The Status of Workplace State Law Discrimination Claims in North Carolina

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On March 23, 2016, in House Bill 2 (HB2), notoriously known as the “Bathroom Bill,” the North Carolina General Assembly set out that the North Carolina Employment Practices Act (NCEEPA) (N.C.G.S. Chapter 143) did not provide a cause of action for wrongful termination based on discrimination. The NCEEPA covers employers with 15 or more employees and provided a discrimination cause of action against employers who discriminated on the basis of race, religion, color, national origin, age, sex or handicap in employment. The statute of limitations was three (3) years in state court.

This change in North Carolina law did not affect employee rights under federal law. If employees wish to file a federal claim, the procedure is entirely different and the statute of limitations is much shorter–180 days to file a charge with the Equal Employment Opportunity Commission and then 90 days to file a lawsuit in federal court, after the EEOC concludes its investigation and issues its determination.

On July 18, 2016, the General Assembly restored the right of employees under the NCEEPA to bring wrongful discharge claims for employment discrimination in state court, but shortened the statute of limitations to one (1) year. The NCEEPA clearly does not prohibit employment discrimination against LBGT persons.

The text of the revised NCEEPA sets out: “It is the public policy of this State to protect and safeguard the right and opportunity of all persons to seek, obtain and hold employment without discrimination or abridgement on account of race, religion, color, national origin, age, biological sex or handicap by employers which regularly employ 15 or more employees.”

Employment discrimination against LBGT persons still violates federal law, and North Carolina employers must comply with both federal and state laws in terms and conditions of employment.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

 

 

Document and Communicate with Employees about Performance Deficiencies

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For multiple reasons, it is imperative that employers document and communicate performance deficiencies with the employee and keep written documentation in the employee’s personnel file. The write-up and counseling should occur at the time the deficiency occurs not at the annual review.

This written documentation and communication with the employee is important to defend against litigation. First, if the employee files an employment discrimination claim, the record of performance deficiency and the employee’s knowledge of the issues illustrate a legitimate, non-discriminatory reason for termination. Second, it may save the employer from paying unemployment benefits. The documented performance problems may illustrate misconduct, which will exclude the employee from receiving unemployment. If the employee were to receive unemployment benefits, they would be charged to the employer’s unemployment account.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Actual Notice Needed for Employees to be Bound to Arbitration

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The fact that two terminated employees signed an acknowledgement of an arbitration agreement is not enough to force the employees to arbitrate their employment discrimination complaints.

Jonathan Collier and Robert McQuen admitted that they signed forms acknowledging their receipt of and promise to be bound by their employer’s arbitration agreement; however, they deny ever receiving the arbitration agreement itself. The failure to receive the actual agreement was fatal in this case.

The court in Collier v. RD America, LLC, held that “without actual notice of the contract’s terms, the contract lacked mutual assent and is not valid and enforceable.”

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Federal Judge Blocks New Overtime Pay Plan

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On November 22, 2016, just 10 days before the implementation date, a federal judge in Texas halted the Department of Labor’s (DOL’s) new federal overtime rule under the Fair Labor Standards Act. The overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476. The rule also provided for adjustments every three (3) years.

Twenty-one states had filed an emergency motion for a preliminary injunction in October to halt the rule. They claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years. The injunction signed by the judge keeps the existing rule salary threshold in place until a final decision in the case is reached.

So, for now, until a final decision in the case is reached, employers may continue to follow the existing overtime rule, which keeps the salary threshold at $23,660.

For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

New Charge Handling Procedures from the EEOC

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EEOC has implemented new office procedures for submission and release of position statements:

  1. They are asking that employers provide relevant evidence and information supporting the employer’s position in attachments;
  2. They are asking that confidential information, such as personally identifiable information, sensitive medical information, or confidential financial information is segregated in attachments;
  3. They ask that employers use the digital charge system to upload position statements and attachments within thirty (30) days of receiving the charge. The mediation option, if offered, can also be chosen using the digital system. The representative’s name can also be provided to the EEOC through the digital system;
  4. It appears that the EEOC will provide the position statement and non-confidential attachments to the charging parties request the information; and
  5. The charging party’s response will not be shared with the employer.

See the EEOC website for additional details.  For help with employment law questions or other civil litigation issues, call Tracy Stroud, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Misuse of Personal Data? Injury Alleged Must Be Concrete

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Standing to sue in Fair Credit Reporting Act violation must allege concrete injury

Employers rely on consumer reporting agencies to run criminal background checks; therefore, the employer must comply with the Fair Credit Reporting Act and must follow the Act’s notice requirement about adverse employment actions taken related to the criminal background check. There have been many class actions which have arisen out of employers’ failure to comply with the notice requirements. The United States Supreme Court may have provided a little relief in that it stated the injury alleged must be concrete for a plaintiff to have standing under the Act.

In Supreme Court case, Spokeo, Inc. v. Robins, the Supreme Court found the Ninth Circuit erred in whether the plaintiff had standing. The Supreme Court held that not only must the injury be particularized but also the injury must be concrete. Bare procedural statutory violations will not automatically confer standing under the statute.

