Hunton Profile

Administrative Law Task Force

The Administrative Task Force plays a critical role in keeping our OSHA practice current and vibrant.  We follow developments daily and we work together to analyze the impact that proposed and actual changes will have on the law in general and specifically on our client’s industries. Employers today face an unprecedented range of workplace safety and OSHA legal issues as government increases worker safety and health regulation and demands meticulous reviews by its OSHA inspection force.

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NLRB Releases Second Round Of Guidance For Social Media Cases

Last week, the NLRB’s Acting General Counsel, Lafe Solomon, released a second report containing guidance relating to employees’ use of social media.  This report comes less than six months after the release of the NLRB’s first report on the subject in August 2011.  Like the August report, the new release summarizes a number of recent cases decided by the NLRB in which an employee was terminated, at least in part, because of his or her comments on social media websites.

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U.S. Department Of Labor Issues New Retaliation Fact Sheets

The U.S. Department of Labor provides general information and compliance guidance regarding numerous wage, hour, employment, and labor laws via “fact sheets” which are available to employees, employers, and the general public. Fact sheets can serve as helpful reference and compliance material for employers. On December 23, 2011, the DOL issued three new fact sheets on the issue of unlawful retaliation.  These newly released fact sheets address retaliation under the Fair Labor Standards Act (“FLSA”), the Family and Medical Leave Act (“FMLA”), and the Migrant and Seasonal Agricultural Workers Protection Act (“MSPA”).

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DOL Proposes To Extend FLSA Protections To In-Home Care Workers

On December 15, 2011, the Department of Labor issued proposed rule changes that would extend the Fair Labor Standards Act’s minimum wage and overtime protections to the roughly two million in-home caregivers providing services to the elderly and infirm.  If enacted, the changes would eliminate the FLSA’s longstanding companionship and live-in domestic service exemptions, and likely lead to a major change in the in-home care worker industry.

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Eleventh Circuit Panel Unanimously Affirms Equal Protection Ruling For Transgender Georgia Public Employee

On December 6, 2011, just five days after it heard oral arguments in the case, the Eleventh Circuit Court of Appeals affirmed a victory for a transgender woman, Vandiver Elizabeth Glenn, who sued her former employer, the Georgia state legislature, for violating the Equal Protection Clause of the United States Constitution.  A three-judge panel unanimously affirmed a summary judgment for the plaintiff, who was fired from the General Office of Legislative Council for undergoing a gender transition.

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Be Cautious Of How Far Back You Are Looking Into An Applicant's Civil Or Criminal History

The U.S. Department of Justice has moved to intervene to defend the constitutionality of the Fair Credit Reporting Act (“Act”) against a consumer reporting agency accused of violating § 605 of the Act.

On November 23, 2010, Shamara T. King filed suit against General Information Services, Inc. (“GIS”) in Pennsylvania federal court claiming violations of the Act.  (See, King v. General Information Services., No. 2:10-CV-06850 (E.D. Pa. Nov. 23, 2010).  Specifically, King claims that when she applied for a job with the United States Postal Service, GIS performed a background check that included details about a car theft arrest that occurred more than seven years prior to the requested background check.  According to § 605(a)(5) of the Act, consumer reporting agencies cannot provide adverse information, except for criminal convictions, “which antedates the report by more than seven years.”

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California Passes Law Prohibiting Discrimination Based On Genetic Information

California Governor Jerry Brown recently signed into law Senate Bill No. 559 (SB 559), which prohibits discrimination based on an individual’s genetic information.  While SB 559 significantly expands the protections from genetic discrimination provided under the federal Genetic Information Nondiscrimination Act of 2008 (GINA), at this time, its impact on most California employers is thought to be limited to the potential for greater damages to be awarded under it than under its federal counterpart.

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California Joins The Growing List Of States Restricting Employers' Use Of Consumer Credit Reports

On October 10, 2011, California became the seventh state to enact legislation restricting public and private employers alike from using consumer credit reports in making hiring and other personnel decisions.  Assembly Bill No. 22 both adds a new provision to the California Labor Code -- Section 1024.5 -- and amends California’s Consumer Credit Reporting Agencies Act (“CCRAA”).  Effective January 1, 2012, California employers will be prohibited from requesting a consumer credit report for employment purposes unless they meet one of the limited statutory exceptions, and those employers meeting an exception, will be subjected to increased disclosure requirements.  Connecticut, Illinois, Hawaii, Oregon, Maryland and Washington already have similar laws on the books, and many other states, as well as the federal government, are contemplating similar legislation.  This trend creates a potential “credit-centric” minefield for employers that do business in any one or more of these states.  In light of the multiple laws affecting their use, employers who utilize consumer credit reports in making personnel decisions should proceed cautiously.  Employers must evaluate the need for these reports in making personnel decisions, review and modify their policies to ensure compliance with the myriad of regulations in this area, and monitor any new developments to ensure continued compliance. 

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Texas Supreme Court Broadens Preemptive Power Of Workers' Comp Act

The Texas Supreme Court officially closed the door on the ability of workers’ compensation claimants to seek supplemental relief under the Texas Insurance Code.  In Texas Mutual Ins. Co. v. Ruttiger, --- S.W.3d ---, No. 08-751 (Tex. Aug. 26, 2011), the Court held that the Texas Workers’ Compensation Act (“Act”) preempts claims against workers’ compensation insurers for unfair or “bad faith” settlement practices under the Texas Insurance Code. 

