Employers conducting background checks of applicants or employees must update the Summary of Fair Credit Reporting Act Rights.  The new notice is available at https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-issues-updated-fcra-model-disclosures/.  The update to the form is primarily related to information about security freezes.  This change is of little importance to employers, but it is important to update the notice given to applicants and employees in order to be in compliance with the law.  If you use a third-party vendor for background checks, you should ensure it is using the updated notice.

If you conduct background checks but are not familiar with the Fair Credit Reporting Act (“FCRA”), it is crucial to get up to speed.  Seemingly minor technical violations have led to major litigation for employers.

FCRA is a federal law that applies in various contexts.  With respect to employers, FCRA applies to those using “consumer reports,” such as credit checks and background checks.  Before requesting such reports, FCRA requires employers to obtain written consent from the applicant or employee and to distribute the Summary of Fair Credit Reporting Act rights.   The written consent must be given on a standalone form.

If the employer chooses to take an adverse action based on information contained in the consumer report, such as a refusing to hire an applicant based on a criminal conviction, the employer must provide a copy of the report along with a copy of the Summary of Fair Credit Reporting Act rights.  This must be done before taking an adverse action.

After taking an adverse action, the employer must provide notice of the adverse action including:

  • the name, address, and phone number of the consumer reporting company that supplied the report;
  • a statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it; and
  • a notice of the employee’s or applicant’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if requested within 60 days.

Employers are also required to securely dispose of reports when they are no longer being used, such as by burning paper files or erasing electronic files so that the information cannot be read or reconstructed.

As a reminder, Connecticut law limits criminal inquiries on employment applications.  Read more about this law here.  Connecticut law also requires background checks for school employers and their contractors.  Read more about this law here.

Our team of labor and employment attorneys can assist employers in complying with the complicated landscape of background check laws and ensuring compliance with all applicable labor and employment laws.

The U.S. Department of Labor has issued new FMLA Notice and Certification forms for use by employers subject to federal FMLA requirements.  The DOL is required to update these forms every three years under the Paperwork Reduction Act of 1980. The previous forms expired on May 31, 2018, and had been extended monthly until the new forms were released effective September 1, 2018.  Employers should start using the new forms immediately.

Of note, “new” is a relative term here, as the updated FMLA forms are identical to the previous versions – with the exception of the expiration date of August 31, 2021. The new FMLA forms are available on the DOL website at https://www.dol.gov/whd/fmla/forms.htm

The recent Supreme Court decision in Janus v. AFSCME struck down a government union’s right to collect agency fees (usually three quarters of the normal union dues) from government employees who do not belong to the union.  The Janus holding could foreshadow a similar shift in a private union’s ability to collect agency fees from non-members in the private sector.

Private sector employees have a right not to belong to a union.  In Communication Workers v. Beck, the Supreme Court held that the union may not require members to pay for the union’s political activities.  Unions may charge objectors an agency fee, which is slightly less than the regular dues. In Beck, the union contract required employees who do not become union members to pay agency fees in an amount equal to the dues paid by union members. The non-member employees challenged the union, arguing that the union’s expenditure of their fees on activities such as political activities violated the union’s duty of fair representation and the First Amendment.  The court found that the National Labor Relation Act authorizes unions to collect only those fees and dues necessary to perform the duties relating to labor-management issues; it could not collect fees to finance political activities.  The court did not determine whether the First Amendment was violated.

In Janus, the Supreme Court addressed the payment of agency fees in the public sector context.  A majority of the court held that agency fees violate “the free speech rights of non-members by compelling them to subsidize private speech on matters of substantial public concern.”  This specifically refers to financing union activities.  Therefore, public sector employees are no longer required to pay an agency fee because it violates their First Amendment rights.

