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Remember to Think Outside the Box: Ban-the-Box Laws Are Not the Only Restrictions on Consideration of an Applicant’s Criminal History

December 5, 2019

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A growing chorus of cities, counties, and states have passed “ban-the-box” laws that restrict when and how employers can consider an applicant’s or employee’s criminal history. Currently, thirteen states (California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, New Mexico Oregon, Rhode Island, Vermont, Washington) and eighteen cities and counties (Austin, Baltimore, Buffalo, Chicago, Columbia (MO), District of Columbia, Kansas City (MO), Los Angeles, Montgomery County (MD), New York City, Philadelphia, Portland (OR), Prince George’s County (MD),  Rochester, San Francisco, Seattle, Spokane, and Westchester County (NY)) have ban-the-box legislation for private employers.

However, employers often forget that use of an individual’s criminal history in making employment decisions may also violate the federal prohibition against employment discrimination under Title VII of the Civil Rights Act. For instance, an employer’s neutral policy to exclude applicants from employment based on certain criminal conduct may disproportionately impact individuals of a certain race or national origin.

Recently, Dollar General Corp. agreed to pay $6 million to resolve a discrimination suit brought by the United States Equal Employment Opportunity Commission over the use of Dollar General’s broad criminal background check policy that purportedly discriminated against African-American applicants and employees. In addition to the monetary settlement, Dollar General must hire a criminology consultant to develop and implement a new criminal background check policy.  The consent decree also requires Dollar General to update its reconsideration process and make it clear to rejected applicants that they may provide information to support reconsideration of their exclusion. The consent decree further

UK HR Two Minute Monthly: covert surveillance; holiday carry over; sexual orientation discrimination; interim relief

Summary

Our December 2019 update outlines the key UK employment law developments over the last month. It includes cases on covert surveillance, sexual orientation discrimination when there is no identifiable victim, harassment under the Protection from Harassment Act 1997, the doctrine of state immunity as it applies to British civilians working in the UK for a foreign state, the test for interim relief in whistleblowing claims and the latest ECJ decision on holiday carry over in sickness absence cases. We also outline other points of note, including the Government’s response to the Women and Equalities Committee report into the use of NDAs in discrimination cases and an independent review of the international evidence on the impact of minimum wages.

Covert CCTV surveillance to monitor workplace theft was not an infringement of employees’ right to privacy under Article 8 ECHR

The European Court of Human Rights has held that the Spanish courts did not fail to protect the Article 8 ECHR rights of employees when they upheld their dismissals based on footage obtained from concealed cameras in the workplace.

The employees worked as supermarket cashiers. An investigation was launched after significant stock discrepancies were identified, which included installing both visible and concealed cameras. Notices were put up in the supermarket to inform customers and staff that CCTV was being used, but staff were not told about the concealed cameras.

The covert CCTV helped identify the five cashiers who were involved in the thefts and all were dismissed. Their unfair dismissal claims

UK HR Two Minute Monthly: religious discrimination; third-party harassment; investigations

Summary

Our November update considers recent developments in employment law, including cases on religion and belief discrimination, third party harassment and investigations. We also outline other points of note, including the new EU Whistleblowing Directive and the EHRC’s Guidance on NDAs.

Dismissal not unfair where in-house counsel recommended changes to investigation report

The EAT has held that a dismissal was not unfair where a draft investigation report prepared by HR and an investigator was altered on the recommendation of in-house counsel.

In this case, the in-house solicitor had advised the investigator to remove his evaluative opinions and conclusions of whether the employee’s conduct amounted to misconduct, and to limit the findings to whether there was a prima facie case to answer. This was on the basis that the conclusions should be left to the disciplinary panel that was subsequently appointed.

The EAT upheld the Tribunal’s decision that the overall dismissal was still fair as there was no evidential material that had been withheld from the investigation report for review by the disciplinary panel.  As part of this decision, the EAT took into account that the appeal hearer (who was a barrister) reviewed the draft investigation reports and did not find that the report was changed in order to make the employee’s dismissal more likely, and no pressure had been applied to the investigators.

Why this matters?

This case is a useful reminder about the scope of the investigator’s role in a disciplinary procedure.  At the outset of an investigation, the

THE ACCIDENTAL SUCCESSOR: Asset Buyers Must Take Care to Avoid Unintentionally Becoming a “Perfectly Clear Successor”

October 31, 2019

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Asset Buyers, beware.  If the Seller has union-represented employees, and you intend to hire some or all of those employees and operate the assets as a union-free employer, take care to avoid becoming an accidental successor.

