Category Archives: Current Affairs

November 2, 2012

Marijuana in the Workplace: Amendment 64 – Same Can, More Worms for Colorado Employers

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.

July 30, 2012

Court Narrows CFAA

By Mark Wiletsky

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.

June 22, 2012

NLRB’s New Website

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.

Steven M. Gutierrez

June 21, 2012

New Case Clarifies Test for Contractor Status

By Mark Wiletsky

Many organizations rely on independent contractors–sometimes referred to as consultants or just contractors–to perform a variety of services. But determining who is a contractor, as opposed to an employee, is not an easy task. A variety of state and federal rules apply, each with different factors and tests. If you misclassify an individual, the penalties can be severe. For example, in Colorado, a business may be fined up to $5,000 per misclassified employee for the first offense, and up to $25,000 per misclassification for subsequent violations if the violations were willful. Businesses may also be liable for back taxes, interest, failure to pay overtime, and a variety of other penalties for failure to provide benefits. Therefore, it's very important to ensure an independent contractor fits the tests for contractor status. A new Colorado case provides some important guidance on this subject.

In Softrock Geological Services, Inc. v. ICAO, the Colorado Court of Appeals had to decide whether an individual who provided services to Softrock as a contractor over a three-year period, without performing similar services for others during that period, was a contractor or employee. Under Colorado's unemployment statute, an individual is presumed to be an employee unless the organization demonstrates that the individual: (1) is "free from control and direction in the performance of the service" and (2) "is customarily engaged in an independent trade, occupation, professional, or business related to the service performed." The second part of the test is often difficult to prove. A number of Colorado cases have concluded that unless the contractual arrangement is relatively brief, an individual must perform services for more than one entity to be a contractor. Such a test, however, places a heavy, and often unfair, burden on businesses.

Businesses do not always track the outside activities of a consultant, and a consultant may choose to work for only one entity for a period of time. Recognizing this, the Court of Appeals in Softrock concluded that it is improper to classify an individual as an employee solely because that person did not perform similar services for others while performing services for the alleged employer. Instead, the failure to perform services for others is merely one factor to be considered. The other factors include: the existence of a quality standard; payment of a salary/hourly rate as opposed to a fixed or contract rate; ability to terminate the individual for limited reasons, such as failing to produce results or violating the contract; whether training is provided; whether tools and benefits are provided; whether the individual is subject to a set schedule or has authority to set his or her own schedule; payment to a business or tradename as opposed to an individual; and whether the individual and the business have combined operations or maintain separate and distinct operations. The court remanded the case to the Industrial Claims Appeals Office for reconsideration, though it is possible this case will be reviewed by the Colorado Supreme Court.

The court's guidance in Softrock is helpful because many times, individuals will meet the test for contractor status even though they choose to perform work for only one entity for an extended period. Still, as this case demonstrates, repeatedly retaining an invidual to perform services as a contractor over an extended period, without confirming that he or she is working for others, is risky. As a result, it is best to ensure that individuals are, in fact, working for others or making their services available to others while performing services for your business.

Here are some additional tips to keep in mind when retaining a contractor:

1. Don't classify someone as a contractor just because that person asks to be a contractor. The business bears the responsibility, and liability, for appropriately classifying its workers.

2. A signed contract is not enough. A court or auditor will look beyond the contract to determine whether the individual meets the appropriate tests for contractor status.

3. Do not pay an individual; instead, ensure you are paying a tradename or business entity. Payment to an individual is a red flag for auditors, even when the person is legitimately a contractor.

4. Avoid hiring former employees as contractors, unless you are certain they meet the test for contractor status. Again, this is a red flag for auditors, as employees are sometimes reclassified as contractors even though their actual duties have not changed.

5. Get a business card, print out a website, or maintain some other evidence that the individual has a business and makes his or her services available to others. This type of evidence can be very helpful in the event of an audit.

