September 16, 2014 - Blank Rome LLP · 2014-09-25 · 9/2014 © Blank Rome LLP 2014. ... Employers cannot act based on the discriminatory religious ... doctrine can properly be applied

Hot Button Issues In Labor and Employment Law: Practical Tips for the California Employer

9/2014

© Blank Rome LLP 2014. All Rights Reserved1

September 16, 2014

Housekeeping

▪ Turn electronic devices to tmute

or vibrate

▪ Return completed CLE credit request forms and evaluations to the registration desk

l f l f k

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▪ Please feel free to ask questions


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Labor and Employment Year in Review and What’s Looming for 2015

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Presented by: Scott F. Cooper

Introduction

▪Opening Session

Summary of top areas employers should know aboutSummary of top areas employers should know about

▪ Exceptionally busy and challenging year

▪ No “one” case or law dominates discussions

▪ Employment problems are all over the map

▪Many issues will “spread” across industries and the country

▪ Best tip: issue spotting

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Best tip: issue spotting


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Topics Run the Gambit

World Events

Work v HomeRegulations

Pay

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Work v. Home

Whistleblowers

Regulations

World Events –Local Employment Problems

▪ Global and domestic events will affect employment issues in most dramatic ways in decadesmost dramatic ways in decades

▪ Return of “Old World” tensions in Europe & ISIS

▪ Energy revolution in the United States

▪ “New Normal” from recession still not settled

▪Weather

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Management Challenges

▪ Stronger economy pressures wage increases

▪ Employee demands increase as mobility options increase▪ Employee demands increase as mobility options increase

▪ Return to the “Age of Good Managers”

▪Many younger HR Personnel and Supervisors have never managed in good economic times

▪ Empowered employees will exercise their rights

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“In bad economic times, you fire people you do not want to.

In good economic times, you hire people you do not want to. “

Increasing Global Influence of Religion at Work

▪More diverse workforce than ever

▪ Per Title VII and EEOC: Religious accommodation required▪ Per Title VII and EEOC: Religious accommodation required unless undue hardship

▪ Employers cannot act based on the discriminatory religious preferences of others

▪ Religious belief must be sincerely held

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EEOC Guidance on Religious Attire

▪ The Equal Employment Opportunity Commission (“EEOC”) recently issued publications addressing workplace rights and responsibilities with respect to religious dress and grooming under Title VII of the Civil Rights Act of 1964.

▪ The EEOC explains that Title VII applies to all religious practices or beliefs that are “sincerely held.” A belief can be sincerely held even if it is recently adopted.

▪ Generally, an employer must accommodate an employee’s religious practices unless doing so would create an undue hardship on the

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operation of the business.

▪ In addition, an employer cannot act based on the discriminatory religious preferences of others, including customers, clients, or co‐workers.

Work Life Clashing with Home LifeSports Leading the Erosion of Line Between Work & Home

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Work Life Clashing with Home Life Internet & TV at Work ‐Workers Are Watching

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Work Life Clashing with Home Life No More 24/7 Email? Or Don’t Email Me (in French or German)

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Happy People in France


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Work Life Clashing with Home Life

▪ Telecommuting on the decline?

▪ Increased remote location workforce▪ Increased remote location workforce

▪More working from home, with less reduction in work and leaves

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Negative Comments Get Protections in CA

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Universities – Legal Ground Zero

▪ A very tough time to be a University

▪ Universities again battleground over cutting edge legal issues:▪ Universities again battleground over cutting edge legal issues:– Reporting

– Student Athlete Unions

– Affirmative Action

– Law school apps drop again

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College Reporting

▪ Colleges faced with tough decisions on reporting rape, sexual assault,reporting rape, sexual assault, molestation and suicides

▪ At center of storm – conflicts of Interest and role of law enforcement

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Changing Landscape of Universities

▪ E.D. Pa. Court in Harris v. St. Joseph’s University found a student may proceed with claimsfound a student may proceed with claims against the University that the school tribunal wrongly found he committed sexual assault

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Changing Landscape of Universities and Potential Impact on Employers

▪ Harris v. St. Joseph’s University: St. Joseph’s University could be liable for tribunal findings of sexual assaultliable for tribunal findings of sexual assault

▪ NLRB Ruling: Northwestern University football players can unionize

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Changing Landscape of Universities

▪ NLRB Northwestern Decision:– OnMarch 26 2014 the NLRB in Chicago issued a decision finding thatOn March 26, 2014, the NLRB in Chicago issued a decision finding that the football players on Northwestern’s team receiving scholarships are “employees” within the meaning of the NLRA and can therefore unionize

– The decision has been appealed

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University at Center of Affirmative Action

▪Schuette v. Coalition to Defend Affirmative Action:Defend Affirmative Action: Permitting voters to decide the applicability of affirmative action policies

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Schuette v. Coalition to Defend Affirmative Action

▪ Supreme Court of the United States held that an amendment to Michigan’s constitution, Proposal 2, that prohibits state universities from considering

t f it d i i d t i l t th C tit ti ’race as part of its admissions process does not violate the Constitution’s Equal Protection Clause. Therefore, state’s voters have the power to stop officials from using race to shape government programs.

– The Court therefore cleared the way for voters elsewhere in the nation to opt to put an end to so‐called “affirmative action” policies — as seven states now do.

▪ The U.S. Court of Appeals for the Sixth Circuit, had struck down Michigan’s ballot measure, relying primarily upon the concept that it is unconstitutional for voters to change the way public policies are developed to make it more difficult to adopt or keep policies that protect racial minorities from

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difficult to adopt or keep policies that protect racial minorities from discrimination.

▪ According to a concurring opinion by Justice Scalia, and joined by Justice Thomas, the majority opinion left open the power of government to adopt race‐based policies to cure “disparate impact” on racial minorities.

