California
As we approached the June 3,
2011 deadline for legislation to pass the initial chamber of origin
fast approaching, the legislative picture began coming into focus as
a number of employment-related bills passed the first chamber and moved
to the second chamber. As a practical matter, bills that passed
this first crucial vote have a sizable likelihood of passing the second
chamber given the current single-party control in the Legislature, and
most will likely make it to the Governor's desk for signature or veto.
Indeed, one bill that would alter the process for selecting union representation
for agricultural workers (SB 104 – discussed below) has already passed
both chambers and has been sent to the Governor for enactment or veto.
Below is a quick recap on the
status of some of the employment-related bills we are monitoring:
Governor Considering Bill
Allowing "Card Check" to Replace Secret Ballot Elections for Agricultural
Employees (SB 104)
California law currently requires
secret ballot elections for employees in agricultural bargaining units
to select labor organizations to represent them for collective bargaining
purposes. This bill would permit agricultural employees, as an
alternative procedure, to select their labor representatives by submitting
a petition to the Agricultural Labor Relations Board signed by a majority
of the bargaining unit. This bill has passed both the Assembly
and the Senate and Governor Davis is considering whether to sign or
veto it. A similar bill (SB 1474) was vetoed in 2010.
Bill Limiting Credit Checks
in Employment Decisions Passes Assembly (AB 22)
This bill would prohibit employers,
other than certain financial institutions, from obtaining consumer credit
reports for employment purposes unless (1) the information is substantially
job-related, meaning that the person for whom the report is sought has
access to financial or confidential information, or (2) the position
at issue is in the state Department of Justice, a managerial position,
that of a sworn police officer of other law enforcement position or
a position for which the law requires the employer to obtain this type
of information.
Similar versions of this bill
passed the California Legislature in 2008, 2009 and 2010 but were vetoed
by the then-Governor Schwarzenegger. This history suggests this
bill will again pass the Legislature and advance to Governor Brown's
office for signature or veto.
Assembly Passes Bill Prohibiting
Mandatory Use of E-Verify (AB 1236)
This bill would prohibit the
state of California, or a city, county, city and county or other special
district from requiring an employer other than one of these government
entities to use the federal E-Verify system, except when required by
federal law or as a condition of receiving federal funds. A similar
version of this bill (AB 1288) passed the Legislature in 2009 but was
vetoed by then-Governor Schwarzenegger. (The Assembly's passage
of this bill prohibiting the mandatory use of E-Verify is interesting
and timely given the United States Supreme Court decision in Chamber
of Commerce v. Whiting (discussed below) upholding Arizona's state
law requiring employers use E-Verify).
Bill Increasing Penalty
for Minimum Wage Violations Passes Assembly (AB 197)
Labor Code section 1194.2 presently
authorizes an employee to recover liquidated damages equal to the amount
of wages unlawfully unpaid in minimum wage violations. This bill
would increase the amount of liquidated damages that may be awarded
to twice the amount of wages unlawfully unpaid, plus interest.
A similar version (AB 1881) was vetoed in 2010.
Bill Increasing Time for
Employers to Respond to EDD Notices Passes Assembly (AB 274)
This bill would provide employers
30 days, rather than the current 10 days, to submit information to the
Employment Development Department concerning an employee's request
for unemployment insurance benefits.
Bereavement Leave Bill Passes
Assembly (AB 325)
This bill would allow employees
to take up to four days of unpaid bereavement leave within a thirteen
month period following the death of a spouse, child, parent, sibling,
grandparent, grandchild or domestic partner, and authorize civil actions
for violations of this new leave right. In 2010, Governor Schwarzenegger
vetoed a prior version of this bill proposing three days of unpaid bereavement
leave.
Bill Prohibiting CFRA-Related
Interference Passes Assembly (AB 592)
California's Family Rights
Act (CFRA) and Pregnancy Disability Leave (PDL) prohibit employers from
refusing to grant leave to an eligible employee for certain statutorily
enumerated reasons (e.g., to care for a family member with a serious
health condition under CFRA, to take leave on account of pregnancy under
PDL, etc.). This bill would amend CFRA and the PDL to make
it an unlawful employment practice for an employer to interfere with,
or restrain the exercise or attempted exercise of any right provided
to an employee under these provisions.
