Labor & Employment N.Y. ("LENY")

The Public Sector Labor Relations Committee is sponsoring a basic-to-intermediate level program that is designed to provide an in-depth look at important current issues that continue to dominate the public discourse vis-a-vis public sector labor relations. The CLE program will be held in Syracuse on May 30, 2012, NYC on June 8, 2012, and Albany on June 13, 2012. The Albany program will also be available via live webcast. The topics that will be addressed are:

1) Patient Protection and Affordable Care Act: What Public Employers and Labor Need to Know

2) Social Media and the Employment Relationship

3) Current Developments in the Collective Bargaining Process (including Effects of the Real Property Tax Cap)

4) The Future of Public Sector Pensions: Where We Are and What Next

5) Ethical Issues in Workplace Investigations

The program has been approved for a total of 5.0 credit hours for ALL attorneys (both experienced and newly admitted), consisting of 4 credit hours in areas of professional practice and/or practice management, and 1 credit hour in ethics.

To view the program brochure and register online for any of the programs, please visit Syracuse Program, NYC Program, or Albany Program.

On March 20, 2012, the U.S. Supreme Court held that States retain their sovereign immunity and cannot be subjected to lawsuits by employees alleging violations of the self-care provision of the Family and Medical Leave Act of 1993 ("FMLA"). The case - Coleman v. Court of Appeals of Maryland (No. 10-1016) - centers around a lawsuit filed by an employee of the Maryland Court of Appeals (an instrumentality of the State of Maryland) who, after requesting time off to take care of his own health issues, was informed that he would be fired if he did not resign.

The FMLA entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave per year for certain specified family and medical reasons. One of those reasons, referred to as the "self-care" provision, permits for the use of such leave when an employee's own serious health condition interferes with the employer's ability to perform at work. Under the FMLA, eligible employees have a private right of action against their employer for violation of their FMLA rights.

The Supreme Court, by a 5 to 4 plurality vote, affirmed the decision of the Fourth Circuit and concluded that the abrogation of State sovereign immunity through the FMLA's self-care provision was not a valid exercise of congressional power under the Fourteenth Amendment. Justice Kennedy, who joined the Court's more conservative bloc of justices and who wrote the Opinion of the Court, concluded: "To abrogate the State's immunity from suits for damages under §5 [of the Fourteenth Amendment], Congress must identify a pattern of constitutional violations and tailor a remedy congruent and proportional to the documented violations. It failed to do so when it allowed employees to sue States for violations of the FMLA's self-care provision."

In its 2003 decision in Nevada Dept. of Human Resources v. Hibbs, the Court held that Congress could subject the States to suit for violations of one of the so-called family-care provisions (which grant leave for reasons related to the care of a family member with "a serious health condition"). But Justice Kennedy distinguished the self-care provision from that family-care provision, explaining that the holding in Hibbs "rested on evidence that States had family-leave policies that differentiated on the basis of sex and that States administered even neutral family-leave policies in ways that discriminated on the basis of sex." Unlike evidence supporting the enactment of the family-care provisions of the FMLA - namely a pattern of state constitutional violations and evidence of sex discrimination or sex stereotyping in the administration of sex leave - the legislative history of the self-care provision "reveals a concern for the economic burdens on the employee and the employee's family resulting from illness-related job loss and a concern for discrimination on the basis of illness, not sex." Thus, since Congress did not pass the self-care provisions to counter sex discrimination in granting leave due to an employee's own illness or incapacitation, the right to sue a state should not extend to violations of the self-care provision.

Justice Ginsburg, who read her dissenting opinion from the bench, argued that the plurality paid little attention to the "overarching aim of the FMLA: to make it feasible for women to work while sustaining family life." Highly critical of plurality's decision, the four dissenting justices maintain "[i]t would make scant sense to provide job-protected leave for a woman to care for a newborn, but not for her recovery from delivery, a miscarriage, or the birth of a stillborn baby."

Despite its critics, Coleman appears to be a fairly narrow decision, applying only to the self-care provision and only with regard to such lawsuits against states. Money damages under the self-care provision are still permitted against private employers.

This post was authored by Seth Greenberg of Greenberg Burzichelli Greenberg P.C.

On February 29, 2012, the New York State Senate passed Bill S60631-2011, which would eliminate the annual notice requirement under the New York State Wage Theft Prevention Act, which we discussed in a prior post.  The Bill does not add text to the Wage Theft Prevention Act, and keeps intact the notice requirements for new hires, but deletes the language regarding the requirement that such notices be provided "on or before February first of each subsequent year of the employee's employment with the employer...." 

