Beware of ICE!

By: Jerrold J. Wohlgemuth

The Department of Homeland Security has issued new and revised I-9 Forms that employers must begin using on May 7 for all new hires.  Failure to properly complete and retain the new forms can result in substantial fines and penalties.  With immigration being a hot issue in Washington, we should expect that Immigration and Customs Enforcement (“ICE”) will be vigilant in conducting audits to enforce the I-9 requirements.  Beware of ICE!

ICE will continue to focus its resources on the criminal prosecution of employers that knowingly hire illegal workers.  Audits of employers for compliance with I-9 requirements is the principal tool for ICE to identify and prosecute violators.  Unfortunately, those audits often result not in prosecution for hiring illegals, but in the imposition of substantial fines for paperwork and retention mistakes even where such mistakes have nothing to do with the employment of illegal aliens.  Under the matrix used for calculating fines, ICE punishes employers based on the percentage of Forms handled improperly, which means that an employer could be fined more than $1,000 per Form if it makes the same mistake in completing or maintaining the Forms for each new hire, even if there are no illegal employees and the mistakes are merely inadvertent or negligent errors.

Employers need to become familiar with the new two-page Form and its accompanying Instructions.  As a general rule, each new hire must fill out and sign Page 1, Section 1 of the Form no later than the first day of employment, but in no event prior to the employee’s acceptance of a job offer.  Section 1 includes a new request for the employee’s telephone number and email address, but employers should know, if asked, that the Instructions indicate that providing such information is optional (although it does not say so on the Form).  After completing Section 1, the employee will have three days to provide the employer with the required documents (Passport, Driver’s License, Social Security Card, Alien Registration, etc.) to prove identity and authorization to work in the U.S.  Employers may not demand or request that the employee produce a specific form of documentation from the List of Acceptable Documents included with the I-9 Form.  Once the proper documents have been produced, the employer must review them to determine that they are current, original and reasonably authentic, and carefully fill out, sign and certify Section 2 of the Form confirming that it has in fact reviewed the documents provided.  The Certification in Section 2 is critical, as it is not sufficient for the employer to simply attach copies of the documents to the Form.

While employers are not required to retain a copy of the documents, keeping a copy with the completed Form is recommended for all new hires, not just for foreign born employees, because it is illegal to discriminate based on an individual’s place of birth.  The I-9 Forms must be retained for the longer of three years from the date of hire or one year following termination, and should be kept in a folder separate from the employee’s personal file, which can easily be produced in the event of an audit.  Employers are subject to substantial fines if the Forms are not properly completed, signed and retained in conformance with the rules.

We recommend that employers audit their I-9 procedures to verify they are currently in compliance with Immigration requirements and to ensure that their HR staff is familiar with the new Form.  We also suggest that employers review their existing policies, or create an I-9 Compliance Policy, to ensure that the proper procedure is followed for each new hire.  Beware of ICE!

Supreme Court Ducks Mootness Question In Genesis

By: Jerrold J. Wohlgemuth

Does an unaccepted offer of judgment for full relief made prior to a motion to certify moot the plaintiff’s claim in an FLSA collective action?  That was the question we hoped the Supreme Court would answer in Genesis Healthcare Corp. v. Symczyk.  Unfortunately, the majority in the 5-4 opinion issued April 16 refused to decide that question, finding that the issue was not properly before the Court because the plaintiff had conceded her claim was moot in the district court and Third Circuit, and had not contested the issue in her opposition to the petition for certiorari.  While we now know from the dissent that Justices Kagan, Breyer, Sotomayor and Ginsburg would find that an unaccepted offer of judgment has no impact on the validity of the underlying claim, the majority opinion leaves unresolved a split among the Circuits.  The Seventh Circuit accepts the argument that a claim must be dismissed as moot when an offer of judgment for full relief is made prior to a motion to certify, while the Third, Fifth and Ninth Circuits allow plaintiffs to circumvent mootness by immediately filing a motion to certify (the Second and Sixth Circuits accept mootness but reject the argument that the case should be dismissed, finding instead that judgment should be entered for the plaintiff in the amount offered by the defendant).  Because the issue remains in doubt, Defendants in FLSA collective actions may prefer to pursue settlement with the individual plaintiff  before a motion to certify has been filed to end the claim, rather than make an offer of judgment, in order to avoid endless litigation over the impact of the offer.

To read our client alert for this case click here.

Employee’s Deactivation Of Facebook Account Leads To Sanctions

By: Helen Tuttle and Noreen Cull

The latest Facebook case highlights how courts now intend to hold parties accountable when it comes to preserving their personal social media accounts during litigation.  Recently, a federal court ruled that a plaintiff’s deletion of his Facebook account during discovery constituted spoliation of evidence and warranted an “adverse inference” instruction against him at trial.  Gatto v. United Airlines and Allied Aviation Servs., et al. , No. 10-CV-1090 (D.N.J. March 25, 2013).

The plaintiff, a ground operations supervisor at JFK Airport, allegedly suffered permanent disabling injuries from an accident at work which he claimed limited his physical and social activities.  Defendants sought discovery related to Plaintiff’s damages, including documents related to his social media accounts.

Although Plaintiff provided Defendants with the signed authorization for release of information from certain social networking sites and other online services such as eBay, he failed to provide an authorization for his Facebook account.  The magistrate judge ultimately ordered Plaintiff to execute the Facebook authorization, and Plaintiff agreed to change his Facebook password and to disclose the password to defense counsel for the purpose of accessing documents and information from Facebook.  Defense counsel briefly accessed the account and printed some portion of the Facebook home page.  Facebook then notified Plaintiff that an unfamiliar IP address had accessed his account.   Shortly thereafter, Plaintiff “deactivated” his account, causing Facebook to permanently delete the account 14 days later in accordance with its policy.

