Appellate Division Rules that Employee’s CEPA Claim Cannot Be Based Upon a Code of Ethics Not Applicable to the Employer
In a case that undoubtedly will be welcomed by New Jersey health care employers, the Appellate Division in Hitesman v. Bridgeway Inc., d/b/a Bridgeway Care Center, Docket No. A-0140-11T3 (App. Div., March 22, 2013) announced that a licensed health care provider cannot sustain a Conscientious Employee Protection Act (CEPA) claim where he or she relies upon a professional code of ethics that applies to the plaintiff, but does not apply to the employer. In doing so, the court overturned a jury verdict in favor of a “whistleblower” that was fired for sharing confidential patient information with a TV news reporter, in violation of the company’s confidentiality policy.
On May 6, 2013, Governor Christie conditionally vetoed Assembly Bill 2878, the so-called “Facebook Bill.” If enacted, it would have prohibited an employer (other than law enforcement agencies or corrections departments) from requiring or requesting a current or prospective employee to provide a user name or password, or access to a personal account on a social networking site. Although he termed the bill well-intentioned, he stated that the proposed legislation painted with “too broad a brush” because it contained provisions that would also allow an employee or job applicant to sue for an injunction and damages, including attorneys’ fees, even in cases in which the inquiry was innocuous and relevant to the job. He gave the example of an employer interviewing a candidate for a marketing job who would be prohibited under the bill from asking about the candidate’s use of social networking in order to assess his or her technological skills and media savvy.
Section 7 of the National Labor Relations Act protects the right of employees to discuss with each other, the terms and conditions of their employment, including their wages and benefits. A recent decision of the National Labor Relations Board once again emphasized that these protections apply to both union and non-union employees, whether the discussions are in person or through social media such as Facebook. Read the rest of this entry »
In a recent decision rendered in the United State District Court for the District of New Jersey, the Magistrate Judge imposed sanctions on a plaintiff who deleted his Facebook account thereby depriving defendants of permissibly requested relevant discovery.
In Gatto v. United Air Lines, Inc., et al., 2:10-cv-01090 (D.N.J. 2013), plaintiff asserted that he incurred personal injuries in the course of his employment as a ground operations supervisor, while he was unloading baggage. As part of their damages-related discovery, defendants sought information related to plaintiff’s social activities, including a request for documents and information related to plaintiff’s social media accounts. Plaintiff initially refused to execute an authorization for the release of his Facebook records, but later was ordered to do so and to change his password to “alliedunited” so that the account could be accessed for review by defendants in connection with the litigation. Plaintiff thereafter received an alert that his account was accessed by an unfamiliar address and, in response, plaintiff deactivated his account, despite the fact that defendants had confirmed it was they who had accessed the account. Plaintiff advised that the Facebook account was not only deactivated, but all account data had been lost. The record reflected that plaintiff’s account was not merely deactivated, but that plaintiff also had to have taken the additional steps required to permanently delete his account and all data stored in the account.
Defendants moved for sanctions based on plaintiff’s spoliation of evidence. Specifically, defendants requested that the court enter an order awarding costs to defendants related to the motion, and an order issuing an instruction at trial that the jury draw an “adverse inference” against plaintiff for failing to preserve his Facebook account. An “adverse inference” permits a jury to infer that the fact that a document was not produced is evidence that the party who destroyed the evidence had a well-founded fear that the contents of the evidence would harm him. The Court denied the request for costs but granted the defendants’ request for an adverse inference charge.
The Court observed that parties in federal court have an obligation to preserve relevant evidence that they know or should know might be requested in the litigation. Spoliation occurs when evidence is destroyed or significantly altered or where a party fails to preserve the evidence. The Court concluded that plaintiff’s conduct met all of the prerequisites for an order directing an adverse inference at trial. Under the facts presented, the Court found that the plaintiff’s Facebook account was relevant to the litigation because plaintiff sought damages for personal injuries and the defense requested information and posts relative to that aspect of damages. Moreover, there was little question that plaintiff had a duty to preserve the account data as it was foreseeable that the account would be sought in discovery. In addition, the Court concluded that the defense was prejudiced by plaintiff’s destruction of the Facebook account because it lost all access to evidence that was potentially relevant to plaintiff’s damages claim. Based primarily on these factors, the Court ordered that an adverse inference would be appropriate at the time of trial.
