Have questions about the January 17, 2013 HIPAA Omnibus Rule? Join Kim C. Stanger of Holland & Hart's Health Law Group in this recorded webinar.
There are significant changes that are reflected in the regulations that will become effective March 26, 2013. Covered entities and business associates must comply with the new rules by September 23, 2013. I think you will agree that Kim's presentation is very enlightening. Enjoy!
Is checking an applicant’s credit history discriminatory? According to the Equal Employment Opportunity Commission (EEOC), using credit checks to screen out applicants may be discriminatory if it has a disproportionately significant impact on a protected group. Although a court recently dismissed an EEOC lawsuit against an organization concerning its use of credit checks, the case should serve as a reminder to review your own policies and procedures with respect to using background and credit checks in the hiring process, as this is likely not the last time the EEOC or the courts will address the issue.
EEOC Sues Claiming Use of Credit Checks Has Disparate Impact on Black Applicants
In December 2010, the EEOC sued Kaplan Higher Learning Education Corporation (Kaplan), alleging that Kaplan’s practice of using credit history in making hiring decisions has a disparate impact on Black applicants in violation of Title VII. In other words, the EEOC asserted that Kaplan’s use of credit histories—while not facially discriminatory—had a disproportionate impact in terms of screening out Black applicants. Kaplan, however, defended its use of credit histories in the hiring process. It claimed that it used credit reports to assess applicants for financial and operational positions after discovering system breaches that allowed business officers to misappropriate student funds. Kaplan asserted that it reviewed an applicant’s credit history to determine whether the individual is under “financial stress or burdens” that might compromise his or her ethical obligations.
In order to provide statistical analysis showing disparate impact on Black applicants, the EEOC relied on its expert, Dr. Kevin Murphy, to analyze the applicant pool and those rejected due to their credit report. Because the race of each applicant was not known, the EEOC’s expert tried to use other means to make determinations about the applicant’s race, even when it was not known.
Kaplan asked the Court to exclude Dr. Murphy’s testimony and report and ultimately, dismiss the EEOC’s case, arguing that Dr. Murphy’s method of determining race was scientifically unsound. The Court agreed. In the absence of any reliable, scientifically sound evidence to link the use of credit reports to race, the Court granted summary judgment to Kaplan.
Use of Credit Reports Going Forward
In the last four or five years, the EEOC has made an issue out of employers’ use of credit reports and criminal history records in hiring decisions, resulting in the filing of a number of lawsuits. The EEOC’s track record in these cases, however, is mixed. In an earlier case alleging disparate impact related to the use of criminal history records, the EEOC finally agreed to dismiss the case after more than three years while the federal court ordered sanctions of over $750,000 against the EEOC for continuing to litigate when it knew of fatal flaws in proving disparate impact. (See EEOC v. Peoplemark, Inc., No. 08-cv-907 (W.D. Mich. 2008)). On the other hand, the EEOC was able to obtain a $3.1 million settlement and policy revisions from Pepsi when it challenged Pepsi’s use of background checks in 2011.
Despite the EEOC’s spotty results in proving disparate impact in these background check cases, employers need to be careful and deliberate in how they use credit reports for hiring purposes. Credit reports should be used only where job-related, such as for applicants seeking positions involving financial responsibility, high level managerial decisions or as required by law. Conduct credit checks only after making a conditional job offer so as not to weed out candidates prematurely on the basis of credit. Finally, be aware that eight states currently have statutory restrictions on the use of credit history in employment decisions so if you are located or are hiring in California, Oregon, Washington, Illinois, Maryland, Connecticut, Hawaii or Vermont, you will need to comply with those restrictions.
Employers will likely face additional requests by employees seeking leave under the Family and Medical Leave Act (FMLA) to care for an adult child who is unable to care for themselves. The Department of Labor (DOL) recently issued an Administrator’s Interpretation (AI), No. 2013-1, clarifying the definition of “son or daughter” under the FMLA as it relates to covered leave for an adult child with a serious health condition. The AI also clarified FMLA leave to care for an adult child injured during military service. Let’s take a look at what employers need to know.
FMLA Leave for Care of a Son or Daughter
The FMLA provides an eligible employee with up to 12 weeks of unpaid, job-protected leave during a 12-month period to care for a son or daughter with a serious health condition. If the child is age 17 or younger, the employee requesting leave need only show that the child has a serious health condition and the employee is needed to care for the child. However, if the child is age 18 or older, leave is available only if the child has a mental or physical disability and is incapable of self-care because of that disability.
