Tuesday, April 21, 2015

Is a LinkedIn search subject to the Fair Credit Reporting Act

I’ve written a lot in the past few years about the pros and cons of companies using social media to conduct background checks on applicants and employees (e.g., here and here). One issue I’ve never considered, however, is whether the social media site is a “consumer reporting agency” subject to the Fair Credit Reporting Act, or the information compiled from such searches qualifies as a Consumer Report. The issue is significant, because if the social sites are CRAs, or their information are CRs, then employers who use these sites to conduct background searches are subject to the FCRA’s myriad pre- and post-screening notice, consent, and disclosure requirements.

Recently, a California federal court examined this very issue in Sweet v. LinkedIn Corporation [pdf], and concluded that LinkedIn’s Reference Search function does not render it subject to the FCRA.

Unlike other social sites, LinkedIn maintains a specific tool that helps employers’ reference checks—a premium tool called “Reference Search,” which creates “a list of people who have worked at the same company during the same time period as the member you’d like to learn more about.” More simply, Reference Search generates a list of potential employment references.

In Sweet, a group of unsuccessful job applicants argued that LinkedIn failed to comply with the FCRA in how it operates and maintains “Reference Search.” The court disagreed, concluding that LinkedIn’s Reference Search is not a Consumer Report under the FCRA.

LinkedIn’s publications of employment histories of the consumers who are the subjects of the Reference Searches are not consumer reports because the information contained in these histories came solely from LinkedIn’s transactions or experiences with these same consumers. The FCPA excludes from the definition of consumer report any “report containing information solely as to transactions or experiences between the consumer and the person making the report.”

In other words, because LinkedIn creates its databases solely from information submitted by its account holders, it falls outside the FCRA’s coverage.

While employers still have EEO concerns with the use of social networks for background checks, this case should give employers some relief, as it appears that the FCRA is one statute they needn’t worry about when using social media to vet candidates or for other employment purposes.

Monday, April 20, 2015

EEOC issues balanced interpretation of legality of employer wellness plans

Several months ago, the EEOC announced its intent to issue regulations interpreting whether employer wellness plans are legal or illegal medical exams under the ADA. Thankfully, last Thursday the EEOC published its proposed regulations, and its good news for employers who use these programs to keep down the cost of their group health insurance.

So, what does this all mean for employers? Let’s take a look, via the helpful Q&A the EEOC published alongside its proposed regs:

Q: What is a Wellness Program?

A: The term “wellness program” refers to programs and activities typically offered through employer-provided health plans as a means to help employees improve health and reduce health care costs. Some wellness programs ask employees to engage in healthier behavior (for example, by becoming more active, not smoking, or eating better), while other programs obtain medical information from employees by asking them to complete a health risk assessment (HRA) or undergo biometric screening for risk factors (such as high blood pressure or cholesterol).

Q: How does the ADA affect workplace wellness programs?

A: The ADA generally restricts employers from obtaining medical information from employees but allows medical examinations of employees and inquiries about their health if they are part of a “voluntary” employee health program…. However, … the Affordable Care Act allows wellness programs to offer incentives—in the form of rewards to participating employees who achieve certain health outcomes or penalties if participating employees fail to achieve health outcomes.

The proposed rule clarifies that the ADA allows employers to offer incentives up to 30 percent of the cost of employee-only coverage to employees who participate in a wellness program and/or for achieving health outcomes.

Q: When is a wellness program considered “an employee health program” within the meaning of the ADA?

A: A wellness program is considered an employee health program when it is reasonably designed to promote health or prevent disease. The program must not be overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease. For example:

  • Asking employees to complete a HRA or have a biometric screening for the purpose of alerting them to health risks (such as having high cholesterol or elevated blood pressure) is reasonably designed to promote health or prevent disease.
  • Collecting and using aggregate information from employee HRAs to design and offer programs aimed at specific conditions prevalent in the workplace (such as diabetes or hypertension) also would meet this standard.

