New HR Developments for 2013 – Part II of II: Federal Rules/Guidance

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Last week we blogged about some of the more significant new California state laws applicable to businesses with employees in California CA Update . This week, we address some of the new HR developments from our friends in the federal government. No matter where your employees are based, you need to be aware of the following:

Use of Arrest and Conviction Records in Employment Decisions
In 2012, the Equal Employment Opportunity Commission (EEOC) issued new guidance on employers’ ability to use arrest and conviction records in making hiring decisions. Employers may not simply reject an applicant solely because they have an arrest record and/or a “criminal” history. Instead, the employer must consider the impact of a particular conviction on the particular job for which the applicant has applied. In order to meet the new requirements and protect against liability, employers should look at the following factors: 1) the nature and severity of the applicant’s offense(s); 2) how much time has passed since the offense; and 3) the nature of the job the applicant is seeking. In other words, the crime needs to fit the job to qualify as a legitimate basis for not hiring the candidate.

Background Check Procedures
As part of their due diligence when hiring a new employee, employers often will run a credit and other background checks on the applicant. The newly created Consumer Financial Protection Bureau issued regulations modifying the notices required under the Fair Credit Reporting Act (FCRA). These regulations include revisions to the standard notice employers are required to provide to applicants and employees when they are obtaining credit history reports, criminal background reports, and other background checks. The changes affect three forms: the Notice to Users of Consumer Reports of Their Obligations under the FCRA and the attached Summary of Your Rights under FCRA, as well as the Notice to Furnishers of Information of Their Obligations under the FCRA. Employers should ensure they are using the revised forms.

NLRB Limits Use of Social Media By Employers
Many businesses hear the term National Labor Relations Board (NLRB) and think “that stuff applies only to unions and since we’re not a unionized work force, it doesn’t apply to me.” Regrettably, that is mistaken. Over the last couple years, the NLRB has taken much more aggressive positions regarding policies applicable to nonunion workplaces. The rationale for the NLRB extending its reach into non-union workplaces is that some employer polices may “chill or restrict concerted activity by employees” and therefore violate employee protections under the federal National Labor Relations Act (NLRA). We can debate whether that is an over reach but, for now, it is important for businesses to understand that the NLRB rulings apply, and all businesses need to take steps to comply with NLRB rulings.

With that background, employers need to be aware of several NLRB rulings invalidating social media policies (on the theory such policies might impermissibly interfere with employees’ rights to engage in protected concerted activity). Some of the provisions that have been held invalid are those that prohibit employees from posting confidential information, inaccurate information, personal information about co-workers, offensive or abusive remarks, information on legal matters, and even policies that prohibit employees from posting a company’s trademarked logo. The NLRB even found that Costco’s social media policy that prohibited employees from posting of statements “that damage the Company, defame any individual or damage any person’s reputation” was impermissible. The takeaway here is that a business should carefully evaluate its social media policy to ensure that it complies with the NLRB’s recent rulings.

Employees’ use of social media and an employer’s social media policy to help control it are thorny issues for businesses. This blog will tackle these issues next month in a two-part series, so check back with us.

NLRB Rulings on Other Employee Policies
In reviewing employer policies for compliance with the NLRA, the NLRB has found a variety of common HR policies to be unlawful. For example, if an employer is investigating a claim of workplace harassment, many policies require that employees interviewed as part of the investigation keep the matter confidential. The NLRB, however, found that such a “blanket” requirement for confidentiality is unlawful. Instead, a company will have to justify, on an individual case-by-case basis, the need for confidentiality (such as the need to protect a witness, to protect evidence from being destroyed, or to prevent a cover up).

Similarly, many an HR handbook contains language that an employee’s employment is “at will” and can be terminated at the will of either party. The NLRB struck down an HR provision that stated the employee’s relationship with the company is at will and that the relationship can never be changed as too broad.

The first of the year is a good time to review all of your company’s HR policies, handbooks, notices, forms and contracts to ensure compliance with all the new state laws and federal regulations. There is a lot to keep up with, but compliant policies are still the best defense to an expensive legal problem down the road.