DOL Issues New FMLA Forms

Posted in Genetic Information Nondiscrimination Act, Medical & Other Leaves

The Department of Labor has finally issued new FMLA forms. These forms (WH-380-E, WH-380-F, WH-381, WH-382, WH-384, WH-385, and WH-385V) may be accessed from the DOL’s website.

The prior FMLA forms expired well before the new ones were issued this past weekend. The new forms contain the Genetic Information Nondiscrimination Act (GINA) disclosure language that directs medical providers not to provide information about genetic tests, genetic services, or the manifestation of disease or disorder in the employee’s family members. Similar language now exists in other medical certification forms issued by the DOL as well.

The new forms are set to expire 5/31/2018.

Expanded Whistleblower Protections Impact Confidentiality Policies and Agreements

Posted in Employee Handbooks & Policies, Whistleblower & Retaliation Claims

All employers should review their confidentiality policies and agreements to ensure adequate protections for whistleblowers in the wake of recent actions by both the Securities and Exchange Commission (“SEC”) and the National Labor Relations Board (“NLRB”).

Last month, the SEC pursued its first enforcement action against KBR, Inc., which had required employees who were interviewed as part of internal investigations to sign confidentiality agreements prohibiting them from discussing the interview without the authorization of the company’s law department. Companies often seek to preclude employees from discussing internal investigations to protect the integrity of the investigation and to ensure employees do not seek to align stories or cover up evidence.

However, in the administrative proceeding filed against KBR, the SEC asserted such provisions violated the law by discouraging individuals from reporting potential securities violations. To resolve the matter, KBR consented to the entry of an order fining KBR $130,000 and requiring it to amend its standard confidentiality agreement to make clear that nothing in the agreement prohibited employees from reporting possible violations of federal laws or regulations to governmental agencies or investigators without prior authorization. In addition, KBR was required to send a copy of the SEC Order to employees who had signed the prior confidentiality agreements since 2011 and to expressly notify them that they did not need to notify the company’s counsel before communicating with government agencies. It is notable that the SEC imposed these measures, even though it acknowledged it was not aware of any instance in which a KBR employee was dissuaded from coming forward to report potential violations or of any efforts by KBR to enforce the confidentiality provisions.

The KBR action followed on the heels of media reports regarding the SEC sending out requests to dozens of public companies earlier this spring seeking copies of non-disclosure, separation and other agreements and its March announcement that confidentiality agreements were fair game for the agency.

In April, the U.S. Chamber of Commerce wrote a public letter expressing “significant concern” regarding the KBR enforcement action, noting that it is the “result of a highly subjective” application of the whistleblower rules and amounts to the SEC undertaking rulemaking through enforcement instead of a notice and comment process. The letter argues that while SEC Rule 21F-17 prohibits a company from threatening to enforce or using a confidentiality agreement to prevent an employee from communicating with SEC staff without company consent, the rule does not prevent companies from having confidentiality agreements, which are a routine part of doing business. The Chamber has urged the SEC to provide more formal guidance to the business community.

The SEC’s increased focus on confidentiality provisions mirrors that of the NLRB. In March, the General Counsel of the NLRB issued a 30-page memo taking issue with many standard employer policies and handbook provisions which the agency contends are unlawful, including standard confidentiality provisions seeking to protect various kinds of information, including customer, employee, confidential, and proprietary information. See our HR Defense blog on the General Counsel Memo here. The NLRB believes such provisions could be understood by employees to bar them from engaging in protected concerted activity concerning their wages and terms and other conditions of employment.

Although no court has yet to uphold either SEC’s or the NLRB’s position regarding confidentiality provisions, employers may want to review and revise their employee handbooks and documents, if necessary, to bring them into compliance with these agency positions.

 

Employers Face Stricter Requirements when Hiring H-2B Workers

Posted in Immigration Planning & Compliance

In response to recent litigation that created significant uncertainty around processing of applications for H-2B temporary foreign workers, the Department of Labor and Department of Homeland Security recently issued a federal regulation that changes the application process and assigns employers additional obligations in 2015.

The H-2B program allows U.S. employers to hire foreign workers when facing a temporary, seasonal, or peakload need. In previous years, employers were required to test the American labor market by conducting an elaborate advertising and recruitment scheme to find qualified, willing, and able American workers to fill such positions. An application for temporary labor certification, which allows an employer to hire H-2B workers, was only approved by the Department of Labor (“DOL”) if the employer attested that it conducted the mandatory advertising and no qualifying American workers applied or were hired. The new regulation essentially ends the use of the attestation model (which includes pre-filing recruitment) and returns to the certification model, under which H-2B recruitment takes place after filing the H-2B temporary labor certification with the DOL.

