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Employment law is the comprehensive legal framework that regulates the employment relationship, including how employers hire, manage, compensate, discipline, and terminate workers. It consists of federal and state statutes, regulations, and court decisions that establish standards for wages and hours, workplace safety, discrimination, employee benefits, family and medical leave, immigration‑related work authorization, and workers’ rights.

According to the U.S. Department of Labor, employment law encompasses major labor standards such as the Fair Labor Standards Act (minimum wage and overtime), OSHA (workplace safety), ERISA (retirement and benefits), FMLA (family and medical leave), and protections for migrant workers . The Legal Information Institute adds that employment law also includes civil rights protections, disability rights, unemployment benefits, and post‑employment benefits .

Company fined $600,000 for I-9 violations

 

A recent decision from the Office of the Chief Administrative Hearing Officer provides an important reminder: keep up on I-9 compliance or face a sizable civil penalty.

Pursuant to 8 U.S.C. Section 1324(a)(1)(B) of the Immigration Reform and Control Act, employers must examine and document the identity and immigration documents of employees. Since the Act’s 1986 enactment, the Employment Eligibility Verification Form, colloquially known as the I-9, is used to verify the identity and employment authorization of individuals hired for work in the United States. Both the employee and the employer must complete the form. In addition, employers must examine the worker’s documentation establishing his or her identity and employment authorization to determine if the documents “reasonably appear to be genuine.”

In 2013, the agency transitioned employers to use of a new form with additional fields (including employee telephone number and e-mail address), new formatting, and clarified instructions. Failure to complete an I-9 form can lead to an enforcement action from Immigration and Customs Enforcement (ICE) with penalties ranging from $110 to $1,100 per form.

Recently, a California-based event design and construction company learned that lesson the hard way when the agency charged the employer with 818 violations of the statute, seeking $812,665.25 in civil penalties.

The company’s “employment verification procedures are sufficiently defective to foreclose a claim of either good faith or substantial compliance,” Administrative Law Judge Ellen K. Thomas wrote, finding that the company engaged in the majority of the violations alleged.

The judge found most of the violations occurred in Section 2 of the I-9, which requires a representative from the employer to review the documents presented by the employee to prove identity and work authorization and then sign, under penalty of perjury, that he or she reviewed the documents. ICE found that 797 of the company’s I-9 forms were left blank. Characterizing the employer attestation in Section 2 as “the very heart” of the verification process, the ALJ fined Hartmann $700 for each violation, or $557,900.

Judge Thomas found other serious violations in the company’s I-9 forms, including failing to ensure that in Section 1 employees checked a box attesting to status as a U.S. citizen, lawful permanent resident, or alien authorized to work (with the need to add an alien registration number if either lawful permanent resident or alien authorized to work were selected). Many employees also failed to sign Section 1, the court found, and the company neglected to have employees list a driver’s license expiration date in Section 2.

The company tried to mitigate the fine by arguing that it improved its processes after receiving notice from ICE, but the judge was not persuaded, particularly as the company made no effort until after the federal agency came knocking. “

[T]he company does appear to need additional motivation to conform its employment verification processes to what the law requires,” Judge Thomas wrote, issuing a total fine of $605,250.

To avoid a similar fate, compliance with I-9 requirements should be taken seriously and employers should ensure that the appropriate forms are being correctly filled out.

Read the decision.

September 23rd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , |

DOL offers new guidance on old question of employee or independent contractor

 

For the last few years, one of the top priorities for the Department of Labor (the “DOL”) has been the fight against the misclassification of employees as independent contractors. In the agency’s latest effort, it released new guidance for employers when classifying workers, using six factors to consider.

The Administrator’s Interpretation 2015-1 focuses on the issue of whether the worker is “economically dependent on the employer or truly in business for him or herself.” The more the worker relies upon an employer for income stream, business skills, and supplies, the more likely he or she is an employee – and entitled to all of the benefits included in that classification, such as overtime or worker’s compensation.

In “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors,” the DOL started with the Fair Labor Standards Act’s (the “FLSA”) definition of “employ:” “to suffer or permit to work.” Under this broad definition, “most workers are employees,” the agency stated unequivocally.

