In early July, Gretchen Carlson, a former “Fox & Friends” co-host, filed a lawsuit against then-Fox News Chairman and CEO Roger Ailes alleging she had been fired after rebuffing his sexual advances. Later that month, Ailes resigned from Fox News and the Fox Business Network, which he had helped build over two decades. This highly visible ordeal highlights the serious nature of sexual harassment claims, which can bring significant consequences, even to heads of multibillion-dollar companies.

Perhaps less visible publicly was the Equal Employment Opportunity Commission’s recent report on the Study of Harassment in the Workplace. The report, which may set the groundwork for how the EEOC looks at harassment in the workplace in the future, looked at what is known about harassment, the factors that may increase its occurrence, and different steps that can help prevent it.

Since 2010, the EEOC has received a gradual but steady increase in the number of charges alleging harassment from 27,356 in 2010 to 27,893 in 2015. That is an average of 76 charges filed every day. Taken individually, harassment charges on the basis of race and sex make up the bulk of charges followed by national origin and religion. Similarly, the monetary benefits secured by the agency against employers have also increased from $118.7 million to $125.5 million during the same time period. Those figures neither take into account the recovery amounts of complaints filed in state court, nor complaints settled privately through mechanisms such as mediation. The report notes that the cost to employers also includes an increase in turnover and decreases in morale and productivity – and all affect the bottom line.

While no employer is immune from claims of harassment, the report identifies a number of workplace environmental risk factors that may increase the prevalence of harassment. For instance, the report notes that lack of diversity, workplaces with significant power disparities between different groups of employees, work that is monotonous or low-intensity, and decentralized work locations may add to the prevalence of harassment. Accordingly, workplaces with a higher number of risk factors may be prone to higher instances of harassment. Notably, the report found that most instances of harassment go unreported, observing that anywhere from 87 percent to 94 percent of individuals do not file a formal complaint. The reasons are varied, including fears of a claim not being believed, inaction by the employer, retaliation, marginalization by co-workers, or career damage.

The report went on to discuss several factors found able to help prevent harassment. Perhaps the most important factor is commitment by company leadership to a workplace that is not only intolerant of harassment but also inclusive, diverse and respectful. Commitment plays a significant part in what employees will consider as acceptable, because it helps lay the foundation for a company’s culture. Another piece of the puzzle is making sure that systems are in place at all levels to hold employees accountable and ensure follow-through when employees fail to adhere to company expectations. Part of those systems includes training at all levels, effective policies, safe reporting, and reward and punishment mechanisms. That may seem like old news; however, the report highlights that instead of the old approach – traditionally prevention, legal compliance and decreasing liability – employers must implement a holistic approach to prevent harassment in order to have a dynamic effect.

For instance, employers should consider an employee’s use of social media. Though social media use may predominantly be done outside of work, it can have both positive and negative effects in the workplace. Accordingly, employers should consider an employee’s use of social media when drafting harassment policies.

Moreover, the report encourages employers to consider training on workplace civility and bystander intervention as part of a holistic harassment prevention program. Workplace civility training has long been used by some employers to establish and promote expectations of respect and civility in the workplace in general. Bystander intervention training, on the other hand, has gained traction in the college setting with a focus on shared responsibility to stop harassment.

The report also encourages the EEOC to partner with other agencies like the National Labor Relations Board and the U.S. Labor Department in order to collaborate on additional research or possible solutions to problems such as keeping investigations as confidential as possible, and the NLRB’s broadening view as to what can be characterized as protected concerted activity.

The report further recommends that the EEOC seek terms in settlements or consolation agreements with employers that adopt compliance programs following the report’s guidance and ask employers to agree that researchers work with employers before and after implementation of compliance programs in order to study the impact of training.

The report’s guidance will no doubt have implications for employers large and small. Employers should take steps to become familiar with the guidance and consider implementing its recommendations accordingly.

Samuel Hernandez is an attorney with Barran Liebman LLP. He provides compliance advice to employers and represents management in employment law litigation. Contact him at 503-276-2175 or shernandez@barran.com.

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With spring break right around the corner and flu season in full swing, a look into protected leave under the Family Medical Leave Act (FMLA) is in order. Why? A recent decision by the Seventh Circuit Court of Appeals has caused a stir by expanding, at least in that circuit, what sort of activity qualifies under the FMLA as “caring for” a family member’s serious health condition.

