Minnesota Employment Law Report - Observations on labor and employment law from FLFV

In Barker v. County of Lyon, --- N.W.2d ----, 2012 WL 1570133 (Minn. Ct. App. May 7, 2012), the Minnesota Court of Appeals recently held that it is unreasonable as a matter of law for an employee to rely on provisions of a personnel handbook if the handbook also contains a disclaimer warning that the employer can modify or eliminate any of the policies at any time.

The case involved the Lyon County personnel manual, which had been altered numerous times over the years.  In 1985, the manual guaranteed retiring employees certain benefits.  In 1991, the manual was amended to include a provision stating that the county reserved the right “to change any of these policies, after notice to and input from employees.” In 1995, the county added a clause on the front of the manual in large, bold-face capital letters stating, “THIS POLICY MANUAL IS NOT AN EMPLOYMENT CONTRACT.” 

In 1999, the manual was amended yet again to cut off the retirement benefit for employees hired after May 1, 1997.  Finally, in 2009, another change to the manual capped the retirement benefit for all employees, including those hired before May 1, 1997. 

Several current and former employees who lost benefits as a result of the amendments brought suit based on the theory of promissory estoppel, which is a legal term meaning “detrimental reliance.”  To succeed with such a claim, the employees needed to show that (1) the county made a “clear and definite promise”; (2) the county intended to induce the employees to rely on the promise; (3) the employees reasonably relied on the promise to their detriment; and (4) the promise must be enforced to prevent injustice.

Like the district court, the appellate court ruled against the employees, finding that their reliance on the pre-2009 versions of the manual was unreasonable because of the disclaimer.  The court further rejected the employees’ argument that they could rely on oral promises made by county representatives.  The court reasoned that “any reliance on oral promises that contradicted provisions in the policy manual was, as a matter of law, unreasonable” because such representations explicitly contradicted the manual’s disclaimer.

Bottom Line

The Barker decision appears to be the first published decision arising from Minnesota's state courts declaring that it is unreasonable as a matter of law for an employee to rely on a provision contained in an employee handbook where the handbook contains a disclaimer warning it can be changed at any time.  If you haven’t already, employers should consider adding a similar disclaimer to their handbooks and manuals.

On April 25, 2012, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued new Enforcement Guidance on using arrest and conviction records when making employment decisions. The EEOC is aggressively pursuing this issue, as reflected by EEOC Commissioner Ishimaru’s remark at a recent public meeting that the EEOC is currently investigating hundreds of cases where employers unlawfully used criminal history in employment decisions.

What an Employer Can Ask?

The Guidance recommends that employers not ask about convictions on applications. When such questions are asked during other parts of the pre-employment process, they should be job-related.

The Guidance states in no uncertain terms that use of arrest records is not job related.  However, when an applicant or current employee is arrested, the underlying conduct that led to the arrest can be considered if it renders the individual unfit for a position and only if the conduct is verifiable and not based solely on the fact of an arrest.

What Factors Should Employers Consider?

The EEOC has long declared that decisions based on a criminal conviction must consider these factors: (1) the nature and gravity of the offense(s), (2) the time that has passed since the conviction and/or completion of the sentence, and (3) the nature of the job held or sought. The new Enforcement Guidance, adds substance to these declarations.

Considering the nature and gravity of the offense(s) requires evaluating the harm caused, the legal elements of the crime, and the classification (i.e, misdemeanor or felony). As to the amount of time that has passed, employers should evaluate each case individually and consider studies of the risk of recidivism. As to the nature of the job, the EEOC says to look beyond the mere job title to analyze the duties, essential functions, and work environment.

Is an Individual Assessment Required?

While stopping short of saying that an individualized assessment is needed, the EEOC makes clear that “the use of a screen that does not include individualized assessment is more likely to violate Title VII.” An individualized assessment generally means that an employer (a) informs the individual that he may be excluded because of past criminal conduct, (b) provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him, and (c) considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.

Employer Best Practices

The Guidance suggests several “Best Practices” for employers who are considering criminal record information when making employment decisions.

• Eliminate policies or practices that exclude people from employment based on any criminal record;


• Train managers, hiring officials, and decision-makers about Title VII and its prohibition on employment discrimination;


• Develop a narrowly tailored written policy and procedures for screening for criminal records;


• Identify essential job requirements and the actual circumstances under which the jobs are performed;


• Determine the specific offenses that may demonstrate unfitness for performing such jobs;


• Identify the criminal offenses based on all available evidence;


• Determine the duration of exclusions for criminal conduct based on all available evidence;


• Record the justification for the policy and procedures;


• Note and keep a record of consultations and research considered in crafting the policy and procedures;


• Train managers, hiring officials, and decision-makers on how to implement the policy and procedures consistent with Title VII;


• When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity; and


• Keep information about the criminal records of applicants and employees confidential.

Bottom Line

The use of criminal records in hiring or employment decision making is not illegal, but the EEOC has made it very clear that employers using them must demonstrate that such use is “job related and consistent with business necessity.” The practices outlined above would be a good start in meeting that standard.

As we reported earlier, on April 13, 2012, a federal judge in South Carolina ruled that the National Labor Relations Board (“the Board”) had no authority to require private-sector employers to post an Employee Rights Notice, disagreeing with another federal judge in the District of Columbia, who held on March 2 that the Board could require the posting.

