Pennsylvania SHRM State

Council Presents:13th Legal and

Legislative ConferenceApril 2013

Lynn C. Outwater, EsquireJackson Lewis LLPOne PPG Place, 28th FloorPittsburgh, PA 15222(412) 338-5140E-mail: outwatel@jacksonlewis.com

The Year In Review…

SELECT SUPREME COURT CASES

National Federation of Independent Business et al. v. Sebelius: Supreme Court Upholds Health Care Reform Law

Patient

Protection

and

Affordable

Care Act

UPHELD

Arizona et al. v. U.S.: Supreme Court Strikes Parts of Arizona Immigration Law, but Most Controversial Provision Survives

Stop, sir. I need to see

some ID.

Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC: Supreme Court Bars Ministers’ Discrimination Claims

No Ministers!

Arbitration Cases

A

CompuCredit Corp. v. Greenwood: Supreme Court Again Confirms Viability of Arbitration Agreements

Application

for Credit

Must arbitrate!

Apply for a

Visa Card

Today

Arbitrate

Your Claims

Tomorrow!

Quilloin v. Tenet Health System Philadelphia, Inc.: District court erred in finding genuine disputes of material fact that might render an arbitration agreement unconscionable and unenforceable.

Agreement

To

Arbitrate

Not

Unconsciona

ble

Zavala v. Wal-Mart Stores, Inc. et al.:Third Circuit issues a precedential opinion that raises the certification bar in collective class actions under the Fair Labor Standards Act (FLSA).

NO CLASS

Braun v. Wal-Mart Stores Inc.Pennsylvania Supreme Court agrees to review $187 million award to Wal-Mart employees.

$187 million

Award to

EmployeesUNDER REVIEW

Foster v. Kraft Foods Global, Inc.Western District holds that payment of overtime under the fluctuating work week method is impermissible under the PMWA.

Christopher et al. v. SmithKline Beecham Corp.,

dba GlaxoSmithKline: Supreme Court Rules Pharmaceutical Sales

Representatives are Exempt From Overtime.Hi Doc! How would

you like some of these meds for your patients?

Why are you selling them

outside?

Because…I am an outside salesman,

of course!

Of course!

In re Enterprise Rent-A Car Wage & Hour Practice Litigation:Third Circuit articulates a standard for determining a joint employer relationship under the FLSA.

No JointEmploym

entParent Company

Subsidiary

Subsidiary Subsidiary Subsidiary

SELECT FEDERAL DISTRICT COURT, THIRD CIRCUIT AND PENNSYLVANIA

DEVELOPMENTS

Lichenstein v. University of Pittsburgh Medical Center:Third Circuit holds terminated employee claiming FMLA retaliation gave her employer sufficient notice that the FMLA might apply to her request for leave to care for her hospitalized mother.

I don’t think this is enough FMLA notice.

Mother has been taken to the hospital and is in the emergency

room.Sufficient FMLA Notice

Bull v. United Parcel Service, Inc.District court improperly dismissed an injured former employee’s disability discrimination case as a sanction for failing to produce originals of medical notes requested by the former employer.

Original Doctor’s notes

District Court Disability Discrimination Cases

Pearce-Mato v. Shinseki:Western District holds VA employee who alleged that she was compelled to retire because of a medical condition has a triable disability discrimination claim under the Rehabilitation Act.

I need an accommodation

because I lost my voice.

VA Hospital

Your request is not in writing so I will

Ignore it!!!!

Kravits v. Shinseki:Western District holds employee with sleep apnea and depression could reasonably establish that his condition substantially limited his ability to sleep and learn and that he was terminated because of his disabilities.

Sir, you have so many health

problems.

I know, and I need

reasonable accommodati

on

Oral Request Unlawfully Ignored

Stodulski v. Medline Industries, Inc.: Eastern District holds that the denial of transfer was not disability discrimination.

I think I need a transfer from this

place.

Not as a reasonable

accommodation!