6. Get your attorney involved early to ensure the person meets the appropriate tests. Although a written agreement is not dispositive, it can help, and analyzing the issue before an audit is generally better than analyzing it for the first time during or after an audit has begun.

7. Do not treat the individual like an employee, i.e., do not have the person sign an employment contract, do not evaluate the individual with the same forms you use for employees, and if you give the person a business card, be sure it notes the individual is a contractor.

8. Do not retain someone as a contractor with the idea of hiring that person as an employee if he or she does well. Most likely, that person will not fit the tests for contractor status.

9. Do not assume that individuals performing short-term projects or part-time work are automatically contractors. Often times, they are part-time or short-term employees.

10. When in doubt, err on the side of employee status.

Contractor misclassification is a big issue in Colorado and many other states. Therefore, be cautious when retaining contractors, and be sure they meet the appropriate tests for contractor status.

June 7, 2012

Last-Chance Agreements — Employer beware!

The EEOC, in its recent press release (http://www.eeoc.gov/eeoc/newsroom/release/5-29-12.cfm) of May 29, 2012, announces a rare victory on summary judgment in what could be a bad trend for employers. In the underlying case of EEOC v. Cognis Corporation, a foreign multinational corporation, the federal judge ruled that the company retaliated against an employee for refusing to waive his rights to file a discrimination charge, both for past conduct and prospective conduct.

The employee, as a condition of continued employment, was asked to sign a last-chance agreement that prohibited him from filing a discrimination charge. According to the EEOC, Cognis conditioned the employment on the execution of the last chance agreement and when the employee refused to be bound by that agreement he was fired. As the Court noted in its opinion, it is not often that an employee is granted summary judgment on a Title VII retaliation claim.

The outcome here is problematic for two reasons. First, in most cases there is often a fact issue over the stated motivation for the adverse action taken by the employer because the motivation for the underlying decision is almost always in dispute; thus, there is a necessary question of fact that would defeat a summary judgment. Second, the Court’s willingness to discount the fact that had the employee not executed the last-chance agreement in the first instance he would have been terminated for a legitimate and non-discriminatory reason – poor performance – is worrisome. In rejecting Cognis’s argument on this point, the Court reasoned that even if it credited Cognis’s argument; it was the employee’s revocation of the last-chance agreement that constituted an adverse action, an act that might dissuade a reasonable worker from making or supporting a charge of discrimination. (See Opinion). This reasoning, of course, doesn’t adequately address the fact that the worker essentially was given consideration to remain employed under the last-change agreement.

What is clear from the Court holding in Cognis is the fact that the last-chance agreement is said to have threatened termination for undertaking future protected activity, which the Court says satisfies one element of the prima facie case of retaliation – a preemptive retaliatory act. Now, all that remains for the Court is a determination of damages. If the Cognis last-chance agreement had not included this prospective provision, I wonder how the case would have turned.

This holding is sure to motivate the EEOC to seek out similar cases of this kind. The EEOC concludes its release by indicating that “[f]iling EEOC charges is a fundamental right of American employees, and this agency always stands ready to protect that right.” EEOC’s Chicago District Director John Rowe further states, “This court’s opinion should cause employers to remember that seeking to dissuade employees from exercising that right is not only bad policy, it’s a violation of federal law which can give rise to very substantial liability.”

Despite the Court’s finding and the threats by the EEOC, this author maintains that narrowly crafted last-chance agreements are often useful to employers, both to ensure employees understand that future satisfactory performance is demanded and to give the employee fair opportunity to improve his/her conduct.

For more information contact Steven M. Gutierrez.

May 15, 2012

Court Invalidates NLRB’s “Ambush Election” Rule

A federal district court judge invalidated the National Labor Relations Board's (NLRB's) controversial "ambush election" rule yesterday, ruling that the Board had lacked a three-member quorum needed to pass the rule last December. The ruling followed a failed Congressional attempt to halt the rule, and came just two weeks after the rule became effective on April 30th. For more information, see the article written by my colleagues Brian Mumaugh and Brad Williams.

