The Fair Credit Reporting Act Needs Your Respect

By Kathleen J. Jennings (kjj@wimlaw.com)

The Fair Credit Reporting Act (FCRA) is one of those laws that often fails to get the respect it deserves. Just the sound of it—it seems to apply to credit reports, so why would an employer need to worry about it? Because the FCRA can also apply to applicant and employee background checks.

A recent decision from a federal court in New York shows us the potential legal consequences of failing to comply with the FCRA. In Garcia v. Execu , S.D.N.Y., No. 17-cv-9401, 2/19/19, Mr. Garcia was terminated on the second day of work because a criminal background check showed that he had open criminal charges. Mr. Garcia said the charges had been dismissed. His termination stood.

So Mr. Garcia filed a class action against the company that hired and fired him, alleging that it violated the FCRA by failing to provide him a copy of his consumer credit report or a written description of his FCRA rights before taking an adverse employment action against him based on the report. The federal district court denied the employer’s motion to dismiss the class allegations. Now the company must defend a class action simply because it failed to provide a copy of Mr. Garcia’s background check to him. This is an expensive lesson for that company.

Here’s what employers need to know about the FCRA: when a company runs background checks through a company in the business of compiling background information, it must comply with the FCRA. Specifically, the FCRA requires the following before the company seeks the background check:

  • Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in a stand-alone format. The notice can’t be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn’t confuse or detract from the notice.
  • If you are asking a company to provide an “investigative report” – a report based on personal interviews concerning a person’s character, general reputation, personal characteristics, and lifestyle – you must also tell the applicant or employee of his or her right to a description of the nature and scope of the investigation.
  • Get the applicant’s or employee’s written permission to do the background check. This can be part of the document you use to notify the person that you will get the report. If you want the authorization to allow you to get background reports throughout the person’s employment, make sure you say so clearly and conspicuously.
  • Certify to the company from which you are getting the report that you:
    • notified the applicant and got their permission to get a background report;
    • complied with all of the FCRA requirements; and
    • won’t discriminate against the applicant or employee, or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.

Additionally, when taking an adverse action (for example, not hiring an applicant or firing an employee) based on background information obtained through a company in the business of compiling background information, the FCRA has the following additional requirements:

  • Before you take an adverse employment action, you must give the applicant or employee:
    • a notice that includes a copy of the consumer report you relied on to make your decision; and
    • a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which you should have received from the company that sold you the report.

(By giving the person the notice in advance, the person has an opportunity to review the report and explain any negative information.)

  • After you take an adverse employment action, you must tell the applicant or employee (orally, in writing, or electronically):
    • that he or she was rejected because of information in the report;
    • the name, address, and phone number of the company that sold the report;
    • that the company selling the report didn’t make the hiring decision, and can’t give specific reasons for it; and
    • that he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

When Love is in the Air At Work

By Kathleen J. Jennings kjj@wimlaw.com)

Happy Valentine’s Day! This holiday is good time for companies to check their policies on workplace romance and see how they are working.

What are the essential elements of a workplace romance policy?

First, transparency. Workplace romance is going to happen, and the employer can better manage workplace relationships when it knows they exist. A good policy will require employees, particularly upper managers, to disclose romantic relationships with other employees. Why is this any of the company’s business? Because the company needs to ensure that someone is not in the supervisory chain of command of an employee he or she is dating. When an employee has authority over an employee that she or she is dating, that differential in power may be portrayed as sexual harassment when the relationship fails. There may also be risk of disclosure of company confidential information to a subordinate or employee who is not authorized to receive the information during “pillow talk.”.

Because transparency is important, there should be real consequences for employees who fail to report workplace relationships. For example, it has been reported recently that Bridgewater Associates, the $160 billion investment, fired a senior manager for failing to disclose a relationship with a colleague in accordance with company policy.

Second, the policy should make it clear it is not acceptable for a supervisor to date a subordinate employee over whom he or she has authority.

Third, the policy should remind employees who are dating that their behavior at work should always remain professional. No PDA in the workplace, please. Also—no hanging around your boo’s office all day long.

Fourth, the policy should also remind employees of the company’s policy against sexual harassment, and that they may report conduct that they consider to be unwanted and inappropriate.

