Monthly Archives: July 2013

July 29, 2013

The Battle Over Background Checks Continues — State AGs Accuse EEOC of “Gross Federal Overreach”

Is it discriminatory if an employer does not hire anyone with a particular criminal conviction, regardless of that person’s race, gender, religion, or other protected characteristic? According to the EEOC’s April 2012 Enforcement Guidance, it might be. But in a July 24, 2013 letter sent to EEOC Commissioner Jacqueline Berrien and the four EEOC Board Members, nine state Attorneys’ General (AGs) disagree. The AGs chastise the EEOC for filing recent lawsuits against BMW Manufacturing Co., LLC and Dolgencorp (Dollar General), in which the EEOC alleges that these employers violated Title VII’s disparate impact prohibition by using a bright-line screening policy that rejected all individuals with past convictions in certain categories of crimes, such as murder, assault, reckless driving and possession of drug paraphernalia.

The letter then criticizes the EEOC’s April 2012 Enforcement Guidance on Arrest and Conviction Records, stating that the EEOC’s policy guidance incorrectly applies the law and constitutes an unlawful expansion of Title VII. The AGs argue that if Congress wishes to protect former criminals from employment discrimination, it can amend the law, but it is not the EEOC’s role to expand the protections of Title VII under the guise of preventing racial discrimination.

The Republican state AGs from Colorado, Montana, Utah, Kansas, Nebraska, West Virginia, Alabama, South Carolina and Georgia joined in this missive to say “enough is enough” on the EEOC’s background check lawsuits. Citing the burden on businesses to undertake more individualized assessments of an applicant’s criminal history, the AGs urge the EEOC to rescind its April 2012 Enforcement Guidance and dismiss the lawsuits against Dollar General and BMW. Not likely, but it may get the attention of federal lawmakers who may try to rein in the EEOC’s position on this issue.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 22, 2013

Myriad of Social Media Privacy Laws Create Havoc for Multi-State Employers

By Elizabeth Dunning

Does your company request that your employees and applicants provide user names and passwords to their personal social media accounts? Do you require applicants to log onto their online accounts in your presence so that you can view their content? Perhaps you ask employees to “friend” their supervisors. If you haven’t followed new developments in state employment laws, you may not realize that such activities are unlawful in some states. In just two years, eleven states have passed social media privacy laws that prevent employers from accessing employees’ and applicants’ personal online accounts. Each state law differs in certain respects, making it difficult for multi-state employers to adopt a uniform and consistent social media policy. To help sort things out, we highlight here the primary differences in the state social media privacy laws.

States with Workplace Social Media or Internet Privacy Laws

The eleven states that have enacted social media or internet privacy laws affecting employers to-date are: Arkansas, California, Colorado, Illinois, Maryland, Michigan, Nevada, New Mexico, Oregon, Utah and Washington. All but one of these states protect the access information for both current and prospective employees, with New Mexico only protecting the log-in information of applicants.

Differences in State Social Media Laws

Generally, all of these states prohibit an employer from requesting or requiring an employee or applicant to disclose his or her user name, password or other means of accessing his or her personal social media accounts. Many of these states also make it unlawful to discipline, discharge, discriminate against or penalize an employee, or fail to hire an applicant who refuses to disclose his or her access information to personal social media accounts. However, that’s where the uniformity in the laws generally ends. The following chart highlights numerous key differences between the state laws.

Legal Provision	States Recognizing Provision
Prohibits employers from requesting that employee add employer representative or another employee to his or her list of contacts (e.g., “friend”)	Arkansas, Colorado, Oregon and Washington
Prohibits employers from requesting employee to access his or her personal social media account in the presence of the employer (“shoulder surfing”)	California, Michigan, Oregon and Washington
Prohibits employers from requesting employee to change the privacy settings on his or her personal social media accounts	Arkansas, Colorado and Washington
Specifically permits employers to view and access social media accounts that are publicly available	Arkansas, Illinois, Michigan, New Mexico, Oregon and Utah
Exception when access required to comply with laws or regulations of self-regulatory organizations	Arkansas, Nevada, Oregon and Washington
Exception for investigations of employee violation of law or employee misconduct	Arkansas, California, Michigan, Oregon, Utah and Washington (Colorado and Maryland limit this exception to investigation of securities or financial law compliance)
Exception for investigation of unauthorized downloading of employer’s proprietary, confidential or financial data	Colorado, Maryland, Michigan, Utah and Washington
Inadvertent acquisition of personal log-in information while monitoring employer systems not a violation but employer not permitted to use the log-in information to access personal social media accounts	Arkansas, Oregon and Washington