The Bill was introduced by Senator DeFrancisco on January 4, 2012.  The Senate Memo summarizing the Bill explains, as its justification, that the annual notice requirement "imposes a new administrative cost on every private sector employer in the state, with aggregate costs in the millions of dollars, and will do little to improve overall compliance with the state's wage laws. The Department of Labor has conceded that wage compliance is an issue for only a small percentage of New York State employers, despite the universal application of this annual notice requirement. This type of annual notification requirement should be reserved for instances where non-compliance has been an issue, however, as an across the board measure, it will add costs and provide little if any additional benefit.  Moreover, this modification to the WPTA leaves in place its most significant reforms intended to assure payment of all wages earned by employees."

Now that the Bill has passed the Senate, it has been delivered to the Assembly, where an identical bill (A08856) is pending, and if passed by the Assembly, will be presented to the Governor for signature.  New York employers should stay tuned for further developments on this Bill. 

This post was authored by Matt Lampe and Joseph Bernasky of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association. 

In Ryan v. Kellogg Partners Institutional Services, No. 37 (3/27/2012), the New York Court of Appeals affirmed a decision of the First Department, Appellate Division which affirmed a jury verdict that enforced an oral assurance given by a financial services managing partner to a new employee recruited from a competitor. Plaintiff Ryan, who had been earning approximately $270,000.00 in salary and bonus, was convinced to leave his position and join Defendant Kellogg, a financial industry start-up. Ryan told Kellogg that if he left his current employer he would be leaving his earned bonus (of $175,000) on the table; in response, Kellogg's managing partner assured him "this would not be a problem." Kellogg asked Ryan if he would be willing to split the bonus payment over two years to which Ryan agreed. Shortly after their initial conversation, Ryan signed an employment application with an "employment-at-will" clause and Kellogg claims that it distributed an employment manual with a similar "employment-at-will" provision. Later, when the time for the bonus payment became due, Kellogg asked Ryan if he would agree to accept a bonus payment deferred into the following year. According to the Court, "Ryan replied that he 'wasn't very happy about it,' but would 'take one for the team' and take the guarantee for the 2004 year instead of 2003." Ryan claims to have discussed the bonus situation "many times" with the managing partner and the compliance department, during which he was told to "relax," Kellogg was "going to get [to] the bonuses soon." Unfortunately, "soon" never came for Ryan, who was discharged allegedly for insubordination and disparagement of Kellogg. Ryan refused to sign the Uniform Termination Form U-5 and ended up suing Kellogg for failure to pay wages in violation of Labor Law §§ 190-198 and for breach of contract. The Supreme Court sent the case to a jury which found the oral assurances of a guaranteed bonus were made, that the bonus was not "discretionary," that the employment-at-will reservations were irrelevant to compensation promised to Ryan before he signed the application, and that Ryan was entitled to attorneys' fees under the Labor Law. The jury, however, did not find that Kellogg's refusal to pay the bonus was willful, depriving Ryan of liquidated damages under the Labor Law. The Court, affirming the Appellate Division and lower court, rejected Kellogg's argument that the oral compensation agreement was barred by the statute of frauds included in the General Obligations Law. Further, it distinguished other long-standing New York precedent enforcing employment-at-will provisions to bar an employee's recovery on breach-of-contract claims, zeroing in on the inartfully drafted clauses Kellogg relied on in this case, which lacked any language retaining the employer's discretion over bonus compensation.

As employers continue to grapple with use of social media by employees for business, for pleasure, and in and outside the workplace, the National Labor Relations Board (the "Board") has issued another report on social media cases (Memorandum OM 12-31), updating a prior report (Memorandum OM 11-74), which we discussed in an earlier post.  In its news release on the updated report, the Board offers two key take-aways: 

1.            "Employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees."

2.            "An employee's comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees."

The updated report covers 14 cases in total, which involve disciplinary action, including discharges, for employee social media activity.  The conclusions in the report demonstrate the fact-specific nature of an inquiry into whether an employer is enforcing its social media policy in a discriminatory manner, which essentially turns on whether the social media activity that is regulated through the policy is group activity protected by Section 7 of the National Labor Relations Act ("NLRA"), as opposed to individual activity (or "gripes" as they are sometimes referred to in the report).  Of the 14 cases discussed in the report, seven address whether the employer's social media policy was lawful on its face, and five of the policies addressed were found to be unlawfully broad for one reason or another.  Although the Board's news release offers the two main take-aways noted above, there are several other issues and pitfalls addressed in the report that employers need to be aware of when drafting a social media policy:

·        Non-Union Employees.  Both union and non-union employees' social media activities are protected by the NLRA.  The report makes no distinction between union and non-union employees in analyzing whether a social media policy is lawful on its face or in its application. 

