August 2009 Archives

August 26, 2009

Senator Ted Kennedy Dies

Ted Kennedy, who died last night, was known as "the Lion of the Senate." He was also a true working class hero, or more accurately, a hero of the working class. He was one of my heroes as well.

Every day, those of us who practice, write about, or apply employment laws are dealing with Senator Kennedy's life work. Since he was first elected to the Senate in 1962, Kennedy introduced, sponsored and/or vigorously supported these landmark employment, labor, and civil rights laws (among many others):

  • The Civil Rights Act of 1964 (the subject of his first speech to the Senate)
  • The Occupational Safety and Health Act (OSHA)
  • The Worker Adjustment and Retraining Notification Act (WARN)
  • The Americans with Disabilities Act (ADA)
  • The Civil Rights Act of 1991
  • The Family and Medical Leave Act (FMLA)
  • The Health Insurance Portability and Accountability Act (HIPAA)
  • The Pension Protection Act
  • The Genetic Information Nondiscrimination Act (GINA)
  • The Lilly Ledbetter Fair Pay Act
  • The COBRA subsidy portion of the American Recovery and Reinvestment Act

In his decades in the Senate, Kennedy was instrumental in increasing the minimum wage, protecting the rights of workers to organize, fighting discrimination, and much more. He was a reliable and fierce advocate of the rights of people of color, women, gay men and lesbians, and people with disabilities. What an unbelievable legacy.  

August 24, 2009

Please Do Not Microchip the Employees (But Biometric Scanning May Be OK)

Did you know that at least four states have passed laws that prohibit mandatory or coerced microchipping, including installing a microchip or radio frequency identification (RFID) tag as a condition of employment? A number of states have legislation addressing the improper use of RFID tags or the information from them (for example, to surreptitiously gather private information). But California, North Dakota, Ohlahoma, and Wisconsin have gone further to ban employers from implanting microchips in their employees as a condition of employment. You can find a list of state RFID laws, with links, here, at the website of the National Conference of State Legislatures.)

California's statute (Cal. Civil Code section 52.7), for example, prohibits requiring, coercing, or compelling anyone to undergo "the subcutaneous implanting of an identification device," including conditioning any private or public benefit on consent to implantation, "including employment, promotion, or other employment benefit, or by any means that causes a reasonable person of ordinary susceptibilities to acquiesce to implantation when he or she otherwise would not." The law imposes penalties of $10,000 per violation, with an additional $1,000 penalty for each day the violation continues; it also creates a right of action, with punitive damages, attorney fees, and litigation costs (including the cost of hiring expert witnesses).

And speaking of high-tech information gathering, one of the fixes currently under consideration for the E-Verify system, the government's online system for authenticating an employee's authorization to work in the United States, involves biometric data. Senator Schumer, Chairman of the Senate Judiciary Committee's Subcommittee on Immigration, Refugees, and Border Security, recently said that E-Verify should include a biometric component -- based on fingerprints, retinal scans, or DNA, for example -- to make sure that the employee is who he or she claims to be. Employment lawyers have raised a number of concerns about the proposal, from privacy violations to concerns about the cost, according to a recent article in the National Law Journal.

Certainly, any employer that requires employees to provide biometric information will have to guard the privacy of that information very carefully. If biometric information is leaked or stolen, the term "identity theft" could take on a whole new meaning -- to include not only identification numbers or bank account information but also the ridges on our fingertips and the unique structure of our faces (or our genes). You can apply for a new Social Security number, but not a new eyeball. And this issue is already on the legislative radar: For example, Illinois recently enacted a law requiring companies that gather biometric data to do so only with written consent, to use reasonable care to store and protect that information (and to refrain from selling it), and to establish a timetable for retaining and destroying the information 

August 22, 2009

Managers May Be Personally Liable for Unpaid Wages -- Even If Company Goes Bankrupt

Last month, the Ninth Circuit Court of Appeals decided that a group of employees could pursue claims for unpaid wages against three individual managers of a company that was in bankruptcy. In Boucher v. Shaw, the Court reinstated a complaint brought by several employees against their former managers at the Castaways, a casino and entertainment center in Nevada. The Castaways was still operating and in Chapter 11 bankruptcy when the employees lost their jobs; shortly afterwards, the bankruptcy was converted to a Chapter 7, and the company was liquidated.

The employees claimed that they never received their accrued vacation and holiday pay and that they were paid late (or not at all) for their final weeks of work. The employees' union also sued to recover dues that had been withheld from employee paychecks. Rather than suing the bankrupt company, the employees sued three individuals: the company's CEO (who owned 70% of the business), the person responsible for handling labor and employment  matters at the company (who owned the remaining 30%), and the CFO (a nonowner). All claimed that they couldn't be sued individually -- and, even if they could, that the lawsuit was barred by the automatic stay, which protects those in bankruptcy from creditor efforts to collect their debts.

