Big Changes to GA Restrictive Covenants Law on the Horizon

The 2010 session of the Georgia General Assembly recently passed HB 173, concerning restrictive covenants and contracts in restraint of trade.  The bill has been codified as O.C.G.A. § 13-8-2.1 and § 13-8-50 – 59.  Hugely important to Georgia employers and employees is O.C.G.A. § 13-8-54(b), which states that if a court finds that a particular contractual restraint is not reasonable, the court can modify, or “blue pencil,” the restraint provision.  Blue penciling is the judicial rewriting of an unenforceable provision to make the provision enforceable.  There has been a rule against blue-penciling non-compete covenants in employment agreements for over 35 years in Georgia.  The statutes are not in force yet – the proposal will be on the statewide ballot in November.  (Source: Daily Report; Atlanta Business Chronicle).

NLRB Without Authority to Issue Nearly 600 Decisions

The United States Supreme Court has held void nearly 600 decisions decided by the two- member, vacancy-riddled National Labor Relations Board (“NLRB”) from the last two years.  The issue before the Supreme Court was whether two members constituted a quorum, or whether three members were still required to issue a binding decision.  The Supreme Court reasoned that interpreting the law to require that the board’s powers be vested at all times in at least three members harmonizes and gives effect to the NLRA’s quorum, delegation and vacancy clauses.  The hundreds of disputes now called into question include disputes involving allegations of unfair labor practices, secret ballot elections relating to union representation and challenges to requiring workers to pay union dues.  (Source: Daily Report, June 23, 2010).

New Incentives by Employers to Promote Employee Weight Loss

 There has been an increase in the number of American employers offering incentives to their workforces to trim their waistlines.  With an ever-growing number of adults considered overweight, employers are feeling the results in terms of sicker employees, lost labor and health care costs.  The types of rewards vary by employers, but include money, vacation trips, reduction in health insurance premiums and other benefits.  Some employers reward employees just for having a health evaluation or enrolling in a class promoting better health.  There have been relatively few studies documenting the success of these programs in terms of long-term weight loss, but Americans can expect to see more of these incentives in the workplace.  (Source: Mike Stobbe, June 1, 2010 Atlanta Journal/Constitution).

Woman Allegedly Fired for Being too Attractive

 A thirty-three year old former business banking officer alleges that her former employer, Citibank, fired her for being too good looking.  Debrahlee Lorenzana claims that soon after she was employed, a pattern of discrimination began that included inappropriate and sexist comments about her clothing and appearance.  She was told to refrain from wearing certain items of clothing because they were “too distracting” for her male colleagues and supervisors to handle.  When Lorenzana pointed out that other female colleagues wore similar clothing, she was told that those other female colleagues were less attractive than she and therefore less distracting or not distracting at all.  She filed a gender discrimination lawsuit but the case was dismissed.  The case is now in arbitration.  (Source: Dareh Gregorian, June 3, 2010 N.Y. Post).

Man Behind the “Whizzinator” Going Back to Jail

The man behind the “Whizzinator” – a male prosthetic that helped men cheat on drug tests, has been sentenced to six months in federal prison. Gerald Wills of Los Angeles sold the device and a product called Number 1 that could be used by either men or women, along with a synthetic urine to fill the devices.

Wills and his partner advertised the devices on the Internet as a way for pilots, truck drivers and others whose safety is regulated by the U.S. Department of Transportation to beat drug tests.

The men pleaded guilty in 2008 to conspiracy to sell drug paraphernalia and conspiracy to defraud the United States, since the products were specifically marketed to beat federal drug tests. Willis had spent nearly six years in prison for a 1980s marijuana-trafficking conviction. (Source: Joe Mandak, (AP)).

Huge Class Certified in Wal-Mart Gender Discrimination Case

The Ninth Circuit Court of Appeals has certified a giant class action against Wal-Mart. Wal-Mart is alleged to have committed gender discrimination in violation of Title VII of the Civil Rights Act. The class would include “all women employed by Wal-Mart at any time after December 26, 1998.”

