Welcome to
Morris County &
Central NJ SHRM Chapters’
SUMMER EMPLOYMENT
LAW UPDATE
Presented By:
Sponsored by:
RECENT CHANGES TO FEDERAL
AND STATE FAMILY LEAVE
LAWS
Presented by:
Gregory Alvarez
What Issues Will We
Address?
Family Leave Update
SHRM Summer
Employment Law
Update
1. 1/28/08 – The FMLA amended to provide
for military family leave
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
2. 2/11/08 – The USDOL published its
proposed revisions to the FMLA
regulations
3. 5/2/08 – Governor Corzine signed
legislation providing for Paid Family
Leave
THE PROPOSED FMLA
REGULATIONS
2/11/08:
DOL
Regulations.
Issues
Proposed
FMLA
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Major Areas Addressed by the DOL:
– Chronic Conditions And Intermittent Leave
– Employer Notice Requirements
– Employer Response To Request For Leave
– Employee Notice Requirements
– Medical Certifications
– Return To Work Certifications
CHRONIC CONDITIONS AND
INTERMITTENT LEAVE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Employees can still take unplanned,
unscheduled leave in the smallest increments
tracked by their employers
• Applies to intermittent leave for employee’s
chronic medical conditions (e.g., asthma,
migraine headaches)
• Concerns of employers acknowledged but,
“self-treatment” by employee remains valid
• Note: “periodic” visits now required; twice a
year is enough
EMPLOYER NOTICE
OBLIGATIONS
• Re: General Notice Obligations, employers have
to do more to educate employees on their rights
to FMLA leave
SHRM Summer
Employment Law
Update
July 16, 2008
• If proposed regulations are adopted, employer
postings and policies regarding FMLA rights
must be reviewed
Jackson Lewis LLP
jacksonlewis.com
•
Employers may distribute or post
electronically if employees have access.
notice
• If no handbook, must be distributed at least
once a year
• Must translate
workforce
for
non-English
speaking
EMPLOYER RESPONSE TO
LEAVE REQUEST
• The DOL proposes to eliminate the WH-381
Form in favor of employers issuing two separate
notices
SHRM Summer
Employment Law
Update
– The first notice is referred to as an “Eligibility” notice
– The second is referred to as a “Designation” notice
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Eligibility notice also advises employees of need
to provide medical certification to corroborate
that leave is medically necessary
• Deadline for notices: increased from two to five
business days
• “Provisional” designation eliminated in most
cases
EMPLOYEE OBLIGATIONS
• Employees have greater responsibilities too
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
• Simply calling in “sick” without providing more
is not enough to obtain FMLA protection
– How much more is needed?
– When will simply being sick become
serious health condition?
jacksonlewis.com
• Employees must now make a “reasonable
effort” to schedule intermittent leave in a
manner that minimizes the disruption on an
employer’s business
– Previously only had to “attempt” to do so
MEDICAL CERTIFICATIONS
• The DOL proposes to change the certification of
health care provider forms
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Employers to be provided with additional information
to better evaluate an employee’s entitlement to leave
– Employers allowed to attach job description or brief
description of the essential functions and require
H/C/P to confirm employee’s inability to perform
– Employers permitted to communicate directly with
H/C/Ps to authenticate and clarify
– Employers also permitted to follow ADA interactive
process if S/H/C also may be disability
• Similar information now provided regarding
Return-To-Work forms
– Existing regulations only allow “simple statement of
their ability to return to work”
“GROWING” INTO FMLA
LEAVE
• Many employers allow employees to take
leave even if they fall short of the 12 months
of service
SHRM Summer
Employment Law
Update
July 16, 2008
– Can you count leave against their 12 month
entitlement if employees reach 12 months of
service while on leave?
Jackson Lewis LLP
jacksonlewis.com
• The DOL has rejected this effort
– Employee entitled to their 12 weeks upon
becoming FMLA-eligible
– Employees with less than 12 months of
service receive more leave than eligible
employees
– Some case law which holds otherwise
ATTENDANCE GOALS
• Current regulations require employers to pay
perfect attendance bonuses to employees who
have missed time from work for FMLA-covered
reasons
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Employers would now be permitted under the
Proposed Regulations to disqualify an employee
from a bonus or award predicated on the
achievement of a goal where the employee fails to
achieve that goal as a result of an FMLA absence
• While this may appear to be a major shift in the
DOL's position, employers ought not to disqualify
individuals on FMLA-qualified leave while allowing
employees on non-FMLA leaves (such as paid
vacation) to receive such awards
NEW FMLA ENTITLEMENTS FOR
MILITARY SERVICE MEMBERS
• Amendments to the FMLA
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
• With limited exception, became effective on
January 28, 2008
• Existing FMLA rules apply unless
otherwise; DOL working on Regulations
stated
jacksonlewis.com
• Two “new” types of FMLA “leave”
– “Qualifying Exigency” leave (12 weeks)
– “Servicemember Family” leave (26 weeks)
NEW FMLA ENTITLEMENTS FOR
MILITARY SERVICE MEMBERS
SHRM Summer
Employment Law
Update
Qualifying Exigency
(Section 102(a)(1)(E))
Servicemember Family
Leave (Section
102(a)(3))
Family Relationship
Servicemember must be
spouse, son or daughter,
or parent of employee
Employee must be
spouse, son or daughter,
parent or next of kin of
servicemember
Military Status of
Servicemember
On active duty or being
called to active duty
Member of Armed Forces
who is undergoing
medical treatment,
recuperation, therapy, is
in outpatient status or is
on temporary disability
retired list for a serious
illness or injury
Connection of Leave to
Servicemember’s Military
Service
Employee is needed to
address qualifying
exigencies arising out of
active duty or call to
active duty
Employee is needed to
care for covered
servicemember
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
QUALIFYING EXIGENCY
LEAVE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• The “qualifying exigency” provision not effective
until the Secretary of Labor issues final
regulations defining “any qualifying exigency”
• In the interim, DOL encourages employers to
provide this type of leave to qualifying
employees
• Examples:
– To arrange for child care
– To see a child off or welcome child home
– To attend pre-deployment briefings
– To attend family support meetings
– To attend reintegration briefings
Source: U.S. Representative Jason
Amendments dated May 17, 2007
Altmire’s
Press
Release
on
FMLA
“SON” OR “DAUGHTER”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Note: Existing FMLA definition does not work
• FMLA Reg §825.113 requires a “son” or
“daughter” to be 18 or under or, if over 18,
incapable of self-care due to a physical or
mental disability
• The Amendments do not change the definition
of son or daughter but … all servicepersons
are over 18
• The anticipated DOL Regulations likely will
deal with this issue
“NEXT OF KIN”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Means the nearest blood relative of the
servicemember
– Likely to affect employees who are not
the “spouse”, “parent” or “son” or
“daughter” of a servicemember
– Brothers, sisters, aunts, uncles,
grandparents, in loco parentis
“NEXT OF KIN”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• The DOL seeking soliciting comments on
the following questions:
– Does each covered servicemember only
have one next of kin who is eligible to
take FMLA leave?