Consider this: some estimates suggest that 70% of workers have had an office romance, with as many as 25-50% turn into marriage (as cited in Wilson, 2015). Employers cannot prevent romance in the workplace, but they can manage it so that it does not undermine employee morale and productivity.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Up in Smoke: The Impact of Legalized Marijuana on Drug Testing in the Workplace

By Kathleen Jennings (kjj@wimlaw.com)

As marijuana becomes legalized across the country, employers are faced with legal and practical issues arising out of the use of marijuana by workers and applicants. Thirty-two states and Washington, D.C., now allow medical marijuana, and 10 states and Washington, D.C. have legalized recreational use.

Employers doing business in states that allow medical marijuana must be aware of the legal protections those laws provide to persons who are using medical marijuana. For example, a Delaware state court recently allowed a former Kraft Heinz Foods Co. employee to move forward with his lawsuit alleging the company violated the state’s medical marijuana law by terminating him for a positive drug test. In 2017, a Rhode Island state court ruled that a fabrics manufacturer could not refuse to hire a paid intern who legally used medical cannabis, even though she could not pass a drug test. And in 2018, a federal court in Connecticut ruled that the state’s medical marijuana law prohibited a health-care company from rejecting a job applicant who failed a pre-employment drug test.

Many state laws that allow the use of medical marijuana also contain anti-discrimination protections specifically for medical marijuana patients. Thus, it is important to know the applicable laws in the jurisdiction(s) where your company does business.

As more states and municipalities legalize marijuana for recreational use, employers face challenges in hiring applicants who can pass drug tests that include screening for THC. In fact, in an effort to increase the applicant pool, some employers have removed THC from the list of drugs that are the subject of pre-employment testing. [Employers who are required to follow DOT drug testing procedures must still test for THC]. However, those employers may still test for the presence of THC in post-accident testing and testing for cause. Note that one of the challenges in testing for the presence of THC is the fact that it metabolizes much more slowly than many other legal and illegal drugs, so it is harder to show a cause and effect between the presence of THC in an employee’s urine and a workplace accident.

If an employer reasonably suspects that an employee is under the influence of marijuana while working, it is important to document any indications of recent drug use in the employee’s physical appearance, demeanor, and—let’s face it—smell, to support a decision to require the employee to submit to a drug test for cause.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Recession-Proofing Your Employment Practices

By Christopher Adams (cda@wimlaw.com) and Elizabeth Dorminey (ekd@wimlaw.com)

No one can predict where the U.S. economy will be a year from now, but signs point to a slow-down in both the U.S. and global economy. If the U.S. experiences a recession similar to the 2007 to 2009 period, we can expect a significant contraction in GDP, and more specifically, a decline in employment. This is relevant because employment-related litigation often is counter-cyclical: it goes up when the economy goes down. Laid-off and terminated workers have more incentive to sue when they can’t find new jobs right away. Lay-offs can give creative plaintiffs’ attorneys insight into possible systemic problems which can serve as vehicles for class or collective actions.

What can an employer do now to insulate itself from these recession-related risks? Here are a few ideas:

l    Update your Employee Handbook. Too often, employers have policies and procedures set forth in their Handbooks and internal guidelines that they do not follow themselves. If you no longer follow a particular policy or process, take it out of your Handbook, particularly if the policy or process involves employee discipline, payroll practices, leave process and/or employee terminations. In most states a handbook isn’t legally binding, but it’s not helpful to have policies that aren’t practiced.

l    Audit your own records. Make certain that your internal data collection process is consistent, particularly across HR database systems. Don’t be the employer who sent a COBRA notice to the wrong address but sent the letter of termination and Separation Notice to the right one. If you use multiple database systems, make sure they communicate with each other to avoid such pitfalls.

l    Make sure your notices are up to date. An incorrect COBRA or FMLA notice can expose an employer to statutory penalties. Are yours up-to-date? A surprising number of employers never updated their FMLA notices and procedures after the 2009 regulation changes. Are your COBRA notices correct? The last several years have seen a significant increase in COBRA class action litigation related to faulty COBRA notices.

