Nolo's Employment Law Blog

If you review applicant or employee credit reports, you're undoubtedly already familiar with the Fair Credit Reporting Act (FCRA). Among other things, this federal law requires employers to get the consent of the employee or applicant before pulling credit and other consumer reports, to give notice if the information in the report might lead you to take adverse action (such as denying the applicant a job or denying the employee a promotion), and to give notice -- again -- if you do ultimately take the adverse action.

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.)  

Almost every week, I'm surprised -- again! -- by a story about online posting gone wrong. But never as surprised as the subjects of these stories, who invariably claim to be shocked that other people actually saw the sexual photos, references to binge drinking and drug use, bathroom humor, snarking, venting, and otherwise not ready for prime time content that they posted on the Internet. This is one of my hobby horses, I know. And I promise to stop talking about it just as soon as it stops happening. But for now, I just keep wondering why people don't get that the content they post publicly will in fact be viewed by . . . the public.

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.   

Yet another federal court has found that an employee may sue not only the company but also individual managers -- and even an HR representative -- for violating the FMLA. As reported here in the Legal Intelligencer, a federal district court judge for the Eastern District of Pennsylvania ruled (in the case of Narodetsky v. Cardone Industries, Inc., et al.) that a fired employee's lawsuit may go forward against the former employer and five individual defendants, including the plant manager and the human resources manager, director, and representative. (The individual defendants filed a motion to dismiss the allegations against them, which the judge denied.)

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.

After the Senate finally convinced Senator Jim Bunning to stand down his one-man protest (covered in my previous post), Congress passed -- and the President signed -- an extension of the COBRA subsidy last week. (You can find the bill, called "The Temporary Extension Act of 2010," here.) The extension is clearly a stopgap measure: It lasts only until the end of this month (March), by which time Congress hopes to have passed a more comprehensive jobs bill that will keep the subsidy in effect through the end of this year.

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.   

About a year ago, the Supreme Court found in favor of an employee, Vicky Crawford, who was fired after she participated in an investigation of workplace sexual harassment. (The case was Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee; you can read my previous post about it here.) The Court held that Crawford could sue for retaliation; Crawford's employer had argued that, because Crawford was only a witness in the investigation and not the person who had originally complained of harassment, she was not protected from retaliation. After the Supreme Court's decision kept Crawford's claim alive, the case went back to the federal district court for a trial on the facts.

A couple of weeks ago, the jury reached a verdict: Crawford was awarded $1.5 million in damages. After losing its legal argument that Crawford couldn't bring a retaliation claim, the employer tried a different tack: It argued that Crawford wasn't fired for participating in the harassment case, but for performance problems. The employer said Crawford was once a good employee, but her performance had been slipping; when an audit revealed problems in the payroll department, including checks that were never deposited, she was ultimately fired.

Of course, we can only know the facts that were recounted in news articles or court decisions about the case. Based on the information I've seen, I think there are a few lessons employers can take from what happened in this case:

• Timing is everything. Retaliation cases are all about timing, more specifically how much time passed between the employee's protected activity and the employer's alleged retaliation. The shorter the time period, the more it looks like retaliation. Here, the HR person who conducted the harassment investigation reported possible problems in the payroll department on the same day she filed her report in the harassment case. Same day plus same person involved in both issues equals huge mountain for the employer to climb to refute a retaliation claim.
• Can I get a witness? You don't necessarily need one to decide that harassment took place. It looks like another big problem for the employer in this case was that it fired three employees who participated in the investigation -- in which pretty bad behavior was alleged. Crawford said that the harasser pulled her head into his crotch, asked to see her breasts, and grabbed his own crotch, saying "you know what's up." Two other employees also said that they were harassed, and were also fired. Yet, the employer argued that it couldn't discipline the harasser because there were no witnesses to the behavior. Again, I've got no inside line on what "really" happened, but if three employees all allege that they were harassed, that's ample reason to take action. Often, there are no witnesses to harassment other than the harasser and the harassee. That doesn't relieve employers of their obligation to take action to stop harassment.
• The work environment affects performance. Here, the employer said Crawford was once a good employee, but her performance declined. We don't know the source of Crawford's performance problems, but in a situation like this, employers should consider whether poor performance might be explained, at least in part, by the harassment. Employees who have been harassed might have higher absentee rates, problems concentrating, and other performance issues. If the problems are attributable to the harassment, the employer should deal with the underlying issue, then work with the employee to help her get back on track.  

Over the weekend, the Senate passed a defense spending bill that included -- among many other things -- an extension of the COBRA premium subsidy provision that's about to expire. (You can find the entire bill at the website of the Library of Congress; search for the bill number, H.R. 3326, then skip ahead to Section 1010). The House already passed the bill, and it's been sent to the President for signing.

Currently, the COBRA subsidy allows those who are involuntarily terminated from September 1, 2008, through December 31, 2009 to receive a subsidy of 65% of their COBRA premium payments for up to nine months. The subsidy went into effect on March 1, 2009, which means that the first group of eligible folks -- those who had already lost their jobs and have been receiving the subsidy since the effective date of March 1 -- used up their nine months of subsidy coverage on November 30.

The extension would:

• allow those who are involuntarily through February 28, 2010, to receive the COBRA subsidy, and
• extend the subsidy period from nine months to a total of 15 months.

The extension to 15 months of subsidy eligibility also applies to those who have already used up their original nine months. For example, someone who was laid off and began receiving the COBRA subsidy on March 1, 2009, would have used up the nine months of subsidized coverage a few weeks ago. Now, that person will be eligible for an additional six months of subsidy payments. And, this coverage can be retroactive: That is, if an employee's subsidy ran out, and the employee didn't pay the full cost of COBRA coverage for December, the employee will have an opportunity to pay the lower amount to receive retroactive continuation coverage.  

