Friday, January 27, 2012

Does the Supreme Court's GPS/Search Decision Mean Anything for Employers?

Some things jumped out at me right away from me Supreme Court's decision in United States v. Jones.  The first is that the press basically got the case wrong-Jones does not stand for the proposition that a warrant is required before the police can put a GPS device in your car and monitor you remotely.  In fact, the Court's only holding in the case (that is, something voted by a majority of the Justices) was a simpler result, namely that placing a GPS tracking device on a vehicle is a "search" within the meaning of the Fourth Amendment.

That doesn't mean that a warrant is required, nor does it even mean that probable cause is required. But it's clear from the opinion that four, and perhaps five of the justices, would hold that long-term monitoring of a vehicle (how long would probably be dependent on the facts of the particular case) violates a reasonable expectation of privacy, and likely would require a warrant.

On the other hand, short-term monitoring of the GPS device, while it is a search, might not require a warrant. In fact, the warrant requirement for a short term monitoring revolves around whether the government has to get a warrant to install the device in the first place. If the installation requires a warrant, then the government's right to monitor the device without a warrant becomes moot.

What does the Court's jumbled opinion mean for employers that engage in GPS or other remote monitoring of their vehicles?  Where monitoring is a general aspect of the job, e.g., with delivery vehicles that are GPS equipped, or workers who travel with company provided, and the GPS enabled, smartphones, things shouldn't change. There is no reasonable expectation of privacy (which is the initial standard by which most state laws assess whether an employer goes too far in watching its workforce) in a situation where an employee using a company provided vehicle or phone is aware of the GPS tracking. But in situations where employers surreptitiously use tracking devices, the decision hints at a red flag.

For example, some employers use private investigators to surreptitiously observe employees who are out on workers compensation leave, to see if they are actually as injured as they claim. These observations frequently involve the placement of a tracking device on an absent employee's vehicle so that the investigator doesn't have to maintain 24-hour coverage to see the employee doing something inconsistent with his workers compensation injury status. Depending on the circumstances, both the placement and the monitoring of such device would likely intrude on employee's reasonable expectation of privacy, as delineated in Jones.

Moreover, the decision has been widely misreported in the press, and raises the awareness and expectation of employees with respect to their right to privacy. Under these circumstances, an employer should look carefully at state law before it or its agents decide to make use of GPS assisted oversight without an employee's knowledge.

UPDATE:  Here's a brief discussion from LawBlog on the application to private citizens.

Monday, January 23, 2012

Obama's Union Busting Chief of Staff

I love this.  So where's the anger and outrage at the fact that the President's new Chief of Staff engaged in "“[e]very single ruthless tactic from the playbook of union-busting" when he was the NYU COO and executive in charge of defeating the unionization efforts of the graduate students?

Not that I think Mr. Lew did anything wrong at NYU.  I just enjoy pointing out the double standard--keep it in mind when the next Republican administration appoints some people accused of being worker unfriendly.

Friday, January 20, 2012

I Guess He's Out of the Running for Employee of the Month

Although it does indicate a sort of Jack Sparrow persona to order dinner for yourself and your date while your ship is actually sinking.

I keep waiting for some Carnival Cruise spokesman (which owns the Costa Concordia) to appear and try to start spinning this mess, but perhaps the company is better off saying nothing. The revelations from the accident are far outpacing the ability of average corporate communications types to respond.

Thursday, January 19, 2012

2M Vacation Hours-Another Reason European Economies Are Unsustainable.

As you might be aware, one of the ways that the French decided to deal with unemployment, and maintain a certain je ne sais quoi type of lifestyle, was to limit their work week to 35 hours. This was a universal limitation, but it was also written with a number of loopholes so that business can actually keep functioning. But for employees covered by the limitation, there are all kinds of disincentives that kick in for the company if the employees end up working more than a 35 hour week. One of those disincentives is that the employees receive paid time off if they work longer hours. So for every hour over 35 employees work in a week, they get at least an hour of paid time off.

Now, here in the colonies, we can fire people if, after we tell them not to, they work sufficiently long hours that they trigger overtime obligations.  We would not have a problem with people voluntarily working more than 35 hours to get the increased vacation benefit.  Not so the French. How bad can it get? Well, at one French hospital alone, the employees have accumulated more than 2 million hours in paid vacation time.  That's in addition to the annual five weeks off that they all receive as a matter of course.

That's a lot of paid vacation. In fact, it's 5475 years of vacation time. The hospital has approximately 450 people working for it, according to its website. So each one of them, on average, is entitled to somewhat more than 10 years of paid vacation. Let's hope the hospital staff doesn't decide to take it all at once.  Although that would be an appropriate and fitting penalty for the promoters of this legislation demonstrating such total ignorance of human nature.

