Legislative Roundup for the Week of February 4, 2013

In addition to the many immigration-related bills that were introduced last week, legislative measures addressing password privacy, FMLA leave, the National Labor Relations Board’s authority, and payroll taxes also made their debut during the first full week of February 2013.

Social Media

Representatives Eliot Engel (D-NY), Jan Schakowsky (D-IL), and Michael Grimm (R-NY) introduced a bill that would prevent employers and educational institutions from requesting individuals’ usernames, passwords, or any other means of accessing their social networking sites and from taking adverse action against job applicants, employees, and students who refuse to provide such information. According to a press release, the Social Networking Online Protection Act (SNOPA) (H.R. 537) is currently the only bipartisan social media privacy legislation that has been introduced at the federal level this year. This bill has been referred to the House Committee on Education and the Workforce.

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Five Key Takeaways For Employers Confronting The Massive, Omnibus HIPAA/HITECH Final Rule

By Philip L. Gordon

At approximately one-half the length of War and Peace, the recently published Omnibus Final Rule, (pdf) which modifies the HIPAA Privacy, Security and Enforcement Rules and implements the HIPAA Breach Notification Rule, can overwhelm in-house employment, benefits, and privacy counsel as well as human resources and benefits professionals trying to discern the Rule’s practical implications for employers who sponsor HIPAA-covered plans, which are “covered entities” under HIPAA. Like most HIPAA-related guidance, the Omnibus Final Rule tends to focus on health care providers, with only a small portion of the ample regulatory commentary aimed at the employer community. Moreover, a detailed reading of the Omnibus Final Rule reveals dozens of technical changes with little or no practical impact on employers and numerous granular modifications that may be relevant to employers, if at all, only with limited frequency. Continue reading this entry at Littler's Workplace Privacy Counsel.

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HHS Releases Long-Awaited Health Privacy Rule

The Department of Health and Human Services (HHS) on Thursday issued its much-anticipated final omnibus rule (pdf) governing privacy for health information. This extensive rule spanning more than 500 pages comprises four final privacy-related regulations. Among other significant changes, the rule modifies the privacy, security, and enforcement regulations implementing the Health Insurance Portability and Accountability Act (HIPAA) to incorporate amendments made by the Health Information Technology for Economic and Clinical Health (HITECH) Act that provided increased protections for an individual’s health information. The new rule also amends HIPAA to address new privacy protections granted under Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA), which prohibits most health plans from using or disclosing genetic information for underwriting purposes. In addition, the rule modifies the HIPAA Enforcement Rule to include the increased and tiered civil money penalty structure provided by the HITECH Act, and establishes final regulations for the HITECH Act’s Breach Notification for Unsecured Protected Health Information rule.

Littler will be providing an in-depth analysis of the new rule and how it will impact both employer sponsors of group health plans and health care providers.

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Congress Approves Bill that Would Increase Trade Secrets Protection

On Tuesday, the House of Representatives by a vote of 388-4 overwhelmingly approved a one-page bill that broadens the scope of what constitutes an employer’s trade secret under the Economic Espionage Act (EEA). Introduced by Sen. Patrick Leahy (I-VT), the Theft of Trade Secrets Clarification Act of 2012 (S. 3642) amends the EEA by clarifying that a trade secret includes information related to “a product or service used in or intended for use in” interstate or foreign commerce.

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The Use of Criminal Records in Employment Will Get Another Look

The U.S. Commission on Civil Rights (USCCR) has announced that it will hold a public briefing to examine the use of criminal background checks in employment. The meeting will discuss in particular how criminal background checks impact African American and Hispanic workers, as well as the Equal Employment Opportunity Commission’s (EEOC) recently-approved updated enforcement guidance on this topic in general. The fact that the USCCR is holding this public forum indicates that the use of criminal histories in employment continues to be a hot-button issue months after the EEOC issued its guidance

The briefing will take place from 9:00 am to 2:00 pm on Friday, December 7, 2012 at 1331 Pennsylvania Ave., NW, Suite 1150, Washington, DC 20425. The briefing will be broken up into three separate panels comprising government officials and academics; business and advocacy group members; and representatives from various trade associations.

Photo credit: Kirby Hamilton

Even Administrative Agencies Make Mistakes: Corrected Model FCRA Forms Now Available To Employers Who Conduct Background Checks

Last week, the Consumer Financial Protection Bureau (CFPB) acknowledged that the Notice of User Responsibilities and the Summary of Rights (as well as two other forms not pertinent to employers) published by the Bureau in December 2011 contained typographical and other technical errors. The announcement is important for employers because the deadline for using the model forms issued by CFPB is January 1, 2013, and some employers and background check companies already had started to use the model forms published in December 2011. Continue reading about this development at Littler's Workplace Privacy Counsel.

