The NLRB's Latest Digital Developments

Last May, we highlighted a pending National Labor Relations Board (NLRB) case where the Board requested comments on whether it should reconsider its view that employees do not have a statutory right to use employer-owned email systems for protected concerted activities. Based on its request in Purple Communications, Inc., the Board appeared to be setting the stage for a potential reversal of its position in Register Guard—as well as a significant re-evaluation of what restrictions an employer may, and may not, impose on the use of its electronic communications systems.

It appears now, however, that the Board is still rehearsing its script:  last month, the Board issued its decision in Purple Communications, 361 NLRB No. 43, (Sept. 24, 2014), and explained that it would “sever and hold for further consideration the question whether Purple’s electronic communications policy was unlawful.”  As a result, the Board’s decision did not reach the merits of whether Register Guard should be overturned.   This means that policies prohibiting any non-business use of an employer’s email system will most likely continue to be lawful—at least in the near term.

In another recent development, the Board held for the first time that merely “liking” a comment on a Facebook page may qualify as protected activity if it relates to comments that are otherwise protected under Section 7 of the NLRA.  Among the issues In Three D, LLC, 361 NLRB No. 31 (Aug. 22, 2014), was whether a bar unlawfully terminated several employees after discovering their discussions on Facebook.  The employees had learned that they owed additional taxes as a result of an accounting error by their employer and had taken to Facebook to vent their frustrations.  One of the employees did not offer any written comments, but did “like” another employee’s post.  The Board found that the comments—including the mere “liking” of another post—qualified as protected concerted activity because they concerned a group discussion of workplace complaints.  It was therefore unlawful for the bar to terminate the employees for their participation in the exchange.

The Board’s conclusion that “liking” a social media post may qualify as protected activity is not altogether surprising.  Other courts, for example, have found that “liking” a post qualifies as speech protected by the First Amendment, reasoning that “liking” a comment is just as much a substantive statement as the comment itself.  It is perhaps no surprise, then, that the Board’s decision appears to “like” the same logic.

What Employers Need to Know About Employer Payment Plans

Some employers may have offered employees pre-tax dollars to help purchase insurance. Such arrangements are called Employer Payment Plans.  Now, however, Employer Payment Plans are prohibited under the Affordable Care Act (ACA) because they are considered group health plans. Under the ACA, group health plans may not establish any annual limit on the dollar amount of benefits for any individual and must provide certain preventive care services without imposing any cost-sharing requirements for these services. Since Employer Payment Plans do not satisfy these requirements, any employer that maintains an Employer Payment Plan for its employees will be subject to a penalty of $100 per day per affected individual.

Nonetheless, an arrangement under which an employee may choose to either receive cash or have an after-tax amount applied toward health coverage is not considered an Employer Payment Plan.  Employers may therefore establish payroll practices by which they forward post-tax employee wages to a health insurance issuer at the direction of an employee without establishing a group health plan, if:

1. No contributions are made by the employer;
2. Participation in the program is completely voluntary for employees;
3. The employer does not endorse the program (although the employer may permit the insurer to publicize the program to its employees and the employer may collect premiums through payroll deductions or dues check offs and remit these funds to the insurer); and
4. The employer receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions.

Supreme Court Will Hear Three Employment Discrimination Cases

The United States Supreme Court held its traditional first of October meeting to determine which cases it will hear during the 2014-15 term.  The Court has accepted three employment discrimination cases.

Young v. United Parcel Service.  The question is whether the employer has to accommodate pregnant employees who are unable to handle some of the physical requirements of the job, i.e. UPS employees who have to carry heavy boxes.  The UPS employee has appealed to the Supreme Court claiming that her needs while pregnant were not accommodated by UPS’s “pregnancy-blind policy”; the policy limited accommodations to employees who were injured on the job, who were defined as “disabled” and who had lost their DOT certification.

Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc.  “Did Abercrombie and Fitch discriminate against a Muslim job applicant when she was rejected based on her desire to wear a head scarf at work?”  The significant question is whether the employer has to have “actual knowledge” that a practice is religious before it is required to accommodate the practice in the workplace.  Abercrombie claims that the job applicant did not explicitly indicate that her scarf had religious meaning.

