January 2011 Archives

January 26, 2011

Another Supreme Court Win for Employees in Retaliation Case

The Roberts Supreme Court, markedly pro-business in many ways (as discussed in this recent New York Times article), has yet to meet a retaliation claim it doesn't like. This week, in Thompson v. North American Stainless, the Court found in favor of a man who claims he was fired because his fiance filed a sex discrimination claim against their mutual employer. 

In previous terms, the Court has found that an employee may bring a retaliation claim under Section 1981 (a Reconstruction Era civil rights law that prohibits race discrimination in contracts) and that a federal employee may sue for retaliation under the Age Discrimination in Employment Act, despite any explicit mention of "retaliation" in either law. The court also found in favor of an employee who claimed she was fired after answering questions as a witness in an investigation of another employee's sexual harassment claim (my previous post about the Supreme Court case here; and the jury's subsequent $1.5 million award in the employee's favor here). And, the Roberts Court also decided Burlington Northern & Santa Fe Railway Co. v. White, which held that retaliation under Title VII encompasses any employer action that "well might have dissuaded a reasonable worker from making or supporting a charge of discrimination." 

This is the standard on which Justice Scalia relied in this week's case, Thompson v. North American Stainless. Eric Thompson met Miriam Regalado when she was hired by North American Stainless in 2000, where he already worked. The two began dating and got engaged, a fact that was known throughout the company. Regalado filed a charge of discrimination against the company, alleging that her supervisors had discriminated against her based on gender. The company was notified of the charge in early 2003; several weeks later, Thompson was fired. He sued the company for retaliation. 

The federal Court of Appeals found that Thompson didn't have a valid claim, because it was his fiance who brought a charge of discrimination against the company. Thompson himself hadn't engaged in any "protected activity" under Title VII, and so had no basis for a lawsuit, even if the company fired him because of Regalado's EEOC charge. 

The Supreme Court disagreed, finding that Thompson could sue for retaliation. Firing someone's fiance is clearly the type of action that could dissuade a reasonable employee from asserting her rights, as the Court found. The trickier part, however, is who has the right to sue for that harm. In this situation, Regalado had the discrimination claim -- and was the target of her employer's retaliation, presumably intended to get her to drop the case -- but Thompson is the one who lost his job. The Court found that the language of Title VII, which allows a "person aggrieved" by a statutory violation to sue, goes beyond only those who have themselves engaged in protected activity. Adopting a standard used in other cases, the Court decided that Thompson could sue because he fell within the "zone of interests" protected by Title VII. Because the company fired him intentionally, with the purpose of undermining the goals of the statute, he had a right to his day in court. 

There has been a lot of discussion about whether this case will radically expand the number of retaliation charges (already at an all-time high -- and the most frequently filed charge at the EEOC in the past two years, surpassing even race discrimination charges). In other words, can a fired employee turn around and argue that he or she was fired because someone else at the company -- a manager or coworker -- filed a discrimination claim? Justice Scalia, who wrote the Thompson opinion, addressed this issue directly, saying that although "we acknowledge the force of this point," it justifies neither a blanket rule that bars all claims of third-party retaliation nor a rule that defines which third parties have a close enough relationship to the discrimination claimant to warrant a retaliation claim. So these issues will have to be decided case by case. 
January 24, 2011

Supreme Court Upholds Contractor Background Checks

On January 19, the Supreme Court rejected a challenge to the federal government's standard background check (called the National Agency Check with Inquiries, or NACI). The majority opinion assumed -- without deciding -- that there is a right to informational privacy, but found that this right wasn't violated by the background checks. (You can read the case here.) 

In the case, a group of employees at the Jet Propulsion Laboratory, a research lab jointly run by Cal Tech and NASA, claimed that two aspects of the NACI violated their rights to privacy: a question about rehabilitation and treatment for illegal drug use, and a requirement that they authorize the government to ask open-ended questions of former landlords, employers, and other references, in which the references are asked broadly about the applicants' financial integrity, "mental and emotional stability," and "general behavior and conduct," among other things. 

The employees who challenged the NACI were government contractors; their official employer was Cal Tech. They were already working at the JPL when they were asked to submit to the screening. (Although federal government employees were already subject to the NACI screening procedures when applying for jobs, contractors were not, until the 9/11 Commission recommended that they also be screened.)

The Supreme Court's opinion began by assuming -- without deciding -- that there is a Constitutional right to informational privacy. This assumption has been seen as a victory by employee advocates, some of whom believed the Court might use this case as an opportunity to decide otherwise. As Justice Scalia wishes it had: His concurring opinion indicates that he sees the Court's failure to decide this issue as a dereliction of duty. He believes the Court should have simply decided that there is no right to informational privacy; his opinion begins with the observation, "Like many other desirable things not included in the Constitution, 'informational privacy' seems like a good idea . . . " (He also believes that the majority's opinion, which weighs the government's need and use for the information against the employees' assumed privacy rights, is "a generous gift to the plaintiff's bar.")

