Financial Services Employment Law

News, Updates, and Insights for Financial Services Employers

Seventh Circuit Court of Appeals Sides with NLRB on Class Action Waivers and Mandatory Arbitration

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the financial services industry: “Federal Appeals Court Sides with NLRB – Holds Arbitration Agreement and Class Action Waiver Violates Employee Rights and Unenforceable.

Following is an excerpt:

The US Court of Appeals for the Seventh Circuit in Chicago has now sided with the National Labor Relations Board (NLRB or Board) in its decision in Lewis v. Epic Systems Corporation, and found that an employer’s arbitration agreement that it required all of its workers to sign, requiring them to bring any wage and hour claims that they have against the company in individual arbitrations “violates the National Labor Relations Act (NLRA) and is unenforceable under the Federal Arbitration Act FAA).” …

The decision of the Seventh Circuit, finding that the Board’s view was not inconsistent with the FAA, sets the ground for continued uncertainty as employers wrestle with the issue.  Clearly, the question is one that is likely to remain open until such time as the Supreme Court agrees to consider the divergent views, or the Board, assuming a new majority appointed by a different President, reevaluates its own position.

Read the full post here.

Update on DOJ Website Accessibility Regulations and Mobile Accessibility: Employer Considerations

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Our colleagues Joshua Stein, co-chair of Epstein Becker Green’s ADA and Public Accommodations Group, and Stephen Strobach, Accessibility Specialist, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the financial services industry:  “DOJ Refreshes Its Efforts to Promulgate Title II Website Accessibility Regulations and Other Accessible Technology Updates – What Does It All Suggest for Businesses?”

Following is an excerpt:

On April 28, 2016, the U.S. Department of Justice, Civil Rights Division, withdrew its Notice of Proposed Rulemaking (NPRM) titled Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Services of State and Local Government Entities.  This original initiative, which was commenced at the 20th Anniversary of the ADA in 2010, was expected to result in a final NPRM setting forth website accessibility regulations for state and local government entities later this year. Instead, citing a need to address the evolution and enhancement of technology (both with respect to web design and assistive technology for individuals with disabilities) and to collect more information on the costs and benefits associated with making websites accessible, DOJ “refreshed” its regulatory process and, instead, on May 9, 2016, published a Supplemental Notice of Proposed Rulemaking (SNPRM) in the federal register. …

The questions posed in the SNPRM indicate that DOJ is considering many of the issues that Title III businesses have been forced to grapple with on their own in the face of the recent wave of website accessibility demand letters and lawsuits commenced on behalf of private plaintiffs and advocacy groups.  It would be a positive development for any eventual government regulations to clearly speak to these issues.  Conversely, it may be even longer before we see final regulations for Title III entities. …

While most current settlement agreements regarding website accessibility focus on desktop websites, many businesses are anticipating that the next target for plaintiffs and advocacy groups will be their mobile websites and applications.  Such concern is well founded as recent DOJ settlement agreements addressing accessible technology have included modifications to both desktop websites and mobile applications.

Read the full post here.

Employers: DOL Final White Collar Exemption Rule Takes Effect on December 1, 2016

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Our colleagues Jeffrey Ruzal and Michael Kun at Epstein Becker Green have a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the financial services industry: “DOL Final White Collar Exemption Rule to Take Effect on December 1, 2016.”

Following is an excerpt:

Nearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016. …

According to the DOL’s Fact Sheet, the final rule will also do the following:

  • The total annual compensation requirement for “highly compensated employees” subject to a minimal duties test will increase from the current level of $100,000 to $134,004, which represents the 90th percentile of full-time salaried workers nationally.
  • The salary threshold for the executive, administrative, professional, and highly compensated employee exemptions will automatically update every three years to “ensure that they continue to provide useful and effective tests for exemption.”
  • The salary basis test will be amended to allow employers to use non-discretionary bonuses and incentive payments, such as commissions, to satisfy up to 10 percent of the salary threshold.
  • The final rule does not in any way change the current duties tests. …

With the benefit of more than six months until the final rule takes effect, employers should not delay in auditing their workforces to identify any employees currently treated as exempt who will not meet the new salary threshold. For such persons, employers will need to determine whether to increase workers’ salaries or convert them to non-exempt.