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Bills Would Prohibit Employers From Requesting Access to Employees' Email and Social Networking Sites

Members of the House and Senate introduced legislation on May 9, 2012 that would ban employers from requesting individuals’ usernames, passwords, or any other means of accessing their social networking sites and from taking adverse action against job applicants and employees who refuse to provide such information. The Password Protection Act of 2012 (pdf) (H.R. 5684, S. 3074), introduced in the Senate by Richard Blumenthal (D-CT), Chuck Schumer (D-NY), Ron Wyden (D-OR), Jeanne Shaheen (D-NH), and Amy Klobuchar (D-MN) and in the House by Reps. Martin Heinrich (D-NM) and Ed Perlmutter (D-CO), would still allow employers to permit the use of social networking within the office on a voluntary basis, establish computer and social media use policies, avail themselves of online information about individuals that is already public, and protect their intellectual property or confidential business information from theft. Employers found in violation of this bill would be subject to monetary penalties only.

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Senators Ask DOJ, EEOC to Investigate Legality of Employer Social Media Login, Password Requests

Senators Richard Blumenthal (D-CT) and Charles E. Schumer (D-NY) have sent requests to the Department of Justice (DOJ) and Equal Employment Opportunity Commission (EEOC) asking them to determine whether the emerging employer practice of requesting job applicants for their social medial login credentials for background check purposes violates federal law. According to Sens. Blumenthal and Schumer, requesting an applicant’s username and password for social media sites such as Facebook is a “disturbing trend” that potentially violates a number of privacy and employment laws.

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NLRB Report Challenges Validity of Many Commonly Used Social Media Policies

In its most recent effort to draw lines on the self-described “hot topic” of the “lawfulness of employers’ social media policies and rules,” the National Labor Relations Board’s (NLRB) Office of General Counsel has taken the position that many policy provisions commonly seen in employers’ social media policies violate the National Labor Relations Act (NLRA). This most recent shot across the bow came on January 24, 2012, in the form of a report, (pdf) issued to senior regional staff, on 14 cases which, according to the General Counsel, “present emerging issues in the context of social media.” This report follows a previous General Counsel report, dated August 18, 2011, which discussed 14 prior NLRB cases involving social media issues.  Continue reading this entry at Littler's Workplace Privacy Counsel.

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Supreme Court Permits Background Checks of NASA Government Contractors

Earlier this week, the United States Supreme Court in NASA v. Nelson (pdf) upheld the National Aeronautics and Space Administration’s (NASA) right to conduct reasonable background checks on the employees of government contractors. While the case focused on the scope of background checks conducted by the federal government, the Court’s ruling provides some useful guidance for private employers as well.  Continue reading this entry at Littler's Workplace Privacy Counsel.

EEOC Releases Additional Guidance Documents on Final GINA Rule

The Equal Employment Opportunity Commission (EEOC) has posted on its website two new guidance documents on the recently published final rule implementing the employment provisions of the Genetic Information Nondiscrimination Act (GINA). Title II of GINA prohibits the use of genetic information in making employment decisions, restricts acquisition of genetic information by employers and other entities covered by Title II, strictly limits the disclosure of genetic information, and prohibits retaliation against employees who complain about genetic discrimination. The first guidance document provides background information on the Title II rule, while the second focuses on questions that might arise for small businesses.  Both guidance materials are presented in question and answer format, and clarify many of the provisions contained in the final rule.

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EEOC Holds Public Meeting to Discuss Employment Credit Checks

On Wednesday, the Equal Employment Opportunity Commission (EEOC) held a public meeting to gather information about the use of credit checks as an employment screening device. Nine panelists representing the views of employers, workers, and the credit reporting industry discussed the reasons for using such reports in the hiring process, employee rights and employer responsibilities under the Fair Credit Reporting Act (FCRA), and current scientific research on credit scores and its correlation to job performance. While a number of panelists claimed that the use of credit reports in employment leads to discriminatory hiring practices and urged the agency to issue new guidance on this topic and increase its enforcement efforts, others explained the necessity of using credit checks in the employment arena, the circumstances under which credit check are used by employers and how existing protections provide sufficient safeguards against discrimination.

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EEOC to Hold Meeting on the Use of Credit History as Employment Screening Device

The Equal Employment Opportunity Commission (EEOC) will conduct a public meeting to discuss the use of credit checks in the employment context. According to the notice (pdf) published in today’s edition of the Federal Register, the meeting will be held on Wednesday, October 20, 2010, at 9:30 a.m. EDT in the EEOC’s meeting room on the first floor of the EEOC office building, 131 M Street, NE., Washington, DC 20507. Due to limited seating and the security process, attendees are encouraged to arrive at least 30 minutes in advance.

