SURVIVE Sc THRIVE W - Woods Rogers

SURVIVE Sc THRIVE .THE SEW

ANNUAL .&, .EMPLOYMENT. SEMINAR

#INTRL al; or3 5

-WOODS ROGERS

WELCOME!

Woods Rogers Edmunds & Williams Combine

Forces in Lynchburg • WR founded in 1893; EW founded in 1885 • Combined Firm: 78 lawyers • Largest practice groups:

– Banking and Corporate – Labor and Employment – Health Care – Litigation – Tax – Trusts and Estates

Woods Rogers Aligns with Innovista Law Richmond, VA

• Strategic alliance formed January 2016 • Three attorneys • Telecommunications, social innovation, government contracting • Collaborating on each firm’s clients • Complements our own Richmond office

LEGAL UPDATE

U.S. SUPREME COURT

Title VII Green v. Brennen

• Issue: statute of limitations for constructive discharge claims – 45 days (federal sector) vs. 300 days

• SCOTUS – S/L runs from date of resignation and not the date of last discriminatory act

• Bright line rule, but extends filing deadline

Attorney’s Fees CRST Van Expedited v. EEOC

• Issue: can EEOC be liable for defense fees? • D.Ct. dismissed majority of sex discrimination claims

and EEOC’s “pattern or practice” claims • ER moved to recover $4.5 million in defense fees on

dismissed claims • 8th Circuit rejected – not fully decided “on merits” • SCOTUS – D may recover fees for frivolous,

unreasonable, groundless claims when resolved in D’s favor, whether on merits or not

FLSA Tyson Foods v. Bouaphakeo

• Issue: donning/doffing time compensable? • 4,000 EEs claimed OT pay for donning/doffing

protective gear required for job • Preliminary/postliminary activities can be

compensable if integral to work activities • SCOTUS – affirmed $5.8 million judgment

Service Advisors Exemption Encino Motorcars v. Navarro

• Issue: deference given DOL interpretations • Dealership treated service advisors as exempt

under salesman exemption • DOL reversed 30 years of prior interpretation that

held service advisors to be exempt • SCOTUS: DOL did not give reasoned explanation for

changing prior interpretation, and reversed

4TH CIRCUIT

“Exotic Dancers” Case McFeeley v. Jackson St. Entertainment • Issue: Are strippers independent contractors? • Strip club classified “exotic dancers” as ICs • 4th Circuit: “economic realities” test – strippers

are EEs. – work schedule, fees, discipline all controlled by club

Trainees Harbourt v. PPE Casino Resorts MD

• Issue: Is training time compensable? • Casino refused to pay trainees who took part in 12-

week training school • 4th Circuit: applied “primary benefit test” results

in FLSA protection for trainees

First Responder Morrison v. County of Fairfax

• Issue: Can first responders be exempt even if supervisory?

• Fire dept. captains treated as FLSA executive exempt • 4th Circuit – primary duty is front-line firefighter • Bright line test – EEs who are primarily “first

responders” are not exempt regardless of mgt functions

ADA Stephenson v. Pfizer

• Issue: Is driving an essential function • Sales rep with eye problems could not drive, and

Pfizer refused to accommodate b/c it was an essential function

• 4th Circuit: jury reasonably could conclude that driving was not an essential function

Title VII Bauer v. Lynch

• Issue: Can employer have different fitness standards for men and women

• FBI required different physical standards (e.g., 30/14 push ups) based on gender

• 4th Circuit – doesn’t automatically violate Title VII where “equal burden of compliance” on both genders

National Origin/Religion Guessous v. Fairview Property

• Issue – comments as evidence of pretext • Property manager discharged for lack of work;

employee claimed pretext based on offensive comments – “camel people” – “Middle-Easterners are crooks”

• 4th Circuit – string of discriminatory comments can undermine an otherwise “legitimate” explanation for discharge

SUPREME COURT OF VIRGINIA

At-Will Employment Johnston v. William E. Wood & Assoc. • Issue: Is ER required to provide any advance notice

prior to discharging at-will EE • EE fired without advance notice sued for having

not been given “reasonable notice” prior to discharge

• S.Ct.: No advance notice required

NEWS FROM THE BIG “3”

EEOC DEVELOPMENTS

EEOC Charges Notable Trends: FY ‘95 to ‘15

CHARGE FY 1995 FY 2015 UP / DOWN

Total Charges 87,529 89,385 Slight Increase

Retaliation-All Statutes 19.5 % 44.5 % Up

Disability 22.6 % 30.2 % Up

National Origin 8.0 % 10.6 % Up

Religion 1.8 % 3.9 % Up

Color 0.8 % 3.2 % Up

Source: EEOC.gov

RELIGION

EEOC Issues Statement on Workplace Discrimination/Muslim

or Middle Eastern • 12/23/2015 • Urges ERs and EEs to be mindful of harassment or

discrimination against vulnerable communities • Offers resource documents for both ERs and EEs • Full news release found at:

http://1.usa.gov/1ZpXNeV

http://1.usa.gov/1ZpXNeV

Rhino Energy Pays $62,000 in EEOC National Origin & Discrimination Suit

1/20/2016

• Harassment based on Polish ancestry – Ethnic slurs, graffiti on walls in workplace

• Co. failed to take prompt action & fired EE for complaints

• Co. must now report to EEOC how it handles internal complaints

Nat. Fed. for the Blind (NFB) to Pay $25,000 for Religious Discrimination

2/8/2016

• EE requested time off on his Sabbath – Sunset Friday-sunset Saturday

• NFB refused accommodation & fired EE • EEOC: “ERs must be prepared to address requests

for reasonable accommodation”

EEOC Sues HospitalityStaff for Religious Discrimination

7/12/2016

• Prep cook at Disney resort • Fired for Rastafarian practices - dreadlocks • Hair tucked in cap over year w/o incident • After Disney compliance inspection, EE told to cut

hair if he wanted to return to work • No effort to accommodate, EE fired

PREGNANCY

Quality Solutions, LLC to Pay $22,500 to Settle EEOC Pregnancy Suit

Feb. 22, 2016

• Medeiros sought temp. job at Quality Solutions

• Mgr. would not send her b/c she pregnant

• Mgr.: job in warehouse - she could get hurt

First Call Ambulance Service to Pay $55,000

• May 27, 2016 • EE informed ER of pregnancy and restriction from lifting

patients >200 lbs. without assistance • Co. refused to accommodate

– removed EE from schedule – forced unpaid leave

• Co. allowed non-pregnant EEs to use “power cot” • Discrimination under Young v. UPS • 3-year consent decree

Shefa Wellness Center EEOC Sues for Pregnancy Discrimination

• Dec. 2, 2015 • EE fired 2 days after informing co. of pregnancy • Worked for only 2 weeks • Told she “deceived” ER by not disclosing pregnancy

during hiring process • Shefa will pay $37,000 settlement to EE • EEOC’s attorney: “Firing woman simply because she is

pregnant is against law.”

DISABILITY AND GENETICS

Joy Mining Machinery Settles EEOC GINA Lawsuit

1-7-2016

• Joy required “post-offer” medical examination • Joy requested family medical history on pre-

placement medical form • Joy must train all mgrs. and HR on GINA • EEOC will monitor compliance

PH Glatfleter Settles Disability Suit for $180,000

• 1-26-2016 • Mfr. required applicants to undergo medical exam

& pass physical test • Screened out individuals with disabilities • Co. never looked into accommodations • Rescinded offers to 2 applicants

Downriver Community Services

Denied Reasonable Accommodation 1-20-2016

• EE requested extended unpaid leave after surgery • ER fired and refused to rehire her based on

herniated disc • EEOC— “ER must demonstrate an

accommodation would impose undue hardship on business operations…cannot fire or refuse to rehire because EE has a disability.”

HARASSMENT

Fox Settles Roger Ailes Sex Harassment Claims

LGBT Protection Current State of the Law

• No federal legislation yet – Congress has not acted

“Equality Act” • July 23, 2015: Bills introduced in House/Senate

– Bans LGBT discrimination in employment, housing, pub. accommodations, pub. ed., fed. funding, credit, and jury system

• Sept. 8, 2015: Referred to Subcommittee • Sept. 2016: Still there….

