CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Archive for the ‘Employment Law Blog – NC’ Category

Enhanced Privacy and Data Security Law on Tap for North Carolina

Posted on: February 8th, 2018

By: Paul H. Derrick

A bi-partisan privacy and data security bill will soon be rolled out in North Carolina, and its impact will be significant. North Carolina Attorney General Josh Stein and State Representative Jason Saine are co-authoring “The Act to Strengthen Identity Theft Protections.”  According to a recent press release and fact sheet, they plan to seek its introduction in the State’s General Assembly during the coming months.

The bill will bring dramatic changes to North Carolina’s existing Identity Theft Protection Act, particularly in two areas: (1) the imposition of an affirmative duty to implement and maintain data security procedures and practices; and (2) a 15-day breach notification window.  Companies that experience a data breach and have failed to maintain reasonable security practices will be deemed to have committed a per se violation of the North Carolina Unfair and Deceptive Trade Practices Act, and each person affected by the breach would constitute a separate and distinct violation of the law.  With provisions for treble damages and attorney’s fees, even for nominal violations, data breach litigation would quickly become much more lucrative for plaintiffs’ attorneys.

The proposed bill also would require companies to notify affected individuals and the Attorney General within 15 days following discovery or notification of a breach.  That is a substantial change from the current law’s requirement that notification be made “without unreasonable delay.”  Businesses will need to have a response plan already in place in the event a breach occurs, rather than waiting until the time arrives to develop a course of action.

Other provisions in the legislation update the definition of security breach to include ransomware attacks, broaden the definition of “personally identifiable information” to include medical information and insurance account numbers, allow consumers to freeze and unfreeze their credit without charge, and provide individuals with greater access to and control over their personal data.

Because it already has strong bi-partisan support, some version of the bill will almost surely be passed into law. North Carolina employers must not wait until that happens to begin preparing for it, however.  Businesses should audit their existing internal privacy and data security programs now and immediately develop meaningful and legally-compliant safeguards in any areas that are lacking.

Please contact Paul Derrick at [email protected] or anyone in FMG’s Data Security, Privacy, & Technology practice group if you would like more information on developing and implementing privacy and data security programs. We also have extensive experience in guiding organizations through data breaches and representing clients in data breach litigation.

NLRB Delivers One-Two Punch to Pair of Standards that Have Dogged Employers

Posted on: December 18th, 2017

By: Paul H. Derrick

In a stunning development, the National Labor Relations Board has overruled a pair of controversial standards that have caused headaches in the business community for years.

In the first case, the NLRB reversed an Obama-era decision that put employers potentially on the hook for labor law violations committed by their subcontractors and franchisees.  By a 3-2 vote, the Board erased its decision in a case known as Browning-Ferris Industries, which found a company to be a joint-employer with a subcontractor or franchisee if it had “indirect” control over the terms and conditions of the terms and conditions of the workers’ employment or had the “reserved authority to do so.”

Since that broad standard was adopted, the Board has used it to bring literally hundreds of cases against McDonald’s and other businesses for the alleged acts of their contractors and franchisees.  Going forward, however, the NLRB says that two or more entities will be deemed joint employers under the National Labor Relations Act only if there is proof that one entity actually exercised direct and immediate control over essential employment terms of another entity’s employees.  Proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will no longer be sufficient to establish a joint-employer relationship.

In a second unexpected development, also by a narrow 3-2 margin, the NLRB overturned its 2004 decision in Lutheran Heritage Village-Livonia, under which many seemingly harmless workplace rules were deemed unlawful.  The Board had determined in that case that employer rules violate the NLRA if they “could be reasonably construed” by employees to prohibit the exercise of rights under the NLRA.

Going forward, the NLRB says that it will consider the nature and extent of a challenged rule’s potential impact on employee rights under the NLRA and the legitimate justifications associated with the rule.  The Board also announced three categories into which it will now classify rules to provide greater clarity and certainty to employees, employers, and unions.

The first category covers rules that are legal in all cases because they cannot be reasonably interpreted to interfere with workers’ rights or because any interference is outweighed by business interests; the second covers rules that are legal in some cases, depending on their application; and the third covers rules that are always unlawful because they interfere with workers’ rights and cannot be outweighed by business interests.  Notably, the Board also announced that it will no longer find a rule to be unlawful simply because it requires employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Because of ongoing changes in the NLRB’s composition and the recent nomination of a new General Counsel, these latest decisions will certainly be the subject of challenge and much debate.  If you have any questions or would like more information, please contact Paul Derrick at [email protected].

Farmworker Union Sues to Overturn NC Law That Nixes Dues Checkoff and Voids Agreements Requiring Farmers to Sign Union Contracts

Posted on: November 20th, 2017

By: Paul H. Derrick

For years, the Farm Labor Organizing Committee, a small Ohio-based union that is the only labor organization representing farmworkers in the State of North Carolina, has used actual and threatened lawsuits as a means of getting farmers in the state to voluntarily recognize and bargain with it. The state’s Farm Act of 2017 contains provisions aimed at stopping that coercive tactic, and FLOC is making good on its promise to fight back.

The Farm Act makes it a violation of the state’s public policy for farms, most of which are small, family-owned operations, to collect membership dues from employees and forward them along to a union, even if the union and the farm have executed a collective bargaining agreement that requires such dues collection. The law also makes it a violation of public policy for a union to require that a farm enter into a union contract as a means of settling a lawsuit or avoiding litigation in the first place.

