IN THIS ISSUE:
Two Supreme Court Rulings Improve Employer’s Ability to Defend Against Harassment, Retaliation Claims
OFCCP’s New Sheriff is Rounding Them Up
What’s Past is Prologue:
Courts’ Views of the EEOC’s Enforcement Guidance Regarding Consideration of Applicants’ Criminal Histories
Chair’s Corner
Save the Date
Distinguished Lawyer Award
Get published

2014-15 OFFICERS
AND COUNCIL MEMBERS

The following slate for the 2014-2015 Employment & Labor Law Section Council was approved at the Section annual meeting that was held on October 26. Terms will begin on July 1, 2014

Chair
Richard A. “Al” Phinney

(864) 271-1300
al.phinney@odnss.com

Chair-Elect
Kristine L. "Kris" Cato

(803) 744-5270
kcato@rtt-law.com

Vice Chair
Stephanie E. Lewis 

(864) 672-8048
lewiss@jacksonlewis.com

Secretary
C. Edward Rawl Jr.
(803) 255-0000
erawl@laborlawyers.com

COUNCIL MEMBERS

Section Delegate
Molly Cherry

(843) 577-9440
mcherry@nexsenpruet.com

Immediate Past Chair
Charles “Fred” Manning II

(803) 255-0000
fmanning@laborlawyers.com

CLE Coordinator
Karen L. Luchka

(803) 255-0000 kluchka@laborlawyers.com

EEOC Liaison
Nicholas Walter

(704) 954-6472
nicholas.walter@eeoc.gov

COMMITTEE CHAIRS

Labor Management Relations
Michael D. Carrouth
(803) 255-0000
mcarrouth@laborlawyers.com

EEO
Brian Lysell
(803) 404-6900
BrianLysell@callisontighe.com

Immigration Law
Melissa L. Azallion
(843) 785-2171
mazallion@mcnair.net

Membership
Amy L. Gaffney
(803) 790-8838
agaffney@glelawfirm.com

Occupational Safety & Health
R. Hayne Hodges II
(803) 799-9311
hhodges@gsblaw.net

Specialization
Debbie Durban
(803) 255-9465
Debbie.durban@nelsonmullins.com

Distance Learning Education
Nekki Shutt
(803) 404-6900
nekkishutt@callisontighe.com

How I Learned to Stop Worrying and Love Social Media Issues: An Overview of the Fourth Circuit’s decision in Bland v. Roberts
R. Timothy Whisler
Ogletree Deakins Nash Smoak & Stewart, PC, Charleston

You don’t have to be an expert in employment law to realize social media issues are a growing presence in employment cases. In other words, “you don’t need a Weatherman to know which way the wind blows.” Whether social media use is a direct cause of lawsuit, or it raises an issue during litigation, the subject is almost unavoidable. The recent Fourth Circuit case, Bland v. Roberts, is instructive for two reasons: 1) clicking “Like” on a Facebook page constitutes speech, and 2) fully explaining the complexities of social media and its effect on the issues to the court can lead to a favorable result.

How it all began       
In 2009, B.J. Roberts, the sheriff of Hampton, Virginia for 17 years, was up for re-election. His opponent, who had worked for the Sheriff for 16 years, recently quit in order to run against Roberts. Needless to say, Roberts was not too fond of his opponent. The employees of the sheriff’s office were appointed by the sheriff, and re-appointments were at the discretion of the sheriff. During the campaign a few of the employees displayed various degrees of support for Roberts’ opponent.

One of the plaintiffs, Mr. Daniel Ray Carter, was a sworn, uniformed deputy sheriff who worked as a jailer in the Corrections Division. Mr. Carter’s extent of support was merely clicking “Like” on the opponent’s Facebook campaign page. Sheriff Roberts had made clear to the staff that those who publicly supported his opponent would not be re-appointed. Roberts won the campaign and, shockingly, did not reappoint Mr. Carter and a few others who had dared to support the “wrong” candidate.

District court ruling
Mr. Carter and five other employees filed suit in the Eastern District of Virginia in March 2011, alleging the sheriff violated their right First Amendment rights to freedom of speech and freedom of association. The district court granted Sheriff Roberts summary judgment on all grounds. Notably, the district court quickly dismissed Carter’s free speech claim, finding Carter had failed to make a “statement of speech.” Bland v. Roberts, 857 F. Supp. 2d. 599, 603 (E.D. Va. 2012). Without much analysis, the district court concluded “merely ‘liking’ a Facebook page is insufficient speech to merit constitutional protection.” Id. Plaintiffs appealed, and the Fourth Circuit opinion provided significant analysis whether liking another’s Facebook page constitutes speech. The ACLU and Facebook filed Amicus Curie briefs.

Facebook Amicus Curie
Facebook’s brief seemed to have substantial influence on the court’s opinion. Although judges assigned to an appeal are not known at the time of filing briefs, Facebook had the foresight to recognize one common denominator of Fourth Circuit judges—age. The youngest, Judge Thacker, is a mere 48 years young (and, coincidently, was assigned to this case). The other two judges (Judge Traxler and Judge Hollander, sitting by designation from the District of Maryland) are in their mid-sixties. As someone who is turning 40 next year, it is certainly not my place to characterize any of these judges as “old.”  However, in the lightning bolt pace of the Digital Age, the judges are a generation removed from the popularity of social media. The largest demographic for Facebook users is 25-34 years old. Regardless of statistics, it is not too much of a risk to assume that older generations may not fully appreciate the enormous impact of social media.