This bill would essentially
codify in CFRA and the PDL the Family Medical Leave Act's (FMLA) prohibition
on employer "interference" with FMLA leave rights. [See e.g.,
29 U.S.C. § 2615(a)(1) ("it is unlawful for any employer to interfere
with, restrain, or deny the exercise of or the attempt to exercise"
substantive rights guaranteed by the FMLA.)
Senate Passes Bone Marrow/Organ
Donation Leave Amendments (SB 272)
Last year, the Governor signed
into law Labor Code section 1510 which entitles employees up to five
days paid leave in a one-year period for bone marrow donations and up
to 30 days paid leave in a one-year period for organ donations.
This bill would amend Labor Code section 1510 to clarify that the days
of leave are "business" days rather than calendar days (e.g., five
"business" days for bone marrow donations), and that the one-year
period is measured from the date the employee's leave begins and consists
of 12 consecutive months. This bill would also specify that such
a leave would not constitute a break in the employee's continuous
service for purpose of his or her right to "paid time off" (in addition
to the sick and vacation entitlement already enumerated in the statute).
Bill Would Require Employers
to Maintain Insurance Coverage during Pregnancy-Related Leaves (SB 299)
Government Code section 12945
currently prohibits employers from refusing employees disabled by pregnancy,
childbirth or a related medical condition to take up to four months
leave from work. This bill would prohibit employers from refusing
to maintain and pay for coverage under a group health plan for an employee
who takes such qualifying leaves. However, the employer would
potentially be entitled to recover from the employee the premiums paid
if the employee failed to return to work after the leave expires unless
the employee qualified for one of the bill's identified statutory
exceptions.
Assembly
Passes Bill to Revise Attorney's Fees Awards in Small Employment Cases
(AB 559)
California's Fair Employment
and Housing Act (FEHA) grants trial courts discretion to award reasonable
attorney's fees to a prevailing party, but Code of Civil Procedure
section 1033 also provides the court discretion to limit fees when the
prevailing party receives a judgment less than what could have been
awarded in a limited civil case ($25,000). In 2010, the California
Supreme Court held in Chavez v. City of Los Angeles (2010) 47
Cal.4th 970 that a trial court has discretion in a FEHA case to deny
a successful plaintiff attorney's fees if the plaintiff proceeds in
unlimited civil court but recovers less than the $25,000 jurisdictional
minimum. (In Chavez, the court denied a nearly $900,000
attorney's fees request in a FEHA discrimination case in part because
the plaintiff only recovered $10,000 in damages.)
This bill would nullify
Chavez and provide that Code of Civil Procedure section 1033.5 shall
not apply to FEHA actions, meaning FEHA plaintiffs recovering small
monetary awards might still recover attorneys' fees awards that dwarf
the amount recovered by plaintiff.
Gender Identity and Expression
Protections Proposed for FEHA (AB 887)
The Fair Employment and Housing
Act (FEHA) presently prohibits discrimination or harassment against
individuals because of "sex," which is defined to include gender,
and through its incorporation of Penal Code section 422.56, gender identity
and behavior. This bill would amend FEHA to specifically identify
"gender, gender identify and gender expression" as characteristics
protected under FEHA. It would also require employers to allow
an employee to appear or dress consistently with the employee's gender
expression (along with gender identity presently required). "Gender
expression" would be defined as "a person's gender-related appearance
and behavior whether or not stereotypically associated with the person's
assigned sex at birth."
Talent Agency Discrimination
Protections Pass Assembly (AB 1364)
Labor Code section 1700.47
presently prohibits talent agencies from discriminating against an artist
because of the artist's race, color, creed, sex, national origin or
handicap. This bill would expand the list of criteria based upon
which a talent agency may not discriminate to be fully consistent with
those identified in the Fair Employment and Housing Act (e.g., adding
ancestry, marital status, age, sexual orientation and changing "handicap"
to mean physical disability, mental disability and medical condition).
Senate Passes Genetic Discrimination
Prohibitions for FEHA and Unruh Act (SB 559)
This bill would amend the Unruh
Civil Rights Act (Civil Code § 51 et seq.) and FEHA, as
well as other statutory anti-discrimination provisions (e.g., contained
in the Education Code, etc.), to prohibit discrimination on the basis
of "genetic information" as defined in the bill.