With that in mind, the DOL turned to the six factors of the economic realities test commonly used by courts when considering whether a worker is an employee or an independent contractor. The agency noted that the labels used by an employer are not determinative of the nature of the relationship and neither are tax filings.

“All of the factors must be considered in each case, and no one factor (particularly the control factor) is determinative of whether a worker is an employee,” the DOL wrote. “Moreover, the factors themselves should not be applied in a mechanical fashion, but with an understanding that the factors are indicators of the broader concept of economic dependence. Ultimately, the goal is not simply to tally which factors are met, but to determine whether the worker is economically dependent on the employer (and thus its employee) or is really in business for him or herself (and thus its independent contractor).”

Is the work an integral part of the employer’s business? If a worker is economically dependent upon the employer, he or she is likely an employee, while a “true independent contractor’s work, on the other hand, is unlikely to be integral to the employer’s business.” Recognizing the increasing use of telecommuting and other flexible work schedules in today’s economy, the DOL added that work can be integral even if it is performed away from the employer’s premises.

The second factor considers whether the worker’s managerial skill affects the worker’s opportunity for profit or loss. A worker in business for him or herself not only has the opportunity to profit but also to experience a loss, the DOL explained. The question isn’t whether a worker is on the job more hours or earns more money but if the worker makes decisions and exercises skill and initiative – hiring other workers or advertising his services, for example – to move the business forward.

In the third factor, the worker’s relative investment as compared to the employer’s investment should be evaluated. “The worker should make some investment (and therefore undertake at least some risk for a loss) in order for there to be an indication that he or she is an independent business,” according to the guidance. Simply purchasing tools or other equipment may not constitute an investment, the agency added, when considered relative to the employer’s investment.

Fourth: does the work performed require special skill and initiative? Technical skills alone will not indicate that a worker is an independent contractor, the DOL said. Instead, business skills, judgment, and initiative should be evaluated. For example, a highly skilled carpenter who provides his services to a construction company may simply be providing skilled labor as an employee. On the other hand, if the carpenter decides which jobs to take, advertises his services, and determines what materials to order, he is more likely to be classified as an independent contractor.

The length of the relationship between the worker and the employer is the focus of factor five. A permanent or indefinite relationship signals an employee, the DOL said. “After all, a worker who is truly in business for him or herself will eschew a permanent or indefinite relationship with an employer and the dependence that comes with such permanence or indefiniteness,” the agency wrote. The length of time should be considered in the context of the industry, however – seasonal positions may not always indicate an independent contractor relationship, for example.

In the sixth factor, the DOL advised employers to think about control. While the control factor should not receive more weight than the other factors in the economic realities test, the nature and degree of the employer’s control should be considered in light of the ultimate determination whether the worker is economically dependent on the employer or an independent contractor. Employers do not need to look over a worker’s shoulder every day to make them an employee, the guidance cautioned, as technological advancements permit many employees to work off-site and unsupervised.

Employers should review the new guidance and be prepared for agency oversight on the issue of worker classification, keeping in mind that the DOL repeatedly emphasized that “most workers are employees.”

Read the Administrator’s Interpretation No. 2015-1.

September 23rd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , |

Revised FCRA Summary of Rights form released

Did you know that a revised version of the Fair Credit Reporting Act (the “FCRA”) Summary of Rights form was released a few months ago?

If the answer is “no,” don’t worry. The form was not published in the Federal Register and appeared under the radar without an announcement.

The FCRA mandates that employers are required to provide a disclosure and obtain written authorization from any applicant or employee prior to conducting a background check. If the employer decides to take an “adverse action” against the applicant or employee based on the results of the background check, the employer must provide the individual with a copy of the background check and the Summary of Rights form under the FCRA.

The revised form does not require a lot of adjustments for employers. Some of the government addresses found on the last page were changed and all references to Maine’s laws were removed. Earlier this year, the state repealed its mini-FCRA to adopt the federal FCRA.

View the new Summary of Rights form.

September 23rd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , |

NYC Commission issues legal enforcement guidance on employment credit checks

The New York City Commission recently issued interpretive legal enforcement guidance clarifying some of the exemptions in the City’s Stop Credit Discrimination in Employment Act (“SCDEA”), as well as recordkeeping requirements and penalties.