Facebook’s brief reads like an instruction manual (in a good way). Facebook provides the court with a linear explanation of its service and how its members (called “users”) are able to publish and share their “opinions, ideas, photos, and activities” to Facebook’s 950 million users. Facebook patiently explains how a Facebook page works and carefully detailed how visible liking a page can be among the online community. Facebook noted that 500 million users are on the site daily and more than three billion (yes, billion) Likes are posted every day. It stated that liking a page is “the 21st-century equivalent of a front-yard campaign sign.”

Fourth circuit ruling
Unlike the district court, the Fourth Circuit provided considerable discussion and analysis whether clicking Like on Facebook constitutes constitutionally protected speech. While both the lower court and the Fourth Circuit agreed that clicking Like requires minimal thought or effort by a user, the Fourth Circuit focused on the vast effect of how liking a page can be communicated to others. In fact, the court’s discussion about Facebook and its services are derived from Facebook’s brief.
           
The court dismissed the lower court’s conclusion that constitutionally protected speech in Facebook must contain “actual statements.” The Fourth Circuit stated, “[t]hat a user may use a single mouse click to produce that message that he likes the page instead of typing the same message with several individual key strokes is of no constitutional significance.”  It added, “it is the Internet equivalent of displaying a political sign in one’s front yard, which the Supreme Court has held is substantive speech.”  Sound familiar?

Why Bland is significant for all attorneys
The holding is somewhat limited since it only provides protection to public employees. But, this case provides much more than influence over the debate of private employees’ privacy and use of social media. Facebook’s attention to detail allowed an opportunity for the court to comprehend its services. While the lower court focused its attention on Carter’s minimal “action” of clicking a button, the Fourth Circuit’s holding stemmed from its analysis of the significance clicking Like can communicate to the vast online community. Reading the Fourth Circuit’s opinion provides all attorneys informative guidance to formulate an argument involving social media to an audience that may not fully grasp how truly influential and powerful the Digital Age has become.

“All speech, written or spoken, is a dead language, until it finds a willing and prepared hearer.”  —Robert Louis Stevenson

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Two Supreme Court Rulings Improve Employer’s Ability to Defend Against Harassment, Retaliation Claims
Michael P. Scott and James A. Byars
Nexsen Pruet, Charleston

On June 24, 2013, the U.S. Supreme Court handed down two critical decisions regarding Title VII of the Civil Rights Act, which improve an employer’s ability to defend against employee claims of harassment and retaliation.

Vance v. Ball State University: who’s the boss?
Employers face Title VII liability when an employee is subjected to workplace harassment and there is a sufficient connection between the harasser and the employer. Burlington Indus. v. Ellerth, 524 U.S. 742, 754-55 (1998); Harris v. Forklift Systems, Inc., 510 U.S. 17, 21 (1993). This connection is automatically established if the alleged harasser is the victim’s “supervisor.” See Ellerth, 524 U.S. 742, 755-58 (1998); Faragher v. City of Boca Raton, 524 U.S. 775 (1998). However, for the past 15 years, lower federal courts and the Equal Employment Opportunity Commission (EEOC) have struggled to settle on a precise definition of the term “supervisor.” 

The EEOC and several federal courts—including the Fourth Circuit Court of Appeals, which covers North and South Carolina—have defined “supervisor” broadly to include anyone with the authority to direct the alleged victim’s work activities. This authority was not limited to hiring and firing, but included things such as scheduling shifts or assigning daily tasks. Other courts, however, applied a more restrictive definition, limiting “supervisor” to those individuals who had the ability to make a tangible employment decision; i.e., to hire, fire, promote or demote the alleged victim. As noted in the January 2013 update, the Supreme Court in Vance v. Ball State University was expected to resolve the dispute once and for all.

In that case, Maetta Vance, an African-American woman, sued her employer, Ball State University, under Title VII. Vance alleged that Ball State was liable because she was subjected to harassment by a white woman who had some authority to direct her daily activities, even though the woman did not have the authority to hire, fire, promote or demote her. The Supreme Court adopted the more restrictive—and employer friendly—definition of “supervisor” and held that only those who are “empowered by the employer to take tangible employment actions against the victim” are considered “supervisors” for the purposes of Title VII. Such tangible actions include “hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” This framework, according to the Court, provides a bright-line rule for employers to determine which employees fall under “supervisory status,” enabling employers, employees and courts to more readily determine that status. Therefore, the broader interpretation espoused by the EEOC and courts in North and South Carolina was effectively overruled.

This decision weakens an employee’s ability to establish the necessary connection between an alleged harasser and employer. However, employers are cautioned that this case does not insulate them from liability if their employees—supervisors or otherwise—create a hostile work environment or subject other employees to harassment. To fully benefit from this decision, employers should clarify in writing the duties and authority of their various managers and team leaders, especially those in middle management and lower-level leadership positions. All employees should be aware of the authority of all managers and supervisors and, as always, employees must be informed that harassment will not be tolerated and should be reported immediately. Additionally, employers should also have a written policy that retaliation against employees making good faith complaints will not be tolerated, as explained further below.

