#SCOTUS unanimously holds that post-work security checks are unpaid

Integrity Staffing Solutions v. Busk asks the question of whether the FLSA entitles hourly employees to be paid for post-shift time spent undergoing mandatory security screenings. The case was brought by two employees of a warehousing company with employee theft issues. To combat the problem, the company implemented mandatory (and time consuming, but unpaid) post-shift security checks.

When I wrote about this case following oral argument, I commented that “I would be surprised … if the employees walk away with a win. This case will hinge on whether the security screenings are key to the nature of the employment…. [T]he employer has the better of this agreement.”

I love it when I’m right.

Yesterday, the Court handed employers a unanimous victory (opinion [pdf] here):

The security screenings at issue here are noncompensable postliminary activities. To begin with, the screenings were not the “principal activity or activities which [the] employee is employed to perform.” Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers.

The security screenings also were not “integral and indispensable” to the employees’ duties as warehouse workers…. The screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment. And Integrity Staffing could have eliminated the screenings altogether without impairing the employees’ ability to complete their work.

Shortly after the Court delivered its opinion, I read the following tweet:

#SCOTUS OKs #WageTheft at Amazon http://t.co/DvSuWmLEqO

— N. William Metke (@metkelaw) December 9, 2014

While I understand that employee advocates are trying to make a point by using the phrase, “wage theft,” their continued use of this misnomer does their cause a disservice. It is not wage theft if a court concludes that time is not compensable. In fact, it’s the opposite of wage theft. Labeling every instance that an employer does not pay an employee as “wage theft” waters down the plight of the minimum-wage worker (which, I understand, is the point of labor’s wage-and-hour efforts). If you want us to take you seriously, you can’t cry thief every time you see an employer carrying a stack of pay envelopes.

EEOC 0-2 on severance-agreement lawsuits … but does it matter?

Recall that in October, a Chicago federal court dismissed a lawsuit filed by the EEOC against CVS, claiming that the pharmacy retailer’s severance agreements violated Title VII by employing allegedly retaliatory language. That court, however, failed to reach the merits of the case, instead dismissing the EEOC’s claims on procedural grounds (the agency’s failure to engage in pre-suit conciliation), thereby depriving employers guidance on whether certain garden-variety provisions in employment agreements violate Title VII’s anti-retaliation provisions. I held out hope that the practical guidance employers seek on this issue would come from a similar lawsuit pending in Colorado.

Last week, a Denver federal court dismissed that other EEOC severance-agreement-as-retaliation lawsuit. Like the earlier CVS dismissal, however, the dismissal in EEOC v. CollegeAmerica Denver was on procedural grounds, and offers little practical import for employers moving forward on this important issue.

Perhaps if there is any solace for employers looking to sue separation agreements to halt future litigation, and not to buy a future lawsuit by the EEOC, employers can look to footnote 3 in the EEOC v. CVS decision:

The “covenant not to sue” provision prohibits an employee from “initat[ing] or fil[ing] … a complaint or proceeding asserting any of the Released Claims.” The general release of claims is set out in ¶ 7 of the Agreement, but that section also includes the caveat that the release does not limit “any rights that the Employee cannot lawfully waive.” However, there is a specific carve out for an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws”; and further provides, “nor shall this Agreement prohibit [the employee] from cooperating with any such agency in its investigation.” … The verb participate is defined as “to be involved with others in doing something” and “to take part in an activity … with others.” http://www.merriam-webster.com/dictionary/participate. It is not reasonable to construe “the right to participate in a proceeding with any appropriate federal … agency,” to exclude the right of the employee from filing an EEOC charge. And, even if the Separation Agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute resistance to the Act.

In other words, the CVS court, albeit in dicta, believes that the EEOC is chasing an unsupportable claim by arguing that covenants not to file charges violate Title VII’s prohibitions on retaliation.

Employers, however, should not lull themselves into a false sense of security. Neither employer won either of these cases on the merits. For whatever reason, this issue is on the agency’s radar, and it will likely seek another case to prove its point regarding these agreements.

For now, the prudent course of action is to make sure that your agreements clearly and unambiguously, in a provision separate and distinct from the release, waiver, and covenant not to sue, state that employees retain their federally protected rights. I am using something like the following:

Nothing in this Agreement is intended to, or shall, interfere with Employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of any of the provisions of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against any of the Released Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

1.2 million reasons to fight harassment

According to an EEOC press release, a Wyoming federal judge has approved a $1.2 million settlement with three well-servicing companies on behalf of a dozen employees who claimed that they suffered regular and repeated racially derogatory comments and jokes:

Employees regularly used terms like “wetback” and “beaner” to refer to Hispanic employees, “wagon burner” to refer to Native American employees, and the “N-word” to refer to black employees…. According to the EEOC’s amended complaint, minority employees on the rigs regularly heard racist terms … such as “n----r-rigging” and telling employees to “n----r a pipe down” were also common.

