California Employers May Be Barred from Requiring Disclosure of Social Media Passwords

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Last week, we posted about the recent uproar over employers and colleges seeking to require applicants to surrender their Facebook passwords as a condition of hiring/admission and how that practice may be analyzed by the courts under an invasion of privacy challenge. 

California employers should also note that the California legislature has proposed a bill that would specifically outlaw the practice.   AB 1844, proposed by Assemblywoman Nora Campos (D), if enacted as currently drafted:

(a)  would prohibit an employer from requiring an employee or prospective employee to disclose a user name or account password to access social media used by the employee or prospective employee; and

(b) would also provide that an employer does not fail to exercise reasonable care to discover whether a potential employee is unfit or incompetent by the employer’s failure to search or monitor social media, as defined, before hiring the employee.

The bill would add sections 980-982 to the California Labor Code to read as follows:

980.  As used in this chapter, "social media" means an electronic medium where users may create and view user-generated content, including uploading or downloading videos or still photographs, blogs, video blogs, podcasts, or instant messages.

981.  For purposes of a claim of negligent hiring, an employer does not fail to exercise reasonable care to discover whether a potential employee is unfit or incompetent by the employer's failure to search or monitor social media before hiring the employee.

982.  An employer shall not require an employee or prospective employee to disclose a user name or account password to access social media used by the employee or prospective employee.

This bill is a mixed bag, as currently drafted.  Proposed section 982 of the Labor Code would make it impossible for those California employers who wish to require applicants to surrender their Facebook and other social media passwords to engage in this conduct.  Certain employers would see this as an unfair restriction.  However, proposed section 981 of the Labor Code would protect California employers from negligent hiring lawsuits that are based on an employer's failure to search or monitor an applicant's social media profile and this would likely be seen as a positive piece of legislation by many California employers. 

AB 1844 was referred to the Assembly Committee on Labor and Employment on March 5.  We would not be surprised if this bill gained some traction as it may end up getting support from both employers and employees.  We will continue to keep you updated on this and other important California legislative developments.

Facebook Offers Advice About Employers Requiring Applicants to Surrender Their Facebook Passwords

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Over the last week or two, there have been many articles written about private employers and colleges that are requiring applicants to surrender their Facebook password as part of the hiring/admissions process.  Today, Facebook's chief privacy officer published Facebook's position on this practice on its website.  Click here for the details. 

What is interesting about this, is that the position statement, published by Facebook's chief privacy officer, Erin Egan, a former Covington and Burling attorney, offers her legal opinions to try to convince employers (private and public), colleges, and others not to engage in this practice.  Egan, offers the following legal analysis in the position statement:

"We don’t think employers should be asking prospective employees to provide their passwords because we don’t think it’s right the thing to do.  But it also may cause problems for the employers that they are not anticipating.  For example, if an employer sees on Facebook that someone is a member of a protected group (e.g. over a certain age, etc.) that employer may open themselves up to claims of discrimination if they don’t hire that person."  "It also potentially exposes the employer who seeks this access to unanticipated legal liability."
"Employers also may not have the proper policies and training for reviewers to handle private information.  If they don’t—and actually, even if they do--the employer may assume liability for the protection of the information they have seen or for knowing what responsibilities may arise based on different types of information (e.g. if the information suggests the commission of a crime)."

Setting aside whether or not private employers in California should be getting their legal advice from Facebook's chief privacy officer, Ms. Egan's advice that engaging in this practice is subject to challenge is accurate.  However, Egan's statement fails to address the biggest problem for California employers (and colleges) who engage in this practice: the California Constitution's privacy protections.

In California, individuals have a constitutional right of privacy that is provided by the California Constitution.  Article I, Section I of the California Constitution provides:   "All people are by nature free and independent and have inalienable rights.  Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy."   California courts have further held that this provision gives rise to the independent tort of invasion of privacy. 

The California Supreme Court has held that to determine whether an individual's constitutional right of privacy has been violated the court must balance the compelling need for the information against the reasonable expectation of privacy the person has in the information.  Most jurors and many judges have Facebook accounts, or at least have password protected information on the internet.  Their expectation of privacy with respect to the information behind the password is almost always going to be very high.  It will be difficult for most employers (other than perhaps those hiring for national security or other related positions where they are exposed to extremely sensitive information), or any college, to demonstrate a compelling or strong need for this information.  Employers have been hiring employees without detailed personal information for hundreds of years.  In most cases, it will be extremely difficult for an employer to demonstrate a new and sudden compelling need to get behind an applicant's Facebook password to be able to evaluate that individual.  When that is measured against a practice that many view as highly offensive and a significant intrusion into personal privacy (requiring someone to give up their personal password), this practice would likely be found improper by our courts and is likely to give rise to an independent tort.

