As long as you follow the rules above, the FCRA allows you to use credit reports for employment purposes, including to decide whether to hire, promote, or even fire. That's the federal law, however; some states see things differently. The economic downturn of the last few years -- and the resulting damage to credit reports and scores -- have led many politicians to reconsider whether it's really appropriate for employers to use credit reports in making job decisions. At least three states (Hawaii, Oregon, and Washington) have passed laws prohibiting employers from considering credit reports in most circumstances. According to the National Conference of State Legislatures, about 20 states are currently considering similar legislation. (See their detailed chart here.)
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This all adds up to good news for same-sex parents, whose rights to parental leave for a partner's biological or adoptive child are now more clearly established. The DOL's interpretation provides other examples as well, such as a grandparent who is caring for children whose own parents are unable to care for them and an aunt who raises a sibling's children after the sibling dies.
The FMLA has always covered those who stand "in loco parentis" (in the place of a parent) to a child, and the DOL's interpretation states that it is merely clarifying what that term means. However, the DOL's interpretation is a clear expansion of rights in at least one way: While the FMLA regulations (at 29 C.F.R. 122(c)(3)) state that an in loco parentis relationship includes day-to-day responsibilities to care for and financially support a child, the DOL's interpretation states that either day-to-day care or financial support is sufficient, as long as the parent intends to assume parental responsibilities toward the child. Along with the express inclusion of gay parents, this signals an intent to expand the law's coverage.
And speaking of same-sex couples and the FMLA, commentators have long opined that same-sex spouses are probably not entitled to leave to care for each other under the FMLA because of the federal Defense of Marriage Act (DOMA), which defines marriage as between a man and a woman. Even though the FMLA regulations state that marriage is to be defined by state law where the employee resides (and includes common law marriage, where it is recognized), the DOMA has been interpreted to override provisions like these where federal rights are concerned. But yesterday, a federal district court in Massachusetts found that the DOMA was unconstitutional. This decision applies only in Massachusetts and may be appealed. For now, however, gay parents and spouses can put these two legal events in the win column.
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After Quon exceeded the limit several times, the city decided to audit his messages for the past two months to determine whether the city should raise its character limit. The audit revealed that Quon had used his pager extensively for personal messages, including sexually explicit messages. Quon and several people with whom he had texted sued, alleging invasion of privacy. (You can find more details on the facts of the case in my earlier post, here.)
The U.S. Court of Appeal for the Ninth Circuit found in Quon's favor. It found that Quon had a reasonable expectation of privacy in his text messages, based on his supervisor's statements that those messages would not be read. It also found that the city had a reasonable justification for searching. In the end, the Court found that the city should have used less intrusive means of determining whether to raise its character limit, such as asking Quon to perform the audit himself or warning Quon that his messages would be audited going forward.
The U.S. Supreme Court disagreed, finding that the city's monitoring was justified and that Quon had no legal claim that he had been subjected to an unreasonable "search" under the Fourth Amendment of the Constitution. The outcome isn't surprising: Courts have largely upheld the rights of employers to monitor employee communications, in the public and private sector. The Ninth Circuit's decision was the outlier in this regard.
What was more interesting, however, was the Court's discussion of how the law should treat technology. Justice Kennedy's opinion for the majority says:
The Court must proceed with care when considering the whole concept of privacy expectations on communications made on electronic equipment owned by a government employer. The judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear. . . . Cell phone and text communications are so pervasive that some persons may consider them to be essential means or necessary instruments for self-expression, even self-identification. That may strengthen the case for an expectation of privacy.
This section of the opinion led to a separate opinion by Justice Scalia, who didn't much care for the notion that the Court should exercise caution by making a limited decision simply because technology is evolving. In his words, "The-times-they-are-a-changin' is a feeble excuse for disregard of duty." He nonetheless agreed with the outcome of the case.
Because Quon involved a public employer, it doesn't apply directly to the private sector, which is not bound by the Fourth Amendment. However, courts have generally followed similar principles in analyzing these cases against private employers. One clear takeaway from the Quon case is, in the words of Justice Kennedy: "[E]mployer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated." (And now a word from the shameless commerce division: If you need help putting together clear communications policies, pick up a copy of my book, Smart Policies for Workplace Technologies.)