It is alleged that women employed in Wal-Mart stores (1) are paid less than men in comparable positions, despite having higher performance ratings and greater seniority; and (2) receive fewer, and wait longer for, promotions to in-store management positions than men.

Wal-Mart has argued the case is too big to defend. (Source: Employment Law 360).

New Federal Employment Poster

The U.S. Department of Labor’s Employment and Training Administration and Wage and Hour Division published a final rule implementing changes to the H-2A program effective March 15, 2010. One of the requirements in the rule is for employers who employ H-2A workers to display a new H-2A poster where employees can readily see it. The poster is also available in Spanish. It will be made available in other languages in coming months. The Immigration and Nationality Act (INA) allows for the employment of temporary non-immigrant workers in agriculture (H-2A WORKERS) only if the employment of U.S. workers would not be adversely impacted. (Source: Department of Labor; http://www.dol.gov/whd/posters/pdf/WHD1491Eng_H2A.pdf).

Criminal Background Checks Raising Litigation Concerns for Employers

Employers who run criminal background checks should take care to follow the law or face significant risk of litigation. A huge percentage of employers run such checks on potential employees for a variety of reasons, including to protect customers, employees and shareholders. And while seeking such protection is a good thing, it can cause serious trouble for an employer if the law is not followed.

Criminal background checks are considered “consumer reports” and are regulated by the Fair Credit Reporting Act (“FCRA”). There are many detailed rules concerning the procurement and use of the background checks. Violations of the FCRA could result in lawsuits against employers seeking actual damages, statutory damages, punitive damages and attorneys’ fees. Employers should, therefore, make sure they are following the law if they are using criminal background checks. (Source: Daily Report, February 23, 2010).

Supreme Court Holds Title VII Anti-Retaliation Protection Extends to Employee Responses to Employer’s Internal Investigation

The U.S. Supreme Court has held that Title VII’s anti-retaliation provision’s protection extends to an employee who speaks out about discrimination not on her own initiative, but in answering questions during an employer’s internal investigation. In Crawford v. Metro. Gov’t. of Nashville, the Court reversed a Sixth Circuit decision that held the “opposition clause” demanded “active, consistent” opposing activities, whereas the employee had not initiated any complaint prior to the investigation.

In response to questions from an official of the government employer during an internal investigation into rumors of sexual harassment by a school district employee, another employee (Crawford) reported that she had been sexually harassed by the individual, too. Crawford was then fired. She filed suit under Title VII, claiming she was being retaliated against in violation of Title VII, which makes it unlawful for an employer to discriminate against any employee who (1) has opposed any practice made an unlawful employment practice “by this subchapter,” (opposition clause) or (2) “has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter” (participation clause).

The Court found that Crawford’s statement was covered by the opposition clause, as an ostensibly disapproving account of the harasser’s behavior towards her. In sum, the Court found that a person can “oppose” by responding to someone’s questions just as surely as by provoking the discussion.
(Source: http://www.supremecourt.gov).

New Jersey Adopts Latest Medical Marijuana Law

New Jersey has become the most recent state to legalize medical marijuana by enacting the Compassionate Use Medical Marijuana Act. Governor John Corzine has signed the bill into law. As far as employers are concerned, the statute explicitly provides that “Nothing in this act shall be construed to require…an employer to accommodate the medical use of marijuana in any workplace.”

Employers in other states are sure to face significant issues in connection with such laws. For example, Michigan adopted The Michigan Medical Marihuana Act in November 2008. And while that law provides that employers are not required to accommodate the ingestion of marijuana in the workplace or any employee working under the influence of marijuana, what happens when employees use medical marijuana in the privacy of their own home and later come to work sober? If use of medical marijuana disrupts an employee’s job performance, the issue may be simpler, but an employee who tests positive on a drug test for medical marijuana may not have performance issues, complicating matters.

In Colorado, employers are stuck, as laws on the matter seem to conflict. Colorado voters passed a medical-marijuana law in 2000 that says employers do not have to accommodate medical marijuana use in the workplace. But a different Colorado law, enacted to protect cigarette smokers, prohibits firing employees for engaging in legal activities during nonworking hours. Some lawyers are advising clients to avoid litigation by trying to accommodate such employees without firing them. (Sources: Detroiter Online/Denver Business Journal/Employment Law 360).

