EEOC Tells Employers “If you like your Criminal Background Check…you Can Keep your Criminal Background Check”

 After suffering defeats over its efforts to enforce guidelines on the use of criminal background checks, it appears the Equal Employment Opportunity Commission (“EEOC”) has launched its version of a charm offensive, while simultaneously girding for appellate battle over its latest courtroom loss.

At the recent American Bar Association's Annual Labor and Employment Conference, top EEOC officials argued that the federal agency was not trying to prevent employers from using background checks. The EEOC’s Senior Counsel James Paretti said the EEOC’s new guidelines merely seek a balance between employers’ interests in protecting property and ensuring personal safety, and making sure that minority job seekers are not subjected to disparate impact discrimination under Title VII.

Paretti denied that the EEOC was administratively seeking to create a new protected class of individuals with criminal records. Under the 2012 enforcement guidelines, the stated rationale for the EEOC’s position was that employers’ reliance on criminal records as a factor in hiring decisions disproportionately affects minorities, who statistically have higher rates of arrest and criminal conviction, i.e. disparate impact.

One continuing complaint about the EEOC’s guidelines is that it places significant costs on employers to create and maintain screening systems to evaluate whether an individual with a criminal record should be excluded on the basis of business necessity, using factors such as the severity of the crime, the period of time since conviction and the specific duties and responsibilities of the job sought. The guidelines further require employers to allow for an additional individualized assessment to those excluded by the initial screening, to explain why they should not be disqualified.

In what appears to be a new approach by the EEOC, Paretti strongly suggested that while employers are free to use background checks, they should not do them until after employers already have determined that the applicant meets all other job qualifications. In a less than subtle threat, EEOC Commissioner Chai Feldblum noted that the agency was looking into whether the EEOC would consider it a record-keeping violation if employers did not retain data on the disparate impact the an employer’s background screening had on minorities.

I have two thoughts on this. First, requiring employers to go through the time and expense of ensuring an applicant’s qualifications, and then leaving a background check until last, could result in wasted efforts and additional costs. For example, an employer could spend significant time and effort confirming that a candidate is ideally qualified to be a daycare administrator, only to find out at the end, per the EEOC’s suggestion, that the job candidate is a convicted sexual offender, and ineligible for such a position.

Second, the EEOC’s intimation that employers who use background checks could be subject to even more stringent record-keeping requirements, belies their claim that they are not trying to eliminate employers from using background checks.

In a related note, you may recall in my September 30, 2013 posting, the EEOC suffered a court defeat in the case of EEOC v. Freeman. In that case, a District Court in Maryland granted summary judgment in favor of the defendant employer Freeman, dismissing the plaintiff EEOC’s claim that Freeman’s background check policies violated Title VII. In the Court’s opinion, it issued a stinging rebuke to the EEOC for pursuing a disparate impact discrimination claim based on “a theory in search of facts to support it.”

On November 6, 2013, the EEOC appealed the District Court’s dismissal of the case to the U.S. Court of Appeals for the Fourth Circuit. Other than the loss of face over the Court’s rejection of their theory of liability, the EEOC has another strong motivation to appeal the adverse ruling. Following the ruling in its favor, Freeman filed a motion to require the EEOC to cover the company’s $1.2 million dollars in attorneys’ fees.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com

Workplace Profanity Can Support Religious Discrimination Claim

A ruling by a federal District Court in Oregon should serve as a warning to employers that a co-worker’s use of profanity in the workplace may be enough to support a triable religious discrimination hostile work environment claim under Title VII of the Civil Rights Act (“Title VII”). In Griffin v. City of Portland, the Court noted that while not every use of profanity that occurred was enough to prove it was directed at the plaintiff because of her protected class, there was sufficient evidence to put the case in front of a jury.

For an excellent in-depth analysis of the case, I would direct you to an article authored by MaryJo Roberts, of my firm’s New Orleans office. For purposes of this posting the facts are as follows.

