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The New Normal


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The New Normal

  1. 1. The New Normal Emerging Legal Trends Affecting the Workplace Mark Bakker Wyche, P.A. November 12, 2013
  2. 2. The New Normal: Increased Regulatory Scrutiny Federal Agencies: • DOL • EEOC • NLRB
  3. 3. The DOL New Normal: Scrutiny of Independent Contractor Classification • Benefits of IC relationship – Reduced payroll taxes and no benefits – No Workers’ Compensation liability – No overtime liability or other related claims – Potential for reduced working space/other overhead – Hedge against future uncertainty
  4. 4. Misclassification of Independent Contractors • Crackdown on IC misclassification • Enforcement Priority • DOL Secretary: “workplace fraud” • Motivations – Protection of workers – Response to claims of unfair competition – Tax recovery
  5. 5. IC Classification Economic Realities Test (FLSA) (1) Degree of control (2) Investment in facilities/equipment (3) Opportunity for profit and loss (4) Permanency of the relationship (5) Required skill
  6. 6. IC Misclassification Red Flags • • • • • Relying solely on consultant label Integrated workforce (“side-by-side”) Integrated compensation systems Long-term or exclusive relationship Headcount/cost-saving motivation
  7. 7. Consequences of Misclassification • • • • • • • • DOL and IRS (state and federal) Tax penalties Overtime liability Unemployment Assessment – SCDEW Penalties/liquidated damages Attorneys’ fees and costs Benefits (e.g., retirement benefits) Potential for class/collective action litigation
  8. 8. Practical Steps • Written Agreements – – – – – Limit exclusivity Encourage economic independence Enhance flexibility Establish conclusion of the work Disavow employment relationship and benefits • Require worker to set up LLC/corporation • Periodically audit and evaluate • Consider alternative (temp staffing)
  9. 9. The New Normal: EEOC & Background Checks Enforcement Guidance (2012) Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act • “New normal” or “clarity” of existing reg’s?
  10. 10. EEOC Enforcement Guidance • Race and national origin discrimination • Arrest v. conviction records • Disparate treatment v. disparate impact – Reliance on national data – Targeting general, blanket anti-hire exclusions “Even when employers apply criminal record exclusions uniformly, the exclusions may still operate to disproportionately and unjustifiably exclude persons of a particular race or national origin.”
  11. 11. Liability for Negligent Hire Claim for negligent hiring and negligent entrustment: a) The company is on notice of an issue that requires it to reasonably inquire into the fitness of a particular employee for a particular position b) The company fails to inquire c) That failure to inquire causes legal damage
  12. 12. Best Practices • Eliminate “blanket” policies or practices • Develop narrowly tailored written policy: – Considers job requirements/contexts – Specify offenses that demonstrate unfitness – Limits duration of exclusions – Conduct individualized assessment • Limit inquiries to “job related” & “consistent with business necessity” • Establish appropriate confidentiality
  13. 13. National Labor Relations Board • Signs of Aggressive activity – Boeing – New NLRB Notice
  14. 14. NLRB • Why?
  15. 15. National Labor Relations Act • NLRB counsel: not “new normal” but “catch up” • Covers most private-sector employees • “Section 7” rights – guarantees employees the right to “engage in” “concerted” and “protected” activities with other employees – Protected activities include: • Discussing wages, discipline, unions • Complaining about policies, supervisors • Complaining about terms/conditions of employment
  16. 16. Handbook Clauses that May Implicate Section 7 Rights • • • • • • • • • • Bans on Disclosing Wages Social Media Bans on Use of Company Name* “Employment-at-will” disclaimers* Confidentiality* – General/investigations Off-duty conduct Access Provisions Solicitation and distribution Harassment* Dispute Resolution Procedures
  17. 17. Social Networking Policies (NLRB) • Activity may be protected if – Done on employee’s time and equipment – Related to terms/conditions of employment or exercise of NLRA rights – Involves “concerted” activity • Swearing/name calling may not justify termination • Overbroad policies will be scrutinized
  18. 18. Social Media and NLRB • Examples of policies that were overbroad: general prohibitions against – Self-identifying as employee – Using company logo – Posting Facebook comments about work – Disparaging company products on-line – Harming the image and integrity of the company – Inaccurate or misleading or offensive remarks • Others that NLRB deemed problematic: – Encouraging employees to solve work problems in the workplace rather than post online – Discouraging the “friending” of co-workers
  19. 19. Butler Medical (Sept. 2013) • E’ee A: terminated & complained on FB – Allegedly told patient about poor condition of vehicles • E’ee B responded: “Sorry to hear that but if you want you may think about getting a lawyer and taking them to court.” • E’ee C: “Hey everybody!!!!! Im [f—— ing] broke down in the same [s—— ] I was broke in last week because they don’t wanna buy new [s—— ]!!!! Cha-Chinnngggggg chinnng—at Sheetz Convenience Store.” Butler : B&C terminated--posts violated company policy
  20. 20. Drafting Your Social Media Policy CLARITY • You CAN prohibit social media postings that: – Make comments about coworkers or supervisors or the employer that are vulgar, obscene, threatening, intimidating, or harassing – That constitutes illegal discrimination or harassment – Carry out illegal conduct – Are maliciously untrue • Specific examples are key • Disclaim that not interfering with NLRA rights
  21. 21. Access Provisions • Employers may prohibit: – Non-employees from entering premises – Off-duty employees from entering internal premises • Employers may not prohibit: – Non-employees from public property – Off-duty employees from external premises Non-Discriminatory enforcement!