The FMLA generally provides that an eligible employee is entitled to leave “in order to care for” a family member with a “serious health condition.” In Ballard v. Chicago Park District, an employee and her mother traveled to Las Vegas as part of the mother’s end-of-life goals, but not to seek medical treatment. The company argued that in order to be protected, the trip had to have been made in connection with ongoing medical treatment.

The court noted that where an employee provides for the family member’s basic medical, hygienic or nutritional needs, the location of where care is delivered is not important. Accordingly, the Seventh Circuit concluded that an employee’s travel to Las Vegas with her terminally ill mother could be protected leave because the FMLA’s provisions for “caring for” a family member are not limited to a particular geographic location.

The Seventh Circuit expressly parted ways with the First and Ninth Circuit courts on this issue. In Marchisheck v. San Mateo County, Tellis v. Alaska Airlines, and Tayag v. Lahey Clinic Hospital, the Ninth and First Circuit courts underscored that “caring for” a family member with a serious health condition requires some level of participation in ongoing treatment of the condition.

Moreover, the courts reasoned that travel unrelated to medical treatment does not fall within the boundaries of “caring for” a family member. For example, in Tayag, the First Circuit determined that an employee’s leave to accompany her husband on a spiritual healing trip to the Philippines was not protected because it was unrelated to medical treatment, even though she assisted her husband with medication and was present in case of his incapacitation. In its disagreement, the Seventh Circuit stated that “none of the cases explain why certain services provided to a family member at home should be considered ‘care,’ but those same services provided away from home should not be.”

The Seventh Circuit’s expansion of what qualifies as “caring for” a family member’s serious health condition creates confusion for employers who must determine how to treat an employee’s request for leave. Employers can still take comfort in the fact that the decision does not bind the Ninth Circuit, which includes Oregon, Washington and California. Employers, however, must be aware of the circuit split because it creates wiggle room for employee plaintiffs to raise arguments and claims that echo the Seventh Circuit’s reasoning.

Although requesting leave to accompany a terminally ill family member to Las Vegas is generally uncommon, requesting it to treat aches, pains and the flu is more likely. According to the Centers for Disease Control, each year 5 percent to 20 percent of the population contracts the flu, resulting in more than 200,000 hospitalizations. But are employees entitled to take protected leave for such relatively minor illnesses?

The Department of Labor tells us that, unless complications arise, leave for the common cold, the flu, earaches, upset stomach, minor ulcers or routine dental work is not protected. The exception is when the illness meets the definition of a serious health condition – an incapacity of more than three consecutive days that also involves qualifying treatment.

In a 1996 opinion letter, the DOL provided an example: “If an individual with the flu is incapacitated for more than three consecutive calendar days and receives continuing treatment, e.g., a visit to a health care provider followed by a regimen of care such as prescription drugs like antibiotics, the individual has a qualifying ‘serious health condition’ for purposes of FMLA.”

Courts have generally followed the DOL’s guidance. In King v. The Permanente Medical Group, a former employee claimed that she had been wrongfully terminated because she had taken sick leave to recuperate from the flu and severe dehydration. The court denied the former employee’s claim because she had failed to establish that her illness was a serious health condition. Specifically, she did not receive care from a doctor. Nor did she receive ongoing medical treatment, such as prescription medication.

With this somewhat gray line as to what may be protected leave under the FMLA, what should an employer do?

Unless clearly not protected by FMLA, employers should treat an initial request for leave as protected leave. Employers should then analyze the request and seek medical certification where necessary in order to determine if the leave meets the definition of a serious health condition. Before making a final determination, employers should be aware that state and local (including Portland and Seattle) sick leave laws may be more generous to the employee.

Samuel Hernandez is an attorney with Barran Liebman LLP. He provides compliance advice to employers and represents management in employment law litigation. Contact him at 503-276-2175 or at shernandez@barran.com.

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Theft of trade secrets is on the rise. 2013 has been replete with news stories of U.S. businesses suffering such theft by competing companies, foreign governments and militaries and hackers. Advances in digital media, peer-to-peer networks, cloud-based applications and interconnected supply chains have given would-be thieves new ways to misappropriate trade secrets.

A 2010 study by Gonzaga Law Review revealed that the number of trade secret cases in federal courts doubled between 1988 and 1995, and doubled again between 1995 and 2004. At that rate, the number is likely to double again before 2020.

