April 14, 2011

Keith Weddington Sarah Ford

PARKER POE ADAMS & BERNSTEIN LLP

EMPLOYMENT LAW UPDATE

AGENDA

I. Judicial Decisions

• U.S. Supreme Court

• 4th Circuit

• N.C. Appellate Courts

II. Legislative Update

III. Hot Topics

2

Supreme Court Decisions

3

Disparate ImpactLewis v. City of Chicago

(Decided May 24, 2010)

Plaintiffs who fail to file charge with EEOC within 180/300 days of employer’s adoption of discriminatory policy, may still assert a timely claim

Adoption vs. Application

4

Disparate ImpactLewis v. City of Chicago

(Decided May 24, 2010)

Must establish prima facie disparate impact claim

Employer uses a particular employment practice

Practice causes a disparate impact on one of the prohibited bases

Beware of comfort based on old familiar policies.

5

PrivacyCity of Ontario, CA v. Quon

(Decided June 17, 2010)

Court avoided making a broadly applicable ruling regarding employee privacy rights with respect to employer provided electronic devices

Court assumed Quon had a reasonable expectation of privacy

Public employee v. private employee

6

PrivacyCity of Ontario, CA v. Quon

(Decided June 17, 2010)

Reasonable search under the 4th Amendment legitimate, work-related purpose not excessive in scope

Be sure computer/internet usage policies keep pace with advancing technology (texting, instant messaging, social networks)

Consistent training and enforcement

7

Background ChecksNASA v. Nelson

(Decided January 19, 2011)

Court assumed, without finding, that a constitutional right to informational privacy exists

Government has greater latitude as employer than when acting as sovereign

Federal government may conduct wide-ranging background checks of workers employed by government contractors.

8

Background ChecksNASA v. Nelson

(Decided January 19, 2011)

Employers (public and private) should evaluate background check procedures to:

ensure reasonableness/job-relatedness avoid prohibited ADA/GINA protected

inquiries ensure information obtained is kept

secure and confidential

9

Third Party RetaliationThompson v. North American Stainless, LP

(Decided January 24, 2011) White v. Burlington Northern: Any

conduct by employer that would dissuade a reasonable person from engaging in protected conduct = adverse action

Terminated fiancé of employee who filed EEOC charge was within “Zone of Interests” protected by Title VII

Policies and training materials should emphasize that 3rd party retaliation is illegal

10

Cat’s PawStaub v. Proctor Hospital(Decided March 1, 2011)

Employer liable where: Supervisor acts with

discriminatory animus Supervisor intends

act to result in adverse action

That act is a proximate cause of ultimate adverse employment action

11

Cat’s PawStaub v. Proctor Hospital(Decided March 1, 2011)

Employer may escape liability if ultimate adverse action unrelated to original biased action

Practical Tips: Train all supervisory

employees Regular performance reviews Conduct independent

investigation, especially if employee challenges disciplinary action or has conflict with supervisor

Get input from multiple sources

12

Protected ActivityKasten v. Saint-Gobain Performance Plastics

(Decided March 22, 2011)

Oral complaint regarding FLSA issue is sufficient to invoke protections of FLSA’s anti-retaliation provision

Oral complaint must be sufficiently clear and detailed for reasonable employer to understand it as an assertion of rights protected by FLSA

Unresolved – complaint to employer vs. governmental body?

13

Protected ActivityKasten v. Saint-Gobain Performance Plastics

(Decided March 22, 2011)

Consider implementing formal process to review and respond to internal complaints

Specify what information employee must provide employer in order to “file” a complaint

14

Attorneys’ FeesFox v. Vice

(Oral arguments heard May 21, 2011)

Issue: Whether a court can award attorneys’ fees to civil rights defendants based on dismissal of claim when plaintiff has asserted other interrelated non-frivolous claims

“But for” versus “fairly attributable”

15

FOURTH CIRCUIT DECISIONS

16

Settlement of FMLA ClaimsWhiting v. Johns Hopkins Hospital

(Decided March 14, 2011)

Hopefully, the final word on waiver of FMLA claims

Affirms reasonableness of DOL’s 2007 regulation approving of the settlement or release of FMLA claims based on past employer conduct without the approval of DOL or court

17

Executive Exemption under FLSAGrace v. Family Dollar Store, Inc.

