Wednesday, May 20, 2015

EEOC Begins Implementation of Online Charge Notifications



This month, the EEOC began to roll out ACT Digital, the agency’s first step to a digital charge system. ACT Digital will enable electronic transmission of documents filed between the parties to a charge and the EEOC. Implementation began on May 6 with EEOC offices in the Charlotte and San Francisco areas. EEOC offices in Denver, Detroit, Indianapolis, and Phoenix will also begin implementation by the end of May. The remaining EEOC offices will roll out implementation in stages, with the EEOC expecting ACT Digital to be available in all offices by Oct. 1, 2015.

Wednesday, May 13, 2015

Caution: Do Not Waive the Attorney-Client Privilege

A recent court order in a case in Iowa reminded me of how easy it is for employers to waive the attorney-client privilege by disclosing (deliberately or inadvertently) the advice they receive from their attorneys. The order shows that a careless reference indicating that a decision was based on the “advice of counsel” opened the door and required the disclosure of conversations between the attorney and the client. Whitney v. Franklin General Hospital (U.S. District Court for the Northern District of Iowa, Ruling on Motion to Quash, April 23, 2015).

One of the oldest recognized privileges for confidential information is the attorney-client privilege. The privilege protects communications between the client and the attorney and keeps those communications confidential. The attorney-client privilege is based on the premise that by assuring confidentiality, the privilege will encourage clients to make full and frank disclosures to their attorneys. As a result, attorneys are better able to provide candid advice and effective representation to the client.

There are exceptions to the privilege. For instance, an attorney can disclose information to prevent a crime. In addition, the privilege may be waived. Here are some examples of how the privilege can be lost in the employment context:

1.     The client or attorney discloses the communication to others: You are working with your attorney on a termination of employment and the preparation of a Separation Agreement for a problem employee. In an email, your attorney reviewed the facts relating to the termination and the potential risks of the decision to terminate the employee. In addition, your attorney asks you for some pay information to complete the Agreement. You forward the email to your payroll company. Because the communication was sent to a third party the communication is most likely no longer privileged.

2.     The communication is made in the presence of individuals who are neither the attorney nor the client: You are redecorating your offices. While in a meeting with your designer (who is not an employee of the company), you receive a telephone call from your attorney. Your attorney wants to discuss how you will be handling a reduction in force. You put the attorney on speaker phone so that you can continue to look at fabric samples with your designer. The designer remains in the room during the conversation. Because the designer is not an employee or agent of the company the privilege relating to the conversation may be lost.

3.     The client provides information about what the attorney recommended: An ex-employee has filed a charge of discrimination with the Equal Employment Opportunity Commission. You decide that you can respond to the charge without consulting your attorney. In your response, you state that you considered options other than termination; however, your attorney recommended that you terminate the employee and, based on that advice, you terminated the employee. Instead of honoring the distinction between recommendations of counsel and the actual reasons for the employment decision (the recommendations of counsel are generally not the actual reasons for the termination) you may have lost the privilege.

The attorney-client privilege is a valuable tool because it allows employers to reduce the risk of litigation by seeking advice from counsel who is familiar with the company, its policies, its operations, and its practices. The examples above illustrate how easy it is to waive the attorney-client privilege. Employers, and their attorneys, must be diligent in order to preserve the attorney-client privilege.


