facebook posts mocking counter-protesters who were run down by a motor vehicle during the rally. In today’s world of mass consumerism, and with the public pressures of social media, this type of public shaming and influence is likely here to stay.

Although public-sector workers generally cannot be terminated for their exercise of speech, many union contracts require “just cause” to terminate, and some employees have employment contracts which control grounds for termination, federal law does not offer any protections for employee hate speech in the private sector, except in limited circumstances discussed later where the employee may otherwise be engaging in protected activity. Thus, for private sector employers not subject to off-duty conduct state law protections, it is not per se illegal to fire workers if what they choose to do or say in their free time reflects poorly on your business.

Employers and employees alike are probably asking: “But what about the Constitutional right to free speech?” The First and Fourteenth Amendments offer little protection for individuals who engage in hate speech and are fired by their private employer. Although “hate speech” in and of itself may be protected (except for fighting words, or true threats of illegal conduct or incitement), a private employer is equally protected when it “speaks” by terminating its employee. Private-sector employers do not have to allow employees to voice beliefs they or other workers may find offensive. While employers in the public sector need to proceed with caution, where a worker attends and participates in something as extreme as a white supremacist/Neo-Nazi rally, the employee will generally lose the protection of the Constitution. For instance, in Lawrenz v. James, the Eleventh Circuit affirmed a correctional institution’s interest in the efficient operation of a correctional facility outweighed a public-sector correctional officer’s First Amendment right to wear, off-duty, a T-shirt adorned with a swastika and the words “White Power.”

Employers must also consider whether the National Labor Relations Act (NLRA) offers any protection to both union and non-union employees engaged in this or similar off-duty conduct. While the NLRA’s primary concern is unionized workers, Section 7 also protects nonunion workers when they engage in “concerted activities for the purpose of . . . mutual aid or protection.” As of late, the National Labor Relations Board has taken an expansive view of Section 7, recently commenting that a picketing worker who made racist comments, with no overt gestures, directed towards a group of black replacement workers was protected. The Board reasoned that one of the necessary conditions of picketing is confrontation, and that impulsive behavior on the picket line is expected, particularly when it is directed against non-striking employees. In affirming the Board’s decision in Cooper Tire & Rubber Co. v National Labor Relations Board, the Eighth Circuit noted the picketing employee’s statements were not violent in character, did not contain overt or implied threats, and were not accompanied by threatening behavior or intimidating actions toward the replacement workers. The speech was protected because it was non-disruptive and occurred while the employee was engaging in protected activity (picketing). Here, it would be difficult for a Charlottesville rally participant to argue that his or her behavior under the circumstances was non-disruptive, non-threatening and/or not intimidating.

To be certain, private employers have a right to hold employees accountable for their viewpoints and to make employment decisions based on those actions, particularly where employers have a good faith belief that an employee’s viewpoints or actions may create a hostile work environment for other employees. However, as with any termination, employers should proceed with caution. Employers should not blindly trust a Twitter-verse investigation and should instead conduct their own investigation before making any employment-related decisions. Moreover, if you are a public sector employer or operate in a state subject to off-duty conduct statutes or one that does not follow the standard at-will employment doctrine, it is imperative you consult with legal counsel before proceeding with discipline or other employment-related decisions. Last, employers must not forget that if the to-be-disciplined employee also falls into a protected class, you should remain cognizant of the potential exposure with respect to a separate or inter-related discrimination claim.

Now may be as good of time as any to re-visit sensitivity and workplace harassment training.

This post was written by Janay M. Stevens of Dinsmore & Shohl LLP.
Read more employment law at the National Law Review.

High Time for Massachusetts Employers to Consider a Marijuana Use Policy

All employers should maintain an employee handbook or similar policy statement that clearly sets out the employer’s position on drug and alcohol use. While federal laws relating to marijuana possession and use have not changed, many states have revised their statutes to legalize, decriminalize, or otherwise permit marijuana possession and use. This has caused some confusion for employers, who must balance the conflicting state and federal rules.

Over thirty states have enacted legislation allowing marijuana use in certain situations. In some states (California and Massachusetts, for example), medical and recreational use is permitted.  In many other states, such as Connecticut and Rhode Island, only medical use is permitted.  A number of states have also adopted legislation that specifically protects marijuana users from termination from employment based solely on a positive test for marijuana.

