Laborsphere

Philadelphia Pregnancy Accommodation Law: Notice Requirement Begins on April 20, 2014

On January 20, 2014, Philadelphia Mayor Michael Nutter signed into effect an amendment to the city’s Fair Practices Ordinance: Protections Against Unlawful Discrimination that expressly includes pregnancy, childbirth, or a related medical condition among those categories protected from unlawful discrimination.

The city law covers employers who do business in Philadelphia through employees or who employ one or more employees. Before this amendment, employers’ obligations under city, state, and federal antidiscrimination laws only required them to treat employees with pregnancy-related issues no worse than any other disabled employee with respect to accommodations. Now employers are not only prohibited from denying or interfering with an individual’s employment opportunities on the basis of pregnancy, childbirth, or related medical conditions, but employers also are required to make reasonable accommodations on these bases to an employee who requests it. The legislation’s non-exhaustive examples of reasonable accommodations include restroom breaks, periodic rest for those who stand for long periods of time, assistance with manual labor, leave for a period of disability arising from childbirth, reassignment to a vacant position, and job restructuring. Employers have an affirmative defense under the law for failing to accommodate an employee if such accommodations would cause an undue hardship.

Employers should take note that this law increases the burden on them to provide reasonable accommodations, since examples like reassignment and job restructuring have traditionally not been required under similar federal and state laws that mandate accommodations for individuals with disabilities. Thus, employers should review their policies and other written materials regarding employee accommodations to ensure that they reflect the increased protections afforded by the amendment. Employers were required to provide written notice to its employees of the protections under this amendment by April 20th or post the notice conspicuously at its place of business in an area accessible to employees. The Philadelphia Commission on Human Relations has provided a model notice to employees, which can be found at: http://www.phila.gov/HumanRelations/PDF/pregnancy_poster.pdf.

Supreme Court Expands Scope of Sarbanes-Oxley Whistleblower Protections

Editor’s Note: The following post appears in the latest issue of the California HR Newsletter.

Supreme Court Expands Scope of Sarbanes-Oxley Whistleblower Protections

The Issue: My company is not publicly traded, but provides services to companies that are. Do Sarbanes-Oxley whistleblower protections extend to our employees?

The Solution: Yes.

Analysis: Enacted in the wake of the Enron and Worldcom scandals, the Sarbanes-Oxley Act imposes increased reporting standards on publicly-traded companies and the outside accountants, consultants, and lawyers supporting them. Section 1514A prohibits public companies, or their contractors or agents, from using adverse employment action, threat, or harassment to retaliate against “an employee” who blows the whistle (internally or externally) on perceived violations of the Act, SEC regulation, or any other federal law relating to shareholder fraud. Though civil remedies are largely coextensive with California’s employee anti-retaliation provisions, federal claims brought under section 1514A are exempt from arbitration and entail potential criminal penalties, including up to ten years of jail time for the responsible decision-makers.

In Lawson v. FMR LLC, decided in early March, the Supreme Court significantly expanded the scope of section 1514A’s protection, extending it to employees of service providers to public companies. The plaintiffs in Lawson were accountants formerly employed by FMR, a private contractor that prepares SEC filings for publicly traded mutual funds. They were allegedly terminated for raising concerns to their superiors regarding accounting and reporting methodologies used by FMR. FMR argued that the case should be dismissed because section 1514A, titled “Whistleblower protection for employees of publicly traded companies,” regulates private contractors only to the extent they are used to retaliate against public company employees, and does not shield a private contractor’s own employees.

The Supreme Court disagreed. Reversing the First Circuit, the Court held that, “based on the text of 1514A, the mischief to which Congress was responding, and earlier legislation Congress drew upon, . . . the provision shelters employees of private contractors and subcontractors, just as it shelters employees of the public company served by the contractors and subcontractors.” Though this expansive interpretation could generate a wide range of potential plaintiffs (a fact duly noted in the dissent), the Court indicated that professional service providers, such as the accountant plaintiffs in Lawson, are the intended and most likely beneficiaries.

Accordingly, private companies providing professional services to publicly traded clients should ensure they have appropriate procedures in place for responding to employee questions or complaints that may be regarded as “whistleblowing.” Failure to do so may expose them to federal remedies above and beyond those already imposed by California law.

