Employers' Lawyers Blog

Colorado Prohibits Employer Access to Social Media Accounts

By Alyssa Yatsko 

Under a new bill recently signed into law by Colorado Governor John Hickenlooper, employers are prohibited from requiring access to an applicant’s or employee’s personal social media account.   Violations could result in penalties and fines.  Here are the details of this new law. 

Employers Denied Access to Private Social Media Accounts 

Colorado joins the growing trend of states restricting employer access to private social media and other online accounts of job applicants and employees.  Colorado’s new law, House Bill 13-1046,  applies to any employer engaged in a business, industry, trade or profession in the state, except government law enforcement agencies.  It prohibits employers from suggesting, requesting or requiring that an applicant or employee disclose their user name, password or other means of accessing their personal account or online services.  Employers also may not compel an applicant or employee to add anyone to their list of contacts (e.g., to “friend” on Facebook, etc.) or to change their privacy settings on their social media accounts.  Employers violate this law if they discipline, discharge or otherwise penalize an employee, or fail to hire an applicant who refuses to disclose any of the prohibited information or refuses to add the employer to their contacts or to change their privacy settings. 

A person harmed by an employer’s violation of the law may file a complaint with the Colorado Department of Labor and Employment (CDLE).  The CDLE is required to investigate the complaint and issue findings within 30 days after a hearing.  The law provides that the CDLE may create rules regarding the penalties for violations, including imposing fines of up to $1,000 for a first violation and up to $5,000 for each subsequent violation. 

Access Permitted for Company Systems and Certain Investigations  

Two exceptions to the prohibition on requiring access to online accounts are spelled out in the law.  First, employers are permitted to require employees to disclose any user name, password or other access to non-personal accounts or services that provide access to the employer’s internal computer or information systems.  Second, employers are allowed to conduct investigations in two areas:  (1) to ensure compliance with applicable securities or financial law or regulatory requirements based on the receipt of information about the use of a personal online account by an employee for business purposes; and (2) to investigate whether an employee has made an unauthorized posting of the employer’s proprietary information or financial data to a personal online account.  No “fishing expeditions” are allowed under the investigative exceptions; employers may only access personal online information for these investigative purposes following the receipt of information that the employee is using his or her personal online accounts in these specific, inappropriate ways. 

Employers Permitted to Enforce Non-Conflicting Policies 

Existing employment policies that do not conflict with the provisions of this new law are permissible and may be enforced.  Employers should examine their policies and practices that may conflict with this law and revise them to remove any requirements or actions prohibited by this law.  Specifically, employers should revisit their background check practices related to social media, workplace investigation procedures, policies governing use of company computers, electronic accounts and personal online accounts as well as any other policy addressing technology and employer access to accounts.

D.C. Circuit Court Tears Down NLRB Poster Rule

By Brad Williams

The writing’s still not on the wall.  On May 7, 2013, the U.S. Court of Appeals for the District of Columbia Circuit rejected the National Labor Relations Board’s (NLRB) controversial poster rule requiring 6 million private employers to post a government-issued notice advising employees of their union-related rights.  The rule remains in limbo pending a related appeal in the U.S. Court of Appeals for the Fourth Circuit, and potential appeal to the U.S. Supreme Court.

Poster Rule and Business Group Backlash

The controversial rule was issued in August 2011 under the NLRB’s purported statutory authority to enact rules “necessary” to carrying out the National Labor Relation Act’s provisions.  The Board had long been empowered under Section 6 of the Act to engage in administrative rulemaking, but had generally eschewed this power to enforce union-related rights through case-by-case adjudication.  In justifying its unusual poster rule, the NLRB claimed that many employees were unaware of their union-related rights.  It cited the small percentage of unionized employees in the private workforce, and claimed that immigrants and high school students were particularly unlikely to be aware of their workplace rights.

