Jottings By An Employer's Lawyer

Wednesday, January 31, 2007

9th Cir. Corrects 4th Amendment Mistake, But Employer's Right to Monitor Computer Survives

Rarely do I venture into the criminal law domain, but sometimes there is an overlap between criminal and employment law. Contents of a company owned computer — when those contents involve child pornography — is a good example.

In August, the 9th Circuit faced with such a case held that an employee of a private sector company had no 4th Amendment expectation of privacy so that a warrantless search of his company owned computer was not unreasonable and the results of the search could be used against him in a criminal proceeding. U.S. v. Ziegler (9th Cir. 8/8/06) [pdf] . That resulted in considerable consternation for 4th Amendment scholars such as Orin Kerr at the Volokh Conspiracy, whose post, Ninth Circuit Mostly Eliminates Private-Sector Workplace Privacy Rights in Computers points out what the 9th Circuit had done in their opinion, and goes on to show why it was wrong.

From an employer's viewpoint, the decision was fine because it did nothing to support an argument that an employee had a privacy right that might bar such a search by an employer. However, the effort to get the court to change its mind which was soon undertaken, raised the possibility that if it did so, the court might say something that would resurrect that fear.

But, if you were worried, you didn't have to be, as yesterday the 9th Circuit panel withdrew its original decision, replacing it with this one. It corrected the 4th amendment problem, at least to Orin Kerr's satisfaction, New Ninth Circuit Decision in Ziegler, doesn't hurt the employer's position and as an added bonus for those who didn't want to see a child pornographer off the hook, reached the same result — there was a valid search that allowed the contents found on the computer to be used in the criminal prosecution.

The difference? Instead of finding that the employee had no reasonable expectation of privacy as against a search by the police, the court found that the employer had the power to search, and thus to consent to the search, which it did.

A nice ending for all, except of course Ziegler.


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Tuesday, January 30, 2007

Farragher/Ellerth Defense Succeeds in 7th Cir. Sexual Harassment Case

The 7th Circuit decision last week in Jackson v. County of Racine (7th Cir. 1/25/07) [pdf] is a good example of a court considering the application of the Farragher/Ellerth defense in a sexual harassment case. Of particular significance to the court was the unwillingness of plaintiffs to file a formal complaint or to provide very much assistance when the employer tried to investigate.

The case was not a total loss, at least for future plaintiffs, as the court used the occasion to gently (especially for the 7th Circuit) chide both parties' counsel's apparent view that in order to be actionable as sexual harassment a workplace must be hellish:

We trust that in the future counsel will avoid the use of a single, overwrought word like “hellish” to describe the workplace and focus on the question whether a protected group is experiencing abuse in the workplace, on account of their protected characteristic, to the detriment of their job performance or advancement.


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Cash Balance Plans (At Least PNC's) Ok - 3rd Cir.

One of the more hotly contested issues in the world of benefits (at least as viewed by a non-benefits lawyer) has been whether or not conversion to cash balance pension plans is permissible or age discrimination in violation of ERISA.

The 3rd Circuit weighs in with an opinion that both serves as somewhat of a primer about cash balance plans — they are a hybrid between defined benefit and defined contribution plans, first developed after ERISA was passed with rules for the latter two types of plans — and in agreement with last summer's decision by the 7th Circuit holding that IBM's cash balance plan was not discriminatory.

The details can be found in today's holding in Register v. PNC Financial Services, Inc. (3rd Cir. 1/30/07) [pdf].


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Monday, January 29, 2007

Garcetti in Action - No Bite for Dog Trainer

In 2006, the Supreme Court limited the circumstances in which a government employee could bring a 1st Amendment retaliation suit against his or her employer by holding that comments made in the course of their regular duties were not protected speech. See The Private Sector Implications of Garcetti v. Ceballos.

Last week, the police officer primarily responsible for establishing the canine handling unit for Circleville, Ohio, found out just what those restrictions were about. Although he had successfully prevailed against defendants' motion for summary judgment in the district court, he had that victory taken away at the appellate level based in part on Garcetti.

What Officer Haynes viewed as public speech — his memorandum to the Chief of Police complaining of restrictions on the canine unit's training schedule:

Now we are about to change boats mid-stream and I expect that there will be serious negative consequences for doing so. Words like “deliberate indifference,” “negligence” and “failure to train” will someday be brought up with respect to the Circleville Police Department’s Canine Program. My response will be, “I told them so.”