Four-part Test to Determine FMLA Leave for an Adult Child with a Disability
To determine whether a parent is entitled to take FMLA leave to care for their adult (age 18 or older) child, four criteria must be met. The adult son or daughter must:
1) have a disability as defined by the Americans with Disabilities Act (ADA);
2) be incapable of self-care due to that disability;
3) have a serious health condition; and
4) be in need of care due to the serious health condition.
Disability Determination. Because the FMLA regulations rely on the definition of disability found in the ADA, the first criteria will be met if the adult child has a physical or mental impairment that substantially limits one or more of their major life activities. Because the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) expanded the definition of major life activities that lead to a disability determination, the issue of disability is not likely to require an extensive analysis.
Incapable of Self-Care. The second criteria specifies that the adult child must require active assistance or supervision to provide daily self-care in three or more of the “activities of daily living” or “instrumental activities of daily living.” In essence, this means that the individual needs help with daily activities such as bathing, grooming, dressing, eating, cooking, cleaning, shopping, maintaining their home, using a telephone, etc. Determining whether an adult child is incapable of self-care due to their disability is a fact-specific analysis that must be made based on their condition at the time of the requested leave.
FMLA Serious Health Condition. If the adult child meets the first two criteria in the test, the analysis turns to whether the child has a serious health condition, as defined by the FMLA. This means the individual has an illness, injury, impairment or physical or mental condition that involves inpatient care or continuing treatment by a health care provider. In many cases, the impairments that meet the definition of disability under the ADAAA will also meet the definition of serious health condition under the FMLA. However, it is important to note that the serious health condition does not have to be associated with the individual’s disability (e.g., a broken leg may be the serious health condition for an individual whose disability is cancer).
Care Needed. Finally, the parent requesting leave must be needed to care for the adult child with a serious health condition. This threshold is relatively low as the term “needed to care” can include providing transportation for doctor appointments, preparing food and offering psychological comfort and reassurance.
Age at Onset of Disability Doesn’t Matter
An important clarification made by the DOL is that the disability of the child does not have to have occurred or been diagnosed before the child turned 18 years old. For purposes of FMLA leave, it does not matter when the disability commenced. The DOL believes this interpretation is consistent with the legislative history and purpose of the FMLA.
Caring for Adult Children Injured During Military Service
Under the FMLA military caregiver provision, the parent of a covered servicemember who incurred a serious injury or illness during military service may take up to 26 weeks of FMLA leave in a single 12-month period. Recognizing that the impact of the injury may extend beyond a single 12-month period, the DOL clarified that the servicemember’s parent may take FMLA leave to care for a son or daughter in subsequent years due to the adult child’s serious health condition, provided all other FMLA requirements are met.
What Do I Do Now?
With the potential influx of new FMLA leave requests related to the care of an adult child, review your FMLA policies and procedures now to ensure that they are consistent with the new DOL guidance. Train your human resource professionals and any supervisors who handle leave requests to recognize the issues associated with leave for the care of an adult child. And finally, given the complexities involved in this four-part test, consult with your legal counsel when faced with a leave request to care for an adult child.
Although some say talk is cheap, that saying does not apply when evaluating an employee’s request for a job accommodation under the Americans with Disabilities Act (“ADA”). Instead, it is important to engage in an open discussion with the disabled employee; failing to do so can easily land your organization in court. A Texas school district recently learned that lesson when a federal judge ruled that discharging a disabled classroom aide without engaging in a good faith interactive process regarding reasonable accommodations could result in liability for the district for a violation of the ADA. Nelson v. Hitchcock Indep. Sch. Dist., No. 3:11-CV-00311 (S.D. Tex. Dec. 21, 2012).
Disabled employee needed accommodation after exhausting FMLA leave. Iris Nelson had worked for the Hitchcock Independent School District (“District”) as a teacher’s aide for the Head Start program since 1996. In February 2009, Nelson learned she needed to have knee replacement surgery on both knees due to severe bilateral knee arthritis. Nelson soon took leave covered by the Family and Medical Leave Act (“FMLA”) for surgery on her right knee. In August 2009, shortly before the new school year was to begin, Nelson met with the District’s payroll and benefits supervisor, Theresa Fails, to request another two-and-one-half months off for surgery on her left knee. Fails informed her that she had exhausted her FMLA leave and would not be eligible for additional leave until the following year.
