Prepared by Ted Gentry 
June 2013

The EEOC Sues BMW for Improper Use of Background Checks in Employment Decisions

The Equal Employment Opportunity Commission is testing the applicability and legality of its new guidelines on how employers should best and legally use background checks in making employment decisions here in South Carolina. The EEOC filed a suit against BMW in Spartanburg, alleging that BMW established a policy of not hiring anyone with certain criminal convictions without first making an individualized assessment of the crimes or the position being offered. This, the EEOC claims, had a disproportionate impact on African-American applicants.

This suit should come as no surprise to our readers. As we outlined earlier this year, the EEOC emphasized this “clarification” of its policy and has targeted employers misusing background checks as part of its broader enforcement plan.

The guidelines suggest that employers using background checks to make employment decisions should:

  • Avoid asking applicants about arrests or convictions during initial interviews;
  • Avoid bright line rules disqualifying applicants based on arrests or convictions;
  • Develop a policy which relates characteristics of certain crimes to non-qualification for certain jobs; and
  • Implement that policy uniformly to applicants belonging to any protected class.

Stay tuned to Wyche at Work for updates on the BMW case. In the mean time, please let us know if we can help establish or review your background check policy.

Supreme Court Update

Many of you have probably noticed that the United States Supreme Court handed down a flurry of opinions this week before its summer recess. Although other cases received more publicity and buzz, the Supreme Court issued two rulings on June 24 that could make it more difficult for employees to advance certain retaliation and discriminatory lawsuits against employers. In Vance v. Ball State University, which we addressed last November, the Supreme Court addressed the question of who was a “supervisor” under Title VII of the 1964 Civil Rights Act. Under Title VII, employers can be automatically liable for discrimination by a supervisor. The Supreme Court held (in a 5-4 opinion) that a supervisor must be “empowered by the employer to take a tangible employment action against the victim.” While the plaintiff argued that this means the authority to “control daily activities” or “evaluate performance”, the Court ruled that for liability to attach to the employer, the individual must have the authority to “hire, fire, demote, promote, transfer or discipline” the employee in question. Because the class of potential “supervisors” is narrower than that advanced by the plaintiff in Vance, plaintiff-employees may have a more challenging time asserting that employers are vicariously liable for the actions of certain supervisors or managers.

In University of Texas Southwestern Medical Center v. Nassar, the Supreme Court also addressed (in another 5-4 opinion) the “anti-retaliation” prong of Title VII. Employers are prohibited under Title VII from retaliating against an employee who complains about employment discrimination. The plaintiff in Nassar tried to convince the Court that the standard of proof in his case was showing that retaliation against him was a “motivating factor” in the decision not to offer him a contract. The Court held that to sustain a retaliation claim (as opposed to a discrimination claim), an employee must directly link (“but for causation”) the retaliation and the adverse job action. Because it is more difficult to prove “but for” causation in certain circumstances, employees may have a more difficult time surviving summary judgment on some retaliation claims.

Both of these cases will be welcomed by employers and their counsel, but they limit liability only on the fringes of Title VII jurisprudence. All employers are encouraged to publish and implement anti-discrimination and equal opportunity policies (which include anti-retaliation protections), investigate claims of discrimination or harassment, and take corrective action when appropriate.

Appellate Court Rules for Employer on Employee’s Hostile Work Environment Claim

The Fourth Circuit Court of Appeals, which governs cases filed in South Carolina, recently decided a hostile work environment claim in an employer’s favor. In Crockett v. Mission Hospital, Inc, CTA  the plaintiff-employee claimed that her supervisor’s conduct, which she alleged rose to the level of sexual harassment, should be attributed to the defendant-employer. In a unanimous decision, the Court held that the employer was entitled to suspend and terminate the plaintiff.

As we noted above, an employer may be vicariously liable for a supervisor’s sexual harassment which results in a tangible employment action like hiring, firing, failing to promote or demoting the employee. In this case, the Court upheld summary judgment in favor of the employer because the Company had good reason for suspending her and terminating her was independent of her allegations of harassment. Furthermore, the employer prevailed because:

(a) The employee failed to carry her burden that she suffered a tangible employment action under the circumstances of this case (she was suspended and terminated for reasons independent of her allegations of harassment);
(b) the employer established a sexual harassment policy, provided a copy of the policy to the employee, and enforced the policy by conducting a month long investigation into the supervisor’s sexual harassment; and
(c) the employee unreasonably refused to cooperation in the company’s investigation.