University of Texas Southwestern Medical Center v. Nassar: retaliation revisited
In a second opinion, University of Texas Southwestern Medical Center v. Nassar, the U.S. Supreme Court addressed the issue of what proof is required for an employee to establish that an adverse employment action, such as a termination or demotion, was caused by unlawful employer retaliation for the employee’s complaints about discrimination.

The plaintiff in Nassar was a staff physician at a university hospital who claimed he was being harassed and discriminated against by a supervisor based on his national origin and religion. To address the complaints, his employer initially granted his request to act as a staff physician without acting as a member of the university faculty, taking him outside the supervision of the alleged harasser. However, the offer was rescinded based on a policy requiring staff physicians to be faculty members. The plaintiff resigned and ultimately filed a lawsuit alleging that he was constructively terminated as a result of unlawful harassment and in retaliation for complaining about that harassment.

The issue before the Supreme Court was the causation standard applicable to retaliation claims. Under Title VII, plaintiffs making status-based discrimination claims—such as those alleging discrimination based on race, sex or national origin—need only prove that discrimination was a “motivating factor” in the employer’s decision to take adverse action in order to establish the claim. Discrimination need not be the only reason for the adverse action in order for the employer to be liable.

The EEOC has traditionally taken the position that this same lesser proof standard applies to retaliation claims, making it easier for plaintiffs to survive summary judgment and potentially recover on those claims. However, the employer in Nassar argued that statutory differences require retaliation plaintiffs to prove that retaliation was the “but for” cause of the adverse action; in other words, that the plaintiff would not have been terminated or demoted absent having engaged in protected activity, such as having made a discrimination complaint.

In a victory for employers, the Supreme Court agreed with the hospital and held that Title VII requires retaliation plaintiffs to prove that adverse action would not have occurred “but for” the employer’s desire to retaliate against the employee for having engaged in protected activity. The Court reasoned that statutory and conceptual differences between the two types of claims—discrimination based on employee status versus retaliation based on voluntary employee conduct—dictated that retaliation claims be subject to stricter standards of causation that are traditionally required to succeed on legal claims. Moreover, the Court held that the increasing frequency of retaliation claims puts a strain on employer and administrative resources, which would only increase by reducing the proof required to establish a claim.

Although this case will likely enable more employers to succeed on summary judgment for retaliation claims, Nassar does not change the legal elements required to establish a retaliation claim. Nor does it have a significant effect on how employers should handle internal complaints of discrimination, harassment or retaliation. Instead, the Supreme Court’s rejection of a “mixed motive” retaliation claim reemphasizes the importance of clearly setting forth in writing all reasons for any adverse employment action taken against employees and ensuring that those reasons are legitimately related to the employee’s performance and business needs.

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Facebook is the New Watercooler, but Not the New Vegas
Karen L. Luchka
Fisher & Phillips, LLP, Columbia

As of June 2013, Facebook, the reigning social media giant, had 1.15 billion monthly active users who spent an average of 8.3 hours a month on Facebook. During roughly the same period of time, Facebook users “liked” a Facebook posting 4.5 billion times a day and uploaded an average of 350 million pictures a day. These statistics demonstrate that Facebook and other social media platforms have become the new water cooler in the office. Employees debate season finales of television shows shows, opine about Miley Cyrus’ dancing, and announce changes in their relationship status at least as often on Facebook as they do around the lunch table in the breakroom.

Communication through social media sites such as Facebook is becoming an increasingly acceptable norm. More and more individuals regularly share details of their daily life and thoughts on Facebook. The consequence for employers, however, is that the same individual who post about being annoyed by the long wait at the doctor’s office is an employee who will post a complaint about a workplace rule she finds oppressive. Similarly, the same individual who gripes about the refereeing of his kid’s soccer game on Facebook is an employee who will vent about a new, stricter manager. However, unlike Vegas, what happens on Facebook does not stay on Facebook, and frequently content posted by employees online spills over into the workplace. As a result, companies and their attorneys are being increasingly challenged to find a balance between employee privacy rights and enforcing workplace standards. A recent case underscores the importance of understanding privacy laws before advising clients on adverse employment actions. Ehling v. Monmouth-Ocean Hosp. Serv. Corp., No. 2:11-cv-03305, 2013 U.S. Dist. LEXIS 117689 (D.N.J. Aug. 20, 2013).

Paramedic’s problematic post
An employee of Monmouth-Ocean Hospital Service Corp. (MONOC) was a registered nurse and paramedic. During her employment with MONOC the employee became a familiar name to human resources and management by receiving six disciplinary notices, taking a half dozen FMLA leaves and serving as the president of the union. During her employment, she also maintained a Facebook page and became Facebook friends with several of her co-workers. She set her privacy settings on Facebook so that only Facebook friends and not the general public could see content she posted. Unbeknownst to her, however, one of her co-workers and Facebook friends was taking screenshots of her Facebook page and providing them to a manager.