11th Circuit Reverses Grant of Summary Judgment in Hostile Work Environment Case

The Eleventh Circuit Court of Appeals has reversed the grant of summary judgment to an Alabama employer in a hostile work environment case, finding there existed sufficient evidence to present a jury question of disparate treatment. Specifically, the court held that evidence that co-workers aimed insults at a protected group may give rise to the inference of an intent to discriminate on the basis of sex, even when those insults are not directed at the individual employee. Further, the court found a jury could infer the requisite intent to discriminate when that employee complained to her employer about the humiliating and degrading nature of the commentary about women as a group and the conduct persisted unabated. (Reeves v. C.H. Robinson Worldwide, Inc.).

The Court viewed the issue as being whether the conduct alleged to have pervaded the employer created a hostile work environment that exposed the employee to disadvantageous terms or conditions of employment to which members of the other sex were not exposed.

11th Circuit Reverses District Court Regarding ADA Pre-Offer Medical Inquiry

The Eleventh Circuit Court of Appeals has reversed an Alabama district court’s grant of summary judgment in favor of an Alabama employer, holding that a plaintiff’s allegation that an employer engaged in an improper medical inquiry, in violation of the Americans with Disabilities Act of 1990, should go forward, despite the fact that the plaintiff is not considered disabled.

The case concerns the “pre-offer” stage of an employment relationship. The court addressed whether a non-disabled individual can state a private cause of action for a prohibited medical inquiry in violation of 42 U.S.C. Section 12112(d). Noting that the issue had not yet been decided in the 11th Circuit, and relying on the statutory language, the plain meaning of the statutory word “applicant,” its placement and its purpose, the court joined its “sister circuits who are unanimous in recognizing a private cause of action irrespective of the plaintiff’s disability status under Section 12112(d)(2).” In addition, the court noted that a contrary reading would go against clear evidence of contrary legislative intent. The court noted that there is, however, a burden to show some damage, in this case, the fact that the plaintiff was not permanently hired. (Harrison v. Benchmark Electronics Huntsville, Inc.; Employment Law 360)

Employers Face Likely Struggle to Obtain Employee Facebook Data

Facebook Deputy General Counsel Mark Howitson has stated unsurprisingly that almost daily, law enforcement officials and civil litigators request information from a user’s Facebook account. The failure of the law to keep up with technology and the absence of any precedent concerning Facebook’s policies, however, leaves much ambiguity concerning what Facebook’s legal responsibilities are to protect user privacy.

There are implications for employers. For example, in 2009 Facebook was successful in refusing the State of Virginia’s demand to supply the contents of a user’s account to settle a workers’ compensation dispute. The Virginia Workers Compensation Commission had issued a daily fine against Facebook for refusing to comply with a subpoena from an airline/employer concerning an ex-flight attendant/employee.

The Electronic Communications Privacy Act, which currently determines Facebook’s legal policies, was passed in 1986, obviously long before “the advent of online social networking, let alone the smartphones through which many users access Facebook.” Some think a federal case is necessary to clear up gray areas.

Facebook has approximately 350 million users. (Source: Amy Miller, Facebook GC Tells Lawyers He’s Looking for a Fight, www.law.com, Feb. 2, 2010).

Solicitor General to Weigh in on Cat’s Paw Case

The U.S. Supreme Court has requested the Solicitor General weigh in concerning a discrimination case brought pursuant to the Uniformed Services Employment and Reemployment Rights Act (USERRA). The case involves the “cat’s paw” theory of employment discrimination.

The “cat’s paw” theory provides that where an employee without formal authority to materially alter the terms and conditions of a plaintiff’s employment nonetheless uses his influence over an employee who does have such power to harm a plaintiff for racial reasons, the actions of the employee without formal authority are imputed to the employer and the employer is in violation of Title VII.

