Federal
Bill to Limit Credit Checks
Re-Introduced (H.R. 321)
Known as the "Equal Employment
for All Act," this bill would amend the Fair Credit Reporting Act
to substantially limit an employer's ability to obtain or use credit
information against prospective and current employees when making employment
decisions. Specifically, this bill would prohibit employers from
using or obtaining consumer reports or investigative consumer reports
regarding "creditworthiness" unless the employee is applying for
or currently holds employment requiring national security or FDIC clearance,
or the employee applies for or holds a high-level position at a financial
institution, or where otherwise required by law. These prohibitions
would apply even if the employee consented to the acquisition or use
of such reports for employment purposes.
(NOTE: a similar bill has been
vetoed in California the last three years, but the new Governor likely
would sign the almost-certain-to-be-reintroduced version in California.
Several other states have enacted similar bills in the last couple years
suggesting there may be growing momentum for this limitation, including
at the federal level).
AGENCY
Federal
IRS' Mileage Reimbursement
Rate Increases to 51 Cents per Mile
As a reminder, as of January
1, 2011, the Internal Revenue Service's standard mileage rate has
increased for business travel from 50 cents to 51 cents per mile.
Reminder: OSHA Form 300A
Posting Deadline February 1st
The Occupational Safety and
Health Act of 1970 ("OSHA") imposes a number of reporting obligations
on certain employers, including an annual obligation to post by February
1st a Summary of Work-Related Injuries and Illnesses in the
preceding year (the so-called Form 300A). Employers subject
to this posting duty must complete and post the Form 300A even if there
are no injuries or illnesses during the prior year, in which case the
form must be posted with zeroes in the total line. A properly-certified
form must be posted in a conspicuous place from February 1, 2011 until
April 30, 2011. A sample Form 300A along with instructions
may be downloaded at
http://osha.gov/recordkeeping/new-osha300form1-1-04.xls.
USCIS Issues Updated Handbook
for Employers for I-9 Issues
The United States Citizenship
and Immigration Services (USCIS) department has recently published its
revised "Handbook for Employers" to assist employers with the Form
I-9 process (this so-called M-274 was last updated in 2009). Amongst
other things, the updated version contains information about new regulations
(including regarding electronic storage and retention of Form I-9s),
as well as visual aids for completing the Form I-9 and it addresses
public comments and frequently asked questions. It also contains
expanded guidance on processing employees to H1-B and H2-a status and
on extensions of stay for employees with temporary employment authorization.
The newly-revised M-274 is available at www.uscis.gov/files/form/m-274.pdf.
JUDICIAL
California
Pregnant Employee's E-mails
to Plaintiff's Attorney from Work Computer Not Privileged
A pregnant employee resigned
and sued for FEHA sexual harassment and constructive termination after
her supervisor sent two e-mails questioning her honesty about her pregnancy
and suggesting that he would accommodate her pregnancy although it would
be burdensome. The California court of appeal summarily adjudicated
her FEHA harassment claim stating that the two e-mails were not sufficiently
severe or pervasive to create an objectively unreasonable hostile work
environment. The appellate court also dismissed her constructive
termination claim observing the two e-mails did not constitute objectively
intolerable conditions forcing her to quit, especially since the supervisor
had indicated he wanted her to stay and would make it work.
The court also held the employee's
e-mails to her attorney from a work computer the day before her resignation
were not privileged since she had no reasonable expectation of privacy.
The court conceded a communication does not lose its privileged character
simply because it is communicated by electronic means or because persons
involved in the delivery or storage of electronic communications may
have access to the communication's contents. In this case, however,
the employee had used the employer's computer after receiving the
employer's electronic communications policy stating personal e-mails
were prohibited on work computers, that the employer retained the right
to monitor its computers for compliance, and that she had no expectation
of privacy in her e-mails. The court reasoned the employee's
communications were thus no different than if she had used the employer's
conference room to consult with her attorney in a loud voice.
(Holmes v. Petrovich Dev. Co., LLC
(2011) ___ Cal.App.4th___, 2011 Cal.App.LEXIS 33.)
(NOTE: this case underscores
the importance of a carefully-worded electronic communications policy
that limits an employee's expectation of privacy in their workplace
electronic communications.)
FEHA Sexual
Harassment Claims Time-Barred
A party seeking to file a FEHA
harassment or retaliation claim must first file an administrative charge
with the Department of Fair Employment and Housing within one year of
the date on which the unlawful practice occurred. In this case, the
California court of appeal concluded the employee's FEHA harassment
and retaliation claims were time-barred because the employee did not
file her DFEH administrative charge until fifteen months after the last
harassing or retaliatory action occurred. The court also held
the so-called "continuing violations" doctrine, under which unlawful
conduct occurring outside the statutory period may be considered if
sufficiently related to unlawful conduct occurring within the one-year
period, did not apply because no unlawful conduct occurred within the
one-year period before the DFEH charge was filed. (Trovato
v. Beckman Coulter, Inc. (2011) ___ Cal.App.4th ___, 2011 Cal.App.LEXIS
99.)