As we reported previously, effective September 3, 2015, the SCDEA amends the New York City Human Rights Law (the “NYCHRL”) to make requesting and using consumer credit history for hiring and other employment purposes, with certain exceptions, an unlawful discriminatory practice.

The SCDEA defines “consumer credit history” as an individual’s “credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding details about (1) credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or (2) bankruptcies, judgments or liens.”

It remains unclear whether the law bans only inquiries, but not public record searches, for bankruptcies, judgments or liens. Under the SCDEA, a consumer credit report includes “any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history,” and given the broad scope of “any  written or other communication of any information by a consumer reporting agency” caution should be taken regarding these searches and even for civil litigation, as such public records may reveal credit-related information that New York City employers are prohibited from using.

While the SCDEA generally establishes eight categories of exemptions, such as those of individuals required to be bonded under city, state, or federal law which are self-explanatory, there has been much speculation as to the scope of others. In its FAQs, the guidance specifically provides that the exemptions do not cover most low-level employees including, but not limited to, bank tellers, cashiers, salespeople, clerical workers, administrative staff, restaurant/bar workers, and private security employees.

Interpretation about non-clerical positions having regular access to trade secrets is also included in the guidance. The SCDEA defines “trade secrets” as “information that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, by other persons who can obtain economic value from its disclosure or use; (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (c) can reasonably be said to be the end product of significant innovation.”

The SCDEA limits the trade secret definition to exclude “general proprietary company information such as handbooks and policies” and “access to or the use of client, customer, or mailing lists.” Consistent with this definition and the broad scope of the NYCHRL, “trade secrets” do not include information such as recipes, formulas, customer lists, processes, and other information regularly collected in the course of business or regularly used by entry-level and non-salaried employees and supervisors or managers of such employees.

The guidance emphasizes that all exemptions to coverage under the SCDEA’s anti-discrimination provisions are to be construed narrowly. Employers may claim an exemption to defend against liability, but they have the burden of proving the exemption by a preponderance of the evidence. No exemption applies to an entire employer or industry–exemptions apply only to positions or roles, and not to individual applicants or employees. The law does permits employers to request credit information in response to any lawful subpoena, court order, or law enforcement investigation.

An employer claiming an exemption must show that the position or role falls under one of the eight  general position categories referenced previously. Employers availing themselves of the exemptions should inform applicants or employees of the claimed exemption, and should also keep a record of their use of such exemptions for a period of five years from the date an exemption is used. Keeping an exemption log will help the employer respond to the Commission’s requests for information.

The guidance sets forth civil penalties for violations of the law (up to $250,000 for willful, wanton, or malicious violations, and up to $125,000 for other violations) in addition to other remedies available under the NYCHRL.

Read the SCDEA, N.Y.C. Admin. Code §§ 8-102(29), 8-107(9)(d), (24); Local Law No. 37 (2015)

Access the interpretive guidance, FAQs and other information about the credit check law here.

 

September 23rd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Florida court allows FCRA suit against Whole Foods to move forward

Reinforcing the importance of complying with even the most technical FCRA requirements, a federal court in Florida allowed a former employee to move forward with his suit against Whole Foods Market Group.

In the putative class action, the plaintiff, who was terminated in June 2013 after the employer conducted a background check on plaintiff and other existing employees, charges that Whole Foods violated the FCRA, and specifically, points to the forms the plaintiff signed when he applied for employment. A “Disclosure Statement” provided: “By this document

[Whole Foods] discloses to you that a consumer report regarding your credit history, criminal history and other background information and/or an investigative consumer report containing information as to your character, general reputation, personal characteristics and/or mode of living may be obtained from personal interviews or other sources in connection with your application for any purpose at any time during your employment.”

The plaintiff was also given a “Consent and Release of Information” form, which stated: “I further understand and authorize [Whole Foods] or those authorized by them to procure a consumer report on me as part of a process of consideration as an employee … I release all parties from liability for any damages which may result from the disclosure of any information outlined herein.”

Although Whole Foods intended for the Disclosure Statement to satisfy Section 1681(b)(2)(A)(i) of the FCRA and each form was a separate single page document, the simultaneous presentation of the consent form rendered the disclosure meaningless, the plaintiff argued. Whole Foods knew that it was required to provide a stand-alone form, the plaintiff added, citing FCRA-related articles posted online by the third-party the company used to run the background checks.

