Businesses are constantly challenged by the ever-evolving landscape of labor and employment law, with new legislation and judicial developments occurring almost daily fueling a seemingly never-ending stream of litigation. For companies operating in multiple states, complying with this patchwork of federal, state, and local laws and developments can be daunting. Knowing these issues are a top concern for management and in-house counsel, Morrison Foerster keeps pace with this rapidly evolving landscape. MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues covering key judicial, litigation and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

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Fourth Circuit Stays Injunction of Trump DEI Executive Orders

President Trump Rescinds Affirmative Action for Federal Contractors and Requires Enforcement Plan to End Unlawful DEI at Private Companies

FAR Council Withdraws “Pay Equity and Transparency” Proposed Rule

The “Preventative Duty”: New Law Places Active Duty on Employers in the UK to Prevent Sexual Harassment in the Workplace

Good News for Employers: Texas Court Blocks FTC’s Non-Compete Ban

The increasingly polarized political climate has placed California employers in the middle of the dispute between the federal and California governments over immigration policy.  On October 5, 2017, Governor Jerry Brown of California signed the Immigrant Worker Protection Act (AB 450) into law.  The new statute, which took effect on January 1, 2018, imposes various prohibitions and requirements on California employers with regard to federal immigration enforcement actions in the workplace.  For example, whereas employers could previously consent to federal agents’ inspection of the workplace and review of employee records, this is no longer true in California under state law.  Violation of AB 450 could result in thousands of dollars in penalties for an employer.  As discussed below, the federal government is currently challenging AB 450 on preemption grounds.  While the future of AB 450 is uncertain, it remains in effect for now.Potential Preemption Of AB 450 By Federal LawThe federal government filed a lawsuit on March 6, 2018 against California, asking for AB 450 and other recently enacted California “sanctuary” laws to be declared constitutionally invalid and seeking injunctions against the enforcement of these laws.  The federal government has already moved for a preliminary injunction, arguing that these laws obstruct the enforcement of federal law, including the Immigration Reform and Control Act of 1986, in violation of the Supremacy Clause of the U.S. Constitution.  In its court filings, the federal government has cited to Arizona v. United States, a 2012 U.S. Supreme Court case in which certain provisions of Arizona law that criminalized undocumented presence and work and authorized warrantless arrests of aliens believed to be removable from the United States were held to be preempted by federal law.  The hearing on the federal government’s preliminary injunction motion is currently set for June 20, 2018 in federal court in Sacramento, California. The scheduling of the hearing, which was set recently on March 29, 2018, was delayed in part by the filing of defendants’ motion to transfer the lawsuit from Sacramento to San Francisco, where a lawsuit by California against the federal government regarding new immigration-related conditions for federal funding is being heard. The court denied defendants’ motion to transfer on March 29, 2018.AB 450 Prohibitions And RequirementsAB 450 applies to all public and private employers in California.  It contains three types of prohibitions on employers.  Recent guidance from the California Labor Commissioner and California Attorney General has confirmed that the application of these prohibitions is a “factual, case-by-case determination” that depends on the totality of circumstances in each specific situation.(1)  AB 450 prohibits employers from providing “voluntary consent” to an “immigration enforcement agent” to enter any “nonpublic areas of a place of labor.”  None of the quoted terms has been defined in the statute.  The prohibition here is inapplicable if the agent provides a judicial warrant (a warrant signed by a judge upon a finding of probable cause).  It also does not prevent employers from taking the agent to a nonpublic area where employees are not present for the purpose of verifying whether the agent has a judicial warrant.According to the recent official guidance on AB 450, an example of providing “voluntary consent” to enter a “nonpublic” area could be freely asking or inviting an immigration enforcement agent to enter that area.  The law does not require physically blocking or physically interfering with the entry of an immigration enforcement agent in order to show that voluntary consent was not provided.  A “nonpublic” area is one that the general public is not normally free to enter or access, for example, an office where payroll or personnel records are kept, or an area that an employer designates (for instance, by posting signs or keeping doors closed) as restricted to employees or management of the business.  AB 450’s prohibition against voluntary consent does not apply to a public place of labor—an area that the general public is normally free to enter and access—such as the dining room of a restaurant or the sales floor of a store during business hours.  The definition of “immigration enforcement agent” continues to remain unclear, however.  No doubt it refers to U.S. Immigration and Customs Enforcement (ICE) agents, but the California Attorney General’s office has identified an ICE agent only as an example of an “immigration enforcement agent.” Accordingly, it is possible that AB 450 extends to officials of other federal agencies with immigration-related functions, such as those in the U.S. Department of Labor, which may at times review I-9 forms, and the U.S. Citizenship and Immigration Services.(2)  AB 450 prohibits employers from providing voluntary consent to an immigration enforcement agent to access, review, or obtain the employer’s employee records without a subpoena (which can be issued under the authority of a government agency or an attorney without the need for prior court approval) or judicial warrant.  This prohibition is inapplicable where an immigration agency has issued a “Notice of Inspection” of “I-9 Employment Eligibility Verification forms and other documents,” in which case employers would be entitled to at least three business days to produce the demanded I-9 forms.(As discussed below, an employer’s receipt of a Notice of Inspection triggers certain notice obligations for the employer.)  Of course, federal officials may instead use judicial warrants to get around the three day notice period.The penalty for violating the first or second prohibition under AB 450 is $2,000 to $5,000 for the first violation and $5,000 to $10,000 for each subsequent violation.  AB 450 provides both the California Labor Commissioner and the California Attorney General with the authority to enforce the first two prohibitions through civil action.  Any penalty collected is to be deposited in the Labor Enforcement and Compliance Fund, a source of funding for the California Labor Commissioner’s Office.(3)  AB 450 prohibits employers from re-verifying the employment eligibility of a current employee unless specifically required by federal law.  The penalty for violating this prohibition is up to $10,000. This penalty is recoverable only by the California Labor Commissioner.AB 450 also imposes two notice requirements on employers regarding record inspections by federal immigration agencies.  (1)  AB 450 requires employers to provide each current employee (and the employee’s authorized representative, such as a union, if any) with a notice of any inspection of I-9 forms or other employment records by an immigration agency within 72 hours of receiving notice of the inspection.  (A simple visit by an immigration enforcement agent would not presumably by itself, absent receipt of a Notice of Inspection, trigger this notice obligation.)  Employers must post the notice in the language normally used to communicate employment information to employees.  The notice must contain the following information:  (a) the name of the immigration agency conducting the inspection; (b) the date that the employer received notice of the inspection; (c) the nature of the inspection to the extent known; and (d) a copy of the Notice of Inspection.  Upon reasonable request, employers must also separately provide a copy of the Notice of Inspection to any affected employee. The California Labor Commissioner’s office has made a <a href="https://www.dir.ca.gov/DLSE/LC_90.2_EE_Notice.pdf">notice template</a> available online.(2)  Within 72 hours of receiving written notice from the immigration agency of the results of the inspection of I-9 forms or other employment records, employers must also provide to each affected employee (and the employee’s authorized representative, such as a union, if any) with a notice regarding the results.  The term “affected employee” in this context means “an employee identified by the immigration agency inspection results to be an employee who may lack work authorization, or any employee whose work authorization documents have been identified by the immigration agency inspection to have deficiencies.”  The notice to the affected employee must be delivered by hand at the workplace if possible or, if hand delivery is not possible, by mail and email (if addresses are known).  The notice must contain the following information:  (a) a description of any and all deficiencies or other items identified in the written immigration inspection results notice related to the affected employee; (b) the time period for correcting any potential deficiencies identified by the immigration agency; (c) the time and date of any meeting with the employer to correct any identified deficiencies; and (d) notice that the employee has the right to representation during any meeting scheduled with the employer.  Employers that fail to provide the required notices are subject to penalties of $2,000 to $5,000 for a first violation, and $5,000 to $10,000 for each subsequent violation.  These penalties are recoverable only by the California Labor Commissioner.  The penalties need not be imposed, however, if an employer fails to provide required notice to an employee at the “express and specific direction or request of the federal government.” Practical Steps For EmployersThere are several steps employers can take to minimize the risk of unintentionally violating AB 450:(1)  Develop written guidelines to inform employees (especially frontline employees) about the appropriate person to contact or actions to take in case immigration enforcement agents appear at the workplace unannounced. (2)  Designate certain individuals in a workplace to handle communications with immigration enforcement agents and provide training on AB 450’s prohibitions and requirements to these individuals.  For example, designated individuals will need to know the difference between a judicial warrant, a subpoena, and a Notice of Inspection.  Only a judicial warrant is acceptable to allow agents to enter nonpublic places in a workplace, whereas either a judicial warrant or a subpoena is acceptable to allow agents to inspect employee records.  The prohibition regarding the inspection of I-9 forms and other documents is inapplicable where a Notice of Inspection has been issued, but the receipt of a Notice of Inspection triggers notice obligations.(3)  Because employers’ own designation of certain areas in a workplace as “public” or “nonpublic” would not be dispositive, employers should preemptively identify which areas of the workplace are not normally accessible to the general public.The impact and validity of AB 450 are expected to continue receiving press coverage as the lawsuit in Sacramento develops and ICE and other federal agencies step up immigration enforcement in California.  As AB 450 is still in effect, however, employers should continue proactively addressing potential compliance issues with AB 450 until they have heard otherwise from a court.

