The “Box” Will be Banned in Minnesota
The Minnesota Legislature passed “ban the box” legislation, and Governor Mark Dayton signed it into law. The law will take effect on January 1, 2014.
In essence, the law will ban private employers from inquiring into a job applicant’s “criminal record or criminal history” before an interview or, if there’s no interview, before a conditional offer of employment:
A public or private employer may not inquire into or consider or require disclosure of the criminal record or criminal history of an applicant for employment until the applicant has been selected for an interview by the employer or, if there is not an interview, before a conditional offer of employment is made to the applicant.
S.F. 523 (to be codified at Minn. Stat. §364.021). Violation does not give rise to a private cause of action, but rather the potential of fines for unremedied violations to be imposed by the Minnesota Department of Human Rights during a one year “introductory” phase. After the first year, higher fines may be imposed for violations, depending on employer size.
The legislation specifically prohibits causes of action by applicants, which was apparently an important part of the political compromises in the new law:
The remedies under this subdivision are exclusive. A private employer is not otherwise liable for complying with or failing to comply with section 364.021.
This legislation places Minnesota at the vanguard in this “ban the box” movement (only 3 other states have the ban). But the prohibition against private causes of action should help reduce employer concerns about its misuse by otherwise unsuccessful applicants.
Takeaways: Employers need to revise their application to take off the “box” (whether literally a “box” or in another form) or any questions about “criminal records or history” and move the inquiry to the interview or conditional offer stages of the hiring process. Since Minnesota is at the forefront, “off the shelf” application forms generated by national-offices for local Minnesota offices need particular attention. And remember, this is really a “fair crack at it” legislation, meaning that criminal history may still be relevant to a hiring decision, but only when the applicant has been able to demonstrate his or her qualifications despite the criminal history. In weighing the impact of such background information, it will be important to consult with legal counsel on the ultimate question of relevancy and the potential of discrimination. While this new legislation doesn’t allow for a private lawsuit, the EEOC is still very interested in the potential misuse of criminal background questions when investigating possible protected class discrimination.
Briggs Employment Lawyers to Present at the 2013 Upper Midwest Employment Law Institute
The 2013 Upper Midwest Employment Law Institute is being held at the Saint Paul RiverCentre on May 20 & 21, 2013. We are pleased to announce that three lawyers from our Employment, Benefits and Labor Section at Briggs and Morgan, P.A. will presenting this year as follows:
- Steve Brunn – “What Do Employers Small and Large Need to Know About the Affordable Care Act?” on May 21 at 11:45.
- Ann Huntrods – “Mentally Ill and Chemically Dependent Employees: Answers to Pressing Questions” on May 21 at 2:45.
- Greg Stenmoe – “Employees With Personality Disorders: Management and Litigation Risks” on May 21 at 11:45.
A copy of the seminar brochure is available here. Several of our other Employment, Benefits, and Labor lawyers will also be at the seminar. We hope that you can attend and that we see you there.
What Employers Need to Know About Same-Sex Marriage in Minnesota
On May 14, 2013, Governor Mark Dayton signed legislation making Minnesota the 12th state to recognize same-sex marriage. The new law will take effect on August 1, 2013. The text of the bill is available here. Here are a few things that employers should keep in mind now that same-sex marriage will be legal in Minnesota:
- Sexual Orientation Discrimination: Even before same-sex marriage was recognized in Minnesota, the Minnesota Human Rights Act (MHRA) prohibited employers from discriminating against applicants or employees on the basis of sexual orientation. See Minn. Stat. § 363A.08. A limited exception to this rule exists for non-profit religious associations or educational institutions that are operated or controlled by religious associations, but the exception does not apply to secular business activities that are unrelated to the religious and educational purposes for which the institution is organized. See Minn. Stat. § 363A.26.
- Marital Status Discrimination: The MHRA also prohibits employers from discriminating against applicants or employees on the basis of marital status. The Minnesota Supreme Court has defined “marital status” to include “the identity of the employee’s spouse and the spouse’s situation, as well as the spouse’s actions and beliefs.” Taylor v. LSI Corp. of America, 796 N.W.2d 153, 156 (Minn. 2011).
