RSS Feed LinkedIn Instagram Twitter Facebook
FMG Law Blog Line

Archive for December, 2016

Widespread Data Hacks Need to Serve as a Reminder to Strengthen Employee Email and Password Policies

Posted on: December 29th, 2016

By: Melissa A. Santalone

With its second, large-scale hack announced on December 14, which this time reportedly compromised more than 1 billion user accounts, Yahoo’s latest cybersecurity conundrum should serve as a reminder to organizations large and small that strong employee email policies are needed to protect confidential and sensitive data. The most recently announced hack into Yahoo’s user accounts, the second announced in the last in 4 months, reportedly exposed the account information of 150,000 government and military employees, including information such as the employees’ names, passwords, phone numbers, birthdates, security questions, and back-up email addresses. These government and military employees provided Yahoo with their official work email addresses as back-ups in case they were ever locked out of their Yahoo accounts.  With this hack, a “hit list” of these official email addresses can be compiled to launch targeted hacking attempts on known government and military accounts in an attempt to obtain sensitive information. While the stolen passwords may be subject to at least some encryption, a real risk of compromise exists to government and military email accounts if the users of those accounts happen to use the same passwords for both their Yahoo and work email accounts.

While the latest Yahoo hack again highlights the potential pitfall of employees using work email addresses in their personal lives, this issue has been raised before in the hacks of user accounts with Ashley Madison and LinkedIn, among others.  In both those hacks, user email addresses were exposed and many of those addresses were corporate email accounts. When the passwords associated with the Ashley Madison or LinkedIn profiles were also exposed and the users reused those same passwords for their corporate accounts, hackers may have gained easy access into corporate emails and possibly even corporate computer systems.

Remember, to some degree, your organization’s cybersecurity is only as strong as your employees’ weakest password. Thus, in order to better protect your organization, you can:

  • Set a policy prohibiting employees from associating their work email accounts with any external services, whether as the primary login or even if just as a back-up email account for recovery purposes;
  • Establish and enforce password policies for all of your corporate user accounts (emails, network logins, etc.) which impose minimum password strength requirements and the resetting of passwords after a short, fixed time period, such as 90 days; and
  • Educate your employees about the risks posed by password reuse across various accounts and require them to use unique passwords for their work accounts that are not use with any other personal account.

For help in drafting or reviewing cybersecurity policies to protect your organization, please contact one of the attorneys in our Cyber Liability, Data Security & Privacy team.

Homebuilder Confidence Doesn’t Translate to a Homebuilding Boom

Posted on: December 21st, 2016

By: Kristian Smith

Confidence doesn’t always translate to construction. A survey from the National Association of Home Builders released earlier this month showed the highest level of homebuilder confidence in 11 years. But the numbers released by the U.S. Census one day later showed home construction plummeted by 19 percent this month.

These numbers do not seem to make much sense, but there are several reasons for the discrepancy.

Due to factors like the improving economy, high demand for housing, and the possibilities for business improvement under “Trumponomics,” many are optimistic about the housing market, but this has not translated to a boom in building.

Builders are dealing with costly new regulations, rising costs for land and materials, and a labor shortage that could continue to worsen. In addition, many builders remain cautious after the recession and seem to be focusing more on quality over quantity – high demand and low supply allows builders to demand a higher price for each home.

Also, at the end of 2012, when home construction was still reeling from the 2008 recession, confidence in home building began to increase but actual home construction did not. Experts say that as home building continues to increase in coming years, the numbers for confidence and construction will become more similar.

Some experts in the home construction industry also believe that the way the surveys weigh confidence may be skewed.

For any questions, please contact Kristian Smith at [email protected].

Be on the Lookout for Minimum Wage Increases in 2017

Posted on: December 20th, 2016

 By: Brad Adler and Agne Krutules

As we enter into 2017, employers should remember that, while the federal minimum wage remains at $7.25, many state and local jurisdictions have passed legislation that will increase their respective minimum wage in 2017.

Below is a list of the states and some of the major local governments that will be increasing their minimum wage in 2017. Of course, if you have employees working within any of these jurisdictions, it is important that you pay them in accordance with the state or local law.

