NLRB Launches New Comprehensive Attack Against Employee Handbook Provisions

In previous posts, such as “NLRB says ‘No Workplace Secrets Allowed!’” I noted that in recent years, the National Labor Relations Board (“NLRB”) has taken an aggressive “bigfoot” approach against many commonly utilized employee handbook policies.  The NLRB’s justification for filing complaints against employers was that overbroad language in employee handbooks purportedly violated the National Labor Relations Act (“NLRA”).  

The first notable example was when the NLRB used the same rationale to find many employers’ social media policies to be in violation of the NLRA.  Another lesson employers learned from the NLRB’s assault on workplace social media policies is that an employer can be found in violation on the basis of an overbroad policy alone, even if there is no action taken against an employee for violation of the policy.  As many employers also learned from the NLRB’s social media focus, even non-union employers can be found in violation of the NLRA. 

Earlier this month, the NLRB issued a 30-page report intended to offer guidance to employers in drafting handbook provisions that will withstand the NLRB’s scrutiny.  The NLRB states the report is intended to address what it describes as “an evolving area of labor law.” This includes routine and longstanding employment policies that the NLRB believes have a chilling effect on employees’ concerted activities protected by Section 7 of the NLRA.

What types of handbook policies have drawn the NLRB’s ire? Examples include employer confidentiality provisions that forbid employee disclosure of “employee information” or “ another’s confidential or other proprietary information.”  The NLRB believes such policies are overbroad when they are not narrowly tailored to protect trade secrets or proprietary information as opposed to violating Section 7 by forbidding discussion of wages or other terms and conditions of employment among employees.  The NLRB report also considers policies that call for employees to be respectful of others in the company or to avoid derogatory comments to also be overbroad and possibly constitute a violation of Section 7. The NLRB report stresses that violations will be found for “even well-intentioned rules”, even when there is no intent to violate Section 7. 

The NLRB’s release of the comprehensive report can reasonably be seen as a warning of another round of aggressive action by the NLRB against employers, similar to what was seen when the Board began going after employers for their social media policies.  This should not be a surprise from an exceedingly political Board, which has actively advanced the administration’s extreme pro-union positions. 

In light of the NLRB report, employers would be well advised to promptly conduct a comprehensive review of all handbook policies to revise any potentially overbroad language, so as to avoid showing up on the NLRB’s radar.  

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

Settlement in HIV Termination Lawsuit Highlights Continuing Employer Confusion over ADA

A nationwide manufacturer and distributor of fruit juice will pay $125,000 to settle a lawsuit brought by the EEOC on behalf of an employee who was terminated after the company learned he was HIV-positive. [EEOC v. Gregory Packaging, Inc. (N.D. Ga.]  The fact that the employer specifically told the man he was being terminated because of his HIV status highlights continuing employer confusion over the Americans with Disabilities Act (“ADA”), even twenty-five years after its passage, and especially as it relates to employees with HIV/AIDS.

The plaintiff in the case was employed as a machine operator at the Newnan, Georgia facility of Gregory Packaging, Inc., a company that sells juice products to school districts and medical institutions. When the employee developed a skin rash unrelated to his HIV, rumors began to circulate among other employees that the employee’s rash was the result of AIDS.  In an effort to quash the rumors, the employee informed his supervisor that while he did have HIV, the skin condition was unrelated, and there was no danger of him transmitting HIV to food products or co-workers.  Despite his good job performance, and no evidence of a health risk, the employee was terminated approximately a month later.  He was informed the reason he was being fired was because he had HIV.

The employee declined a separation agreement offered by the company, which included a release of claims. The Equal Employment Opportunity Commission (“EEOC”) subsequently brought a lawsuit on the employee’s behalf, alleging violations of the ADA and similar claims brought under Georgia state law.  Despite the company’s early efforts to fight the lawsuit, the case was settled pursuant to a court-approved consent order, which provided for the $125,000 payment by the New Jersey based company, and required equal employment opportunity training and reporting to the EEOC.