Read the full post here.

OSHA’s Electronic Recordkeeping Rule: New Pitfalls for Employers

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Our colleague Valerie Butera, a Member of the Firm at Epstein Becker Green, has a post on the OSHA Law Update blog that will be of interest to many of our readers in the financial services industry: “OSHA’s New Electronic Recordkeeping Rule Creates a Number of New Pitfalls for Employers.”

Following is an excerpt:

On May 12, 2016, OSHA published significant amendments to its recordkeeping rule, requiring many employers to submit work-related injury and illness information to the agency electronically.  The amendments also include provisions designed to prevent employers from retaliating against employees for reporting injuries and illnesses at work.  The information employers provide will be “scrubbed” of personally identifiable information and published on OSHA’s website in a searchable format. …

OSHA plans to rely upon computer software to remove personally identifiable information from these records.  The software will supposedly remove all of the fields that contain identifiers such as the employee’s name, address, and work title, and to search the narrative field in the form to ensure that no personally identifiable information is contained in it.  OSHA’s reliance on a computer system to detect every piece of identifiable information in a narrative is terribly risky and increases the potential for a data breach.

Read the full post here.

NLRB May Make It Harder for Employees to Decertify Unions

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the financial services industry: “NLRB Looks to Make It Harder for Employees to Decertify Unions.”

Following is an excerpt:

National Labor Relations Board (NLRB) General Counsel Richard F. Griffin, Jr., has announced in a newly issued Memorandum Regional Directors in the agency’s offices across the country that he is seeking a change in law that would make it much more difficult for employees who no longer wish to be represented by a union to do so.  Under long standing case law, an employer has had the right to unilaterally withdraw recognition from a union when there is objective evidence that a majority of the employees in a bargaining unit no longer want the union to represent them. …

An employer faced with evidence that a majority of its employees no longer wish to be represented by their union has always faced a difficult choice – whether to petition for an election or to respect its employees’ request and take the risk of charges and litigation by immediately withdrawing recognition. Clear understanding of the law and facts, as well as the potential consequences of each course of action has always been critical.  By issuing this Memo and announcing his goal, the stakes have clearly been raised, and the right of employees to decide—perhaps the ultimate purpose of the National Labor Relations Act—has been placed at serious risk.

Read the full post here.

DOL Releases New Poster and Employer’s Guide to FMLA

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Financial services employers should note that the Department of Labor’s Wage and Hour Division (“DOL”) has just released a new Family Medical Leave Act (“FMLA”) poster and The Employer’s Guide to The Family and Medical Leave Act (“Guide”).

New FMLA Poster

The FMLA requires covered employers to display a copy of the General FMLA Notice prominently in a conspicuous place. The new poster is more reader-friendly and better organized than the previous one. The font is larger and the poster contains a QR code that will connect the reader directly to the DOL homepage. According to the DOL, however, the February 2013 version of the FMLA poster can continue to be used to fulfill the FMLA’s posting requirement.

The Employer’s Guide to The Family and Medical Leave Act

According to the DOL, the Guide is intended to provide employers with “essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.” The Guide reviews issues in chronological order, beginning with a discussion of whether an employer is covered under the FMLA, all the way through an employee’s return to work after taking FMLA leave. The Guide includes helpful “Did You Know?” sections that shed light on some of the lesser-known provisions of the FMLA. The Guide also includes hyperlinks to the DOL website and visual aids to improve the reader’s experience. Overall the Guide helps navigating the complex FMLA process; however, it does not provide any guidance beyond the existing regulations.