Non-Discrimination Laws: State by State

Source: ACLU.org

Title VII: Transgender Protections –

EEOC Rulings • Macy v. Dept. of Justice (4/12/12)

– Discrimination based on gender identity is sex discrimination in violation of Title VII

EEOC’s Strategic Enforcement Plan

• Adopted in December of 2012 • The SEP includes "coverage of lesbian, gay, bisexual

and transgender individuals under Title VII's sex discrimination provisions, as they may apply" as a top EEOC enforcement priority

President Obama Signs Executive Order to Protect LGBT Workers

7/21/14 • Prohibits federal contractors from discriminating on

basis of sexual orientation or gender identity • “…today in America, millions of our fellow citizens

wake up and go to work with the awareness that they could lose their job, not because of anything they do or fail to do, but because of who they are – lesbian, gay, bisexual, transgender. And that’s wrong.” – President Obama

EEOC Files First Transgender Lawsuits

Sept. 25, 2014 • EEOC v. Harris Funeral Homes (E.D. Mich.) and

EEOC v. Lakeland Eye Clinic, P.A. (M.D. Fla.) • EEs fired b/c transgender, transitioning, and/or did

not conform to gender-based stereotypes

Title VII: Transgender Protections –

EEOC Rulings • Lusardi v. Dep’t of the Army (3/27/15)

– Denying equal access to restroom corresponding to gender identity is sex discrimination

– Cannot condition on EE providing proof of surgery – Cannot restrict EE to single-user restroom

• ER can make single-user restroom available to all EEs

Deluxe Financial Settles Transgender Discrimination Suit

1-21-2016 • 6/5/2015: Third transgender lawsuit filed • EE started job as male • Informed supervisor transitioning to woman • Deluxe refused to let her use ladies restroom • 1/21/2016: Deluxe to pay $115,000, issue apology and

provide reference for future ERs • Deluxe’s health benefits will not exclude medically

necessary care based on transgender status

Title VII: Sexual Orientation Protections – EEOC Ruling

• Baldwin v. Foxx, (7/15/15) – EEOC held for first time that Title VII bans sexual

orientation discrimination

EEOC Sues Scott Medical Health Center for Sexual Orientation Discrimination

March 1, 2016 • Mgr. made anti-gay comments to gay male

• EE complained to director

– Director: “Mgr. just doing his job” – Refuses to take action to stop harassment

• EE quits

EEOC Sues IFCO Systems for Sexual Orientation Discrimination

March 1, 2016 • Female EE harassed by supervisor

– “You would look good in a dress” – “I want to turn you back into a woman”

• EE complained & called hotline • EE was fired • Case subsequently settled

NC Legislation (HB2)

• March 23, 2016: NC Governor signs HB2 requiring

bathroom use according to birth certificate gender

• March 28, 2016: LGBT supporters file suit

• UNC Prof: “I think there is no question that this could wind up at the Supreme Court.”

VA Gov. Vetoes Anti LGBT Bill • March 30, 2016: Gov. McAuliffe vetoes anti-LGBT

bill

• Bill allowed businesses to refuse services to LGBT community on basis of religious belief

• Gov. McAuliffe: “Nothing more than an attempt to stigmatize.”

Bathroom Access Rights for Transgender Employees Under Title VII • IMPORTANT CONCEPT IN LIGHT OF RECENT

DEVELOPMENTS

• Transgender bathroom access rights under Title VII trump contrary state law

• State law is not a defense under Title VII (or Title IX)

Virginia A.G. Opines on LGBT Rights 5/10/16

But Wait! 7th Cir.: Sexual Orientation not

Protected under Title VII 7/29/16

• Hively v. Ivy Tech Comty. Coll. – Ct. rejected the EEOC’s Guidance – Bound by precedent rejecting orientation claims – Reviewed EEOC’s Baldwin decision. – “Perhaps the writing is on the wall” for a change in

Federal Law but that change must come from Congress or SCOTUS

SCOTUS Reverses 4th Cir. Denies Bathroom T-Male

8/3/16 • Based on Gloucester Co. School Brd’s emergency

application, Ct. ruled 5-3. – Justice Breyer joined the court’s conservative

members “as a courtesy” to preserve the status quo.

– No binding effect on any other case. – SCOTUS must determine if it will hear this case.

U.S. HOME CRIME TERRORISM ECONOMY IMMIGRATION DISASTERS MILITARY EDUCATION ENVIRONMENT PERSONAL FREEDOMS REGIONS

OHIO

Ohio judge orders girls' bathroom access for transgender student Published September 27, 2016 - Associated Press +

Mit a biologically

Barack Obama's rule on transgender bathrooms on Monday, ordering err COLUMBUS, Ohio — A federal judge rejected a school district's challenge to Pre

is."

est Judge Algenon Marbley said the Highland Local Schools in Morrow County had failed to provide a persuasive argument that giving the student access to the girls' restroom would jeopardize other students' privacy or safety. He further ordered that Highland use a female name and pronouns in referring to the 1 1 - yea r-old.

"(S)chool districts that have encountered these very issues have been able to integrate transgender students fully into the academic and social community without disruption, and certainly without the doomsday scenarios Highland predicts, such as sexual predators entering an elementary-school restroom," he wrote.

male student who identifies as female be treated "like the girl she t

I

Status of State Sex-Segregated Facilities Legislation Ei

States that have considered legislation in 2016 that would restrict access to sex-segregated facilities on the basis of biological sex. Most recent data available as of September 13, 2015.

No current legislation Pending Failed Signed into law Vetoed

Source: National Conference of State Leuislatures. Show details —

WOODS ROGERS ATTORNEYS AT LAW

LAW

Carolina Blues Hoops drain

al NORTH CAROLINA is leaking sporting

events. On Sept. 12 the NCAA announced that it would remove its championships from the state, and the ACC followed suit two days later. In July the NBA pulled its 2017 All-Star Game from Charlotte. And the Southern Conference is considering moving its basketball tournaments, scheduled for March, out of Asheville. Each organization offered the same explanation• North Carolina's Public Facilities Privacy and Security Act, known as HB2.

Commonly called "the bathroom bill," the legislation was signed into law by Governor Pat McCrory in part as a response to a Charlotte ordinance that extended antidiscrimination protection to the city's LGBTQ community. Although the statute is best known for its mandate that people use bathrooms that correspond with the gender listed on their birth certificates, its critics are more concerned that it removes LGBTQ anti-discrimination protections.

Almost from the beginning, the law has been

unpopular among residents. And that was before it cost them—literally: The Williams Institute at the UCLA School of Law estimates that the act could be responsible for a $5 billion loss per year.

Commissioners for each league have said they remain open to returning to the state if the law is repealed. McCrory is locked in a tight re-election race, and his opponent, Roy Cooper, has criticized the law. McCrory may discover this November that North Carolinians prefer their sports to their governor. —David Gardner

SPORTS ILL USTRATEEI SEPTEMBER 26.2016

k WOODS ROGURS A "1"1" 0 14 N I Y s Al LA \\

DOL DEVELOPMENTS

Joint Employment Update Jan. 20, 2016

• New Administrator’s Interpretation (No. 2016-1): Joint Employment under the FLSA

• FLSA broadly defines employment relationship and scope of joint employment

• Discusses horizontal and vertical joint employment

• Economic realities test

UNITED STATES DEPARTMENT OF LABOR

All DOL 0 OASP Advanced Search

Engage Share SEARCH

A to Z I Site Map I FAQs I Forms I About DOL I Contact Us I Espanol

Office of the Assistant Secretary for Policy

DOL Home > GASP > Fair Pay and Safe Workplaces

Was this page helpful?

Executive Order 13673: Fair Pay and Safe Workplaces FAR Rule and DOL Guidance published August 25, 2016

Background

On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order to require prospective federal contractors to disclose labor law violations and give agencies guidance on how to consider labor violations when awarding federal contracts.

While the vast majority of federal contractors play by the rules, every year tens of thousands of American workers are unlawfully denied overtime wages, discriminated against in hiring or pay, put in physical danger on the job, or otherwise denied basic workplace protections by the federal contractors who employ them using taxpayer dollars. Taxpayer dollars should not reward companies that break the law, and contractors who meet their legal responsibilities should not have to compete with those who do not.

The Executive Order also ensures that contractors' employees are given the necessary information each pay period to make sure that they are getting paid what they are owed, and that workers who are victims of sexual assault or sexual harassment get their day in court and are not forced to arbitrate these claims if they work for companies with very large federal contracts.

Bringing the Executive Order to Action

On August 25, 2016, after extensive input from the public, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the final rules and guidance implementing the Executive Order. These regulations and guidance make sure that agencies have the information they need to determine which contractors are providing their workers with basic protections. Using this information, agencies can ensure that taxpayer dollars only go to contractors that are willing to meet their responsibilities to their employees. They also create a process for agencies and DOL to help contractors come into compliance with labor laws and to ensure that contractors who get federal contracts continue to comply with labor laws while they are receiving federal funds.