l    Update ERISA-governed benefit plans. Will your benefit plans meet the needs of a workforce that might need greater access to funds due to economic stress? Do you allow distributions upon termination of employment? (There are good arguments for and against allowing such distributions.) Do you allow for loans and/or hardship withdrawals? The IRS has proposed changes to the hardship distribution rules – stay tuned. Also, have your disability-related plans been updated to reflect the 2018 DOL regulatory changes?

l    Be aware of “disparate impact” claims. “Disparate impact” refers to a statistically significant adverse impact on some protected group of a facially neutral policy or practice. If you must lay off employees, check the demographics to be sure the affected employees aren’t predominantly over 40, or female, African-American, or otherwise members of a protected group.

l    Build a plan for unemployment claims. Do you have in place a procedure for responding to your State’s unemployment compensation hearing process? These proceedings can be a goldmine for a plaintiffs’ attorneys. An ill-prepared supervisor or HR representative testifies under oath, and what they say can be turned against the employer.

l    Watch out for WARN. In a worse-case scenario of a mass layoff or facility closing, remember that the Worker Adjustment and Retraining Notification Act (WARN) may apply, requiring advance notice of certain mass layoffs or closings.

l    Stay out of court by choosing arbitration. Consider requiring new or existing employees to sign an arbitration agreement, waiver of class/collective participation, choice of laws, and/or choice of forum agreements. Recent court decisions have upheld such agreements, allowing confidential resolution of individual claims instead of wholesale litigation. This is a complex issue, and no one choice is correct for every employer, but such agreements can help control future legal claims by terminated workers.

As Ben Franklin so famously put it, “an ounce of prevention is worth a pound of cure.” Start recession-proofing your employment policies and practices today.

 

Christopher Adams is a paralegal and a member of the Wage and Hour practice team at Wimberly, Lawson, Steckel, Schneider & Stine, P.C. He can be reached at (404) 365-0900 or cda@wimlaw.com.

Elizabeth Dorminey is a principal in the Athens office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. where she is a member of the Wage and Hour practice team. She can be contacted at ekd@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

A Time of Reflection—And Preparation

By Kathleen J. Jennings (kjj@wimlaw.com)

The end of the year can be a time of reflection. For many businesses, the time between Christmas and the New Year can be an excellent time to reflect on the progress made in meeting goals for compliance with state and federal employment laws and to prepare for the challenges of the new year. Some things to review may include the following:

  • When is the last time that your Employee Handbook was reviewed for legal compliance? Laws are constantly changing, and your handbook needs to keep up with those changes.
  • When is the last time that your Job Application form was reviewed for compliance?
  • Do you have a written harassment policy that is posted and accessible?
  • When is the last time that you conducted harassment training for your supervisors and managers? We suggest that it be done annually.
  • Have you audited pay records to determine if there are any potential issues with discrimination in pay?
  • When is the last time that you reviewed your exempt employees to determine if their actual job duties qualify them to be exempt? Remember—paying an employee a salary, by itself, does not make that employee exempt.
  • Do you have procedures in place to make sure that non-exempt employees are receiving overtime for hours worked that qualify for overtime?
  • Is the minimum wage changing in your state?
  • Have you reviewed your I-9 files to make sure that the I-9s are correctly filled out and that the proper documentation was reviewed?
  • Is your facility ready for an OSHA inspection? Take a walkaround to look for obvious violations such as accessible exits, working lights on exit signs, eye wash stations that work, visible warning signs, electrical outlets in good working order, and general housekeeping. Also—are employees wearing required PPE?
  • Do you have a safety training program? Is all training documented?
  • Does your leave policy comply with ADA and the FMLA?
  • Is there anything or anyone that employees seem to complain about on a regular basis? Is there anything you can do about it? Employees that believe that management does not listen to their concerns may be more likely to reach out to a third party, such as a union or an agency such as the EEOC or OSHA.

Happy New Year!

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2018 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 
 

Fifth Circuit Considers Whether Sexual Orientation is Covered By Title VII–In A Case Filed By A Heterosexual

By Kathleen J. Jennings (kjj@wimlaw.com)

The issue of whether discrimination on the basis of sexual orientation is protected by Title VII is under consideration by several Circuit courts and may one day be decided by the U.S. Supreme Court. A case before the Fifth Circuit Court of Appeals has an interesting twist: the lawsuit was filed by a heterosexual married female employee who was terminated due to a post on Facebook objecting to transgender bathroom use. [Bonnie O’Daniel v. Industrial Service Solutions, et al, Docket No. 18-30136].