·        Disparaging Comments.  The report considers several examples of policies prohibiting disparaging comments in one way or another, such as general prohibitions on "defamatory" language, "inappropriate conversations," or using "unprofessional communications," or requiring social media communications to be "professional."  The report emphasizes that these types of blanket prohibitions can chill employees in the exercise of their rights under Section 7 of the NLRA to "engage in ... concerted activities for the purpose of collective bargaining or other mutual aid or protection," and were therefore found to be unlawful.  For example, the Board held that a rule prohibiting "[m]aking disparaging comments about the company through any media, including online blogs, other electronic media or through the media" would reasonably chill Section 7 rights because it could reasonably be construed to prohibit an employee from criticizing the employer's pay practices, and did not include any limiting language or examples of prohibited commentary.  Of course, a social media policy still needs to be consistent the employer's policies against harassment and discrimination, which is where limiting language, an issued discussed below, comes into play.   

·        Confidential Information.  The report's conclusions on prohibitions on discussing "confidential information" illustrate the careful balance that must be struck between an employer's duty or desire to protect certain information, such as trade secrets, non-public financial information, protected personal information, and the like, on the one hand, and an employee's right to discuss terms and conditions of employment, such as wages, on the other hand.  One policy addressed by the report prohibited employees from disclosing or communicating information of a confidential, sensitive nature, or non-public information concerning the company on or through company property to anyone outside the company without prior approval of senior management or the law department.  The policy was found unlawful because it did not define confidential, sensitive, or non-public information and could therefore reasonably be construed to prohibit employee from discussing matters such as wages and working conditions, which may be non-public but are discussions protected by the NLRA.  Again, limiting language and explanatory definitions can remedy the issue.

·        Company Name, Logo, & Marks.  Many organizations seek to limit the use of their company name, logo, and trade or service marks, but the report makes clear that employees have a Section 7 right to use their employer's name or logo in conjunction with protected concerted activity, such as communicating with co-workers or the public in general about a labor dispute.  Accordingly, a policy prohibiting the use of the company name or service mark outside the course of business without approval of the law department was held unlawful. 

·        Media Communications.  Restrictions on communications with the media can be another difficult area to navigate.  The report explains that employees have the right to communicate with the public regarding an on-going labor dispute, and that for this reason blanket prohibitions on communicating with the media or requiring prior authorizations will be held to be unlawfully overbroad. 

·        Identifying the Employment Relationship.  The report found a policy that required that employees always identify themselves as the employer's employees on social media and state that their views were their own when posting about job-related matters was both (1) unlawfully overbroad, because the Board views personal profile pages as an important function in enabling employees to communicate on social media with co-workers at their own or other locations (although the Board does not explain how the policy impeded this function), and (2) unlawfully burdensome on Section 7 communications because it required employees to repeat that their views are their own in every communication.  In the context of another policy, however, the Board recognized that employers need to carefully navigate between allowing communications protected under the NLRA and the Federal Trade Commission's guidelines on endorsements and testimonials,  pursuant to which individuals who have a relationship to a company, such as employees, must disclosure that relationship when discussing the company's products or services or those of its competitors.  Thus, the Board found lawful a policy that required employees to state that their views were their own and not those of the employer when discussing "promotional content" via social media, and defined "promotional content" as communications designed to endorse, promote, sell, advertise or otherwise support the employer and its products and services, referring to the Federal Trade Commission's regulations. 

·        Savings Clauses.  Although the report emphasizes that limiting language can cure overbroad language in a social media policy, a general savings clause may be insufficient to render a social media policy lawful under the NLRA.  For example, one policy discussed in the report stated that "in external social networking situations, employees should generally avoid identifying themselves as the Employer's employees, unless there was a legitimate business need to do so or when discussing terms and conditions of employment in an appropriate manner."  The Board found the policy unlawful because it did not define or explain what was "appropriate," either through specific examples or limiting language, which could chill employees from criticizing the employer's labor policies, treatment of employees, or other terms and conditions of employment.  The policy had a savings clause that provided that the policy would not be interpreted or applied so as to interfere with employee rights to self-organize, form, join, or assist labor organizations, to bargain collectively though representatives of their choosing, or to engage in other concerted activities, or to refrain from engaging in such activities.  The Board concluded that an employee could not reasonably be expected to know that this language encompassed discussions the employer deemed "inappropriate" and thus the savings clause was insufficient to render lawful the otherwise overbroad policy. 

·        Limiting Language and Examples.  Although the report includes several examples of overbroad policies, it also includes examples of lawful policies that restrict social media communications on the above-discussed topics, but included limiting language or examples, which kept the policy within the bounds of the NLRA.  For example, a policy that prohibited social media communications that are vulgar, obscene, threatening, intimidating, harassing, or a violation of company policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status or characteristic, was held lawful because it provided examples of the egregious conduct it prohibited.  Similarly, a policy that prohibited employees from using or disclosing confidential and/or proprietary information was found lawful where it defined confidential and/or proprietary information as including personal health information about customers or patients, and "embargoed information" such as launch release dates and pending reorganizations.  The report explains that the limiting language and examples made clear that the policy was intended to protect the employer's legitimate interest in keeping certain information confidential and the privacy interests of the customers, and the prohibitions would not reasonably be understood to restrict communications protected under Section 7 of the NLRA. 