Wednesday, January 18, 2012

Paterno's Failure

And so now we know that Penn State coach Joe Paterno, after getting a credible report of horrific behavior from one of his assistants, simply kicked it up the management food chain and then stopped thinking about it.  He never acted like someone who thought, really thought, about what would happen if the allegations were true, or if his legal superiors (but who were not the keepers of his legacy) treated this report the way he did.

I still don't get it.  You can't be the head coach of a program that prides itself on above board, upright operation, and turn something like this over to bureaucrats without a second thought.  By the time this event happened, Penn State football was a brand, and so was Paterno.  He abandoned both.

This is a lesson that needs to be reinforced to senior management everywhere--just being legal isn't enough sometimes.  Sometimes you have to take responsibility for the organization's character and well being.  Amazingly, no one thought about what the revelation that a potential pedophile operated within the halls of the Penn State athletic department would mean, to the kids affected, to the organization, or to various individuals on the periphery.  This was a monumental failure of judgement, character, ethics, fortitude, and just about every other quality we believe is essential to running an effective business.  A failure at all levels, too.

UPDATE:  And so the whole miserable house of cards that was the Paterno empire comes crashing down.  Again, what is evident is that the money, prestige, and political influence of big time college athletics simply overwhelmed the values and judgment of the people running the school.  This affair is another lesson that power corrupts, and allowing one individual to amass so much influence is a recipe for disaster.  On occasion I deal with clients that have the misfortune to have created people like Paterno in his last few years.  Invariably, I counsel them to jettison the employee at first opportunity.  Otherwise, the entire organization becomes infected with the moral decay emanating from the power center.
I'll hope this lesson is taken seriously in organizations across the country, but I doubt it will be more than a year or two before we read of some similar ethical failure.

Monday, January 16, 2012

Nothing to Do with Employment Law

Unless you work in a pizzeria and/or love leftover pizza. Reheating pizza has always been a total disaster for me--I usually just eat the stuff cold.  Then I saw this on Sobering Thoughts and thought, "Genius."

Bon appetit.

A Hard FLSA Lesson

It's usually amusing to see what happens when people start running up against the more non-sensical aspects of FLSA enforcement, but this is a sad story.  It's sloppily reported by the Chicago Tribune, especially given the headline, but reflects something that employers with hourly employees must be aware of:  there is no such thing as volunteer work for a non-exempt (hourly) employee.  If you are working for the benefit of your employer, you have to be paid for it, even if the work is being done voluntarily during a non-paid break period.

The trouble in this particular case, in which a woman was fired for trying to catch up with her work during an off the clock break, is that if the employer allowed this to happen, it would be liable for two or three times her wages for the period worked, regardless of whether the employee wanted to be paid.  I think termination on the first offense is a little harsh (as did the state unemployment agency), but the employer was within its rights given that this situation has big implications for the workforce.

These situations are relatively rare, but the lesson should be reinforced--employees who work for you without recording their time, even voluntarily, are still adding compensable hours to their weekly totals, and must be paid for that time.  Intent is not an issue here, but knowledge is.  The employer must be aware of when its employees start and stop work in order to avoid double or triple back wage penalties under the wage and hour laws.  This is a particular issue for employers that pay non-exempt employees a "salary"--if these folks are adding hours to their day by coming in early, staying late, or working during non-compensated time, then you have to increase their paychecks, including overtime, or risk an expensive visit from the DOL.

Friday, January 13, 2012

The Latest Social Media Issue for Employers: Who Owns a Twitter Account?

There's a particularly interesting case percolating in federal court in the Northern District of California, where an employer is suing a former employee over the content and value of a Twitter account.

The company, going by the unlikely moniker of "Phonedog", is in the business of reviewing wireless and mobile electronic products and services and provides users with resources needed to shop for mobile carriers. The former employee worked as a product reviewer and video blogger and used a Twitter account with the Phonedog moniker, via which he transmitted his reviews and other content. The account was accessed through a password, and disseminated information to promote Phonedog services. This particular former employee was apparently adept at his job and his Twitter account had approximately 17,000 followers at the time he resigned. Following his resignation, the former employee switched the account handle to his own name, and begin using the account to promote another company, TechnoBuffalo.

I can only hope that Phonedog impleads TechnoBuffalo into the case, just for the name.

