Wednesday, December 17, 2014

Lost in the Cloud: Dropbox, Data “Insecurity,” and Employee Shenanigans

For the uninitiated, Dropbox and other similar tools—such as SkyDrive, Google Drive, or Cubby—allow a user to log in to an account, upload documents or files to the cloud, and then access or download them from any device, anywhere at any time. Users can sync folders across devices and share or sync files with others.
 
Chances are, more than a few of your employees have discovered the ease and utility of cloud-based storage and file sharing tools. They are incredibly useful. But, along with the upsides that these tools offer–like increased efficiency and team collaboration – they also can cause serious data “insecurity” headaches for employers.
 
Here’s a run-down of some of those risks:
1) Data Hackers:

While Dropbox disputes the allegation that it was “hacked,” usernames and passwords for over 7 million Dropbox users were compromised this past October. Employees using cloud storage to perform work tasks could leave company information vulnerable to the nefarious activities of others.
2) Employee Malfeasance:

Another data “insecurity” risk is employee malfeasance. There are a number of pending lawsuits alleging that employees used Dropbox or other cloud-based storage applications to misappropriate confidential company information. Unfortunately, sophisticated and savvy users of cloud-based tools sometimes help themselves to company information and documents and leave little trace behind. While a tell-tale sign of misappropriation is a flurry of email or downloading activity in the final days before an employee’s departure, what if the employee regularly synced work files to a cloud-based application over a much longer period of time? Or, what if an employee routinely printed sensitive documents to a home computer? These are real risks to consider and try to prevent.
3) eDiscovery Nightmare:

Have you ever had to subpoena Google, or Facebook, or any other online provider to obtain data? It’s not fun, easy, or quick. In addition, the process gives the person in control of the account at issue plenty of notice and time to cover up his or her tracks. And even if you do get your hands on some data, you may never be able to receive or recover the user access data that could reveal important details about when files were taken and what happened to them after that.
All of these potential scenarios leave an employer vulnerable to losing control of important records, potential trade secrets, and evidence to prove wrongdoing. In addition, to be able to establish a misappropriation claim against a wrongdoer, a company must demonstrate that it took sufficient, reasonable steps to protect its trade secrets and confidential information. If cloud storage and access is a free-for-all with no employer attention paid to what employees are uploading, accessing or sharing with others, an employer may face credible arguments that it has not taken sufficient steps to protect its information.

So, take a good look at your technology use and social media policies. Do they address employee use of  cloud-based storage? Do you have good systems in place to detect or block activity that could lead to a breach of information security? Is your company data vulnerable without you even realizing it? Depending on what you find, it may be time to roll up your sleeves and revise your employment policies and practices.

Wednesday, December 10, 2014

The Supreme Court May Soon Have the Final Say on an Employer’s Duty to Accommodate Pregnancy

2014 has been a big year for pregnancy protections in employment law. In May, Minnesota enacted a new pregnancy accommodation law, and in July the federal Equal Employment Opportunity Commission (EEOC) issued an updated pregnancy discrimination guidance document. Developments in this area are set to continue in the upcoming year. Last week, the U.S. Supreme Court heard oral arguments in the Young  v. UPS case–a highly watched case involving an employer’s potential duty to accommodate pregnant workers under the federal Pregnancy Discrimination Act (PDA). It is well-settled that pregnancy discrimination violates the PDA and other employment discrimination laws, but the question pending before the Supreme Court in the Young case is whether–similar to disability discrimination laws–employers have an affirmative duty to grant pregnancy accommodations.
 
Ms. Young was working for UPS in 2006 when she became pregnant. Her job description required her to haul 70 pounds. On her midwife’s recommendation that Ms. Young not lift more than 20 pounds during her pregnancy, Ms. Young requested a temporary lightened load. At the time of her request, UPS had a “light duty” policy for three groups of employees:  (1) those injured on the job; (2) those with a disability under the Americans with Disabilities Act, or (3) those who had lost their driving credentials. Because Ms. Young’s situation did not fall into any of the identified light duty groups, her request was denied, and she was placed on an unpaid leave.