Bill Targeting Non-California
Choice of Law and Forum Provisions Passes
Assembly (AB 267)
This bill would prohibit employment
contract provisions (including in applications or handbooks) requiring
an employee, as a condition of obtaining or continuing employment, to
use a forum other than California or to agree to a choice of law other
than California law, to resolve any employment-related issues that arise
in California.
Bill Requiring Written Commission
Contracts Passes Assembly (AB 1396)
This bill would amend Labor
Code section 2751 and require that by January 1, 2013, all employers
entering into employment contracts for services to be performed in California
and contemplating payment in commissions to put the contract in writing
and identify the method by which commissions will be computed and paid.
Employers failing to comply with these requirements would be liable
to employees for triple damages. This amendment is intended to
address a judicial decision which had effectively invalidated a prior
version of Labor Code section 2751 because it imposed these requirements
only on out-of-state employers. This amendment would apply these
requirements to all employers entering into employment contracts involving
commission payments for services performed in California.
Assembly Passes Bill to
Require Retention of Displaced Property Service Employees (AB 350)
Under the current Displaced
Janitor Opportunity Act (Labor Code § 1060 et seq.), contractors
and subcontractors that are awarded contracts to provide janitorial
or building maintenance services at particular sites are required to
retain for up to 60 days certain employees employed at that site by
the previous contractor or subcontractor. This bill would rename
the act the Displaced Property Service Employee Opportunity Contract
and make its provisions applicable to "property services," which
would include licensed security (as defined), landscape, window cleaning,
food cafeteria and dietary services. The bill would also extend
the 60-day retention period up to 90 days. These retention provisions
do not apply to employees the contractor or subcontractor can demonstrate
had not satisfactorily performed under the terminated contract.
Assembly Passes Bill Prohibiting
Workers' Compensation Apportionment Based Upon Protected Characteristics
(AB 1155)
This bill would limit the consideration
of an employee's protected characteristics (e.g., race, religious
creed, national origin) in workers' compensation proceedings in two
respects. First, it would provide that no workers' compensation
claim shall be denied because the employee's injury was related to
the employee's race, religious creed, color, national origin, age,
marital status, sex, sexual orientation, or genetic characteristics.
This provision is intended to prevent coverage from being denied because
an employee was assaulted or injured by another party because of the
employees' protected characteristics (e.g., a racially motivated assault
on an employee performing his or her duties).
The second provision would
preclude the use of certain "risk factors" based on protected classifications
when apportioning liability and causation for permanent disability purposes.
Thus, physicians would not be permitted to consider race, national origin,
gender, sex, genetic characteristics, and certain other factors when
assessing apportionment of the causes of an industrial disability.
The Legislature passed similar bills in 2008 and 2010 (SB 1115 and SB
145), which were vetoed by then-Governor Schwarzenegger.
Increased Workplace Smoking
Prohibitions Passes Senate (SB 575)
Labor Code section 6405.5 currently
prohibits smoking of tobacco product inside an "enclosed space"
(as defined) at a place of employment, and authorizes civil fines for
violations. This bill would expand the prohibitions on workplace
smoking to include "owner-operated businesses" (except where the
owner-operator is the only employee) and eliminate most of the currently
specified exceptions that permit smoking in certain work environments
(e.g., hotel lobbies, bars and taverns, tobacco shops, banquet rooms,
warehouse facilities and employee break rooms).
Assembly Passes Bill to
Limit Immediate Appeal Rights for Motions to Compel Arbitration (AB
1062)
Code of Civil Procedure section
1294 currently authorizes a party to immediately appeal a trial court
order denying a motion to compel arbitration. This bill would
amend section 1294 to limit the ability to immediately appeal an order
denying arbitration to only motions filed pursuant to a private or public
sector collective bargaining agreement. In other words, private
employers or businesses would no longer be able to immediately appeal
a denial of their arbitration request but would be limited to either
filing an appeal at the end of the case, or pursuing an immediate petition
for writ of mandate, the review of which is discretionary with the court
of appeal.
AGENCY
Federal
DOL Issues Smart Phone App
Allowing Employees to Track Their Hours Worked
The Department of Labor recently
unveiled a new application for smartphones allowing employees to independently
track the hours they work. This app is available in English and
Spanish and creates a timesheet for employees to track regular hours
worked, break times and overtime. This free app is currently compatible
with the iPhone and iPod Touch and can be downloaded through the DOL's
website or iTunes, and additional versions for other smartphones are
expected shortly. More information about the DOL's initiative
is available at www.dol.gov/whd.