Jurisdiction Current Min. Wage Planned Min. Wage Effective Date
Alaska $9.75 $9.80 January 1, 2017
Arizona $8.05 $10.00 January 1, 2017
City of Flagstaff, AZ $8.05 $12.00 January 1, 2017
Arkansas $8.00 $8.50 January 1, 2017
California* $10.00 $10.50 January 1, 2017*
Berkeley, CA $12.53 $13.75 October 1, 2017
Cupertino, CA $10.00 $12.00 January 1, 2017
Emeryville, CA $13.00 $14.00 July 1, 2017
Los Altos, CA $10.00 $10.50 January 1, 2017
Los Angeles, CA $10.50 $12.00 July 1, 2017
Los Angeles County, CA $10.50 $12.00 July 1, 2017
Mountain View, CA $11.00 $13.00 January 1, 2017
Oakland, CA $12.55 $12.86 January 1, 2017
Palo Alto, CA $11.00 $12.00 January 1, 2017
Pasadena, CA** $10.00 $10.50 July 1, 2017
Richmond, CA $11.52 $12.30 January 1, 2017
San Diego, CA $10.50 $11.50 January 1, 2017
San Francisco, CA $13.00 $14.00 July 1, 2017
San Jose, CA $10.30 $10.50 January 1, 2017
San Mateo, CA $10.00 $12.00 January 1, 2017
Santa Clara, CA $11.00 $11.10 January 1, 2017
Santa Monica, CA $10.50 $12.00 July 1, 2017
Sunnyvale, CA $11.00 $13.00 January 1, 2017
Colorado $8.31 $9.30 January 1, 2017
Connecticut $9.60 $10.10 January 1, 2017
District of Columbia $11.50 $12.50 July 1, 2017
 Florida $8.05 $8.10 January 1, 2017
Hawaii $8.50 $9.25 January 1, 2017
Chicago, IL $10.50 $11.00 July 1, 2017
Cook County, IL $8.25 $10.00 July 1, 2017
Johnson County, IA $9.15 $10.10 January 1, 2017
Polk County, IA $7.25 $8.75 April 1, 2017
Wapello County, IA $7.25 $8.20 January 1, 2017
Maine $7.50 $9.00 January 1, 2017
Portland, ME $10.10 $10.68 January 1, 2017
Maryland $8.75 $9.25 July 1, 2017
Montgomery County, MD $10.75 $11.50 July 1, 2017
Prince George County, MD $10.75 $11.50 October 1, 2017
Massachusetts $10.00 $11.00 January 1, 2017
Michigan $8.50 $8.90 January 1, 2017
Missouri $7.65 $7.70 January 1, 2017
Kansas City, MO*** $7.65 $9.82 January 1, 2017
Montana $8.05 $8.15 January 1, 2017
New Jersey $8.38 $8.44 January 1, 2017
Albuquerque, NM**** $8.75 $8.80 January 1, 2017
Bernalillo County, NM $8.65 $8.70 January 1, 2017
Las Cruces, NM $8.40 $9.20 January 1, 2017
New York***** $9.00 $9.70 December 31, 2016
New York City, NY****** $9.00 $11.00 December 31, 2016
Nassau, Suffolk, and Westchester Counties, NY $9.00 $10.00 December 31, 2016
Ohio $8.10 $8.15 January 1, 2017
Oregon******* $9.75 $10.25 July 1, 2017
South Dakota $8.55 $8.65 January 1, 2017
Vermont $9.60 $10.00 January 1, 2017
Washington******** $9.47 $11.00 January 1, 2017


* Although the statewide minimum wage will increase from $10.00 to $10.50 as of January 1, 2017, employers with 25 or fewer employees will receive a one-year reprieve and will not face the statewide increase in 2017.

** In Pasadena, employers with 25 or fewer employees will face a minimum wage increase to $10.50 as of July 1, 2017, while larger employers will face an increase from $10.50 to $12.00 as of the same date.

*** The Kansas City minimum wage was slated to increase to $9.82 on January 1, 2017, but is stalled due to pending court challenges. The Missouri Supreme Court is expected to soon rule on the issue. The same holds true for the St. Louis minimum wage, which was scheduled to increase to $10.00 as of January 1, 2017.

**** However, if the employer provides healthcare and/or childcare benefits to the employee during any pay period and pays an amount for these benefits equal to or in excess of an annualized cost of $2,500, the minimum wage will increase from $7.75 to $7.80.

***** For fast-food employers outside of New York City, the minimum wage will increase from $9.75 to $10.75 on December 31, 2016.

****** For businesses with less than 11 employees, the minimum wage will increase from $9.00 to $10.50. For fast-food establishments in New York City, the minimum wage will increase from $10.50 to $12.00 on December 31, 2016.

******* For employers within the state’s Urban Growth Boundary, the minimum wage increase on July 1, 2017 will be from $9.75 to $11.25. For employers in frontier counties, the minimum wage increase on July 1, 2017 will be from $9.50 to $10.00 per hour.