For employers whose H-2B workers are scheduled to begin employment prior to October 1, 2015, an employer must now register with the DOL (the details of how to do so are not yet available), and then apply for temporary labor certification before conducting required recruitment within a mere 14 day period. To further apprise U.S. workers of available positions, the job order listed in the State Workforce Agency (“SWA”) will now be public for up to two months, and must also be filed between 75 and 90 days before the H-2B workers’ prospective first day. The DOL is also creating an electronic job registry that displays all H-2B job postings nationwide. As with previous years, DOL approval is a prerequisite to applying for visas with the Department of Homeland Security.

In addition to the stricter advertising requirements and timeframes, employers now face additional responsibilities in relation to H-2B workers. For example, employers must now pay for inbound travel, per diem, and any visa-related expenses incurred by H-2B workers, and also provide them with copies of the job orders in their native language. H-2B workers must also be offered at least 35 hours of work per week, instead of the previous requirement of 30 hours.

H-2B employers also have additional obligations to their American workers. Employers must now hire qualified workers referred by the SWA or DOL job orders, and must also contact U.S. workers who previously filled similar positions. H-2B employers are also now prohibited from any layoffs of U.S. workers for 120 days prior and 120 days following the dates of need and, if a layoff is necessary, must first layoff H-2B workers before any similarly-situated American workers. The employer must also accept referrals and hire U.S. workers who apply up until three weeks prior to the first date of need, and update the DOL about any U.S. applicants and interviews.

In order to ensure compliance with strict timeframes, recordkeeping, and document retention requirements, employers should consider updating their staff on these developments, and should plan to begin the H-2B application process six months prior to the date that H-2B workers are needed.

EEOC Has a Limited Duty to Conciliate, Supreme Court Rules

Posted in Employment Discrimination Harassment & Retaliation, Employment Investigations & Audits, Employment Litigation

Before filing suit against an employer, the Equal Employment Opportunity Commission has a duty to notify the employer of the claim and give the employer an opportunity to discuss the matter. But the EEOC has no duty to engage in good faith negotiations with the employer, according to the U.S. Supreme Court’s decision in Mach Mining, LLC v. EEOC (April 29, 2015).

The case arose after the EEOC investigated a sex discrimination charge against Mach Mining in which the charging party claimed the company had refused to hire her as a coal miner because of her sex. The EEOC determined that reasonable cause existed to believe the company had engaged in unlawful hiring practices. Under Title VII, if the EEOC finds reasonable cause, it must first “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” The EEOC may sue the employer only if it is unable to secure from the employer a conciliation agreement acceptable to the EEOC. Pursuant to these statutory obligations, the EEOC sent a letter inviting Mach Mining to participate in informal conciliation proceedings and notifying them that a representative would be contacting them to begin the process. A year later, the EEOC sent Mach Mining a second letter, stating that “such conciliation efforts as are required by law have occurred and have been unsuccessful” and that any further efforts would be “futile.” The EEOC then sued Mach Mining in federal district court alleging sex discrimination in hiring. Mach Mining asserted in its answer that the EEOC had “failed to conciliat[e] in good faith” prior to filing suit. The EEOC moved for summary judgment on that issue, contending that its conciliation efforts are not subject to judicial review.

The case raised a few important questions. Can a court review the EEOC’s efforts to conciliate? If so, what is the scope of review? And does the EEOC have to negotiate in good faith, something that it apparently failed to do in the Mach Mining case?

The answers, according  to the Supreme Court, are: yes, limited, and no. Yes, a court can review the EEOC’s efforts to conciliate. But the scope of review is limited to ensuring that the EEOC has notified the employer about the specific allegations, described which employees have allegedly suffered, and “tried to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice.” And no, beyond these obligations, the EEOC does not have a duty to negotiate in good faith. “Congress[,]” the court wrote, “granted the EEOC discretion over the pace and duration of conciliation efforts, the plasticity or firmness of its negotiating positions, and the content of its demands for relief.”

So where does that leave employers when the EEOC finds reasonable cause? The answer seems to be that employers can take little solace in the fact that the EEOC has an obligation to conciliate before filing suit. The duty to conciliate is limited, and under Mach Mining, so too is a court’s authority to review whether the EEOC has met its obligations.