As a recent decision of the D.C. Circuit Court of Appeals reminds us, the terms of the asset purchase agreement (APA) and all communications with Seller’s employees – by both Buyer and Seller – must be carefully managed.  Otherwise, Buyer can accidentally become a “perfectly clear successor” that is required to:

  • initially honor the terms of the existing collective bargaining agreement (CBA),
  • recognize the current labor union as the bargaining representative of the unionized Seller employees whom Buyer hires, and
  • bargain with the union over the terms of a new CBA for those employees going forward.

THE ASSET BUYER’S OPTIONS

Under the National Labor Relations Act, if an asset Seller has union-represented employees, and Buyer wishes to hire some or all of them and operate the assets, Buyer has three basic options:

  • Assume the CBA. Buyer will be bound by the terms of the CBA from the Closing Date and will be obligated to recognize the union as the bargaining representative of the employees covered by the CBA.  In most cases, the union will have no duty to bargain over changes to the CBA until the CBA is ready to expire – perhaps years after Closing.
  • Try to remain union-free. If it declines to assume the CBA, Buyer will normally be

When HAL Conducts the Interview: Illinois Employers Face New Law Regarding Use of A.I. in Employment Interviews

October 29, 2019

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Technology has always had a significant impact on the way companies do business. With the increasing use of artificial intelligence (“A.I.”), no task is exempt from a robotic upgrade. In fact, a growing number of companies are utilizing A.I. to screen potential employees through, among other processes, the video interview. As the New Year approaches, it is important that Illinois employers familiarize themselves with changes in the law surrounding A.I. in hiring. Specifically, beginning January 1, 2020, employers using A.I. to screen applicant video interviews for Illinois-based employment will be subject to the Artificial Intelligence Video Interview Act (the “Act”).

But What Is A.I. Video Interview Screening?

 Most A.I. screening of video interviews involves applicants recording themselves answering a series of interview questions. Like HAL, the conflicted computer in 2001: A Space Odyssey, more sophisticated A.I. even has the ability to simulate “natural” human conversation with which interviewees interact. The video interview is then analyzed using “deep learning,” which is essentially an algorithm that evaluates several data points such as facial expressions, word choice, body language, vocal tone, etc. By the end of the analysis, the A.I. generates an applicant score based on the collected data points and, in some instances, provides a recommendation on whether the applicant is a good fit for the position sought.

So How Does The Act Regulate A.I. Video Interview Screening?

Here is what we know about the Act signed into law by Governor J.B. Pritzker (D) on August 8, 2019:

Requirements:

  • Employers must

Want to Protect Your Trade Secrets? Update Your Employment Agreements!

October 11, 2019

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Since 2016, the Defend Trade Secrets Act (DTSA) has provided employers with a federal cause of action against employees, former employees and other bad actors who misappropriate trade secrets.  In addition to injunctive relief, DTSA remedies include civil seizure, compensatory damages, punitive damages and attorney fees.  However, in order to preserve the right to seek punitive damages and attorney fees from an employee or former employee, the employer must have provided notice of the whistleblower-protection provisions of the Act.  Those provisions protect employees and former employees from criminal or civil liability for disclosure of trade secrets made (a) in confidence to a government official or an attorney for the purpose of reporting or investigating a suspected violation of law, or (b) under seal in a judicial proceeding.

Notice of the whistle-blower protection provisions must be included “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.”  This would commonly include, for example, employment agreements, confidentiality or nondisclosure agreements, noncompetition agreements, and separation agreements.  The notice requirement applies to all such contracts entered into or revised after May 11, 2016.

The notice may be provided by including the whistleblower-protection provision in the agreement or by cross-referencing a policy that contains the required disclosure.  It is unclear whether paraphrasing the statutory language will be sufficient.  Therefore, the safer course is to quote the pertinent text, such as:

Notwithstanding the foregoing, 18 U.S.C. §1833(b) provides, in part: “(1) An individual shall not be

UK HR Two Minute Monthly: whistleblowing; religion or belief discrimination; employment status

October 9, 2019

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Our October update considers recent developments in employment law, including cases on the whistleblowing public interest test, whether vegetarianism is a protected belief under discrimination law, and employment status. We also outline other points of note, including guidance published by the Banking Standards Board on regulatory references, the latest employment tribunal statistics and revised immigration arrangements in the event of a no-deal Brexit.

