Labor & Employment Newsletter - Spring 2012
Court Order Indefinitely Delays Implementation of NLRB Notice Posting Requirement
By: David M. Stevens
In the latest development of the ongoing drama surrounding the National Labor Relations Board’s mandate that all employers covered by the National Labor Relations Act must post a notice of employee rights under the law, the U.S. Court of Appeals for the District of Columbia Circuit has issued an order staying implementation of the posting requirement, which had been set to take effect on April 30, 2012. This article examines the controversy surrounding the posting requirement and the impact of the D.C. Circuit’s decision.
As regular readers of this newsletter are aware, on August 30, 2011 the National Labor Relations Board (“NLRB”) took the unprecedented step of issuing a regulation requiring that all employers subject to the National Labor Relations Act post a notice summarizing the rights of employees under the statute. The notice consists of a summary of the rights established by the NLRA, including the right of employees to form a union and engage in other collective activities to seek improved terms of employment, and also describes certain employer conduct which is unlawful under the NLRA. The notice explicitly encourages employees to contact the NLRB if they believe a violation of the law has occurred.
When the NLRB first announced the posting requirement, the deadline for employers to post the notice was set for November 14, 2011. The NLRB’s action immediately became the subject of multiple court challenges, however, and the Board therefore pushed the effective date back to January 31, 2012. The Board later delayed the implementation date a second time, to April 30, 2012.
The U.S. District Court for the District of Columbia, considering a challenge to the posting requirement filed by a coalition led by the National Association of Manufacturers, issued a ruling on March 2nd upholding the NLRB’s authority to require employers to post the notice. Yet the court found that a related portion of the rule -- declaring that the failure to post the notice would itself be considered an unfair labor practice -- exceeded the NLRB’s authority.
Just over a month later, the U.S. District Court for South Carolina issued its own decision on a parallel challenge to the posting requirement by a coalition including the U.S. Chamber of Commerce. That court broke from the D. C. District Court by finding the posting requirement itself to be beyond the NLRB’s statutory authority.
While the South Carolina case was still pending, the groups leading the challenge to the law in the District of Columbia sought an emergency injunction from the U.S. Court of Appeals for the D.C. Circuit to stay the notice posting requirement pending resolution of an appeal of the District Court’s decision. On April 17, the Court of Appeals granted an injunction to keep the notice posting requirement from taking effect.
In a subsequent press release, the NLRB acknowledged that “In view of the DC Circuit's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court.” It is clear, however, that the NLRB does not intend to abandon the notice posting issue in the wake of the adverse rulings, with NLRB Chairman Mark Gaston Pearce quoted in the release as stating that, “We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.”
Takeaway for employers: The legal wrangling concerning the NLRB notice posting requirement appears to be far from finished. The D.C. Circuit’s decision, however, ensures that employers do not need to post the notice by the previously announced April 30, 2012 deadline, and can instead wait to see how the challenges to the posting requirement are dealt with by the courts. Future issues of this newsletter will continue to track these cases.
Maryland Legislature Passes Bill Prohibiting Employers from Requesting Social Media Passwords
By: David M. Stevens
During the recently completed legislative session, the Maryland General Assembly became the first state legislature in the country to pass legislation prohibiting employers from requesting access to employees’ and job applicants’ personal computer accounts, most notably Facebook and other social media accounts. This article examines the effects the law will have on how Maryland employers handle hiring decisions and internal investigations.
In recent months, numerous media outlets have presented reports of instances in which job applicants have been requested to provide potential employers with the passwords to their social media accounts in the course of the hiring process, including being asked to log onto personal Facebook pages during job interviews. Although there is considerable doubt as to whether this practice has become widespread, the attention resulting from these reports spurred a number of legislative efforts to restrict the circumstances in which an employer can require an applicant or employee to grant the employer access to his or her personal computer accounts.
Late in its 2012 legislative session, Maryland’s General Assembly became the first state legislature in the county to pass a bill addressing this topic. Barring a veto of the legislation by Governor Martin O’Malley, the new legislation will take effect October 1, 2012.
