7.26.2013

Employer Sued for Accessing Employee’s Personal Emails on Company-Owned Blackberry

Many employers provide employees with smartphones to use in their jobs. Typically, employers permit employees to use these devices for personal reasons, such as communicating with friends and family through their private email accounts. Does an employer have the right to read these personal emails because they are sent and received through a company-owned smartphone? The answer, according to a federal court in Ohio, is clearly “no.”

In Lazette v. Kulmatycki, N.D.Ohio No. 3:12CV2416, (June 5, 2013), the employer, Verizon Wireless, provided a blackberry for the employee’s use. The employee was told that she could also use the company-issued phone for personal email. In September 2010, the employee left Verizon and returned the phone to her supervisor without deleting her personal Gmail account from the phone. She understood that Verizon would “recycle” the phone for use by another employee. Eighteen months later, the employee learned that her supervisor had been accessing her Gmail account and disclosing the contents of the emails he had accessed. The employee neither consented to nor authorized the supervisor’s secret reading of her personal emails. The employee changed her password once she learned of her supervisor’s actions. Before she did so, however, the supervisor had accessed 48,000 e-mails in the employee’s Gmail account. The emails included communications about the employee’s family, career, financials, health, and other personal matters.

The employee brought suit against Verizon and her supervisor, alleging violations of the Stored Communications Act. This statute prohibits intentionally accessing without authorization a “facility” (such as an email server) through which electronic communications are provided. Verizon moved to dismiss the complaint on the grounds that the supervisor had authority to access the employee’s Gmail account because the phone was a company-owned blackberry and the plaintiff had implicitly authorized his access.

The court rejected Verizon’s arguments and denied its motion to dismiss. The court held that the mere fact the supervisor used a company-owned blackberry to access the employee’s emails did not mean that he acted with authorization to do so. Further, the employee did not implicitly consent to the supervisor accessing her email when she returned her blackberry without having ensured that she deleted her Gmail account. The employee’s negligence in failing to delete her Gmail account did not amount to approval, much less authorization, to read her personal emails. The court analogized: “There is a difference between someone who fails to leave the door locked when going out and one who leaves it open knowing someone [will] be stopping by.”

What lessons does this case teach employers? First, don’t read emails from employees’ personal email accounts without their consent. The simple fact that an employee is using a company-owned phone or computer to access his or her personal emails does not authorize the employer to read those emails. Second, develop a personnel policy that prohibits employees from reading personal electronic communications of their coworkers without consent. Make sure employees understand and follow this policy. Finally, have employees return their company-owned phones directly to the IT department rather than the employees’ supervisor, and ensure that any personal information regarding the employee is removed before the device is reissued.



Contact: Nathan Pangrace
216.615.4825

7.23.2013

New Form I-9 Rules and Best Practices

Employers are now using the new Form I-9 (Revision 03/08/13N), which became effective on May 7, 2013, when verifying the employment authorization of new employees. In addition to the instructions on the form itself and the detailed information contained in the updated M-274 Handbook, employers should also be aware of and, where applicable, comply with of the following guidance provided by the U.S. Citizenship and Immigration Services (USCIS) during a meeting with members of the American Immigration Lawyers Association (AILA) following the release of the new Form I-9.

1. Employers must provide new hires with the full, expanded I-9 instructions at the time they complete Section 1 of the I-9, not only the employee portions. Employers may not restate or reformat the I-9 instructions, but may laminate the official I-9 instructions for distribution to new employees.

2. There are two new optional fields in Section 1, the employee’s telephone number and e-mail address. Although the form does not state this, the instructions confirm that these fields are optional. USCIS confirmed that there are new rules in the I-9 instructions for fields where, if no information is to be completed, “N/A” either must or may be noted. Therefore, it is best practice to ensure that “N/A” is used in all fields where there is no applicable information in both Sections 1 and 2. Note that if the employee has no other names, he or she must record N/A in the corresponding field.