Massachusetts does not have such a statute. However, the Massachusetts Supreme Judicial Court recently issued a ruling that greatly complicates the issue of how to deal with an employee who is using marijuana. In Barbuto vs. Advantage Sales and Marketing (July 17, 2017), the SJC ruled that an employee who had been terminated as a result of a positive marijuana test could bring a claim for handicap discrimination under the Massachusetts anti-discrimination statute.  In Barbuto, the plaintiff was an employee of the defendant, who had a valid prescription for marijuana to help in treating Crohn’s disease.  After the employee was terminated because of a positive marijuana test, she brought a claim against the employer alleging, among other counts, a failure to provide a reasonable accommodation under the Massachusetts anti-discrimination statute.  The trial court dismissed all of the employee’s claims.  On appeal, the SJC upheld the trial court’s dismissal of most of the claims, but held that the employee could bring a claim under the anti-discrimination statute for disability discrimination and a failure to accommodate.  The SJC then reversed the dismissal of that count and sent the matter back to the trial court.

The SJC was careful to point out that employers could limit or defeat such claims by showing that allowing marijuana use would cause an undue hardship on an employer’s business, such as where the permitted use would conflict with other requirements like the Federal Drug Free Workplace Act. The SJC also clearly stated that Massachusetts law does not require any employer to permit on-site marijuana use as an employee accommodation. Even with those limitations, however, the Barbuto ruling does create some landmines for employers.  Massachusetts employers should become very familiar with the marijuana laws applicable in all states in which they have employees, and should enact employment policies consistent with those laws (which may differ significantly from state to state).  In addition, employers should consider and adopt (and consistently apply) policies that address how a positive test is handled (including addressing any reasonable accommodation issues).  For now, in Massachusetts, an employer will need to show how accommodating an employee’s medically prescribed marijuana use creates an undue hardship on the employer, and employers wishing to prohibit all marijuana use will need to be able to show this.

This post was written byMark J. Tarallo of Murtha Cullina.

Read more employment law news at the National Law Review.

Share Recent Eighth Circuit Case Illustrates the Need for Newest Members of the NLRB to Be Confirmed Sooner Rather Than Later

In another example of a federal circuit court taking the National Labor Relations Board (NLRB) to task for stretching federal labor law past the point of recognition, the Eight Circuit Court of Appeals recently refused to enforce a NLRB order reinstating several former employees. The former employees were discharged after they posted flyers around town insinuating their employer was selling unsafe, germ-laden sandwiches as part of a campaign to enhance their sick leave. MikLin Enterprises, Inc. v. NLRB, No. 14-3099 (July 3, 2017).

In its decision, the Eight Circuit upbraided the NLRB for abandoning and ignoring the Supreme Court of the United States’ precedent regarding when an employee can be disciplined for “disloyalty” in the midst of a union organizing drive. The Eighth Circuit took particular issue with the NLRB’s interpretation of the seminal Supreme Court case NLRB v. Local Union No. 1229, IBEW (Jefferson Standard) and found that the NLRB’s reasoning effectively overruled Jefferson Standard.

Background

MikLin is a family business that owns and operates 10 Jimmy John’s sandwich shop franchises in the Minneapolis-St.Paul area. In 2007, several MikLin workers began an organizing campaign seeking representation by the Industrial Workers of the World (IWW) union.

In an attempt to garner more support for a rerun election, union supporters began a sick leave campaign in early 2011. They posted a flyer on community bulletin boards in MikLin stores with two identical images of a Jimmy John’s sandwich. Above the first image were the words, “YOUR SANDWICH MADE BY A HEALTHY JIMMY JOHN’S WORKER.” The text above the second image said, “YOUR SANDWICH MADE BY A SICK JIMMY JOHN’S WORKER.” Below the pictures, the white text asked: “CAN’T TELL THE DIFFERENCE?” The response, in red and slightly smaller, said: “THAT’S TOO BAD BECAUSE JIMMY JOHN’S WORKERS DON’T GET PAID SICK DAYS. SHOOT, WE CAN’T EVEN CALL IN SICK.” Below, in slightly smaller white text, was the warning, “WE HOPE YOUR IMMUNE SYSTEM IS READY BECAUSE YOU’RE ABOUT TO TAKE THE SANDWICH TEST.” The text at the bottom of the poster asked readers to help the workers win paid sick days by going to their website.

The day before the IWW could request a rerun election, its supporters distributed a press release, letter, and the sandwich poster to more than 100 media contacts. The press release highlighted discussed the employees’ need for sick leave and ended with a threat: If MikLin would not talk with the IWW about their demands for paid sick leave, they would proceed with “dramatic action” by “plastering the city with thousands of Sick Day posters.”