Daughter’s Facebook Post Leads to Costly Breach by Father of a Confidentiality Clause in His Settlement Agreement With Former Employer

A recent decision by a Florida appeals court, Gulliver Schools, Inc. v. Snay, stands as a stark reminder of the perils of trying to maintain confidentiality in the age of social media where news can travel faster than the speed of sound and inadvertent dissemination of information that is intended to be “confidential” can be difficult, if not impossible, to prevent.

Patrick Snay sued his former employer, Gulliver Schools, for age discrimination and retaliation under the Florida Civil Rights Act after his contract as the school’s headmaster was not renewed. The parties reached a settlement in the amount of $150,000 ($10,000 in back pay, $80,000 for non-wage damages, and $60,000 in attorney’s fees), and agreed that the “existence or terms” of the agreement were to be kept strictly confidential. The confidentiality provision prohibited Snay from “directly or indirectly” disclosing or discussing the case or the settlement with anyone except “his attorneys or other professional advisors or spouse.” It contained a clawback or liquidated damages provision allowing for the disgorgement of plaintiff’s portion of the settlement payments in the event of a breach.

Only four days after the parties had signed the settlement agreement, the school notified Snay that he had materially breached the agreement based on a Facebook posting of Snay’s college-age daughter, who boasted to approximately 1200 Facebook friends (many of whom were either current or past Gulliver students): “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Mr. Snay testified that he believed his daughter was retaliated against at Gulliver, that she was “very concerned about” the lawsuit, and that after the settlement was reached he and his wife decided to tell their daughter that the case had settled and that they were happy with the result. They apparently did not tell her that the settlement was confidential or that she should not disclose such information to anyone else. The trial court found that neither Snay’s comments to his daughter nor his daughter’s Facebook comment constituted a breach. The appeals court disagreed and reversed, ruling that Mr. Snay “violated the agreement by doing exactly what he had promised not to do,” and “[h]is daughter then did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the school.”

Confidentiality clauses like the one in the Snay/Gulliver settlement agreement are common and should be enforced when they are clear, unambiguous and voluntarily and knowingly agreed to. From a drafting standpoint, if it was important for Mr. Snay to have disclosed certain information about the settlement to his daughter (as he had claimed at his deposition), then the confidentiality provision could have included “immediate family” as permissible recipients of confidential information and have subjected those family members to the same confidentiality obligations as Mr. and Mrs. Snay.

In addition, attorneys should take heed of this opinion in light of their ethical and legal obligations to protect client confidences. The duty to protect privileged and confidential client information extends to current clients (RPC 1.6), former clients (RPC 1.9), and prospective clients (RPC 1.18). Zealous representation and confidentiality are at the foundation of the attorney-client relationship, but if an attorney’s spouse, family member, or co-worker, inadvertently or otherwise posts on social media client or case information that is confidential (e.g., “mom just settled big toxic tort case, off to Mexico for much needed family vacation!”), such disclosure could be disastrous.

Proposed California Paid Sick Leave Law Will Require Employers to Provide Paid Sick Leave to Employees

Are you a California employer currently providing paid sick leave to your employees? You may soon have to! California Assemblywoman Lorena Gonzalez (D-San Diego) recently introduced legislation (Bill AB1522) approved by the Assembly Labor and Employment Committee requiring employers in the State of California to provide their employees with paid sick leave.

This bill would enact the Healthy Workplaces, Healthy Families Act of 2014 to provide, among other things, that an employee who works in California for 7 or more days in a calendar year is entitled to paid sick days to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th calendar day of employment. And employers would be subject to statutory penalties as well as lawsuits, including the recovery of attorneys fees by the aggrieved employee against employers, for alleged violations.

It is important to note that this type of bill is not new in California, as the San Francisco Paid Sick Leave Ordinance became effective on February 5, 2007 and all employers must provide paid sick leave to each employee — including temporary and part-time employees — who performs work in San Francisco.

The California Chamber of Commerce as well as other employer groups are opposed to this bill and view it as a job killer.

Stay tuned….

Just Don’t Ask: With The Fair Chance Ordinance, San Francisco Joins A Growing Number Of Jurisdictions That Restrict Employers’ Pre-Hire Inquiries About Applicants’ Criminal Histories

In February 2014, San Francisco joined the growing number of jurisdictions that have enacted so-called “ban the box” laws. Like many of its counterparts, San Francisco’s Fair Chance Ordinance, which will become effective in August 2014, significantly limits employers’ abilities to inquire about and/or consider applicants’ and employees’ criminal records when making employment decisions.