Not surprisingly, the annual cost of trade secret misappropriation is in the billions of dollars, and no company with potential trade secrets is immune from such acts.

Trade secrets can be considered information that gives the owner some form of advantage over competitors. Trade secrets may include chemical formulas, company marketing plans, pricing strategies, client lists and software source code.

To qualify as a trade secret, the protected information must be commercially valuable and not generally known or ascertainable by other persons. Additionally, the owner must take steps to maintain its secrecy. Some companies choose to protect their intellectual property as a trade secret because, unlike patents, trade secrets may give an indefinite protection to the holder (for example, the formula to Coca-Cola will remain protected as long as the trade secret remains secret).

When thinking of trade secret theft, it’s easy to imagine a spy infiltrating a highly secured space and covertly removing a “Top Secret” file. However likely that “Mission: Impossible” scenario may be, research indicates that in more than 75 percent of cases, trade secret misappropriation is performed by current or former employees and business partners. As a result, it is important for employers to have policies and procedures in effect that protect confidential information from being hacked, disclosed, transferred or otherwise improperly disseminated. The focus should be on the most likely threat: dishonest employees.

Trade secret misappropriation generally follows competition. We often hear about former employees taking company information and using it to compete directly with the former employer, usually by starting a new business or helping a new employer.

Recently, for instance, a former DuPont employee was hired by Kolon Industries of South Korea. Kolon sought to use DuPont’s Kevlar technology and other trade secrets retained by the former employee for its own benefit. Ultimately, DuPont was awarded $920 million in damages and the former employee was sentenced to 18 months of imprisonment.

Former employees may retain trade secret or confidential information not because they intend to sell it or use it to compete with their former employer, but rather because they feel entitled to the information. They also may not believe retention is wrong, or that the company will do anything about it.

A 2013 international online study by Symantec entitled “What’s Yours is Mine: How Employees are Putting your IP at Risk” showed that most employees do not believe that using competitive data from a previous employer is wrong. Moreover, half of the employees who lost their jobs in the previous 12 months retained their employers’ confidential information, and 40 percent planned to use that information in their new jobs.

The study further illustrated that only 38 percent of employees said that their employer viewed the protection of information as a business priority, and fewer than 50 percent of those surveyed said that their organization takes action when sensitive data is removed against company policies.

Employers should know that both federal and state laws like the Uniform Trade Secrets Act protect company trade secrets, though the specifics of the laws may differ slightly from state to state. In most instances, as in Oregon, the holder of a trade secret can seek to have the misappropriator enjoined from using the trade secret for a period of time or indefinitely. The owner may also seek to recover damages and possibly attorney fees.

That said, an ounce of prevention is worth a pound of cure. Instead of having to litigate the issue after the fact, employers are better served dealing with the potential of trade secrets on the front end.

One option is to have employees sign a noncompete agreement. In Oregon, however, a noncompete agreement is voidable and may not be enforced by a court unless certain factors are met. For example, the employee must sign the noncompete agreement two weeks before starting work, and the employee’s salary has to be a minimum amount. Also, the noncompete has a temporal limitation of two years from the date of termination.

An employer can have nondisclosure agreements with employees and implement employee policies that address in an employee handbook how trade secrets should be handled. Employers should also minimize the risk of losing sensitive information by granting access to only those employees who have a need to the information and by instituting safeguards like passwords, sign-out sheets, and labels on sensitive information as appropriate. At termination, an employer should require the employee to return all company property and information in possession.

The employer should also take steps to educate employees about what it considers confidential information, as well as employee rights and obligations. The employer should also enforce its agreements to safeguard against misappropriation.

Samuel Hernandez is an attorney with Barran Liebman LLP. He provides compliance advice to employers and represents management in employment law litigation. Contact him at 503-276-2175 or at shernandez@barran.com.

The post Corporate trade secrets: Keep competitors close and employees closer appeared first on Daily Journal of Commerce.

2012 was a year full of changes and extensions to employee background check laws. These changes underscore the complexity and ever-increasing requirements compelling employers to review their practices and choose a background screening agency wisely, particularly given the increased number of individual and class-action lawsuits and agency investigations.

E-Verify extension

Federal law permits companies to employ only individuals who are authorized to work in the United States. All employers must verify an employee’s work authorization within the first three days of employment and complete a Form I-9 (employment eligibility verification).

