The United States Department of Labor (DOL) recently issued a new Family and Medical Leave Act (FMLA) poster. Employers who are covered by the FMLA are required to display a DOL-prepared poster advising employees and applicants of the major provisions of the Act.

According to the DOL, for now an employer has the choice to continue to use the prior version of the poster (dated February 2013) or to use the new poster (dated April 2016). Even so, use of the new poster is recommended because it is better organized and more user-friendly. It is also generally advisable for employers to use the most current version of required postings. The new poster can be found here, free of charge.

In addition to the new poster, the DOL has also issued a new Employer’s Guide to the FMLA. The guide is intended to provide employers with information concerning their obligations and options for administering FMLA leave. The guide is available here for free download.

On May 11, 2016, the Occupational Safety and Health Administration (“OSHA”) finalized a recordkeeping and reporting rule that will require covered employers to take the additional step of electronically submitting to OSHA, injury and illness information that is required to be maintained under existing OSHA regulations.  The rule becomes effective January 1, 2017.

The new electronic submission requirement applies to: (a) employers with 250 or more employers who are currently required to keep OSHA injury and illness records (i.e. OSHA forms 300, 300A and 301) and (b) employers with 20-249 employees in certain industries with historically high rates of occupational industries and illnesses.  The electronic submission requirements do not alter the employer’s obligation to complete and retain injury and illness records, as before.  For illnesses and injuries occurring in 2017, the electronic submission deadline is July 1, 2017.

Believe it or not, OSHA plans to post the injury and illness data it collects on its public website (www.osha.gov).  OSHA has indicated that it will remove any personally identifiable information (“PII”) before making the data available to the public.  States that operate their own job safety and health programs (i.e. OSHA state plans) must adopt requirements that are substantially identical to the new rule within six (6) months.

The new requirements introduce a public watchdog role.  Apparently, this role is being added in response to the near doubling of the number of workplaces in the U.S. from 1981 to the present, and the corresponding decrease in the ratio of OSHA inspectors, to one per 4300 workplaces (according to a study by the Center for Effective Government).

The rule also bars employers from retaliating against workers for reporting workplace injuries and incidents, thereby creating a supplemental avenue for disgruntled workers who are inclined to pursue a wrongful discharge cause of action, in addition to more traditional workers’ compensation claims, for alleged workplace injuries.

The net effect of the rule may be to spur additional employment lawsuits, by making it easier for plaintiff lawyers to mine for accident information.

We will keep you apprised as to further developments, but in the interim, please feel free to contact any member of our Labor and Employment Group, with questions or concerns.

An appeals court recently reinstated the four game suspension issued to Tom Brady by the National Football League. The Patriots quarterback previously had his four game suspension reversed by the United States District Court for the Southern District of New York, but in a 2 to 1 decision, the Second Circuit Court of Appeals overturned that decision. We previously offered you some lessons that could be taken from the “Deflategate” saga. We also noted that we did not believe that the District Court used the appropriate standard of review in evaluating Brady’s appeal of his suspension (yes, this is us patting ourselves on the back).

The decision is a double edged sword for employers with a unionized workforce, because it contains both good and bad news. The good news is, the court recognized that the NFL had bargained for the right to issue disciplinary action to players for rules violations and to have Commissioner Rodger Goodell serve as the arbitrator to decide internal appeals of those disciplinary actions. The court recognized that the collective bargaining agreement between the NFL and the Players’ Association was clear on these points. The court noted that, while this scheme was unorthodox, it was what the parties bargained for in the agreement.

The bad news: the court also recognized that the decisions of arbitrators are afforded broad deference and are very hard to overturn. And all too often it is the employer on the losing side of an arbitration decision that faces an uphill battle on appeal. In affirming Goodell’s decision on Brady’s internal appeal, the court reaffirmed the high level of deference owed to arbitrator’s awards. The battle may have been won by the NFL here, but it often seems that employers generally are losing the war.

Only time will tell if Brady and the Players’ Association pursue a further appeal. In the meantime, we can continue to take lessons from this much publicized labor dispute with a football twist.

