On April 16, 2015, the New York City Council, by a vote of 47-3, approved legislation that would prohibit the use of credit checks in employment decisions except in limited circumstances. The bill, which is expected to be signed by Mayor Bill De Blasio, would amend the New York City Human Rights Law to make use of credit history in employment decisions an unlawful discriminatory practice. In passing this law, New York City joins the growing number of states and municipalities that have enacted legislation to restrict the ability of employers to request or use the credit history of applicants and employees. These state and local initiatives stem from the increased use of credit history as an employment screening tool and from concerns that credit history is not relevant to the performance of many jobs, and moreover, may adversely affect certain groups, including minorities and low-income individuals. The New York City bill is noteworthy in that it is one of the most restrictive laws to date, even after certain exceptions were added to the proposed legislation.
As the world reels in the wake of last month’s shocking crash of Germanwings Flight 9525 in France, many are questioning what, if anything, the airline should—or could—have done to prevent the tragedy. These questions necessarily touch on important issues about what an employer is permitted to address in pre- and post-employment medical screenings concerning an employee’s mental health.
On March 25, 2015, the U.S. Supreme Court issued a decision in Young v. United Parcel Service, Inc., holding that the Pregnancy Discrimination Act (PDA) requires courts to consider the extent to which an employer’s policy treats pregnant workers less favorably than it treats non-pregnant workers similar in their ability or inability to perform their job duties.
In a much-anticipated move, the SEC on April 1, 2015 commenced a cease-and-desist action against KBR (formerly Kellogg Brown & Root) alleging its confidentiality agreements violated Dodd-Frank’s whistleblower regulations. KBR simultaneously agreed to settle the matter for $130,000. This is the first such case brought by the SEC, which had indicated over the last year or more that it was actively seeking examples of such alleged violations in order to enforce its Rule 21F-17, which provides, “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement…” In unofficial comments, SEC staff had expressed the view that standard confidentiality and non-disparagement provisions found in many employer agreements might violate the Rule to the extent they did not have express carve-outs stating that nothing in those provisions prevented employees from going directly to the Commission with concerns.
On March 18, 2015, the General Counsel of the National Labor Relations Board (NLRB) issued a report (General Counsel Memorandum GC 15-04) summarizing recent NLRB enforcement action regarding many common employment policies. The report is relevant to nearly all private employers, regardless of whether they have union represented employees. It is troubling because it finds that many seemingly innocuous, sensible employer handbook provisions and policies are unlawful because they could potentially be interpreted to chill employees’ rights to engage in concerted protected activity under the National Labor Relations Act.
Just in time for Women’s History Month, California State Senator and Chair of the California Legislative Women’s Caucus, Hannah-Beth Jackson, introduced Senate Bill 358 (SB 358), which seeks to narrow the gender pay gap in California. Citing best supporting actress Patricia Arquette’s recent Oscar acceptance speech where she called for, “wage equality once and for all and equal rights for women,” Senator Jackson hopes to turn that rallying cry into concrete legislation in California.
On March 2, 2015, the SEC announced a whistleblower bounty award of between $475,000 and $575,000, its 15th under the Dodd-Frank whistleblower program. While the SEC’s order is scant on detail, it does disclose that the award will go to a corporate officer, making it the first award to go to an officer under the program. This award is in keeping with the SEC’s approach to demonstrate in the relatively small number of awards made to date that a broad range of individuals can get bounties for providing original information of corporate wrongdoing under Dodd-Frank.
The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), 38 U.S.C. §§ 4301–4335, not only prohibits discrimination against employees and potential employees based on their military service, it also imposes certain obligations on employers with respect to employees returning to work after a period of service in the U.S. military.
The IRS recently announced that severance payments are taxable wages under FICA, and thus employers who seek tax refunds on those payments will be denied. The IRS’s position reflects the United States Supreme Court’s ruling in United States v. Quality Stores, Inc., issued in March of last year.