Pay Issues: Minimum Wage Hike Fights Growing

▪Minimum wage fights gaining ground

▪ Significant traction in the fast food industry▪ Significant traction in the fast food industry

▪ Local activism

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9/2014


California Requires Paid Sick Days

▪ The Healthy Workplaces, Healthy Families Act of 2014

▪ Signed September 8 2014▪ Signed September 8, 2014

▪ Expected to affect 40% of state’s workers

▪ For every 30 hours worked, employees accrue one hour of paid sick leave, which can be used to care for themselves or a family member

▪ Capped at 24 hours

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Pay Issues: Wage Fixing & Failure to Give Meal Breaks

▪ Tech Giants Apple, Google, Intel and Adobe reached $324 million accord toAdobe reached $324 million accord to settle a lawsuit alleging the companies conspired to suppress salaries by not recruiting one another’s workers

▪ The suit covers over 64,000 employees

▪ August 8 2014 Judge Kohn rejected

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▪ August 8, 2014, Judge Kohn rejected tentative settlement


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Pay Issues: Micro Staffing

▪ Growing use of analytics to staff retail establishments timed to the hour based on projected customer flowthe hour based on projected customer flow

▪ Computer projected models such as these create new challenges for employers

▪ The resultant fall out on workers who cannot schedule with predictability is being increasingly scrutinized

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Pay Issues: Scrutiny on Internships

▪ Feds and California cracking down on internships that are “really work.”really work.

▪ National trend: in April, NYC prohibited discrimination against paid and unpaid interns

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Pay Issues: DOL Guidance on Internships

▪ Interns receiving training f th i d ti lfor their own educational benefit may work at for profits without compensation

▪Many states and cities covering interns under anti‐discrimination laws

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discrimination laws

Changing Role of the Intern in NYC

▪ On March 26, 2014, the New York City Council unanimously passed the amendment to the New York City Human Rights Law applying the law to paid and unpaid interns.

▪ The amendment defines intern as an “individual who performs work for an employer on aThe amendment defines intern as an individual who performs work for an employer on a temporary basis whose work: provides training or supplements training given in an educational environment such that the employability of the individual performing the work may be enhanced; provides experience for the benefit of the individual performing the work; and is performed under the close supervision of existing staff.”

▪ This definition of intern tracks somewhat, though not precisely, all of the factors historically used to determine intern status for wage and hour purposes. Nevertheless, the amendment expressly states that interns are protected under the New York City Human Rights Law “without regard to whether the employer pays them a salary or wage.” The legislation comes on the heels of a federal court decision late last year, which dismissed a discrimination claim under the New York City Human Rights Law on the basis that the plaintiff intern was not a covered employee under the law

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that the plaintiff intern was not a covered employee under the law.▪ It is critical that employers with operations in New York City consider:

– Proper classification of workers as employees or unpaid interns under the appropriate analysis for wage and hour purposes.

– Update policies, practices and training to include interns when it comes to issues addressing discrimination, harassment, retaliation and disability/religious accommodation


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Pay Issues: Fair Labor Standards Act Regulations

▪ Sandifer v. United States Steel Corporation: Parties to a CBA can negotiate whether time spent changing into protective clothingnegotiate whether time spent changing into protective clothing is compensable

▪ Executive Order mandates revisions to overtime regulations under the FLSA

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Fair Labor Standards Act

▪ Sandifer v. United States Steel Corporation: Section 203(o) of the Fair Labor Standards Act (FLSA) —which allows parties to a collective bargaining agreement to decide for themselves through negotiations whether “time spent in changing clothes … at the beginning or end of each workday” is compensable applies to articles of protective clothing such as flame retardant jackets pantscompensable — applies to articles of protective clothing such as flame‐retardant jackets, pants, hoods, snoods, wristlets, leggings, hardhats, work gloves and steel‐toed boots.

▪ “The statutory compensation requirement to which § 203(o) provides an exception embraces the changing of clothes only when that conduct constitutes ‘an integral and indispensable part of the principle activities for which covered workmen are employed,’” the Court explained. And protective clothing is the only type of clothing that is integral and indispensable to the work of members of many occupations, such as factory workers, butchers, and longshoremen.

▪ Although the Supreme Court affirmed the decisions below, it did take issue with the de minimis rule — under which courts can declare short periods of time noncompensable under the rationale that the law does not take account of trifles — as applied to the FLSA. “We doubt that the de minimisdoctrine can properly be applied to the present case,” the Court noted. “A de minimis doctrine does not fit comfortably within the statute at issue here, which, it can fairly be said, is all about trifles —the relatively insignificant periods of time in which employees wash up and put on various items of

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the relatively insignificant periods of time in which employees wash up and put on various items of clothing needed for their jobs” (emphasis in original). Thus, the Court appears to have opened to door to considering the broader question of whether the long‐established de minimis rule will continue to apply to cases brought under the FLSA.

▪ The Court’s unanimous decision provides clarity for employers with unionized workforces on the issue of compensation for changing time. It also demonstrates the Court’s preference that issues such as compensation for clothes changing time be handled through the give‐and‐take of collective bargaining. On the other hand, the Court’s decision may weaken even further employers’ ability to use the de minimis defense in wage and hour litigation.


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Fair Labor Standards Act –Changing Landscape

▪On March 13, 2014, President Obama issued a memorandum directing the Secretary of Labor to propose revisions to thedirecting the Secretary of Labor to propose revisions to the Department of Labor’s existing overtime regulations under the Fair Labor Standards Act (“FLSA”)– The memorandum stated the President’s view that the regulations regarding the FLSA’s overtime exemptions for executive, administrative, and professional employees (also known as the “white collar” employee exemptions) are “outdated” and “have not kept up with our modern economy”

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with our modern economy.

– Commentators expect that the Secretary of Labor will propose to increase the minimum salary requirement for employees covered by the “white collar” exemptions. The minimum salary, currently $455 per week, was last increased in 2004.