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Weapons Allowed?: Texas SB 321 And Guns On Company Property

Effective September 1, 2011, many Texas employers may no longer prohibit some employees from keeping guns in their vehicles while parked on company property. On June 17, 2011, Texas Governor Rick Perry signed SB 321, which amends Chapter 52 of the Texas Labor Code and makes it unlawful for a public or private employer to prohibit licensed or legally authorized employees from keeping a firearm or ammunition in a locked, privately owned vehicle in a parking lot, parking garage, or other employer-provided parking area. SB 321 will require many employers to revise the anti-weapon policies that likely have been in place for years.

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Employers Take Note: NLRB Provides Guidance For Social Media Cases

The focus on social media by the National Labor Relations Board (“NLRB” or the “Board”) continues as evidenced by its recent report issued by Acting General Counsel Lafe Solomon.  The report discusses fourteen social media cases that were decided by the Board after Regional Directors submitted requests for advice to the Board’s Division of Advice.  The cases highlighted by Solomon give some insight to how the NLRB will handle various social media issues in the future.

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No Retaliation Claim For Applicants Under The FLSA

The Fair Labor Standards Act, 29 U.S.C. 215(a)(3) ("FLSA") forbids an employer from retaliating against an employee for making prior FLSA complaints.  Simple concept, one would think.  But with most employment related legal issues, the "devil" is often in the details.  What is an "employee," exactly, under the FLSA?  Does it include an applicant for employment, who is retaliated against by a prospective employer?  A divided panel of the U.S. Court of Appeals for the Fourth Circuit recently ruled that the answer is "no," rejecting a claim that a prospective employer violated the FLSA by rescinding an employment offer to an applicant after learning about a FLSA lawsuit the applicant filed against her prior employer.  Dellinger v. Sci. Applications Int'l Corp., 2011 U.S. App. LEXIS 16635 (4th Cir. Aug. 12, 2011).

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Connecticut Restricts Employer Access To Employee Credit Reports

In March, we reported on the increasing attention that federal and state legislatures, as well as the EEOC, were paying to employers’ use of employee credit checks in employment decisions. At the time of posting, four states had laws regulating employer use of credit history data and fourteen additional states were considering similar measures. Earlier this month, Connecticut passed Public Act No. 11-223 regulating employer use of credit reports.

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Update: NLRB Continues To Closely Probe Employer Terminations Following Employee Complaints On Social Media

In October 2010, the National Labor Relations Board (“NLRB”) raised the eyebrows of employers and observers when its Hartford, Connecticut Regional Office issued an unfair labor practice complaint against an employer after it allegedly terminated an employee for posting unflattering statements about her supervisor on Facebook.  The NLRB and the company settled the complaint in February 2011, on condition that the company revise its rules so they do not improperly restrict employees from discussing their wages, hours and working conditions with coworkers and others while not at work.  The employer also agreed that it would not discipline or discharge employees for engaging in such discussions.

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DOL Announces Smartphone "App" To Help Employees Track Work Hours

The United States Department of Labor (“DOL”) has announced the launch of its first application, or “app,” for smartphones to “help employees independently track the hours they work and determine the wages they are owed” in accordance with the Fair Labor Standards Act (“FLSA”). The application is available in both English and Spanish and allows employees to privately record regular work hours, break and meal times, and any overtime hours. The free app is currently compatible only with iPhone and iPod Touch; however, the DOL is exploring updates for compatibility with other smart phones such as Android and Blackberry phones.

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Ninth Circuit: SOX Whistleblower Protection Doesn't Cover Employee Disclosures To The Media

On May 3, the Ninth Circuit ruled in Tides v. Boeing Co., No. 10-35238, that the whistleblower provisions of the Sarbanes-Oxley Act (“SOX”) do not protect employees who disclose information to the media. Although SOX bars public companies from retaliating against employees who report conduct that they reasonably believe constitutes certain types of fraud or securities violations to Congress, federal regulatory or law enforcement agencies, or a person with supervisory authority over the employee, the Ninth Circuit held that this protection does not extend to employee disclosures to the media. Federal appeals courts have previously ruled on press disclosures under other whistleblower statutes, but the Ninth Circuit’s ruling is the first to analyze such disclosures under SOX.

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Supreme Court Holds That Class Arbitration Waivers Are Enforceable Under The FAA

On April 27, the U.S. Supreme Court decided that the Federal Arbitration Act (“FAA”) preempts rules created by states, such as California, that classify most class action arbitration waivers in consumer contracts as unconscionable.  The Court’s 5-4 decision in AT&T Mobility LLC v. Concepcion, 2011 WL 1561956 (U.S. Apr. 27, 2011) could signal big changes for consumer − and potentially wage and hour − class action litigation.

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Update: NLRB Remains Focused on Social Media Issues

The National Labor Relations Board (“NLRB”) regional offices addressing complaints involving employers’ social media policies must seek advice from the NLRB’s Division of Advice before taking any action. The memorandum, issued by the NLRB’s Office of the General Counsel on April 12th, added social media disputes to the list of matters that must be submitted to the Division of Advice.  The Division of Advice is responsible for issuing opinions on difficult or novel labor issues. 

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Employee Texting While Driving May Lead To Employer Fines

Most of us have sent a text while driving, and we all know that this practice can be dangerous. This is as true on the rural roads of America, as it is on the busiest of freeways. It is no surprise, with all of our technological distractions, that motor vehicle crashes are consistently the leading cause of worker fatalities. It is also no surprise that OSHA has taken notice of this issue and is taking action. OSHA is prepared to start issuing citations and fines to employers for distracted driving by employees.

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Plaintiffs Not Sitting Still When It Comes To Filing "Suitable Seating" Class Actions In California

The Bright v. 99 Cents Only Stores decision, issued by the California Court of Appeal for the Second Appellate District last November, illustrates a recent wage and hour class action litigation trend against retail employers in California over lack of “suitable seating” for their employees. The California Supreme Court denied review of this case in February 2011.