Nelson claims that she told Fails that she would work using a cane or a walker until she became eligible for more leave but Fails allegedly responded that she could not use walking aids. Nelson also stated that she would just have to take pain pills, a suggestion Fails supposedly refused as well. After the meeting, Fails notified the District’s interim Head Start director and the school superintendent of the conversation and recommended that until a doctor’s note could be obtained and a decision made, Nelson should not be allowed to return to work.
Without hearing anything more on her accommodation request, Nelson returned to work on August 17, 2009 and filed a form requesting leave which would begin on August 20, 2009. Nelson did not receive a response to her leave request and unilaterally took off to have her surgery on August 23, 2009. On August 25, 2009, the District’s superintendent sent Nelson a letter denying her leave request, noting that she had exhausted her FMLA entitlement. Six days later, the superintendent sent Nelson a notice of termination, informing her that her “employment with Hitchcock ISD has been terminated for being unable to perform the essential functions of your job.” Not surprisingly, Nelson sued, claiming that the District violated the ADA when it terminated her instead of accommodating her disability.
Court finds evidence that District failed to engage in ADA-required interactive process. The Court concluded that Nelson’s ADA claim could proceed to trial as Nelson presented sufficient evidence that the District never engaged in the communication and good faith interactive process regarding her accommodation requests that is required under the ADA. The Court noted that Nelson offered to postpone her surgery had she been allowed the accommodation of using a cane, walker or pain pills. Although the District argued that it would have been unreasonable to allow Nelson to supervise children while using a walking aid or while under the influence of pain medications, the Court ruled that it need not reach a reasonableness determination because the District had failed to engage in the required interactive process that would have allowed the District to assess the alternate accommodations. The Court pointed out that had the District discussed the alternatives with Nelson, it could have clarified whether she needed a walking aid or pain pills or both, whether any over-the-counter medications would have been sufficient and what the side effects of any required dosage would be. Only by engaging in that dialog could the District determine whether Nelson’s requested accommodations would impose an undue hardship on the District.
Lessons learned. When faced with an accommodation request, employers should not jump to deciding whether the proposed solution places an undue burden on the company, without first actually talking to the employee and seeking further input from the employee if the proposed solution seems unreasonable or unworkable. Employers must engage the employee in an interactive dialog to discuss what would allow the employee to perform the essential functions of their job. Remember, when it comes to reasonable accommodations under the ADA, there is often more than one way to skin a cat. The first accommodation requested may not be the only, or even the best accommodation for a particular disabled employee. By including the affected employee in the accommodation process, employers meet their ADA obligation while exploring the options that could allow the employee to stay on the job. You may not always reach a solution that works for both parties, but as long as you try in good faith—and appropriately document your efforts—it is much harder for the employee to attack your process and actions in a lawsuit down the road.
Can you fire an employee who is unable to return to work due to a medical impairment if that individual has exhausted all of his available leave? What if the employee has been on an extended leave of absence, and has exhausted his Family and Medical Leave Act (FMLA) leave and short-term disability benefits, but still has some restrictions on his ability to work? The answer: maybe, but only if you have engaged in an individualized inquiry under the Americans with Disabilities Act (ADA) before doing so.
Some companies provide generous amounts of leave for employees with health or medical issues. Still, a company should not have a policy by which it automatically terminates employees who cannot return to work when they have exhausted available leave, or if they are unable to return without restrictions. Such policies likely violate the ADA, which generally requires an individualized approach to working with individuals with disabilities. Automatically discharging an employee just because that person has exhausted available leave is not consistent with the ADA's individualized inquiry. Similarly, demanding that individuals be 100% recovered from an injury or impairment before returning to work typically violates the ADA's requirement to accommodate disabled employees who are qualified, but unable to perform the essential job functions without an accommodation.
The Equal Employment Opportunity Commission (EEOC) has challenged a number of companies that maintained these blanket policies, and it continues to do so. On November 9, the EEOC announced that it entered into a consent decree (which is essentially a public settlement agreement) with a nationwide trucking company that supposedly discharged employees automatically upon exhausting their leave or when they were unable to return to work without restrictions. Although the company admitted no wrongdoing, to resolve the lawsuit it agreed to pay $4.85 million, revise its policies to comply with the ADA, provide mandatory periodic training to employees on the ADA, report particular employee complaints about the ADA to the EEOC, post a notice about the settlement, and appoint an internal monitor to ensure compliance with the consent decree.
