Labor and Employment Digest: January 2014

Here's what’s on the minds of labor and employment experts

In a practice area with as much individuality as labor and employment law, the voices of law firms inject the kind of color, insight and expertise that provide inside counsel and other legal professionals with a cornerstone of true understanding.

Just as the disparate personalities in the workplace can help one gain perspective, each month InsideCounsel brings you the opinions and thoughts of those practicing in the labor and employment field for a fuller view of the landscape. Read on to learn what’s on the minds of labor and employment experts, and check back each month for developments.

EEOC eyes employee background checks

“The EEOC identified eliminating barriers in recruiting and hiring as a national priority in its 2013 strategic plan. The Agency contends that extensive background checks adversely impact minorities. However, many employers conduct routine background checks for legitimate reasons, such as to avoid making bad hiring decisions that could harm the business or pose safety risks. Employers should develop pre-employment policies that appropriately screen employment candidates, without running the risk of class litigation by the EEOC.”

—Barbara Johnston, partner, Paul Hastings Inc.

The NLRB and social media: Non-union employers in the crosshairs

“Social media is central to workplace conversation, and employees frequently take to the Internet to complain about their employers, managers and coworkers. In response, employers are promulgating social media policies in an attempt to discourage employee comments that depict the company in a negative light. However, such policies may violation the National Labor Relations Act.”

—Theodora Lee, shareholder, Littler Mendelson

Wellness programs could be fit for EEOC complaints

“As highlighted during the EEOC’s May 2013 public meeting, the body of law regulating wellness programs is enormous, undeveloped, and uncoordinated. Employers must review wellness programs to ensure technical compliance with the Affordable Care Act, ERISA, ADA and GINA. These programs also could expose employers to class actions, including disparate impact claims, by individuals with disabilities, racial minorities, women, or older workers under the ADA, Title VII, the EPA or ADEA.”

—Francis P. (Frank) Alvarez, partner, Jackson Lewis

NLRB ruling on arbitration agreements repealed

“On Dec. 3, 2013, employers with class action waiver provisions in their mandatory arbitration agreements won another significant victory. The 5th Circuit in D.R. Horton, Inc. v. NLRB ruled that such provisions are enforceable and not a violation of an employee’s right to engage in concerted activities under the NLRA. In light of the staggering numbers (filings, defense costs and exposure) associated with wage and hour and other class actions, employers with arbitration agreements should audit for compliance with this decision, and those without should consider implementation in the New Year.”

—Natalie Pierce, shareholder, Littler Mendelson

Staffing firms could pose potential EEOC risk

“Beware: Using a staffing firm doesn’t shield your company from employment-related claims by employees placed with you. In September [2013], the N.D.N.Y. found that GE was a ‘joint employer’ with its staffing company, refusing to dismiss a terminated temporary employee’s claims. 2013 also saw a flurry of suits by the EEOC against ‘borrowing employers.’ Protect your company by fostering strong relationships with staffing companies and ensuring contracts require legal compliance and cooperation and assign liability appropriately.”

—Laura B. Friedel, partner, Levenfeld Pearlstein

Equal Pay Task Force on the prowl

“Employers should review and evaluate their compensation systems and structure. The June 2013 White House Equal Pay Task Force concluded that the ‘persistence’ of a gender pay gap is due to discrimination. The EEOC has designated compensation discrimination as a ‘national priority;’ the OFCCP is collecting more pay data and using looser standards to analyze it; the private plaintiffs’ bar is circling. Attention to compensation issues now is a wise investment to prevent/minimize investigations and claims in this area.”

—J. Randall Coffer, partner, Fisher Phillips

Marijuana legalization and the workplace

“In 2012, voters in Colorado and Washington approved initiatives to legalize marijuana. Sixteen states have laws allowing for the use of marijuana for medical purposes. These state laws conflict with federal law, which treats marijuana as an illegal drug for which there is no legitimate purpose. Employers should review their substance abuse policies to ensure the policies foster a drug-free workplace while taking into account the increased use of marijuana for recreational and medicinal purposes.”

—Barbara Johnston, partner, Paul Hastings Inc.

Colorado clambers to correctly classify contractors

“Colorado companies continue to struggle with the challenges associated with the misclassification of workers as independent contractors, especially given the uptick in compliance audits by the Colorado Department of Labor and Employment. In addition to satisfying IRS and other federal tests, Colorado companies must ensure that their written independent contractor agreements meet the requirements of the Colorado Worker’s Compensation and Employment Security Acts, and that their workers satisfy the multi-factor tests under these statutes.”

—Todd Fredrickson, managing partner, Fisher Phillips

Reviewing Illinois employment agreements

“A June decision from the Illinois appellate court in Chicago held that at-will employment of less than two years isn’t sufficient consideration for restrictive covenants. With the petition for appeal recently denied, companies should analyze template agreements and agreements signed in the last two years to ensure they have sufficient consideration. If not, agreements should be redrafted and reissued to include additional consideration—such as notice of termination without cause or pay in-lieu.”

—Laura B. Friedel, partner, LP Legal

California class action

“Employers in California continue to be hit with class action lawsuits over alleged wage and hour law violations. Recent pro-employer rulings from the U.S. Supreme Court and the California appellate courts, however, provide employers with a potent weapon to resist class actions, in the form of arbitration agreements. Courts are forcing plaintiffs who signed these agreements to arbitrate their claims individually, not via class action. California employers are foolish not to implement arbitration.”

—James J. McDonald, Jr., managing partner, Fisher Phillips

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