JUDICIAL
California
Payments Based Upon
Number of Vehicles Sold Rather Than
the Vehicle's Value Constitute "Commission Wages" Exempting Employees
from Overtime Requirements
A number of California's
Industrial Wage Orders exempt from state law overtime requirements employees
who earn at least one-and-a-half times the minimum wage and more than
half of the employee's compensation represents commissions.
Labor Code section 204.1 governs commissions paid to vehicle dealers
and defines commission wages as "compensation paid to any person for
services rendered in the sale of such employer's property or services
and based proportionately upon the amount or value thereof."
In this case, car sales consultants
filed a class action seeking unpaid overtime arguing the employer's
compensation program of paying the consultants a uniform dollar payment
per car ($154), plus a guaranteed base pay, did not constitute "commissions"
under Labor Code section 204.1 because these payments were not based
on a percentage of the car's value or price. The California
appellate court rejected this argument and granted summary judgment
in the employer's favor, holding these uniform payments constituted
a "commission" under Labor Code section 204.1.
The court first reiterated
the California Supreme Court's conclusion in Ramirez v. Yosemite
Water (1999) 20 Cal.4th 785, that the commissioned sales
exemption is limited to employees actually involved in selling products
or services, and who receive commissions as defined in the Labor Code.
However, the appellate court rejected the employees' argument "commissions"
must be a percentage of the sales price, noting that Labor Code section
204.1 specifically states commissions may be "based proportionately
upon the amount or value thereof." Noting it was addressing
a case of first impression, the appellate court observed while most
prior cases had addressed commission based upon the value/price of the
object sold, the Labor Code specifically contemplated commission payments
based upon the number of items sold. The Court noted the amount
paid was proportionate to the number of vehicles sold, which satisfied
the commission wage requirements. (Areso v. Carmax, Inc. (2011)
___ Cal.App.4th ___, 2011 Cal.App.LEXIS 618.)
(NOTE: while Labor Code section
204.1 is specifically labeled as applying to vehicle dealers and this
particular case involved vehicle sale consultants, the California Supreme
Court has previously suggested its interpretations of Labor Code section
204.1 may apply more broadly than just that context. It will also
be worth watching to see if subsequent courts adopt Areso's
interpretation of Labor Code section 204.1 or instead rely upon the
authorities distinguished in Areso which had limited section
204.1 to commissions based upon the "value" of the object sold.)
Following Rehearing, Appellate
Court Again Holds Employees May Recover up to Two Premium Wage Payments
per Day for Missed Meal and Rest Periods
Labor Code section 226.7 requires
an employer who fails to provide an employee with a meal or rest period
to pay that employee one additional hour of pay (a so-called "premium
payment") for each day that the meal or rest period is not provided.
An undecided issue has been the number of premium payments an employee
may receive each day, with employees arguing they may receive up to
two payments if both a meal and rest period is missed, and employers
arguing employees may recover only a single premium payment per "work
day." In 2009, a federal district court in California
held the Industrial Wage Orders treat these as separate violations and,
thus, employees may recover up to two premium payments in a single day
if both a meal and rest period is missed. (See Marlo v. UPS
(C.D. Cal. 2009) 2009 U.S.Dist.Lexis 41948.) However, since lower
federal district court decisions are not binding in California, it remained
to be seen whether California state courts would adopt a similar rule.
As discussed in the March 2011
Newsletter, a California court of appeal had followed Marlo and
held that employees may recover up to two additional hours of pay on
a single work day for meal and rest period violations if both a meal
and rest period is missed. Following rehearing, this same appellate
court reached the same conclusion and essentially reissued unchanged
its prior opinion. The California appellate court first concluded that
the legislative history to section 226.7 supported this interpretation,
noting it was enacted concurrently with the Industrial Wage Orders which
are structured such that meal and rest period violations are treated
as separate violations. The court also concluded allowing up to
two premium payments would further public policy by dissuading employers
who had already failed to provide a rest period (and already owed an
hour premium pay) from also not providing a meal period. (United
Parcel Service, Inc. v. Superior Court (ex rel Allen) (2011) ___
Cal.App.4th ___, 2011 Cal.App.LEXIS 652.)
