September 05, 2018
Author: Scott D. Wilson
Organization: Scott D. Wilson, A Professional Law Corporation
I. Background Checks
Some employers who use LinkedIn, Facebook, background checks or other methods to screen employees find themselves at the receiving end of a lawsuit, EEOC or state division of civil rights charge. On the other side of the spectrum, other employers find themselves defending negligent hiring lawsuits, and allegations that they failed to adequately screen problem out employees who may have caused physical harm or financial loss to others. Pre-employment screening is the process by which an employer determines if a candidate possesses the appropriate qualifications and is otherwise a safe and appropriate match for the job and for the company. If the employer does business within a highly regulated industry certain state and federal laws may require certain types of screening. State and federal laws may also determine how and under what circumstances employers may use certain screening methods, including: Questions on Applications (and in Interviews); Criminal Background and Credit Checks; Motor Vehicle Reports; Medical Exams; Drug Screening; Personality or Aptitude Tests; Immigration/I-9/National Origin Issues; and Using Social Media to Pre-Screen.
A. Consumer Credit Reports– FCRA and FACTA
1. Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (15 USC 1681, et seq.) tells us what employers must do before conducting a background check and once they have decided to exclude a candidate based on information contained in the background report. It is a federal law designed to promote accuracy, fairness, and privacy of date collected, used, or disclosed by a consumer reporting agency (CRA), a third-party agency that collects and provides date about one’s creditworthiness or criminal background for purposes of making employment, tenancy, or credit decisions. The Act applies not only to credit checks but to criminal background checks as well. The FCRA is enforced by the Consumer Financial Protection Board.
Steps to follow:
1. Obtain the applicant’s written consent.
2. Provide pre-adverse action notice before taking adverse action, including a copy of the report and a Summary of consumer rights under the FCRA, which gives the applicant an opportunity to explain any negative items on the report.
3. After taking an adverse action, provide an adverse action notice, including the CRA’s name, address, and phone number, along with a statement that the employer and not the CRA made the adverse decision.
1. The FCRA does not apply when the employer conducts the background check itself, without using a CRA.
2. Each violation of FCRA requirements can result in fines from the CFPB and sometimes by lawsuits.
3. The FCRA disallows reporting certain items: bankruptcies after 10 years; civil suits, judgments, arrest records after 7 years; paid tax liens after 7 years; accounts placed for collection after 7 years; any other negative information (except criminal convictions) after 7 years.
2. Fair and Accurate Credit Transactions Act (FACTA)
The Fair and Accurate Credit Transaction Act of 2003 (FACTA) added sections to the federal Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681 et seq.). FACTA’s definition of “consumer reports” excludes from FCRA requirements misconduct investigation reports and any reports used for “investigation” into “compliance with Federal, State or local laws and regulations, the rules of self-regulatory organization, or any preexisting written policies of the employer”, as long as the employer/investigator does not order the reports to investigate the employee’s creditworthiness, credit standing, or credit capacity. Under FACTA, an employer ordering a credit or criminal background check as part of an investigation does not have to a) notify the employee or get his or her consent beforehand; b) give him/her a copy of the report or c) wait a “reasonable” amount of time between giving him/her the copy of the report and taking the adverse action. If it does take adverse action against the employee it need only provide a summary of the “nature and substance” of the report, but may not exclude “the sources of information acquired solely for use in preparing” the report, such as witnesses.
FACTA leaves certain terms undefined, which can create more questions, such as: What exactly is an “investigation”? Which preexisting written policies may form the basis for such an “investigation”? What form must disclosure of the “nature and substance” of a report take (written or oral)? By when must an employer disclose to an employee the “nature and substance” of a report forming the basis of an adverse action? While very little case law in this area exists, there are a few cases that provide some clarification. Some district courts have interpreted the statute.