The NLRB poster rule required all private employers covered by the Act—6 million businesses—to post an 11-by-17 inch government-issued notice in “conspicuous places,” and on intranet or internet sites used to communicate with employees.  The poster advised employees of their rights to organize and join unions, to collectively bargain, and to strike and picket.  Failure to post was an unfair labor practice, and could separately be used as evidence of an employer’s unlawful motive in other Board cases.  The statute of limitations on unfair labor practice charges would also be tolled in cases where employers failed to post.

Business groups excoriated the rule as unbalanced.  The poster did not advise employees of their additional rights to decertify unions, to refuse to pay dues in right-to-work states, or to object to dues payments in excess of those needed for representational purposes.  The rule also arguably implicated employers’ free speech rights, and exceeded the NLRB’s Section 6 authority because the Act does not expressly mandate that the Board educate employees about workplace rights.  Some groups claimed that the Obama administration was also improperly attempting to bypass the legislative process through substantive rulemaking.

Small Colorado Employers Face Higher Damages for Discrimination Claims

By Mark Wiletsky and Steve Gutierrez

Small businesses beware: your employees now have more incentive to sue you.  As of January 1, 2015, employees can recover compensatory and punitive damages for employment discrimination claims against businesses that employ between one to fourteen people under Colorado’s Job Protection and Civil Rights Enforcement Act of 2013, signed into law by Governor John Hickenlooper on Monday, May 6, 2013.  But don’t despair.  By taking some proactive steps now, businesses can minimize their exposure to potential claims. 

Increased Exposure for Small Employers 

Colorado’s new anti-discrimination law changes the landscape for small employers by allowing compensatory and punitive damages against Colorado’s small businesses (with 1-14 employees), along with attorneys’ fees and costs to the employee if he or she prevails, back pay, front pay, interest, and other potential relief.  Thankfully, the new Colorado law contains some safeguards against outrageous damage awards that would likely put small employers out of business.  For businesses with 1-4 employees, compensatory and punitive damages are capped at $10,000.  For businesses with 5-15 employees, such damages are capped at $25,000.  Businesses with greater than 15 employees are subject to the existing damages caps found in the federal anti-discrimination laws. 

The availability of these damages to employees of businesses with fewer than 15 employees will likely result in more discrimination cases filed in Colorado against small businesses, significantly raising the potential exposure for small business owners.  That is especially true given that such claims may be filed in state court, which is often viewed by attorneys representing employees as a more favorable forum for such claims. 

Age Discrimination No Longer Cut Off at Age 70 

The Job Protection and Civil Rights Enforcement Act of 2013 also eliminates the age 70 cutoff for age discrimination claims brought under Colorado law.  This brings the state law into line with the federal Age Discrimination in Employment Act which does not have an upper age limit.  Consequently, employees age 40 and older are protected from employment discrimination under both state and federal law. 

Good Faith Efforts May Avoid Punitive Damages 

Under the new Colorado law, employers will not be subject to punitive damages if they can demonstrate good-faith efforts to prevent discriminatory and unfair employment practices in the workplace.  In addition, no punitive damages are available in a lawsuit involving a claim of failure to make a reasonable accommodation for a disability if the employer can demonstrate good-faith efforts to identify and make a reasonable accommodation that would provide the disabled employee with an equally effective opportunity and would not cause an undue hardship on the employer’s operation.  Small businesses should begin those good-faith efforts now so that policies and procedures to prevent and respond to discrimination are in place when the law goes into effect. 

Steps Small Businesses Should Take to Minimize Risk 

Unfortunately for small businesses, the mere threat of a lawsuit, however meritless, may stretch tight resources to the breaking point.  That is why it is so important to take proactive measures now, which will help minimize the risk of such lawsuits.  Among other things, small businesses should:  

1)  Adopt and distribute policies that prohibit discrimination, harassment, and retaliation in the workplace.  Require new and existing employees to acknowledge their receipt of these policies, preferably on an annual basis. 

