Proposed FCRA Class Action Lawsuit Filed Against Uber Technologies

By Leila G. O’Carra

A proposed class action lawsuit filed on November 24, 2014, alleges that Uber Technologies, Inc. and others violated the Fair Credit Reporting Act by obtaining criminal history reports, and taking adverse employment actions based on the information in the reports, without making disclosures required under the Act.

Uber runs a smartphone ridesharing application. Riders can request transportation, enter their location and destination, pay their driver, and rate their experience with the app. Drivers use company-provided smartphones pre-loaded with the Uber app to accept transportation requests.

Named plaintiff Abdul Mohamed was a driver with Uber until October 28, 2014, when he was notified by email that the company would not consider his proposal to work as an “Uber X” driver due, in part, to information obtained through a background report. Mohamed’s complaint alleges that he has only a minor criminal history involving Medicaid for his seven children.

According to Uber.com,

“Every ridesharing and delivery driver is thoroughly screened through a rigorous process we’ve developed using constantly improving standards. This includes a three-step criminal background screening for the U.S. — with county, federal and multi-state checks that go back as far as the law allows — and ongoing reviews of drivers’ motor vehicle records throughout their time on Uber.”

The FCRA regulates the use of “consumer reports” (including background reports provided by third party vendors) for employment purposes. In general, an employer may only obtain such a report when it (1) makes a clear and conspicuous disclosure to the employee or applicant, before the report is obtained, in a document that consists solely of the disclosure, that a report may be obtained; and (2) obtains prior written authorization from the applicant/employee. Before an employer takes adverse action against an applicant/employee based in part on a consumer report, it must provide the affected individual with a copy of the report and a description of consumer rights under the FCRA. The employer must also provide an adverse action notice if the report is used to deny employment. Mohamed claims that Uber failed to properly notify him that it would obtain his background report, and it did not provide him with a copy of his background report and description of his FCRA rights prior to terminating his employment.

Employers can avoid the issues that Uber is facing by consulting with their legal counsel to review FCRA requirements and craft compliant FCRA notices, authorizations, and disclosures. The FCRA regulations even provide a model summary of consumer rights – one of the documents that Mohamed claims Uber did not provide to him.

OFCCP Issues Proposed Rule for Federal Contractors Prohibiting Policies/Practices Under Which Employees May be Disciplined For Discussing Pay

By Edwin S. Hopson

On September 15, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) proposed a new rule that would prohibit federal contractors from discharging or otherwise disciplining employees who discuss, disclose or inquire about their pay or the pay of another employee or applicant for employment.

“Workers cannot solve a problem unless they are able to identify it. And they cannot identify it if they aren’t free to talk about it without fear of reprisal,” said OFCCP Director Patricia A. Shiu in her press release. “Pay transparency isn’t just good for workers. It’s good for business. Fairness and openness are great qualities for a company’s brand.”

Back in April 2014, the President signed Executive Order 13665, which instructed Secretary of Labor Perez issue a proposed rule within 160 days that required “pay transparency” by federal contractors. The rule proposed would amend the Equal Opportunity clauses in Executive Order 11246. The new rule adds definitions for “compensation,” “compensation information,” and “essential job functions,” terms which appear in the revised clauses of the Executive Order. The proposal also establishes two types of defenses that contractors can use against allegations of discrimination under EO 13665.

The proposed rule will be published in the September 17 issue of the Federal Register and will be open for public comment for 90 days. See  http://www.dol.gov/ofccp/PayTransparencyNPRM.

Training for New Hazard Communication Standard Must be Completed by December 1, 2013

By Edwin S. Hopson

The Kentucky Labor Cabinet has issued a reminder to all Kentucky employers that by December 1, 2013, all employees who could be exposed to chemicals in the workplace are required by law to be trained on the label elements and safety data sheet format of the Globally Harmonized System of Classification and Labeling of Chemicals.

The system is an international approach to hazard communication involving businesses that regularly handle, store and use hazardous chemicals.

In a press release, Labor Cabinet Secretary Larry Roberts, stated: “[t]his affects nearly every industry in the Commonwealth.  If there are chemicals in the workplace, it’s almost certain that employees in that workplace will need to be trained under these new requirements by Dec. 1. Those employees have the right to know and understand these hazards and the precautions they need to take.”

The Kentucky OSH Program revised its Hazard Communication Standard in 2012, aligning it with federal OSHA’s standard.  This change also aligns the standard with the United Nations’ global chemical labeling system.

Federal OSHA has also set a December 1 deadline by which time the Hazard Communication training must be completed.

Employers who do not train the appropriate employees could face citations and monetary penalties.

For a fact sheet on the OSHA requirements see:

https://www.osha.gov/Publications/OSHA3642.pdf

New I-9 Forms Must Now Be Used, Starting Today, According to USCIS

By Glen M. Krebs

The U.S. Citizenship and Immigration Services (USCIS) is reminding all employers that beginning today, May 7, 2013, they must start using the revised Form I-9, Employment Eligibility Verification (Revision 03/08/13)N for all new hires and reverifications.