The NLRB Slams a Non-Union Financial Services Employer Over Its Commonplace Employee Manual Rules

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Jonathan L. ShapiroLauri F. RasnickIn a recent decision, a National Labor Relations Board (“NLRB”) Administrative Law Judge (“ALJ”) ruled that Quicken Loans’s (the “Company”) Detroit, Michigan branch (along with five related entities) violated the National Labor Relations Act (“NLRA”) by using and disseminating an employee manual in its non-union workplace that the ALJ concluded interfered with employees’ rights under the NLRA.  This was yet another case in which the NLRB took aim against Quicken Loans for adopting work rules and/or policies that an ALJ found would “chill” non-unionized employees in the exercise of their rights under the NLRA.  As we previously discussed in another blog post, in March 2016, the NLRB found that the Company’s branch in Scottsdale, Arizona violated the NLRA by implementing unlawful work rules after one of its bankers used profanity and complained about a client in an office restroom.

The most recent case revolved around a 238-page employee manual referred to as the “Big Book.”  In Quicken Loans Inc. et al. and Hugh MacEachern, Case Number 07-CA-145794, an ALJ found a number of provisions in the Big Book unlawfully interfered with employees’ rights to engage in concerted activities concerning their terms and conditions of employment.  Although Quicken Loans has vowed to appeal the April decision to the Board in Washington for setting a “dangerous precedent,” the decision in reality follows a long line of NLRB precedents that have taken a buzz-saw to employment policies and agreements where it believes they may interfere with employees’ protected Section 7 activity (i.e., activity that implicates employees’ right to form, join or assist labor organizations or collectively bargain or act for their mutual aid and protection).  In this latest decision, the ALJ reviewed a number of the Big Book’s rules, ultimately finding many, but not all, to be unlawful on account of being “overbroad,” which the ALJ explained means is a rule that is broader than necessary to protect the employer’s legitimate interest and that “employees would reasonably interpret . . . to encompass protected activities” under the NLRA.  We list and discuss some of these rules below to shed light on what the NLRB considers to be unlawful interference with employees’ rights, as opposed to a lawful work rule.

Found to be Unlawful Rules:

  • “This book contains confidential information that must not be disclosed outside the Company or used for purposes other than for the Company’s legitimate business purposes. This book or any of its contents may not be reproduced or disseminated to anyone not employed by the Company.” The ALJ concluded this rule was overbroad and would be seen by employees as prohibiting actions protected by the NLRA because there was no way for an employee to know what portions of the Big Book were confidential. Moreover, a blanket prohibition on dissemination of “any of [the Big Book’s] contents” was overbroad because the Big Book discussed matters relating to the terms and conditions of employment.
  • “Think before you Tweet. Or post, comment or pin. What you share can live forever. If it doesn’t belong on the front page of the New York Times, don’t put it online.” The ALJ found this to be a violation of the NLRA because an employee considering this rule would reasonably feel chilled from expressing negative, but protected, information about the Company, which is protected by the NLRA.
  • “The Company recognizes that team members may desire to display mementos pertaining to family or other personal items. However, nothing can be displayed that is, or could be deemed to be, harmful or offensive to a reasonable person and his or her system of beliefs.” The ALJ concluded this rule was unlawful because a reasonable employee would “think twice” in the face of this rule before displaying pro-union mementos and thus would see it as a prohibition on union related activity.
  • “The Company’s buildings, offices, common areas . . . are to be used only for conducting Company business and transactions, and for no other purpose.” The ALJ found this rule was unlawful because an employee would reasonably understand it to bar solicitation and other protected activity at times and in places where such activities are protected by the NLRA.
  •  “You shall not photograph or record through any means the Company’s operations, systems, presentations, communications, voicemails, or meetings.” The ALJ found that this policy was unlawful because employees would likely understand this to prohibit protected activity, such as the recording of a meeting held to discuss wages and other terms and conditions of employment.
  •  “[You may not use] Company Resources to engage in inappropriate acts that exhibit conduct that is not in the best interests of the Company, its clients, or Team Members”; “[You may not use a] signature line that contain religious, political, sexual or other inappropriate content.” The ALJ found the first rule was overbroad and unlawfully interfered with employees’ rights because an employee would believe that using email to harshly criticize the terms and conditions of employment would be considered “inappropriate” action “not in the best interest of the Company.” Similarly, the ALJ held that the second rule was unlawful and interfered with employees’ statutory rights because an employee would likely believe that “inappropriate content” would include speech protected by Section 7 of the NLRA.
  •  “[You may not] “Communicat[e] with the media without express authorization from the Corporate Communications Team.” The ALJ found this to be a “straightforward” violation of the NLRA because employees have a right to communicate with the media on subjects relating to their terms and conditions of employment, including but not limited to formation of and membership in and representation by unions.