Phonedog sued the former employee for theft of trade secrets and interference with business relationships. In a recent decision, the court allowed the case to go forward, but what's particularly noteworthy are the issues that the court will be resolving through the course of the litigation. Issues such as: who owns a Twitter account? The short answer is that Twitter does, but is there a property interest when a company licenses an account from Twitter that is then used exclusively by an employee in the pursuit of his duties? And who actually owns the Twitter followers? Or, more appropriately, who has an economic right to continued access to those Twitter followers? The company, of course, argues that the list of followers is akin to a business customer list, but since these people aren't buying anything from the company (Phonedog derives its income from the advertising that it sells based on the number of people that use its site for mobile carrier reviews), does the customer analogy apply? And finally, what's the appropriate measure of damages for loss of such a Twitter account? Is it the loss of advertising, or is it possible to fix a definitive monetary number based on each follower of the account over a set period of time? How far into the future do you have to project that these followers would stay with the account, and can you project increases with enough particularly and reliability?

I'll provide updates on the litigation as I get them.  As the definition of economic activity expands through social media, this case may be a bellwether.  At the very least, it raises some compelling legal questions.

And here's another SM decision involving LinkedIn--similar issues.

Thursday, January 12, 2012

The Supreme Court Formally Adopts a Ministerial Exception in Employment Discrimination Cases

In a case that was perhaps surprising for its unanimity, if not for its result, the Supreme Court announced that religious organizations are not subject to federal discrimination laws with respect to their selection and management of ministers, and perhaps others.  The case at issue involves a claim of ADA retaliation by a Lutheran minister who also served as a teacher in the church school.  The Court unanimously decided that allowing a discrimination claim to go forward under the circumstances would constitute an unlawful interference in the religious and theological workings of the congregation, something strictly prohibited by the First Amendment.

The case has limited application with respect to churches and their ministers and other similar employee positions. From my perspective, what was interesting about this case was the bizarre argument propounded by the Obama administration's solicitor general that religious organizations deserve no more special protection from state interference under the First Amendment than does any other group of people, such as a social club. "This remarkable position," as Justice Roberts put it (he was being polite), does not square with the express language of the First Amendment.

Where this decision might have some interesting offspring is in its application to other groups with systematic and strongly held beliefs that the EEOC has considered "religious" for discrimination purposes. If those groups have employees, the organizations might well be insulated from employment discrimination law.  That would be pretty ironic.

Wednesday, January 11, 2012

New BCS Playoff?

May it come to pass.  Or run.  Or option.  Just get it done.

Proving Discrimination: Who Is a Proper Comparator to the Plaintiff?

The Seventh Circuit recently published a highly useful opinion providing important guidance on how to prove an employment discrimination case by comparing an employer's adverse action against a plaintiff with how the employer treated other employees in the workforce.

A brief bit of pedanticism: one of the easiest ways to prove a discrimination case is to show that the employer took more severe action against the plaintiff that it did against other employees. The key to the showing is to demonstrate that the comparator employees are "similarly situated" to the plaintiff employee. As you might imagine, this is a highly fact-specific type of inquiry, and courts have struggled to fashion an adequate model of what constitutes a similarly situated employee for many years.

In this case, the U.S. Postal Service (which, as an aside, generates a vastly disproportionate amount of employment discrimination claims involving the federal government) terminated a 32-year, black female employee after it discovered that she told her psychiatrist she had thoughts about killing her supervisor. The Postal Service refused to put her back in her position, although these alleged threats had dissipated by the time her doctors cleared her to return to work. When it ultimately fired her, the Postal Service told her that her expressed threats violated the Postal Service's ban on "violent and/or threatening behavior". According to the Court, the rule in question indicated that there was "no tolerance of violence or threats of violence by anyone at any level" in the Postal Service. The employee sued for race and gender discrimination.

In her lawsuit, the plaintiff employee (who was ultimately returned to work following an arbitration of her discharge) identified two white male employees involved in an incident where they held a knife to the throat of a black male coworker (or brandished a knife, as the Postal Service characterized it) while pinning down his legs. The two employees were suspended without pay for 14 days, later reduced to seven days after the union objected to the severity of the punishment. Although the trial court determined that these two white employees could not serve as comparators because they reported to a different supervisor and held different jobs than the plaintiff, the Seventh Circuit determined that in fact these were proper comparators, and that the different discipline they received justified allowing the case to go forward to a jury.

The court pointed to the fact that even though the two white males had a different supervisor, the person who made the decision to suspend them was the same person who made the decision to terminate the plaintiff. This is a key point for the court--for purposes of determining whether someone is similarly situated, the question is not who the supervisor was, but who the decision maker was. In other words, the plaintiff and the comparators generally must have the same decision-maker for the parties to be considered similarly situated.

