Posts Tagged ‘employers’

Forgetting to provide employees with notice of their right to elect COBRA health care continuation coverage under an Employee Retirement Income Security Act governed group health insurance plan, within the 44 day statutory notice period for doing so, may be a costly mistake for employers.  In Fama v. Design Assistance Corp, the Third Circuit held that a former employee, who resigned from a company, was entitled to $2,930 in statutory damages after her former employer was 293 days late in providing the former employee with notice of her right to continued health care coverage.   In so holding, the court said that COBRA penalties of $10 a day are appropriate where an employer does not exhibit bad faith and an employee incurred medical expenses during the lapse in coverage.

  This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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The recent case of Waldon v. Cincinnati Public Schools, before the Southern District of Ohio, exemplifies the frustration many employers might be feeling over the use of criminal background checks.  For those not in the know, criminal background checks spawn a host of issues.  For example, if you don’t use the checks, will you be sued for negligent hiring?; or if you use the criminal background checks will you be sued for discrimination? It’s enough to make your head spin, and as evidenced below, bright-line rules regarding the use of criminal background checks, simply don’t work.

In the case of Waldon, the Ohio legislature amended a state law to require criminal background checks of all current public school employees, including those not responsible for the care, custody, or control of children and to terminate any employee convicted of any of a certain crimes, no matter how far in the past the crime may have occurred and no matter how little the crime related to the present readiness of the particular employee to provide services safely and with excellence.

In seemingly earnest compliance with the state law, the Cincinnati Public Schools terminated ten employees with criminal convictions based on the state law mandate.  Nine of the ten employees were African American.  Two of the fired employees, Waldon and Britton, sued the school district alleging that the state law had a racially discriminatory impact on African Americans in violation of  Title VII of the 1964 Civil Rights Act and Ohio state law.

Undoubtedly, the broad language of the state law that mandated the termination of employees (even those who had no contact with children) for certain convictions no matter how far in the past and regardless of how the crime related to the employee’s ability to perform his/or her job, would produce absurd results.  And it did.  For example, Walton, one of the terminated employees, had been found guilty of felonious assault in 1977 and incarcerated for two years before the school district’s civil service office wrote in support of his parole and offered him employment in 1980.  For nearly 30 years Waldon worked without incident for the school district before he was terminated from his position as a systems monitor based on his decades old conviction.  Moreover, during his tenure with the school district, he never had contact with children.  Britton, the other plaintiff, was convicted in 1983 for acting as a go-between in the purchase and sale of $5 worth of marijuana.  Despite this conviction, she had worked for the school district as an instructional assistant for 18 years without incident before she was terminated based on her decades old and relatively minor conviction.

In Waldon, the court found that the plaintiffs presented sufficient facts to support their disparate impact claims under Title VII and Ohio state law because the state law disproportionately affected African Americans.  Moreover, the school district failed to demonstrate a business necessity for following the state law requiring the discharge of employees of convicted of certain crimes.

Although the school district argued that the court should dismiss the complaint because the school district merely followed state law in firing Waldon and Britton, in a harsh statement for employers, the court stated that compliance with state law is no defense because a violation is a violation.  A state law cannot trump the purpose of Title VII.

In the Waldon case, it mattered little that the school district was just following the state law and did not intend to discriminate because intent is irrelevant in disparate impact cases where the courts look at whether facially neutral employment practices have a disproportionately negative effect on a certain protected group that cannot be justified by “business necessity.”  In this case, the school district could not show that the plaintiffs posed an obvious risk to school children based on their past convictions and therefore could not establish a “business necessity.”

The court unsympathetically concluded that once the school district saw that nine of the ten employees being fired were African American, it was not compelled to follow the state law because Title VII trumps state mandates, and that the school district should have raised questions with the state board of education regarding the disparity.

This is a harsh case for employers because the court makes it clear that employers cannot blindly rely on state law mandates regarding the use of criminal background checks.  Rather, employers must evaluate whether seemingly neutral state law mandates have a discriminatory impact.  The employment and labor law attorneys at Harmon & Davies, P.C. are here to navigate employers through these sometimes treacherous waters.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Disparate impact, Labor & Employment | No Comments »

Word to the Wise: Steer Clear of Overtime Violation Claims

The $20.9 million settlement between Rite Aid Corp. and assistant managers and co-managers for overtime pay violations under the Fair Labor Standards Act and various state laws, which settlement was approved by the U.S. District Court for the Middle District of Pennsylvania earlier this year, should serve as a stark reminder that employers need to be ever vigilant in their efforts to properly classify and pay employees.