– How do you determine if an employee is
the nearest blood relative?
– Does it matter if the nearest blood relative
of a covered servicemember is unable or
unwilling to provide care?
– Should a covered servicemember be
allowed to designate any blood relative as
next of kin for purposes of FMLA leave to
care for the servicemember?
LINGERING QUESTIONS
•
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
Lingering Questions:
– Are employees entitled to only one 26
week period of servicemember family
leave?
jacksonlewis.com
– Could the 26 workweek entitlement be
calculated per injury of a covered
servicemember?
COMPLIANCE STRATEGIES
• Amend/Supplement FMLA policies
–
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Must comply with FMLA “General” notice policies
• Decide whether your company will provide
“qualifying exigency” leave pending issuance of
DOL Regulations
–
–
If so, in what circumstances?
One option – determine on case by case basis
reserving total discretion to Company
• Train supervisors on when leave is required
• Anticipate/prepare for potential lengthy leave
situations by cross-training
• Develop certifications for confirming entitlement
to “qualifying exigency” leave
NEW JERSEY PAID FAMILY
LEAVE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• May 2, 2008 – Gov. Corzine signs family
leave bill that amends the State’s existing
temporary disability benefits law (“TDI”) to
provide eligible employees up to six weeks of
family leave benefits to care for sick family
members or a newborn or newly adopted
child
• January 1, 2009 – employees begin paying
tax
• July 1, 2009 – employees eligible for benefits
NEW JERSEY PAID FAMILY
LEAVE
COVERED EMPLOYERS?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
1. Any entity or person;
2. Employing one or more individuals;
and
3. Who pays the individual(s) at least
$1,000 in the current or preceding
calendar year.
NEW JERSEY PAID FAMILY
LEAVE
WHO IS ELIGIBLE?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– Employees who work 20 base weeks and
earn at least 20 times minimum wage
($143); or
jacksonlewis.com
– Employees who have earned 1,000 times
minimum wage ($7.15) adjusted to the next
higher multiple of $100 ($7,200) in calendar
year preceding the leave
NEW JERSEY PAID FAMILY
LEAVE
FAMILY LEAVE BENEFITS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
A covered individual is eligible for family leave
benefits if he or she takes leave from work:
1. To provide care for a family member who has a
serious health condition;
2. To be with a child during the first 12 months
after the child’s birth if either the individual, or
the domestic partner or civil union partner of the
individual, is a biological parent of the child; or
3. During the first 12 months after the placement
of the child for adoption.
NEW JERSEY PAID FAMILY
LEAVE
DEFINITIONS
SHRM Summer
Employment Law
Update
July 16, 2008
• Family member – child, spouse, domestic
partner, civil union partner or parent (not
parent-in-law?)
Jackson Lewis LLP
jacksonlewis.com
• Serious Health Condition – Same definition
as under New Jersey Family Leave Act
(“NJFLA”)
• “To Provide Care” – Same definition as under
NJFLA
NEW JERSEY PAID FAMILY
LEAVE
AMOUNT AND DURATION OF BENEFITS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– Two-thirds of weekly salary up to a weekly
maximum (currently $524) for up to 6 weeks
(after the 8th consecutive day of leave)
jacksonlewis.com
– $74.85 per day for up to 42 days in a 12
month period for intermittent leave (Why not
30 days?)
