Employer Law Report

Bureau of Consumer Financial Protection issues revised FCRA summary of rights form

Section 301 of the federal Economic Growth, Regulatory Relief and Consumer Protection Act, which was signed into law on May 24, 2018, amended the Fair Credit Reporting Act (FCRA), effective Sept. 21, 2018, to require consumer reporting agencies (such as those that employers use for applicant and employee background check purposes) to include new language on the Summary of Rights form that explains a consumer’s right to obtain a security freeze to protect against identity theft. The statutory language states that “a security freeze shall not apply to the making of a consumer report for use of the following: … (I) Any person using the information for employment, tenant, or background screening purposes.”

Nevertheless, when the Bureau of Consumer Financial Protection issued its interim final rule on Sept. 12, 2018, it indicated that employers indeed would have to provide a notice of the right to obtain a security freeze as part of the Summary of Rights. A copy of the revised form is available here. Because plaintiffs’ counsel are constantly in search of any opportunity possible to expand their ability to file class actions alleging FCRA violations, cautious employers will want to use the new form at least until the Bureau decides to shift its position or the courts force them to shift.

Sixth Circuit decision shows similarly situated employees must truly be similarly situated in discrimination cases

Employers facing workplace discrimination claims in the 6th Circuit should find some comfort in the court’s recent decision in DeBra v. JP Morgan Chase & Co., which endorses a heightened standard for plaintiffs to demonstrate that they were treated less favorably than similarly situated employees outside their protected class.

The plaintiff worked as a bank teller for Chase until she was terminated for on-the-job errors, such as overpaying customers, leaving bank funds unsecured on counters and accidentally failing to return bank cards to several customers. She alleged, however, that the bank’s reliance on these errors for her termination was really a pretext for age discrimination because other, younger tellers committed the same errors yet were retained.

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U.S. Department of Labor issues new opinion letters covering FMLA and FLSA issues

On Tuesday, August 28, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced the issuance of six new opinion letters covering a variety of issues under the FMLA and FLSA. Specifically, the opinion letters address the following issues:

  • “No-fault” attendance policies and roll-off of attendance points under the FMLA
  • Organ donors’ qualification for FMLA leave
  • Compensability of time spent voluntarily attending benefit fairs and certain wellness activities
  • Application of the commissioned sales employee overtime exemption to a company that sells an internet payment software platform
  • Application of the movie theater overtime exemption to a movie theater that also offers dining services
  • Volunteer status of nonprofit members serving as credentialing examination graders

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Sixth Circuit holds that employer was not required to extend lunch breaks for exercise as reasonable accommodation

Many people exercise daily, and for Shannan McDonald, her exercise was prescribed by her physician for her genetic disorder.  McDonald, employed as a receptionist for UAW-GM Center for Human Resources (CHR), regularly exercised in her employer’s on-site gym during her lunch break.  Per the collective bargaining agreement that covered her employment, each year CHR permitted employees to elect annually whether to take a 60 minute lunch break or a 30 minute lunch break with two other 15 minute breaks. The election remained in place for the entire year following election. McDonald chose the 30 minute lunch break. Continue Reading

Sixth Circuit upholds agreement to arbitrate FLSA claims on individual basis

On Aug. 15, 2018, the Sixth Circuit in Gaffers v. Kelly Services, Inc. held that the Fair Labor Standards Act (FLSA) does not render an arbitration agreement that requires claims to be brought individually illegal and unenforceable. Following the Supreme Court’s recent decision in Epic Systems Corp. v. Lewis, which held that a federal statute does not displace the Arbitration Act unless it includes a “clear and manifest” congressional intent to make individual arbitration agreements unenforceable, the court rejected the plaintiff’s arguments that FLSA displaced the Federal Arbitration Act simply by providing for a right to “collective action.” Instead, the Sixth Circuit, consistent with Epic, held that the FLSA “gives employees the option to bring their claims together. It does not require employees to vindicate their rights in a collective action, and it does not say that agreements requiring on-on-one arbitration become a nullity if an employee decides that he wants to sue collectively after signing one.” The Sixth Circuit then went on to reject the plaintiff’s next argument that the Arbitration Act’s savings clause permitted the court to refuse to enforce the individual arbitration agreements because they are “illegal” under the FLSA based on Epic. Continue Reading

