Many employers have opted to use technology to their advantage by adopting biometric timekeeping systems or similar systems for workplace access. But adopting such technology is not without risk. Indeed, with data breaches on the rise, employees and consumers have become more vigilant about protecting their personal data and using state privacy laws and the like to do so. The Illinois Biometric Information Privacy Law is one such law that places restrictions on businesses that collect biometric information of individuals. That law defines biometric information as “any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier [i.e. ‘a retina, iris scan, fingerprint, voiceprint, or scan of hand or face geometry’] used to identify an individual.” 740 ILCS 14/10.
Employment Law Seminar
The Chicago FBA invites you to attend its Employment Law Seminar on Thursday, January 23, 2014. This program will feature eight judges from the federal and Illinois judiciary, including the Seventh Circuit Court of Appeals, the Northern District of
Illinois and the Circuit Court of Cook County, as well as representatives from the Equal Employment Opportunity Commission, University of Chicago Law School and private practitioners.
Do not miss this opportunity to hear firsthand from these experts about the ever-changing landscape of federal and state laws and regulations. Panel discussions will cover recent developments in employment discrimination law, procedural developments in individual and class litigation, settlement and mediation, and EEOC investigations and litigation, among other topics of utmost
importance to employment law attorneys, employers and employees.
To view the agenda and pricing information, click here.
Thursday, January 23, 2014
1 to 5 p.m.
Cocktails and Hors d’oeuvres to follow
Hosted by Drinker Biddle & Reath LLP
191 North Wacker Drive
3.75 Illinois MCLE credit hours*
Register online: www.fedbarchicago.org/employment-law-seminar
* FBA Chicago will be applying for accreditation for 3.75 Illinois MCLE credit hours. Continuing legal education credits for other states must be handled by individual attendees.
Cheryl Orr, partner in the San Francisco office, will be speaking on two panels at Drinker Biddle’s upcoming 2013 ERISA Insurance Symposium. This complimentary symposium, which will be held in the firm’s Chicago office on November 12 & 13, 2013, is intended for in-house counsel and those with ERISA compliance responsibility. It will feature panel discussions and breakout groups with a practical focus on developments and challenges for the recordkeeping divisions and affiliated broker-dealers of insurance companies operating in the qualified retirement plan market. Topics to be discussed include:
- Regulatory developments at the DOL and IRS
- Retirement income guarantees
- ERISA litigation and DOL investigations of service providers
Cheryl’s first panel, Technology Issues for Insurance Companies, will discuss data security issues, cyber risks, FINRA privacy concerns and the impact of the ADA on websites. Her second panel, Odds and Ends: Breakout Discussion of Issues and Problems, will include discussion for Broker-Dealers/RIAs on several topics, including: (i) Conflicts of interest issues; (ii) Ongoing challenges for broker-dealers arising under previously-sold variable annuity contracts; (iii) Employee vs. independent contractor challenges and mitigating risk; and (iv) Pension factoring.
To register for the symposium please visit the registration page here.
San Francisco Partner Cheryl Orr was quoted in a recent story in the Chicago Tribune on Illinois medical marijuana law and the legal implications for Illinois employers whose policies are at odds with the law. Some of the issues Illinois employers will need to confront include reconciling their drug-free work place policies with patients’ rights, what they can ask job applicants, how to deal with an impaired employee and whether or not an employer can punish an employee for engaging in what is now deemed to be a legal activity.
Cheryl submitted that the Illinois statute may offer civil employment protections for workers. One provision of the Illinois law appears to narrowly tie the ability to discipline a medical marijuana patient for failing a drug test to those employers who are specifically connected to federal work or funding. This framework, Cheryl wrote, “creates a plausible argument that the statute does provide protections” for medical marijuana users in the private sector.
LaborSphere previously looked at employer liability under the Illinois law, and other states who have laws providing for some form of legalized medical marijuana, and will continue to follow this ever evolving area of law.