3. For employers who use electronic I-9 systems, pre-population of Section 1 of Form I-9 by electronic I-9 programs is not permissible, regardless of whether the preparer/translator section is completed and regardless of whether the employee provided the original information that is pre-populated. Employers should be aware that an electronic I-9 program that involves pre-population of employee information in Section 1 carries significant legal risk.

4. Employers must use the new I-9 form for all reverifications. When the employee at hire presented documents that expire and need to be reverified, the employer may not use Section 3 of an outdated form to record the reverification of the updated documents. However, for a returning employee who is eligible for rehire on the original documents, the employer may complete Section 3 of the existing I-9, even if it is an outdated version, as long as the employee is returning within 3 years of the original hire and the I-9 documentation continues to be valid.

5. The 3-day rule for completing Section 2 is based on the employer’s operations schedule. If the employer operates a business that is closed on the weekend, the 3-business days for the employer’s requirement to complete Section 2 does not include weekends. However, if the employer’s business runs through weekends or holidays, such as a hospital or production plant, the employer must complete Section 2 within 3 business days including the weekends and holidays, even if human resources or management staff is not available on such weekends or holidays.

6. In addition to the new Form I-9, employers who hire foreign workers should familiarize themselves with the new electronic I-94 record and guide employees to properly record the information on Form I-9. With the implementation of the electronic I-94 process, employers will no longer see the I-94 record stapled to a passport, but a printed document from the U.S. Customs and Border Protection website.

7. Employers must establish a policy regarding the completion of Form I-9 for employees with new identities. The newly updated M-274 Handbook states that employers whose employees come forward with new identities “should” complete a new I-9 and, if enrolled in E-Verify, submit a query through the E-Verify system. USCIS clarified that this is a suggested best practice but is not a requirement. Therefore, for employees who present documentation of a new identity, the employer should establish a policy to either: (1) complete a new I-9 and if applicable, complete an E-Verify query; or (2) update the existing I-9 form with the new identity information. Either way, employers should apply the policy consistently.

Rules regarding the verification of employment authorization are frequently updated or changed. To discuss this topic further or learn more about meeting federal and state law requirements, please call or e-mail Roetzel attorney Klodiana Tedesco.



Contact: Klodiana Tedesco
614.723.2092
ktedesco@ralaw.com


7.10.2013

Class Action Waiver with Opt-Out Provision Found Lawful Under the NLRA


On June 25, 2013, a National Labor Relations Board administrative law judge (“ALJ”) held that Bloomingdale’s, Inc.’s arbitration program did not violate the National Labor Relations Act (“NLRA”) because the Company’s 30-day opt-out period was sufficient to render the program voluntary.

The case (Bloomingdale’s Inc., NLRB ALJ, No. 31-CA-71281, 6/25/2013) arose from a wage and hour dispute between Bloomingdale’s and a former sales associate. Several months after she was terminated, the sales associate filed a class action suit against the Company in California state court seeking to recover unpaid overtime and other wages. Bloomingdale’s removed the case to federal court and moved to compel arbitration, arguing that the employee had waived her right to pursue class actions by failing to opt-out of the Company’s early dispute resolution program. The federal district court granted the Company’s motion and dismissed the class action lawsuit. In response to the Company’s motion to compel arbitration, the associate filed an unfair labor practice charge with the National Labor Relations Board (“NLRB” or “Board”), alleging that the Company was unlawfully interfering with the right of employees to engage in protected concerted activities by invoking the class action ban. 

Bloomingdale’s mandatory arbitration program, called Solutions InStore, required final and binding individual arbitration for employment-related disputes with certain exceptions, including claims under the NLRA.  New hires such as the sales associate in this case were given notice and opportunity to opt-out of this program by signing and returning an election form within 30-days of hire.  The sales associate failed to opt-out of this program within the requisite period and thus was subject to the mandatory arbitration provision and class action ban. 

In finding the program lawful, the ALJ concluded that the 30-day opt-out period was “not insubstantial or [an] unjustifiable period of time.”  The ALJ further held that a one-time requirement that employees sign and mail a preprinted election form to opt-out of this program was at best a minimal administrative burden and not unlawful under the NLRA.  Additionally, the ALJ noted that federal law favors the arbitration of disputes. 

