Employment Law Updates

CONGRESS MODIFIES SCOPE OF RED FLAG PROGRAMS

Many of you are aware of a law that was enacted several years ago, commonly referred to as the “Red Flags” Rule.  Under the “Red Flags” Rule, any “creditor” with any “covered accounts” must have a “Red Flags” program.  Because this rule is intended to help stop identity theft, it is intentionally broad.  Originally, the definition of “creditor” was interpreted to include any person or business that regularly extends, renews, or continues credit or arranges for credit or accounts.  A “covered account” is an account for goods or services used primarily for personal, family or household use; or any account for which there is a reasonably foreseeable risk to customers of identity theft.   Initially, any company that sends out bills, invoices or statements was thought to be considered a “creditor” under this rule.

However, on December 7, 2010, Congress modified the scope of who is actually affected by the “Red Flags” Rule.   Under the revised definition, professionals who extend credit only as part of their services, and with little risk of identity theft, are not subject to the “Red Flags” program.  Therefore, attorneys, accountants, physicians, dentists and similar professionals are no longer subject to the “Red Flags” Rule. 

If you have any questions about the “Red Flags” Rule, including whether you or your business would be considered a “creditor” or what a “Red Flags” Program should include, be sure to contact an attorney knowledgeable in this area of the law.

EMPLOYEE COMMITTEES MAY VIOLATE THE NATIONAL LABOR RELATIONS ACT IN UNION AND NON-UNION COMPANIES

Under the National Labor Relations Act (NLRA), employers may not dominate or interfere with an employee committee that qualifies as a labor organization. 

 What is a labor organization?  An employee committee is considered a labor organization if the committee interacts with the employer regarding the terms and conditions of employment, such as the wages and hours of employees.  In contrast, a committee formed simply to gather information is likely not a labor organization under the NLRA.    

 If an employee committee constitutes a labor organization, an employer many not dominate or interfere with it.  The National Labor Relations Board has found that employers illegally dominated or interfered with employee committees when management created the committee or otherwise controlled the terms by which it operated. 

 It is important to realize that these restrictions apply even if your company is not unionized. 

 If you have questions regarding the appropriate scope and functions of employee committees, contact an experienced employment law attorney. 

SERVICE ANIMALS UNDER THE ADA – REVISED REGULATIONS EFFECTIVE ON MARCH 15, 2011

Is your business open to the public and therefore subject to regulation under the Americans with Disabilities Act (“ADA”)?  If so, you should know that there are new regulations concerning service animals, which take effect on March 15, 2011.  The revised regulations clear up the law as to what is a service animal and offers guidance for those businesses serving disabled patrons. 

Under the revised regulations, service animals are dogs, or in some circumstances miniature horses, that are individually trained to work or perform tasks for a disabled person.  Other animals, such as monkeys, lizards, cats, or snakes, are not service animals regardless of whether they have been trained. 

The service animal must be house trained, and it must remain leashed while in your place of business unless the handler’s disability or the nature of the service animal’s work prevents the use of a leash.  If excused from the leash requirement, the handler must still retain control of the service animal.  In addition to these requirements, a miniature horse must be of an appropriate type, size, and weight so that it may safely operate in your specific business facility.  If these conditions are not met, an employee may legally exclude the service animal.

Employees may not ask about the nature or extent of an individual’s disability; however, if the individual’s disability and the service animal’s role are not obvious, an employee may ask two specific questions.  First, an employee may ask whether the service animal is required because of a disability.  Second, an employee may ask what type of task the service animal is trained to perform.  Employees may not legally request documentation or charge a fee for the service animal. 

Keep in mind that these laws are related to businesses open to the public; ADA regulations related to employment issues are separate.

If you have questions about what kinds of service animals you must allow in your place of business, you should contact an attorney who has experience with the ADA.

EMPLOYEES’ TESTIMONIALS COULD BE HARMFUL TO YOUR COMPANY

Many employers understand that a well-drafted social media policy may prevent employees from using Facebook or other networking websites to complain about the company.  Yet, few employers realize that an employee’s positive praise for company products or services via social media may violate the Federal Trade Commission’s advertising guidelines, thus putting the company at risk for an enforcement action.

 The FTC recently issued guidelines requiring employees to clearly and conspicuously disclose any relationship to a company before promoting or praising the company’s products or services on social networking sites or blogs.  If an employee fails to disclose the relationship, the FTC may pursue an action against the employer, even if the employer was unaware of the employee’s endorsement. 

 Employers can greatly reduce the risk to the business by creating an internal policy that informs employees of the need for disclosure if using social media to discuss or promote company products or services.  The comments to the FTC guidelines suggest that the FTC is unlikely to bring an action against an employer who enforces such an internal policy.  To learn more about whether your company should have a social media policy, be sure to consult with an experienced employment attorney. 

MAKE SURE YOUR JOB DESCRIPTIONS ARE CURRENT

Unfortunately, our current economic times have required employers to do more work with less employees.  As a result, at least some positions have been consolidated or modified so your employees’ current job descriptions are probably outdated.  Keep in mind that several employment laws rely on accurate job descriptions – such as whether the employer can request a credit report, whether an employee can be reemployed in modified/light duty for a period of time, or whether a person is qualified for a position based on the essential functions of the job.  It is a good idea to review job descriptions on a regular basis to ensure that they are accurate and current.   