Fair Pay and Safe Workplaces

Contractor ❑isclosures

Subcontractor Disclosures

Paycheck Transparency

Mandatory Arbitration

Preassessment

ALCA Directory

FAQs

Additional Resources

Executive Order 13673 "Blacklisting Rule" for Federal Contractors Will

Commence Next Month • 8/25/16 - DOL published final guidance regarding

"Fair Pay and Safe Workplaces" Executive Order • Requires contractors/subs to disclose:

– administrative merits determinations – civil judgments – arbitral awards

• Covers violations of 14 different Fed. labor laws and E.O.s, and state-law counterparts

Executive Order 13706 Paid Sick Leave for Federal Contractors

• 9/30/16 – DOL published final rule – 127 pages! • Must provide 56 hours (7 days) of paid sick leave • Can utilize current PTO/Sick leave as long as meets or

exceeds requirements of E.O. • Use in increments as small as 1 hour • FMLA interplay – broader coverage under E.O. • Grace period until 1/1/20 for CBAs entered into prior

to 9/1/16 (as long as provide minimum)

Executive Order 13706 Paid Sick Leave for Federal Contractors

• Who are covered contractors – Construction procurement Ks (DBA) – Service Ks (SCA) – Concessions Ks – Ks in connection with Fed. property or lands

• NOT – Public utilities – Financial institutions – Others outside definition above

0 All DOL 0 OLMS Advanced Search SEARCH Engage

A to Z I

UNITED STATES DEPARTMENT OF LABOR

Share

Site Map I FAQs I Forms I About 00L I Contact Us I Espanol

. LMRDA Section 203 and Implementing Regulations (29 CFR Parts 405 and 406) . Persuader Reporting Orientation Program (PROP) . Online Public Disclosure Room . Persuader Fact sheet and Other Guidance . How to File a Complaint with OLMS . Labor Organization Reporting and Disclosure Requirements . Contact OLMS for Additional Assistance

-WOODS ROGERS a S

OHM Mr INISM 11 MOW,

Office of Labor-Management Standards

DOL Home > OLMS > Employer/Consultant Reporting ,t Was this page helpful?

Office of Labor-Management Standards (OLMS) Form LM-10 Employer and Form LM-20 Consultant Persuader Reporting under the LMRDA

Notice: The U.S. District Court for the Northern District of Texas issued a nationwide preliminary injunction against the persuader rule on June 27, 2016. - PDF

The Labor-Management Reporting and Disclosure Act (LMRDA) establishes reporting and recordkeepIng requirements for employers and labor relations consultants. The transparency created by these requirements is designed to better inform workers in making determinations regarding the exercise of their rights to organize and bargain collectively_ With knowledge that the source of the information received is an anti-union campaign managed by an outsider, workers will be better able to assess the merits of the arguments directed at them and make an informed choice about how to exercise their rights.

Under LMRDA section 203(a), an employer must report, on Form LM-10, certain expenditures and activities, including certain specified financial dealings with unions and union officials and agents (see the Form LM-10 FAO for further information), as well as any agreement or arrangement with a third party consultant, to persuade employees as to their collective bargaining rights or to obtain cedar information concerning the activities of employees or a labor organizatIon in connection with a labor dispute involving the employer. Under LMRDA

DOL “Persuader” Rule Enjoined Organizing/Bargaining Rights

6/27/2016 • Would require reporting – activities and finances

– ER reports – Consultant/atty reports

• Advice exemption narrowed • Direct/indirect communication – persuader activity

– Coordinating supervisor interactions w/ EEs – Drafting materials disseminated to EEs – Creating presentations/seminars – Drafting policies informing EEs about union issues

• N.D. Texas granted preliminary injunction

BREAKING NEWS DOL/FLSA

EFFECTIVE DEC. 1, 2016

Breaking News: 9/20/2016

• 21 U.S. states filed suit claiming new OT rule will place heavy burden on state budgets.

– U.S. Chamber and other groups filed separate challenge

in same fed. court in Texas

– Only 7 percent of full-time salaried employees are currently eligible for overtime pay, he said, down from 62 percent in 1975.

Updated FLSA Regulations on “White Collar” Exemptions

Effect of the New Rules • DOL estimates 4 million-plus salaried workers

currently ineligible for OT will become eligible.

• DOL estimates another 100,000 will receive raise to remain exempt.

What Should You Do Now? • Conduct immediate audit of all classifications

currently classified as exempt – New rules may require reclassification or salary

increases.

• Remember, rule goes into effect Dec. 1, 2016.

New Board Member on the Way • Kent Hirozawa (Obama appointee) term expired

Aug. 27, 2016

• Lauren McFerran – term exp. 2019 • Mark Gaston Pearce (Chair) – term exp. 2018 • Philip Miscimarra – term exp. 2017

NLRA Now Covers Grad Student/TAs

• 8/23/2016 • 3-1 decision by NLRB • Student teaching assts. at Columbia U. and other

private univ. and coll. are statutory EEs covered by the NLRA

• Reverse 2004 decision saying “it deprived an entire category of workers of the protections of the Act…”

Return to “Sturgis” Standard – Units with Jointly and Solely Employed EES

7-11-2016

• 3-1 decision by NLRB • Reversed Oakwood Care Center, 343 NLRB 659 (2004) • Holds petitioners seeking to represent employees in

bargaining units that combine solely and jointly employed EEs of a single user ER no longer required to obtain ER consent.

5

30

24 24 24 24

25 24 26 24 27 26 28 24- 26 25

FY06 FY07 FYOB FY09 FY10 FY1 1 FY12 FY13 FY14 FY15

k- -WOODS ROGERS - MUM EOM 11 MOW,

Median Size of BargaintiThg -Units in Elections FY OG to FY 1S

Median Size

18

12

FY060

5

FY07 FY08 FY09 FY10 FY. 1 1 FY12 F -̀ L 3 z L

THE DIGITAL WORKPLACE Cyber 1:

Chief Justice Roberts • “[Modern cell phones] are now such a pervasive • and insistent part of daily life that the proverbial

visitor from Mars might conclude they were an important feature of human anatomy.”

• Riley v. California 573 U.S. ___(2014)

Your Employees Are Probably on Social Media.

• Top 5 Networks – Facebook—1.59 billion users – Twitter—320 million users – LinkedIn—100 million users – Pinterest—100 million users – Instagram—400 million users

Dangers of Employee Posts • Cast company in a negative light • Reveal trade secrets and other proprietary information • Google employee revealed upcoming products

(trade secret) • Vicarious liability (Acting as agent of company can create

corporate liability) • Defamation • Social media creates a permanent record • Gossip and damaging comments remain accessible for long

lengths of time

Can an Employer Discipline or Terminate for Social Media Activities? • National Labor Relations Act protects right of employees to

act together to address working condition, with or without a union.

– Employees cannot be disciplined if posts concern “protected concerted activities”.

– Recent NLRB decisions point to broadening definition of “protected concerted activities”.

– Protections extend to work related conversations conducted on social media.

Concerted Activity: – Generally requires two or more employees acting

together to improve wages or working conditions.

– Action of single employee may be considered concerted if he or she involves co-workers before acting, or acts on behalf of others.

Protected Concerted Activity • For “Concerted Activity” to be “Protected” it must

seek to benefit other employees.

• Will the improvements sought – whether in pay, hours, safety, workload, or other terms of employment – benefit more than just employee taking action? (protected).

• Or is action more along the lines of personal gripe, reflecting individual employee issues? (not protected).

Case 1 • Employee asked coworkers in Facebook post for reactions to

another employee's complaint about work quality and staffing levels, and four responded with posts.

• Subject of Facebook discussion complained to management about harassment and cyber-bullying. Employer then fired all five employees who posted Facebook messages for on-line harassment.

• The employer argued that it was simply enforcing its anti-harassment policy.

Case 1 • Holding:

– NLRB GC viewed employee's request for assistance from coworkers as concerted activity and concluded the terminations were illegal.

– Became NLRB's first adjudicated social media case, and NLRB administrative law judge agreed with General Counsel that the Facebook discussion related to matters affecting the employees' employment and, therefore, was protected activity.

Case 2 • Employee asked by supervisor to prepare report after

several complaints about her job performance.

• Employee requested union representative to assist her, and her supervisor denied the request.

• After shift ended, employee posted insulting and profane comments about supervisor on Facebook, which spurred comments from other employees.

• Shortly afterward, employer fired employee, citing complaints about her unprofessional behavior.

Case 2 • Holding:

– Even though the employee published profane insults about her supervisor on social media, comments were protected, concerted activity.

– The employee's discussion was about terms of employment (supervisory actions) with coworkers who were her Facebook friends.

Case 3 • Employee at Skinsmart Dermatology, engaged in Facebook group

message with six current and three former employees for purposes of planning social event.

• She criticized supervisor using in message using vulgar profanity.

• No other employee joined in the verbal attack on supervisor and the employee’s rant was reported the next day to management.

