Posts filed under ‘HR’
My friend Chris Pajak, who handles the HR consulting for the Association, has had the good fortune to work across from my office for the last several years, but the honor has not been all his. From listening to Chris respond to a wide variety of HR questions ranging from the thought-provoking to the down-right bizarre, I have been able to keep my finger on the pulse of trending HR issues.
Recently, he got a question about what steps an employer could take to monitor the health of an employee who had just returned from a trip to Africa? It’s a darn good question. Yesterday, the Bond, Schoeneck and King law firm released an excellent Q and A on employment issues related to Ebola. Rather than give my own two cents on an extremely fluid and complicated area, I am going to suggest you take a few minutes to read their post this morning.
However, I can’t resist just one editorial comment. When it comes to Ebola, let’s use some common sense. Don’t get caught up in the idiotic media frenzy. You have a hell of lot better chance of dying from the Flu than from Ebola. On that happy note, drink and be merry. . .
Well, it’s opening day for legal junkies. The first Monday in October the Supreme Court starts hearing cases it will decide over the 2014-2015 term that ends in June. With the caveat that there may be cases added in the coming weeks and months, here is a look at the cases on the Court’s docket that will have an impact on your operations.
Perez v. Mortgage Bankers Association, No. 13-1041, 134 S. Ct. 2820 (2014).
This case is important to credit unions for two reasons. First, if you employ mortgage originators, then you have been caught in a whirlwind of conflicting administrative rulings in recent years regarding whether your mortgage originators are entitled to overtime pay under the Fair Labor Standards Act. Under the FLSA, so-called non-exempt employees are entitled to overtime when they work more than 40 hours a week. However, there are several exceptions to this requirement. In 2006, the Department of Labor issued an opinion letter stating that mortgage loan originators were exempt from the overtime requirement. In 2010, the DOL issued an “administrative interpretation” reversing that 2006 opinion letter and mandating that employers pay overtime to loan originators.
In this case, the Court will decide at what point an agency’s administrative interpretation has effective become a Rule that can only be changed through the regulatory process by issuing a new rule replete with a comment period. As a result, the Court’s decision in this case will provide further guidance to those of you who employ mortgage originators.
For those of you who don’t employ mortgage originators, the case will provide important guidance about how legally binding those NCUA guidance letters are on your credit unions.
EEOC v. Abercrombie and Fitch Stores, 731 F. 3d 1106 (10th Circuit 2013).
Under Title 7, if you have 15 or more employees, you must agree to reasonable accommodations for employees’ religious beliefs, providing that doing so does not pose an undue hardship on your business. This means, for example, that a teller at your credit union with a sincerely held religious belief is entitled to wear a head scarf even if doing so mandates an exception to your dress code. However, does Title 7 apply where an applicant or employee never informs an employer that she needs a religious accommodation? This is the question that the Court will grapple with in this case. It deals with a Muslim applicant for a sales position who was denied employment because the head scarf she wished to wear for religious reasons conflicted with “the look” that the company wishes to project for its sales people. What makes the case interesting is that the applicant never told the employer that she had to wear the scarf for religious reasons. Your HR people are going to want to pay particular attention to this case since best practice currently dictates that employers not ask about the religious beliefs of applicants during an interview.
Jesinoski v. Countrywide Home Loans, 13-604.
We all know that the Truth in Lending Act grants homeowners a three-day right of rescission on mortgage transactions. Where such a notice is not provided, a borrower has three years “after the date of consummation of the transaction” to bring a lawsuit cancelling the mortgage. This case deals with a narrow but important question: does a borrower exercise his right to rescind the transaction by notifying the creditor in writing within three years of the consummation of the transaction or must he file a lawsuit within three years of the transaction? This may not seem like a big deal, but the Circuit courts have been all over the map on this one.
Young v. United Parcel Service, 12-1226.
