Are Workplace Recording Bans Legal?

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

Smart phone technology, and the ability of video and audio recordings to be uploaded to social media sites, has prompted many employers to adopt rules regulating the surreptitious recording of workplace interactions.  The “no recording” rule adopted by Whole Foods Market Group, Inc. is a common example:

“It is a violation of [Company] policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received from [management], or unless all parties to the conversation give their consent. Violation of this policy will result in corrective action up to and including discharge.”

The business justifications for such a rule can include (1) prevention of workplace bullying, harassment and retaliation, (2) protection of trade secrets and proprietary information, (3) protection of private or embarrassing information shared in confidence, (4) protection of vendor and customer relationships, and (5) encouragement of open dialogue among employees.

The National Labor Relations Board (“NLRB”), however, has long held that a work rule violates Section 8(a)(1) of the National Labor Relations Act “if it would reasonably tend to chill employees” from engaging in concerted activities for mutual aid or protection. Such a work rule can violate the Act even if adopted by a non-union employer. Subject to review and enforcement in federal court, the NLRB has the power to order an employer to (1) revise or rescind a work rule determined to violate Section 8(a)(1), and (2) post notices prescribed by the Board.

On June 1, 2017, the U.S. Court of Appeals for the Second Circuit affirmed and enforced a 2015 NLRB Decision ordering that Whole Foods’ “no recording” rule be rescinded or revised. The NLRB opined that the rule unqualifiedly prohibited all workplace recordings, including recordings in pursuit of concerted activities for mutual aid or protection.  The Board found that the rule could reasonably chill the employees in the exercise of their protected rights, such as “recording images of protected picketing. documenting unsafe workplace equipment or hazardous working conditions, documenting and publicizing discussions about terms and conditions of employment, documenting inconsistent application of employer rules, or recording evidence to preserve it for later use in administrative or judicial forums in employment-related actions.”

The Second Circuit also enforced an order from the NLRB Decision requiring that a notice be posted at all Whole Foods’ facilities companywide.  The prescribed notice includes the following statement: “The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.”  The prescribed notice also reminds Whole Foods’ employees of their right to “form, join or assist a union.”

To be clear, the Whole Foods decisions only addressed a rule which unqualifiedly prohibited all workplace recording. The decisions did not go so far as to declare all “no recording” rules unlawful under Section 8(a)(1).  Indeed, at least one previous NLRB decision found that an employer rule that prohibited the use of cameras for recording images in a hospital setting did not violate Section 8(a)(1), in light of the compelling patient privacy interests at stake.

As noted in a previous post on this blog, it is strongly recommended that employee handbooks be periodically updated.  The Whole Foods decisions show why such periodic updates are important.  For any employee handbook with a workplace recording ban similar to the Whole Foods’ rule above, the time for such an update is now.

In this regard, the first remedial action contemplated in response to the Whole Foods decisions need not be the elimination of a recording ban altogether. Indeed, the legal risks of such an option may be prohibitive for certain employers.  Rather, the first remedial actions contemplated should be analyses of two questions:  (1)  Does the existing rule have a potential chilling affect on the exercise of protected employee rights?;  and (2) if so, can the language of the rule be modified to serve its underlying business justifications without the collateral damage of a potential chill on protected employee rights?  Ultimately, the best option may be to maintain the “no recording” rule, albeit with a narrower scope.  Of course, any “no recording” rule should be reviewed with legal counsel prior to adoption.

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Texas Supreme Court Upholds Right of Employee to Sue for Sexual Assault!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC

In October 2011, a female associate at the Frisco, Texas Steak N Shake restaurant was allegedly sexually assaulted by her supervisor.  She subsequently filed a common law assault suit claiming Steak N Shake was responsible for the misconduct of a vice principal. There are many likely reasons why Steak N Shake was not also sued under the Texas Commission on Human Rights Act (“TCHRA”), which prohibits gender discrimination in employment. Chief among these likely reasons is the $300,000 maximum damage cap imposed by the TCHRA, which does not exist as to common law assault claims.