Pay Issues: Equal Pay

▪ In April, President Obama signed 2 executive actions to address pay discrimination andactions to address pay discrimination and strengthen the enforcement of equal pay laws among federal contractors

▪ The EEOC has prioritized sex discrimination and equal pay issues, pushing employers to consider flexible schedules and telecommuting

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telecommuting


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Equal Pay Issues

▪ In April, President Obama signed two executive orders designed to address pay discrimination and strengthen the enforcement of equal pay laws

f d l t tamong federal contractors.– One Executive Order prohibits federal contractors from retaliating against

employees or applicants who choose to discuss their compensation. This Order does not apply to situations where an employee with access to others’ compensation information as part of his/her essential job functions discloses that information to persons without such access. The Department of Labor (“DOL”) is expected to issue proposed regulations implementing the Executive Order.

– The second Presidential Memorandum instructs the Secretary of Labor to propose new regulations requiring federal contractors and subcontractors to submit to DOL “summary data on the compensation paid to their employees including data by

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summary data on the compensation paid to their employees, including data by sex and race.” The President further instructed the Secretary to consider approaches that would (1) enable DOL to direct its enforcement resources toward entities whose data suggests potential compensation discrepancies , (2) minimize the reporting burden on federal contractors, and (3) encourage voluntary compliance with federal pay laws.

Pay Issues: Supreme Court Rules on Severance Payments

▪ United States v. Quality Stores Inc.:Severance payments are taxableSeverance payments are taxable wages for purposes of the Federal Insurance Contributions Act (FICA)

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9/2014


United States v. Quality Stores Inc.

▪ Issue: whether a particular form of severance payments constituted “wages” under FICA, the federal payroll tax imposed by FICA on both employers and employees to fund the Social Security and Medicareemployers and employees to fund the Social Security and Medicare programs

▪ Holding: Supreme Court of the United States unanimously held (8‐0, with 1 recusal) held that given the statutory definition of wages, “and as a matter of plain meaning” severance payments constitute “remuneration for employment.”

– This decision overruled the Sixth Circuit which – affirming the judgments of the bankruptcy court and the district court – had held that the payments were not wages, creating a split among the circuits.

▪ Rationale: In reaching this conclusion the Supreme Court noted that the

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Rationale: In reaching this conclusion the Supreme Court noted that the payments are made to employees (or former employees), and they are typically based on such factors as the employee’s function and tenure with the employer. In this way, they are “like many other benefits employers offer employees above and beyond salary payments,” such as “health and retirement benefits, stock options, or merit‐based bonuses,” all of which plainly constitute “remuneration for employment.”

Expanding Protection for Whistleblowers

▪ Lawson v. FMR LLC: – Whistleblower protection applies to employeesWhistleblower protection applies to employees of a public company's private contractors and subcontractors.

▪Wiest v. Lynch:– Application of Lawson, finding a non‐publicly traded employer acted as an agent of publicly traded parent company

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▪ Department of Homeland Security v. MacLean– Upcoming S. Ct.: Does Whistleblower protection extend to disclosing protected information?


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Whistleblower Issues – Changing Dynamics

▪ Jackie Hosang Lawson and Jonathan M. Zang v. FMR LLC et al. (Supreme Court)

– Lawson and Zang were employees of private company underLawson and Zang were employees of private company under contract with a public company to provide advisory services

– Lawson alleged she was harassed and ultimately forced to quit because she provided Fidelity managers with information on inappropriate expense reporting, retention of investment company fees, and methodologies for reporting or accounting for mutual fund expenses and operations. Zang contended he was fired for informing Fidelity management that disclosures that were being prepared for submission to the Securities and Exchange Commission did not accurately reflect the details of some fund managers' compensation.

– First Circuit Held: only people who work for public companies

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y p p p pare protected by the Sarbanes Oxley Act, which protects whistleblower activity

– Supreme Court Held: The anti‐retaliation protection that the Sarbanes‐Oxley Act provides to whistleblowers applies to employees of a public company's private contractors and subcontractors.

Whistleblower Issues – Changing Dynamics

▪Wiest v. Lynch, E.D. Pa.– Issue: First federal ruling to examine the scope of an agency relationship between a publicly tradedan agency relationship between a publicly traded company and a non‐publicly traded company necessary to trigger coverage under the whistleblower protection provision of the Sarbanes‐Oxley Act

– Held: Plaintiff Jeffrey Wiest sufficiently showed that his former employer, the non‐publicly traded Tyco Electronics Corp. acted as an agent of its publicly traded parent company, Tyco Electronics Ltd. Plaintiff also sufficiently stated a claim

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yagainst the President of the Tyco business

– Rationale: The Court relied heavily on the U.S. Supreme Court's 2014 ruling in Lawson v. FMRLLC, which held that Section 806 covers "any officer, employee, contractor, subcontractor or agent of" a publicly held company.


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Looking Ahead in the Supreme Court: More Whistleblower Issues

▪ Department of Homeland Security v. MacLean– Issue: Whether certain statutory protections codified at 5 U.S.C. § 2302(b)(8)(A), which are inapplicable when an employee makes a disclosure “specifically prohibited by law,” can bar an agency from taking an enforcement action against an employee who intentionally discloses sensitive security information.