NEW JERSEY PAID FAMILY
LEAVE
EMPLOYEE OBLIGATIONS
SHRM Summer
Employment Law
Update
1. 30 days notice if leave is sought to be with a child
after the birth or the placement of the child for
adoption
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
2. Prior notice in a reasonable and practicable manner if
the leave is to care for a family member with a serious
health condition
3. Make a reasonable effort to schedule the leave so as
not to unduly disrupt the operations of the employer
4. Submit medical certification
NEW JERSEY PAID FAMILY
LEAVE
MEDICAL CERTIFICATION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
An employee must provide a medical certification from
the health care provider setting forth:
1. The date on which the serious health condition
commenced;
2. The probable duration of the condition;
3. The medical facts regarding the condition;
4. A statement that the condition warrants the
individual providing care; and
5. An estimate of the amount of time needed to care
for the family member
NEW JERSEY PAID FAMILY
LEAVE
INTERMITTENT LEAVE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
An employee may receive benefits for intermittent leave if:
1. The total time does not exceed 12 months;
2. Provides 15 days’ notice before the first day on which
benefits are paid;
3. Makes a reasonable effort to schedule the leave so as
not to unduly disrupt the operations and, if possible,
provide a schedule of the leave; and
4. Submits a medical certification including the medical
necessity for the intermittent leave, the duration and
the dates of the treatments
NEW JERSEY PAID FAMILY
LEAVE
OTHER COMPONENTS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Employer may require employee to exhaust
up to 2 weeks paid leave (vacation, sick)
which reduces 6 week period of benefits.
NEW JERSEY PAID FAMILY
LEAVE
COST TO EMPLOYEES & RECEIPT OF BENEFITS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• January 1, 2009 - employees begin paying tax of
$24.93 per year or about $0.48 per week (tax
rate=0.09% on the portion of wages, subject to TDI)
• July 1, 2009 - employees eligible for benefits
• January 2010 - tax increases to $33.24 per year or
about $0.64 per week (tax rate=0.12%)
NEW JERSEY PAID FAMILY
LEAVE
JOB PROTECTED LEAVE?
SHRM Summer
Employment Law
Update
SMALL EMPLOYERS - (Fewer than 50)
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
The failure or refusal to restore an employee to
employment following paid family leave will not be a
wrongful discharge in violation of a clear mandate of
public policy. Furthermore, an employee of such an
employer will not have a cause of action against the
employer, in tort, or for breach of an implied provision
of employment, or under common law, for refusing or
failing to restore the employee to employment.
NEW JERSEY PAID FAMILY
LEAVE
JOB PROTECTED LEAVE?
SHRM Summer
Employment Law
Update
LARGE EMPLOYERS – (50 or more)
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
For employers who are covered under FMLA and the
NJFLA (50 or more employees), the Act does not grant
an employee any entitlement to employment
restoration. However, it does not increase, reduce or
modify any entitlement of an employee to return to
employment or any right to take action under the FMLA
and the NJFLA.
DEALING WITH EMPLOYEE ACCESS
OF CHILD PORNOGRAPHY IN THE
WORKPLACE AND HANDLING
EMPLOYEE ARRESTS
Presented by:
David B. Lichtenberg
THE CHILD PORN DILEMMA
• What do I do if child pornography is
discovered in the workplace?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
• Destroy it?
jacksonlewis.com
• Is “Big Brother” already watching?
THE CHILD PORN DILEMMA
•
Duty to report child pornography to
the authorities?
SHRM Summer
Employment Law
Update
July 16, 2008
–
CPPA – federal law
–
Doe v. XYC – New Jersey case
–
How far does the duty go?
Jackson Lewis LLP
jacksonlewis.com
THE CHILD PORN DILEMMA
• Is it Child Pornography or not?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– NJ criminal statute
• Child = under 16 years of age
• “Prohibited sexual act”
– Be cognizant of differing and possible
broader federal and state law
THE CHILD PORN DILEMMA
• What if I guess wrong?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– NJ criminal statute not forgiving
• Mistaken belief is no defense
• Even if that belief is reasonable
jacksonlewis.com
– Possible liability for company
• Digitally generated images
• Malicious prosecution
THE CHILD PORN DILEMMA
• How do I investigate the issue?
SHRM Summer
Employment Law
Update
– Have a plan in place/review policies
July 16, 2008
Jackson Lewis LLP
– Confronting the accused
jacksonlewis.com
– Third party witnesses
– Maintaining and reviewing electronic data
THE CHILD PORN DILEMMA
• Who do I report it to?
SHRM Summer
Employment Law
Update
– Local Police
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– FBI
• Who should issue the report?
THE CHILD PORN DILEMMA
•
SHRM Summer
Employment Law
Update
July 16, 2008
Former Employees vs. Current
Employees
–
The “special relationship” is gone
–
NJ criminal statute revisited
–
Sarbanes Oxley
Jackson Lewis LLP
jacksonlewis.com
THE CHILD PORN DILEMMA
• Practical Considerations
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Review electronic communications
policies and preservation protocol
– Educate managers
– Have a plan in place for investigation
– Consider bringing in experts to deal
with electronic and criminal issues
– Background checks
OFF DUTY MISCONDUCT: WHAT TO
DO WITH ARRESTED EMPLOYEES?
Step 1:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Adopt A Policy
• Put employees on notice that you have a
legitimate concern when employees are arrested
- Safety
- Integrity
- Image
• Demonstrate that policy applies to all employees
- Must still practice what you preach
• Advise that any decision based on investigation,
not arrest
WHAT TO DO WITH
ARRESTED EMPLOYEES?
Step 2:
SHRM Summer
Employment Law
Update
Require Employees To Report If
They Are Arrested Or Charged With
Crime
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Managers should report knowledge of employees’
arrest
• Crime – violation, misdemeanor or
felony under local, state or federal law
WHAT TO DO WITH
ARRESTED EMPLOYEES?
Step 3:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Decide Whether Employees Should
Be Suspended Pending
Investigation
• Does alleged misconduct raise serious
concerns about safety of employees/clients?
• Would questions about integrity significantly
compromise employer or client property?
