Computer Fraud and Abuse Act and Employment

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In a case filed in Eastern District of North Carolina alleging a claim under the federal Computer Fraud and Abuse Act (CFAA), (Sageworks, Inc. v. Creatore) the district court found that the employee accessed information belonging to the employer without authorization and exceeded his authorized access to obtain information.

Cases under CFAA can be brought in federal or state court. An employer can sue employee when the employee accesses and uses information without authorization. This law is commonly being used to file a lawsuit against an employee when the employee takes employer information and goes to work for a competitor.

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.

Paid Leave as Reasonable Accommodation in NC

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The EEOC has published guidance that providing paid maternity-only leave related to mother’s recovery does not violate Title VII. But does the policy raise the possibility of paid leave as a reasonable accommodation for a qualified individual with a disability?

By linking the leave to the mother’s recovery, the leave is based on a physical impairment. If paid maternity leave is linked to a disability, then employers may not be able to deny similar paid leave as a reasonable accommodation to other qualified individuals with a disability. Nothing in the ADA allows employers to favor one type of disability over another by providing better accommodation or benefits. Employer’s attorneys need to be mindful when advising clients on paid maternity leave policies.

If you have questions about North Carolina employment law, please contact Tracy Stroud at Colombo Kitchin Attorneys at 252-321-2020.

NC Choice of Law and Forum in Business Contracts

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The North Carolina General Assembly has decided to legislate choice of law in commercial transactions.  It will be codified at N.C. Gen. Stat. §1G-1. The statute only applies to business contracts. The definition in the statute excludes consumer contracts and employment contracts. The statute says is when it becomes law and applies to business contracts entered into before, on, or after that date.

The benefit of this statute is that that parties they can choose North Carolina law to govern their contracts and they can select North Carolina as a forum to resolve their disputes. Before the statute was enacted an opposing party could attack choice of law in court by saying that the dispute did not have a “reasonable relation” to North Carolina or application of our law would violate a “fundamental policy” of the state whose law would apply in the absence of the choice of law provision.

Now, those attacks are not allowed under the statute. If the parties to a business contract agree that North Carolina law will govern their relationship, it may not be attached on reasonable relation or fundamental policy grounds.

The new law also allows parties to a contract to choose whether they want disputes litigated in North Carolina. Before, parties could attack forum clauses on the basis of substantial hardship or unequal bargaining power.

Finally, the new law also gives parties to business contracts the ability to select a specific North Carolina county in the contract as the place where any lawsuit relating to the contract must be filed.

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 Seventh Circuit Court of Appeals Case Holds that Sex = Sexual Orientation

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Laws governing employment discrimination based on sexual orientation are changing.

  • EEOC has consistently issued guidance that “sex” includes sexual orientation and gender identification.
  • As much as EEOC had wanted it to, until April 4, 2017, no court had held that Title VII barred sexual orientation discrimination.
  • Seventh Circuit Federal Court of Appeals (Illinois, Indiana, and Wisconsin) ruled that sex discrimination extends to sexual orientation Hively v. Ivy Tech Community College of Indiana (April 4, 2017)
  • This is the law in Illinois, Indiana, and Wisconsin and provides persuasive authority for our Federal Circuit, the Fourth Circuit.

If you have questions about employment law issues, please contact Tracy Stroud at 252-321-2020.

New North Carolina Law Regarding Franchisors

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Franchisors are not employers under N.C. Gen. Statute Chapters 95, 96, 97 and 105, which means franchisors cannot be held responsible for NC Wage and Hour violations, Occupational Safety and Hazard violations, Workers’ Compensation violations, and unemployment claims.

  • Only about 2,500 franchisors in the United States
  • Law will likely protect out-of-state interests and if franchisor is the decision-maker for the franchisee, there is no one to hold liable
  • The burden on compliance on Wage and Hour law, OSH workers’ compensation and unemployment will fall to small business owners, the local franchisee
  • Law signed by Governor Roy Cooper on May 4, 2017

For more information about the passage of the new law or if you have other employment law questions, please contact Tracy Stroud at 252-321-2020.

Come September, Your Form I-9 Will be Outdated

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Here are changes to the I-9 form.  The new form must be used by September 18, 2017.

  1. The USCIS has changed the name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices to its new name: Immigrant and Employee Rights Section.
  2. Removal of the words “the end of” from the phrase “the first day of employment.”
  3. Revisions to the list of acceptable documents:
  • The Consular Report of Birth Abroad (Form FS-240) has been added to List C. If you’re filling out the Form I-9 online, you will be able to select this form from the dropdown menus. Using e-verify? You can also select Form FS-240 when creating a case for an employee who presents this document for Form I-9.
  • All the certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350 and Form FS-240) have been combined into selection C #2 in List C.
  • All List C documents except the Social Security card have been renumbered. Example: The employment authorization document issued by the Department of Homeland Security on List C has changed from List C #8 to List C #7.

Employers can continue using the older version through Sept. 17. On Sept. 18, you must use the revised version. You’ll notice the revision date of 07/17/17 N at the bottom of the form. Storage and retention rules for any previously completed Forms I-9 remain the same.

Penalties for non-compliance:

Just last year, the Immigration and Customs Enforcement (ICE) nearly doubled fines for violations with Forms I-9. There is a $216 – $2,126 fine per Form I-9 paperwork violation. That’s an increase from $110 – $1,100. For unlawful employment of unauthorized workers, the fine for the first offense increased to $539 – $4,313 per worker from $375 – $3,200. For unfair immigration-related practices, specifically document abuse, the fine per individual increased to $110 – $1,110.

If you have any questions regarding employment issues, please contact Tracy Stroud at Colombo Kitchin Attorneys, 252-321-2020.

EEOC Issues Guidance on Depression, PTSD and Other Mental Health Conditions in Workplace

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On December 12, 2016, the EEOC published information summarizing the rights of individuals in the workplace who suffer from depression, PTSD, and other mental health conditions. The information covers information such as discrimination and harassment, privacy and reasonable accommodations in the workplace.

The link to the publication is https://www.eeoc.gov/eeoc/publications/mental_health.cfm.

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.