The plaintiff in the case, Kellymarie Griffin, described herself as a devout Christian. She alleged that co-workers frequently used profanity in the workplace, including the names of God and Jesus Christ in their curse words. The Plaintiff alleged that because of her deep religious beliefs, she was offended by such profanity and would inform her co-workers that such language was offensive to her. From the facts of the case, it appears that for the most part, such profanity from her co-workers was not directed at her because of her faith or on the basis of religious animus, and the co-workers generally refrained from cursing in her presence after she spoke with them.

More troubling were specific comments from plaintiff’s co-worker Theresa Lareau. According to the lawsuit, Lareau called plaintiff a “wacko” and told plaintiff that she prayed to something “that didn’t exist.” On one occasion, after plaintiff complained about profanity, Lareau allegedly told her "I'm sick of your Christian attitude, your Christian [expletive] all over your desk, and your Christian [expletive] all over the place" and Ms. Lareau accused Plaintiff of using her religion for attention.

Plaintiff filed a lawsuit claiming she was subjected to a religiously hostile work environment because of her religion. Her employer sought to have the case dismissed on summary judgment, but the District Court denied the City’s motion, allowing the case to proceed to trial. The Court held that "not every allegation of offensive conduct" by Plaintiff's co-workers will ultimately be pertinent to the question [of] whether Ms. Griffin was subjected to a hostile work environment because of her protected status”, but that she had "shown sufficient evidence of religiously discriminatory conduct to make out a claim for hostile work environment religious discrimination as a matter of law."

The Court’s opinion distinguished between profanity that directly implicated religious ideas and profanity that were simple secular epithets. Of note was the Court’s observation that the absence of a hostile intent was not enough to insulate an employer from liability and “if conduct occurred 'because of' a plaintiff's protected status, even if the actor does not intend hostility or even know that the conduct may be perceived as hostile, that conduct is relevant to whether the plaintiff experienced a hostile work environment." The Court also found there was a jury question as to whether the City had taken sufficient action to remedy the alleged religious discrimination.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijman@phelps.com

“Don’t Mess with Texas” . . . the Lone Star State Sues the EEOC over Employers’ Use of Criminal Background Checks

The State of Texas has filed a lawsuit against the Equal Employment Opportunity Commission (“EEOC”), alleging that the federal agency has overstepped its statutory authority by imposing limits on employers’ use of criminal background checks in making employment decisions.

It has been over a year since the EEOC issued strict enforcement guidelines, seeking to limit employers’ ability to make employment decisions based on an individual’s criminal history. The stated rationale for the EEOC’s position is that employers’ reliance on criminal records as a factor in hiring decisions disproportionately affects minorities, who statistically have higher rates of arrest and criminal conviction, and has a disparate impact in violation of Title VII of the Civil Rights Act (“Title VII”). While not completely banning the use of background checks, the EEOC guidelines place a burden on employers to prove that such reliance is based on business necessity.

The lawsuit by the State of Texas alleges that the EEOC “purports to limit the prerogative of employers, including Texas, to exclude convicted felons from employment” and that the State of Texas and “its constituent agencies have the right to impose categorical bans on the hiring of criminals, and the EEOC has no authority to say otherwise.”

Since the EEOC released the new enforcement guidelines in 2012, it has brought a series of lawsuits against employers, alleging violations of Title VII. However, federal courts have expressed skepticism over the federal agency’s theory of liability and in recent cases, have ruled against the EEOC and in favor of employers. In one such case, a U.S. District Court chastised the EEOC for pursuing a disparate impact discrimination claim based on “a theory in search of facts to support it.”

In its lawsuit, the State of Texas is asking the U.S. District Court to declare that the EEOC’s use of the guidelines are invalid and to enjoin the EEOC from challenging the State’s policy of not hiring convicted felons for certain state jobs.