To avoid these issues or a potential ADA violation due to your leave policies, consider the following tips:
Managing employee leaves is not easy, and it often requires navigating a variety of statutory rights, including the FMLA, the ADA, and workers' compensation. But taking an individual approach is far better than relying on a "one-size-fits-all" policy, which may very well result in a lawsuit or enforcement action.
A union’s request for information demands a timely response, even if the requested information is irrelevant to the collective bargaining relationship or any underlying grievance. That’s the ruling of a recent National Labor Relations Board (NLRB) decision expanding an employer’s duty to bargain in good faith under Section 8(a)(5) of the National Labor Relations Act (NLRA). Employers must now timely respond to all requests for information involving bargaining unit members or risk an unfair labor practice charge.
The statutory duty to bargain in good faith includes the duty to provide unions with information needed to engage in collective bargaining or administration of a collective bargaining agreement (e.g., through a grievance procedure). As such, the NLRB has long held that employers must timely provide unions with information that is relevant and necessary to their performance as collective bargaining representatives. It has also long held that employers must timely object to requests for relevant information that might lawfully be withheld on the basis of confidentiality, privacy, or other interests.
Before its decision last month, however, the NLRB had never previously decided whether an employer must timely respond to a union’s request for information that is determined (or admitted) to be irrelevant. An employer must now timely respond.
In its October 23, 2012, decision, the NLRB held that a company engaged in interstate trucking violated Sections 8(a)(1) and 8(a)(5) of the NLRA by failing for a period of four and one-half months to respond to a union’s request for information involving the company’s drivers. This was so even though the union admitted that the request was irrelevant to any pending grievance. In its ruling, the Board characterized the requested information as “presumptively relevant” at the time the request was made because it related to unit employees. The Board determined that the company had a duty to “respond promptly” to the union’s request, even if just to explain its reason for refusing to provide the (irrelevant) requested information.
The Board’s latest decision is troubling. Employers may now no longer ignore union requests, even when the requested information is clearly irrelevant to collective bargaining or contract administration. Instead, they must promptly respond to all requests and either (a) provide the requested information, or (b) explain why it is being withheld. This is true with respect to any requests involving bargaining unit members. Employers are thus encouraged to consult counsel immediately after receiving information requests to ensure the preparation of an adequate and timely response. Failure to do so may expose employers to unfair labor practice charges and give unions leverage in ongoing negotiations or grievance proceedings.
By Dora Lane and Mark Wiletsky
Most employers today provide a handbook or another document confirming employees’ at-will status. Until recently, there was no question that this is a good business practice. But earlier this year, an NLRB (National Labor Relations Bureau) administrative law judge concluded in Am. Red Cross Ariz. Blood Servs. Region, No. 28-CA-23443 (Feb. 1, 2012), that such a disclaimer violated the employees’ right to engage in concerted activity under the National Labor Relations Act (NLRA). The judge reasoned that the disclaimer, which said “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way,” effectively precluded employees from engaging in concerted activity (a protected right under the NLRA) to alter their at-will status.
Thankfully, the NLRB—which enforces the NLRA—has pulled back. On October 31, 2012, the NLRB issued two memos regarding the enforceability of “at-will” provisions in employee handbooks. The first memo involved a provision, stating as follows:
“No manager, supervisor, or employee at Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.”
This provision was found permissible because it explicitly permitted the company’s president to enter into written employment agreements that modify the employment at-will relationship, and therefore included the possibility of potential modification of the at-will relationship through a CBA ratified by the president.
The second memo involved the following provision:
“No representative of the Company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ relationship.”
This provision was determined to be lawful (but a closer question than the first provision) because it only highlighted the company’s policy that its own representatives cannot modify the at-will relationship and reinforced that the handbook did not create a contract of employment.
With both of those provisions, the NLRB distinguished the American Red Cross case because there the at-will employment relationship could not be altered or modified “in any way.”
Bottom line: As with its position on social media policies, the NLRB appears to be splitting hairs in terms of what type of language is, and is not, a violation of the NLRA with respect to at-will disclaimers. While these two decisions suggest that the NLRB will not take an unreasonably aggressive approach in challenging at-will disclaimers, it’s not a bad idea to compare your own disclaimer to the ones the NLRB approved to avoid any potential issue with the NLRB.
