Transcript PAID FAMILY LEAVE IN NEW JERSEY

2008 Hot Topics in
Labor & Employment Law
Presented by:
Labor & Employment Group
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
www.nmmlaw.com
17 June 2008
2008 Hot Topics in
Labor & Employment Law
• New Jersey Paid Family Leave Act, Keith McDonald
• Potpourri of Employee Privacy Issues, Karen Thompson
• Electronic Discovery 2008: Coming to a HR Department Near You,
Fernando Pinguelo
• Emergent Tax Issues in Employment Law, Charles Bruder
• Developments in Harassment Law, David Cassidy
• Family and Medical Leave Act, Proposed Regulations Changes,
Pat Collins
2
Please help yourself to food
and drinks
Please let us know if the room
temperature is too hot or cold
Bathrooms are located past
the reception desk on the right
Please turn OFF your cell
phones
Please complete and return
surveys at the end of the
seminar
3
Paid Family Leave in New
Jersey
Presented by:
Keith D. McDonald
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
What Is It?
•
A new state law that provides New
Jersey employees with six weeks of paid
leave over a 12-month period to care for:
– a newborn or newly-adopted child; or
– an ill child, parent, spouse or domestic
partner.
5
How Much?
• Employees taking leave will receive up to
two-thirds of their wages, capped at $524
a week.
• A one-week waiting period is required
before paid leave kicks in.
6
Important Dates
• January 1, 2009
– The new law takes effect.
– Payroll deductions begin.
• July 1, 2009
– Payments become available to eligible
employees.
7
How Is It Funded?
• Employee funded.
• Increase to employee TDB taxes starting
January 1, 2009.
• Increase will range from $.34 - $.64 per
week depending on annual income,
costing no worker more than $33 per year.
8
Who Is Eligible?
• Available to all New Jersey employees
who pay into the state’s Temporary
Disability Benefits system
– Test - worked at least 20 weeks or earned at
least 1000 times the hourly minimum wage
during the prior year.
9
Who Is Eligible? (cont.)
• Paid family leave through the TDB system
will be available regardless of the number
of employees.
• Differs from FMLA and NJFMLA, which
require 50 or more employees.
10
Temporary Disability Benefits
• Existing TDB system only provides paid
leave to employees who are unable to
work because of their own disability,
illness or injury suffered outside of the job.
• This includes disability due to pregnancy
and recovery after giving birth.
11
Temporary Disability Benefits
(cont.)
• New law expands benefits to employees
that need to take leave for an illness or
injury to a family member, or to bond with
a newborn or adopted child, regardless of
whether the individual suffers from a
disability or illness resulting from child
birth.
12
Paid Family Leave vs. Other
Family Leave Statutes
• Paid family leave does not affect the protections
provided by the NJFLA and FMLA.
• An employee that qualifies for leave under the
NJFLA and FMLA and paid family leave can
receive paid leave for six of the 12 weeks of
unpaid leave.
• Employers can require employees to exhaust
their paid family leave benefits and NJFLA and
FMLA benefits concurrently.
13
Job Protection
• Unlike the NJFLA and FMLA, paid family
leave does not offer job protection for
employees.
• If an employee qualifies for paid family
leave and not leave under the NJFLA and
FMLA, the law does not require that the
employer reinstate the employee after
taking paid family leave.
14
Job Protection (cont.)
• Other considerations for small employers
– Disability discrimination under NJLAD or ADA
– Retaliation claim under common law
retaliation principles
• Risks of litigation
15
Employer Notice Requirements
• Conspicuous posting and copy of the
notification.
• Notice must be issued:
– (1) not later than 30 days after the notification form is
provided by the Department of Labor;
– (2) at the time of hire;
– (3) whenever an employee provides notice that the
employee is taking covered leave; and
– (4) at any time, upon an employee’s first request for a
copy of the notice.
16
Employee Notice Requirements
(cont.)
• Employees must provide at least 30 days
notice when seeking paid family leave to
care for a newborn or newly-adopted child.
• No prior notice is required when an
employee seeks paid family leave to care
for an ill child, parent, spouse or domestic
partner.
17
Effects on Current Policies
• Employers have the option to require
employees to use up to two weeks of
available sick pay, vacation pay, or other
fully paid leave before receiving the paid
family leave benefits.
• Policy must be written.
18
Effects on Current Policies (cont.)
• Employers can require that paid family leave
benefits run concurrent with employer paid
leave.
– Employers can require that the 6 weeks of paid family
leave be reduced by the amount of fully paid leave
provided by the employer.
• If an employee is required to use up to two
weeks of employer paid leave, there is no oneweek waiting period.
19
Intermittent Leave
• Leave taken to care for a newborn or newlyadopted child must be taken on a continuous
basis unless the employer agrees to permit the
employee to take intermittent leave.
• Intermittent leave is permitted to take care of a
family member, however, the employee must
make reasonable effort to schedule leave as to
not unduly disrupt employer’s operations.
20
Recommendations
• Evaluate and update current leave policies
to reflect the new paid family leave
benefits.
• Prepare notification procedures and
posting requirements.
• Provide training to human resource
personnel about the new law.
21
A Potpourri of Employee
Privacy Issues
Presented by:
M. Karen Thompson
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
Disclaimer
Comments apply to employers in the private sector
only. Due to constitutional protections against
unreasonable governmental actions, comments
should not be assumed to apply to governmental
entities in all cases.
