Recent Federal Developments in Employment Law

1. Recent Federal Developments in Employment Law Eric Paltell, Esq. Kollman & Saucier, P.A. 2012cumberland valley shrm Legal & Legislative conference

2. Program Overview • Supreme Court Developments • Thompson v. North American Stainless • Staub v. Proctor Hospital • Kasten v. Saint-Gobain Performance Plastics • EEOC Developments • New Enforcement Guidance on Criminal Background Checks • NLRB Developments • General Counsel’s Memoranda on Social Media Policies • NLRB Notice Posting Requirements • IRS Developments • Voluntary Classification Settlement Program

3. Supreme Court Developments

4. Thompson v. North American Stainless (131 S.Ct. 863) • Extends retaliation protection under Title VII to the fiancé of employee who has filed charge of discrimination • Protection applies to any person within an amorphous “zone of interests” • Likely result is years of litigation over who falls in that “zone” – co-workers, family, former employees?

5. Kasten v. Saint-GobainPerformance Plastics(131 S.Ct. 1325) • Extends FLSA-anti-retaliation protection to oral complaints • Rejects argument that complainant must have formally “filed” complaint to be protected • Requires that complaint be “sufficiently clear and detailed” for employer to understand employee is raising an FLSA issue

6. Staub v. Proctor Hospital(131 S.Ct. 1186) • Holds employers liable for discrimination under USERRA by applying “cat’s paw” theory • Employers now face liability even when the decision-maker does not possess any discriminatory animus • Implications are substantial: internal investigators can no longer rely solely on information from managers when evaluating disciplinary actions

7. EEOC Developments

8. What is the New EEOCEnforcement Guidance About? • EEOC issued new Enforcement Guidance (“EG”) on use of arrest and conviction records in hiring, effective April 25, 2012 • EG replaces prior guidance issued in 1987 and 1990 • Legal authority for EEOC to regulate use of criminal background checks is statistical evidence that African Americans and Hispanics are more likely to have a criminal record – meaning that a policy barring hiring persons with a criminal record will tend to exclude minorities

9. Disparate Impact Theory • A policy of conducting criminal background checks on applicants is presumed to have a disparate impact on African Americans and Hispanics because statistics show they are convicted of crimes more often than persons in other groups • As a result, employers must show that the exclusion of persons with convictions is “job related and consistent with business necessity” for the position being applied for

10. What is “Job Related and Consistent With Business Necessity?” • EEOC says there are three ways to show valid business necessity: • Federal law prohibits hiring someone with a certain type of criminal record (note that a state law prohibition is not enough for the EEOC – but I don’t think courts will agree with EEOC on that); • Statistical validation through the Uniform Guidelines for Employee Selection Procedures (almost never done); or • A “Targeted Screen”AND (in most cases) an “Individualized Assessment”

11. What is a Targeted Screen? • A “targeted screen” means the employer must consider at least the following criteria (the “Green factors”) when evaluating a criminal record in a hiring decision: • The nature and gravity of the crime; • The passage of time since the conviction or completion of the sentence; and • The nature of the job applied for (duties; working environment, level of supervision, etc.)

12. What is an Individualized Assessment? • The EEOC says an “individualized assessment” means: • Notice to the individual that his criminal record caused him to be excluded; • An opportunity for the individual to explain why the conviction should not bar him from the job; and • Consideration by the employer as to whether the additional information justifies making an exception (i.e., a mistake in his file; a clean record since conviction; his age at time of conviction)

13. More on the Individualized Assessment • It need not be an in-person meeting – can be done by letter or email, with applicant being given a deadline to provide explanatory information • The EEOC says there may be circumstances where the connection is so clear (i.e, a recent conviction for auto theft for a person applying for a parking valet position) that an individualized assessment is not required • However, the EEOC says that making an individualized assessment can “help employers avoid Title VII liability”