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The dispute before the Supreme Court was over the interpretation of a provision of the National Labor Relations Act that gives the NLRB the authority to delegate its powers to a quorum of at least three members -- and, that once such a three-member group has been designated to handle certain issues, two of its members may constitute a quorum as to those issues. Confused? So were the federal Courts of Appeal, which split as to whether this provision allowed the NLRB to decide cases with only two members or required at least three members. (See my previous post for a few more details on this dispute.)
In the Supreme Court case, New Process Steel v. National Labor Relations Board, five Justices found that the provision about two members acting was effective only if everyone in the three-member quorum was still on the Board. So, for example, if a three-member quorum had properly been delegated the right to hear cases, and one of the members had to recuse him- or herself from hearing a particular case (say, because of a conflict of interest), the remaining two members could issue a decision -- but only if the third member was still on the Board. Once the Board had only two members, they were no longer authorized to issue decisions.
But they did anyway. Which raises the question: What about those 600 or so decisions? Can the party that lost go back and reopen the case? If so, where should those cases be heard -- by the now four-member NLRB? In federal court? And what of the parties who have had to act in accordance with the rulings of the now-declared illegitimate two-member "rump" by, for example, recognizing a union or losing an unfair labor practice case?
Lots of questions, and not so many answers just yet. There's a nice analysis of the issues over at SCOTUSBLOG. The post points out that the NLRB has issued a statement saying that it expects all pending appeals of two-member Board decisions to be remanded to the Board, so it can "further consider" and resolve them. However, it's still unclear how the many more cases that are now done and dusted -- either because they were never appealed or because the appeal has been decided -- will be dealt with.
]]>The case involved a written test the city gave for applicants to be firefighters. The city gave applicants their test scores (which divided applicants into the categories of "well qualified," "qualified," or "not qualified") and were told that they were unlikely to be hired unless they fell into the "well qualified" category. Later, the city began its actual hiring, and did just what it had said it would do: It used the earlier announced cut-off scores to choose successful applicants from those in the well qualified category.
A group of African-American applicants challenged the practice as discriminatory based on disparate impact. The city countered that the applicants should have filed their charges at the EEOC within 300 days of learning what their test scores were and how the city intended to use them. The applicants contended that they filed their charges in a timely manner, within 300 days after the city applied that announced policy to actually make hiring decisions, and the Court agreed.
It's hard to see how the Court could have held otherwise, for two reasons: First, as Justice Scalia's opinion points out, requiring the plaintiffs to sue within 300 days of the announcement of a policy or forever hold their peace would insulate ongoing discrimination from challenge. Once the employer made it past the 300-day mark, it could apply its discriminatory policy with impunity forever.
Second, what if circumstances changed or the city decided not to go forward with the policy after all? For example, what if the city suddenly had the money to hire many more firefighters than it had previously planned to hire, and so was able to accept applicants whose scores were too low for the well qualified category? Or, what if the city had second thoughts about the policy and decided not to follow it by the time hiring began? An applicant who sued anyway based solely on the city's announcement of its policy -- which it didn't go on to apply -- would have a tough time prevailing in court.
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In this case, Fink told her supervisors about the genetic test results and her surgery. She said that she felt comfortable doing so because she had received positive reviews, merit increases, and bonuses. Once she returned from surgery, she claims that her job duties were taken away, she was demoted, and was soon fired. The company has denied the allegations and said that its actions were warranted.
With so few facts on the table, it's hard to glean many lessons from this situation -- except perhaps that silence is golden. From an employer's perspective, it's always a good idea to limit the number of people who are privvy to information that cannot legally be considered when making employment decisions. If the decision maker doesn't know the protected information, whether it's that the employee has a disability, has complained of sexual harassment, or is pregnant, it's more difficult to prove discrimination or retaliation. And from an employee's perspective, limiting disclosure also limits the number of people who have an opportunity to act badly.
]]>What will this mean in practice? It's not entirely clear, as the DOL hasn't yet issued any proposed regulations or concrete details of how the plan will shape up. However, The New York Times reported today that the new approach will require employers to draft compliance plans explaining how they will make sure they aren't violating workplace safety and wage and hour laws. Employers will also be required to document key decisions -- for example, why the employer has determined that an employee is exempt from overtime or that a worker should be classified as an independent contractor rather than an employee -- and then provide that documentation to both the worker and the DOL.