While this case arose in the personal injury context, it did involve an injury incurred at work, and thus, the facts indirectly relate to the employment context. Undoubtedly, the Court’s reasoning and the legal precepts underlying this decision can be applied in any employment litigation. As social media continues to grow as a form of communication, its potential relevance to an employment dispute likewise continues to grow. As this case demonstrates, employers are able to pursue social media as an area of inquiry in the discovery process, and employees need to be mindful of obligations to preserve their social media, as well as other potentially discoverable electronically stored data related in any way to the litigation, or risk the consequences of not doing so. It is important to craft non-objectionable discovery demands for electronic communications, including social media accounts, because these communications and accounts may be a valuable source of information relevant to the case.
The blog entry on March 4, 2013, noted a bill pending in the New Jersey legislature, “The Opportunity to Compete Act,” that would limit an employer’s ability to ask about a job applicant’s criminal background, at least until a conditional offer of employment is made. This bill follows the nationwide trend of what has become known as “ban the box” legislation because it requires the removal of any questions regarding the applicant’s criminal history from employment applications.
Several New Jersey cities have already enacted ordinances limiting employers’ use of criminal background checks, joining more than 40 cities nationwide. Newark, the largest city in the state with the greatest per capita number of parolees in the country, passed a ban the box ordinance effective November 18, 2012 that is reputed to be the most comprehensive in the nation. It prohibits employers with 5 or more employees that do business or employ persons in the city from conducting criminal background checks as part of the hiring process, if the employment will be performed substantially within the city. Employers cannot ask about criminal history on job applications or during interviews, and cannot advertise that eligibility for hire is limited based on the criminal record. Criminal background checks are permitted if required by federal or state law, however, or if the employer has made a good faith determination that the job is of sufficient “sensitivity” to warrant a criminal background check. Unfortunately, the ordinance does not define the “sensitivity” needed to justify a criminal history report.
Atlantic City also prohibits pre-offer inquiries into the criminal history of applicants for city positions, unless required by state and/or federal law. It requires all vendors doing business with the city to have practices, policies and standards that are consistent with the City’s, which will be part of the criteria to be considered in awarding contracts.
Once a conditional offer of employment has been extended, both ordinances permit criminal records to be obtained, although the Newark ordinance has a limited look back period ranging from eight years for indictable offenses to five years for disorderly persons convictions. If the offer is then rescinded as a result of that background check, the employer must provide a copy of the criminal record to the applicant and the reasons for withdrawal of the offer. The applicant then has a limited period within which to respond.
Philadelphia, Pennsylvania has enacted a ban the box ordinance for both public and private employers with more than 10 employees, which also applies to all parties providing goods and services to the city. New York City has an Executive Order banning the box for city government jobs and contractors doing business with its Human Services Department.
On the federal level, the EEOC issued a Guidance in 2012 regarding the use of arrest and conviction records in hiring decisions which may have an adverse impact due to race or national origin. It recommends that employers limit their inquiries and base their adverse employment decisions only on criminal records that are job related. In considering how specific criminal conduct may be linked to a particular job, the Guidance provides three factors to consider: the nature and gravity of the offense or conduct; the time elapsed since the offense and/or completion of the sentence; and, the nature of the job sought.
Although this Guidance does not have the force of law, the EEOC plans to rely on it when enforcing claims brought under Title VII. Unfortunately, the Guidance may complicate an employer’s efforts to avoid the risk of harm to its customers and employees, and to avoid liability if such harm occurs because it ignored available information about an applicant’s criminal history.
The Guidance includes examples of best practices for employers who do consider criminal record data when making employment decisions. It recommends that employers develop a narrowly tailored written policy to screen applicants for criminal conduct, and determine the specific offenses that may demonstrate unfitness for performing a particular job. It advises employers to train managers and decision makers on how to implement their policies consistent with Title VII, and to limit questions about criminal records to those that are related to the job in question and consistent with business necessity.
Given this nationwide trend of ban the box legislation, it is critical that employers be aware of applicable statutes and local ordinances not only in those states and cities where the employer is located or where the hiring process occurs, but also in the locale in which the job applicant will work.
On March 8, 2013, the United States Department of Labor’s (“DOL”) Final Rule implementing changes to the Family and Medical Leave Act (“FMLA”) regulations goes into effect. These changes relate to the FMLA regulations on military caregiver leave for veterans, qualifying exigency leave for care of a military member’s parent, and the method for calculating leave for flight crew employees. A side by side comparison of the former regulations with the new regulations is available on the DOL’s website at http://www.dol.gov/whd/fmla/2013rule/comparison.htm.
Beginning on March 8, 2013 all employers covered by the FMLA are required to display a new poster which summarizes the FMLA’s major provisions, including the changes contained in the Final Rule. A copy of the new poster is available on the DOL’s website at https://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf.