The attorneys at Harmon & Davies are here to assist employers with all of their labor and employment related needs, including their overtime and break policies and the proper classification of employees.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in FLSA, Labor & Employment | No Comments »

At the beginning of February 2013, the Labor Department’s Office of Federal Contract Compliance Programs (“OFCC”) issued Directive 306 warning federal contractors to carefully consider their nondiscrimination obligations before adopting hiring practices that exclude applicants based on their criminal history records.  In other words, federal contractors and subcontractors need to be cautious about how they use criminal history records.

What Employers Should Already Know:  Employers should know that Title VII of the Civil Rights Act of 1964 makes it unlawful to discriminate in employment based on race, color, national, origin, religion, or sex.  If you are a federal contractor or subcontractor you should also know that Executive Order 11246, the enforcement of which is overseen by the OFCCP, prohibits federal contractors from discriminating in employment decisions based on race, color, national origin, religion, or sex.  This means that in hiring decisions, federal contractors cannot engage in disparate treatment (meaning intentionally treating members of protected groups differently) or disparate impact (meaning using policies and practices that are neutral on their face, but have a disproportionate impact on members of protected groups and are not job-related and consistent with business necessity).

What Some Employers Might Not Know:  Some employers might be thinking: “I have every right to exclude applicants with criminal records from working for me.”  At some level that reasoning seems logical, but the employer would be wrong, at least in part.   To be clear, federal laws (emphasis is on federal) do not prohibit an employer from requiring applicants to provide information about arrests, convictions or incarceration.  Moreover, under applicable federal laws, a criminal history record alone does not constitute a protected class.  However, employers may not treat people with the same criminal records differently because of their race, national origin or another protected characteristic.

To be clear, merely having a criminal history record does not place someone into a protected group under applicable federal laws.  However, federal antidiscrimination laws may be implicated when criminal records are considered in the hiring process.  Indeed, due to racial and ethnic disparities in our criminal justice system, job postings containing blanket exclusions of anyone with any kind of conviction or arrest record may be in violation of federal law.

How Employers Get Themselves Into Trouble: 

Scenario No. 1:  The Disparate Treatment Scenario

A closely held private corporation operating as a federal contractor, owned and operated by a family of the Christian faith, runs criminal background checks on all its applicants.  Per the contractor’s hiring policy, they will not hire anyone convicted of a DUI within the past three years as a truck driver for their shipping operations.  However, the family that owns the company consistently waives this requirement when the applicant a member of their church, but not for members of other religious organizations.

How this is wrong:  The employer is treating people with the same criminal records, i.e., DUIs, differently based on their religious affiliation.

Scenario No. 2:  The Disparate Impact Scenario

A federal contractor has a hiring policy that prohibits anyone who was ever convicted of any crime from being hired.

Why this is wrong:  This blanket prohibition against hiring anyone with a conviction is going to have a greater impact on blacks and Hispanics who have higher conviction rates than other races.

Precautions that Employers Should Take:  First, the OFCCP recommends that contractors, as a general rule, refrain from inquiring about convictions on job applications and that when contractors make such inquiries, the inquiries be limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity.

Arrest Records:  With respect to arrest records, the OFCCP recommends that employers allow an applicant to explain the circumstances of the arrest to determine whether the conduct underlying the arrest justifies an adverse employment action.  Keep in mind that the arrest does not necessarily mean that the person committed a crime and even if they did, the crime might not have any correlation to the job position.

Ensure that the Criminal Conduct is Job Related and Consistent with Business Necessity:  Exclusions of an applicant based on the applicant’s criminal history report should only occur where the applicant’s criminal conduct is job related and consistent with business necessity.  For example, if the job is a preschool teacher, eliminating the candidate because he or she was convicted for child molestation two years ago appears sufficiently job related and consistent with business necessity.  However, if the job is a computer programmer, eliminating the candidate because he or she was convicted of driving without a license 10 years ago does not appear job related or consistent with business necessity.