  22. 22. Solicitation and Distribution Provisions • Employers may prohibit – Non-employees from soliciting and distributing – Employees from soliciting and distributing during “work time” and in “work areas” • Employers may not prohibit: – All employee solicitation and distribution – Employees from “talking” about a union or terms and conditions of employment Non-discriminatory enforcement!
  23. 23. Arbitration Agreements • DR Horton Case (2012) – Agreement requiring employee to arbitrate claims violates Section 7 rights • Interferes with access to NLRB • Must expressly carve out right to bring NLRB charges – Class action waivers violate Section 7 rights
  24. 24. The New Normal: Managing Other Social Media Issues • Some old boundaries and axioms no longer relevant (business/personal) • “Frontier law” but apply familiar frameworks
  25. 25. Social Media – Hiring • Appeal of SM in Hiring • Risks – False identity – Inaccurate information – Impermissible subject matter • E.g., UK professor/religious discrimination • Limit Risks – Third party vendors – Separate cybervetters from decision makers
  26. 26. Social Media – Access to Passwords  Accessing passwords – with permission  Banned in 12 states  Not recommended  Accessing passwords – no authorization  Trapp v. DHS  resorting to self-help could expose an employer to civil and possible criminal liability Fair Game: unsecured, publicly available social media
  27. 27. Bring Your Own Device Policy (BYOD) • Benefits – Employees carry single device – Convenience/practical response to technology – Reduce costs of devices to employer • Risks – Security concerns – Potentially higher IT costs – Disaster for discovery in litigation – Erosion of personal/business spheres
  28. 28. Other BYOD Employment Law Issues • Personal Privacy protections – Computer Fraud and Abuse Act – Stored Communications Act • Wage & Hour considerations • Harassment/hostile work environment • Security of confidential information
  29. 29. BYOD Policy • Broad Authorization to: – Monitor use and content – Wipe data upon termination/lost device – Turn over devices for investigations • Diminished expectation of privacy • Obligation to notify if lost/stolen • Require data encryption/password protection
  30. 30. Social Media – Ownership Who gets the friends when the employment relationship breaks up?
  31. 31. Best Company Practices to Protect Social Media • Company establishes Account (name and content) • Structural protection – Adopt uniform branding, content and style guides – Assign employees to administer SM accounts • Anticipate separation of employment – Reference SM in restrictive covenants – Have manager also keep account/password information – Take quick action upon separation of employment
  32. 32. Best Practices, ctd. • Written agreement/policy that clarifies rights and duties – Blogs, accounts are company property – Employee must transfer all account information upon termination – Administering SM is part of employee’s job Remember NLRB admonitions: Write policies in pencil rather than in pen
  33. 33. Impact of Supreme Court Decision on Same Sex Marriage on Employment Law • Defense of Marriage Act enacted 1996 – Definition of “marriage” and “spouse” – Affected numerous tax/estate/employee benefit laws • U.S. v. Windsor decided 2013 – Unconstitutional to limit “marriage” and “spouse” to opposite-sex couples
  34. 34. Primary Employer-Related Laws Affected • • • • • Federal Tax ERISA COBRA HIPAA FMLA IRS/ERISA determination: “place of celebration” FMLA determination: “place of residence”
  35. 35. Next Steps • Best practice: obtain same-sex marriage information • Review employment policies, handbooks, benefit plans, SPDs and summaries and insurance policies • Make legally necessary changes and any changes desired in accordance with corporate HR strategy Stay Tuned: More guidance expected
  36. 36. And while we are on the subject of Sexual Orientation and Emerging Trends • Increased jurisdictional protection in states/cities • Employment Non-Discrimination Act (ENDA)
  37. 37. Bullying, Hazing, and Healthy Workplace Initiatives
  38. 38. Legal aspects of bullying • No current anti-bullying laws – “Healthy Workplace Act” • Laws/causes of action – Federal and state anti-discrimination laws – Harassment – Intentional Infliction of Emotional Distress – OSHA General Duty Clause – ADA accommodation Next Major Arena for Employment Claims?
  39. 39. The New Normal Emerging Legal Trends Affecting the Workplace Mark Bakker Wyche, P.A. November 12, 2013