As you can see, the differences in the laws exceed the similarities, making it difficult for an employer operating in more than one covered state to comply with all applicable provisions. Even the definition of covered social media accounts varies by state, creating even more inconsistencies.

Would a Federal Law Help?

With eleven laws in place and almost 20 additional states considering social media privacy bills, the issue seems ripe for a federal bill that would bring some uniformity to the protections offered to employees and applicants. In February 2013, the Social Networking Online Protection Act, which offers such workplace protections, was introduced into the U.S. House of Representatives. Unfortunately, it has languished in committee and is not expected to pass. In addition, a federal law on the issue will likely only simplify the web of state laws if it specifically preempts state law. Without federal preemption, we might face two sources of law on the issue, federal and state, which might muddy the waters even more. In any event, it does not appear that a federal law will be enacted before additional states enact their own laws, leaving employers to struggle with the variances in state law.

Best Practices for Complying with Social Media Privacy Laws

With the vast amount of information available on social media and the increased use of social networking platforms for business purposes, it is likely that most employers will at some point need to access or review content on an employee’s or applicant’s social media account. Perhaps it will be for an investigation of an employee who downloaded proprietary information or perhaps it will be to confirm derogatory statements about the company made by an employee. Whatever the reason, the first step is to recognize that these laws exist and you will need to review which, if any, apply to your company and/or the employee involved. Remember that you are generally free to access publicly available social media content. However, if one of these state laws applies, consult with legal counsel before accessing (or requesting access to) any personal social media accounts to determine what restrictions and exceptions are applicable to your particular circumstances.

Establish a social media policy specifying that employees are not permitted to disclose or post proprietary or confidential company information on their personal social media accounts. Make a clear delineation between company/business-related social media accounts where you control who speaks on behalf of your organization, and personal accounts where employees do not represent the views of the company. Be careful that your social media policy does not run afoul of the National Labor Relations Act by interfering with employees’ right to discuss their wages and working conditions in a concerted manner. Communicate your policy to your employees through normal channels, such as your employee handbook, online policy/intranet, etc.

Train your supervisors, managers and human resources staff on these laws. Sometimes supervisors or HR folks think it is acceptable to ask an employee to “friend” them online, or to ask for their log-in information to view pictures or other benign posts. Despite good intentions, company representatives could get you into legal trouble so advise them of these laws and your restrictions on requesting access to personal social media accounts.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 8, 2013

Nevada Restricts Employer Access to Social Media Accounts

By Dora Lane

Employers who like to research an applicant’s social media sites will be limited to reviewing only publicly available information under a new law passed in Nevada. Effective October 1, 2013, Nevada employers may not require or request access to an employee’s or applicant’s personal social media account. Assembly Bill 181, recently signed into law by Governor Brian Sandoval, prohibits employers from conditioning employment on the disclosure of an individual’s user name, password or other information needed to access the individual’s personal electronic services and accounts. It also prohibits employers from taking, or threatening to take, any adverse action against an employee or applicant who refuses, declines or fails to disclose their social media access information.

Unlawful for Employers to Demand Access to Personal Social Media Accounts

Under this new law, it is unlawful for an employer in Nevada to directly or indirectly seek the user name, password or other access information to a personal social media account from any employee or prospective employee. This prohibition means you cannot require, request, suggest or otherwise cause the individual to disclose the information necessary to access their personal account.

A social media account is defined to mean “any electronic service or account or electronic content, including, without limitation, videos, photographs, blogs, video blogs, podcasts, instant and text messages, electronic mail programs or services, online services or Internet website profiles.”