23
Tension Between Competing Interests
• Employees’ Right
to Privacy of
Personal,
Confidential and
Financial
Information
• Employers’ Right to
Protect Assets,
vs. Promote Their
Business and
Maintain Secure
Workplaces
24
Sources of Privacy Rights
Constitutional:
a)
Fourth Amendment to U.S. Constitution
b)
Applicable state constitutions
Statutory:
a)
Federal Laws and regulations
b)
State Laws and regulations
Common Law of Privacy – Restatement of Torts,
Invasion of Privacy
Contractual: Collective Bargaining Agreements
25
Sources of Privacy Rights
Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81
(1992) defined a right to privacy based on New Jersey’s
constitution and common-law as a public policy right:
“The right of an individual to be . . .protected from any
wrongful intrusion into his private life which would outrage
or cause mental suffering, shame or humiliation to a
person of ordinary sensibilities.”
Right of privacy extends to the workplace and employees
can sue for infringement.
26
Sources of Privacy Rights
Factors courts will apply to determine infringement include:
– Balance employee’s individual right to privacy against
competing public interest (e.g. public health or safety).
– Was there a legitimate expectation of privacy by employee?
– Was advance notice provided to the employee?
– Extent of the intrusion - was least intrusive method used?
– Effect on employee dignity.
– Was there a legitimate business purpose for the intrusion?
– Was there nondisclosure of private information except for
necessary and legitimate purposes?
27
Health Information and Inquiries
Health Insurance Portability and Accountability Act (HIPAA), 29 U.S.C. § 1181 et seq.– requires employers to protect “individually
identifiable health information” that they
maintain or transmit that relates to an
employee’s present or future physical or
mental condition or care, including payments
for health care.
28
Americans with Disabilities Act (ADA), 42
U.S.C. §12101 et seq. (15 or more employees)
• Prohibits inquiries/testing about medical conditions unless jobrelated and consistent with business necessity, including pre-hire
inquiries of non-disabled applicants (O’Neal v. City of Albany, 293
F.3D 998 (7th Cir. 2002)).
• Permits post-offer medical examinations if all persons in job
category are examined.
• Medical records/information acquired, including through workers’
compensation claims, must be kept confidential and separate from
personnel records .
• Voluntary medical exams that are part of an employee health
program need not be job-related or consistent with business
necessity.
• No protection for illegal drug users under the ADA, but may be
protected post-rehabilitation.
29
Family Medical Leave Act (FMLA), 29 U.S.C.
§2611 et seq. (50 or more employees)
• Entitles employers to require a medical certification from employees.
• Entitles employers to request clarification of the certification, but only
through their own doctors.
• Entitles employers to require a second medical opinion at their cost.
• Prohibits seeking more information than that requested on
Certification of Health Care Provider form; direct contact with
employee’s doctor.
• Employer may require employees on sick leave, including FMLA
leave, to report to a hot line when they leave their homes (Callison
v. City of Philadelphia, 430 F.3d 117 (3d Cir. 2005)).
30
Pre-Employment Screening –
Credit Histories
Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. – designed to
protect the privacy of information prepared by consumer reporting agencies
and to guarantee that the information supplied is as accurate as possible.
•
Consumer reports contain information about personal and credit
characteristics, records of arrests for prior seven years, character,
reputation and lifestyle and may include interviews with employee’s friends,
neighbors and associates.
•
Person’s credit record is only available for legitimate business needs;
employers must get written authorization from applicant and provide specific
written notice that report will be requested and may be used.
•
If applicant refuses to consent, employer may reject applicant.
•
If report is relied on to refuse employment, employer must disclose the
report and provide copy of applicant’s rights under FCRA in writing.
31
Pre-Employment Screening –
Credit Histories
Fair and Accurate Credit Transactions Act
(FACTA), 15 U.S.C. § 1681(w) (amended
FCRA) – requires employers to take reasonable
measures to dispose of employees’ credit reports
obtained as part of the hiring process, including
any background checks on employees as well as
applicants which are obtained by the employer.
32
Pre-Employment Screening –
Credit Histories
FTC Regulation, 16 C.F.R. 682.1 et seq. - defines “reasonable
measures” by example, to include burning, pulverizing or
shredding of documents, erasing electronic media, or hiring a
third party to destroy data.
– Enforcement: Both federal and state authorities may
enforce FACTA
– Exposure to statutory damages of $1,000 for each
separate violation
– Exposure to civil suits and class actions for actual
damages to employees
33
Pre-Employment Screening –
Criminal Histories
• In New Jersey, employers may obtain certain criminal conviction
records to determine a person’s qualifications for employment.
• Employers may obtain records of convictions in New Jersey state
courts, arrests and pending charges of violations of laws.
• Requests must be made on prescribed form signed by the
subject and accompanied by employer’s certification.
• If information disclosed will be used to disqualify candidate for
employment, then applicant must be provided notice and
opportunity to confirm or deny information.
• Title VII – criminal records can’t be an absolute bar to hiring as it
may disparately exclude certain racial groups; must show
business necessity to rely on criminal records.
• Certain states restrict use of criminal histories in hiring decisions.
34
Pre-Employment Screening –
Educational Background
• Permitted if education is germane to the
position.
• Family Educational Rights and Privacy Act
(FERPA), 20 U.S.C. §1232g prohibits schools
from disclosing educational records without a
release from applicant (or parent if minor).
• EEOC guidelines – education requirements that
disproportionately affect certain groups may
violate Title VII unless justified by business
35
necessity.
Pre-Employment Screening Internet Resources
• Google and other search engines.
• Social sites (MySpace, Facebook)
• No expectation of privacy for information in the
public domain
• Risks for employer if data obtained about applicants
includes factors that shouldn’t be used in making
hiring decisions
Best Practice: Have third party screen
impermissible information from decision makers.