Thursday, May 7, 2015

“Digital Natives,” “Millennials,” and Recruiting and Retaining Young Workers

Two recent articles pose interesting questions regarding recruiting and retaining younger workers. The first, at Fortune.com, and a related Wall Street Journal blog post, consider whether an employment advertisement seeking “digital natives” is evidence of age discrimination. The article notes that the term “digital native” was coined by author Marc Prensky and refers to individuals who grew up with technology, becoming “‘native speakers’ of the digital language of computers, video games and the Internet.”
Fortune found, however, that employers have used the term in a way that could create legal risks.
Fortune did a simple search in Indeed.com and found dozens of listings, including from both established media giants and startups of all sizes, in which being a “digital native” is listed as a requirement. . . . The employment attorneys contacted by Fortune all argued that using the term leaves employers open to charges of age discrimination.
Interestingly, the article notes that the potentially problematic use of the term could arise from ignorance. For example, an ad posted by Panasonic seeking a “digital native” required “that candidates have a minimum of 10 years professional ‘hands-on experience,’ five years management experience, five years digital experience and preferably a MBA”—hardly the résumé of a 20-something.
Meanwhile, a Wall Street Journal article surveyed employer’s efforts to retain and utilize “millennial” workers. The Journal found two primary responses to this challenge.
The rising number of young workers has some companies worried about keeping them on board. Other businesses are embracing flux in the talent market, and say they are focused on getting the most from young hires while they have them.
The article provides interesting ideas related to retention and management of younger workers.
From a legal perspective, whether you’re seeking to recruit digital talent, or retain younger workers, undertaking your efforts thoughtfully and focusing on your real business needs can help limit your risks.
It’s important to remember that your word choices matter. Terms used in advertising have long been used by plaintiffs’ attorneys as evidence of discrimination. Whether an employer intentionally seeks younger workers or not, advertising for “recent graduates” or “digital natives,” could be cited as evidence of age discrimination. Scrutinize your words and eliminate problematic terms. Instead, focus on the skill that is needed. The legitimate skill sought by the term “digital native”—fluency in digital media—can be expressed in a way that does not relate to one age group. Dropping problematic terms for terms specific to the legitimate skills needed will lower your risks.
Similarly, if your company has a problem retaining younger workers, it’s legitimate to focus on the problem. However, you should ensure that your retention efforts aren’t somehow limited to benefit the young. Whether it’s additional benefits,  flexible work arrangements, or rules, don’t explicitly or implicitly limit a benefit to a particular age group.
Finding and retaining the right talent will always be a challenge. A little planning can go a long way to preventing problems.


Thursday, April 30, 2015

Supreme Court Gives Employers a New, But Not Very Sharp, Tool for their Defense Arsenal Against the EEOC

Earlier this week, the U.S. Supreme Court issued a much anticipated ruling on the question of whether courts have the authority to review the adequacy of the Equal Employment Opportunity Commission’s (EEOC) pre-lawsuit efforts to settle a case under Title VII of the Civil Rights Act of 1964. The EEOC’s website contains a press release declaring the Court’s Mach Mining ruling a “step forward” for discrimination victims, but other commentators have declared the ruling to be a victory for employers. This mixed reaction likely stems from the fact that the Court’s opinion, when read carefully, is a careful balancing act between permitting judicial review and giving deference to the EEOC.

The Supreme Court’s decision was issued on April 29, 2015, in the case of Mach Mining, LLC v. EEOC. Under Title VII, the EEOC is required, after finding probable cause on a Title VII charge, to “endeavor to eliminate” the alleged illegal practice “by informal means of conference, conciliation, and persuasion.” In addition, before the EEOC can sue an employer, it must be unable, within a specified time, to obtain a settlement agreement acceptable to the EEOC. In the Mach Mining case, the EEOC filed a lawsuit alleging that Mach Mining engaged in a pattern and practice of sex discrimination against female applicants. Mach Mining claimed that the EEOC case should not be permitted to proceed, because the EEOC had not participated in good faith pre-suit settlement efforts.

The Supreme Court sided with Mach Mining in finding that federal courts do have the authority to review whether the EEOC satisfied its conciliation obligations. The Court held that, while Congress gave the EEOC wide latitude as to the nature of its settlement efforts, it did not deprive the parties of the right to judicial review.

The Court also held, however, that the authorized scope of its judicial review is narrow. The Court rejected the EEOC’s position that only a facial examination of EEOC documentation was proper and Mach Mining’s position, at the other end of the spectrum, that a “deep dive” review was proper. Instead, the Court held that federal court review is limited to determining if the EEOC gave the employer notice of the claim and tried to engage the employer in some form of discussion to give the employer a chance to remedy the alleged illegal practice. In landing on this scope of review, the Court noted that Title VII’s conciliation provision “smacks of flexibility.” Under Title VII, the EEOC must make a conciliation endeavor, but can use any methods it wishes and has the sole discretion as to its settlement strategy, offers, and the ultimate decision as to whether to settle or litigate. The Supreme Court further noted that, in most cases, the EEOC will be able to present a sworn affidavit demonstrating it satisfied its conciliation obligations, with the court only needing to do further review if the employer provides credible opposing evidence.