The Young case focuses on the meaning of the PDA’s language prohibiting discrimination “because of” pregnancy. UPS maintains that its light duty policy is “pregnancy neutral” and not discriminatory, because it excludes both pregnant employees and non-pregnant employees–such as non-pregnant employees injured off the job. Ms. Young argues, however, that the PDA requires more than neutrality and mandates the availability of benefits to pregnant employees that are available to other employees. Both the trial court and the U.S. Court of Appeals for the Fourth Circuit ruled in UPS’ favor, finding that UPS’ policy did not treat pregnant women differently given that they could receive a light duty assignment for the same reason as other employees (i.e. an on the job injury) and given that Ms. Young was not similar in her work abilities as compared to others given light duty assignments.

The Supreme Court agreed to hear the Young case before the EEEOC issued its July 2014 pregnancy guidance. In that guidance, the EEOC maintains, like Ms. Young, that the PDA does require an employer to provide light duty work for a pregnant worker if it does so for other employees. The EEOC guidance does not, however, have the force or effect of law. As such, employers should be watching for the Supreme Court’s Young decision in 2015 to see the Court adopts the EEOC’s position or a different approach. Based on the oral arguments before the Court last week, legal analysts are saying that the case is too close to call. So stay tuned…the Supreme Court’s decision is expected by June of 2015.

Wednesday, December 3, 2014

Be Prepared - Watch for the Following in the New Year:

Believe it or not, 2014 is drawing to a close and a new year is around the corner. As you prepare for 2015, here are some items on the U.S. Department of Labor’s regulatory agenda that you will want to track:

·       We’ve been on the look-out for proposed revisions to the Fair Labor Standard Act’s (FLSA) “white collar” exemptions from overtime and minimum wage requirements since March of 2014. That was when President Obama issued a directive for the Labor Secretary to “modernize and streamline” the existing regulations and increase the minimum salary for the “white collar” exemptions. The Department of Labor has now indicated that the proposed revisions will not be released until at least February of 2015. The final rule adopting any revisions will not be issued until sometime after the legally required notice and comment period is completed.

·       We expect the Department of Labor to issue a final rule revising the definition of “spouse” under the Family and Medical Leave Act (FMLA) by March of 2015. This definition change is necessary following the U.S. Supreme Court’s decision in United States v. Whiting. In Whiting, the Supreme Court held that restricting the federal definition of “marriage” and “spouse” to heterosexual couples is unconstitutional. In response to Whiting, the Department of Labor issued a Notice of Proposed Rulemaking proposing a final rule that would provide that eligible employees in legal same-sex marriages may take FMLA leave to care for their spouse, regardless of whether their state of residence recognizes their marriage.

·       The Office of Federal Contract Compliance Programs, a division of the Department of Labor, intends to issue a final rule in the near future to implement Executive Order 13672. This Executive Order prohibits federal government contractors from engaging in employment discrimination based on sexual orientation or gender identity. It appears that the OFCCP will be publishing its final regulations without a public notice and comment period. In that event, the regulations will likely be effective when issued.

Employers should stay tuned in the New Year and will need to adjust their policies and practices when the Department of Labor’s final rules appear.

Tuesday, November 25, 2014

Senate Report Criticizes EEOC


On Monday, the current Ranking Member of the U.S. Senate Committee on Health, Education, Labor and Pensions (and chairman in the next Congress) Lamar Alexander issued a report critical of the Equal Employment Opportunity Commission’s (EEOC) litigation tactics and management. Among other concerns, the report found that:
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Today’s EEOC . . . is pursuing many questionable cases through sometimes overly aggressive means—and, as a result, has suffered significant court losses that are embarrassing to the agency and costly to taxpayers. Courts have found EEOC’s litigation tactics to be so egregious they have ordered EEOC to pay defendants’ attorney’s fees in ten cases since 2011. The courts have criticized EEOC for misuse of its authority, poor expert analysis, and pursuit of novel cases unsupported by law. 