. . . You know, or should know, that any deviation from the old training regime will probably result in an expensive learning experience. But I will not be paying the bill. You have received my last words of caution. ...

to the 6th Circuit was nothing more than the “the quintessential employee beef: management has acted incompetently.” Haynes v. City of Circleville, Ohio (6th Cir. 1/25/07)[pdf]. And employee beefs, legitimate or not, are no longer (if they ever were) the grist of successful 1st amendment claims.

Author's note:Although I could justify this post for the legal point, candor requires me to note that I mainly did it because Circleville, Ohio (the Pumpkin Capitol of the world) was the scene of the first formal legal hearing where I appeared as an "employer's lawyer." Actually, appear might not be technically correct, since in the summer of 1974, Richard Nixon was being forced out of the White House in disgrace, and I was a summer clerk at the (still) wonderful Columbus based law firm, Vorys, Sater, Seymour and Pease having finished only my first two years of law school at the University of Texas School of Law. Although I may not have been "on the record" as appearing, I did do the background investigation, sat at counsel table and I think helped write the post-hearing brief in an NLRB unfair labor practice hearing conducted by an NLRB administrative law judge.

What would have made this an even better post was if Judge R. Guy Cole, Jr. had been on the panel (he wasn't) since he was one of my fellow clerks at Vorys, Sater in the summer of '74.


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Need More Time To Comment on Possible Changes to the FMLA Regs?

The kind souls at the DOL have graciously extended the deadline from February 2nd to February 16th by this post in last Friday’s Federal Register.

If you are puzzled what this is all about, check out New FMLA Regulations? Not Quite, But A Start.

There still has not been anything to change my view that you won’t see any new regulations until at least the next administration. And then, if you are an employer, you may not want to.


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Wednesday, January 24, 2007

A Tremendous Loss - Confined Space Closes Shop

I have never met or even corresponded with Jordan Barab, but I have long been impressed by not only his insightful and informative posting, but more importantly his fervid belief in the cause of safety for workers. You need only read a single posting to get that message loud and clear.

Today is his last day of posting. You can see Moving On: Closing Up Shop for the details and an invitation to an on line farewell which starts in just about 2 hours. From the 62 comments that have already been left, there will be plenty of company there.

Although the blog will be gone, Jordan won’t be gone entirely. In his words:
Starting next week, I’ll be heading to the House of Representatives Committee on Education and Labor, working on OSHA-related legislation, oversight hearings, investigations, etc. In other words, instead of just writing about what Congress and this administration needs to be doing to protect workers, I’ll hopefully be able to directly affect some of those things.
Although many might think given the title of this blog that I would have different views from Jordan, and we certainly might differ on methods of how to get there, I don’t think there is anyone who works in the field of employment law and labor who doesn’t earnestly want the safest of workplaces for all employees. And certainly all who do can appreciate and admire the passion which Jordan Barab has — and I am sure will — bring to that task every day. I know I do. Not just a hat tip, but my hat’s off to Confined Space and Jordon Barab who will leave a definite hole in one corner of the blogosphere.


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Thursday, January 18, 2007

4th Circuit Upholds Striking Down Wal-mart Benefits Law

Here's the link to the 2-1 opinion by the 4th Circuit affirming the district court's finding that Maryland's law requiring certain employers, tailored to impact only Wal-mart, were required to provide health benefits or pay a tax, was pre-empted by ERISA. Retail Industry Leaders Association v. Fielder (4th Cir. 1/17/07) [pdf].

The two sides of the arguments are succinctly summed up by the majority and dissenting opinions:

From the majority:

In effect, the only rational choice employers have under the Fair Share Act is to structure their ERISA healthcare benefit plans so as to meet the minimum pending threshold. The Act thus falls squarely under [Shaw v. Delta Airlines'] prohibition of state mandates on how employers structure their ERISA plans. See Shaw, 463 U.S. at 96-97. Because the Fair Share Act effectively mandates that employers structure their employee healthcare plans to provide a certain level of benefits, the Act has an obvious "connection with" employee benefit plans and so is preempted by ERISA.