Days later, IWW supporters implemented their threat to plaster the city with posters. However, in the new version of the poster, rather than asking for support of the employees’ request for paid sick leave, the public posters listed the MikLin CEO’s personal telephone number and instructed customers to call him to “LET HIM KNOW YOU WANT HEALTHY WORKERS MAKING YOUR SANDWICH!” Two days later, MikLin fired six employees who coordinated the attack and issued written warnings to three others who assisted in it.

The NLRB Proceedings

The Board’s administrative law judge (ALJ) determined that MikLin violated the National Labor Relations Act by discharging the employees. Citing prior Board decisions, the ALJ ruled that the NLRA “protects employee communications to the public that are part of and related to an ongoing labor dispute” unless they are “so disloyal, reckless, or maliciously untrue as to lose the Act’s protections.” The ALJ found that to lose the act’s protections “an employee’s public criticism . . . must evidence ‘a malicious motive’ or be made with knowledge of the statements’ falsity or with reckless disregard for their truth or falsity.”

The ALJ found that the posters in question were not maliciously untrue. “While ‘it is not literally true that employees could not call in sick,’ the ALJ observed, employees ‘are subject to discipline if they call in sick without finding a replacement,’” and thus—according to the ALJ—the assertion that employees were required to work when sick was protected hyperbole. Though MikLin had a strong track record with the health department, the ALJ found that “it is at least arguable that [MikLin’s] sick leave policy subjects the public to an increased risk of food borne disease.”

A divided panel of the Board affirmed the ALJ’s findings and conclusions. The majority found “that neither the posters nor the press release were shown to be so disloyal, reckless, or maliciously untrue as to lose the Act’s protection.” The public communications “were clearly related to the ongoing labor dispute concerning the employees’ desire for paid sick leave. . . . Indeed, any person viewing the posters and press release would reasonably understand that the motive for the communications was to garner support for the campaign to improve the employees’ terms and conditions of employment by obtaining paid sick leave rather than to disparage [MikLin] or its product.”

MikLin appealed the Board’s order reinstating the employees to the Eighth Circuit Court of Appeals. On appeal, a three-judge panel upheld the NLRB’s ruling, but upon rehearing en banc by the full court, the ruling was overturned.

The Eighth Circuit’s Analysis

In its full court hearing, the Eighth Circuit took the NLRB to task for significantly misreading the Supreme Court’s decision in Jefferson Standard. First, the majority focused on the Board’s interpretation that no act of employee disparagement is unprotected disloyalty unless it is “maliciously motivated to harm the employer.” They found this additional requirement impermissibly overruled Jefferson Standard.

Second the court balked at the Board’s definition of “malicious motive.” The Board excluded from Jefferson Standard’s interpretation of Section 10(c) of the NLRA all employee disparagement that is part of or directly related to an ongoing labor dispute as improper. In other words, the Board refused to treat as “disloyal” any public communication intended to advance employees’ aims in a labor dispute, regardless of the manner in which, and the extent to which, it harms the employer.

The court rejected that idea:

By requiring an employer to show that employees had a subjective intent to harm, and burdening that requirement with an overly restrictive need to show “malicious motive,” the Board has effectively removed from the Jefferson Standard inquiry the central Section 10(c) issue as defined by the Supreme Court — whether the means used reflect indefensible employee disloyalty. This is an error of law.

Rather than employee motive, the Eighth Circuit explained that critical question in the Jefferson Standard disloyalty inquiry is whether the employees’ public communications reasonably targeted the employer’s labor practices or indefensibly disparaged the quality of the employer’s products or services. The Eight Circuit found that when employees convince customers not to patronize an employer because its labor practices are unfair, subsequent settlement of the labor dispute brings the customers back—to the benefit of both employer and employee. By contrast, the court found, sharply disparaging the employer’s products or services as unsafe, unhealthy, or of shoddy quality causes harm that outlasts the labor dispute to the detriment of employees, as well as the employer.

Key Takeaways

While the Eighth Circuit’s decision is heartening, its effect will be limited for the time being as the NLRB is under no obligation to recognize the court’s interpretation of federal labor law. Further, the decision highlights the cost of fighting incorrect NLRB decisions for employers; MikLin had to appeal the ALJ’s decision to the NLRB, then appeal that decision to the Eighth Circuit, and then request a rehearing after the three-judge panel wrongly decided the appeal. Many employers simply do not have the resources to see a fight like this through to the end.

