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.)  

Last week, Pamela Fink filed a charge with the EEOC, alleging that she was fired from her job after telling her employer that she carried the BRCA2 gene (linked to some forms of breast cancer) and had undergone a voluntary double mastectomy after her two sisters had both been diagnosed with the disease. According to news reports, this is the first publicized case under GINA -- and one of the first EEOC charges to allege wrongful termination rather than improper disclosure of medical information.

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. 

The battle over continued extensions of the COBRA subsidy and emergency unemployment benefits continues in Congress. Last week, Congress passed -- and the President signed -- another stopgap measure, continuing these programs through May 31 (COBRA) and June 2 (unemployment benefits). Still under consideration: a bill that would continue these benefits through the end of the year, as part of a larger budget package. Although both the House and Senate have passed a version of this budget bill, they are sufficiently different to require reconciliation and another vote before becoming law.

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.

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.   

Toward the end of last year, Congress extended the COBRA subsidy provision. The original subsidy program applied only to those who were involuntarily terminated from September 1, 2008, through December 31, 2009. These former employees were entitled to a 65% subsidy of their continuing health insurance premiums for up to nine months. The extension increased the duration of the subsidy to 15 months. It also extended the eligibility period to include those who were involuntarily terminated through February 28, 2010. If you don't have your calendar in front of you, that was two days ago.

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.

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.  

We've heard a lot in the past week about President Obama's proposed budget, unveiled in conjunction with his State of the Union speech last week. Topic number one seems to be how the budget plan would affect the national deficit. Apparently of quite a bit less interest, judging by the limited press it's received, is the proposal to extend the COBRA subsidy through 2010.

It's been reported that the budget proposal would make the subsidy available to those who are involuntarily terminated from March 1, 2010, through the end of the year. These folks would be eligible for up to 12 months of subsidized health care continuation (employees who are involuntarily terminated up until the end of February 2010 are eligible for 15 months of the subsidy, based on the first extension, passed by Congress this past December).

Are people taking advantage of the subsidy? The answer is a resounding yes, according to a survey reported in Business Insurance. Large employers reported that more than twice as many laid off employees have opted to continue their health insurance through COBRA since the subsidy first became available.

If the subsidy extension passes, some state legislatures may have to get on the ball in a hurry. A number of states offer "mini-COBRA" laws, which typically provide the right to continue health insurance to those working for smaller employers (COBRA covers only those with at least 20 employees). These laws differ widely in the details, including what counts as a qualifying event and how long continuation coverage can last. But most of them have this in common: As long as former employees meet the other requirements for the subsidy (for example, they were involuntarily terminated and meet certain income restrictions), they are eligible for the COBRA subsidy, even if they are receiving continuation coverage through a state law rather than through COBRA.

To allow employees to take advantage of the subsidy, a number of states amended their laws -- for example, to give employees who originally passed up continuation coverage a second chance to elect coverage once the subsidy was available. However, some states tied their amendments explictly to the original time frame for which the subsidy was available, and so might have to take legislative action to make sure employees of smaller employers are still eligible if the subsidy is extended.

It's interesting to me that, at a time when health care reform has been described as "on life support," unconscious," or in terms of some other unfortunate medical metaphor, the COBRA subsidy -- which is, after all, government-funded health insurance -- enjoys wide popularity, inside and outside of Congress.

UPDATE: After it was blocked temporarily by a Senator, Congress passed -- and the President signed -- a stopgap measure that extends the COBRA subsidy until the end of March 2010. (Congress is currently beginning work on comprehensive jobs legislation which will extend the subsidy to the end of this year.) The stopgap bill also clarifies that employees who initially lost their health insurance because of a reduction in hours are eligible to claim the subsidy if they subsequently lose their jobs. Read about it here.  

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.