– Facts: Air marshal protested a decision to cut down on air marshals aboard flights out of Las Vegas. After dissatisfaction with the TSA response the

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After dissatisfaction with the TSA response the employee went public and told a news reporter about the cut back and lost his job

– Cert granted in May 2014 case will be heard during October 2014 term

Employee Wellness

▪ Governments are increasingly regulating health issues– California Paid Sick LeaveCalifornia Paid Sick Leave

– NYC attempted soda ban, paid sick time off

– In April, set an Executive Order banning smoking in city parks in Philadelphia

– E‐cigs increasingly under scrutiny

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NYC: Earned Sick Time Act

▪ Under the Earned Sick Time Act:– Coverage: New York City employers with 20 or more employees must provide paid sick time in accordance with the law as of

April 1, 2014. Beginning on October 1, 2015, the coverage threshold is lowered to employers with 15 or more employees. Employees who work at companies that do not meet the threshold requirements are nevertheless entitled to job protection for

t 40 h f id i k ti hup to 40 hours of unpaid sick time each year.– Earning and Accrual: Employers must provide at least one hour of sick time for every 30 hours worked by the employee, up to a

maximum of 40 hours of sick time in a calendar year. Sick time begins to accrue as soon as the employee is hired (so long as on or after April 1), however an employee can only start using accrued sick time upon the later of 120 days after the commencement of the employee’s employment, or 120 days after the April 1 effective date of the new law.

– Use of Sick Time: Employees get to determine how much accrued sick time they need to use, although employers can “set a reasonable minimum increment for the use of sick time not to exceed four hours per day.” Sick time may be used only for the following reasons: (i) the employee’s mental or physical illness, injury or health condition, or need for medical diagnosis, care or treatment of such an illness, injury or health condition; (ii) the employee’s need for preventative medical care; (ii) the care of an employee’s family member who needs medical diagnosis, care or treatment of a mental or physical illness, injury or health condition; (iii) the care of an employee’s family member who needs preventative medical care; (iv) closure of the employee’s place of business by a public official due to a public health emergency; or (v) the employee’s need to care for a child whoseschool or childcare provider has been closed by a public official due to a public health emergency. Employers may require an employee to provide written confirmation that the employee used sick time in accordance with the new law.

– Carry‐Over of Unused Sick Time: Unused accrued sick time must be carried over to the following calendar year. However, at no time is an employer required to allow the use of more than 40 hours of sick time in any calendar year, and an employer may choose not to allow unused paid sick time to carry over if the employee is paid for such unused paid sick time by the end of the

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choose not to allow unused paid sick time to carry over if the employee is paid for such unused paid sick time by the end of theapplicable calendar year. In addition, employers are not required under the law to pay for unused sick time upon “termination, resignation, retirement, or other separation from employment.”

– Notice of Need for Sick Time: Employers are permitted to require reasonable notice of the need to use sick time. When the need is foreseeable, employers may require no more than 7 days’ notice, and, when not foreseeable, employers may require notice to be given as soon as practicable.

– No Retaliation: Employers may not retaliate or threaten to retaliate against an employee for exercising or attempting to exercise rights under the new law.

– Notice to Employees: Employers are required to provide employees at the commencement of their employment with written notice of the employee’s rights to sick time under the new law.

Americans with Disabilities Act – New Interpretations

▪ The American Psychiatric Association released a new edition of the DSM (“DSM‐5”), making it more likely for employees tothe DSM ( DSM 5 ), making it more likely for employees to claim ADA protection

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Americans with Disabilities Act – New Interpretations

▪ Last summer the American Psychiatric Association released a new edition of Diagnostic and Statistical Manual of Mentalnew edition of Diagnostic and Statistical Manual of Mental Disorders (“DSM‐5”)– Includes new diagnoses for mental illnesses such as communication disorder (persistent difficulties in the social uses of verbal and nonverbal communication), new depressive disorders (including recognition of a premenstrual dysphoric disorder), and certain impulse related disorders (such as hoarding and skin‐picking).

▪ These changes are likely to make it easier for employees to

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▪ These changes are likely to make it easier for employees to claim they qualify for ADA protection

Changes in Pennsylvania Law: Reporting Child Abuse

▪ Changes to Pennsylvania law expands child abuse mandatory reporting requirements to include professionals with “licenses”reporting requirements to include professionals with licenses – This may include attorneys

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9/2014


Legislative Watch –Evolution of Gay Marriage*

▪ In May, a Middle District of P l i C tPennsylvania Court nullified Pennsylvania's marriage laws holding they violate the due process and equal protection clauses of the U.S. Constitution, following similar

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following similar decisions in 12 federal courts including recently in Idaho, Arkansas and Oregon

Legislative Watch: Broader Protections for Pregnancy

▪More states passed laws this year providing further protections for pregnant womenfor pregnant women

▪ Reasonable accommodations not just for ADA anymore

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9/2014


NJLAD

▪ Pregnancy added to NJLAD and requires employers to offer reasonable accommodations to pregnant employees who request accommodation.

– The new law defines pregnancy as “pregnancy childbirth or medical conditions relatedThe new law defines pregnancy as pregnancy, childbirth, or medical conditions related to pregnancy or childbirth, including recovery from childbirth.” This definition is significant because it is likely broad enough to cover a range of conditions and ailments and specifically includes recovery from childbirth as being within its parameters. The new law prohibits an employer from treating any female employee that the employer knows or should know is pregnant less favorably from other non‐pregnant employees who are similarly situated in their ability or inability to work.

– The law also imposes a requirement that employers offer pregnant employees a reasonable accommodation unless it would cause the employer an undue hardship. The law includes examples of some reasonable accommodations: “bathroom breaks, breaks for increased water intake, periodic rest, assistance with manual labor, job restructuring or modified work schedules, and temporary transfers to less strenuous or hazardous

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work.” – The law specifically declares that it “shall not be construed as otherwise increasing or

decreasing” any existing statutory rights to paid or unpaid leave in connection with pregnancy.

– With the enactment of these new protections for pregnant employees, New Jersey joins a number of other states — including Texas, California, Illinois and Connecticut — that have recently adopted laws addressing pregnancy discrimination.

