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2011 Spring Employment Update

Genetic Information Nondiscrimination Act (GINA) In Effect

The EEOC recently issued the final regulations implementing Title II of the Genetic Information Nondiscrimination Act (GINA), which took effect in January 2011.  GINA prohibits use of genetic information to make decisions about health insurance and employment and restricts the acquisition and disclosure of genetic information, making it illegal to discriminate against or harass employees because of genetic information.  There are six exceptions to this rule.  The first exception, where an employer inadvertently requests or requires an individual’s genetic information, is likely to play a significant role in today’s social media world.  The statute describes, as an example, the situation where an employer is “friends” with an employee on Facebook and learns about genetic information because the employee posts such information on his or her Facebook page.  To avoid GINA violations, employers should understand what entails “genetic information.”

Rise in EEOC Charges for Employer Credit Checks in Preemployment Screening

One of the EEOC’s hottest litigation areas has become employer credit checks.  This comes at a time when employers are slow to hire and potential employees are trying to rise out of a three-year-long recession.  Employers can (theoretically) be more selective in seeking the best candidates, including those with good credit.  Recent studies show that 13% of organizations conduct credit checks on all job candidates and another 47% consider credit history for select jobs.  Employers must be vigilant of the risks involved in hiring based (in any part) on an individual’s credit history.  Comply with the Fair Credit Reporting Act.  If a business purpose can be shown for requesting credit report information, cross reference that purpose with the job’s written description and written background requirements or job disqualifications.  If the use of credit information tends to screen out protected groups, do not inquire about credit information.  In December 2010, the EEOC sued Kaplan Higher Education Corp. over its use of credit checks, claiming that Kaplan denied jobs based on credit histories in such a way that it had a disparate impact on blacks.

Employers’ Headaches Eased by Effective Social Media Policies

Increasingly, social media use by employees is causing employers some serious headaches.  Current and former employees’ posts to social networking sites like Facebook, LinkedIn, and MySpace may create embarrassment, cause harassment or discrimination, or improperly reveal an employer’s confidential information.  While employers must be careful not to violate laws prohibiting them from taking action against employees for their lawful off-duty conduct, they should implement and enforce social networking policies in the workplace.  Such policies should supplement existing electronic communications and internet usage policies and should be maintained in the company’s handbook.  Well-drafted social media policies can help protect an employer against legal liability and harm to its reputation and goodwill, and should remind employees that public or workplace social media activity is not private.

The recent settlement in the NLRB case against American Medical Response, the ambulance service provider, sends a message to employers.  Here, AMR discharged an employee who called her supervisor a mental patient in a “friends only” Facebook post, in violation of AMR’s social media policy.  Overly broad policies, like AMR’s, prohibiting employees from “making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, co-workers and/or competitors,” may not hold up in court.  Employers should carefully analyze their social media policies to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work.

Oral Complaints May Constitute Protected Activity, Receive Retaliation Protection by the U.S. Supreme Court

The U.S. Supreme Court held recently that the Fair Labor Standards Act prohibits employers from retaliating against employees who “file” an oral complaint that the employer is violating the FLSA.  The ruling significantly expands the potential for retaliations suits against employers.  The suit arose when the plaintiff alleged that he was terminated based on oral complaints made to his employer that the location of the time clocks violated the FLSA.  The employer’s defense, that the plaintiff had not made any significant complaint about the time clock location and was fired for other reasons, was not convincing to the Supreme Court, which found that both oral and written complaints fall within the scope of protection provided by the FLSA.  The Court set the following parameter for determining whether an employee has “filed” a complaint: “[A] complaint is ‘filed’ when ‘a reasonable, objective person would have understood the employee’ to have ‘put the employer on notice that [the] employee is asserting statutory rights under the [act].’”  Employers should seriously consider all internal complaints and position themselves to defend all employment actions taken against employees.

Whistleblowers Receive Incentives and Strong Protection Under the Dodd-Frank Act

In the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Congress strongly encourages whistleblowing and provides strong protection from retaliation.  Congress provided for monetary awards for whistleblowers who provide original information to the SEC or CFTC.  The provisions also strengthen the whistleblower protection provided by the Sarbanes-Oxley Act and the False Claims Act and create additional whistleblower retaliation causes of action.  These provisions will significantly affect the financial services industry, by increasing disclosures to the SEC and CFTC and the potential for large damage awards by juries, enabling whistleblowers to obtain broader discovery, and increasing public exposure of fraudulent schemes (by exempting whistleblower retaliation claims from pre-dispute arbitration).

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