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Employers may recall the “no match” rule most recently from the George W. Bush administration’s efforts to strengthen the enforcement of U.S. immigration laws.  The Social Security Administration (SSA) sends “no match” letters to employers who submit W-2 forms with names and social security numbers for employees that do not match the SSA’s database information.  A “no match” can result when an employee provides a fake social security number to an employer.  The practice of sending “no match” letters became inactive during the Obama administration as the E-Verify system expanded and became the preferred method for confirming worker eligibility.

But, in an era where the number of workplace raids, detentions, and deportations continue to increase, it should come as no surprise that employers will once again start receiving “no match” letters in 2019.  In fact, during a workplace raid, the Department of Homeland Security can ask an employer for “no match” information.

Nevertheless, employers should take care not to immediately terminate employees with “no match” letters.  Doing so puts an employer at risk of being sued, including for claims of national origin, race, or citizenship discrimination.  Accordingly, do not ask employees to re-verify their I-9s based only on “no match” letters.  And, do not automatically assume that your employee is not authorized to work in the U.S.

“No match” letters also can result from legitimate clerical errors, failures to report a name change due to marriage or divorce, or even identity theft.  Employers should, therefore, compare the “no match” information with their own personnel records to identify any errors and report them.  If no errors exist, employers should advise their employees to contact the SSA directly to update their records.  Employers also will need to comply with the requirements outlined in the “no match” letter for updating and resolving discrepancies.

In prior guidance, thirty-days was considered a reasonable period of time for employers or employees to take steps to correct discrepancies, and 90 days was the maximum amount of time permitted for resolution.  The Trump administration may move towards shortening the period to resolve discrepancies from 90 to 60 days.  Employers should always document their efforts to resolve any “no match” issues and apply procedures for handling these letters uniformly to all affected employees.

For more information on this topic, please contact:

Eric Biasden at ebaisden@beneschlaw.com or 216.363.4676

Alan Rothenbuecher at arothenbuecher@beneschlaw.com or 216.363.4436

Margarita Krncevic at mkrncevic@beneschlaw.com or 216.363.6285

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Author: Adam Primm

The National Labor Relations Board (“NLRB”) released today a draft rule that would reverse the Obama Board’s 2015 Browning-Ferris Industries joint-employer decision, which greatly expanded the NLRB’s test for determining whether business constitute joint-employer.

The proposed rule, set for publication in the Federal Register tomorrow, would only find a business qualifies as a joint-employer of another business’s workers if it “possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority” will no longer establish a joint-employer relationship.

This rule represents a complete reversal of the Browning-Ferris Industries standard that stated companies were joint-employers if they had only “indirect” control over workers, whether or not that control was ever exercised.

The NLRB’s decision to pursue administrative rulemaking in this area is designed to “foster predictability, consistency, and stability” regarding joint-employer status after three years of uncertainty. The decision to begin the administrative rulemaking process and seek public comment on the draft reconfirms the Board’s commitment to address joint-employer liability through such rulemaking, as Chairman Ring previously stated in May. (see reference to joint-employer developments in July 18, 2018 bulletin). Ring was joined by Members Marvin Kaplan and William Emanuel in the proposal, while Member Lauren McFerran dissented.

With the publication to the Federal Register, the public can now comment and provide feedback on the proposed rule. The comment period will be open for 60 days from publication in the Federal Register. The NLRB then will have the opportunity to review and respond to those comments when promulgating a final rule.

For more information on this topic, contact a member of Benesch Labor & Employment Practice Group.

Eric Baisden | ebaisden@beneschlaw.com | 216.363.4676

Peter Kirsanow | pkirsanow@beneschlaw.com | 216.363.4481

Adam Primm | aprimm@beneschlaw.com | 216.363.4451

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Authors: Adam Primm and Peter Kirsanow

After a busy eight months since December of 2017 that saw the National Labor Relations Board (“NLRB”) issue a number of important decisions addressing topics such as joint-employers (rescinded), company policies, micro-units, and others, while also exploring rule-making regarding joint-employers, quickie elections, and blocking charges, the use of employer email systems is next in line for attention.