Raising data protection concerns was sufficient to satisfy the whistleblowing public interest test

The Employment Appeal Tribunal (EAT) has confirmed that an employee was entitled to whistleblowing protection when she had a reasonable belief that alleged data protection breaches by her employer were in the public interest.

The employee worked for a small charity which among other things supports victims of domestic violence. Due to performance concerns, the employee’s probationary period was extended. The employee subsequently raised concerns that, given the nature of the sensitive and confidential personal information she dealt with, the charity was in breach of data protection legislation by failing to provide her with her own mobile phone and also with secure storage facilities to hold client records. The employer subsequently terminated her employment on performance grounds. The employee brought a claim that she had been automatically unfairly dismissed for blowing the whistle.

The employment tribunal found that the complaints raised by the employee were not in the public interest as they concerned her own contractual position, which prevented her from succeeding in her whistleblowing claim. However, on appeal, the EAT disagreed. The employment

Asset Purchasers: Beware Bans on Salary History Inquiries

When one employer purchases the assets of another and intends to employ some or all of the seller’s employees, it is very common for the asset purchase agreement to require the seller to disclose certain personnel information regarding those employees.  Often this disclosure includes such items as name, title, hire date, current salary, and other compensation and benefit information.  However, such provisions may violate state and local bans on salary history inquiries.

To date, fourteen states and Puerto Rico have prohibited or restricted private sector employers from seeking information about a prospective employee’s past compensation.  In some of those states, employers are permitted to ask about compensation history only at a certain point in the hiring process.  But in most, employers are never allowed to seek this information.  Many local governments have also enacted their own bans.

Colorado’s new statute is typical.  Effective January 1, 2021, it will be unlawful for employers to “seek the wage rate history of a prospective employee or rely on the wage rate history of a prospective employee to determine a wage rate.”  The statute defines “wage rate” broadly to mean (a) for hourly employees, the hourly rate plus the value per hour of all other compensation and benefits received, and (b) for salaried employees, the total of all compensation and benefits received.  Given the remedial purpose of the statute – to eliminate pay gaps based on gender and race – it is likely that courts will construe the statute broadly in favor of employees

Medium and large businesses getting ready for private sector off-payroll working rules in the UK

Despite calls for the start date to be delayed, it appears that the extension of the off-payroll working rules to private sector engagements will go ahead in April 2020.

Under the draft legislation, responsibility for determining whether engagements with individuals who provide their services through an intermediary (typically a “PSC”) are within the off-payroll working rules shifts to the client, with the burden of operating PAYE and collecting National Insurance Contributions (“NICs”) falling on the relevant “fee payer” in the work supply chain. More detail about the requirements under the draft legislation can be found in our earlier blog.

As they prepare for the changes, many medium and large businesses are taking the opportunity to review their use of consultants and the terms of their contractor services more widely, in some cases leading to a major shake-up in engagement models. In addition to reviewing the terms which apply where a business contracts directly with a PSC, it is also important to consider the terms on which employment agencies provide contractor services.  With only six months to go until the changes go live, businesses which have not started the review process should act now.

New Overtime Rule More Employer-Friendly Than Last Attempt

Today, the U.S. Department of Labor finally announced its long-awaited changes to the regulations regarding overtime compensation. Effective January 1, 2020, the minimum salary required for most exemptions under the Fair Labor Standards Act will rise from $455 per week to $684 per week (or from $23,660 to $35,568 annualized). The minimum salary for the “highly compensated employee” exemption will rise from $100,000 to $107,432 per year.

Additionally, employers will be permitted to use nondiscretionary bonuses and other incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary, as long as that compensation is paid at least annually. And if an employee fails to earn sufficient incentive compensation in a 52-week period to maintain “exempt” status, the employer may make up the shortfall (up to 10% of the minimum required salary) in a one-time payment in the first pay period after the end of the 52-week period.

The “final rule” announced today is more employer-friendly than the Department’s last attempt to update the overtime regulations, which was enjoined by a federal court in 2016 before the changes could take effect. The final rule issued in 2016 would have raised the minimum salaries for exemption considerably higher, making an estimated 4 million workers eligible for overtime pay, and it would have provided for automatic increases in the salary thresholds going forward. The final rule announced today is predicted to make 1.3 million workers overtime-eligible and does not provide for any automatic adjustments in the future.

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