There are several interesting arguments that could be made with respect applying Janus to the private sector.  While it may seem obvious that all U.S. citizens have rights under the First Amendment, what is not widely known is that the deprivation of a citizen’s First Amendment rights can only be addressed if the violation is done by state action.  There is a line of cases holding that union rules or contracts requiring payment of union dues do not constitute state action, and thus cannot be addressed by the First Amendment.  However, in Connecticut, we have a statute, Section 31-51q, which protects employees in their exercise of rights under the First Amendment.  This could be grounds for an employee to allege, like in Janus, that their payment of an agency fee to a private union violates their First Amendment rights as provided in the cause of action in Section 31-51q. Continue Reading Landmark Decision Could Impact Private Sector Unions

Recently, the U.S. Supreme Court ruled that government workers who choose not to join a union cannot be charged for the cost of collective bargaining and related activities.

In a 5-to-4 decision, a majority of the Court noted in Janus v. AFSCME, Council 31, that “agency fees” violate, “the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”

As we have reported before, this case stemmed from an Illinois public sector employee who challenged a requirement that government workers who opt out of a union still have to pay partial dues (known as an “agency fee”) to cover the union’s cost of negotiation and other functions associated with policing and enforcing the contract.  This decision overrules the Court’s own 41-year-old precedent, which said workers did not have to pay for unions’ political activities but could be required to contribute to other costs of representation, such as negotiating wages and benefits and processing grievances.  The Court’s decision frees those non-members from having to pay the fees. Continue Reading Janus Decision Expected to Weaken Public Sector Unions and What You Need to Know

Public agencies responding to requests made under the Freedom of Information Act will face a new notification requirement starting October 1, 2018, when requests are made for records contained in an employee’s personnel, medical or similar files.  Importantly, these procedures apply only when requests are made for records contained in such files.  Similar information contained in other records (such as interoffice emails) do not trigger the same protection.

Under the current law, when a public agency receives a request to inspect or copy records contained in any of its employees’ personnel or medical files and similar files, and the agency reasonably believes that the disclosure of such records would legally constitute an invasion of privacy, the agency must follow a notification procedure designed to allow the employee to object to the disclosure.  Specifically, the agency was required to disclose whatever responsive records would not be an invasion of privacy, but also notify each employee concerned in writing (except if written notification would be impractical due to a large number of employees concerned) and also notify each employee’s collective bargaining (union) representative, if any.  If the employee objected to the disclosure of information after such a notification, the public agency would not disclose it unless and until the Freedom of Information Commission ordered disclosure.   The employee should be given the opportunity to object to the disclosure only of those records whose disclosure could legally constitute an invasion of privacy.

The law remains unchanged with respect to the procedure for information that the public agency reasonably believes would legally constitute an invasion of privacy.  It adds a requirement that whenever a public agency receives a request to inspect or copy records contained in any of its employees’ personnel or medical files and similar files, and the agency reasonably believes that the disclosure of such records would not legally constitute an invasion of privacy, the agency shall first disclose the requested records to the person making the request to inspect or copy such records and subsequently, within a reasonable time after such disclosure, make a reasonable attempt to send a written or an electronic copy of the request to inspect or copy such records or a brief description of the request, to each employee concerned and his or her collective bargaining representative, if any.

It is important to note that the public agency must promptly disclose the requested information when it reasonably believes disclosure would not legally constitute an invasion of privacy.  The disclosure in such cases must occur prior to the notification of employees and union representatives.

To determine whether a disclosure could legally constitute an invasion of privacy, public agencies must apply the Perkins test, developed from case law under the Freedom of Information Act.  Under the Perkins test, a disclosure could legally constitute an invasion of privacy if the information sought does not pertain to legitimate matters of public concern and the disclosure of such information is highly offensive to a reasonable person.   By way of example, details of an employee’s medical condition and treatment are generally viewed as meeting the Perkins test, while numerical attendance records are not.

In another update to the Freedom of Information Act, the Freedom of Information Commission will have some discretion to afford relief to public agencies contending with vexatious requesters, including the ability to relieve the public agency of responding to that requester’s Freedom of Information Act requests for up to one year.  This is welcome news for public agencies struggling under the burdens of complying with requests made to encumber or antagonize the public agency.