• Would continued access to information or
authorization be viewed as negligent?
• Do present facts indicate likelihood that
employee committee offense?
• With or without pay?
WHAT TO DO WITH
ARRESTED EMPLOYEES?
Step 4:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Investigate Circumstances
Surrounding Arrest/Charges
• Review media reports
• Obtain police reports
• Speak directly with employee
- Give full opportunity to explain
- Assess employee’s credibility
• If you conduct background search, must
comply with FCRA/NJ law
- Need employee’s consent
WHAT TO DO WITH
ARRESTED EMPLOYEES?
Step 5:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Make Decision
• Decision based on investigation – not arrest
• If likely that employee committed offense
charged, decide appropriate discipline
• Can consider unavailability due to
incarceration
• Should revisit decision upon disposition of
matter
Put onus on employee to follow up
RECENT DEVELOPMENTS
AFFECTING FEDERAL & STATE
“WHISTLEBLOWER” CLAIMS
Presented by:
Richard J. Cino
TOPICS TO BE COVERED
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Significant Whistleblower Protection
Statues & Developments
• Effective Corporate Governance
Program:
– Conflicts of Interest
– The Audit Committee
– Corporate Compliance and Ethics
Program
THE BIG QUESTION:
The Impact of Corporate Governance to
Address Whistleblower Issues
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Sarbanes-Oxley Act of 2002
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• New Jersey Conscientious
Employee Protection Act (“CEPA”)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
What Civil Protections Does the
Sarbanes-Oxley Act Provide to
Whistleblowers?
WHISTLEBLOWER LAWS
• In general, a Whistleblower must show:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– (1) he/she is engaged in protected activity or
conduct;
– (2) the employer knew or should have known
of the protected activity;
– (3) the employee suffered an unfavorable
personnel action; and
– (4) the protected activity was a contributing
factor in the unfavorable action
(Standard under the New Jersey Conscientious Employee
Protection Act)
NEW DEVELOPMENTS
UNDER CEPA
SHRM Summer
Employment Law
Update
• Carmona v. Resorts International Hotel, Inc.,
A-83-05 (February 21, 2007)
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Employee has burden of establishing that
complaint was reasonable and made in
good faith
– Employer’s investigative report admissible
- was not hearsay
NEW DEVELOPMENTS
UNDER CEPA
SHRM Summer
Employment Law
Update
• Quinlan v. Curtiss-Wright Corp.,
No. L-8976-03
(N.J. Super. Ct. Feb. 13, 2007)
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Jury awarded $9 million to a woman
terminated in retaliation for bringing a
discrimination suit
– Large jury awards are a potential exposure
employers face from retaliation lawsuits
NEW DEVELOPMENTS
UNDER CEPA
• D’Annunzio v. Prudential Ins. Co. of Am.,
192 N.J. 110 (Sup. Ct. 2007)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– An independent contractor can sometimes
be an employee under CEPA and, thus,
entitled to whistleblower protection under
the statute
– Private agreements designating the work
status of individuals are “informative but
not dispositive” in analyzing a working
relationship under CEPA
NEW DEVELOPMENTS
UNDER CEPA
• Lake v. City of Brigantine,
396 N.J. Super. 65 (Law Div. 2007)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– The notice of claim provisions of the Tort
Claims Act (TCA) cannot be applied to
claims brought pursuant to CEPA
– This emphasizes the remedial purpose of
the CEPA statute
NEW DEVELOPMENTS
UNDER CEPA
SHRM Summer
Employment Law
Update
• Maw v. Advanced Clinical Communications,
Inc.,
179 N.J. 439 (Sup. Ct. 2004)
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– An employee’s private dispute concerning
a non-compete clause in an employment
agreement is not actionable under CEPA
– The goals and intentions of CEPA are to
protect the public interest
NEW DEVELOPMENTS
UNDER CEPA
• Donofry v. Autotote Systems, Inc.,
350 N.J. Super. 276 (App. Div. 2001)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– CEPA protects employees who blow the
whistle on themselves
jacksonlewis.com
– Employee’s reporting of own transgression
is protected activity
New Developments Under
SOX
• Livingston v. Wyeth, Inc., 520 F.3d 344 (4th
Cir. 2008)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Employee complaints not protected under
SOX if there was no objectively reasonable
basis to believe that employer was
violating the securities laws
– Speculative beliefs do not comprise an
existing violation under SOX
NEW DEVELOPMENTS
UNDER SOX
• Platone v. FLYi, Inc.,
ARB Case No. 04-154, 2003-SOX-27 (ARB.
Sept. 29, 2006)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Complainant’s communications to
employer must relate to federal mail, wire,
bank or securities fraud statutes, any rule
or regulation of the SEC, or any provision
of federal law relating to fraud against
shareholders
– Relevant inquiry in examining protected
activity under SOX is what employee
communicated to employer prior to
termination
NEW DEVELOPMENTS
UNDER SOX
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Welch v. Cardinal Bankshares Corp.,
ARB No. 05-064, ALJ No. 2003-SOX-15
(ARB May 31, 2007)
– Complainant must have a reasonable belief
that employer violated any of the laws
protected by SOX
– Employee’s SOX complaint must
definitively and specifically relate to the
categories of fraud or securities violations
listed in SOX
NEW DEVELOPMENTS
UNDER SOX
• Bechtel v. Competitive Tech., Inc.,
448 F.3d 469 (2d Cir. 2006)
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Preliminary order of reinstatement not
enforced because regulations were not
authoritative over the district court
– Appeals must work their way through the
administrative system before the federal
courts become involved
NEW DEVELOPMENTS
UNDER SOX
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Bishop v. PCS Admin. (USA), Inc.,