Millard v Miller, 2005 WL 1899475 (W.D. Wis. Aug. 9, 2005) arose out of plaintiff’s termination after sustaining a workplace injury. During litigation of the workers’ compensation claim, plaintiff obtained postponement of a scheduled independent medical examination, because, she said, she would be going to visit relatives on day of the scheduled exam. Her employer did not believe her, and got a copy of her credit report, in order to subpoena records of her credit card use to show she was shopping instead of visiting relatives as she claimed. The employer shared the report with its workers’ compensation carrier and the plaintiff claimed that the failure to provide her with a disclosure and obtain her consent before requesting the report violated the FCRA. The court decided this was an “investigation” under the FACTA. The employer admitted it got the report to get information about her off-duty conduct in a workers’ compensation case. The court did not find that a problem, because it held that “misconduct relating to employment” should be interpreted broadly, and that Congress chose to use the phrase “relating to” to include more than matters strictly related to workplace activity or conduct. Use of the report in a workers’ compensation hearing, which necessarily involves an employment injury was therefore obtained to investigate “misconduct relating to employment,” said the Court. The court also found the workers’ compensation carrier to be the employer’s “agent”, and that it was therefore permissible to share the report with the workers’ compensation carrier.
In Martin v. First Advantage Background Services Corp., 877 F.Supp.2d 754 (D.Minn. July 13, 2012) the plaintiff had previously worked for and later been reemployed by his employer in its home mortgage department. The employer ran a background check three months after his re-hire. The background check revealed negative items, not present on his background checks done during his previous employment, and the company fired him. The employee said that the items on the report were not true and provided documentation to refute the report. When the employer refused to rescind the termination, the employee sued and alleged FCRA violations. The employer argued that the background check was part of an investigation that looked into the employee’s compliance with federal laws and regulations concerning those working for financial institutions, and also to ascertain his compliance with employee handbook policies requiring that those who do not meet background screening requirements or those of the Financial Institutions Reform, Recovery and Enforcement Act cannot be employed or continue employment. The employee argued that FACTA applies only to investigations of employee misconduct already suspected by the employer. The court disagreed and said that FACTA’s plain language clearly exempted the report from the FCRA, as long as the employer really ordered the report for the purposes it claimed. In Pearce v. Maxillofacial Associates, LLC, 2010 US Dist LEXIS 133430 (W.D. Okla.Dec. 16, 2010) an employer was allowed to order a background check on an employee claiming sexual harassment, even though it may have been doing so in an attempt to intimidate her. The court reasoned that since the employer ordered the report to investigate the plaintiff’s allegations of misconduct it fell within the exemption and that alleged ulterior motives for ordering the report did not affect the applicability of the exemption.
B. Bankruptcy/Arrest/Conviction Records
11 USC 525(a) provides that government employers “may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.”
By slight contrast, 11 USC 525(b) provides that private employers may not “terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.”
The majority of courts have strictly construed this difference and prohibited governmental employers, but not private employers, from discriminating in hiring based on bankruptcy status. See “The Bankruptcy Shadow: Section 525(b) and the Job Applicant’s Sisyphean Struggle for a Fresh Start,” 29 Emory Bankruptcy Developments Journal 553 (2013).
2. Arrest Records
EEOC and some courts have held that because members of some minority groups are arrested substantially more often than others in proportion to their numbers in the population, making personnel decisions on the basis of arrest records has a disproportionate impact upon these groups. EEOC Policy Guidance N-915-061 (9/7/70); EEOC Compliance Manual Vol. II, Appendix 604-A. Arrest records are problematic because arrests do not necessarily lead to convictions and are therefore not necessarily indicative of any propensity to criminal acts. Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364 (5 Cir. 1974) (policy of rejecting all applicants who had significant arrest records violates Title VII); Carter v. Gallagher, 452 F.2d 315 (8 Cir. 1971).
3. Conviction Records
Best policy: there should be correlation between conviction and the job for which the applicant is applying. Statistics demonstrating a disparate impact on minorities could implicate Title VII. See Green v. Missouri Pacific Railroad Co., 523 F.2d 1290 (8 Cir. 1975) (employer’s policy of not hiring anyone convicted of crime other than minor traffic offense held to have disparate impact on African-Americans).
4. Criminal background checks sometimes required.
La. R.S. 40:61.1– Employees who deal with the state’s vital records (in the division of records and statistics, office of public health, Department of Health and Hospitals) cannot be hired or promoted without a criminal background check.