Be Prepared to Defend Your Position:  To establish that a criminal conduct exclusion that has an adverse impact is job related and consistent with business necessity, the employer needs to show that the policy operates to effectively link specific criminal conduct, and its dangers, with the risk inherent in the duties of a particular situation.  The EEOC has described two circumstances where it believes employers will consistently meet the “job related and consistent business necessity” defense.  The first circumstance is where the employer validates the criminal conduct exclusion for the position in question in accordance with the Uniform Guidelines on Employee Selection Procedures (“UGESP”).  For some employers this can be a costly process.  Therefore, if the employer does not go through the validation process in accordance with the UGESP, the EEOC has outlined three factors that the employer should use as a starting point for analyzing how specific criminal conduct may be linked to particular positions.  The three factors that are relevant to whether a criminal conduct exclusion is “job related and consistent with business necessity” are as follows:

  1.  Consider the nature and gravity of the offense or conduct.  This is the first step in determining whether a specific crime may be relevant to concerns about risks in a particular position.
  2. Consider the time that has passed since the offense, conduct and/or completion of the sentence:  Employer policies typically specify the duration of the criminal conduct exclusion.  The amount of time that has passed is probative of the risk the applicant poses in the position in question.  Relevant and available information to make this assessment includes studies demonstrating how much the risk of recidivism declines over a specified time.  In other words, the employer should not just set the duration arbitrarily.  The employer needs to research this.  If the employer is excluding applicants with convictions within the last 7 years, the employer should be prepared to explain what is different about an applicant who was convicted 5 years ago from one that was convicted 7 years ago.  Otherwise the duration might appear arbitrary.
  3. The nature of the job sought or held:  It is important to identify the particular jobs subject to the exclusion.  Linking the criminal conduct to the essential functions of the position in question may assist an employer in demonstrating that its policy or practice is job related and consistent with business necessity because it bears a demonstratable relationship to successful performance of the jobs for which it was used.

Conduct Individualized Assessments:  The OFCCP advocates for individualized assessments rather than blanket prohibitions based on criminal history reports.

Confidentiality:  Employers should always be mindful of the confidential nature of applicants’ and employees’ criminal records and should use such information only for its intended purposes.

Check State and Local Laws/Regulations:  It is also important for employers to know that various states and cities  have enacted additional laws and regulations governing employer’s use of criminal records, so it is always important for employers to be familiar with the state and local laws of the jurisdiction where they are operating.  For example, in California, employers cannot ask applicants about certain marijuana convictions.

In closing, although some employers may recoil at the thought of hiring an employee with a criminal history, by having a closed mind the employer might be missing out.  For example, in researching this blog I did a Google search of famous people with criminal records.  These are three of the names that I found:  Nelson Mandela, Johnny Carson, and Bill Gates.  Now just think about what great talent an employer with a blanket criminal record exclusion would be missing out on.

The attorneys at Harmon & Davies are dedicated to serving the Labor and Employment Law needs of employers.  We are here to assist employers with crafting hiring policies that include criminal history policies.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Labor & Employment, OFCCP | No Comments »

A provision of the Affordable Care Act  commonly referred to as the “preventive services mandate” requires employers to provide employee health plans that cover, without cost to the employee, contraceptives, abortifacients, abortion, and sterilization.  In Conestoga Wood Specialties Corp. v. Sebelius, a closely held, secular, for-profit corporation, operated by a family of the Mennonite faith, claimed that compliance with that the Affordable Care Act’s preventive services mandate violated the corporation’s sincerely held religious beliefs.

This raised an issue of first impression for the U.S. District Court of the Eastern District of Pennsylvania as to whether a secular, for-profit corporation has religious rights under the First Amendment.  Although federal district and appeals courts are split on the issue of whether secular corporations have a right to challenge the validity of the preventive services mandate, the Eastern District held that a corporation does not possess such a right based upon: (1) a lack of historical support for the proposition that a secular, for-profit corporation possesses the right to free exercise of religion (in other words, religious rights are purely personal guarantees that have only been extended to individuals); and (2) an adherence to the corporate form.

In the Conestoga Wood case, the corporation unsuccessfully argued that it should be considered the alter egos of its shareholders, all of whom practice the Mennonite faith.  In rejecting this argument, the court stated that it would be entirely inconsistent to allow the shareholders to enjoy the benefits and protections of incorporation while simultaneously piercing the corporate veil for the limited purpose of challenging the preventive services mandate.

The court further reasoned that because the ultimate and deeply private choice to use an abortifacient contraceptive rests not with the shareholders of the corporation, but with the corporation’s employees, any burdens imposed upon the employer by the regulations would be too attenuated to be considered substantial.  Moreover, the court stated that the regulations apply to the employer corporation, not to the shareholders individually.  Accordingly, the court said that whatever burden the shareholders may feel from being involved with a for-profit corporation that provides health insurance that could possibly be used to pay for contraceptives, is too indirect of a burden to be considered substantial under the Religious Freedom Restoration Act.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Posted in Business Law, Labor & Employment | No Comments »