The bill creates a general rule that “an employer may not request or require that an employee or applicant disclose any user name, password, or other means for accessing a personal account or service through an electronic communications device.” The bill is thus quite broad in scope, as it bars any request for access to the personal accounts of either an applicant or an employee. The act further provides than an employer may not “discharge, discipline, or otherwise penalize or threaten to discharge discipline, or otherwise penalize” an employee for refusing to disclose information relating to personal accounts. This same prohibition applies to the refusal to hire applicants who refuse to provide such information.
The most obvious effect of the bill will be to eliminate the disclosure or use of information posted to password-protected computer accounts, such as an applicant’s private Facebook page, during the hiring process. Perhaps of even greater concern for employers, however, is that the bill contains only very limited exceptions to the general rule regarding the accessing of such information in the course of workplace investigations. The bill provides that its language shall not be construed as preventing (i) investigations by an employer “for the purpose of ensuring compliance with applicable securities or financial law, or regulatory requirements” where the employer has received a report of an employee’s use of a personal website or online account for business purposes, or (ii) investigations regarding unauthorized downloading of an employer’s proprietary information or financial data.
Notably absent from these exceptions is a provision that would generally permit employers to request access to personal accounts in the course of workplace investigations unrelated to disclosures of the employer’s confidential data, such as in a situation where an employee claims that another employee is using social media to engage in sexual or other harassment. In investigating such claims, Maryland employers will now need to be cognizant of the restrictions on obtaining information relating to such activities via a request to the employees involved for passwords or other access to restricted accounts.
Takeaway for employers: Assuming that this bill is signed by Governor O’Malley and takes effect October 1, 2012, Maryland employers will be barred from requiring applicants to turn over passwords to social media or other online accounts during the hiring process. Employers will likewise be barred from requesting access to such accounts in the course of most investigations of workplace misconduct. Employers will need to evaluate their operating procedures to ensure compliance with these new requirements, and will likewise need to consider alternative steps for gathering necessary information in the course of investigations into workplace misconduct.
Fourth Circuit Holds That Internal FLSA Complaint Can Support Retaliation Claim
By: Kevin C. McCormick
In a recent decision, the United States Court of Appeals for the Fourth Circuit held that an employee’s internal complaint to company management about possible wage-hour violations may be protected under the Fair Labor Standards Act’s anti-retaliation provisions. The Fourth Circuit reversed the decision of the trial court, which had dismissed the case based on its finding that the informal complaints were not protected under the FLSA. This article examines the facts of this important case, as well as the significant implications for employers.
The plaintiff in the case, Cathy Minor, worked for Bostwick Laboratories, Inc. as a medical technologist. According to her Complaint, Minor and several other members of her department met with Bostwick’s chief operating officer (COO) on May 6, 2008. The purpose of the meeting was to call to the COO’s attention the fact that Minor believed her supervisor had willfully violated the FLSA. Specifically, Minor informed the COO that her supervisor routinely altered employees’ timesheets to reflect that they had not worked overtime when they had. At the conclusion of the meeting, the COO told the group that he would look into the allegations.
The following Monday, Bostwick terminated Minor’s employment. Minor was told that the reason for her termination was that there was “too much conflict with her supervisors and the relationship just was not working.” When Minor further questioned the rationale behind her termination, she was told that she was “the problem.”
Minor filed an action against Bostwick alleging that her termination was in retaliation for her having engaged in protected activity under the FLSA’s anti-retaliation provision. The alleged protected activity consisted of Minor’s report to the COO concerning the alteration of the timesheets and the resulting lack of overtime pay. Minor sought compensatory damages, punitive damages and attorneys’ fees.
Bostwick moved to dismiss Minor’s claim. The trial court framed the issue as whether an employee’s intra-company complaint regarding possible FLSA violations by her employer qualifies as protected activity under the FLSA. The trial court found that it did not, in large part because the plain language of the statute indicated that a formal official proceeding was required to invoke the clause’s protection. As a result, the trial court dismissed Minor’s claim.
The Appellate Decision
According to the Fourth Circuit, the sole question presented by the appeal was whether an employee’s compliant lodged within her company, as opposed to a complaint filed with a court or government agency, may trigger the protection of the FLSA’s anti-retaliation provision. Finding that the issue was of first impression in the Fourth Circuit, the court then carefully reviewed statutory language, as well as relevant case law addressing this issue.