This case makes clear that employers can reduce the likelihood of liability for a supervisor’s alleged nefarious conduct by establishing and following policies prohibiting employee misconduct, including sexual harassment, and establishing and following procedures for responding to employee misconduct. Do not hesitate to contact Wyche for assistance establishing or reviewing such policies.

NLRB Update and the Courts

We reported the attempts last year by the National Labor Relations Board to mandate posting requirements for employers – union and non-union – informing employees of their rights under the National Labor Relations Act. Recent appellate courts that have taken up this issue, including the case originally litigated in South Carolina, have upheld the position that the NLRB did not have the authority to require the poster. The United States Supreme Court has also agreed to hear whether a whole slew of recent decisions and regulations promulgated by the NLRB should be invalidated because certain NLRB appointments were not appropriate “recess appointments.” We will continue to monitor these and other developments as the NLRB continues to attempts to assert its influence in non-unionized settings.

South Carolina Legislative Update

The South Carolina General Assembly has been active as well during the first part of the 120th Session. Here is a brief summary of the General Assembly’s actions related to employment issues:

Legislation:

  • S 438 prohibits state government entities from requiring a bidder or contractor to enter into a project labor or other agreement with a labor organization that employees on a specific project will be union-represented as a condition of performing work on public construction projects. The act became effective June 7, 2013.
  • S 465 amends the Small Employer Health Insurance Availability Act to redefine “eligible employee” as “one who works on a full-time basis and has a normal workweek of thirty or more hours”, as well as certain real estate persons who, among other things, sell, lease or rent real estate for a licensed real estate broker on a straight commission basis. The amendment became effective June 7, 2013.
  • S 530 amends the South Carolina Patients’ Insurance and Benefits Protection Act relating to closed panel health plans to remove the requirement that certain employers who offer only closed panel health plans to employees also offer a point-of-service option. The point-of-service option may not discriminate against certain health care providers by excluding them from network participation on the basis of their profession. The amendment also increases the allowable differences between coinsurance percentages for in-network and out-of-network covered services and supplies under the point-of-service option. The amendment becomes effective July 22, 2013.
  • H 3632 amends the Workers’ Compensation statute relating to the maintenance tax imposed by the Workers’ Compensation Commission on self insurers and how payments of assessments and penalties are disbursed between the Commission and State Treasurer. The employers’ maintenance tax rate and penalties remain unchanged. The amendment becomes effective July 1, 2013.
  • H 3960 amends the Multiple Employer Self-Insured Health Plan to require an employer who participates in such a plan to execute hold-harmless agreements, on forms provided by the Department of Insurance, in which the employer agrees to pay all unpaid portions of insured claims. The amendment became effective June 13, 2013.

Regulations:

  • New mediation regulations will be in effect for Workers’ Compensation cases with the approval of R 4286. According to a Workers’ Compensation Commission announcement on the new regulations, The Commission will begin notifying parties of hearing requests for the July/August term for claims subject to the new regulations, the Commission plans to conduct seminars in Columbia, Greenville, and Charleston in September to review the regulations and procedures. The regulations are effective upon publication in the State Register, which is expected to be June 28, 2013.

Wyche at Work in the News

Mark Bakker was asked to analyze and comment on the Working Families Flexibility Act of 2013 in an article published earlier this month in GSA Business. Passed by the United States House of Representatives in May, the Act would modify the Fair Labor Standards Act by providing private-sector employees the choice of paid time off in lieu of cash wages for overtime hours worked. Importantly, the United States Senate is unlikely to pass this measure, and it has only a remote chance of becoming a law. Therefore, this initiative provides a good reminder to private sector employers: non-exempt employees must be paid overtime when they work more than 40 hours in a given workweek. There is no current flexibility – even when your employees desire or prefer it — to provide “comp time” to employees in lieu of overtime wages. If we have prognosticated incorrectly and this bill does become law, we will be sure to update you immediately of this development.

If you have any questions about these or other workplace law topics, please contact Ted Gentry.

This update is provided by Wyche for educational and informational purposes only and is not intended and should not be construed as legal advice.