Another California Appellate
Court Denies Class Certification Finding Employers Need Not Ensure Employees
Take Offered Meal and Rest Periods
While California employees
and employers continue to wait for the California Supreme Court decisions
in Brinker and Brinkley
regarding whether employers must ensure meal periods are taken or simply
provide an opportunity to take such a break, another California court
of appeal has weighed in. In this class action lawsuit, the appellate
court acknowledged that the issue regarding the duty to provide meal
and rest breaks is presently pending before the California Supreme Court,
but concluded it was within its discretion to rule on the class certification
issue given how long these cases have been pending. Relying upon numerous
federal court decisions, the court concluded employers must provide
an opportunity to take a meal and rest period but need not ensure they
are taken. The court also concluded class certification was inappropriate
since the employer had provided ample evidence of its meal and rest
period opportunities, meaning the reasons any employee chose not to
take breaks would largely involve individualized inquiries inappropriate
for class action purposes.
The Court also held that the
three named class representatives were unqualified to represent the
class. One of them had two felony and three misdemeanor convictions,
while the second one had a very brief tenure with the company and had
limited recollection of the conditions of employment, suggesting he
could not meaningfully testify about the alleged violations. Finally,
the third named class representative testified the employer provided
him with meal and rest periods and he never worked off the clock, meaning
he could not fairly represent the class because he received all the
rights to which he was entitled. (Flores v. Lamps Plus, Inc.
(2011) 195 Cal.App.4th 389.)
(NOTE: as discussed in prior
newsletters, this is simply the most recent California appellate court
decision drawing a similar conclusion about an employer's meal and
rest period obligations. However, another recent case (Tien
v. Tenet Health Care (2011) 2011 W.L. 523611) reaching the same
conclusion was recently granted review pending Brinker
and Brinkley meaning it is not presently citeable, and it is
widely expected the same will soon occur in Flores.)
Union-Issued
Flyers Containing Personal Attacks
on Management Member Not Protected Free Speech Involving a Public Interest
A mid-level management employee
filed a defamation and false light action against union members who
distributed flyers throughout his apartment complex stating "neighbors
beware of this man," "protect your family, safeguard your property,"
he "tried to take away workers' pension benefits."
The union unsuccessfully attempted to dismiss these claims under California's
anti-SLAPP statute (Code of Civ. Proc. § 425.16) arguing the statements
were protected free speech involving matters of public interest.
The California court of appeal
reiterated that anti-SLAPP dismissal motions involve a two-step inquiry,
with the defendant first demonstrating the challenged action arises
from protected activity and, if so, the plaintiff demonstrating a probability
of prevailing on the merits. The appellate court observed that
speech involving public concerns is entitled to constitutional protections
generally, but cautioned that not all speech necessarily implicates
a public concern. Specifically, the court noted that not all labor
disputes automatically rise to the level of a public interest, and a
union cannot turn an otherwise private matter into one of public interest
through its own actions, including flyers such as these involving a
private individual. The court emphasized these flyers were distributed
in a different city away from the jobsite, were mostly personal and
not strike-related, they targeted a management employee not involved
in the labor negotiations, and the audience had neither knowledge nor
interest in the strike. (Price v. Operating Engineers Local Union
No. 3, et al. (2011) ___ Cal.App.4th ___, 2011 Cal.App.LEXIS
651.)
Federal
United States Supreme Court
Upholds Arizona State Law Requiring Employers to Use E-Verify to Determine
Employee Eligibility
In 2007, the state of Arizona
passed the Legal Arizona Workers Act which (1) required that licenses
of Arizona employers that knowingly or intentionally employ unauthorized
aliens be suspended and in certain circumstances, revoked; and (2) required
all Arizona employers to use the federal E-Verify system to confirm
the workers they employ are legally authorized workers. The United
States Chamber of Commerce filed a pre-enforcement challenge to this
law arguing federal immigration law expressly and impliedly preempted
this state law. In a lengthy 5-3 decision, the United States Supreme
Court rejected these challenges and held federal law does not preempt
Arizona's licensing law, or its requirement that all Arizona employers
must use the otherwise voluntary federal E-Verify system.