Press Release1-28-13

EEOC Reports Nearly 100,000 Job Bias Charges

in Fiscal Year 2012Commission Obtains $365 Million for Victims of Workplace Discrimination;

Reduces Charge Inventory by 10 Percent for Second Consecutive Year

The U.S. Equal Employment Opportunity Commission (EEOC) today announced that it received 99,412 private sector workplace discrimination charges during fiscal year 2012, down slightly from the previous year. Year-end data show that retaliation (37,836), race (33,512) and sex discrimination (30,356) were the most frequently filed charges.

The EEOC achieved a second consecutive year of a significant reduction in the charge inventory, something not seen since fiscal year 2002. The EEOC reduced the pending inventory of private sector charges by 10 percent from fiscal year 2011, bringing the inventory level to 70,312.

In fiscal year 2012, the EEOC filed 122 lawsuits including 86 individual suits, 26 multiple-victim suits (with fewer than 20 victims) and 10 systemic suits. The EEOC’s legal staff resolved 254 lawsuits for a total monetary recovery of $44.2 million.

EEOC also continued its emphasis on eliminating systemic patterns of discrimination in the workplace. In fiscal year 2012, EEOC completed 240 systemic investigations which in part resulted in 46 settlements or conciliation agreements. These settlements, achieved without litigation, secured 36.2 million dollars for the victims of unlawful discrimination.

22

EEOC Approves New Strategic Plan Focusing on Systemic

DiscriminationIn its latest Strategic Plan, the Equal Employment Opportunity Commission has indicated it will dedicate significant resources to focus on remedying systemic discrimination. 

Under the Agency’s Strategic Plan for years 2012-2016, approved on February 22, 2012, the EEOC will target widespread patterns or practices of discrimination, such as discriminatory policies having a broad impact on an industry, profession, company, or geographic area. 

According to the 2012-2016 Plan, the Agency has seen a dramatic increase in the number of discrimination charges filed since the economic downturn.  23

EEOC Approves New Strategic Plan Focusing on Systemic

Discrimination

This, along with a cut of over $7 million in its budget, according to the Agency, has “created a need for the EEOC to think strategically about how best to target its efforts to ensure the strongest and broadest impact possible in its efforts to stop unlawful employment discrimination.”  The EEOC concluded that the most efficient way to target discrimination is to find and pursue big cases. 

24

EEOC Strategic EnforcementPlan Draft

25

EEOC released new and aggressive SEP draft on September 4, 2012.

- Stated Plan Priorities: - Target systemic class-based recruiting and hiring

discrimination.- Protection of immigrant and migrant workers from

discrimination.- Investigation of emerging issues such as: common

ADA defenses invoked by employers, protecting members of LGBT community from employment discrimination, and pushing employers’ to accommodate pregnant women.

- Other particular employment practices of interest include “pre-employment tests, background screens, and date of birth screens in online applications”.

- Plan also states that EEOC will focus on “channeling/steering of individuals into specific job due to their status in a particular group.”

Link: http://www.eeoc.gov/eeoc/plan/sep_public_draft.cfm

-

Significant Statutory and Regulatory Developments

NLRB Developme

nts

Social Media

Guidance

EEOC Enforcement Guidance on Use of Arrest

and Conviction

Records

EEOC decides Title VII

Prohibits Transgender Discriminatio

n

The New EEOC Guidance On The Use Of Arrest And Conviction Records In

Making Employment Decisions

On April 25, 2012 the EEOC approved, by a 4-1 vote, an Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964The Guidance was effective immediatelyThere was no public comment on proposed contentThe Guidance is 52 pages (although pages 27-52 are endnotes) and give examples of proper and improper employer practices

27

Pennsylvania Criminal Background Check

ConsiderationsPennsylvania Criminal History Record Information Law (CHRI)– Felony and misdemeanor convictions may

be considered by Employer only to extent they relate to applicants suitability for employment in the position for which he/she applied.

– If decision to not hire is based in whole or in part on CHRI, must notify applicant in writing.