- Exemption for Marriage Ceremonies: For employers who administer marriage solemnizations or ceremonies, the new law includes an exemption for religious associations, which allows them to refuse to provide goods or services for marriage solemnizations or ceremonies that violate their sincerely held religious beliefs. The exception extends to employees or volunteers of religious associations who are acting within their responsibilities for the religious association. However, the exception does not apply to secular business activities that are unrelated to the religious or educational purposes of the religious association.
Takeaways: While same-sex marriage in Minnesota will likely not have a significant impact on employment law, employers should make sure that their policies and practices do not discriminate on the basis of sexual orientation or marital status.
Impairments and Health Professionals: What’s an Employer to do?
Health professionals, including physicians, dentists, nurses, paramedics, pharmacists, psychologists and social workers, are far from immune from chemical dependency, mental illness, and other conditions that impair their ability to do their jobs. When an impairment leads to poor performance or misconduct, health care employers, like other employers, must analyze whether discipline, a reasonable accommodation, or another approach is warranted. But they do so in a highly regulated environment, where patient health and safety are paramount.
Where the health professional is licensed, the employer and other involved professionals may have duty to report the facts to a professional licensing board or, as discussed below, to a diversion program. Employers of physicians and registered nurses, for example, are to report certain: (a) actions taken by the institution to revoke, suspend, or limit the professional’s privilege to practice; (b) disciplinary actions; or (c) resignations by professionals before investigations are concluded. See Minn. Stat. §§ 147.111 and 148.263. Each of the licensing statutes for the many licensed health professions is different, but many contain some form of mandatory reporting. Some require reporting from the employer and others require reporting only from licensed professionals. Many contain protections from liability for those making a report.
A reporting to a licensing board may not be the only required report. Depending on the circumstances, an employer may have other reporting obligations — for example to the Department of Health, to a welfare agency or common entry point for issues involving minors or vulnerable adults, to the DEA, or to the Board of Pharmacy among others.
As to licensing board reports, typically, once a report is made, the board will investigate and, depending upon the outcome of the investigation, may enter into a corrective action agreement with the professional, or proceed to revoke, suspend or condition the license of the professional, or take other disciplinary action. The public nature of disciplinary actions has led to concerns that some situations might go unreported, and leave impaired professionals in practice, and without monitoring, practice restrictions, or treatment, thus posing ongoing risks to public safety.
Minnesota has developed a program to address at least some of these issues. The Health Professional’s Service Program (HPSP) typically provides referrals for evaluation and treatment and develops an agreement with the professional that may include health and work place monitoring, practice restrictions, random drug screening, support group participation, and requirements regarding documentation of compliance. Generally, health professionals are eligible to participate in HPSP if they are licensed by a participating board and are “unable to practice with reasonable skill and safety by reason of illness, use of chemicals, or as a result of a mental, psychological or physiological condition.” They are unable to participate, however, if they have been noncompliant in the past, are already under a disciplinary action, were accused of sexual misconduct, are believed to create a serious risk of harm if they continue to practice, or if they have diverted controlled substances other than for their own self administration. The HPSP statute currently provides that a report to HPSP fulfills the requirement that a report be made to the licensing board under that professional’s practice act. See Minn. Stat. § 214.29. Employers should note, however, that bills were introduced in the Minnesota House and Senate in the current session (see H.F. No. 1604 and S.F. No. 1181) that would require employers to report knowledge of diversion of narcotics or controlled substances to the appropriate licensing board and provide that reporting to HPSP alone would not be sufficient.
Takeaway: It is important for employers to review each circumstance carefully and fully understand their reporting and other obligations in dealing with a health professional whose impairment has or may lead to problems in the workplace. Employers should take action to protect public health and safety while also fulfilling their obligations as an employer to the affected professional.
Employee Handbook Haiku
Often times, policies in employee handbooks are longer and wordier than necessary. If for some reason your company was required to fit its entire employee handbook into a single haiku poem, here is what I would recommend:
Employment at-will,
We monitor your e-mails,
Report harassment.