The court agreed. “Based on the allegations, with all inferences drawn in favor of plaintiff, if both the disclosure and the consent forms combined and read as one document with the waiver and release included simultaneously with the disclosure, the complaint states a claim for relief,” the judge said, denying Whole Foods’ motion to dismiss the suit. The court also allowed the plaintiff’s contention that Whole Foods “willfully” violated the FCRA to move forward. Under the statute, reckless and knowing violations constitute willful violations, the court noted, and the plaintiff presented sufficient allegations that the defendant knew it was required to provide a stand-alone form separate from the employment application and yet failed to do so.

“The allegations that defendant had access to legal advice and guidance from the FTC yet it knew that its conduct was inconsistent with that guidance and the plain terms of the statute, are sufficient to withstand attack at this stage of the proceedings on a motion to dismiss,” the judge wrote.

The decision provides an important reminder to employers that class actions alleging technical violations of the FCRA, particularly Section 1681(b)(2)(A)(i), remain popular with plaintiffs with statutory damages from $100 to $1,000 for a willful violation available.

Whole Foods is facing an identical suit in California federal court while other companies have settled similar cases for significant amounts, such as the recent deal Publix Super Markets struck with a class in Tennessee federal court for $6.8 million, a $2.5 million payout by Domino’s Pizza, and a settlement agreement for $3 million between grocery chain Food Lion and job applicants.

Read the court order here.

June 12th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , |

New law limits credit checks for New York City employers

New York City has joined the growing list of employers placing limits on credit checks. On April 16, the City Council overwhelmingly voted in favor of a bill prohibiting the use of credit checks in most employment situations. Mayor Bill De Blasio signed the legislation on May 6, amending the city’s Human Rights Law to make the use of credit history for hiring and other employment purposes, with certain exceptions, an unlawful discriminatory practice. Set to take effect on September 3, 2015, the law will have a sizable impact on employers in New York City. A review of current policies and procedures to determine if any exceptions apply is key, while employers with a statewide presence should consider whether to continue credit checks in other locations where they remain legal.

As defined by the law, “consumer credit history” means an individual’s credit worthiness, credit standing, credit capacity, or payment history, as indicated by: (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual regarding (1) details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or (2) bankruptcies, judgments or liens. The law further provides that “a consumer credit report shall include any written or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity or credit history.”

Importantly, employers are prohibited not just from the request or use of credit history for applicants, but also from using credit history as a factor in employment decisions for current employees in “compensation, or the terms, conditions or privileges of employment.”

When initially introduced, the proposal featured no exceptions to the ban on credit checks. But over the course of the past year, limited exceptions were added to the bill. As enacted, the legislation permits the use of credit checks for prospective employees of broker-dealers who must register with the Financial Industry Regulatory Authority (FINRA) as well as for police officers and other public officials in a position involving a “high degree of public trust.” Additional exceptions allow a review of credit history when required by state or federal law or regulations; for positions when an employee must possess a security clearance or has “regular access” to intelligence or national security information; for non-clerical positions with access to “trade secrets;” for computer security positions when the employee’s duties include the ability to modify digital security systems; and for employees with signing authority over third-party funds or assets greater than $10,000 or fiduciary responsibility to an employer with the authority to enter into financial agreements of $10,000 or more.

The law permits individuals to file a complaint of discrimination with the New York City Commission on Human Rights within a one-year period or a complaint in court, with a three-year statute of limitations. Remedies include back pay, reinstatement, compensatory and punitive damages, and attorney’s fees and costs.

New York City joins 12 other jurisdictions that have prohibited credit checks in employment-related decisions, including the city of Chicago as well as California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington.

Read the New York City legislation here.

June 12th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

EEOC loses – again – in challenge to background checks

In the latest blow to the Equal Employment Opportunity Commission’s (the “EEOC”) attempts to regulate employers’ use of background checks, the Fourth U.S. Circuit Court of Appeals threw out a case in a scathing opinion that expressed disappointment in the agency’s litigation conduct.

The controversy began in April 2012, when the EEOC released guidance on the issue of criminal background checks for employers. The “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” emphasized that while the use of criminal history does not violate the statute per se, an employer may run afoul of the law if the checks result in systemic discrimination based on a protected category like race, color, national origin, religion, or sex.