However, asking employees to provide medical information on a HRA without providing any feedback about risk factors or without using aggregate information to design programs or treat any specific conditions would not be reasonably designed to promote health.

Q: When is a health program considered “voluntary”?

A: The NPRM lists several requirements that must be met in order for participation in employee health programs that include disability-related inquiries or medical examinations to be voluntary. Specifically, an employer:

  • may not require employees to participate;
  • may not deny access to health coverage or generally limit coverage under its health plans for non-participation; and
  • may not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees (such as by threatening to discipline an employee who does not participate or who fails to achieve certain health outcomes).

Additionally, if a health program is considered a wellness program that is part of a group health plan, an employer must provide a notice clearly explaining what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.

Here’s the $64,000 question:

Q: How much of an incentive may employers offer to encourage employees to participate in a wellness program or achieve certain health outcomes?

A: 30 percent of the total cost of employee-only coverage.

I am thrilled that the EEOC did not go nuclear and blow up wellness programs as discriminatory under the ADA. Given the surging cost of health insurance and the massive burden those costs place on employers and employees, it is relief that the EEOC is leaving these beneficial programs intact. Moreover, the EEOC’s 30% hard cap is certainly more palatable than a fuzzy “reasonableness” standard that begs for litigation and uncertainty. While both employers and employees can quibble over whether 30% is too low, too high, or just right, I’d rather have this Goldilocks debate over a number we can see than a different debate over a fuzzy standard that we cannot.

A full copy of the proposed regulations is available here [pdf].

Friday, April 17, 2015

WIRTW #364 (the “almost famous” edition)

“Daddy, this guy wants to talk to me, but he needs your permission first.” My daughter came running over to me last Saturday at the Rock Hall with those words. She was waiting backstage for her Joan Jett band to go on. Typically, that statement would have given me pause, but given the number of news cameras that were around, I had an idea “this guy” was legit. Here’s the result:

This wasn’t Norah’s only press of the day. Here’s a clip from another local news channel, this one of a “future superstar” (their words, not mine) doing her thing on stage:

The hits keep on coming for my little girl, and I’ll keep sharing them.

Here’s the rest of what I read this week:


Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

Thursday, April 16, 2015

Your employees are your biggest security risk

It seems that every week we read a story about another company that has been hacked and had its information and data compromised. Most companies believe that their greatest security risk comes from cyber terrorists overseas—nameless and faceless hackers sitting in some high tech hovel in some foreign country.

Your greatest security risk, however, comes from within—your own employees.

Case in point? This story, via Fusion:
In January, authorities arrested Eddie Raymond Tipton, the Director of Information Security for the Multi-State Lottery Association, a non-profit organization that runs multi-state games for 33 different state lotteries, on charges of fraud.… Tipton is being accused not just of claiming a winning ticket he wasn’t allowed to have, but hacking into the lottery’s random number-generator software to engineer a win for himself.… 
According to the court documents, the Multi-State Lottery Association’s random-number generator computers are disconnected from the Internet and kept in a locked, glass-walled room that is under 24-hour video surveillance. Prosecutors allege that Tipton entered the room on November 20, 2010, changed the camera’s settings to have it record less frequently, and inserted a USB drive containing malware that would manipulate the results of the upcoming lottery drawing.
I'm not saying that the threat from your employees comes from the type of malicious mischief of which Tipton is accused. With data security, sins of omission can be as deadly as sins of commission. Do you have a Bring Your Own Device Policy? Do you have employees sign confidentiality agreements? Do you train your employees on the evils of unsecured WiFi and what to do when a mobile device goes missing? If not, you are being cavalier with your data security, which places your entire business at risk of being the next big data breach story.