With President Trump’s selections to the NLRB being vetted by Congress this week, we can hope for a light at the end of this long, dark tunnel for employers.

This post was written byMatthew J. Kelley of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Go to the National Law Review for more legal analysis.

Sign of Future Changes? DOL Proposes 18-Month Extension of Transition Period for Compliance With ERISA “Fiduciary Investment Advice” Rule

On August 9, the US Department of Labor (DOL) announced in a court filing that it has proposed an 18-month extension of the full implementation of the Best Interest Contract Exemption (the “BIC Exemption”) under the ERISA fiduciary investment advice rule. The Proposed Extension would also apply to the Principal Transaction Exemption and Prohibited Transaction Exemption 84-24 (together with the BIC Exemption, the “Exemptions”). In April of this year, the DOL extended the effective date of the Rule until June 9 and limited the requirements of the Exemptions to only require compliance with the “impartial conduct standards” (ICS) through December 31 (the “Transition Period”). If the Proposed Extension is approved, full compliance with the Exemptions will not be required until July 1, 2019.

As described in our earlier advisory, “Compliance With the ERISA Fiduciary Advice Rule for Private Investment Fund Managers and Sponsors and Managed Account Advisers: Beginning June 9, 2017,” compliance with the ICS generally requires that an investment advice fiduciary (1) act in the “best interest” of plan participants and IRA owners; (2) receive no more than “reasonable compensation” (as defined under ERISA and the Internal Revenue Code); and (3) make no materially misleading statements about recommended transactions, fees, compensation and conflicts of interest.

The Proposed Extension was submitted to the Office of Management and Budget (OMB) in the form of an amendment to each of the Exemptions.

This post was written by Henry Bregstein Wendy E. Cohen David Y. Dickstein Jack P. Governale Christian B. Hennion and Gary W. Howell of Katten Muchin Rosenman LLP
For more legal analysis visit the National Law Review.

The Changing Landscape of Sexual Orientation Discrimination Law

From the time Congress passed the Civil Rights Act of 1964 until earlier this year, federal courts have consistently held that the Act’s protections against employment discrimination did not apply to discrimination on the basis of sexual orientation. However, in March, the Seventh Circuit Court of Appeals (which covers Wisconsin, Illinois, and Indiana) became the first court to rule the other way, holding that Title VII of the Civil Rights Act’s prohibition against discrimination on the basis of sex includes discrimination based on sexual orientation. What has occurred in federal courts in the wake of that decision, however, has only muddied the waters.

Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. Prior to the Seventh Circuit’s notable decision, courts had only permitted gay employees to make claims of sex discrimination if the employee could show the discrimination occurred because the employee did not conform to gender stereotypes, not simply because of the employee’s sexual orientation. The Seventh Circuit found that the gender stereotype argument is unnecessary, stating “it is . . . impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex.”

The question is far from settled. In April, in a case involving a gay skydiving instructor who claims he was fired because of his sexual orientation, a three-judge panel of the Second Circuit ruled that it could not follow the Seventh Circuit’s decision. It held that a three-judge panel could not overturn precedential decisions regarding Title VII’s application to sexual orientation discrimination. Such a ruling would require a review by the entire panel of judges. The Second Circuit has granted such a review (an en bancreview), indicating that perhaps the full panel of judges may be willing to follow the lead of the Seventh Circuit.

The picture becomes fuzzier still because of conflicting input from two government agencies. In preparation for its en banc review, the Second Circuit invited the EEOC to offer an opinion on the matter. The EEOC restated a stance it has held since 2012, saying sexual orientation discrimination is inextricably linked to gender and gender stereotypes and should fall under the protection of Title VII. However, on July 26, 2017, the Department of Justice filed a brief taking the opposite position. The DOJ argued Congress did not intend Title VII to apply to sexual orientation, and that expansion of the protection should be left to Congress, not implemented by the courts. The DOJ also says that the court owes no deference to the EEOC.

Because the federal circuits are now split on the issue, the question may eventually be decided by the United States Supreme Court. The Court has already been asked to review a case in which a former security guard at a Georgia hospital claims she was forced to quit because she was gay. The Court has not yet said whether it will hear the case. Ultimately, as the DOJ suggests, Congress could pass legislation to decide the issue one way or the other.