Pennsylvania Human Relations Commission Employee Selection Guidelines—Prohibits consideration of misdemeanor

convictionsBusiness risk decision as to what to consider

28

Pennsylvania Criminal Background Check

Considerations

Pennsylvania Older Adult Protective Services Act– Regular contact with patients or

residents age 60 or over, or unsupervised access to living quarters

Pennsylvania Child Protective Services Law– “Significant likelihood of regular contact with

children in the form of care, guidance, supervision or training”

29

The New EEOC Guidance On The Use Of Arrest And Conviction

Records In Making Employment Decisions

Arrests itself – as opposed to underlying conduct – should not be considered in making employment decisions – no significant change – the Guidance respects an employer’s right to make credibility determinationConvictions – should be subject to individualized analysis and dialogue - as noted under some states- such individualized analysis also was suggested – to a lesser extent – in the prior guidance

30

New Guidance

Targeted Screens Accompanied by Individualized Assessment – THE BEST PRACTICE - the Guidance clearly prefers that a targeted screen be accompanied by notice to the individual under scrutiny and an individualized assessment of the individual and the crime and the position in question. The Guidance lists nine possible topics of consideration in an individualized assessment, all of which generally require a dialogue:

31

New Guidance

Criminal record is inaccurateThe facts and circumstances surrounding the offense;The number of offenses for which the individual was convicted;Age at time of conviction or release from prison;Evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, without incidents of criminal conduct;The length and consistency of employment history before and after the offense;

32

New Guidance

Rehabilitation;Employment or character references and other information regarding the individual’s fitness for the particular position; andWhether the individual is bonded.If the individual does not respond to the employer’s inquiries, the employer may make its decision without the information.

33

EEOC GuidanceCriminal and Arrest Records

- Guidance Lists Best Practices for Employers Who Use Criminal Background Checks in Hiring Process- Develop a narrowly tailored written policy

and procedure for screening applicants and employees for criminal conduct.

- Policy should identify essential job requirements and the actual circumstances under which jobs are performed

- Determine the specific offenses that may demonstrate unfitness for performing such jobs

- Train managers and hiring officials on how to implement policy consistent with Title VII

Link: http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm

34

NLRB Developments

American Red Cross Arizona, Case 28-CA-234334 (February 1, 2012).– The following at-will language in a

handbook was found unlawful by an Administrative Law Judge of the NLRB:

• “I agree that the at-will employment relationship cannot be amended, modified, or altered in any way.”

35

NLRB Developments

Increased Enforcement Activity Outside of the

Unionized Workplace

At-Will Disclaimers in Employee Handbooks:- “I further agree that the at-will employment relationship

cannot be amended, modified or altered in any way.” - Invalid: NLRB reasoned that it could be seen to prohibit

rights of employees to engage in concerted activity.

- “I understand my employment is ‘at will’” and “I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me” and executives.

- Removed by employer after NLRB complaint and settlement

36

NLRB Office of the General Counsel

Advice MemorandumFebruary 4, 2013

Fresh & Easy Neighborhood Market, Case 21-CA-085615The Region submitted this case for advice as to whether the Employer violated Section 8(a)(1) by maintaining an at-will employment policy stating that employees’ at-will employment status may only be altered through an agreement executed by the individual employee and an Employer executive. We conclude that the Employer’s policy is lawful as employees would not reasonably construe this provision to restrict Section 7 activity.

Facts

A provision in the employee handbook (the “Handbook Clause”) describes the employment relationship as “at-will” and states, in relevant part:

“Nothing in this [Handbook] changes this at-will relationship, guarantees you a benefit, creates a contract of continued employment or employment for a specified term, or any contractual obligation that conflicts with the [Employer’s] policy that the employment relationship with its employees is at-will.No representative of the [Employer] other than a[n Employer] executive has the authority to enter into any agreement for employment for a specified duration or to make any agreement for employment other than at will. Any such agreement that changes your at-will employment status must be explicit, in writing, and signed by both a[n Employer] executive and you.”

Action

We conclude that the Employer’s policy is lawful as employees would not reasonably construe it to restrict Section 7 activity. The policy does not foreclose the possibility of employees modifying their employment relationship or require employees to waive their right to future modification of their at-will status by a bargaining representative.

NLRB

Confidentiality of Internal Investigations:Banner Health System d/b/a/ Banner Estrella Med. Ctr., 358 NLRB 93 (July 30, 2012): Hospital asked employees interviewed in connection with an internal investigation to not discuss the matter with co-workers while the investigation was ongoing. - NLRB Board: held to be violation of National Labor

Relations Act. - Clarified that a “mere suggestion” to employees that

they not communicate regarding an internal investigation could interfere in the exercise of the rights of both union and non-union employees to engage in “concerted activities” and to discuss terms and conditions of employment.