Appropriate policing of employees' social media activities is necessary given the speed at which online communications are spread, and the potential impact that such communications may have on an employer's operations and reputation.  To be sure, there are a host of legal and business concerns that need to be addressed in a comprehensive social media policy, but the two Board reports are a helpful starting place for employers looking to create or amend social media policies.   

This post was authored by Matt Lampe, Joseph Bernasky, and Michele Bradley of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

It is common to see individuals named as defendants in discrimination cases brought under New York State or New York City law. Unlike Title VII, which does not provide for individual liability according to the Second Circuit (Tomka v. Seiler Corp., 66 F.3d 1295, 1317 (2d Cir. 1995), abrogated on other grounds by Burlington Indus. v. Ellerth, 524 U.S. 742 (1998), both the New York State Human Rights Law and the New York City Human Rights Law provide one or more bases upon which an individual can be held liable for discriminatory conduct.

The issue of individual liability under the State law was recently the focus of a decision by District Judge J. Paul Oetken in Robinson v. Gucci America, et al., 11-CV-3742 (February 9, 2012). In Robinson the Plaintiff, a tax attorney for Gucci, accused the company and several executives, including Matteo Mascazzini, Gucci's Associate President, of several violations of State and Federal discrimination law, including sex, race, national origin and disability discrimination, and retaliation, in connection with her termination of employment. According to the Complaint, Robinson alleged that she had been subjected to sexual harassment by her supervisor "almost from the time she started at Gucci", and that her complaints to Human Resources went unheeded. After several run-ins with Human Resources and other executives, Robinson was placed on the first of two administrative leaves that Gucci directed.

Up to this point, there is no mention of wrongdoing by Mascazzini in the Complaint, a not unsurprising development, given his position as Associate President. Mascazzini became involved, however, upon Robinson's return from her first administrative leave, when Robinson was told to report to a different work location, in New Jersey. When Robinson demurred, Mascazzini directed her to report to New Jersey, and it was this instruction that formed the basis of her claim that Mascazzini retaliated against her under the "aiding and abetting" theory of liability found in the New York State Human Rights Law.

In moving to dismiss the claim against him, Mascazzini conceded for the purpose of the motion that the move to New Jersey constituted an adverse employment action. Nor did he dispute that Robinson engaged in protected activity. Instead, Mascazzini focused on the absence of any allegation in the Complaint that he had knowledge of Robinson's alleged prior protected conduct; therefore, he could not have "retaliated" against her for engaging in that protected conduct.

Citing the "plausibility" standard for determining dismissal motions (that a Plaintiff must plead sufficient facts to state a claim to relief that is plausible on its face), the Court rejected Mascazzini's argument, and denied his dismissal motion. The Court was persuaded by several factors: (1) that Robinson was not licensed to practice in New Jersey, and told this to Mascazzini; and (2) that Robinson told Mascazzini at their meeting that she was being retaliated against. According to the Court, these factors lead to the conclusion that there was "no logical reason" for the direction to work in New Jersey, and that such a circumstance "constitute[s] strong evidence of an intent to discriminate." Thus, based on the pleadings, the Court determined that a reasonable inference that Mascazzini aided and abetted retaliation could be drawn.

The decision provides a cautionary tale for executives one or two levels removed from direct supervsion of an employee turned plaintiff. Presumably, had Mascazzini not inserted himself into the dispute by directing Robinson to report to the New Jersey location, either he would not have been named a defendant, or the Court would have dismissed the claim against him. Mascazzini can take some comfort, however, in the fact that the decision was rendered only at the pleading stage, and that Robinson still has the burden of proving to a jury that he unlawfully retaliated against her.

            The Second Circuit Court of Appeals recently ruled that telecommuting is a potential reasonable accommodation under the Americans with Disabilities Act ("ADA") and the Rehabilitation Act.  Although new technologies have made telecommuting more commonplace, not all employers have embraced the work-from-home concept.  The Second Circuit's recent opinion, as well as recently proposed and enacted telework legislation, highlight that employers cannot ignore telecommuting, and should consider the myriad legal issues that telecommuting presents, including wage-and-hour liability, privacy and data protection concerns, workplace safety, and other obligations. 