April 16, 2012

Court Strikes Down NLRB Notice-Posting Requirement, Leaves Employers Hanging

By Brian M. Mumaugh and Bradford J. Williams

The U.S. District Court for the District of South Carolina just became the second federal district court to weigh in on the legality of a National Labor Relations Board (NLRB) rule requiring most private employers to post a notice informing employees of their rights under the National Labor Relations Act (NLRA). In his April 13, 2012, decision, Judge David C. Norton held that the notice-posting rule exceeded the NLRB’s authority in violation of administrative law. The decision leaves employers hanging regarding their obligations in advance of the April 30, 2012, notice-posting deadline.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters “in conspicuous places” advising employees of their rights under the NLRA. These rights include the right to form, join, or assist unions; to negotiate with employers through unions; to bargain collectively through representatives of employees’ own choosing; and to strike and picket. The rule was stridently opposed by business groups which felt that it violated employers’ First Amendment rights, and mandated the posting of an excessively pro-union message. The final rule required employers who customarily communicate with employees regarding personnel matters using an intranet or internet site to post the notice prominently on that site.

To ensure compliance, the rule provided that failure to post the required notice would be deemed an unfair labor practice (ULP) under Section 8(a)(1) of the Act. The Board could automatically toll (or stay) the six-month statute of limitations for all ULP actions—not just those arising out of a failure to post—where employers failed to post the notice. In addition, the knowing and willful refusal to post the notice could be used “as evidence of unlawful motive” in ULP cases in which motivation was at issue.

In late 2011, the NLRB’s final administrative rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule’s effective date was postponed to January 31, 2012, and then to April 30, 2012.

On March 2, 2012, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued a ruling in the first of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. Mar. 2, 2012). Judge Jackson broadly upheld the NLRB’s right to issue the notice-posting rule, but struck down automatic sanctions for failure to post the required notice. She held that failure to post might constitute an ULP, and might toll the statute of limitations, but found that the Board would have to make specific findings in each ULP case to impose such sanctions. Judge Jackson’s decision is currently on appeal to the U.S. Court of Appeals for the District of Columbia Circuit, and the appellate court has not yet ruled on a motion that would enjoin the rule’s enforcement pending the court’s decision.

Last Friday, Judge Norton stepped into this fray by issuing a diametrically opposed decision in the second of the two lawsuits, Chamber of Commerce v. NLRB, No. 11-cv-2516 (DCN) (D.S.C. Apr. 13, 2012). Judge Norton found that the Board had exceeded its authority under Section 6 of the Act by issuing the notice-posting rule. Noting that Section 6 gives the Board the power to make “such rules and regulations as may be necessary to carry out the provisions of the [NLRA],” the judge found that the notice-posting rule was not “necessary” to any of the Act’s provisions. On the contrary, the NLRA empowers the Board to prevent and resolve ULP charges and to conduct representative elections. Judge Norton noted that these duties are inherently “reactive,” and found that nothing in the Act requires employers to “proactively” post notices of employee rights. As Judge Norton concluded: “Neither Section 6 nor any other section of the NLRA even mentions the issue of notice posting.”

Judge Norton further rejected the argument that the Board had acted appropriately by filling a statutory “gap” in the NLRA. He observed that Congress had inserted at least eight explicit notice requirements into federal labor statutes since 1934, while the NLRA had “remained silent.” He concluded that Congress “clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires,” but found that there is “not a single trace of statutory text that indicates Congress intended for the Board to proactively regulate employers in this manner.”

Interestingly, Judge Norton did not discredit the Board’s factual finding that there is an increased need for employees to learn of their NLRA rights, and he did not dispute Judge Jackson’s conclusion that the Board had articulated a rational connection between this finding, and the Board’s decision to promulgate the notice-posting rule. Nonetheless, he implicitly found that any such connection was irrelevant in light of the plain language and structure of the Act, which he said compelled his conclusion that the Board lacked the authority to promulgate the rule.