On August 1, 2018, the NLRB issued a Notice and Invitation to File Briefs regarding whether it should overturn the 2014 Purple Communications (361 NLRB No. 126) decision that allowed workers to use company email for union organizing purposes. The case at issue is Caesars Entertainment Corporation d/b/a Rio All-Suites Hotel and Casino, 28-CA-060841. In April of 2018, the Ninth Circuit remanded the case back to the NLRB for consideration in light of Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017), which revised the NLRB’s evaluation of company policies (see prior alert here). At issue in Caesars is whether the company’s computer usage policy prohibits employees from using the company’s email system to engage in Section 7 communications during nonworking time.

In Purple Communications, the NLRB determined that employees were permitted to use the employer’s email system to engage in concerted protected activities, even if the employer maintained a published policy prohibiting the use of company email for a non-business purpose. The NLRB defined email as the new “natural gathering place” for employees to congregate and the “predominant means of employee-to-employee communication”, i.e., the new “water cooler.” Although the NLRB acknowledged that special circumstances would “make [a] ban [on email] necessary to maintain production and discipline,” it would be rare for circumstances to justify such a ban.

Purple Communications may face a second challenge, as well. An Administrative Law Judge decision issued on May 10, 2017 in Newmark Grubb Knight Frank, No. 28-CA-178893 (2016), is ripe for a decision. In Newmark, an ALJ ruled that the company’s policy that limited employees’ use of the company’s telecommunication and electronic communication resources to “business purposes only” violated the NLRA under Purple Communications. Newmark appealed to the NLRB, asking it “to reverse its decision in Purple Communications and instead to reaffirm, consistent with decades of prior precedent … that employees do not have a statutory right to use their employer’s email systems” for NLRA-protected reasons. Briefing in Newmark was completed in July 2017, so the case is ready for a decision from the NLRB.

For more information on this topic, contact a member of the firm’s Labor & Employment Practice Group.

Eric Baisden at ebaisden@beneschlaw.com or 216.363.4676.

Peter Kirsanow at pkirsanow@beneschlaw.com or 216.363.4481.

Adam Primm at aprimm@beneschlaw.com or 216.363.4451.

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Authors: Peter Kirsanow and Adam Primm

On Monday, May 21, 2018, the United State Supreme Court, in a 5-4 opinion written by Neil Gorsuch, ended a six-year dispute started by the National Labor Relations Board’s (“NLRB”) 2012 decision in D.R. Horton, 357 NLRB 2277 (2012), which held that mandatory arbitration agreements that contain class and collective action waivers violate Section 7 of the National Labor Relations Act (“NLRA”).

In Monday’s opinion, Justice Gorsuch wrote that the Federal Arbitration Act (“FAA”) instructs that “arbitration agreements providing for individualized proceedings must be enforced” and neither the FAA nor the NLRA suggest otherwise. Therefore, employers do not violate the NLRA if they require workers to forgo the ability to pursue class actions by including the class waiver provisions in arbitration agreements that must be signed as a condition of employment. In January 2017, the Supreme Court consolidated decisions from the Fifth Circuit (Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013, 1015 (5th Cir. 2015)), which rejected the NLRB’s position and upheld class action waivers, and the Seventh and Ninth Circuits (Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016), Morris v. Ernst & Young, 834 F.3d 975 (9th Cir. 2016)), both of which followed the Board’s original D.R. Horton decision.

The dispute began in 2012 in  D.R. Horton, in which the Board ruled that D.R. Horton violated Section 7 of the NLRB by requiring employees to agree to mandatory arbitration of employment disputes and forego class and collective action as a condition of employment. The Fifth Circuit refused to enforce the Board’s order, concluding that the decision violated the FAA. D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013). In Murphy Oil, the Fifth Circuit again rejected the Board’s D.R. Horton position. The Second and Eighth Circuits followed suit. Sutherland v. Ernst & Young, 726 F.3d 290, 297 n.87 (2d Cir. 2013); Patterson v. Raymours Furniture Co., No. 15-2820 (Sep. 2, 2016 2d Cir.).

However, the Seventh and Ninth Circuits soon created a split among the appellate courts requiring Supreme Court clarification. In Epic Systems, the Seventh Circuit departed from other federal circuits and sided with the Board, ruling that an employer’s arbitration agreement requiring employees to bring wage-and-hour claims in individual arbitrations and prohibiting class and collective actions violates Section 7 of the NLRA. The Seventh Circuit found there was nothing so “concerted” as class action litigation. The Ninth Circuit soon followed in Morris v. Ernst & Young. The Sixth Circuit in NLRB v. Alternative Entertainment, Inc., 858 F.3d 393 (6th Cir. 2017), continued the split by siding with the Seventh and Ninth Circuits.