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One set of changes determines the coverage and limits in health care plans. Although these changes will have to be made by the insurance companies themselves, employers will have to make sure the plan(s) they select meets the requirements -- and may have to pay a higher price for it. (Although existing group health plans can be "grandfathered," they still must incorporate some of these changes.) These changes include:
Another set of changes is specific to employment. For example:
Then there's that "play or pay" provision. The law doesn't require employers to offer health care coverage. However, it creates penalties for employers that don't provide coverage or that provide less generous benefits. Here's basically how it works:
This time, Congress waited long enough to extend these benefits that some people faced a gap in coverage. The original programs expired on April 5, but the short-term extension passed on April 15. Those whose unemployment benefits ran out must now reapply to receive compensation retroactively for the time they missed.
The unemployment benefits extension helps only those who had not yet exhausted their regular and extended benefits. Currently, between regular state benefits, the extended benefits program (which provides an additional 13 to 20 weeks of benefits), and the four tiers of extended benefits available through the Emergency Unemployment Compensation (EUC) program, unemployed workers in some states can collect up to 99 weeks of benefits. (Because some of these benefits depend on the state's unemployment rate, fewer total weeks of benefits are available in some states.)
The extension Congress passed will help workers who have not yet used up all of these benefits, by continuing the existence of these programs. However, workers who have already exhausted all available benefits through these programs won't be helped by the extension. For these very long-term unemployed, the only hope is the Congress will add a fifth tier to the emergency benefits program, making benefits available beyond the current 99-week maximum.
]]>This week's story? Well, there were a few. Most cringe-worthy to me was the engaged couple profiled in the New York Times who like to fight on Facebook, because, as the soon-to-be Mrs. said, "A lot of people aren't with us if we have a fight at home . . . [This way] all of our friends can kind of comment on it." Has the couple considered how all their online sniping looks to readers beyond their social circle? I would guess not, judging from the fact that even their friends think the online fighting is inappropriate. (One bridesmaid complained to the Times about having to spend hundreds of dollars getting ready to be in the wedding when "their whole relationship is falling apart on Facebook.")
Or how about the three prison guards in Nebraska, fired after one said on Facebook that he enjoyed smashing an inmate's face into the ground, and the other two posted supportive comments? The British travel agent fired after complaining about a coworker on Facebook, saying "I swear I will smack the brown-nosing cow in the face before the end of my shift!"?
Then, there was a conversation I had with a friend who conducts sexual harassment prevention training, who told me that she is routinely met with audience surprise when she points out that harassment and inappropriate behavior can take place via social networking sites. The surprise isn't that there's sexually explicit or biased content on these sites, but that it could get you in trouble at work. These sites are widely seen as part of our private lives, not our professional lives. Even if you're the boss and you've "friended" your reports and coworkers, who are now all invited to view your X-rated photos. Even if you're job hunting and employers Google your name (according to a recent Wall Street Journal column, 85% of hiring managers do), only to find your sexually explicit posts. Even if your company has its own Facebook or MySpace page or Twitter account, and individual employees have joined as fans, friends, or followers -- which means corporate customers can click on over to employee posts (that weren't intended to represent the company).
What interests me most about these situations is the simultaneous desire to be seen (isn't that the purpose of posting online?) and surprise when it happens, at least beyond the intended audience. I'm using the term "surprise" as a stand-in for what is usually a stronger response: Often, someone whose online post comes back to bite the poster in the posterior expresses anger, affront, even a sense of unfairness or violation that content posted for friends and like-thinkers was viewed differently -- and maybe used as a basis for judgment --by outsiders and authority figures. The affront seems to come from the lack of control over how posted content is interpreted. The poster wanted others to think he or she was funny, clever, or cool, and is offended to have instead been found crude, insensitive, or mean.
Despite George W. Bush's malaprop references to "the Internets," there's only one -- and I think that might be at the root of the problem. On the Internet, many find a creative outlet, a place to express themselves and engage with a like-minded community. But it's also a tool for job hunting and recruitment, research, shopping, advertising, dating, propaganda, law enforcement, you name it. Our friends can read what we post, but so can our employers, our customers, the cops, our mother's book group, our wedding party, our local prisoners' rights organization, and that brown-nosing cow. So let's be careful out there, people.