Employer's Mistake of
Law Does Not Constitute "Inadvertence"
Excusing Violation of Labor Code's Wage Statement Requirement
Labor Code section 226(a) provides
that every employer shall, semimonthly or at the time of each payment
of wages, furnish each of its employees an accurate itemized statement
in writing showing, inter alia, the amount of gross wages earned,
the total hours worked by the employee, any deductions, net wages earned,
and the period for which the employee is paid. Section 226.3 of
the Labor Code provides that an employer who fails to comply with this
statute is subject to civil penalties, but requires the Labor Commissioner
to consider whether the violation was inadvertent and to use its discretion
whether to penalize an employer for a first violation due to clerical
errors or inadvertence.
In this case, the Division
of Labor Standards Enforcement ("DLSE") assessed more than $70,000
in civil penalties against an employer who failed to provide itemized
wage statements to sixteen employees lacking social security numbers.
Instead, the employer had treated them as independent contractors, issuing
them Form 1099 federal income tax statements at the end of the year.
The employer argued that its noncompliance was "inadvertent" within
the meaning of section 226.3, as it had mistakenly assumed that statements
are only required when the employer withholds taxes from the employee
and since the employer could not withhold taxes from employees without
social security numbers, no statements were necessary.
The appeals court rejected
the employer's argument that the statute contained a "state of mind"
requirement and determined that the term "inadvertence" was to be
provided its plain and commonsense meaning (i.e., "unintentional,"
"accidental," or "not deliberate.") The court determined
this employer's failure to provide itemized wage statements was intentional,
and held ignorance of the law was not a defense to noncompliance.
(Heritage Residential Care, Inc. v. Division of Labor Standards Enforcement
(2011) ___Cal.App.4th___, 2011 Cal. App. LEXIS 83.)
Federal
United States Supreme Court
Upholds Background Checks for Government Contractor Employees
Current employees of contractors
working at NASA's Jet Propulsion Laboratory were informed they must
complete a standard background check mandated by a 2004 executive order
or they would be denied access to the lab and face possible termination.
The employees sued claiming this background check process violated their
constitutional right to informational privacy. In particular,
the employees objected to inquiries about their treatment or counseling
for recent illegal drug use, and to open-ended questions sent to the
employees' designated references concerning whether they have "any
reason to question" the employee's "honesty or trustworthiness"
or have "adverse information" concerning a variety of subject matters.
The Ninth Circuit Court of Appeals precluded these inquiries finding
the drug-treatment-related questions were not of legitimate interest
and the open-ended inquiries about "trustworthiness" were not sufficiently
narrowly-tailored.
A unanimous United States Supreme
Court reversed, upholding the government's ability to conduct standard
background investigations on federal contract employees. The Court observed
government employers have a legitimate interest in conducting basic
background checks to ensure a "competent, reliable workforce" and
noted these particular inquiries have long been used in the public and
private sectors. The Court concluded that the background
checks were reasonable given the government's interests even if these
employees were contractor employees, and it rejected the argument that
the government must show that the questions are "necessary"
or are the least restrictive means of furthering its interests. The
Court also found it significant that all information collected in connection
with these background checks would be subject to non-disclosure pursuant
to the Privacy Act. (National Aeronautics and Space Admin. v. Nelson
(2011) ___ U.S. ___, 2011 U.S.LEXIS 911.)
Employees Who Leave Due
to Impending Business Closure Have Not
"Voluntarily Departed" for WARN Act Purposes
The Worker Adjustment and Retraining
Notification Act (WARN Act) provides that an employer may not order
a plant closing or mass layoff, which results in an employment loss
for 50 or more employees during any 30-day period, unless the employer
provides a 60-day written notice of such an order to each affected
employee. In this case, employees who stopped reporting to work
after receiving notice their employer would close in less than two weeks
sued alleging the employer failed to provide the required 60-day WARN
notice.
The employer argued a WARN
Act notice was not required because all but 30 employees "voluntarily
departed" their jobs prior to the scheduled closure date, meaning
they had not suffered an "employment loss" as defined by the WARN
Act. The Ninth Circuit Court of Appeals rejected this argument,
holding that employees who leave a job because the business is closing
have not "voluntarily departed" within the meaning of the WARN Act.
The court also observed that
the statute requires "affected employees" be given notice of the
impending closure. "Affected employees" are those who may
"reasonably be expected to experience an employment loss as a consequence
of a plant closing." Thus, the affected employees must be determined
prospectively in order for the employer to give proper notice.
Additionally, as the DOL has suggested, the starting point for determining
whether there is an actual or reasonably expected employment loss (as
a consequence of a plant closure) is to determine how many positions
will be eliminated by the closing. The court also determined that
"unless there is some evidence of imminent departure for reasons other
than the shutdown, it is unreasonable to conclude that employees voluntarily
departed after receiving notice of the upcoming closure."
(Collins v. Gee W. Seattle LLC (9th Cir. 2011) ___F.3d ___, 2011
U.S. App. LEXIS 1169.)