Judge Norton’s decision is extremely favorable for employers, but is it unfortunately only likely controlling in the District of South Carolina. Conversely, Judge Jackson’s decision is broadly disappointing for employers, but is only likely controlling in the District of Columbia. Courts in other jurisdictions—including in the Tenth Circuit—have yet to weigh in on the issue. If Judge Norton’s decision is eventually appealed (as is likely), and the U.S. Court of Appeals for the Fourth Circuit reaches a different decision than the U.S. Court of Appeals for the District of Columbia, the notice-posting issue could end up before the U.S. Supreme Court.

A spokesman for the NLRB announced last Friday that the Board was studying Judge Norton’s decision, and would be deciding on an appropriate course of action. As it has done before, the Board might postpone enforcement of the rule pending further court action. Alternatively, the Board might take the position that the rule is only unenforceable in the District of South Carolina, but is enforceable elsewhere. The U.S. District Court for the District of South Carolina, or the U.S. Court of Appeals for the District of Columbia Circuit (or even the U.S. Court of Appeals for the Fourth Circuit, if Judge Norton’s ruling is appealed), could separately enjoin enforcement of the rule given the current split in legal opinion.

In the wake of Judge Norton’s decision, employers are advised to monitor further developments in both the District of South Carolina case, and in the District of Columbia case. Employers may also want to monitor the NLRB’s website. As the April 30th notice-posting deadline approaches, employers may wish to consult with legal counsel about the potential costs of posting an arguably pro-union poster, and the likelihood that the notice-posting rule may eventually be invalidated in their jurisdiction.

For more information or advice on compliance, please contact Brian M. Mumaugh or Bradford J. Williams of Holland & Hart’s Labor & Employment Practice Group.

April 2, 2012

EEOC Issues Final Rule On Disparate Impact

By Mark Wiletsky

Last week, the Equal Employment Opportunity Commission (EEOC) issued its final rule governing disparate impact claims arising under the Age Discrimination in Employment Act of 1967 (ADEA). A disparate impact occurs when a policy or practice that is facially neutral has a disparate, or significantly greater, impact on older workers than younger ones. The EEOC's final age bias rule addresses the “reasonable factors other than age” defense, or RFOA, under the statute. According to the EEOC, the rule “makes the existing regulation consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA [reasonable factors other than age], and not business necessity[.]” For more information, see the post by my colleague, Scott Randolph.

March 27, 2012

Furor Over Facebook Continues

By Mark Wiletsky

Following up on my post last week, the flap over employers asking applicants to turn over their passwords to social media accounts, such as Facebook, rages on. Two senators–Sens. Richard Blumenthal (D-Conn.) and Charles Schumer (D-N.Y.)–on March 25 asked the Department of Justice and the EEOC to investigate this practice (http://blumenthal.senate.gov/newsroom/press/release/blumenthal-schumer-employer-demands-for-facebook-and-email-passwords-as-precondition-for-job-interviews-may-be-a-violation-of-federal-law-senators-ask-feds-to-investigate). Facebook joined the fray by warning employers about this practice, and of course the ACLU has raised concerns as well (http://www.cnn.com/2012/03/23/tech/social-media/facebook-employers/index.html?hpt=hp_t3). Is this issue being overblown? Other than media reports about a couple of public entities, it is unclear how many employers are demanding applicants turn over passwords to social media accounts as a condition of employment (or consideration for employment). Still, the heightened media attention is a good reminder for employers to review their hiring practices and their social media policies. If you have not yet read the NLRB's January 25, 2012 Operations Management Memo (http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report), I recommend doing so. Even though I disagree with certain aspects of the Memo, it provides some good examples of things to avoid in both social media policies and discipline/termination situations involving social media–for Union and non-Union work environments.