The Court began its analysis
noting the applicable federal law (the Immigration Reform and Control
Act (IRCA)) prohibits employers from knowingly hiring unauthorized aliens
and imposes federal civil and criminal sanctions for employers violating
this prohibition. The Court also noted that while IRCA expressly
preempts States from imposing "civil and criminal sanctions" on
those who employ unauthorized aliens, IRCA's statutory language did
not preclude States from imposing sanctions "through licensing and
similar laws." (8 U.S.C. § 1324a(h)(2).) The Court concluded
the Arizona law did not conflict with federal immigration law by imposing
new civil or criminal sanctions, which would be preempted, but instead
simply imposed sanctions under the licensing authority expressly reserved
to the states through IRCA's statutorily enumerated savings clause.
Applying a similar statutory
analysis, the Court concluded the Arizona requirement employers use
the federal E-Verify system to do business in Arizona did not conflict
with, and thus was not preempted by, the Illegal Immigration Reform
and Immigrant Responsibility Act (IIRIRA). The Court noted that
while the IIRIRA statutorily prohibited the Secretary of Homeland Security
from requiring any entity (outside of the Federal Government) to use
the federal E-Verify system, the IIRIRA contains no language circumscribing
state action. In other words, while the federal government could
not require non-federal government-related employers to use E-Verify,
the federal law did not preclude states from imposing laws mandating
their state employers use this system. (Chamber of Commerce
v. Whiting (2011) ___ S.Ct. ___, 2011 U.S.LEXIS 4018.)
(NOTE: as a practical matter,
this decision will not materially impact most California employers (except
those who are federal contractors subject to a 2008 executive order),
as California has not passed a state law counterpart to the Arizona
law, and it is unlikely it will do so. Accordingly, most California
employer's participation in E-Verify will remain voluntary.
However, this decision will likely impact those states who have enacted
provisions similar to Arizona's requiring all employers to use E-Verify
(e.g., Georgia, Mississippi, South Carolina and Utah) and those states
requiring state contractors or agencies to use the system. It
may also prompt other states to consider provisions similar to the Arizona
law, so non-California employers should keep a watch on legislative
developments in their states.)
United States Supreme Court
Holds ERISA Does Not Authorize District Court to Reform Plan Based on
Summary Plan Description, But May Authorize Equitable Relief
Approximately 25,000 CIGNA
employees filed suit under ERISA after the company changed from a defined-benefit
plan to a cash-balance plan, and the class action plaintiffs relied
heavily upon a summary newsletter touting the benefits of this change-over
and argued they were misled or not provided proper notice. The
district court agreed these disclosures violated ERISA's notice obligations,
and relying upon ERISA § 502(a)(1)(B), it first reformed the new pension
plan and then awarded benefits according to this reformed plan.
The United States Supreme first
concluded that the specific ERISA provision the district court relied
upon (section 502(a)(1)(B)), did not authorize the court to reform the
plan based upon alleged misrepresentations contained in the summary
plan description. The Court noted that this particular section
only authorizes plan participants to sue to recover benefits owed under
the plan, and the summary plan description is distinct from the underlying
plan. However, the five-justice majority opinion then noted that
another ERISA subsection (§ 502(a)(3)) specifically authorizes equitable
relief with the particular standard to recover depending upon the particular
equitable theory utilized. The Court remanded to the district
court to reassess the appropriate relief under a different ERISA section
(subsection (a)(3) rather than (a)(1)(B)), observing that while the
plan participants must demonstrate actual harm, they need not always
demonstrate detrimental reliance depending upon the remedy sought.
(Cigna Corp. v. Amara (2011) ___ S.Ct. ___, 2011 U.S.LEXIS 3546.)
Sarbanes-Oxley Does Not
Protect Employees of Publicly-Traded Companies Who Disclose Information
to the Media
Two auditors at a public company
who were terminated for violating the company's internal policy prohibiting
non-authorized disclosures to the media sued alleging they were terminated
in violation of the Sarbanes-Oxley Act (SOX), 18 U.S.C. § 1514A(a)(1),
for reporting SOX violations and other securities laws. The Ninth
Circuit Court of Appeals affirmed summary judgment in the employer's
favor holding SOX does not protect employees of publicly-held companies
from retaliation when they disclose information regarding designated
types of fraud or securities violations to members of the media.
The court concluded section 1514A(a)(1), as drafted, protects employees
only when they provide such information to the following statutorily-enumerated
entities: (1) a federal regulatory or law enforcement agency, (2) a
member or committee of Congress, or (3) a supervisor or other individual
who has the authority to investigate, discover or terminate such misconduct.
