Suits In The WorkPlace

Invasion of the Pod People

     PC World contained an interesting article recently entitled "Can an iPod Bring Down Your Company?"  It seems the answer is an unequivocal "yes", because notwithstanding their sleek appearance and unparalleled functionality for listening to music, video, etc., iPods and MP3 players are very good storage devices that can remove all kinds of information from a computer system just like a thumb or a flash drive. 

     The problem, of course, is that iPods are seen as relatively innocuous -- they're for entertainment, right?  Employers who might be nervous watching people tote 80 gigabytes of flash drives into their offices apparently have little to no concern about a similarly capable iPod.  The nature of the iPod storage system, according to the article, means that people can remove huge amounts of data (40 gigs, or even 80 gigs in some of the video models) and frequently go undetected.  The article notes that such theft of corporate data using an iPod is known as "slurping." 

     Yikes!!  That'll be bad news for 7-11 and the Slurpee business for sure.  At least, I wouldn't be talking about my icy, refreshing beverage around the office in the presence of the IT department.

      The article doesn't provide much guidance on how to prevent corporate theft using these devices other than banning them from the workplace entirely.  That may not be an option in most companies.  But it might not be a bad idea to tell employees they can't place iTunes or comparable software on their own computers for downloading purposes, especially since there is now a report of an iPod virus that migrates from iTunes to an individual unit, and back out again.

     Just another little thing to worry about on Friday the 13th.

All Leaves Are Not Created Equal

    The Uniformed Services Employment and Reemployment Rights Act ("USERRA") is a statute with which I am all too familiar, given my lengthy Reserve career in the armed forces.  The statute is unique among employment discrimination statutes because, in some cases, it requires an employer to treat a protected employee better than her similarly situated peers.

    But not always.  The statute requires that an employer provide the same benefits to employees out on military service as those generally provided by the employer to employees who are on a nonmilitary related "furlough or leave of absence."  38 U.S.C. § 4316(b)(1).  The Department of Labor generally interprets this to mean that the best deal offered to an employee on furlough or leave of absence is the same deal that must be offered to a military service member who is out on military leave. 

    But not all leaves are created equal.  In a case at the Federal Circuit, a Department of Justice employee sued for 27 days of paid holiday time for which he was not compensated because he was on a 2 1/2 year active duty tour with the military.  The employee's claim was based on the employer's policy of paying holiday pay for other employees to attend jury or court proceedings.

    The Federal Circuit rejected this, noting that jury leaves are typically a short-term affair, especially when compared to the typical 12-month-to-3-year active-duty rotation for which the employee was seeking the paid holidays.  In other words, an employer is entitled to compare the nature of the leave of absence against the military service in determining whether the same benefit applies.

    A common-sense approach that is now mirrored in the USERRA regulations (20 C.F.R. § 1002.150).

Private Postings Prove Problematic for Politicos

     As the story concerning the Administration's firing of eight U.S. attorneys continues to unravel (and you thought it was only private sector employers that could bungle routine decisions this badly), an interesting side-story is developing -- the use of email accounts outside of the employer's control for the conduct of employer related business.  The Washington Post, among other major papers, is now detailing claims that White House staff used email accounts set up outside of the White House servers to conduct official business and avoid federal legal requirements to maintain accurate email records. 

     This isn't just a problem for government officials seeking to avoid public scrutiny.  Private sector employers must be aware of when and if their employees are using unapproved email accounts.  Especially with the new Federal Rules of Civil Procedure regarding electronic disclosure, an employer simply must have complete overview and control of its employees' electronic communications and records.  This is especially true in employment litigation, where there are frequently selective supervisor files, not part of the official personnel file, that are maintained on employees or created in response to particular situations.  I am aware of at least two cases in the last year in which supervisors were using Yahoo accounts that were completely unknown to their employer to store emails and other documents relating to situations at work.

     There might be several solutions to this kind of an issue, but perhaps the most obvious is a quick audit through human resources and front-line supervisors to determine if anyone is in fact using these types of accounts for storage or the conduct of company business.  Some employers require an annual certification by selected managers that they are not, and will not, store company information in anything other than company servers or on company computer systems.  In any event, it's key that legal staffs and human resources become aware if there is a practice of using non-company systems or sites to warehouse company information.

Class Action Trend -- Demotion / Promotion / Hirings / Internal Practices

    The recent settlement of Federal Express's 9th Circuit race discrimination case, for more than $53 million, points to an increasing trend in the class action arena -- suits based on claims that discriminatory internal practices permeate the entire employment decision making structure of a company and are reflected in disparate hiring, promotion, demotion or discipline actions. 

     This particular case, filed in 2003 in Northern California (what a surprise), alleged a pattern of race discrimination against blacks and Hispanics through a disproportionate assignment of minorities to part-time or so-called "casual" positions, versus full-time jobs.  The suit also alleged that minorities were provided with fewer promotions than non-minority employees, disciplined more frequently for petty offenses, and paid less over all.

     Although the settlement is gigantic, it is probably miniscule compared to the cost of defending a certified class of tens of thousands of employees in different jobs, across different stores and management teams.  In fact, once a court certifies such a class, it becomes almost cost prohibitive for an employer to backtrack through the myriad of employment decisions related to just the class representatives to try to prepare a defense.

     So the lesson to all of us now is to beware of employment practices that might impose some kind of a statistical glass ceiling on certain groups.   Some federal, and many state, judges seem more than willing to certify classes comprised of wildly disparate individual cases, as long as an over-all trend is alleged and can be supported with relatively limited evidence.  These kinds of suits also effectively discourage the kind of decentralized decision-making used by many companies given current improvements in communication.   The existence of a corporate human resources department with arguable responsibility for company policies and their implementation can be used as evidence to defeat a claim that individual store managers were responsible for the employment decisions at issue.  The message is clear -- monitor your activities companywide or face a substantial risk of multi-plaintiff or class action litigation.