NYC: Pregnancy Notice and Accommodation

▪ A new amendment to the New York City Human Rights Law imposes new obligations on employers with 4or more employees. The Human Rights Law has existing prohibitions against gender, pregnancy and disability discrimination.existing prohibitions against gender, pregnancy and disability discrimination. The amendment expands notice and accommodation obligations for pregnancy and pregnancy‐related conditions, even if they do not qualify as a “disability” under the law. Therefore, New York City employers:

– Must provide a written notice of rights under the new law at the time of hire to all individuals hired on or after January 30, 2014.

– Must provide a written notice of rights under the new law to all existing employees, regardless of date of hire, on or before May 30, 2014.

– Must reasonably accommodate an employee’s “pregnancy, childbirth, or related medical condition that will allow the employee to perform the essential requisites of the job,” provided that (i) the pregnancy, childbirth or related medical condition “is known or

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should have been known” by the employer, and (ii) such accommodation does “not cause undue hardship in the conduct of the covered entity’s business.” Potential accommodations could include, depending on the circumstances, assistance with manual tasks, breaks, leave/time off or work station changes. As with disability accommodations, it is the employer’s burden to prove that an accommodation would pose an “undue hardship.”

– May – but are not required to – post written notice of rights under the new law at an accessible location in the workplace.


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Continuing Social Media Issues

▪ Employers continued to be faced with issues of whether to monitor employees’ social p ymedia

▪WSJ reports: 39% of employers dig into job candidates on social sites

▪ 43% said they had found something that made them deep‐six a candidate.

▪ 19% said they found information that sold

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them on a candidate, such as communication skills or a professional image.

▪ Terminations due to social media posting are on the rise

Conclusion

▪Big Events – world, economy and social changes – will radically affectsocial changes – will radically affect employment issues

▪But another year of incremental changes through cases and regulations

▪Home v work issues

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Home v. work issues

▪Higher focus on pay▪More accountability – whistle blowing and government regulation


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Questions?

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Wage & Hour Developments: Class‐Action Waivers, Commissioned and Piece‐Work Employees, and E R i b t

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Expense Reimbursements

Presented by: Howard M. Knee


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Arbitration Agreements –Waivers of Class and Collective Actions

▪ Class Action/ Collective Action

▪ Iskanian V. CLS Transportation of Los Angeles LLC. – held that FederalIskanian V. CLS Transportation of Los Angeles LLC. held that Federal Arbitration Act preempts California law so that class and collective action waivers are enforceable

▪ Rejected argument that waivers are unlawful under the National Labor Relations Act (DR Horton)

▪ Court held that Federal Arbitration Act does not preempt representative actions under PAGA, the California Private Attorneys G l A

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General Act

▪ Drafting arbitration agreements is important – agreements still cannot be procedurally and substantively unconscionable

▪ Practical effect – employees may file multiple requests for arbitration which can be time consuming and expensive for employer

BYOD – Business Expenses

▪ Labor Code Section 2802 – Employers must reimburse employees for necessary business expenses

▪ Cochran V. Schwan’s Home Services, Inc.

▪ Court held that employer must reimburse customer service managers who use cellular phones for work related purposes

▪ Court rejected employer argument that it should not be required to reimburse employees who had plans that charge a flat rate for unlimited use

▪ Court held that employers must pay a “reasonable percentage” of

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Court held that employers must pay a reasonable percentage of employees’ cellular phone bills, otherwise employers would reap a windfall

▪ Significant that a violation of Labor Code Section 2802 will trigger PAGApenalties

▪ Logically the Court’s decision applies to other devices as well, such as laptop computers


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Commissioned and Piece Rate Employees

▪ Fair Labor Standards Act requires employees to be paid minimum wage for all hours worked in a work weekg

▪ California wage orders require employees to be paid minimum wage for all hours worked

▪ Gonzalez V. Downtown LA Motors (April 2013) – Court of Appeal held that under state law, an employee must be paid minimum wage for each and every hour worked

▪ Employees at Downtown LA Motors were service technicians who

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were paid a piece rate for repair work

▪ Employer believed payment was lawful so long as employees were paid an average of at least minimum wage for all hours worked each work week

Commissioned and Piece Rate Employees (cont.)

▪ Employees argued that piece rate only covered pay for repair work and that they were entitled to be paid separately for other tasks, y p p y ,such as cleaning, attending meetings, training, reading repair bulletins

▪ The Court held that piece rate did not cover these other work activities and that employees had to be paid separately for such time

▪ Balasanyan V. Nordstrom, Inc. (Federal Court, December 2013)

▪ Same holding but applied to commissioned employees

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▪ Practical effect– Could require separate payments for 10 minute rest breaks

– May not want to pay employee on a commission basis (but may lose overtime exemption for certain sales employees)


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Questions?

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Bring Your Own Device (BYOD) Policies: Reimbursements, Privacy and Security Issues

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Presented by: Caroline Powell Donelan


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The “Consumerization of Information Technology”

▪ According to the latest IDC hresearch…

79% of adult smartphone

users have their phones with them for at least 22 hours a day

77% of adults check their

phones ithin 15 min tesphones within 15 minutes of waking up

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BYOD Policy Considerations

Wage and Hour Issues

Harassment and

Discrimination

Employee Exit

Strategy

Employee Privacy

Data Security

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Managing Wage & Hour Concerns

“Off‐the‐Clock” Work and Overtime

Even if a nonexempt employee uses his or her personalEven if a nonexempt employee uses his or her personal device voluntarily, the employee must be compensated for any time spent making work‐related calls or reading and writing emails

Limit nonexempt employees from accessing email or making work‐related calls outside scheduled hours

Limit the BYOD program to employees who are exempt fromLimit the BYOD program to employees who are exempt from overtime

Create a process for tracking and reporting all work performed and discipline violations

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Managing Wage & Hour Concerns

Reimbursement Issues: Who Pays?Cochran v Schwan’s Home Service (August 12 2014):Cochran v. Schwan’s Home Service (August 12, 2014):

• If employees must use their cell phones for work‐related calls, they must be reimbursed a reasonable portion of their cell phone bills for that use

• Employee cannot waive the right to reimbursement (LC 2804)

• Which method of reimbursement is right for you?