And the dissent:

I respectfully dissent on the issue of ERISA preemption because the Act does not force a covered employer to make a choice that impacts an employee benefit plan. An employer can comply with the Act either by paying assessments into the special fund or by increasing spending on employee health insurance. The Act expresses no preference for one method of Medicaid support or the other. As a result, the Act is not preempted by ERISA.

Given the split, the importance of the issue, at least politically, we will no doubt see a request for en banc consideration and a cert. petition regardless of how the en banc request turns out.

You should check out the "Law School Professor of today" Paul Secunda's comments including his earlier ERISA analysis at Workplace Prof Blog. His quick analysis and reporting earned him the title in the WSJ Law Blog story, Fourth Circuit Puts Another Nail in Wal-Mart Bill’s Coffin. For the record, he predicted the majority opinion but as a policy matter would prefer to see the statute allow such legislation.

Update: A different view from the academic side comes from Professor Ross Runkel at his Employment Law Blog, his view — the dissent got it right.


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Saturday, January 13, 2007

An Important Principle for Understanding Employment Law

One wishes Judge Easterbrook's quote was emblazoned on the top of every employment law case file as a reminder to the judge of the limits of the task ahead; and to the extent the judge feels a wrong has been done, that there is in fact a consequence for the employer, if not a remedy for the current plaintiff:
It is not enough to demonstrate that the employer was mistaken, inconsiderate, short-fused, or otherwise benighted; none of those possibilities violates federal law. See Forrester v. Rauland-Borg Corp., No. 05-4650 (7th Cir. June 29, 2006) (collecting authority); Pollard v. Rea Magnet Wire Corp., 824 F.2d 557 (7th Cir. 1987). Poor personnel management receives its comeuppance in the market rather than the courts.
Yindee v. CCH Inc., 458 F.3d 599, 18 A.D. Cases 417 (7th Cir. 08/11/2006)

It also would not be a bad reminder for legislators trying to remove all perceived bad acts from the workplace, rather than letting good employers with better practices obtain the more talented employees by distinguishing themselves based on their voluntary, as opposed to legislatively mandated practices.

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Friday, January 12, 2007

Wanting to Hire an Aussie?

Then you may want to comment on the rules related to a new visa category (E-3) that is limited to "nationals of the Commonwealth of Australia." Apparently recent legislation is going to allow 10,500 E-3 visa's anually. If you are interested in commenting on the rules under which they will be issued, now is your chance. Here is the Notice of proposed rulemaking; request for comments as published in today's Federal Register.


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Thursday, January 11, 2007

Who Controls Your Email System -- You or Your Employees?

Normally the answer is clear — the employer. But the National Labor Relations Board's grant of a request for oral argument on the appeal of the ALJ's decision in The Guard Publishing Company, d/b/a The Register-Guard, Cases 36-CA-8743-1, makes it clear there is at least another side to be considered when the communications involve concerted activity under the NLRA.

The issue, much oversimplified is — can employers prohibit their employees from using the company's email system to discuss union issues.

But the issues are more complex, so much so the the Board has asked the parties (and amicus) to provide input in seven different areas. My thoughts in red:

1. Do employees have a right to use their employer’s e-mail system (or other computer-based communication systems) to communicate with other employees about union or other concerted, protected matters? If so, what restrictions, if any, may an employer place on those communications? If not, does an employer nevertheless violate the Act if it permits non–job-related e-mails but not those related to union or other concerted, protected matters. [Could any employer actually stop all non-work related email activity even if it wanted to?]

2. Should the Board apply traditional rules regarding solicitation and/or distribution to employees’ use of their employer’s e-mail system? If so, how should those rules be applied? If not, what standard should be applied? [Good luck to the Board in applying a 1947 statute to a 21st century workplace. If you can do it, what about trying your hand on the 1938 FLSA.]

3. If employees have a right to use their employer’s e-mail system, may an employer nevertheless prohibit e-mail access to its employees by nonemployees? If employees have a right to use their employer’s e-mail system, to what extent may an employer monitor that use to prevent unauthorized use?

4. In answering the foregoing questions, of what relevance is the location of the employee’s workplace? For example, should the Board take account of whether the employee works at home or at some location other than a facility maintained by the employer? [Just one more question to put on your checklist of items to think about when considering telecomuting employees.]

