The Obama administration announced earlier this month that businesses will be provided a one-year reprieve before they are required to comply with the mandate to provide all employees with health care insurance under the Affordable Care Act (ACA). The extension, announced by the U.S. Treasury Department, cited a need for more time to implement the complex requirements.

Specifically, Mark J. Mazur, assistant secretary for tax policy with the Treasury Department, said the move is designed to allow the Treasury to simplify the new reporting requirements and “provide time to adapt health care coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Under the ACA, businesses with 50 or more employees must provide affordable health benefits to at least 95 percent of their workforce or pay a penalty (the “pay or play” mandate). The extension of “pay or play” is especially welcome news to smaller employers that worried that the cost of the available alternatives would be too burdensome to bear.

Looking forward, the Treasury Department announced plans to this summer publish formal guidelines to assist employers with reporting requirements. The ACA requires information reporting by insurers and some employers with respect to the health coverage offered to their full-time employees. Treasury officials intend to “strongly encourage” employers to implement the information reporting requirement of ACA in 2014. Employers that implement the information reporting requirement will provide a test of the system and contribute to a smoother transition in 2015.

Employers should use the additional time and the Treasury Department’s guidelines to prepare for the transition. Employers must be mindful that the one-year reprieve is a delay – not a repeal – of the ACA.

Oregon passes workplace protection law for unpaid interns

On June 13, Oregon Gov. John Kitzhaber signed into law a bill extending employment discrimination protection to interns. The new law grants unpaid interns legal recourse under Oregon’s employment discrimination laws for workplace violations – including sexual harassment, unlawful discrimination and retaliation for whistleblowing.

The new law defines interns who are entitled to protection as individuals who are performing work for an employer for the purpose of training if: (a) the employer is not committed to hire the person performing the work at the conclusion of the training period; (b) the employer and the individual agree in writing that he or she is not entitled to wages for the work performed; and (c) the work performed:

• Supplements training given in an educational environment that may enhance the employability of the intern;

• Provides experience for the benefit of the person performing the work;

• Does not displace regular employees;

• Is performed under the close supervision of existing staff; and

• Provides no immediate advantage to the employer providing the training and may occasionally impede the operations of the employer.

This definition tracks the test for unpaid interns who are exempt from the Fair Labor Standards Act’s minimum wage and overtime requirements.

Under the new law, unpaid interns are now protected from discrimination and retaliation on the basis of race, color, religion, sex, sexual orientation, national origin, marital status, age, military service, and disability, and discrimination and retaliation based on certain societal obligations – including aiding in criminal or civil proceedings and testifying before the Oregon Legislature.

The statute also provides protection for unpaid interns who report, in good faith, information that the intern believes is evidence of a violation of a state or federal law, rule or regulation.

The new law also extends discrimination protection to Oregon unpaid interns who are victims of domestic violence, harassment, sexual assault or stalking. As with paid employees, the employer may require certification in the form of a police report, protective order or other evidence from a court, administrative agency, mental health professional or attorney that the intern is appearing in a proceeding or undergoing treatment relating to the domestic violence, harassment, sexual assault or stalking.

Additionally, collecting, testing or using genetic information of the interns is prohibited. Employers in Oregon cannot require interns to pay for medical testing as a condition of their internship unless a medical examination or health certificate is required pursuant to federal or state law or local ordinance. Finally, employers may not restrict interns’ lawful use of tobacco during nonworking hours.

The new law does not create an employment relationship under Oregon’s wage and hour law, employment laws regarding minors, state occupational safety and health laws, workers’ compensation laws, unemployment laws, or state laws governing employment agencies.

The protections extended to unpaid interns in Oregon under the new law are essentially the same as for regular employees, so this would be an excellent time for Oregon employers to review their discrimination and retaliation policies. They should be sure that all protected classes and activities are addressed, and modify the policies to add where necessary that unpaid interns are covered. Also, managers, supervisors and employees involved in company internship programs should receive training regarding the new law.

Finally, employers should, as a general matter, review their company internship programs to be sure that unpaid interns meet the definition for exempt status under the FLSA, and if not, are paid in accordance with Oregon minimum wage and overtime statutes.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-889-8861 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-889-8874 or dstait@littler.com.

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On May 22, Gov. John Kitzhaber signed into law a bill prohibiting Oregon employers from requiring or requesting that employees or job applicants provide access to personal social media accounts, add the employer to their social media contact lists, or allow the employer to view their personal social media accounts.

The new law also prohibits employers from disciplining employees for refusing to provide access to personal social media accounts, and grants employees or applicants the right to file a lawsuit against the employer for violations of the law. Oregon is the 10th state to pass such a bill.

The law identifies certain circumstances wherein an employer would not commit an unlawful employment practice regarding access to employees’ or applicants’ social media accounts. First, an employer may investigate a complaint of harassment or other employee misconduct and direct an employee to share content from a personal social media account, but only if the complaint indicates that a social media account is involved. This does not give the employer carte blanche to demand unfettered access, however. The employer’s request must be narrowly tailored to meet the needs of the investigation.

Second, separate from any investigation, if an employee’s or applicant’s social media account allows members of the public to view his or her full profile, an employer is free to access the person’s account.