If you have questions about employment law or other civil litigation issues, please call Tracy Stroud at 252-321-2020.

Defend Trade Secrets Act of 2016 and Employment Agreements

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On May 11, 2016, President Obama signed the Defend Trade Secrets Acts of 2016 (DTSA) into law and the law took effect immediately. It provides federal civil remedies for misappropriation of trade secrets and aligns the definition of trade secrets with the Uniform Trade Secrets Act, which most states have adopted.

The Act prohibits a wide range of conduct from theft to violation of a preexisting duty owe by the defendant or even by some third party. Such a preexisting duty may be express, arising from a contract or implied, such as the duty of employees to protect the trade secrets of their employers.

There are two ways a person or company may be found liable in a civil action for misappropriation of trade secrets under the DTSA: (1) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (2) disclosure or use of a trade secret of another without express or implied consent.

Employment agreements needs to be updated if they include language about misappropriation of trade secrets. It makes sense to review your agreements to preserve all rights and to make sure employees are aware of their rights under the new law. For example, the DTSA does provide protections to employees divulging trade secrets for whistleblowing purposes. DTSA cannot be used to restrict employees from moving to jobs with competitors. Companies will still have to look to state law and restrictive covenants to protect them in that arena. State law is not pre-empted by the DTSA.

Please call Tracy Stroud with questions about employment law or other civil litigation issues at 252-321-2020.

Changes to FLSA and How to Prepare Your Employees

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Please call Tracy Stroud with questions about employment law or other civil litigation issues at 252-321-2020.

Changes to FLSA and How to Prepare Your Employees

This Final Rule changes to the Fair Labor Standards Act updates the salary level required for exemption. These changes go into effect December 1, 2016 and the result is that millions of employees will have to be reclassified as non-exempt.

The changes are as follows: (1) It sets the standard salary level at $913 per week or $47,476 annually for a full-year worker; (2) It sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to $134,004; (3) It establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption; and (4) It amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

Practical Effect

The federal government estimates that as many as 4.2 million, the number of currently exempt workers in the United States, will now become non-exempt under the Final Rule on white-collar exemptions under the Fair Labor Standards Act.

Here are a few tips for employers to make the transition to “new non-exempt” less painful: (from JD Supra)

Let the employees know that the reclassification was the government’s mandate. Let them know the reclassification was required by a change in the law.

Provide training on timekeeping issues. If you decide to let the employees keep their flexibility, they’ll have to understand the importance of accurately documenting their time worked – even if it’s something as “trivial” as taking a business call in the car on the way to work or answering some emails in the evening at home. This is a very hard habit to start.

Communicate that you want them to accurately post time. Many new non-exempt employees are going to want to keep doing their work the way they always have and not write down their time. Persuade the new non-exempt employees that they must post all hours worked. This communication will be an on-going battle.

Do not let the “new non-exempt” take off in the middle of the work day for personal matters, come in late or leave early without accurately posting. Many exempt employees are used to having the freedom and flexibility. If want to let the new non-exempt employees be flexible, that’s great, but they’ll need to accurately record their non-working time, too. If they’re being paid according to the fluctuating workweek method, then you’d normally have to pay them for a full week if they worked any time during that week unless the time off was covered by PTO.

Learn the FLSA overnight travel rules because you’ll need to apply them. The rules during the workday are relatively simple: Commuting time (between home and workplace) is generally not compensable unless work is performed, but all travel time that occurs “in a day’s work” (between worksites) is covered, even if no actual “tasks” are performed. Travel time between home and an off-site assignment may be at least partially compensable, depending on the length of the trip.

But if your new non-exempt has to go out of town overnight, then all kinds of crazy rules apply.  Make sure you know them.

 

Employment Background Checks Revisited: What Every Employer Needs to Know

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In light of increased lawsuits against employers for violations under the Fair Credit Reporting Act (“FCRA”), every employer should insure it is performing employment background checks correctly. This law covers both credit and criminal background checks. A successful lawsuit under the FCRA can recover statutory damages between $100 and $1000 per violation, attorney’s fees, and costs, punitive damages as well as actual damages to the employee.

An employer must have written authorization and disclosure from a job applicant or employee prior to conducting an employment background check. The authorization and disclosure must stand alone, and cannot be combined with other forms or hidden within the job application. Many employers get the authorization and disclosure requirement wrong. Waiver forms or liability disclaimers cannot be added to the authorization form.

Another essential requirement of the FCRA is the adverse action notification. The Adverse Action is a two-step process that must be followed strictly. Many employers get tripped up by skipping one or even both steps: Step one, the “pre-adverse action” notice is sent to the applicant prior to making a “no hire” decision based on the background check. You have to provide the applicant with a notice, send a copy of the report, and attach a Summary of Rights under the FCRA. Step two, the “adverse action” notice, is sent after the final decision has been made and must contain information on how to dispute the background check.

Colombo Kitchin can provide you with the proper authorization and disclosure forms as well as proper adverse action notices. If you would like an evaluation of your employment background process, please contact our firm. We will be glad to help.