On June 8, 2009, she posted a statement on her Facebook page about a shooting that had taken place at the D.C. Holocaust museum. Her status update noted that the shooter had been shot by other guards, but survived. The employee wrote: “I blame the DC paramedics. I want to say 2 things to the DC medics 1. WHAT WERE YOU THINKING? And 2. This was your opportunity to really make a difference!”  The employee’s Facebook friend took a screen shot of her page showing her comments and provided it to a manager. The hospital suspended the employee based on concerns that her posts reflected a “deliberate disregard for patient safety.”

The employee sued alleging, among other things, that the hospital violated the federal Stored Communications Act by accessing her Facebook posts. The court ruled that while the federal law did apply to certain Facebook content, the hospital did not improperly access her post by viewing the screenshot taken by her co-worker.

Standards of the Stored Communications Act
The MONOC employee sued under the federal Stored Communications Act (SCA), which is a law passed in 1986 to protect the privacy rights of individuals in electronic stored communications. The problem with the law, however, is that it was enacted before the introduction of the World Wide Web in 1990 and therefore its application to modern technology and communications has not been widely tested by the courts. As a result, both courts and employers are beginning to grapple with its impact on employer’s access to online content.

The law’s primary premise is that it prohibits intentional access, without authorization, to non-public electronic communications. The court closely analyzed the law and concluded that Facebook posts are electronic communications within the meaning of the law. Additionally, the court concluded that because the employee had adjusted her privacy settings so that only friends could see her posts, her Facebook postings were non-public and therefore fell within the protections of the Stored Communications Act. Accordingly, her employer was prohibited from intentionally accessing her posts without authorization.

Authorized access
After finding the SCA protects the privacy of Facebook posts when individuals utilize privacy settings, the court next considered whether the access to the posting was unauthorized. In particular, the SCA contains an “authorized user” exception that permits access by individuals who are both authorized users of the communication service and who were intended recipients of the communication.

The court found that the authorized user exception applied to MONOC’s viewing of the paramedic’s postings, and its rationale provided a lot of insight for employers on how to handle reports of Facebook or online misconduct by employees. The basis for the court’s finding that the access to the paramedic’s page was authorized was two-fold. First, her posting was accessed by someone who was a Facebook friend of hers and, as a result, had rights to view her postings. Therefore, as her Facebook friend, her co-worker was an intended recipient of her postings.

Second, the co-worker was not coerced or pressured to turn over the postings. In particular, the court found that the access to her Facebook posting was done by an authorized user because her Facebook friend viewed and copied the postings voluntary and not based on any coercion or request by his employer. The court inferred that had the employer or one of its managers pressured the co-worker to provide copies of the paramedic’s Facebook posts, the access would have been unlawful.

The rationale behind the court’s finding was that if the access to the Facebook postings had been made because of pressure from the employer, the employer would be the real entity accessing the postings, and it was not an authorized recipient of the communication. When a Facebook friend voluntarily turns over the information, however, he or she is an authorized user and intended recipient of the communication and there are no restraints on his or her ability to share the communication with others. The law, according to the court, presumes that a Facebook user assumes the risk that what happens on Facebook, does not stay on Facebook, and that their Facebook friends can voluntarily share their postings with others.

In the case of MONOC’s paramedic, the court ruled that the employer’s actions were lawful because access was made by an authorized user, her Facebook friend, and turned over to the company voluntarily. Accordingly, it was lawful for the hospital to review the postings and take lawful disciplinary action against the paramedic.

Best practices for handling Facebook follies
The MONOC case is a good reminder that it is important for employers to pause before taking any action based on content posted on a social networking site, such as Facebook, and ensure that both its access to the information is lawful and disciplinary action would be appropriate. If an employer becomes aware of a concerning post on a social media site, the first question it should ask is whether the post is accessible to the general public. If it is generally accessible to the public, then the employer can lawfully view it.

If the posting is not generally accessible to the public, then the employer should investigate how it learned about the posting and whether any copies of the posting that were provided to the employer were voluntarily provided by someone who was authorized to see the posting. If access to the postings was made by someone who was not an authorized user, such as a Facebook friend, or a supervisor or manager pressured a co-worker to provide access to the posting, then the employer should not view the posting or take any action based on it.

Finally, before taking any disciplinary action, the employer should consider whether disciplinary action is consistent and lawful. The protections of Title VII and other anti-discrimination laws against discrimination and retaliation apply to disciplinary action taken based on online misconduct. Therefore, any disciplinary action taken should be consistent with employer’s policies and past practices. Additionally, the National Labor Relations Act protects non-supervisory employee rights to discuss the terms and conditions of their employment in a concerted manner. Accordingly, if an employee is posting comments or concerns about topics such as his or her wages, hours or treatment by a supervisor, those postings may be protected in some circumstances and disciplinary action would be unlawful.

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Background Becomes Battleground
Michael P. Scott
Nexsen Pruet, Charleston

The Equal Employment Opportunity Commission (EEOC or Commission) recently filed federal lawsuits against Dollar General Corporation and a BMW manufacturing plant in South Carolina, based upon the EEOC’s revised guidance concerning the use of criminal background checks. The commission’s new guidelines, revised last year, recommend that employers not ask applicants about past criminal convictions and encourage employers to give job applicants an opportunity to explain past criminal misconduct before they are rejected. The EEOC emphasizes that background checks have a discriminatory impact on minorities and can violate Title VII of the Civil Rights Act—even if the background check policy applies to all applicants regardless of race.