What is most surprising about this case, is that even before the ADA’s expansion under the Americans with Disabilities Amendment Act (“ADAAA”), it was generally established that a person with HIV/AIDS met the Act’s definition of an individual with a disability.  Furthermore, as noted in EEOC guidelines, even those who are regarded as having HIV/AIDS are protected under the Act, even if they do not have the disease.  The example given by the EEOC is a person being fired on the basis of a rumor that he had AIDS, even though he was not infected.

Employers involved in the food and restaurant industry are often at the focus of these types of lawsuits. As was the case at Gregory’s Georgia facility, the situation is often fueled and exacerbated  by rumors spread by co-workers or customers, and fears of HIV/AIDS being transmitted through an employee’s contact with food products.   

According to the Department of Health and Human Services, HIV/AIDS is not a disease that can be transmitted through food handling. Diseases that can be transmitted by an infected person handling food include (1) noroviruses, (2) the Hepatitis A virus, (3) Salmonella, (4) Shigella, (5) Staphylococcus, and Streptococcus.  For more detailed information, employers in the food service/restaurant industry can find guidance through the EEOC publication “How to Comply with the Americans withDisabilities Act: A Guide for Restaurants and Other Food Service Employers.”

Employer’s also need to be aware that in the context of HIV/AIDS, the ADA also protects employees who do not have the disease, but have an association or relationship with someone who does.  In the EEOC guidelines, examples of employment discrimination against persons with HIV or AIDS include:

•         An automobile manufacturing company that had a blanket policy of refusing to hire anyone with HIV or AIDS.

•         An airline that extended an offer to a job applicant and then rescinded the offer after the employer discovered (during the post-offer physical) that the applicant had HIV.

•         A restaurant that fired a waitress after learning that the waitress had HIV.

•         A university that fired a physical education instructor after learning that the instructor’s boyfriend had AIDS.

•         A County tax assessment office that cancelled training opportunities for an accountant following her disclosure that she had HIV.

•         A retail store that generally rotated all sales associates between the sales floor (where they could earn commissions) and the stock room (where they processed merchandise) except for the sales associate who was rumored to have HIV, who was never rotated to the floor.

•         A call center employee who was denied a promotion to shift manager because his employer believed the employee would be unreliable since he had AIDS.

•         A company that contracted with an insurance company that had a cap on health insurance benefits provided to employees for HIV-related complications, but not on other health insurance benefits.

While the ADA does include a “direct threat” defense in regard to employees who pose a significant risk of substantial harm to the health and safety of the employee or others, the defense  requires medical or other objective evidence, as opposed to subjective beliefs or assumptions based on stereotypes.  However, the take-away from this case is that proper training of supervisors in addressing ADA issues is a much better and less expensive option than having to establish defenses after a suit has been filed.

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





“Sign of the Beast” Hand Scanning Case Provides Valuable Lesson to Employers

An employer’s use of a high-tech device to stay in compliance with the Fair Labor Standards Act (“FLSA”) has resulted in a large dollar jury verdict in a religious discrimination case, as well as continued scrutiny from the Equal Employment Opportunity Commission (“EEOC”).  [EEOC v. Consol Energy, Inc., N.D. W.Va.] The case should serve as a valuable lesson to employers when it comes to providing for reasonable accommodation of religious practices, as required under Title VII of the Civil Rights Act of 1964.

Accurate time-keeping of employee work hours is a requirement of the FLSA, but employers routinely have to deal with employees who forget to properly clock-in or clock-out, or who sometimes arrange for friends/co-workers to falsify work hours by having them clock-in for the otherwise absent employee.  One high-tech solution that employers have started using is biometric devices, which scan an employee’s unique fingerprint or handprint to simplify the process and to guarantee that the person clocking-in is the actual employee.  How could anything go wrong with such a fool-proof and elegant solution?  That question would best be directed to mining company Consol Energy, Inc.

Consol operates a coal mine in West Virginia, and utilizes a biometric hand scanning device to track employee work hours for purposes of payroll and FLSA compliance.  One employee, Christian Beverly Butcher, told his supervisor that he could not comply with the hand scanning policy because he believed the technology has a connection to the “mark of the beast” and the Antichrist, as alluded to in the Book of Revelation in the New Testament of the Bible. 