COBRA SUBSIDY EXTENDED THROUGH MAY 31, 2010

On April 15, 2010, President Obama signed a bill that, among other things, extended the current COBRA subsidy program to employees who were involuntarily terminated on or before May 31, 2010.

 

Under this most recent extension, workers involuntarily terminated at any time between September 1, 2008, and May 31, 2010, will qualify for the subsidy.  In addition, if the worker’s hours had been reduced to the level where it became a qualifying event and then was later involuntarily terminated between March 2, 2010, and May 31, 2010, that worker is eligible for the subsidy.  You can obtain more information about the COBRA subsidy program and the revised forms required for COBRA notices at this governmental website http://www.dol.gov/ebsa/cobra.html.

OREGON SUPREME COURT: EMPLOYERS NEED NOT ACCOMMODATE EMPLOYEE'S USE OF MEDICAL MARIJUANA

Last week, the Oregon Supreme Court resolved an issue that had long-vexed Oregon employers: whether they had to accommodate an employee’s use of medical marijuana.  In Emerald Steel Fabricators, Inc., v. Bureau of Labor and Industries, the Court ruled that Oregon's employment discrimination laws do not require such an accommodation.  Rather, the Court concluded that an employee's use of medical marijuana constitutes an "illegal use of drugs," as that phrase is used in Oregon's employment discrimination laws.  Accordingly, if an employee is currently engaged in the use of medical marijuana, an employer may take an adverse employment action against the employee because of that use and not run afoul of Oregon’s discrimination laws.

COBRA SUBSIDY EXTENDED – AGAIN

On March 2, 2010, President Obama signed a bill that, among other things, extended the current COBRA subsidy program to employees who were involuntarily terminated on or before March 31, 2010.

 

As you probably recall, in February 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (routinely referred to as the “stimulus bill” or “ARRA”).  The ARRA included a program requiring former employers to pay 65% of the COBRA premium for any “Assistance Eligible Individual” who experienced a qualifying event between September 1, 2008, and December 31, 2009, so long as that person timely elected COBRA coverage.  Employees would then be reimbursed by the federal government for the subsidized amount.  Under ARRA as originally enacted, an Assistance Eligible Individual was only allowed to receive the subsidy for nine months.  On December 19, 2009, Congress expanded the COBRA premium subsidy program by including workers who were involuntarily terminated by February 28, 2010, and extending the benefit to up to 15 months.

 

Under this most recent extension passed on March 2, 2010, workers involuntarily terminated at any time between September 1, 2008, and March 31, 2010, will qualify for the subsidy.  In addition, if the worker’s hours had been reduced and was then later involuntarily terminated after March 2, 2010, that worker is eligible for the subsidy.  For more information about the COBRA subsidy program and to obtain the revised forms required for COBRA notices, check out this website.  http://www.dol.gov/ebsa/cobra.html.

 

 

IF YOUR EMPLOYEE INVENTS SOMETHING ON THE JOB, WHO OWNS IT?

Many businesses rely heavily on ideas.  Understandably, these businesses spend large amounts of time and resources protecting those ideas by way of a patent, trademark, or copyright.  But too often those same businesses do not consider who owns an idea when it is dreamed up by an employee while she or he is on the job.  They may mistakenly rely to their detriment on their standard employment contract or the law, without further consideration.

 

In a recent federal appeals court decision, Stanford University could not prove ownership to valuable patents covering inventions developed by an employee despite the fact that the employee had signed an agreement containing terms that ostensibly protected the university’s interests in the inventions.  Unfortunately, the university's loss might have been avoided if the employment agreement had been drafted with more care.  The case highlights the importance of including provisions in an employment contract that outline an employee's obligation to assign inventions to his or her employer.  If you have questions about protecting ideas important to your business, contact Hershner Hunter's employment and business attorneys.

 

NO-REHIRE POLICY DRAWS THE IRE OF THE EEOC

During the recent economic downturn, many employers were forced to put in place early retirement plans.  Many such plans include a policy that prevents participating employees from reapplying to or being rehired by the employer.  Such policies are commonly referred to as “no-rehire” policies.  While there is often a good business reason for such a policy, employers should carefully consider when to implement it.

 

For example, last year the Equal Employment Opportunity Commission (EEOC) filed a lawsuit in federal court alleging that a no-rehire policy implemented by AT&T violated the Age Discrimination in Employment Act (ADEA).  The EEOC’s theory is that the denial of reemployment resulted in a disproportionate number of older workers (40 and older) not having the same opportunity to apply for reemployment, in violation of the ADEA.  EEOC Acting Chairman Stuart J. Ishimaru said about the case: “We’ve been taking a new and hard look at age discrimination recently, and we’re intent on enforcing the ADEA strategically and vigorously.  This particular case highlights the Commission’s commitment to combating age-based disparate impact discrimination.”

 

To avoid a similar fate, employers should consult with an experienced employment attorney before organizing and implementing an early retirement plan.