The Second Circuit's Opinion on Telecommuting as a Reasonable Accommodation

            In Nixon-Tinkelman v. N.Y. City Dep't of Health & Mental Hygiene, No. 10-3317-cv, 2011 WL 3489001 (2d Cir. Aug. 10, 2011), the plaintiff suffered from several physical ailments including cancer, heart problems, hearing impairment, and asthma.  The plaintiff had worked at the New York City Department of Health and Mental Hygiene ("DOHMH" or the "Department") since 1984 and had worked out of DOHMH's Queens office for 21 years as a Regional Director.  In January 2006, she was transferred to the Department's Manhattan location.  The transfer resulted in a longer and more difficult commute for Ms. Nixon-Tinkelman.  As a result, she requested, as an accommodation for her disability, to be reassigned to a "work location closer to home in order to reduce the stress and anxiety associated with the hour and a half commute each way every day."  Representatives from the Department met with Ms. Nixon-Tinkelman to discuss possible alternative assignments.  DOHMH concluded that one of the assignments in which Plaintiff expressed an interest was "inappropriate" because the job required extensive travel and therefore would not resolve Ms. Nixon-Tinkelman's commuting issue.  DOHMH further concluded that Ms. Nixon-Tinkelman's suggestion of a transfer to the Department's Pest Control Office in Queens was not a "viable" option.  Because the Department believed that there was no suitable reassignment that could be made within the organization to accommodate Ms. Nixon-Tinkelman, they denied her request.  Ms. Nixon-Tinkelman filed suit under the ADA and sections 501 and 504 of the Rehabilitation Act, alleging that the Department failed to make a reasonable accommodation.

            Under the ADA and Rehabilitation Act, an employer has an affirmative duty to provide a reasonable accommodation when it is aware that an employee has a qualifying disability that prevents the employee from performing essential job functions, so long as the accommodation does not unduly burden the employer.  Granting summary judgment for the defendant, the Southern District of New York ruled that commuting was beyond the scope of the plaintiff's job, and "not within the province of an employer's obligations under the ADA and the Rehabilitation Act."  The Second Circuit reversed, relying on two prior cases in which the Second Circuit ruled that an employer might have an obligation to assist with an employer's commute:  Lyons v. Legal Aid Soc'y, 68 F.3d 1512 (2d Cir. 1995); and DeRosa v. Natl's Envelope Corp, 595 F.3d 99 (2d Cir. 2010). 

            In Lyons, the Second Circuit reversed the dismissal of an ADA claim alleging that Plaintiff's employer failed to accommodate her request for a parking space near her office.  The district court dismissed the case on the ground that the accommodation requested by Lyons was unreasonable as a matter of law; however, on appeal, the Second Circuit ruled that the complaint stated a claim on which relief could be granted, holding that "there is nothing inherently unreasonable . . . in requiring an employer to furnish an otherwise qualified disabled employee with assistance related to her ability to get to work."  In DeRosa, the Second Circuit suggested that permitting a disabled employee to work from home was a reasonable accommodation.  The DeRosa court vacated an award of summary judgment for the employer, in which the district court ruled that the plaintiff was judicially estopped from bringing an ADA claim.  In so doing, the Second Circuit did not question the reasonable accommodation--working from home--that the Plaintiff sought.  The Nixon-Tinkelman court's reliance on DeRosa implies that the Second Circuit interprets the decision as standing for the proposition that working from home can be a reasonable accommodation.

            In Nixon-Tinkelman, the Court of Appeals explained that the determination of whether an accommodation is "reasonable" must be made on a case-by-case basis and remanded the case back to the trial court to conduct the required "fact-specific inquiry."  The Second Circuit made clear that employers cannot categorically deny requests for an accommodation to work from home or to receive other commuting accommodations.  Rather, employers must assess the circumstances of such requests on an individualized basis as they would with any other request for an accommodation.  The Second Circuit suggested a non-exhaustive list of factors for the trial court to use in evaluating the reasonableness of a potential accommodation, such as:

·        The number of individuals employed by the employer;

·        The number and location of the employer's offices;

·        Whether other available positions existed for which the employee was qualified;

·        Whether the employee could have shifted to a more convenient office without unduly burdening the employer's operations; and

·        The reasonableness of allowing the employee to work from home without on-site supervision.

The Second Circuit further provided illustrative examples of commuting accommodations that the district court should consider, including whether DOHMH could: (1) transfer Ms. Nixon-Tinkelman back to Queens, (2) permit her to work from home, or (3) provide her a car or parking permit to minimize the burden of her commute and make it easier for her to travel to and from her doctor's appointments.

Recent Legislative Initiatives to Increase the Availability of Telecommuting

            The Second Circuit's decision is in line with a recent trend favoring telecommuting.  On December 9, 2010, President Obama signed into law the Telework Enhancement Act, which gave federal agencies a six-month window of time to establish a telework policy and notify employees of their eligibility under the policy.  The new law requires each agency to implement a telework policy, designate a telework managing officer to oversee the agency's telework program, and ensure continuity-of-operations planning, particularly when employees' commutes are affected by inclement weather.  Several states, including Connecticut, Florida and Virginia, have also recently implemented or proposed legislation regarding telecommuting.  For example, New Jersey has proposed legislation that provides private sector tax incentives for certain business telecommuting program development and implementation costs and a separate bill that requires state agencies to adopt telecommuting programs.  In June 2010, Connecticut enacted a law to develop and implement telecommuting guidelines for state employees with the goal of having a positive effect on worker efficiency, the environment, and traffic congestion.  In New York, legislation has been proposed to require public employers to establish policies and programs allowing public employees to perform all or a portion of their duties remotely (see, e.g., A00206 / S 1381) as well as establishing tax credits for employers who enact policies to encourage teleworking (see S 2065).  This wave of legislative activity, along with the Second Circuit's recent opinion, provide a good opportunity for employers to consider the legal, operational, and administrative issues related to telecommuting.