Lump Sum Allowance vs. Paying for the Device and Cost of Data Plan

• Employers who want or need more control over information maintained on an employee’s mobile device are more likely to pay for the device and service charges and to require employees to agree to more detailed usage terms

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Harassment & Discrimination

Duty to prevent harassment…Quick access to and sharing of material that could be in violation of anti‐Quick access to and sharing of material that could be in violation of antiharassment policies

– Train supervisors on your policies concerning the use and misuse of electronic resources

– Ensure your policies cover harassment by coworkers for off‐duty conduct that creates a hostile work environment

Duty to provide qualified individuals with disabilities with bl d ireasonable accommodations…

This can include providing costly assistive technology to employees with disabilities

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Employee Privacy

▪ Employees have no reasonable expectation of privacy in any information stored or transmitted through the employer’sinformation stored or transmitted through the employer s information systems…

*however*

▪ Employees do have a reasonable expectation of privacy when the information is stored and transmitted on their own devices– Issuing a remote wipe command– get consent!

All 50 states have computer trespass laws Potential liability under the– All 50 states have computer trespass laws. Potential liability under the CFAA if the access causes damages > $5,000 ; CA’s parallel law

– Accessing personal emails, medical information, and life choices

– Be clear regarding possible need to access a device for litigation holds or workplace investigations

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Data Security and Trade Secret Protection

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Threats related to BYOD policies: Lost or stolen devicesData‐targeted malwareUnauthorized use

Managing Risks When Data is Stored and Transmitted on an Employee’s Device

▪ How can you protect your information?

▪ Carefully consider who should be allowed to participate in the▪ Carefully consider who should be allowed to participate in the BYOD program

▪ Update confidentiality agreements

▪ Take practical measures to safeguard confidential information and trade secrets (restricted access, strong passwords, etc.)

▪ Install security software to manage the device and secure data‐get consent!

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get consent!

▪ Remind employees to physically secure their device against theft, loss, or unauthorized use


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Developing an Exit Strategy

▪ Disable email or synchronization access as part of the exit interview and HR checklistsinterview and HR checklists

▪ Preserve and (if necessary) delete company information from departing employees’ dual‐use devices

▪ Have a clear methodology for backing up user's personal photos and personally‐purchased applications prior to any "exit wipe”

R i d l th t fid ti lit bli ti i▪ Remind employees that confidentiality obligations are ongoing and survive the end of the employment relationship

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Questions?


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Beware! The National Labor Relations Board Invades the Non‐Union Workplace

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Presented by: Robert M. Lieber


▪ NLRB INTRUSION INTO NON‐UNION EMPLOYERS AFFAIRS*– *(These principles apply to unionized employers too)(These principles apply to unionized employers too)

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▪ Not a new trend▪ Not a new trend

– Notice‐Posting Requirement for Non‐Union Employers

– Weingarten extended to non‐union employers

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▪ BASIC FOUNDATION:▪ BASIC FOUNDATION:

– NLRA SECTION 7: PROTECTED CONCERTED ACTIVITIES

“PROTECTED”: any activity that the Board considers outside the bounds of labor‐management civility; e.g.. assault on a manager or employee

“CONCERTED”: performed by or on behalf of more than one

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employee


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▪ Risks Arise from Actions and Policies▪ Risks Arise from Actions and Policies

▪ Risk: Termination or Discipline of employees for engaging in protected concerted activities (real or perceived)

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▪ Focus today on policies▪ Focus today on policies

▪ Policies the Board has deemed wholly or partially unlawful:– Social Media Policy

– Confidentiality Policies

– Communications Policies

– Dignity & Respect Policies

Electronic Resources

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– Electronic Resources

– Media Relations

– Use of Trademarks/Logos


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▪ Language and actions the Board has ruled unlawful▪ Language and actions the Board has ruled unlawful

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SOCIAL MEDIA POLICIES

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NLRB: Social Media Policies

▪ Generally: The NLRB has found Facebook posts (1) among▪ Generally: The NLRB has found Facebook posts (1) among employees and (2) about terms and conditions of employment to be protected concerted activity.

▪ The NLRB found that clicking the “like” button under a Facebook post may constitute protected activity.

‐Triple Pay Sports Bar and Grille (last month)

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▪ This was what the employee “liked”:▪ This was what the employee liked : Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money . . . Wtf!!!!!

▪ Another employee posted:

I owe too Such an a hole

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I owe too. Such an a__hole.


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▪Other employees also posted:

I F ING OWE MONEY TOO!I F___ING OWE MONEY TOO!

I have never had to owe money at any jobs . . . i hope iwont [sic] have to at TP . . . probably will have to seeing as everyone else does!

▪Only two employees were terminated:

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The “like” employee and the one who wrote “I owe too. Such an a__hole.” Both were unlawfully terminated, said the Board.


▪ Policy required disclaimer with each post regarding workplace▪ Policy required disclaimer with each post regarding workplace information. Found overbroad.

‐Kroger (ALJ)

▪ Even though the Board’s GC recognizes an employer’s legitimate need for a disclaimer.

‐Kroger

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▪ Employee terminated for pro‐union Facebook posts and emails during decertification effort.

‐New York Shuttle


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CONFIDENTIALITY POLICIES

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NRLB: Confidentiality Policies

▪ “[n]ever discuss details about your job company business or▪ [n]ever discuss details about your job, company business or work projects with anyone outside the company” and to “[n]ever give out information about customers or DIRECTV employees.

▪ Confidentiality rule prohibited revealing information “related to l i f ti d d t ”

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. . . personnel information and documents”

‐Flex Frac Logistics


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NRLB: Confidentiality Policies

▪ Confidentiality rules that by their terms forbid disclosure of▪ Confidentiality rules that by their terms forbid disclosure of “information concerning employees” are unlawful.