36
Privacy Issues Regarding Wire and
Electronic Communications
In 2005, 60% of 840 companies surveyed by American
Management Association monitored employees’ e-mails.
Reasons to monitor
–
–
–
–
–
–
Employee training
Evaluate communications with customer
Protect against disclosure of trade secrets
Investigate misconduct, claims of harassment/discrimination
Monitor improper use of company systems
Police against illegal activities
37
Privacy Issues Regarding Wire and
Electronic Communications
Federal Wiretap Act, 18 U.S.C. §§2510-2522 – Electronic
Communications Privacy Act (“ECPA”) imposes civil and criminal
liability on any person who “intentionally intercepts”, tries to
intercept or procures another to intercept “any wire, oral or electronic
communication.”
• Applicable to telephone and electronic communications alike.
• Expectation of privacy as to telephone communications is irrelevant,
but does apply to other oral communications.
• Interception can be as simple as listening in on an extension phone
or more sophisticated methods.
38
Privacy Issues Regarding Wire
Communications – Telephones
Two exceptions to the prohibition against interception of
telephone (wire) communications:
1. If one of the parties consents (may be explicit or implied
consent)
– Consent may be a condition of employment – obtain signed
consent.
– Caution – merely telling employees that telephone calls may be
monitored may not be enough due to inconsistent decisions.
Best Practice: Include consent in handbook with
acknowledgement signed by employee; prepare a written
policy covering interception and monitoring.
39
Privacy Issues Regarding Wire
Communications - Telephones
2. Ordinary course of business exception to wire communications:
-
Applies if the conversation is a wire conversation via telephone
equipment.
-
The interception concerns the operation of the business and
-
Employer has legitimate business purpose (not required if the
employee previously consented).
-
Monitoring of personal calls is not within this exception and
employer must desist after determining call is personal.
40
Privacy Issues Regarding Wire and
Electronic Communications
Service Provider Exception of ECPA –
permits provider of service to intercept or use electronic
communications which are transmitted using its facilities,
incident to its business or to protect its rights or property.
Employers that provide their own telephone networks or
e-mail systems may qualify as providers under this
exception.
41
Privacy Issues Regarding Wire and
Electronic Communications
New Jersey Wiretapping & Electronic
Surveillance Control Act, N.J.S.A.
§2A:156A-3 - makes it a crime to “intercept” any
wire, electronic or oral communication, or disclose the
contents, and follows federal act for interpretation.
Exceptions: Same as the federal statute.
42
Privacy Issues Regarding Wire and
Electronic Communications
Other State Statutes Provide Broader Protections:
– Laws of thirteen states are more stringent than federal law and
require the consent of all parties to legally record or intercept
an electronic and/or wire communication: California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts,
Michigan, Montana, Nevada, New Hampshire, Pennsylvania and
Washington.
– Caveat: Even if only one of the parties is located in one of those
states, you still must obtain consent of all participants.
– Notification at outset of conversation that it may be recorded may
constitute implied consent; obtaining employees’ signature
acknowledging receipt of policy to monitor may constitute
consent.
43
Electronic Communications Monitoring –
E-mails
“Interception” of an electronic communication occurs when
the communication is acquired after its transmission by the
sender, but before its receipt by the intended recipient - no
violation under ECPA if post-receipt e-mails are monitored
– United States v. Councilman, 418 F.3d 67 (1st Cir.
2005) – e-mail monitoring programs which provide
real time interception capabilities may violate
Wiretapping Act
44
E-mail and Internet Use Monitoring
Analysis: reasonable expectation of privacy in data on workplace
computers balanced against employer’s interest in maintaining legitimate
use of its systems.
Other considerations:
–
–
–
–
–
–
–
Is the computer shared with or accessible to others?
Is it password protected?
Is personal use of work computers permitted?
Is there a regular monitoring program in place?
Are there policies governing IT personnel’s actions?
Is the monitoring “event based?”
Does illegal activity occurring outweigh all privacy concerns?
Best Practice: Promulgate policies that use of company
systems is for business use and may be monitored.
45
E-mail and Internet Use Monitoring
Statutory Protections:
• Connecticut & Delaware: require advance notice of
electronic monitoring (e-mails, telephone and Internet,
etc.); exception in Connecticut for illegal activities or
hostile work environment; monetary penalties for
violation.
• New York – Bill introduced 5/15/08 regarding electronic
monitoring, requires prior written notice upon hiring and
once annually to all employees, informing them of the
types of electronic monitoring that may occur.
46
E-mail and Internet Use Monitoring
Employer’s Duty to Monitor:
– When employer has technical and legal ability to
monitor employees’ e-mail and Internet activities, may
have a duty to act to monitor to protect interests of
third parties. Doe v. XYC Corp., 382 N.J.Super. 122
(App.Div. 2005)
– Employer had authority to consent to FBI’s search of
employee’s workplace computer, even though
employee had reasonable expectation of privacy.
United States v. Zeigler, 474 F.3d 1184 (9th Cir. 2007)
47
Protection of Employee Records and
Personal Information
•
•
•
Thirty-nine states have statutes protecting employee
personal information.
Private right of action and penalties available in many
states for violations.
Most statutes require documentation of steps taken to
implement data security practices.
Best Practice: Implement policies to ensure
protection and steps to be taken in event of a breach.
48
Protection of Employee Records and
Personal Information
New Jersey: Identity Theft Prevention Act, N.J.S.A.