The EEOC contends that the use of criminal background checks by Dollar General and BMW has discriminated against African-Americans. According to the commission, Dollar General, the nation’s largest small-box discount retailer, has implemented and utilized a criminal background policy that resulted in employees being fired and job candidates being screened out for employment in a way that disproportionately affected minorities. The EEOC’s lawsuit alleges that Dollar General rejected two African-American applicants without regard to the specific circumstances of their criminal records. The first had previously worked for another discount retailer for four years without incident, but also had a six-year-old conviction for possession of a controlled substance. The second did not have a felony conviction at all—the records check was simply incorrect.

Closer to home, the EEOC alleges that BMW, with facilities in Spartanburg, S.C., disproportionately screened African-American applicants using a background check policy that was not job-related or consistent with a business necessity. In other words, the convictions that disqualified applicants were not closely related to his or her ability to perform that job. According to the commission, BMW’s “blanket” policy excluded all applicants, regardless of qualifications, based on several types of crimes, without taking into account the distinction between felonies and misdemeanors or the time elapsed since the conviction. For example, the EEOC alleges that one African-American applicant was denied employment based solely on a 1990 misdemeanor conviction that was punished by a $137 fine.

The two lawsuits are the first to be filed since the EEOC issued its revised guidance under Title VII. In a statement, the commission explained that “overcoming barriers to employment is one of our strategic enforcement priorities, (and) we hope that these lawsuits will further educate the public and the employer community on the appropriate use of conviction records.” 

However, the Dollar General and BMW lawsuits are the not first time the EEOC has alleged discriminatory impact based on the use of background checks. Prior to the publication of the revised guidance, the EEOC brought a similar lawsuit in federal court against Freeman Companies, a Maryland-based integrated services provider. The court dismissed the lawsuit because the EEOC failed to present any identified, specific practice in Freeman’s background check policy that had a discriminatory impact.

The court was bothered by the EEOC’s tactic of bringing a lawsuit to validate its discriminatory impact theory without having any facts to support it. The court also noted the Dollar General and BMW cases and explained “any rational employer in the United States should pause to consider the implications of actions of this nature” because “the EEOC has placed many employers in the Hobson’s choice of ignoring criminal history … or incurring the wrath of the EEOC.”  

These lawsuits are the latest examples of the EEOC’s aggressive pursuit of its strategic enforcement priorities and their resolution, which, coupled with the court’s decision in the Freeman case, will likely set the tone for future actions.

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OFCCP’s New Sheriff is Rounding Them Up
Cheryl L. Behymer
Fisher & Phillips, LLP, Columbia

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) Director Patricia Shiu proclaimed herself the “new sheriff in town” when she assumed her position during President Obama’s first term in office. Director Shiu has a background as a litigator, often representing plaintiffs in civil rights matters. In one of her earliest announcements as director and often in subsequent interviews, Director Shiu emphasized the OFCCP’s intent to engage in an aggressive enforcement of the affirmative action obligations required of federal contractors and subcontractors. Director Shiu has stood by her promise.

The OFCCP enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, as amended (Section 503), and the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended (VEVRAA). Employers who have 50 or more employees and a direct contract with the federal government, or a subcontract necessary for the performance of the federal contract or that assumes some of the obligations of the federal contract, or are a financial institution under some circumstances, are subject to the affirmative action requirements. Where the contract in issue is in the amount of $50,000 or more, the employer must meet the full affirmative action requirements imposed by Executive Order 11246 and its implementing regulations, most notably, conducting specific and mandatory statistical analyses of the gender and racial/ethnic demographics of its workforce. Where the contract at issue exceeds $100,000, the employer is also required to meet the requirements of VEVRAA, which will soon require comparing its veterans workforce representation with a national benchmark, currently eight percent.

Under President Obama’s administration, the OFCCP has more than doubled the number of its compliance officers, that is, those persons tasked with conducting OFCCP audits or compliance reviews. Therefore, more and more federal contractors have found themselves the subject of these government audits. Not only have the number and intensity of the audits increased during Director Shiu’s leadership, but also Director Shiu has dramatically expanded the scope of the OFCCP’s focus. So far, in 2013 alone, the OFCCP has made four significant changes—all of which result in potentially greater federal contractor liability: (1) new compensation analysis; (2) new Federal Contractor Compliance Manual; (3) new VEVRAA regulations; and (4) new Section 503 regulations.

Compensation directive
Effective February 28, 2013, the OFCCP simultaneously rescinded its prior discrimination analysis guidance and implemented OFCCP Directive 307. Directive 307 (also called DIR 2013-03) noted that the OFCCP was abandoning its previous methods for examining employer discrimination (using tiers and multiple regression analysis that included a “safe harbor” for employers). Instead, the OFCCP implemented a case-by-case analysis, holistic approach, purportedly based on Title VII principles. The OFCCP has refused to identify any trigger numbers, that is, specific points at which it identifies indicators that result in a deeper level of inquiry, as it had previously provided. Instead, the OFCCP has said that it intends to ferret out compensation disparities in any amount or in any percentage of difference among various employees.

