On May 14, 2012, the United States District Court for the District of Columbia ruled the NLRB’s “quickie election rule” that was effective April 30, 2012 is invalid because the Board did not have a quorum at the time the rule was adopted.  The first sentence of the opinion is, “According to Woody Allen, eighty percent of life is just showing up.”  The court concluded that Member Hayes, who opposed the adoption of the rule, did not show up for the vote depriving the Board of a statutory three member quorum.  At this time, it is not clear whether the Board will appeal the court’s ruling or cure the lack of quorum.

By Keith Overholt

On April 25, 2012, the EEOC issued an update to its Enforcement Guide warning that it will carefully scrutinize employers who use arrest or conviction records as part of their pre-employment screening. The new Guidance, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964,” provides an indication of the EEOC’s position when examining employer’s pre-employment screening.

The Guidance is clear that employers should only use records of convictions, not arrests, in pre-employment screening and only within tight limitations.  The EEOC will effectively presume that a pre-employment screening for criminal convictions will result in a disparate impact upon minorities.  This means that it will presume such screening will disproportionately exclude protected classes from employment consideration, shifting the burden to the employer to show the policy is not discriminatory.   The fact that the employer has a racially balanced workforce will not be sufficient to disprove disparate impact.

If an employer uses criminal conviction records as pre-employment screening, it should:

1. not ask about convictions on the job application and use the screening only after the candidate has advanced in the interview process;
2. limit the inquiry to convictions narrowly tailored to identify criminal conduct “with a demonstrably tight nexus to the position in question”;
3. limit the time within which the conviction occurred;
4. have an articulable business necessity for the exclusion; and,
5. provide the affected candidate the opportunity to explain the conviction to determine whether the policy as applied is job related and consistent with business necessity.

The Guidance also states employers must show that their policy “operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position.” A policy that excludes all candidates with any criminal convictions from all employment opportunities will not withstand EEOC scrutiny.

This is an area fraught with pitfalls for employers.  If you have, or are planning to implement, a pre-employment screening regimen that includes restrictions for criminal convictions, you should consult experienced labor counsel.

Each case a business or individual may face is unique and may require legal advice. If you would like additional information regarding the content of this article, please contact the author, Keith Overholt, or the Chair of our Labor and Employment Department, John Egbert.

By Keith Overholt

On Friday, April 13, 2012, the United States District Court for the District of South Carolina, Charleston Division, issued an order holding the National Labor Relations Board (NLRB) may not require employers to post a notice advising employees of their rights under the National Labor Relations Act.

This ruling conflicts with last month’s ruling by the United States District Court for the District of Columbia upholding the NLRB’s authority to require posting of the notice.

Unless and until an Arizona federal judge, the Ninth Circuit Court of Appeals or the United States Supreme Court rules the NLRB has no authority to require the poster, the rule will apply to Arizona employers, which currently have until April 30, 2012 to comply.

Each case a business or individual may face is unique and may require legal advice. If you would like additional information regarding the content of this article, please contact the author, Keith Overholt, or the Chair of our Labor and Employment Department, John Egbert.

Although litigation continues to determine whether the National Labor Relations Board may require virtually all employers to post a notice of certain rights afforded under the National Labor Relations Act regardless of whether its employees are organized, April 30, 2012 is the date on which employers must comply.  As of April 30, all employers must post the notice in a conspicuous place, typically where other government mandated notices concerning wage and hour laws and other employee rights are located.  A coalition of employer groups sued the NLRB in federal court in Washington, D.C. seeking to have the court hold that the requirement was beyond the Board’s authority.  The court upheld the NLRB’s authority to require the poster but ruled the NLRB may not deem the failure to post the notice as an unfair labor practice by itself or to suspend the statute of limitations on employees’ unfair labor practice charges.  The court’s ruling does permit the NLRB to find the failure to post the notice to be evidence of union animus in unfair labor practice proceedings on a case by case basis.  We expect the NLRB to take that position in virtually all cases, the significance of which will vary according to the specific circumstances of each employer.

Unless and until the District of Columbia Court of Appeals orders otherwise, employers desiring to comply with NLRB’s mandate must post the notice by April 30, 2012.  A copy of the notice may be found at  www.nlrb.gov/poster.

The United States Department of Labor released a summary of Frequently Asked Questions (FAQs) regarding implementation of the summary of benefits and coverage (SBC) provisions of the Affordable Care Act. These FAQs have been prepared jointly by the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments). Like previously issued FAQs (available at http://www.dol.gov/ebsa/healthreform/ and http://cciio.cms.gov/resources/factsheets/), these FAQs answer questions from stakeholders to help people understand the new law and benefit from it, as intended.

Read now: http://www.dol.gov/ebsa/pdf/faq-aca8.pdf

WEST CHESTER, Pa. — The U.S. Department of Labor has obtained a summary judgment ordering Compass Capital Partners Ltd. and owner Harris M. DeWese to restore $661,206 to the defunct West Chester company’s retirement plan. The judgment resolves a lawsuit filed by the department in August 2011 that alleged violations of the Employee Retirement Income Security Act.

The suit resulted from an investigation by the department’s Employee Benefits Security Administration, which found that DeWese withdrew funds from the plan eight times from October 2006 to October 2007 and deposited them in his personal account and a Compass Capital Partners bank account. DeWese then used the plan funds to pay the company’s operating expenses and also transferred a portion of them to Tampa, Fla.-based Hillsboro Printing, a company in which DeWese was a shareholder. Compass Capital Partners ceased operations, and the plan was unable to pay benefits to retired participants as a result of DeWese’s actions. (more…)

Workers, beneficiaries have retirement savings restored

WASHINGTON, Feb. 23, 2012 /PRNewswire-USNewswire/ — The U.S. Department of Labor’s Employee Benefits Security Administration has announced that the Tribune Co., GreatBanc Trust Co. and various insurance carriers have completed funding of a global settlement in the amount of $32 million to be allocated among the Tribune Employee Stock Ownership Plan’s participants, and to pay for legal and administrative expenses. The settlement is with, among others, the department and the plaintiffs in a private class action lawsuit, and resolves the department’s claims of violations of the Employee Retirement Income Security Act.

“This settlement ensures that the Tribune Employee Stock Ownership Plan’s participants and beneficiaries will be able to receive the benefits that are rightfully theirs,” said Secretary of Labor Hilda L. Solis. “I am pleased that participants’ hard earned retirement savings have been returned.”

“The fulfillment of this settlement is good news for participants in the Tribune Employee Stock Ownership Plan,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security. “It is the culmination of my agency’s commitment and extreme hard work in this case to ensure that the employees’ contributions to the plan are handled with the utmost of care according to the law and according to what is right.” (more…)