Finally, it is not an unlawful employment practice under the new law for an employer to inadvertently gain access to a personal social media account while monitoring the employee’s Internet activity on the employer’s network during work time.

The new law presents some unanswered questions for employers. “Social media” is defined very broadly under the law to include any electronic medium that allows users to create, share or view user-generated content through email, the Internet or other electronic means.

Ownership of social media accounts is a developing area of law. Does a customer list belong to the company or the departing employee when it exists on the employee’s LinkedIn contact list, Facebook page, Twitter account or even Outlook? Do trade secret laws apply? Does the employer have the right to protect customer lists and other proprietary information?

The new law may create as many questions as it answers. In the meantime, employers are advised to review their social media policy and include a statement of intent to comply with the new law.

EEOC settles first GINA case

The Genetic Information Nondiscrimination Act was debated in Congress for 13 years as scientists worldwide worked to complete the mapping of the human genome. On Nov. 21, 2009, six years after the human genome project was completed, GINA finally became law.

Last month, nearly four years after GINA became law, the Equal Employment Opportunity Commission settled its first lawsuit involving a discrimination claim based on an applicant’s genetic history.

In its lawsuit, the EEOC charged that a large fabric distribution company violated GINA when it asked a clerk applicant for her family medical history in its post-offer medical examination. The EEOC also claimed that the employer violated the Americans with Disabilities Act when it rescinded the job offer, alleging that it was because it regarded her as having carpal tunnel syndrome (CTS).

The post-offer medical exam included a questionnaire that asked the applicant to disclose the existence of medical conditions – including heart disease, cancer, tuberculosis, hypertension, diabetes, arthritis and mental disorders – within her family. The applicant also was subjected to further medical evaluations to determine whether she suffered from CTS.

After the company withdrew its job offer, the applicant made a written request for reconsideration, emphasizing that she did not have CTS; however, the company did not respond.

Under GINA, it is illegal for employers that employee 15 people or more to discriminate against employees or applicants because of genetic information including family medical history. The law also restricts employers from requesting, requiring or purchasing such information. Likewise, the ADA prohibits discrimination against qualified individuals with disabilities, or individuals who are incorrectly regarded as having disabilities.

The lawsuit and settlement were filed at the same time on May 7, in a federal court in Oklahoma. The company agreed to pay the applicant $50,000 and take specified actions designed to prevent any future discrimination. Officials will post an anti-discrimination notice to inform employees, distribute anti-discrimination policies to employees, and provide anti-discrimination training to employees with hiring responsibilities.

“Employers need to be aware that GINA prohibits requesting family medical history,” said David Lopez, General Counsel of the EEOC. “When illegal questions are required as part of the hiring process, the EEOC will be vigilant to ensure that no one be denied a job on a prohibited basis.”

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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In an unprecedented and controversial move, the U.S. Occupational Safety and Health Administration (OSHA) last month released an interpretation letter explaining that the Occupational Safety and Health Act (the act) lets workers at establishments without collective bargaining agreements designate a non-employee to act on their behalf during inspections. Thus, the door is open for union representatives to accompany OSHA inspectors into non-unionized worksites.

The letter, written by Richard Fairfax, an OSHA deputy assistant secretary, contradicts the act’s standard that says, “representative authorized by employees shall be an employee of the employer.”

The act provides that where the employees are not represented by a union, the OSHA inspector “shall consult with a reasonable number of employees concerning matters of health and safety in the workplace.” To that end, OSHA developed the following regulation:

The representative authorized by employees shall be an employee of the employer. However, if in the judgment of the compliance safety and health officer, good cause has been shown why accompaniment by a third party who is not an employee of the employer (such as an industrial hygienist or a safety engineer) is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace, such third party may accompany the compliance safety and health officer during the inspection.

This regulation has been consistently interpreted by OSHA to provide for accompaniment by a labor union only where the union was certified or recognized as representing the employees. At no point in any manual, or other guidance, has OSHA ever approved a non-employee union representative as a participant or observer in an on-site inspection of an employer.

OSHA’s new announcement – allowing non-representative union access to non-union worksites during OSHA inspections – fundamentally departs from the regulatory standard without legal authority to do so. While creating a near absolute right of a union to participate in its inspections, OSHA has attempted to set itself up as the sole arbiter of other organizations that may participate where there is no union that represents the workers at a worksite.

Finally, the new OSHA interpretation may be subject to a broader legal challenge because OSHA failed to conduct notice and comment rulemaking before apparently changing the applicable inspection standard. However, OSHA emphasizes that letters of interpretation do not create new or additional regulations.

New OSHA initiative focuses on temporary workers

OSHA is taking a hard look at the safety and training of temporary workers. In an April 29 memorandum sent to regional administrators, OSHA outlined new procedures that its compliance safety and health officers should follow when they are inspecting a workplace to determine whether employers are adequately protecting temporary workers.

The new procedures include determining whether temporary workers are exposed to conditions in violation of OSHA rules, and whether the workers received safety and health training “in a language and vocabulary they understand.”

For this purpose, OSHA will consider the term “temporary workers” to include those who “work under a host employer/staffing agency employment structure.”

According to the memo, “recent inspections have indicated problems where temporary workers have not been trained and were not protected from serious workplace hazards due to lack of personal protective equipment when working with hazardous chemicals and lack of lockout/tagout protections, among others.”