OFCCP has expanded its definition of “compensation.” Compensation now includes overtime, premium pay, vacations, benefits and even territory assignments, as well as promotional opportunities. OFCCP has noted that it particularly intends to scrutinize potential “channeling,”  that is, for example, an employer’s assigning female employees to lower-paid bakery jobs while assigning new male employees to the deli department where they receive a higher level of compensation.

Although this directive does not have the same force of law as federal regulations, federal contractors are aware, as is the agency most certainly, that internal agency guidance provides a roadmap for employers, and employers wishing to avoid compensation violations should comply with the directive to the extent possible.

Federal Contract Compliance Manual (FCCM)
The newly revised FCCM, while not adding any substantive law, clarifies the agency’s approach in such matters as compliance reviews. In fact, the FCCM includes the checklist document used by compliance officers who are conducting agency audits. Thus, employers may refer to the FCCM to anticipate the OFCCP’s methods and questions they expect to be asked.

New veterans regulations
The OFCCP’s new veterans regulations now require contractors to establish hiring benchmarks for protected veterans. The new regulations clarify the four veterans categories, specify mandatory language that must be inserted into the contractor’s contracts, and describe how and when the contractor must ask applicants about their veteran status. The regulations are effective March 24, 2014. With the new regulations, OFCCP posted FAQs, support materials and offered a webinar for the contractor community within two days of the regulations’ first appearance.

These regulations significantly increase the data collection required by federal contractors. Federal contractors must collect data and compare it with an eight percent national benchmark, as currently established, or the employer may establish its own benchmark, using specific factors.

First, applicants must be asked to identify whether they want to be considered a “protected veteran.” Then, after the individual is hired, he or she is asked to voluntarily self-identify the specific applicable veterans categories. Although the OFCCP does not require the contractor to conduct adverse impact analyses, as it does with the gender and race/ethnic data it also collects, the contractor must, of course, compare its data with the benchmark. The OFCCP has stated that a contractor that fails to meet the benchmark will not be subject to a violation or any financial penalties on that basis alone.

Section 503 regulations
New regulations for individuals with a disability are also effective on March 24, 2014. OFCCP now requires federal contractors to request an applicant, at the pre-offer stage, to offer an opportunity to voluntarily self-identify as an individual with a disability. Anticipating pushback from the contractor community, as had been expressed in the hundreds of comments it received to the proposed regulations, the OFCCP posted on its website an opinion letter from the EEOC endorsing the OFCCP’s pre-offer identification requirements.

Federal contractor employers have a utilization goal of seven percent disabled employees in each job group. They must provide OFCCP’s required identification request form to pre-offer applicants, post-offer applicants and the workforce within one year of March 24, 2014, then every five years.

As with the veterans regulations, the employer has been told not to fear a violation or financial penalty as a result of a failure to meet the seven percent utilization goal. However, also as with the veterans regulations, the employer must collect and review the statistical data it receives as a result of its inquiries of applicants and employees.

Other OFCCP initiatives
The OFCCP has also issued a new directive about how it will calculate back pay, and it has put contractors on notice in the new regulations, as well as its FCCM, that it intends to expand the temporal scope of its request for data forward in time from the date of its scheduling letter. The OFCCP’s strategic and intentional approach to enforcement shows that Director Shiu is serious in her efforts to ferret out what she believes to be discrimination. Director Shiu is also adamant in her approach that “what gets measured gets done,” and she has underscored her commitment to this principle by requiring employers to collect and analyze data under two new sets of regulations—the Veterans and the Disability regulations. While the OFCCP has also given a nod to contractors’ business needs by agreeing to phase in some of the new veterans and Section 503 regulations, the new regulations nonetheless add a significant burden to the contractor community that was already scrambling to redesign its HRIS systems to capture more of the data required by the OFCCP and its new compensation analytical methods.

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What’s Past is Prologue: Courts’ Views of the EEOC’s Enforcement Guidance Regarding Consideration of Applicants’ Criminal Histories
John W. Sulau
Jackson Lewis, LLP, Greenville

A federal district court has recently rejected the EEOC’s enforcement efforts with respect to criminal background checks. In EEOC v. Freeman, No. RWT 09cv2573, 2013 U.S. Dist. LEXIS 112368 (D. Md. Aug. 9, 2013), the court roundly criticized the EEOC’s assertion that an employer’s simply conducting a criminal background check (or obtaining an employee’s or applicant’s credit history) could violate Title VII.

The EEOC published its Criminal History Enforcement Guidance (the Guidance) in 2012. See Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, EEOC Enforcement Guidance No. 915.002 (Apr. 25, 2012). Attorneys general from nine states (including South Carolina) wrote a letter to the EEOC urging it to reconsider its Guidance and enforcement position, calling the agency’s actions “a quintessential example of gross federal overreach” and accusing the EEOC of attempting to extend Title VII to protect former criminals.