56:11-44 et seq.• Protects “personal information” defined as last and first name or
initial, plus SSN, DLN, State ID nos., bank, account information.
• Applies to any entity conducting business in NJ however organized.
• Protects consumers, whether employees, job applicants,
contractors.
• Requires timely destruction of personal information.
• Requires notification of security breach to employees and NJSP.
• Limits use and display of SSNs.
49
• Substantial penalties for non-compliance.
Protection of Employee Records and
Personal Information
New York: Confidentiality of Social Security Account
Numbers, N.Y. Gen. Bus. § 399-dd –
• Places limits on use and disclosure of an individual’s SSN by
persons, firms, partnerships, associations or corporations.
• Prohibits intentional communication of individual’s SSN to general
public.
• Requires businesses to implement safeguards and limit
unnecessary employee access to SSNs.
• Prohibits businesses from requiring transmittal of unencrypted SSNs
over the Internet.
• Restricts businesses’ ability to print SSNs on mailings, etc.
• Civil penalties enforceable only by Attorney General.
50
Protection of Employee Records and
Personal Information
New York: Disposal of Personal Records Law, N.Y. Gen. Bus. §
399-h
Requires business to dispose of records with “personal identifying
information” by shredding, destruction, modification or other
reasonable action to prohibit access by unauthorized persons.
Personal identifying information includes SSNs, DLNs, credit card and
account information, mother’s maiden name, etc.
Civil penalties enforceable only by Attorney General.
51
Desk, Office and Common Area Searches or
Surveillance
Employer must balance right to control and operate its business against
employee privacy interests. Analysis includes:
•
•
•
•
•
•
Can employee maintain that there is a reasonable expectation of privacy?
(no legitimate claim as to common areas except restrooms)
Was there advance notice through handbook or policy reserving right to
search?
Was there a general practice of conducting searches?
Were there reasonable grounds to suspect search will reveal evidence of
work-related misconduct or illegal activity?
Was the scope of the search reasonable in scope and not excessively
intrusive?
Locked cabinets and drawers may be private depending on access.
52
Verification of Employment Requests
• Must be accompanied by employee’s signed release that
should be matched with signature on file to confirm.
• Exercise care with questions about probability of
continued employment, likelihood of continued bonus,
date of applicant’s next pay increase and projected
amount.
• Best practice: retain copies of employee’s release and
completed VOE in personnel file.
53
Right of Privacy Off the Job
Violations of corporate codes of conduct force
executive resignations:
• Chris Albrecht, former CEO Home Box Office (assaulted
girlfriend)
• David Colby, former CFO Well Point, Inc. (numerous
affairs led to lawsuits)
• Kerry Shiba, former CFO Kaiser Aluminum
(inappropriate relationship)
• Harry Stonecipher, former CEO Boeing (inappropriate
relationship)
54
Right of Privacy Off the Job
Statutory Protections
Anti-Discrimination Laws:
•
Title VII and New Jersey LAD prohibit
discrimination based on sexual
orientation, gender identity, civil union
status.
•
ADA, LAD prohibit discrimination based on
disabilities, which may include obesity.
55
Right of Privacy Off the Job
Lifestyle Discrimination Laws:
– Protect an employee’s right to engage in lawful
activities during non-work time and away from
employer’s premises (e.g. California, Colorado,
North Dakota).
– Protect employee from discrimination for use of
lawful products away from work (Illinois, Minnesota,
Montana, North Carolina,Tennessee, Wisconsin).
– Protect employees from discharge or refusal to hire
because of use of tobacco products (New Jersey,
N.J.S.A. §34:6B-1, 17 other states).
56
Right of Privacy Off the Job
New York: prohibits employers from discriminating
against anyone for outside legal activities away from
the workplace, including “recreational activities”
defined as “sports, games, hobbies, exercise, reading,
and the viewing of television, movies and similar
material.” NY L. Law §201-d.
Issue is unresolved whether romantic relationships
constitute “recreation.”
Slohoda v. United Parcel Service, 193 N.J. Super. 586
(App.Div.1984) – challenged discharge on privacy
grounds for violating company policy against adultery.
57
Blogs – The Good, the Bad and the Ugly
Blogs – websites created by companies, trade associations
or individuals to provide a forum to comment on news or
events affecting their lives or businesses.
Company sponsored blogs (internal access)
– Preferred method to circulate competitive
intelligence.
– Disseminate news on products or research.
– Monitor employee feelings about the company.
58
Blogs – The Good, the Bad and the Ugly
Industry-specific or personal blogs (public)
– Enable disgruntled employees to cybersmear the
employer.
– Risk of disclosure of confidential information or
worse.
– Generally not password protected so accessible to
public at large.
– Pseudonyms, anonymity, encrypted routing devices
shield blogger’s identity.
59
Blogs – The Good, the Bad and the Ugly
First Amendment Protections for Anonymous
Bloggers
– State v. Reid, ____ N.J. ____ (2008) (A-105-06) –
recognized constitutionally protected privacy interest
in employee’s anonymity in Internet activities;
quashed subpoena to ISP for subscriber information.
– John Doe No. 1 v. Cahill, 884 A.2d 451 (Delaware
2005) – defamed politician denied access to identity
of anonymous bloggers.
60
Blogs – The Good, the Bad and the Ugly
20% of United States companies have formal policy in place to monitor blogs
containing remarks about the company (May 2006 survey by public relations
firm Makovsky & Co.)