For government employers, disciplining and terminating employees can be especially difficult. Not only does the public employer face the same challenges in complying with the standard alphabet soup of employment laws that private employers do, including the ADA, ADEA, FMLA, Title VII, etc., they also have the complicated task of considering the application of an employee’s Constitutional rights in making employment decisions. Unfortunately, the protections provided by the constitution to government employees don’t rely on the kinds of “immutable” traits often in issue in the alphabet soup context, which means that determining when constitutional rights could be violated is particularly troublesome.

Recently, in Heffernan v. City of Paterson, the United States Supreme Court brought the analysis applicable to First Amendment retaliation claims closer to your typical alphabet soup case in one small way – focusing on the employer’s intent. In a typical discrimination context, the employer’s intent is key when examining the reason given for the action and the circumstantial evidence that may call that stated reason into question. In short, the question is: was it the employer’s intent to discriminate in disciplining an employee, or was it really the employee’s violation of an employer policy?

In the First Amendment context, employer intent is usually irrelevant or assumed; the focus instead is on whether the speech or activity is personal or on a matter of public interest, whether the employee acted as a citizen or an employee, and how the speech or activity could harm the government’s interests. Heffernan, however, presented the unique situation where the employee contended he didn’t intend to speak or act at all, but the employer punished him for its perception that he had. The Court therefore faced the following question: whose intent is more significant in the constitutional rights context? The Heffernan Court found that it is the employer’s intentions that are critical to determining whether there has been a violation of the employee’s rights.

In reaching this decision, the Court considered the following facts: Jeffrey Heffernan was employed as a police officer for the City of Paterson in 2005 under Chief of Police James Wittig. Both the Chief and Heffernan’s direct supervisor had  been appointed to their positions by the Mayor, who was running for reelection. During the campaign, Heffernan’s colleagues spotted him at campaign headquarters talking with campaign workers and holding a campaign sign for the Mayor’s opponent, who was a known friend of Heffernan. When word reached his supervisors, Heffernan was demoted from a detective position to a patrol officer position, and given an undesirable patrol post, allegedly to punish his involvement in the opposition’s campaign.  Heffernan denied being involved in the campaign, and denied supporting the candidate, stating that he was only picking the sign up for his mother, who was bedridden and could not do it for herself.

In response to his demotion, Heffernan filed a lawsuit against the City contending that he had been demoted because the City believed he engaged in conduct that constituted protected activity, even though he denied that he had intended to speak or act.

Prior case law is very clear that government employers are prohibited from making an employment decision because an employee supports a particular political candidate. However, Heffernan was contending that he didn’t actually support the oppositional candidate, but the City mistakenly believed he did. The City’s position in the litigation was that, since he hadn’t intended to engage in protected activity, his activity wasn’t protected…and its demotion decision could therefore only violate his rights if in fact he actively supported the candidate.

Ultimately, the Court concluded that “the government’s reason for demoting Heffernan is what counts…When an employer demotes an employee out of a desire to prevent the employee from engaging in political activity that the First Amendment protects (even if the employee did not intend to engage in that activity), the employee is entitled to challenge that unlawful action under the First Amendment…” Whether the employer has correctly or incorrectly deduced the employee’s motives in engaging in particular behavior, the Court opined that the same constitutional harm would result – an employee would be demoted or terminated for appearing to engage in protected activity, thereby discouraging other employees from engaging in what should be protected activity. Because the harm would result regardless of the accuracy of the employer’s belief, the employer’s reason for the employment action must govern in determining if a First Amendment cause of action and violation exists.

Unfortunately for Heffernan, his fight with the City will continue on, as the Supreme Court did not reach the ultimate question of whether his rights had been violated. To the contrary, the Court’s decision remanded the case back to the trial court to determine whether or not Heffernan’s demotion occurred pursuant to an existing neutral policy prohibiting police officers from overt involvement in any political campaign, and whether such a policy complies with constitutional standards generally.