Professional Employer Organizations: New Tax Services Possible

Posted in Employee Benefits

Currently, Professional Employer Organizations (PEOs) have no comprehensive federal framework under which to offer employment tax collection and remittance services to their clients. The Small Business Efficiency Act (“SBEA Act”) is set to change this effective as of January 1, 2016, following an interim deadline for the IRS to establish a federal certification program for interested PEOs by July 1, 2015. While the SBEA Act will not require PEOs to provide employment tax collection and remittance services to their clients, the SBEA Act will provide a new way for interested PEOs to add these tax services to their larger base of product and service offerings. This expansion to the general PEO service model is widely perceived as a positive development by both PEOs and their clients.

More specifically, the SBEA Act codifies the authority of certified PEOs (“CPEOs”) to assume sole liability to collect and remit employment taxes on behalf of their employer customers. The SBEA Act also clarifies that CPEOs will be granted successor employer status to eliminate double taxation from a wage base restart for employers that join or leave a PEO relationship in the middle of the tax year, and confirms that the CPEO may claim any available federal tax credits on behalf of its customers. To be certified by the IRS, a CPEO will have to submit annual audits and quarterly attestations to the IRS, as well as comply with certain bonding obligations. A CPEO will also be subject to an annual fee of $1,000.

It is critical to note that the SBEA Act does not change the existing landscape with respect to identifying whether a CPEO and/or its client is the employer of any particular worker. Although a CPEO will be able to assume new levels of responsibility for paying employment taxes on behalf of customers, the SBEA Act clarifies that the Act will not change the analysis of the identification of the underlying common law employer, particularly for the purpose of defining employees under the Affordable Care Act’s “employer mandate”.

No, You Cannot Prohibit Employees from Protesting or Discussing Their Wages

Posted in Labor Relations

A reminder to employers concerned about employees’ discussing their wages or acting in concert to petition for higher wages: This is legally protected activity that employers cannot prohibit or restrain. A recent National Labor Relations Board decision involving a Chipotle restaurant chain in Missouri illustrates this point.

Patrick Leeper was a Chipotle employee as well as a member of a labor union. He actively participated in its “Show Me 15” campaign, which seeks to raise the minimum wage in Missouri to $15 per hour. Leeper participated in protests in which union members carried banners and signs and wore t-shirts displaying messages aimed at raising the minimum wage. He also discussed wages with other employees and publicly questioned the employer’s pay policies.

A supervisor interrogated employees about which employees had been discussing wages, told employees they could not talk about their wages, threatened employees with retaliation if they talked about their wages or other terms and conditions of employment, and told employees that all managers were instructed to report any employee discussions about wages and that no employee should be talking about wages. The company eventually fired Leeper, ostensibly for missing a mandatory store meeting.

Under Section 7 of the National Labor Relations Act, employees have the right to engage in concerted activities for their mutual aid or protection. Section 8(a)(1) of the Act makes it unlawful for an employer to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights. The test for evaluating whether an employer’s conduct or statements violate Section 8(a)(1) is whether the statements or conduct have a reasonable tendency to interfere with, restrain, or coerce protected activities.

After a trial, the administrative law judge assigned to the case ruled that the employer violated Section 8(a)(1) by: (1) telling employees that they could not talk about wages; (2) telling employees there would be reprisals for talking about wages; (3) instructing managers not to let employees discuss wages, and to report employee wage discussions to management; and (4) firing Leeper for engaging in concerted activities with other employees.

Employers may rightfully be concerned that employees who join together to protest and discuss their wages and working conditions will sow discord among the workforce, pressure the employer to pay higher wages, and encourage the formation of a labor union if one is not already in place. Yet this type of concerted activity is precisely what the Act was designed to protect. Any attempt by an employer to prohibit or restrain such activity will likely be met by swift and forceful action by the NLRB.

Supreme Court Rules on, But Fails to Clarify, Pregnancy Discrimination Law

Posted in Disability, Employment Discrimination Harassment & Retaliation

The Pregnancy Discrimination Act extends Title VII’s prohibition against sex discrimination to include pregnancy. It also says that employers must treat “women affected by pregnancy . . . the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work.” But what does this latter provision mean when an employer accommodates some but not all workers with nonpregnancy-related disabilities? That was the issue addressed by the Supreme Court’s decision in Young v. United Parcel Service, Inc. (March 25, 2015). Unfortunately the Young decision fails to offer clear guidance to employers, and is likely to lead to more litigation over the meaning of pregnancy discrimination in the workplace.