3% of employers over a one year period disciplined or fired employees for
blogging (SHRM 2005 study)
IBM guidelines require employees to identify themselves when blogging about
IBM and caution about discussing politics or religion (USA Today, June 15,
2005)
Most companies lack policies regarding employee blogging → risks when
bloggers are disciplined or discharged for blogging
Best practice: adopt guidelines prohibiting negative comments about
management, co-workers, the company or its products; seek legal counsel if
blogs assert employer misconduct, whistleblowing or on-the-job discrimination
61
Technological Monitoring - Evolving Area of
the Law
In 2004, employers spent approximately $9 billion in technological
monitoring devices for the workplace.
Rand Corporation study of six large private companies (>1500
employees) revealed no regard for employee privacy in use.
Human Tracking Technology:
–
–
–
–
–
–
GPS Trackers (global positioning systems)
RFID (radio frequency identification incl. microchip implants)
Cellular technology (installation of GPS chips in cell phones)
Biometrics (voice or iris recognition, fingerprint or facial imaging)
Smart Cards (used by 53% of employers)
E-Z Pass
62
Technological Monitoring - Evolving Area of
the Law
Justifications:
• Ability to study workplace patterns to improve efficiency
• Measure time, labor and human error
• Track employee theft, misconduct, sleeping on the job
• Restrict access to high security areas
• Assist investigations of workplace incidents
• Locate personnel quickly in event of emergency
• Ease of installation into uniforms, ID cards, badges
63
Technological Monitoring - Evolving Area of
the Law
Privacy Concerns:
• Permit constant tracking on and off-site of employees.
• Can reveal non-work related information about personal habits,
interests or associations which can run afoul of discrimination laws or
be misused by third parties or coworkers.
• Can be read surreptitiously without employees’ consent.
• Less secure systems can be read by unauthorized readers.
• Links to other databases provide entrée to host of personal
information, including personnel and medical records.
• Risk of identity theft and misuse by law enforcement.
• Lack of best practice policies to govern use of technologies and
protect information.
64
Technological Monitoring - Evolving Area of
the Law
National Labor Relations Act – provides minimal
protection as it prohibits employers from engaging
in surveillance of protected concerted conduct and
employers must negotiate regarding certain forms
of employee surveillance.
65
M. Karen Thompson
[email protected]
Certified as a Civil Trial Attorney
By the New Jersey Supreme Court
Areas of Practice:
Labor & Employment
Products Liability Defense
Alternative Dispute Resolution
Admitted to Practice before:
New Jersey and New York State and Federal Courts
United States Supreme Court
66
ELECTRONIC DISCOVERY 2008:
Coming to an HR Department Near You
Presented by:
Fernando M. Pinguelo
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
E-discovery
• What is it?
• Why should you care?
• What to do and when?
68
What is it?
Discovery: The process of finding or
learning something that was previously
unknown with the intent of using it in a
civil or criminal legal case.
69
What is it?
The good ol’ days . . .
70
What is it?
“E” or Electronic or Electronically
Stored Information (ESI):
Information created, manipulated,
communicated, maintained, or stored in
digital form by computer hardware and
software.
71
Today . . .
•
•
•
•
•
•
•
Laptops/Desktops
Servers
Phone Systems (VoIP)
Printers & Copiers
PDA’s/Cell Phones
CD’s/DVD’s
USB Thumb Drives
72
What is it?
The Corporate Enterprise Network
73
The FINE print . . .
Document is defined to be synonymous in meaning and equal in scope to the usage of this term in
Federal Rule of Civil Procedure 34(a), including, without limitation, electronic or computerized data
compilations. A draft or non-identical copy is a separate document within the meaning of this term.
Document shall be interpreted broadly and means any tangible form of communication, whether
written, produced by hand, printed, recorded by word, sound, or image, reproduced by any mechanical
process, or produced by or stored in a computer or similar device, regardless of origin or location.
This includes but is not limited to: writings, records, files, correspondence, reports, memoranda,
calendars, diaries, minutes, electronic messages, voice mail, e-mail, sound recordings, telephone
message records or logs, computer and network activity logs, hard drives, backup data, removable
computer storage media such as tapes, discs and cards, printouts, document image files, web pages,
databases, spreadsheets, software, books, ledgers, journals, orders, invoices, bills, vouchers, check
statements, worksheets, summaries, financial data, production data, appointment data, and
scheduling data, data compilations, computations, charts, diagrams, graphic presentations, drawings,
films, charts, digital or chemical process photographs, video, phonographic, tape or digital recordings
or transcripts thereof, drafts, jottings and notes, and studies or drafts of studies or other similar such
material. Information that serves to identify, locate, or link such material, such as file inventories, file
folders, indices, metadata, and any other data compilations from which information can be obtained
and translated if necessary are also documents. Electronically stored information which is in the
possession, custody, or control of Respondent shall be translated, if necessary, by Respondent into a
reasonably usable form.
74
BIG headache!!!
75
Why should you care?
$$$
76
Why should you care?
•
•
•
Court sanctioned plaintiff $8.5 million for e-discovery
abuses. Qualcomm Inc. v. Broadcom Corp., 2008 U.S.
Dist. LEXIS 911 (S.D. Cal. 2008)
Court sanctioned defendant $125,000 for e-discovery
abuses. Wingnut Films, Ltd. v. Katja Motion Pictures
Corp., 2007 U.S. Dist. LEXIS 72953 (C.D. Cal. 2007)
Court sanctioned defendant $1,000 for e-discovery
abuses. In re Spoonemore, 2007 Bankr. LEXIS 2215
(Bankr. D. Kan. 2007)
77
Why should you care?
You are being watched.
78
Why should you care?
APC Filtration, Inc.