• Skinsmart terminated employee, stating that it was “obvious” she was not interested in working at Skinsmart.

Case 3 • Holding:

– NLRB’s AGC found that the messages were not protected concerted activity under the NLRA because they did not involve shared employee concerns regarding terms and conditions of employment.

– Rather, messages were mere “griping” without any plan or intent for action.

Case 4 • An employee complained on Facebook about the

"tyranny" at work, asserting that the

• Assistant general manager was a "super mega #*^&%."

Case 4 • Holding:

– This was not protected because it was merely an individual gripe, rather than logical outgrowth of any prior group activity.

Consider the following: • Check whether employee’s post attracted or solicited

response from co-workers.

• Calls for co-workers to take action likely constitute “protected” activity.

• Complaints about work or co-workers—even if vulgar—can be considered “protected” activity.

• Messages posted outside of workplace or work hours can still be considered protected concerted activity.

Consider the following: • Be especially sensitive to messages that reference

collective bargaining or labor requirements.

• Often, social media is not initial venue for airing work-related complaints. Investigate whether

• Complaints voiced online were previously brought to attention of employer.

Policy Language to Avoid in Employee Handbooks

• Prohibiting posts discussing employer’s non-public information, confidential information, and

• Legal matters (without further clarification of the meaning of these terms);

• Prohibiting employees from harming image and integrity of company, making statements that are detrimental, disparaging or defamatory to employer, and prohibiting employees from discussing workplace dissatisfaction;


• Prohibiting posts that are inaccurate or misleading or contain offensive, demeaning or inappropriate remarks; and instructing employees to use friendly tone and not engage in inflammatory discussions;

• Requiring employees to secure permission prior to posting photos, music, videos, quotes and personal information of others;


• Prohibiting non-commercial use of employer’s logos or trademarks;

• Discouraging employees from “friending” co-workers;

• Prohibiting online discussion with government agencies concerning company;

• Encouraging employees to solve work problems in workplace rather than posting about such problems online; and

• Threatening employees with discipline or criminal prosecution for failing to report violations of unlawful social media policy.

Can Employers Request An Employee’s Password?

• Illegal under Virginia Law – On March 23, 2015, Gov. McAuliffe signed H.B. 2081.

– Prohibits employers from requiring current or prospective employees from sharing login

– Information for social media or from requiring employees to add supervisor as contact.

– Limited exceptions for complying with other state or federal laws or investigations.

• Federal ban has been proposed (Password Protection Act)

• Facebook has issued statement condemning the practice.

The Use Of Social Media To Vet Prospective Employees

• Legal Risks And Potential Landmines: – Too Much Information – Discrimination Allegations – Too Little Information

• Credibility, Accuracy, and Authenticity Issues

Best Practices and Policies to Minimize Employer Risk

• Obtain the applicant's consent and only conduct the review after a conditional job offer has been extended.

• Avoid relying exclusively on the results from any social network review in making any employment decisions.

• Consider ways to verify and confirm what information has been accessed.

Best Practices and Policies to Minimize Employer Risk

• Be consistent with your searches. Do not discriminate when Googling based on the person’s race, age, gender or name (national origin bias).

• Googling may pull up photos, which means you may have to explain whether you considered the individual’s race/age/disability in your hiring decision.

• Be certain that you have effective and compliant Fair Credit Reporting Act authorizations and disclosures that legally permit appropriate background checks.

What is a trade secret? • Any type of information

– Formula, pattern, compilation, program, device, method, technique, or process

– Derives independent economic value from not being generally known

• Subject to reasonable measures to maintain its secrecy

Virginia Trade Secrets Act

• To Establish a Violation of the Act, You Must Show: – Existence of a “Trade Secret” – Actual or Threatened “Misappropriation" by Defendant

• Injunction for as long as trade secrets exist, and reasonable period thereafter to eliminate unfair commercial advantage

• Actual loss, unjust enrichment, reasonable royalties, punitive damages

The Defend Trade Secrets Act of 2016

• Legislation adopted to federalize trade secrets law.

• Prior to the Act, trade secret law was exclusively handled at the state level.

• Though many states followed the Uniform Trade Secrets Act, states had varied in their application of the Uniform Trade Secrets Act.

The Defend Trade Secrets Act of 2016 • The Act defines “trade secret”: • “information, including a formula, pattern, compilation,

program, device, method, technique, or process, that:

– Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

– Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Trade Secrets Act of 2016 • Provides a three-year statute of limitations after the discovery of

claims of trade secret theft.

• Allows federal courts to issue ex parte seizure orders to prevent the dissemination of a trade secret.

– This provision allows a company to go to a court alone – without the opposing party – to obtain an order mandating information / property to be held by a court until the dispute is resolved.

– The only caveat on this provision is that it is to be used in “extraordinary circumstances,” a term that is not defined by the Act, but presumably limits its applicability.

Damages Under the Act Can be Significant

• Allows for a series of remedies upon a finding of a misappropriation of a trade secret including: injunctive relief, damages for the actual loss, and damages for any unjust enrichment that is not addressed in computing the actual loss.

• In addition, upon a finding that the trade secret was willfully and maliciously misappropriated, the prevailing party may be awarded punitive damages up to two times the amount of the actual damages awarded.

• The Act also provides for attorney’s fees to a prevailing party. However, if the claim for misappropriation of trade secrets is made in bad faith, or a motion to terminate the injunction is made or opposed in bad faith, then the prevailing party in that instance may also be awarded attorney’s fees.

Filing Actions to Protect Trade Secrets

• By providing that a company may file in federal court to protect its trade secrets, The Act gives Virginia businesses in particular advantages over Virginia’s codification of the Uniform Trade Secrets Act.

• This is because it can be difficult to obtain early summary judgment in Virginia state courts, which limit substantially the use of deposition testimony to support a motion for summary judgment.

• The Federal Rules of Civil Procedure provide for mechanisms to move for summary judgment early in a case, hopefully resolving it through a motion rather than the case needing to be litigated to trial.

• Notably, the Act does not trump state law, so a company may elect in filing a complaint to proceed under either the Uniform Trade Secrets Act at the Virginia state level or the Defend Trade Secrets Act at the federal level.

How to Avoid Losing Trade Secret Protection

• Be proactive and solicit the assistance of the Court in Litigation.

• Request Protective Orders

• Enter into Confidentiality Agreements

• Request closed-door hearings

• Request sealing of court records

• Ask the Court to order the parties and witnesses not to disclose trade secrets

Document Retention • What is a Document Retention Policy (DRP)

Provides for the systematic review, retention, and destruction of documents received or created in the course of business.

• Identify and provide guidelines for documents that need to be maintained.

• Determine how long certain documents should be kept.

Why do you need a Document Retention Policy?

• Certain document retention required under state and federal law.

• Business Efficiency – Free up valuable storage space – Quickly locate important documents – Reduce time spent handling and retrieving

documents

Why do you need a Document Retention Policy?

• Protection in Litigation – Not having the right document can be the

difference between winning and losing a case.

– Evidence of a clear and consistently enforced DRP, enacted for valid purposes can go a long way to convince the court that the destruction of a document was reasonable.

Compliance With Federal and State Laws and Regulations

• Many documents must be kept for a specific period of time pursuant to federal, state or local laws.

• The timelines for keeping given documents have changed multiple times over the years, and should be checked frequently for compliance with the most current federal and state regulations.

Compliance With Federal and State Laws and Regulations

• Documents have certain regulated retention timelines, some of which are outlined in the leave behind materials.

• Note, this does not constitute a comprehensive survey of all record retention requirements.

• We recommend asking the team at Woods Rogers to verify the retention requirements applicable to the specific records you have questions about before you decide to destroy them.

General Guidelines • Statutes define minimum retention periods, with

certain exceptions (ex. Form I-9s), a longer retention period may be prudent.

• SHRM has generally supported retention of: – Personnel records for 7 years after termination – Medical/benefits records for 6 years after plan year – Hiring Records: 2 years after hiring decision (unless

federal contractor)

General Guidelines • General Financial Records – 5 years • Contracts – 5 years from the date of termination of the

agreement • If contract documents relate to potential litigation – 10 years

Accounting Records (banks statements, expense reports, etc.) – 7 years

• VA Society of CPAs recommendation Workers’ comp claims and payroll records – 10 years

• VA Society of CPAs recommendation • Tax Records- 4 years from the date the tax is paid

Paper Copies of Personnel Records • Guidelines on the destruction of paper copies of personnel records

when an electronic record keeping system has been adopted.

• A variety of the major federal employment agencies have adopted standards for the keeping of personnel records in electronic form.

• Collectively, the general principles contemplated by these federal agencies are similar.

– There is no requirement that paper originals of personnel records be kept.