The takeaway from this flurry of activity is that this is an area of law that is very much in flux. For decades, the position of federal courts in regards to sexual orientation discrimination under Title VII was clear. Now, the landscape has shifted, and the ground is still settling. Employers should be aware that changes are happening quickly in this area and proceed cautiously when a situation potentially involving a sexual orientation discrimination claim arises.

This post was written by Mark G Jeffries of  Steptoe & Johnson PLLC.
Much more legal analysis at the National Law Review.

What Is Going On With The Revised EEO-1 Form? Acting EEOC Chair Provides Insight Into Its Status

As loyal readers of our blog are aware, in February 2016, the EEOC released a rule to amend the Form EEO-1.  The new rule requires private employers (including federal contractors) with 100 or more employees to submit pay data with their EEO-1 reports.  Employers with fewer than 100 employees will still not need to file an EEO-1.  Federal contractors with 50-99 employees are still required to file an EEO-1, but are not required to submit the new pay data.  The rule is slated to go into effect on March 31, 2018.

Since the election of President Trump, employers have been watching anxiously to see if the new form and the burdens it places on them will be modified or ideally repealed.  Although employers are not required to submit the new form until March 2018, the addition of compensation information has dramatically increased the complexity of preparing EEO-1 submissions.  As a consequence, if the new EEO-1 form is to remain in effect, employers should start preparing for this new requirement immediately (if they have not already begun).

Efforts have been underway to rescind the new EEO-1 form – including efforts in Congress.  The Chamber of Commerce requested that the Office of Management and Budget (“OMB”) rescind the new form because it violates the Paperwork Reduction Act (“PRA”), arguing that the EEOC’s revised EEO-1 does not “(1) minimize the burden on those required to comply with government requests; (2) maximize the utility of the information being sought; and/or (3) ensure that the information provided is subject to appropriate confidentiality and privacy protections” as required by the PRA.

On August 3, 2017, Acting Chair of the Equal Employment Opportunity Commission (“EEOC”), Victoria Lipnic, speaking at the Industry National Liaison Group’s Annual Conference in San Antonio, Texas, discussed the fate of the revised Form EEO-1.  Speech provided new information about the EEO-1 and her efforts to have the revised form rescinded.

Chair Lipnic noted that the Office of Information and Regulatory Affairs (“OIRA”), which is housed within the OMB, would be the entity deciding Chamber of Commerce’s challenge.  Chair Lipnic informed the gathering that the Administrator of OIRA, Neomi Rao, had only recently been confirmed to the post, but that she (Chair Lipnic) had already reached out to discuss the issues raised by the new EEO-1 form.

Chair Lipnic shared that she has sent Administrator Rao a memorandum, asking OIRA to decide by the end of this month (August 2017) whether to implement or discard the wage data collection portion of the revised EEO-1.  Recognizing the burden posed by the new compensation data requirements, Chair Lipnic expressed that it was important to provide employers with information about the fate of the revised EEO-1 sooner rather than later, so employers can prepare to comply.  In Chair Lipnic’s words, “time is of the essence.”

This post was written by Connie N Bertram Guy Brenner and Alex C Weinstein of Proskauer Rose LLP.
Read more legal analysis at the National Law Review.

California Employers Face New Notice Requirement for Domestic Violence, Sexual Assault, and Stalking Time Off

The California Division of Labor Standards Enforcement (DLSE) has published a new form that must be added to the growing list of documents that employers are required to provide to employees at the time of hire.

The new form refers to employees’ rights under California Labor Code Section 230.1 relating to protections of employees who are victims of domestic violence, sexual assault, and/or stalking. Last October, we notified California employers about this new law amending Section 230.1, Assembly Bill (AB) 2337. The amended law requires employers with 25 or more employees to provide an employee with written notice of his or her rights to take time off for the following purposes:

  1. “To seek medical attention for injuries caused by domestic violence, sexual assault, or stalking.
  2. To obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence, sexual assault, or stalking.
  3. To obtain psychological counseling related to an experience of domestic violence, sexual assault, or stalking.
  4. To participate in safety planning and take other actions to increase safety from future domestic violence, sexual assault, or stalking, including temporary or permanent relocation.”

The law requires employers to provide the notice “to new employees upon hire and to other employees upon request.”

As we reported previously, employers were not required to distribute this information until the California Labor Commissioner published a form employers could use to comply with the law. The law gave the Labor Commissioner until “on or before July 1, 2017” to develop and post the form.