Defendant drove 20 miles and threw his
computer in a dumpster after receiving
notice of lawsuit.
79
Why should you care?
APC Filtration, Inc. (cont.)
Award of default judgment denied
because the evidence was provided by a
third party, so the court concluded the
destruction of evidence did not affect the
outcome of the case.
80
Why should you care?
The Corporate Enterprise Network
81
What to do (NOT) . . .
82
What to do. . .
Three BASIC steps:
• Heighten your sensitivity to a problem that may
result in a formal complaint being filed.
• Identify individuals attached to the problem and
work with IT to suspend routine document
destruction practices and preserve ESI.
• Work closely with in-house & outside counsel to
preserve ESI and issue a Litigation Hold.
83
What to do. . .
Litigation Hold: Suspend automated
document destruction policies, and place
a “hold” on key ESI.
• Litigation “holds” must be:
–
–
–
–
–
communicated in writing
issued by someone with authority
tailored to identify purpose of the hold
specific in detailing which data should
be maintained and why
periodically confirmed
84
What to do. . .
• Select Your Team of Experts
• Consider hiring outside experts to assist in the effort and who will
work closely with the attorneys.
• Factors to consider in retaining e-discovery professionals:
– Experience
– Familiarity with forensic tools
– Capacity to screen high volumes of information
– Quantify costs
– Witness testimony
– Ability to identify what is accessible and retrieve inaccessible
information
85
. . . and when?
Three TRIGGERS:
• Lawsuit or other similar formal proceeding filed
• Statutory requirements compelling preservation
for specified time (i.e., Sarbanes, HIPAA, SEC,
IRS, NJ Public Utilities, etc.)
• Lawsuit that is “reasonably anticipated”
86
. . . and when?
Lawsuit that is “reasonably anticipated”
Huh?
87
. . . and when?
Zubulake IV
a.
Widespread circulation of e-mails titled
“attorney client privilege.”
(+)
b.
Supervisor admits in deposition he was aware of possible lawsuit.
(+)
Key co-workers knew of the possibility of lawsuit.
(=)
c.
Triggering date was the point and time when key co-workers
were aware of the possibility of this specific matter being litigated.
88
. . . and when?
M&T Mortgage Corp.
Duty to preserve was triggered when company
received a “strikingly similar complaint” from the
Department of Consumer Affairs in another
lawsuit.
89
. . . and when?
Consolidated Aluminum Corp.
Sending a demand letter that included a request
for e-mails triggered duty to preserve where “key
players” took part in drafting the letter.
90
. . . and when?
Cache La Poudre Feeds, LLC
a. Plaintiff’s counsel sends demand letter to defendants.
(+)
b. Plaintiff’s counsel calls defendants to discuss settlement.
(≠)
Did NOT trigger duty to preserve for defendants:
Demand letter and phone call discussed rights of plaintiff and
invited defendants to negotiate to discuss possible solutions.
Letter did not threaten lawsuit or ask for preservation.
91
. . . and when?
Broccoli
• Employee sued company alleging sexual
harassment and accusing human resources
administrator of “inappropriate sexually charged
behavior.”
• Company sanctioned (monetary and adverse
inference instruction) for failing to issue a
Litigation Hold.
92
. . . and when?
Broccoli (cont.)
“TRIGGERS” of interest:
Employee (a) handed written complaint to human
resources at the time of his termination citing his
unfair treatment by the HR department; (b)
informed two supervisors orally and in e-mail; and
(c) allegedly met with the HR regional manager.
93
. . . and when?
Broccoli
(cont.)
Court commented on company’s unwise
document retention policy (e-mails in a user’s
“sent” folder for over 7 days automatically
transferred to the “deleted items” folder; deleted
items folder is purged every 14 days and
irretrievable; NO BACKUP TAPES).
94
You NOW KNOW what “it” is
You NOW KNOW why you should care
You NOW KNOW what to do and when
Thank you and be REDI for what’s to come!
Response to
Electronic
Discovery &
Information
95
Emergent Tax Issues In
Employment Law
Presented by:
Charles A. Bruder
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
Code Section 409A – An Overview
• Enacted in response to perceived abuses.
• Intended to accomplish three goals:
– Indentify when compensation deferrals occur;
– Provide for specific payment triggers; and
– Govern the timing of the payment of deferred
compensation.
• To encourage compliance, Congress
enacts penalty provisions…
97
Code Section 409A
Why Compliance Is So Important
• An employer’s failure to comply with Code
Section 409A may result in the following
negative consequences:
– Accelerated income taxation
– Interest and penalty imposition
– Excise taxes – Twenty Percent (20%) of the
payment amount
• All interest and penalties payable by the
recipient
98
Deferred Compensation
How Do We Identify It?
• Deferred compensation includes any legally
binding right to receive a payment of
compensation in a future year
• A legally binding right exists if the payment is not
subject to a substantial risk of forfeiture
• What is a substantial risk of forfeiture? Depends
upon the facts and circumstances
99
Code Section 409A
Where Could Traps Be Lurking?
• The broad definition of “deferred compensation”
means that employers could unwittingly cause
their employees/consultants to be impacted by
Code Section 409A
• “Traditional” deferred compensation/deferred
bonus plans are easy to identify … but …
100
Code Section 409A
Where Could Traps Be Lurking?
