This blog post originally appeared in an Employer Alert published by McNees Wallace & Nurick LLC’s Labor and Employment Group in October 2012. The Employer Alert can be accessed here.

The newly created Consumer Financial Protection Bureau (“CFPB”) recently issued regulations that modify the notices required under the Fair Credit Reporting Act (“FCRA”). The new regulations include one change that is significant to employers who regularly obtain criminal background reports, credit history reports, and other background checks on their applicants and employees.

The CFPB’s regulations modify the “Summary of Consumer Rights under the FCRA.” The FCRA requires that employers provide this standard notice to applicants and employees when, among other things, a pre-adverse action notice is sent. The regulations require that employers begin using the new form on January 1, 2013; until then, employers should continue to use the old form.

The biggest change to the notice is that consumers are now directed to the CFPB to obtain information about their rights under the FCRA, rather than to the Federal Trade Commission. (The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in 2010, transferred rulemaking authority over the FCRA to the CFPB.) The CFPB made similar changes to the notices that consumer reporting agencies are required to provide.

Model forms are available in the appendix to the FCRA regulations at 12 C.F.R. § 1022 and likely will be posted on the CFPB’s website, www.consumerfinance.gov, come the new year. The new form can also be downloaded here (.pdf).

In light of the significant changes to the regulatory framework surrounding the FCRA and the increasing concern about consumer privacy, we can expect that this will not be the CFPB’s last word on employee screening and background checks. We will keep you updated on additional changes to the FCRA in the future.

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Group.

Mitt Romney recently drew criticism for commenting to the National Federation for Independent Business (NFIB) that employers should weigh in on the upcoming election when speaking to employees. Specifically, Romney told NFIB members: "I hope you make it very clear to your employees what you believe is in the best interest of your enterprise and therefore their job and their future in the upcoming elections." Romney went on to say that there is "[n]othing illegal about you talking to your employees about what you believe is best for the business, because I think that will figure into their election decision, their voting decision and of course doing that with your family and your kids as well." These comments likely had many HR professionals across the country asking, "Can employers really do that?"

Continue Reading Bringing Politics into the Workplace during Election Season: A Wise Move for Employers?

It seems like we have been spending a lot of time discussing successful appeals of arbitration decisions lately, which is been a good thing for Pennsylvania employers. Recently, we reported on two cases in which an employer successfully appealed a negative arbitration decision. Historically, such successful appeals have been difficult. However, the current trend continued when a decision from the Commonwealth Court of Pennsylvania, sitting en banc (as full court rather than simply a three judge panel), rounded out the trifecta.

In Pa. Dept. of Corr. v Pa. State Corr. Officers’ Assoc. (pdf), the court was asked to analyze whether a grievance arbitrator’s decision reinstating corrections officers accused of inmate abuse was rationally derived from the collective bargaining agreement, and of so, whether the award violated a well-defined public policy. You may recall from our prior posts that these questions call for the application of the "essence test" and the limited public policy exception to that test.

Let’s take a step back.  The grievants had been suspended pending investigation of corroborated allegations of inmate abuse, and the union filed grievances challenging the suspensions. The first issue before the arbitrator was whether the grievances were timely filed. The parties’ agreement required that grievances be filed within 15 days of the alleged "occurrence" giving rise to the dispute. The arbitrator found that the grievances were in fact timely filed, even though they were filed well beyond 15 days after the implementation of the suspensions. The arbitrator reached this conclusion by finding that the suspensions constituted continuing violations of the agreement. The arbitrator held that, as a result, the grievances were timely filed even if back pay would be limited to the date the grievances were filed. Basically, the arbitrator held that each day of suspension gives rise to a new occurrence, triggering a new 15 day period.

What did the court have to say?  The court disagreed and succinctly concluded that the arbitrator’s decision, which did not cite to any provision of the agreement, lacked foundation in and failed to logically flow from the agreement. Put simply, the arbitration decision failed the essence test. The court did not reach the issue of whether the decision would violate a public policy.