Mach Mining, LLC v. EEOC.  This case involves the extent to which courts may enforce the EEOC’s duty to conciliate cases pre-litigation.  Mach moved for summary judgment alleging the EEOC had failed to fulfill its statutory duty to conciliate the case in good faith.  There is a split among the Appellate Circuits as to whether or not the EEOC’s duty to conciliate is reviewable by a court.

Inflexible Leave Policies and the EEOC

The last several years have seen the Equal Employment Opportunity Commission (“EEOC”) take an aggressive stance on inflexible leave policies.  According to the EEOC, these policies – which subject employees to termination after a maximum period of leave – are unlawful because they do not consider whether an additional period of leave might be a reasonable accommodation for individuals with a disability.  The EEOC has achieved considerable success pursuing class-action lawsuits against companies that maintain fixed leave policies, including lawsuits against Supervalu, Inc. and Sears, Roebuck & Co. that settled to the tune of $3.2 million and $6.2 million, respectively.
 
In May, however, the EEOC’s smooth sailing hit some headwinds when the Tenth Circuit Court of Appeals issued its decision in Hwang v. Kansas State University finding that a state university lawfully terminated a professor after she had exhausted her leave under a six-month maximum leave policy.  Although the court readily acknowledged that the professor was a capable teacher, it noted that the professor, by her own admission, had been unable to perform any duties of her position for six months.  Given the length of the absence, the court found it difficult to conceive how an absence so long “could be consistent with discharging the essential functions of most any job in the national economy today.”  And, even if it were, the court concluded that it was still “difficult to conceive when requiring so much latitude from an employer might qualify as a reasonable accommodation.”

In reaching its conclusion, the court briefly addressed the EEOC’s guidance that employers must modify a “no-fault” leave policy if an employee with a disability needs additional unpaid leave as a reasonable accommodation.  According to the court, the EEOC’s guidance did not address the preliminary question it was trying to tackle, which was:  when is a modification to an inflexible leave policy a reasonable accommodation?  Without giving a definitive answer to that question, the court found that, in this particular case, granting an additional period of unpaid leave beyond six months was simply not reasonable.

Although the Hwang decision has the potential to turn the tide on the EEOC, the agency has not sent out any signals that it sees muddy waters ahead.  Just one month after Hwang, the EEOC announced that it had reached another settlement with Princeton HealthCare Systems for $1.35 million, resolving claims concerning PHCS’s 12-week leave policy.  In its press release, the EEOC noted that “addressing emerging and developing issues under the ADA is one of six national priorities” identified in its Strategic Enforcement Plan.  Whether the EEOC chooses to clarify its position through additional guidance, or through further litigation, remains to be seen.

Human Rights Commission Looking for Early Information From Claimants

Representing defendants in claims before the Maine Human Rights Commission can be frustrating because the allegedly detailed statement of charge is often not very detailed. It can be difficult to respond to a claim when the defendant doesn’t fully understand the nature of the charges. Recently, I received a sexual harassment claim which, while detailed in many respects, was vague as to the specific acts of sexual harassment. Apparently, the Human Rights Commission felt the same way. They established a procedure which simultaneously sent the document request to the plaintiff and the respondent. In this case, the request to the complainant asked for very detailed information regarding the sexual harassment, including who committed it, what occurred, when it occurred, where it occurred, who was present, how complainant reacted to it, and how the complainant’s job was affected. Further, it asked whether complainant complained to anyone and to whom, whether an investigation was conducted, whether corrective action was taken, and the identity of any witnesses. This information can be very helpful to the Commission who investigates the claim, as well as the respondents, and can also facilitate the speed of the case.

Do You Know What Your Restrictive Covenant Restricts?

When preparing employment agreements, businesses often want to include provisions that restrict employees in their use of company information, contact with customers, or choice of next employer.  These restrictions, called restrictive covenants, serve very distinct purposes and it is important to keep the purpose of each in mind when preparing employment agreements.  For example, although a non-disclosure agreement might prevent an employee from disclosing confidential business information to a competitor, it would not necessarily preclude the employee from jumping ship to work for that same competitor.