- Bottom line: Supervisors and investigators need to assess the precise need for secrecy and restrictions on employee discussion before demanding, or even suggesting, that employees keep information confidential during the course of an investigation.

40

Hot Off The Press…

Banner Health System d/b/a Banner Estrella Medical Center, 358 NLRB no. 93 (July 30, 2012)– To justify a confidential instruction to a witness,

accused/accuser an employer should consider:• The severity of the allegation• Whether a person needs protection against

retaliation• Whether protection against destruction of

evidence is required• Whether any testimony is in danger of being

fabricated• Whether there is a realistic need to prevent a

cover up• Whether to particularize the instruction

Banner is on appeal at DC Circuit but held in abeyance pending Noel Canning.

41

Other Protected Concerted Activity Implications

The NLRB’s protected concerted activity focus implicates many policies, such as:

1. Confidentiality

2. Communications, Media

3. Corporate Code of Conduct

4. Non-Harassment, Civility

5. Non-Disparagement & Gossip

6. E-Communications & Computers

7. Solicitation and Distribution

8. Dress Code (uniform, buttons, etc.)

9. Access (Off-duty employees and third parties)

10. At-will language

42

NLRB

Social Media Policies in Employee Handbooks - NLRB focus on whether social media policy language could “reasonably” be read as restricting employees’ rights to engage in protected concerted activity. Examples of unlawful language in NLRB report:– Telling employees that if they are in doubt about whether

to post something, “DO NOT POST” but rather check with company’s attorney or legal department.

– A policy that suggests that employees not “pick fights” online and to communicate in a “professional tone.”

– Advising employees that they are “encouraged to resolve concerns about work by speaking with co-workers, supervisors or managers.”

– Telling employees that they can’t publish online “material non-public information” or “confidential or proprietary” information.

– Prohibiting employees from making “disparaging or defamatory comments.”

43

NLRB Finds Unlawful a Costco RuleAgainst Posting Damaging Statements

• Costco Wholesale Corp. unlawfully maintained a number of rules in a nationwide employee handbook that violated the National Labor Relations Act, including one prohibiting employees from electronically posting statements that damage the company or any person's reputation, the National Labor Relations Board ruled Sept. 7 (Costco Wholesale Corp., 358 N.L.R.B. No. 106, 9/7/12 [released 9/10/12]).

• The three-member panel found the company violated Section 8(a)(1) of the NLRA by maintaining rules prohibiting employees from: (a) “unauthorized posting, distribution, removal or alteration of any material on company property”; (b) discussing private employee matters including various terms and conditions of employment; (c) sharing sensitive information such as payroll data; and (d) sharing “confidential” information such as employees' names, addresses, telephone numbers, and email addresses. 44

Recommendations forEmployer Consideration

Review employee handbooks and other workplace policies NOW to insure current policies are lawful in light of recent NLRB actions Tips for a legally policies in light of NLRB’s new policing efforts– Avoid overly broad provisions that could be

reasonably construed to prohibit protected conduct

– Consider adding a specific disclaimer limiting the policy provisions so that they do not hinder employees’

– Right to engage in protected concerted activity – but not sufficient on its own

Review social media and other policies regularly in light of changes in technology and in the lawConduct executive/management training

45

The New NLRB Playbook: Strategies to Stay Ahead of

the Curve

Conduct new, focused training for legal, HR and executives/managers/supervisors about the legal requirements of the “new” NLRA to understand NLRB initiatives, and legal rights/responsibilities to insure compliance

Conduct a legal/HR assessment on internal and external matters to ensure lawful best practices

46

Good Sound Preventive Practices

Review all employer workplace policiesFollow policiesMaintain core valuesTreat everyone equally – applicants and employeesPractice employee empowerment and employee engagementTo take adverse action, requires bona-fide business related reasonsProtected classes can be impacted by our actionsDon’t stereotype peopleRecognize protected concerted activityKeep work environment and culture healthy

47

The End!

Thank You!