In sum, Egan's conclusion that requiring applicants to surrender their facebook password as a condition of employment or admission is a legally risky practice, appears to be very accurate.  However, for California employers or employers hiring California applicants, the risks are even higher, due to the privacy protections of the California Constitution.

H-1B Visa Quota Will Open April 2

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The Government will accept new H-1B visa filings on April 2 for a start date of Oct 1.   H-1Bs are for college degreed professionals such as software developers, engineers, chemists, scientists, teachers, financial analysts, pharmacists, and dentists.  The annual quota of 85,000 visas applies to first time H-1Bs, not to extensions with the same company or transfers to other companies. 

It is suggested that employers query their departments to see if they have a need for such a visa for either a possible new hire or to keep a valued current foreign national employee work authorized.   Due to the recession, the annual quota is not expected to fill up right away.  However, employers should not wait too long.  It is hard to predict when this year’s quota will be filled – possibly anywhere from one to five months.

Many employers have valued foreign national employees working on a one-year work permit after college (known as Option Practical Training or OPT).  Since the OPT will expire, it’s important that the H-1B visa be explored to allow them to remain work authorized.  Some employees are eligible for a one-time extension of their OPT (based on their education in science, technology, engineering, and math), but eventually will still need the H-1B visa.

Please note that it’s important that before you extend a job offer to a foreign national who requires sponsorship, you make sure that all immigration eligibility issues are covered such as their immigration history, eligibility for the visa, how much time in H-1B status they will be allowed, prevailing wage, etc. You don’t want any surprises. 

Immigration issues should first be addressed on your job application and include two questions regarding work authorization:  First, “Are you authorized to work in the U.S.” and second,  “Will you require sponsorship to work in the U.S.”   If the applicant answers “yes” to sponsorship, there are a host of permissible follow up questions regarding immigration status and history that can and should be delved into prior to extending an offer.

For more information and/or assistance with H-1B issues, please contact Greg Berk at (949) 622-5851 or gberk@cdflaborlaw.com.

Will Being Unemployed Be a New Protected Class?

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State and federal lawmakers are growing increasingly concerned about how our economy is making it difficult for long term unemployed workers to get back into the workforce.  As a result, there is a movement to make being unemployed a new protected class.  With a larger than normal percentage of voters being unemployed, you can bet this will be popular with some politicians up for re-election in November. 

California is one of a number of states where legislation has been introduced to protect unemployed workers and prohibit an employer from using a person's unemployed status at the time of applying for a job as a negative criteria in the hiring process.  The California bill is AB 1450 and was introduced in January.  In addition to the California bill, Congress has introduced HR 2501 in the House and S 1471, two bills that would provide similar protections on a nationwide basis. 

Currently, most protected status suits deal with harassment and termination of the employment relationship.  Hiring discrimination cases are relatively rare.  However, if any of these bills pass, employers covered by them should expect a wave of new litigation by unemployed applicants applied for positions but were not hired.  Employers will certainly have to alter their hiring practices and train those making the hiring decisions and doing the screenings, in order to ensure that they can defend against such suits. 

These bills will be something to keep an eye on in the coming months.  We will continue to keep you posted on this blog.

Confusion Surrounds California’s New Wage Notice

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As we previously posted on this blog, a new California law was passed in October requiring California employers, effective January 1, 2012, to provide new hires with a written notice containing certain wage and other information.  The new law is codified as Labor Code section 2810.5 and requires employers to provide newly hired non-exempt employees with the following  categories of information (in one self-contained writing):

1. The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission or otherwise, including any rates for overtime;

2. Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;

3. The regular payday designated by the employer;

4. The name of the employer, including any “doing business as” names used by the employer;

5. The physical address of the employer’s main office or principal place of business, and a mailing address, if different;

6. The telephone number of the employer;

7. The name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and

8. Any other information the Labor Commissioner deems material and necessary.

Employers are required to begin providing the foregoing information to non-exempt new hires effective January 1.  If there are changes to any of the information provided, written notice of the change must be provided to employees within 7 calendar days.  The information must be provided in the language normally used by the employer to communicate employment-related information.  The new law exempts from the notice requirement State workers and most unionized employees covered by the terms of a collective bargaining agreement, as well as employees who are exempt from overtime.