All employers are required to complete and retain a Form I-9 for each employee hired to work in the United States.

Note: the revision date for the new Form I-9 is printed on the lower left corner of the form. Also, employers need not and should not complete a new Form I-9 for existing employees if a properly completed Form I-9 is on file.

USCIS advises that a Spanish version of Form I-9 (revision 03/08/13)N is available on its website for use in Puerto Rico only.  Spanish-speaking employers and employees in the 50 states, Washington, D.C., and other U.S. territories may use the Spanish version for reference, but must complete and retain the English version of the I-9 form.

The revised forms are available at www.uscis.gov/I-9. And for more information, you may call 888-464-4218. Government representatives are available Monday through Friday, from 8 a.m. to 5 p.m.  USCIS also maintains a website, I-9 Central, to support Form I-9 users.

To order forms, you can contact USCIS at 1-800-870-3676. For free downloadable forms and information on USCIS programs, immigration laws, regulations, and procedures, you can visit www.uscis.gov.

 

SIXTH CIRCUIT REJECTS RETIREES’ CLAIMS TO FIXED LIFETIME HEALTHCARE BENEFITS

by Leila G. O’Carra

The Sixth Circuit recently issued two opinions addressing retired employees’ claims to lifetime, unchangeable healthcare benefits. In both cases, the Sixth Circuit rejected the retirees’ claims.  In Reese v. CNH America LLC, Nos. 11-1359/1969, the parties’ collective bargaining agreement (CBA) promised healthcare benefits to eligible retirees and their spouses for life.  The lawsuit arose when the employer, CNH, attempted to modify the scope of the retirees’ healthcare plan.  The retirees claimed that CNH could not alter their vested benefits without union approval. 

In rejecting the retirees’ claims, the Sixth Circuit held that healthcare benefits, unlike other kinds of benefits, cannot be “fixed” because of the constant evolution of medical advances and the fluctuation of healthcare costs attendant to such improvements.  Accordingly, the court reasoned, the employer necessarily retains the right to make unilateral “reasonable” changes to the retirees’ healthcare plan.  Furthermore, the court noted, the retirees had not complained about prior to changes to the plan.

The Sixth Circuit remanded the case to the district court to determine whether the changes proposed by CNH were reasonable considering the following:

• Does the modified plan provide benefits “reasonably commensurate” with the old plan?
• Are the proposed changes “reasonable in light of changes in health care?”
• Are the benefits “roughly consistent with the kind of benefits provided to current employees?”

Judge Bernice B. Donald dissented from the majority opinion, writing that the retirees’ vested right to receive health care benefits for life precluded CNH from making unilateral changes to the level of benefits provided.  Judge Donald agreed with the district court’s holding that any changes to the plan “must be reached though negotiation and agreement between the union and the employer.”

Four days after deciding Reese, the Sixth Circuit, in Wittmer v. Acument Global Technologies, Inc., No. 11-1793, permitted the employer, Acument, to eliminate retirees’ health benefits based on reservation-of-rights language found in the parties’ CBA.  The AcumentCBA promises “continuous health insurance” to retirees and their spouses “during the life of the retiree.”  However, the document also specifies that the employer “reserves the right to amend, modify, suspend, or terminate the Plan.”  Relying on this language, Acument terminated plan benefits in 2008.  A class of 64 retirees sued, claiming that Acument violated the Labor Management Relations Act and the Employee Retirement Income Security Act.  The Sixth Circuit viewed the matter as purely contractual, and determined that pursuant to the terms of the contract, Acument reserved the right to terminate benefits at any time. 

In so holding, the Court rejected the plaintiffs’ argument that the grant of “continuous” benefits “during the life of the retiree” created “vested, unchangeable benefits.”  The Court reasoned that, in context, the term “continuous” meant simply that benefits would not terminate automatically when the CBA expired.  The Court also rejected plaintiffs’ assertion that the reservation-of-rights clause applied only to pension benefits, finding that the CBA dealt with healthcare and pension benefits together, and used the term “pension plan” and “plan” interchangeably to cover all benefits.      

Dissenting Judge David Dowd, Jr., (United States District Judge for the Northern District of Ohio, sitting by designation) found ambiguities in the benefits provision of the CBA and would have remanded the case to the district court and allowed extrinsic evidence to prove the intent of the parties with respect to vesting of benefits. 

NLRB General Counsel’s Office Approves Two Employment-At-Will Policies

By George J. Miller

 

In July of this year I posted on this blog that the NLRB’s Acting General Counsel is beginning to scrutinize employers’ at-will employment policies.  At that time I reported about an NLRB administrative law judge’s decision that an at-will policy which said that the at-will relationship could never be altered violated the National Labor Relations Act (NLRA), because employees could reasonably construe it to prohibit them from exercising their right under the NLRA to attempt to obtain union representation and negotiate a collective bargaining agreement or otherwise to advocate concertedly for a change in the at-will relationship.