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Look Before You Tweet: Employer May Be Liable For Impersonating Employee On Facebook, Twitter

An employer who allegedly posted to an employee’s Facebook and Twitter accounts without her consent may face liability for its actions, according to a federal judge in Illinois. The case is Maremont v. Susan Fredman Design Group, Ltd., in the U.S. District Court for the Northern District of Illinois (2011 U.S. Dist. LEXIS 26441, March 15, 2011).

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How Can Employers Deflect The Cat's Paw?

Earlier this month, the U.S. Supreme Court ruled that the “cat’s paw” theory of employment discrimination -- that an employer can be liable for the discriminatory animus of an employee who influences, but does not make, an ultimate employment decision -- applies to claims brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA), the law that protects individuals called to military service during their private employment.  In a unanimous decision, the Court held that

“if a supervisor performs an act motivated by anti-military animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.” 

Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011).

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Are English-Only Policies A Business Necessity?

During the past 50 years, the American workforce has changed drastically. One of the most noticeable changes has been the absorption of immigrants into the workforce who do not speak English as their first language.

In response to the increased linguistic diversity of the workforce, many employers have implemented policies that limit or completely prohibit their employees from speaking languages other than English while at work. These so called “English-only” polices may violate the national origin protections of Title VII of the Civil Rights Act of 1964. Employers that implement these policies are at risk of being sued not only by employees who feel wronged by the policy, but also by the U.S. Equal Employment Opportunity Commission.

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As The EEOC World Turns In 2011

The 2010 fiscal year was a busy one for the EEOC as employees filed a record number of charges.  See A Year In Review: EEOC Charges & Trends.  This wave of charges is historic -- not just because of the number of charges filed, but also because of the evolving trends in the types of claims made. Unfortunately for employers, these trends will likely continue in 2011 and beyond.

Historically, the most common types of claims filed were those of race and sex discrimination. Although these particular types of claims remain prevalent (the number of both race and sex discrimination claims increased in 2010), other types of claims are emerging at an alarming rate due to recent changes in the legal landscape.

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Legislatures And The EEOC Shine Spotlight On Credit Checks

A commonly used pre-employment screening method--conducting credit checks--has drawn increased scrutiny in recent months. Legislatures at the state and federal levels are considering bills that would limit employer use of credit checks. Moreover, two recently-filed lawsuits, one of which was filed by the EEOC, seek to challenge the use of pre-employment credit checks in hiring decisions. 

Only four states--Hawaii, Illinois, Oregon, and Washington--currently have laws regulating employer use of credit history data. Sparked by the downturn in the economy, fourteen additional states--California, Colorado, Connecticut, Indiana, Kentucky, Maryland, Missouri, Nebraska, New Jersey, New Mexico, New York, Pennsylvania, Texas, Vermont--are considering similar measures.

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Supreme Court Upholds NASA Background Checks

On January 19, 2011, the United States Supreme Court issued a unanimous ruling in National Aeronautics and Space Administration v. Nelson, finding that questions contained in background checks NASA conducted on independent contractors are reasonable, employment-related inquiries that further the government’s interests in managing its internal operations.  Stating that “[t]he challenged portions of the forms consist of reasonable inquiries in an employment background check,” the Court reversed a Ninth Circuit decision that the questions NASA asked of the contractors invaded their privacy.

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New York's Wage Theft Prevention Act

On December 13, 2010, New York passed the Wage Theft Prevention Act (“WTPA”).  The WTPA, which amends the state’s labor law regarding wage payments, and becomes effective on April 12, 2011.  It  heightens the requirements of employers as relating to notice and the payment of wages while also stiffening the penalties for notice and payment failures.

Notice Requirements:

The law currently in effect requires employers to inform new hires in writing of their designated pay date, rate of pay, and overtime rate, if applicable.  The WTPA revises this portion of the law, placing further obligations on employers by requiring this notice to be issued not only upon hire but also by February 1 of every subsequent year.  The WTPA also expands the information to be provided to include: the employee’s rate of pay and how it is paid (hourly, weekly, commission, etc.); allowances claimed against minimum wage (e.g., tip, meal or lodging credits); the employer’s regular pay day; the employer’s name and any “doing business as” names; the address of the employer’s main office or principal place of business and mailing address if different; the employer’s telephone number, plus any other information the Commissioner of Labor deems “material and necessary.”  The notice must be provided in English, or in the employee’s primary language if his/her primary language is not English, and must be signed and acknowledged by the employee each time it is received.

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Watch List 2011 - Key Labor and Employment Regulations And Legislation

The Obama Administration has addressed labor and employment issues aggressively over the past two years.  The Department of Labor, under President Obama’s direction, has articulated its “Plan/Prevent/Protect” agenda and its focus on openness and transparency in labor practices.  As a result of the steps taken by the Obama Administration in 2010, the new Republican-dominated Congress may have to decide a number of regulatory and legislative measures that will directly affect labor and employment law in 2011. The following is a list of proposed regulations and legislation that employers and their attorneys should watch this year:

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Florida Agencies And Contractors Must Use Federal E-Verify System To Confirm Employee Eligibility

Federal law requires employers to only employ individuals who are eligible to work in the United States. The U.S. Department of Homeland Security, in partnership with the U.S. Social Security Administration, has implemented an “E-Verify” system that allows participating employers to verify eligibility in a quick and cost-efficient manner. E-Verify is a free, federal database that compares information submitted by employees to Social Security and Homeland Security records. Employers who use E-Verify can quickly identify and reject persons who are ineligible to work in the United States.  Once employers hire workers, they process their information through the E-Verify database. If the submitted records match, the new employees are eligible to work. If the records do not match, the database notifies the employers, who must then give the worker eight days to provide sufficient proof of eligibility.