La. R.S. 40:1300.52– requires employers to do criminal checks on non-licensed persons who will provide nursing, health, or support services at a nursing or other adult care facility.
La. R.S. 15:587.1– employer of persons with supervisory or disciplinary authority over children must ask Bureau of Criminal Identification and Information whether applicant has certain convictions.
La. R.S. 17:15– Most elementary or secondary school employees must be checked and certain convictions disqualify an applicant for employment.
La. R.S. 46:51.2– All employees of juvenile facilities and child abuse investigators must be checked. Employers may seek authority to check employees and volunteers for day care centers, maternity homes, scouting organizations, and any organizations whose employees supervise children.
La. R.S. 37:2950(A),(B), and (D)
A. Notwithstanding any other provisions of law to the contrary, a person shall not be disqualified, or held ineligible to practice or engage in any trade, occupation, or profession for which a license, permit, or certificate is required to be issued by the state of Louisiana or any of its agencies or political subdivisions, solely because of a prior criminal record, except in cases in which a conviction directly relates to the position of employment sought, or to the specific occupation, trade, or profession for which the license, permit, or certificate is sought.
B. Any decision which prohibits an applicant from engaging in the occupation, trade or profession for which the license, permit or certificate is sought, which is based in whole or in part on conviction of any crime, as described in Subsection A, shall explicitly state in writing the reasons for the decision.
D.(1)(a) This Section shall not be applicable to:
(i) Any law enforcement agency.
(ii) The Louisiana State Board of Medical Examiners.
(iii) The Louisiana State Board of Dentistry.
(iv) The Louisiana State Board of Nursing.
(v) The Louisiana State Board of Practical Nurse Examiners.
(vi) The State Racing Commission.
(vii) The State Athletic Commission.
(viii) The Louisiana State Board of Pharmacy.
(ix) The Louisiana State Bar Association.
(x) The Louisiana Professional Engineering and Land Surveying Board.
(xi) The Louisiana State Board of Architectural Examiners.
(xii) The Louisiana State Board of Private Investigator Examiners.
(xiii) The Louisiana State Board of Embalmers and Funeral Directors.
(xiv) The Louisiana State Board of Elementary and Secondary Education.
(xv) The Office of Financial Institutions.
(xvi) The Louisiana Physical Therapy Board.
(xvii) The Louisiana Board of Massage Therapy.
La. R.S. 23:291: §291. Disclosure of employment related information; presumptions; causes of action; definitions
A. Any employer that, upon request by a prospective employer or a current or former employee, provides accurate information about a current or former employee's job performance or reasons for separation shall be immune from civil liability and other consequences of such disclosure provided such employer is not acting in bad faith. An employer shall be considered to be acting in bad faith only if it can be shown by a preponderance of the evidence that the information disclosed was knowingly false and deliberately misleading.
B. Any prospective employer who reasonably relies on information pertaining to an employee's job performance or reasons for separation, disclosed by a former employer, shall be immune from civil liability including liability for negligent hiring, negligent retention, and other causes of action related to the hiring of said employee, based upon such reasonable reliance, unless further investigation, including but not limited to a criminal background check, is required by law.
5. Williams v. Butler, 577 So.2d 1113 (La.App. 1 Cir. 1991): When an employee is to be placed in a position of supervisory or disciplinary authority over children, it has a duty to properly screen an applicant and continue to do retention screening to determine whether the employee has been convicted of a crime of “moral turpitude.”
6. The Employee Polygraph Protection Act of 1988 (EPPA) generally prevents employers from using lie detector tests, either for pre-employment screening or during the course of employment, with certain exemptions. Employers generally may not require or request any employee or job applicant to take a lie detector test, or discharge, discipline, or discriminate against an employee or job applicant for refusing to take a test or for exercising other rights under the Act. In addition, employers are required to display the EPPA poster in the workplace for their employees. Federal, state and local governments are excluded. In addition, lie detector tests administered by the Federal Government to employees of Federal contractors engaged in national security intelligence or counterintelligence functions are exempt. The Act also includes limited exemptions where polygraph tests (but no other lie detector tests1) may be administered in the private sector, subject to certain restrictions:
To employees who are reasonably suspected of involvement in a workplace incident that results in economic loss to the employer and who had access to the property that is the subject of an investigation; and
To prospective employees of armored car, security alarm, and security guard firms who protect facilities, materials or operations affecting health or safety, national security, or currency and other like instruments; and
To prospective employees of pharmaceutical and other firms authorized to manufacture, distribute, or dispense controlled substances who will have direct access to such controlled substances, as well as current employee who had access to persons or property that are the subject of an ongoing investigation.