‐Cintas

▪ The rule does not exempt protected communications with third parties such as union representatives, Board agents, or other

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governmental agencies concerned with workplace matters.

‐Cintas


COMMUNICATIONS/TRADE SECRET POLICIES

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NLRB: Communications/Trade Secret Policies

▪ The Board has found Facebook posts among employees about▪ The Board has found Facebook posts among employees about terms and conditions of employment to be protected concerted activity.

‐Bettie Page Clothing, Hispanics United of Buffalo

▪ You may not make disparaging or defamatory comments about

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DISH Network, its employees, officers, directors, vendors, customers, partners, affiliates or our, or their, products/services.


▪ Disparaging Comments:▪ Disparaging Comments:

“[m]aking disparaging comments about the company through any media, including online blogs, other electronic media or through the media.” – unlawful

▪ Prohibition:

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Disclosing any information about Muse or its owners, students and employees., including employee compensation (“Titanic” producer James Cameron)


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▪ Discussion of terms and conditions must be in an “appropriate”▪ Discussion of terms and conditions must be in an appropriate manner, without defining “appropriate.”

▪ Rule prohibiting “insubordination or other disrespectful conduct” and “inappropriate conversation.”

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▪ Employer policy prohibiting disclosure of “confidential, sensitive or non‐public information concerning the company” without further definition.


▪ Requiring that employees first bring “any work related▪ Requiring that employees first bring any work‐related concerns” to the employer before accessing social media.

▪ Employer policy that required “prior authorization by senior management or the law department.”

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ELECTRONIC RESOURCES POLICIES

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NLRB: Electronic Resources Policies

▪ “Employees may not blog enter chat rooms post messages on▪ Employees may not blog, enter chat rooms, post messages on public websites or otherwise disclose company information that is not already disclosed as a public record.”

‐DirectTV

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CONTACT WITH MEDIA POLICIES

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NLRB: Contact with Media Policies

▪ “Employees must direct all media inquiries to a member of the▪ Employees must direct all media inquiries to a member of the Public Relations team, without exception. Employees should not contact or comment to any media about the company unless pre‐authorized by Public Relations. The rules are in place to ensure that the company communicates a consistent message.”

DirectTV

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‐DirectTV


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▪ Rationale:▪ Rationale:

Employees would reasonably construe the unequivocal language in the Respondent’s rule as prohibiting any and all such protected communications to the media regarding a labor dispute.

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▪ “If law enforcement wants to interview or obtain information▪ If law enforcement wants to interview or obtain information regarding a DIRECTV employee, whether in person or by telephone/email, the employee should contact the security department in El Segundo, Calif., who will handle contact with law enforcement agencies and any needed coordination with DIRECTV departments.” Unlawful as applied to NLRB agents.

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▪ “It is the policy of Trump Hotels & Casino Resorts that only the▪ It is the policy of Trump Hotels & Casino Resorts that only the following employees, Chief Executive Officer, the respective property’s Chief Operating Officer, General Manager or Public Relations Director/Manager is authorized to speak with the media ”

‐Trump Marina

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TRADEMARKS/LOGOS

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NLRB: Trademarks/Logos

▪ "Do not use any company logo trademark or graphics which▪ Do not use any company logo, trademark or graphics, which are proprietary to the company, or photographs or video of the company’s premises, processes, operations or products, which includes confidential information owned by the company, unless you have received the company’s prior written approval.”

Giant Foods

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‐Giant Foods

NLRB: Trademarks/Logos

▪ “Flat prohibition” on employee use of IP would limit actions▪ Flat prohibition on employee use of IP would limit actions protected by Section 7, which protects employee activities such as forming, joining or assisting unions and the right to band together for mutual benefit.

‐Kroger/ALJ

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COURTESY & RESPECT POLICIES

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NLRB: Courtesy & Respect Policies

▪ Disrespect▪ Disrespect

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▪ “Everyone is expected to be courteous polite and friendly to▪ Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.”

‐Karl Klaus Motors

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▪ A bus company’s rule that prohibits “[d]iscourteous or▪ A bus company s rule that prohibits [d]iscourteous or inappropriate attitude or behavior to passengers, other employees, or members of the public found unlawful.”

‐First Transit

▪ “Disrespect to our guests including discussing tips, profanity or negative comments or actions. Insubordination to a manager or l k f t d ti ith f ll l

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lack of respect and cooperation with fellow employees or guests.”

‐Hooters


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▪ Vulgarity & Cursing▪ Vulgarity & Cursing

▪ Basic Law: (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was in any way provoked by an employer’s unfair labor practice.

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‐Atlantic Steel


▪ Employee terminated for calling supervisor a “f***ing mother▪ Employee terminated for calling supervisor a f***ing mother f***er” and a “f***ing crook,” among other profanities. Termination unlawful!!

‐Plaza Auto Center, Inc. (2014)

▪ NLRB found profane (“f” word) confrontation between

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employee and a manager of a store protected. Second Circuit reversed and told Board to reexamine.


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▪ “We think the analysis of [the Board] improperly disregarded▪ We think the analysis of [the Board] improperly disregarded the entirely legitimate concern of an employer not to tolerate employee outbursts containing obscenities in the presence of customers.” in light of public environment, etc.

▪ Board found the conduct protected – now on appeal again. P li “T t t l ith t d di it

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Policy: “To treat people with respect and dignity.

‐Starbucks


GOSSIP, NEGATIVE ATTITUDE, RUMORS

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NLRB: Gossip, Negative Attitude, Rumors

▪ “Comment on rumors or speculation related to the company’s▪ Comment on rumors or speculation related to the company s business plans” unlawfully broad.

‐Kroger

▪ Board recently invalidated several rules that prohibited gossip and negativity.