Decided March 22, 2011

Salaried retail store manager was an executive employee exempt from FLSA’s overtime provisions despite spending 99% of her time on nonexecutive tasks

Time factor was not controlling Even while doing non-managerial

tasks, Grace was responsible for running the store profitably and dealing with whatever issues arose

Sexual HarassmentEEOC v. Cromer Food Services, Inc.

(Decided March 3, 2011)

Issue: Can employer be held liable for harassment of an employee by a third party?

Employer is liable if it knew or should have known of the harassment and failed to take appropriate actions to halt it.

Knowledge can be imputed to employer if a reasonable person, intent on complying with Title VII, would have known about the harassment

19

Volunteer Exemption Under FLSAPurdham v. Fairfax County School Bd.

(Decided March 10, 2011)

Golf coach was “volunteer” exempt from FLSA

Volunteer = individual who performs hours of service for a public agency for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation

20

Volunteer Exemption Under FLSAPurdham v. Fairfax County School Bd.

(Decided March 10, 2011)

Employee of public agency exempt if: receives no compensation or is paid

expenses or nominal fee, and volunteer services are different from

normal duties

Private employees cannot be volunteers

21

Calculating Damages Under FLSADesmond v. PNGI Charles Town Gaming

(Decided Jan. 18, 2011)

Issue: Measure of damages in FLSA misclassification cases involving salaried non-exempt workers?

“Half-time” methodology: 50% OT premium—provided that employer & employee had mutual understanding salary covered all hours worked and employee made not less than minimum wage for every hour worked

22

North Carolina State Court Decisions

23

Non-Solicitation AgreementsMJM Investigations, Inc. v. Sjostedt

(Decided July 20, 2010) Employer’s failure to define “current or

prospect client” rendered non-solicitation clause unenforceable

Clearly define “customers” and “prospects” How determined? At what point in time? Limit to those for whom employer has legitimate

need for protection.

Be sure both noncompete and non-solicitation provisions each contain a time period (in case one is blue-penciled out)

24

Oral Employment AgreementsKornegay v. Aspen Asset Group, LLC

(Decided April 12, 2011)

Oral agreement to pay 20% commission bonus upheld

Memo stating “No Bonuses. No Commissions. No Nothing until Aspen sees fit & confident we are making money” insufficient to negate bonus plan under NCWHA.

Trial judge’s decision re: liquidated damages and attys fees is reviewed de novo for abuse of discretion.

25

Oral Employment AgreementsKornegay v. Aspen Asset Group, LLC

(Decided April 12, 2011) Clear written agreement or policy re:

bonuses and commissions is essential How calculated? When earned? When payable? When lost or forfeited?

Any ambiguity will be construed against the employer.

26

Legislation

27

Americans with Disabilities Act Amendments (ADAAA)

Signed into law on September 25, 2008

Amendments effective January 1, 2009

Final Rules issued March 25, 2011

28

Final Rules Implementing ADAAA

Primary Purpose: “To make it easier for an individual seeking protection under the ADA to establish that he/she has a disability within the meaning of the ADA.”

Focus is on whether individual was/was not reasonably accommodated or otherwise discriminated against – NOT whether individual is disabled

29

Final Rules Implementing ADAAAA

Claims under “actual disability” and “record of” versus claims under “regarded as.”

No per se list of disabilities; but, non-exhaustive list of examples of conditions that would likely be considered disabilities.

Goal: Courts should spend less time on determining coverage under the ADA and more time to determine if a discriminatory act occurred.

30

Impact on Employers

More requests for accommodations More internal review More EEOC charges More lawsuits More retaliation complaints Fewer dismissals and early

conclusions

31

Final Rules Implementing Genetic Information Nondiscrimination Act

(GINA)

Health insurers and employers cannot discriminate on the basis of an individual’s genetic information

32

GINA

Took effect on November 21,2009

Final Regulations Implementing GINA were issued on November 9, 2010 and took effect on January 10, 2011

What is Genetic Information?