7. Negligent Hiring
In general, the theory of negligent hiring is that \"[a]n employer whose employees are brought into contact with members of the public in the course of their employment is responsible for exercising a duty of reasonable care in the selection ... of its employees.\" Di Cosala v. Kay, 91 N.J. 159, 450 A.2d 508 (1982). Therefore, if an employer negligently hires an individual who is incompetent or unfit for the job, and knew or should have known through a reasonable investigation that the employee was unfit, the employer may be liable to third parties whose injuries were proximately caused by the employer's negligence. According to the Restatement (Second) of Agency § 213 comment d (1958), an employee may be deemed incompetent because of a reckless or vicious disposition, and if an employer, without exercising due care in hiring, employs a person with such propensities to do an act which necessarily brings him into contact with others, the employer may be liable for harm caused by the propensity. To maintain an action for negligent hiring, however, the plaintiff must first show that the defendant owed a duty to the plaintiff or to the class of which she is a member. See Turner v. Grier, 43 Colo. App. 395, 608 P.2d 356 (1979); Restatement (Second) of Agency § 213 comment a (1958).
In cases involving a claim for negligent hiring and retaining, it is necessary to show the employer knew or should have known of the employee's dangerous propensities. See, e.g., Southern Bell Tel. &c. Co. v. Sharara, 167 Ga.App. 665 (307 S.E.2d 129) (1983). Even where a defendant is entitled to summary judgment on a claim for negligent entrustment because of plaintiff's failure to show defendant's actual knowledge of the driver's incompetency, this does not mean he is entitled to summary judgment on a claim of negligent hiring because the standard of care in such cases is whether defendant, in the exercise of reasonable care, should have known of the driver's incompetency. Cherry v. Kelly Svcs., 171 Ga.App. 235 (319 S.E.2d 463) (1984).
II. Sexual Harassment Allegations
An employer may avoid liability for harassment that does not involve an adverse employment action (e.g., termination or demotion) if the employer can demonstrate: (1) it took reasonable steps to prevent and promptly correct sexual harassment in the workplace, and (2) the aggrieved employee unreasonably failed to take advantage of the employer's preventive or corrective measures. This principle often is referred to as the \"Faragher/Ellerth affirmative defense,\" a reference to two 1998 United States Supreme Court decisions in which the Court established the defense.
In order to assert the Ellerth/Faragher defense successfully, an employer must \"exercise reasonable care to prevent and correct promptly any sexually harassing behavior.\" This standard requires both preventive and remedial measures. As for the former, an employer's adoption of an anti-harassment \"policy and its efforts to disseminate the policy to its employees establish that [the employer] exercised reasonable care to prevent sexual harassment in the workplace. In addition, an employer must take steps to correct the particular situation promptly. In Swenson v. Potter, 271 F.3d 1184 (9th Cir.2001), the court explained that \"[n]otice of the sexually harassing conduct triggers an employer's duty to take prompt corrective action that is `reasonably calculated to end the harassment.'\" Id. at 1192 (citations omitted). \"The reasonableness of the remedy depends on its ability to: (1) `stop harassment by the person who engaged in harassment;' and (2) `persuade potential harassers to refrain from unlawful conduct.'\"
Although an \"investigation is a key step,\" Swenson, 271 F.3d at 1193, the court will \"consider the overall picture\" to determine whether the employer's response was appropriate. Id. at 1197. An employer's remedial \"obligation actually has two parts. The first consists of the temporary steps the employer takes to deal with the situation while it determines whether the complaint is justified. The second consists of the permanent remedial steps the employer takes once it has completed its investigation.\" Id. at 1192.