]]>The underlying challenge was raised by a group of scientists, engineers, and administrative support employees who worked at the Jet Propulsion Laboratory (JPL), a research lab run by NASA and the California Institute of Technology. The employees were officially employed by CalTech. Following a policy change in 2007, all JPL employees whom the government categorized as "low risk" (they didn't have access to classified material) had to submit to the background check procedures routinely applied to federal civil service employees in order to maintain their access to the JPL. The employees filed a lawsuit and sought a preliminary injunction to stop the new policy from going into effect until the court had a chance to decide whether it was constitutional.
The background check -- called the Nationwide Agency Check with Inquiries (NACI) -- requires employees to provide information on their residential, education, employment, and military histories; give references; and disclose any use of illegal drugs in the past year, along with any treatment or counseling received. Employees must also sign a release form allowing the government to collect information from landlords, employers, and references on a wide variety of topics, including "financial integrity," "mental or emotional stability," and "general behavior or conduct."
The Ninth Circuit Court of Appeals ruled in favor of the government on several issues. However, the Court found that the employees were entitled to a preliminary injunction because they had raised serious questions as to whether their constitutional right to informational privacy was violated by the question asking about drug treatment or counseling and by the release form (and subsequent inquiries it authorized). NASA petitioned the Supreme Court to hear the case, and the Court agreed to do so earlier this month.
This case challenges background checks applicable to government employees and contractors. The U.S. Constitution protects only against action by the government (in this case, NASA's decision that JPL employees had to pass a background check), not actions by private companies and employers. So, while the outcome of the case could be hugely significant to federal sector employees, who have been subject to these same background check requirements for decades, it won't be directly applicable to those who work in the private sector. However, state courts often follow the Supreme Court's lead and guidelines in deciding cases alleging violations of privacy, even though the right to privacy applicable in those cases generally comes from a state constitution, statute, or case law, not the U.S. Constitution.
Private sector employees could be more directly affected by some of the background check developments reported on this week by SHRM, here (you may need to be a SHRM member to view the article). SHRM reports that the EEOC is considering issuing new enforcement guidance explaining when employers may consider an applicant's credit history and arrest and conviction record in the hiring process. The EEOC has long stated that using credit reports and criminal records to disqualify applicants could have a disparate impact based on race; if so, the employer would have to show that the practice is job-related and consistent with business necessity. SHRM offers some tips that will help employers avoid legal trouble when performing background checks, including that employers should be selective in deciding which positions require a background check and should allow applicants to explain negative information that turns up.
]]>The employee who was fired, Dmitry Narodestsky, claimed that the day after his wife told the company he would need leave for surgery, the defendants searched his computer looking for a reason to fire him. Narodestsky was fired about two weeks later for forwarding an email to another employee. Several of the individual defendants were present at the termination meeting.
The judge refused to dismiss the claims against the individual defendants based on the language of the FMLA regulations, which state that "any person who acts directly or indirectly in the interest of an employer to any of the employees of such employer" may qualify as an employer under the law. The judge also found that the individual defendants exercised some control over Narodetsky's employment, in that they participated in the decision to fire him and the termination meeting.
This decision is only the latest in a long line of cases that have upheld FMLA claims against individual managers and officers who have played a role in denying an employee's FMLA rights. To make sure your company is in compliance, pick up a copy of Nolo's The Essential Guide to Family and Medical Leave (full disclosure: I'm the coauthor). The most recent edition covers the 2008 revision of the FMLA regulations, recent provisions relating to leave for military family members, and the new forms and notice requirements.
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But the one-month extension of the subsidy wasn't the only COBRA news in the Temporary Extension Act: The bill also expands eligibility for the subsidy to those who initially lose their health insurance coverage due to a reduction in work hours, then are laid off. This is a small but vitally important change: Many businesses have tried to weather the current economic storm by cutting back on hours worked (and how much employees are paid for those hours). The most recent figures from the Bureau of Labor Statistics (for February 2010) show that more than six million people are involuntarily working part time due to business conditions or lack of work. Unfortunately, given the current economic climate, many of these businesses will ultimately have to make deeper cuts -- and many of these involuntary part-timers will eventually lose their jobs altogether.
The new law gives these employees another opportunity to elect COBRA coverage once they are terminated -- and, therefore, become eligible for the subsidy. A cut in hours that makes an employee ineligible for group health insurance through the employer's plan is already a COBRA qualifying event, and the new law doesn't change that. Nor does the law make employees who are still working at reduced hours eligible for the subsidy. What the law does is provide an additional election period to these employees if they subsequently lose their jobs and become eligible for the subsidy. If an employee initially declined coverage or elected coverage but let it lapse, the new law gives that employee another chance to elect coverage after a job loss.