Certain arrangements subject to Code Section
409A may not be readily apparent:
–
–
–
–
Severance Arrangements/Employment Agreements
Deferred Directors Fee Arrangements
Stock Options with Below Market Strike Prices
Phantom Stock Arrangements, Stock Appreciation
Rights Plans
– Independent Contractor Agreements with Deferred
Payments
– Retention Bonus Arrangements
101
Code Section 409A
Permissible Payment Triggers
• Code Section 409A provides specific triggers for
the payment of deferred compensation:
- Death
- Disability
- Retirement
- Specified Date
- Change in Control
- Separation From Service
• Deferral arrangements which are subject to
Code Section 409A must adopt these terms.
102
Code Section 409A
Timing Restrictions
• Generally, any change in the timing of a
payment of deferred compensation must
be made at least 1 year before payments
would commence, and must extend the
initial payment date for another 5 years
• Failure to comply = accelerated income
tax/excise tax imposition
103
Code Section 409A Compliance
What Should an Employer Do?
• Self Policy Statute – No IRS filing required
• Review all arrangements NOW!
• All deferred compensation arrangements must
be properly documented by December 31, 2008
• Amend/terminate arrangements, if necessary
– Amendments/terminations are subject to specific
rules
• “Good Faith” operational compliance is required
now
104
Code Section 125
New Proposed Treasury Regulations
• Effective January 1, 2009
• Apply to all arrangements which qualify for
income tax benefits under Code Section 125
– Group Medical Insurance Plans
• Treasury Regulations clarify that Code Section
125 is the exclusive means under which
nontaxable group health benefits may be
provided to employees
105
Code Section 125 Proposed Treasury
Regulations - What Has Changed?
Written Plan Requirement
– Plans must include the following items:
• Specific details concerning all benefits available under the
plan
• Eligibility provisions for participation
• Rules governing benefits elections, maximum elective
contribution limits
• Rules governing the irrevocability of elections
• Details concerning employer contributions
• Definition of plan year
– Plans must be operated in accordance with stated terms
106
Code Section 125 Proposed Treasury
Regulations - What Has Changed?
Nondiscrimination Testing Required
– Cafeteria plans cannot discriminate in favor of highly
compensated employees.
– Similarly situated employees must have a uniform
opportunity to elect to receive benefits.
– Objective nondiscrimination testing formula is
provided in the Treasury Regulations.
– “Safe Harbor” for premium-only cafeteria plans.
107
Code Section 125 Proposed Treasury
Regulations – What Should Employers Do?
• Treasury Regulations apply to plan years
commencing on or after January 1, 2009
• Need to carefully review plan documents
– Summary plan descriptions
– Intranet/employee communications
– Cafeteria plan forms brochures
• Pre-year discrimination testing
• Amend plan documents currently
• Create a compliance manual
108
Developments In
Harassment Law
Presented by:
David Cassidy
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
The Legal Test for Harassment
•
“Unwelcomed”;
•
“Because of;”
•
“severe and pervasive;” and
•
“Totality of the circumstances.”
110
Affirmative Defense
• Anti-Harassment Policy:
– Periodic publication?
– Effective grievance process?
– Training?
111
Is This Unlawful Harassment?
• A co-worker uses the phrase “dirty Jews” in the presence of a
Jewish employee;
• A co-worker places a German flag sticker above an Israeli flag
sticker on a Jewish employee’s locker;
• A supervisor asks a Jewish employee, several times, about his
“big Jew nose;”
• A supervisor tells a Jewish employee he would not be permitted to
wear a yarmulke on Passover due to uniform restrictions; and
• A co-worker comments, in the presence of a Jewish employee,
that “Jews are good with numbers” and “Jews make all the
money.”
112
Cutler v. Dorn (cont.)
The facts of the case:
• Jason Cutler (Plaintiff) and Robert Shreve (co-worker) were police
officers.
• In a discussion about the Macabee games, which Cutler described
as the Jewish Olympics, Cutler thought he heard a co-worker,
Shreve, blurt out, “those dirty Jews.”
113
Cutler v. Dorn (cont.)
• Cutler reported the incident.
• The incident is investigated.
• Shreve sent to sensitivity training.
• At no time after that incident did Shreve utter any antiSemitic remarks.
114
Cutler v. Dorn, cont’d
• Cutler filed suit in the Superior Court of New Jersey, Camden
County, alleging violations of the NJLAD.
• At trial, the evidence showed:
– Haddonfield police officers engaged in considerable joking, laughing,
and “breaking chops.”
– Officers also maintained a humor file, which was kept in two file
cabinets.
115
Cutler v. Dorn (cont.)
• Cutler admitted he participated in “breaking chops.”
• Cutler admitted he viewed the “humor” file from time to
time.
• Cutler admitted he created some of the material.
116
The Jury Speaks . . .
• Cutler did suffer a hostile environment “based on his
religion or ancestry.”
• Awarded zero damages!
• Employer asked the trial court to dismiss the verdict.
• Trial Court denied the Employer’s motion but stated it
was a “close call.”
117
Court Ruled
• The Court ruled:
– Not severe or pervasive conduct.
– Other remarks occurred in a context of good-natured pranks and
joking.
– Cutler participated from time to time.
– Case is pending before the N.J. Supreme Court and a decision
is expected shortly.
118
The Appellate Division Decision
The Appellate Division overturned the verdict:
– Haddonfield Police Department was a relatively small group who
delighted in playing pranks, teasing, ribbing, and “breaking each
other’s chops.”
– Shreve’s one anti-Semitic comment was isolated, not directed at
Cutler, and not made by a supervisor.
– Until Shreve's comment, Cutler never objected or complained.
119
Lessons Learned
• Context matters.
• Plaintiff’s participation matters.
• Even though the Dorn case was a “legal” win,
the Employer lost time, money, morale,
attorneys’ fees and energy to defend the case!