As the end of the year approaches, Congress and President Obama are considering whether to extend several important economic benefits to help ease the effects of the recession. For instance, the tax credit for first-time homebuyers, an $8,000 credit that one economist says will have resulted in 400,000 home sales during its tenure, is set to expire on December 1, 2009. Unemployment benefits are another topic of discussion: The House of Representatives has already passed a bill that would provide an additional 13 weeks of unemployment benefits in states with unemployment rates of at least 8.5%. The Senate is considering a different approach, which would extend benefits for 14 weeks in every state, and by an additional six weeks in states with higher unemployment.

And what of the COBRA subsidy, by which the government picks up almost two-thirds of the tab for continuing health insurance for workers who have lost their jobs involuntarily? (Learn more about the subsidy in this article.) The subsidy, which lasts for nine months, applies only to employees who are fired or laid off by the end of this year. According to Workforce Management, the percentage of eligible employees who actually enroll in COBRA has doubled since the subsidy went effect. The White House has said that it is considering  seeking an extension of the subsidy. So far, however, Congress doesn't appear to have taken up any legislation that would effect this change. If Congress doesn't act, workers who are fired or laid off after the first of the year will once again have to pay the full cost of continuing health insurance -- and, given the statistics above, many are likely to decide that this is a luxury they can't afford.  

Managers routinely report that laying off workers is one of their least favorite job responsibilities. And it's no wonder why: Especially in our current tough economic climate, managers worry about whether laid off workers will be able to find a new job -- and make ends meet while they're looking. Add to that the stress of having to actually break the news to employees, worries over whether remaining employees will be able to handle the workload, and concern over whether the company itself will survive the recession, and you can see why layoffs provoke so much managerial anxiety.

Well, they've got even bigger concerns in France: kidnapping. As reported by CNN, there were three separate kidnapping incidents in March 2009, at Sony France, 3M France, and most recently at Caterpillar. Employees at Caterpillar, angered after hearing that the company had proposed laying off 700 workers, took four executives hostage; there's no word yet on whether they've been released. The workers did release a human resources director who recently had a heart attack. As tactics go, this one is proving to be effective: The kidnapping incidents at Sony France and 3M France both resulted in renewed discussions or negotiations between the union and the company, which is also what the Caterpillar workers say they want.

According to data released yesterday by California's Employment Development Department (EDD), 10.5% of Californians are unemployed -- which means able to work, available to work, looking for work, and not working at all. Behind the percentage points are almost two million people out of work, and fewer than half of those are currently collecting unemployment benefits. Over the past year, California's construction industry has seen the largest percentage of job losses, while employment in the fields of education and health services has actually grown a bit.

The numbers are echoed by recent figures on mass layoffs compiled by the federal Bureau of Labor Statistics, which show that California had the largest number of new claims for unemployment as a result of mass layoffs, in which at least 50 employees lose their jobs. In fact, California lost more than twice as many jobs in mass layoffs than any other state. And none of these numbers include those sometimes referred to as "underemployed," such as those who have taken part-time positions because they can't find a full-time job, those who have accepted a job that pays much less than a previous position, and those who are still working but have experienced hour or wage cuts.

For those of us who still have jobs and are wondering how we can help friends, relatives, and colleagues who haven't been so lucky, the New York Times published a great article by Ron Lieber today, called "Not Laid Off? How to Aid the Less Fortunate".

According to the Labor Department, the unemployment rate rose to 6.5% last month, the highest in 14 years. In the first ten months of this year, 1.2 million jobs have been lost in the U.S., more than half of them in the last three months. More than 10 million Americans are unemployed, and another 6.7 million are involuntarily underemployed -- working part time when they'd rather be working full time. (Check the grim data for yourself here.)

Lots of good information is out there for companies that have to conduct layoffs and employees faced with layoffs. And certainly, people who've lost their jobs deserve most of the attention, sympathy, and assistance.

But what about the employees who are left after the layoffs -- those who are expected to do the same amount of work (or more) with fewer resources and less help; who are anxious, sad, perhaps even angry about who was laid off or how it was handled; who may have had to make sacrifices of their own, such as pay cuts or loss of benefits; and who may be torn between their loyalties to the company and their need for job security? A great article in the most recent issue of HR Magazine (published by the Society for Human Resource Management) gives employers tips on how to help these employees -- and how to convince the best of them to stay the course. (SHRM members can find it here.)

The article explains that employees who are not laid off are likely to become more risk averse, concerned that failure could lead them to be next on the chopping block. This understandable concern leads to a more conservative approach to the development of new products, markets, and customers -- not the best outcome for a company in the throes of a downturn. The article also discusses the "survivor guilt" that can overcome remaining employees, as well as the long-term stress on employees who have to do more work to make up for missing colleagues. Statistics presented in the piece indicate that turnover -- in the form of employees leaving voluntarily -- increases dramatically at companies that have laid workers off. On average, companies that laid off .5% of their workforces sustained a 2.5% increase in turnover, which means that these companies lost five employees for every one they laid off.

So what can companies do? The article presents a number of valuable tips, including being honest and "overcommunicating" with employees who remain, making sure layoff and restructuring decisions are perceived as fair, allowing employees to vent, and giving remaining employees a reason to stay -- preferably with plausible details, such as careful plans to turn things around and timelines for improvement.  

Lisa Guerin