Federal law prohibits discrimination against employees because they are pregnant. But, are you discriminating against a pregnant employee by refusing to provide her an accommodation? In this case, the Court will determine if UPS acted properly when it refused to accommodate a pregnant driver’s request that she not be made to lift heavier packages. This case isn’t as clear cut as it sounds. Whereas federal law requires companies to provide reasonable accommodations to disabled persons, the company argues that since pregnant women are not considered disabled, it is not allowed to provide accommodations for pregnancy that would result in pregnant women being treated differently than their non-pregnant peers.
I will, of course, be keeping an eye on this and other cases in the coming months. In the meantime, for those of you who want additional information about the upcoming Court term, a great source of information is the SCOTUS blog.
Yesterday, the CFPB, which prides itself on being a statistics-driven, cutting edge agency of the 21st Century, announced a new rating system for its employees which deemphasizes statistics. For several months now, the CFPB has been dogged by increasingly strident accusations that its managers engaged in discriminatory practices. These accusations were bolstered by an internal report highlighted in yesterday’s CU Times showing statistical disparities based on race in the performance review process. For example, 20.3 percent of white employees received the highest rating (a 5 on a 1-5 scale), while only 10.5% of African-American employees received this rating. The CFPB is responding to this “proof” of racial disparity by implementing a pass-fail system of employee evaluations, doing away with those troublesome numbers. Instead, employees will retroactively be classified as either solid performers or unacceptable ones.
CFPB’s retreat speaks volumes about statistics and their limits. Disparity impact analysis, where regulators and litigators argue that a facially neutral lending policy can be proven to discriminate against individuals based on statistical analysis, is predicated on the assumption that statistics don’t lie. Advocates of this approach argue that at some point statistical disparities demonstrate that even facially neutral policies reflect discriminatory undertones and/or practices.
On the other end of the spectrum, on which I would place myself, are those who take a jaundiced view of disparate impact analysis. Statistics only tell a fraction of the story. For instance, the CFPB’s statistical chart can’t tell you about how often an employee had to be pushed to get his work done. Similarly, statistics alone can’t capture the full extent of negotiations that went on between a mortgage originator and a consumer who happened to be African-American. Nevertheless, the explosion of data makes it more, not less, likely that statistics will be used to judge the effectiveness of anti-discrimination laws. This is why I find the CFPB’s response so telling. Rather than defend its evaluations, it implicitly assumes that its managers must be racially biased. Remember, these are the same people who will ultimately be reviewing lending trends and using increased HMDA data to spot discrimination.
The pre-eminence of disparate analysis is going to have real life consequences. For instance, the reality is that as lenders heighten their underwriting standards to make sure that they can document why a borrower can repay a mortgage loan or decide to only make so-called qualified mortgages, these decisions will have a disproportionately negative impact on minority groups that, in the aggregate, have less income.
What will be the response of legislators and regulators? Will they look at these statistics and realize that they reflect deep-seated, complex problems that simply can’t be assumed to only reflect racial animus? Or will they do what the CFPB has done and simply water down evaluation standards so that the difficult issues raised can be “solved” instead of addressed.
The way my father explained it to me, people have been getting pregnant for quite some time. In addition, since 1978, federal law has banned discrimination in the workplace on the basis of pregnancy. So you may find it odd that pregnancy is a hot topic in legal circles these days. However, recent developments have brought the issue of pregnancy discrimination to the forefront of HR law.
First, the Supreme Court has decided to review a case next term, Young v. United Parcel Service, in which it will clarify what accommodations, if any, must be provided to a pregnant employee. Not coincidentally, the EEOC recently released an updated guidance on this issue for the first time in more than two decades.
The issues involved are not as clear cut as you might think. First, let’s start with the basics. We all should know that you can’t discriminate against someone just because she is pregnant. The Pregnancy Discrimination Act provides that pregnant women “shall be treated the same for all employment purposes. . .as other persons.” It seems simple enough, but the case the Supreme Court is going to hear involved a driver whose job required her to lift up to 70 lbs. The company’s policy excused drivers from this requirement if they were disabled or if they lost their license, but not if they were pregnant. The company argued that it was required to treat her equally with all other employees and it would not be doing that if it excused her from the weight restrictions just because she was pregnant.