Earlier today, the D.C. Circuit granted the National Association of Manufacturer’s emergency motion for an injunction pending appeal because of the split of opinion between the district courts. Nat’l Assoc. of Mfrs. v. NLRB, No. 12-5068 (D.C. Cir. April 17, 2012).  The Circuit reasoned: “The uncertainty about enforcement counsels further in favor of temporarily preserving the status quo while this court resolves all of the issues on the merits.” The Circuit will handle this appeal in an “expedited” manner, and the court will hear oral arguments in September.

This afternoon the Board issued a press release, which stated: “In view of the D.C. Circuit's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court.”

Bottom Line

While the injunction remains in force, employers do not need to post this notice.  We will be closely following this issue and stay tuned for further developments.

All of a sudden, the prospect of employers demanding Facebook passwords as part of the hiring process has burst onto the scene.  Cries of outrage have ensued - Facebook hinted at legal action, the ACLU is talking privacy-related lawsuits, state legislators (including one in Minnesota) are drafting bills in prohibiting the practice, and two U.S. Senators are calling for investigations by the Department of Justice and the Equal Employment Opportunity Commission.

Employers’ use of social networking sites (“SNS”) like Facebook or LinkedIn to screen applicants is nothing new.  One 2011 Reppler study even found that 91% of employers were doing it and that 69% of those eliminated at least one candidate based on information uncovered.

Just what are the risks of using SNS’s in the pre-employment arena?

Risks of Reviewing SNS Information

In general, anti-discrimination laws prevent employers from asking applicants about their marital status, pregnancy, future child bearing plans, religion, disability and other questions related to characteristics or traits protected by these laws.  Perusing an applicant’s Facebook page or Twitter site may allow the employer to obtain this prohibited information, and may give the rejected applicant reason to believe that it was this information that caused them to lose the job, not their lack of qualifications or poor interviewing skills.

Risks of Asking for Applicants’ Passwords

In particular, requesting an applicant’s SNS password may also violate the federal Stored Communication Act (“SCA”) or the Computer Fraud and Abuse Act (“CFAA”). The SCA prohibits intentional access to electronic information without authorization or intentionally exceeding that authorization, and the CFAA prohibits intentional access to a computer without authorization to obtain information.

Of course, neither of these statutes applies where the individual has consented to the access. Thus, the question becomes whether any such consent is truly voluntary or whether it was coerced by the threat of not getting the job if the consent is withheld.

In the case of Pietrylo v. Hillstone Restaurant Group, 2009 WL 3128420 (D.N.J. Sept. 25, 2009), for example, employees created an online chat group for venting frustrations about the employer and their managers. When the company learned of the site, one participating employee provided her log-in information under the belief that she was would have been penalized if she did not do so. This was enough for the jury to find that the access was not authorized and that it violated the SCA.

Bottom Line

While Pietrylo involved a current employee, the analysis seems just as compelling in the pre-hire context.  For this reason, until we have more certainty about the legalities of this practice, employers should be wary of requiring applicants to provide login credentials to secure social media websites and then using those credentials to access private information stored on those sites.

This does not mean that SNS’s are not valuable tools in an overall pre-employment procedure.  It just means that employers should be cautious about whether they wish to enter this legal gray area by requiring access to what is otherwise considered a private domain.

On Friday, March 2, 2012, a federal judge in Washington, D.C. upheld the National Labor Relations Board requirement that nearly all employers must post a notice of employee rights under the National Labor Relations Act.   After two self-imposed delays, the judge’s decision paves the way for the requirement to go into effect on April 30, 2012.

The judge did strike down two pieces of the NLRB’s enforcement scheme, but the judge took care to limit the practical effect of that determination.

Posting Requirement

The court first upheld the NLRB's posting requirement.  The court found the Board had not overstepped its congressional authority by mandating the notice and that the notice-posting requirement did not violate employers’ First Amendment rights.

Enforcement of the Posting Requirement

The NLRB’s new rule set forth three consequences for an employer’s failure to post the mandated notice: (1) it may constitute an independent unfair labor practice; (2) it may be grounds for tolling the 6-month statute of limitations; and (3) the Board may consider it to be evidence of unlawful motive in a case in which motive is an issue.

The court struck down two of the three enforcement mechanisms, noting that the Board exceeded its authority from Congress when it labeled the failure to post an unfair labor practice and that such failure could toll the 6-month statute of limitations.  The court did not strike down the union animus provision of the rule. According to the court, “unlike the unfair labor practice and tolling provisions, the animus provision neither creates an unfair presumption nor relieves the Board of making a case by case determination.”

Limited Help to Employers

Despite specifically striking down the tolling provision and the unfair labor practice provision, the court was careful to limit the practical effect of its ruling. Specifically, the court held only that the Board cannot make “a blanket advance determination” that the failure to post will always constitute an unfair labor practice or toll the statute of limitations. Thus, according to the court, “the Board could still find failure to post to be evidence of an unfair labor or justification for equitable tolling in individual cases.”

Bottom Line

Because the court upheld the posting requirement, employers should assume they will be required to comply with the posting rule and should post the notice on or before April 30, 2012. The NLRB has published its Employee Rights Poster on its website (a printer-friendly version is available here).

Given the limited practical effect of the court’s ruling as to the NLRB’s enforcement of the rule, employers should carefully consider the risks that could come from failing to post the notice.

Stay tuned for further developments.