Said EEOC General Counsel David Lopez, “This type of outrageous discrimination sadly still exists. Employers in the oil and gas industry should heed this settlement and renew their efforts to ensure that employees are treated equally regardless of race or national origin.” EEOC Regional Attorney Mary Jo O’Neill added, “The type of blatant racist conduct alleged in this case has no place in the workplace. We believe that our lawsuit and the significant relief obtained in this settlement will send the message, not only to the defendants, but to the entire industry that the EEOC will not this kind of misconduct - or retaliation for complaining about it.”

Over the past couple of weeks, our country has been hyper-focused on race. It’s pathetic that employees still have to suffer workplaces with any degree of racism. While I believe that not every mishandled situation is because of race, this EEOC settlement shows that we still have a ways to go with race relations, and employers that shirk or ignore their responsibilities in this regard do so at their peril.

WIRTW #347 (the “bad santa” edition)

A big thank you to NPR’s Yuki Noguchi, who interviewed me for a story on office holiday parties gone badly, which ran on Wednesday’s Morning Edition. You can listen here:

I love my money-quote as the story’s main call-out. I should emboss it on my business cards.

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Have you voted yet for this year’s ABA Blawg 100? You have until Dec. 19 to cast your vote here. (And a hearty and heart-felt thank you to Casey Sipe for the kind words in nominating me this year).

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Here’s what I read this week (and last week):

Discrimination

• Cancer and the Workplace: Tips for Employers and A Thanksgiving to Remember: When Cancer Strikes — via Dan Schwartz’s Connecticut Employment Law Blog
• Do you have a “super” anti-harassment contract with your employees? — via Eric Meyer’s The Employer Handbook Blog
• Accommodating service animals in the workplace — via HR Hero Line
• “Oh Wow, You Look So Pretty I Can’t Even Concentrate” (Part II) — via Employment Discrimination Report
• Sexual Harassment Investigations — via Employment Essentials
• The EEOC and wellness programs: coming home to roost? — via Michigan Employment Law Connection
• EEOC promises guidance on wellness programs in February — via Robin Shea’s Employment & Labor Insider

Social Media & Workplace Technology

• Issue of Threats via Facebook Heads to the Supreme Court — via Molly DiBianca’s Delaware Employment Law Blog
• Googling Candidates: Ray Rice Version — via The HR Capitalist, Kris Dunn
• The Key to Managing Cyber Monday: Just Be Generous With Employees — via TLNT
• Will “Facebook at Work” be a LinkedIn Killer? — via The Tim Sackett Project
• Fitbit Data May Become Evidence in the Courtroom — via Ride The Lightning
• The Newest Field of E-Discovery: You — via Above the Law
• Is Your Company on Instagram? 3 Things GCs Should Watch For — via In House

HR & Employee Relations

• The One Where Evil HR Lady Gets Fired — via Evil HR Lady, Suzanne Lucas
• Are old ways of treating employees coming back? — via Mike Haberman’s Omega HR Solutions
• News Flash: My Background Check and I Am Boring — via employeescreenIQ Blog
• Disgruntled Employee’s Alleged Parting Shot Leads to Federal Indictment — via Suits by Suits
• Ten Actions You Can Take Now to Protect Your Company’s Trade Secrets – Action Three: Create a Culture of Confidentiality — via netWORKed Lawyers
• Doggy Day Care Chain Makes Pet Sitters Sign Noncompetes To Protect “Trade Secrets” — via Huffington Post
• I Want it Now: Entitlement in the Workplace — via HR Schoolhouse
• Unconscionable Employment Arbitration Agreements — via Phil Miles’s Lawffice Space

Wage & Hour

• Wage Theft Costs American Workers as Much as $50 Billion a Year — via Texas Employment Law Blog
• Report: Buccaneers Employ Indentured Servants As Concessions Workers — via Deadspin
• No FLSA Overtime Recovery For What Employer “Should Have” Paid — via Wage and Hour Laws Blog
• Avoid Being the Next Unpaid Intern Headline — via Wage & Hour Defense Institute
• FLSA Rules For Exempt Employees During Snow Days — via Minnesota Employer
• Happy Thanksgiving from my Lovable FMLA Abuser, Albuquerque Turkey — via Jeff Nowak’s FMLA Insights

Labor Relations

• 2014 Union Win Rates Increase Over Same Period in 2013 — via Matt Austin Labor Law
• Board ALJ Hits Phillips 66 For Media Gag Policy — via Labor Relations Today
• Franchise arrangements pose legal problem for NLRB’s proposed joint-employer standard — via Ohio HR Law
• NLRB General Counsel on Joint Employment: “The More (Employers) The Merrier” — via The Emplawyerologist
• Facebook Bus Drivers Join Teamsters — via Labor Relations Today

Reading the #SCOTUS tea leaves: Young v. UPS and pregnancy accommodations

Yesterday, the Supreme Court heard oral argument in Young v. UPS, which will decide whether Title VII requires an employer to accommodate pregnant workers the same as non-pregnant workers similar in their inability to work.