This haiku accomplishes three of the primary goals of employee handbooks. It informs employees that they are employed at-will. It warns them not to expect their company e-mails to be private. And by directing employees to report harassment, it preserves the employer’s ability to assert the Faragher-Ellerth affirmative defense.
Takeaway: While it’s not advisable to fit an entire employee handbook into a single haiku, employers should keep in mind that sometimes shorter policies are more effective and more likely to be read by employees.
Remember to Use New I-9 Forms Starting May 7, 2013
The federal government has released new I-9 forms that are required to be used by all employers beginning tomorrow, on May 7, 2013. The new forms should be used only for newly hired employees. As most employers are aware, the I-9 form is used to verify that a new hire is legally authorized to work in the United States. A copy of the new I-9 form is available here.
While the new forms do not make significant changes in the verification process, there are a few differences. Both the old and new forms have three sections: Section 1 to be completed by the employee; Section 2 to be completed by the employer; and Section 3 to be completed if there is a need to re-verify an employee’s eligibility to work in the United States. The new form also asks for an employee’s email address and telephone number so that Immigration and Customs Enforcement (ICE) and the Justice Department’s Office of Special Counsel (OSC) can conduct follow-up interviews of employees more easily when I-9 audits of employers are performed. While the Bush administration appeared to target its enforcement activities against undocumented workers, the Obama administration seems more focused on targeting employers for work eligibility violations related to I-9 forms. ICE and OSC have stepped up their enforcement actions during the past few years in targeting employers for I-9 violations. ICE audits of employer I-9 forms have increased from over 250 in 2007 to over 3,000 in 2012, according to data provided by the Associated Press.
Additionally, the new form is now two pages instead of one page. While the new form more prominently requires the employee to attest to his or her citizenship or immigration status (and thus eligibility to work in the United States), the two-page format may increase retention costs for larger employers, and may increase the risk that one or both pages of the I-9 form may be misplaced or lost, which is tantamount to a failure to complete the I-9 form.
Takeaway: Be sure to start using the new version of the I-9 form no later than May 7, 2013. The failure to use the correct form may subject an employer to liability if ICE conducts an I-9 audit. With an increasing emphasis on employer I-9 audits by the current administration, it is more important than ever that employers ensure that I-9 forms are properly completed when an employee is hired.
Can an Employer Deduct the Cost of Lost, Stolen, or Damaged Property from an Employee’s Wages?
Under Minnesota law, an employer generally cannot make a deduction, either directly or indirectly, from the wages due to or earned by an employee “for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer” unless one of the following two situations applies:
- After the loss occurred or the claimed indebtedness arose, the employee voluntarily authorizes the employer to make the deduction; or
- A court holds the employee liable for the loss or debt.
Minn. Stat. § 181.79, subd. 1(a). If the employee authorizes the deduction, that authorization must be in writing and must state the amount that will be deducted from the employee’s wages for each pay period that the deduction will apply. See id. If an employer violates this statute, it can be held liable for twice the amount of the deduction taken. Id., at subd. 2.
This statute does not apply when (1) an applicable collective bargaining agreement contains a contrary provision; (2) an employer of employees who are commissioned salespeople establishes rules with the purpose of disciplining the salespeople, by fines or otherwise, for errors or omissions in performance; or (3) an employee makes a purchase or receives a loan from the employer and voluntarily authorizes wage deductions for the cost of the purchase or the loan. Id., at subd. 1(c).
Takeaway: If an employee loses, steals, or damages property, a Minnesota employer should not unilaterally deduct the cost or value of the property at issue from the employee’s wages. To offset the loss against the employee’s wages, the employer may seek the employee’s consent to the deduction through a written authorization.
How to Handle FMLA Leave Abuse
At our recent Safeguarding Employers in 2013 seminar, we provided employers advice regarding how to address fraudulent use of leave under the Family and Medical Leave Act (FMLA). On many occasions employers are reasonably suspicious that an employee is taking purported FMLA leave for other purposes, such as vacation, attending to errands, or simply taking time away from work. While the FMLA permits employers to take certain action in response, employers should do so carefully.