On August 29, 2013, the EEOC replied to the attorneys general to inform them that it would not withdraw the lawsuits and to clarify its stance on employers’ use of background checks. Specifically, the EEOC explained that it expects employers to use a two-step process when considering applicants’ criminal histories: first, employers should use a “targeted” background check that considers “the nature of the crime, the time elapsed [since the crime was committed], and the nature of the job.” Then, employers should conduct an individualized assessment of applicants who were purged from the candidate pool as a result of the targeted background check. The EEOC characterizes the second step as “a safeguard that can help an employer to avoid liability when it cannot demonstrate that using only its targeted screen would always be job related and consistent with business necessity.”

Freeman and EEOC litigation of Guidance
In Freeman, the EEOC claimed that the defendant company “engaged in a ‘pattern or practice’ of discrimination … against African-American, Hispanic, and male job applicants by using criminal history as a job criterion …” Id. at *12. Specifically, the EEOC alleged that Freeman’s use of criminal background checks had a disparate impact on these groups and argued their use in employment decisions was not job-related or necessary to Freeman’s business. Id. at *13. To support its argument, the EEOC offered evidence from two experts who claimed that their examinations of the statistical effect of Freeman’s use of criminal background checks showed that African-American, Hispanic and male candidates suffered a disparate impact as a result of the reliance on the background checks. Id. at *19-21.

As the court explained in detail, the data submitted by the EEOC’s experts was fraught with errors, and accordingly, the court ruled the experts’ reports inadmissible. Id. at *21-40. The court also rejected the EEOC’s argument that, even if its experts’ reports were inadmissible, the national statistics demonstrating that African-Americans, Hispanics and men are arrested and incarcerated at a higher rate than other groups supported the EEOC’s case. Id. at *39-42. The court remarked that the EEOC offered no evidence to demonstrate that the “general populace” reflected in the national statistics was similar to the pool of applicants who allegedly suffered a disparate impact as a result of Freeman’s use of background checks. Id. at *39-40. Further, Freeman considered an applicant’s conviction records, not the applicant’s arrest or incarceration records, in its employment decisions, and therefore, the national statistics proffered by the EEOC were largely inapplicable. Id. at *40. The court also noted that Freeman used a variety of background and credit checks in its employment decisions, and the kinds of background checks conducted on an applicant varied depending on the type of position Freeman sought to fill. Id. at *5-12. According to the court, Freeman’s system of background checks could be separated into multiple parts, and the EEOC had failed to meet its burden to identify a specific background or credit check (or series of checks) that caused the alleged disparate impact. Id. at *42-45. Finally, the court pointed out that the EEOC conducts criminal background checks on all job applicants and conducts credit checks for about 90 percent of its positions. Id. at *3. In sum, the EEOC’s case suffered from a variety of flaws, and as a result, it could not establish that Freeman’s use of criminal background checks had a disparate impact. Freeman, No. RWT 09cv2573, 2013 U.S. Dist. LEXIS 112368.

Importantly, the court’s remarks regarding employers’ use of background checks reached beyond the instant case and struck a blow against the crux of the EEOC’s enforcement position, set forth in the Guidance, that consideration of an applicant’s criminal history could by itself violate Title VII. The court characterized the lawsuit as “a theory in search of facts to support it,” then explained if the EEOC prevailed, employers would face a “Hobson’s choice” of either ignoring applicants’ criminal backgrounds and thereby exposing themselves to liability for criminal acts committed by employees or being sued by the EEOC for attempting to maintain an honest workforce by considering applicants’ criminal histories. Id. at *53-54. In closing, the court wrote, “Something more, far more, than what is relied upon by the EEOC in this case must be utilized to justify a disparate impact claim based upon criminal history and credit checks. To require less, would be to condemn the use of common sense, and this is simply not what the discrimination laws of this country require.” Id.

Beyond Freeman: Pending EEOC litigation
Although Freeman marked a setback for the EEOC in its efforts to limit employers’ reliance on criminal background checks, the agency seems determined to continue litigating this issue. On June 11, 2013, the EEOC filed lawsuits against Dollar General in the Northern District of Illinois and BMW Manufacturing in South Carolina alleging the companies’ use of criminal background checks have a disparate impact against African-American candidates, and that the background checks are not job-related or necessary to the companies’ businesses.

The EEOC’s case against Dollar General is based upon the company’s practice of sending the personal information of an applicant who has received a job offer to a vendor who conducts a background check on the applicant. The EEOC alleges that the vendor has developed a matrix to evaluate applicants’ criminal backgrounds, weighing the seriousness of the crime committed and the amount of time that has elapsed since the crime was committed, among other factors. The EEOC emphasizes that the background check leaves no room for an individualized assessment of an applicant; if the applicant fails the background check, his or her employment offer is automatically rescinded. Dollar General allegedly does not consider the age of the applicant when the crime was committed, the relationship between the crime committed and the position for which the applicant has applied, or any other potentially mitigating factors. According to the EEOC, this practice has resulted in Dollar General’s eliminating African-American applicants at a disproportionately high rate. Specifically, the EEOC claims that between January 2004 and April 2007, Dollar General’s background check eliminated 10 percent of African-American applicants while only seven percent of non-African-American applicants were eliminated. The EEOC seeks an injunction against BMW’s continued use of its background check policies and damages for the claimants.