UPS required Peggy Young to be able to lift up to 70 pounds as part of her job as a package delivery driver. After she became pregnant, her doctor limited her lifting. Ms. Young requested that UPS move her to a light duty assignment. UPS’s collective bargaining agreement allowed an employee to work a light duty assignment only because of an “on-the job” injury or when “disabled” under the ADA. Because Ms. Young did not meet either of these categories UPS denied her request.

Ms. Young’s lawsuit argued that UPS violated Title VII because the Pregnancy Discrimination Act required UPS to provide her with a “reasonable accommodation” to the same degree it accommodated a disabled employee. The 4th Circuit disagreed, finding that UPS’s policies did not treat pregnant workers less favorably, but the same as any other worker who did not meet the specific requirements for light duty under the CBA. 

The case may hinge on where the justices fall on the right comparator for UPS’s pregnant workers. Is it those employees who are ADA-disabled or otherwise injured on-the-job, whom UPS accommodates, or those non-ADA employees injured off-the-job, whom UPS does not accommodate.

As one would expect, the Justices appear to be split down ideological (maybe gender) lines, and, as is often the case, Justice Kennedy may be the key that will unlock this issue. He, however, was relatively quiet during the argument, only asking a handful of questions, which failed to shed any light on his thought process. Truth be told, it was a very curious argument, and the case, at least based on the Justice’s queries, is not easily predictable.

I am hopeful that the court will side with working parents and rule in favor of the employee in this case. A ruling for UPS would, I fear, promote the unequal treatment of pregnant workers, which is anathema to the spirit, if not the letter, of the Pregnancy Discrimination Act. No employer should be allowed to act as if it is exempt from the law.

A PDF of the compete oral argument transcript is available here.

Let’s all strive to be a little more flexible

Two weeks ago I had no choice but to take my 8-year-old daughter to a hearing. My wife was out of town for work, and Norah was home from school sick with a fever. So, we packed up her iPod and a Harry Potter book, and we drove down to the Industrial Commission. We had a great morning. We stopped for breakfast at Starbucks and talked—about school, her friends, and life in general. In the back of my mind, however, I was a bit on edge, as I had no idea how the hearing officer would react to an unplanned bring-your-daughter-to-work day.

As it turns out, my edge was for naught. The hearing officer could not have been cooler. She welcomed Norah to the hearing room with open arms, and complimented her on our way out on how well she behaved (as if there was any doubt). In fact, she was so cool that she noted “Miss Hyman” as having made an appearance for the Employer in her written opinion.

Compare my story to that of an attorney, who, having given birth, asked a Department of Justice Immigration Judge to continue a hearing. Amazingly, that judge refused. Or, consider this example from my past of a lawyer who refused to agree to a continuance while my son was in the hospital.

What’s the lesson here? Career and life don’t always get along. Yet, the meaning of “working time” in this country is changing. Technology has made it much easier for employees to work anywhere at any time. The law, however, is traditionally slow to react. Last month, the 7th Circuit held that regular attendance at work is an essential function of most jobs (even in the face of the defendant-employer’s “Work at Home” policy), and, next year, the 6th Circuit will decide the issue of telecommuting as an ADA reasonable accommodation.

Just because the law is slow to react to this paradigm shift in the definition of “work” does not mean that you should avoid flexible work policies for your employees. Employers that can adapt to the shifting needs of their employees, and their ability to work outside the four walls of the office and the traditional 9-to-5 hours, will have a leg up on attracting and retaining talent. Isn’t that the best reason to be flexible with your workers?

Oh, and in case you’re curious, Norah’s legal career is off to a rousing start. She’s 1-0. She’ll have a tough when she grows up between lawyer or rock star.

Federal court holds that Title VII does not protect the transgendered

LGBT rights continue to dominate headlines. Last month, the 6th Circuit became the first federal appellate court to uphold a state-law same-sex marriage ban, teeing up a likely showdown in the Supreme Court sometime next year. In September, the EEOC filed its first two lawsuits alleging sex discrimination on behalf of transgender employees (here and here).

Now, a federal court in Texas has expressly held that Title VII’s prohibition against sex discrimination does not extend to a transgender employee. Eure v. The Sage Corp. (W.D. Tex. 11/19/14) (h/t: Eric Meyer) involves a truck-driving instructor born a female but who presents as a male.  Eure alleged that her employer’s National Project Director, upon seeing her with a student, said, “What is that and who hired that,” adding that Sage did not hire “cross genders.”

The court, however, dismissed Eure’s sex-discrimination claim, concluding that Title VII’s prohibition against sex discrimination does not cover transgender employees.