In reliance upon the 2010 Texas Supreme Court opinion in Waffle House, Inc. v. Williams, the trial court determined that the TCHRA provided the exclusive remedy for workplace sexual harassment, which included the plaintiff’s assault claim.  Accordingly, the trial court granted Steak N Shake’s motion for summary judgment.  Upon appeal, Dallas’ Fifth District Court of Appeals affirmed the trial court’s ruling.

In a February 24, 2017 opinion, the Texas Supreme Court reversed the summary judgment ruling. The Court confirmed again that, “[w]here the gravamen of a plaintiff’s case is TCHRA covered harassment, the Act forecloses common-law theories predicated on the same underlying sexual-harassment facts.”  However, “where the gravamen of the plaintiff’s case is assault, we hold that the TCHRA does not preempt a common law assault claim.”

For Texas employers, the significance of the decision in B.C. v. Steak N. Shake Operations, Inc. is not limited to a potential exposure to higher damage awards.  Employers are encouraged to review their employment practices liability insurance policies to determine whether assault claims are excluded from coverage.

What Austin Employers Need to Know About Fair Chance Hiring Ordinance

By Robert G. Chadwick, Jr., Managing Member,  Seltzer Chadwick Soefje & Ladik, PLLC.

Austin’s Fair Chance Hiring Ordinance remains the only Texas municipal “ban the box” ordinance restricting the ability of a private employer to consider a job candidate’s criminal history in a hiring decision.  There is no corresponding Texas state law which sets forth a similar restriction.

What Employers are Covered by the Ordinance?

The ordinance applies to any “person, company, corporation, firm, labor organization, or association that employs at least fifteen individuals whose primary work location is in the City for each working day in each of 20 or more calendar weeks in the current or preceding calendar year.”  The ordinance does not apply to (1) the United States; (2) a corporation wholly owned by the government of the United States; (3) a bona fide private membership club (other than a labor organization) that is exempt from taxation under Section 501© of the Internal Revenue Code; (4) the state or a state agency; or (5) a political subdivision of the state.

What Jobs are Covered by the Ordinance?

The ordinance applies to all jobs other those for which a federal, state or local law, or compliance with a legally mandated insurance or bond requirement disqualifies an individual based on criminal history.

What Criminal History is Protected by the Ordinance?

The criminal history protected by the ordinance includes an arrest, conviction, plea of nolo contender, or deferred adjudication arising from a felony or Class A or B misdemeanor criminal accusation made under Texas law, federal law, or a comparable law of another U.S. state.

What Does the Ordinance Prohibit?

The Ordinance makes it unlawful for an employer to:

  • Publish or cause to be published information about a job that states or implies that an individual’s criminal history automatically disqualifies the individual from consideration for the job.
  • Solicit or otherwise inquire about the criminal history of an individual in a job application.
  • Solicit criminal history information about an individual or otherwise consider an individual’s criminal history unless the employer has first made a conditional offer of employment to the individual.  This prohibition broadly includes solicitation of criminal history information directly from the individual or indirectly from a third-party source, such as the Texas Department of Public Safety.
  • Refuse to consider hiring an individual because the individual did not provide criminal history information before the individual received a conditional employment offer.
  • Refuse to hire, or otherwise take adverse action against, an individual because of the individual’s criminal history unless the employer has determined that the individual is unsuitable for the job based on an individualized assessment conducted by the employer.
  • Take adverse action against an individual because the individual has reported a violation of the ordinance by the employer, or has participated in an administrative proceeding under the ordinance.

What is a Conditional Employment Offer?

A conditional employment offer means an oral or written offer by an employer to employ an individual in a job, or placement in a staffing agency’s staffing pool, that is conditioned solely (1) on the employer’s evaluation of the individual’s criminal history, and/or (2) any pre-employment medical examinations authorized under the Americans with Disabilities Act (“ADA”).