The circuit court distinguished
SOX from the Whistleblower Protection Act (5 U.S.C. § 2302
(b)(8)) which prohibits retaliation against government employees for
"any disclosure of information" without limitations as to the specific
types of entities to which protected whistleblowers report such information.
(Tides v. Boeing Co. (9th Cir. 2011) 2011 U.S.App.LEXIS
8980.)
Employee Who Exceeds Employer's
Restrictions in Accessing Confidential Database Potentially Violates
the Computer Fraud and Abuse Act
A former high-ranking executive
who, along with several accomplices' assistance, accessed his employer's
confidential computer databases argued he could not be criminally liable
under the Computer Fraud and Abuse Act (CFAA) (18 U.S.C. § 1030
et seq.) because he and his co-workers were initially provided access
to the computer and this database. Drawing upon the ninth circuit's
recent decision in LVRC Holdings LLC v. Brekka
(9th Cir. 2009) 581 F.3d 1127, the executive argued he could
not exceed unauthorized access by accessing information unless he had
no authority to access the computer under any circumstances. The
ninth circuit rejected this overly narrow interpretation and held an
employee exceeds authorized access when he or she obtains information
from the computer and uses it for a purpose that violates the employer's
restrictions on the use of the information.
The circuit court noted CFAA
subjects to punishment individuals who knowingly and with intent to
defraud and either accesses a protected computer without authorization
or who exceed authorized access, with the latter defined as someone
who accesses the computer with authorization but then obtains or alters
information the accesser is not entitled to obtain or alter. The
circuit court repeatedly stressed the employer's numerous steps to
protect this database, including policies and agreements specifically
limiting access and use of this confidential information, noting these
restrictions provided fair warning that violators were subjecting themselves
to potential criminal liability. These express warnings and limitations
distinguished the LVRC Holdings case in which the employer had
not implemented any such restrictions such that an employee who initially
had access to the computer would not have understood he exceeded such
access by using the information in a particular manner. The court
also rejected the argument this interpretation would impose criminal
liability every time an employee violated his employer's computer
usage policy (e.g., to check their sports scores, etc.), noting CFAA
violations require the obtaining of value exceeding $5,000. (United
States v. Nosal (9th Cir. 2011) 2011 U.S.App.LEXIS 8660.)
(NOTE: this decision further
underscores the need to proactively take steps to maintain the confidentiality
of so-called confidential information, including policies limiting the
access and use of such information.)
FMLA
Leave Properly Denied Where Employee
Failed to Submit Sufficient Documentation
Supporting Requested Leave
A federal employee requested
a medical leave under the Family Medical Leave Act (FMLA) submitting
three documents: (1) a doctor's prescription by her psychiatrist,
(2) a letter from her psychiatrist and (3) a medical certification form
diagnosing her with post-traumatic stress disorder, and indicating she
needed medical treatment, bed rest, two prescription medications and
120 days off work. The agency requested additional information
because the employee-provided information did not provide a summary
of the medical facts supporting this diagnosis or explain why the employee
could not perform her work duties. After the employee repeatedly refused
to provide additional information, the agency denied her leave and her
subsequent unauthorized absences resulted in her termination.
The Ninth Circuit Court of
Appeals upheld the termination decision holding the employee had failed
to provide a summary of the medical facts that supported her diagnosis
as required under 5 U.S.C. § 6383(b)(3). The court observed that
a medical certification "shall be sufficient if it states [among other
things] the appropriate medical facts within the knowledge of the health
care provider regarding the condition." In this case, the employee-provided
certification contained a diagnosis, but no explanation about the employee's
limitations or the nature of the needed medical treatments. The
court also rejected the employee's suggestion the employer should
have requested a second and third opinion, holding that the need for
additional medical opinions is triggered only when an employer "has
reason to doubt the validity" of the certificate, not its sufficiency.
Lastly, the court concluded the employer had provided the employee twenty-two
days to submit sufficient information, thus satisfying the statutory
requirement of at least fifteen days and, if not practicable, a reasonable
time period up to thirty days. (5 C.F.R. § 630.1207(h).) (Lewis
v. United States (9th Cir. 2011) 2011 U.S. App. LEXIS
10576.)