UPDATE: Governor Christie Vetoes “Facebook Bill” (5/14/2013)
In recent months, several potential new laws that could impact the workplace have been slowly advancing through the New Jersey Legislature, and it would be prudent for employers to periodically monitor their status. Below, we highlight some of the pending legislation:
First, following federal and state trends, the New Jersey legislature continues to consider a law prohibiting employers from requiring current employees or job applicants to disclose their user names or passwords to “personal accounts,” which is defined to include social networking websites. (A2878/S1915). Interestingly, an Assembly floor amendment was adopted which revised the definition of “personal account” to exclude any account used by employees or applicants for business purposes of the employer or to engage in business related communications. This amendment therefore, appears, to distinguish between an employer’s ability to access a website traditionally used for social purposes versus a website traditionally used for professional networking. A larger, related question for employers to consider still remains, namely, whether it is ever advisable to use on-line searching as part of the employment or pre-employment screening process.
Second, New Jersey is following another legislative trend, with its introduction and consideration of “The Opportunity to Compete Act.” (A3837/S2586). This Act establishes certain employment rights for persons with criminal histories. Among its other findings, the Legislature found that “removing obstacles to employment for people with prior criminal records provides economic and social opportunities to a large group of people living in New Jersey, which, in turn, increases the productivity, health, and safety of New Jersey communities.” This bill is aimed at limiting an employer’s ability to make inquiries regarding a potential job candidate’s criminal history, at least until a conditional offer of employment has been made. For those employers that routinely conduct criminal background checks as part of their recruitment and hiring process, this legislation will be of particular importance.
Finally, employers also should be aware of the “Save New Jersey Call Center Jobs Act.” (A3775/S2188). This law would apply to employers with 50 or more full-time workers, or 50 or more workers that in the aggregate, work at least 1,500 hours per week for purposes of staffing a call center. Such employers would be required to notify the Commissioner of Labor and Workforce Development if, under certain conditions, they relocated or transferred one or more of its call centers from New Jersey to one or more foreign countries. This law would not create a private cause of action for aggrieved employees, but it would provide for civil penalties.
It is important for employers that may be impacted by these potential laws to remain mindful of the status of the legislation in order to ensure their compliance if these bills are ultimately signed into law.
Recently, the United States Court of Appeals for the Sixth Circuit decided a case helpful to all employers who rely upon automatic payroll deduction policies for meal breaks. In White v. Baptist Memorial Health Care Corporation, 2012 U.S. App. LEXIS 22752 (6th Cir. Nov. 6, 2012), the Sixth Circuit held that, if an employer establishes a reasonable process for an employee to report work performed during unpaid breaks, it is not liable for non-payment if an employee fails to report the work performed through the established process. Note that while this Sixth Circuit decision is not necessarily binding on New Jersey courts, it is still helpful for area employers, as explained below.
Factual Background – Unpaid Meal Break Automatically Deducted
The facts in White were that the defendant Baptist Memorial Health Care Corporation provided employees at its various hospitals with an unpaid 30-minute meal break each workday. The hospital automatically deducted the unpaid meal break from employees’ hours worked. The hospital’s policy provided that in the event an employee performed any work during their meal break, they were instructed to report such work by either filling out an “exception log,” submitting a written note to a supervisor, or verbally informing a supervisor of the work performed, depending upon the department in which the employee worked.
The plaintiff in White reported work performed during meal breaks on several occasions, and she was compensated for the work reported on such occasions. However, at some point in time, she unilaterally stopped reporting her meal-break work, and therefore was not compensated for such work because the hospital was unaware of it. There was no evidence that she was discouraged from filling out the exception log, other than her testimony that she believed that continuing to do so was an “uphill battle.”
The plaintiff filed a collective action under the FLSA, arguing that the hospital’s automatic deduction policy resulted in employees not being paid for meal-break work. She maintained that the automatic deduction policy unlawfully “shifts the burden” of ensuring employees are paid for all time worked from an employer to its employees. She further argued that the hospital knew or should have known about work performed during meal breaks that went unreported.
The Sixth Circuit’s Decision Upholding Automatic Meal Break Deduction
The district court granted summary judgment to the hospital on the plaintiff’s claim, finding that the hospital had no reason to know of her unpaid meal-break work because she failed to report it. The Sixth Circuit affirmed, holding that “if an employer establishes a reasonable process for an employee to report uncompensated work time the employer is not liable for non-payment if the employee fails to follow the established process.” The court reasoned that, by failing to use such reporting procedures, an employee “prevents the employer from knowing its obligation to compensate the employee and thwarts the employer’s ability to comply with the FLSA.” In this case, the plaintiff unilaterally stopped reporting meal-break work even though she had been compensated when she reported such work in the past. Moreover, although the plaintiff had complained to management about having to perform work during meal breaks, she never indicated that she was not reporting this work or that she was not being compensated for it. Accordingly, the majority affirmed summary judgment as a matter of law.