Ms. O’Daniel, an HR employee of Plant-N-Power Services, Inc. in Louisiana, made a Facebook post that she described as follows: “The post included a photo array of a man (or possibly a transgender woman) wearing a dress at Target[, a retail store]. The post expressed [O’Daniel’s] views on an ongoing public debate, specifically her discontent with the possibility of this individual being permitted to use a women’s bathroom and/or dressing room at the same time as [O’Daniel’s] young daughters.”

The President of Plant-N-Power Services, Inc., who is a member of the LBGTQ community, saw the post, and Ms. O’Daniel was disciplined and ultimately discharged. (Yet another cautionary tale about posting controversial things on social media).

Ms. O’Daniel alleged that she was terminated on the basis of her sexual orientation—heterosexual, and in retaliation for complaining that she was discriminated against on the basis of her sexual orientation (heterosexual). The District Court dismissed the lawsuit, finding that Title VII does not protect employees from discrimination in the basis of sexual orientation, and Ms. O’Daniel appealed to the Fifth Circuit.

The EEOC and several LBGTQ advocacy groups have filed Briefs arguing that Title VII does prohibit discrimination n the basis of sexual orientation. So the irony here is that a heterosexual ex-HR employee who publicly posted her objections to transgender bathroom use may be the person who convinces the Fifth Circuit Court of Appeals to recognize sexual orientation as a protected status. We’ll keep you posted on this.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2018 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

No-Match Letters Are Coming Back—Are you Ready?

By Kathleen J. Jennings (kjj@wimlaw.com)

The Social Security Administration has announced that it will resume sending “no-match” letters to employers starting in 2019. [The SSA stopped sending “no-match” letters back in 2012.]

What is a “no-match” letter? It is a written notice issued by the Social Security Administration (SSA) to an employer, usually in response to an employee wage report, advising that the name or Social Security number (SSN) reported by the employer for one or more employees does not “match” a name or SSN combination reflected in SSA’s records. The letter cautions employers against taking any adverse employment action against a referenced employee based solely on receipt of the letter, and explicitly states that the letter makes no statement about the referenced employee’s immigration status. Rather, the letter simply reports an apparent error in either the employer’s records or SSA’s records, and seeks the employer’s and, if necessary, the employee’s assistance in conforming those records.

What action should an employer take upon receipt of an SSA no-match letter or other notice of a no-match? To confirm that a reporting or input error is not the cause of a no-match, an employer, with the assistance of the referenced employee, should confirm that the name and SSN reported accurately reflects the referenced employee’s name and SSN. If no error is discovered, the employer should then advise the referenced employee to contact the local SSA office to address the reported no-match. An employer should not use the no-match letter or other no match notice by itself as the reason for taking any adverse employment action against the referenced employee. In addition, employers should not use the receipt of a no-match letter or other no-match notice (or the fact that an employee raises any objection to the employer’s no-match response procedures) as a basis to either retaliate against the employee or otherwise subject the employee to heightened scrutiny. Doing so may violate the anti-discrimination provision of the Immigration and Nationality Act (INA), or other state or Federal equal employment opportunity or labor laws. While not required to do so, an employer may schedule (and document) periodic meetings or other communications with the employee during the resolution period to keep abreast of the employee’s efforts to resolve the no-match, and to determine whether the employee needs more time to resolve the no-match than initially contemplated.

Employers should not jump to conclusions when they receive these letters. If an employee’s name and SSN don’t match SSA’s records, this does not necessarily mean the employee is not authorized to work. There are many possible reasons for a no-match letter, many of which have nothing to do with an individual’s immigration status or work authorization. Because of this, an employer should not assume that an employee referenced in a no-match letter is not work authorized and should not take adverse action against the referenced employee based on that assumption. Such action could subject the employer to liability for discrimination under the antidiscrimination provision of INA. When in doubt, consult with counsel.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2018 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.