Posts filed under ‘HR’
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.
As faithful readers of this blog know, I am not an employment law attorney but I still like to highlight emerging issues that may confront you in the workplace. One of the issues that most intrigues me is the extent to which employers should delve into an applicant’s social media postings as part of the hiring and promotion process.
I’ve come to believe that looking into someone’s Facebook postings, as tempting as it might be, does more harm than good. A good interview will get you all the information you need about an applicant, while checking someone’s Facebook page could potentially set you up for a claim that you discriminated against an applicant because of their race, religion, and, in states like New York, sexual orientation.
A good friend of mine thinks I am nuts. He points out that you can learn a lot about a person from what they post on Facebook. Do you really want a camp counselor, for instance, who brags about how much pot they smoked over the weekend?
Yesterday, the Equal Employment Opportunity Commission hosted a meeting/conference discussing the various workplace issues raised by social media and I love the compromise that one of the attorneys, Renee Jackson of Nixon Peabody, suggested as part of the dialogue. First, make sure that social media is just one of several sources you access when doing an applicant background check. Second, have a third-party or employee not involved in the hiring decision review publicly available information about the employee from social media cites. This employee can report just the facts but omit information such as an employee’s race or religion that should not be part of the hiring decision in the first place.
Speaking of religion, the EEOC recently issued guidance on accommodation of an employee or applicant’s religious beliefs in the workplace. Title VII of the Civil Rights Act of 1964 bans employers with 15 or more employees from discriminating against an employee based on, among other things, her religious beliefs. This means that employers must accommodate an employee’s sincerely held religious beliefs unless doing so would constitute an undue hardship for the employer.
The recently issued, wide ranging guidance stresses, among other things, that a customer’s unease with an employer’s religious attire doesn’t allow the employer to reassign the employee. This means, for example, that you can’t shift a teller who is a practicing Sikh to a back office position because members have complained he wears a turban. Another theme of the guidance is that employers should not delve too deeply into how strongly an employee actually holds his or her religious beliefs. For example, an employee might wear a religious symbol for only one month out of the year or be a recent convert to an obscure faith but these facts are irrelevant in determining how best to accommodate the employee.
One other theme worth noting has to do with dress codes. Employers should make exceptions to dress codes to accommodate sincerely held religious beliefs. Doing so doesn’t mean that the dress code can’t be enforced against other employees. The bottom line with all of this is to be reasonable.
I understand why some of you can’t stand compliance. After all, a successful compliance program often depends on strict adherence to mind-numbing regulations, which can seem divorced from reality, let alone common sense. Well, like it or not, the better your compliance program the less you’ll have to deal with something you probably dislike even more, which is a lawsuit.
A great case in point was highlighted by a recent blog posted by Bond, Schoeneck and King highlighting a recent employment litigation trend that could ensnare your credit union if you are not careful. I haven’t seen any cases on this issue popping up yet in New York, but I am sure we will see them in the near future. In it’s labor report blog, BSK reports on a case in California in which the plaintiffs are seeking to bring a class-action lawsuit against an employer for an alleged violation of the Fair Credit Reporting Act (15 USC 1681). This statute is doubly important to credit unions because it not only regulates the use of credit reports in making lending decisions, but also impacts the way they go about making employment decisions.
I’m sure many of you already know that the Act requires employers to give job applicants notice whenever a credit report is going to be accessed as part of the employment process. The statute requires a written “clear and conspicuous” disclosure, The tricky part is that the statute mandates that this disclosure be “in a document that consist solely of the disclosure that a consumer report may be obtained for employment purposes.”
Employment litigators are beginning to go after employers who provide the necessary pre-employment disclosures, but couple the notice requirement with language in which the applicant agrees to waive any legal action against the employer for accessing the credit reports. For instance, earlier this year, a federal district court in Pennsylvania ruled that an employer violated the Act by not putting the pre-employment disclosure on a separate document without liability waivers. See Reardon v. Closetmaid Corp.
Equally troubling for employers was that the court ruled that the law was clear enough to put the employer on notice that they could be sued for monetary damages for the illegal disclosure. This ruling is important because an employer would otherwise be able to argue that even if it made a mistake, it was a reasonable mistake based on its interpretation of the law.
The bottom line is that if you access credit reports as part of the employment process you have been put of notice. I would make sure that your credit union puts their Fair Credit Reporting Act disclosure on a single piece of paper that contains nothing but the FCRA Notice.
If you think you’re having a bad day, you could be thankful that you’re not Yahoo CEO Marissa Mayer, who has to explain to her Board of Directors why she fired her hand-picked Chief Financial Officer a little more than a year after he took the job at a cost of $42 million in severance benefits.
He was reportedly a bad fit with the company from the beginning, clashing with Mayer within months of being hired and failing to deliver advertising revenue.
I know I don’t have to tell you that going through the process of hiring someone only for that person not to work out is one of the most expensive costs of doing business. You may want to pick up this month’s issue of the Harvard Business Review and take a look at what some of the most innovative companies in America are doing to transform HR practices.
Regardless of how big or small your credit union is, there are new approaches you should consider taking. The best written value statements in the world are meaningless unless you can translate them into tangible practices for your credit union.