At the time the EEOC released the stricter guidelines, many legal commentators noted that Congress had never granted the federal agency such rulemaking authority, and that the guidelines were an illegitimate exercise of authority.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com

Employment Non-Discrimination Act Nears Senate Vote and Related "Lagniappe"

In a  posting last month, I noted on the improved prospects for passage of the Employment Non-Discrimination Act (“ENDA”), which would extend Title VII protection against employment discrimination to lesbian, gay, bisexual or transgender employees (“LGBT”). The law would make sexual orientation/sexual identity a protected class in the same manner race, religion, gender, national origin, age and disability are protected under existing federal laws, and make it illegal for organizations with 15 or more employees to:

"[F]ail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual . . . because of such individual’s actual or perceived sexual orientation or gender identity."

On Monday, October 28, 2013, Senate Majority Leader Harry Reid (D-Nev.) announced that he would bring the legislation to a Senate vote within the coming weeks. The legislation has picked up support from two Republicans in the majority Democrat chamber. Passage in the Senate would be a symbolic first for the legislation, which has been unsuccessfully introduced in one form or another for decades. However, it is unlikely that bill will get much traction in the House of Representatives.

This is an issue where the private sector has quietly taken action without the help or hindrance of lawmakers in Washington. A significant majority of Fortune 500 companies have voluntarily put in place policies prohibiting discrimination in the workplace on the basis of sexual orientation or sexual identity. Some states also have  passed similar legislation into law.

 

However, specific provisions of ENDA do raise concern among employers, on such issues as employer dress codes. The language of ENDA does not prohibit “reasonable dress or grooming standards” but would require employers to permit:

"[A]ny employee who has undergone gender transition prior to the time of employment, and any employee who has notified the employer that the employee has undergone or is undergoing gender transition after the time of employment, to adhere to the same dress or grooming standards as apply for the gender to which the employee has transitioned or is transitioning."

Employers also have expressed worries about ENDA interpretations that would require employers to allow access to restrooms or dressing/locker rooms to employees who are biologically one gender, but identify with another gender. With the potential for sexual harassment liability or privacy issues, some business owners believe, for example, that ENDA would force them to ignore the legitimate concerns of female employees about having to share a restroom of dressing room with a male employee who self-identifies as a woman.

Regardless of how ENDA fares in Congress, the Equal Employment Opportunity Commission (“EEOC”) is already trying to pursue some of the same goals of ENDA, within the existing structure of Title VII. As I’ve previously discussed, late last year, the EEOC released its Strategic Enforcement Plan (“SEP”) for 2013 – 2016. Among the agency’s targeted goals was to provide LGBT coverage under Title VII sex discrimination, even though such protection is not contained within the actual statute. The SEP also addressed the agency’s intent to curtail employer’s use of criminal background checks when making employment decisions.

In a somewhat related story, on September 27, 2013, in an en banc ruling, a ten-judge majority of a bitterly divided sixteen-judge Fifth Circuit Court of Appeals held that the EEOC could establish a same-sex harassment claim with evidence of gender stereotyping in the form of sexually charged taunting directed at a male employee by his male supervisor. EEOC v. Boh Bros. Constr. Co., (5th Cir. Sept. 27, 2013).

In 2007, the employee filed a charge with the EEOC alleging sexual harassment stemming from the conduct of his male supervisor, who oversaw an all-male workforce on an ironworker construction site. The supervisor purportedly was lewd and vulgar to the employee on a daily basis, including instances of exposing his genitals to the employee while urinating, simulating anal intercourse whenever the employee bent over, and using homophobic slurs to refer to the employee. Upon completion of the administrative process, the EEOC brought an enforcement action on the employee’s behalf and, following a three-day jury trial, obtained a $300,000 verdict in favor of the employee.

The employer appealed the verdict. Initially, a Fifth Circuit panel tossed out the trial verdict for the employee, finding that there was insufficient evidence to establish that the supervisor had discriminated against the employee because of his gender. The EEOC subsequently sought and obtained an en banc review. Upon review, the en banc majority disagreed with the panel’s decision to overturn the jury verdict.