Amendment 64 would, among other things, allow individuals age 21 and over to possess and use one ounce or less of marijuana. If the Amendment passes next week, employers will face increased uncertainty when it comes to the enforcement of workplace drug testing policies. A reckoning is inevitable because the debate over the scope of employers' rights to terminate workers who use marijuana outside of work and then test positive in violation of company policy has been brewing for several years in the context of Amendment 20 (which decriminalized the use of medical marijuana by registered patients). Amendment 64 does not clarify the extent of employers' right to terminate for marijuana use. On the contrary, it fans the flames by incorporating language that fueled employment litigation in the medical marijuana context following Amendment 20's passage, and by extending coverage to the general workforce, not just a handful of employees who are registered medical marijuana patients.
The debate to date
In November 2000 Colorado voters approved Amendment 20, which authorizes patients with certain debilitating medical conditions to receive from the State of Colorado a registry identification card allowing them to obtain and use marijuana without threat of criminal prosecution by the state authorities (but not the federal government).
With regard to employers' rights, Amendment 20 states: "Nothing in this section shall require any employer to accommodate the medical use of marijuana in any workplace." Both sides of the debate agree that this language preserves employers' right to prohibit employees from using marijuana at work, regardless of whether employees hold medical marijuana cards.
The parties sharply diverge, however, on the subject of whether Amendment 20 preserves employers' right to prohibit medical marijuana users from reporting to duty under the influence of, or having trace amounts of, the drug in their systems due to off-duty use. This issue typically arises when an employee tests positive for THC (the psychoactive constituent found in marijuana) in a random or post-accident workplace drug screen. Because most workplace drug testing policies prohibit employees from using illegal drugs as defined by federal or state law, employees are typically terminated following such positive results.
In recent years, medical marijuana cardholders who have been terminated from jobs for failing workplace drug screens have argued that the "in any workplace" language allows employers to regulate medical marijuana use at work, but not during non-working hours. These legal arguments take many forms, but the predominate themes in litigation to date are that (1) medical marijuana use is not illegal under state law and (2) employers should not be permitted to regulate an employee's off-duty medical marijuana use absent evidence that a worker is actually impaired at work. One obvious Colorado law that is triggered in the context of this argument is Colorado's lawful off-duty activity statute, which makes it unlawful for employers to terminate workers for engaging in lawful activities outside of work during non-working hours.
On the flipside, employers assert that Amendment 20 does not place any obligation upon companies to accommodate employees who use medical marijuana. Employers are free to enforce their drug testing policies and to prohibit the use of illegal drugs, including marijuana, whether medical or not, even when the use occurs off the worksite during non-working hours. Employers further assert that the Amendment is intended to provide certain individuals with an affirmative defense against criminal prosecution, but not to restrict employers' rights. Moreover, because marijuana is still illegal under federal law, an employee's use of marijuana outside of work is not a "lawful" activity that is covered by Colorado's lawful off-duty activity statute.
To date, Colorado courts have not squarely addressed whether employers can lawfully terminate employees who use medical marijuana outside of work during non-working hours and subsequently fail workplace drug screens. The Colorado Court of Appeals came close to weighing in on the issue in 2011 when it upheld the Colorado Industrial Claim Appeals Office's (ICAO's) decision to deny unemployment benefits to a worker, Jason Beinor, who was terminated for violating his employer's zero-tolerance drug policy after testing positive for marijuana in a random drug test. See Beinor v. Indus. Claim Appeals Office, 262 P.3d 970 (Colo. App. 2011).
Beinor argued that the Colorado Constitution protected his marijuana use because he used marijuana for medicinal purposes outside of work and was in the process of obtaining a registry card. In its opinion, the Court of Appeals made the following observations: (1) marijuana remains a Schedule I controlled substance under federal law and cannot be lawfully "prescribed;" (2) Amendment 20 provides an exemption from criminal prosecution – it does not grant medical marijuana users the "right to use the drug in any place or in any manner;" and (3) medical marijuana users do not have an "unfettered right to violate employers' policies and practices regarding use of controlled substances." However, the court cautioned that its holding was limited to the issue of whether the ICAO properly denied unemployment benefits. By contrast, the court was "not deciding whether the amendment limits an employer from discharging an employee for using medical marijuana." Thus, while the decision provides some helpful guidance into the direction Colorado courts would likely take in the future if faced with the issue, the debate concerning the extent of employers' right to terminate employees for engaging in off-duty use of medical marijuana remains unresolved.