A compliance safety and health officer who encounters temporary workers during an inspection is directed to “document the name of the temporary workers’ staffing agency, the agency’s location, and the supervising structure under which the temporary workers are reporting (i.e., the extent to which the temporary workers are being supervised on a day-to-day basis either by the host employer or the staffing agency).”

NLRB quorum controversy update

Last month, the U.S. House of Representatives narrowly passed the Preventing Greater Uncertainty in Labor-Management Relations Act by a vote of 219-209. The bill requires the National Labor Relations Board to suspend all activities that require a three-member quorum and prohibit the enforcement of any quorum-required action taken after President Obama made three January 2012 appointments to the NLRB.

As we reported in February, the U.S. Court of Appeals for the D.C. Circuit opened the door to invalidating virtually all of the NLRB decisions during 2012 when it found that the NLRB lacked a quorum based on Obama’s alleged “recess” appointments.

Obama has the authority to make necessary appointments to the NLRB when Congress is not in session. When it is not in recess, the Senate has to confirm presidential appointments to the NLRB.

On Jan. 12, the Senate was not recessed when the president used his recess appointment authority to seat three members of the NLRB. The Senate was merely holding shortened sessions, leading the D.C. Court of Appeals to observe that the president’s interpretation of “not in session” gives him “free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction.”

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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The city of Portland last month joined Seattle, San Francisco, Washington, D.C. and Connecticut when it passed an ordinance requiring employers to provide paid sick leave to their employees.

Under the ordinance, private businesses with six employees or more must provide up to 40 hours of paid sick leave per year to employees who work at least 240 hours per year in Portland, while businesses employing fewer than six employees in Portland must offer up to 40 hours of unpaid sick leave per year.

Federal, county and local governments are exempt from the ordinance, with the exception of the city of Portland itself. In including city employees under the new law, Mayor Charlie Hales said that Portland is “consciously different in many ways and it’s time the city’s values are reflected in its economic policy as well.”

Effective Jan. 1, 2014, employees will begin accruing one hour of sick time for every 30 hours worked – up to a maximum of 40 hours per year. Employees hired thereafter will begin accruing sick time immediately, but not be able to use their hours for the first 90 days of employment.

While many observers have applauded the new ordinance, some business groups have expressed concern about the cost, logistics and education of business owners. Currently, no money is allocated in the city budget to communicate with business owners about the ordinance. There are also concerns about Portland businesses being disadvantaged compared to others in the state that are not required to pay for sick leave.

Among other things, the ordinance requires covered employers to establish a designated means – such as a designated telephone number – for the employee to use when notifying the employer that sick time is being used. Employees will be required to notify the employer of the need for sick time before the start of the employee’s shift, “or as soon as practicable.” For absences lasting more than three consecutive days, employers may require verification from a health care provider.

Employers that already provide a minimum of 40 hours per calendar year of “paid time off through a PTO policy,” “that can be used under the same provisions” of the ordinance do not have to provide any additional sick leave.

Employees may use sick leave in increments of one hour for the “diagnosis, care or treatment” of a mental or physical illness, injury or health condition being suffered by themselves or a family member. Family members include spouses, domestic partners, parents, children, grandparents, grandchildren and parents-in-law. Sick leave also may be used for issues related to domestic violence, harassment, sexual assault or stalking as defined under Oregon law.

The Oregon Bureau of Labor and Industries or the city will create a notice that employers will be required to post at the worksite.

Many questions remain to be answered concerning enforcement, application and matters such as how benefits will be affected and how the new law applies to unionized workers. Between now and the end of the year, Portland City Council will work with both supporters and opponents of the law to develop rules and regulations to answer those questions.

On the heels of Portland passing its sick leave ordinance, both the U.S. Senate and House of Representatives reintroduced versions of the Healthy Families Act, which would require businesses with 15 or more employees nationwide to provide up to 56 hours of paid sick leave annually.

Employers get relief from agency penalties for stale violations

A statute of limitations is the period of time within which a lawsuit must be filed. After the statute of limitations has run, the party wanting to sue may have lost legal recourse. The “discovery rule” suggests that the statute of limitations clock starts ticking not when the violation occurs, but when it is reasonably discovered.

Agencies that investigate businesses – such as the U.S. Occupational Health and Safety Administration – have long used the discovery rule to assess penalties against businesses for violations that may have happened and been addressed long ago. Generally, the agency uncovers these violations while investigating something else.

A recent U.S. Supreme Court decision, Gabelli v. SEC, held that the discovery rule cannot be used in this way. The court held that a statute of limitations for civil penalties means what it says: The government must file suit seeking civil penalties within the allotted time, and the time for filing is not delayed until the government discovers or reasonably could have discovered the alleged unlawful act.

In making this ruling, the court distinguished between government actions seeking penalties and private actions brought by plaintiffs, noting that the government employs investigators who have the power and duty to seek out violations of law, while private plaintiffs have no such investigatory powers.