Although same-sex harassment has been judicially recognized for over a decade, this decision links the concept of unlawful gender stereotyping directly to same-sex harassment and reminds employers that same-sex taunting can be actionable. Moreover, the court noted that there was no evidence that either the employee or supervisor were homosexual, nor was evidence presented that the conduct at issue was motivated by sexual desire. The court’s opinion cautions that notions of sexual harassment based solely on sexual desire or exclusively between members of the opposite sex are misplaced and can increase risks for employers who are not aware that the prohibitions can be broader.

Employers should review their anti-discrimination and anti-harassment policies in light of this opinion, and stay tuned for further developments in this area.

* Lagniappe: An extra or unexpected gift or benefit, i.e. “a little something extra”. (Chiefly Southern Louisiana & Mississippi).

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijman@phelps.com

 

“You’ve Got (Mass) Mail”…From the EEOC?

In an ironic reversal of roles, on Monday October 21, 2013, the Equal Employment Opportunity Commission (“EEOC”) asked a federal District Court in the District of Columbia to dismiss a lawsuit filed against the agency by an aggrieved employer. The lawsuit alleges the EEOC unconstitutionally solicited or “trolled” the company’s employees to become class members in a potential age discrimination class action. (Case New Holland, Inc. and CNH America LLC v. EEOC et al., Civil Action No. 1:13cv1176).

The suit claims the EEOC violated the law by sending a mass e-mail, utilizing the company’s business e-mail domains, to over 1300 management and non-management employees, requesting the employees complete a survey and supply evidence of discrimination against the employer.

For employers more familiar with the typical EEOC procedures associated with a Charge of Discrimination, the mass e-mailing and request for information, without any notice to the company, raises some serious red flags.

The facts of the case are as follows. In March 2011, the EEOC notified CNH America, LLC (“CNH”) that it was launching a nation-wide review of the company for alleged violations of the Age Discrimination in Employment Act (“ADEA”). The company employs approximately 10,000 people in the United States. The EEOC made a sweeping request for information and documents.

According to the lawsuit, in January 2012, the company produced to the EEOC 300 documents totaling 5,707 pages and over 600,000 electronic records from CNH databases, totaling 66,630 pages of documents. After complying with the agency’s request, the company received no communications of any sort from the EEOC until June 5, 2013, eighteen months later.

At 8:00 a.m. on June 5, 2013, the EEOC conducted a mass e-mailing to the business e-mail addresses of 1330 CNH employees across the United States and Canada. Over 200 of the recipients were members of management. The e-mail stated the EEOC was conducting “a federal investigation” and making “an official inquiry” into allegations that CNH discriminated against job applicants and employees, and contained a link to an on-line series of questions. It also asked for the employee’s birth date, address and telephone number. The EEOC’s on-line survey instructed CNH employees to “Please complete and submit this electronic questionnaire as soon as possible.”

The e-mail had been sent without any advance notice to CNH and according to the lawsuit, the mass mailing disrupted CNH’s business operations at the start of the work day and communicated to employees they should cease their legitimate work duties and instead immediately respond to the agency’s questions. A significant concern was the company’s belief that the EEOC had deliberately cut the employer out of the investigatory process, and had solicited members of management, whose statements arguably could have bound the company.

CNH filed its lawsuit on August 1, 2013, alleging that the EEOC’s mass e-mailing: (1) was not authorized by any EEOC rule or regulation, (2) violated the federal Administrative Procedure Act, (3) constituted an unreasonable search and seizure in violation of the Fourth Amendment, (4) violated the takings clause of the Fifth Amendment, and (5) violated the EEOC’s own compliance manual, which requires that an employer be allowed to have a spokesman or attorney present during an interview of management employees, and that advance notice be given. The suit claims the EEOC engages in bullying tactics to force companies into monetary settlements of questionable claims.