Can a Conditional Employment Offer be Withdrawn?

The ability of an employer to withdraw a conditional employment offer, based upon an evaluation of the candidate’s criminal history, is limited.  A conditional employment offer may be withdrawn only if the employer does so after evaluating (1) the nature and gravity of any offenses in the individual’s criminal history; (2) the length of time since the offense and the completion of the sentence; and (3) the nature of the job duties for which the individual has applied.  If a conditional employer offer is withdrawn, or any other adverse action is taken against an individual based on the individual’s criminal history, the employer must so inform the individual in writing.

Does the Ordinance Provide any Relief to Austin Employers under Texas Law?

No. Austin employers enjoy no immunity from civil liability for negligent hiring or negligent failure to provide a safe workplace.

What Does the Ordinance Allow?

The ordinance expressly allows:

  • An employer to explain to job applicants, in writing, the individualized assessment system that the employer uses to consider criminal history.
  • A staffing agency to solicit criminal history information about an individual and to make an individualized assessment of an individual’s criminal history when the staffing agency has identified a job to which the individual will be employed or placed in a job pool.
  • An employer to withdraw a conditional employment offer for any lawful reason.

Does the Ordinance Provide Aggrieved Individuals with a Private Right of Action?

No.  For violations, the ordinance only provides for a civil penalty assessed by the City.

What is the Civil Penalty for Violation of the Ordinance?                           

No civil penalty may be assessed prior to April 4, 2017.  Thereafter, an employer who fails to cease a violation by the end of the 10th business day after the employer receives written notice of the violation from the City is liable to the City for a civil penalty of up to $500 for that violation. An employer is liable for no more than one civil penalty for each job to which the violation relates.

What Does the Ordinance Mean for Austin Employers?

Austin employers must remain mindful of the legal risks of hiring or retaining employees with criminal background histories. After all, such legal risks dwarf those presented by the Fair Chance Hiring Ordinance.  To avoid civil penalties, however, Austin employers must conform their hiring processes to the standards set forth in the ordinance.

Gun Violence: The Legal Tug of War for Employers!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

On May 4, 2016, an employee was terminated from his place of employment at a transportation company in Katy, Texas. Later that day, he returned with a shotgun.  Before he turned the gun on himself, the former employee allegedly had killed one coworker and injured another.

Lest the significance of the events in Katy be minimized, consider two statistical realities.  First, the most recent data published by the Bureau of Labor Statistics shows that shootings accounted for 307 workplace homicides in 2014 alone; 61 of these homicides were attributable to current or former coworkers.  Workplace homicides similar to those in Katy thus occur weekly, on the average.

Second, in 2015, more firearm background checks were conducted by the FBI – 23,141,970- than any previous year in recorded history. For the first five months of 2016 alone, 11,698,006 background checks were conducted by the Bureau.  Gun ownership in this country is trending up, way up.

If these statistics are not sobering enough, many private employers now find themselves in an unwanted position on the frontline of a legal tug of war between seemingly competing political forces. Even as existing laws are being construed to impose duties upon employers to safeguard employees from gun-related violence, other laws are being passed or interpreted to limit the ability of employers to infringe upon the rights of gun owners or applicants or employees with criminal backgrounds.  Before any private employer can adopt a policy addressing gun-related violence, therefore, it is imperative to understand the legal landscape created by this tug of war.

Federal Safety Laws

Currently, there is no federal law which regulates guns in the workplace.  The Occupational Safety & Health Act (“OSH Act”), however, imposes two relevant duties upon private employers.

First, under the OSH Act’s “general duty clause”, an employer has a statutory duty to “furnish each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.” 29 U.S.C. § 654(a)(1).  Directive Number CPL 02-01-0252 was adopted by the Occupational Safety & Health Administration (“OSHA”) on September 8, 2011 to establish procedures for investigating, inspecting and citing employers where incidents of workplace violence have occurred.  If OSHA determines that a shooting was a recognized and preventable hazard, a citation may be issued in accordance with this Directive for violation of the “general duty clause.”