The FMLA regulations provide that “[a]n employee who fraudulently obtains FMLA leave from an employer is not protected by FMLA’s job restoration or maintenance of health benefits provisions.” 29 CFR 825.216(d). Accordingly, an employer may discipline or discharge an employee who fraudulently takes FMLA for another purpose. In support of this principle, courts have developed an “honest belief” rule.
The “honest belief” rule provides that “so long as the employer honestly believed in the proffered reason given for its employment action, the employee cannot establish pretext even if the employer’s reason is ultimately found to be mistaken, foolish, trivial or baseless.” Jaszczyszyn v. Advantage Health Physician Network, 2102 WL 5416616 (6th Cir. 2012). This rule may not, however, protect an employer which takes adverse action against an employee without proper investigation and foundation.
Employers should not rely on mere speculation and stereotyping when concluding that an employee is not really affected by a serious health condition. Caution is particularly warranted when an employer is considering the leave of an employee with a mental serious health condition. If appropriate, employers should consider interactive follow up before taking adverse action, such as seeking a complete medical certification, having a health care provider clarify a medical certification, obtaining a recertification of the employee’s condition, or getting a second opinion from another health care provider.
Takeaway: Employers do not have to tolerate FMLA leave abuse by employees. However, employers should take steps to obtain objective and particularized facts before acting on suspicions of improper use of leave. Failure to do so could result in claims of FMLA interference or retaliation.
National Labor Relations Board Mired in Uncertainty
Recently, President Obama announced his intention to nominate three members to the National Labor Relations Board (“NLRB”), but the legal status of the NLRB is far from clear.
The five-member NLRB issues decisions that interpret and apply the National Labor Relations Act (“NLRA”) to employers and unions. The NLRA impacts both union and non-union companies. The five members of the NLRB serve staggered terms and must be nominated by the President and confirmed by the Senate. On April 9, 2013, President Obama renominated current Democratic Chair Mark Gaston Pearce, whose term expires on August 27, 2013. Pearce is a union-side labor attorney from Buffalo, New York. The President also nominated two management-side labor attorneys, Republicans Philip Miscimarra and Harry I. Johnson III. Miscimarra is a partner with Morgan, Lewis & Bockius in Chicago, and Johnson is a partner with Arent Fox in Los Angeles.
These three nominees join two other Democrats who were previously nominated, Richard Griffin and Sharon Block. Griffin is a former General Counsel for the International Union of Operating Engineers, and Block is a former staff counsel to the late Senator Edward Kennedy, and served under former Democratic Secretary of Labor Hilda Solis. Griffin and Block are currently serving as “recess” appointees to the NLRB.
Part of the problem with the five NLRB nominations is that the recess appointments of Griffin and Block were declared unconstitutional and invalid earlier this year by the District of Columbia Circuit Court of Appeals in Noel Canning v. NLRB. Under that decision, all of the NLRB decisions issued after Griffin and Block were named recess appointees on January 4, 2012 are void because the NLRB lacked the three-member quorum necessary to issue decisions. On April 25, 2013, the NLRB recently requested discretionary review of the Noel Canning case by filing a petition for a writ of certiorari with the U.S. Supreme Court.
Some Senate Republicans have declared their intent not to confirm the package of the five NLRB nominations since it includes the two “recess” appointees who were previously declared unconstitutional. Whether the Senate will actually confirm this package of nominees seems up in the air at this point given the position of many Senate Republicans.
During 2012, the NLRB issued a number of decisions which are viewed as tilting the playing field in favor of unions and employees, and have drawn the ire of employers. Some of these decisions also impact non-union employers in areas like social media, employment at-will statements, and confidentiality of investigations involving employee misconduct. But these decisions, for the time being, have been declared void by the D.C. Circuit Court of Appeals. At the same time, Chairman Pearce has announced his intent to have the NLRB continue with business as usual, even though the D.C. Circuit has ruled that the 2012 decisions were invalidly issued when the NLRB did not have a quorum.