Other NLRB administrative law judges have recently invalidated similar arbitration and opt-out provisions, although those cases centered on the fact that the policies contained confidentiality provisions that forbade employees from disclosing to other employees the existence, content or results of arbitration. Such administrative law judge decisions, including the recent decision in Bloomingdale’s, lack precedential authority until reviewed and affirmed by the Board. Several cases related to such provisions now await Board action.  


Contact: Emily Wilcheck
419.254.5260
ewilcheck@ralaw.com

7.08.2013

Obama Administration Delays Affordable Care Act’s Employer Mandate and Reporting Requirements Until 2015

The Obama administration announced on July 2, 2013, that it will delay enforcing two key parts of the Affordable Care Act (ACA) until 2015, including the ACA’s reporting requirements and the requirement that businesses provide health care coverage to employees or pay a penalty.

By way of background, the ACA requires information reporting by insurers, employers and other parties that provide health insurance coverage. The Obama administration expects to publish rules implementing these provisions this summer, after discussions with industry stakeholders. Mark Mazur, Assistant Secretary of the Treasury, stated that the administration decided to delay implementing these rules because of concerns from the business community about their complexity and the need for additional time to implement them. According to Mazur, delaying implementation of the reporting requirements until 2015 will allow the administration to consider ways to simplify the new reporting requirements and give businesses additional time to adapt health coverage and reporting systems.

The ACA also requires businesses with 50 or more employees to provide health insurance or pay a penalty of $2,000 per employee (the employer “pay-or-play” mandate). Since employer penalties can only be assessed based on the new information reporting requirements, the administration is also delaying the pay-or-play mandate until 2015.

The administration will publish formal guidance describing this delay within one week. However, it “strongly encourages” employers, insurers, and other reporting entities to voluntarily comply with the reporting requirements in 2014, in preparation for the full enforcement of the law in 2015. The administration also encourages employers to expand health care coverage for employees before the pay-or-play penalties go into effect.

Lastly, Mazur stated that the administration’s delay of these requirements will not affect the timing of any other provision of the ACA, such as the new health insurance exchanges.​ Valerie Jarrett, Senior Advisor to President Obama, recently announced that the federal government is still “on target” to open the health insurance exchanges on October 1, 2013.



Contact: Nathan Pangrace
216.615.4825



7.02.2013

Court Rules Hobby Lobby Can Challenge the Affordable Care Act’s Contraception Mandate and Will Not Have to Pay Fines



On June 27, 2013, the Tenth Circuit Court of Appeals in Denver ruled that Oklahoma City-based arts-and-crafts retailer Hobby Lobby Stores, Inc. may contest the contraception mandate provision of the Affordable Care Act and will not have to pay fines in the meantime. This decision is a significant victory for opponents of the federal birth-control coverage mandate. 

The family-owned company (along with its sister company Mardel, Inc., a chain of Christian bookstores) is challenging the law, which requires businesses to provide employee health insurance coverage for contraceptives, as a violation of religious freedom. The reprieve gives Hobby Lobby more time to argue in a lower court that for-profit businesses – not just currently exempted religious groups – should be allowed to seek an exception if the law violates their religious beliefs. Hobby Lobby is arguing that the mandate violates the faith of company founder and CEO David Green and his family. Conversely, the government argues that allowing for-profit corporations to exempt themselves from requirements that violate their religious beliefs would be in effect allowing the business to impose its religious beliefs on employees.

The appeals court remanded the case for more argument, but the judges indicated that Hobby Lobby has a reasonable chance of success. “We hold that Hobby Lobby and Mardel . . . have established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive-coverage requirement, and have established an irreparable harm.” Hobby Lobby faced fines of $100 per day for each employee it refused to cover beginning July 1. With more than 13,000 employees, the company would have faced fines of at least $1.3 million per day, or almost $475 million per year, had the appeals court not ruled in their favor.

Roetzel will continue to monitor this case and provide further updates as litigation progresses. It would not be surprising if this issue ultimately comes before the Supreme Court for final adjudication.




Contact: Alexander Kipp
216.820.4204