The immediate take-away for government employers and elected officials (and the HR personnel who love them), in light of the Heffernan decision should be on the reinforcement of what we know already from other employment discrimination cases: we must examine the reason for an employment decision before it is made to ensure there is  no protected classification or protected activity motivating the decision. Even if the employer is  wrong about what the employee intended by his actions, a decision motivated by an intent to punish what would otherwise be protected activity could violate the constitution.

This post was contributed by Alan Boynton, Chairman of McNees’ Injunction Practice Group.

On April 27, 2016, the United States House of Representatives voted 410-2 to approve the proposed Defend Trade Secrets Act (DTSA). The vote follows the Senate’s unanimous approval of the bill. President Obama has stated that he will sign the bill. This rare display of legislative and executive cooperation and goodwill is, on its own, quite impressive. Along the way, a couple of key compromises were required to gain consensus. Putting those compromises aside for the moment, what ultimately emerged is a law which could have significant effects on how employers deal with rogue ex-employees.

The departure of employees for competitors is not an unusual occurrence in modern business. Also fairly common is the assertion that those employees took with them customer lists, spreadsheets and (even more so today) gigabytes of electronic business data. Faced with such misconduct, because trade secret misappropriation has been considered a tort under state law, employers have traditionally been compelled to seek relief in state court, often in employee friendly jurisdictions and courts. In recent years, most states have adopted variations of the Uniform Trade Secrets Law, which has leveled the playing field considerably. Yet, some significant variations still exist from state to state. Through the DTSA, Congress has decided to largely eliminate those distinctions. Moreover, and critically, it has shifted the venue for handling most post-employment matters to federal district courts.

The DTSA technically applies only to trade secrets related to products or services used in interstate or foreign commerce. In today’s world, finding products that don’t qualify under this standard may be difficult. Once that threshold is met, and federal jurisdiction is established on the trade secret claim, all related state-law claims can follow the trade secret claim into federal court, now allowing the injured ex-employer to pursue claims for breaches of non-competition, non-solicitation and confidentiality agreements alongside the trade secret ones in a venue which might be less employee-friendly than a local state court where the defendant may reside. While there remains a bit of uncertainty as to how the DTSA will be applied, one thing seems fairly certain: federal courts may soon be seeing a significant uptick in cases that were previously routinely handled by the local county courts.

One final observation: It appears that the DTSA is being inserted in the federal crimes code. Perhaps it is appropriate, then, that a new weapon granted to employers in the DTSA but not found in the Uniform Trade Secrets Acts in most states is the possibility of ex parte seizure of the alleged misappropriated trade secrets. The use of this powerful weapon by federal courts is supposed to be limited to “extraordinary circumstances” (the addition of this limitation was one of the compromises that led to overwhelming approval of the bill) but it could provide quite a strong tool for the ex-employer. Stay tuned to see how courts will interpret and apply this provision in the DTSA

On April 17, 2016, Pennsylvania Governor Tom Wolf signed the Medical Marijuana Act (MMA), which legalizes medicinal marijuana in Pennsylvania. The MMA, which takes effect on May 17, 2016, includes various provisions related to employment, and we have received many questions regarding what employers must, can and cannot do as a result of the new law. The simple answer is that, for the time being, we do not believe that employers are required to take immediate action. No immediate changes to your drug and alcohol policies or how you deal with drugs in the workplace are necessary for now, but stay tuned.

The MMA requires the Department of Health (“Department”) to promulgate full regulations within 18 months, and the Department is also required to begin publishing temporary regulations no later than six months from the Act’s effective date. Accordingly, we expect further guidance before the end of 2016 and anticipate frequent changes to the rules and regulations surrounding the MMA and its interpretation thereafter.

So, what do you need to know about the law now?

  • The MMA contains an employment anti-discrimination provision that states as follows:

No employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against any employee regarding an employee’s compensation, terms, conditions, location or privileges solely on the basis of such employee’s status as an individual who is certified to use medical marijuana. MMA §2103(b)(1).