When I first read this decision I wondered why she couldn’t be treated as disabled under the ADA. But the Fourth Circuit, which heard the case being decided by the Supreme Court, ruled that the ADA doesn’t apply to pregnant women. As a result, the Fourth Circuit ruled that the company acted legally despite the fact that her request to lift lighter packages could have been easily accommodated.
Undoubtedly with an eye toward weighing in on the Supreme Court’s decision, the EEOC’s recently updated pregnancy guidance argues that there may be circumstances in which pregnant women are protected under the ADA. As I like to say, this is one of those cases that are going to be worth keeping an eye on. With my usual caveat that I am not an HR attorney but I like to play one occasionally writing this blog, this is one area where it seems a bit of common sense goes an awfully long way. UPS has provided us a great case to consider, but had it not been so stubborn in adhering to its policy, an employee could easily have been accommodated and millions of dollars in legal fees could have been avoided.
Governor Cuomo made it official yesterday: he held a bill signing ceremony to mark approval of legislation (A.6357-e) making New York the latest state in the nation legalizing the medical use of marijuana. Its use will be ramped up over the next 18 months as the state promulgates the necessary regulations.
Despite what I have seen in the blogosphere, it is not time to stack up on the munchies. Unlike states such as Washington and Colorado, which have legalized marijuana possession, and other states, such as California, that have legalized the “medical” use of marijuana, the legislation is drafted in a way that medical use of marijuana will be limited to people with designated illnesses and only available in forms prescribed by doctors.
The use of medical marijuana in New York will be highly regulated. According to the Governor’s memo, the law allows for five registered organizations that can each operate up to four dispensaries statewide. Registrations for organizations will be issued over the next 18 months unless DOH or the Superintendent of State Police certifies that the new program could not be implemented in accordance with public health and safety interests. Because it is so regulated, chances are your credit union won’t be asked to open up a business account for these organizations, and if it is the organizations are so highly regulated that much of your due diligence will be easily obtainable. This means that, at least in the short term, legalization of the drug won’t present financial institutions with the legal question of how to comply with federal laws banning the possession and sale of marijuana and bank secrecy act requirements mandating that credit unions and banks monitor their accounts for potentially illegal activity with state law declaring marijuana use to be legal.
This is not to say that your credit union won’t be impacted by this law. Under the legislation a certified caregiver or patient can’t be subject to any civil or disciplinary action by a business or licensing board solely because of their lawful use of marijuana. In addition, eligible users are classified as disabled under New York’s human rights law. At the very least, we now know that there are going to be employees legally entitled to be taking marijuana. So, if you have a policy of categorically prohibiting employee drug use, this is going to have to be modified.
Conversely, it doesn’t mean that an employee can come into work today and get stoned at lunch time. The state is going to have a registry of patients. The key is not to make changes tomorrow. If you heard the Governor speak yesterday, then you heard a person who is dead serious about making sure that this legislation truly is for medical purposes and not a backdoor means of legalizing pot smoking. The regulatory process will be a serious one and given the number of issues that need to be addressed, I’m sure the concerns of employers will be taken into account. In the meantime, it appears that New York financial institutions have avoided the legal quagmire that comes from a more unregulated approach.
The Swiss are known for many things. For my money, they make the best chocolate in the world and, as people have known for generations or at least after reading The Davinci Code, Switzerland is where you put your money when you don’t want anyone else to know about it. Not anymore.
Yesterday, Credit Suisse copped a plea. It admitted to systematically making illegal efforts to help wealthy citizens avoid paying U.S. taxes Credit Suisse’s sins included assisting clients in using sham entities to hide undeclared accounts; soliciting IRS forms that falsely stated that sham entities were the beneficial owners of these accounts; destroying account records sent to the United States; and structuring transferred funds to evade CTR reporting requirements.
