Month: October 2017

Changes on the Horizon in Labor and Employment Law

As 2017 winds down, there are a few developments that may change the legal landscape for employers:

· Class-Action Waivers in Employment Arbitration Agreements. Arbitration agreements, in which employees agree to submit disputes with their employer to arbitration rather than to court, have become common. Often, the agreement stipulates that all claims must be submitted on an individual basis, thus precluding class actions. The National Labor Relations Board (NLRB) opposes such class action waivers, arguing that they violate employees’ rights under the National Labor Relations Act (NLRA). Federal appellate courts are divided on the issue: the Fifth Circuit has held that such arbitration clauses are lawful, whereas the Seventh and Ninth Circuits have held that they are prohibited by the NLRA. On October 2, the U.S. Supreme Court heard arguments in three cases on this issue that have been consolidated before the Court. Depending on the Court’s decision, employers may need to revise their employment agreements.

· Joint Employer Bill. The Save Local Business Act (H.R. 3441) is progressing through the House of Representatives with bipartisan support. This bill, if it passes, will restrict the definition of “joint employer,” thereby reversing the NLRB’s infamous Browning Ferris decision. “Joint employer” is the legal doctrine whereby one business can be held legally liable for the employment law violations of another business, such as a subcontractor or franchisee. In Browning Ferris, the NLRB held in 2015 that simply having the right to control another business’s workers, even if that right is never exercised, was sufficient to confer joint employer liability. The pending legislation would limit joint employer liability under both the NLRA and the Fair Labor Standards Act (FLSA) to businesses that actually control another business’s workers.

· Evolving Policy for Transgender Employees. U.S. Attorney General Jeff Sessions has announced that Title VII’s prohibition on sex discrimination “does not encompass discrimination based on gender identity per se, including transgender status.” This announcement reverses the past administration’s policy that deemed employment discrimination against transgender individuals to be discrimination on the basis of sex in violation of Title VII. Under President Obama’s administration, the Equal Employment Opportunity Commission (EEOC) pursued several cases against employers for Title VII discrimination against transgender individuals. Attorney General Sessions’ pronouncement signals a departure from those enforcement efforts.

Employers still should be cautious in taking any adverse action against transgender or gay individuals, however, because several courts have held that Title VII does prohibit discrimination on the basis of gender identity and sexual preference. Even in jurisdictions where courts share Attorney General Sessions’ view, plaintiffs’ attorneys routinely file such cases, claiming that the employer discriminated against an individual because he or she failed to conform to gender stereotypes. The law is well-settled that discrimination based on gender stereotypes violates Title VII.  Also, under current law, federal government contractors are prohibited from discriminating against applicants and employees based on sexual preference and gender identity (which includes transgender individuals).

USCIS Changes Form 1-9 . . . Again

United States Citizenship and Immigration Services (“USCIS”) has again changed the Form I-9, less than a year after its last revision. You may recall that in January 2017, a new Form I-9, dated November 14, 2016, replaced the prior version of the form, which had not been updated since 2013.  The core Form I-9 requirements were unchanged, but the November 14, 2016, version included additional instructions and enhanced formatting, including to provide for completion in a fillable-PDF format.

Less than 6 months later, on July 17, 2017, USCIS released yet another updated Form I-9. Until last week, employers had the option of using the November 2016 or the July 2017 version of the form. However, the July 2017 version became mandatory on September 18, 2017.

The July 17, 2017, Form I-9 reflects changes to the prior version in the following, almost entirely non-substantive, ways:

· In the accompanying “Instructions for Form I-9, Employment Eligibility Verification,” the “Office of Special Counsel for Immigration-Related Unfair Employment Practices” was changed to “Immigrant and Employee Rights Section.” This change simply reflects the change in the name of this division of the Department of Justice.

· Also in the accompanying Instructions, specifically those related to “Completing Section 1,” the phrase “the end of the first day of employment” was changed to “the first day of employment.” It appears this change was made simply for consistency with Section 1 of the Form I-9, which already referenced “the first day of employment” (not “the end of” the first day).

· List C “Documents that Establish Employment Authorization” was changed by adding Form FS-240 “Consular Report of Birth Abroad” as an acceptable document, combining all Department of State-issued certifications of report of birth (Form FS-240, Form DS-1350, and Form FS-545), and renumbering the List C documents.  Other than adding Form FS-240 as an acceptable document, these changes were purely to format.

As was the case with the prior change, employers do not need to use the new Form I-9 on existing employees—they should simply start using the form for employees hired or who require recertification on or after September 18, 2017.  Proper compliance requires the employer to use the version of the form in effect on the date the employee was hired or recertified.  If the wrong form was used, the employer should redo the employee’s Form I-9 using the correct form.  USCIS’s issuance of the new Form I-9 did not affect applicable retention requirements, which remain the same: employers must retain Form I-9s for all current employees and, for former employees, must retain Form I-9 for the longer of (1) one year after the employee’s termination date; or (2) three years after the employee began work for the employer.

It is important for employers to ensure they strictly comply with the Form I-9 requirements—including by using the correct version of the form.  Fines for Form I-9 paperwork violations, which include using an outdated version of the Form I-9 range from a minimum of $216 to a maximum of $2,156 for each and every Form I-9 violation occurring after November 2, 2015.  The new Form I-9 and associated forms can be found here:  https://www.uscis.gov/i-9

Counting Down to Deadline for DoD Requirements for Safeguarding Covered Deference Information and Cybersecurity Incident Reporting

Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7012 goes into effect on December 31, 2017. This “Cyber Clause” applies to most companies that do business directly with the Department of Defense as well as subcontractors and vendors. The Cyber Clause applies to Covered Defense Information (CDI), which is broadly defined to include almost all nonpublic information. If the Cyber Clause applies to your work your information system that contains CDI, must be compliant with National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, Rev. 1. For all contracts awarded prior to October 31, 2017, contractors are required to notify the government of any security requirements specified by NIST SP 800-171 that were not implemented at the time of award. When a contractor discovers a cyber incident that affects a covered contractor information system or CDI the contractor must analyze the incident and rapidly report the incident to the government. To avoid or reduce the cost of compliance you need to determine as soon as possible whether a contract includes CDI. This should be done at the pre-bid stage and continue after contract award. Once you determine the scope of the identified CDI you can evaluate which steps to take for compliance. These may include: (1) Bringing your entire information system into compliance – likely the most costly method; (2) Disputing the identification of the CDI to reduce its scope; (3) Proposing alternative less costly security measures; (4) Establishing a segregated in-house information system that is NIST compliant; and, (5) Adjusting your prices and rates to account for the cost of compliance. In almost every circumstance compliance will be costly and time-consuming, but the penalty for non-compliance could be substantial. For more information, please contact the authoring attorney.

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