Employers Caught In Crosshairs Of Immigration Debate – Understanding And Complying With The California Immigrant Worker Protection Act

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Employers Caught In Crosshairs Of Immigration Debate – Understanding And Complying With The California Immigrant Worker Protection Act

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The increasingly polarized political climate has placed California employers in the middle of the dispute between the federal and California governments over im

As companies begin to think about their summer internship programs, they may want to consider the recent change in the legal landscape surrounding unpaid internships. For good reason, companies have generally been concerned about the legality of unpaid internships, given the U.S. Department of Labor’s (“DOL”) hard stance on the issue and several class actions brought on behalf of unpaid interns over the last ten years.  However, just last month, after the Second Circuit once again refused to adopt the DOL’s hardline stance, the DOL has moved off of its position and has recognized the “primary beneficiary test,” which takes a much more flexible, totality of the circumstances approach to analyzing whether unpaid interns should be paid as employees. The main question under the primary beneficiary test is whether the benefit the intern gets from the internship, such as skills training and professional development, outweighs any potential benefit the company receives. This move by the DOL follows a line of case law rejecting the DOL’s previous standard as too rigid and often finding that the unpaid interns, based on the circumstances of each particular case, are not employees. With this changed landscape in mind, companies may want to revisit the possibility of offering unpaid internships to students. But, before hastily doing so, companies should carefully review and structure their internship program to ensure that the intern is the “primary beneficiary” in the relationship. The Courts Repeatedly Found the DOL’s s Six-Factor Test Was Too RigidThe federal Fair Labor Standards Act (“FLSA”) defines an employee as “any individual employed by an employer,” and defines employ as “to suffer or permit to work.” Under federal law, a distinction has developed between interns or trainees on the one hand and employees on the other. If an individual is determined to be an employee, he or she must be compensated for his or her services in accordance with federal and state minimum wage and overtime laws. More than 70 years ago, the U.S. Supreme Court decided the seminal case on the issue – Walling v. Portland Terminal Co., 330 U.S. 148 (1947) (“Portland Terminal”). Portland Terminal involved unpaid railroad trainees who worked alongside railroad employees. The DOL sought an injunction against Portland Terminal for failing to pay its trainees the minimum wage under the FLSA. The Supreme Court was tasked with interpreting the relatively thin provisions of the FLSA to determine whether the trainees should be considered employees. After reviewing a number of factors, the Court ruled that the trainees were not employees. In reaching its decision, the Court compared the trainees to students in an educational setting and noted that the FLSA’s definition of employer cannot be read so broadly that it includes all students as employees of the schools they attend.Based on the factors considered in Portland Terminal, the DOL identified six criteria for deciding whether trainees or unpaid interns are employees under the FLSA. Under the DOL’s six-factor test, an individual will cross the line from “intern” or “trainee” to “employee” unless all of the following factors are met:<ol><li> The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;</li><li>The internship experience is for the benefit of the intern;</li><li>The intern does not displace regular employees, but works under close supervision of existing staff;</li><li>The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;</li><li>The intern is not necessarily entitled to a job at the conclusion of the internship; and</li><li>The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.</li></ol>The difficulty with the DOL’s six-factor test was that it was too rigid and too dependent on the facts in Portland Terminal, especially the fourth factor—the employer derives no benefit from the intern. In applying the test, many courts have concluded that the six criteria are relevant but not conclusive and have rejected the mechanistic application of the test.The New Primary Beneficiary Test Provides a Fluid and Flexible ApproachRecognizing that the DOL’s six-factor test was too rigid, the Second Circuit in Glatt v. Fox Searchlight Pictures, Inc. sought to provide guidance for a more appropriate “primary beneficiary test” that would provide more flexibility. The Second Circuit articulated a list of seven non-exhaustive factors to aid courts in determining whether an intern is an employee for purposes of the FLSA, which are:<ol><li>The extent to which the intern and the employer clearly understand that there is no expectation of compensation.  Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.</li><li>The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.</li><li>The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.</li><li>The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.</li><li>The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.</li><li>The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.</li><li>The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.</li></ol>In applying these factors, courts should consider the totality of the circumstances. No one factor is dispositive, every factor need not point in the same direction, and other factors beyond this list may be considered.The touchstone of the primary beneficiary test recognized by the Second Circuit is that it weighs the tangible and intangible benefits provided to the intern against the intern’s contribution to the company’s productivity. The test has three salient features. First, it focuses on the benefit the intern gets from the internship. By focusing on the educational aspects of the internship, the test better reflects the role of internships in today’s economy. Second, it provides courts with the flexibility to examine the economic realities as they exist between the intern and the company. The test acknowledges that the company may get some benefit from the internship program; indeed, students want to engage in projects and tasks that contribute to the professional work of the organization. But, the totality of the circumstances approach allows courts to sniff out employers that exploit unpaid interns by using their free labor without providing the interns with an appreciable benefit in education or experience. Third, the test acknowledges that the intern‑employer relationship is different and should not be analyzed in the same way as the standard employee-employer relationship.Other courts have followed suit, rejecting the DOL’s stringent six-factor test and instead applying the flexible primary beneficiary test.  Recently, on December 8, 2017, the Second Circuit applied the primary beneficiary test and found that unpaid interns of various magazines owned by the Hearst Corporation were not employees under the FLSA. On December 19, 2017, the Ninth Circuit similarly applied the primary beneficiary test and found that cosmetology students who provided services in the school’s salon clinics did not qualify as employees under the FLSA, Nevada law, or California law.In response to the move away from the DOL’s six-factor test, on January 5, 2018, the DOL issued a new release, replacing its prior guidance, indicating that the test for unpaid interns and students working for “for profit” employers should be the primary beneficiary test. The DOL recognized that the test is a flexible test with no single factor being determinative and stated that the analysis will necessarily depend on the unique circumstances of each case.Based on the affirmative acknowledgement of the primary beneficiary test by both courts and the DOL, it is safe to say that this test should be applied when analyzing unpaid internship programs going forward.        Is California Law Regarding Unpaid Interns Different?Although no California state court has affirmatively applied the primary beneficiary test, it is likely that a California court would do so, or at the very least, apply a similar test appropriate for the occupational training setting. California federal courts have recognized that “although California law defines the scope of the employment relationship more broadly than the FLSA, there is no indication that California courts have or will depart from federal law on this issue.” Moreover, in a 2010 opinion letter, the California Division of Labor Standards Enforcement (“DLSE”) stated that it “has historically followed federal interpretations which recognize the special status of trainees and interns who perform some work as part of an educational or vocational program” as falling outside of California’s minimum wage laws if there is “a sufficient showing that the intern/trainee is enrolled in a bona fide internship or training program.” The opinion letter stated that “it is reasonable and appropriate for the DLSE to look to the factors used by the DOL in determining the exemption for purposes of coverage ofState minimum wage coverage for trainees/interns in the absence of a State statute or regulation on the matter.” With the DOL’s recent adoption of the primary beneficiary test in January 2018, it is expected that the DLSE and California courts will do the same. The Importance of Classifying an Intern ProperlyIn considering whether to provide an unpaid internship program, companies should understand the potential liability they may face if an unpaid intern is found to be an employee. In addition to the potential exposure to unpaid wages, including overtime, under state and federal labor laws, an adverse ruling could also implicate other laws in the employee-employer context, such as discrimination laws, immigration laws, employee benefits, workers’ compensation coverage, unemployment benefits, and tax issues. For this reason, it is important for California employers to ensure that their unpaid internship programs are in compliance with federal and state laws.Considerations for Structuring an Unpaid Internship ProgramCompanies with unpaid internship programs or companies seeking to establish an unpaid internship program should take a moment to reassess the program under the primary beneficiary test. Based on the non-exhaustive factors articulated by the Second Circuit, some useful considerations include: <ol><li>Requiring that the intern receive academic credit from their academic institution for the internship so that it is tied to the intern’s formal education program.</li><li>Incorporating substantive trainings and other educational, classroom-like components into the internship program.</li><li>Including additional benefits for the intern, such as a mentorship program and shadowing opportunities.</li><li>Limiting the internship program to a specified length of time, such as a semester, so that it corresponds to the intern’s academic calendar and is not so long that the intern is no longer provided with beneficial learning.</li><li>Ensuring that interns understand from the beginning that the internship is unpaid and that they should not have any expectation of employment with the company following the conclusion of the internship.  It may be useful to have interns acknowledge their understanding in writing.</li><li>Keeping tabs on the work performed by the interns to ensure that the work provides significant educational benefits to the intern and keeping a record of the work performed.</li></ol> And, of course, the underlying purpose of the primary beneficiary test should always be kept in mind, so companies should ask this question of their programs: Does our internship program primarily benefit our interns?