So what?  For those of us with responsibilities for responding to grievances, this decision is significant. The court seems to have thrown out the continuing violation theory, a theory that unions often rely on when grievances are untimely filed, but there is some ongoing impact on the grievant.  Because most agreements prohibit an arbitrator from adding language to the agreement, as the agreement did here, without a specific provision providing for its use, employers should strongly consider taking the position that the continuing violation theory is dead.

This post was contributed by Tony D. Dick, an Associate in McNees Wallace and Nurick LLC’s Labor and Employment Group in Columbus, Ohio.

The Equal Employment Opportunity Commission (EEOC) recently issued a “Questions and Answers” sheet emphasizing that although Title VII and the Americans with Disabilities Act (ADA) do not expressly prohibit employers from discriminating against the victims of domestic violence, sexual assault, or stalking, these laws may create liability for employers in certain circumstances. For instance, employers may be liable under Title VII for treating such victims less favorably based on sex or sex stereotypes or for permitting sexual harassment against these individuals. Likewise, denying a reasonable accommodation to an employee with a violence-related disability or permitting different treatment of an employee with a disability stemming from an incident of domestic violence or sexual assault may violate the ADA. The document provides a number of illustrative examples of these potential pitfalls facing employers:

 

 

Continue Reading EEOC Issues Guidance on Potential Application of Title VII and ADA to Employees Who Have Experienced Domestic Violence, Sexual Assault, or Stalking

On November 8, 2011, we reported that a National Labor Relations Board Administrative Law Judge issued an interesting decision involving an employee who was discharged for posts he made on his Facebook page. The ALJ found that the employee was not discharged in violation of the National Labor Relations Act, because even though some of the employee’s Facebook posts were protected, the employee’s termination was based on only non-protected posts. Recently, the Board upheld the ALJ’s decision, providing helpful guidance to employers on the limits of the NLRA’s protections.

On September 28, 2012, the Board affirmed the ALJ’s decision in Knauz Motors, Inc. (pdf) The key question was whether the employee was fired for engaging in "concerted protected activity" under the NLRA. At issue were two Facebook posts made by the employee. The first included "mocking and sarcastic" pictures and comments about a sales event. Apparently, the employee was dissatisfied with the food selection for the event, which included hot dogs and water. The ALJ found, and the Board agreed, that since the food choices could impact the employee’s commissions, which were a term and condition of his employment, the pictures and mocking comments were "concerted protected activity."
 

The ALJ and the Board took a different view of the second set of Facebook posts, which contained pictures and comments making fun of an accident at a related dealership. The accident involved a 13-year-old boy who was behind the wheel of a vehicle that crashed into a retaining pond. The employee posted pictures of the accident and made some inappropriate comments. The Board affirmed the ALJ’s conclusion that these posts did not constitute concerted protected activity because there no was connection to the employee’s terms and conditions of employment. Ultimately, the ALJ and the Board held that the employee’s discharge was not a violation of the NLRA because he was terminated for the non-protected posts, and not the posts regarding the sales event.

The Board also agreed with the ALJ that some of the employer’s policies were overly broad in violation of the NLRA, including the employer’s Courtesy Policy. The Courtesy Policy provided: 

Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image of the Dealership.

The Board held that the prohibition on "disrespectful" conduct and "language which injures the image or reputation of the Dealership" could be construed to prohibit protected activity, and therefore, was unlawful.

While there is some good news in the Knauz Motors decision, specifically that there are limits to the protection afforded to employees who take to Facebook to mock their employers, there continues to be frustration regarding the broad reading of the NLRA. As a result of the Knauz Motors decision, some employers may need to update their policies, again.

Given the popularity of Facebook, Twitter, and LinkedIn, more and more organizations are resorting to social media sites to promote their brands and manage their public profiles. Employers are also encouraging employees to open social media accounts to carry out marketing and networking objectives. As corporate and professional social media use increases, so is the frequency of lawsuits challenging just who owns such social-networking accounts and content—the company or the employee who maintains them. A federal judge is being asked to address this very issue in a case involving a Pennsylvania woman’s claim that her former employer violated the Computer Fraud and Abuse Act (CFAA) when it took control of her LinkedIn account after she was fired (pdf).