Under Section 215(a)(3) of the FLSA, it is unlawful for a covered employer to “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding.”
In her appeal, Minor contended that an employee who complains of FLSA violations to her employer is protected because she has “filed any complaint” within the meaning of the statute. In support of her position, Minor relied on a recent Supreme Court decision, Kasten v. Saint-Gobain Performance Plastics Corp., 131 S.Ct. 1325 (2011).
In Kasten, the Supreme Court found that an employee did not have to file a formal written complaint with the U.S. Department of Labor in order to be entitled to the anti-retaliation provisions of the FLSA.
In considering the applicability of Kasten on Minor’s claim, the Fourth Circuit found that while the reasoning in Kasten was persuasive, it was not directly controlling. According to the court, in Kasten the Supreme Court considered whether an employee’s oral complaint to his employer qualified as protected activity. In so doing, the Supreme Court looked at the text of the statute, focusing on the word “filed.” It concluded upon review that the word “filed” did not unambiguously require a writing.
The Supreme Court also looked at Congress’ intent in drafting Section 215(a)(3). It concluded that Congress intended the anti-retaliatory provision to cover oral complaints based in large part on the FLSA’s remedial purpose requiring a broad interpretation to achieve its basic objectives. The court also considered the positions of the Secretary of Labor and the EEOC that oral complaints are protected activity within the meaning of the FLSA.
The Supreme Court did, however, stress that an employer needed fair notice as to when a complaint had been filed and held that “to fall within the scope of the anti-retaliatory provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.”
Significantly, in Kasten, the Supreme Court declined to address the question of whether an intra-company complaint could qualify as protected activity under the FLSA. The Supreme Court did, however, state that “insofar as the anti-retaliation provision covers complaints made to employers,” limiting the scope of protected activity to written complaints would “discourage the use of desirable informal workplace grievance procedures to secure compliance” with the FLSA.
In reaching its conclusion that Minor’s oral complaints to the COO could be protected under the FLSA, the Fourth Circuit emphasized that it did not intend that every employee complaint would constitute protected activity. To the contrary, according to the Fourth Circuit, the statute requires fair notice to employers.
Thus, to protect employers from unnecessary uncertainty, some degree of formality is required for an employee complaint to constitute protected activity—certainly to the point where the employer has been given fair notice that a grievance has been lodged and does, or should, reasonably understand that matter to be part of its business concerns. Therefore, the Fourth Circuit directed that the proper standard to be applied was whether Minor’s complaint to her employer was sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and to call for its protection.
In this case, Minor’s allegations met that standard. The facts as alleged by Minor indicated that she expressed her concerns regarding FLSA violations to the COO in a meeting specifically called for that purpose. Minor also alleged that the COO agreed to investigate her claims, indicating that the COO had a clear and detailed understanding of the issues.
While the court opined that it expressed no view as to whether Minor should ultimately prevail on her claims, in reversing the trial court’s decision, the Fourth Circuit found that her allegations were sufficient to survive summary dismissal and proceed to trial. (Minor v. Bostwick Laboratories, Inc., 669 F.3d 428 (4th Cir. 2012))
Takeaway for employers: This is a significant decision for employers in Maryland (and other states encompassed by the Fourth Circuit) who must now tread carefully in responding to any oral complaints raised by employees alleging FLSA violations. Prior to Kasten, and now Minor, it was well-settled in the Fourth Circuit that in order to be protected under the FLSA’s anti-retaliation provisions, the employee needed to file a complaint alleged FLSA violations with the Department of Labor. Kasten held that an oral complaint was sufficient. Now, under Minor, an employee need not even file an oral complaint with the DOL or any other appropriate agency.
To be sure, under Minor and Kasten, the employee must specifically complain about FLSA violations such that the employer understands the nature of the complaint. However, as long as the employee includes the initials “FLSA” in his or her oral complaints, it would be prudent to consider such a complaint as protected under Section 215(a)(3) of the FLSA, and to avoid taking any actions that could constitute retaliation against that employee.