Interestingly, the law does not mention access to personal social media accounts that are available for public viewing without a user name or password. Accordingly, it appears that employers are not prohibited from accessing and viewing any publicly available social media accounts (though it may be risky for employers to do so for other reasons).

Discrimination and Adverse Actions Forbidden

This law also makes it unlawful for a Nevada employer to discharge, discipline, discriminate against in any manner, deny employment to, or deny promotion to any employee or prospective employee who refuses, declines or fails to disclose his or her user name, password or other information needed to access his or her personal social media account. Threats to take any such action are unlawful as well.

Exceptions for Access to Employer Systems and for Legal Compliance

The law allows employers to require an employee to disclose the user name, password or any other information to an account or service, other than a personal social media account, for the purpose of accessing the employer’s own internal computer or information system. In addition, the law does not prevent an employer from complying with any state or federal law or with any rule of a self-regulatory organization.

No Specified Enforcement Mechanism

The social media access restriction contained in Assembly Bill 181 does not specify any method by which employee or applicant allegedly harmed by a violation of the law can pursue relief. In addition, no remedies are specified in the bill. Because the bill amends Chapter 613 of the Nevada Revised Statutes on Employment Practices, a violation of the social media password protection provision conceivably could result in remedies available under that Chapter, but that conclusion is by no means clear.

Nevada Joins Trend, Becoming the Eleventh State to Restrict Employer Access to Social Media

Ten other states prohibit or restrict an employer’s access to social media accounts: Arkansas, California, Colorado, Illinois, Maryland, Michigan, New Mexico, Oregon, Utah and Washington. Numerous other states have proposed or are considering passage of social media password protection legislation. Employers located in or hiring in those states should review the applicable restrictions before seeking access to an individual’s personal social media accounts.

July 3, 2013

ACA Employer Health Care Mandate – “Pay or Play” – Put Off Until 2015

By Elizabeth A. Nedrow

In our Alert a few months ago, we described the so-called “pay or play” penalty provisions affecting employers under the federal health care reform statute known as ACA (the Patient Protection and Affordable Care Act). Yesterday the Obama Administration informally announced that it will delay implementation of pay or play until 2015. Yesterday’s announcement included a promise to publish formal guidance regarding this change within the next week.

Reducing the Complexity of ACA Implementation

The Administration cites complexity of the pay or play requirements as the reason behind this delay in implementation. In response to concerns by businesses that they need more time to understand and comply with the complex law, the Treasury Department states that they are looking to simplify the new reporting requirements. Mark Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, wrote: “Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.” Mazur states that the Administration will work with employers, insurers and other reporting entities to voluntarily implement information reporting in 2014 so that they may conduct “real world testing” of reporting systems which should lead to a smoother implementation in 2015.

Look for Additional ACA Guidance Soon

While employers certainly welcome the news that there is more time to comply with ACA mandates, the delay doesn’t mean employers can take the summer off. As noted above, we can expect formal guidance on pay or play implementation in the next week, and additional action may be required after that. In addition, the Administration’s announcement states a hope that employers will voluntarily comply with pay or play in 2014 (including the reporting systems), so that implementation in 2015 will go smoothly. Other provisions of ACA, such as the requirement that individuals have health insurance coverage or pay a penalty (the individual mandate), elimination of pre-existing condition exclusions, and the operation of health insurance exchanges, are still currently scheduled to go into effect on January 1, 2014.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 1, 2013

Affirmative Action by State University Requires Strict Scrutiny and No Workable Race-Neutral Alternatives

By Jude Biggs

In a highly anticipated opinion regarding the future of affirmative action, the U.S. Supreme Court ruled that to avoid violating the Equal Protection Clause, the University of Texas’ consideration of race in its admissions process must meet a strict scrutiny standard where its affirmative action efforts are narrowly tailored to meet its diversity goal. Fisher v. University of Texas at Austin, No. 11-345 (U.S. June 24, 2013). Because the Fifth Circuit Court of Appeals gave the University substantial deference in deciding whether its affirmative action plan was narrowly tailored to meet its stated goal, the Supreme Court vacated the lower court’s decision in favor of the University and sent the case back to the lower court with instructions to apply the tougher strict scrutiny standard.