In the context of the OSHA violation described above, the statute of limitations is generally six months. The Supreme Court decision means that companies will not have to defend themselves or pay civil penalties for violations that occurred more than six months ago and have long since been remedied.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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In January 2012, President Obama, acting to prevent the loss of a quorum, appointed three new members to the NLRB. Normally, as part of the federal government’s system of checks and balances, the Senate would have advice-and-consent authority over these appointments. However, if the Senate is not in session and the number of board members falls below the three required for a quorum, the president has authority to fill the vacant seats without the Senate’s consent.

At issue in this case is the meaning of “not in session.”

The Senate was not recessed when Obama made his appointments. It was merely holding short sessions, leading the court to observe that the president’s interpretation of “not in session” gives him “free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction.”

According to the D.C. Circuit opinion, Obama’s recess appointment authority is limited to periods when the Senate has actually adjourned its session, and only with respect to vacancies that “happen” or arise during such recess.

If the U.S. Supreme Court declines to hear the case on appeal or affirms the appellate court decision, the case could have a significant impact on all decisions issued by the NLRB since January 2012.

Under similar circumstances, following the 2010 Supreme Court decision establishing that three board members are required for a quorum, the NLRB had to revisit and resolve more than 600 cases heard previously. In recent months, the board has issued a number of precedent-setting decisions on such topics as social media, union dues and non-union activity that could meet the same fate.

According to a statement issued by the NLRB, it will continue to perform its statutory duties and issue decisions.

Final rule issued for HIPAA and HITECH

At slightly more than 500 pages, the new rule governing health information privacy is not an easy read. In-house employment, benefits and privacy lawyers – as well as human resources and benefits professionals – are discovering this as they try to determine the rule’s practical implications.

This extensive rule comprises four final privacy-related regulations, makes major modifications to the Health Insurance Portability and Accountability Act (HIPAA), incorporates amendments made by the Health Information Technology for Economic and Clinical Health Act (HITECH), and addresses new privacy protections granted under the Genetic Information Nondiscrimination Act of 2008 (GINA). What does all this mean for employers?

Like most HIPAA-related guidance, the final rule focuses on health care providers, with only a small portion of regulations aimed at employers. Moreover, a detailed reading of the final rule reveals dozens of technical changes with little or no practical impact on employers.

Here are five “big picture” tidbits for employers that sponsor HIPAA-covered plans:

1.  Not that much has changed. The compliance framework remains fundamentally unchanged. Employers have substantially the same compliance obligations and plan participants have substantially the same rights with respect to their protected health information (PHI).

2. Employers have some time to comply. The earliest compliance deadline is Sept. 23, 2013. Employers generally will have additional time to comply with the changes likely to have the greatest impact on them – i.e., the distribution of updated privacy notices and the modification of business associate agreements.

3. Not every “HIPAA violation” is a security breach. A covered entity confronted with an unauthorized use or disclosure of PHI can avoid providing notice of a security breach if, after conducting a risk assessment, it determines that there is a low probability the PHI has been compromised. The risk assessment must include four risk factors: 1, the nature and extent of the PHI involved; 2, the unauthorized person who used the PHI or to whom the disclosure was made; 3, whether the PHI was actually acquired or viewed; and 4, the extent to which the risk to the PHI has been mitigated.

4. Employers will need to issue revised privacy notices. Any employer that maintains a benefits website must post the revised notice by Sept. 23, 2013, and include the revised notice in its next annual mailing to plan participants. Employers with no benefits website, and that wait until Sept. 23 for their revised privacy notice to become effective, will have until Nov. 22, 2013 to distribute the updated notice. The revised notices will need to inform recipients of: 1, their right to receive security breach notification; 2, HIPAA’s new prohibition on the use of genetic information; and 3, the requirement that the employer obtain the subject’s authorization before using PHI for marketing purposes or before selling PHI.

5. Employers should review and possibly amend business associate agreements. The final rule modifies the minimum required contents of agreements with service providers who receive PHI from a covered entity, such as third-party administrators and insurance brokers. In addition to previously required provisions, these service provider agreements must now include provisions requiring them to: 1, comply with the HIPAA Security Rule’s requirements; 2, report any security breach to the covered entity; 3, enter into an agreement with any subcontractor that receives the covered entity’s PHI; and 3, comply with the provisions of the HIPAA Privacy Rule applicable to any obligation that the covered entity delegates to the service provider.

Although there are other changes that may impact employers, these are the ones with the most significant practical impact on HIPAA-covered employers.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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Remember the name Jaszczyszyn. It stands for the proposition that an employer that has a measured response to suspicions of dishonest behavior by an employee will be better off than an employer that terminates first and asks questions later.

In Jaszczyszyn v. Advantage Health Physician Network, the U.S. Court of Appeals for the Sixth Circuit held that the company did not violate the Family and Medical Leave Act when it terminated the plaintiff while she was on medical leave, after discovering that Facebook photos showed she was attending a festival with friends.

The facts

The plaintiff had been an employee of Advantage Health Physician Network for nine months when she began complaining of back pain from a car accident she was involved in before being hired by the company.

Her job required her to sit at a desk for long periods of time, and the company accommodated her by allowing her to stand as much as necessary. When standing proved to be insufficient, she requested time off, noting on her work release form that she was “completely incapacitated” and could not perform her work duties.