Wage-and-Hour Concerns Arising from Telecommuting

            The Nixon-Tinkelman decision acknowledges that lack of supervision may pose difficultly in allowing an employee to work from home.  This may be particularly true for non-exempt employees.  Aside from the more obvious concern of some employers about a loss of productivity absent on-site supervision, there is also a converse risk that overzealous non-exempt employees would work "off-the-clock," i.e., engage in work without reporting their time, absent on-site supervision.  In the work-from-home context, where the ability of employers to monitor an employee's activity is limited, allegations of violations of federal and state wage and hour laws for such off-the-clock work may prove more difficult to refute than those brought by employees who work at an employer site under direct supervision.  Given this reality, it is important for employers to have specific, well enforced wage and hour policies governing work-from-home employees. 

Privacy and Data Security Concerns Arising from Telecommuting

            In addition, employees who do work from home are most likely able to do so via remote electronic access to the employer's network, which can raise  a whole host of concerns over the privacy and security of personal information and confidential company information that the employee may be able to access remotely: 

·        Whether the remote access to the employer's network will be made via secure connection, which decreases the risk of a security breach while information is in transit, and whether employees will be able to download files directly to their personal computer, reducing the employer's ability to protect the security of those files. 

·        Whether the employee will be using a company-issued computer or a personal computer.  Employee-owned computers increase security risks because the employer has limited ability to monitor the software on the computer and restrict user access.  For example, a personal computer might contain third-party data sharing software that could access company information that has been downloaded to the computer.  Moreover, employers have limited ability to ensure that other home users of an employee-owned computer would not be able to access company files if, for example, the remote connection is left open.  Either situation could trigger notice obligations under state data breach notification statutes if covered personal information is accessed or acquired by an unauthorized person.

·        Whether necessary files and data can be transferred only via a secure network or whether portable media, such as thumb drives, will also be permitted for file and data transfers, and if so, what level of security, such as encryption and password protection, will be required.  The shrinking size of portable media provide greater freedom, flexibility, and mobility, but also pose greater risk of loss or theft due to their diminutive size.

·        How to ensure the security of a work-from-home employee's workstation.  For example, will the screen be visible to others and how will the remote employee secure paper files? 

Employers will need to develop and implement both administrative mechanisms, such as clear policies that put employees on notice of their rights and responsibilities, and operational mechanisms, such as implementing encryption and monitoring technology and other electronic security measures, that balance the need to preserve confidentiality and maintain security while allowing for the flexibility and mobility the employer's off-site employees' need.

Workplace Safety Issues and Liabilities Arising from Telecommuting

            Further, although telecommuters are not at the workplace, employers must still be concerned with workplace safety issues.  Workers compensation laws, OSHA and other workplace safety regulations can still apply to remote employees, so employers must develop ways to ensure that work-from-home employees comply with relevant safety protocols even in their home offices.  Although OSHA has announced that it will not conduct inspections of employees' home offices, and does not expect employers to conduct inspections, the agency will hold employers responsible for injuries or hazards at remote locations, including home offices, if they are caused or created by materials, equipment, or work processes that the employer provides or requires the employee to use at the remote location.  As well, OSHA will conduct inspections of home-based work sites when it receives a complaint or referral that indicates a violation of a safety or health standard that threatens physical harm.   Most state workers' compensation laws, including New York, are not limited to work related injuries that occur at the employer's fixed physical location, and therefore can apply to work-related injuries occurring at a home office or other work location.  The employee will still have to establish that the injury arose out of and in the course of employment, and not during a break or other non-work related activity. 

            Another recent area of liability, brought about by the technologies that have helped expand the mobile workforce, stems from injuries and damages caused by employees texting and talking while driving.  For example, in Bustos v. Dyke Industries Inc., Miami Dade Case No. 01-13370 (2001), an employer settled for over $16 million, after a jury initially awarded over $21 million in damages to an elderly woman who was hit and severely disabled by a salesman who was making a work related call on his cell phone while driving, resulting in the accident.  Again, due to the lack of on-site supervision, employers should, at minimum, enact clear policies on workplace safety issues that consider the particular circumstances of remote employees.    

            There may certainly be other concerns associated with remote employees in particular industries, and the issues noted above are but a sample of the concerns that telecommuting can raise.  Given the recent trend towards telecommuting, and the Second Circuit's decision clarifying that, in certain circumstances, it can be required as a reasonable accommodation, employers should take the opportunity to review their own telecommuting policies and procedures and consider the various issues that may arise when their own employees work from home or other remote locations. 