So, how does your credit union translate its corporate value statement into a tangible HR action plan? The question is particularly important for the credit union industry where so much of our growth and ultimate survival depends on projecting a unique brand of financial services. One approach that has been highlighted recently involves getting a wide variety of your staff involved in the hiring process.
For example, at Amazon, even hires for Junior Executive positions go through numerous interviews. These interviews are conducted by employees, or bar-raisers as they are called within the company, who volunteer for the job. What makes the program unique is that an applicant will be analyzed not only by the department with which he will be working but by an individual who may have little day-to-day contact with him or her once hired. What’s more, these bar-raisers all have the authority to nix a candidate. The result of this approach makes hiring at Amazon a laborious and time consuming process, but it ensures that whoever is hired not only has the skills to get the job done but has the type of personality that will ensure she is a good fit for the company.
A second thing you can do is to follow the example of Netflix and recognize that as your credit union evolves there are some employees who may no longer be a good fit. What Netflix does, to the consternation of many HR attorneys, is minimize the importance of performance reviews and instead empower managers to quickly communicate with employees and let them go when their skills no longer reflect the company’s needs. Netflix has avoided many potential legal pitfalls with this approach by also giving out some of the most generous severance packages within Silicon Valley.
One of the little chestnuts tucked away in the Congressional wish list that is Dodd-Frank is a requirement that financial institutions promulgate guidelines for assessing how good a job financial institutions do at fostering diversity in their workplace. Specifically, section 342 requires each financial agency’s Office of Minority and Women Inclusion to develop standards for “assessing the diversity policies and practices of entities regulated by the agency.” Crucially, the statute stipulates that these assessments should not be construed to mandate any requirement regarding an institution’s lending policies.
While I am tempted to point out that financial institutions are already among the most highly regulated businesses in the country when it comes to issues involving Race and minority advancement, the law is the law, so the question is how can this regulation be shaped in a way that does not needlessly burden credit unions while providing a benefit.
These seem to be the questions still vexing regulators, including the NCUA. Recently the major bank regulators came out with proposed guidance to implement Dodd-Frank’s mandate and they seem more than willing to consider unique approaches to assessing how lending institutions of all shapes and sizes are doing when it comes to hiring minorities. The regulation actually calls on financial institutions to make a “self-assessment” of a range of hiring and contracting practices. The preamble stresses that the “assessment envisioned by the agencies is not one of a traditional examination. . .Agencies will not use the examination or supervision process in connection with these proposed standards.” In addition, institutions would be encouraged but not required to make these assessments available to their regulators and the public through their websites.
Finally, the regulators repeatedly stress that they know many institutions already have to demonstrate how they are fostering diverse workplaces by, for example, requiring institutions with 100 or more employees or who are federal contractors with 50 or more employees, that meet certain conditions, to file reports with the Equal Employment Opportunity Commission.
Assessments could be designed in a way that reflect an individual entity’s “size and characteristics.” So, what exactly is required under this proposed self-assessment guidance? All institutions, regardless of their asset size or number of employees would be required to assess 1) the organizational commitment to diversity and inclusion considerations in employment, promotion and contracting; 2) how policies and procedures allow your institution to evaluate the effectiveness of their efforts at workplace diversity; 3) the extent to which they take a vendor’s record on diversity into account when making contracting decisions; and 4) the extent to which it publicizes its diversity efforts.
As it stands right now, these regulations are a lamb in sheep’s clothing since regulators could have used their Dodd-Frank mandate to impose much more onerous requirements than they are currently suggesting. Nevertheless, these self-assessments will impose new burdens, particularly on smaller credit unions that may not have formalized their minority hiring and promotion practices and policies. Furthermore, today’s self-assessment could be tomorrow’s public mandate. In the hands of the wrong regulators, section 342 has the potential to become an HR nightmare for credit unions.
A quick note: the links have not been working for the past couple of days so feel free to visit NCUA’s website to look at the proposed regulations. I’m going to God’s Country, aka Long Island, so I will be back on Tuesday.
As an unabashed Luddite who is nonetheless more dependent on technology than anyone I know, I am more than a little envious of the employee who can be on the phone responding to a text message, keep up with the latest news and eat lunch all at the same time. Increasingly, the multi-task ideal is becoming a critical skill to master for career advancement.
But what if the myth of the archetypal multi-tasker is just a bunch of bunk and all those hours spent tethered to our smartphones are actually keeping us from getting enough sleep to be truly productive employees? In 2009, Clifford Nass, who passed away yesterday, set out to research what makes multi-taskers so good at juggling many tasks at once and absorbing so much information. What he found instead was that people aren’t particularly good at multi-tasking, they just think they are. If you really want to do something right, do it one task at a time.
And all this glorification of multitasking, replete with bring your devices to work policies has created a culture glorifying the never ending work day. For instance, a recent report on NPR profiled a credit union CEO who was sending and receiving emails at all hours of the day and night, having convinced herself that she just needed about five hours of sleep. She eventually came to her senses. She stopped checking her email before she went to bed and limited smart phone use to her top executives. The results were that she was healthier and her employees were coming to work having gotten a better night sleep themselves. The allegedly lost hours of productivity were more than made up by being fully prepared to face the day.
It seems to me that we are letting our machines run us, rather than the other way around. Without spending a cent, or even having a staff meeting, you can make your credit union more productive within months by showing your employees that it’s okay to put down the cell phone and get a good night’s sleep.