The majority's opinion discusses a number of factors that, in its view, weigh in the government's favor, such as the existence of protections against unnecessary disclosure of the information once it is gathered; the government's role in this case as a manager of its employees (rather than a sovereign of its citizens); the important -- and taxpayer funded -- work done by the employees who brought the case; the common practice in private industry of asking open-ended reference questions such as those on the NACI; and, in the case of the question about drug rehab and treatment, the government's stated intention of using that information for good rather than evil, by considering an employee's efforts to turn things around as a favorable quality. 

These considerations, however compelling, seem to skirt an important issue, which the Court didn't spend much time on: Why does the government need this information in the first place? If there is a privacy right, then the government must have a strong interest in the information it seeks, and the way it goes about getting that information may not be unnecessarily intrusive. It isn't enough to say that everyone else gathers this type of information too, and we'll keep it confidential once we get it. To me, it looks like the Court's assumption of a privacy right was fairly half-hearted. The opinion doesn't read as if the Court thought this information was protected by a privacy right but the government's need for it outweighed the employees' interests. Instead, it seems the Court didn't much believe in the right it assumed, and accorded it relatively little weight in the balance. 

Because this case involves public employment and a (possibly) Constitutional right, it does not apply directly to the private sector. And, despite the Court's claims to the contrary, many private employers don't go this deep in their background checks, at least not for employees who won't hold the highest ranks on the company ladder. The main takeaway from this case may be simply that privacy continues to be a divisive, tentatively handled issue on the Supreme Court -- with this timely reminder arriving only a few days before the anniversary of the Court's ultimate privacy case, Roe v. Wade. 
January 12, 2011

Paid Donor Leave for California Employees

Beginning this year, California employees are entitled to paid time off to donate organs or bone marrow. (Cal. Labor Code sections 1508 - 1513.) Employers with at least 15 employees must allow employees to take up to 30 days of paid leave in any one-year period for organ donation, and up to five days in any one-year period to donate bone marrow. The donation need not be for the employee's family member; it can be for any other person. 

Employers may require employees to use up to five days of their accrued paid sick or vacation time to donate bone marrow, and up to two weeks for organ donation. This time off cannot be counted towards the employee's leave entitlement under the Family and Medical Leave Act (FMLA) or the California Family Rights Act. In other words, this time off is in addition to the 12 weeks of leave for which the employee may be eligible under these laws. 

January 9, 2011

Tax Cuts, Credit Discrimination, and More

Happy New Year! While I was busy finishing my new book (Employment Law: The Essential HR Desk Reference, available soon and described here in our Winter 2011 catalog), there were a handful of interesting developments in the field, starting with that giant tax cut bill.

  • Payroll tax cuts. The amount employers are required to withhold from employee paychecks to fund Social Security will be temporarily reduced from 6.2% to 4.2%. (Employer contributions will remain at 6.2%; withholding for Medicare will also stay the same, at 1.45% each for employees and employers.) This is an extra $20 in your paycheck for every $1,000 you earn. Employers are required to start withholding the new lower amount by January 31, 2011, and to adjust employee paychecks by March 31, 2011, to make up for any amount improperly withheld in January. (You can find the official IRS notice about the cuts, which includes withholding tables, here.)
  • Unemployment benefits extended. The law reinstates the Emergency Unemployment Compensation (EUC) program, which lapsed temporarily on November 30, 2010. Most states offer an initial 26 weeks of unemployment benefits. For those who haven't found a job when these benefits run out, the EUC program provides another 34 to 53 weeks of benefits, depending on the state's unemployment rate. A separate federal-state program, the Extended Benefits Program, provides another 13 to 20 weeks of benefits to employees who exhaust their EUC benefits. (For details on how long benefits last under these programs, check out Nolo's article Unemployment Benefits: How Much Will You Get and For How Long?) With the EUC program reinstated through the end of 2011, employees are once again eligible for a maximum of 99 weeks of benefits in some states; the "99ers" -- those who have already used their 99 weeks -- aren't helped by the new law.
  • Extended tax credits and deductions. The law extends a number of popular tax breaks that were set to expire at the end of this year, from deductions for education expenses to credits for certain energy efficient home improvements. In a move popular among employers and employees alike, Congress extended the tuition tax break, which allows employees to exclude from their taxable income up to $5,250 per year in tuition assistance provided by their employers.
  • EEOC focuses on credit discrimination. The EEOC has long taken the position that relying on an applicant's credit history in making employment decisions can have a disparate impact on women and people of color. This has become a more pressing issue as the economy continues to struggle. In October of 2010, the Commission signaled renewed interest in this area by holding a public meeting and taking testimony from a panel of experts about the effect of relying on credit reports in employment. A couple of weeks ago, the EEOC took the issue on squarely by filing a pattern or practice lawsuit against Kaplan Higher Education Corporation. The EEOC argues that the company's practice of denying employment based on credit history had a disparate impact on black applicants, and is not justified by business necessity.
  • National Labor Relations Board (NLRB) proposes posting requirement. The NLRB issued a proposed rule that would require all private employers subject to the National Labor Relations Act (NLRA) to post a notice of employee rights under the law, similar to the notices currently required for wage and hour laws and discrimination laws. Employers that communicate with their employees primarily in electronic form would also have to provide the notice electronically. The rule would apply not just to unionized workplaces, but to all employers covered by the NLRA. Failure to post would constitute an unfair labor practice.