As an alternative, the agency suggested employers strive to perform individualized assessments of prospective employees, and consider factors such as the nature of the crime and its relation to the potential job, as well as the individual’s rehabilitation efforts and the length of time that has passed since the conviction.

The EEOC then followed up with multiple lawsuits alleging that certain employers engaged in the discriminatory use of background checks, disproportionately screening out African-American workers in cases filed against BMW Manufacturing in South Carolina, Dollar General in Illinois, Kaplan Higher Education Company in Ohio, and Freeman Company in Maryland.

To date, all of the lawsuits have been dismissed and the agency has faced criticism about its efforts to pursue such cases from both industry and lawmakers. The most recent critic: the Fourth Circuit.

In the agency’s case against Freeman Company, the EEOC alleged the company’s use of criminal background checks for all applicants and credit checks for “credit sensitive” positions had an unlawful disparate impact on black and male job applicants. To support its case, the agency produced expert reports by an industrial/organizational psychologist. But the federal district court granted summary judgment for Freeman, finding the psychologist’s reports “rife with analytical errors” and “completely unreliable.”

The Fourth Circuit affirmed the ruling, identifying “an alarming number of errors and analytical fallacies” in the reports, “making it impossible to rely on any of his conclusions.” Freeman provided complete background screening logs for thousands of applicants to the EEOC but the psychologist “cherry-picked” data, the court said, omitting information from half of the company’s branch offices while purporting to analyze all the background checks, and further failed to utilize an appropriate sample size, selecting the vast majority of data to focus on before October 14, 2008.

Although the relevant time period extended to August 31, 2011 and Freeman conducted over 1,500 criminal checks and more than 300 credit reviews between October 14, 2008 and August 31, 2011, the psychologist used data from only 19 applicants during that time, just one of whom passed the check.

A “mind-boggling number of errors and unexplained discrepancies” existed in the psychologist’s database, the panel added, rejecting the EEOC’s argument that the mistakes originated in Freeman’s data. The psychologist introduced the errors, the court said, and further managed to introduce fresh errors when he tried to supplement his original reports with corrections.

“The sheer number of mistakes and omissions in the analysis renders it “outside the range where experts might reasonably differ,” the three-judge panel wrote. One of the panelists added a concurring opinion expressing concern with the “EEOC’s disappointing litigation conduct” and continued efforts to defend the psychologist’s work despite other courts reaching similar conclusions about his reports.

“The Commission’s conduct in this case suggets that its exercise of vigilance has been lacking,” according to the concurring opinion. “It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face consquences for failing to do so.”

With public criticism, zero litigation victories, and a counterargument from one defendant that its background check procedures are the same as those conducted by the agency itself, the Fourth Circuit’s decision does not bode well for the future of EEOC challenges to background checks. That said, employers should still be cautious and utilize background reports in a non-discriminatory manner.

Read the EEOC guidance.

Read the opinion in EEOC v. Freeman.

May 8th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

No number, no lawsuit

Tossing a lawsuit alleging religious discrimination, the Sixth U.S. Circuit Court of Appeals found that an applicant could not sue after refusing to provide his Social Security number to a prospective employer. The plaintiff, an applicant for a position with an energy company, claimed that he had no number because he “disclaimed and disavowed it” on account of his sincerely held religious beliefs.

The company’s refusal to hire the plaintiff violated Title VII and Ohio state law, the complaint charged, requesting both injunctive relief in the form of a job and monetary damages. A federal district court judge dismissed the lawsuit, and the federal appellate panel affirmed.

Courts considering the issue apply a two-step analysis, the Sixth Circuit explained. First, the court determines whether the plaintiff established a “prima facie case of religious discrimination,” which requires proof that the plaintiff “(1) holds a sincere religious belief that conflicts with an employment requirement; (2) has informed the employer about the conflicts; and (3) was discharged or disciplined for failing to comply with the conflicting employment requirement.” If the plaintiff manages to establish a prima facie case, the burden shifts to the employer to show it could not “reasonably accommodate” the religious beliefs without “undue hardship.”

This suit failed under the first step, the panel said, because the Internal Revenue Code mandates that employers collect and provide the Social Security numbers of their employees. Because the company’s collection of the plaintiff’s number was a “requirement imposed by law” and not an “employment requirement,” the court had no need to consider the sincerity of the plaintiff’s beliefs.