Linda Eagle was co-founder and president of Edcomm, a bank consulting and training company. In 2008, Eagle created a LinkedIn profile; she used the profile to promote Edcomm’s services, foster her reputation, reconnect with friends and colleagues, and build her personal and professional network. Eagle shared the account password with another employee, who assisted Eagle in maintaining the LinkedIn profile. In 2011, following a change in ownership, Eagle was fired. After her termination from Edcomm, Eagle attempted to access her LinkedIn account, but was unsuccessful. Edcomm, using Eagle’s password, had accessed her account and changed her password so as to restrict Eagle’s access. In addition, Edcomm removed Eagle’s name and picture and posted information on the new executive who was hired in her place. Three weeks later, Eagle was able to regain access to her LinkedIn account.

Eagle then sued, claiming that the unauthorized takeover of her LinkedIn account violated the CFAA, caused her to lose potential business contacts and future revenue, and damaged her reputation. In response, Edcomm filed a counterclaim alleging that it had maintained and monitored the LinkedIn profile for the company’s benefit, that it was the rightful owner of the account, and that Eagle misappropriated the account for personal use.

Continue Reading Employer Takeover of Employee’s LinkedIn Account Does Not Violate Federal Computer Hacking Law, Question of Ownership Remains

As readers of this blog surely are aware, the National Labor Relations Board (NLRB) has embarked on a crusade against overbroad social media policies and handbook language. Notably, in a trio of social media reports, the NLRB’s Office of General Counsel suggested that prohibitions on offensive, demeaning, and inappropriate comments or statements that could damage the reputation of the company or its employees are unlawfully vague and could have a chilling effect on employee communications critical of the terms and conditions of their employment. Moreover, the Office of General Counsel expressed its opinion that the inclusion of a Section 7 disclaimer would not save ambiguous policies. Recent decisions, however, signal that the NLRB has adopted a contrary position.

In September, the NLRB issued two decisions striking down two such anti-disparagement policies as overbroad. In both decisions, though, the NLRB was critical of the fact that the policy in question did not include language excluding protected Section 7 communications from its broad reach. While the NLRB rulings do not go as far to say that a disclaimer of restrictions on Section 7 activity would cure a vague policy, the NLRB’s analysis suggests that a disclaimer could be effective. Specifically, the NLRB reasoned that such limiting language would reduce the likelihood that employees could reasonably construe the policy as applying to protected concerted activity.

In light of these recent decisions and the flurry of NLRB activity in this area, both unionized and non-unionized employers should revisit their social media policies and employee handbooks to ensure they could survive the NLRB’s scrutiny. In policies prohibiting disparaging comments, whether at work or on social media, employers would do well to include specific examples of what is not allowed—e.g., language that is vulgar, obscene, threatening, harassing, or malicious. In addition, employers should incorporate into their policies language disclaiming an intent to interfere with an employee’s Section 7 rights, including the right to discuss wages, hours, or other terms and conditions of employment.

The Supreme Court of Pennsylvania recently confirmed that sexual harassment is against public policy. Seems like a no brainer, right? The court seemed to agree, stating that the decision in Phila. Housing Authority v. AFSCME, District Council 33, Local 934 [WARNING EXPLICIT] (pdf) was not "a difficult case." So, why did it take over a decade to reach this conclusion?

Let’s look at what happened.  The union representing an employee of the Philadelphia Housing Authority filed a grievance challenging the employee’s termination for sexual harassment. An arbitrator reinstated the employee, with back pay, despite finding that the employee was not credible and had refused to take responsibility for his "lewd, lascivious and extraordinary perverse" physical and verbal harassment of a coworker. After the decision was appealed and wound its way to the court (for the second time), the court held that it was against public policy for an arbitrator to reinstate an employee who was terminated by a public employer for engaging in physical and verbal harassment. Although the arbitrator’s award was entitled to deference under the essence test, the award essentially amounted to a reward for the employee’s borderline criminal behavior and was contrary to the clear public policy prohibiting sexual harassment in the workplace.