Two recent cases should give employers pause as to whether their restrictive covenants with their at-will employees are enforceable. On May 28, 2013, a United States District Court in Massachusetts held that under Massachusetts law, a confidentiality agreement signed by an at-will employee was unenforceable where the employee’s title, duties, remuneration and other terms of employment had materially changed since signing the agreement. Then, on June 24, 2013, an Illinois Appellate Court held that unless an at-will employee is employed for at least two years, restrictive covenants the employee signed at the beginning of employment are unenforceable for lack of adequate consideration. Moreover, the Illinois court held it was irrelevant whether the employee quits or is terminated before two years of employment. While the rulings rely on the applicable state law, they address important points that may have broader application than only in Massachusetts and Illinois.
In Smartsource Computer & Audio Visual Rentals v. Robert March et al, D. Mass. (May 28, 2013), Smartsource filed an action to enforce its noncompete agreements with its former employee, March. March was hired by Smartsource in 2006 as a Senior Account Executive, and signed an offer letter with a simple confidentiality agreement/restriction. In 2007, March was promoted to Branch Sales Manager, in 2008 to Regional Sales Manager, in 2010 to Regional General Manager, and again in 2012 to Regional Sales Manager. With each change his job responsibilities and compensation changed. Citing to Massachusetts law, the court denied the requested injunctive relief to Smartsource. Although stopping short of a definitive ruling on the merits, the court noted that “it may well be under [Massachusetts case authority], March’s 2006 confidentiality agreement has been abrogated, and he is not bound by any restrictive covenants.” March and the Massachusetts cases cited therein suggests that when material changes to an employment relationship are contemplated, the employer should consider revisiting the existing restrictive covenant agreement and consider whether a new agreement is advisable.
More recently, the Illinois Appellate Court for the First District (Cook County) in Eric D. Fiefield et al v. Premier Dealer Services, Inc., (Ill. App. Ct., 1st Dist. June 24, 2013), answered the question as yet definitively unanswered in Illinois: What additional employment period after the signing of a restrictive covenant agreement is sufficient consideration to make the agreement enforceable against an at-will employee? The Court answered at least two years, even where the employee signs the restrictive covenant at the outset of employment. Fiefield had worked for the predecessor company that was acquired by Premier. Fiefield was then hired by Premier in late October 2009, and as a condition of employment Fiefield was required to and did sign an employment agreement containing a two-year restrictive covenant. Fiefield signed the agreement on October 30, 2009 and started work on November 1, 2009. On February 12, 2010, Fifield resigned to go to work for a competitor. Fiefield and his new employer then filed suit against Premier seeking a declaratory judgment that the restrictive covenant agreement was unenforceable. The circuit court ruled the agreement was not enforceable because it lacked consideration. Premier appealed and the Appellate Court affirmed, agreeing that there was inadequate consideration. The court held that regardless of whether Fiefield had signed the agreement before he started work or after he started work, “Illinois courts have repeatedly held there must be at least two years or more of continuous employment to constitute adequate consideration in support of a restrictive covenant…This rule is maintained even if the employee resigns on his own instead of being terminated.”
The Premier decision will surely send employers in Illinois scrambling to reconsider the validity of their at-will employee restrictive covenant agreements in Illinois. However, help may be on the way as Premier has filed a petition for leave to appeal the decision to the Illinois Supreme Court. Granting review is within the Court’s discretion, and the Illinois Chamber of Commerce and other employer groups are backing Premier’s bid. Even if the case is not reviewed or reversed, however, there are a number of possible solutions to the Premier consideration problem. These include offering employees consideration for the non-compete in addition to simply offering at-will employment (such as a “bonus” payment or possibly elaborating on the consideration offered to include, for example, training, access to customers and valuable confidential information and trade secrets) or offering employees some form of term employment contract.
If you have at-will employees with restrictive covenants less than two years old, and you view confidentiality and restrictive covenant agreements important to your business, or if your agreements with your employees significantly predate their current job positions, compensation and other conditions, these cases should sound the alarm to review your competitive advantage protections.
Across the country, employers in states allowing medical marijuana use have been grappling with whether these statutes impact employer policies concerning drug testing and maintaining a drug-free workplace. Though the statutes allow for marijuana use for medical purposes (and some for recreational purposes), these statutes do not consistently address the impact of legal medical marijuana on employers, if at all. And the number of states enacting such legislation is continuing to grow.