While a partial victory for employers, those who had hoped the Mach Mining case would reign in some of the EEOC’s aggressive litigation tactics are bound to be disappointed. Mach Mining does provide employers a vehicle for requiring the EEOC to make a genuine effort at conciliation, but does not go so far as to require “good faith” settlement positions or tactics on the part of the EEOC.

Friday, April 24, 2015

Joint Employment: Whose Employees Are You Liable For?



Much has been written in recent months about the National Labor Relations Board (NLRB) standard for joint employment liability between separate businesses, especially with respect to franchisor McDonald’s Corporation, which is facing dozens of cases in which it has been named as a respondent along with its franchisees. The NLRB’s General Counsel has been advocating for a change to the joint employer test currently used by the NLRB.  An arm of the U.S. Chamber of Commerce recently published a 40-page report on how the NLRB’s proposed new joint employer test threatens small businesses.

Even without a change to the legal standard, though, businesses and nonprofits have often been caught off-guard by the types of arrangements that can give rise to claims of joint employer liability against an entity that doesn’t serve as the employer on paper or issue workers’ paychecks or Form W-2’s. Besides the franchise relationships at issue in the McDonald’s cases, arrangements with heightened joint employer risks include independent contractor relationships, the full range of temporary or contingent worker service models, and workforce supply arrangements. The latter sometimes come in the form of employee leasing or Professional Employer Organizations (PEO’s). Also, joint employment issues can arise when two companies are affiliated by some measure of common ownership or control.

Business organizations would be wise in this current legal climate to take a proactive approach to minimizing joint employment risks. Worthwhile steps to consider taking now include:
  • Reviewing employee handbooks and manuals for possible joint employer issues
  • Auditing workplace practices and procedures
  • Training directors, officers, and management on key joint employment risks
  • Reviewing affiliations with other entities, as well as service contracts, to assess and take steps to minimize joint controls and joint employer risks
  • Conducting insurance coverage audits and considering insurance against joint employment risks
Unfortunately, joint employer liability is not an area of the law that is well-defined and uniform.  The standards for determining joint employment can vary depending on the legal context and jurisdiction, and there are not many bright-line rules. Businesses can, however, enhance their chances of avoiding joint-employer surprises by being proactive and seeking legal counsel to navigate through these challenging issues.

Thursday, April 16, 2015

EEOC Issues Important Transgender Rights Ruling, Finding that Restroom Use Should Match Gender Identity

The Equal Employment Opportunity Commission (EEOC) forged new ground earlier this month when it ordered the U.S. Army to pay damages to a transgender employee based on a discriminatory restroom policy. We have reported in past posts on the EEOC’s increased enforcement focus on transgender rights in the workplace under Title VII of the Civil Rights Act of 1964, as well as the increased societal focus on this issue. (See, prior posts here and here.) The EEOC’s recent April 1st ruling in Tamara Lusardi v. John M. McHugh, Secretary, Department of the Army reflects this trend and sets forth important guidance on the EEOC’s position on transgender restroom rights.

The EEOC’s ruling stemmed from a charge of discrimination filed by Tamara Lusardi, a transgender woman. In its ruling, the EEOC found that the Army discriminated against Lusardi by prohibiting her from using the female restroom that matched her gender identity, repeatedly referring to her by male, rather than female, pronouns, and making other hostile remarks. In 2010, Lusardi talked with her supervisors about her process of transitioning her gender presentation/expression from male to female. At the time, Lusardi agreed to use a unisex restroom rather than the women’s restroom until she had undergone a planned surgery. On several occasions when the unisex restroom was unavailable, however, Lusardi used the women’s restroom. On each such occasion, she was confronted by her supervisor, told that her female restroom use made others uncomfortable, and that she must use the unisex restroom until she could show proof of having undergone a “final surgery” to become female.  