To add greater uncertainty to the mix, the House of Representatives narrowly passed a bill on April 12, 2013, essentially along party lines, that would strip the NLRB of authority to take any substantive action until the Supreme Court rules on the anticipated appeal of the Noel Canning decision, or the Senate confirms a quorum of members to the NLRB. This bill is HR 1120, titled “Preventing Greater Uncertainty in Labor-Management Relations.” A similar bill was previously introduced in the Senate. But the Senate bill died in committee, and was never brought up for vote by the full Senate – which is not surprising given the Senate’s Democratic majority. Now that the House passed HR 1120, the Senate will likely be forced to at least consider the issue.
Even if the Democratic-controlled Senate were to pass the bill (which seems highly unlikely), President Obama has indicated that he would veto the legislation rather than concede that his recess appointments were unconstitutional and that the NLRB lacks authority to take any action since it does not have a quorum, at least according to the Noel Canning decision. And it is far-fetched to think that a presidential veto would be overridden by the needed two-thirds majority vote in both the House and the Senate.
Takeaways:
- So where does this leave employers? Confused about the current state of labor law and waiting for action by the Supreme Court, most likely. Even if the Supreme Court grants discretionary review of Noel Canning, it is unlikely that the Supreme Court would issue any decision resolving this dispute before sometime next year.
- Why should employers care about this dispute? Even though the NLRB’s 2012 decisions are void according to the D.C. Circuit, Chairman Pearce is expected to continue to have the various Regional Offices of the NLRB investigate and prosecute violations of the NLRA following the precedents set by 2012 NLRB decisions. Employers that want to challenge the findings of a Regional Office about alleged unfair labor practices that violate the NLRA will initially go to trial before an NLRB Administrative Law Judge, who will likely follow the 2012 NLRB decisions, at least until the Supreme Court rules otherwise. Thus, employers would be wise to consult with labor counsel before taking action with respect to unions, or taking action against employees in areas like social media, at-will statements, or confidentiality of investigations, all of which now have the close attention of the NLRB. Stay tuned.
Supreme Court Upholds Dismissal of FLSA Collective Action Claim
Court dockets continue to remain full with lawsuits alleging violations of the Fair Labor Standards Act (FLSA) minimum wage or overtime provisions. Many times these cases are filed on behalf of the named person bringing the lawsuit, as well as other employees similarly situated. These cases brought on behalf of a group are known as collective actions.
In a case decided on April 16, 2013, the United States Supreme Court determined what happens to such a lawsuit when the claims of the person bringing the suit become moot. Genesis Healthcare Corporation v. Symczyk, No. 11-1059 (Apr. 16, 2013). In that case, the employee alleged that her employer had improperly failed to pay her, and others, for time worked during breaks. Before any other employee joined the lawsuit, the employer offered to pay her the full amount of her claim. The employee rejected that settlement offer. Nonetheless, the lower courts held, and on appeal to the Supreme Court the employee did not challenge, that by offering to fully compensate the employee the employer had mooted her claim making her no longer eligible to seek relief for herself. The employee argued, however, that she was still entitled to pursue her lawsuit on behalf of fellow employees with the same types of claims.
Although not all of the Supreme Court Justices agreed, the Court decided that the employee was no longer eligible to pursue claims on behalf of her fellow employees. Because no other employee had yet joined the lawsuit, the only live claim was that of the employee who filed the case. Once her claim was determined to no longer exist, the Court held that there was no longer any present claim remaining to resolve and decided that the whole case was properly dismissed. The Court indicated that the result would have been different if other employees had already joined the litigation before the filing employee’s claim became ineffective.
Four of the nine Justices dissented from the Court’s decision because they reasoned the employee’s own claim did not become ineffective merely because the employer made a settlement offer to pay her full claim. Justice Kagan’s dissenting opinion makes for a colorful read, in which she notes that the majority resolved only “an imaginary question.”
Takeaway: Lawsuits alleging FLSA violations, particularly those seeking collective action status, can involve complicated procedural issues. Employers should take care to consider pertinent strategic options, including potentially offering a settlement to the named plaintiff.
Is Court or DOL Approval Required for Settlements of Claims under the FLSA?