Second, an employer must report to OSHA within 8 hours (1) all work-related fatalities, and (2) all work-related hospitalizations. 29 C.F.R. § 1904.39. These reporting obligations include deaths or injuries from work-related shootings.

Federal Discrimination Laws

One agenda of the Obama Administration has been the expansion of job opportunities for individuals with criminal records.  There is no federal law which protects such individuals from bias in private employment,  but Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq., does outlaw discrimination by private employers based upon race or color.  Under the Obama Administration, the Equal Employment Opportunity Commission (“EEOC”) has maintained that a criminal background check policy can adversely affect the employment of minorities, in violation of Title VII.

In January 2012, Pepsi agreed to pay $3.13 million and provide job offers and training to resolve a charge of race bias based upon a hiring policy which excluded job applicants who had been arrested pending prosecution even if they had never been convicted of any offense. Later that year, the EEOC filed suit against BMW for a criminal conviction policy that denied access to its facilities to employees with certain criminal convictions.

State Safety Laws

Many states have statutes similar to the OSH Act which obligate private employers to provide a safe workplace to their employees. Most states also have common law causes of action for negligent hiring, negligent supervision and negligent retention which impose a duty upon such employers to exercise ordinary care regarding employees.

In Yunker v. Honeywell, Inc., 496 N.W.2d 419 (Minn. 1993), for example, the Minnesota Court of Appeals rejected Honeywell’s claim that it breached no ascertainable duty of care in retaining an employee who later shot and killed a female co-employee.  As evidence of Honeywell’s neglect, the court noted that the assailant had (1) sexually harassed female employees, (2) challenged a male coworker to a fight, (3) threatened to kill a coworker during an angry confrontation following a minor car accident, and (4) engaged in repeated outbursts toward the murdered employee including scratching the words “one more day and your dead” on her locker.

State and Local Discrimination Laws

In the absence of any express federal prohibition, five states –Hawaii, Kansas, New York, Pennsylvania and Wisconsin –have enacted statutes which make it unlawful for private employers to discriminate against applicants or employees with arrest or conviction records. Such statutes have varying exceptions based upon the nature of the job and the suitability of the applicant or employee for the job.

Moreover, nine states – Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Vermont – have recently enacted so called “ban the box” statutes which prohibit inquiries by private employers into conviction records until after the employment application.  Many more municipalities, including Austin, Texas, have passed similar “ban the box” ordinances.

State Gun Rights Laws

At the state level, a  political movement to protect the rights of individuals to bear arms has resulted in the adoption of legislation specifically applicable to the private workplace. These statutes, which have now been adopted in 22 states, vary and include (1) definitions of the circumstances under which an employee may lawfully store a firearm in a vehicle while parked on an employer’s property, (2) requirements that employers post signs regarding any firearm restrictions, (3) prohibitions against searching a privately owned vehicle for firearms, (4) a bar against asking any applicant or employee whether he owns a firearm, and (5) a ban on conditioning terms of employment on the relinquishment of a right to possess a firearm.

Any hope that these statutes will be successfully challenged in court is quickly fading.  Two federal challenges have already been unsuccessful. See Ramsey Winch v. Henry, 555 F.3d 1199 (10th Cir. 2009); Florida Retail Federation, Inc. v. Attorney General of Florida, 576 F.Supp.2d 1281 (N.D.Fla. 2008).

Takeaway for Private Employers

The prevention of gun violence in the workplace is a goal not conducive to quick and easy fixes. Policies which ban all guns or hiring of individuals with conviction records may promote safety and security against workplace shootings, but may run afoul of protected legal rights. Similarly, policies which slant too far in favor of employee rights may avoid civil rights litigation, but present a risk to the safety and security of the workplace. Only by adopting carefully considered policies which strike the proper balance between safety and security on the one hand, and employee rights on the other hand, can private employers effectively minimize the legal risks imposed on them by competing political forces.