While the foregoing seems fairly straightforward to apply, some confusion has arisen over the eighth category of prescribed information listed—“any other information the Labor Commissioner deems material and necessary.”  The Labor Commissioner waited until late December to post anything substantive about this new law and has since revised its position at least once regarding the scope of the new law, leaving employers with less than clear guidance over compliance.  Under the new law, the Labor Commissioner is charged with creating a template that employers may (but are not required to) use to comply with the new notice requirement.  The Labor Commissioner waited until almost the end of December to publish this template, which is available here.  Interestingly, the Labor Commissioner’s template includes several additional categories of information (beyond those enumerated in the actual statute):

1. The employee’s hire date and position;

2. The business form of the employer (e.g. corporation, partnership, LLC, etc.);

3. Specified information about other businesses or entities the employer uses to hire employees or to administer wages or benefits;

4. Whether the employee’s employment agreement is written or oral; and

5. The employer’s workers’ compensation policy number.

Adding more to the confusion, the Labor Commissioner also posted (at the eleventh hour) some “Frequently Asked Questions” about the new law, including guidance stating that the notice needed to be provided to all current employees, not just to new hires as indicated in the statute.  It appears that the Labor Commissioner’s office then realized it had overstepped its authority in exceeding the scope of the statute by extending its coverage to current employees, so the Labor Commissioner (without explanation) revised the FAQ to delete this reference.  The most current FAQ published by the Labor Commissioner’s office is here.  Employers should review both the template and FAQ.

Although employers are not required to use the Labor Commissioner template as a form notice, they are advised to make sure that any written notice they create includes all categories of information indicated on the Labor Commissioner template.  To be clear, it appears that the Labor Commissioner does have the authority (prescribed by the express language of the statute) to broaden the categories of information that must be provided in writing to new hires.  At this time, the notice must only be provided to new hires and not to current employees.  However, changes to any of the information provided in the new hire notice will need to be provided to current employees within 7 calendar days of the change.

Employers should note that although the new law does not provide for any specific penalties for non-compliance, it appears that the law can be enforced through California’s “catch-all” penalty provision, known as the Private Attorneys’ General Act (PAGA).  PAGA allows for recovery of substantial penalties for non-compliance with provisions of the Labor Code.  Employers should review the Labor Commissioner template and guidance and ensure that they have a compliant notice in place, if they have not already done so.  Employers are advised to include language in their notice to make clear, as applicable, that the employment relationship is at will and that nothing in the notice should be construed as creating a contract of employment or for the promise of any particular term or condition of employment, and that the employer has the right to change the terms and conditions of employment at any time with both employer and employee having the right to terminate the employment relationship with or without cause or advance notice.  Employers should also monitor the Labor Commissioner website from time to time in the event there are changes to the content of the notice requirement that may be prescribed by the Labor Commissioner.

Labor Commissioner Publishes Optional Notice for Employer Use to Comply With Wage Theft Protection Act

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Effective January 1, 2012, California employers will have to comply with newly enacted Labor Code section 2810.5(a).  This new law, known as the Wage Theft Protection Act of 2011, requires employers to provide employees with written information at the time of hire concerning wages and related information.  California's Labor Commissioner was tasked with creating a template employers may use to provide the required information.  The Labor Commissioner has just published the optional template, which is available here.  For more information on the requirements of the new law, click here and here.

California Court Applies Ministerial Exception to FEHA

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In Henry v. Red Hill Evangelical Lutheran, the plaintiff was a preschool teacher and the director of preschool education at a private preschool run by a Tustin, California Lutheran church.  The school terminated her employment after if found that the plaintiff was living with her boyfriend and raising their children together, without being married.  The school required that all students and teachers be "practicing Christians."  The school felt that the plaintiff's lifestyle was violating the church teaching and commitment to live as a practicing Christian.  It decided to end the employment relationship on this ground. 

The plaintiff, Sara Henry, subsequently sued and alleged that her termination violated the California Fair Employment and Housing Act 's prohibition against marital discrimination.  The Lutheran school argued that the lawsuit was barred because FEHA's definition of "employer" does not include a non-profit religious corporation.  The school further argued that Henry could not allege a common law wrongful termination action either in this situation, whether it is based on FEHA or the California Constitution.  The court agreed, holding that the ministerial exception to FEHA set forth in section 12926(d) of the Government Code barred the claim and that the California Constitution did not support the lawsuit either. 