Because the plaintiff did not have enough accrued paid time off to cover her expected absence, the company recommended that she take FMLA leave. She was informed of her rights and responsibilities under the FMLA, as well as the company policy requiring that she maintain regular contact with her supervisor and comply with the company’s normal absence notification requirements.

Following 10 days of leave, the plaintiff returned to work, stating that she did not require extended leave, but rather occasional leave on an “as-needed” basis when she had flare-ups, which, she claimed, could last anywhere from a few hours to a few days.

After a single day of work, she took intermittent leave, but treated it as continuous and open-ended and did not return to work. Moreover, the plaintiff failed to fulfill her obligation to keep her supervisor informed that she would be absent as her leave continued.

In spite of concerns regarding the plaintiff’s continuous absences, the company did not question her use of FMLA leave. After several weeks of continuous leave, she provided the company with a note indicating that she would be completely incapacitated for an additional three weeks.

Three days after providing the note, the plaintiff and some friends attended “Pulaski Days,” a local Polish heritage festival. One of her friends took numerous photographs of the plaintiff visiting three different halls at the festival, and posted the photos on Facebook. That same weekend, the plaintiff left messages with her supervisor that she would not be at work on Monday due to her back pain.

Several of the plaintiff’s co-workers were also her Facebook friends. When they saw the photos of her “partying,” they felt betrayed because they had been covering her work while she was allegedly out due to medical issues. One of the co-workers brought the photos to the attention of the plaintiff’s supervisor, who initiated an investigation.

The company contacted the plaintiff and requested that she report to the office to discuss issues relating to her leave. During the meeting, the parties discussed the plaintiff’s violation of the company’s communications policy, her job requirements and the medical condition that allegedly prevented her from working. They also discussed the fact that the company took fraud very seriously, which the plaintiff agreed she knew.

The company then confronted the plaintiff with the Facebook photos and asked for an explanation. The plaintiff did not deny her actions or offer any explanation. Her only response was that no one told her it was prohibited conduct. Because she did not offer a reasonable explanation for the discrepancy between her claim of complete incapacitation and the photos of her activities at the festival, her employment was terminated at the end of the meeting.

The lawsuit

Six months later, the plaintiff filed suit, claiming retaliation and interference related to her FMLA leave. The Sixth Circuit affirmed the lower court decision dismissing both of her claims. Addressing the retaliation claim, the court noted that the plaintiff offered “little or no evidence” of any connection between the protected FMLA activity and the termination, while the company proffered evidence of an adequate investigation.

As to the interference claim, the court held that, where an employee has “received all of the FMLA leave to which (she) is entitled,” any interference claim must fail.

In the end, the court found it reasonable that the company held an “honest belief” that the plaintiff had committed fraud based on the Facebook photographs, her medical claims and the company’s interview with her, and concluded that “(the company’s) termination of (the plaintiff) because of her alleged dishonesty constituted a non-retaliatory basis for her discharge.”

Lessons for employers

Complete a thorough investigation prior to any adverse employment action. The company terminated the plaintiff’s employment only after conducting an internal investigation and directly discussing concerns with her about potential fraudulent conduct – concerns that were supported by an “honest belief” of fraud after she posted photographs on Facebook that were inconsistent with her FMLA leave.

Put a decision-making process in place and don’t circumvent it. Many employers may have fired the plaintiff when she first violated her intermittent leave or failed to report. If the company had done so, the court decision might have been different.

The court upheld the use of the “honest belief” standard when reviewing an employer’s decision-making process, and the company was able to make a convincing case for honest belief by the time of termination. Given this, an employer should be prepared to show its process, how it arrived at its decision, and the information it reviewed in reaching that decision.

Document the process. The company was able to refute the plaintiff’s interference claim by showing it provided the entitled FMLA leave before acting, even when questions and concerns arose. Had it not conducted an appropriate investigation and merely terminated the FMLA entitlement as soon as suspicion arose, the end result might have been different.

Social media is a double-edged sword. Although Facebook evidence worked in the company’s favor, that may not always be the case; this is a developing area of law. Before taking action, consult an attorney, or review the National Labor Relations Board’s guidance.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

The post Lessons from a key termination case appeared first on Daily Journal of Commerce.

The 2012 election is over, and it’s a whole new ballgame for America. We have a bright, young president, the Republicans control the U.S. House of Representatives and the Democrats command the U.S. Senate. OK, so it’s not a new ballgame, but rather just in the later innings.

The president is a little older and grayer, and the Democrats have a slightly larger margin in the Senate, but overall not much has changed on a national level. Federal agencies can get back to the business of government with their political appointees in place, and the battling houses of Congress will likely continue to block each other from passing any groundbreaking legislation.

Here is a brief overview of what employers can expect on the legislative and regulatory front.

Legislation

The previous Congress considered some powerful employment-related bills, including the Employment Nondiscrimination Act (creates comprehensive employment anti-discrimination protections for individuals based on their sexual orientation or gender identity), the Paycheck Fairness Act (addresses male-female income disparity), and the Robert C. Byrd Mine and Workplace Safety and Health Act (makes sweeping changes to the Occupational Safety and Health Act).

All of these bills stalled last year and are likely to remain stalled for the foreseeable future unless the Democrats gain control of the House in 2014 elections. With the House and Senate at odds politically, few labor and employment-related bills are anticipated, although there is speculation that comprehensive immigration reform could be the president’s next legislative priority.