According to news reports (e.g., Wall Street Journal, Washington Times) the report and the issues it chronicles may have an impact on the likely upcoming reconfirmation vote in the Senate on EEOC General Counsel P. David Lopez.

It seems unlikely that this debate will alter the EEOC’s enforcement agenda and litigation tactics in the short-term. However, it will be interesting to see if this report and related debate will shift the agency’s more aggressive tactics in the future.

Tuesday, November 18, 2014

Not A Zone You Want to Get Into: Jury Smacks AutoZone with Discrimination/Retaliation Verdict

On Monday a federal jury in California awarded $185 million to a former AutoZone store manager who alleged that throughout her employment she had been discriminated against, demoted, and ultimately terminated because of her gender and in retaliation for complaining about discrimination. Rosario Juarez worked at an AutoZone retail store in San Diego from 2000 to 2008. Although she received promotions and advanced in positions within the store, these allegedly occurred only after she raised complaints about disparate treatment of women employees. 

After Juarez informed the company of her pregnancy in 2005, she claims she was pressured by her district manager to step down because of concerns over her ability to be both a manager and a new mother. She refused to step down and complained about further discrimination. She claimed that nothing was done in response to her concerns and that instead she was demoted in 2006. 

Following her demotion, Juarez filed a charge of discrimination with the California Department of Fair Employment and Housing in 2007. Her lawsuit alleges that following her filing of the charge, AutoZone devised a plan to terminate Juarez’s employment by blaming her for a customer service representative’s misplacement of money from a cash register. Obviously the jury agreed, and awarded Juarez $872,000 in compensatory damages and a punitive damages award that was not only huge, but well over the amount asked for by Juarez’s attorney.

While the details of this case are just coming to light, I think it is fair to say that the jury’s disgust was significant. Some information being reported about the case suggests that the discriminatory behavior went beyond the district manager who took the adverse employment actions against her. With a verdict of this size, the jury likely found the discriminatory beliefs to have been systemic. This case also points to the danger of terminating an employee after the employee has brought a charge of discrimination. Unless they had verifiable proof that she had engaged in the misconduct justifying termination of her employment, there’s a real danger that the decision is going to be viewed as retaliation.

Thursday, November 13, 2014

Combating Ebola in the Workplace – and “Fearbola” Too!

For the first time in weeks, online news reports have been relatively Ebola free. This week, the last Ebola patient in the U.S. was declared Ebola free and released from the New York hospital where he had been quarantined. There are currently no known Ebola cases in the U.S. 

Nevertheless, I am continuing to field questions about how employers can keep their workplaces free of the potentially deadly Ebola virus. In addition to being concerned about their employees’ well-being, these employers are mindful that federal and state OSHA laws require employers to take reasonable steps to maintain a safe workplace.

It is definitely wise to take the recent Ebola outbreak seriously, to stay up to date, and to implement any CDC and OSHA guidelines and protocols that apply to your workplace. It is also important, though, to keep perspective. While some types of jobs pose higher risks (i.e., health care, laboratory, mass transit, death, or cleaning positions), most U.S. workers face far greater risks from the seasonal flu than from Ebola.

Last month, I read an article on CNN that, while tongue in cheek in tone, included an important take-away message that holds true for employers. In the article, the author wrote about the “scariest virus in America” – “Fear-bola.” The author described “Fear-bola” as follows:
Right now, two-thirds of Americans are suffering from "Fear-bola." . . . . It's a hyper-contagious disease that affects the brain, making sufferers fear a widespread Ebola outbreak in the United States.

Fear-bola is an airborne disease that spreads through conversation, entering your brain through your ears. . . . Once inside your body, Fear-bola attacks the part of the brain responsible for rational thinking. . . .

The author then made the following critical point:  “Fear-bola is dangerous because it leads to confused decision-making and illusions.” This point is one I have made in talking with employers about Ebola concerns. In the employment law area, one of the most dangerous things to do is to make decisions based on fear, speculation, or emotion rather than concrete, legitimate business concerns or risks. None of us make our best decisions when we are scared or acting on conjecture.