2006 U.S. Dist. LEXIS 37230, *30-31 (N.D.
Ill. May 23, 2006)
– Employee’s complaints regarding
sufficiency of corporate compliance and
ethics program did not relate to threatened
fraud against shareholders and was not
protected activity
– The phrase “relating to fraud against
shareholders” must be read as modifying
each item of the series, including “rule or
regulation of the SEC”
NEW DEVELOPMENTS
UNDER SOX
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
• Sussman v. K-Mart Holding Corp.,
05-70378 (E.D. Mich. Nov. 15, 2006)
– Passage of time can be too great to
support a whistleblower action
jacksonlewis.com
– Intervening events can preclude a finding
of causal connection in SOX whistleblower
cases
NEW DEVELOPMENTS
UNDER SOX
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Murray v. TXU Corp.,
2005 U.S. Dist. LEXIS 10945 (N.D. Tex.
June 7, 2005)
– SOX does not expressly provide a right to
a jury trial
– The plain language of SOX only provides
for compensatory damages, which include
reinstatement, back pay, litigation costs,
expert witness and attorneys’ fees
DEVELOPING AN EFFECTIVE
CORPORATE GOVERNANCE
PROGRAM
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Who Needs a Corporate Governance
Program?
– Publicly held companies
– Non-publicly held companies
– Large organizations
– Small organizations
– For-profit corporations
– Non-profit corporations
YOUR COMPANY
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
CONFLICTS OF INTEREST
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• A conflict of interest policy defines prohibited
relationships with outside companies and
individuals
• Provides a mechanism for identifying and
reporting potential conflicts
• Provides guidelines to assist in developing
policies and procedures to address conflicts
• Addresses unauthorized use of company
assets
• Be careful!
THE CORPORATE
COMPLIANCE AND ETHICS
PROGRAM
• Code of Ethics
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Comprehensive
– Procedures to Renew and Update
– Regular Training
– Routine Self-Evaluation of Program
Effectiveness
– Mechanism to Receive Internal
Complaints
AUDIT COMMITTEE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Independence is key
• Coordination of internal and external
audit functions
BUT REALLY, . . .
Why Should I Care About Corporate
Governance?
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
THE LAWS CAN IMPROVE
YOUR ORGANIZATION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Whistleblower protection laws help
an organization to monitor its
behavior and identify potential issues
that could result in liability
BENEFITS:
• ORGANIZATIONS WILL:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Identify potential risks
– Assess the effectiveness of the
corporate governance program
– Identify areas where the organization
needs to focus greater attention
– Thoroughly investigate and address
complaints and demonstrate the
organizations commitment to
appropriate behavior
BENEFITS:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Demonstrates the organization takes
employees concerns seriously
• Improve the organizations image
internally and externally
• Reduce potential civil and criminal
liability
• Avoid bad publicity and reduced
employee morale and productivity
COPING WITH THE NEW AGE OF
ELECTRONIC DOCUMENT
MANAGEMENT FROM A HUMAN
RESOURCES STANDPOINT
Presented by:
Brett M. Anders
&
Joseph Lazzarotti
E-DISCOVERY – AN EVOLVING
OBLIGATION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Electronic data has been considered
discoverable evidence in federal court for more
than 30 years
• Parties have a duty to thoroughly investigate,
preserve and disclose the existence and location
of potentially relevant documents, including
electronic documents
• Parties must disclose when documents are
available in electronic form
FACTS ABOUT ELECTRONIC
INFORMATION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Studies indicate approximately 98% of all
documents today are created in electronic
form
– At least 70% of corporate records are
stored in electronic format
– 30% of business information is never
printed
• Almost 90% of employees use office e-mail
for personal reasons
• Electronic data is obtained in 3 out of every 4
lawsuits involving Fortune 500 companies
CHALLENGES IN DEALING WITH
ELECTRONICALLY STORED
INFORMATION
• Sheer Volume
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
–
–
–
–
30 – 70 billion e-mails sent per day
CD-ROMs (650 MB) can hold 325,000 pages
Thumb Drives (1 GB) can hold 500,000 pages
Back-up Tapes (1 Terabyte) can hold
500,000,000 pages
jacksonlewis.com
• Multiple Copies
• Multiple Locations
• Multiple Versions
AMENDMENTS TO THE
FEDERAL RULES
• Prompted by the differences between paper and
electronic documents
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Volume of Electronically Stored Information
(ESI) is exponentially greater than the volume of
paper records, and thus the costs that are
associated with discovery as a result
– Dynamic nature of ESI. Information is no longer
fixed or static
– ESI is almost impossible to delete, unlike paper
which can be shredded
– In order to be reviewed or usable, ESI may
need to be retrieved, restored, or translated
THE AMENDMENTS – IN
SUMMARY
• The Amendments address six key points:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– ESI must be considered during discovery
– Create “meet and confer” provisions encouraging
the parties to explicitly discuss e-discovery issues
at the outset of litigation
– Mandate the format in which ESI must be
produced
– Create a limited exception to disclosure based on
“undue burden or cost”
– Establish “Safe Harbor” for ESI destroyed as a
result of the routine, good faith operation of
electronic information systems
– Add protection for privileged information
inadvertently disclosed within ESI
ELECTRONICALLY STORED
INFORMATION
• E-mail
• Internet
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
–
–
–
–
–
–
Web Pages
Chat Rooms
Cookies
History Logs
Cache files
Blogs
• Databases
• Word Processing
Files
• Spreadsheets
•PowerPoints
•Voice Mails
•Video Files
•Audio Files
•Graphics (.pdf, .jpg)
•System History Files
•Metadata
POTENTIAL LOCATIONS OF
ESI
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
•
•
•
•
•
•
•
•
•
•
•
•
•
Mainframe computer
Server
PC/Laptop
PDA
Cellular Telephone
Voice Mail System
Zip Disks
Flash Drives
Removable Hard Drives
Floppy Disk
DC-ROM/DVD
Compact Flash Card
RFID
•
•
•
•
•
•
•
•
•
•
•
VOIP Phone Systems
Digital Cameras
GPS Systems
Security Systems
Vehicle Computer
Devices
Caller ID Device
Paging Device
Fax Machine
Printer/Copier
iPods
Microfilm/Microfiche
FIVE PHASES OF
E-DISCOVERY
• Establish retention policies and controls
SHRM Summer
Employment Law
Update
• Preserving
information