Our team of labor and employment attorneys regularly assists municipal and board of education clients in complying with Freedom of Information Act requests and regularly defends clients before the Freedom of Information Commission.  Contact us for assistance in handling FOIA requests or FOIC hearings.

The Supreme Court on Monday, in a 5-4 decision in Epic Systems Corp. v. Lewis, No. 16–285 (U.S. May 21, 2018) (consolidated cases), ruled that companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues.  The Court’s decision could affect some 25 million employment contracts.

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by another federal law, the Federal Arbitration Act which for over 70 years coexisted with the NLRA and during this time permitted individual arbitration agreements.  Gorsuch also noted that the NLRA’s protections on “concerted activity” must only be understood in the context of traditional labor relations matters (such as union organizing and collective bargaining), not civil litigation of claims arising under statutes other than the NLRA: “If workers were allowed to band together to press their claims,” he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

The Court also rejected the argument that courts owe deference to the NLRB’s view of things, pointing out that courts do not and should not grant deference to an agency’s interpretation of a federal law outside its sphere of responsibility: “The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

Requiring employees to submit class or collective claims to arbitration on an individualized basis is increasingly common.  Going forward, companies already employing this practice can be confident that the agreement is enforceable.  For employers who have not yet adopted such agreements, they should consider the benefits of doing so.  Our team of labor and employment attorneys can advise you on this topic.

Joining several other states including New York, New Jersey, and Massachusetts, Connecticut is set to enact legislation banning salary history inquiries by employers or their agents.  The General Assembly passed the measure and Governor Malloy is expected to sign it into law with an effective date of January 1, 2019.

The move is part of a trend among several states and municipalities to remove a barrier to gender-based pay equity.  Asking an employee’s salary history, the reasoning goes, allows employers to further entrench gender-based pay disparities by continuing a prior employer’s gender discrimination.  For example, if an employer makes it a practice to hire new employees at 10% above their prior salary in order to lure new hires, an applicant earning $70,000 at a prior job would be hired at $77,000 and an employee earning $80,000 at the prior job would be hired at $88,000 for the same work.  While prior salaries of applicants can vary for many factors other than gender, the aim of legislation like this is to eliminate the echoes of prior employers’ gender discrimination.

There are a few limitations on the ban:

  • It does not apply to any actions taken by an employer, employment agency, or employee or agent thereof pursuant to any federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes;
  • It does not apply if the prospective employee has voluntarily disclosed salary history; and
  • It does not apply to inquiries about other elements of a prospective employee’s compensation structure, as long as the employer does not inquire about the value of the elements of such compensation structure.

Significantly, nothing in the legislation prohibits employers from asking prospective employees about their salary requirements.  In other words, employers may not be permitted to ask what a prospective employee made at his or her old job, but can still ask what salary the prospective employee requires in order to accept the position in question.

In addition, the legislation does not prohibit employers from using salary history in setting compensation, so in theory, if an applicant voluntarily discloses his or her prior salary, it would be permissible to set pay based on it.  However, a recent case from the Ninth Circuit Court of Appeals, Rizo v. Yovino, held that salary history can never be a legitimate basis to pay women and men differently for the same work under the federal Equal Pay Act, so to avoid the possibility of inadvertent gender-based differentials in pay, it is best to avoid using salary history as well.

Under the Connecticut legislation, employers can be liable for compensatory damages, attorney’s fees and costs, punitive damages, and any legal and equitable relief the court deems just and proper.

Is this legislation constitutional?  Recently, a salary history ban enacted in Philadelphia was partially enjoined by a federal judge on the basis that it violates the First Amendment’s free speech clause.  The judge determined that the portion of the ordinance banning the employer from using the information to set pay was valid, but blocked the portion allowing the employer to ask about the information.  Thus, it will be interesting to see whether Connecticut’s legislation (which only bans inquiries and not use) will be challenged on constitutional grounds.