– However, if an electronic copy of any type of paper original document cannot be clearly, accurately or completely transferred to an electronic recordkeeping system, the original copy must be retained.

Guidelines Cont’d • Guidelines on the destruction of paper copies of personnel

records when an electronic record keeping system has been adopted. – Additionally, paper originals stored in electronic format must be

readily convertible into legible and readable paper copy.

– An employer who plans on destroying paper records must be sure all letters, numbers, and words in their electronic personnel records are able to be read and identified in any inspection, and a printed copy would meet this same standard.

General Guidelines • If these guidelines are met, the electronic record keeping

system should comply with applicable federal law. – The electronic records are maintained in such a manner

that they may be readily inspected and/or copied.

– The recordkeeping system should be capable of retaining, preserving, retrieving and reproducing the electronic records.

– The electronic records should be maintained in reasonable order and in a safe and accessible place for their potential inspection.

General Guidelines – The electronic recordkeeping system is not subject, in whole or in

part, to any agreement or restriction that would, directly or indirectly, compromise or limit a person's ability to comply with any reporting and disclosure requirement or any other obligation.

– Paper originals stored in electronic format are readily convertible into legible and readable paper copy; and

• The term "legible" means the observer must be able to identify all letters and numerals positively and quickly to the exclusion of all other letters or numerals.

• The term "readable” means that the observer must be able to recognize a group of letters or numerals as words or complete numbers.

DATA BREACH— IT’S NO LONGER JUST A PROBLEM FOR IT

Cyber 2:

Agenda • Introduction • Notable Breaches 2016-2015 • Scenarios: How Does It Happen? • Protection: Steps to avoid a Breach • Breach: Rapid Response Protocol

Data Breach Definition • An incident in which an individual name plus a

Social Security number, driver’s license number, medical record or financial record (credit/debit cards included) is potentially put at risk because of exposure.

• [This exposure can occur either electronically or in paper format.]

An Enterprise-Wide Issue • The days of getting an email from a far off prince needing help

with his estate are gone!

• Modern “Hackers” now include: – Employees – Customers – Board of Directors – Vendors – Shareholders – Regulators – Partners – Third parties

An Enterprise-Wide Issue • Breach response impacts far beyond the IT

Department in most scenarios: – HR Managing disgruntled impacted employees

– Marketing Public relations / brand impact

– CFO / CEO Response impacts bottom line / all levels of the organization

– IT Managing security going forward

An Enterprise-Wide Issue

Source: http://blog.gemalto.com/security/2014/07/30/the-real-cost-of-a-retail-data-breach/

An Enterprise-Wide Issue

Source: The 2016 Ponemon Cost of a Data Breach Study

World’s Biggest Data Breaches Source: http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/

http://www.informationisbeautiful.net/visualizations/worlds-biggest-data-breaches-hacks/









• September 2016

• Largest data breach in history

• At least 500 million user accounts

• Delay in reporting, first discovered in July

• May negatively impact sale to Verizon

Notable 2016 Breaches


• March 2016 • Ransomware attack • Largest healthcare provider in

Maryland & Washington, DC • 10 hospitals • 250 outpatient facilities • 30,000 employees • Thousands of patients • Well-known security vulnerability

in their system

• April/May 2016 • Insider data breach • Google notified EEs on May 9 • Third-party vendor sent personal

info to another company’s benefits dept.

• Included names and SSNs • Other company deleted info

immediately


• April 2015 • 3000 employees • Stolen laptop • Info password protected,

but not encrypted • Names, addresses, DOB,

SSNs exposed

• May 2015 • 100,000 taxpayers compromised • “Get Transcript” system was

hacked • ID’s allegedly stolen by Russian

criminals to file fraudulent tax returns

• February 2016—IRS reports the number compromised is now 700,000+

2016 Stats: 687 as of 9/20/2016

Source: Identity Theft Resource Center

Notable 2016 Breaches • Last week, Vera Bradley

Designs, Inc. said that

payment cards used at

its retail stores between

July 25 and Sept. 23

were potentially

hacked.

• Likely spearphishing

attempt carried out

by foreign entity

• Passed to WikiLeaks

Insider Threats • 60% of all attacks are carried out by insiders • ¾ fueled by malicious intent • ½ inadvertent actors

Source: 2016 Cyber Security Intelligence Index by IBM

Insider Threats • Three primary types of insider threats:

– Human error – Malicious employees – Cyber criminals who steal employees’ identities

Example: Ransomware

Example: Phishing W-2 Scheme IRS in March 2016 issued an alert regarding W-2 phishing schemes noting that a number of the emails contained the following language:

Example: Phishing W-2 Scheme

Spelling

Example: SpearFishing

Example: Insider Attack • British software company Sage Group PLC

experienced an insider attack this past August

• 32 year old employee accessed between 200 and 300 of its business customers, believed to include bank account info

• How did she do it? Her employee login credentials

Example: SMi-Shing • SMi-Shing

Source: social-engineer.org

Not secure (https)

Email address different from below .net vs .com

Incorrect email

Example: Spyware Spyware

Only install software from a trusted source

Not all “pop up” boxes are legitimate. It if doesn’t seem right, it probably isn’t!

Example: Keylogger • Keylogger

In addition to personal information, they know key strokes, mouse clicks, screen displays, websites visited, files that are opened and closed….

How Does It Happen…Really?

Watch here: https://www.youtube.com/watch?v=N682eopajzA

https://www.youtube.com/watch?v=N682eopajzA

How To Protect – Educate and train your users – Outline clear use policies for new employees and

vendors – Back up data regularly – Maintain security patches – Create a Data Breach Task Force – Create a Breach Response Plan

How To Protect: Response Plan • Assemble your Data Breach Task Force

– Need a rapid response team from all parts of the organization • IT • HR • C-suite • Marketing / PR • Legal (to protect privilege)

How To Protect: Response Plan • Elements of a response plan:

– Task force activation – Back up measures / protection in place to prevent

the spread of the attack – Press release packets – Documentation protocols – Know who to report to (i.e., employees in different

states trigger different notice requirements)

How To Protect: Response Plan • Know the regulatory climate:

– For example: • Health entities have requirements under HIPAA for

written policies and procedures related to data security

• Credit unions and financial institutions have requirements for written response plans under applicable federal regulations

How Hackable Is Your Password? • The length and strength of your password can make a huge difference in

how long it takes for hackers to crack the code!

If you have an all lowercase 5-

character password, a hacker can feast on your personal

data by the time you get your drive-thru

order.

Do you have a 5-character password with all lowercase letters and numbers? A hacker can crack it before you and

Spike make it around the block.

Hackers are in incredibly flexible even without

exercise. In the hour you spend doing yoga, they can crack a 5-character

password with upper and lowercase letters.

Longer, stronger passwords put hackers in

a time-out. An 8-character password that

uses upper and lowercase letters and

symbols takes longer to crack than raising a child.

How to Protect: Cybersecurity Insurance

• Get cybersecurity insurance! – Can cover business interruption and extra expenses

related to a security or privacy breach.

• May be coverage under existing company policies but best step is to be prepared in advance

How to Protect: Hire a Vendor to Simulate an Attack

• A number of vendors in the field now provide simulated attacks so that your organization can be prepared – Be wary of directly hiring a vendor without in-house

or outside counsel involved as the findings of the report may be discoverable.

How to Protect: Know the Legal Landscape

• Best step is to be prepared and know what laws apply, for example: – HIPAA / FTC Health Breach Notification Rule

health records impacted – Gramm-Leach Bailey financial institutions /

security and confidentiality of customer information –Payment Card Industry Data Security credit

card information

How to Protect: Know the Legal Landscape

• Virginia Code: – Requires notice to the Virginia Attorney General and

each affected resident if there is a reasonable belief that "personal identifying information" of Virginia residents has been breached

– Applies to any entity that "owns, maintains, or possesses computerized data which contains personal identifying information" of Virginia residents.

How to Protect: Know what constitutes a “breach”

• Each statute has its own definition, but generally: – A data breach is an incident in which sensitive,

protected or confidential data has potentially been viewed, stolen, or used by an unauthorized person.

Source: TechTarget

How to Protect: Know what constitutes a “breach”

• Notably, many statutes consider just the unauthorized "access" of such information a "breach", even if nothing more is done with the information.

• Additionally, many statutes, e.g., HIPAA, require that you "presume" there was a breach and then notice is required UNLESS, you can demonstrate that there is a low probability that the information has been compromised.

Breach: What happens next? • Activate your rapid response team!

– Conduct immediate risk assessment and implement the plan.

– Identify the nature and extent of the information involved

– Determine the unauthorized person who accessed/used the information or to whom the disclosure was made.