            This post was authored by Matt Lampe, Joseph Bernasky, David Krieger, and Mariya Nazginova of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

            2012 is the first year that private-sector New York employers must provide the annual written pay notice required by the Wage Theft Prevention Act.  Although the initial passage of the Wage Theft Prevention Act over a year ago garnered significant attention, it is worth reiterating now that the February 1 deadline for provision of the annual notice is rapidly approaching and employers should use the remaining time to ensure compliance with the new notice obligations.

            On December 14, 2010, then-Governor David Paterson signed the Wage Theft Prevention Act, S. 8380/ A. 11726 (the "Act"), into law in New York State, which amended Section 195 of the New York Labor Law.  Joining a growing number of states with similar wage theft legislation, the Act sought to address classification of employees and payment of statutorily-mandated minimum wages and overtime, and included enhanced civil and criminal penalties for non-compliance.  In effect since April 9, 2011, the requirements applies to all private-sector employers in New York.

            Under the Act, every employee, whether full or part-time, whether covered by a union contract or not, and regardless of exempt status, must receive a written pay notice between January 1 and February 1 of each year, including the following information:

• the employee's rate of pay, including overtime rate of pay, if non-exempt;
• the basis of the wage payment (e.g., by  the  hour, shift, day, week, salary, piece, commission, or other); 
• the regular payday;
• the allowances taken as part of the minimum wage (e.g., tip, meal and lodging deductions); 
• the employer's official name and any other "doing business as" names; and 
• the address and phone number of the employer's main office or principal location, and mailing address if different. 

2012 is the first year that employers must provide the annual written pay notice, which applies even if none of the information has changed from the prior year.          

            Under the Act, the notice must be provided in English and in the employee's primary language if the New York Department of Labor ("NY DOL") offers a translation.  Currently, the NY DOL offers dual language translations in Chinese, Haitian Creole, Korean, Polish, Russian, and Spanish, all of which are available here.  Employers with seasonal employees on layoff between January 1 and February 1 must furnish the notice as soon as the employees return from layoff.  The notice may be distributed electronically, but only if employees' receipt of the notice and acknowledgment is verifiable and if the employee is able to print a copy for their records. 

            In addition, the Act requires employers to obtain a signed and dated acknowledgment of the notice from each employee.  Employers must retain copies of the notice and accompanying acknowledgment for six years, and provide them to the NY DOL upon request.  If an employee refuses to acknowledge the notice, an employer should still give the notice and note the refusal on its retained copy.  Moreover, an employee cannot waive the written notice requirement.  The NY DOL can assess penalties of $50 per week per employee if a proper written notice is not provided, and employees can sue for not receiving a proper written notice with damages capped at $2,500 per employee. 

            With the February 1, 2012 deadline rapidly approaching, employers should take any remaining steps necessary for to meet the annual notice requirements.  The NY DOL provides web-based, printable model templates for employers seeking guidance, which are available here.  The Act does not require the use of these particular forms, and employers may develop their own forms so long as all the information legally required is included.  The NY DOL has also published a Fact Sheet on the Act, available here, and a set of FAQs, available here.

            This post was authored by Matt Lampe, Joseph Bernasky, and Jenny Ma of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

In Karen Scott v. WPIX, Inc., http://www/newyorklawjournal.com/CaseDecisionFriendlyNY.jsp (SDNY 12-28-2011), plaintiff, an Executive Producer for WPIX, who held her job for sixteen years, was terminated for the stated reason of poor Nielsen ratings. At the time, plaintiff was 43 years old and the chief decision-maker was 50 years of age. United States District Court Judge William H. Pauley denied WPIX's motion for summary judgment seeking to dismiss plaintiff's ADEA, Executive Law, and city Human Rights Law claims. Judge Paley found that plaintiff had produced sufficient evidence to satisfy the fourth element of her prima facie case and sufficient evidence to establish a disputed issue of material fact about whether WPIX's stated reason for her termination was pretextual. Here were the critical factors resulting in the denial of summary judgment: (1) although the decision-maker was also within the protected age class (thus weakening the prima facie case), the 8-year age difference coupled with (2) derogatory remarks about older employees ("certain anchors were 'too old' for their jobs"), and (3) other adverse employment actions against older employees. As to establishing pretext, Judge Paley was persuaded by: (1)the lack of documentation of performance-related issues in her employee file; (2) the fact that the station's ratings had fluctuated undermining the claim that she was terminated for "failing ratings"; (3) the disparaging comments and adverse employment actions referred to above in support of the prima facie case. Given this record, and the "more lenient 'motivating factor' standard of the state and city laws," the whole case was cleared to move to trial.