and
collecting
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Processing of e-discovery
• Managing of e-discovery
• Presenting digital evidence
relevant
RETENTION POLICIES AND
CONTROLS
• Update Technology/Electronic Communications
Policies
SHRM Summer
Employment Law
Update
• Establish – and follow – a formal document
destruction and retention policy
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Prepare – and update – inventory of electronically
stored information
• Establish a formalized litigation hold procedure, which
includes the suspension of document destruction
practices when litigation is anticipated
• Teach employees to appropriately manage electronic
data
INVENTORY OF
ELECTRONICALLY STORED
INFORMATION
• Hardware and Software:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Begin with inventory of the various types of
hardware (desktop, notebook PCs, servers,
PDAs, home computers) and storage media
(hard drive, floppy, USB drives, server drives,
tapes)
– Continue with various types of software used
(Microsoft Office, Lotus Notes, proprietary
software, etc)
INVENTORY OF
ELECTRONICALLY STORED
INFORMATION
• E-mail and Attachments
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Understand how and where e-mail and attachments
are saved:
• Hard drives
• Archives
• Local servers
• Central server or ECM system
INVENTORY OF
ELECTRONICALLY STORED
INFORMATION
• Electronic Documents
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– Understand how ordinary course electronic records
are retained (e.g., word processing, PowerPoint,
PDF, Excel, etc).
jacksonlewis.com
– Understand how and where electronic documents
are saved – on hard drives, on local servers, or on a
central server or ECM system.
PRESERVING AND
COLLECTING RELEVANT
INFORMATION
• When Is The Duty To Preserve Triggered?
SHRM Summer
Employment Law
Update
– Anticipated or actual litigation
July 16, 2008
Jackson Lewis LLP
– Notification of a potential claim, such as a
preservation letter or an EEOC charge
jacksonlewis.com
– Statutory or regulatory requirements (e.g., record
retention requirements, etc.)
– Occurrence of events which, in the past, have
consistently led to litigation
PRESERVATION PLAN
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Should be developed by IT, HR, business
department heads and counsel
• Must cover paper and electronic documents
• If employees work at home and may have
records, consider preservation plan for those
locations
• Turn off auto-delete function for key employees
and business areas
• HR and IT should develop preservation plan for
departing employees as well as offices or
business that will be closing
PRESERVATION PLAN
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Design “litigation hold” procedures that allow all
document destruction to be halted immediately if the
duty to do so arises
• Analyze the scope:
– What are the dates of interest?
– What kind of documents were created by key
players?
– Who are the document custodians?
– Who are the likely key witnesses?
– Who is knowledgeable about how and where
electronic documents are stored?
– Where are documents stored?
– Where is backup data stored?
SPOLIATION – WHEN EDISCOVERY GOES BAD
• Spoliation defined:
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
– Destruction or material alteration of evidence
– Failure to preserve evidence
jacksonlewis.com
– May be negligent or intentional
• Sliding Scale
• Bad Faith v. Degree of Prejudice
• Goal is to level the playing field
ELEMENTS OF A
SPOLIATION CLAIM
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Evidence in question is in party’s control
• Actual suppression, withholding or
destruction
• Evidence is relevant to claims or defenses
• Reasonably foreseeable that evidence
would be discoverable
• Destroyed/withheld “with a culpable state of
mind”
• The party requesting the information is
prejudiced by the spoliation
SPOLIATION SANCTIONS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Discovery sanctions may be imposed for:
– Failure to investigate
– Failure to preserve
– Failure to make adequate disclosures
– Failure to produce
– “Suspicious circumstances”
• Use of a program known as Evidence
Eliminator to wipe clean a hard drive
POTENTIAL SANCTIONS
FOR SPOLIATION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Financial sanctions
– Attorneys’ fees
– Costs of production/restoration
– Pay for expert/special master
• Adverse inference
• Shifting of burden
• Suppression of evidence/expert reports
• Revocation of pro hac vice application
• Facts in question deemed established
• Dismissal or default judgment
DATA SECURITY STATISTICS
• Since February 2005, reported data disclosure incidents
in the United States have involved more than 218 million
records
–
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Source: http://www.privacyrights.org/ar/ChronDataBreaches.htm February 13, 2008
• 85% of companies responding suffered data breach in the last
24 months
– 81% were required to notify individuals due to state statutes (97%),
GLBA (20%) and other regulations
• Top 3 causes:
– 42% lost or stolen laptops, PDAs and memory sticks
– 16% negligent employees or contractors
– 10% 3rd parties such as vendors and outsourcers
• 57% of respondents did not have an incident response plan
Source: “The Impact of Data Breach” by Larry Ponemom, May 15, 2007
EFFECTS OF IDENTITY THEFT
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Fastest growing crime in North America*
• Federal Trade Commission reported 2007 was
the 8th year in a row that identity theft topped list
of complaints**
• 8.9 million victims per year in the US, almost 4%
of the population***
• $50 billion in losses to businesses***
• Mean resolution time = 40 hours***
• Mean out of pocket costs exceeding $400***
*Source: The Vancouver Sun. July 3, 2007
**Source: www.ftc.gov/opa/2008/02/fraud.pdf. For 2007, 32% of all 813,899 complaints
received by the FTC related to identity theft, or 258,427
***Source: The 2006 Identity Fraud Survey Report - released by the Council of Better Business
Bureaus and Javelin Strategy & Research
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
DEVELOPING A DATA PRIVACY
AND SECURITY PLAN
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• KEY CONCERNS
– Confidentiality
– Security
– Integrity
– Accessibility
• KEY STEPS
– Risk Assessment/Vulnerability Audit
– Policy Preparation/Implementation
– Training
– Re-evaluation
BEST PRACTICES ON PROTECTING
PERSONAL INFORMATION STORED
ELECTRONICALLY BY YOUR
COMPANY
Presented by:
Brett M. Anders
&
Joseph M. Lazzarotti
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
CONTROLLING BLOGGING,
INSTANT MESSAGING
AND OTHER EMPLOYEE
COMMUNICATIONS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
WHAT IS BLOGGING?