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OSHA Declares Texting While Driving A Workplace Hazard

Recently, there has been a large amount of public commentary regarding the dangers of distracted driving, including texting while driving.  The Occupational Safety and Health Administration (OSHA), which regulates workplace safety, has now officially declared texting while driving to be a workplace hazard and an OSHA violation.  In its recent open letter to employers, OSHA explained that:

It is [the employer’s] responsibility and legal obligation to create and maintain a safe and healthful workplace, and that would include having a clear, unequivocal and enforced policy against the hazard of texting while driving.  Companies are in violation of [OSHA] if, by policy or practice, they require texting while driving, or create incentives that encourage or condone it, or they structure work so that texting is a practical necessity for workers to carry out their job.

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Are Social Networking Sites The New Company Water Cooler? The NLRB's Acting General Counsel Thinks So.

Employees are increasingly talking about supervisors and other employees on social networking sites, and sometimes the talk can get nasty.  Complaining about co-workers and supervisors is not new.  However, distributing those complaints via the internet is.  Employers often seek to crack down on such negative talk via policies and disciplinary action.  However, Lafe Solomon, the NLRB’s acting general counsel, has publicly stated that employees have the right to communicate jointly about working conditions, regardless of whether those communications are made on social networking sites or at the company water cooler.  The NLRB will decide the validity of Mr. Solomon’s statement in connection with a recently-issued complaint.

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Georgia Voters Pass Constitutional Amendment Strengthening Enforceability Of Non-Compete Agreements And Restrictive Covenants

When asked on November 2, 2010, “Shall the Constitution of Georgia be amended so as to make Georgia more economically competitive by authorizing legislation to uphold reasonable competitive agreements,” Georgia voters overwhelmingly answered “Yes.” 

By this vote, the Georgia voters approved the Restrictive Covenants Act, a law that will dramatically alter Georgia’s legal landscape regarding non-compete agreements and other restrictive covenants.  The Act increases the enforceability of these agreements and allows courts to modify them to the extent reasonably necessary to enforce and protect legitimate business interests.  In order to become effective, Georgia residents had to amend the state Constitution -- an event that happened three days ago during Georgia’s general election.  Although there is a question regarding when the Act actually will become effective, by its own terms, it became effective on November 3, 2010.  Below is a summary of some of the key provisions of the new law.

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It's Not Too Late to Register For The Health Care Reform Update Webinar

Please join us for a complimentary webinar program on Thursday, November 4,  covering recent developments on:

  • Enforcement
  • "Grandfathered" Status
  • The Immediate Group Health Plan Reforms, including
    • Adult Child Coverage
    • Retroactive Rescissions
    • Lifetime/Annual Limits
    • External/Internal Appeals Process
    • Preventative Services and Other Patient Protections
  • W-2 Health Benefits Reporting
  • FSA/HRA Reimbursement of OTC Drugs
  • Early Retiree Reinsurance Program

Register here.

Special Feature: German Government Moves on Draft Law Regarding Employee Data Protection

On August 25, 2010, the German government approved a draft law concerning special rules for employee data protection, originally proposed by the Federal Ministry of the Interior.  A background paper on the draft law was published on August 25, 2010.

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Please Join Us For a Health Care Reform Update

Please join us for a complimentary webinar program on Thursday, November 4,  covering recent developments on:

  • Enforcement
  • "Grandfathered" Status
  • The Immediate Group Health Plan Reforms, including
    • Adult Child Coverage
    • Retroactive Rescissions
    • Lifetime/Annual Limits
    • External/Internal Appeals Process
    • Preventative Services and Other Patient Protections
  • W-2 Health Benefits Reporting
  • FSA/HRA Reimbursement of OTC Drugs
  • Early Retiree Reinsurance Program

Register here.
 

Recent Lawsuit Reminds Employers: You May Be Liable For Non-Employee Harassment

If an employee told you that a regular customer had a habit of making inappropriate sexual comments to her, would you think that your company could be liable to your employee for the customer’s conduct?  The answer is “yes,” your company could be liable.  A recent lawsuit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”) serves as a reminder that employers may be liable for the harassing conduct of not only their employees, but also, non-employees such as customers, delivery people, copier repair personnel, and independent contractors.

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Hunton & Williams LLP Launches Health Care Reform Center

Hunton & Williams announced today the launch of its new website — the Hunton & Williams Health Care Reform Center, huntonhealthcarereform.com.   The website focuses on legal developments in the area of the recent federal health care reform.

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One Tweak To Offer Letters Could Save Millions

Employers who hold their breath and declare an employment position as “exempt” from the Fair Labor Standards Act’s overtime previsions − all the while knowing that the exempt v. non-exempt question is a close call − should take a simple step to save themselves substantial damages should a court later rule the position non-exempt.

When entering into an employment arrangement with the employee, the employer should obtain the employee’s acknowledgement in writing that the employee’s weekly hours may fluctuate, and that each weekly portion of the employee’s annual salary will constitute payment for all hours worked during that week.

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Employers Should Be Aware Of The Potential For Successor Liability Under The FMLA

Under the Family and Medical Leave Act ("FMLA"), not only is an "employer" responsible for compliance with the FMLA, but any "successor in interest of an employer" is responsible as well. However, the FMLA does not define the term "successor in interest." The meaning of this term is crucial because an employee who has worked for an employer for less than 12 months might still be eligible for FMLA protection if that employer is considered a successor in interest to the employee’s former employer and the employee’s combined length of service for both employers is 12 months or more.

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Unions May Turn To Facebook To Find Unfair Labor Practices

How would you handle the following situation?  You have recently learned that one of your employees “posted” on Facebook complaining about the company, specifically commenting on work conditions and wages.  Several other employees have made comments on this employee’s Facebook page and a discussion has ensued.  These comments and complaints are damaging to the company’s reputation and portray the company in a negative light. 