As required by AB 2337, the Labor Commissioner’s office recently released the notice. The DLSE has made both an English and Spanish version of the notice available on its website. The notice also contains information on employees’ rights to reasonable accommodation and to be free from retaliation and discrimination.

Finally, the new law clarifies that employers that do not use the Labor Commissioner’s notice may use an alternative that is “substantially similar in content and clarity to the form developed by the Labor Commissioner.”

This post was written by Christopher W. Olmsted and Hera S. Arsen of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Read more legal analysis on the National Law Review.

Employees Celebrate Chip Party: Embedding RFID Chips – Would You Agree to This?

On 1 August 2017, employees of a Wisconsin-based technology company enjoyed a “Chip Party” – but not the salty kind.  21 of Three Square Market’s 85 employees agreed to allow their employer to embed radio frequency identification chips in their bodies. We are familiar with the Internet of Things, is this the Internet of People?

Three Square Market (known as 32M) highlighted the convenience of microchipping their employees, reporting that they will be able to use the RFID chip to make purchases in the company break room, open doors, access copy machines and log in to their computers.

While the “chipped” employees reported that they felt only a brief sting when the chips were inserted, chipping employees draws deeper cuts through ethical and privacy issues.

One such issue is the potential for the technology to gradually encroach with further applications not contemplated by its original purpose. RFID technology has the potential to be used for surveillance and location-tracking purposes, similar to GPS technology. It also has potential to be used as a password or authentication tool, to store health information, access public transport or even as a passport.

While these potential applications will offer convenience to employers and consumers, the value of the information generated by each transaction is arguably greater for the marketers, data brokers and law enforcement entities that use it for their own purposes. Once data like this exists it can be accessed in all manner of circumstances.  Can you ever provide sufficient advice and counselling to employees to create informed consent free from the power imbalance of the employment relationship?

All keen on tech here at K&L Gates, but no one was putting their hand up for a similar program here, we’ll all just use our pass card to open the door, thanks.  We were left brainstorming films that use implants to see where this technology could take us as it is all too common in Sci-Fi films.  Have a look at The Final Cut, 2004 (warning 37% Rotten Tomato rating), where implants took centre stage by storing people’s experiences.  We are not there yet, but we have taken the first wobbly step on the path.

Read more about 32M’s use of RFID chips here.

See here to find out more about tracking employees with other technologies.

Read more legal analysis on the National Law Review.

Olivia Coburn and Cameron Abbott of K&L Gates contributed this article.

Wave of the Future or a Step Too Far? Wisconsin Company Offers Employees Microchip Implants, Employment Issues Abound

When wireless is perfectly applied the whole earth will be converted into a huge brain, which in fact it is, all things being particles of a real and rhythmic whole. We shall be able to communicate with one another instantly, irrespective of distance. . . . and the instruments through which we shall be able to do his will be amazingly simple compared with our present telephone. A man will be able to carry one in his vest pocket.

–Nikola Tesla, 1926

While we may now take Tesla’s connected world for granted, one cannot help but wonder what readers thought of his predictions in 1926 when he made the above statements in a magazine interview. It remains to be seen whether a similar pattern of skepticism, realization, and acceptance will eventually emerge regarding news that a vending machine company is offering its employees the opportunity to have microchips embedded in their hands to allow more convenient access to facilities, computers, and financial accounts.

The Wisconsin-based employer is reportedly the first in the United States to offer microchips (at a cost to the employer of $300 each) to employees on a voluntary basis. The microchip, roughly the size of a grain of rice, would be inserted into an employee’s hand between the thumb and forefinger, and could be used instead of a key to access buildings, log onto computers or printers, and even pay for goods in the company’s break room. It is not unlike fingerprint or other biometric technology that is becoming more widely used. In this case, however, the pertinent information is stored on the embedded microchip.

The company noted that in the future, the chip may also be able to store medical information or be used for transactions outside of the company. The chip’s technology is not, however, currently able to use GPS to track employees’ whereabouts.

Employers considering whether to implement such emerging technology may want to carefully assess whether the convenience outweighs the risks. Among the legal issues are the following:

Personal Privacy

While the company making headlines has stated that it will not use the technology to track its employees’ whereabouts (and the technology cannot currently support GPS monitoring), embedded microchips like this could create an electronic trail of the employee’s whereabouts whenever the employee is scanned to access secured locations.