Agency activity

In anticipation of the presidential election, most agency rulemaking activities were put on the back burner. The spring 2012 unified regulatory agendas, which offer insight into the administration’s regulatory priorities and were due to be released in April, still haven’t been published. Now that the election is over, it is anticipated that those agendas will be announced before the end of the year, and that a flurry of proposed and final regulations will be issued in the next couple of months.

The National Labor Relations Board, one of the few agencies to remain active throughout this year, issued several decisions (and agreed to revisit past ones) dealing with employer social media policies, micro bargaining units, graduate student union organizing, off-duty access, and the duty to provide witnesses statements gathered from internal investigations, among other issues.

The NLRB may be hampered, however, by court challenges of the validity of two members’ recess appointments, and other judicial challenges regarding rules for representation elections and notice posting requirements.

Agencies within the Department of Labor are considering particularly contentious rules, including some under the Fair Labor Standards Act that would let domestic caregivers earn overtime and federal minimum wage.

The Employee Benefits Security Administration is expected to re-propose a rule that would clarify who is a “fiduciary” under ERISA when providing investment advice to retirement plans and other employee benefit plans.

The Occupational Safety and Health Administration is developing a proposed rule implementing a new injury and illness prevention program. Under I2P2, a new standard would be created that would require employers systematically to search out and fix workplace hazards.

A number of proposed rules from the Office of Federal Contract Compliance Programs are pending, including two that would remove compliance barriers that have prevented some companies from becoming federal contractors. These rules would amend the nondiscrimination and affirmative action requirements for Vietnam-era veterans and individuals with disabilities. The agency also is considering development and implementation of a new compensation data collection tool, and a revision to its sex discrimination guidelines.

Employers can expect to see continued agency efforts by the DOL and the Department of Justice to combat retaliation against whistleblowers, and worker misclassification.

Health care

The U.S. Supreme Court recently upheld the Affordable Care Act’s individual insurance mandate. Although there are new challenges to the law, employers should prepare for the law’s other provisions, including the mandate that employers with more than 50 workers provide health care insurance or pay a penalty. This provision of the ACA becomes effective for benefit plan years beginning after Jan. 1, 2014.

Agencies charged with implementing the ACA will likely be releasing abundant regulations defining, among other things, the benefits that qualified health plans must contain and the criteria that will be used to classify a worker as “full time,” and therefore, require benefits.

Deficit control

An impending issue heading into 2013 is whether a solution can be reached on certain federal budget issues by Jan. 2. If no solution is found by that date, the president is required to cut discretionary defense spending and discretionary nondefense spending by uniform amounts, estimated at approximately 10 percent and 8 percent, respectively. How that will impact federal contractors remains to be seen.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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Social media websites are a relatively new phenomenon, and employer policies that establish what employees may post on those websites have been the (moving) target of labor disputes and litigation. The National Labor Relations Board last month issued an opinion that should help employers in this area.

Policies prohibiting damaging statements about the company or its employees

The NLRB ruled that employers could not enforce blanket provisions prohibiting damaging statements about their companies or employees. Such a policy would violate the National Labor Relations Act by chilling employees from publicly commenting about the terms and conditions of their employment.

For this reason, the NLRB found the following policy statement to be in violation of the NLRA: “Employees should be aware that statements posted electronically (such as [to] online message boards or discussion groups) that damage the company, defame any individual or damage any person’s reputation . . . may be subject to discipline …”

Citing prior decisions, the NLRB suggested alternative language that would be permissible. The decision identifies several categories of unprotected speech that an employer could prohibit. The list included speech that is: (a) “malicious, abusive or unlawful;” (b) “profane language” and “harassment;” (c) “injurious, offensive, threatening, intimidating, coercing, or interfering with” other employees; and (d) “slanderous or detrimental to the company.”

In other words, the NLRB supported the prohibition of the use of speech that falls outside of the NLRA’s protection.

Policies prohibiting employees from discussing co-workers’ health conditions

Some companies have received substantial civil penalties and stiff criminal sanctions because employees’ confidential health information was compromised. As a result, many companies have adopted overly broad policies in their attempts to limit their liability.

The NLRB found the following policy to be in violation of the NLRA: “Employees are prohibited from discussing private matters of members and other employees … including topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accommodations, workers’ compensation injuries, personal health information, etc.”

According to the NLRB, this policy violates the NLRA because it lists private matters that relate to the terms and conditions of employment. An acceptable policy substitute, according to the NLRB, would be a policy that prohibits employees, whose job duties entail access to employees’ health information, from disclosing that information in any manner, including publication in social media.

Policies prohibiting employees from discussing their compensation

If an employer’s goal is to prohibit its employees from comparing paychecks, it will eventually find itself running afoul of the NLRA. An employee’s pay is clearly a term of employment, and limiting the employee’s right to share that information with co-workers is a violation of the NLRA.

If, however, the employer’s goal is to protect confidential information, the NLRB’s decision seems to suggest that a policy prohibiting employees from disclosing compilations of payroll data, when properly characterized as confidential business information, would not violate the NLRA.