In some cases, the plaintiffs bringing successful sex stereotyping claims are transgender people, arguing that the discrimination that they have suffered is because their coworkers perceived their behavior or appearance as not “masculine or feminine enough.” However, courts have been reluctant to extend the sex stereotyping theory to cover circumstances where the plaintiff is discriminated against because the plaintiff’s status as a transgender man or woman, without any additional evidence related to gender stereotype non-conformity…. [D]iscrimination based on transgender status is [not] per se gender stereotyping actionable under Title VII.

What lessons can we learn from this case? While many courts have extended Title VII’s protections to address sexual orientation and gender identity based on “sex stereotyping” (i.e., an employee’s failure to conform to traditional male or female gender roles), this issue is far from settled. Because the issue is not clear, we not-so-patiently wait for Congress to step in and address the issue by amending Title VII to make this coverage clear and unambiguous. In the meantime, you, as an employer, are free to decide the issue for your own workplace by drafting (and, more importantly, enforcing) policies of inclusion for LGBT employees.

Feds say you can't force high-cost employees onto Health Care Exchange

Do you have an employee with a high-cost medical condition? For example, an employee with hemophilia could incur hundreds of thousands or dollars or more in medical costs per year. That one employee could be catastrophic for the overall cost of your company’s group health plan. As a result, many employers are taking advantage of Obamacare’s health-care exchanges by paying these employees to secure their own private medical insurance.

This practice, however, may be changing, and it’s not for the better. According to TLNT, the Departments of Labor, Health and Human Services, and the Treasury have jointly warned employers not to dump high-cost employees from group health plans:

As employers try to minimize expenses under the health law, the Obama Administration has warned them against paying high-cost workers to leave the company medical plan and buy coverage elsewhere. Such a move would unlawfully discriminate against employees based on their health status….

The Affordable Care Act requires exchange plans to accept all applicants at pre-established prices, regardless of existing illness. Because most large employers are self-insured, moving even one high-cost worker out of the company plan could save a company hundreds of thousands of dollars a year. That’s far more than the $10,000 or so it might give an employee to pay for an exchange plan’s premiums….

The Affordable Care Act itself doesn’t block companies from paying sick workers to find coverage elsewhere…. But other laws do, including the Health Insurance Portability and Accountability Act and the Public Health Service Act, according to three federal agencies. Specifically, paying a sick worker to leave the company plan violates those statutes’ restrictions on discriminating against employees based on medical status, the departments said in their bulletin.

I understand how dropping an ill employee from health coverage because of a medical condition would violate a variety of laws, including the ADA. But, in these cases, employers are not “dropping” employees. Instead, they are merely shifting coverage from an employer-sponsored plan to a government-sponsored plan. The cost to the employee, and the coverage available to the employee, should not change. If the cost and coverage does not change, this practice should not violate any laws.

An employee must ask for ADA accommodation to receive it

By now, hopefully everyone reading this blog knows that the expiration of an employee’s 12 weeks of annual FMLA leave is not necessarily the end of that employee’s unpaid leave of absence for his or her own medical issues. Under the ADA, an employer must consider granting unpaid leave the exceeds the FMLA as a reasonable accommodation, provided that the employee actually requests the accommodation. As Judge v. Landscape Forms (6th Cir. 11/24/14) [pdf] makes clear, an employer is not required to offer a reasonable accommodation that an employee does not first request.

The facts of the case are relatively simply. Mark Judge took an FMLA leave to heal his shoulder after surgery from a non-work injury. At the time of his FMLA leave, he advised the company that his recovery time was 4-6 months. When his 12 weeks of FMLA leave expired, however, he did not advise of an expected return to work date, or otherwise ask for any additional unpaid time off as an accommodation.

Under those circumstances, the court concluded that the company had no obligation to provide any unpaid leave in excess of Judge’s 12 weeks of FMLA:

The EEOC regulations interpreting the ADA place the initial burden of requesting an accommodation on the employee. Once that request is made, the employer has a duty to engage in an interactive process to identify the precise limitations resulting from the disability and potential reasonable accommodations that could overcome those limitations. But if the employee never requests an accommodation, the employer’s duty to engage in the interactive process is never triggered…. 

Judge argues that Landscape Forms should have granted him a leave of absence until mid-November 2011, when he ultimately was released to work without restrictions. However, Judge fails to identify any statement he made before he was fired that could be construed as a request for leave until then….

Leaves of absence and reasonable accommodations are two of the trickier workplace issues facing employers. When those two issues converge with one employee, the complexities increase exponentially. As Judge v. Landscape Forms illustrates, unpaid leaves of absence are not a guaranteed entitlement, and employees must ask for for accommodation before being able to sue over its denial.

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Happy Thanksgiving. I am extraordinarily thankful that you take the time to read my thoughts every day. I’ll see everyone back on Monday after a much needed long weekend.

It’s five in a row for the ABA Journal’s Blawg 100

For the fifth year in a row, I am honored that the ABA Journal has chosen the Ohio Employer’s Law Blog for the Blawg 100, its list of the 100 best legal blogs.

