Category Archives: Employment Counseling

April 25, 2013

Tips for Complying with Utah’s Internet Employment Privacy Act

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.

January 30, 2013

EEOC Fails to Prove Credit Checks have Discriminatory Impact

By Mark B. Wiletsky

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.

May 10, 2012

Good Documentation — a recipe for success

By Mark Wiletsky

As a follow-up to a recent post, here is an article with tips for documenting employee performance issues.

Before terminating an employee, even in an at-will state such as Colorado, employers are well-advised to have good documentation in hand. A solid “paper trail” documenting legitimate performance or behavioral issues is often your best weapon to prevent or quickly resolve opportunistic claims from poor performers and disgruntled employees. Although documenting problems is not required by law, jurors expect to such evidence when faced with a claim that the employee was terminated for an unlawful reason. There is no “one-size-fits-all” approach to documenting performance problems, but following a recipe will help to ensure that your documentation contains the key ingredients to ward off a claim.

1. Start with the facts. When documenting performance or behavior problems, avoid ambiguous or subjective phrases and terms, such as saying the employee has a “bad attitude” or has behaved “inappropriately.” Instead, be factual, specific, and give examples. For example, rather than saying an employee has “repeatedly been late to work,” you could write: “John’s shift begins at 8:00 a.m. However, on March 5, 21, and 28, 2012, John arrived at 8:10 a.m., 8:15 a.m. and 9:00 a.m., respectively. John did not call his supervisor in advance to notify him that he would be late those days. As a result of John’s tardiness, employees from the earlier shift had to stay late, causing the company to incur additional expenses, which it is trying to minimize.” Also, replace labels (such as “bad attitude”) with a description of the actual conduct that is at issue, e.g., John has been inattentive during staff meetings, he failed to work with his teammates to complete deliverables on the X project, etc. Lastly, avoid acronyms and highly technical jargon. Make sure that a layperson could read the document and understand the problem.

2. Add in the employee’s explanation. After identifying the problem, recite the employee’s explanation for the problem, or confirm the employee admitted to the behavior. For example: “When Michelle and I met with John on April 1 to discuss his tardiness, John admitted he had been late on the days noted above, but claimed that he had overslept or that road construction delayed him.” Then state that those excuses are not legitimate and reiterate the expectation that the employee will adhere to the rule at issue.

3. Throw in some history. If the employee has had other problems recently, reference those issues. Similarly, if you have had prior conversations with the employee about the conduct at issue, and that conduct is recurring, point out those past conversations: “This is not the first time John has had problems with tardiness. We spoke about this issue on February 5, 2012, because he had arrived late to work two times in a two-week period, and I warned him that he needed to be sure to arrive on time and notify his supervisor if he was going to be late.” But don’t go back too far into the past, and be sure that you are following any applicable collective bargaining agreement with respect to the time period during which past performance issues may be used against an employee.

4. Lay out expectations. Make sure the employee knows what you expect, and include a policy (or excerpt), if applicable. A common sentence included in disciplinary memoranda is: “We expect immediate and sustained improvement. If there are any further issues or problems, you will be subject to additional discipline, up to and including termination of employment.”

5. Finish off with a signature. Make sure the employee signs a document to confirm receipt. Employees or their attorneys may claim that an unsigned document was created after the fact, or that the issue was never discussed with the employee. If the employee refuses to sign the document, simply note the employee refused to sign, and consider sending a copy of the memo to the employee via e-mail with a note, such as: “John – here is a copy of the warning memo that we discussed a few minutes ago.”

Although there is no one “recipe” for successful documentation, following the steps outlined above should be a good start to ensure that you are appropriately documenting performance issues.

April 24, 2012

Good Documentation Dooms FMLA Claim

by Mark Wiletsky

A recent case issued by the Tenth Circuit (which covers Colorado) provides a good reminder about the importance of good documentation, and following your employment policies. In Peterson v. Exide Technologies, the Tenth Circuit affirmed summary judgment in favor of Exide Technologies, dismissing Peterson's Family and Medical Leave Act (FMLA) and wrongful discharge claims as a matter of law. Peterson was involved in a forklift accident, in which he was injured. After the accident, he was placed on FMLA leave for 10 days. After investigating the accident, the employer determined that Peterson had violated its safety policies. Therefore, Exide terminated Peterson four days after the accident, while Peterson was on FMLA leave.

Peterson then sued, claiming his discharge violated his rights under the FMLA, and gave rise to a common law claim for wrongful discharge in violation of public policy. The district court and the Tenth Circuit disagreed. Peterson had a history of documented safety violations, and he had no evidence that the stated reason for his discharge–yet another safety violation–was a mere cover-up (or pretext) for an unlawful motive. Importantly, the court rejected Peterson's argument that Exide had failed to follow its own progressive discipline policy. The court noted that Exide's progressive discipline policy was discretionary rather than mandatory, and it did not prevent Exide from considering past disciplinary actions, even if they were dated.

Peterson also claimed the incident giving rise to his termination was minor, and that he was not at fault for the accident. Again, however, the court rejected his arguments, reasoning that Exide could legitimately rely on the final accident given Peterson's record of unsafe work performance. Thus, even though Peterson was terminated while on FMLA leave, his claims were dismissed. There are several important lessons from this case, including:

1. Document performance and behavior issues as they occur.

2. Review your employment policies to ensure they do not create mandatory language with respect to progressive discipline, or any other language that might limit your right to terminate an employee.

3. It is possible to discharge employees while on FMLA leave, but be cautious when doing so. Such a decision has a heightened possibility of leading to litigation. Even if, as in this case, you can successfully defend the case, consider whether there is another approach that might allow you to avoid litigation altogether.

March 29, 2012

Discharge Checklist

By Mark Wiletsky

Here's a great checklist from Nicole Snyder in our Boise office for things to think about before discharging an employee; you can also get to the checklist from this link: http://www.idahoemploymentlawblog.com/2012/03/a-checklist-to-use-before-discharging-an-employee.html. It's a great list of items to consider before you discharge an employee, regardless of whether your employees are in Idaho or another state. As with any checklist, this is not meant to be all-encompassing; you may be in state with special rules, or in an industry subject to regulations that impact a discharge decision. Still, this is a great resource.