The lawsuit seeks a permanent injunction prohibiting the EEOC from soliciting CNH employees by e-mail, and additional injunctive relief to prevent the EEOC from utilizing any of the information obtained through the mass e-mailing. The lawsuit claims:

"The EEOC has never, before June 5, 2013, sent out emails through business email servers, without any prior notice to the respondent employer, in an attempt to unearth plaintiffs against the employer"

On October 21, 2013, after some extensions granted by the District Court, the EEOC responded with a Motion to Dismiss. While addressing CNH’s various claims, the EEOC’s primary argument was that the case should be dismissed because the District Court lacked subject matter jurisdiction to consider CNH’s claims because it was not a “final agency action”, and that the EEOC’s actions were within the agency’s investigative authority. Additional briefing by the parties will take place before any ruling.

I am not going to try to “read the tea leaves” as to how the District Court will ultimately rule in this case, but a few things are worth noting. First, the EEOC has been less than successful lately when it comes to telling U.S. District Judges what their authority is in regard to the agency. You’ll recall in a recent posting, I discussed the EEOC’s recently stated position that the agency’s conciliation efforts with employers, or lack thereof, were not subject to review by the federal courts. As noted in my article, the EEOC subsequently received a severe slap-down by a U.S. District Judge in Texas. The EEOC also has recently found itself subject to significant monetary sanctions by federal courts for some of its investigatory and litigation tactics.

Second, this extremely aggressive approach by the EEOC should concern employers because it seems to be a deliberate effort to cut employers and their legal counsel out of the investigatory process. The EEOC has always had the investigatory right to interview non-management employees without an employer representative or attorney present. However, because a statement by a member of management could be considered a binding admission on the part of the company, an employer is entitled to have legal counsel present for such interviews. It’s very easy to envisage a manager being cowed by a very official and intimidating e-mail into providing information, unbeknownst to the employer.

Third, heavy handed tactics, such as the mass mailing to the CNH employees described in the Complaint, or other EEOC actions that have caught the attention of the federal courts and resulted in sanctions, could conceivably result in blowback for the agency. This might include congressional action to limit the EEOC’s authority.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com

The EEOC’s Title VII Conciliation Duty Remains Fair Game for Judicial Review

I am going to apologize in advance for this “Employee with the Dragon Tattoo Employment Law Blog” posting, because I suspect it will likely contain more than your daily suggested requirement of “legal-ese”. However, the issue of the Equal Employment Opportunity Commission’s (“EEOC”) duty to engage in conciliation before suing an employer seems to be developing into another ongoing showdown between the agency and the federal courts. It is also an important issue for employers.

What prompted this posting was an editorial in the Wall Street Journal entitled "Is the EEOC Above the Law?"  It addressed the EEOC’s recently stated position that the EEOC’s conciliation efforts with employers, or lack thereof, were not subject to review by the courts. As detailed in the editorial, the EEOC subsequently received a severe slap-down by a U.S. District Judge in Texas. It also got me thinking about a case I had a number of years ago where the question of “good faith conciliation” became a significant issue.

For non-lawyers (and other well-adjusted folks) “conciliation” is just a fancy word for trying to reach a settlement before an EEOC Investigation and determination evolves into an actual lawsuit brought by the agency.  It's an option many employers want to at least explore before having to engage in the costly defense of a discrimination suit brought by a government agency. 

When the EEOC makes a “reasonable cause” determination in the course of investigating a charge of discrimination, it triggers a mandatory responsibility under 42 U.S.C. § 2000e-5(f)(1) to engage in good faith conciliation efforts before filing a lawsuit. This responsibility is not supposed to be a mere formality that is satisfied by merely making a few telephone calls and then checking a box on an agency form. Conciliation, after all, serves important public interests by, among other things, guaranteeing administrative due process to the accused, protecting the public from unwarranted litigation expense, and conserving scarce administrative and judicial resources. It is for these reasons that federal courts uniformly recognize that the responsibility of good faith conciliation is so important that honoring it is a condition precedent to the EEOC filing a lawsuit.