Breach: Notice Requirements

• Most breaches are going to require written notice to impacted individuals without unreasonable delay – Breach may require description of the breach in general

terms to impacted employees, for instance

• Are there agency notice requirements?

– HIPAA requires notice to the Office of Civil Rights, HHS

– Virginia law requires notice to the Attorney General

Breach: Notice Requirements • Notification to media??

– Depends on the size of the breach.

• Virginia requires notice to "major statewide media" if breach affects more than 100,000 individuals.

Breach: Work Force Impacts • Breaches can have significant impact on work force

moral especially W-2 phishing schemes as often it may involve the identity of your employees being stolen

• HR needs to be prepared to deploy full counter measures! – Not required by law, but identity theft insurance can

sometimes help with morale

Breach: Litigation can occur • Lawsuits are starting to pop up out of these

breaches – Some claim negligence on the part of a company to

maintain records / policies / procedures to keep the breach from occurring

– Because of potential lawsuit be hyper vigilant to privilege issues when investigating a breach!

Conclusion • Takeaway tips:

– The threat is real and constant – it’s not a question of if, but when a company will be hit.

– Develop your rapid response plan and develop a breach task force. Investigate cyber security insurance.

– Know the legal landscape so that you know what landmines to avoid.

– Train, train, train your employees on how to avoid a breach. Your best defense is a well trained organization!

THE ACA HITS THE FIVE YEAR MARK

EMPLOYERS’ PERSPECTIVE ON THE ACA’S IMPACT TO DATE

International Foundation of Employee Benefit Plans’ 2016 Survey

• Survey of 446 HR & Benefits Professionals across 20 different industries found:

– ACA Reporting and Disclosure is the most challenging aspect for organizations (58% of respondents);

– 20% of respondents identified cost as the biggest challenge;

– 10% of respondents identified communication issues;

– The reminder identified, administration, plan design and “other” problems as the biggest challenge.

Source: International Foundation of Employee Benefit Plans at Ex. 3, available at https://www.ifebp.org/pdf/aca-impact-survey-2016.pdf

https://www.ifebp.org/pdf/aca-impact-survey-2016.pdf







Do Employers want the ACA repealed in its entirety?

• NO: 44.2%

• Yes: 35.4%

• Not Sure: 20.4%

Source: Id. at Ex. 4

Survey of Employer Offers of Coverage

Source: Id. at Exs. 9-11, 16.

• 97.3% of employers offer coverage to all full-time EEs.

• 35.5% currently offer to part-time EEs.

• 97.2% stated they would continue those offers in 2017.

• Only 0.2% will drop coverage.

• 97.5% stated they were likely to offer coverage 5 years from now.

Survey of Compliance with Minimum Value & Affordability

• 97% Reported Meeting Minimum Value

• 94.7% Reported Meeting Affordability

Source: Id. at Exs. 31.

Employer Compliance/Cost Reduction Strategies

• 10.6% adjusted hours to reduce # of full-time EEs.

• 7.4% added workers to assist with compliance.

• 36.6% have increased out of pocket limits.*

– [*Remember, there is a ceiling: 2016 = $6,850 (self-only); $13,700 (family).] Source: Id. at Exs. 24-25.

Employer Compliance/Cost Reduction Strategies

• 33.6% increased in-network deductibles.*

• 27.9% increased copayments or coinsurance.*

• 25.1% increased EE’s share of drug costs.*

• 30.6% increased EE’s share of premium costs.**

– [**Affordability imposes a limitation: 9.66% for 2016]

• 24% increased EE cost for dependent coverage.

Source: Id. at Exs. 24-25.

Survey of Employer Reporting Issues

• 69.3% say reporting costs are significant.

• Fully Insured ERs:

– 24.7% hired a vendor for reporting; – 23.8% used payroll vendor; – 17.6% used their insurance company.

• Self-Insured ERs

– 28.4% hired a vendor for reporting; – 16.7% used payroll vendor; – 16.1% used their third-party administrator.

Source: Id. at Exs. 46, 48-49.

THE FUTURE OF THE ACA

Marketplace Viability • Aetna has backed out of exchanges in 11 of its 15 states.

– It is still selling in Virginia.

– Aetna says it lost $430 Million through exchange coverage.

• Aetna’s move follows UnitedHealth and Humana (which Aetna is seeking to purchase).

• Aetna’s move came less than a month after the DOJ sued to block its acquisition of Humana.

Marketplace Viability • Market reforms make it difficult for insurers to assess risk and adjust plans

and costs based on risk:

– No preexisting condition exclusions;

– Premiums cannot be based on health factors;

– Guaranteed issue requirements prevent consideration of health factors;

– Subsidies increase proportion of high risk participants;

– Individual and small group market participants are treated as single risk pools;

– Medical loss ratio requires 80% spend on claims and quality improvements in small group and 85% in large group.

Marketplace Viability • On September 6, 2016, CMS issued a proposal to reinforce the

Exchanges.

• The proposal has a wide variety of changes to assist with risk assessment and allow for more accurate cost sharing/premium increases. For example:

– Creating multiple child age bands to allow increases in premiums for ages 0-20.

– Proposed modifications to risk adjustment programs that shift funds from lower-risk plans to higher-risk plans.

– Updates to risk adjustment models.

Cadillac Tax • Both nominees oppose the Cadillac Tax.

– Cadillac Tax is a 40% excise tax on coverage costs that exceeds $10,200 (self) and $27,500 (family).

– Consolidated Appropriations Act for 2016 postponed implementation from 2018 to 2020

Repeal of Automatic Enrollment • ACA provision that required ERs with 200 or more

FTEs to automatically enroll EEs and new-hires in lowest-premium plan.

• Implementation was delayed pending regulations.

• Bipartisan Budget Act of 2015 repealed automatic enrollment.

REPORTING REQUIREMENTS

Reporting Deadlines Forms 2015 Tax Yr. Deadline 2016 Tax Yr. Deadline

Form 1095-C (Employee Statement) & Form 1095-B (Taxpayer Statement)

March 31, 2016 January 31, 2017

Paper Filing: Form 1094-C & 1094-B (IRS Transmittal)

May 31, 2016 February 28, 2017

Electronic Filing: Form 1094-C & 1094-B (IRS Transmittal)

June 30, 2016 March 31, 2017

New Indicator Codes: Conditional Offer of Spousal Coverage • The draft forms add two new indicator codes to 1095-

C, line 14:

– 1J. MEC providing MV offered to EE & MEC conditionally offered to spouse; MEC not offered to dependents.

– 1K. MEC providing MV offered to EE & MEC offered to dependents; and MEC conditionally offered to spouse.

Removal of Qualifying Offer Transition Relief

• 2015 “Qualifying Offer Transition Relief” is no longer an option: – 1094-C, Line 22(B) has been removed

– 1095-C, Code 1I. (Qualifying Offer Transition Relief 2015) has been removed

2015 Transition Relief that May Apply to Non-Calendar Yr. Plans

• For 2015 plan year months that extend into 2016:

– Midsize Employer Transition Relief (50-99 FTEs) may be available;

– Large ER (100 or more FTEs) may meet 70% relaxed offer obligation for 2015 plan yr. months (but 95% for 2016 plan year months);

– Large ER (100 or more FTEs) can use the relaxed no offer penalty formula for 2015 plan yr. month (# of Full Time EEs – 80);

– Dependent coverage transition relief.

• These are unavailable for 2016 plan year months.

BONUS SESSION!

I-9: THE LATEST NEWS AND POINTERS

I-9 Fines Just Went Way Up • Effective 08/01/2016, civil fines for I-9 violations

were increased

• Many of the increases are in the range of 50% to over 100%!