The panel also noted that every other federal appellate court to consider the issue has concluded “that Title VII does not require an employer to reasonably accommodate an employee’s religious beliefs if such accommodation would violate a federal statute,” citing decisions from the Fourth, Eighth, Ninth, and Tenth Circuits, as well as federal district courts in Michigan and Virginia.

All of the courts have arrived “at the same, sensible conclusion: ‘

[A]n employer is not liable under Title VII when accommodating an employee’s religious beliefs would require the employer to violate federal … law,” the Sixth Circuit wrote. “This conclusion is consistent with Title VII’s text, which says nothing that might license an employer to disregard other federal statutes in the name of reasonably accommodating an employee’s religious practices.”

For employers, the decision provides even greater peace of mind. With five federal appellate courts in agreement that a religious discrimination claim will not stand against an employer that complies with federal requirements to collect an applicant’s Social Security number, companies do not have to worry about the merits of a Title VII lawsuit under such circumstances.

Read the opinion.

May 8th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , |

Do you know about specialty consumer reports?

Credit reports are a part of life, whether applying for a credit card or purchasing a home. But what about specialty consumer reports?

Many people are unaware that dozens of other types of consumer reports exist, filled with information about medical and prescription history, for example, or insurance claims. Specialty consumer reports gather data from a wide variety of sources including information provided by consumers on applications (such as an apartment lease or a wireless phone contract) as well as public documents like criminal records and marriage licenses.

The reports provide information geared for a specific industry. A truck driving company might purchase reports that detail a job applicant’s driving record and motor vehicle insurance claims while an insurer will review a report with claims filed by a homeowner to check an individual’s historic use of insurance policies. Other niche reports provide data on loan balances, information about any bounced checks, and bank account history for lenders; another company tracks consumers’ product returns and will alert large retailers for fraud prevention purposes.

The Fair Credit Reporting Act (the “FCRA”) entitles consumers to one free report per year from any nationwide credit or specialty reporting agency (plus another free report if an adverse action has been taken, or the consumer disputes an item in the report that was corrected).

Recently, consumer rights group Consumer Action focused on the issue of specialty consumer reports in an “Insider’s Guide to Specialty Consumer Reports: A Guide to Obtaining, Understanding and Managing Your Information,” complete with a directory of furnishers. Staffers went through the process of requesting their own reports to help provide information for consumers about the types of reports available and their rights to request reports or correct errors.

Access the Consumer Action guide.

Read the directory of specialty consumer report furnishers.

May 8th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Medical marijuana laws put employers in a tough spot

The growing number of jurisdictions permitting medical marijuana is putting employers in a tough position. One the one hand, marijuana remains illegal under federal law and a workforce under the influence isn’t much of a workforce at all. On the other hand, 23 states and the District of Columbia now permit the use of marijuana for regulated medical purposes and some state laws include anti-discrimination provisions prohibiting employers from taking action against employees based on their status as a registered medical marijuana user.

A first-of-its-kind lawsuit demonstrates the conundrum. In December, the American Civil Liberties Union filed suit in a Rhode Island state court on behalf of an individual who allegedly was denied an internship after she disclosed that she lawfully carried a medical marijuana card for severe migraines.

According to the complaint, the company told the applicant that she had been rejected because of her status as a cardholder, and despite promises not to bring medical marijuana on the premises or come to work under the influence, the applicant was denied the position.

The lawsuit charges that the company violated Rhode Island’s medical marijuana law which prohibits schools, employers, and landlords from refusing “to enroll, employ, or lease to, or otherwise penalize, a person solely for his or her status as a cardholder.” The complaint – which also includes allegations of disability discrimination under state law – seeks compensatory and punitive damages.

Employers in states permitting medical marijuana would be well-advised to review their relevant law when considering marijuana use or marijuana-related criminal records in employment decisions. While Rhode Island is not alone in including an anti-discrimination requirement in its law, joined by Arizona, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, and New York, other states – including California, Massachusetts, and New York – are clear that employers have no obligation to accommodate an employee’s medical marijuana use or permit them to work under the influence.

Read the complaint.

January 29th, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , , , , , , , , , , |
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