Found to be Lawful Rules:

  • “From time to time, team members may have access to private Company information, for example, information about financial performance, strategy, forecasts, etc. Such information is confidential, any may not be shared with people or entities outside the Company—including members of the media.” The ALJ said this provision was lawful because, based on the explanation of the type of information covered by the rule, employees would reasonably understand that the rule related to their employers’ interest in the security of their proprietary information and not to information protected by Section 7.
  •  Unacceptable conduct includes: “Harassment: verbal, physical, or visual harassment of a team member, client, consultant, business partner, vendor or any other person associated with the Company.” The ALJ stated that this was lawful because employees have a right to a workplace free of unlawful harassment.
  • “You acknowledge and agree that: (a) all documents . . . and (b) all office equipment and supplies . . . are and shall remain the property of the Company . . . The ALJ held that this was lawful because it included no language prohibiting the sharing, copying or dissemination of employee lists or other information that is described as company property.
  • Transmission of Sensitive Information. Sensitive information must not be transmitted over the Internet without prior management approval.” The ALJ said that this was lawful because the Big Book defined Sensitive Information and provided 21 examples of such information. Thus, it would be unreasonable for an employee to conclude that he was precluded by this work rule from transmitting Section 7 information.
  •  “Personal Electronic Devices. Approval from management . . . is needed before any Sensitive Company information is stored on a personal electronic device, and the amount of information stored should be kept to a minimum. Special protection needs to be enabled on each device to ensure that the stored information is kept secure. The ALJ found that an employee would not likely construe “sensitive” information to include information protected by Section 7 activity.

Based on the findings, the ALJ ordered Respondents to cease and desist from maintaining the overly broad work rules.  Respondents, however, had already done so:  on December 4, 2015, by email notice sent to all employees, the Respondents rescinded all versions of the Big Book, effective immediately.

This case is yet another example of the NLRB’s continued broad view of what constitutes “concerted protected activity,” “work rules” and unlawful activity under the Act.  Because the distinction between an overbroad and lawful work rule is not always clear-cut, any employer subject to the Act (one whose company affects commerce) should carefully review its various agreements and policies, whether in an nondisclosure agreement, offer letter, handbook, manual, separation agreement, or the like to ensure that they do not contain rules that would potentially chill union-related activities.  Taking a proactive approach will put employers in the best possible position if they have to face scrutiny from the NLRB.

NLRB Argues “Misclassification” of Independent Contractors Is Unfair Labor Practice

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the financial services industry: “NLRB Argues ‘Misclassification’ as an Independent Contractor Is Unfair Labor Practice.”

Following is an excerpt:

In a further incursion into the area of the gig and new age economy, the Regional Director for the National Labor Relations Board’s Los Angeles office has issued an unfair labor practice complaint alleging that it is a violation of the National Labor Relations Act (the “Act”) for an employer to misclassify an employee as an independent contractor. …

The issuance of the complaint in this case comes less than a month after the Board’s General Counsel issued General Counsel Memorandum 16-01, Mandatory Submissions to Advice, identifying the types of cases that reflected “matters that involve General Counsel initiatives and/or priority areas of the law and labor policy.”  Among the top priorities are “Cases involving the employment status of workers in the on-demand economy,” and “Cases involving the question of whether the misclassification of employees as independent contractors,” which as reflected in the IBT complaint the General Counsel contends violates Section 8(a)(1) of the Act.