More news from the NLRB on work rules

The Obama-era NLRB sometimes gave employers fits with decisions and guidance concerning employer work rules. It was common for the Obama-era Board to strike down fairly common, neutral work rules, often based on the idea that employees might interpret the rules to restrict employee rights. It did not take long for Trump-era NLRB appointees, however, to put their stamp on National Labor Relations Act law (see our article about some early actions by Trump NLRB appointees). The current members of the NLRB and the NLRB General Counsel are clearly inclined to give employers more latitude when drafting work rules. Following are some examples of the NLRB’s change in direction. Continue Reading

Sixth Circuit finds insurance coverage for phishing losses

The risk of loss due to some form of cyberattack should prompt employers to consider insuring against those losses. But, not all cyberinsurance policies are created equal. That point is made abundantly clear in the recent 6th Circuit case, American Tooling Center, Inc. v. Travelers Casualty and Surety Co. of America.

The plaintiff, American Tooling Center, Inc. (ATC) is a Michigan-based manufacturer that subcontracts some of its manufacturing work to a Chinese vendor. During a time period that it had business insurance coverage through Travelers, ATC received a series of emails from an impostor pretending to be its Chinese vendor. These emails advised ATC that the vendor had changed its bank accounts and that ATC should wire transfer its payments to these new accounts. After ATC had transferred approximately $834,000 to these fraudulent accounts, it learned that it had been duped. ATC then made a claim on its Travelers business insurance policy. Travelers denied the claim and litigation followed. Continue Reading

U.S. Supreme Court rules that public sector unions may no longer collect fees from nonmembers

On Wednesday, June 27, 2018, the United States Supreme Court ruled in a 5-to-4 decision that the application of public sector union fees to nonmembers is a violation of the nonmembers’ First Amendment rights. The Court’s decision in Janus v. AFSCME overturns precedent established in a 1977 Supreme Court decision, Abood v. Detroit Board of Education, where the Court allowed the collection of union fees from nonmembers for collective bargaining related costs, excluding lobbying and political expenses. In overturning the decision, the majority in Janus held that Abood was “poorly reasoned” and an “anomaly in…First Amendment jurisprudence.” The court’s decision in Janus will have a long-lasting effect on public sector labor unions and will affect millions of unionized workers across the country.

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Final association health plan regulations provide opportunity for small employers…maybe

In February, we reported that the Department of Labor (DOL) issued a proposed rule that could make it easier for small businesses to join together to purchase health insurance. That proposed rule sparked considerable debate on the general merits of association health plans (AHPs), as well as on the nuances of the proposed rule. Some commentators and experts remained skeptical of such arrangements, citing to the history of AHPs being used as a vehicle for fraud. Others were clearly in favor of any rule that might provide small employers with a new avenue to provide health coverage to their employees. And still others were cautiously optimistic, reserving judgment until some of the open issues in the regulations were resolved.

Well, the debate can now begin in earnest, as the DOL has issued the final regulations. Continue Reading

Adding more confusion to the world of website accessibility, WCAG 2.1 has been published

As many of you know, we have been keeping up on the growing litigation involving the accessibility of websites under the Americans with Disabilities Act (ADA) in our past posts: “Florida federal judge holds that supermarket chain’s website must be accessible to disabled” and “ADA public accommodations law reform on its way?” Many stakeholders have urged that websites of businesses that operate public accommodations should be accessible to the WCAG 2.0 AA standard. WCAG is the Web Content Accessibility Guidelines developed by the World Wide Web Consortium (W3C), the private organization focused on improving the Internet experience and who develops recommendations for website accessibility. There are levels of “success criteria:” A, AA and AAA—in increasing levels of accessibility. The government recently issued regulations requiring federal government websites to be accessible to the WCAG 2.0 AA standard and often insists on this same level of compliance when it settles enforcement actions against private businesses. Continue Reading

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