Wisconsin Legislative Update

June 2014

By: Alan E. Seneczko, Esq.

The Wisconsin legislature recently enacted two laws that affect Wisconsin employers. The laws, which took effect in April 2014, are not particularly “earth-shattering,” but they are nonetheless worth noting.

Recordkeeping, Exempt Employees – One of the weird anomalies of Wisconsin wage and hour law has always been its requirement that employers keep records of the hours worked by exempt, salaried employees. I am sure that many of you are now saying “it did,” but have no fear. It no longer does. 2013 Wis. Act 286 amended the Wisconsin minimum wage law to expressly provide that employers are not required to keep records of the hours of employment of employees who are exempt from the requirement to be paid overtime and not paid on an hourly basis.

Social Media Account Access – By now, employers should know that they cannot access an employee’s Facebook page, personal email account, etc., without the employee’s authorization, given that such conduct is prohibited by the federal Stored Communications Act. As a result, 2013 Wis. Act 208, “Internet Privacy Protection,” should be old news.

Effective April 10, 2014, the law prohibits a Wisconsin employer from requesting or requiring an employee or applicant to disclose access information for, grant access to, or allow observation of a personal internet account (an account “created and used by an individual exclusively for purposes of personal communications”) as a condition of employment; and from discharging, refusing to hire or otherwise discriminating against a person who refuses such a request or opposes such practices. An employer may, however:

• Discharge or discipline an employee for transferring confidential information or financial data to the employee’s personal internet account without authorization.
• Conduct an investigation of misconduct, if the employer has reasonable cause to believe that activity in the employee’s personal internet account relating to the misconduct has occurred. Examples include alleged unauthorized transfer of proprietary information; job-related misconduct; violations of the law or the employer’s work rules as specified in an employee handbook. In such circumstances, an employer may require an employee to grant access to or allow observation of a personal internet account, but may not require the employee to disclose access information for that account.
• Restrict or prohibit a person’s access to certain internet sites while using a device or network supplied or paid for by the employer.
• Request or require access to a device, account or service supplied or paid for by the employer, which is provided by virtue of the employment relationship or is used for the employer’s business purposes.
• View, access, or use information about an employee or applicant that is available in the public domain or that can be viewed without access information.
• Request or require disclosure of an employee’s personal email address.

An employer that inadvertently obtains access information through use of an electronic device or program that monitors the employer’s network, or through an electronic communications device supplied or paid for by the employer is not liable for possessing that information as long as the employer does not use that information to access the employee’s personal internet account.

Simple rule of thumb:  If it is personal and you need the employee’s password to see it; you cannot look. If you can see it in the public domain without a password, no problem.  

Questions? Please contact WS Attorney Alan E. Seneczko at (262) 560-9696, or email alseneczko@wesselssherman.com .

 

Minnesota Federal Court is the First to Address Discrimination Claims Brought Under the Affordable Care Act

March 2015

By: James B. Sherman, Esq.

In what is believed to be the first case to allege discrimination under the often overlooked civil rights provisions of the Affordable Care Act (ACA), a federal district court judge in Minnesota recently denied motions to dismiss a lawsuit filed against two Minneapolis area health care organizations.  The lawsuit accused the defendants of sex discrimination by rendering substandard health care to the plaintiff based on his status as a transgender man.  Judge Susan Nelson noted that this was a case of first impression under the relevant antidiscrimination provisions of the ACA, also known as Obama Care.  The ruling allows the case to proceed with further discovery on the ACA claims as well as related claims brought under the Minnesota Human Rights Act.

With all the attention given to participation and coverage issues under the sweeping new provisions of the ACA, its civil rights provisions have gone largely unnoticed by the public.  The ACA prohibits health programs and activities receiving federal financial assistance from taking the following actions on the basis of race, color, national origin, sex, age, or disability: (1) exclusion from participation in such programs or activities; (2) denial of benefits; or (3) discrimination.  This first known case brought under these provisions of Obama Care will be closely watched, since it may prove to be just the start of an explosion in the number of lawsuits alleging discrimination in the provision of healthcare in America.  

Questions about discrimination, the ACA or any related matters? Please contact James B. Sherman at (952) 746-1700 or jasherman@wesselssherman.com.