Employers' rights under Amendment 64
Amendment 64 does not provide any additional guidance on this issue. The Amendment contains three provisions that address employers' rights. First, like Amendment 20, Amendment 64 does not require employers to "permit or accommodate" the use of marijuana "in the workplace." Second, employers may have policies restricting the use of marijuana by employees. Third, employers may prohibit and regulate the "possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana" on their property.
Thus, like Amendment 20, Amendment 64 opens the door for employees to argue that employers may regulate marijuana use inside the workplace, but may not impede employees' right to use marijuana outside of work. However, unlike Amendment 20, which provides an affirmative defense to criminal prosecution, Amendment 64 would decriminalize marijuana use under state law. Additionally, Amendment 64 purports to allow employers to retain policies restricting employees' use of marijuana; however, the Amendment does not specify whether such restrictions may lawfully extend to off-duty use. If the arguments lodged in the context of Amendment 20 are any indication, employees who are terminated for testing positive for marijuana will likely continue to argue that employers' policies may only regulate use and possession on company property.
Employers' drug testing policies at center stage
If Amendment 64 passes, employers' drug testing policies will be at the heart of workplace disputes over employees' marijuana use. Because marijuana use is expected to grow if the Amendment passes, employers may expect that a greater number of employees will likely test positive for the drug in random screens. This increase in positive tests, in turn, will likely lead to a greater number of challenges by employees terminated for violating their employers' zero-tolerance policies. Further, because marijuana use would be lawful at the state level, employers would no longer be able to argue, as they did in the Amendment 20 context, that marijuana is illegal under both state and federal law.
Moreover, if Amendment 64 becomes law, employees who lose their jobs because of a drug screen revealing trace amounts of marijuana in their urine will likely argue that their employers' drug testing programs infringe upon their right under the Colorado Constitution to use marijuana outside of work. In other words, they (or their advocates) will likely take the position that, if a worker is not under the influence of marijuana at work and does not pose a safety risk, an employer may not lawfully terminate his or her employment. Workers will likely further argue that there must be outward signs of impairment at work in order for employers to legally terminate their employment.
Employers, on the other hand, will likely be forced to take a firm and even stance when interpreting and enforcing drug testing policies prohibiting the use of marijuana. Inconsistent application of such policies may expose companies to discrimination claims based on a "disparate impact" or other theory of discrimination. The practical problem that employers may face is that, unlike breathalyzer tests which can easily detect whether someone is under the influence of alcohol at work, urine tests cannot easily detect the level of marijuana impairment. Marijuana may be present in an individual's urine for several weeks. Blood tests may detect the level of marijuana in a person's system with greater accuracy, but they are more invasive and still do not pinpoint when a person actually used the drug. Further, impairment at work can go undiscovered until an accident occurs. This creates an unacceptable risk of exposure for companies which have a duty to protect employees and the public from harm. Policies that prohibit use altogether avoid these and other issues and allow employers to implement drug testing programs with greater efficiency.
Ultimately, marijuana remains a Schedule I controlled substance under federal law. Amendment 64 is clear on that point. Thus, if marijuana is legalized in Colorado, employers will need to take care to ensure that their drug policies expressly prohibit the use of illegal drugs as defined by federal law. Of course, employees who are fired or disciplined for testing positive for marijuana will still likely argue that federal law cannot usurp their right to use marijuana under Colorado's Constitution. However, employers may be able to justify their decision to continue enforcing drug testing policies through reference to federal supremacy or common sense arguments.
Bottom line
If Amendment 64 becomes law, it will ultimately be up to the courts or the legislature to settle the debate and provide employers with the clarity that the Amendment currently lacks. Resolving the unsettled issues could take months, or even years. In the meantime, employers would likely be in the trenches for the foreseeable future, incurring legal fees and spending more internal resources navigating employee grievances.
In today’s digitized workplace, it is easier than ever for employees to steal information. Whether through a thumb drive, external hard drive, e-mail, or other means, employees can easily transfer reams of information in mere seconds, often without detection until it is too late. Because such information is often incredibly valuable–and potentially harmful when improperly used by a competitor or another–organizations sometimes are forced to sue an employee and/or the employee's new employer for misappropriating such information. At times, law enforcement may be involved. But often, it is up to the employer to initiate a civil action.