Good faith conciliation efforts depend on the honest and straightforward communication of basic factual information. Common sense dictates that good faith conciliation efforts do not include “hiding the ball” by failing to communicate, or worse, withholding, basic factual information, since such tactics obviously deprive the accused of both the opportunity to respond to claims against it and the ability to understand the basis of any damages sought in settlement of those claims. Rather, good faith conciliation efforts can only occur when the EEOC “lays the cards on the table” by disclosing factual information sufficient to afford the accused with a reasonable opportunity to respond to the claims and damages at issue before the EEOC commits itself to litigation.

To satisfy the statutory requirement of good faith conciliation, the EEOC must: (1) outline to the employer the reasonable cause for its belief that the law has been violated; (2) offer an opportunity for voluntary compliance; and (3) respond in a reasonable and flexible manner to the reasonable attitudes of the employer. If a court finds that the EEOC terminated conciliation prematurely or failed to conciliate in good faith, it may stay the action and compel the EEOC to conciliate or dismiss the lawsuit. 42 U.S.C. § 2000e-5(f)(1) (1976) (the court may “in its discretion stay further proceedings for not more than sixty days pending further efforts of the Commission to obtain voluntary compliance”); see also EEOC v. Agro Dist., LLC, 555 F.3d 462, 469 (5th Cir. 2009) (“Courts remain free to impose a stay for the EEOC to continue prematurely terminated negotiations, and where the EEOC fails to act in good faith, dismissal remains an appropriate sanction.”).

So what are some hallmarks of “bad faith” conciliation? Denying an employer’s reasonable request for a face-to-face meeting is a common and compelling factor in finding that the EEOC has failed to conciliate in good faith. See, e.g., EEOC v. Agro Dist., LLC, 555 F.3d 462, 469 (5th Cir. 2009); EEOC v. Pacific Maritime Assoc., 188 F.R.D. 379, 380-381 (D. Or. 1999).

Another tactic found by the courts to be unreasonable and in bad faith is if the EEOC takes an “all-or-nothing” approach to settlement. See, e.g., Agro, 555 F.3d at 468 (“The EEOC's take-it-or-leave-it demand for more than $150,000 represents the coercive, ‘all-or-nothing approach’ previously condemned by this court…”); EEOC v. Asplundh Tree Expert Co., 340 F.3d 1256, 1259 (11th Cir. 2003) (“As we have said before, such an ‘all or nothing’ approach on the part of a government agency, one of whose most essential functions is to attempt conciliation with the private party, will not do”).

Lastly, federal courts have held that the EEOC’s failure to explain its monetary demands is not reasonable and does not allow a defendant to properly respond. See, e.g., EEOC v. Golden Lender Fin. Group, No. 99 CIV. 8591 (JGK), 2000 WL 381426, at *5 (S.D. N.Y. Apr. 13, 2000) (holding that the EEOC did not meet its statutory obligation to conciliate when it ended conciliation after the charged party sought additional information regarding the requested damages of certain alleged victims); EEOC v. Pac. Mar. Ass’n, 188 F.R.D. 379, 381 (D. Or. 1999) (ordering a stay for further conciliation where “meaningful conciliation efforts were thwarted” during conciliation after “[c]ounsel for [defendant] reasonably requested that the EEOC investigator explain his calculation of the monetary settlement offered”).

In the case I was involved in, my co-counsel and I were faced with all three of the tactics described above. We were representing an out-of-state company in a sexual harassment claim brought by a number of employees, and the particular out-of-state EEOC office had filed suit after very perfunctory and unproductive conciliation.  The client had responded promptly and correctly when it discovered the actions of a rogue supervisory employee, yet the EEOC was demanding an excessive "take-it-or-leave-it" monetary settlement, wildly disproportionate to actual damages in the case.