Maybe not – two recent cases cast doubt on the longstanding assumption that settlements under the Fair Labor Standards Act (FLSA) require approval by either a court or the Department of Labor (DOL) to be enforceable.
The leading case holding that court or DOL approval is necessary for FLSA settlements is Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). In that case, the Eleventh Circuit Court of Appeals explained that:
Recognizing that there are often great inequalities in bargaining power between employers and employees, Congress made the FLSA’s provisions mandatory; thus, the provisions are not subject to negotiation or bargaining between employers and employees.
The court further explained that:
FLSA rights cannot be abridged by contract or otherwise waived because this would “nullify the purposes” of the statute and thwart the legislative policies it was designed to effectuate.
Accordingly, the court in Lynn’s Food Stores, Inc. held that either court or DOL approval was required for an FLSA settlement to be enforceable. The court explained that when a court reviews a proposed settlement under the FLSA, it must ensure that the settlement is “a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”
Two recent decisions have suggested that court approval is not always required for an FLSA settlement to be enforceable. First, the Fifth Circuit Court of Appeals held that a private settlement of FLSA claims may be enforceable without court or DOL approval when there exists a “bona fide dispute to liability” and the plaintiff-employees are represented by legal counsel. See Martin v. Spring Break ’83 Productions, L.L.C., 688 F.3d 247, 255–56 (5th Cir. 2012), cert. denied, 133 S.Ct. 795 (Dec. 10, 2012).
More recently, the Eastern District of New York held that court approval was not required for an FLSA settlement if the litigation had already commenced and the plaintiff-employees were represented by counsel. In that case, the judge explained that:
[A]lthough I have ruled to the contrary in the past, I have come around to the view that the procedure of a court requiring approval before it permits parties to voluntarily dismiss an FLSA action is incorrect. It runs afoul of Fed. R. Civ. P. 41, which gives the plaintiff, at the early stage of the case, or the parties jointly, at a later stage in the case, free reign to discontinue for any reason.
Picerni v. Bilingual SEIT & Preschool Inc., No. 12 Civ. 4938 (BMC) (E.D.N.Y., Feb. 22, 2013). The judge stated that “I believe the parties can voluntarily dismiss an FLSA case without judicial approval —if the defendant is willing to undertake the risk of doing so.”
Takeaways: The trend against a strict requirement for court or DOL approval of FLSA settlements is favorable for employers. However, the law in this area remains unsettled. Therefore, if certainty is desired, employers may still want to obtain court or DOL approval of a settlement under the FLSA out of an abundance of caution.
“Hey, I was Just Trying to be a Nice Guy!” – Don’t be Inconsistent When Discussing An Employee Termination
A case out of the Eleventh Federal Circuit provides a cautionary tale for any employer who is trying to cut a terminated former employee a break in references. Maybe don’t be a “nice guy”:
In Kragor v. Takedo Pharmaceuticals of America, Inc., 702 F.3d 1304 (11th Cir. 2012), the Appellate Court reversed and set for trial an age discrimination case in which a manager who had terminated an employee for misconduct disavowed the reason in a subsequent reference call. He apparently wanted to help out the former employee—who learned about the kindness and brought it into evidence as proof that the reasons given for the termination were pretextual. The Appeals Court found this contradiction created a triable case to allow the age discrimination case to proceed:
When the employer’s actual decisionmaker, after terminating an employee for misconduct (or the appearance of misconduct), says without qualification that the employee is exceptional, did nothing wrong, did everything right, and should not have been fired, that contradiction—when combined with a prima facie case—is enough to create a jury question on the ultimate issue of discrimination.
So much for trying to be a “nice guy.”
Takeaways: Be cautious in staying consistent with the reasons provided for a termination and statements to third parties. Good intentions do not always lead to good results. When you want to give a more positive reference after a troubled termination, work with legal counsel on maintaining consistency with the company’s reasons for termination.
Ankoor Bagchi
Ann Huntrods
Britt Gilbertson
Danielle Fitzsimmons
David Schooler
Ellen Brinkman
Michael Miller
Michael Wilhelm
Mike Moberg
Neal Buethe
Sally Scoggin
Steve Brunn