Last night on Twitter, another of the honorees affectionately called me an “employment law nerd” because of my selection. It is a title I wear as a badge of honor. As has been the case for the four prior years, I am thrilled to be on a list of blogs of such high quality written by lawyers who are my friends.

Now comes the shameless part. If you are so inclined, the ABA Journal is asking you to weigh in and vote on your favorites. Go to www.abajournal.com/blawg100 to register and vote. Voting ends at close of business on Dec. 19, 2014.

Thank you to all my readers.

There is no easy fix for the overtime-pay problem

Those of you who are long time readers know they I’ve long rallied for changes to the Fair Labor Standards Act. The law is overly complex, anachronistic, and nearly impossible for compliance by employers.

Last week, I read an article on politico.com arguing that the FLSA’s exemptions need to be rewritten to make it easier for employees to qualify for overtime pay. This is not the right solution to this country’s wage-hour problems. You don’t fix one problem by creating another, i.e., punishing small and midsize employers by requiring them to start paying groups of employees overtime en masse. What will be their solution to this newly created problem? Reverse engineering. They will look at each employee’s W-2 wages for the past years, and calculate the appropriate lower hourly wage (or salary) to play each newly overtimed employee that will result in the same annual W-2 figure with the time-and-a-half rolled in.

This is not a solution. It’s an administrative burden that will not put more money in workers’ pockets. The solution is to make FLSA compliance easier for employers by simplifying decades-old regulations.

There is one wage-hour change I can support. Pending in the Ohio legislature is a bill that would require retail employers to pay triple-time to employees who work on Thanksgiving. Dear readers, please do not shop on Thanksgiving. Retailers require employees to give up their holiday because we show up for sales like lemmings to the 25% off sticker. I understand why safety forces and medical workers need to give up their holidays. But the cashier at Target? He or she deserves the day of add much as I you and I do. So if we need a law to disincentive employment on these days, then so be it.

WIRTW #346 (the #grossatwork edition)

Gawker wants to know, “What’s the Grossest Thing You've Ever Done at Work?” Me? I very accidentally walked in on a very naked octogenarian. You? Share in the comments, or on Twitter with the hashtag #grossatwork.

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

Discrimination

• Pick a number, any number: $185 million for pregnancy bias — via Walter Olson’s Overlawyered
• Employers Must Treat Pregnant Workers Mindfully to Avoid Compliance Challenges — via Smart HR Manager
• Personal desktop printers: convenience or reasonable accommodation? — via Technology for HR
• Senators Grill EEOC General Counsel Lopez In Confirmation Hearings W— via orkplace Class Action Litigation

Social Media & Workplace Technology

• The NLRB and the EEOC are primed to sue you for using social media in the hiring process — via Mike Haberman’s Omega HR Solutions
• Does Your Technology Match Your Culture? — via SocialFish
• Facebook Testing New Service Designed For Workplace Use — via TLNT
• Is it against the law to remote wipe an employee's Candy Crush high score? — via Eric Meyer’s The Employer Handbook Blog
• Fitbit data is being used as evidence in court — via The Verge
• When inappropriate texts aren’t harassment — via Evil HR Lady, Suzanne Lucas
• The Inbox - Love Me Tinder — via Suits by Suits
• Teacher’s Racist Twitter Rant and the Law — via Phil Miles’s Lawffice Space

HR & Employee Relations

• “Happy Holidays” vs. “Merry Christmas” — via Evil Skippy at Work
• Workers Gave Up $52 Billion In Vacation, is it Time to End 20th Century Vacation Policies? — via Blogging4Jobs
• OSHA Warns Retailers It Expects Better Than Business as Usual on Black Friday — via Employer Defense Law Blog
• I Love Sports References in the Workplace — via Next Blog
• Planning your workplace holiday party? Read this first! — via Robin Shea’s Employment & Labor Insider
• Chick-fil-A Manager Loses His ****, Posts Ban of Slang Words in Store — via The HR Capitalist, Kris Dunn
• Workplace of the Future? Citi’s Experiment — via Families and Work Institute Blog
• A Working Father’s Response — via DOL’s Work in Progress

Wage & Hour

• FLSA Suit Against Supervisors Barred by 11th Amendment Workplace Prof Blog
• Employees of New York City Strip Club Dance Off With $10M Employment Law Worldview
• Wage Theft Continues To Plague Workers Overtime Lawyer Blog
• And Another One: Conde Nast Settles Intern Pay Lawsuit In House
• Employee wage, time off, and benefit issues that arrive with winter storms HR Hero Line
• What is Off-the-Clock Work? Wage & Hour - Development & Highlights

Labor Relations

• Wal-Mart Labor Struggles to Result in Black Friday Protests — via Workplace Prof Blog
• VW Implements New Labor Policy, Potentially Paving Way For UAW — via Labor Relations Today

Don’t forget the photo authorizations for your holiday party

Are you having a holiday party for your company? Are you planning on sharing the cheer by posting photos of said party on your corporate Facebook page or other social media? If so, don’t forget to have your employees sign authorizations before you post those photos.