The Court rejected both of these arguments and allowed the employees' lawsuit to go forward. The Court found that all three of the individuals were "employers" under the Fair Labor Standards Act (FLSA), because all had control over the employment relationship. The Court also found that the automatic stay protected only the Castaways itself, not the individual owners and managers.

Given the number of businesses that are going under, this case is a timely reminder that employee wages must be paid, regardless. If the company itself declares bankruptcy, individual managers can be sued. Even if those managers declare personal bankruptcy, unpaid wages are considered a "priority debt," which means they jump to the head of the repayment line along with unpaid child support and tax debts.  

August 19, 2009

When Does the Work Day End? When You Stop Answering Your Cell Phone

Last week, the Wall Street Journal reported on a couple of lawsuits filed by hourly employees who claimed that they weren't paid for time they spent responding to phone calls and text messages after work. In both cases, the employees said they were issued cell phones or smart phones by the company, and were expected to respond to calls and messages even after hours.

These cases seem fairly clear cut to me: Assuming the evidence backs up the employees' claims, they're entitled to pay. Under the Fair Labor Standardsa Act (FLSA), hourly employees must be paid for all time they spend working, whether the employer requires it or the employee puts in the hours voluntarily. The employees in these cases were responding to work messages and calls on equipment the company provided to them, presumably at least in part so they could do this type of work offsite and after hours.

If the employees were arguing only that they had to be "on call," the rules are a bit different. If, for example, an employee has to carry a pager or cell phone on the weekend and be prepared to respond if necessary, courts look at a number of factors to determine whether the employee is working or not. But in these cases, employees seek pay for all of the on-call time -- in other words, if the pager is on, the employees argue that the meter should be running. There's no dispute that once an employee on call actually gets a call and has to respond, that employee is working and must be paid. So, even under this line of cases, employees who are answering cell phone calls and responding to text messages are working.

Employers that issue portable communications devices -- like cell phones, BlackBerrys, or laptops -- to hourly employees could get into trouble here. In fact, some commentators recommend not providing this type of equipment to hourly employees, or at least requiring those employees to leave their equipment at work, to make sure that they aren't putting in time for which they aren't being paid (especially these days, when many employers have instituted furloughs or otherwise cut work hours as a cost-saving measure).  

If you want help creating policies for laptops, cellphones, and smart phones, pick up a copy of my book Smart Policies for Workplace Technologies (Nolo).

August 13, 2009

Use of Company Email for Union Messages

As anyone who listened to even a few minutes of Justice Sotomayor's confirmation hearings knows, the role of the courts in our government of separated powers is not to make the law, but to apply the law. Sounds simple enough (especially when repeated hundreds of times over the course of a week, thank you Senators), but it gets tricky in a hurry when age-old legal principles have to be applied to new developments. This is especially true where technology is concerned: Is it an illegal search if law enforcement uses heat-detecting equipment -- from outside a building -- to uncover an urban pot farm? Do paparazzi at a celebrity wedding unreasonably intrude on the fabulous couple's right to be left alone? Can an employer read text messages sent from one spouse to another during a lunch break?

The courts and the National Labor Relations Board (NLRB) have been wrestling with this problem in defining the appropriate use of email. A couple of years ago, the NLRB issued a controversial decision, In re Register Guard, on employee use of email for union-related messages. This case hinged entirely on how the NLRB categorized email: If email were classified as a conversation, then the rules for union-related communications would apply. The employer would not be allowed to prohibit email relating to union issues. As long as such conversations took place during nonwork hours (for example, during breaks) and didn't cause undue disruptions to work, they would be allowed.

The NLRB didn't view email as a conversation, however: Instead, it applied the rules for use of company property. Under those rules, employees don't have a legal right to use company-owned equipment as they wish. So, the NLRB found, the company was free to restrict employee use of email, as long as it didn't single out union-related messages for punishment. In the Register Guard case, the NLRB found that the company could choose to prohibit all solicitations for outside organizations, including the union, while allowing personal solicitations (like party invitations or notices of tickets or furniture for sale), without violating the law.

Last month, however, this decision was partly overturned. The federal Court of Appeals for the District of Columbia Circuit took a closer look at the case and found that the employer had discriminated against union messages. First off, the Court noted that the NLRB's distinction between solicitations for organizations and personal solicitations was entirely of its own creation: The company's policy prohibited all solicitations, period. And, the Company had not disciplined employees for sending out other solicitations, even though they were equally prohibited by the policy. The Court found that the company enforced its policy selectively only against union messages while allowing a variety of other solicitations to go undisciplined, which is a violation of the National Labor Relations Act.