]]>Last week, the House of Representatives passed a temporary measure that would have extended the eligibility period for another month, to the end of March 2010, to give Congress some time to get its act together and pass a more comprehensive jobs bill. But the Senate has been blocked from voting on the extension by Senator Jim Bunning of Kentucky. Bunning's camp says he doesn't necessarily oppose the measure, but wants Congress to stop passing spending bills that it can't pay for. (Bunning himself, in response to criticism of his action last week on the floor of the Senate, had a shorter comment: He is reported to have said "tough s%*t" in response to another Senator's remarks that Bunning should drop his opposition to the bill.)
Bunning has been taking a lot of criticism for his action, but that's nothing new for this Senator. After a public fight last year with the National Republican Senatorial Committee (which reportedly included a threat by Bunning to sue the group), Bunning announced he would not run for reelection. In recent years, Bunning's apparent gaffes, from his comments about Supreme Court Justice Ginsberg's cancer to his comment that an opponent in his previous reelection race looked like one of Saddam Hussein's sons, have garnered a lot of press.
Bunning's action prevents the Senate from passing the House's temporary measure by unanimous consent. If that procedural avenue is blocked, the Senate will have to override his objection or simply pass the COBRA extension as part of its broader jobs bill (which, in its current form, extends the program until the end of this year), either of which will take some time.
]]>First, it was reported this week that President Obama's proposed budget includes a $25 million effort to stop the misclassification of employees as independent contractors, with funding for 100 new enforcement positions at the IRS. The Labor Department estimates that up to 30% of businesses misclassify employees as contractors, according to an article in the New York Times.
This move isn't so surprising when you consider the economy -- and the money a company can save by classifying workers as contractors, who aren't entitled to benefits, overtime, workers' compensation coverage, or unemployment if they are let go. I've even heard stories of employees being laid off, then brought back months later as independent contractors to do essentially the same work.
According to a study cited in Inc., about half of the jobs that have been created during the current economic recovery are "contingent," which means they are held not by employees but by temps and contractors. Used properly, contingent workers give companies the flexibility to ramp up quickly for a particular project, using professionals with experience and expertise, then pare back down just as quickly (and with very little legal exposure) once the project is done. Used improperly, turning employees into contingent workers exploits the employees, hurts morale and cohesion in the workplace, depletes state and federal tax coffers, and ultimately leaves workers at far greater risk of hitting bottom -- with no unemployment to protect them -- if the work runs out.
And speaking of hitting bottom and tax coffers, there was a second story about contractors this week. Apparently, the man who crashed a plane into an IRS office in Austin, Texas, yesterday was particularly angry about a provision of the Tax Code involving worker classification. The Times reported that the man's suicide note cited a 1986 law that made it more difficult for companies to classify certain workers who provide technical services as independent contractors. (The pilot of the plane was a computer software engineer.) The law ("Section 1706") essentially takes away certain defenses for these companies if they are audited for misclassification: Other companies can point to past industry practice, court rulings, and similar evidence to show that they had a reasonable basis for classifying workers as contractors, but those defenses aren't available for these technical services workers. The Times cites critics of the law, who say that it has prevented technical workers from becoming wealthy entrepeneurs and stymied technological innovation. The Times also reports that the law was passed essentialy as a way to raise tax revenue.
Taken together, these two stories show the tension underlying worker classification: Workers are supposed to be classified according to the work they do, but the amount of money at stake seems to cloud everyone's judgment. And, the financial interests of private business and the government are decidedly at odds here. Generally speaking, when workers are classified as contractors, companies save money and the government loses money. When workers are classified as employees, companies pay more and the government collects more.
While the financial incentives on both sides of the equation are therefore strong (and opposing), they are not supposed to be decisive. The law says that workers are to be classified according to what they do: Is their work essential to the employer's business? Does it require special training, skills, tools? Considering a long list of factors, do the workers truly look like independent business people, who can be expected to bargain at arm's length with the employer and cover their own costs of doing business? Or do they look more like employees, who have less bargaining power and may therefore need some protection against discrimination, on-the-job injuries, potentially oppressive working conditionsg, and job loss? With both business and government going broke, however, these fundamental policy considerations seem to have taken a back seat to financial concerns.
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