Unless and until such a challenge is successful, employers in Connecticut should prepare to comply.  Employers should remove any questions about salary history from their employment applications and any screening instruments that may be used by third party agents, such as recruiting firms.  Employers should also instruct anyone conducting interviews on their behalf not to inquire about salary history.  In addition, when setting compensation, employers should ensure that any differences in compensation among employees performing the same work can be justified by factors other than sex or prior salary.  Legitimate job-related factors can include amount of experience, level of education, ability, and job performance.

Our team of labor and employment attorneys can assist employers with all aspects of employment law compliance, including the onboarding process and avoiding discrimination claims.  Contact us for assistance in addressing any compliance concerns.

Federal law requires employers to verify the identity and employment eligibility of their current and prospective employees and document their compliance using the Employment Verification, Form I-9. U.S. Immigration and Customs Enforcement (“ICE”) Homeland Security Investigations (“HSI”) has the authority[1] to inspect and review employer’s Forms I-9 and conduct workplace raids. Employers in Connecticut and other parts of New England face a fair chance of an I-9 audit and enforcement activity in their place of business.  This note covers compliance with Forms I-9.

A violation for the unlawful employment of an undocumented worker can result in the imposition of fines to employers, the arrest of employers who knowingly employ undocumented workers, and the arrest of workers working without lawful authorization for employment in the United States.[2]

Continue Reading Is your business ready for an inspection from U.S. Immigration and Customs Enforcement?

In a given year, about 2,000 complaints of employment discrimination are filed with the Connecticut Commission on Human Rights and Opportunities (CHRO).  For some employers, the receipt of a CHRO charge is their first exposure to the legal system (other than Unemployment).  The employer has only thirty days to respond to the charge, and only ten days to choose whether to participate in a pre-answer conciliation process.  Employers need to be prepared to respond whenever a CHRO charge is filed.  The following is an employer’s roadmap to the CHRO process.