An interesting decision from the Eastern District of Pennsylvania is worth noting in this Blog. While its focus is on Pennsylvania common law, the case addresses the novel issue of LinkedIn account ownership, an issue that is likely to arise in multiple jurisdictions throughout the country, including New York.

The case is Eagle v. Morgan, et al., Civil Action No. 11-4303 (E.D.Pa. December 22, 2011), and the general facts will be familiar to anyone with a passing interest in the legal posturing that occurs when a valued employee, particularly a former owner, leaves a long-time employer. Plaintiff Linda Eagle ("Eagle") founded and operated a financial services and training company for over twenty years. She and her partners sold the company, Edcomm, Inc., in October 2010, but remained on as employees until June 2011, when they were fired by the new owner, Sawabah Information Services Company. A lawsuit by the company against Eagle, for securities fraud and other claims relating to the sale of the business, followed a week later, but will not be addressed in this post.

The facts get more interesting when modern technology and new methods of doing business are introduced, in the form of a LinkedIn account. While she owned Edcomm, and later as its employee, Eagle had established a LinkedIn account, which she maintained with the help of her administrative assistant. When Eagle attempted to access her LinkedIn account later that day, access was denied (another founder who was also terminated had the foresight to change his password before the termination meeting). Edcomm had accessed the account with Eagle's password, changed the password and then changed Eagle's account profile to display the name and photo of one of the new owners of Edcomm. Thus, individuals searching for Eagle were routed to a LinkedIn page featuring the name and photo of the Defendant, Morgan, but which included Eagle's resume and CV, her honors and awards, and her connections. Several weeks later, however, Eagle was able to regain control of the account, though the decision does not explain how she did so.

Before regaining control of the account, Eagle brought an action against Edcomm and numerous individual defendants for alleged violations of federal statutes (the Computer Fraud and Abuse Act and the Lanham Act), and various common law torts. Edcomm responded with several counterclaims, including several directed at Eagle's alleged misappropriation of the LinkedIn account in her own name. Many of the claims related to a company-issued cell phone and cell phone number, and will not be addressed in this post, other than to note that most of these claims were dismissed. The more interesting allegations raised by the company relate to the LinkedIn account.

The counterclaim Complaint alleged that while Eagle managed Edcomm the company had required employees to create LinkedIn accounts utilizing their Edcomm email address, utilize a specific template created by the company, with specifically approved language regarding Edcomm's business, the employee's work history and professional activities, photos taken by a company-hired photographer, links to Edcomm's web-site, and a template for replying to inquiries from LinkedIn users. The counterclaim Complaint further alleged that several Edcomm employees were responsible for monitoring the LinkedIn accounts, correcting violations of company policy, and who maintained several accounts on behalf of Edcomm employees. All departing employees were required to return Edcomm-related connections and content from their LinkedIn account.

According to the Court, these factual allegations were sufficient to state a cause of action for Misappropriation of Ideas against Eagle, as well as Unfair Competition. The Misappropriation claim survived because Edcomm sufficiently alleged it had made a substantial investment of time, effort and money into developing Eagle's LinkedIn account, meaning that it was wrong or tortious for Eagle to then access and take the account away from the company after her termination. The tort of Misappropriation of Ideas also requires that the idea be "novel," but the Court did not address how a LinkedIn account could be considered "novel."

The Court rejected, however, the claim that Eagle's retention of the LinkedIn account constituted misappropriation of a "trade secret," because the account information on the LinkedIn account was generally known in the wider business community, or capable of being derived from public information.

Edcomm's unfair competition claim also survived the dismissal motion. Under the Restatement (Third) of Unfair Competition, an unfair competition claim can be made where "the means of competition are otherwise tortious with respect to the injured party." While the Court cautioned that this liberal standard should not act as a "catch-all" for any form of wrongful business conduct, Edcomm's unfair competition claim was viable at the pleading stage because Eagle may have unlawfully misappropriated the LinkedIn account.

Thus, it seems that under the right circumstances, a LinkedIn account may not actually belong to the individual whose name appears on the account's home page, and whose professional history and accomplishments are detailed in the account's profile. This is an interesting development, but one that may not withstand further scrutiny, given the Court's acceptance, without much discussion, of the notion that a LinkedIn account is a "novel" idea worthy of protection. The viability of this decision may also be impacted by the LinkedIn user agreement, which states that the "user" is the owner of the account. The Court did not address this fact in its decision, and in this case, if the company's allegations prove to be true, the company may well be deemed to be the account "user."

As it currently stands, the decision may impact how employers do business. In the typical non-compete case, especially in the sales arena, the legal battle often focuses on the former employee's "contacts." This decision may embolden employers to take a more active role in the initiation, development and/or maintenance of LinkedIn accounts by and for their employees, in order to prevent employees from keeping those contacts that are stored on LinkedIn, and strengthen post-departure claims of misappropriation and unfair competition.