Like many states, Ohio has a statute that protects an individual’s name, voice, signature, photograph, image, or likeness. This “right of publicity” prohibits one from using another’s persona for a commercial purpose without written consent.

It may be sufficient to have statement in your employee handbook advising employees that, from time to time, the company may post pictures of employees on the company’s website, Facebook page, etc., and employees who wish to opt out should advise HR in writing. The overly cautious employer, though, will want this to be an opt-in process, with employees providing specific written consent for the use of their likeness in photos.

Regardless, employers should do something to ensure that they are not infringing on employees’ right of publicity with photos of employer-sponsored events. Otherwise, your holiday lump of coal might come in the form of a lawsuit by a shy, and overly litigious, employee.

Jury verdicts are just numbers on a paper

On Monday, a California jury awarded a former Autozone employee $185 million in punitive damages. She had sued the company for pregnancy discrimination, claiming that the district manager who fired her was promised a promotion if he fired all of the women in his stores. Last week, the same jury awarded the plaintiff $900,000 in compensatory damages for lost wages and emotional distress.

While $185 million is a staggeringly huge number, this plaintiff will only ever collect a tiny fraction of it, at best. Due process tells us that punitive damages must bear some reasonable relationship to the size of the compensatory award, typically not to exceed a ratio of 9:1.

Moreover, if this case was filed in Ohio, and not California, damage caps would kick in to severely restrict the verdict. Ohio’s tort reform law caps punitive damages in state-law employment discrimination claims to two-times the compensatory award. Thus, in Ohio, this plaintiff’s punitive award would cap at $1.8 million, still a large number, but out of the nine-figure stratosphere.

Jury verdicts are headline grabbers—big splashy numbers that grab everyone’s attention. Trust me, Autozone’s attention has been grabbed. It will file a motion to reduce the jury verdict, and it will appeal, while, at the same time, this plaintiff will file motions seeking her attorneys’ fees. Ultimately, this case will confidentially settle, and we will never know the final dollars exchanged.

More damaging than the amount of the award is the negative publicity associated with it. Because of the verdict’s inordinate size, the press has labeled Autozone as a company that discriminates against women in the worst way possible—systemically and intentionally. That damage is much worse than this employee punching a lotto ticket that she will never cash.

More on data security as an unfair labor practice

A few months ago, I wrote how the NLRB was exploring new areas of potential protected concerted activity to regulate. One such area is information and data security.

According to Employment Law 360, the NLRB potentially is looking to expand its reach in the area of cybersecurity, this time investigating whether an employer was required to bargain with its labor union over the impact of a data breach on its employees:

A postal workers union has lodged a charge with the National Labor Relations Board over the U.S. Postal Service’s handling of a recent data breach, a novel move that adds union negotiations to the already sprawling list of concerns companies must contend with in their race to mitigate cyberattacks.

In a Nov. 10 charge filed with the NLRB, the American Postal Workers Union accused USPS of engaging in unfair labor practices in violation of the National Labor Relations Act, by failing to give the union advance notice “that would enable it to negotiate the impacts and effects” on employees of the cyberattack….

The union specifically took issue with USPS’ offering employees affected by the incident one year of free credit-monitoring, a decision that the postal workers characterized as a unilateral change to wages, hours and working conditions that an employer is generally not permitted to make without first bargaining with the union.

Responding to a cyber-attack is complicated and complex. The federal FTC, along with a patchwork of divergent state laws, requires quick communication of various levels of detail and complexity to individuals and regulators following a data breach. If employers need to add communications to labor unions to this list of constituents (and this issue remains very much open), it will create additional burdens on employers, which could potentially slow down a company’s other response efforts.

To avoid these issues, employers should consider bargaining these issues into the terms of collective bargaining agreements, so that you have a game plan in place before you have to respond. Otherwise, when faced with a data breach, you could be faced with running your response programs through the filter of your labor unions, which could hamper your other response efforts, and subject your company to potential liability from the cyber breach.

6th Circuit rules in favor of nonprofit in discrimination claim brought by volunteers

In Bryson v. Middlefield Volunteer Fire Dep’t, the 6th Circuit held that a “volunteer” can qualify as an employee covered by Title VII under certain limited circumstances. In making that determination, a court must examine not only whether the volunteer is paid, but also the degree of control exercised by the employer over the manner and means by which the work is accomplished.

Last week, in Sister Michael Marie, et al. v. American Red Cross [pdf], the same court applied that test to uphold the dismissal of the Title VII religious discrimination, retaliation, and harassment claims filed by two nuns against the organization for which they had volunteered. In concluding that the two plaintiff-nuns were bona fide volunteers, and not employees, the court heavily relied on the lack of compensation paid by the Red Cross, coupled with its inability to control their performance via termination of employment or threat thereof.