Includes Genetic test results Family medical history

Does NOT include Information about employee gender or age Information about current disease/disorder Tests for drug/alcohol use

34

Who is Protected Under GINA?

Applicants Employees Former employees

35

What Does GINA Prohibit?

Prohibits use of genetic information in employment-related decisions

Prohibits intentionally acquiring genetic information

Prohibits harassment Prohibits retaliation

36

STRICT REQUIREMENT OF CONFIDENTIALITY

Genetic Information Nondiscrimination Act (GINA)

Interplay between GINA, ADA, and FMLA Effect on Employer-Sponsored Wellness

Programs Same remedies as Title VII Employee training is a must

37

What’s The Status?

38

PayCheck Fairness Act

Protecting Older Workers Against Discrimination Act

Employment Nondiscrimination Act

Employee Free Choice Act

HOT TOPICS IN EMPLOYMENT LAW

39

Hot Topics in 2011

Social Networking in the Workplace

Misclassification of Independent Contractors

Investigation of Systemic Discrimination

Impact of Credit Checks in Hiring

Form I-9 Audits

40

Social Networking Sites

• 

Social Networking Statistics

Facebook has 500 million active users (http://voices.washingtonpost.com/posttech/2010/07/facebook_hits_500_million_user.html?referrer=emaillink)

Twitter has more than 190 million users, tweeting 65 million times a day (June 8, 2010, TechCrunch.com)

By June 2008, Technorati was tracking over 112 million blogs (http://www.blogherald.com/2008/02/11/how-many-blogs-are-there-is-someone-still-wondering/)

42

What’s the problem?

Meet Kevin Colvin

What’s the problem?

““Cisco Fatty”Cisco Fatty”

A Cisco applicant tweeted this:

“Cisco just offered me a job! Now I have to weigh the utility of a fatty paycheck against the daily commute to San Jose and hating the work.”

Your Social Media Policy

Address time management

Prohibitions may include: profanity about co-workers, false statements, confidential information, harassment

Policy should be narrowly crafted with a disclaimer re labor rights

Misclassification of Independent Contractors

U.S. DOL study found 10-30% of employers audited had misclassified workers

IRS estimates it is losing $20 billion a year due to worker misclassification

Obama’s $25 million “Misclassification Initiative”

Increasingly subject of FLSA suits

Independent Contractors v. EmployeeWhy Does the Classification Matter?

Employee

Employer pays payroll taxes & withholds income taxes

Employee may qualify for UC and WC

Protection under anti-discrimination laws

Protection under federal and state wage and hour laws

Independent Contractor

IC pays self-employment taxes & reports own income

No UC or WC No overtime No protection under

anti-discrimination and workplace safety laws

47

Factors

Control of manner and means of work

Skill required Source of tools and

instruments Length of

employment Place where work is

performed

Method of payment Receipt of benefits Vacation Opportunity for

profit/loss Hired party’s role

in hiring and paying assistants

48

What Should You Do?

Identify who you have classified as ICs

Conduct an analysis of each position Reclassify?

49

Enforcement InitiativeSystemic Gender Discrimination

Nationwide focus for EEOC

Prevent systemic discrimination, with focus on gender discrimination

Class actions and large settlements and damages awards

50

What Should an Employer Do?

Review policies on transfers and promotions and analyze compensation practices

Conduct training for managers to address best practices in making hiring, pay and promotion decisions

Conduct prompt and effective investigations of gender-based conduct or decisions in the workplace

51

Credit Checks in Hiring Process

Whether employer’s use of credit checks as a condition of employment violates federal civil rights laws?

Disparate impact against women and minorities

EEOC heard testimony on October 20, 2010

52

Form I-9 Audits by ICE/DHS

Increased enforcement and higher fines

Failure to verify authorization to work

“Paperwork” violations

Audit: Internal or External

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Office Locations• Charleston, SC• Charlotte, NC• Columbia, SC• Myrtle Beach, SC• Raleigh, NC• Spartanburg, SC

Kd

Keith Weddington Sarah Ford Direct Dial 704-335-9035 Direct Dial 919-835-4507keithweddington@parkerpoe.com sarahford@parkerpoe.com