E-Verify is an Internet-based system that lets employers determine whether their employees are eligible to work in the U.S. Use of E-Verify is not mandatory unless the employer is a federal contractor or employing individuals in Arizona, but other employers may choose to enroll in E-Verify.

Originally, E-Verify was due to expire at the end of September 2012; however, now it will continue through Sept. 30, 2015. The extension does not change the manner in which an employer uses E-Verify. Accordingly, an employer should continue to follow existing general principles and methods to comply with the law and E-Verify rules.

Consumer Financial Protection Bureau – Notice to Employees

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act established the Consumer Financial Protection Bureau. The CFPB is charged with, among other things, conducting rulemaking and enforcement of federal consumer financial protection laws, which previously were within the purview of the Federal Trade Commission.

Pursuant to the Dodd-Frank Act and the Fair Credit Reporting Act, the CFPB published an interim rule on Dec. 21, 2011, amending three essential forms mandated by the FCRA and used in employment background screening processes. Effective Jan. 1, 2013, the modified forms must reflect that consumers can obtain information pursuant to their rights under the FCRA from the CFPB instead of the FTC. The forms are available as appendixes to the regulations (model forms and disclosures).

The three forms concerned are:

• A Summary of Your Rights Under the Fair Credit Reporting Act
• Notice to Furnishers of Information: Obligation of Furnishers Under the FCRA
• Notice to Users of Consumer Reports: Obligations of Users Under the FCRA

The “Summary of Your Rights Under the FCRA” is a notice that must be provided to an employer by a consumer reporting agency when the employer requests an employee’s consumer report.  (Also, remember that before the employer can request a consumer report, it must provide the employee with a FCRA Disclosure Notice and obtain the employee’s written authorization.)

In turn, the employer must provide the employee with the notice when a consumer report is used to deny employment or to take any adverse employment action. The employer must provide the employee with the name, address and phone number of the CRA that provided the information.

The “Notice to Furnishers of Information” applies to certain furnishers of information to CRAs, which may include employers and firms hired to conduct background screening checks.  This notice requires that furnishers of information be familiar with applicable laws and comply with federal guidelines and regulations dealing with the accuracy of information provided to CRAs.

The “Notice to Users of Consumer Reports” is provided to users of consumer reports informing them of their legal obligations. For instance, users of consumer reports must have a permissible purpose under the FCRA to obtain a consumer report (e.g., for employment purposes, including hiring and promotion decisions, where the consumer has given written permission).

State restrictions on use of credit reports

Although the FCRA provides employers performing background checks on employees or potential employees the ability to obtain consumer reports when they have a permissible purpose, an increasing number of states – including Oregon and Washington – have enacted laws and regulations that prohibit employers from accessing an employee’s or applicant’s credit report, subject to specific, limited exceptions.

One of the exceptions in Oregon is where the employee’s credit history is “substantially job-related” to a position requiring access to financial assets. This exception must be applied narrowly and the employer must explain how the employee’s credit history is “substantially job-related” to the job duties.

EEOC enforcement guidance

Earlier this year, the Equal Employment Opportunity Commission issued enforcement guidance on employer use of arrest and conviction records in making employment decisions. Although the EEOC did not ban criminal background checks, it places employers on notice that different treatment based on criminal history may lead to claims of disparate treatment based on race and national origin.

Tips for employer compliance

Improper adherence to the different requirements related to background checks can leave an unwary employer open to civil suits and EEOC complaints for engaging in prohibited employment policies and practices, including discrimination.

Employers should revise their practices and forms to comply with CFPB’s and Oregon’s restrictions on using consumer or credit reports to make employment decisions. When using a third-party background screening firm, an employer should make sure that the agency understands the complexity of both federal and state regulations and is using the new forms.

Finally, once background information is obtained, employers should consider the nature or gravity of any criminal offense, the time elapsed since the offense or completion of the sentence, and the nature of the job and conduct an individualized assessment to determine whether an adverse employment action is consistent with business necessity.

Samuel Hernandez is an attorney with Barran Liebman LLP. He provides compliance advice to employers and represents management in employment law litigation. Contact him at 503-276-2175 or at shernandez@barran.com.

The post Making a list and checking it twice: this year’s developments in background checks appeared first on Daily Journal of Commerce.