Significant Take Aways for Employers
White is significant because it re-affirms the right of employers to maintain an auto-deduct policy for unpaid meal breaks, as long as the employer has adopted and published a clear mechanism for employees to report time worked “off the clock” so that, in those circumstances where they did perform work, they will be paid. In this respect, White also affirms the applicability of an important affirmative defense often utilized by employers in discrimination and harassment cases, referred to as the avoidable consequences defense (i.e. the plaintiff failed to follow established reporting procedures, and therefore did not “mitigate” his or her damages), to wage and hour claims.
The holding in White underscores the importance of a company’s wage and hour, time reporting, and payroll policies, which will help demonstrate that employees are: 1) educated on the process for reporting off the clock work; 2) encouraged to use the prescribed reporting process; and, 3) compensated for work reported. We recommend that these important policies be maintained in your employee handbook and/or in stand-alone policies, so that acknowledgement of receipt by the employee can be readily demonstrated. Even if your current handbook contains these policies, they should be reviewed at least every year to make sure they are effective and practical in application, especially in light of the ever-evolving nature of wage and hour.
On December 15, 2012, in American Baptist Homes and Service Employees International Union, the National Labor Relations Board (“NLRB”) held that employers may have to disclose witness statements obtained as a result of a workplace investigation to a union upon request for such documents if the statements are necessary and relevant for the union to perform its duties. To determine when witness statements must be disclosed, the NLRB has adopted the traditional balancing test generally applied to a union’s request for information: does the employer’s interest concerning confidentiality, witness coercion, harassment or retaliation outweigh the union’s need for the information. Prior to American Baptist Homes, employers generally were not required to turn over witness statements obtained during a workplace investigation. Now, however, employers must weigh the factors above to determine if a witness statement should be disclosed to a union upon request. As one might imagine, this subjective determination puts employers in a predicament. Indeed, the failure to disclose relevant statements could result in an NLRB charge, but the disclosure of the statements could have adverse consequences on future investigations or even ongoing parallel litigation. As a result of this ruling, Employers will certainly face more information requests from unions targeted at witness statements. Accordingly, during a workplace investigation involving unionized employees, employers must now consider whether collecting witness statements is beneficial to the Company and, if the statements are collected, what information should be included in the statements. Employers can increase the chance that witness statements will be protected by documenting specific concerns when the statements are initially collected such as confidentiality, intimidation, harassment or retaliation, which may justify not disclosing an individual’s witness statement down the line.
Adding to an already crowded landscape of required employment-related posters, recently enacted legislation in New Jersey will require employers with 50 or more employees to post notification of the “right to be free of gender inequity or bias in pay, compensation, benefits or other terms and conditions of employment under the ‘Law Against Discrimination,’… Title VII of the Civil Rights Act of 1964, … and the Equal Pay Act of 1963…, which prohibit wage or compensation discrimination based on gender.” In addition to the requirement to post this notice, the law also requires that a written copy of the notice be distributed to all employees within 30 days after the form of notification is issued by the State. The notice must also be distributed annually to all employees and at certain other times, including upon hire and upon the request of the employee. The law provides for various options by which employers are permitted to distribute the written notice, including by e-mail delivery, via printed material (such as pay check inserts or an attachment to an employee handbook), or through an internet or intranet website. All employees must acknowledge receipt of the notice, which must be available in at least English and Spanish, either in writing or by electronic verification. The details of the new legislation can be reviewed in full at: http://www.njleg.state.nj.us/2012/Bills/PL12/57_.PDF.
For planning purposes, employers still have some time to prepare for this new notice obligation. While Chapter 57 of the Public Laws of 2012 became effective on November 19, 2012, the “posting and distribution requirements contained in the law are not triggered until the Commissioner of Labor and Workforce Development issues the form of notification by regulation,” and this has not yet taken place. The regulatory process can take months, thus further delaying the publication of the approved notice. Therefore, it is essential for employers to stay up-to-date in order to insure they satisfy the notice requirement in a timely manner. The good news is that the Department of Labor and Workforce Development will be providing a resource for employers tracking this new requirement. For updates, employers can check the Department website at: http://lwd.state.nj.us/labor/employer/content/employerpacketforms.html.