In announcing the deal, Attorney General Eric Holder called it “a major step in our ongoing effort to protect the American people from financial misconduct — and to hold accountable any individual, bank or other institution that violates our laws and abuses the public trust.” Now for my commentary:
I wonder if the Attorney General really believes what he said? The fact is that the financial crisis has been ongoing since 2008 and it has taken the Justice Department, filled with some of the brightest, most aggressive legal minds in America, six years to get one bank to plead guilty to a criminal offense in relation to issues that have nothing to do with the underlying banking issues that triggered the Great Recession. If you think I am being cynical, then ask yourself if your credit union admitted to any of the offenses to which Credit Suisse is to plead guilty would it be in business today or would you be looking for a defense attorney?
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The CFPB is conceding that its employment practices may have had a disparate impact on its minority employees. Yesterday, the CFPB announced that it will no longer be using a five point scale to grade employees. Why? Because an analysis conducted by the agency indicated that more than 20% of White employees received the highest possible ranking last year compared with 9% of Hispanics, 10.5% of African-Americans and 15.5% of Asians. The Wall Street Journal quotes Director Richard Cordray announcing “we have determined that there were broad-based disparities in the way performance ratings were assigned across our employee base.” The CFPB’s employment practices are sure to get a lot of attention at a Congressional hearing later this week.
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Last but not least, every so often when I am reading up on the economy, I am reminded of one of my favorite lines from The Doors, “I’ve been down so ever damn long that it looks like up to me.” Later today, a report will be released indicating that nearly 10 million U.S. households remain underwater on their mortgages and another 10 million households have so little equity in their house that they can’t meet the expenses of selling a home. To be sure, this represents a dramatic improvement from the 31% of Americans whose homes were underwater in 2012, but the fact that 18.8% of U.S. mortgages are underwater shows that while there may be some light at the end of the tunnel, many Americans aren’t there yet.
Judging by the number of people who have told me over the years that they have had to get permission to access my blog at their credit union, I know there are many credit unions that have policies prohibiting the use of company electronic equipment and email systems for activities unrelated to the employee’s job. Assuming you have an appropriate policy on the issue, and you aren’t selectively enforcing it, such policies are fine according to a 2009 decision by the United States Court of Appeals for the District of Columbia, (Guard Publishing Co. v. National Labor Relations Board, 571 F.3d 53 (2009)).
But has the Internet become such an integral part of communication that policies imposing blanket bans on non-business use of employer equipment are outdated? Our good friends at the NLRB think so and its head counsel is bringing an Administrative Appeal before the Board in a case called Purple Communications, Inc. (Cases 21-CA-095151; 21-RC-091531 and 21-RC-091584) in which it is going to ask the Board to reverse the DC court’s 2009 ruling. Given the importance of the issues involved, the NLRB is requesting interested parties to file amicus briefs for or against its appeal. It’s a very good assumption that win or lose, the issue will once again be examined by the DC federal court.
Why should you care? Most importantly, even though most of you don’t have union shops, the NLRB is seeking to regulate the ability of all employers to limit the use of office technology. It is concerned that overly restrictive technology policies inhibit the ability of employees, regardless of whether or not they belong to a union, to take “concerted actions” against problems in the work place. Second, the case will provide HR professionals much-needed guidance about the use of technology in the workplace. For example, this case deals specifically with the use of company owned and distributed technology but is likely to provide some indication as to where regulators and the courts are headed related to appropriate limitations for employees who are allowed to bring their own devices to work.
My personal view is that the existing legal precedent makes perfect sense and provides both employees and employers a bright line rule to follow. Unfortunately, common sense and consistency aren’t top priorities of the current NLRB hierarchy. Bottom line: this is a case to keep an eye on and even to consider writing an amicus for if you think it may have an impact on your credit union policies. By the way, if you don’t yet have a technology policy, you should develop one quickly.