14. Use of Arrest Records • EEOC says that exclusion from employment based solely on an arrest violates Title VII because African Americans and Hispanics are arrested at a rate 2-3 times higher than the general population • EEOC also disallows arrests as sole basis for exclusion because arrest records do not show final disposition and may not be accurate • However, EEOC permits employers to make an employment decision based on the conduct underlying the arrest

15. Example of Permissible Use of Arrest Information • Employee is arrested for distribution of marijuana. After obtaining the arrest report, employer learns that employee was alleged to be dealing in the company parking lot. Employer does investigation and gets eyewitness corroboration that employee was seen dealing. Although employee denies it, employer finds eyewitness more credible because she is long term employee known for her honesty. In these circumstances, employer can discharge employee based on the results of its independent investigation.

16. NLRB Developments

17. NLRB Social Media Guidance • General Counsel issued 3 reports summarizing 35 cases addressing employee use of social media and employer social media policies under NLRA • Memoranda affirm that “Section 7” rights extend to employee communications made using social media, so long as: • Communications are with or on behalf of others, and • The communications seek to improve terms and conditions of employment

18. NLRB Social Media Guidance (cont’d) • NLRB will challenge any social media policy it perceives as “chilling” Section 7 rights: • Can’t use overly broad language (i.e., prohibiting “inappropriate discussions” ) • Can’t have blanket prohibition on disclosing “confidential”information • Can’t prohibit use of company logo on posts, tweets, and websites • Can’t save a policy with a general disclaimer

19. NLRB Social Media Guidance (cont’d) • NLRB gave some examples of permissible social media policies: • Prohibitions on use of social medial in manner that violates harassment or workplace violence policies • Prohibitions on disclosure of confidential student or patient information protected by law • Prohibitions on pressuring co-workers to connect through social media • In general, the more specific the policy and the more narrow its scope, the more likely the NLRB will find it legal • Examples of prohibited behavior are very helpful National Association of College and University Attorneys

20. NLRB Notice Posting Requirement • Requires all employers post notice advising employees of their right to form unions under the NLRA • Codified at 29 CFR 104.202 • U.S. Court of Appeals for the D.C. Circuit has enjoined NLRB from enforcing the rule until at least late 2012

21. Contents of Notice • Informs employees of: • Right to form a union; • Right to bargain collectively; • Right to join with co-workers to raise work related complaints; • Right to strike

22. Contents of Notice (cont’d) • Also makes employees aware that employer cannot: • Prohibit them from soliciting for a union in non work time in non-work areas; • Interrogate employees about support for a union; • Take adverse action against employees because they support a union; • Prohibit employees from wearing union buttons or t-shirts; or • Spy on union activities

23. Posting Obligations • Must be posted where the employer posts other notices • Must also be posted on intranet or website if that is where the employer normally communicates to employees about personnel policies

24. Enforcement & Penalties • No monetary penalty for failure to post • However, failure to post could be an unfair labor practice • Could also result of tolling of the 6 month statute of limitations

25. IRS Developments

26. Voluntary Classification Settlement Program • Voluntary program which allows employers to reclassify persons historically treated as independent contractors as employees without incurring interest or penalties • Employer is only required to pay 10% of the employment taxes that would have been due in the preceding tax year • Employer must meet certain conditions to qualify for program • VCSP started in September 2011 and not certain how long it will remain in effect

27. VCSP Implications • IRS will not share information with DOL or state agencies • IRS will not audit you if application is rejected • However, could be “spillover” implications on other employment laws: • Former contractors may now be eligible for benefits • May increase number of employees to point where employer becomes covered by employment laws (15 and 50 employees are “magic” numbers)

28. Eligibility Criteria for VCSP • Workers must have been consistently treated as independent contractors • Employer must have filed any required form 1099’s for the past three years • Employer cannot be under audit by the IRS, DOL, or any state agency regarding the classification of its workers • Employer must submit application (Form 8952) to IRS to determine if it is eligible

29. Questions?