Since 1996, 20 states and the District of Columbia have enacted some form of legislation that allows for the non-criminal use of marijuana for medical purposes. In fact, in the last three years, eight states have passed medical marijuana laws – and Illinois became the 21st jurisdiction to legalize medical marijuana when Governor Quinn signed HB 1 into law on August 1.
As such, companies that employ individuals in states with medical marijuana may be uncertain as to whether or under what circumstances they can take action with respect to an employee that fails a drug test or otherwise admits to being a medical marijuana patient.
Civil Protections – Where Do We Stand Today?
Most of the states that have enacted a medical marijuana law have statutory language that is silent about medical marijuana patients’ civil protections. Of the 21 jurisdictions that have medical marijuana on the books, 15 do not provide for any form of employment protections. In fact, supreme courts in California, Oregon, Washington and Montana have all upheld employer decisions to discharge employees that were medical marijuana patients. The plaintiffs in these lawsuits have argued that medical marijuana users are protected under such statutes because the law itself creates the sought-after employment protections, that the employer’s decision to discharge the user violates the public policy of the state, and/or that the employer discriminated against them on the basis of a disability when it failed to accommodate their medical marijuana use. The courts, in response, have held that the medical marijuana statutes in their state only protect patients from criminal sanctions and do not create any civil remedies or protections. As such, the courts have held that these statutes do not create a clear public policy that might otherwise support a wrongful termination claim or establish that medical marijuana users belong to a protected class. With respect to claims based on asserted disabilities, courts, like the Supreme Court of Oregon, have held that federal law preempts any argument that an individual is protected from disability discrimination on the basis that they are a medical marijuana patient.
Another argument that was recently tested by a plaintiff in Colorado is that an employer’s decision to discharge a medical marijuana user who fails a drug test violated the state’s “lawful activities” statute. Colorado, like many states, prohibits employers from taking action against an employee for engaging in lawful activities or using lawful products outside of the workplace. In a decision dated April 25, 2013, the Court of Appeals of Colorado held that the state’s “lawful activities” statute did not bar the employer from discharging an employee who tested positive for marijuana after a random drug test and who was also a licensed patient. Coats v. Dish Network, LLC, case nos. 12CA0595, 12CA1704 (Co. Ct. App. April 25, 2013). The court held that since the Colorado statute did not specify whether an activity’s “lawfulness” was determined by state or federal law, and marijuana is illegal under federal law, employees that use medical marijuana are not shielded by the statute from the risk of termination.
Despite the lack of civil protections in a majority of jurisdictions that have legal medical marijuana, a few states do provide clear restrictions on an employer’s ability to discriminate against a medical marijuana patient. In Connecticut, Maine and Rhode Island, medical marijuana patients are given protected status and employers are prohibited from discriminating against an employee merely due to their status as a medical marijuana patient. Under Illinois’ HB 1, Illinois also now prohibits such discrimination.
In addition, Arizona and Delaware have adopted much more explicit and impactful statutorily language that bars an employer from discriminating against a registered and qualifying patient who has failed a drug test for marijuana metabolites or components. The only exceptions to this rule are that an employer may act upon the results of a failed drug test if the patient “used, possessed or was impaired by marijuana on the premises of the place of employment or during the hours of employment” or failing to do so would jeopardize an employer’s “monetary or licensing related benefit under federal law or regulations.” See ARS 36-2813 and Del. Code Title 16, § 4905A. Neither statute has been tested in the courts, but the language of these statutes appears to plainly prohibit employers from firing an employee who is a qualified medical marijuana patient based solely on a failed drug test. Rather, in these two states, most employers will need to prove that their decision was based on the fact that the employee used, possessed or was impaired by marijuana while on the job.