2)  Train supervisors, managers and employees.  Everyone in the workplace should be trained on your anti-discrimination policies and procedures with specialized training provided to supervisors and managers who must recognize harassment and discrimination and know what to do when they observe it or receive a complaint.  In small workplaces, dealing with complaints of discrimination or retaliation can be difficult.  Still, if you address it promptly and appropriately, you will be in a better position to avoid or defend against a claim. 

3)  Document performance issues.  We often see meritless lawsuits filed because legitimate performance concerns were not shared with the employee or appropriately documented.  If an employee has performance issues, be sure to get it in writing.  Focus on the problem, give concrete examples, and warn the employee that a failure to achieve immediate and sustained improvement may result in termination. 

4) Arbitration agreements. Consider whether it would be appropriate to have employees sign an arbitration agreement.  Such agreements take discrimination claims out of the civil court system, and generally allow for a more streamlined resolution.  However, arbitration is not necessarily cheaper than a court proceeding; in fact, in some cases it might cost more.  Be sure to consider all the benefits and burdens of arbitration before relying on such agreements.  And if you prefer arbitration, make sure your agreement complies with all applicable legal requirements.   

Essentially, small employers need the same policies and procedures to deal with discrimination as larger employers do, even though many smaller employers simply do not have the same resources.  Take the next 18 months before the law becomes effective to educate yourself, your supervisors and your employees on discrimination issues and take the steps that will help minimize your risk to the damages that will be available soon to aggrieved employees. 

Colorado Restricts Employers' Use of Credit Reports

By Mark Wiletsky 

Employers using credit reports to evaluate applicants and employees take note: Colorado recently enacted the “Employment Opportunity Act” limiting the use of credit reports in employment decisions.  In passing this law, Colorado joins eight other states--California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington--in restricting employers from obtaining and/or using credit history information when evaluating applicants and employees.   The new Colorado law exempts certain job positions from the prohibition on the use of credit reports, but the exceptions are very fact specific.  Employers need to analyze the job responsibilities of the position at issue in order to determine if they may use credit information under this new law. 

Prohibition on the Use of Consumer Credit Information for Employment Purposes 

Effective July 1, 2013, section 8-2-126 of the Colorado Revised Statutes provides that an employer shall not use consumer credit information for employment purposes unless the credit information is substantially related to the employee’s current or potential job.  This means that Colorado employers are prohibited from using credit information in the employment context except in those limited situations where credit or financial responsibility is substantially related to the job.  The type of information prohibited under this law includes any written, oral or other communication of information that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history.  This includes a credit score, but does not include the name, address or date of birth of an employee associated with a social security number. 

“Substantially Related” Analysis Looks to Job Responsibilities 

When determining whether a particular position falls within the exception where credit information is “substantially related to the employee’s current or potential job,” employers may not rely on an informal, best-guess determination.  Instead, employers must carefully analyze whether the job in question meets the parameters detailed in the new law.  

Under Colorado’s law, “substantially related to the employee’s current or potential job” is defined to apply to positions that: 

1)         Constitute executive or management personnel or officers or employees who constitute professional staff to executive and management personnel, and the position involves one or more of the following: 

                A)    Setting the direction or control of a business, division, unit or an agency of a business;

                B)    A fiduciary responsibility to the employer;

                C)    Access to customers’, employees’, or the employer’s personal or financial information (other than information ordinarily provided in a retail transaction); or

                D)    The authority to issue payments, collect debts or enter into contracts; OR 

2)         Involves contracts with defense, intelligence, national security or space agencies of the federal government.

Consider this example:  you are hiring a human resource specialist who will administer employee benefits within your company.  May you obtain and use a credit report on applicants for this position?  Assuming this position does not involve federal defense, intelligence, national security or space agency contracts, you first must determine if this position is an executive or management position, or alternatively, if this position is considered professional staff to an executive or manager.  In our example, the employee benefits specialist position may or may not be an executive or management position at your company.  If not, the position may be considered professional staff to an executive or manager if the position reports to an HR Director, Vice President or other similar high level manager or officer.  If we assume this position meets this threshold determination, you next must analyze if the position involves one or more of the four areas of responsibilities where credit information will be deemed substantially related.  Because an employee benefits specialist is likely to have access to employees’ personal and perhaps financial information, it appears to fall within the third area of responsibility where credit information will be deemed substantially related to the job, but the answer is certainly not clear-cut.

