North Carolina law imposes stringent requirements on employee drug testing. But courts have long held that employers who fire employees on the basis of false positives are not liable for the employees’ harms and losses. Last week, the South Carolina Supreme Court changed all that. The Court held that laboratories owe a duty of reasonable care to the employees they are testing. Shaw v. Psychemedics Corp., No. 2017-002538 (S.C. Mar. 20, 2019). Now, wronged employees can recover directly from the labs who got them fired.
The Court recognized that these labs should be aware of the harm they cause employees by wrongly reporting positive test results. The Court agreed that these labs need to be incentives to take precautions aimed at eliminating false positives. Under pre-existing South Carolina law a wrongdoer is liable for harm to a third party arising out of his contract with another party, despite the absence of any contract between the wrongdoer and his victim.
A federal judge in the District of Columbia has ordered that the pay data collection component of EEO-1 reports, which never took effect, be restored.
Background
The pay data survey, proposed in early 2016 during the Obama Administration, would require employers to report in their annual EEO-1 reports the number of employees in 12 “pay bands” in each of the 10 EEO-1 categories. (That’s a hundred and twenty “bands.”) The federal Office of Management and Budget initially approved the revised EEO-1 Report form that would have allowed employers to provide this information.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00Laborhttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngLabor2019-03-13 16:34:062019-05-21 11:10:04Court Puts EEO-1 Pay Data Back In Play. Now What?
Time for our regular case roundup. The 4th Circuit issued several important decisions over the past two months, including clarifying the standard for retaliation claims under the False Claims Act, allowing rumors to support a Title VII claim, and providing two clashing opinions on medical exams of current employees.
When can an employer require its employee to undergo a medical exam without running afoul of the Americans with Disabilities Act (ADA) or the Rehabilitation Act? In recent weeks, the Fourth Circuit enriched the case law on illegal-exam claims in two divergent opinions, ruling for the employee in EEOC v. McLeod Health, Inc., — F.3d —-, 2019 WL 385654 (4th Cir. Jan. 31, 2019) and for the employer in Hannah P. v. Coats, — F.3d —-, 2019 WL 664491 (4th Cir. Feb. 19, 2019).
The ADA and the Rehabilitation Act both prohibit covered employers from requiring an employee to undergo a medical exam “unless such examination . . . is shown to be job-related and consistent with business necessity.” 42 U.S.C. § 1112(d)(4)(A). The EEOC’s enforcement guidelines provide that, ordinarily, to meet the “job-related and consistent with business necessity” standard, “the employer must reasonably believe, based on objective evidence, that either (a) the employee’s ability to perform an essential job function is impaired by a medical condition, or (b) the employee can perform all the essential functions of the job, but because of his or her medical condition, doing so will pose a ‘direct threat’ to his or her own safety or the safety of others.” The Fourth Circuit’s recent McLeod and Coats opinions touch on both the “direct threat” and impairment causing a failure to perform the essential functions scenarios, respectively.
Last week, the U.S. Court of Appeals for the Sixth Circuit recognized that “the way we work in America is changing. The relationships between companies and their workers are more fluid and varied than in decades past.” Acosta v. Off Duty Police Services, Inc., Nos. 17-5995/6071 (6th Cir. Feb. 12, 2019). Many companies now seek to classify their employees as independent contractors in order to avoid providing them overtime, health insurance, workers’ compensation protections, unemployment benefits, and even minimum wage and social security contributions. In 2017, the Trump Administration reversed Obama-era rules combatting this trend, signaling that the current Department of Labor would throttle back on investigation and enforcement of the Fair Labor Standards Act when it came to misclassified employees. The Fair Labor Standards Act is the federal law that requires employers to pay their employees minimum wage and overtime.
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With many of President Trump’s agency nominations being held up in the Senate, followed by the longest government shutdown in history, it’s been a relatively quiet year for labor and employment law at the federal level. Nonetheless, here are my picks for the most significant developments of the past year.
No. 1: #MeToo. Although a little of the furor seems to be dying down, the #MeToo movement had a big impact on employment law in 2018. The Equal Employment Opportunity Commission reported an almost 13 percent increase in charges alleging sexual harassment in Fiscal Year 2018, which ended September 30, 2018. Now that the agency is back up and running, it will be interesting to see what happens in FY 2019. Although North Carolina has not yet followed the nationwide trend of banning non-disclosure provisions in sexual harassment settlements or mandating employee harassment training, many employers here are already voluntarily adjusting their policies, procedures, and training.
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With the increasingly competitive workforce, employers are searching for ways to efficiently hire quality candidates. One method employers use to lower costs and simultaneously increase efficiency is the use of Artificial Intelligence (AI) to assist with the tedious job of searching through countless resumes. While AI undoubtedly offers significant advantages to employers, there are also many risks. The “pre-existing real-world data” that the AI system relies on for training can be one source of these risks. “[Al]though an AI system itself does not have any biases, the information humans choose to use in the system may be biased.” The full effects of AI in the hiring process have yet to be seen; accordingly, employers need to take steps to ensure they do not expose themselves to liability while implementing this new technology.
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In a published opinion on January 8, 2019, the Fourth Circuit concluded that Section 2000e-16(c), which applies to federal government workers, is not a jurisdictional requirement. The 180-day waiting period is instead a prudential prerequisite to suit. Because of the Court’s holding, employers will need to use Rule 12(b)(6) when claiming that the plaintiff failed to wait the required 180 days.
This case, Stewart v. Iancu, 17-1815, 2019 WL 122868 (4th Cir. Jan. 8, 2019), involved a federal employee alleging, among other things, disability discrimination, retaliation, and hostile work environment under the Rehabilitation Act and Title VII. The panel, consisting of Chief Judge Gregory and Judges Wynn and Motz, reversed the District Court and remanded for further proceedings.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00Laborhttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngLabor2019-02-06 09:50:052019-02-06 09:50:05Procedure Matters: Fourth Circuit Holds 180-Day Waiting Period for Federal Employees to File Suit is Not Jurisdictional
Charlotte is a banking town, and in banking towns, everyone’s a vice president. If you work for a bank, brokerage firm, or other financial institution for a couple of years, you’ll make VP, even if your duties, management responsibilities, and pay don’t change. Dunn, Andrew, Your Charlotte bank VP title doesn’t really mean much, Charlotte Agenda, Nov. 19, 2015. This VP title creep has moved into other industries, devaluing what it means to be VP. Schumpeter, Too many chiefs, The Economist, Jun. 24, 2010.
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For the last post of the year, I’m doing my normal case roundup. It’s been several months since I last posted — thank you to everyone who submitted posts this fall! — so this is a long one. I’ve inserted which laws are addressed in each case if you’re looking for something specific. Finally, I wish everyone Happy Holidays and a great New Year.
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