An employer’s ability to terminate a non-compliant employee, which is perhaps an employer’s greatest source of control, is meaningful because the employee stands to lose not only her job, but also the source of income upon which she depends…. Though we make no attempt to resurrect the economic realities test from the grave, its  central teaching remains instructive…. The economic reality is that when volunteers work without traditional forms of remuneration like salary and benefits, employers are generally without leverage to control that volunteer’s performance.

While you might think it’s cold to conclude that two nuns could not pursue discrimination claims, this case makes a broader policy statement in favor of nonprofit organizations. The lifeblood of nonprofits is their volunteer base. Without the aid of volunteers, nonprofit organizations, which operate on limited budgets and scant resources, would not survive. If volunteers could easily sue these organizations for discrimination or other employment-related claims, nonprofits would be much more reluctant to use the services of volunteers to staff their needs, thus making it much more difficult for them  to carry out their missions and provide their essential services.

By relying heavily on the lack of payment to show lack of control, the 6th Circuit drew a line that will be difficult for most bona fide volunteers to cross to demonstrate employment status. And while no organization should discriminate against anyone providing services to it, this case decides that the public good done by nonprofit organizations outweighs the public policy against employment discrimination.

WIRTW #345 (the “earworm” edition)

Ever since my wife and I went to see Rhett Miller a couple of weeks ago, Lost Without You has been stuck in an unending loop in our collective head. Now, it is my gift to you.

For earworms, you could do a whole lot worse. At least Lost Without You is a good song. It could be It’s A Small World.

Here’s what I read this week:

Discrimination

• Despite Employment Discrimination Training, “Human Nature Often Rears Its Ugly Head” — via Employment Discrimination Report
• Seed and Fertilizer Providers to Pay $187,500 for Genetic Information and Disability Discrimination — via EEOC News Releases
• Obesity: Grounds for Unlawful Discrimination in Europe? — via LE Blog
• Is your wellness program illegal according to the EEOC? — via Omega HR Solutions
• 3 Tips for Harassment Investigations — via Molly DiBianca’s Delaware Employment Law Blog
• Sexting, flirting, but no sexual harassment here — via Eric Meyer’s The Employer Handbook Blog

Social Media & Workplace Technology

• Home Depot switches execs to iPhones, MacBooks as it blames Windows for massive breach — via TiPb
• Harvard secretly installed cameras in lecture halls to monitor student attendance — via The Verge

HR & Employee Relations

• Tuesday’s GOP “shellacking” may not change much for employers — via Robin Shea’s Employment & Labor Insider
• The Workplace Issues That Keep HR Professionals Up at Night — via TLNT
• Everything You Need to Know About Paid Sick Leave — via Evil HR Lady, Suzanne Lucas
• The Right Way to do an Exit Interview — via Blogging4Jobs
• Study: Men value work flexibility, too — via Business Management Daily
• Background Check Settlements Still Costing Employers Big Dollars — via Dan Schwartz’s Connecticut Employment Law Blog

Wage & Hour

• Why a 40-Hour Worker Means More to Small Businesses — via WSJ.com: Small Business
• A Labor and Employment Audit of Santa’s Workshop — via New York Labor and Employment Law Report
• Intern-Employee FLSA Case Dismissed Because Clinical Experience Is Not “Work” — via Wage & Hour - Development & Highlights
• Put Up or Shut Up: 8th Circuit Shuts Down Overtime Claim Because Plaintiff’s Guestimates of His Hours Worked Are Insufficient — via The Wage and Hour Litigation Blog
• Gentlemen’s Club Cannot Strip Dancers of Employee Status — via Labor & Employment Law Perspectives
• Wage & Hour Litigation Insurance: A Viable Option for Employers Wishing to Mitigate Risk? — via Washington Workplace Law

Labor Relations

• In Murphy Oil, NLRB Reaffirms Its Stance on Class Action Waivers — via In House
• Obama Withdraws NLRB nominee — via The Hill’s Briefing Room

Are you doing enough to protect your trade secrets from theft in the cloud?

Do your employees use Dropbox (or Google Drive, or Box, or iCloud, etc.) to store work documents? The appeal of these cloud services is easy to see. Because they provide the ability to store electronic files and access them across multiple devices linked to the same account (i.e., one’s office PC, home computer, iPhone, and iPad), they have exponentially increased the work-life balance of employees who need to work beyond the traditional 9-5. With that benefit, however, comes significant risk to employers.

You may think Dropbox and other cloud services don’t present a risk. After you, your employees are loyal and trustworthy. But, it only takes one layoff to turn a loyal employee into a desperate job seeker looking to provide value to turn a prospective employer into a new job. In that instance, the trade secret cat is out of the bag, and you are spending, and spending, and spending, to try to wrangle it back in.