A Changing Landscape:  Unpaid Internships Under the DOL’S New Primary Beneficiary Test

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A Changing Landscape: Unpaid Internships Under the DOL’S New Primary Beneficiary Test

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As companies begin to think about their summer internship programs, they may want to consider the recent change in the legal landscape surrounding unpaid intern

Managing employees’ leaves of absence is a tricky business for employers. While laws like the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) provide a set amount of leave protection and are generally easy to follow, courts and agencies have said that anti-discrimination statutes such as the Americans with Disabilities Act (ADA) and the disability provisions of the California Fair Employment and Housing Act (FEHA) may require an employer to provide additional leave beyond the full extent of the leave laws as a reasonable accommodation of an employee’s disability. This result is paradoxical; courts have consistently held that attendance is an essential job function, which an employee on an extended leave obviously cannot perform. Nonetheless, the law has generally been that an extended leave may be a reasonable accommodation if it would likely be effective in allowing the employee to return to work at the end of the leave. To terminate employment under these circumstances could thus expose an employer to liability for disability discrimination, failure to accommodate and failure to engage in the interactive process, unless the employer can make the arduous showing that extending the leave would pose an undue hardship or that the leave is essentially open-ended, either explicitly or implicitly.In a welcome development for employers in Illinois, Indiana and Wisconsin, the Seventh Circuit reached a different result in the second half of 2017. It held that an employee on an extended leave of absence is beyond the protection of the ADA and that leaves of absence are the province of the FMLA, not the ADA. At the end of the year, however, the Ninth Circuit reminded us that this is not the law in California.  Employers here still need to consider extending leaves well beyond the FMLA and CFRA entitlements in order to avoid running afoul of the ADA and FEHA.The Seventh Circuit:  “The ADA is an antidiscrimination statute, not a medical-leave entitlement.”The Seventh Circuit caused ripples last September with its Severson v. Heartland Woodcraft, Inc. opinion, concluding that a multi-month leave of absence was beyond the scope of a reasonable accommodation under the ADA.The relevant facts are straightforward. The plaintiff had been employed by a wood fabricator since 2006 in various physically demanding positions. He had suffered from back pain since 2005 and, in 2010, was diagnosed with a chronic back condition, which did not hamper his ability to work except when he experienced severe “flare-ups.” In June 2013, the plaintiff wrenched his back at home, which aggravated his preexisting condition and caused him to miss work. He requested and received FMLA leave and, throughout the summer, underwent treatment that proved generally ineffective. The plaintiff remained in touch with the defendant’s human resources (HR) manager and submitted periodic doctor’s notes explaining his continued inability to work and requesting leave extensions, which were approved.  In mid-August, the plaintiff told the employer that he had scheduled back surgery on what was the last day of his 12-week FMLA leave. He needed an additional two months to recover after surgery and requested an extension of his leave during this time. In late August, just a day before the plaintiff’s scheduled surgery date, the HR manager informed the plaintiff his employment would end when his FMLA leave expired and invited him to reapply after he recovered from surgery and was medically cleared to work. The plaintiff had the surgery as planned and, when he was cleared to work without limitations three months later, sued the employer for ADA discrimination for failing to accommodate his disability by refusing to allow a two- or three-month leave of absence.The district court granted the employer summary judgment on the ground that the plaintiff’s proposed accommodation was not reasonable.  The plaintiff appealed, and the U.S. Equal Employment Opportunity Commission (EEOC) filed an amicus brief in support of reversal.The Seventh Circuit affirmed the award of summary judgment for the employer.  In affirming the judgment, the court noted that “[t]he ADA is an antidiscrimination statute, not a medical-leave entitlement.” For this reason, “[a] multimonth leave of absence is beyond the scope of a reasonable accommodation under the ADA.” The court explained that a reasonable accommodation, by its statutory definition, is one which allows a disabled employee to perform the essential functions of his position. A long-term leave of absence cannot be a reasonable accommodation because it does not give a disabled individual the means to work but rather excuses his not working. Unlike intermittent time off or a short leave of absence, “a medical leave spanning multiple months does not permit the employee to perform the essential functions of the job” and removes the employee from the class of persons protected by the Act.The Seventh Circuit specifically rejected the EEOC’s argument that a long-term medical leave should qualify as a reasonable accommodation when it is (1) of a definite, time-limited duration, (2) requested in advance and (3) likely to enable the employee to perform the essential job functions when he returns. Such a rule would effectively transform the ADA into a medical-leave statute and would amount to an “open-ended extension of the FMLA.” That can’t be the law, the Seventh Circuit concluded, because the ADA applies only to those who can do the job and long-term medical leave is the domain of the FMLA.The Ninth Circuit:  “A leave of absence can constitute a reasonable accommodation.”Of course, the Seventh Circuit’s Severson opinion is not the law in California. A decision at the end of the year, Villalobos v. TWC Administration LLC, is a timely reminder of that unfortunate fact.As in Severson, the relevant facts in Villalobos are not complicated. The plaintiff was employed by defendant for 24 years as a direct sales representative.  In May 2013, the plaintiff initiated a leave of absence based on a claimed disability, which he identified as stress, anxiety and insomnia. He exhausted his protected medical leave in late July but requested (and received) an extension of this leave until early September as an accommodation of his claimed disability. When this extension expired, the plaintiff’s doctor sent a note requesting a second extension of his leave until early October. The employer approved this request too but noted that it might be unable to accommodate a further extension. The plaintiff returned to work in early October and worked for approximately five weeks before initiating another leave of absence due to his alleged insomnia, depression and anxiety. The employer sent ADA paperwork to the plaintiff in mid-November, who returned it about a month later requesting a leave of absence until late January 2014.  The employer granted the request but noted that any further extension would need to be evaluated. In early February, the plaintiff requested yet another extension of his leave, until mid-March. This time, the employer determined it could no longer accommodate the plaintiff’s continuing leave requests and terminated his employment in late February.The plaintiff sued the employer, in relevant part, for disability discrimination, failure to reasonably accommodate and failure to engage in the interactive process, all in violation of FEHA. He also alleged wrongful termination derivative of these claims.  