OFCCP Settles Alleged Systemic Discrimination Against…Males

By Chris Chrisbens

Occasionally, the question arises whether the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) will pursue alleged discrimination against white males.  The OFCCP answered that question last Thursday announcing an audit settlement with federal contractor Goodwill Industries of Southern California alleging systemic discrimination against men.  OFCCP’s press release states that “Goodwill’s hiring process favored female applicants for entry-level positions as attendants at local donation centers, in part because of perceptions that women have better customer service skills.” 

While denying discrimination, Goodwill agreed to pay $130,970 in back wages to 200 unsuccessful male applicants and to make 18 job offers to qualified men previously rejected. 

"Sex discrimination in the workplace can take many forms, and we are committed to fighting all of them," said OFCCP Director Patricia A. Shiu. "That means getting away from outdated notions about
what constitutes 'men's work' and what constitutes 'women's work.'”

For federal contractors it is especially important that they pay attention to statistically significant hiring disparities against both women and men, and are prepared to defend their hiring criteria as job-related and consistent with business necessity. In this case, Goodwill’s alleged belief that men were not as well-suited for customer service as women clearly did not pass muster. 

Related articles

EEOC Fails to Prove Credit Checks have Discriminatory Impact

OFCCP Wins Again: Health Care Providers May Be "Subcontractors" with Affirmative Action Obligations

BUZZ KILL: Employee Legally Fired For Off-Duty Marijuana Use

By Emily Hobbs-Wright & Brad Williams

The Colorado Court of Appeals issued a precedent-setting decision today upholding an employee’s firing for off-duty marijuana use.  Citing federal law, the court held that using pot during non-working hours is not “lawful activity” under the state’s lawful off-duty activity statute.  The decision provides the first direct guidance on terminating workers for off-duty marijuana use since Amendment 64 legalized the drug’s use and possession last November.

The case involved a quadriplegic employee licensed to use pot under the state’s medical marijuana amendment.  The company terminated his employment after he tested positive for drugs in violation of company policy.  The terminated worker claimed that he used the drug within the limits of his license, had never smoked on his employer’s premises, and had never been under the drug’s influence at work. 

In the lawsuit, the terminated worker claimed that the company’s actions violated Colorado’s lawful off-duty activity statute, which prohibits termination for any “lawful activity” conducted off an employer’s premises during nonworking hours.  Before today, Colorado courts had never squarely addressed whether the statute prohibits termination for off-duty marijuana use, when it is permitted under Colorado law. 

Invoking a dictionary definition of the term “lawful,” the Court of Appeals held that “for an activity to be ‘lawful’ in Colorado, it must be permitted by, and not contrary to, both state and federal law.”  Because marijuana use remains illegal under federal law, termination for off-duty pot-smoking does not violate the statute.  The court also noted that its interpretation maintained the “balance between employer and employee rights” reflected elsewhere in Colorado law.

The decision is hugely important for Colorado employers.  Amendment 64, like the medical marijuana amendment before it, did not require employers to “permit or accommodate” pot use, and expressly permitted policies restricting such use.  But before today, courts had never previously decided whether state or federal law defines “lawful activity” under the statute.

The decision may not be the final word.  Further appeal to the Colorado Supreme Court is possible, and other legal theories based on disability and similar laws remain untested.  But for now, the decision provides the best guidance yet on terminating marijuana users, suggesting that courts will protect employers’ rights to enforce drug policies notwithstanding Colorado’s legalization of marijuana.  It further reinforces the importance of employers defining illegal drugs as those prohibited under both state and federal law in drug policies.

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.