Thus, in resolving the split and rejecting the NLRB’s stance (adopted by the Seventh, Ninth, and Sixth Circuits), the Supreme Court endorsed the legality of employers’ use of mandatory arbitration agreements that include class action waivers.

Companies should consult with counsel to determine whether such waivers should be included in employment or arbitration agreements.

For more information on this topic, contact a member of Benesch’s Labor & Employment Practice Group.

Eric Baisden | ebaisden@beneschlaw.com | 216.363.4676

Peter Kirsanow | pkirsanow@beneschlaw.com | 216.363.4481

Adam Primm | aprimm@beneschlaw.com | 216.363.4451

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Authors: H. Alan Rothenbuecher and Karly B. Johnson

U.S. Customs and Border Protection (“CBP”) recently updated its 2009 directive pertaining to border searches of electronic devices. The Supreme Court of the United States has deemed warrantless searches by CBP legal and “reasonable” in light of national security concerns. With the advent of this digital age, CBP has now expanded its directive to include searches of electronic devices, which include password-protected laptops, phones, and other handheld devices.

The updated directive also states that travelers shall “present electronic devices and the information contained therein in a condition that allows inspection of the device and its contents.” Therefore, CBP officers may request that travelers enter any passwords or biometric data to allow for device inspection. While U.S. Citizens cannot be denied entry to the United States for refusing to provide a password, a CBP officer may detain the electronic device for further inspection. Non-citizens that refuse to allow inspection may be denied entry or face complicated questioning.

In expanding the scope of the directive, CBP did recognize that a search of an electronic device should only encompass information stored on the device itself. Information stored on cloud-based platforms should not be included in a CBP search. The directive further distinguishes between “basic” and “advanced” searches. “Advanced” searches, which require the use of external equipment to review, copy, or analyze device contents, are only permitted when there is reasonable suspicion of unlawful activity or a national security concern.

Additionally, attorney-client privileged material is remains subject to heightened protections.  When an individual asserts this privilege, the CBP officer should request clarification as to specific files, file types, folders, or categories of information that may be privileged. CBP then utilizes “Filter Teams,” comprised of legal and operational personnel, to segregate the privileged information.  But because such Filter Teams are few and far between, a traveler asserting the attorney client privilege will likely have his or her device detained. Upon completion of the inspection, copies of any materials maintained by CBP and determined to be privileged will be destroyed.

While the CBP still only examines 0.01% of travelers’ electronic devices, the consequences of being selected for such an inspection are significant. Individuals with any data stored on their electronic devices that is sensitive or privileged, should consider taking steps to protect against device seizure and/or information disclosure. Accordingly, travelers should consider:

  • Using a temporary or travel laptop, forensically cleared of local documents and privileged information;
  • Using a temporary or travel mobile phone – business calls may be forwarded from an office number to the mobile phone;
  • Utilizing software and tools housed on the internet;
  • Turning off devices at least five minutes before reaching an inspection point to avoid access to Random Access Memory;
  • Backing up and deleting sensitive data in advance of reaching an inspection point;
  • Utilizing a separate user account and/or e-mail account for sensitive information – if possible, removing the accounts from device in advance of reaching an inspection point;
  • Using strong encryption and complex passwords;
  • Utilizing two-factor authentication;
  • Utilizing “private browsing” features and clearing search histories and cookies;
  • Partitioning and encrypting hard drives;
  • Protecting the FireWire data port; and
  • Wiping smart mobile devices remotely.

The updated directive is available at:

https://www.cbp.gov/sites/default/files/assets/documents/2018-Jan/CBP-Directive-3340-049A-Border-Search-of-Electronic-Media-Compliant.pdf

If you have any questions on this topic, please contact a member of Benesch’s Immigration Practice Group:

H. Alan Rothenbuecher at arothenbuecher@beneschlaw.com or 216.363.4436

Linda Gemind at lgemind@beneschlaw.com or 216.363.4609

Margarita S. Krncevic at mkrncevic@beneschlaw.com or 216.363.6285

Rick Hepp at rhepp@beneschlaw.com or 216.363.4657

Karly B. Johnson at kjohnson@beneschlaw.com or 216.363.6265

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