The district court granted the employer’s motion for summary judgment.The Ninth Circuit reversed. The court opined that the plaintiff was not outside of FEHA’s protection simply because he was unable to work at the time of his termination, “because one form of reasonable accommodation can be an extended leave of absence that will, in the future, enable an individual to perform his essential job duties.” More specifically, a leave of absence can be a reasonable accommodation “‘where it appears likely that the employee will be able to return to an existing position at some time in the foreseeable future.’” Although courts consider whether a requested leave was finite or indefinite in evaluating reasonableness, the plaintiff’s planned return to work in March 2014 meant there was a triable issue of fact as to whether the requested leave was finite. The plaintiff’s multiple extension requests might prove dispositive in determining whether the plaintiff’s request for yet another extension was reasonable, but this too was a factual issue for trial and not summary judgment, per the Ninth Circuit. There was likewise a triable issue as to whether granting the requested further extension would pose an undue hardship because the employer had allegedly allowed at least two other employees to take similar extended leaves. The Villalobos decision does not address the Seventh Circuit’s Severson decision in any way. But the starting point in Villalobos—supported by a body of Ninth Circuit and California authority—is that an extended leave of absence may be a form of reasonable accommodation. This is completely inconsistent with the Seventh Circuit’s rationale in Severson. What lessons can California employers learn from the Severson and Villalobos decisions?The Severson and Villalobos decisions point to several lessons for California employers seeking to manage leaves of absence without violating the ADA and FEHA:<ul><li>An extended leave of absence, beyond the time provided under the FMLA and CFRA, may be a reasonable accommodation in California. Of course, this is not a new legal development, but it is the most important takeaway for employers from the Severson and Villalobos decisions. Even after an employee has exhausted his protected leave under the FMLA and CFRA, the ADA and FEHA may nonetheless require a California employer to provide additional leave as an accommodation for an employee’s disability.</li><li>Even in California, indefinite leaves of absence are not reasonable. As a general matter, an employer is not required to wait indefinitely for an employee’s condition to improve. However, Villalobos teaches that an employee’s repeated requests to extend an ongoing leave is not the same thing as an indefinite leave, at least for purposes of summary judgment. If it includes a proposed return-to-work date, an employee’s request is most likely not a request for “indefinite” leave as a matter of law. Relatedly, an employer generally need not provide repeated leaves of absence for an employee with a poor prognosis of recovery, but the mere fact that a medical leave has been repeatedly extended does not mean that it would continue indefinitely.</li><li>Whether an extended leave of absence is reasonable depends in part on the employee’s prognosis. According to Villalobos, an extended leave of absence is not a reasonable accommodation under FEHA if it is not “likely” the employee would be able to return to an existing position at some point in the foreseeable future.  Other case law suggests a less rigorous standard. In Humphrey v. Memorial Hospitals Association, for example, the Ninth Circuit noted that “the ADA does not require an employee to show that a leave of absence is certain or even likely to be successful to prove that it is a reasonable accommodation.” Rather, the employer must attempt an accommodation so long as it “could have plausibly enabled a handicapped employee to adequately perform the job.” Under either standard, however, it is relevant to an employer’s reasonableness determination how likely or plausible are an employee’s post-leave chances of being able to return to an existing position. If the employer is not certain about an employee’s prognosis for recovery, the employer should seek clarification from the employee or the employee’s medical provider.</li><li>Even Severson says that intermittent time off or short-term leaves can be reasonable accommodations.  The Seventh Circuit noted that intermittent time off or short-term leaves may be analogous to part-time or modified work schedules, which are statutory examples of what a reasonable accommodation may include under the ADA. These statutory examples are equally operative in the Ninth Circuit, and California employers should recognize that intermittent time off or short-term leaves may be forms of reasonable accommodation.</li><li>The employer’s duty to engage in the interactive process is continuing. In finding triable issues of fact as to the employer’s alleged failure to engage in the interactive process, the Villalobos court emphasized employers’ “affirmative” duty to engage in the interactive process on a “continuing” basis, “which is not exhausted by one effort.” Despite granting all of the plaintiff’s earlier requests to extend his leave of absence, the employer in Villalobos was denied summary judgment because it denied the employee’s final request. The court also faulted the employer for not communicating with the employee between the date of his final extension request and the date he was terminated and for not telling him he would be terminated if he failed to return to work by the end of his most recent accommodation. The lesson here appears to be that employers should never stop communicating with employees on leave and that the interactive process requires the employer to keep considering additional potential accommodations throughout the process. A corollary observation is that extended leaves of absence are often just one of many potential accommodations an employer and employee should consider as they engage in the interactive process. </li><li>Arguing that a requested leave would pose an undue hardship can be undermined by evidence that other similar leaves have been granted. The employer in Villalobos was denied summary judgment of its undue hardship defense because of evidence it had provided similar extended leaves to other employees. In determining whether to grant a requested leave extension, employers should consider how it compares to other leave requests they have granted or denied.</li><li>Talk to your lawyer. This last lesson is the most important.  Employers should always consult counsel when managing extended leaves of absence and determining whether proposed accommodations would be reasonable. In this evolving and fact-intensive area of law, seemingly minor differences between two situations can be outcome determinative.</li></ul>ConclusionThe Seventh Circuit’s Severson opinion is not the law of the Ninth Circuit. Unless the Ninth Circuit reconsiders, the likeliest route for relief for California employers is review by the U.S. Supreme Court, which often takes cases where the Circuit courts are split on an important point of law. Meanwhile, California employers must continue to consider extended leaves of absence as potential reasonable accommodations under the ADA and FEHA, separate and apart from an employee’s leave entitlement under the FMLA or CFRA. We can help as you navigate the challenging issues that abound in this area.