Your natural inclination may be to instruct the employee to take these comments down and prohibit him from continuing to use Facebook to discuss work issues.  Yet, unions may be looking for you to do exactly that so they can try to file an unfair labor practice charge with the National Labor Relations Board (“NLRB”).  Employers have the right to protect their reputations and to prevent the possible disclosure of confidential information.  But unions may try to construe the above situation and the employer’s reaction to it as interference with an employee’s right to engage in concerted activity, a violation of Section 8 of the National Labor Relations Act (“NLRA”).  Notably, such an argument by unions could apply to both unionized and non-unionized employers. 

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Congress Proposes Additional Independent Contractor Legislation; "The Fair Playing Field Act" Receives Strong Support From White House

Our prior posts have chronicled recent attempts by Congress and state legislatures to crack down on employers who misclassify employees as independent contractors, the most notable of which was the Employee Misclassification Prevention Act that, among other things, seeks to create a cause of action under the FLSA for misclassification and to require employers to keep records of hours worked by independent contractors.  On September 15, Congress took yet another step in the enforcement direction when Senator John Kerry (D-Mass.) and Representative Jim McDermott (D-Wash.) introduced The Fair Playing Field Act of 2010 (S. 3786, H. 6128), which seeks to close a so-called “loophole” under the current tax regime.

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Group Health Plan Reforms -- New Notice Requirements for Immediate Reforms

Set out below is a chart that describes the various notices that are required under government regulations for the group health plan reforms and related requirements that will be in going into effect for plan years beginning on or after September 23, 2010 (e.g., January 1, 2011 for calendar year plans) -- including the special notice requirement for those plans that intend to continue to maintain “grandfathered” status, along with a link to any model notice/language provided by the government.

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No Private Cause of Action Against Employers for Taking a Dip in the Tip Pool

Section 351 of California’s Labor Code prohibits employers from taking any gratuity patrons leave for their employees, and provides that such gratuity is “the sole property of the employee or employees to whom it was paid, given, or left for.”  A number of Courts of Appeal have consistently held that this prohibition does not extend to employer-mandated tip pooling -- where employees must pool and share their tips with other employees.  Louie Hung Kwei Lu, a former card dealer with Hawaiian Gardens Casino, Inc., decided to test these rulings.

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Health Care Reform - Regulations Issued on Expanded Internal/External Claims Review Process For Nongrandfathered Group Health Plans

On July 19, 2010, the United States Departments of Health and Human Services, Labor and Treasury issued interim final regulations covering the mandates under the Patient Protection and Affordable Care Act, as amended (the “Health Care Reform Act”), relating to the internal and external claims review process. These requirements, which do not apply to grandfathered group health plans, substantially expand the claims review and appeals processes that group health plans must follow in administering claims. Because the new requirements apply as of the beginning of the first plan year on or after September 23, 2010, all group health plans, especially self-funded plans that administer claims internally, must begin taking action now to update their claims review processes and plan documentation to comply with the new rules.

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Law Firm Shareholder Does Not Qualify To Bring Workplace Discrimination Claims

According to recent federal court decisions, a shareholder, director, or other individual holding a similar position in a corporation may find his or her job status disqualifies him or her from legal relief under many state and federal anti-discrimination laws should such individual believe that he or she has been the subject of unfair treatment in the workplace. In Kirleis v. Dickie, McCamey & Chilcote, P.C., No. 09-4498 (3rd Circuit July 14, 2010), the U.S. Court of Appeals for the Third Circuit affirmed a district court’s ruling that a law firm shareholder was not an “employee” of the professional corporation protected by federal and state anti-discrimination laws.

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New Illinois Law Restricts Employer Use Of Credit History

As reported on Hunton and Williams LLP’s Privacy and Information Security Law Blog, on August 10, 2010, Illinois Governor Pat Quinn signed the Employee Credit Privacy Act, which prohibits most Illinois employers from inquiring about an applicant’s or employee’s credit history or using an individual’s credit history as a basis for an employment decision. The definition of “employer” under the Act exempts banks, insurance companies, law enforcement agencies, debt collectors and state and local government agencies that require the use of credit history.

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Privacy and Data Security Law Deskbook Addresses Important Labor Law Issues

On July 20, 2010, Hunton & Williams LLP announced the release of the first edition treatise Privacy and Data Security Law Deskbook (Aspen Publishers).  The deskbook provides a detailed overview of the workplace issues affected by information privacy and data security law and is a practical one-stop loose-leaf guide for privacy professionals, compliance officers and lawyers responsible for privacy or data security. 

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Proposed USDA Regulation Requires Slaughter Facilities To Pay Overtime For Inspector Donning And Doffing

The USDA’s Food Safety and Inspection Service (“FSIS”) is proposing an amendment to USDA regulations that would require meat and poultry processors to pay overtime to USDA inspectors who engage in donning and doffing activities that, when combined with the time spent engaged in inspection activities, result in more than 8 hours of work per day.  The FSIS claims that the amendment is necessary to achieve compliance with the Supreme Court’s decision in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), and the Office of Personnel Management’s interpretation of that decision.

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Ninth Circuit Adopts Single Test For Employee/Independent Contractor Determinations

The U.S. Court of Appeals for the Ninth Circuit recently held—consistent with other courts that have considered the issue—that “insurance agents are independent contractors and not employees for purposes of various federal employment statutes,” including ERISA, the ADEA, and Title VII.  In Murray v. Principal Financial Group, Inc., case number 09-16664, the panel unanimously affirmed a district court order granting summary judgment in favor of a purported employer because it found that the plaintiff was an independent contractor, not an employee entitled to the protections of Title VII.  The panel’s opinion clarifies the appropriate test for distinguishing between employees and independent contractors in the context of Title VII, and concludes that despite apparent precedent for multiple tests, there is, in fact, only one.