******** Seattle employers with 500 or more employees will see an increase in their minimum wage from $13.00 to $15.00 on January 1, 2017. The SeaTac minimum wage applicable for hospitality and transportation workers will increase from $15.24 to $15.35 as of January 1, 2017. In Tacoma, the minimum wage will increase from $10.35 to $11.15.

The minimum wage for federal contractors covered by those regulations and Executive Order 13658 (primarily those with Davis-Bacon Act and Service Contract Act contracts) will increase from $10.15 to $10.20 effective January 1, 2017.

Disability Accommodation & Job Competition

Posted on: December 20th, 2016

By: Michael M. Hill

We previously have written about the EEOC’s guidance on the Americans with Disabilities Act (“ADA”) and pointed out that, in some cases, reassigning a disabled employee to another position (such as a light-duty position) may be a reasonable accommodation of the disability. The EEOC’s position has been and still is that, if another position is available and the employee with a disability meets the basic qualifications, then that employee must be given the position without having to compete for it (unless giving it to the disabled employee would pose an undue hardship on the employer).

This rule does not apply in the Eleventh Circuit, which covers Georgia, Florida, and Alabama. In EEOC v. St. Joseph’s Hospital, Inc., the Eleventh Circuit Court of Appeals held that an employer still may require the disabled employee to compete equally with others for an open position, and the employer generally is free to select the best qualified candidate.

The employee in St. Joseph’s was a nurse in the psychiatric ward who, after developing back problems and undergoing a hip replacement, started walking with a cane.  The hospital’s management feared that her cane may be used as a weapon by the psychiatric patients and gave her thirty days to apply for another job in the hospital.  She applied for seven other hospital positions but was not hired for any of them.

The rub, for the EEOC, was that she had to compete with other internal applicants for the positions she desired. The EEOC argued that the ADA’s duty to provide a reasonable accommodation required the hospital to give her a position for which she was qualified, even if another applicant was more qualified.

The Eleventh Circuit disagreed and held that the duty to accommodate an employee’s disability does not require “preferential treatment.” The Court pointed out that the ADA is not an affirmative action statute and “was never intended to turn nondiscrimination into discrimination against the non-disabled.”  While some cases may present “special circumstances” that would warrant an exception to the employer’s “best-qualified applicant” policy, such circumstances were not present in this case.

This case is an important reminder that, while federal laws like the ADA apply throughout the country, individual federal circuits may differ in how they interpret an employer’s obligations under the law, which even may differ from the EEOC’s position. Employers would do well to consult counsel in developing policies that comply with the law of their particular circuit.

For any questions you may have, please contact Michael Hill at [email protected].

FCC Chairman Wheeler Announces Plan to Step Down

Posted on: December 15th, 2016

By: Matthew N. Foree

Today, the Federal Communications Commission (“FCC”) issued a statement that Chairman Tom Wheeler, a Democrat who has held the position for more than three years, has announced that he intends to leave the FCC on January 20, 2017.

As part of the announcement, Chairman Wheeler issued the following statement: “Serving as F.C.C. Chairman during this period of historic technological change has been the greatest honor of my professional life. I am deeply grateful to the President for giving me this opportunity. I am especially thankful to the talented Commission staff for their service and sacrifice during my tenure.  Their achievements have contributed to a thriving communications sector, where robust investment and world-leading innovation continue to drive our economy and meaningful improvements in the lives of the American people.  It has been a privilege to work with my fellow Commissioners to help protect consumers, strengthen public safety and cybersecurity, and ensure fast, fair and open networks for all Americans.”

Chairman Wheeler was involved in the FCC’s controversial July 2015 Declaratory Ruling and Order (“Declaratory Ruling”), which clarified its position on several issues related to the Telephone Consumer Protection Act (“TCPA”) as reported previously. An appeal of the Declaratory Ruling is currently pending before the U.S. Court of Appeals for the D.C. Circuit.

Chairman Wheeler’s intent to leave the FCC creates an interesting issue as to his successor and the political majority of the Commission. Currently, the Commission includes three Democrats and two Republicans.  Significantly, the Senate took no action to reconfirm Democrat Commissioner Jessica Rosenworcel, meaning that she will be leaving the FCC.  Wheeler and Rosenworcel’s vacancies will leave the Commission with a 2-1 Republican majority until President-Elect Trump fills out the Commission. The vacancies would enable President-Elect Trump, whose campaign is currently involved in TCPA litigation, to appoint two more Republican Commissioners who may be more willing to constrain the interpretation of the TCPA and ultimately end the statute’s boon to plaintiffs’ counsel.  We will continue to monitor this issue and report on any significant developments.