The employee in the case, a member of the Army reserve, was fired from his position as an angiography technologist. A jury sided with the employee after he argued that the discharge was in violation of USERRA because the reasons given were mere pretext for discrimination based on his military association. The employee invoked the “cat’s paw” theory of liability, claiming that the decisionmaker based the termination decision on false information from another supervisor who was biased against the employee’s military status.

On appeal to the Seventh Circuit Court of Appeals, the employer argued that the lower court gave an improper instruction regarding the “cat’s paw” theory and improperly admitted evidence of animus by non-decisionmakers. The Seventh Circuit agreed with the employer’s position and held there was insufficient evidence to support a verdict under the cat’s paw theory. More importantly, the Seventh Circuit, noting a lack of guidance in existing case law concerning the “division of labor between judge and jury,” found that prior to giving an instruction or admitting evidence of non-decisionmaker animus, a trial court should determine whether a reasonable jury could find “singular influence” on the evidence to be submitted. The case is Staub v. Proctor Hospital. (Source: Employment Law 360).

Proposed Swine Flu Bill Introduced

Concerns about the spread of the H1N1 virus have prompted several Democratic members of the U.S. House of Representatives to introduce emergency legislation that would guarantee employees who are sent home or directed to stay home by their employer five paid sick days.

The stated purpose of the “Emergency Influenza Containment Act” is to ensure that American workers are able to follow, without financial harm, the recommendations of their employer and public health authorities to stay home when they have symptoms of a contagious disease that may put co-workers, customers, or the public at risk. The bill applies to full time and part time employees in businesses with 15 or more workers.

According to figures compiled by the Bureau of Labor Statistics, 72% of part-time workers, 37% of non-union workers and 18% of union workers are not allowed any paid sick days. (Source: Employment Law 360; www.allgov.com).

Company Fined $1.6 Million by DOL

Tempel Grain Elevators, LLP has been fined more than $1.6 million after a teenage worker died at the company’s Haswell, Colorado grain storage operation on May 29, 2009. The teenager suffocated after being engulfed by grain in a bin. The DOL found the company also exposed other teenage workers to hazards.

After an investigation, OSHA proposed $1,592,500 in fines for 22 alleged willful and 13 alleged serious citations. The Wage and Hour Division separately uncovered 77 child labor violations involving fifteen minor employees, including employing underage workers, allowing teenage employees to work hours prohibited by the Fair Labor Standards Act (“FLSA”), and allowing them to work in jobs prohibited by occupation standards as well as by the department’s hazardous occupations orders. (Source: 11/23/09 OSHA News Release; www.dol.gov).

Supreme Court to Address Legality of Two-Member NLRB Decisions

The Supreme Court has granted certiorari to address the legality of two-member National Labor Relations Board decisions. The Supreme Court will consider whether the NLRB is authorized to issue decisions while three of its five seats remain vacant. The NLRB has operated with only two members for a little over two years, since the appointments of two Board members expired in December of 2007.

Rather than cease functioning, the two remaining members have continued to issue decisions in matters on which they can agree. Nearly 500 decisions have been issued and dozens of those have been appealed to the federal courts of appeals on the two-member question, and decisions have been split.

In July 2009, President Obama nominated three additional members to the NLRB. They are currently awaiting confirmation by the Senate. (Source: NLRB, Employment Law 360).

EEOC Sues JPMorgan Chase for Sex Discrimination and Retaliation

The U.S. Equal Employment Opportunity Commission (“EEOC”) has filed suit against JP Morgan Chase (“JP Morgan”), alleging JP Morgan violated federal law by subjecting female employees to wage discrimination, a sexually hostile environment and retaliation. The suit was filed in the U.S. District Court for the Southern District of Ohio.

The suit alleges that a female employee was fired for complaining about terms and conditions of employment which negatively impacted female employees’ compensation, including their ability to earn commissions and bonuses.

Such conduct violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on national origin, race, color, sex or religion and protects employees from retaliation for complaining about or opposing such discrimination.

The EEOC filed sit after first attempting to reach a voluntary settlement. The Case Number is 1:09-cv-00711. (Source: Employment Law 360; EEOC Press Release).