We responded by filing a motion with the court to stay litigation and compel good faith conciliation. In a well-reasoned opinion, the U.S. Magistrate assigned to the case ruled in our favor and ordered the EEOC back to the table.  While the case was not resolved at the "re-conciliation", it laid the groundwork for a later settlement of the case for a reasonable amount.

I think the ability of the federal courts to review the EEOC’s conciliation efforts is a valuable protection for employers, and without it, the statutory requirement of conciliation would become meaningless. In fairness and full disclosure, my overwhelming experience with the EEOC in this regard, especially the local office here in Jackson, Mississippi, has been positive and the people professional and upfront in conciliation negotiations. However, as shown by the many court opinions on the subject, bad faith conciliation occurs and the judiciary is a vital check to such abuse.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com

Accessing Employee’s Personal E-Mails on Company-Issued Phone Exposes Employer to Liability Under Federal Stored Communications Act

Earlier this month, I posted an article on how employers could face liability under the federal Stored Communications Act (“SCA”) if they solicited Facebook “friends” to access an employee’s social media postings. 

According to a U.S. District Court in Ohio, employers also could face SCA liability for viewing an employee’s e-mails on a company-issued phone.

In Lazette v. Kulmatycki and Cellico Partnership d/b/a Verizon Wireless, 3:12-cv-2416 (JGC) (N.D. Ohio June 5, 2013), Sandi Lazette received a company-issued Blackberry from her employer, Verizon Wireless.  Lazette would send and receive business related e-mails on the device. She was told that she also could use the company-issued phone for personal e-mail so she linked the device to her personal G-mail account.

When she left the company in September 2010, she returned the company-issued phone to her supervisor, Chris Kulmatycki. She understood that Verizon would “recycle” the phone for use by another employee.  However, when Lazette returned the phone, she neglected to delete the access to her personal Gmail account.

Over the next 18 months, without Lazette’s knowledge or authorization, Kulmatycki accessed her G-mail and accessed approximately 48,000 of her e-mails, which included communications about her family, career, financials, health, and other personal matters.  Lazette subsequently filed suit against Verizon and her former supervisor under the SCA. 

The company sought to have the case dismissed on a number of grounds, including its argument that the supervisor’s access was “not” unauthorized because: (1) he used a company-owned Blackberry; (2) he did not access a “facility,” as the statute uses that term; and that (3) Lazette authorized Kulmatycki’s access because she had not expressly told him not to read her e-mails and that she implicitly consented to his access by not deleting her G-mail account. Not surprisingly, the District Court rejected Verizon’s argument:

Turning to the substance of defendants’ contentions, defendants, in effect, contend that plaintiff’s negligence left her e-mail door open for Kulmatycki to enter and roam around in for as long and as much as he desired . . . Whether viewed through the lens of negligence or even of implied consent, there is no merit to defendants’ attempt to shift the focus from Kulmatycki’s actions to plaintiff’s passive and ignorant failure to make certain that the blackberry could not access her future e-mail.

After the District Court denied Verizon and Kulmatycki’s motion to dismiss, the case settled in August 2013 before it went to trial.

In this particular case, it’s obvious that the supervisor’s actions were not authorized by Verizon and his stalker-like review of the plaintiff’s personal e-mails were not for any legitimate business purpose. 

Aside from the inherent creepiness and “ick factor” of the plaintiff’s former supervisor, this case highlights the need for employers to have very clear policies as to what level of privacy an employee can expect in their use of a company’s devices or when an employee uses a personal mobile device or computer on behalf of their employer. 

In years past, such policies would simply inform employees that they should have no expectation of privacy, and that the company device is the property of the employer and may be subject to monitoring.  However, with companies allowing more personal use of company devices or moving to the practice of “BYOD” or “bring Your Own Device” for use at work, the lines have gotten blurred.  As such, employers need to regularly review and update their handbook policies to address how technology is actually being utilized by employees.

In light of this case, a good internal practice would be for a company’s IT department to review all returned devices and ensure they are scrubbed of any personal information before being recycled to another employee.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com.