Nonprofits Insurance Alliance

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Overbroad Employee Confidentiality Agreements

Many employers require employees to sign a Confidentiality Agreement regarding certain data and information that the employee will have access to in the course and scope of their employment. There are certain types of employer data that must be maintained as confidential such as:

  • Client identification or personal health information under the federal Health Insurance Portability and Accountability Act (HIPAA);
  • Personally identifiable information (PII), such as donor names and credit card numbers or employee addresses and social security numbers under privacy and state confidentiality laws.

Additionally, general business information that an employer needs to keep confidential for business reasons to maintain a competitive advantage such as business plans, financial resources, funding sources or customer lists falls within the definition of trade secrets and can be maintained as confidential.  Protecting this data is simple, right? You just have employees sign a broad confidentiality agreement, and that’s that!

Like many areas of employment law, it’s not that simple. In a recent decision of the Second Circuit Court of Appeals, which covers New York, Connecticut and Vermont, the court held that a non-union nonprofit organization violated the National Labor Relations Act (NLRA) by promulgating an unlawful confidentiality agreement and terminating an employee for his refusal to sign the agreement.  The agreement required employees to maintain confidential information protected by HIPAA, but went beyond that and “strictly prohibited” employees from disclosing information with respect to all “non-public information intended for internal purposes,” including ”administrative information such as salaries and the contents of employment contracts.”  The policy also prohibited employees from being “interviewed by any media source, or answering any questions from any media source regarding their employment” or “other workings and conditions” of the employer without the employer’s consent.

When an underperforming and problematic employee was ultimately terminated for his refusal to sign the agreement, he filed an unfair labor practice charge with the National Labor Relations Board (NLRB). Citing the longstanding NLRB rule that discipline imposed pursuant to an unlawfully overbroad employer policy is unlawful, the NLRB, as affirmed by the court on appeal, determined that the termination was unlawful even though in this instance the employee was acting alone. All employees covered by the NLRA, regardless of whether they are unionized, have the right to engage in what is considered “protected concerted activity” under that NLRA, and discipline based on any policy that restricts concerted activity is unlawful.  While a confidentiality policy could prohibit HR or accounting staff from discussing the salaries of other employees, such a policy could not prohibit employees discussing their own compensation rate, or asking their coworkers to discuss this compensation.

Nonprofits should review any confidentiality policies or agreements to make sure that employees covered by the NLRA are not restricted in their ability to discuss or reveal information that involves the terms and conditions of their employment or their rights to engage in protected concerted activity, which would include discussions with co-workers or third parties such as the traditional or social media.

What You Need to Know About Retaliation Claims

Since the United States Equal Employment Opportunity Commission (EEOC) issued its enforcement guidance surrounding workplace retaliation last summer, employers have been on notice to exercise caution when taking adverse action against an employee following protected activity.  Absent clearly documented evidence of a legitimate business reason for adverse action, like termination, such action taken by an employer following an employee’s participation in protected activity may be deemed as retaliatory, leaving the burden on the employers to defend their actions. Protected activity includes such things as:  requesting an accommodation; taking a leave of absence; or participating in an investigation.

Laying out a three-prong test, the EEOC tells us that in order to establish a claim of retaliation, employees merely need to show that: 1) they were participating in protected activity; 2) they suffered some kind of adverse employment action; and 3) there is a causal link between the activity and employment decision.

Unfortunately, even employment actions taken with no retaliatory motive and made in good faith may undergo scrutiny if an employee feels they are being punished. Therefore, while the first two prongs of the EEOC’s test may appear straightforward, the following should be considered as best practices in order to minimize risk and disconnect the link between protected activity and subsequent adverse employment action:

  • Maintain a written policy that is made available to all employees regarding zero tolerance for retaliation, including ways an employee may report actual or suspected retaliatory conduct.
  • Have written employment policies and consistently apply them.
  • Review policies and practices to ensure employees are not deterred from engaging in protected activity.
  • Train managers and supervisors on your anti-retaliation policy and how to handle employee discipline following protected activity.
  • Promptly and thoroughly investigate all complaints.
  • Accurately report job performance on performance evaluations. A below-average performing employee should not receive all superior marks. Use factual examples to support less than satisfactory ratings.
  • Clearly and thoroughly document business decisions your nonprofit may make that employees may consider as adverse (e.g., moving office space or eliminating positions).
  • Document job-related reasons for all actions, including poor performance or unwillingness to perform duties, to link adverse actions to poor performance rather than protected activity.
  • Ensure employees are aware of their job requirements by having up to date job descriptions, acknowledged by the employee.
  • Evaluate options in lieu of termination or discipline, including coaching, performance improvement plans, and additional training, especially if the adverse action is close in time to the protected activity.

Employers should also be aware that while retaliation may be as obvious as a termination, it can also be less recognizable, such as with overlooking an employee for a promotion, directing another employee to engage in harassment or retaliatory conduct, and criticizing or questioning an employee for filing a complaint.

Because the EEOC has linked adverse action to protected activity despite the passage of years between events, it’s critical for employers to always document and consistently apply policies.

While retaliation is prohibited conduct under state and local laws, employees also can find protection under Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), Title V of the Americans with Disabilities Act (ADA), Section 501 of the Rehabilitation Act (Rehabilitation Act), the Equal Pay Act (EPA), and Title II of the Genetic Information Nondiscrimination Act (GINA).

 

*Note: While this article focuses on the employment relationship, retaliation is prohibited against job applicants and volunteers. 