 

On October 31st, NLRB Acting General Counsel Lafe Solomon released two memoranda from his office’s Division of Advice which analyze at-will employment clauses in two employee handbooks and find that both are lawful under the NLRA.  Together with the earlier case, they provide a guide for employers on how to write these policies so that they will withstand NLRB scrutiny. In the handbook of trucking company Rocha Transportation, the clause advised drivers that their employment is at-will and may be terminated at any time.  It said that, “No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will.”  It continued: “Only the president of the Company has the authority to make any such agreement and then only in writing.” The Division of Advice Memo notes that this clause explicitly states that the relationship can be changed, and so employees would not reasonably assume that they were prohibited from exercising their NLRA rights.The other memo concerned a case involving Mimi’s Café in Casa Grande, Arizona.  The Teammate Handbook description of at-will employment at Mimi’s Cafe’ includes the sentence: “No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.” The Advice Memo found this was not unlawfully broad because the clause does not require employees to agree that the employment relationship cannot be changed in any way, but merely highlights that the employer’s representatives are not authorized to change it.

According to an NLRB press release, “[t]he Advice Memos are provided as guidance for employers and human resource professionals in a developing area that has drawn considerable attention recently.”  The press release concluded:  “Because Board law in this area remains unsettled, the Acting General Counsel is asking all Regional Offices to submit cases involving employer handbook at-will provisions to the Division of Advice for further analysis and coordination.”

Any non-union company which has an employee handbook and might find itself the target of a union organizing campaign should carefully scrutinize any and all at-will policies in the handbook.  If a union organizing campaign begins, it is certain that the union will review the employee handbook and will file an unfair labor practice charge at the NLRB if the at-will policy is improperly worded.  Other policies which are vulnerable to attack are confidentiality, social media, union-free, off duty access to property, no solicitation/no distribution, conflicts of interest and outside employment.  Unlawful policies must be rescinded or reworded, and employers must notify employees in writing that they have done so, that they will not maintain or enforce such unlawful policies, and that they will not violate the NLRA in any like or related manner.  Thus, if the union is successful in attacking these policies, that could bolster their image in the eyes of the employees and influence the outcome of the organizing campaign. 

 

Must “Adverse Employment Action” be Tangible?

By Courtney Ross Samford

A federal judge in Wisconsin recently denied Chrysler Group, LLC’s motion for summary judgment to dismiss an EEOC claim of unlawful retaliation in EEOC v. Chrysler, E.D. Wis. No. 08-CV-1067.  The EEOC filed a complaint against Chrysler in late 2009 on behalf of two female employees, Donna Hobbs and Michelle Zahn, who claim that they were retaliated against with threatened termination after they lodged complaints of sexual discrimination against their supervisor.

Title VII of the Civil Rights Act contains an anti-retaliation provision that forbids retaliation against an employee that “made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” 42 U.S.C. § 2000e-3(a).  A prima facie case of retaliation requires the following elements: (1) the employee engaged in a statutorily protected activity; (2) the employee suffered a materially adverse action by his employer; and (3) a causal link between the two. Chapin v. Fort-Rohr Motors, Inc., 621 F.3d 673, 677 (7^th Cir. 2010). 

Chrysler argued in its motion for summary judgment that Hobbs and Zahn did not experience any adverse employment action because neither “suffered any lost time, neither was tangibly disciplined in any way, lost any benefits or was given a less desirable job….”  See February 17, 2011 Decision and Order, p. 15.  However, District Judge William F. Callahan explained that “an adverse employment action need not be tangible” and concluded that a reasonable trier of fact could decide that Hobbs and Zahn suffered a materially adverse action based on the threat of termination.  Id. See also Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 64-66 (2006). 

This case should serve as a warning to all employers that retaliation claims may be based on more than just termination, lost time, or a loss of pay or benefits.  Indeed, non-tangible adverse employment actions, such as threats of termination, may support an EEOC complaint as well. 

Furthermore, the court focused on the “context-driven nature of anticipatory retaliation allegations based on threats of termination.” See Decision and Order, p. 16.  Judge Callahan emphasized that the manner in which Hobbs and Zahn’s supervisor delivered the threats of termination is determinative in this type of case.  For example, he explained that “[i]f [the supervisor] was screaming and pounding his fists on the table while threatening termination, as Zahn and Hobbs testified, this scenario paints a much more hostile and intimidating atmosphere than if [he] delivered his message in a normal tone of voice, as he contends he did.”  Id. at 17.  Thus, not only should employers be mindful of the wording they elect to use in disciplinary warnings, but they should also be aware of the overall tone and atmosphere created when such a warning is delivered as this may detrimentally affect an employer’s ability to successfully resolve an EEOC claim in the future.