The agency’s lawsuit against BMW alleges that BMW directed a vendor—allegedly the claimants’ joint employer—whose employees worked exclusively at BMW’s plant to apply BMW’s policy against hiring applicants who were convicted of violent crimes or crimes involving moral turpitude. The EEOC claims the vendor screened out 88 employees, 70 (80 percent) of whom were African-American. The EEOC faults BMW for, among other things, failing to distinguish between felony and misdemeanor convictions and not considering the applicant’s age at the time of the crime. As in the Dollar General case, the EEOC seeks an injunction against BMW’s continued use of its background check policies and damages for the claimants.

Recently, states have begun to take action to short-circuit the EEOC’s attempts to enforce its Guidance. On November 4, 2013, the State of Texas sued the EEOC in the Northern District of Texas, seeking declaratory and injunctive relief to prevent the EEOC from forcing the state to change the policies of state agencies that prohibit hiring applicants with certain criminal histories. This lawsuit was preceded by attorneys general from nine states sending a letter to the EEOC to protest its adoption and enforcement of the Guidance.

Employers across the country have come to realize that effective background check procedures can help produce more informed hiring decisions; protect employees, customers and company assets; and reduce liability for negligent hiring and other workplace claims. At the same time, these recent developments in the law have resulted in increased scrutiny of employers’ criminal and credit background check policies.

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Chair’s Corner
C. Frederick W. Manning II
Fisher & Phillips, LLP, Columbia

The Annual North Carolina/South Carolina Employment and Labor Law CLE in Charleston was a big success. Our program coordinator, Stephanie Lewis, did an outstanding job, but as usual, it was the invaluable work of Tara Caine and Marley Douglas who made the task of pulling it all together seamless and hassle free. The large attendance (more than 225) was a good sign of the strength of our section; however, if we want to attract more attendees without further compromising the available space we must look for possible alternative arrangements. We all know suitable facilities in Charleston are limited. We welcome ideas from the section members regarding options, keeping in mind that this is a joint endeavor and our North Carolina counterparts also get a say.

For those section members who agreed to speak this year—thank you and great job. We look forward to more volunteers for our future programs.

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Save the Date

Section Midyear Meeting, Lunch & Award Presentation
May 16, 2014
Bar Conference Center

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2014 Distinguished Lawyer of the Year Award

The Employment & Labor Law Section will honor an individual nominated by his/her professional peers for meritorious service to employment and labor law practice in South Carolina. The honoree will be selected by the Section Selection Committee, which consists of the current Section chair, up to five past Section chairs and one former award recipient. The 2014 recipient will be recognized at the Section Midyear meeting, scheduled for May 16, 2014 in Columbia.

Click here for a nomination packet. The deadline to submit nominations and supporting documents is March 7, 2014.

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Articles Needed

Articles are needed for the next issue of the Employment & Labor Law Section newsletter. If you are interested in submitting an article, please forward your submission(s) to Karen L. Luchka at kluchka@laborlawyers.com.

For your convenience, below are the newsletter guidelines:

  • Article Preparation: Articles should be e-mailed in Word format to Section Newsletter Coordinator Karen L. Luchka at kluchka@laborlawyers.com or Bar staff liaison Tara G. Caine at tcaine@scbar.org. Word count should be under 1,000 words for articles and 500 words or less for opinion pieces.
  • Style: Articles should present practical information in a clear and readable manner. The style should be as non-technical as possible, and "legalese" should be avoided. Humor is welcome where appropriate and examples that illustrate a point are usually helpful. Articles should be written for the average lawyer who is looking for usable information that is not difficult or time-consuming to read. Except when referring to a specific individual, articles should be gender neutral whenever possible. Articles should also be written in the third person, except when the author is relating a personal experience relevant to the subject of an article.
  • Author Credits: Authors will receive bylines at the beginning of articles and credit lines at the end. The credit line will include the author's name; title; firm, company or school; city; and state if outside South Carolina. No biographical sketches will be included.
  • Warranty and Representation: By submission of an article, the author warrants and represents that he or she has included no material in the article in violation of any rights of any other person or entity and that he or she has disclosed all relationships with any person or entity producing any product or providing any service referred to in the article.
  • Editing of Title and Text: All articles are edited by the South Carolina Bar's Communications Division according to the AP Stylebook.

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Disclaimer

This is a newsletter for the South Carolina Bar’s Employment and Labor Law Section. The South Carolina Bar and the Section council members reserve the right to refuse to publish any submission which is not consistent with their goals and standards. Articles that are published reflect only the opinions of their authors; they do not represent or reflect any positions held by the South Carolina Bar or the Section officers and council members. It is the policy of this newsletter that on all submissions of original articles, the authors assign their copyright in the work to the South Carolina Bar. Publisher may reprint, or authorize other entities to reprint, the material as deemed appropriate. The publisher has the right to authorize the reproduction, adaptation, public distribution and public display of the article as a contribution to this newsletter in electronic media, computerized retrieval systems and similar forms; such authorization includes use of the article anywhere in the world by means of public display, conversion to machine readable form and reproduction and distribution of copies. The South Carolina Bar is not required to secure the consent of the author before exercising the above named rights. In addition, the Bar has no duty or responsibility to negotiate, collect or distribute any royalties in connection therewith.

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