For a copy of this landmark decision, email Christine Beggan at chbeggan@wesselssherman.com or call (952) 746-1700.

SEIU Brings $15.00/hour Wage Fight to Home Care Agencies; Rumored Plans Multi-City Walkout in March

March 2015

By: James B. Sherman, Esq.

Over the past year, the Service Employees International Union (SEIU) has made headlines for its attempts at organizing fast food workers.  The union’s rallying cry has been to advocate for a $15.00 per hour wage rate.  A typical tactic used by the SEIU and other unions, most notably in the retail, services and fast food industries, is to stage walkouts where employees leave their posts and assemble outside of the employer’s business to protest wages and other terms of their employment. Recently, however, the SEIU has turned its attention to the home healthcare industry.  Rumors of a planned walkout event in the coming weeks in a number of cities around the country, including Chicago and Milwaukee, could have serious consequences for the clients who depend on home health agencies for their care.

Employers who may be impacted by these tactics are well advised to have a plan in place before being hit by a walkout or picketing, etc.  However, these situations are governed by complex labor laws that must be taken into account.  For example, where employees protest together, “in concert,” their activities may be protected by the National Labor Relations Act.  This protection is not dependent on union involvement, so even non-unionized employees may be protected from being discharged or disciplined for walking out on their jobs or going “on strike.”  At the same time employees engaging in these sorts of activities may go beyond the protections of the law, for example by engaging in acts of violence or in some rare cases that arguably may be applicable to the home healthcare industry, endangering clients by walking off the job.  While in most instances employers may not discharge or terminate striking union or non-union employees, employers do retain the right to stay open for business, hiring temporary replacement workers or even in some cases, “permanent replacements,” but the striking workers retain the right to come back to work if and when any appropriate jobs become available.  Because the options available to employers are varied and highly regulated by federal law, it is highly recommended that employers consult with experienced labor lawyers for advice on best practices in these scenarios.  

Minnesota Supreme Court Creates New Defense to Noncompete Agreements Based on Relying on Advice from Legal Counsel

March 2015

By: James B. Sherman, Esq.

In Minnesota and elsewhere, employers who hire an applicant whom they know has a noncompete agreement with a former employer often find themselves defending a lawsuit alleging “tortious interference” with that agreement. A claim of tortious interference essentially alleges that the hiring employer caused a former employee to breach his or her noncompete agreement by offering a job in conflict with its restrictions. Because it is an intentional tort this type of claim rests on the fact that the hiring employer knew about the applicant’s agreement with the former employer, but nevertheless chose to hire the applicant in violation of the noncompete. A typical defense to a claim of tortious interference is for the hiring employer to prove that the noncompetition agreement is either not being breached, or is unenforceable for any number of reasons. A recent decision of the Minnesota Supreme Court, issued on March 4, 2015 in the case of Sysdyne Corp. v. Rousslang, et al., has added another potential defense to claims of tortious interference.  An oversimplification of this new defense might be articulated as: “My lawyer said it was okay to hire this applicant.”

Okay, so the defense articulated by the court in Sysdyne was considerably more complex and laden with legalese than the above, but it did hinge on the hiring employer’s reliance on the advice, albeit erroneous legal advice, of its lawyer who had advised that the applicant’s noncompete agreement with his former employer was poorly drafted and thus unenforceable.

The defense articulated by the court in Sysdyne was not without limitations. At the outset, any reliance on the advice of counsel must be “reasonable” under the circumstances.  In discussing what may be reasonable the court referred to its previous decision in the case of Kallok v. Medtronic, Inc. There, the hiring employer was found liable for tortious interference – and liable for Medtronic’s legal fees in addition to its own – because it did not “candidly provide its attorneys with all relevant information.” In that case the defendant never told its lawyers details about the applicant’s position and responsibilities as an employee at Medtronic, nor of his access to confidential information. Quoting Kallok, the court in Sysdyne Corp. stated that hiring employers “may not rely upon an infirm consultation with counsel” to justify hiring an applicant in violation of a noncompete agreement.

So what can Minnesota employers take from the new Supreme Court decision in Sysdyne?

1.      Don’t hire applicants who have noncompete or other restrictive employment agreements (non-solicitation, confidentiality, etc.) with former employers without a good faith assessment of the agreement to determine whether doing so might expose your company to a claim of tortious interference.