The D.C. Circuit didn't examine the underlying issue of whether the legal rules applicable to discussions or property should apply to email. But there's a good chance the NLRB itself may take a second look at this determination: The five members of the NLRB are nominated by the President. One of the two sitting members dissented in the Register Guard decision, and President Obama has recently nominated three new members to join her. Given the singular importance of email in today's workplace, it's probably safe to say we haven't yet heard (or typed or texted) the last word on this question.

For information on email policies at work, see Nolo's article Email Security Policy: Why You Need One for Your Employees.   

August 11, 2009

Workplace Camera Doesn't Violate Employee Privacy Rights

Last week, the California Supreme Court decided a big workplace privacy case, Hernandez v. Hillsides, Inc. The case involved a camera hidden in an office shared by two clerical employees of a private residential facility for abused and neglected children. The director of the facility set up the camera after learning that someone was using a computer in that office to view pornography after hours, a violation of the facility's rules and mission to provide a safe place for abused children. After the two women who shared the office discovered the hidden camera equipment -- "small, blinking, and hot to the touch," in the court's oddly breathless description -- they sued for invasion of their privacy.

In reaching its decision in favor of the facility, the Court looked at two issues: (1) whether the hidden camera intruded on the employees' reasonable expectations of privacy, and (2) if so, whether that intrusion was offensive or serious, given the facility's justification for using the camera and other relevant facts.

On the first point, the Court found in favor of the employees. Although the facility had a policy warning employees that their use of company computers could be monitored, employees had no reason to believe that this monitoring might include video recording. The employees had a private office and were not warned about the camera surveillance. Also, the camera was hidden. Weighing all of these facts, the Court found that the employees had a reasonable expectation that they would not be subjected to secret video recording in their office.

On the second point, however, the employees lost. First off, the employees were never actually filmed: The director of the facility activated the recording equipment only a few times, and only after the employees had left for the day. The Court found that the facility limited its intrusion in other ways, such as by directing the camera only at the computer workstation which had been used to access pornography, leaving the system in place only for a few weeks, and limiting the number of people who knew about the surveillance. The Court also found that the facility's reason for setting up the camera -- catching the person who was viewing pornography -- was a legitimate business concern.

Unlike many states, California has an explicit constitutional right to privacy, and is widely viewed as protective of privacy rights. Still, this decision doesn't seem that surprising, mostly because the women were never actually filmed. It's not hard to see why they were upset by the mere existence of the camera (apparently, one of the women often changed into her gym clothes in the office), but it was never actually used to record them. If there were any evidence that the women were taped, it might have undercut the facility's justification for recording and led to a different outcome.


August 3, 2009

EEOC Offers Guidance on Waivers of Discrimination Claims

You won't be surprised to hear that the economic downturn has led to huge numbers of layoffs. According to the Bureau of Labor Statistics, more than half a million employees lost their jobs in a "mass layoff event" in the first quarter of 2009, the highest numbers on record. And this counts only incidents in which at least 50 employees at the same company were laid off in a five-week period, not the many more jobs lost in smaller layoff actions or at smaller employers every day.  

In recognition of these figures, the Equal Employment Opportunity Commission recently released some guidance on waivers of discrimination claims. Many employers who lay off workers condition severance payments on the employee signing a release, agreeing to give up (waive) the right to sue the company for any violations of employment law. To be enforced by a court, such waivers must be knowing and voluntary, and must give the employee something of value (typically money) in exchange.

Additional rules, intended to make sure that the waiver really is knowing and voluntary, apply when an employer asks an employee to waive the right to sue under the Age Discrimination in Employment Act (ADEA). And, an employee who is at least 40 years old and is part of a group that's laid off or offered an incentive to resign must be given certain statistical information on the program and the affected employees. These rules are described in the EEOC's regulations interpreting the ADEA, at 29 C.F.R. 1625.22 and 1625.23.

The EEOC's new guidance, written for an employee audience in the form of questions and answers, doesn't appear to create any new rules or requirements. But it does provide a good refresher for companies that are using releases, including a checklist and some sample language waiving discrimination claims that meets the EEOC's requirements. (If you're using an attorney to draft or review your releases -- as you should -- he or she will no doubt find the brevity of the EEOC's sample language humorous.)

For more information on using a release as part of a severance package, see Nolo's article Using Severance Agreements to Avoid Lawsuits.