120
Oral Argument
Court’s statements at argument seemed to focus
on:
– Cutler reached his breaking point so participation not
a defense.
– Intent of the speaker is not relevant.
– The jury got it right.
121
The Family & Medical
Leave Act
Proposed Regulation Changes
Presented by:
Patrick T. Collins
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
[email protected]
Department of Labor Rulemaking Process
• Request for Information (RFI) – December 1, 2006
– 15,000 comments
• Report on RFI – June 2007
• DOL’s Proposed Rule – February 11, 2008
– www.dol.gov/esa/whd/FMLANPRM.htm
• Public Comments – Closed April 11, 2008
123
Proposed FMLA Changes
• Q & A Format Eliminated
– Replaced by sections with subject matter headings
• Section restructured to allow easier access
–
–
–
–
Leave For Pregnancy or Birth
Employee Notice Requirements
Medical Certifications
Fitness For Duty Certifications
124
Proposed FMLA Changes
Employer Notice Requirements
• Consolidated employer notice requirements from
various existing sections into “one-stop” section
containing all employer notice obligations.
• Streamlines all notice requirements and clarifies
stages of the FMLA process at which certain
notices have to be provided.
• Extends timeframe that employers have to send
out notices – from 2 business days to 5
business days.
125
Proposed FMLA Changes
Ragsdale/Designation
• Eliminates categorical penalty invalidated in
Ragsdale.
• Clarifies employer responsibilities to designate
leave as FMLA leave prospectively.
• Clarifies that retroactive designation is permitted
absent a showing of individualized harm.
126
Proposed FMLA Changes
Employee Notice
• Modifies employee notice requirements for unforeseeable leave
to require employees to provide notice per employer’s usual &
customary call-in procedures, upon learning of need for leave.
– Exemption for emergencies.
– Employers have cited lack of advance notice (e.g., before
shift starts) of unscheduled absences – as unintended
consequence of current regulations.
• Defines what constitutes “sufficient information” that employees
must provide to put employer on notice of need for FMLA leave.
127
Proposed FMLA Changes
Medical Certification – Content & Clarification
• Streamlines process.
• Permits employers to directly contact employee’s health care
provider but only to authenticate and/or clarify certification.
• Employer may not ask for more information beyond what is on
certification form.
• Updates DOL’s optional Form WH-380.
• Allows – but does not require – health care providers to
provide diagnosis as part of certification.
• If medical certification is incomplete, employers must state in
writing what is lacking and give employee 7 calendar days to
cure.
128
Proposed FMLA Changes
Fitness-For-Duty Certifications
• 2 changes to process:
– Employer may require certification to address
employee’s ability to perform job’s “essential
functions.”
– Employer may be permitted to require employee to
furnish a fitness-for-duty certificate before employee
returns to work, when reasonable safety concerns
exist.
129
Proposed FMLA Changes
Substitution of Paid Leave
• Confirms – employers can maintain terms & conditions
associated with use of all forms of paid leave when
substituting it for unpaid FMLA leave.
• Current rule: terms & conditions apply to sick leave only.
• Proposed rule: include vacation, paid time off.
• Employee always entitled to unpaid FMLA leave.
130
Proposed FMLA Changes
Light Duty
• Clarifies that time spent performing “light duty” work
does not count against employee’s FMLA leave
entitlement and reinstatement rights.
• At least 2 courts have held that employee uses up 12week entitlement when working “light duty.”
131
Proposed FMLA Changes
Serious Health Condition
•
Retains current 6 definitions; adds guidance
for 2 terms:
1) “Continuing treatment”: 3 consecutive days
incapacity + 2 visits to health care provider:
period is 2 visits within 30 days.
2) “Chronic SHC”: Periodic visits for chronic
conditions: 2 visits/year.
132
Proposed FMLA Changes
Perfect Attendance Awards/Performance Based
on Goals
• Reconciles contradictory language within the
regulation.
• Confirms employer does not have to permit employee
who takes FMLA leave to qualify for a “perfect
attendance award IF –
• Employees taking non-FMLA leave are treated in an
identical manner.
133
Proposed FMLA Changes
Continuous Service
• 12 months of employment need not be consecutive.
• Employment prior to 5-year break in service need not be
counted.
• FMLA requires employers to maintain records for 3
years.
– Burden of proof on employee
• Exceptions to 5-year rule:
– Military service
– Collective bargaining agreement
134
Proposed FMLA Changes
Waiver of Rights
• Reinforces longstanding DOL position that employees
may voluntarily settle FMLA claims without court or DOL
approval or supervision.
• Clarification needed due to recent 4th Circuit decision
interpreting current regulations as prohibiting employees
from prospectively or retroactively waiving rights.
• Prospective waivers remain prohibited.
135
Proposed FMLA Changes
Military Family Leave Changes
•
Public Law 110-181 amended FMLA – 2 new leave entitlements:
1)
Eligible employees can take up to 26 workweeks of leave to
care for covered servicemember with serious illness, injury.
2)
Or may take leave for “qualifying exigency” due to
servicemember on active duty or called to active duty status.
•
Provision 1) went into effect on signing – 1/28/2008.
•
Provision 2) dependent on DOL’s issuing regulation defining
“qualifying exigency”.
•
DOL is seeking comment on issues arising from statutory
changes, to quickly & fully implement them in a final rule.
136
Questions &
Answers
2008 Hot Topics in
Labor & Employment Law
Presented by:
Labor & Employment Group
Norris McLaughlin & Marcus, P.A.
Somerville, NJ 08876-1018
908-722-0700
www.nmmlaw.com