5. Is employees’ use of their employer’s e-mail system a mandatory subject of bargaining? Assuming that employees have a Section 7 right to use their employer’s e-mail system, to what extent is that right waivable by their bargaining representative?

6. How common are employer policies regulating the use of employer e-mail systems? [A very high percentage I would hope.] What are the most common provisions of such policies? Have any such policies been agreed to in collective bargaining? If so, what are their most significant provisions and what, if any, problems have arisen under them?

7. Are there any technological issues concerning e-mail or other computer based communication systems that the Board should consider in answering the foregoing questions? [Kudos to the Board for a very good question.]

Argument will be heard on March 27. If history repeats itself, it will be sometime thereafter before a decision is issued, followed by an appeal to a circuit court and at least a petition for certiorari, before we have a definitive answer.

Although given the powers of the Board to reconsider its positions, we know nothing is ever really final until the Supreme Court says so. See Weingarten Rights Do, Do Not, Do, DO NOT Apply to Non-Union Employees for one such example.


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Wednesday, January 10, 2007

Same Sex Couples, The Hair of the Dog and the FLSA

Although the Fourth Circuit Court of Appeals is often viewed as conservative I really don't think it was making a moral judgment when it wrote:
When relationships have deviated from the traditional understanding of employment in fundamental ways, the Supreme Court has refused to shoehorn them into the Act. (my emphasis)
even though it was discussing a same sex relationship gone sour.

I am sure Michelle Hirsch and Tammy Steelman foresaw only a mutually harmonious relationship when they not only joined households but Steelman quit her job to join Hirsch's already established dog grooming business, The Hair of the Dog. Unfortunately instead of bliss, when problems overtook the relationship, litigation soon followed.

Since traditional family law remedies were not available, Steelman's lawyer creatively argued (along with state law causes of action) that Hirsch had not been adequately compensated for her services as an employee as required by the Fair Labor Standards Act.

Although one wonders if the Court could not have used the same rationale that the 5th Circuit did last week in tossing an FLSA case because the plaintiff did not show that his occupation was engaged in commerce, see Sobrinio v. Medical Center's Visitor's Lodge, Inc. (5th Cir. 1/4/07) [pdf], the 4th Circuit instead focused on the domestic arrangements of the couple and whether or not Steelman's situation was what the drafters of the FLSA intended when it defined "employee".

Bottom line the Court concluded it wasn't:

Taking the evidence in this case in the light most favorable to her, the plaintiff cannot be adjudged an "employee" for purposes of the FLSA under these precedents, or under any analysis based in "economic reality." The intended lifetime partnership she described was not "the bargained-for exchange of labor for mutual economic gain that occurs in a true employer-employee relationship." Harker, 990 F.2d at 133 (internal quotations omitted). According to the plaintiff, the couple saw their work together as a way to improve an economic future that they intended to share in perpetuity, rather than as a transfer of one individual’s assets to another in exchange for labor. The plaintiff did not obtain a bargained-for portion of her supposed employer’s assets — she took from those assets for her own purposes with a discretion that is fundamentally alien to employer-employee relationships.

Although noting that possible state court rememdies existed for Steelman, the Court dismissed her FLSA claim. Besides proving again that employment law has the greatest stories, Steelman v. Hirsch (4th Cir. 1/10/07) [pdf] is yet another reminder of the perils of mixing romantic relationships and work.


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The Swinging of a Pendulum? MSJ's and Employment Law

Anyone who has been around the legal world for a long time knows that how the law is interpreted tends to swing back and one forth from one side to another just like a pendulum (some might say one extreme to another). It may be just a blip on the screen, but several comments lately have made me more aware of a growing feeling that we may be in the midst of one of those swings in the legal world I inhabit — employment law.

Just a couple of examples — First, Professor Paul Secunda's comment this morning at the Workplace Prof Blog:
If my home state of Mississippi is even considering passing a minimum wage increase, you know that you have a bona fide minimum wage wave sweeping the country.
Minimum Wage Craze Sweeping the Nation.

And a second, from Tom Peters, hardly an anti-business figure, commenting on Peter Hebert's NYT article, Working Harder for the Man ($) on the disparity between payments to CEO's and non-supervisory employees: "I believe in markets—and I also believe that we are on the verge of backlash of a magnitude seldom seen."