•
Blogs typically take the form of an
interactive online journal, with the host
uploading and publishing content and
responding to feedback from other
participants
•
A growing number of “bloggers” are
focusing on their workplace
•
Most are public; some require user
membership
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
MOST IMPORTANT DISTINCTION
BETWEEN BLOGS AND WEBSITES –
BLOGS ARE VERY EASY TO CREATE
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
WHAT IS “INSTANT
MESSAGING”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
•
Instant messaging (“IM”) is a
telephone call on a computer screen
•
IM users engage in conversations
(over the internet) in which users can
“message” anyone who is online at a
particular moment in time
WHAT IS “INSTANT
MESSAGING”
SHRM Summer
Employment Law
Update
•
An IM user installs an IM program on his
or her computer
•
The user creates an account to log into
the provider’s server
•
When the user is logged in, “buddies” or
“contacts” may be added
•
Buddies and contacts also have
accounts with IM programs installed on
their computers
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
KEY DIFFERENCE BETWEEN
BLOGGING/IM AND E-MAIL
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Information conveyed through
blogging is typically not stored on the
user’s computer
• Unlike email, IM does not create a
record at all unless a participant
takes an affirmative step to do so
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
OTHER THAN NEGATIVE
PUBLICITY, WHY SHOULD
EMPLOYERS BE
CONCERNED WITH
EMPLOYEE BLOGS?
EMPLOYEE COMPUTER AND
INTERNET ABUSE STATISTICS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• 30 – 40% of Internet use in the workplace is not
related to business
• 64% of employees say they use the Internet for
personal interests during working hours
• 70% of all Internet pornography traffic occurs during
the nine-to-five workday
• 37% of workers say they surf the Internet constantly
at work
• 60% of all online purchases are made during working
hours
• 70% of security breaches come from trusted insiders
• 27% of Fortune 500 organizations have defended
themselves against claims of sexual harassment
stemming from inappropriate e-mail
EMPLOYEE BLOGS CAN
EXPOSE EMPLOYERS TO RISKS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
•
Negligent hiring/supervision
•
Divulgence of trade secrets or proprietary
information
•
Hostile work environment or discrimination
•
Disclosure of non-public information that can
subject employer to liability under securities
laws
•
Breach of privacy
•
Reputational harm to employers
jacksonlewis.com
REPUTATIONAL HARM TO
COMPANY
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• An airline flight attendant posted provocative
pictures of herself on a personal blog while
wearing her uniform on a company plane
• An employee of a computer company posted a
picture on his personal blog that included
competitor’s computers the company had
purchased
• A sports writer posted inflammatory comments on
his blog about the ethnic heritage of producers of
certain movies
THE “PATENT TROLL
TRACKER”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
• An employee, the director of employer’s
intellectual property department, launched an
anonymous blog focusing on “patent trolls,” a
derogatory term for companies that acquire and
license intellectual property and assert them in
court to win damagers from vendor companies
jacksonlewis.com
• A Chicago lawyer, who was critical of the
blogger, offered a $15,000 bounty to anyone
willing to expose the patent Troll Tracker’s
identity
THE “PATENT TROLL
TRACKER”
SHRM Summer
Employment Law
Update
• After the employee blogger revealed his identity,
two patent attorneys who were previously
mentioned in the blog sued him – and his
employer – for defamation
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• The employee’s direct manager knew about the
blog but the content was provided by the
employee and the company did not edit the blog
• Case is still pending
TERMINATED BLOGGER
• An employee was terminated after 10 days of employment
based on statements made in a blog he started regarding
employment with the company
SHRM Summer
Employment Law
Update
July 16, 2008
• Blog was started for the employee’s girlfriend and close
friends
Jackson Lewis LLP
jacksonlewis.com
• “Both [the company’s] profits and revenue are growing at
an unprecedented rate”
• Termination sparked a great deal of debate and publicity for
the company
• Has caused other companies to re-think corporate
sponsored blogs
RISK OF DISCHARGING
EMPLOYEE BLOGGERS
• Violation Of Whistleblower Laws
SHRM Summer
Employment Law
Update
– Sarbanes-Oxley And State/Local Laws
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Violation Of National Labor Relations
Act
• Violation Of Anti-discrimination And
Anti-retaliation Laws
POTENTIAL CLAIMS BY
EMPLOYER AGAINST
BLOGGERS
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Defamation
• Tortious interference with a business
relationship
• Breach of confidentiality agreements
• Breach of duty of loyalty
• Infringement of intellectual property
STRATEGIES FOR FIGHTING
BACK AGAINST EMPLOYEES
WHO POST
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Conduct independent investigation
• Ascertain identities through subpoena or
“John Doe” action
• If identity can be reasonably ascertained,
consider sending cease and desist letter
• Advise innocent employees mentioned in
blog of steps being taken
• Beware of creating even more publicity!!