Although a variety of claims may be asserted in such circumstances, employers sometimes turned to the Computer Fraud and Abuse Act (or CFAA) for relief. The CFAA is a federal statute that provides civil and criminal penalties when an employee, among other things, intentionally accesses a computer without authorization, or exceeds authorized access to a computer and obtains anything of value or causes damage. On its face, the statute appears to prohibit an employee from using his or her access to a computer to misappropriate his employer’s trade secrets or other confidential information. A recent decision by the Fourth Circuit Court of Appeals, however, concluded otherwise.
In WEC Carolina Energy Solutions LLC v. Miller, the employee (Miller) allegedly downloaded WEC’s proprietary information, at the direction of a competitor, and then used the information to help the competitor solicit a customer. WEC sued Miller under a variety of theories, including conversion, tortious interference with contractual relations, civil conspiracy, misappropriation of trade secrets—and violation of the CFAA. The district court dismissed the CFAA claim and remanded the remaining claims to state court. On appeal, the Fourth Circuit affirmed the dismissal of the CFAA claim.
Because the CFAA contains criminal penalties, the Fourth Circuit adopted a narrow interpretation of the CFAA. It distinguished situations in which an employee exceeds his access to information—which may violate the CFAA—from those in which the employee merely uses his authorized access to misappropriate information. For example, an employee “accesses a computer ‘without authorization’ when he gains admission to a computer without approval” and he “‘exceeds authorized access’ when he has approval to access a computer, but uses his access to obtain or alter information that falls outside the bounds of his approved access.” In WEC, the court concluded that Miller had authorization to access to the information at issue, despite WEC’s policies preventing the improper use of such information. Thus, even though Miller had no authority to download and/or transfer it for another’s use, he was not liable under the CFAA. The court noted that a contrary interpretation could result in criminalizing otherwise innocent conduct, such as when an employee violates a policy against downloading information so that he can work at home.
Interestingly, the Fourth Circuit sided with the Ninth Circuit on this issue, adding to the Circuit split. The Seventh Circuit previously reached a contrary result. It held that an employee may be liable under the CFAA when he accesses a computer or information on a computer in a way that is adverse to his employer, as doing so terminates his agency relationship and any authority he otherwise has to access such information. Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418, 420-21 (7th Cir. 2006).
The Fourth Circuit’s narrow interpretation of the CFAA, if adopted by other courts or, eventually, by the Supreme Court, is disappointing to those who seek to hold rogue employees accountable for misappropriating confidential or proprietary information. The CFAA allows employers access to federal courts in these types of situations, which at times may be the preferred venue, and contains other stiff penalties. Still, and as noted in WEC, employers have other options at their disposal, including a variety of state law claims that can be very effective.
Practical Tips
Even though the Fourth Circuit held that Miller did not violate the CFAA by his actions, it is a good idea to review and potentially update your computer use policies, especially if you have not done so in a while. Technology changes so rapidly that policies may be out-of-date soon after they are issued. At a minimum, be clear about the confidential and sensitive nature of information available on your systems, and permissible uses of such systems. If employees have limited access to certain databases or areas, be sure to emphasize such limitations and the potential penalties for violating those limitations. Also, don’t forget to remind employees that they have no expectation of privacy when using or accessing your organization’s computer resources. You may not always be able to prevent an employee from misappropriating confidential or proprietary information, but strong policies and practices are a good deterrent and a strong tool to use if you have to sue an individual who engaged in such conduct.
The U.S. Department of Labor received much fanfare when it rolled out its new timesheet app. In its news release of 2011 (http://www.dol.gov/opa/media/press/whd/WHD20110686.htm), DOL indicated that it believed the application would ensure that workers received the wages to which they were entitled.
Not to be outdone, although not as an application, the National Labor Relations Board announced that it has launched a new interactive website to describe the rights of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act. The webpage can be found at: http://www.nlrb.gov/concerted-activity.
You will see that the NLRB details numerous case examples where it found the conduct of employers to violate the act. The interactive map serves to lead the reader to the detail of a case that provides factual detail about the violation. This is just another example of how the social media network can be used as a public relations effort to justify an agency's public purpose and to inform employees of their rights.
For more information on the NLRB or other traditional labor relations questions, feel free to send a comment or reach me directly.