This anti-discrimination provision seems clear; however, it does raise some unanswered questions.  Although more than 20 other states have legalized medicinal marijuana, for purposes of the MMA, an “individual who is certified to use medical marijuana” seemingly refers only to individuals certified under Pennsylvania law. It is unclear whether an employee who is certified in another state would be entitled to the protection of §2103(b)(1).  Also, keep in mind that it will take some time for Pennsylvania to implement the regulatory framework to begin the certification process, set up dispensaries and begin actually distributing marijuana.

  • Employers are not required to accommodate the use of medical marijuana at work and employers retain the ability to discipline employees for using marijuana at work. Along these lines, the MMA provides:

Nothing in this Act shall require an employer to make an accommodation for the use of medical marijuana on the property or premises of any place of employment. This Act shall in no way limit an employer’s ability to discipline an employee for being under the influence of medical marijuana in the workplace or for working while under the influence of medical marijuana when the employee’s conduct falls below the standard of care normally accepted for that position. MMA §2103(b)(2).

While employers retain the right to discipline users of medical marijuana if they are “under the influence” at work, we do not yet know what is meant by “under the influence.” It remains to be seen which definition of “under the influence” will apply to potential employee discipline.

  • The MMA prohibits certified users from performing certain safety-sensitive jobs while “under the influence” of medicinal marijuana, including: (1) operating or being in physical control of chemicals which require a permit issued by the federal government, state government, federal agency or state agency; (2) operating or being in control of high-voltage electricity or any other public utility; (3) performing any employment duties at heights or in confined spaces, including, but not limited to, mining; (4) performing tasks that the employer deems life-threatening to either the employee or any employees of the employer; and (5) performing any duty that could result in a public health or safety risk. MMA §510.
  • The MMA does not require employers to “commit an act that would put the employer or any person acting on its behalf in violation of federal law.” MMA §2103(b)(3). For example, an employer would not be required to accommodate medicinal marijuana use if such accommodation violates federal DOT regulations.
  • The MMA does not, currently, supersede an employer’s rights under the ADA. For example, under current interpretations of the law, employers are not prohibited by the ADA from discharging an employee who tests positive for marijuana, even if the use is pursuant to a valid prescription. This could change, however, as the MMA evolves and as we further understand how “under the influence” will be defined in Pennsylvania. Further, the EEOC may change its position on the protected nature of medical marijuana as more states allow its use.

As with any new law, we have much left to learn. The McNees Labor and Employment Group will be closely monitoring the implementation of the temporary and permanent MMA regulations. We will keep you advised as things develop and are hopeful that the temporary regulations will address some of our unanswered questions, including: (1) what is meant by “under the influence;” and (2) whether the anti-discrimination provisions apply to those certified to use medical marijuana in other states. In the meantime, should you have specific questions about the law, your policies or your employees, please do not hesitate to contact any member of the McNees L&E Group.

Have you by chance recently received an email from your company’s CEO requesting copies of employee W-2 forms?  If so, don’t respond without first verbally confirming that the request is legitimate.  Several of our clients in Pennsylvania have reported receiving such fraudulent emails.  These emails are part of a broad “spoof” scheme launched by computer fraudsters with the goal of gaining unauthorized access to individual tax records.  The emails are typically sent to HR professionals from a high-ranking company officer and “kindly request” a file containing employee W-2 forms.  The thieves then use the personal information on W-2 forms (i.e. names, addresses, social security numbers, and earnings information) to file false tax returns and commit other forms of identity theft.  This scam is not limited to central Pennsylvania.  On March 1, 2016, the IRS issued a notice alerting employers of the scheme.  The IRS notice contains additional information and can be viewed by clicking here.

If you suspect your company may have released W-2 forms or other personally identifiable information to unauthorized parties, be sure to promptly comply with federal and state laws governing data breach notifications.  Companies with employees in multiple states will need to comply with the varying requirements of each state.  If you have any questions regarding your obligations under data breach notification laws, please contact any member of the McNees Privacy & Data Security Group or the McNees Labor and Employment Practice Group.

For what seems like an eternity, we have been waiting for the U.S. Department of Labor to issue the new Fair Labor Standards Act “white-collar” overtime exemption regulations. While many have speculated on when the final regulations would be issued, most assumed that the DOL would wait until the summer or fall of 2016 to issue the new regulations.