Depending on where access points are installed, an employer could gain useful information, such as how long an employee spent in the break room, in the same vicinity as another employee who was allegedly harassed, or where material went missing. Further, having a record of frequent “check-ins” throughout the day as the employee accesses buildings, printers, computers, vehicles, etc. might aid in verifying time records for payroll purposes or compliance with delivery schedules and other customer expectations. This technology is already available to employers through access cards, login PINs, and other devices. The embedded chip would be another technology to use for that purpose, and it would be more difficult to trick the system with “buddy punches” and other surreptitious behavior with microchip technology. On the other hand, an employer could also theoretically confirm how long an employee spent in the restroom, at a union meeting, or complaining to human resources.

If embedded chips ever advance to the point of supporting GPS, a current body of case law regarding non-embedded GPS devices (like phones and devices installed on company vehicles) offers insights into potential legal risks. Companies use these technologies to track the whereabouts of employees, but that also gives companies information that could form the basis of a discrimination claim. For example, a company may learn that an employee is regularly at a medical clinic, which the employee might use to claim disability discrimination. Or, in Wisconsin where state law protects against discrimination based on the use or non-use of lawful products, the employer might learn that the employee spends a lot of off-duty time at the neighborhood bar, which could lead to a claim that the employee was discriminated against for using legal products while not on duty.

In addition, requiring GPS tracking of employees’ whereabouts is a mandatory subject of bargaining for unionized employees. Even for non-union employees, courts have found that employers go too far if they track employees’ whereabouts in places where employees would have a reasonable expectation of privacy (like their homes). Public employers face even greater risks in using GPS technology because courts have found that GPS technology may qualify as a search under the Fourth Amendment.

Data Privacy

Information from the chip (e.g., banking information and medical information) has value and could be the target of theft. Just as personal information could be hacked from other company databases and infrastructure, hacking may be a possibility with this new technology. Because the chip is provided by the employer, would the employer be liable for damages resulting from the misappropriation of stolen information? If an employer were negligent in implementing security protocols on the microchips, there could be litigation over the employer’s liability.

Workers’ Compensation

If an employee has a medical reaction from the implant or the procedure of implanting the chip (for example, developing an infection), there is a possibility that the medical reaction could give rise to a workers’ compensation claim because the chip was provided by the employer for work-related reasons.

Medical and Religious Accommodation

The employer in question here is not requiring employees to embed the chips, but requiring employees to do so would be difficult. Employees would likely have a right to opt out of the requirement based on medical or religious objections. It is not unlike requiring employees to get an annual flu vaccine. Some employees are medically unable and must be granted a medical accommodation under the Americans with Disabilities Act and applicable state laws (absent an undue hardship to the employer). Others may object on religious grounds and therefore qualify for accommodations on that basis.  At least one court has supported an employee’s right to decline on religious grounds far less invasive biometric access technology.

A Look Into the Future

While the microchips currently in use appear to serve limited purposes, it is not farfetched that the technology will continue to develop and allow new uses. Employees may be comfortable with the current use, but not with future uses. Clear communication with employees as to the capabilities and uses of the chip would be essential to minimizing legal risk.

Even more practically, the technology of the chip itself may become outdated or employees might leave their employment with the company and the company would need to determine what to do with the chip already embedded into the employee. This could create medical challenges in removing the chip or controversies with the employee over who has rights to the chip itself or is obligated to pay for its removal.

While the company at issue here has not made implanting a microchip a condition of employment, social, economic, and practical influences could leave employees with little alternative. Just like the convenience of direct deposit has made paper payroll checks virtually obsolete, so too the convenience of chip technology may render physical keys, identification badges, and similar access control measures a thing of the past. Why risk losing or forgetting your identification badge when you can guarantee the necessary data is with you at all times? Financially, it seems likely that an employer could offer an incentive to employees who make use of the chip technology much like auto insurance companies offer premium reductions to those who permit tracking of their driving habits. Many employers already offer shift premiums, are chip premiums on the horizon?

Ultimately, while this developing technology may certainly provide some added convenience and may not be all that significant a departure from our society’s current reliance on mobile devices, embedding a microchip into an employee’s body takes the invasiveness of the technology and the legal ramifications one step further and requires a thoughtful weighing of the risks versus the benefits.

More legal analysis is added daily at The National Law Review.

This post was written by Keith E. Kopplin  and Sarah J. Platt of Ogletree, Deakins, Nash, Smoak & Stewart, P.C..