Whatever the Seventh Circuit Says, Extended Leave
May Be a Reasonable Accommodation in California

elcblog-january-_2018.jpg

Whatever the Seventh Circuit Says, Extended Leave May Be a Reasonable Accommodation in California

Whatever the Seventh Circuit Says, Extended Leave May Be a Reasonable Accommodation in California

elcblog-january- 2018

Managing employees’ leaves of absence is a tricky business for employers. While laws like the Family and Medical Leave Act (FMLA) and the California Family Righ

It was another busy year in the California Legislature with regard to employment and labor issues. Of particular note for California employers are the new laws related to employee hiring practices with the prohibitions on requesting an employment applicant’s salary history information, limitations on the use of an employment applicant’s criminal conviction history, and the New Parent Leave Act, which provides 12 weeks of unpaid parental leave for employees of small employers (20 or more). Discussed in detail below are the most significant new laws pertaining to private employers in California that are effective January 1, 2018, unless otherwise noted. California employers should review their policies and procedures, especially those related to employee hiring, to ensure compliance with these new laws in 2018.While California is busy providing additional protections for employees, the U.S. Department of Labor and the National Labor Relations Board under the Trump administration are busy undoing various Obama-era decisions and regulations in a pro-employer shift likely to continue throughout 2018.AB 1008: Ban The Box – Criminal Conviction HistoryEmployers of five or more employees are prohibited from (1) including on a job application, prior to making a conditional offer of employment, any questions regarding an applicant’s criminal conviction history; (2) inquiring into or considering an applicant’s criminal conviction history prior to making a conditional offer of employment; or (3) considering, distributing, or disseminating information about arrests not resulting in a conviction, referral to or participation in a post-trial diversion program, or convictions that have been sealed, dismissed, expunged, or statutorily eradicated. (Government Code § 12952.) In addition, where an employer plans to deny an applicant employment solely or in part because of an applicant’s criminal conviction history, the employer must first undertake an individualized assessment of whether the applicant’s criminal history has a direct and adverse relationship with the specific job position. This assessment must include consideration of: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense or conduct and completion of the sentence; and (3) the nature of the job held or sought. The employer is not required to put the results of the individualized assessment in writing.If the employer makes a preliminary decision that the criminal conviction history disqualified an applicant, the employer must provide the applicant with written notice, which may but is not required to explain the reasons for its decision. The notice to the applicant must include the following information: (1) notice of the disqualifying conviction(s); (2) a copy of the conviction history report (if any); and (3) explanation of the applicant’s right to respond to the notice before the preliminary decision becomes final, which may include submission of evidence challenging the accuracy of the conviction history report and evidence of rehabilitation and mitigating circumstances. The applicant has five business days to respond to the notice. If within those five days the applicant informs the employer in writing that the applicant is taking specific steps to obtain evidence to dispute the accuracy of the criminal history report, the applicant is entitled to an additional five business days to respond to the notice. The employer must consider the information submitted by the applicant before making a final decision.If the final decision is to deny employment, then the employer must provide written notice to the applicant which includes: (1) the final denial or disqualification; (2) any existing procedure of the employer to challenge the decision or request reconsideration; and (3) the right of the applicant to file a complaint with the Department of Fair Employment and Housing (DFEH).Please note that certain limited exceptions apply, including where state, federal, or local law required the employer to conduct criminal background checks and restrict employment based on criminal history.AB 168: Employee Salary History BanWith the addition of Labor Code § 432.3, employers are prohibited from relying on the salary history information of an applicant as a factor for determining whether to offer an applicant employment or what salary to offer an applicant. Employers are also prohibited from seeking salary history information, including compensation and benefits, about an applicant. Further, upon request, employers must provide an applicant the pay scale for the position. However, if an applicant voluntarily and without prompting discloses the applicant’s salary history to an employer, the employer is not prohibited from considering and relying on that information in determining the salary for the applicant.California is not the only jurisdiction banning salary history inquiries as an effort to combat pay inequities. New York City recently enacted its own salary history ban, as detailed below. In doing so, New York City joins California, Delaware, Massachusetts, Puerto Rico, Oregon, Pittsburgh, New Orleans, and San Francisco (Philadelphia has passed a law, but it is presently being challenged; New York has a bill pending before the Senate).New York City's Employee Salary History BanNew York City Local Law No. 2017/067 prohibits employers from inquiring about the salary history of an applicant for employment or relying on the salary history of an applicant in determining the salary, benefits, or other compensation for such applicant during the hiring process, including the negotiation of a contract. However, employers may discuss an applicant’s expectations with respect to salary, benefits, and other compensation. If an applicant voluntarily and without prompting discloses salary history to an employer, the employer may consider salary history in determining salary, benefits, and other compensation for such applicant and may verify such applicant’s salary history. Salary history may also be considered for current employees seeking an internal transfer or promotion. Penalties for non-compliance resulting in unlawful discrimination under the city Human Rights Law could be as much as $125,000 for an unintentional violation or $250,000 for a willful violation. This law went into effect on October 31, 2017.SB 63: New Parent Leave ActEmployers who employ at least 20 employees now must provide employees working at a worksite with at least 20 employees within a 75-mile radius who have more than 12 months of service and have worked at least 1,250 hours in the prior 12 months with 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. (Government Code § 12945.6.) The employer must guarantee employment in the same or a comparable position upon return. Leave is unpaid, but employees may use vacation, paid sick time, or other accrued paid time off during leave. Employers must maintain and pay for health care coverage during parental leave at the level and under the conditions that coverage would be provided if the employee continued to work. If both parents are employed by the same employer, the employer is not required to grant leave to the parents of more than 12 weeks, and may but is not required to provide these parents with simultaneous leave. Further, it is unlawful for employers to refuse to hire, discharge, fine, suspend, expel, or discriminate against employees for exercising their right to leave or giving information or testimony as to the employee’s own or another person’s leave during an investigation or proceeding related to New Parent Leave Act rights, as well as interfering with or denying an employee’s right to leave.The New Parent Leave Act does not apply to employees entitled to leave under the California Family Rights Act or the federal Family and Medical Leave Act. However, to the extent the California Family Rights Act regulations are within the scope and do not conflict with the New Parent Leave Act, the Fair Employment and Housing Council will incorporate those regulations by reference. In addition, through January 1, 2010, the DFEH, upon receiving necessary funding, must create a parental leave mediation pilot program. The pilot program allows employers to request that all parties participate in the DFEH’s Mediation Division Program within 60 days of receipt of a right-to-sue notice issued by the DFEH for a violation of the New Parent Leave Act. If an employer makes a timely request for mediation, an employee may not pursue any civil action until the mediation is complete. The employee’s statute of limitations, including for all related claims not under the New Parent Leave Act, will be tolled upon receipt of the employer’s request to participate in the DFEH’s Mediation Division Program until the mediation is complete. A mediation will be deemed complete when, at any time after the employer’s request, either party notifies the DFEH’s Mediation Division Program and all other parties that it is electing not to participate in, or is withdrawing from, the mediation or the DFEH notifies the parties that it believes further mediation would be fruitless.AB 450: Emplpyment Regulation – Immigration Worksite