Firefighters’ Case Going to Supreme Court

The United States Supreme Court will hear a case from the Seventh Circuit Court of Appeals originally brought by approximately 6,000 black firefighters. In 1995, the City of Chicago administered a new written test to 26,000 applicants for jobs as firefighters. After grading the tests, the City placed the applicants in three categories, based on their scores – “well qualified,” “qualified,” and “not qualified.” The plaintiffs were placed in the “qualified” category.

The lawsuit, now in its second decade, charges that the test had a disparate impact on the black applicants – that is, disproportionately classified them as “qualified” rather than “well qualified,” and was not a valid test of aptitude for firefighting. If this is true, the basing of hiring decisions on the test violated Title VII of the Civil Rights Act of 1964.

The Supreme Court will decide whether the lawsuit is untimely. The plaintiffs were required, as a prerequisite to being allowed to sue, to file a charge with the EEOC within 300 days after their claim accrued. They filed their charge 420 days after the date on which notice of the test results had been sent. But it was within 300 days of the City’s beginning to hire applicants from the “well qualified” list.

The district court ruled that the lawsuit was timely because each time the City hired applicants in the “well qualified” group it committed a new Title VII violation. The Seventh Circuit reversed, holding that the discrimination was complete when the tests were scored and the applicants learned the results. The case is Lewis v. City of Chicago. (Source: Employment Law 360).

Atlanta Ordinance Affecting Adult Entertainers Unconstitutional

The Supreme Court of Georgia has held that a City of Atlanta Ordinance “directly impairs the operation” of Georgia statutes by prohibiting persons aged 18-21 from entering the premises of licensed establishments where they are legally entitled to hold jobs that involve dispensing, serving, selling or handling alcohol. Five adult entertainers working as performers at a business to which the ordinance applied brought suit, challenging the constitutionality of the ordinance and arguing that it is a local law that conflicts with and is preempted by Georgia general law.

The ordinance provided that no person under 21 “shall enter, remain in or loiter on any licensed premises…licensed for the sale of alcoholic beverages by the drink at retail, or sale of alcoholic beverages for consumption on the premises…”

The Georgia Supreme Court, reading two Georgia state statutes, found that it was clear that the “Legislature’s intent is to allow persons who are over the age of 18 but not yet 21 years old to dispense, serve, sell or handle alcoholic beverages as part of their employment,” and that “[t]o do so, persons within that age group must necessarily be permitted to enter licensed establishments where such beverages are dispenses, served, sold or handled. (Source: Atlanta Journal/Constitution).

Employers Seeking Advice Due to Swine Flu

Around this time of year, many employers offer flu shots for their employees at reduced or no cost. Concerns about the H1N1 virus, or swine flu, however, is causing many employers to reconsider their current corporate policies in connection with vaccinations. For example, employers are asking whether a seasonal or swine flu vaccination can be mandated for employment; whether sick employees should be segregated from healthy employees; whether a doctor’s note should be required before a sick employee returns to work; and whether temporary adjustments to sick leave policies should be made to encourage sick workers to stay home.

The issues are hugely important. To avoid costly litigation, employers must be mindful of their needs while considering their employees’ health privacy concerns. The Americans with Disabilities Act (“ADA”), for example, forbids employers in some circumstances from firing employees due to their illness or from discriminating against employees who were ill but have recovered. An employer is also required to make a reasonable accommodation to the known disability of a qualified applicant or employee if it would not impose an “undue hardship” on the operation of the employer’s business.

In addition to legal concerns, employers face uncertainty in connection with the creation of swine flu policies – it is still unclear as to how available H1N1 vaccinations will be.

A recent study found that just a mild pandemic affecting 1.4 million people could cost the global economy $330 billion. (Source: Atlanta Journal/Constitution).

E-Verify Deadline Approaching

Starting Septembe 8, 2009 companies with federal contracts must enroll in E-Verify, an Internet-based system run by the Department of Homeland Security, to check the immigration status of both current workers and prospective hires. Implementation of the E-Verify program has been repeatedly delayed. There are several exclusions and exemptions connected to the E-Verify rule, including the fact that it applies to businesses providing more than $100,000 in goods or services through a federal contract. (Source: Atlanta Business Chronicle).