The use of credit checks in employment has been receiving some attention in Congress. Last month, the House Financial Services Committee conducted a hearing to discuss the Equal Employment for All Act (H.R. 3149), a bill that would amend the Fair Credit Reporting Act to make it unlawful, with certain limited exceptions, to base adverse employment decisions against prospective and current employees on consumer credit reports. This legislation has not advanced in Congress.

This is the second meeting held in recent years in which the use of credit checks in the employment process has been discussed at an EEOC meeting. On May 16, 2007, a public meeting was held in which the EEOC discussed “how agency-enforced laws apply to employment testing and screening

Topics of discussion at the 2007 meeting included the use of credit histories in the pre-employment process. No formal action was taken by the EEOC following the 2007 meeting.

U.S. Supreme Court's Decision in NASA Case Could Have Significant Implications for Private Employers

This week, the U.S. Supreme Court heard oral argument in a case challenging NASA’s background checks of “low risk” private contractors working at the agency’s Jet Propulsion Laboratory (JPL). At first blush, the case does not appear to be particularly relevant to private employers given that NASA is a public employer and the appeal will turn principally on the Supreme Court’s interpretation of the federal constitutional right to information privacy applicable only to public employers. Deeper consideration suggests, however, that the Court’s decision could have significant implications for private sector employers.  Continue reading this entry at Littler's Workplace Privacy Counsel

House Committee Holds Hearing on Bill Limiting Employment Credit Checks

On Thursday, the House Financial Services Committee held a hearing to discuss the Equal Employment for All Act (H.R. 3149), legislation that would make it unlawful, with certain limited exceptions, to base adverse employment decisions against prospective and current employees on consumer credit reports. While a number of panelists spoke in support of limiting the use of such employment-based credit checks, others testified that doing so is unnecessary and could put employers at risk.

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House Approves Background Check Bill for Child-Centric Workers

The House of Representatives approved by an overwhelming 413-4 margin legislation that would make it easier for employers to conduct background checks on employees who supervise, educate, or otherwise provide care for children. The Child Protection Improvements Act (H.R. 1469) would, among other things, make permanent the Child Safety Pilot Program created in 2004 by the PROTECT Act. This program established a nationally accessible fingerprint-based criminal history background check system for volunteers and employees of youth-serving organizations.

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Proposed Revisions to HIPAA Regulations

The U.S. Department of Health and Human Services (HHS) published on July 14, 2010, a voluminous Notice of Proposed Rulemaking (NPRM), containing dozens of proposed amendments to three sets of Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations: the Privacy Rule; the Security Rule; and the Enforcement Rule. The proposed amendments are directed principally at implementing the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which amended HIPAA and went into effect on February 17, 2010. A careful review of the NPRM for its impact on employers who sponsor HIPAA-covered plans reveals that, if the proposed changes were adopted, employers would be required to revise their business associate agreements, their HIPAA notice of privacy practices, and their policies for responding to access requests. The NPRM also provides employers with a roadmap for avoiding civil monetary penalties. To learn more about the NPRM and its implications for employers, please continue reading Littler's ASAP, What Do Employers with HIPAA-Covered Health Plans Really Need to Know About Recently Proposed Revisions to HIPAA Regulations?, by Philip L. Gordon.

Quon Decision Provides Useful Guidance for Private Employers While Skirting Broad Pronouncements on Employee Privacy Rights

As anticipated in Littler's Workplace Privacy Counsel's blog post describing the oral argument before the U.S. Supreme Court in City of Ontario v. Quon (pdf), the Court declined today to make any broad pronouncements concerning employee privacy rights in electronic communications using employer-issued equipment. The Court reserved expressing an opinion given the newness and evolving nature of cell phone and text message communications. Instead, the Court held that the City of Ontario Police Department did not violate the Fourth Amendment rights of a SWAT team member, Sgt. Jeff Quon, by reviewing text messages sent and received by Quon on a department-issued pager because, even assuming that Quon had a reasonable privacy expectation, the City’s review of his text messages was motivated by a legitimate work-related purpose and was not excessive in scope. Notwithstanding its narrow and fact-specific nature, the Court’s ruling still provides useful guidance for private employers.  Continue reading this entry at Littler's Workplace Privacy Counsel blog.