Policies prohibiting disclosure of employees’ contact information

Prohibitions against sharing contact information are impermissibly broad, according to the NLRB’s decision. The problem here is that such a policy could hinder employees’ efforts to organize – a clear violation of the NLRA.

On the other hand, employers who are concerned with the privacy of their employees can prohibit the sharing of information obtained from the employer’s own files. The NLRB draws a distinction between information that employees learn “in the normal course of their work activity” (i.e., through discussions with co-workers) and information that employees learn from “their employer’s confidential or private records.”

Policies requiring employees to use “appropriate business decorum” in communications

Perhaps the biggest surprise in the recent NLRB decision was that policies requiring employees to use “appropriate business decorum” in their communications were upheld.

The NLRB reasoned that employers are allowed to establish rules intended to promote a “civil and decent workplace,” as long as a reasonable employee would understand the rule to be aimed at achieving that purpose. Moreover, employers need not define their terms or give clarifying examples.

The NLRB found acceptable policies that prohibit social media content that: (a) constitutes “insubordination … or other disrespectful conduct” to a supervisor; (b) is “disloyal, disruptive, competitive or damaging;” or (c) “tends to bring discredit to, or reflects adversely on,” the employee, co-workers or the company.

DOL promotes flexible work environment

The U.S. Department of Labor recently launched a new website devoted to workplace flexibility.

“Workplace flexibility,” a DOL spokesperson said, “is a universal strategy that promotes an inclusive workforce and levels the playing field for people with disabilities.”

The Worksite Flexibility Toolkit, launched to coincide with National Disability Employment Awareness Month, contains links to 172 resources. Visitors may access information on pending legislation, case studies, fact and tip sheets, frequently asked questions, issue briefs, reports, journal and news articles, slides, websites and other resources designed to educate both employers and employees on various legal and logistical aspects of workplace flexibility.

The website is available at .

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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Savvy employers long ago recognized the risk of retaliation claims whenever an employee reported discriminatory practices. Now, a new challenge faces employers, particularly contractors and agents of companies that conduct business with the federal government.

Recent amendments to the anti-retaliation provisions of the federal False Claims Act have expanded the whistle-blower protections beyond employees, to contractors and agents working on behalf of companies with federal contracts. The financial incentives to whistle-blowers are significant. They may be awarded a portion (usually 15-25 percent) of any monetary amount the government reclaims due to fraud or misuse.

Oregon has had a similar version of the FCA since January 2010, but with some important differences – primarily that there is no private right of action. Only the Oregon attorney general can enforce the state law. (See the Jan. 24, 2011 issue of the 91��Ƶ to learn more about the Oregon law.)

In light of the potential financial risks, employers may be legitimately concerned about potential claims. Often, courts will apply a good-faith standard resulting in early dismissal of these claims, but employers should proactively do whatever they can to avoid litigation.

Every employer should:

• Ensure that policies, procedures and actual practices support compliance with government regulations and contract provisions;
• Make failure to report noncompliance a serious violation of company policy;
• Institute control mechanisms, such as anonymous hotlines, so that employees are able to raise concerns and allegations during early stages of projects;
• Provide to outside contractors compliance materials that are the same or similar to those provided to employees;
• Train human resources, compliance and supervisory staff in the applicable government regulations, and ensure that they will respond appropriately to any complaints of wrongdoing.

In addition, keep records of all complaints and the steps made to rectify any problems. In the case of litigation, a complete record corroborating the facts and the employer’s investigation will help limit liability.

OSHA memo addresses Severe Violator Enforcement Program

The Occupational Safety and Health Administration has issued a memorandum to its regional administrators informing them of the criteria that employers must meet to be removed from the agency’s Severe Violator Enforcement Program.

The SVEP subjects employers to increased penalties and more stringent enforcement measures for willful, repeat and failure-to-abate violations of the Occupational Safety and Health Act.

According to the OSHA memo, an employer is eligible for removal from the SVEP three years after the final disposition of the issues raised by the SVEP inspection. Such “final dispositions” include failure to contest the citation, entrance into a settlement agreement, the OSHA Review Commission’s issuance of a final order, or the issuance of a court of appeals decision.

In addition, the employer must have abated all SVEP-identified hazards that constitute violations, paid all fines, complied with any and all settlement terms, and not have received additional serious citations related to the initial SVEP inspection at the initial or related work sites.

OSHA’s regional administrators have discretion to approve an employer’s removal from the SVEP list, except in cases involving national corporate-wide settlements. If the regional administrator finds that an employer did not meet the requirements or failed to take any of the steps outlined above, the employer will remain on the SVEP list for an additional three years before becoming eligible for re-evaluation.

For cases involving national corporate-wide settlement agreements, the OSHA Directorate of Enforcement Programs will make the determination, upon the termination of the agreement, regarding the employer’s removal from the program. The memo states that removal from the SVEP cannot be used as an incentive for settlement.

President Obama signs bill extending immigration programs

President Obama last week signed Senate Bill 3245 into law, authorizing renewal of several immigration programs for three years.

The E-Verify, EB-5 Regional Center, Conrad State 30/J-1 Visa Waiver and Special Immigrant Nonminister Religious Worker programs were set to expire on Sept. 30, 2012, but will now remain in force until at least Sept. 30, 2015.