Tips for Complying with Utah’s Internet Employment Privacy Act

By Elizabeth Dunning

Effective May 14, 2013, Utah employers may not request employees or applicants to disclose information related to their personal Internet accounts.  The Internet Employment Privacy Act(IEPA), recently signed into law by Utah Governor Gary R. Herbert, prohibits employers from asking an employee or applicant to reveal a username or password that allows access to the individual’s personal Internet account.  In addition, employers may not penalize or discriminate against an employee or applicant for failing to disclose a username or password.  A similar restriction applies to higher educational institutions through passage of the Internet Postsecondary Institution Privacy Act. 

With enactment of the IEPA, Utah becomes the fifth state to pass legislation that limits an employer’s access to social media accounts, joining California, Illinois, Maryland and Michigan.  New Mexico passed a similar law shortly after Utah and New Jersey’s law passed the legislature and is awaiting the governor’s signature.  A bill introduced in February in the U.S. House of Representatives called the Social Networking Online Protection Act (H.R. 537) is stuck in committee. 

Public Online Accounts Are Fair Game under the IEPA 

The IEPA does not restrict or prohibit employers from viewing or using online information about employees and applicants that the employer can obtain without the employee’s username or password.  Any online information that is available to the public may be accessed and viewed by employers without violating the IEPA.  Consequently, individuals who set privacy settings on their online accounts to allow “public” access effectively opt themselves out of any protections offered by this new law. 

Utah Restriction Applies to Accounts Used Exclusively for Personal Communication 

In prohibiting employers from requiring disclosure of online usernames and passwords, the IEPA draws a distinction between personal Internet accounts and those used for business related communications.  The law only restricts employer access to personal online accounts that are used by an employee or applicant exclusively for personal communications unrelated to any business purpose of the employer.  It does not, however, restrict access to accounts created, maintained, used or accessed by an employee or applicant for business related communications or for a business purpose of the employer.  

In practice, the line between personal and business related accounts may be blurred as many employees use their personal online presence to network and communicate for business reasons.  Consider the sales person who uses his or her LinkedIn account to communicate with potential buyers within a particular industry, or the CPA who posts tax reminders on his or her Facebook page.  Are those accounts accessible under the IEPA since they are not used “exclusively” for personal communications?  A plain reading of the law suggests that may be the case, thereby watering down the potential protections offered by the IEPA to applicants and employees.   

Steps for Complying with the IEPA 

Utah employers should review their HR forms, policies and practices to ensure that they do not ask applicants and/or employees to provide a username or password to their personal Internet accounts.   Train supervisors and managers not to ask for this information as well.  In fact, take the opportunity to remind supervisors and managers not to “friend” subordinates on personal online platforms, such as Facebook.  In addition, reinforce that employees and applicants may not be penalized or treated adversely for failing to provide a username or password for personal online accounts.   

Remember, too, that even though the IEPA does not prohibit accessing an employee’s or applicant’s public social media accounts, viewing such information creates other risks.  Employers may view information regarding the individual’s religion, race, national origin, disability, age, or other protected group status that could give rise to a discrimination claim.  Furthermore, online information is unreliable and ever-changing, meaning that employers should not rely on what they see online when making employment decisions.  To stay out of trouble, consult with legal counsel before viewing or using social media in the employment context.

For more information about permissible actions and potential damages under the Utah Internet Employment Privacy Act, please see our Client Alert.

NLRB Says Investigation Confidentiality Policy is Unlawful

By Chris Chrisbens                                                                                                  

Following its decision in Banner Health (despite the uncertainty caused by the Noel Canning decision), the National Labor Relations Board (NLRB) recently released an Advice Memorandum stating that  Verso Paper Corporation’s written policy calling for employees to maintain confidentiality in all workplace investigations violates Section 7 “concerted activity” rights under the National Labor Relations Act (NLRA).   Verso’s policy is unlawful, says the NLRB, “because it does not take into account the Employer’s burden to show in each particular situation that the Employer has a business justification for confidentiality that outweighs employees’ Section 7 rights.” 