Uncertainties Around Illinois Statute
Whether Illinois’ medical marijuana statute provides similar protections is a more uncertain question. With regard to employer liability under the proposed statute, HB 1’s provisions are generally couched in what they do not prohibit, leaving open to interpretation what it may bar with regard to workplace decision-making. HB 1 first states that it does not prohibit “an employer from enforcing a policy concerning drug testing, zero-tolerance or a drug free workplace provided the policy is applied in a nondiscriminatory manner.” The bill also states that employers are not limited from “disciplining a registered qualifying patient for violating a workplace drug policy.” These initial provisions suggest that Illinois’ statute is in line with the majority of jurisdictions, but then it goes on to provide that “[n]othing in this Act shall limit an employer’s ability to discipline an employee for failing a drug test if failing to do so would put the employer in violation of federal law or cause it to lose a federal contract or funding.” This language, like that in Arizona and Delaware, appears to potentially prohibit employers from relying upon a failed drug test for marijuana unless the employer has contrary obligations under federal law or regulation. The statute continues down this road by also stating that it does not create a cause of action against an employer for actions based on a good faith belief that the medical marijuana user used, possessed or was impaired by marijuana while working. It also provides that an employer may consider a patient to be impaired when they exhibit “articulable symptoms … that decrease or lessen [the employee’s] performance of the duties or tasks of the employee’s job position.” This provision further states that if an employee is disciplined under this section, that they must be given an opportunity to contest the employer’s determination.
Taking these latter provisions into account, there are strong arguments in favor of the position that Illinois’ medical marijuana does provide similar civil employment protections as found in Arizona’s and Delaware’s statutes. First, the bill states that employees cannot sue an employer for actions that were based on a good-faith belief that the employee was impaired, that the belief that an employee is impaired must be based on “articulable symptoms,” and that employees must have an opportunity to rebut the idea the they were impaired. These provisions suggest that an employer may be found to have acted in bad faith and subject to liability if it discharges an employee without an articulable basis for why it believed that the employee was impaired or fails to give an employee a chance to challenge an assertion that they were impaired on the job. In addition, the statute appears to tie the ability of an employer to discipline an employee for failing a drug test to an employer’s obligations under federal law. This framework creates a plausible argument that the statute does provide protections for medical marijuana users who do not use or are not impaired by marijuana on the job. However, the pronouncement that employers are not limited in keeping drug testing, zero tolerance, or drug-free workplace policies seems to conflict with such a finding. Perhaps one way to read these provisions consistently is to find that the statute allows employers to maintain such policies, but that they must treat medical marijuana patients in the same manner as other employees that have been prescribed legal medications. In reality, the only way we will know the answer to this question is when the law is inevitably relied upon by a qualified patient who is fired for failing a drug test that is positive for marijuana.
Recommendations for Employers in Medical Marijuana Jurisdictions
So, how should employers respond to these increasingly more common medical marijuana laws? For those employers who have federal contracts or are otherwise subject to federal regulations concerning drug-free workplaces, your practices do not need to change. According to the Department of Transportation, which regulates and provides drug testing requirements for certain safety-sensitive positions, it is “unacceptable for any safety-sensitive employee subject to drug testing under the Department of Transportation’s regulations to use marijuana.” Thus, employers subject to such or similar regulations should continue to comply with applicable federal law.
Employers that are not subject to federal drug testing regulations should review their substance abuse policies to ensure compliance with local and state law. Employers in states that generally do not provide for employment protections should still consider whether their state has a “lawful activities” or “lawful products” statute or whether courts in their state may be more favorable to finding a clear public policy protecting medical marijuana users. In light of the holdings of those decisions that have addressed the issue, courts in these states will likely find that their state law does not establish a clear public policy in favor of medical marijuana patients. However, this analysis may differ in Colorado and Washington, both of which now allow for legal recreational use. In those states that do provide for some form of employment protection, you should carefully revise your policies to be consistent with those laws.
Employers should also consider whether or when they will conduct drug testing. With the passage of these laws, employers should expect that more of their employees may be using marijuana outside of the workplace. Similarly, employers should expect more challenges, based on the long period of time that marijuana metabolites remain in an individual’s system, from employees that have failed drug tests but who claim they were not impaired while working. In Arizona, Delaware and Illinois, employers should revise their substance abuse policies to make sure they conform to state law and ensure that employees who are qualified patients are not disciplined solely on the basis of a failed drug test. Lastly, employers should train their supervisors and managers to recognize signs of impairment (whether due to marijuana, alcohol, or other substances) and how to deal with inquiries from employees regarding their use of medical marijuana.
 States that provide for some form of legalized medical marijuana states are: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington.
 The six jurisdictions that do provide some level of civil protections are: Arizona, Connecticut, Delaware, Illinois, Maine, and Rhode Island.