Ninth Circuit Holds Employer May Only
Recover Attorneys Fees Incurred Exclusively on
"Frivolous" Claims
As most employers know, California and
federal courts routinely reward prevailing civil rights plaintiffs their
"reasonable" attorneys' fees, while prevailing employers may only
recover if they demonstrate the unsuccessful plaintiff's claims were
"frivolous" and/or unreasonably prosecuted. In this case,
the ninth circuit reversed a $125,000 attorneys' fees award in a prevailing
employer's favor, and articulated a standard making it even more difficult
for employers to recover, even when the employee's claims are frivolous.
Specifically, the Ninth Circuit Court of Appeals held that under Title
VII, an employer may only recover fees attributable exclusively to a
plaintiff's frivolous claims. In other words, the employer
must identify those fees incurred solely because of frivolous claims
and the employer cannot recover any fees for work that was also related
to non-frivolous claims, even if at least a portion of the work was
also related to the frivolous claims.
(Harris v. Maricopa County
Super. Ct. (9th Cir. 2011), ___F.3d___, 2011 U.S. App. LEXIS 1068.)
Employer's
Failure to Respond to Internal Harassment Claims Precludes Summary Judgment
A temporary employee working
on an all-male production line informed his trainer/working foreman
and Human Resources that co-workers were making disparaging comments
about his sexual orientation. Two days after his complaint to
Human Resources, the company terminated him for violating its call-in
policy when he took a day off due to stress. The district court
granted the employer's summary judgment motion but the Ninth Circuit
Court of Appeals reversed concluding triable issues of fact regarding
the employee's Title VII retaliation claim and the adequacy of the
employer's response to his sexual orientation harassment claim.
The appellate court noted the
jury would need to determine whether the "trainer" was a "supervisor,"
in which case the employer would be vicariously liable for his harassment
and have his knowledge imputed to it, or a "co-worker" in which
case the employer could potentially argue it had taken appropriate remedial
action upon learning of the co-workers' harassment. The court
noted this determination would depend not upon the job titles or the
workplace's formal structure, but upon the extent of the "trainer's"
authority over the individual. The court also raised questions
about Human Resources' response reiterating its duty to adequately
investigate and discipline if needed, and reminding that "inaction
constitutes a ratification of past harassment, even if such harassment
independently ceases." Finally, the court concluded the temporal
proximity (two days) between the Human Resources complaint and the termination
provided sufficient evidence of pretext to warrant a jury trial on the
Title VII retaliation claim. (Dawson v. Entek Int'l
(9th Cir. 2011) ___ F.3d ___, 2011 U.S.App.LEXIS 468.)
United States Supreme Court
Upholds Third-Party Retaliation Claim
An employee sued for Title
VII retaliation alleging his employer terminated him in retaliation
for an earlier EEOC discrimination claim filed by his fiancé, who worked
for the same employer. The district court and the Sixth District
Court of Appeals dismissed the claim holding Title VII does not permit
third-party retaliation claims. However, a unanimous United States
Supreme Court reversed holding that on these facts as plead, the discharged
employee had standing to pursue a Title VII retaliation claim even though
he had not previously engaged in a protected legal activity.
Drawing upon its recent decision
in Burlington N. & S. F. R. Co. v. White (2006) 548 U.S.
53, the Supreme Court first concluded that the employer's discharge
of the employee would constitute actionable retaliation even if directed
against someone other than who filed the initial internal complaint.
The Court reiterated that Title VII's retaliation claim is broader
than its discrimination claim and applies not simply to actions affecting
the terms and conditions of employment, but to actions that might dissuade
a reasonable worker from making or supporting a charge of discrimination.
The Court reasoned that a reasonable worker might be dissuaded from
engaging in protected activity if she knew her fiancé would be fired
as a result. Notably, the Court recognized its ruling might make
it difficult to determine how far these protections extend (i.e., would
they apply to a girlfriend being fired? Or even a close friend?) and
it declined to identify a fixed class of relationships for which third-party
reprisals are unlawful.
The Court next concluded the
discharged third-party fiancé had standing to sue for Title VII
retaliation. The Court noted that Title VII permits any "person
claiming to be aggrieved" to pursue a civil action. The Court
concluded that the term "aggrieved person" permits suit by persons
failing within the "zone of interests" of the statute (i.e., possessing
an interest sought to be protected by the operative statute).
The Court concluded that the fiancé, as an employee of the retaliating
employer, fell within the "zone of interests" sought to be protected
by Title VII, but noted as an example, that a shareholder whose stock
price dropped because the employee had been terminated would not have
standing under Title VII. (Thompson v. North American Stainless,
LP (2011) ___ U.S. ___, 2011 U.S.LEXIS 913.)
(NOTE: The California Supreme
Court has yet ruled on the issue of third-party retaliation claims under
the FEHA. However, because the pertinent FEHA provisions contain
similar language permitting suit by any "person claiming to be aggrieved"
(Gov. Code § 12965(b)) it is foreseeable California courts may follow
Thompson.)