You may recall from our prior posts that the essence test is an extremely deferential standard of review by which courts review the decisions of arbitrators. Under that test, if an arbitrator’s decision is grounded in the collective bargaining agreement, and is rationally derived from that agreement, then the court will not disturb the arbitrator’s findings. In the majority of cases, the courts simply defer to the decision of the arbitrator.  So what happened here? 

Continue Reading Appealling An Arbitration Decision – A Success Story Part II

Earlier this month Senator Bob Casey (D-PA) introduced the Pregnant Workers Fairness Act to the Senate floor. The proposed bill, which would supplement the Pregnancy Discrimination Act enacted by Congress in 1978, borrows the reasonable accommodation framework of the Americans with Disabilities Act. Specifically, the bill would require employers to provide reasonable accommodations to employees limited by pregnancy, childbirth, or related medical conditions. Such accommodations could include providing stools for pregnant employees whose jobs require significant periods of standing, permitting pregnant workers to carry water bottles, modifying lifting requirements, or reassigning non-essential tasks. The bill would also prohibit employers from firing employees because of pregnancy or requiring them to take pregnancy leave.

The Pregnancy Discrimination Act currently prohibits employers from discriminating against employees for being pregnant. Most employers–including those in Pennsylvania–are not, however, required to make an accommodation on account of an employee’s pregnancy. (A small handful of states, most notably California, have passed their own pregnancy-related disability laws.)

A companion bill was previously introduced in the House of Representatives in May but has made little advancement. We will keep you apprised of significant legislative developments through our blog.

This post was contributed by Adam R. Long, a Member in McNees Wallace and Nurick LLC’s Labor and Employment Group.

In the wage and hour realm, even the most knowledgeable Pennsylvania employers often are unaware of potential compliance pitfalls presented by state law. Like the FLSA, the Pennsylvania Minimum Wage Act ("PMWA") contains overtime and minimum wage requirements applicable to Pennsylvania employers. The PMWA is similar, but not identical, to the FLSA, and compliance with the FLSA does not always guarantee compliance with this state law. For example, unlike the FLSA, the PMWA does not contain a specific overtime and minimum wage exemption for employees in computer-related occupations. Thus, a computer professional in Pennsylvania who safely falls within the FLSA exemption still may be entitled to overtime compensation pursuant to the PMWA. In other words, compliance with the FLSA could result in overtime liability for the unwary Pennsylvania employer.

Earlier this week, a federal court in Pennsylvania highlighted another area where the requirements of the FLSA and PMWA arguably differ. In Foster v. Kraft Foods Global, Inc. (pdf), the employer compensated non-exempt employees pursuant to the "fluctuating workweek" method of overtime compensation. Under the fluctuating workweek method, an employee receives a guaranteed fixed weekly salary for all straight-time earnings, regardless of the number of hours worked, and an additional one-half of the employee’s regular rate for all hours worked over forty in the workweek. The employee’s regular rate may change (or "fluctuate") from week to week, because it is based upon the employee’s actual hours worked. The fluctuating workweek method of overtime compensation is expressly permitted by the FLSA’s regulations and used by many employers to compensate non-exempt employees on a fixed salary basis while minimizing overtime costs.

The court in Foster held that, contrary to the FLSA’s regulations, the PMWA’s regulations do not allow payment of only an additional one-half of the regular rate for overtime hours pursuant to the fluctuating workweek method. Instead, the court found that the PMWA requires that employees compensated under this method receive an addition one and one-half of their regular rate for overtime hours, essentially eliminating this method of compensation’s primary advantage to employers.

Pennsylvania employers who compensate non-exempt employees pursuant to the fluctuating workweek method should reevaluate their practices in light of the Foster decision. The decision serves as a stark reminder for all Pennsylvania employers, even those who do not use the fluctuating workweek method, that FLSA compliance may be only half the wage and hour battle. All Pennsylvania employers should be aware that the requirements of the FLSA and the PMWA are not identical and ensure compliance with both laws.