This is one of the first California published opinions to discuss the ministerial exception to FEHA.  Although the case appears clear cut on its face, it is plausible that the decision may have been different if the plaintiff had been able to present evidence that the school was aware of other teachers/administrators who were not living their lives as "practicing Christians" in accordance with the principles of the school and church.  Religious institutions dealing with similar situations should be aware not only of the scope of coverage of the ministerial exception, but also that should apply their religious principles equally and fairly in order to receive a similar result as in Red Hill Evangelical Lutheran, under similar factual circumstances.  Lawyers advising religious institutions should understand that good plaintiffs' attorneys will attempt to be very aggressive in discovery proceedings to uncover evidence of unequal treatment. 

A copy of the full opinion is available here.

No Duty to Accommodate Employee Who Isn’t Qualified for Job

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In Johnson v. Board of Trustees, the Ninth Circuit elaborated on the limits of an employer’s duty to accommodate a disabled employee.  Trish Johnson was a special education teacher in Idaho with a history of depression and bipolar disease.  Johnson’s position required a state teaching certificate, which in turn required certified teachers to meet a minimum level of continuing education credits in a five year period.  When her contract came up for renewal in the fall of 2007, Johnson had not completed the continuing education requirements because she suffered a major depressive episode over the summer, so she petitioned the school board to seek provisional authorization from the state to allow her to teach temporarily without a license.  The Board denied her request because 1) she had five years to obtain the credits and 2) the Board only petitioned the state when there was no certified teacher available to fill a position.  A certified teacher was available and was hired.

Johnson brought suit for disability discrimination, a suit summarily dismissed by the trial court.  On review by the Ninth Circuit, the Court agreed that Johnson's claim should be dismissed.  The Court held that in order to prevail on a claim for disability discrimination or failure to accommodate, the plaintiff must establish that she was a "qualified individual with a disability."  To establish this, the plaintiff must show that she 1) has the experience, education and skills required by the job and 2) can perform the essential functions of the job, with or without a reasonable accommodation.  The Board argued that Johnson failed to establish that she met the requirements of the job, and there was therefore no need to accommodate her disability.  Johnson countered that because she could have obtained her teaching certificate with an accommodation of additional time, the Board was required to accommodate her ability to obtain her teaching certificate.  The Court disagreed, and held that there is no duty to accommodate an employee’s efforts to meet the job skills requirement.  By way of a straightforward example, the Court noted that under the EEOC guidelines, a law firm that requires incoming attorneys to be members of the bar need not accommodate a visually impaired attorney who fails to pass the bar exam.  On the other hand, the firm is required to provide a reasonable accommodation to a visually impaired –  but otherwise qualified – bar member.  Simply summarized, guidance by the EEOC “explicitly disclaims any requirement of providing reasonable accommodation to disabled individuals who fail to meet the job prerequisites on their own.” 
Since the job requirement itself was neither discriminatory nor had a disparate impact on disabled individuals, the district court’s ruling was allowed to stand.  The Johnson case is available here.

Labor Commissioner to Issue Template for Compliance With New Wage Notification Requirement

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We previously posted on California's passage of the Wage Theft Protection Act of 2011 (AB 469), which requires California employers to start providing written notice to new hires of wage payment information as well as various other categories of information.  Our prior post is here.  California's Labor Commissioner is required to prepare a template for employers to use for this purpose.  The Labor Commissioner has published on its website (here) that this template, along with guidance on compliance, will be available in mid-December.  We will post this information as soon as it becomes available.

California Governor Vetoes Several Bad Employment Bills, But Signs Law Limiting Use of Credit Reports and a Few Others

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In pleasant news for California employers, Governor Brown vetoed several unappealing employment bills this past weekend.  The bills he vetoed include (1) AB 267, which would have invalidated forum selection and choice of law provisions in employment contracts with California employees, (2) AB 325, which would have required California employers to provide bereavement leave, and (3) SB 931, which would have imposed new requirements for use of payroll cards.  That is the good news.