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Seventh Circuit Holds Nursing Home Violated Title VII In Accommodating Resident's "White-Only" Request

An Indiana nursing home was found in violation of Title VII this month for acceding  to a resident’s request for white-only healthcare providers.  In Chaney v. Plainfield Healthcare Ctr., No. 09-3661 (7th Cir. July 20, 2010), a unanimous panel of the U.S. Court of Appeals for the Seventh Circuit reversed a lower court’s ruling in favor of the nursing home and held that this was a clear violation of Title VII.

The nursing home, Plainfield Healthcare Center (“PHC”), housed a resident who did not want assistance from black nursing assistants.  PHC complied with this racial preference by detailing on an assignment sheet, which employees received daily, that no black nursing assistants should enter the particular resident’s room or provide her with care.  The court held that this policy violated Title VII by creating a racially-charged and hostile work environment, as the assignment sheet unambiguously and daily reminded plaintiff, a black nursing assistant, that certain residents preferred no black nursing assistants, and that unlike white aides, plaintiff was restricted in the rooms she could enter, the care that she could provide, and the patients she could assist.

PHC argued that long-term care facilities have obligations to their clients that place them in a different position than most employers.  PHC further argued that Indiana regulations state that long-term care residents have a right to choose a personal attending physician and other providers of services, and that without the policy, PHC risked exposing black employees to racial harassment from the residents and therefore exposing itself to hostile workplace liability.  The court found all of these arguments unavailing, instead offering several alternative courses of action that PHC could have taken, such as:

  • Warning residents before admitting them of the facility’s non-discrimination policy, and securing in writing each resident’s consent to the policy;
  • Assigning staff based on race-neutral criteria that would minimize the risk of conflict;
  • Advising its employees that they could ask for protection from racially harassing residents; and/or
  • If racially-biased residents wished to employ white aides at their own expense, allowing reasonable access to those aides.

While this case is particularly relevant for providers of long-term care, it also serves as a reminder to all employers that if they cater to customers’ perceived racial preferences, they may be found in violation of Title VII.  Employers faced with customers who demand service-providers of a certain race or ethnicity should, in lieu of formulating policies that accede to such demands, seek the advice of legal counsel to devise solutions that will not run afoul of Title VII.

Break Time For Nursing Mothers Clarified

The Department of Labor’s Wage and Hour Division recently issued a fact sheet explaining employers’ obligations under the break time requirement for nursing mothers found in the Patient Protection and Affordable Care Act, which amends Section 7 of the Fair Labor Standards Act (“FLSA”).

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Employers Beware: ADA Claims On The Rise Now And Into The Foreseeable Future

As was predicted following the passage of the ADA Amendments Act of 2008 (ADAAA), which went into effect in January 2009, there has been a subsequent surge in the filing of lawsuits under the Americans with Disabilities Act (ADA).  Lawsuits brought under the ADA now comprise the highest percentage of claims filed by former employees.  When compared with the number of ADA-related lawsuits filed in the first three months of 2009, there has been a nearly 40% percent increase in the number of ADA-related suits filed in 2010  during the same period.  Moreover, the second quarter of 2010 saw the number of ADA-related lawsuits increase by 15% over those filed in the first quarter.

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Rent-A-Center v. Jackson: A Win for Pro-Arbitration Employers

Who decides whether an arbitration agreement is unconscionable when the agreement explicitly delegates that decision to the arbitrator?  According to a slim majority of the U.S. Supreme Court in Rent-A-Center v. Jackson, No. 09-497, ___ U.S. ___, slip op. (June 21, 2010), the arbitrator does, if a party challenges the enforceability of the arbitration agreement.  The district court may only intervene if a party specifically challenges the validity of the agreement to delegate that decision to the arbitrator.  The decision makes it more difficult for a current or former employee who has signed an arbitration agreement with a proper delegation provision to avoid arbitration and bring a private lawsuit.  That is a positive result for pro-arbitration employers.

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Sales Representatives' Overtime Lawsuits Continue To Result In Conflicting Decisions

In a recent decision, a federal district court judge held that Abbott Laboratories, Inc.’s pharmaceutical sales representatives do not qualify for either the outside sales or administrative exemptions of the Fair Labor Standards Act (“FLSA”).  Under the FLSA, employers are required to pay overtime for hours worked over 40 in a week, unless an employee qualifies for an exemption under the Act. While the FLSA contains many such exemptions, the most commonly used exemptions are the executive, outside sales, and administrative exemptions.  Each exemption has specific requirements that must be met.

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Senate Labor Committee To Conduct Hearing On Independent Contractor Legislation

The Senate Committee on Health, Education, Labor, and Pensions has announced that it will conduct a hearing on Thursday, June 17, 2010 on the Employee Misclassification Prevention Act, which was introduced in both the Senate and House on April 22, 2010.  The Act seeks to amend the Fair Labor Standards Act so that worker misclassification is a violation of federal law.  The act also requires employers to maintain records reflecting hours worked and wages paid to independent contractors.  See our previous post for a detailed discussion of the legislation.

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Eleventh Circuit Upholds Restrictive Covenants In Employment Agreement

A recent Eleventh Circuit Court of Appeals decision upheld the validity of noncompetition and nonsolicitation covenants in an employment agreement governed by Georgia law.  In H&R Block Eastern Enterprises, Inc. v. Morris, the Eleventh Circuit reversed the United States District Court and ruled that provisions in H&R Block’s employment agreement with its former employee, Vicki D. Morris, were valid and enforceable restrictive covenants under Georgia law.  This decision provides additional guidance to employers attempting to draft enforceable employment agreements to protect legitimate business interests.  It also highlights why the Georgia General Assembly recently passed legislation attempting to offer clarity in this area of the law.