And, it far easier for an employer to challenge a decision that is not well-grounded in fact or reason.

While employers have a legal duty of safety, overreacting to Ebola concerns without a real, concrete risk to your workplace can pose other legal risks. So, a balanced approach is wise. In seeking balance, some of the key issues to keep in mind include: 
  • Non-Discrimination Obligations:  Employers should be mindful of the employment laws prohibiting racial or national origin discrimination. Because the Ebola outbreak has primarily affected West African countries, employers should ensure that measures they take are not targeted solely at individuals of West African descent and that neutral measures do not have an inappropriate disparate impact.
  • Limits on Disability Inquiries: Disability discrimination laws place limits on medical exams and the nature and timing of medical inquiries that can be made of applicants and employees. When the H1N1 pandemic was in the news some years ago, the Equal Employment Opportunity Commission (EEOC) issued a Pandemic Preparedness guidance document addressing what types of medical inquiries are permissible and when a medical exam (which includes requiring employees to take their temperature) can be required.
  • Leave Laws:  If you do have a sick worker – whether due to Ebola, the flu, or some other infectious disease - you’ll want to assess whether the individual is entitled to time off and any other benefits under your company policies or any applicable leave of absence law. For example, an ordinary bout of the flu typically doesn’t trigger Family and Medical Leave Act (FMLA) rights, but more serious cases  – particularly if they require hospitalization – can implicate the FMLA or other leave laws.
  • Anti-Retaliation Rights:  It may be tempting to discipline or terminate an employee who, out of fear, refuses to come to work or to perform certain duties. Keep in mind, though, that employees have anti-retaliation protections under OSHA and other laws if they are making a good faith complaint that an employer is not meeting its safety obligations. In addition, depending on the employee’s situation, you may need to review whether any disability discrimination law issues are at play. 
While you should stay mindful of these legal issues, there are a number of sound, reasonable  preventive measures to consider adopting as we keep our fingers crossed and hope that we’ve seen the last Ebola case in the U.S. Educating employees on infectious disease and encouraging flu shots and good hygiene is always a good idea. In addition, businesses can consider limiting non-essential business travel to Ebola-affected countries, implementing a lawful approach to asking employees narrowly tailored questions about personal travel or other forms of possible exposure to Ebola, and encouraging and incentivizing sick workers to stay home. If you have evidence of a real, concrete risk of Ebola to your workplace or employees and customers in higher-risk categories, such as health care, other more aggressive measures might also be permitted. In the end, though, running your actions past legal counsel to ensure a balanced approach is wise.

Thursday, November 6, 2014

Wellness Programs Continue to be a Target for the EEOC

As we mentioned in a post last month, the EEOC has a clear agenda to target employer wellness programs. In our earlier post, we discussed two lawsuits against employers in Wisconsin. Now, the EEOC has set its sights on one of our local employers - Honeywell. Last week, the EEOC sued Honeywell over a wellness program that involves employees and their spouses being asked to participate in biometric screening and a determination of body mass index. According to the EEOC’s complaint, employees who don’t participate along with their spouses are assessed a surcharge of up to $500 on medical costs and the company may reduce contributions to their health savings account by up to $1500. The EEOC alleges that the screening and subsequent penalties for not participating are unlawful under the federal Americans with Disabilities Act and may also constitute discrimination based on genetic information under the federal Genetic Information Nondiscrimination Act. Honeywell claims that its program is lawful under the Affordable Care Act, pointing out that employees aren’t required to participate and those who don’t do not risk termination of their employment. 

This week, the EEOC unsuccessfully sought an injunction from the court to prevent Honeywell from assessing a surcharge while the case is pending. Although this injunction motion was denied, the court did not rule on the legal validity of Honeywell’s program. How that issue will ultimately be resolved is unknown. Employers may, however, find themselves losing the cost savings they are often trying to achieve with wellness programs if they become embattled in litigation over the legality of a program. The silver lining for employers (other than those named in the lawsuits), though, is that the courts will hopefully provide more clarity on what is permissible for wellness programs. So, stay tuned!