III. Statutes Trigger Obligation to Investigate
Many state and federal laws in the area of employee relations effectively require employers to undertake investigations in order to meet their obligations. The general duty of any employer who either knows or should know about a discrimination, harassment, threat, or safety problem faced by an employee is to take prompt and effective remedial action to put an end to the problem. In order to know what action to take, or to find out whether action is even necessary, the employer must investigate the situation and ascertain the facts. Employers that fail to investigate such situations usually lose claims or lawsuits brought by employees in response to the problems.
Important laws and legal situations that require employer investigations include:
1. Job discrimination laws: Title VII, ADA, ADEA, state law counterparts
2. Health and safety laws: OSHA; prevention of workplace violence
3. Drug-free workplace laws: Drug-Free Workplace Act of 1988
4. Background checks required by many state laws
A. Family and Medical Leave Act: Manuel v. Westlake Polymers, Inc., 66 F. 3d. 758 (5th Cir. 1995)– (First FMLA case decided by any federal circuit court of appeal) June Manuel sued for violation of FMLA when her employer fired her while she was out with an ingrown toenail. She notified her employer of her condition but did not mention FMLA. The federal district judge threw out her FMLA case, reasoning that since Manuel had not mentioned needing medical leave nor the FMLA, the company could not be expected to know how painful the affliction was. The Fifth Circuit reversed.
Per DOL regulations - “in all circumstances, it is the employer’s responsibility to designate leave, paid or unpaid, as FMLA qualifying, based on the information provided by the employee.” If the employer does not have sufficient information about the employee’s reason for leave, “the employer should inquire to further ascertain whether the paid leave is potentially FMLA-qualifying.”
B. Americans with Disabilities Act of 1990
Title I of the Americans with Disabilities Act of 1990 (the \"ADA\") requires an employer to provide reasonable accommodation to qualified individuals with disabilities who are employees or applicants for employment, unless to do so would cause undue hardship. \"In general, an accommodation is any change in the work environment or in the way things are customarily done that enables an individual with a disability to enjoy equal employment opportunities.\"
An employer should respond expeditiously to a request for reasonable accommodation. If the employer and the individual with a disability need to engage in an interactive process, this too should proceed as quickly as possible. Similarly, the employer should act promptly to provide the reasonable accommodation. Unnecessary delays can result in a violation of the ADA.
The employer and the individual with a disability should engage in an informal process to clarify what the individual needs and identify the appropriate reasonable accommodation. The employer may ask the individual relevant questions that will enable it to make an informed decision about the request. This includes asking what type of reasonable accommodation is needed.
The exact nature of the dialogue will vary. In many instances, both the disability and the type of accommodation required will be obvious, and thus there may be little or no need to engage in any discussion. In other situations, the employer may need to ask questions concerning the nature of the disability and the individual's functional limitations in order to identify an effective accommodation. While the individual with a disability does not have to be able to specify the precise accommodation, s/he does need to describe the problems posed by the workplace barrier. Additionally, suggestions from the individual with a disability may assist the employer in determining the type of reasonable accommodation to provide. Where the individual or the employer are not familiar with possible accommodations, there are extensive public and private resources to help the employer identify reasonable accommodations once the specific limitations and workplace barriers have been ascertained.
When the disability and/or the need for accommodation is not obvious, the employer may ask the individual for reasonable documentation about his/her disability and functional limitations. The employer is entitled to know that the individual has a covered disability for which s/he needs a reasonable accommodation. Reasonable documentation means that the employer may require only the documentation that is needed to establish that a person has an ADA disability, and that the disability necessitates a reasonable accommodation. Thus, an employer, in response to a request for reasonable accommodation, cannot ask for documentation that is unrelated to determining the existence of a disability and the necessity for an accommodation. This means that in most situations an employer cannot request a person's complete medical records because they are likely to contain information unrelated to the disability at issue and the need for accommodation. If an individual has more than one disability, an employer can request information pertaining only to the disability that requires a reasonable accommodation. As an alternative to requesting documentation, an employer may simply discuss with the person the nature of his/her disability and functional limitations. It would be useful for the employer to make clear to the individual why it is requesting information, i.e., to verify the existence of an ADA disability and the need for a reasonable accommodation.