  1. First, breathe.  Many employers (and virtually all large employers) in Connecticut face a CHRO charge at some time.  The filing of a charge does not mean that you or your employees are bad people, are going to jail, or are going to have to pay out a massive verdict.  Factually or legally baseless charges are, unfortunately, quite common.  While using an attorney may seem like a costly proposition, in many cases, an attorney can help resolve the matter quickly and efficiently so that it does not hang over your head.
  2. The next step is to determine whether there is insurance coverage that might cover the charge and to notify the carrier.  Typically, the appropriate carrier is the Employment Practices Liability Insurance (EPLI) carrier.  It is possible for a general business policy or other insurance policy to cover this kind of claim.  Failing to notify the insurance carrier promptly can result in a loss of coverage for that charge or the reassignment of the case to a different attorney once work has already commenced.  If the company does not have EPLI, it is worth considering purchasing such coverage for the future.
  3. If the company has insurance coverage, the carrier will likely assign an attorney.  Otherwise, you will need to select an attorney.  It is a good idea to choose attorneys who have substantial experience in the area of Connecticut employment law and who regularly appear before the CHRO.  General practice attorneys are often unfamiliar with the specifics of practice before the CHRO and the nuances of employment law in Connecticut.  Even though the CHRO process is somewhat informal, the case can make its way to state or federal court, so it is important to set the groundwork at the agency with a firm prepared to litigate in court if necessary.  A company can represent itself at the CHRO, but not in court.
  4. If you think the case can be settled quickly and efficiently and want to attempt settlement prior to responding to the allegations, you must request pre-answer conciliation within ten days (not business days) after receiving the charge.  This is a very short window and no extensions are available.  If the company does not have an attorney already, it may be difficult to get advice on this question before a response is due.  One option is to request pre-answer conciliation to preserve the option and then find an attorney to assist, or even attend the pre-answer conciliation prior to obtaining counsel.  Of course, an attorney can be invaluable in drafting a settlement agreement that best meets the company’s needs.
  5. If the company does not engage in pre-answer conciliation or a settlement is not reached, it will need to respond to the charge.  This involves responding to the employee’s claims from a factual and legal standpoint and offering the employer’s own explanation for what happened.  For example, an employee may claim she was fired for complaining about sexual harassment, but the employer may be able to show that the person who fired her never knew about the complaint at the time the termination decision was made.  This is where it is ideal to have good documentation of the employer’s decision making process.  The employer can make arguments to try to have the case dismissed at the Case Assessment Review stage.  If the case is retained, the next step is a mandatory mediation, which may be skipped if there was a pre-answer conciliation.
  6. The mandatory mediation is an attempt to settle the case.  While the CHRO encourages settlement, it is up to the parties whether to settle and on what terms.  If the employee’s expectations are reasonable, a settlement is often achievable on terms that make financial sense for the employer, especially if there is insurance.  Unfortunately, some employees demand million-dollar settlements and ignore the opinion of the mediator that the case is actually worth substantially less.
  7. After the mandatory mediation, if the case has not settled, it will be assigned to an investigator.  It is also possible to request early legal intervention to try to have the CHRO dismiss the case without an investigation.  A request for early legal intervention may also result in the case being fast-tracked to a public hearing, although this is rare.  When the CHRO dismisses a case, it issues a “release of jurisdiction” allowing the employee to proceed to court on the case.  The employee may also request a release of jurisdiction if he or she would rather not wait around for the CHRO to do its investigation and would rather go straight to court.  Whether to request a release of jurisdiction is a strategic decision, because going to court may be less desirable than proceeding in the CHRO.
  8. If the case is not released, the investigator will set up a fact-finding hearing where evidence and testimony are presented on the case.  It is usually several months after the hearing before the fact-finding report is issued.  First, a draft report is issued and the parties have an opportunity to comment before a final report is issued.  That report determines whether there is reasonable cause to believe discrimination occurred or whether there is no reasonable cause and the case will be dismissed.
  9. If there is a finding of reasonable cause, the matter proceeds to the Office of Public Hearings, which engages in a conciliation process and a hearing.  After that hearing, the CHRO could appeal a decision in favor of the employer to court.  This is rare.  In fiscal year 2016-2017, out of 2376 complaints at the CHRO (most of which were employment-related), only 78 were certified to a public hearing and only 5 proceeded to the end of the public hearing process to result in a referee decision.  (The statistics do not indicate which party won in those cases and, if the employer won, whether the CHRO appealed in court.)

Just how many CHRO cases end up in court is not easily determined.  More than a third of CHRO cases are withdrawn due to a settlement.  Many of the remaining cases are dismissed from the agency with the employee retaining the ability to sue the employer in court, but many employees do not pursue their cases in court.

While an employer can represent itself at the CHRO, an experienced employment attorney can remove a great deal of the stress and anxiety from the process by giving perspective on the likelihood of an unfavorable finding, advising on the value and terms of a good settlement, drafting factual and legal arguments that are persuasive to CHRO officials, and being ready to jump into litigation should the employee proceed to court.  The attorney can even give advice on policies and procedures to prevent future disputes.

The labor and employment department at Berchem Moses PC has more than 100 years of collective experience navigating the CHRO process and litigating discrimination claims.  We would be happy to partner with your business to address any labor and employment concern, including CHRO charges.

As the #metoo and #timesup movements continue gaining momentum, Connecticut employers should not be surprised that the start of the 2018 Connecticut General Assembly session saw the introduction of a bill to increase workplace harassment prevention training in Connecticut. Should HB 5043 pass in its current form, it would be the first substantial revision to Connecticut’s workplace harassment prevention training requirements since their enactment in 1992.

Connecticut, one of only three states with similar mandates, currently requires employers of 50 or more employees to provide two hours of workplace sexual harassment prevention training to supervisors within six months of the supervisor being hired as a supervisor or promoted to a supervisory position. The new bill seeks to significantly expand this training requirement increasing the number of employers covered, the topics that must be addressed and the frequency of the training.  Additionally, the bill would increase the content and frequency of information employers must post regarding workplace harassment. Continue Reading More Connecticut Employers May Have To Provide Workplace Anti-Harassment Training. Will Your Company Be One Of Them?