Represented by civil rights lawyers from the American Civil Liberties Union, the Southern Poverty Law Center, and the North Carolina Justice Center, the union and two individual migrant farmworkers, both of whom previously brought legal actions against their non-union employers, have filed a lawsuit in federal court against Governor Roy Cooper and the director of the North Carolina court system. The lawsuit claims that the Farm Act impedes their First Amendment right to participate in union activity and is racially discriminatory (i.e., because most of the state’s farmworkers are Latino). It demands that the court declare portions of the Farm Act to be unconstitutional and also asks that preliminary and permanent injunctions be entered to restrain state officials from enforcing those provisions of the law.

North Carolina farmers employ about 100,000 workers annually, and FLOC claims to have almost 5,000 dues-paying members among that workforce. Because there are no federal or North Carolina laws that give agricultural workers a right to demand a union election, FLOC insists that the only way it can organize workers is by actual or threatened lawsuits over issues such as alleged wage and hour violations, where part of the settlement demanded includes farmers voluntarily recognizing the union as the bargaining representative of their employees and collecting dues from the workers on behalf of the union.

A copy of FLOC’s lawsuit can be found here. We will continue to keep you apprised of developments in this area as they occur. In the meantime, if you have any questions or would like more information, please contact Paul Derrick at [email protected].

NLRB Tells Appellate Court that Racial Harassment by Picketers is OK

Posted on: November 1st, 2017

By: Paul H. Derrick

The National Labor Relations Board is urging the full Eighth Circuit Court of Appeals not to review a 2-1 panel decision that found a union picketer’s racially derogatory comments toward black replacement workers to be protected speech that could not be used as grounds for his termination. Although admitting that the picketer’s comments to the black workers were offensive, the NLRB stated that the comments simply were not vile enough to lose the protections of the National Labor Relations Act.

The comments in question included the picketer yelling “Did you bring enough KFC for everybody?” toward a van carrying replacement workers and asking if other picketers could “smell fried chicken and watermelon.” Based on those and other comments, the employer elected not to return the picketer to work after its labor dispute with the union ended. The union filed a grievance on the picketer’s behalf, and an arbitrator ruled that the company had just cause to fire him.  An NLRB administrative law judge and the NLRB itself disagreed, however, and ordered that the worker be rehired and given back pay and benefits.  According to the NLRB, the racially derogatory remarks, although directed at minority workers confined in a vehicle that was crossing a hostile picket line, were non-violent and non-threatening offhand comments that would not objectively be perceived as coercive or intimidating.  In other words, they merely reflected the picketer’s animal exuberance.

In its initial appeal to a three-judge panel of the Eighth Circuit, the company argued that bringing back the picketer would conflict with its obligation under Title VII of the Civil Rights Act to eradicate racial harassment in the workplace. In a split decision, two of the panel’s judges ruled that the racial taunting did not create a hostile work environment, was not violent in character, did not contain any overt threats to the replacement workers, and was not accompanied by acts of physical intimidation.  The third judge ruled that the picketer’s termination should stand, reasoning that no employer in America can be required to allow racial bigotry in the workplace.

Whether the NLRB will prevail in its position that picket line racial harassment is an exception to the general rule that such workplace misconduct is absolutely prohibited remains to be seen.  In the meantime, employers should be aware that the NLRB has taken this same position many times over the years, although not all courts agree with it.  Until the U. S. Supreme Court gives more definitive guidance on the issue, there likely will be continued disagreement well into the future.  These cases generally rise and fall on their own unique and specific facts, so there is no one-size-fits-all answer as to how a particular case will be seen by the NLRB or the courts.

If you have any questions or would like more information about this or any other labor law issue, please contact Paul H. Derrick at [email protected].

 

EEOC Lawsuit for Disability and Genetic Information Discrimination is Cautionary Tale for Employers

Posted on: September 28th, 2017

By: Paul H. Derrick

The Equal Employment Opportunity Commission is seeking back pay, compensatory damages, punitive damages, and injunctive relief against one of the nation’s largest retailers for withdrawing job offers to applicants whose post-offer medical examinations revealed they had disabilities. The lawsuit also alleges that the post-offer medical examinations unlawfully solicited family medical history from those job applicants.

In the lawsuit, the EEOC alleges that an applicant received a job offer contingent on successfully completing the company’s post-offer medical examination. When the employee revealed during the examination that he suffered from monocular vision, medical personnel informed him that the company required applicants have corrected 20/50 vision or better in both eyes. Despite successfully having performed similar work in the past, the employee’s job offer was rescinded.

The EEOC also claims that the company screened out people with high blood pressure and a variety of other conditions, even though the impairments would not prevent the individuals from performing the jobs they had already been offered. During the post-offer medical examinations, applicants were asked to provide detailed information about their family medical history, including answering questions about cancer, heart disease, and diabetes.

Regardless of the outcome of this lawsuit, employers should see it as a reminder that the Americans with Disabilities Act prohibits the use of selection criteria or qualification standards that screen out individuals with disabilities unless those standards are job-related or consistent with business necessity. Post-offer medical examinations are not automatically unlawful, but they cannot be used to weed out individuals with disabilities.

Likewise, the Genetic Information Nondiscrimination Act protects employees or job applicants from discrimination based on genetic information. GINA includes a strict prohibition against soliciting a job applicant or employee’s family medical history.

If you have any questions or would like more information, please contact Paul Derrick at [email protected].