C. Fair Labor Standards Act
The employer must determine which employees are covered by, and which are exempt from coverage under, the Fair Labor Standards Act. This entails separating employees from independent contractors, and regular staff employees from exempt professional, administrative, executive employees among other things. The label attached by the employer is not determinative, nor is the question of whether the employee is paid hourly or salaried. The employer must maintain records under the FLSA and be aware of how many hours his covered employees are working.
D. Occupational Safety and Health Act
In response to an employee complaint to OSHA, OSHA conducts some sort of inspection. Often, OSHA prefers to \"investigate\" complaints by faxing a letter asking about the hazard to the employer, rather than by conducting an on-site inspection. The employer is required to respond back to OSHA within five working days. However, if the employee gives OSHA a written, signed complaint that documents a hazard or an OSHA violation and want OSHA to come to the workplace, OSHA must do an on-site inspection. OSHA will give employers advance notice of an inspection only under four conditions: In cases of apparent imminent danger, to try to get management to fix the condition immediately; when the inspection must be after regular business hours or when special preparations are necessary; if management and worker representatives are not likely to be on-site unless they have advance notice; in other circumstances where the OSHA Area Director thinks a more complete inspection would result, such as in a fatality investigation.
E. Sarbanes-Oxley Act
'Public Company Accounting Reform and Investor Protection Act' (in the Senate) and 'Corporate and Auditing Accountability and Responsibility Act' (in the House) and more commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It was named after sponsors U.S. Senator Paul Sarbanes (D-MD) and U.S. Representative Michael G. Oxley (R-OH). As a result of SOX, top management must individually certify the accuracy of financial information.
The Act mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's \"principal officers\" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports quarterly.
The Sarbanes-Oxley Act of 2002 (“SOX”) contains significant protections for corporate whistleblowers. Given its diverse civil, criminal and administrative provisions, the statute may be considered, over time, one of the most important whistleblower protection laws. Unlike most whistleblower laws, the SOX's whistleblower protection provisions are not limited to providing a legal remedy for wrongfully discharged employees. In addition to containing employment-based protections for employee whistleblowers, the law contains four other provisions directly relevant to whistleblower protection. First, the law requires that all publicly traded corporations create internal and independent “audit committees.” As part of the mandated audit committee function, publicly traded corporations must also establish procedures for employees to file internal whistleblower complaints, and procedures which would protect the confidentiality of employees who file allegations with the audit committee.
Second, the SOX sets forth new ethical standards for attorneys who practice before the Securities and Exchange Commission (SEC). This law, and the SEC’s implementing regulations, require attorneys, under certain circumstances, to blow the whistle on their employer or “client.”
Third, the SOX amended the federal obstruction of justice statute and criminalized retaliation against whistleblowers who provide “truthful information” to a “law enforcement officer” about the “commission or possible commission of any Federal offense.” This provision of the SOX was not limited in its application to publicly traded corporations; it covers every employer nationwide.
Fourth, Section 3(b) of the SOX contains an enforcement provision concerning every clause of the SOX. This section states that “a violation by any person of this Act. . .shall be treated for all purposes in the same manner as a violation of the Securities Exchange Act of 1934.” This section grants jurisdiction to the SEC to enforce every aspect of the SOX, including the various whistleblower-related provisions. It also provides for criminal penalties for any violation of the SOX, including the whistleblowerrelated provisions.
These four provisions of the Sarbanes-Oxley Act collectively provide a unique and comprehensive federal framework for enforcing whistleblower protections for corporate employees. In addition to these four provisions, the law contains an employee protection provision which permits whistleblowers to file a complaint before the U.S. Department of Labor alleging unlawful retaliation.
F. Affordable Care Act
While 96 percent of employers are not subject to ACA reporting requirements or the employer responsibility provision because they have fewer than 50 employees, in 2015 requirements begin to phase-in for the remaining four percent of employers that are required to offer quality, affordable coverage to employees or make a payment. The final regulations substantially streamline reporting requirements for employers, particularly those that offer highly affordable coverage to full-time employees. The Affordable Care Act prohibits employers from retaliating against employees who report violations of the Act's health insurance reforms, found in Title I of the Affordable Care Act.