I’ve seen two cases in which a company alleged that an employee absconded with trade secrets or other confidential information by storing them remotely on a cloud service.

• In a lawsuit filed last week, Lyft accused its former COO of snatching thousands of sensitive documents when he left to work for its chief competitor, Uber. The mode of theft? The downloading of emails and documents to his personal Dropbox account in the months leading up to his defection.
• Last year, Zynga settled a lawsuit it had filed against a former manager whom it alleged had used Dropbox to steal its trade secrets upon leaving for a rival startup.

What can an employer do to minimize risk of trade-secret misappropriation or other breach of confidentiality, short of filing expensive and protracted litigation? Consider these 8 steps, courtesy of the ABA Section of Litigation’s Intellectual Property Committee:

1. Limit access to trade-secrets on a need-to-know basis. The fewer people with access to trade secrets, the more likely the information will remain secret.
2. Limit access to cloud-based solutions on company computers and prohibit any use of personal cloud solutions for company materials. Consider installing software to limit access to any cloud solutions that are not approved by the company.
3. Implement policies and train employees about the use (or non-use) of cloud solutions and, more generally, about the protection of confidential information. Employee handbooks, new-employee orientations, posted company policies, and annual employee training sessions all provide opportunities to address these issues.
4. Monitor when files are accessed or downloaded, and by whom. This will allow the company to take immediate action in the event it discovers suspicious activity.
5. Require employees to sign NDAs. All employees should sign NDAs prohibiting them from taking or using company information for any purpose other than their work for the company. These obligations should extend beyond termination.
6. Conduct exit interviews. This will allow the company to explore whether the employee retained any confidential information and to instruct him or her that any such information should be immediately returned or destroyed.
7. Collect and secure computers used by terminated employees. By examining the computer of a former employee, a company can often determine if any information was taken before the employee’s departure and what that information was.
8. Label or name files containing trade secrets as “Confidential” or “Trade Secret.” While this probably will not prevent unauthorized use or access, it may help a company to persuade a court that any misappropriated information still qualifies for trade-secret protection. This is because confidentiality labels help show that the company took reasonable steps to maintain secrecy by notifying the employee as to the sensitivity of the information.

You cannot absolutely protect against the use of the cloud by your employees. All an employee has to do is email a file to a personal email account, and your control over that file is gone. Implementing these 8 measures, however, will place your business in the best position possible to limit your risk, and secure against theft of sensitive information by exiting or otherwise disgruntled employees.

Recap of #hrintelchat on pregnancy discrimination

Yesterday afternoon, Jeff Nowak and I had a lively tête-à-tête on Twitter—aka the #hrintelchat—on all things pregnancy discrimination. In case you missed it (and given the numbers of folks tweeting along, I’m going to guess that you did), below is a neat little summary of the hour-long tweetfest. The rights of pregnant workers is an important issue that will only get more important and dual-income families and single moms are the rule and not the exception.

Thanks to Thompson HR for the invitation and for hosting. I enjoyed my hour of tweeting (even if my wrists and fingers did not).

#hrintelchat Tweets

Putting paternity leave on equal footing with maternity leave, #hrintelchat

This afternoon, from 3 – 4 pm, EST, I, along with my friend, Jeff Nowak, will be hosting a TweetChat for Thompson Information Services on the “Evolving Rights of Pregnant Employees in the Workplace.” Follow us on Twitter at #hrintelchat, and tweet your questions or comments to @ThompsonHR, @jeffreysnowak, and @JonHyman. We’ll be discussing workplace right and accommodations of pregnant employees. More information is available here.

While our TweetChat will focus on the rights of pregnant women, females aren’t the only ones that have workplace rights when it comes to new babies. According to the New York Times, even though many men have the same right to paternity leave that their female counterparts have to maternity leave, few exercise that right out of fear and stigmatization.

Paternity leave is perhaps the clearest example of how things are changing — and how they are not. Though the Family and Medical Leave Act of 1993 requires companies with more than 50 employees to provide 12 weeks of unpaid leave for new parents, it requires no paid leave. The 14 percent of companies that do offer pay … do so by choice. Twenty percent of companies that are supposed to comply with the law, meanwhile, still don’t offer paternity leave…. And almost half the workers in the United States work at smaller companies that are not required to offer any leave at all.

Even when there is a policy on the books, unwritten workplace norms can discourage men from taking leave. Whether or not they are eligible for paid leave, most men take only about a week, if they take any time at all. For working-class men, the chances of taking leave are even slimmer.

Here are a few “don’ts” to keep in mind in managing new dads in your workplace.

• Don’t forget the men in your workplace when you’re crafting leave policies.
• Don’t deny leaves to new dads doling out post-childbirth leaves of absence.
• Don’t punish those that use those policies and leaves, such as limiting promotions, opportunities, or raises.
• Don’t apply unconscious stereotypes about the dedication or loyalty of men who take leaves of absence for familial responsibilities.