As a proposed reasonable accommodation, the company offered to allow Butcher to scan his left hand with his palm up, which he declined.  Butcher resigned, stating that he was doing so involuntarily.  He brought his complaint to the EEOC, which filed suit on his behalf against the company, alleging that Consol had violated Title VII by failing to reasonably accommodate Butcher’s sincerely held religious beliefs.

A federal judge in West Virginia denied Consol’s effort to have the lawsuit dismissed on a motion for summary judgment, and in January 2015, a jury ruled in Butcher’s favor and awarded $150,000.00 in compensatory damages.  The EEOC has since filed a post-trial motion seeking an additional $413,000 in front and backpay.  Adding insult to injury, on March 4, 2015, the EEOC moved the District Court to grant an injunction barring the company from forcing its employees to use biometric hand scanning systems, arguing that there is a risk the company will continue to violate anti-discrimination laws.

Religious accommodation cases can be a minefield for employers. The lesson to be learned from this case is that Title VII and the EEOC take a very broad view of religion, and generally, courts do not want to be placed in the position of deciding what is or is not a bona fide religion or religious practice or belief.  Accommodations are not required if the employer would suffer undue hardship – that is, “more than de minimis “ or a minimal cost. Whether an accommodation would be an undue hardship is determined on a case-by-case basis, and considers the potential burden on an employer’s business in addition to any monetary costs. 

While a reasonable accommodation does not have to be the particular accommodation preferred by the employee, it does have to be an accommodation that resolves the religious conflict with the workplace practice.  In this case, the company’s offer to let Butcher scan his left hand, palm up as opposed to his right hand, palm down, did not resolve the essential conflict between Butcher’s sincerely held religious belief and the company’s biometric time recording system.  In this case, the company could have avoided very expensive litigation simply by allowing Butcher to have used a non-biometric time recording system, such as a manually filled-out time card.

It is for this reason, that employers are well advised to include in their employee handbooks language that makes employees aware of their right to request religious accommodation.  Employers also should provide training to supervisors on how to recognize religious accommodation issues and how to successfully address such requests. 

Religious accommodation cases typically involve conflicts between religious practices and uniformly applied workplace dress codes or grooming standards, or workplace schedules that conflict with an employee’s Sabbath or other religious holidays.  However, every case can vary.  As noted in the original article from which this blog draws its name, even an employee’s tattoo can raise religious accommodation issues.  While the religious conflict in EEOC v. Consol Energy, Inc. is not something usually encountered by employers, it illustrates that every religious accommodation issue needs to be addressed on a case-by-case basis, and that there is no “one-size fits-all” solution.

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

EEOC Blasted for Reliance on “Slipshod” Work of “Expert” Witness in Background Check Lawsuit

 

 

The Equal Employment Opportunity Commission ("EEOC") last week suffered a major defeat in its aggressive litigation offensive against employers using criminal and credit background checks. In an excoriating opinion affirming a lower court decision in EEOC v. Freeman, the United States Court of Appeals for the Fourth Circuit held that the expert witness on which the EEOC entirely bases its theory of liability conducted "slipshod work" and is "utterly unreliable".

 

The EEOC takes the position that utilizing such background checks in making employment decisions violates Title VII under a "disparate impact" theory of liability, because it disproportionately affects African-Americans and Hispanics, who statistically have higher rates of arrest and criminal conviction or bad credit.

 

I previously discussed the Freeman case in my August 2014 post Mad Men: The EEOC Advertises its Aggressive Agenda. In Freeman, a United States District Court in Maryland granted summary judgment in favor of the employer, dismissing the EEOC’s claim that the company’s background check policies violated Title VII. In so doing, the District Judge in the case recognized Freeman’s policy of conducting criminal history or credit record background checks on potential employees as "a rational and legitimate component of a reasonable hiring process." The District Court chastised the EEOC for pursuing a disparate impact discrimination claim based on "a theory in search of facts to support it," disregarding the EEOC’s expert’s report as "laughable" and "an egregious example of scientific dishonesty." The EEOC subsequently appealed the District Court’s decision to the Fourth Circuit.

 

The Fourth Circuit panel agreed with the lower court as to the seriously flawed statistical data and conclusions submitted by industrial and organizational psychologist Kevin R. Murphy on behalf of the EEOC. What makes the EEOC’s reliance on this expert witness even more puzzling is that the EEOC has repeatedly used Murphy in similar lawsuits, and other federal courts have likewise ruled against the EEOC and excoriated the sloppy and error ridden expert reports.