Similarly, the fact that the two white males had different job titles and duties than the plaintiff was not significant in this case. As the court noted, the issue is not whether the employer classified the comparators in the same way, but whether the employer subjected them to the same employment policies. In a situation where the comparators worked at the same job site as the plaintiff, were subject to the same standards of conduct, violated the same rule, and were disciplined by the same supervisor, the fact that they held different titles and duties becomes irrelevant.

The court noted that this "same standards" factor will depend on the specific circumstances of the case. Where a case involves quality of job performance, a comparator's job title and duties become much more important. But where the similarly situated employee violated a general workplace rule that applies to everyone, the issue of job title and duties becomes far less important. Perhaps under circumstances where the plaintiff was a relatively low ranking employee, and the similarly situated employee was a senior manager, application of the same policy might be significantly different. But in this case, there was no evidence that in fashioning discipline, the Postal Service took into account the roles or duties of the the plaintiff or the individuals involved in the knife incident.

Finally, the court had little difficulty in noting that the expression of a threat against the supervisor in the context of a psychological evaluation was certainly the equivalent of--if not less severe than--a situation involving the brandishing of a knife against a coworker. Accordingly, the court determined that the plaintiff raised a material issue of fact with respect to her treatment in comparison to other employees who were not in the same protected category. The Seventh Circuit reversed the lower court's summary judgment, and sent the case back for trial.

Lessons? This case is unusual in that the decision-maker involved had clear knowledge of the knife brandishing incident but for some reason elected not to apply the same standard to plaintiff. Having a single point of review for disciplinary actions is one way of making those actions consistent. Another is to identify the factors used in making disciplinary decisions, and record them somewhere so that it's possible to make at least an argument that there was some differentiation between employees. Finally, this decision is quite readable and raises excellent points for practitioners and human resource specialists alike. I highly recommend reviewing it.

Tuesday, January 10, 2012

NLRB Limits the Scope of Arbitration Agreements

In what is being perceived as a part of a continuing attack on the ability of employers to limit their litigation exposure through employment agreements requiring arbitration (and also part of a continuing effort to bolster the business of labor unions and trial lawyers), the NLRB has now determined that employers may not require their employees to sign arbitration agreements limiting class actions or other collective legal claims. The decision, if it goes unchallenged on appeal, will have significant implications for employers that use arbitration agreements as a means of limiting their class-action exposure.

The Board's decision appears to fly in the face of a recent Supreme Court case which held that state courts could not prohibit class-action waivers in arbitration agreements. That case--AT&T Mobility--determined that limiting the scope of an agreement in a consumer contract frustrated the Federal Arbitration Act's purpose of encouraging arbitration of disputes.

The agreement in question here required all disputes and claims relating to employment issues to be submitted to final and binding arbitration, and the arbitrator was limited to hearing only individual claims. The Board determined that the effect of the agreement was to limit employees, as a condition of employment, from filing collective litigation of claims in any form, arbitral or judicial.

The Board determined that the agreement's provision violated the National Labor Relations Act's defense of protected concerted activity by employees; so-called Section 7 rights. Section 7 rights are particularly broad, and apply regardless of whether the employer is unionized. The Board has greatly expanded the scope of Section 7 rights recently, particularly in the arena of social media. Accordingly, all employers that make use arbitration agreements need to pay careful attention to this holding.

In an interesting rhetorical twist, the Board noted that employees represented by a union can waive their collective action rights under the terms of a collective-bargaining agreement, but that individual employees may not. The Board also noted that AT&T Mobility applied to consumer contracts; this was a distinction the Board found important because the Board's decision affected far fewer people in each instance than a typical consumer contract.

This distinction seems to me to be a false one-the scope of the Board's efforts arguably apply to more than 120 million people, far more than an average consumer contract. Moreover, there is Supreme Court precedent indicating that there is no particular difference between arbitration agreements signed by individual employees and those signed by union representatives.

I should also note here that the Board's decision does not foreclose the use of arbitration agreements per se. As long as an employer leaves open a way for its employees to engage in class action litigation, the employer may require individual claims to be arbitrated. Of course, this option keeps in place the ability of employees and their attorneys to engage in hugely expensive collective actions, about which the employer can do nothing.

The employer in this case has the ability to appeal this decision, and I suspect it will do so. In the meantime, one possible way of limiting collective action exposure would be to write a detailed arbitration agreement limiting discovery and litigation processes, which are the most significant expenses in class action litigation. Whether that would survive Board review is an open question.  Finally, employers should note that managerial employees are not covered by the Board's decision, nor are independent contractors, an important exception for many employers.