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TAKE‐AWAYS

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NLRB: Take‐Aways

▪ Review ALL policies NOW (not just social media)▪ Review ALL policies NOW (not just social media).

▪ Clean up ambiguous language; ensure protected concerted activity is excluded; add disclaimer.

▪ Check with legal counsel for up‐to‐date issues.

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NLRB: Take‐Aways

▪ Be careful about enforcement with discipline (more expensive▪ Be careful about enforcement with discipline (more expensive ULP).

▪ Train managers to not react but report to HR or legal to get review before acting.

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▪ Double check with counsel before taking adverse action against employee.


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Questions?

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Protecting Trade Secrets in the Age of Cybersecurity

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Presented by: Michael L. Ludwig, Colleen A. Carolan


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The Growing Threat of Cybercrime

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Discussion Topics

▪ Importance of Trade Secrets

▪ The Legal Landscape

▪ Recent Trends in Cybercrime

▪ Practical Advice for the Protection of

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Practical Advice for the Protection of Trade Secrets in the 21st Century


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California Trade Secret Laws:What is a Trade Secret?

▪ California Uniform Trade Secrets Act (“CUTSA”): Cal. Civil Code sections 3426‐3426.11sections 3426 3426.11

▪ Information, including a formula, drawing, pattern, compilation including a customer list, program, device, method, technique, or process that:

d d l l l f

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1. Derives independent economic value, actual or potential, from not being generally known to the public; and

2. Is the subject of reasonable efforts to maintain secrecy.

California Trade Secret Laws:Trade Secret Examples

What kinds of confidential information can a company protect??What kinds of confidential information can a company protect??

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California Trade Secret Laws:Maintaining Secrecy

1. Limit access and disclosure1. Limit access and disclosure

2. Instructions regarding confidentiality

3. Lock up hard copies

4. Password protection

5. Rigorous non‐disclosure agreements

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Why are trade secrets important?

▪ Protect investment in research and development, marketing efforts, and strategic planningefforts, and strategic planning

▪ Protect information that may not beprotected by patents, trademarks, or copyrights

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▪ Provide powerful litigation tools and strategies


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Laws Related to Trade Secrets

▪ California Laws– CUTSACUTSA

– Cal. Comprehensive Computer Data Access and

Fraud Act

▪ Federal Trade Secret Laws– Federal Computer Fraud and Abuse Act

Economic Espionage Act

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– Economic Espionage Act

– Proposed Federal Trade Secret Legislation

California Trade Secret Laws:Cal. Penal Code § 502

▪ California’s Comprehensive Computer Data Access and Fraud Act

▪ Fines, imprisonment, and asset forfeiture.

▪ Private action for “damage” to system.

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▪ Scope of employment exception.


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Computer Fraud and Abuse Act (CFAA)

▪ Prohibits unauthorized access to a protected computer

▪ Prohibits transmission of a virus to a protected computer

▪ Trafficking in passwords or other access credentials

▪ Criminal & Civil Enforcement

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Criminal & Civil Enforcement

▪ Penalties include up to 20 yearsin prison

Economic Espionage Act

▪ Criminalizes misappropriation of trade secrets with intent to (1) benefit foreign power or (2) injure owner of the trade secretbenefit foreign power or (2) injure owner of the trade secret

▪ Expanded scope after Aleynikov decision and passage of Theft of Trade Secrets Clarification Act

▪ Bipartisan “Defend Trade Secrets Act” introduced in April 2014 would provide private right of action

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Recent Trends in Cybercrime

▪ FBI’s Internet Crime Complaint Center (IC3) established in 2000– Complaints have grown from under 20,000 per year to approximately

300,000 per year

▪ $100 billion lost to cybercrime each year (McAfee)

▪ In 2012, 50% of targeted attacks were aimed at businesses of fewer than 2 500 employees (Symantec)

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fewer than 2,500 employees (Symantec)

▪ 31% of cyber attacks aimed at business with fewer than 250 employees (Symantec)

Top Ten States Ranked by the Total Number of Complaints Received by IC3 in 2013

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Cybersecurity Threats:

▪ Social Engineering Scams

▪ Network Breaches

▪ Physical Breaches

▪Mobile Breaches

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Mobile Breaches

Risk Factors:

Employees Can Be The Weakest Link!

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Employee Attitudes About IP Theft

▪ Symantec study from 2013:– 62% of employees: “OK to62% of employees: OK to transfer work documents to personal devices”

– 56% of employees do not believe it is a crime to use a competitor’s trade secrets

– Only 38% of employees say their manager views data

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gprotection as a priority

– 51% think it is acceptable to take corporate data because company does not enforce policies

Employee Ignorance

▪ Spearphishing

▪ Unauthorized applications▪ Unauthorized applications

▪Misusing corporate computers

▪ Disregarding password and login/logout procedures

▪ Piggybacking and tailgating

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▪ Remote worker security


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Establish a Culture of Data Security

▪ Employee Training

▪ Update Employees PoliciesUpdate Employees Policies and Procedures

▪ Password Protocols

▪ BYOD programs that require security measure compliance

▪Measure Employee C li

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Compliance

▪ Limit Access

▪ Clean Entry/Clean Exit

Avoiding Allegations of Misappropriation

▪ Efforts that companies should take to ensure that they are not receivingmisappropriated information:receiving misappropriated information:

‐ Hiring Protocols – ask about the individual’s post‐employment obligations, including non‐disclosure agreements

‐ Clear advice to candidates for employment who are presently working for a competitor about their obligations

‐ Signed acknowledgements that employee has not and will not

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download/misappropriate confidential information from prior employer


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Questions?

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Th k f j i i t dThank you for joining us today

Documents

September 16, 2014 - Blank Rome LLP · 2014-09-25 · 9/2014 © Blank Rome LLP 2014. ... Employers cannot act based on the discriminatory religious ... doctrine can properly be applied