In a somewhat surprising move, the DOL on Tuesday sent its final regulations to the Office of Management and Budget (“OMB”) for its review. OMB review is the final step in the rulemaking process and can take anywhere from a few weeks to a few months. After completion of OMB review, the final rule will be published in the Federal Register and likely take effect 60 days after publication.

It now appears that, rather than in late 2016, the new FLSA white-collar overtime regulations will be issued this spring or early summer. We do not yet know what the final regulations will contain, but based on the content of the proposed regulations issued last June, we can assume that the changes to the FLSA white-collar exemptions will be significant and result in many currently exempt employees losing their exempt status. Specifically, we expect a sizable increase in the minimum salary requirement, as the proposed regulations would double the current $455 minimum weekly salary requirement to approximately $970 (i.e., over $50,000 per year).  In addition, we anticipate changes to the duties tests for a number of these exemptions, the details of which are currently unknown.

With Tuesday’s news, it is even more vital for employers to consider how they will respond to the new overtime exemption tests.  Many employees currently treated as exempt from overtime will need to be reclassified as non-exempt or otherwise have changes made to their compensation and/or duties to remain exempt.  Employers likely will have only 60 days to respond to the new rules and make necessary changes to employees’ compensation and overtime exempt status.  Now is the time for employers to consider the impact that the anticipated changes would have on the status of their exempt workforce and determine next steps.

The United States Department Labor recently issued a Notice of Proposed Rulemaking to enforce President Obama’s September 2015 Executive Order establishing paid sick leave for federal contractors. Now that we have been able to digest the lengthy proposed rules, we wanted to share some of our thoughts about the proposed rules with you.

What do the proposed rules say?

The proposed rules require certain federal government contractors and subcontractors to annually provide their employees with up to seven (7) days of paid sick leave. The leave can be utilized for the employee’s own illness, to attend a doctor’s appointment, to care for a sick family member, or for absences related to domestic violence, sexual assault, and stalking.

If finalized, when will the proposed rule go into effect?

If the proposed rule is not challenged, it is expected that the rules will apply to certain contracts entered into with the federal government on or after January 1, 2017.

Will this proposed rule impact every federal contractor?

No. It will only impact four types of contractual agreements: 1) procurement contracts for construction covered by the Davis-Bacon Act; 2) service contracts covered by the Service Contract Act; 3) concessions contracts for services on federal lands (i.e. the snack stand at a national park); and 4) contracts in connection with federal property or land rentals/leases. So, if your company manufactures widgets for the federal government, the proposed rule likely does not apply to you. However, if your company is constructing a building for the federal government, providing a service to the federal government, renting space from the federal government or vice versa, your company is probably covered by the new rule.

Does the proposed rule apply to all employees or just the employees servicing federal contracts?

The proposed rule only applies to persons engaged in performing work on a covered federal contract. The regulations provide that an employee who spends more than 20% of his/her working time performing services in connection with a covered federal contract is also covered under these rules. However, as a matter of practice, it may be difficult to explain to your workforce why some employees are entitled to paid sick leave and others are not.

Under the rule, will employees automatically be entitled to paid sick leave?

No. The rule requires contractors to allow employees to accrue at least one (1) hour of paid sick leave for every 30 hours worked on a covered federal contract. The proposed rule envisions that contractors will be able to limit the amount of paid sick leave to 56 hours each year but must permit employees to carry over accrued, unused paid sick leave from one year to the next. Even though rollover is required, a contractor can prevent an employee from accruing additional sick leave in excess of 56 total hours.

The proposed rule requires the contractor to provide employees with at least a monthly update on the amount of paid sick leave the employee has accrued but not used. Employees will be permitted to take sick leave in increments of no greater than 1 hour.

How does an employee request paid sick leave under the proposed rule?

The proposed rule requires that the employee request (orally or in writing) the ability to take leave at least 7 calendar days in advance of foreseeable leave and as soon as practicable in all other cases. Worried the employee is faking it? The proposed rules only allow a contractor to require certification from a physician or other provider if the absence is for three or more consecutive days.