If it is a true swing, one of the canaries in the coal mine could be the current main battleground of most employment law cases — summary judgment. Which made more pertinent today's post in the ACS Blog that begins:

Circuit Judges in the Fourth and Eighth Circuits have recently criticized their colleagues for being too quick to grant summary judgment--a quick method of resolving a case which should only be granted when no issues of material fact are reasonably in dispute.

And the two cases in which that opinion was voiced (both dissents by the way), Luh v. J.M. Herber Corp. (4th Cir. 12/21/06) [pdf] and Melvin v. Car-Freshener, Inc. (8th Cir. 7/12/06)[pdf] are — you guessed it, employment law cases.

If that pendulum is in fact swinging, to borrow advice recently given Rudy Giuliani's campaign after it lost a briefing book — employment law litigators who have never tried a jury trial (and their clients) better buckle their chinstraps.

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Minimum Wage Increase Takes One Step Forward Today

That's the plan according to the chair of the House Committee on Education and Labor, George Miller who is announcing an expected vote on the increase in the House of Representatives today. You can check out the details of how the House proposal would work at the Committee's website, Raise the Minimum Wage. The bill itself is the Fair Minimum Wage Act of 2007.

However, the UPI is reporting that there may be problems in the Senate unless it is coupled with tax relief for small businesses. See Minimum wage may face Senate problem.


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Thursday, January 04, 2007

The Failure to Rehire After a Release - A Common Sense View from the 6th Circuit

Just 3 days before Christmas, the 6th Circuit held that an employee who had signed a release of his age claim in return for an enhanced severance could not claim that the failure to rehire him was age discrimination. The Kellogg Company v. Sabhlock (6th Cir. 12/22/06) [pdf].

Although the Court was careful to point out that it was not setting an all encompassing rule — "Under some facts a general release will bar a subsequent failure to rehire claim and under other facts it will not. It depends on how closely related the rehire is to the original termination in terms of time and subject matter." — and Kellogg had done its job by including an agreement that it had no obligation to rehire him at any time in the future, it was still a nice Christmas gift for employers faced with a problem that appears almost insoluble if discrimination and retaliation statutes are interpreted literally.

Here the 6th Circuit avoided both an unfair result and perhaps more importantly for others a rule that would discourage enhanced payments in return for releases, by holding that "his claim of age discrimination in the failure to rehire arose out of his termination and cannot be the basis for a separate claim. After releasing an age discrimination claim, the employee cannot resurrect the age discrimination claim by reapplying for employment." (my emphasis)

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USERRA Uses 2 not 3 Prong Burden Shifting Approach - 1st Circuit

Reversing a district court's summary judgment, the 1st Circuit today joined what it found all other circuits to have considered the issue and holds that the burden shifting analysis in USERRA cases is the 2 prong standard used for the NLRA, rather than the 3 prong McDonnell Douglas standard used in Title VII. Velasquez-Garcia v. Horizon Lines of Puerto Rico, Inc. (1st Cir. 1/4/07) [pdf].

Garcia complained he was terminated because of his military service. The company claimed he was terminated for violating its Code of Business Conduct because he was cashing other employee's paychecks for a fee. He had not been warned about his conduct nor did he have any prior disciplinary action. He claimed discrimination in violation of USERRA. The Court of Appeals after reviewing the legislative history found that the appropriate test for burden shifting was that used under the NLRB:

The employee first has the burden of showing, by a preponderance of the evidence, that his or her protected status was ‘a substantial or motivating factor in the adverse [employment] action’; the employer may then avoid liability only by showing, as an affirmative defense, that the employer would have taken the same action without regard to the employee's protected status.

Emphasizing its point, the Court stressed "this two-pronged burden-shifting analysis is markedly different from the three-pronged burden-shifting analysis in Title VII actions."

And in this case decisive. Once Garcia established that his military service may have played a role in his termination, the employer could win only by showing that it would have taken the action regardless of his military service. Since all that was required at the summary judgment stage was for Garcia to show there were triable issues of fact on both, the appeals court sent the case back for a jury to decide.

The case also has a good study of how courts can differ in the way they view evidence. It may also be a reflection that at times certain plaintiffs' claims are more in favor, for lack of a better term. Unlikely that it is on a conscious level, but judges are humans (at least most are) and are influenced by the same things as all other citizens, including at this particular moment great gratitude for those who serve in the military.


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