Related Links:

The EEOC Enforcement Guidance on Retaliation and Related Issues:  https://www.eeoc.gov/laws/guidance/retaliation-guidance.cfm

Questions and Answers:  Enforcement Guidance on Retaliation and Related Issues:
https://www.eeoc.gov/laws/guidance/retaliation-qa.cfm

Small Business Fact Sheet: Retaliation and Related Issues:  https://www.eeoc.gov/laws/guidance/retaliation-factsheet.cfm

Claims That Could Have Been Avoided: The Ill Effects of Poor Communication

A lack of communication can be detrimental to businesses and organizations alike, as well as the working relationship between employees, as it elevates stress levels and undermines confidence. However, as one nonprofit learned, that’s not the full extent of the damage that can result from poor communication. Poor or absent communication can end up costing tens of thousands of dollars. To learn just how damaging it can be, read below for one nonprofit’s experience.

The Claim

A nonprofit offering recovery services hired a short-term, part-time employee to their staff. The employee was given a verbal offer, as opposed to a written offer letter, and was under the impression that she would be in a position that would receive supervised hours, which she needed in order to obtain a professional license. Instead, the insured had hired her into a position that did not have the desired supervision, as she had understood. Once the employee began work, she complained that she was not being supervised, but nothing was done because she had been hired into a role that did not include supervised hours. Additionally, she objected to the client medication dispensing procedures and refused to perform this function.

After being employed for a mere six weeks and working just 48 hours, the employee’s job was terminated because: 1. the nonprofit could not give her the supervised hours that she desired and; 2. she refused to follow the medication procedures, which the nonprofit labeled insubordination. The employee responded by filing a complaint against the nonprofit with the professional licensing board, followed by a lawsuit in State Court. Although the claim relating to the employee’s lack of supervision had no merit, the suit brought several issues to light regarding the propriety of the nonprofit’s medication procedures, which ultimately supported the plaintiff’s claim of retaliation for whistleblowing. In the end, the nonprofit settled with the former employee for a significant amount of money, even though she had earned very little during her employment.

Lessons Learned

This claim likely could have been avoided if proper communication had been utilized at the outset of the hiring process. The expectations of the position should have been clearly communicated to the employee in a job description listing essential job functions with a written job offer establishing the terms of the employment.  If this had been done, the employee may not have accepted the job to begin with, or would have understood that professional supervision was not being offered so there would not have been the unmet expectation that motivated her filing suit. Written documentation would have supported the nonprofit’s hiring intent.

Additionally, the nonprofit should have investigated the concerns expressed by the employee to determine if proper medication procedures were being followed, rather than dismiss her objections as insubordination. Had it done so, the nonprofit would have been able to correct the internal errors and it would most likely have avoided liability. In essence, the lack of communication ended up costing tens of thousands of dollars, and hours of staff time, which far exceeds the staff costs associated with drafting clear on-boarding documentation and conducting an investigation into complaints related to operational compliance.

Risk Alert: What You Need to Know About the New I-9 Form

As all employers are aware, the Immigration Reform and Control Act of 1986 requires all employers to verify that all employees hired after November 6, 1986 are legally entitled to work in the United States. Employees must also provide employers with sufficient documentation that establish identity and employment eligibility, and complete the I-9 Employment Eligibility Verification form. The last form before the 2016 revision was published on March 8, 2013.

On November 14, 2016 a new version of the I-9 that was required to be used exclusively by January 22, 2017.  Now, after almost 7 months of becoming comfortable with the “new” revision, it was announced on July 17, 2017, that a “newer” version of the I-9 has been published.

Employers are permitted to use either the November 14, 2016 revision or the newer July 17, 2017 version until September 17, 2017.  On and after September 18, 2017, employers are required to use the July 17, 2017 revision, exclusively — at least until another revision is issued.

Details as to what the newest revisions provide, as well as a link to the form itself can be found here.

 

Post-Accident Drug Testing – It’s No Longer Automatic

For years, many employers have automatically required drug testing of an employee involved in any work-related accident.  The fact that an accident occurred was justification for the testing, without regard to whether any suspected drug or alcohol use contributed to the accident, and regardless of the severity of the injury or damage.

Some states have placed limitations on this practice. For example, in the 2013 California decision resulting from Freeman v Kohl’s, it was found that such a policy of automatic testing was overbroad and invaded privacy rights of  employees.  It held that an  employer’s post-accident policy that requires drug testing in the event of any reported work-related injury, regardless of the extent of any damage, the extent of the injury, and whether the claimant bears any responsibility for incurring the injury, is invalid.

There is now a new and national directive that affects virtually all employers who maintain and implement such a policy.  In August of 2016, the Federal Occupational Health and Safety Administration (OSHA) issued its final rule on electronic reporting of workplace injuries.  Among other things, this rule found that the use of this broad policy after any workplace injury may deter reporting of such injuries and concludes that drug testing policies should limit post-incident testing to situations in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use.

According to OSHA, examples of unreasonable use of the test would include a bee sting, a repetitive strain injury, or an injury caused by a lack of machine guarding or a machine or tool malfunction.

As a result of this new order, there is an increased, but significant risk in continuing the practice of conducting an automatic drug test after any work related accident.  There are significant fines that will be imposed for use of these policies that deter reporting of workplace injuries — and there is also the possibility of facing claims of invasion of privacy from affected employees.

In light of this new rule, drug testing policies must be reviewed and modified to ensure that post-accident drug testing is performed in a fashion consistent with OSHA’s mandates.

 

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