Pursuant to the Ordinance, San Francisco employers are prohibited from asking about applicants’ criminal histories until either (a) after the applicants’ first live interview, or (b) after a conditional offer of employment has been extended. However, the Ordinance places considerable limits on obtaining and using any information obtained. Specifically, employers are prohibited from inquiring about or taking any adverse action against applicants or current employees based on: (a) any arrests not leading to a conviction, except for some unresolved (i.e., pending) arrests; (b) participation in or completion of a diversion or deferral of judgment program; (c) convictions that have been judicially dismissed, expunged, voided, invalidated or otherwise rendered inoperative; (d) convictions or other determinations of the juvenile justice system; (e) convictions older than seven years; and/or (f) information pertaining to any offense other than a felony or misdemeanor (e.g., infractions). Before making any inquiry about an applicant’s conviction history, the Ordinance requires that the employer provide the applicant in question with a notice promulgated by the San Francisco Office of Labor Standards Enforcement (“OLSE”).

The Ordinance also requires that employers engage in an individualized assessment and consider only directly-related convictions when making decisions about applicants. Employers also must consider the amount of time that has elapsed since the applicants’ convictions and any evidence of rehabilitation, inaccuracy of the applicants’ records, and/or other mitigating factors. Before making any adverse decision, employers are required to provide the employee with a written notice of their intention to make such a decision, detailing the reasons for the decision. In addition, if any background report was considered by the employer, the employer must also provide that to the applicant. Any affected candidate has seven days following receipt of the employer’s notice to submit evidence regarding: (i) the inaccuracy of the criminal history information; or (ii) rehabilitation or mitigating factors. If the employer receives such information from an applicant, it must delay its intended action and consider the additional information.

In addition to the above restrictions, the Ordinance contains strict anti-retaliation/interference provisions. The Ordinance also requires that employers post a notice of applicants’ and employees’ rights in a conspicuous place at every workplace, job site, or other location in San Francisco that is under the employer’s control and that is frequently visited by employees or applicants. In addition, any job postings must contain a notice that the employer will comply with the Ordinance’s requirements.

Though San Francisco’s ordinance is particularly stringent, the City is by no means alone in banning employers from inquiries about applicants’ criminal pasts: dozens of cities and several other states – including Hawaii, Massachusetts, Minnesota, and Rhode Island – have enacted similar “ban the box” legislation. Moreover, there are a growing number of organizations pushing for the enactment of similar laws and ordinances across the country.

Employers in jurisdictions that have already enacted “ban the box” laws should ensure that they avoid any impermissible inquiries. Employers in locations that have not yet been affected should closely monitor developments in their jurisdictions to avoid any exposure.

Cheryl Orr and Sarah Millar Quoted in InsideCounsel Labor & Employment Digest: April 2014

Cheryl Orr, partner and co-chair of the Labor & Employment group, and Sarah Millar, partner and vice chair of the Employee Benefits & Executive Compensation group, were both quoted in InsideCounsel’s April 2014 Labor & Employment Digest. The monthly digest “brings together the voices of labor & employment and employee benefits lawyers to get their take on the issues shaping the policies of workplace compliance and regulation.” Sarah’s quote looked at how employers can avoid the challenges presented by tobacco cessation programs and Cheryl’s looked at how the anti-drug policies of companies located in states where marijuana is now legal for medical or recreational use are affected. Both quotes are below in their entirety.

Avoid the challenges of tobacco cessation programs

“Tobacco cessation programs structured outside a health plan can be problematic. Some state laws prevent employers from making hiring and firing decisions based on someone’s smoking status. It puts employers between a rock and a hard place. The law is complicated and ties your hands in some respect, but there are options and creative ways to incentivize healthy behavior. It’s a matter of walking through the steps and thinking it through, then coming up with an effective communication plan.”

Marijuana legalization and anti-drug policies

“Companies located in one or more of the 21 states that allow the use of medical marijuana need to understand the laws may affect a company’s anti-drug policy. For employers that have federal contracts or are otherwise subject to federal regulations concerning drug-free workplaces, your practices do not need to change. Otherwise, employers should expect more challenges from staff that fail drug tests but claim they weren’t impaired while working. Training programs for managers will help them recognize signs of impairment and answer inquiries regarding the use of medical marijuana.”