IV. Alleged Theft or Fraud
Companies routinely investigate allegations of theft or fraud for loss prevention purposes. Other circumstances when the need for investigation may arise include: attitude problems; substance abuse; threats or violence in the workplace; vandalism and sabotage; violations of work rules; and others
A. Rouly v. Enserch Corp., 835 F.2d 1127 (5 Cir. 1988), affirming summary judgment for employer (lesson is to act quickly and decisively):
“In the instant case, Pool was protecting important interests by terminating not only employees who had engaged in criminal activity, but also employees who had apparently violated noncriminal company policies. There was some utility for the company in carrying out all the firings on the same day, so as to present a strong picture to remaining employees and so as to use the deputy sheriffs to protect against outbursts. In view of the extensive evidence concerning the fertility of the oil patch for rumors, Rouly's argument that a one day delay would have spared him is unconvincing. In any event, Pool's need to quickly clean house outweighs the purely speculative benefit to Rouly of a few days' delay. Because Pool's conduct was not unreasonable, the district court did not err in rejecting the invasion of privacy claim.”
B. O'Connor v. Ortega, 480 U.S. 709 (1987), is a United States Supreme Court decision on the Fourth Amendment rights of government employees with regard to administrative searches in the workplace, during investigations by “supervisors,” as distinguished by law enforcement, for violations of employee policy rather than by law enforcement for criminal offenses. The Court held that under the Fourth and Fourteenth Amendments, a public employee has a reasonable expectation of privacy as to his desk and files in his private office, but that no warrant or “probable cause” was required for his supervisors to search them for noninvestigatory work-related purposes (as office inventory), or for investigation of work-related misconduct, which the Court defined as “inefficiency, incompetence, mismanagement, or other work-related misfeasance of employees.”
C. Saacks v. City of New Orleans, 687 So.2d 432 (La.App. 4 Cir. 1996)
A former NOPD police officer challenged the admissibility of documents he contended were illegally seized from his office. The record revealed that the police chief received an anonymous call that documents relating to private police detail business could be found in the plaintiff’s departmental office. The city attorney authorized an immediate administrative search of the office. Plaintiff was not notified of the search or present as he had been suspended from the department the previous day. There was no probable cause or search warrant to conduct the search of plaintiff’s office. Documents were seized from plaintiff’s office which supported charges against him of failing to supervise a subordinate, failing to obtain an occupational license, and using department property for personal gain. The court held that the search was a legal administrative search and that the plaintiff’s constitutional right to privacy was not violated. The court reasoned that the search was conducted not in private offices or a residence but in NOPD offices and desks and filing cabinets belonging to the Department, and that a city employee cannot have as high an expectation of privacy as a private citizen.
D. Cangelosi v. Schwegmann Brothers Giant Supermarkets, 390 So.2d 196 (La. 1980)
This tort suit for damages arose out of an incident which occurred when plaintiff was a cashier in defendant's supermarket. Plaintiff alleged that defendant's supervisory personnel defamed her and invaded her privacy during an investigation of a customer's altered check.
“The record discloses a sufficient basis to justify defendant's good faith and lack of malice in provoking an investigation regarding plaintiff's involvement in the incident. The court of appeal correctly reasoned: When an alteration is made to a check received by a store owner's employee in the regular course of business, the employer is certainly entitled to investigate the circumstances surrounding the incident, as long as the investigation is conducted in good faith and in a reasonable manner.”
1 A lie detector includes a polygraph, deceptograph, voice stress analyzer, psychological stress evaluator or similar device (whether mechanical or electrical) used to render a diagnostic opinion as to the honesty or dishonesty of an individual.
A polygraph means an instrument that records continuously, visually, permanently, and simultaneously changes in cardiovascular, respiratory and electrodermal patterns as minimum instrumentation standards and is used to render a diagnostic opinion as to the honesty or dishonesty of as individual.