Enforcement ActionsThis law prohibits employers from voluntarily consenting to an immigration enforcement agent entering any nonpublic areas of a workplace unless the agent has a judicial warrant. (Government Code §7285.1.) Employers also may not voluntarily consent to an immigration enforcement agent accessing, obtaining, or reviewing employee records without a judicial warrant or subpoena. (Government Code §7285.2.) Violations subject employers to a penalty of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for a subsequent violation. In addition, employers must provide employees notice in the language in which the employer regularly communicates employment-related information with any inspections of the I-9 Employment Eligibility Verifications forms or other employment records by an immigration agency within 72 hours of the employer receiving notice of the inspection. The posting must contain the following information: (1) the name of the immigration agency conducting the inspection; (2) the date the employer received notice of the inspection; (3) the nature of the inspection to the extent known; and (4) a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms for the inspection to be conducted. (Labor Code § 90.2.) The Labor Commissioner is required to provide a template for the required posting by July 1, 2018. Employers are further required to provide employees who are identified through the inspection as lacking work authorization or having deficiencies in their work authorization documents individual notice of the results of the inspection.AB 1701: Labor-Related Liabilities For General Contractor All direct contractors making or taking contracts for the execution, construction, alteration, or repair of a building, structure, or other private work must assume and are liable for any debt owed to a wage claimant (or a third party acting on their behalf) incurred by a subcontractor. The direct contractor’s liability includes unpaid wages, fringe and other benefit payment, and contributions and interest, but not penalties or liquidated damages. The new law will apply to all contracts entered into on or after January 1, 2018.AB 2337: Employment Protections – Victims Of Domestic Violence, Sexual Assault, Or StalkingThe Labor Commissioner has published a notice available on its website as required by Labor Code § 230.1 to notify employees of their rights in regards to protections against discrimination and retaliation and the availability of time off and use of vacation, personal leave, or compensatory time off due to their status as victims of domestic violence, sexual assault, or stalking. Employers must provide this notice (or a notice with substantially similar content) to new employees or to other employees upon request. This requirement went into effect when the notice was posted on the Labor Commissioner’s website earlier this year.AB 2899: Minimum Wage ViolationsLabor Code § 1197.1 provides that an employer or other person who pays less than minimum wage is subject to a civil penalty, restitution of wages, liquidated damages, and penalties under Labor Code section 203. It further allows an employer or other person to appeal a Labor Commissioner’s finding of a violation by a writ of mandate to the superior court. The new amendment to Labor Code § 1197.1 requires an employer or person challenging the Labor Commissioner’s finding of a violation to post a bond with the Labor Commissioner equal to the total amount of any minimum wages, liquidated damages, and overtime compensation due and owing before filing a writ of mandate. The bond is forfeited to the employee to whom wages are owed if payment is not made to the employee where ordered by the Court, if the writ of mandate is dismissed, or if a settlement agreement is executed.SB 306: Retaliation Actions – Complaints, Administrative ReviewLabor Code § 98.7 has been amended to give the Division of Labor Standards Enforcement authority to initiate an investigation into an employer whom it suspects has discharged or discriminated against an individual in violation of any law under the Labor Commissioner’s jurisdiction without first receiving a complaint. This includes suspected retaliation occurring during the course of the adjudication of a wage claim, a field inspection, or certain immigration-related threats. Once an investigation is complete, a report will be provided to the Labor Commissioner or a designee. The Labor Commissioner may hold an investigative hearing to fully establish the facts. Labor Code § 98.7 now also permits the Labor Commissioner, during an investigation, to petition the superior court for temporary or preliminary injunctive relief. If an employee has been discharged or otherwise faced adverse action for raising a retaliation claim, the court must order appropriate injunctive relief on a showing that reasonable cause exists to believe that an employee was discharged or otherwise retaliated against. However, temporary injunctive relief does not prohibit an employer from terminating an employee for conduct unrelated to the claim of retaliation.SB 396: Employment – Gender Identity, Gender Expression, And Sexual OrientationGovernment Code § 12950.1 was amended to require that the mandatory two-hour sexual harassment training for supervisors include training inclusive of harassment based on gender identity, gender expression, and sexual orientation. The training must include examples of harassment based on gender identity, gender expression, and sexual orientation, and must be presented by trainers with knowledge and expertise in those areas. This training must be completed within six months of a supervisor assuming the supervisory positon, and employers must provide this training to all supervisors at least once every two years. In addition, Government Code § 12950 was amended to require employers to post a poster developed by the DFEH regarding transgender rights in a prominent and accessible location in the workplace.Under Trump, The DOL Is Shifting Its Regulations To Favor EmployersThe federal Department of Labor (DOL) under the Trump administration is busy withdrawing Obama-era administrative guidance and proposing new rules in a pro-employer shift within the DOL. For example, in June, the DOL withdrew 2015 and 2016 informal guidance on joint employment and independent contractor status. The informal guidance made it easier to find that two or more entities were joint employers under the FLSA and therefore liable to employees for FLSA violations and also increased the likelihood that independent contractors were misclassified and therefore entitled to wages under the FLSA.The Overtime Final Rule, which was published by the Obama DOL in May 2016, would have raised the minimum salary requirement for exempt employees under the FLSA to $47,476. Then in August of that year, the Rule was invalidated by the U.S. District Court for exceeding the DOL’s authority by setting any salary threshold. In July of this year, the Trump DOL issued a request for information regarding what changes should be made to the Rule. The DOL plans to appeal the decision on the lack of authority to set a salary threshold and then move to stay the action and engage in further rulemaking to determine what the minimum salary for exempt employees should be. It is expected that the minimum salary level will be significantly lower than the amount in the 2016 Rule.On December 5, the DOL issued a Notice of Proposed Rulemaking regarding tip pooling. The new rule would allow employers to share tips amongst employees who do not traditionally receive direct tips such as cooks and dishwashers. The proposed rule applies to employers who pay tipped employees the federal minimum wage and do not take advantage of a tip credit under the Fair Labor Standards Act (FLSA).NLRB Taking Advantage Of Its Republican Majority Before Chairman Miscimarra’s Term EndsThe National Labor Relations Board (NLRB) is having a busy end of the year, dismantling Obama-era board decisions seen as pro-union and pro-employee. The Republicans are taking advantage of their first majority status in a decade through the end of the year when Republican Chairman Phillip Miscimarra’s term ends. It is not known who President Trump will nominate to be the next chairman. Until a new chairman joins the board, there is likely to be a stalemate with a two-Republican, two-Democrat Board.The Board’s recent activity includes 3-2 decisions on party lines overturning the 2015 Browning-Ferris decision, which set forth a more expansive test for joint employment; the 2011 Specialty Healthcare decision allowing micro-units of workers to organize; the 2004 Lutheran Heritage Village-Livonia decision regarding the standard to be applied in evaluating whether employee handbook policies violate the National Labor Relations Act by infringing on employees’ rights, which had been used in recent years to invalidate numerous employers’ policies; and the 2016 DuPont ruling requiring employers to bargain with unions before implementing changes to employment conditions even where those changes are consistent with the employers’ past practice.In addition, in September 2017, Peter Robb was confirmed as the new general counsel to the Board. It is expected that he will also play a key role in overturning Obama-era board decisions and instituting a pro-management shift within the board under the Trump administration based on the complaints he chooses to issue and the general counsel memoranda he issues to regional directors regarding his positions on current labor issues.ConclusionWith these conflicting forces at work, it promises to be another busy year in employment law in 2018.