 

One of the Circuit Judge on the Freeman panel expressed serious concern over the EEOC’s litigation tactics because "[d]espite Murphy’s record of slipshod work, faulty analysis, and statistical sleight of hand, the EEOC continues on appeal to defend his testimony . . . It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so."

 

Under the EEOC’s current guidelines, for an employer to avoid Title VII disparate impact liability for excluding an individual with a criminal record, the employers must show that any reliance on a criminal history is job related and consistent with business necessity. In doing so, an employer must show that it considered three factors: (1) the nature and gravity of the offense, (2) the amount of time since the conviction, and (3) the relevance of the offense to the type of job being sought. The EEOC’s guidelines place the burden on employers to develop screening guidelines to individually assess each applicant/employee to determine whether a criminal history may be used as a factor in any employment decision.

 

It’s important to note that currently, no federal law prohibits the consideration of criminal convictions in making employment decisions, and the EEOC’s position is simply an aggressive outgrowth of the agency’s current strategic enforcement plan.

 

While the Fourth Circuit’s ruling is very good news, the case is still troubling from a business perspective. The EEOC continues to force employers to engage in expensive litigation to defend themselves against a theory of liability based on what amounts to fabricated evidence.


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



Sandwich “Secrets” and Noncompete Agreements

The sandwich chain Jimmy John’s is getting some unwanted attention from the federal government amid reports that it requires its low-level employees to sign noncompete agreements as a condition of employment. The story was first reported by the Huffington Post, and it resulted in Congressional Democrats sending a letter to the Federal Trade Commission (“FTC”)  and the U.S. Department of Labor (“DOL”), describing the restrictive covenants as “clearly anti-competitive and intimidating to workers.”  The House Democrats are asking for the FTC and the DOL to investigate the sandwich chain.

Is Jimmy John’s doing something illegal by making its sandwich-makers sign noncompetes?  The answer is “no.”  A better question to ask is whether it’s a good idea, and the answer to that is “not really.” 

In most states, this type of “restrictive employment covenant” is generally not favored, but will be enforced by the courts if the terms of the agreement are reasonable under the particular circumstances.  Generally, there are three requirements: (1) the employer has a valid interest to protect; (2) the geographic restriction is not overly broad; and (3) a reasonable time limit is given.  The employer bears the burden of proving the reasonableness of the agreement.  The reason these types of agreements are construed very narrowly is that most courts recognize that an employer is not entitled to protection against ordinary competition from a departing employee.

Despite the efforts to make this into a “federal case”, noncompete agreements are typically governed by state law, which can vary depending on where you live or operate a business.  For instance, in the state of Georgia, a noncompete agreement will be enforced only if the employee possesses selective or specialized skills, learning, abilities, customer contacts, customer information, and confidential information that that they have obtained as the result of working for the company.  In Tennessee, Texas and Maryland, such agreements are enforceable only against employees who had access to or were entrusted with the employer’s trade secrets or other confidential or proprietary information.  In other states, such as California, noncompete agreements are generally unenforceable.

In most of the matters I’ve handled involving noncompete agreements, the employees in question were either highly trained individuals in technical fields, with direct access to their employer’s trade secrets, or were high level sales people with similar access to confidential customer information.  The lesson to be learned is that the use of these agreements should be confined to key employees whose knowledge of trade secrets and other confidential information could cause serious damage if they went to work for a competitor.  I would be hard pressed to come up with a scenario where a fast food employer would legitimately need  to have a crew worker enter into a noncompete agreement. 

While I would be the first one to laud the attributes of a well-made sandwich, I think it’s fair to say that the average Jimmy John’s employee making your “J.J. Gargantuan®” is not privy to any company trade secrets.  By having low-level employees sign noncompete agreements, the company does not appear to be protecting any valid interest, and instead has brought itself some unwanted attention (and ridicule).

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





Dept. of Labor Delays FLSA Enforcement and Penalties Against Home Healthcare Companies

             Employers in the home healthcare industry will be getting a brief delay in the enforcement of new regulations extending minimum wage and overtime requirements to home healthcare workers under the Fair Labor Standards Act (“FLSA”). 