• Reason: Catching up with inflation over the years

I-9 Fines: Just Increased TABLE of FINES

Activity Old Fines New Fines

I-9 Paperwork $110 to $1,100 $216 to $2,156

per document

Alien, unauthorized $375 $539

employment, first time,

per individual

Alien, unauthorized $2,200 $4,313

employment, second time,

per individual

Alien, unauthorized $4,300 to $6,500 $6,489 to $10,781

employment, third or

more times,

per individual

E-Verify, final $550 $751

nonconfirmation

I-9 fine: Enhancers

Enhancement Matrix

Factor Aggravating Mitigating Neutral

Business size + 5% - 5% +/- 0%

Good faith + 5% - 5% +/- 0%

Seriousness + 5% - 5% +/- 0%

Unauthorized Aliens + 5% - 5% +/- 0%

History + 5% - 5% +/- 0%

Cumulative Adjustment + 25% - 25% +/- 0%

Note: Initial fine amounts per violation can change depending on percentages involved. The higher the percentage, the higher the initial per violation amount

Some 2016 Decisions No. 1 • US v SKZ Harvesting 02/08/2016

• Seasonal workers • 5 unauthorized workers • No I-9s for 55 workers • 9 incomplete I-9s • ICE wanted $74,587, finding conduct to be on the egregious

side and applying enhancers • Some workers who had been rehired used different SSNs and

several workers all used the same SSN among them • ALJ decided to reduce to $29,600 as a matter of discretion

due to size of employer

Some 2016 Decisions No. 2 • US v Safe-Air of Illinois, Inc. 03/11/2016

• 37 incomplete I-9s • 2 I-9s were nonexistent • ICE wanted $34,969 • Safe-Air’s primary defense: We are a small company

struggling to survive with lots of financial obligations already

• ALJ agreed and noted no bad faith and no prior history of problems

• Reduced fine to $18,450

Some 2016 Decisions No. 3 • US v Golden Employment Group, Inc. 05/04/2016

• In response to the Notice of Inspection, Golden Employment could not timely present 140 I-9s, could not produce 236 I-9s at all, and had 89 improperly completed I-9s

• ICE asked for a fine of $281,325

• Golden Employment argued that it is a small employer and complied with every request and demand of ICE, including terminating unauthorized employees and making all corrections for technical or procedural violations

• ALJ said good faith should have been taken into consideration and there was no knowing employment of unauthorized individuals

• Reduced fine to $209,600

Some 2016 Decisions No. 4 • US v Jula888, LLC d/b/a Para Tacos La Chilanga

08/25/2016 • No I-9s for 32 employees • 100% noncompliance • ICE asked for civil fine of $34,408.00 • Defense was ICE cannot establish the number of

employees, so cannot be said to be 100% noncompliance rate

• This did not go over well with ALJ • Civil fine of $33,379.50 imposed, so reduced by $28.50

Discrimination • Many cases initiated by the Department of Justice • Civil fines imposed • Back pay ordered • Mandatory training

Discrimination • Don’t forget that the I-9 process can open the

employer to discrimination claims if process is not handled correctly

• Asking for too many documents • Refusing to accept Permanent Resident Cards • Refusing to hire any alien no matter what • Reverifying when not supposed to • These are the types of things that can get an employer

in trouble

Discrimination Fines Discrimination: $375 $445

national origin, citizenship

status, first time,

per individual

Discrimination: $3,200 $3,563


status, second time,

per individual

Discrimination: $4,300 to $6500 $5,345 to $8,908


status, third or more times,

per individual

Document abuse, $110 to $16,000 $178 to $17,816

per document

Document fraud, $375 to $1,100 $475 to $1,782

per document

Document fraud, $3,200 $3,563

second or more times,

per document

Document fraud, $275 to $6,500 $376 to $8,908

per document

Document fraud, enhanced, $2,200 to $5,500 $3,005 to $7,512

second or more times,

per document

2016 Cases – No. 1 • Rancho Bernardo Health Care, LLC 05/31/2016

• Unfair documentary practices • During I-9 process, demanded that Lawful Permanent

Residents produce Permanent Resident Cards (a/k/a Green Cards)

• Cannot tell employee what to produce for I-9 purposes • $24,000 fine + administrative action and monitoring

• 3 • 4

2016 Cases – No. 2 • American Association of Colleges and Podiatric Medicine

06/20/2016 • Accused of citizenship status discrimination • As a paid referrer, created and published job postings for

clerkships • Job postings asked about citizenship status or place of birth • Also failed to highlight that not all non-U.S. citizens need

sponsorship for employment-based visas – i.e., American nationals, permanent residents, asylees and refugees

• Fined $65,000 and required to modify website, applications and postings + other administrative actions

2016 Cases – No. 3 • TEB Staffing, Inc. d/b/a Eastridge Workforce

Solutions 08/15/2016 • Unfair documentary practices • Demanded specific documents from lawful

permanent residents but no one else • Civil fine of $175,000 + administrative action

2016 Cases – No. 4 • Cumberland Staffing Inc. d/b/a Atwork Cumberland

Staffing 09/17/2016 • Citizenship Status Discrimination • Posted a job posting that required production of a U.S.

birth certificate • Posted for 65 days • No legal justification for such restriction • Civil fine of $1200 (got off cheaply) • But lots of required activity and oversight

Pointer: Name Change • What to do when an individual changes his/her

name • If in a rehire or reverification event, name change

MUST be recorded in Section 3 • If otherwise, not mandated but RECOMMENDED to

record in Section 3

I-9 Name Change Continued • Standard: Employer to take steps “to be

reasonably assured of employee’s identity” and “the veracity of claim to a legal name change”

• Okay to ask for documentation to verify name change

• Documentation NOT limited to I-9 documents • Marriage Certificate or Divorce Decree is okay

I-9 Name Change Continues • Can copy and attach name change documentation so

employer’s actions “are well documented if the government asks to inspect”

• But if company policy is to no keep copies, the same should apply here, but there is no official position by government on this point

• For legal name change only, rest of Section 3 is not completed (Doc Title, Doc No, Exp Date)

I-9 Name Change Continued • If do not copy documentation, we suggest simple

memo to attach to I-9 • Recite that name change occurred • Documentation provided and reviewed • Section 3 was completed to record name change • I-9 now indexed under new surname

Pointer: I-9 Pre-population of Section 1

• Can employer pre-populate portions of Section 1 and then give I-9 to employee?

• Makes sense, this is an electronic world, right?

• Not to the government

• If anyone, including employer, assists in any way with the completion of Section 1, MUST complete the Preparer or Translator section as well

I-9 Pre-population of Section 1 continued

• So while pre-population is “allowed,” it is really frowned upon

• By pre-populating and then signing as a Preparer, run the risk of creating unneeded complications in the event of inaccurate or false information

• We do not encourage this practice

Pointer: Remote Hires • What to do when need to hire someone at a

remote location from office?

• Retain someone locally to receive and review I-9 documentation

• But what if local person scans copies of documents to main office and main office reviews copies of I-9 documents and completes Section 2?

Pointer: Remote Hires Continued • A company that utilized this procedure for 242 I-9s was told such

action was improper and it was hit with a fine of $237,162.75.

• Case went to the Fifth Circuit Court of Appeals as Employer Solutions Staffing Group II, LLC v OCAHO decided 08/11/2016

• Issued a lengthy opinion

• Noted the vagaries of the instructions and the confusion that can result when applied to corporate entities

Pointer: Remote Hires Continued • Noted failure of ICE to warn that such conduct was

improper in its view

• Decided ESSG “did not violate the law when one corporate representative in El Paso, Texas, examined original documents in the presence of hire employee, and another corporate representative in Edina, Minnesota, inspected photocopies of the documents and completed Section 2 of the I-9 Form.”

• Civil fine was vacated

Pointer: Remote Hires Continued • This activity happened in 2010 and 2011

• While this case was progressing through the court system, the most recent I-9 form was being created

• Seeing the hand-writing on the way, Department of Homeland Security mooted the result of this case going forward by inserting clarifying language into the instructions on the I-9 form

Pointer: Remote Hires Continued • More particularly, on page 3, paragraph 1, now

have: – “The person who examines the documents must be

the same person who signs Section 2.” – Thus the procedure used by ESSG no longer works. – Whoever examines the documents, and that must

be in presence of employee, must sign Section 2

Pointer: Remote Hires Continued • So, in remote hire situations, the local person must

complete and sign Section 2

• SIDE NOTE: Certain states, like California, have restrictions on who can serve that role and simple Notaries cannot; must be an Immigration Consultant due to state bonding requirements

I-9 Top Ten Mistakes • Not understanding the difference between correcting I-9s and

correcting bad I-9 practices

• Allowing untrained staff to administer I-9s

• Not conducting an internal I-9 audit

• Having untrained staff engage in the I-9 audit

• Not supervising new employees filling out Section 1, which causes many Section 1 mistakes

I-9 Top Ten Mistakes Continued • Accepting unacceptable documents.

• Accepting fraudulent documents, such as fake lawful permanent resident or Social Security cards.

• Not recording the document title, issuing authority and expiration date or not recording the information correctly.

• Failing to sign and date.

• Making corrections without initializing and dating them.