Young was a part-time driver for UPS. When she became pregnant, her doctor advised her that she should not lift more than 20 pounds. UPS required drivers to be able to lift up to 70 pounds and told Young that she could not work while under a lifting restriction.  Young sued, claiming that UPS violated the PDA by refusing to accommodate her pregnancy-related lifting restriction. Young pointed to UPS policies that accommodated workers who were injured on the job, had disabilities covered by the Americans with Disabilities Act, or had lost Department of Transportation certifications. Young contended that under these policies, UPS had accommodated several workers whose disabilities created work restrictions similar to hers. She argued that these policies showed that UPS discriminated against its pregnant employees because it had a light-duty-for-injury policy for numerous “other persons,” but not for pregnant workers. Young argued that under the PDA, whenever an employer accommodates some workers with disabling conditions, an employer must accommodate pregnant workers who are similar in their ability to work, even if other non-pregnant workers do not receive accommodations.

UPS argued that since Young did not fall within its on-the-job injury, ADA, or DOT policies, it had not discriminated against Young on the basis of pregnancy, but had treated her just as it treated all “other” relevant persons. UPS argued that an employer violates the PDA only if it fails to offer pregnant women the accommodations it provides to others within a facially neutral category. For example, according to UPS, an employer can deny accommodations to pregnant employees as long as it denies accommodations to other workers with off-the-job injuries.

The Court rejected both arguments and held that: (1) a plaintiff may make out a prima facie case under the PDA by showing that she sought and was denied an accommodation, and that the employer accommodated others similar in their ability to work; (2) the employer may then seek to justify its refusal to accommodate the plaintiff by relying on legitimate, nondiscriminatory reasons for denying her accommodation – but those reasons normally cannot be simply that it is more expensive or less convenient to accommodate pregnant women; (3) if the employer meets its burden, the plaintiff may in turn show that the employer’s proffered reasons are pretextual by providing evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s reasons are not sufficiently strong to justify the burden, so as to give rise to an inference of intentional discrimination.

Under Young, the new “rules” on pregnancy discrimination are murky, and the analysis of a pregnancy discrimination claim will now be highly fact-specific. This state of affairs invites litigation and suggests that most cases will be adjudicated only after an expensive trial rather than at the summary judgment stage.

All of this is bad news for employers, except that the Young decision may effectively be moot. As the Court suggests toward the beginning of its decision, a different statute, the ADA Amendments Act of 2008, may require employers to accommodate pregnant employees with temporary impairments. Thus, employers would be wise to consider accommodating pregnant workers with impairments in order to avoid liability under the ADA, even if the employees’ rights under the PDA are unclear following Young.

Employee Handbooks Should Be Reviewed in Light of NLRB Report

Posted in Employee Handbooks & Policies

Your employee handbook may be unlawful. That’s the takeaway from a 30-page report issued by the National Labor Relations Board’s Office of the General Counsel on March 18, 2015.

The report, entitled “Report of the General Counsel Concerning Employer Rules,” presents recent developments on employee handbook rules arising in the context of NLRB cases that address whether particular rules violate the National Labor Relations Act by restricting rights guaranteed under section 7 of the Act. Section 7 gives workers the right to form unions and engage in other types of concerted activity, i.e., when two or more employees act together to improve wages or working conditions. The NLRB says that employee handbook rules that have a “chilling effect” on section 7 rights violate the Act, which makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act.

The report contains many examples of policies that the General Counsel has opined are either lawful or unlawful, depending on whether they can reasonably be construed to restrict section 7 activities. The rules address a variety of workplace policies, including confidentiality, employee conduct both inside and outside the workplace, the use of company logos, copyrights and trademarks, restrictions on photography, recording and the use of personal electronic devices, leaving work, conflicts-of-interest, social media usage, solicitation, and restrictions on disclosing the employee handbook or its provisions.

Employee handbook policies on any of these issues may run afoul of the Act. But in many cases, employers may be able to bring an unlawful rule into compliance by modifying the rule or adding an explanation or examples to make it clear that the rule is not intended to restrict section 7 rights.

Employers and their counsel should immediately review existing employee handbooks in light of the General Counsel’s report to ensure compliance with the Act. As the report makes clear, it is not necessary for an employer to apply an unlawful policy in order to run afoul of the Act. The mere maintenance of an unlawful policy violates the Act and can give rise to an unfair labor practice charge.

Employers’ Safety Records Will Soon Be a Click Away

Posted in Workplace Safety & OSHA

Employers should be aware of a proposed OSHA recordkeeping rule that is expected to be issued as a final rule this year. The proposed rule requires employers to electronically report to OSHA data on serious workplace injuries and illnesses that the employers already collect on OSHA injury logs. OSHA will provide a secure web site for the data collection, and will make all of the data it collects publicly available online after redacting personally identifiable information.