Is this really a big deal?

Assuming the new rules apply to your business, probably! Most American business already provide some type of paid time off or paid sick leave to their employees—and most provide in excess of seven (7) days. The Department of Labor estimates that this new proposed rule will only impact a relatively small number of people—about 437,000 employees—who currently receive no paid sick leave. But, because the proposed rule provides specific instructions regarding accrual, use, requests for leave, and rollover, this rule could impact how many employers administer their PTO and/or sick leave policies. The provisions regarding domestic violence, sexual assault, and stalking are also unique.  If certain requirements are met, a contractor’s existing paid sick leave or PTO policy could meet the requirements of the rule.

How can I let the federal government know my feelings on the proposed rule?

Provide comments by clicking on this link. You have until April 12, 2016 to do so.

Interested in learning more? Check out this Department of Labor Fact Sheet, shoot us an email, or give us a call. As this proposed rule moves toward final implementation, we are happy to assist you in developing a sick leave and/or PTO policy that complies with the President’s Executive Order.

 

The Pennsylvania courts have delved into the “App Store,” addressing for the first time the use of smartphones and their applications in the context of illegal wiretapping.

Pennsylvania’s Wiretap Act forbids the “interception” of private conversations using an “electronic, mechanical, or other device,” unless all of the participants consent to that recording.  State laws like this one, as well as federal wiretapping laws, explain why you have often heard messages from telemarketers informing you that your call may be recorded “for quality assurance purposes.”  Such a warning, and your continued participation in the call, indicates that you have consented to the recording.  Without such consent, the recording of an otherwise private conversation constitutes illegal interception of a conversation, which is a felony criminal offense.

In 2014, in Commonwealth v. Spence, the Pennsylvania Supreme Court departed from this “dual consent” standard, finding that the Wiretap Act does not prohibit the surreptitious interception of private communications, so long as that interception is accomplished using a telephone rather than some other “device.”  In that case, a state trooper used an arrestee’s phone to call his drug dealer, then gave the phone back to the arrestee and instructed him to activate the speaker function.   The drug dealer incriminated himself during the phone call, and was arrested.  Challenging his arrest, the dealer argued that his private conversation with the arrestee had been illegally intercepted by the state trooper.  The court disagreed, finding that Pennsylvania’s General Assembly had deliberately excluded telephones from the definition of “electronic, mechanical, or other device.”  Because the state trooper had not used any “device” other than the telephone itself to record the call, the Wiretap Act did not forbid his actions.

In February, in Commonwealth v. Smith, the Pennsylvania Superior Court considered this exception for use of a “telephone” in light of “evolving technological advances of the modern day smartphone.”  In Commonwealth v. Smith, an employee was charged with interception of oral communications after he recorded a conversation he had with his former boss during a private meeting.  Without the boss’s knowledge or consent, the employee began recording the conversation with his iPhone’s “Voice Notes” app to capture statements regarding an ethics complaint.  After this recording was discovered during the employee’s wrongful termination lawsuit, the employee was charged with a felony violation of the Wiretap Act.

The Superior Court had to decide whether the Act’s exception for interception by use of a “telephone” encompassed today’s smartphone capabilities.  The court found the use of a smartphone app constituted the illegal use of an “electronic, mechanical, or other device” rather than the use of a “telephone” permitted by the exception to the wiretapping law.  The court ruled that, “[a]lthough [the employee] used an app on his smartphone, rather than a concealed tape recorder, to surreptitiously record his conversation with [his former boss], the result is the same. His actions constituted a violation of [the Wiretap Act].”

The case offers another example of the care that must be taken before recording a private conversation in Pennsylvania.  Without explicit consent from the participants, such recording is illegal.  This is true whether the conversation is captured on surveillance video, a tape recorder, or a smartphone app.

Devin Chwastyk is chair of the Privacy & Data Security group at McNees Wallace & Nurick.  He counsels organizations with regard to data security policies and in responding to data breaches.