As a case in point, the federal district court in Massachusetts recently granted a preliminary injunction to a large medical device manufacturer enforcing the terms of a non-disclosure agreement with a former employee, but denied the manufacturer’s request for an injunction barring the employee from working at a competing business.  Boston Scientific Corp. v. Lee (D. Ma. May 14, 2014).  The employee, Dr. Lee, had signed an employment agreement with Boston Scientific Corporation that prohibited Dr. Lee from disclosing Boston Scientific’s proprietary information.  The agreement also required Dr. Lee to return all documents containing Boston Scientific’s proprietary information upon the termination of his employment.  The parties, however, did not sign a non-competition agreement.  After Dr. Lee left Boston Scientific to join one of the company’s alleged competitors, Boston Scientific filed for a preliminary injunction enjoining Dr. Lee from (1) disclosing its proprietary information and (2) working at the competitor.

Although the court found Boston Scientific was entitled to an injunction enjoining Dr. Lee from disclosing any of its proprietary information, it held the non-disclosure and confidential information provisions of his employment agreement could not be transformed into covenants not to compete.  So, in the absence of a non-competition agreement, the court declined to grant an injunction restraining Dr. Lee’s employment.

Interestingly, this decision coincides with bills pending in the Massachusetts legislature that propose significant limitations on the use of non-competition agreements in the state.  Whether this legislation will become law, and what form it will take if it does, is still unclear.  A blog post on this topic will therefore have to wait for another day – so stay tuned.

Employer's Electronic Communication Policy Negates Expectation of Privacy in Employee's Work Computer

Adding its voice to the growing body of cases illustrating the importance of electronic communications policies, a federal court in Virginia ruled earlier this year that an employee had no reasonable expectation of privacy in personal files stored on his work computer where his employer maintained a policy that clearly informed him that he should have no such expectation.  Walsh v. Logothetis  (E.D. Va. Jan. 21, 2014).

The plaintiff in the case, Thomas Walsh, began working at Virginia Commonwealth University (VCU) in 2008 as a Chief Administrative Officer in the School of Medicine.  In the spring of 2011, Walsh’s supervisor, who was an Associate Dean in the School of Medicine, raised concerns about the financial management of Walsh’s department.  VCU conducted an audit as a result of the supervisor’s concerns.  In connection with the audit, VCU searched Walsh’s work computer and found copies of his personal 2007 and 2008 tax returns, which Walsh had stored on the computer.  The tax returns showed that Walsh had falsified his employment application to VCU by overstating the salary he had earned at his previous job.  The audit also showed that Walsh had failed to follow other financial procedures implemented by VCU.  Based on the results of the audit, VCU terminated Walsh’s employment.

Walsh later sued in federal court alleging a variety of constitutional and statutory violations.  Among his many claims, Walsh alleged that the search of his work computer was unlawful under the Fourth Amendment.  Specifically, Walsh alleged that several VCU policies permitted employees to store personal files on their work computers and that he therefore had a reasonable expectation of privacy with respect to the personal tax returns he had stored on his work computer.

The court acknowledged that public employees, such as Walsh, generally have a reasonable expectation of privacy in their workplace.  However, the court concluded that employees cannot have a legitimate expectation of privacy in electronic communications where a policy puts them on notice that their communications may be monitored.  VCU had such a policy, which provided:

No user shall have any expectation of privacy in any message, file, image or data created, sent, retrieved, received, or posted in the use of the Commonwealth’s equipment and/or access.  Agencies have a right to monitor any and all aspects of electronic communications and social media usage.  Such monitoring may occur at any time, without notice, and without the user’s permission.

Consequently, even though Walsh may have been permitted by VCU to store personal information on his work computer, he did not have any reasonable expectation that this information would remain private.

The result in Walsh v. Logothetis is relevant for private employers, even though the case involved a public employee and a claim under the Fourth Amendment.  This is because common law claims for invasion of privacy, like privacy claims under the Fourth Amendment, generally require a plaintiff to show that he or she had a reasonable expectation of privacy.  A clear policy stating that such an expectation does not exist in electronic communications stored or accessed on a work computer is therefore equally important for employers in both the public and private sectors.