Supreme Court to Decide Constitutionality of Certain Background Check Questions for Federal Contractors

U.S. Supreme Court buildingThe U.S. Supreme Court has agreed to decide whether the government violates a federal contract employee’s constitutional right to informational privacy when it (a) asks in the course of a background investigation whether the employee has received counseling or treatment for illegal drug use that has occurred within the past year, and (b) when it asks the employee’s designated references for any adverse information that may have a bearing on the employee’s suitability for employment at a federal facility, when the information obtained in both scenarios is to be used for employment purposes only and is protected under the Privacy Act, 5 U.S.C. 552a. In National Aeronautics and Space Administration v. Nelson (09-530) the U.S. Court of Appeals for the Ninth Circuit disagreed with a lower court, which had found no constitutional violations. The Ninth Circuit reversed (pdf) the district court’s decision, and ordered the entry of a preliminary injunction barring the use of the forms asking the above questions for the background checks on federal contract employees working at NASA’s Jet Propulsion Laboratory (JPL), a federal research and development facility owned by the agency. The California Institute of Technology (Caltech) operates JPL pursuant to a contract with NASA. All of the positions at JPL are filled by contract employees.

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Supreme Court Review of Quon May Provide Important Guidance for Private Employers

The U.S. Supreme Court has agreed to review the Ninth Circuit Court of Appeal’s decision in Quon v. Arch Wireless, a case with potentially important implications for private employers. As explained in prior posts, the appellate court held that the City of Ontario Police Department violated a SWAT officer’s reasonable expectation of privacy by reviewing the content of his sexually explicit text messages, even though: (1) the messages had been sent with a Department-issued pager through a service provider under contract with the Department, and (2) the Department’s formal policy informed all SWAT officers that the Department might review their text messages. In reaching that conclusion, the Ninth Circuit relied principally on a statement by the officer in charge of the text messaging program to the SWAT officer that the Department would not review his text messages if he voluntarily paid any overage charges resulting from excessive personal use.  Continue reading at Littler's Workplace Privacy Counsel blog. 

GINA Becomes Effective November 21, 2009: Are You Ready?

picture of a double helix DNA strandThe Genetic Information Nondiscrimination Act (GINA) takes effect on November 21, 2009. How does GINA impact employers?  GINA does the following: (a) prohibits employers from discriminating against an employee based upon genetic information, (b) places broad restrictions on an employer’s deliberate acquisition of genetic information, (c) mandates confidentiality for genetic information that employers lawfully collect; (d) strictly limits disclosure of such information, and (e) prohibits retaliation against employees who complain about genetic discrimination.  Continue reading at Littler's Workplace Privacy Counsel blog.

HHS Issues Interim Final Rules Strengthening HIPAA Enforcement

The Department of Health and Human Services (HHS) has published interim final rules that conform the enforcement regulations of the Health Insurance Portability and Accountability Act (HIPAA) to those made by the Health Information Technology for Economic and Clinical Health Act (the HITECH Act) regarding the electronic transmission of health information. Signed into law as part of the American Recovery and Reinvestment Act of 2009 (ARRA or ”Economic Stimulus”), the HITECH Act, among other things, modified the HHS Secretary’s authority to impose civil monetary penalties for violations of HIPAA rules occurring after Feb. 18, 2009. These HITECH Act revisions significantly increase the penalty amounts the Secretary may impose for such violations.

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Federal Agencies Publish Interim Final Rules Prohibiting Discrimination Based on Genetic Information in Health Insurance Coverage and Group Health Plans

The Department of Labor (DOL), Internal Revenue Service (IRS), and the Centers for Medicare and Medicaid (CMS) have published in the Federal Register interim final rules (pdf) governing Sections 101 through 103 of Title I of the Genetic Information Nondiscrimination Act of 2008 (GINA). Title I of GINA amended the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act (PHS Act), the Internal Revenue Code of 1986 (Code), and the Social Security Act (SSA) to prohibit discrimination in health coverage based on genetic information. Sections 101-103 contain provisions banning discrimination based on genetic information in health insurance coverage and group health plans. The EEOC has not yet issued final rules interpreting Title II of GINA, which prohibits discrimination in employment based on genetic information, and limits the acquisition and disclosure by employers and other entities of such information.

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DOT Regulation on Observed Return-to-Work and Follow-Up Drug Testing Goes into Effect August 31, 2009

After a lengthy public comment period and legal challenges, a U.S. Department of Transportation (DOT) drug testing regulation requiring employees of aviation, railroad, motor carrier, mass transit, pipeline and maritime industries who previously failed a drug test to partially disrobe and be directly observed during return-to-work and follow-up tests will go into effect August 31, 2009.  Continue reading at Littler's Workplace Privacy Counsel blog.