The California Legislature and The Trump Administration: Different Directions

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The California Legislature and The Trump Administration: Different Directions

The Era of Comprehensive Federal PFAS Regulation Has Arrived:  Industry Braces First for EPA’s Expansive Retroactive Reporting and Recordkeeping Requirement 

elcblog-december- 2017

It was another busy year in the California Legislature with regard to employment and labor issues. Of particular note for California employers are the new laws 

Increasing digitalisation of the workplace means that many routine activities nowadays entail the processing of employees’ personal information. Sophisticated data management tools allow for greater efficiency and help to identify and contain business risks. What often follows is harmonisation of HR data platforms within an employer’s group of companies, seeking to deliver consistent and seamless HR management across business units and national borders.With the growth of workplace digitalisation, employers need to ensure that their policies and procedures adapt to a growing awareness amongst the general population of privacy rights and to expanding regulatory requirements and oversight, especially in the European Union (EU). As of 25 May 2018, privacy law within the EU will be governed by the EU General Data Protection Regulation (GDPR). This framework updates and modernises the principles enshrined in the 20-yearold EU Data Protection Directive, and will be directly applicable in all EU Member States. Notably, the GDPR provides for an unprecedented sanctions framework, with fines of up to 4% or EUR 20 million of an undertaking, whichever is higher.In this article, we consider three key areas that can become data privacy minefields for employers in the EU:<ol><li>Conducting background checks, or vetting staff or potential hires: in the EU, in-depth screening is only permitted on an exceptional basis;</li><li>Monitoring IT equipment and workplace correspondence, both on a systematic basis and as a one-off (e.g., into suspected misconduct): getting it wrong can be costly, as EU laws can require significant works-council involvement and may result in criminal liability in some cases; and</li><li>Transferring employee data outside the EU: where an employer seeks to integrate its workforce planning tools with affiliates in the EU, it will need to be mindful of the restrictions on data transfers under the EU privacy regime.</li></ol>The UK will leave the EU in March 2019. In the sidebar adjacent, we consider the impact of Brexit on UK employee data privacy rights and wider UK employment law.Pre-Employment Screening It has become common practice for employers to check the internet for publicly available content about job candidates. However, just because information is publicly available does not mean an employer should review it. A recently published opinion by the Article 29 Working Party (WP29), an advisory body made up of a representative from the data protection authority of each EU Member State, provides useful guidance in determining whether employers may use information collected online. As far as social media platforms are concerned, a distinction is made between social media for mainly private purposes and social media for mainly professional purposes. The WP29 stresses that employers should not assume that merely because an individual’s social media profile is publicly available they are then allowed to use that information for their own purposes. Much depends on the source of the information. Employers will typically have a legitimate interest in reviewing candidates’ profiles on LinkedIn and other sites, which contain information relevant to the candidates’ professional qualifications. Social media such as Facebook and Twitter, on the other hand, contains private content that is typically irrelevant to the candidate’s application and is therefore offlimits. Searches on public websites and via search engines such as Google serve a legitimate interest, if they are limited to information relevant to a candidate’s position.Information provided by the candidate during the application process may be used, and the employer is free to verify this information and contact references provided by the candidate for this purpose. However, this process should again focus on relevant information and should not be used as an opportunity to gather unrelated information, such as on the candidate’s private life or any health issues (save where the information is necessary in order to make reasonable adjustments to the recruitment or interview process for disabled candidates) or union activities. In the UK, questions about health (other than information necessary to make reasonable adjustments for disabled candidates) would only be defensible after an offer of employment has been made.Whether information is relevant will depend on the specific position in question. For example, checks on a candidate’s financial probity or criminal background checks may be appropriate for some positions, e.g., to screen delivery staff for past road traffic offences. For other positions, such as in securities trading, they may even be required by local law. For most jobs, however, a criminal background check will not be relevant and is prohibited. Similarly, drug tests will only be permitted on an exceptional basis, e.g., where the position requires the employee to operate heavy machinery or vehicles.The “relevance test” will also inform the applicable retention periods for data collected in the recruitment process. Personal information collected during the recruitment process should generally be deleted as soon as it becomes clear that an offer of employment will not be made or is not accepted by the candidate. If data is required to justify the employer’s rejection of a candidate, however, it may be kept for a longer period of time (not longer than the applicable statute of limitations). If employers wish to retain the candidate’s information for future vacancies, they should obtain explicit consent (e.g., in their rejection notification). Consent is also required if, within a group of companies, affiliates intend to share candidates’ information.Candidates must receive fair notice about the processing of their data. Art. 14 GDPR provides a list of specific items to include in this notice and requires that notice be given, at the latest, one month after the processing. For reasons of transparency, it is advisable to provide notice beforehand by way of a privacy policy or similar document posted on the recruitment page. Where employers have established uniform recruitment policies or staff questionnaires, these may require works-council approval in some EU jurisdictions. Moreover, the employer’s data protection officer, if there is one, may have to be involved when conducting background checks.Employee MonitoringMonitoring employees has become standard practice in many workplaces, and the rapid adoption of new information technologies provides employers with an ever-increasing visibility over employee behaviours. At the same time, the reasons for monitoring can vary greatly. In some industries, monitoring may serve to ensure workers’ safety in hazardous working environments or even be required by industry-specific regulation (e.g., in the financial services sector). Employers may monitor to check the smooth operation of their IT systems. For many employers, however, the primary motive for monitoring is to check employees’ performance, detect misconduct, or ensure compliance with specific company policies and procedures.Under the EU’s privacy regime, any processing of personal information is permitted only if either the individual consents or the employer can rely on a basis stipulated under statutory privacy law. The WP29 has, however, consistently stressed that employers should not rely on employees’ consent to workplace monitoring (with few exceptions). This is because of the inequality in bargaining power between employer and employee, which calls into question whether employees can ever validly consent. The WP29 reasons that employees are in a situation of dependence and might fear adverse consequences if they refuse to consent. Monitoring may be permissible where it is required in order to perform the employment contract or serves legitimate interests of the employer, provided the monitoring is strictly necessary for a legitimate purpose and complies with the “principles of proportionality and subsidiarity.” The “proportionality test” requires the employer to balance its business needs with the counterweighing privacy interests of the affected employees, taking into account, inter alia, the degree of invasiveness and potential consequences for the employee’s private life. “Subsidiarity” means that the employer should first investigate other, less invasive means to protect its interests. For example, monitoring of every online activity of the employees is usually disproportionate. The WP29 stresses that prevention should be given much more weight than detection, as the employer’s interests are better served by preventing IT misuse through technical measures (such as blocking certain websites) than by expending resources in detecting misuse.These principles have been confirmed by a recent judgement of the European Court of Human Rights in Strasbourg (ECHR – not to be confused with the Court of Justice of the European Union in Luxembourg). In the case before the Court, a Romanian employee, Mr. Bărbulescu, had used his workplace email account to exchange private messages with his fiancée and his brother – and was subsequently dismissed. His employer had recorded his messages and introduced the transcriptions as evidence in the dismissal procedure. While the employer had expressly forbidden personal use of company resources, it was unclear whether he had been given adequate notice of this policy. The Court ruled that the monitoring had breached Mr. Bărbulescu’s right to respect for private life per Article 8 of the European Convention on Human Rights. The Court recurred to the principles of proportionality and subsidiarity and held that the employer had failed to substantiate a legitimate reason for the monitoring and take into account potential repercussions for the employee (his fiancée had subsequently decided to end their relationship). The Court also stressed the need for proper notification, in particular of (i) the possibility that the employer may take measures to monitor communications, (ii) the implementation of such measures, and (iii) the extent of the monitoring (including whether it applies only to the flow or additionally to the content of communications and any limits in volume/portion, time, space, and number of individuals accessing the monitoring results).As an example of good practice, monitoring should be subject to a prior privacy impact assessment. This vetting mechanism has been introduced under Art. 35 GDPR for high-risk processing activities and requires the employer to, inter alia, identify safeguards and security measures for the privacy risks arising from the anticipated processing (irrespective of the technology concerned or the capabilities the technology possesses). In addition, the conditions of potential monitoring should be transparently set out in a privacy policy, and employers should introduce acceptable-use policies, outlining the permissible use of the company’s IT equipment, as well as its limits. In some countries, such as Germany, the introduction of technology capable of monitoring (even if it is not intended for that purpose) must also be negotiated with the works council. More generally, employers should be aware that the monitoring of employee communication is subject to country-specific regulation, in particular by local telecommunications and telemedia law. These regulations may impose even more stringent requirements, including criminal liability for violations of telecommunication secrecy.Transfer of Employee DataMost US employers with UK operations are likely already aware of the potential barriers to data flows between the EU and the US In 2015, the once commonly used mechanism, known as the Safe Harbor regime (under which organisations receiving data in the US self-certified adherence to certain data privacy principles), became defunct after a ruling by the Court of Justice of the European Union that the regime did not provide adequate protection to personal information transferred from the EU. Whilst a replacement framework and self-certification regime (the “Privacy Shield”) has now been approved by the European Commission, most multinational employers deal with cross-border transfers of employee data using “binding corporate rules” (if the transfer is intra-group) or European Commission–form “standard contractual clauses” (if the transfer is between the employer and a third party, and one of them is based outside the EU).As part of preparation for GDPR, multinational employers should audit what employee data is transferred outside the EU and the purpose for which it is transferred and ensure that, to the extent such transfers are necessary, data is transferred securely and adequate mechanisms are in place (such as those described above) allowing the non-EU recipient to receive the data.Employers are also well advised to keep an eye on Brexit negotiations to see what approach will be taken to UK data privacy standards post-Brexit. The UK will be subject to the GDPR prior to Brexit, but it remains to be seen whether it will be deemed to provide adequate protection post-Brexit to receive employee personal information from the EU.ConclusionWorkplace digitalisation presents employers with vastly growing opportunities but brings along an array of new compliance risks as well. Within the European Union, the processing of employee data is subject to a number of stringent tests set out under statutory law. Most often, employees cannot waive the protection afforded to them by the law. Consequently, while employers are required to provide transparent notice, they will typically not be able to rely on employees’ consent for their data processing.As the GDPR enters into force on 25 May 2018, introducing an unprecedented catalogue of financial sanctions, the stakes will be rising considerably. Employers are advised to review their processing operations, and implement any necessary changes, well before this deadline. Depending on the type of data processed, employers may be required to consult their data privacy officer (if there is one) and conduct a prior privacy impact assessment. Under local law in various EU Member States (such as Germany), the processing may also trigger works-council codetermination rights and even potential criminal liability, in particular where employee data falls under the protection of local telecommunication and telemedia law. The latter will typically be the case if the employer introduces technology that permits the monitoring of workplace communication, via phone, email, or other devices.