Banner Health:  Blanket Confidentiality Violates NLRA Section 7

As reported in July 2012, the NLRB in Banner Health held that at the outset of each investigation employers must carefully balance whether a confidentiality requirement truly is warranted under the specific circumstances, or whether it would unfairly impinge employees Section 7 rights to discuss their working conditions.  Only where a need for confidentiality outweighs Section 7 rights can confidentiality be required. 

Unfortunately, the NLRB’s analysis in Banner Health at least implied that the only relevant factors weighing in favor of confidentiality are whether witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.  The NLRB provided no guidance as to whether or not any additional factors, or what other factors, might be important in justifying a confidentiality instruction.  In particular, the NLRB in Banner Health did not discuss overarching factors which generally warrant confidentiality in most workplace investigations, including encouraging witness and complainant participation. 

Verso Paper’s Unlawful Confidentiality Policy

Verso Paper’s policy articulated the broadly-accepted bases for investigation confidentiality:

Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

The NLRB’s Advice Memo suggests that Verso’s blanket policy is unlawful because “specific facts” revealing a “legitimate and substantial” reason are necessary to justify confidentiality in each case: 

An employer may prohibit employees’ discussions during an investigation only if it demonstrates that it has a legitimate and substantial business justification that outweighs the Section 7 right.  In Banner Health, the Board held that an employer must show more than a generalized concern with protecting the integrity of its investigations. Rather, an employer must “determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, and there [was] a need to prevent a cover up.” 

*  *  * 

The Employer may not avoid this burden by asserting its need to protect the integrity of every investigation, but rather must establish this need in the context of a particular investigation that presents specific facts giving rise to a legitimate and substantial business justification for interference with the employees’ Section 7 right.  (Emphasis added.) 

How a Colorado Bill Could Provide Up to 24 Weeks of FMLA Leave

By Brian Mumaugh

Could Colorado employees be entitled to take up to 24 weeks of job-protected leave every 12 months?  Yes, in some circumstances, if the bill recently passed by the Colorado House of Representatives and progressing through the Senate is signed into law.  Although greatly downsized from its original form, House Bill 1222 expands the group of family members for whom Colorado employees are entitled to take leave from work under the federal Family and Medical Leave Act (FMLA) to include care for civil union partners and domestic partners.  In certain circumstances, this expansion could result in an employee being entitled to 24 weeks of FMLA leave in a given year.  Let’s look at what the bill provides.

Leave to Care for Civil Union and Domestic Partners 

Colorado employees currently must look to the federal FMLA for job-protected leave benefits.  Federal FMLA provides an eligible employee up to 12 weeks of leave during a 12-month period to care for a spouse, child or parent who has a serious health condition.  The federal FMLA, however, does not permit leave for an employee to care for his or her civil union partner or domestic partner.  If signed into law, House bill 1222, called the Family Care Act, would allow an eligible employee to take leave to care for the employee’s partner in a civil union or the employee’s domestic partner (if the employer recognizes the person as the employee’s domestic partner or the domestic partnership is registered with the municipality or the state, as applicable).  The employer would be permitted to require the employee to provide reasonable documentation or a written statement of the family relationship, in accordance with the FMLA.  The employer also would be allowed to require the same medical certification as may be required under the FMLA. 

Immigration Law Webinar: New I-9 Forms Effective on May 7th

Last month, U.S. Citizenship and Immigration Services announced that employers should begin to use the revised version of the I-9 employment eligibility verification form. The new I-9 will be mandatory for all employers beginning on May 7th.

Join us for a complimentary 30-minute webinar to learn what changes have been made and what you need to know about using the new I-9 form. 

Wednesday, April 24, 2013
Noon – 12:30 p.m. MST
Webinar login information will be included in your RSVP confirmation.

SPEAKER CLICK NAME TO VIEW BIO
Roger Tsai, Of Counsel, Holland & Hart llp

Click here to RSVP now.

Please respond by Tuesday, April 23, 2013. 

Questions? Contact Tracy Taylor at tttaylor@hollandhart.com.