Wednesday, April 15, 2015

Sex stereotyping as transgender discrimination

Last week the EEOC settled, for $150,000, one of its first cases alleging sex discrimination against a transgender employee. This week, another transgender employee filed a remarkably similar lawsuit in federal court in Louisiana. The key difference between the two cases? The Louisiana employer had a formal policy against employees presenting at work as a gender other than their birth gender:

Title VII does not (yet) specifically identify “sexual orientation” as a protected class. But, sexual stereotyping has been illegal for decades. Keep this in mind, and keep an open mind, if your employee shows up as John on Friday and Joan the following Monday.

Tuesday, April 14, 2015

EEOC seeks a quarter-billion dollars from NYC

Earlier this month, the EEOC’s New York District Office issued a Determination [pdf] finding probable cause to believe that New York City violated Title VII and the Equal Pay Act through a “pattern of wage suppression and subjective promotion based on … sex, race, and national origin.” The conciliation agreement the agency proposed seeks compensation in excess of more than $246 million. That eye-popping number should catch the attention of every employer.

While settlement proposals are merely numbers on a piece of paper, and no one expects NYC to roll over and play dead, this story holds an important lesson for employers. The EEOC, which is an agency of limited financial resources, is going to go after that which will provide the most bang for its buck. If you are a large employer, you have a large target on your back, and the EEOC is taking aim. Yet, even small employers should show concern, because while the size of the target is might be proportionate to the size of the employer, even a small hit can prove devastating for a small employer. If you are not currently under investigation (and most of your aren’t), consider yourself as living on borrowed time. Take advantage of it. Use this time to audit all of your HR and employer practices (hiring, firing, pay, policies, etc.) to ensure compliance with all employment laws, including Title VII. It might sound trite, but knowledge really is power. Better to find out that you are out of compliance before an agency knocks on your door than after.

Monday, April 13, 2015

Some thoughts on accommodations and flexible workplaces

I’ve been thinking a lot over the past three days about the flexibility that employers afford their employees. I am part of a family with two working professional parents (one of whom travels a great deal), and two young children. If I did not have flexibility in where I perform my job, my life would become exponentially more difficult in light of my wife’ travel schedule. The reality is that technology (specifically iPhones, emails, laptops, and iPads) makes work easier. I no longer need to be tethered to my office to be productive. Yes, I enjoy coming to work. I like the camaraderie of my co-workers. I like seeing and talking to other people. I’m a social person and I like being social. But, I can write a brief, or counsel a client, from anywhere. I don’t need my office to produce. 

Last Friday, the 6th Circuit decided EEOC v. Ford Motor Co., which, according to the Court, applied “common sense” to decide that “regular on-site attendance is required for interactive jobs, and that “regular, in-person attendance is an essential function … of most jobs….” I could not disagree more. When the 6th Circuit originally decided this case one year ago, it relied on technology to determine that employers should at least consider whether telecommuting is a reasonable accommodation for a particular job.

As technology has advanced in the intervening decades, and an ever-greater number of employers and employees utilize remote work arrangements, attendance at the workplace can no longer be assumed to mean attendance at the employer’s physical location. Instead, the law must respond to the advance of technology in the employment context, as it has in other areas of modern life, and recognize that the “workplace” is anywhere that an employee can perform her job duties.

My main problem of the re-hearing panel’s decision is that the “common sense” it is applying is rooted in 1965, not 2015. To paraphrase John Oliver from last night, just as it is no longer acceptable to slap a female co-worker on the backside while calling her “toots,” it is no longer acceptable to assume that work must be performed at work. While I haven’t read the 1,400 page record of the Ford case to determine whether physical attendance at work was essential for this plaintiff’s job, my main critique of this decision is that it swings to needle too far to the side of inflexibility. It sets inflexibility as the rule, and telecommuting as the exception. I would flip the rule.

Telecommuting is an important benefit that promotes work/life balance for employees. It is great benefit that employers should be using to attract and retain employees for whom this benefit matters. With the state of technology in 2015, there is little reason that employer should not be doing so.

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