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Disparate Impact Claims Ruled Timely Based On Continued Use Of Hiring Test

On Monday, the United States Supreme Court ruled that claims brought by African American firefighters who had sued the City of Chicago alleging that a hiring test was discriminatory were not time barred.  Lewis v. City of Chicago, No. 08-974, 560 U.S. ___ (2010).  The City conceded that its use of the hiring test was unlawful, but argued that the firefighters claims were untimely.  Addressing only the statute of limitations issue, the Court issued a unanimous decision in favor of the firefighters, holding that the firefighters timely filed a disparate impact claim based on the continued use of the hiring test.

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Conducting Internal Audits To Ensure Employees Are Properly Classified

The proposed 2011 fiscal year federal budget signifies a renewed commitment to combating employee misclassification, as it contemplates funding an additional 4,700 investigations into worker misclassification issues.  With penalties for worker misclassification being quite steep -- including back taxes, interest, and even punitive fines -- employers should audit their workforce to ensure that their independent contractors are properly classified.

Unfortunately, there is no bright line test to determine whether a particular worker has been properly classified as an independent contractor.  In fact, the precise definition of an independent contractor not only varies between federal and state law, but can also vary from state to state and even statute to statute.  

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Congress's Latest Attempt To Curtail Use Of Independent Contractors

Continuing a trend in Congress to limit employers’ use of independent contractors, on April 22, 2010, Rep. Lynn Woolsey (CA) and Senator Sherrod Williams (OH) introduced the Employee Misclassification Prevention Act (H.R. 5107, S. 3254) (“EMPA”) in the House and Senate respectively.  The EMPA would amend the Fair Labor Standards Act (“FLSA”) and render worker misclassifications a violation of federal law.  Employers would be required to maintain records reflecting hours worked and wages paid for employees and non-employee workers.  They also would be required to provide workers a “notice” that identifies: the worker’s classification, a yet to be created Department of Labor website (containing an on-line complaint link), contact information for the applicable Department of Labor office, and other additional information as prescribed by regulation.  For workers classified as non-employees, the Notice would be required to state: “Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or non-employee. If you have any questions or concerns about how you have been classified or suspect that you may have been misclassified, contact the U.S. Department of Labor.”

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DOL Plans To Amend Regulatory FLSA Recordkeeping Requirements

In its recently published Spring 2010 Regulatory Agenda, the Department of Labor (“DOL”) announced that it plans to propose a rule that would amend the current recordkeeping regulations under the Fair Labor Standards Act (“FLSA”).  Under the proposed rule, any employers seeking to exclude workers from the FLSA’s coverage will be required to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to provide to Wage and Hour Division (“WHD”) enforcement personnel upon request.  The proposal will also address burdens of proof when employers fail to comply with records and notice requirements.

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States And DOL Take A Closer Look At Unpaid Internships

With a dearth of job openings for recent college graduates, many have pursued unpaid internships while continuing to search for fulltime employment.  A 2008 survey found that half of all college students hold at least one internship before graduating.  In light of the 18.8% March unemployment rate for American workers aged 16-24—nearly double the 9.7% unemployment rate for the workforce at large—this practice can be beneficial for interns, who gain experience and contacts, as well as for employers, who can benefit from having eager interns ready to learn and contribute.

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Employers' Right To Snoop Is Thrown For A Loop

For an employer preparing to defend against a legal action by a disgruntled employee, few moments are as intoxicating as digging into the employee's electronic files on the company-owned computer.  The golden dirt often emerges in the form of a gossipy e-mail or an internet search for something racier than the sports scores.

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Pick On Mom At Your Own Peril: The Emerging Trend Of Family Responsibilities Discrimination

Think you are doing your pregnant employee a favor by taking her off a big account to give her some time “for herself”?  Think again!  You may just be opening yourself up for a lawsuit.

Most employers have never heard of Family Responsibilities Discrimination (“FRD”).  FRD is an umbrella term for workplace discrimination based on stereotypes about how employees with family caregiving responsibilities will or should act.  For example, an employer may assume that a new mother will not be as committed to her career or as reliable as she was before she had a baby.  Or an employer might believe that a mother “should” be home with her children and may refuse to give her assignments that require travel or late hours. The discrimination arises because the employer’s actions are based on stereotypical beliefs, rather than on the individual employee’s performance or own desires.  And family caregiving is not just limited to childcare.  In fact, an increasing proportion of caregiving is devoted to the elderly and disabled. As with childcare, women are disproportionately responsible for caring for their relatives, including parents, spouses, and other relatives.

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Workplace Rules And Job Requirements Justify Employers' Termination Decision In Face Of ADA Claims Based On Alcoholism

Establishing work rules and job descriptions for employees not only provides employees with a better understanding of job expectations, but also helps protect employers from liability for discrimination and other employment-related claims.  In Budde v. Kane County Preserve, No. 09-2040 (7th Cir. March 4, 2010), the U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s ruling that the ADA does not protect an employee who violates workplace rules from discipline up to and including termination, even if the violation is caused by a disability.

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New NLRB: Employers Watch Out

President Obama’s recent recess appointments to the NLRB leave one Republican among three liberal Democrats.  Should the opportunity present itself, the Board’s new composition will likely result in the overturning of two employer-friendly cases, Register Guard (email policy) and Oakwood Healthcare, Inc. (supervisory status). Overturning either of these cases may produce highly unfavorable results for employers.  The Board already has such an opportunity in Register Guard.  The D.C. Circuit recently remanded Register Guard for reconsideration on a limited basis, but the Board may seize the opportunity to reverse its initial holding.