E-Verify helps employers verify employees’ employment eligibility.

EB-5 Regional Center is available to immigrant entrepreneurs who invest between $500,000 and $1 million in a U.S. business that creates at least 10 full-time jobs for U.S. workers; in exchange, the entrepreneurs who meet the qualifications can be given permanent resident status.

Conrad State 30/J-1 Visa Waiver assists medical doctors who studied medicine in the United States on J-1 status. Each state receives 30 J-1 visa waivers for foreign medical graduates each fiscal year. A J-1 visa waiver eliminates the requirement that a J-1 physician return to his or her home country for two years before applying for a permanent U.S. visa.

Special Immigrant Nonminister Religious Worker provides a path to permanent residence for religious workers in the United States. It covers religious workers who hold a professional or nonprofessional position within their religious vocation.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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What does a government contractor do if the federal government suddenly, and without notice, cuts funding to its project? What if the funding cuts compel the contractor to close a facility and/or lay off workers?

The Worker Adjustment and Retraining Notification Act requires that employees be given 60 days’ advance notice of covered plant closures or mass layoffs. But if money no longer is coming in from the federal government for a contractor to continue paying its workers for 60 days, what does it do then?

On July 30, the Department of Labor issued a guidance letter with some direction on the applicability of the WARN Act in regard to potential layoffs by federal contractors.

Under the Budget Control Act of 2011, Congress must either cut $1.2 trillion from the deficit or raise the debt ceiling by the same amount. If it were to opt for the latter, however, across-the-board cuts in federal programs would be enacted automatically. These automatic cuts – approximately 10 percent – would take effect on Jan. 2, 2013.

A sudden cut in the revenues that pay for job positions with federal contractors would likely compel many of these employers to lay off a large number of employees immediately and potentially close facilities. Because many employers are aware of this possibility, they are trying to determine how to comply with the 60-day advance notice requirement under the WARN Act.

In response to this concern, the DOL’s guidance letter maintains that circumstances requiring layoffs may never occur. Any number of contingencies may occur – and if so, layoffs or facility closures may not be necessary.

For example, the guidance letter notes, it is possible that the budget issue may be remedied and cuts avoided altogether. Or, if cuts were to occur, they could be implemented over time. Thus, the guidance letter indicates that conditional notices sent in advance of any budget cuts to comply with the WARN Act would unnecessarily, and contrary to the spirit of the law, cover too many employees. The guidance letter asserts that conditional notices would not be legally compliant because it would be impossible for them to contain accurate content because of the unknown variables regarding cuts.

Further, the guidance letter notes that there is an exception to the WARN Act’s 60-day notice requirement where the plant closure or mass layoff “is caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” Under the “unforeseeable business circumstances exception,” an employer may order the plant closure or mass layoff “before the conclusion of the 60-day period…”

Consequently, the guidance letter concludes: “If Federal agencies announce before Jan. 2 (2013), or in the wake of sequestration, specific contract terminations or cutbacks that will require contractors to lay off or separate their employees in less than 60 days, such federal announcements would be sudden and dramatic, and in such cases, consistent with the WARN Act, employers will not have to provide the full period of notice.”

It is uncertain what legal deference courts will give to the guidance letter. The WARN Act’s implementing regulations state that the DOL “has no legal standing in any enforcement action and, therefore, will not be in a position to issue advisory opinions of specific cases.”

As to what the WARN Act actually requires of an employer in the context of potential cuts, the courts – not the DOL – will make that determination. Moreover, a court will have to decide whether the unforeseeable business circumstances exception of the WARN Act applies.

NLRB upholds ruling that company violated NLRA

On Aug. 4, 2007, following the breakdown of contract negotiations between Dresser-Rand Co. and Local 13 of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers – Communications Workers of America, the union began striking to pressure Dresser-Rand to agree to union bargaining demands.

Dresser-Rand continued operations throughout the strike by hiring both temporary and permanent replacement workers. During the strike, 13 strikers crossed the picket line and returned to work at the plant.

On Nov. 19, 2007, the union offered to return to work on behalf of the remaining strikers. Dresser-Rand rejected the union’s offer and began a lockout. It did not lock out the permanent replacement workers it hired during the strike. However, it did lock out both the current strikers and the crossovers.

After the lockout ended, the union claimed that Dresser-Rand had violated the National Labor Relations Act, in part by locking out the strikers and the crossovers but not the permanent replacement employees; and by recalling the crossovers to work before the union made an unconditional offer to return and the rest of the employees were recalled.

On Aug. 6, in a 2-1 decision, the National Labor Relations Board upheld the administrative law judge’s decision that Dresser-Rand had violated the NLRA by: locking out full-term strikers and crossovers, but not other unit employees; reinstating crossovers ahead of full-term strikers; discharging a striker for purported strike misconduct; suspending a reinstated striker for referring to permanent striker replacements as “scabs” during a floor meeting; and denying accrued vacation leave to certain strikers.

The board also found that the employer violated the NLRA by failing to bargain over the process of returning strikers to work.

Howard Rubin is a shareholder in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or hrubin@littler.com.

Don Stait is Special Counsel in Littler Mendelson’s Portland office. Contact him at 503-221-0309 or dstait@littler.com.

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