Hunton Employment & Labor Perspectives

The Veterans’ Employment and Training Service (VETS) of the Department of Labor (DOL) just posted a “Special Announcement” delaying the 2011 VETS-100/100A Filing Cycle.

Typically, covered employers are required to submit the VETS-100 and VETS-100A Reports annually by September 30.  The forms identify the number of protected veteran employees and new hires in the workforce.  This year, the Department had announced a plan to accept electronic submissions of the reports effective August 1, 2011.  Unfortunately, technical problems have interfered with the electronic filing.  Contractors presently cannot register or file for the 2011 cycle.

On August 9, 2011, the Ninth Circuit Court of Appeals ruled that a putative class action cannot be rendered moot by a defendant’s Rule 68 offer of judgment to the named plaintiff, even when the offer of judgment fully satisfies the named plaintiffs claim.  In doing so, the Ninth Circuit joined the other three circuits that have considered the pre-certification effect of an offer of judgment on the mootness of a class action.  The other three circuits (Second, Third, and Fifth) have similarly held that a defendant cannot “pick off” lead plaintiffs with an offer of judgment in order to avoid a class action.

First introduced in the Employee Free Choice Act as an alternative to card check, the quickie election has been brought back as part of the National Labor Relations Board’s (“NLRB”) rulemaking process.  On June 21, 2011, the NLRB, with Board Member Brian Hayes dissenting, issued a Notice of Proposed Rulemaking suggesting numerous changes to the procedures governing union elections.  These proposed changes are significant and if accepted would both alter the landscape of secret ballot elections and place employers at a severe disadvantage.

The national unemployment rate, as reported by the Department of Labor, has stubbornly remained at about 9% or higher for more than two years. As many of these unemployed individuals search for new jobs, some have purportedly been denied available employment opportunities simply because they were unemployed. Unemployment discrimination, as it is often called, is not currently prohibited under federal law. The EEOC and Congress, however, have taken steps focused on so-called unemployment discrimination that could affect how employers conduct their hiring processes.

In March, we reported on the increasing attention that federal and state legislatures, as well as the EEOC, were paying to employers’ use of employee credit checks in employment decisions. At the time of posting, four states had laws regulating employer use of credit history data and fourteen additional states were considering similar measures. Earlier this month, Connecticut passed Public Act No. 11-223 regulating employer use of credit reports.

The EEOC recently released an informal discussion letter suggesting that employers may be obligated to do more than just maintain a separate file for employee medical records, especially when those records are in an electronic format. Both the Americans with Disabilities Act of 1990 (“ADA”), as amended, and the Genetic Information Non-Discrimination Act of 2008 (“GINA”) require employers to maintain a confidential medical record, which is separate from the employee’s other personnel file(s), for information about the employee’s medical conditions, medical history or “genetic information.” The statutes do not, however, specify how such records are to be maintained or what level of security must be in place to protect the confidentiality of medical or genetic information.

On July 8th, partially relying on the U.S. Supreme Court’s June 20th decision in Wal-Mart Stores, Inc. v. Dukes (for an analysis of the Dukes decision, see our previous blog entry), the United States District Court for the Northern District of California decertified a class of current and former store managers who alleged that Dollar Tree Stores Inc. had misclassified them as exempt employees and denied them overtime pay.  The case, Cruz v. Dollar Tree Stores, Inc., proves that although Dukes involved discrimination as opposed to wage and hour claims, the rationale in Dukes can also be used to defeat wage and hour class actions.

The class action under the Fair Labor Standards Act arguably is the employer’s most dreaded legal claim.  In April 2011, the United States Supreme Court provided a potential escape hatch for employers.  In AT&T Mobility v. Concepcion, the Supreme Court seemed to signal -- “seemed” being the operative word -- that employers need only enter into arbitration agreements in which employees disclaim their ability to file an FLSA class action (or, as it’s actually called in the FLSA, a “collective” action).

On June 24, 2011, the Texas Supreme Court wrote the next chapter concerning the enforceability of non-compete agreements in Texas.  A company’s provision of stock options to employees was deemed satisfactory consideration for a non-compete agreement in Marsh USA Inc. and Marsh & McLennan Companies, Inc. v. Cook, --- S.W.3d ----, 2011 WL 2517019 (Tex., 2011).  The Court declared that stock options are reasonably related to the protection of a company’s goodwill, a business interest worthy of protection under the Covenants Not to Compete Act (CNCA).  Although goodwill is intangible, Texas law has long recognized that it is “a property and integral part of [a] business just as its physical assets are.” Marsh USA, Inc., 2011 WL 2517019 * 11. 

The National Labor Relations Board (“NLRB”) handed down an opinion last month, in Sheet Metal Workers International Association, Local 15 (Brandon Regional Medical Center), 361 NLRB No. 162 (2011), that constitutes a victory for union members and giant inflatable rats everywhere.  Inflatable rats have been used by unions to protest employers’ use of non-union (or “rat”) workers since as early as 1991.  Giant inflatable rats have been the subject of lawsuits in the past, and a previous case has made it all the way to the Supreme Court of New Jersey.  See State v. DeAngelo, 197 N.J. 478 (2009).  The inflatable rat in question was 16 feet tall and 12 feet wide.  It was located 100 feet from the entrance of a hospital, run by a neutral company, whose independent contractor subcontracted work to a company which utilized non-union workers.