Hot Topics For Multinational Employers: Privacy In The Workplace, The EU General Data Protection Regulation, And Brexit


For more than two decades, Hanno has advised and represented leading domestic and international corporations in a wide variety of industries, including technology, consumer products, automotive, and 

Hanno Timner

Hanno Timner is a partner in the Berlin office and head of the Employment and Labor practice group in Germany. He advises and represents national and international employers in all labor law issues and disputes.

Managing Partner, London

Annabel is a partner at Morrison Foerster and co-Managing Partner of the London office.

Annabel Gillham

Associate

Lara Sirimanne is an associate in the London employment practice of Morrison & Foerster. She advises domestic and international clients on the full spectrum of both contentious and non-contentious emp

Lara M. King

Lara King

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Hot Topics For Multinational Employers: Privacy In The Workplace, The EU General Data Protection Regulation, And Brexit

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Increasing digitalisation of the workplace means that many routine activities nowadays entail the processing of employees’ personal information. Sophisticated d

It was only a couple of years ago, on March 27, 2015, that a jury rejected Ellen Pao’s gender discrimination claims and rendered a defense verdict in favor of her former employer, a prominent Silicon Valley venture capital firm. The Ellen Pao case, and the media attention it received, helped place concerns about bias and gender pay equity in the spotlight in Silicon Valley. Now issues of bias and pay equity in the workplace are again taking center stage in Silicon Valley, with almost daily media reports about Silicon Valley’s gender problem, and a continuing list of companies and notable Silicon Valley figures being taken to task with allegations of inappropriate conduct towards women, including but not limited to Binary Capital co-founder Justin Caldbeck and 500 Startups founder Dave McClure. Also high-profile lawsuits recently have been filed, including against UploadVR with allegations of a sex room in the office, and against Google for violation of the California Equal Pay Act.Read our <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt97378393f2fd47ac/62731608deee7329767e764c/171009-employment-law-commentary.pdf" target="_blank">newsletter</a>.

Workplace Bias and Gender Pay Equity in Silicon Valley

Eric Akira Tate co-chairs the firm’s Global Employment and Labor Group. He represents technology and other companies in bet-the-company trade secrets and employee mobility cases.

Eric Akira Tate

Eric Tate chairs the firm’s Global Employment and Labor Group. He has represented technology and other companies in the biggest and most highly-publicized trade secrets and employee mobility cases across multiple industries. Eric also represents companies in whistleblower, wage and hour, and other employment litigation.

Eric Tate

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Workplace Bias and Gender Pay Equity in Silicon Valley

elcblog-september- 2017

It was only a couple of years ago, on March 27, 2015, that a jury rejected Ellen Pao’s gender discrimination claims and rendered a defense verdict in favor of h

The Third Circuit has recently taken steps to resolve inconsistent precedent regarding the standard for pleading hostile work environment harassment. In Castleberry v. STI Group, decided in July, the Third Circuit held for the first time that a single, isolated offensive comment could give rise to liability for harassment. Although Supreme Court precedent has long provided for the possibility that a lone incident can give rise to a harassment claim, in practice, employers have been able to defend these claims with success on the basis that isolated actions are rarely, if ever, severe enough to alter the conditions of employment. Castleberry reminds employers that harassment claims based on single statements should not be presumed insignificant; instead, they should be evaluated in their full factual context.Read our <a target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt00964c8f6493e301/627316090d4d8e1d7f10f272/170907-employment-law-commentary.pdf">newsletter</a>.

Sticks and Stones May Break My Bones, But Words Survive Dismissal: Castleberry v. STI Group

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Sticks and Stones May Break My Bones, But Words Survive Dismissal: Castleberry v. STI Group

Sticks and Stones May Break My Bones, But Words Survive Dismissal: Castleberry v. STI Group

elcblog-august- 2017

The Third Circuit has recently taken steps to resolve inconsistent precedent regarding the standard for pleading hostile work environment harassment. In Castleb

Some prayers go unheard; others go to the Equal Employment and Opportunity Commission. Recently, employers in three states have faced actions from Muslim employees demanding increased accommodation for prayer in the workplace. In May, an employer in Minnesota refused to schedule prayer breaks requested by employees, and subsequently fired some workers who refused to comply with the work schedule. In response, the Council on American-Islamic Relations (CAIR) filed a complaint with the Equal Employment and Opportunity Commission (EEOC). Similar situations have recently arisen with employers in Wisconsin and Colorado.Read our <a target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt289da1d9dde7e5be/6273160e4886af2aa2be106e/170726-employment-law-commentary.pdf">newsletter</a>.

Let Us Pray: The Challenges of Accommodating Muslim Prayer in the Workplace

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Let Us Pray: The Challenges of Accommodating Muslim Prayer in the Workplace

elcblog-july- 2017

Some prayers go unheard; others go to the Equal Employment and Opportunity Commission. Recently, employers in three states have faced actions from Muslim employ

A California jury recently awarded a $3.3 million verdict to a California Department of Transportation (“CALTRANS”) employee who alleged a variety of disability-related claims involving CALTRANS’s failure to properly accommodate his allergy to certain scents and his supervisor’s and co-workers’ retaliatory actions in light of his requests for accommodation. The basis of the award was failure to accommodate the plaintiff’s disability – his allergic reaction to certain scents – and retaliation under the Americans with Disabilities Act (“ADA”) and a similar state law. While it may be easy to dismiss such claims as insignificant or overwrought, the jury awards and settlements described below make clear that these claims can be serious and must be addressed.Read our <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt039af4d340e65018/62730eee5f7b601eaaebcd8a/170628-employment-law-commentary.pdf" target="_blank">newsletter</a>.

When One Person's Scent Is Another Person's Disability

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When One Person's Scent Is Another Person's Disability

elcblog-june- 2017

A California jury recently awarded a $3.3 million verdict to a California Department of Transportation (“CALTRANS”) employee who alleged a variety of disability

It took 124 years, but the California Supreme Court in Mendoza v. Nordstrom, Inc., No. S224611, 2017 WL 1833143 (Cal. May 8, 2017) finally addressed in detail California’s day-of-rest statutes (Labor Code Sections 551, et seq.) originally enacted in 1893. Such a seemingly simple statute: “Every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” No one knew this could be so complicated.Read our <a target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltbc750b22d773f8ae/62730eef220ab5285f518e4b/170525-employment-law-commentary.pdf">newsletter</a>.

“On The Seventh Day He (She) Rested” . . . Maybe

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“On The Seventh Day He (She) Rested” . . . Maybe

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It took 124 years, but the California Supreme Court in Mendoza v. Nordstrom, Inc., No. S224611, 2017 WL 1833143 (Cal. May 8, 2017) finally addressed in detail C