2.      Don’t listen to off-the-cuff opinions (even from lawyers) that noncompete agreements are not enforceable; oftentimes they are enforced in court.

3.     Do consult with an experienced employment attorney who is well versed in the law of noncompete and other restrictive agreements.  However, a legal opinion will be useless unless it is grounded in a reasonable investigation of all relevant facts. At a minimum this includes information about the applicant’s former position and duties with his or her former employer, measured against those of the new position with the hiring employer.

Getting a legal opinion before hiring someone with a noncompete or other restrictive employment agreement is highly recommended and can avoid costly litigation.  Now, thanks to the Minnesota Supreme Court’s recent decision in Sysdyne, a legal opinion (even one that may turn out to be wrong) can also potentially provide a viable defense to claims of tortious interference if you do hire the applicant.

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The author, James Sherman, is licensed to practice and has drafted and enforced noncompete and similar agreements in Minnesota, Wisconsin and Illinois for over 20 years. He also reviews these agreements and counsels employers who are considering an applicant with these sorts of restrictions with a former employer. Contact Mr. Sherman with questions at (952) 746-1700 or email jasherman@wesselssherman.com. 

New Chicago Law Bans the Box for Small Employers Under Fifteen Employees

March, 2015

By Anthony J. Caruso, Jr., Esq.

An Illinois state law, effective January 1, 2015, the Job Opportunities for Qualified Applicants Act, prohibits Illinois employers with fifteen or more employees, from pre-screening applicants for employment based on criminal history.

Also, a City of Chicago ordinance, effective January 1, 2015, has similar provisions for the small Chicago employer with less than fifteen employees.

Who is covered under the Chicago law?

Any small employer with a facility in Chicago or subject to the city’s Title 4 license requirements.

What employment positions are excluded?

The same positions as under the Illinois state law: federal and state law exclusions based on specific crimes; standard fidelity bond exclusions; and positions under Emergency Medical Service Systems Act.

Any special provisions under the Chicago law?

Yes! If criminal history (secured after interview or offer of employment) is used to disqualify (in whole or in part), employers must give written notice to the applicant as to the reason for the rejection.

What are the penalties?

The Chicago Commission on Human Relations can assess penalties to include fines of $100 to $1,000 along with suspension or revocation of city licenses.

If you have questions or concerns about employment policies or any other questions related to workers’ compensation or employment law, please call attorney Anthony J. Caruso, Jr. of Wessels Sherman’s St. Charles, Illinois office at 630-377-1554 or e-mail ancaruso@wesselssherman.com

Ambush Election Countdown – April 14, 2015

March 2015
By Richard H. Wessels, Esq.

The Ambush election countdown is on. The new pro-union NLRB quickie election rules are slated to go into effect April 14, 2014. We remain hopeful that the on-going challenge in the US Congress and/or legal challenges in Federal Courts in Texas and in Washington, DC will stall this big advantage which will be given to labor unions. But, one never knows. Here are the key elements of the new rules:

•  Fast track elections (10-21 days)
• Tough procedural changes limiting employer rights
• Detailed requirements on employee information the employer must provide to the union  early in the process – name, home address, personal phone number, email address

What should an employer do? Our best answer is assume the worst and be prepared. At a minimum, this should include:

•  Basic skills training for front-line supervisors. Front-line supervisors are your best defense. We can accomplish this in a supervisor training session of about an hour and a half.
• Review our updated ABCs of Staying Union Free. My legal assistant Lisa Narug has just completed the update and you can receive a complimentary copy by contacting her at linarug@wesselssherman.com
• Be ready to react immediately. It’s comparable to a 911 situation! If you are hit with a petition, contact a skilled labor lawyer immediately. This is not something for someone who has not had vast experience in union election campaigns. We stand ready to react on a moment’s notice. My email address is riwessels@wesselsherman.com. My office phone is 630-377-1554 and my cellphone is 312-401-7444.

Stand by for updates on this dangerous situation. As I said in one of my recent updates, our guess is that one of these challenges will be successful and the ambush rules will be stalled. However, you need to be prepared in the event that they are implemented on April 14^th.

Questions? Call Attorney Dick Wessels of Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email him at riwessels@wesselssherman.com.