Defendants moved for spoliation of evidence sanctions, claiming that the lost Facebook postings contradicted Plaintiff’s claims about his restricted social activities.  In response, Plaintiff argued that he had acted reasonably in deactivating his account because he did know it was defense counsel accessing his page.  Moreover, the permanent deletion was the result of Facebook’s “automatically” deleting it.  The court, however, found that the Facebook account was within Plaintiff’s control, and that “[e]ven if Plaintiff did not intend to deprive the defendants of the information associated with his Facebook account, there is no dispute that plaintiff intentionally deactivated the account,” which resulted in the permanent loss of  relevant evidence.  Thus, the court granted Defendants’ request for an “adverse inference” instruction (but declined to award legal fees as a further sanction).

The Gatto decision not only affirms that social media is discoverable by employers, but also teaches that plaintiffs who fail to preserve relevant social media data will face harsh penalties.  Employers are reminded to specifically seek relevant social media (Facebook, Twitter, blogs, LinkedIn accounts) in their discovery requests since such sources may provide employers with sufficient evidence to rebut an employee’s claims.  This case also serves as a reminder and a warning to employers that the principles of evidence preservation apply to social media, and employers should take steps very early in the litigation to preserve its own social media content as it pertains to the matter.

Blowing The Wrong Whistle – Close Scrutiny Of Code Of Ethics Dooms Nurse’s Lawsuit Under New Jersey’s Whistleblower Statute

By: Lawrence J. Del Rossi

New Jersey’s Conscientious Employee Protection Act (CEPA) is remedial legislation designed to protect employees who “blow the whistle” on illegal or unethical activity committed by their employers or co-workers.  To be sure, CEPA is a powerful anti-retaliation statute, providing an array of significant remedies to an aggrieved party.  However, as the saying goes, with great power comes great responsibility.  A recent decision by the Appellate Division, Hitesman v. Bridgeway, Inc. (decided March 22, 2013), highlights the important gatekeeping functions of trial courts in CEPA cases.  Click here for a copy of Hitesman.

Not every employee who “blows a whistle” is a “whistleblower” subject to the protections of CEPA.  An employee who lacks an objectively reasonable belief that his or her employer’s conduct violated a law or public policy or constituted improper quality of patient care cannot, as a matter of law, sustain a viable claim under CEPA.  The Supreme Court in Dzwonar v. McDevitt, 177 N.J. 451 (2003) provided the legal framework for trial courts to use to separate the proverbial wheat from the chaff in most CEPA cases.  First, the trial court must identify a law, rule, or regulation promulgated pursuant to a law or a clear mandate of public policy, that the plaintiff believed was violated by the employer’s conduct.  Next, the court must determine whether there is a “substantial nexus between the complained-of conduct and [the] law or public policy identified by the court or the plaintiff.”  If the trial court so finds, the jury then must determine whether the plaintiff “actually held a belief and, if so, whether that belief was objectively reasonable.”

In Hitesman, the plaintiff, a nurse who worked at a long-term nursing home facility, disclosed to government regulators “practices of Defendant that he reasonably believed constituted improper quality of patient care and violations of his professional code of ethics.”  He sued under CEPA after he was fired for admittedly violating the defendant’s confidentiality policy (improper disclosure of patient information).  The trial court allowed the plaintiff’s CEPA claim to proceed to a jury trial, and the jury found in the plaintiff’s favor on liability.  However, on appeal the Appellate Division reversed the jury’s verdict.

Applying the analytical framework in Dzwonar for determining whether the plaintiff has established a prima facie case under CEPA, the court in Hitesman found that the plaintiff had failed to proffer facts that would support an objectively reasonable belief that a violation of law or clear mandate of public policy by his employer had occurred.  The Appellate Division concluded that the plaintiff’s reliance on the American Nursing Association’s Code of Ethics (“Code”), his employer’s Employee Handbook and a Statement of Residents’ Rights, was misplaced because none of these documents constituted a source of law or public policy closely related to the conduct about which the plaintiff claimed he had blown the whistle.  While the section of the Code relied upon by the plaintiff provided guidance as to whether he had acted in compliance with the Code in expressing his concerns, nothing in the Code established any standards regarding patient care.  As a result, the court held that the plaintiff’s belief that his employer had acted in violation of the Code was not objectively reasonable as a matter of law.

The court in Hitesman also concluded that “generalized statements” in the employer’s Employee Handbook about a commitment to “the best quality of health care” and requirements that its employees comply with all applicable statutes, regulations and ethical standards were “far too vague” to provide a “high degree of public certitude in respect of acceptable versus unacceptable conduct.”  Thus, an employee’s reliance on generalized statements that the employer and its employees will comply with the law will not support a CEPA claim.

All too often, plaintiffs in CEPA cases cite a litany of broad and generalized legislative, ethical rule or code of conduct statements to challenge management decisions.  Do not let a plaintiff get away with the “throw everything at the wall to see what sticks” approach in CEPA cases.  Hitesman and Dzwonar require trial courts to engage in a rigorous analysis to determine whether the plaintiff had, as a matter of law, an objectively reasonable belief that the complained-of conduct violated a law or public policy.  Because CEPA does not shield a complainer who simply disagrees with an employer’s course of lawful conduct, close scrutiny of the complained-of conduct by the trial court is essential.  As the court in Hitesman explained, it is “not enough for an employee to rest upon a sincerely held – and perhaps even correct – belief that the employer has failed to follow the most appropriate course of action, even when patient safety is involved.”  Instead, the employee must have an objectively reasonable belief that a violation of relevant legal authority occurred.