I-9 Tips • Five Tips re I-9s generally:

1. Consult legal counsel 2. Put I-9 responsibility in one person or a core group

and make sure that person/group knows the rules 3. Employees must choose documents to present 4. Take only what is needed for I-9 completion 5. Create a tickler (calendar) system re reverifications

I-9 Tips • Tips for Responding to a Notice of Inspection:

1. Always anticipate receipt of a Notice of Inspection and have action plan in place

2. Never waive the three days to collect documents and respond

3. ICE agent is not your friend no matter what 4. Never count on an extension, but go ahead and

request if think it would be helpful but request must be reasonable and supportable

Breaking News • On or before November 22, 2016, expect a new

version of I-9 to be published • How the I-9 form might be changed has not been

revealed as of yet • The existing I-9 form with a revision date of

03/08/2013 will continue to be acceptable for use until January 21, 2017

Breaking Unofficial News • In the last 10 days, USCIS has admitted to immigration

attorneys that it is trying to sort out how to handle transgender issues for I-9 purposes

• Now treat as a name change if you are familiar with the person

• If do a new I-9, attach to old I-9 • If new hire, do not need former name in “Other

Names” lines

TROUBLING TRENDS & HR CHALLENGES

JOINT EMPLOYER

What is a Joint Employer • What is a joint employer?

– Share or co-determine matters governing essential terms and conditions of employment; exercise significant control over the same employee.

– Can apply to employees who may be designated as independent contractors or come from a temporary employment agency and both employers may have liability.

Why Does Joint Employer Status Matter?

• Multiple entities can be liable as employers in cases involving: – Title VII (employment discrimination) liability for employers

of the complainant.

– Fair Labor Standards Act

– Migrant and Seasonal Agricultural Worker Protection Act

– National Labor Relations Act

Joint Employment Update Jan. 20, 2016

• New Administrator’s Interpretation (No. 2016-1): Joint Employment under the FLSA

• FLSA broadly defines employment relationship and scope of joint employment

• Discusses horizontal and vertical joint employment

• Economic realities test

Factors To Consider for Joint Employer Status (Title VII)

• Authority to hire and fire the individual;

• Day-to-day supervision of the individual, including employee discipline;

• Whether the putative employer furnishes the equipment used and the place of work;

• Possession of and responsibility over the individual's employment records, including payroll, insurance, and taxes;

• The length of time during which the individual has worked for the putative employer;

Factors To Consider for Joint Employer Status (Title VII)

vi. Whether the putative employer provides the individual with formal or informal training;

vii. Whether the individual's duties are akin to a regular employee's duties;

viii.Whether the individual is assigned solely to the putative employer; and

ix. Whether the individual and putative employer intended to enter into an employment relationship.

WELLNESS PLANS

Should You Implement and Employee Wellness Plan

• Types of Wellness Programs 1. Participatory Wellness Programs

2. Health-Contingent Wellness Programs

Participatory Wellness Programs • Programs that either do not provide a reward or do

not include any conditions for obtaining a reward that are based on an individual satisfying a standard related to a health factor.

Health-Contingent Wellness Programs • Activity Only or Outcome-Based Designs.

1. Activity Only Plans require a participant to do a certain activity. a. Examples: walking, diet, or exercise programs that do not

require an individual to attain or maintain a specific health outcome.

2. Outcome-Based Plans require individuals to satisfy a standard related to a health factor to obtain a reward. a. Examples: plans that measure employees' health metrics and

require them to maintain certain levels.

Employee Wellness Plans • Wellness Plans are subject to regulation by a variety of federal

laws including: a. Americans with Disabilities Act (ADA)

b. Affordable Care Act (ACA)

c. Health Insurance Portability and Accountability Act (HIPAA)

d. IRS Regulations

e. Employee Benefits Security Administration Regulations

f. Health and Human Services Department Regulations

g. Recently Proposed Regulations from the Equal Employment Opportunity Commission (EEOC)

Applicable ADA Restrictions • Restrictions on medical information that employers may

obtain from employees.

• Makes it illegal to discriminate against individuals based on disability.

• However, "[a] covered entity may conduct voluntary medical examinations and inquiries, including voluntary medical histories, which are part of an employee health program available to employees at that work site." 42 U.S.C. § 12112(d)(4)(B).

ACA Non-Discriminatory Factors • Frequency

• Total of all incentives/ surcharges must be less than or equal to 30% of the total cost of employee coverage

• Reasonable design

• Uniform availability

• Reasonable alternative standards

Reasonable Alternative Standards • Employers must provide reasonable

accommodations and reasonable alternative standards for programs for employees who desire to participate in the programs and obtain the applicable rewards but are unable to meet the requirements of the plan.

Participatory Wellness Programs • Current Regulations (since 2013) do not require an

employer to include a reasonable alternative standard for participatory wellness program.

• Proposed EEOC guidelines would require: 1. An employer to provide reasonable accommodations.

2. Engage in an interactive process with the employee who cannot participate to determine whether a reasonable accommodation or alternative to participation in the wellness program is available.

Activity Only Program • Must allow a reasonable alternative standard (or waiver of the

otherwise applicable standard) for obtaining the reward for any individual for whom it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard, and for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard

• When a reasonable alternative standard is requested, an employer can ask for a doctor verification to prove that the health condition that creates a requirement actually exists.

Outcome-Based Program • Must have reasonable alternative standard (or waiver

of the otherwise applicable standard) for obtaining the reward for any individual who does not meet the initial standard for obtaining a reward based on a measurement, test, or screening.

• An employer is not allowed to ask for a doctor verification of a health condition to determine need for a reasonable alternative standard.

Does Your Plan Provide a Reasonable Alternative Standard?

• Facts and circumstances to consider: – The time commitment must be reasonable.

– For diet programs, the plan must pay for the membership or participation fee.

– If the individual's personal physician states that the standard is not medically appropriate, then the reasonable alternative standard must accommodate the recommendations of the physician with regard to medical appropriateness.

– If the reasonable alternative standard is completion of an education program, the plan must make the educational program available or assist the employee in finding a program and the plan may not require an individual to pay for the cost of the program.

Notice Requirements • Must provide notice to participants of the

reasonable alternative standards to qualify for the reward in all plan materials and in any disclosure that the individual did not satisfy an initial outcome based standard.

Caps on Incentives • DOL, IRS, and HHS final regulations issued June

2013 limit the amount of incentives that a participant can receive to no more than 30% of what it would cost to be covered under the plan.

TERMINATION

Termination • Ever wonder how to terminate someone whose

annual reviews are consistently "Meets Requirements" or worse yet, "Outstanding," but day-to-day performance is a challenge?

Best Practices • Accurately and regularly document employee performance issues

and keep track of performance problems more frequently than annual reviews. – Objective comments recorded in real-time are critical to improve

performance.

– Documentation can also help refute claims of wrongful termination.

– Ensure that the appropriate documentation makes it to the main personnel file.

– Determine whether supervisors are keeping their own files.

Patience • The problem of inflated job performance reviews didn't happen

overnight and it can't be cured overnight a. Employees deserve, and juries expect, employees to be told

their deficiencies and given an opportunity to improve

b. Enlist supervisors and reviewers in the process to make them understand they were part of the problem and must be part of the solution

c. Begin following progressive discipline policy as appropriate, particularly for quantifiable situations (absent, tardy, lack of production, etc.)

d. MANAGE THE EMPLOYEE!

Legal Concerns a. Consider if the employee has a legitimate excuse for their

poor performance such as a disability or serious health condition. – If employee's actions or statements create ambiguity, ask

the employee "Do you have a serious health condition or a disability for which you would like to request a reasonable accommodation?" 1. If the employee answers in the negative, document his

responses

2. If the employee answers in the affirmative, provide FMLA paperwork or conduct interactive process as appropriate

Legal Concerns • Conducting and documenting interactive process is crucial

– If nature or extent of disability is not apparent, you may ask for documentation from employee's medical provider

– Generally best to ask employee what accommodation they desire, rather than offering company's idea for an accommodation

– Employer need not volunteer an accommodation and is not required to automatically accept requested accommodation • Employer may offer an alternate accommodation so long as it is reasonable

• A reasonable accommodation must be granted unless it presents an undue hardship

• Undue hardship is considered on a case-by-case basis considering all circumstances, including size of company, cost of accommodation, dollars of lost productivity, and disruption of work force

Chronic Absenteeism • It is important to determine why they are

chronically absent.

– If the employee's absences are due to health conditions, the Family and Medical Leave Act or the Americans with Disabilities Act may apply.

Company Policies • Look at company policies and language in employee

handbooks that address absenteeism. a) Progressive discipline is a good way to handle

absenteeism.

b) Does your policy allow employees to carry over PTO from year to year?

c) Make sure that notification procedures are clear and are being followed.

Documentation • Determine how situations of chronic absenteeism have been

handled in the past. Inconsistencies between the treatment of different employees may lead to discrimination claims.

• Document substandard performance and absences including dates, hours missed, and the reason that the employee gives for the absences. Supervisors need to be trained on best practices to ensure that documentation is sufficient.

• Employer can ask for doctor's notes but it is important to be consistent across employees.

QUESTIONS? Thank you!

SURVIVE Sc THRIVE W - Woods Rogers

Documents

Transcript of SURVIVE Sc THRIVE W - Woods Rogers