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Downsizing & Data Loss - The Alarming Connection

In an effort to ride out the current economic storm, many businesses find themselves downsizing, conducting mass layoffs, and even declaring Chapter 11 bankruptcy in an effort to survive.  These tough decisions inevitably lead to disgruntled former employees, whose ethics tend to take a backseat when it comes to “getting even” with their employers. 

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"Wage Theft" Laws: Coming Soon to a County Near You

Employers striving to comply with federal and state wage laws may soon have one more thing to worry about -- local “wage theft” laws.  In Florida, the Board of Commissioners for Miami-Dade County recently approved an ordinance that prohibits private sector employers from failing to pay employees all wages owed and gives the county authority to intervene and seek remedies on behalf of employees.  San Francisco already has a wage theft ordinance, and Los Angeles and New Orleans are considering similar measures.

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Renewed Attention To Paycheck Fairness Act Puts Employers On Notice

For those who thought the proposed Paycheck Fairness Act had faded away, here is a wake-up call.  After more than a year since the bill was passed by the House of Representatives and introduced in the Senate, the Senate Committee on Health, Education, Labor and Pensions is holding a new hearing on March 11 to focus on equal pay issues.

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California's Kin Care Benefits Do Not Apply to Uncapped Sick Leave Plans

California employers should take note that this week, the California Supreme Court limited benefits offered under California's kin care laws and held that kin care benefits do not apply to uncapped sick leave plans.

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California DLSE Issues Opinion Letter Regarding Deductions for Partial-Day Absences for Exempt Employees

Companies doing business in California should note that, on November 23, 2009, the Chief Counsel of the California Division of Labor Standards Enforcement (“DLSE”) issued an Opinion Letter on behalf of Labor Commissioner Angela Bradstreet, in which the DLSE modified its position on the issue of making deductions from vacation and sick leave balances accrued by exempt employees for the purpose of covering partial-day absences.  The Opinion Letter brings California law more in line with the federal Fair Labor Standards Act regarding the “salary basis test” and deductions from exempt employee paid time-off accounts for partial-day absences.

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EEOC's Near-Record Number of Discrimination and Retaliation Charges in 2009 Foretells Increased Liability Concerns for Employers

The EEOC reported that workplace discrimination charges reached near-record highs in 2009.  According to the EEOC, there were 93,277 charges filed in fiscal year 2009 -- the second-highest level in its history. 

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California Supreme Court Upholds Forfeiture Provision In Employee Incentive Plan

A recent decision from the California Supreme Court has provided a rare victory for companies with employees in that state.  In Schachter v. Citigroup, Inc., the Court ruled that a forfeiture provision in an employee incentive compensation plan did not violate California wage laws.

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Employers Should Ensure COBRA Notices Are Compliant With New Legislation

The American Recovery and Reinvestment Act of 2009 (ARRA), which provides premium reductions for health benefits under COBRA, was recently amended by the Department of Defense Appropriations Act, 2010 (2010 DOD Act).  Under this new legislation, those involuntarily terminated through February 28, 2010, a change from the prior cut-off of December 31, 2009, are entitled to COBRA continuation assistance.  Furthermore, the legislation extended the length of that assistance to 15 months from 9 months.

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Can Employees Claim Privilege On Work Email Accounts?

A recent decision of the U. S. District Court for the District of Columbia has cast doubt on the view that employees have no reasonable expectation of privacy in work email accounts.  Specifically, in Convertino v. United States Department of Justice,  Judge Royce C. Lamberth held that an employee’s communications with his attorney, sent to and received on the employee’s work email account, were protected from disclosure by the attorney-client privilege, even though the employer regularly accessed and saved such email communications.

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New Means of Communication: Employee Text Messaging Presents Unique Employment Issues

The Supreme Court last week agreed to decide whether a California police department violated the privacy rights of an employee police officer by reading sexually-explicit text messages on the officer’s employer-issued pager.  The case, Quon v. Arch Wireless Operating Company, is on appeal from the Ninth Circuit, which ruled that in certain circumstances a public employee has a reasonable expectation of privacy in personal text messages -- even when those messages are sent on a device owned and provided by the employer. The decision is directly at odds with current employee privacy law, which generally holds that employees have no reasonable expectation of privacy in electronic communications on employer-provided electronic devices, and it adds to the list of headaches for employers adjusting to the exploding use of instant messaging in the workplace.

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Medical Marijuana Leaves Employers In A Haze

What to do with an employee who tested positive for marijuana used to be an easy decision.  That is not necessarily the case anymore.

Thirteen states have legalized the use of marijuana for medical purposes.  Some of these states require employers to accommodate the medical use of marijuana.  Although use of marijuana remains illegal under the federal Controlled Substances Act regardless of whether it is medically prescribed, the U.S. Department of Justice announced in October 2009 that federal agents will target users and distributors of marijuana only when they violate both federal and state laws.  In addition, employers may have to consider whether they must allow employees to use medical marijuana as a reasonable accommodation pursuant to the federal Americans With Disabilities Act (ADA).  These developments have caused employers to re-examine their “zero tolerance” policies with regard to drug use by employees.

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COBRA Subsidy Likely To Expand - Proposed Legislation Would Extend and Expand Subsidy for Former Employees

In the past two months, both the House and Senate have proposed legislation that would extend the COBRA subsidy for health insurance created by the America Recovery and Reinvestment Act of 2009 (ARRA). The ARRA subsidy will begin to expire on December 1, 2009 without government action.  As the subsidy expires, unemployed Americans receiving the subsidy will see their COBRA premiums increase from 35% to 100% of the premium cost.

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