Labor & Employment Insights

Employment Law Newsletter

Effective January 1, 2013, employers using third parties to conduct applicant/employee background checks must issue an updated Fair Credit Reporting Act (FCRA) notice to affected applicant/employee. Under the FCRA, employers must issue the updated notice summarizing rights under the FCRA whenever the employer intends to obtain a consumer report on the employee/applicant, or when the employer intends to take any adverse action based upon the report. Copies of the new form are available at www.consumerfinance.gov/learnmore.

Employment Law Newsletter

In a decision that may ultimately negate any post January 2012 decisions issued by the National Labor Relations Board (NLRB), the D.C. Circuit Court of Appeals in January 2013 struck down as unconstitutional three controversial “recess” appointments to the NLRB by President Obama. The court held that the presidential power to make appointments when Congress is in “recess” (and therefore unavailable to vote on the nominations) does not apply to a generic break in Congressional proceedings for several days. The President’s nominations were made in January 2012 when the Senate was not in recess but was meeting in sessions every three days and thus were unconstitutional from their inception.

Although the issue is far from settled – the U.S. Supreme Court has decided to hear the recess appointments issue – the questionable status of the currently constituted Board may be fatal to a slew of decisions issued under the recess appointees. At issue in many of these rulings was whether employer policies and practices infringed upon employees’ rights under Section 7 of the National Labor Relations Act (NLRA) to engage in “concerted activity,” including discussion of the terms and conditions of employment with coworkers. Although the NLRA was historically implicated in unionized workplaces, its protections apply to non-unionized workplaces as well, and non-unionized employers are increasingly targeted by the NLRB for violations of the Act. These decisions have created a firestorm among employers, who view the NLRB’s recent pronouncements as pro-union attacks upon employers’ abilities to reasonably manage their workplaces. Below is a summary of some of the Board’s more controversial rulings:

Employment Law Newsletter

Lady Gaga’s formal personal assistant (and former personal friend) has filed suit against the pop star for violation of the overtime payment requirements of the Fair Labor Standards Act (FLSA), which requires overtime payment for all hours worked in excess of 40 hours to employees who are not exempt from the FLSA’s overtime mandate. The assistant claims that she was on duty 24 hours a day to attend to the Lady Gaga’s every personal need, without the benefits of breaks or even time to sleep. Contrary to a common misperception among employers, the fact that the assistant was paid on a salaried basis is immaterial to the question of whether or not she qualifies as an exempt employee under the FLSA – an unlikely prospect given the nature of her job duties. Lady Gaga could be looking at significant liability because under the FLSA, a prevailing employee is entitled to 2 times the amount of unpaid wages due in the preceding 2- or 3-year period, plus interest and attorney fees, which often eclipse the unpaid overtime.

Employment Law Newsletter

In December 2012, the EEOC approved its Strategic Enforcement Plan announcing six national enforcement priorities the agency will focus on through 2016:

1. equal pay enforcement;

Employment Law Alert

Many employers administering leave under the FMLA are ignorant of the following notices that must be provided to employees invoking FMLA leave rights:

Eligibility Notice: provided within five business days of a leave request informing the employee whether or not they meet the FMLA’s eligibility requirements. In most cases, this notice is sent the employer is in possession of a medical certification or other information needed to make a final determination whether leave request qualifies under the FMLA.

Employment Law Newsletter

On June 27, 2012, the Untied States Department of Labor (DOL) issued a new 16-page guide book entitled “NEED TIME? The Employee’s Guide to the Family and Medical Leave Act.” The guide book provides a “simple overview” of the leave benefits accorded to employees under the FMLA.

Among other things, the guide includes an easy to follow flow chart employees and employers can utilize to determine FMLA eligibility, provides information on how FMLA leave is to be processed by employers, and encourages employees to bring a copy of the guide book to their medical providers to assist them in complying with the medical certification process. The manual also provides information on how employees can file a complaint with the DOL if they believe their FMLA rights have been violated by an employer. The guide is currently available in English on the DOL’s website, http://www.dol.gov/whd/fmla. A Spanish version is expected in the near future.

Employment Law Newsletter

Many employers use criminal background checks to “weed out” individuals who engage in activities that pose significant risks to the workplace. This past April the United States Equal Employment Opportunity Commission (EEOC) issued its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (“Guidance”). Employers should consult the Guidance before considering criminal histories when making employment decisions.

While having a criminal record is not a protected characteristic under Title VII, the Guidance warns that excluding an individual from employment on the basis of an arrest or criminal history may result in unlawful race or national origin discrimination under Title VII in one of two ways. First, the Guidance points to statistical evidence showing that Blacks and Hispanics are arrested and convicted in far greater numbers than Caucasians. Thus, an employer taking these records into account may unintentionally discriminate along racial and national origin lines because Blacks and Hispanics are disproportionately arrested as compared to other groups (commonly known as unintentional disparate impact discrimination). Second, an employer can utilize the existence of an arrest or conviction as a pretext to intentionally deny employment on the basis of race or national origin (commonly known as intentional disparate treatment discrimination).

Internal investigations by employers into allegations of unlawful harassment, theft or other workplace misconduct are commonplace in today’s work environment. In an effort to protect the complainant, the accused and the witnesses – not to mention the fundamental integrity of the investigation – employers typically warn those participating in the investigation that the matters discussed are confidential and are not to be discussed outside the context of the investigation. This standard common sense practice has now been deemed a potential violation of employee rights under the Section 7 of the National Labor Relations Act (NLRA) by the National Labor Relations Board.

As noted in our previous article in this issue, the NLRB is flexing its muscles to challenge employer practices in non-unionized workplaces that historically were not on the Board’s radar screen. These have included attacks on standard social media policies and employee handbook disclaimers as violations of employees’ rights to engage concerted activity. The NLRB’s July 13, 2012, ruling in Banner Health Systems is just another example of the Board’s extending its reach into non-unionized workplace. In that decision, the Board reasoned that a blanket confidentiality warning to employees during the course of an internal investigation could discourage employees from seeking the support of co-workers in pursuing or defending a claim of workplace misconduct. Because Section 7 of the NLRA accords employees the right to freely communicate with co-workers about the terms and conditions of employment without fear of retaliation by the employer, the Board concluded that any suggestion by the employer to maintain the confidentiality of the investigation could discourage employees from exercising these rights.

Although the Board stopped short of invalidating all confidentiality instructions during the course of an internal investigation, it cautioned that a blanket prohibition will not pass muster. To survive a challenge the employer must show that prior to giving a confidentiality instruction it engaged in a case-specific analysis to determine whether (1) witnesses were in need of protection; (2) evidence was in danger of being destroyed; (3) testimony was in danger of being fabricated; and, (4) there was “a need to prevent a cover up.” Absent such factors, the NLRB will find the confidentiality instruction a violation of Section 7 of the NLRA.

Employment Law Newsletter

For the first time in three years, proposed legislation being championed by Senate and Assembly Democrats would raise the minimum wage from $7.25 to $8.50. The bill was introduced despite the December recommendation from the Minimum Wage Advisory Commission that the rate remain unchanged for 2012. Should the bill be adopted, New Jersey’s minimum wage rate would be among the highest in the country, topped only by Oregon and Washington. Although Gov. Christie has hinted at a veto, he expressed his intention to listen to arguments on both sides of the issue.