In particular, employers with 250 or more employees will be required to electronically report to OSHA the information currently reported on Forms 300 (log of work-related injuries and illnesses), 301 (injury and illness incident report) and 300A (summary of work-related injuries and illnesses). This requirement will not apply to businesses with 250 or more employees that are partially exempt from keeping injury and illness records. The proposed rule does not add to or change any employer’s obligations to complete and retain injury and illness records.

The proposed rule will also impact smaller employers. Businesses with 20 or more employees in designated industries will be required to electronically submit the information from OSHA Form 300A to OSHA or OSHA’s designee on an annual basis. This will replace the current requirement that employers that receive OSHA’s annual survey form complete it and mail it in.

So what’s the rationale behind this new rule? According to OSHA, public posting of workplace injury and illness data will encourage employers to identify and eliminate hazards so that they can be seen as leaders in workplace safety. The data will also allow employees and prospective employees to compare safety records at different companies, and allow researchers to better identify causes of injuries and emerging health hazards.

The new rule will not, according to OSHA, result in more OSHA enforcement overall. But it will allow OSHA to identify relatively safe and unsafe workplaces and allocate the agency’s limited resources accordingly. Employers with poor safety records should therefore take heed.

Illinois Restrictive Covenants: The “Gray” Bright Line Regarding Sufficient Consideration

Posted in Non-Compete & Trade Secret Litigation

Illinois non-compete law continues to wend a circuitous path through the employment landscape, making it occasionally difficult for employers and employees alike to predict outcomes in these cases.

One issue that has arisen with some frequency concerns the matter of consideration for a restrictive covenant with an employee where the only consideration provided is employment: namely, is mere employment sufficient, or must there be something “else?”

In 2013, this question arose in the Illinois appellate court with jurisdiction over Cook County (Chicago) in Fifield v. Premier Dealer Servs., 2013 IL App (1st) 120327. The restrictive covenant there actually was more generous than many, providing that it would not apply if Mr. Fifield was terminated without cause during the first year of his employment (seemingly providing some consideration other than mere employment). The First District concluded that an employee must remain employed for at least two years in order for a restrictive covenant to be enforceable. And, it does not matter whether the employer or employee ended the relationship – Mr. Fifield, the employee, had resigned his position. The Illinois Supreme Court declined to hear the case on a petition for leave to appeal.

The court’s holding arguably can be interpreted to apply only where the sole consideration provided was employment, because the written opinion does not reflect whether Premier Dealer Services argued that other consideration was provided, such as training, a bonus, stock or access to confidential information. The inapplicability of the covenant if the employer terminates the employee before at least 12 months of employment similarly is not sufficient. The Illinois Appellate Court for the Third District has since followed this decision, applying the two-year rule to strike down a restrictive covenant in the absence of other consideration, where the employee served for only nineteen months. Prairie Rheumatology Assocs., S.C. v. Francis, 2014 IL App (3d) 140338. Neither opinion addresses whether other elements of consideration may suffice to shorten the two-year period.

While these decisions represent binding precedent on the courts within their jurisdictions (Chicago, and 21 other counties), they represent only persuasive authority for the rest of Illinois, including the three federal district courts that serve the state. The decisions have not led to predictable results in these other courts.

In two recent Chicago federal cases, the courts rejected the two-year rule and found shorter periods sufficient. See Bankers Life & Casualty Co. v, Miller, Case No. 14 C 3165, 2015 WL 515965 (N.D. Ill. Feb 6, 2015) (Shah, J.) (rejecting two-year rule, denying a motion to dismiss); Montel Aetnastak, Inc. v. Miessen, 998 F. Supp. 2d 694, 716 (N.D. Ill. 2014) (Castillo, C.J.) (finding 15 months sufficient).

In contrast, two other federal decisions, one from Chicago and the other from Peoria, predicted that the Illinois Supreme Court would go the other way and adopt the two-year rule. See Instant Tech., LLC v. DeFazio, Case No. 12 C 491, 2014 WL 1759184 (N.D. Ill. May 2, 2014) (Holderman, J.) (striking down covenants with shorter employment periods); Cumulus Radio Corp. v. Olson, Case No. 15 C 1067, 2015 WL 643345 (C.D. Ill. Feb. 13, 2015) (McDade, J.) (15 months not sufficient).

Thus, this is an area of law that continues to evolve in Illinois. A practitioner faced with one of these cases must take care to examine the consideration provided for the covenant, take stock of the jurisdiction in which the case is pending, and be creative in offering any relevant consideration arguments while at the same time preserving any serious issue for appeal given the current state of these matters.

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