ADOPT A BLOGGING
POLICY
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
Key Provisions:
– Do not disclose confidential or insider information
– Be mindful of your duty of loyalty
– Make clear you are expressing your own views
and opinions and that you do not speak on behalf
of the Company
– Explain when, if at all, an employee blogger may
reproduce the Company’s identifying marks
– Be respectful of your fellow employees
– Remind managers and supervisors of their special
position of trust; should not blog about company’s
business (But – some activity may be protected)
– Put employees on notice that you will investigate
claims
– Failure to follow guidelines may result in discipline
ELECTRONIC COMMUNICATIONS
/ TECHNOLOGY POLICIES
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Why the need?
– A vast majority of business and an employee’s
work is conducted electronically
– Employees are increasingly performing a
greater percentage of their work from outside
the office
– Employees frequently use instant and text
messaging to communicate with co-workers and
business partners regarding sensitive projects
– Employees are increasingly using personal
web-based e-mail accounts to send projects
home to work on after hours
RISKS ASSOCIATED WITH USE OF
PERSONAL E-MAIL ACCOUNTS FOR
BUSINESS PURPOSES
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– These web-based e-mail services create
“holes” in the company’s electronic security
systems
– Messages, which are typically stored on the
mail provider’s server, may become property
of the mail provider
– Potential for corporate e-mail messages to be
reviewed by a third parties
– Messages sent from web-based accounts
typically do not pass through the company’s
corporate e-mail system and as a result, the
company might not be able to recover critical
documents in the event of litigation
ELEMENTS OF AN ELECTRONIC
COMMUNICATION/TECHNOLOGY
POLICY
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Statement that the use of the system is for
business purposes only (or that limited personal
use is allowed)
– Information created by or stored on the Company’s
systems is the Company’s property
– The Company reserves the right to monitor use of
its systems, which includes monitoring e-mail and
voice mail
– Employees should have no expectation of privacy
as it relates to information created by or stored on
the Company’s systems
– The storing of electronic information on portable
devices without prior approval is prohibited
ELEMENTS OF AN ELECTRONIC
COMMUNICATION/TECHNOLOGY
POLICY
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
– Forwarding of Company information to personal email accounts is prohibited
– The company’s policy prohibiting harassment
applies, in its entirety, to the use of the Company’s
systems
– The company’s systems may not be used for any
illegal activity, including downloading or distributing
pirated software or data
– No one may access, or attempt to obtain access
to, another’s electronic communications without
appropriate authorization
– Employees who violate this policy may be subject
to discipline, up to and including termination
CONSIDER SUBSTANCE AND
DESTINATION OF ELECTRONIC
COMMUNICATIONS
SHRM Summer
Employment Law
Update
July 16, 2008
• HIPAA, FMLA, ADA, CFAA
• Social Security Numbers
• Personal Information
Jackson Lewis LLP
jacksonlewis.com
• Vendors
• Employee Residence/Portable Device
• Cross-border
PHI: EMPLOYMENT
RECORDS EXCLUSION
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Medical Information Held
b/c of Employer
Obligations Under Law
– FMLA, ADA
– Occupational Injury
– Disability Insurance
Eligibility
– Sick Leave Requests
– Drug Screening
Results
– Workplace Medical
Surveillance
– Fitness-For-Duty
Tests
Determining Factor
•Medical Info ≠ PHI!
•WHY Employer Has
the Medical
Information
•If not because of
Covered Entity
Status,
–Not PHI!
FEDERAL WIRETAP ACT AND
STORED COMMUNICATIONS
ACT
•
– Prohibits “interception” of electronic
communications
SHRM Summer
Employment Law
Update
July 16, 2008
– Ordinary course of business exception
Jackson Lewis LLP
jacksonlewis.com
Wiretap Act
•
Stored Communications Act
– Prohibits unauthorized intrusions of
stored electronic information
– Provider exception
FEDERAL WIRETAP AND
STORED COMMUNICATIONS
ACT
•
Several, but not all, circuits have held
an employers' e-mail monitoring is not
an "interception" because the
acquisition of electronic
communications must occur
contemporaneously with transmission
•
More likely that IM monitoring would
fall within the meaning of “interception”
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
EMPLOYEE MONITORING . . . A
NEW FRONTIER
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
• Genetic Nondiscrimination
• GPS
• Radio Frequency Identification
Technology
• Electronic Group Device and Activity
Monitoring – Microsoft Patent
Application
THANK YOU FOR YOUR
PARTICIPATION!
SHRM Summer
Employment Law
Update
July 16, 2008
Jackson Lewis LLP
jacksonlewis.com
www.jacksonlewis.com