The U.S. Department of Labor’s (“DOL”) final rule is scheduled to take effect January 1, 2015, but on October 7, 2014, the DOL announced it would delay enforcement and the imposition of penalties for a period of six months, or until June 30, 2015.  For the following six months, or until December 31, 2015, the DOL will exercise its discretion in determining whether to bring enforcement actions, based on the extent to which employers have made “good faith efforts to bring their home care programs into FLSA compliance.”

 It is important for employers to remember that despite the DOL's enforcement delay, they are still required to begin complying with the new rule as of January 1, 2015.

            Up until the new rule, the FLSA contained an exemption that employees providing “companionship services” to elderly persons or individuals with illnesses, injuries, or disabilities were not required to be paid the minimum wage or overtime pay if they met certain regulatory requirements.

            This change will result in nearly two million direct care workers, such as home health aides, personal care aides and certified nursing assistants falling under the requirements of the FLSA.  Business groups and Congressional Republicans had strongly pushed for a complete suspension of the new rule, expressing fears that it would make home healthcare unaffordable and result in disruption to patient care.  In explaining its reason for the additional delay in active implementation, the DOL noted:

When we announced the final rule, we provided a 15-month implementation period before its effective date. We did so out of recognition that home care services financing is complex, and that making adjustments to operations, programs and budgets in order to comply with the rule would take time. Some states, tell us that they’re ready to implement the rule. Others, because of budget and legislative processes, have requested an extension.  After careful consideration, the department decided to adopt a time-limited non-enforcement policy. This approach will best serve the goals of rewarding hard work with a fair wage while not disrupting innovative direct care services.

            For employers seeking more detailed information on the changes to the FLSA under the final rule, the DOL is providing an on-line fact sheet.

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



EEOC Says “Do as I Say” and “Pay no Attention to What I Do” in Background Check Battle

            In its litigation offensive against employers over the use of criminal/credit background checks in making employment decisions, the federal agency is getting put on the spot over its own employment practices in two high profile cases. 
 

            In earlier posts, I discussed the EEOC’s lawsuits against national retailer Dollar General, and car maker BMW Manufacturing Co., alleging that the employers’ criminal background check policies systematically discriminated against African-American job applicants or existing employees.
 

            In the Dollar General case, the EEOC is currently fighting a motion to compel filed by the retailer, in which Dollar General is asking a U.S. District Court in Illinois to force the anti-discrimination agency to disclose its own policies on using background checks and criminal histories in employment decisions.  In a South Carolina District Court, BMW also has filed a similar motion to compel, seeking all of the EEOC’s documents regarding its policies and guidelines for evaluating the criminal records of individuals applying to work for the federal agency.
 

            Not surprisingly, the EEOC is arguing to the Courts in both cases that it should not be required to turn over the information, claiming the agency’s own practices are irrelevant to the allegations against the two companies.  In response, BMW, echoing an earlier response by Dollar General, noted to the Court:
 

This is not the first time that the EEOC has refused to provide information about its own employee screening policies and procedures while claiming that the policies and procedures of others are        unlawful . . . [a]nd, in all cases, courts have concluded that the information is relevant to issues of business necessity and estoppel and have compelled the EEOC to provide it.

The other cases BMW and Dollar General are referring to likely include the crushing defeat handed to the EEOC earlier this year by the United States Court of Appeals in Equal Employment Opportunity Commission v. Kaplan Higher Education Corporation.  In that case the EEOC sued the educational services company for implementing credit checks after discovering that some employees had stolen student’s financial aid payments. The credit check policy applied to job applicants seeking positions where they would have access to cash or financial information. The EEOC claimed the policy disproportionally impacted “more African-American applicants than white applicants.”
 

In its affirmation of the district court’s grant of summary judgment in favor of the company, the Sixth Circuit blasted the EEOC’s disparate impact theory of liability. In ruling against the EEOC, the Sixth Circuit noted that pursuant to its own personnel handbook, the EEOC runs the very same type of credit checks on its employees because “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” The court specifically and wryly noted that this was the very same reason that Kaplan adopted its policy.