The bad news is that Governor Brown signed into law AB 22, which limits California employers’ ability to use credit reports for employment purposes.  Under the new law, employers (with the exception of certain financial institutions) are prohibited from obtaining or relying on credit reports for applicants and employees, unless the report is sought in relation to (1) a position in the California Department of Justice; (2) a managerial position (defined as a position that qualifies for the executive exemption from overtime); (3) a sworn peace officer or other law enforcement position; (4) a position for which credit information is required by law to be disclosed or obtained; (5) a position that involves regular access (other than in connection with routine solicitation of credit card applications in a retail establishment) to people’s bank or credit card account information, social security number, and date of birth; (6) a position in which the employee would be a named signatory on the employer’s bank or credit card account, authorized to transfer money on behalf of the employer, or authorized to enter into financial contracts on behalf of the employer; (7) a position that involves regular access to cash totaling $10,000 or more of the employer, a customer, or client during the workday; and (8) a position that involves access to confidential or proprietary information (defined as a legal “trade secret” under Civil Code 3426.1(d)).

Even if the employer is permitted to obtain a credit report under one of the exceptions outlined above, the employer must first provide written notice to the applicant or employee, specifying the permissible basis for requesting the report and providing a box for the employee/applicant to check off to request a copy of the report, which must be provided free of charge and at the same time the employer receives its copy of the report.  If employment is denied based on information in a credit report, the employer must advise the applicant/employee and provide the name and address of the credit reporting agency that supplied the report.

Other labor and employment legislation signed into law by the Governor in the last few days includes the following:

SB 459 (Misclassification of Independent Contractors):  This new law creates stiff penalties for willful misclassification of employees as independent contractors.  The law defines “willful” as “voluntarily and knowingly misclassifying” an individual.  The law also makes it unlawful for an employer to charge an individual who has been willfully misclassified any fees or other deductions from compensation if those fees and deductions (e.g. for licenses, space rental, equipment) would have been prohibited had the individual been properly classified as an employee. In the event of a finding of willful misclassification, penalties may be assessed in the range of $5,000 to $25,000 per violation.  Additionally, an employer in violation may be ordered to display prominently on its Internet web site (or other area accessible to employees and the general public) a notice that explains the employer has been found guilty of committing a serious violation of the law by willfully misclassifying employees, along with other prescribed information. The new law also imposes joint and several liability on individuals who, for money or other valuable consideration, knowingly advise an employer to treat an individual as an independent contractor to avoid employee status.  Excepted from liability are employees who provide advice to their employer, and licensed attorneys providing legal advice to the employer.

AB 469 (Notice of Pay Details):  This new law requires employers to provide each employee, at the time of hire, with a notice that specifies (1) the pay rate and the basis, whether hourly, salary, commission or otherwise, as well as any overtime rate, (2) allowances, if any, claimed as part of the minimum wage, including meals or lodging, (3) the regular payday, (4) the name of the employer, including any “doing business as” names used by the employer; (5) the physical address and telephone number of the employer’s main office or principal place of business, and a mailing address if different, and (6) the name, address and telephone number of the employer’s workers’ compensation carrier.  The employer must notify each employee in writing of any changes to the information set forth in the notice within 7 days of the changes, unless such changes are elsewhere reflected on a timely wage statement or other writing required by law to be provided.

AB 887 (Gender Identity and Expression):  This new law amends the Fair Employment and Housing Act (as well as various other laws) to make clear that discrimination on the basis of gender identity and “gender expression” is prohibited.  Gender expression refers to a person’s gender-related appearance and behavior, whether or not stereotypically associated with the person’s assigned sex at birth.  The new law also requires employers to allow an employee to appear or dress consistently with the employee’s gender expression.

AB 1236 (E-Verify):  This new law prohibits the state, or a city or county, from requiring employers to use E-Verify as a means of verifying employees they hire are authorized to work in the United States.

AB 243 (Farm Labor Contractors):  This new law requires employers who are farm labor contractors to disclose to employees the name and address of the legal entity that secured the employer’s services.  This information must be disclosed as part of the employees’ itemized wage statements required by Labor Code section 226.

SB 126 (Agricultural Labor Relations):  This new law deals with petitions objecting to the conduct of an election before the Agricultural Labor Relations Board and specifies that where the ALRB refuses to certify an election because of employer misconduct that, in addition to affecting the results of the election, would render slight the chances of a new election reflecting the free choice of employees, the labor union shall be certified as the exclusive bargaining agent for the bargaining unit.

Unless otherwise specified most new laws take effect January 1, 2012.  California employers will want to familiarize themselves with these new laws as applicable to their workforces and operations, and revise policies and procedures accordingly.