The EEOC found that the Army’s restroom restriction was a discriminatory adverse employment action based on Lusardi’s sex, noting that equal access to restrooms is a significant, basic condition of employment and a crucial aspect of a transgender employee’s transition. The EEOC found that it was improper for the Army to condition access to the female restroom on any medical procedure, stating:

“Nothing in Title VII makes any medical procedure a prerequisite for equal opportunity (for transgender individuals, or anyone else). An agency may not condition access to facilities – or to other terms, conditions, or privilege of employment – on the completion of certain medical steps that the agency itself has unilaterally determined will somehow prove the bona fides of the individual’s gender identity.” 

In ruling against the Army, the EEOC rejected the Army’s defense that Lusardi had agreed to use the unisex restroom, holding that an employee cannot prospectively waive Title VII rights. The EEOC also rejected the Army’s argument that the discomfort of other employees was a legitimate reason to restrict a transgender individual’s restroom use.

The EEOC also found that the harm to Lusardi extended beyond the denial of equal access to a resource open to others. By restricting Lusardi to use of a unisex bathroom, the EEOC found that the Army had isolated and segregated Lusardi from other persons of her gender and perpetuated the sense that she was not worthy of equal treatment, dignity, and respect.

The EEOC’s decision in Lusardi makes clear the EEOC’s position that transgender individuals must be permitted to use the workplace restroom that matches the individual’s gender identity. While the Lusardi decision is not binding on federal courts, federal courts often defer to the EEOC’s position on federal discrimination laws. As such, employers should review their restroom policies and practices to avoid discrimination risks and should be training managers and employees on transgender rights in the workplace.







Thursday, April 9, 2015

Increased Governmental Scrutiny for Employee Confidentiality Restrictions


Employers should be aware of recent federal agency activity that may require modifications to employee confidentiality agreements. The federal Securities and Exchange Commission (SEC) issued a press release on April 1, 2015, trumpeting the SEC’s first enforcement action against an employer based upon the company’s use of confidentiality agreements for its employees that included “improperly restrictive language.” In its press release, the SEC announced that KBR Inc., a Houston-based technology and engineering company, had entered into a settlement agreement with the SEC agreeing to pay a $130,000 penalty and agreeing to amend the company’s confidentiality statement to make clear that its employees are free to share information with the SEC. The SEC was driven by a concern that confidentiality language used by KBR could have a “chilling effect” on possible employee whistleblowers, causing them to be reluctant to report possible securities violations to the SEC.

The SEC's action taken in the KBR matter should cause all companies, not just publicly traded companies, to review their existing employment-related agreements and policies to ensure that they do not run afoul of whistleblower protections. Similar considerations may also arise from the perspective of other governmental agencies including the Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and analogous state agencies, to name a few. Careful employment law attorneys regularly ensure that confidentiality provisions that exist in a variety of employment-related agreements do not improperly restrict the right of an employee (or former employee) to provide assistance or input to the EEOC on an investigation of the employer. Similarly, careful employers – and their attorneys – should be mindful of confidentiality requirements that might be perceived by the NLRB to improperly encroach upon workers’ rights to organize or exercise rights under the National Labor Relations Act (applicable to all employers, whether with unionized workforces or otherwise).

Considerations about potentially over-reaching confidentiality clauses may be raised by a variety of documents commonly generated and used in the workplace, including, for example:
  • Separation/severance agreements
  • Internal compliance/investigation process documents
  • Front-end confidentiality agreements/employment agreements
  • Other confidentiality policies used in the workplace
It would be prudent for employers to review their current confidentiality agreement wording, in all of these types of documents or agreements, to ensure that the language does not inadvertently run afoul of these “whistleblower stymying” concerns or other concerns of governmental agencies. At the same time, employers should still continue to be aware of the significant value that confidentiality provisions may provide in protecting a company’s sensitive business information. The key for these provisions continues to be that if they are to be used, they require careful consideration when drafting them. Using “off-the-rack” agreements or wording can be risky.