Read the full post here.

New Online Recruiting Accessibility Tool Could Help Forestall ADA Claims by Applicants With Disabilities

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Frank C. Morris, Jr.

Frank C. Morris, Jr.

In recent years, employers have increasingly turned to web based recruiting technologies and online applications. For some potential job applicants, including individuals with disabilities, such as those who are blind or have low vision, online technologies for seeking positions can prove problematic. For example, some recruiting technologies and web-based job applications may not work for individuals with disabilities who use screen readers to access information on the web. The U.S. Department of Labor’s Office of Disability Employment Policy (ODEP) recently announced the launch of “TalentWorks.” TalentWorks is a free online resource intended to assist employers in providing accessibility in their web based job applications and recruiting technologies for job seekers with disabilities.

TalentWorks can provide background information on accessibility and e-recruiting in addition to tips for providing online job applications, digital interviews, pre-employment tests and resume upload programs that are accessible. The tool was created by DOL’s ODEP’s Partnership on Employment and Accessible Technology (PEAT). The PEAT developed the tool after a national survey of people with disabilities found 46% of the respondents rated their most recent online job application experience as “difficult as to impossible.”

Employers would be well advised to review TalentWorks in connection with their online recruiting efforts because if their online recruiting tools are not accessible to individuals with disabilities, they may be targeted for alleged Americans with Disabilities Act (ADA) violations by individuals, advocacy groups for the disabled and the EEOC – particularly if they do not provide alternative, regularly used, legitimate methods for job application. Moreover, federal contractors now have specific affirmative action goals for individuals with disabilities. In any audit of a contractor by DOL’s Office of Federal Contract Compliance Programs (OFCCP), it is likely that OFCCP will scrutinize whether the contractor’s avenues for job applications, including online recruiting, is accessible to individuals with disabilities. Further, a contractor may not be able to meet its goals for hiring of people with disabilities if their application process is not accessible.

The U.S. Department of Justice (DOJ) has investigated a number of cities and universities for alleged ADA violations in connection with their application, recruitment and training processes. DOJ’s enforcement activities have resulted in various settlement agreements requiring the cities (see page 4) and universities involved to make their application processes accessible to individuals with disabilities (See specifically Paragraph 22).

In light of such potential claims, we are working with employers on assessing their online recruiting and application processes, as well as their websites, to enhance accessibility and reduce potential exposure to ADA claims. With DOL’s focus on this issue with TalentWorks, it is clear that this is an issue that will continue to attract increasing attention and enforcement activity.

Employers: Caregivers Will Be Protected Under New York City’s Human Rights Law

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Our colleagues Peter M. Panken, Nancy L. Gunzenhauser, and Marc-Joseph Gansah have a post on the Retail Labor and Employment Blog that will be of interest to many of our readers in the financial services industry: “Employers Should Care About This: New York City’s Amendment on Caregiver Discrimination.”

Following is an excerpt:

The New York City’s Human Rights law (“NYCHRL”) prohibits employment discrimination against specified protected classes of employees and applicants including:

race, color, creed, age, national origin, alienage or citizenship status, gender, sexual orientation, disability, marital status, partnership status, any lawful source of income, status as a victim of domestic violence or status as a victim of sex offenses or stalking, whether children are, may be or would be residing with a person or conviction or arrest record.

If this list wasn’t long enough, on May 4, 2016, NYCHRL will add “caregivers” to the protected classes including, anyone who provides ongoing medical or “daily living” care for a minor, any disabled relative or disabled non-relative who lives in the caregiver’s household. …

Read the full post here.