Rejected Caucasian Applicant Alleges School Violated Constitution by Considering Race

In 2008, Fisher applied for admission to the University of Texas at Austin. Fisher, who is white, was denied admission. For years, the University had considered race as one of various factors in its undergraduate admissions process. Under the affirmative action plan in place when Fisher applied, the University remained committed to increasing racial minority enrollment on campus but did not assign a numerical value based on race for each applicant. Instead, the University included an applicant’s race as one of numerous components that made up the applicant’s Personal Achievement Index. When Fisher was rejected, she sued the University and various school officials alleging that the University violated the U.S. Constitution’s Equal Protection Clause by considering race.

Affirmative Action Survives, But Is Narrowed

The federal district court and the Fifth Circuit appellate court upheld the University’s admissions plan. The Fifth Circuit, however, gave substantial deference to the University, both in the definition of its compelling interest in creating diversity in its student body and in deciding whether its affirmative action plan was narrowly tailored to meet its goal. When the Supreme Court agreed to hear this case, supporters of affirmative action worried that the more conservative court would rule that consideration of race under affirmative action programs was unconstitutional.

The Fisher decision, however, does not actually decide the constitutionality issue but instead defines the standard by which courts must evaluate a program that considers race as a factor. The Court explained that the University must meet the demanding burden of strict scrutiny and remanded the case to the Fifth Circuit to analyze whether the University has offered sufficient evidence to prove that its admissions policy meets that scrutiny. The Court stated that “the reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity.”

Justice Thomas: “Use of Race is Categorically Prohibited”

Justice Clarence Thomas joined in the majority’s decision, agreeing that strict scrutiny should apply to the University’s use of race in its admission program. Writing a separate concurring opinion, however, he went further, stating that he would hold that a state’s use of race in higher education admissions decisions is categorically prohibited by the Equal Protection Clause. Justice Thomas would overrule the 2003 Supreme Court decision in Grutter v. Bollinger, which upheld the use of race as one of many “plus factors” in an admissions program, and abolish the use of race as a factor in affording educational opportunities. He finds that there is no compelling interest that could justify what he calls racial discrimination. He states that there is no doubt that the University’s discrimination injures white and Asian applicants who are denied admission because of their race, but he also believes that those who are admitted under the “discriminatory admissions program” suffer even more harm, stamping them with a “badge of inferiority.”

Justice Thomas’ views differ from those of retired Justice Sandra Day O’Connor, who wrote in 2003 in Grutter, that “classroom discussion is livelier, more spirited, and simply more enlightening and interesting” when students are exposed to the “greatest possible variety of backgrounds.” Justice O’Connor also stated that the Court expected that after 25 more years, the use of racial preferences would no longer be needed. Today, some might say American universities have reached the point when affirmative action is no longer needed; others, however, do not believe the United States has achieved the promise of true equality.

Whether Justice Thomas’ view is adopted or whether Justice O’Connor’s views remain in force in the future – at least for awhile – remains to be seen.

Will Fisher Be Revisited Again?

The Fifth Circuit now must apply the strict scrutiny standard to the evidence provided by the University of Texas to determine whether its consideration of race meets Equal Protection muster. No matter the outcome, it is likely the “losing” party will seek review of that decision by the U.S. Supreme Court. We know how Justice Thomas will rule, but the question remains, will enough other justices join him to throw out any consideration of race in state affirmative action programs?

Private Employers Not Bound by This Decision

Because the Equal Protection clause applies only to state actors (providing that no state shall deny to any person the equal protection of the laws), the analysis of whether an affirmative action program violates the Equal Protection clause does not apply to private companies or organizations. That said, there could be a spillover effect. Generally, discrimination in the workplace is governed by Title VII and analogous state laws. It is unclear whether individuals who feel they have suffered reverse discrimination by a private employer’s affirmative action or diversity efforts will leverage the narrowing scope of affirmative action in the public sector. It is likely private sector litigants will point to Justice Thomas’ concurring opinion to try to abolish any consideration of race in the employment context as discriminatory, and others will point to Justice O’Connor’s rationale for affirmative action. So stayed tuned!