Workers Can Sue Employer for Failing to Protect Personal Data

In a ruling that should make employers everywhere sit up and take notice, the Pennsylvania Supreme Court recently decided that workers could bring a negligence claim (in other words, a lawsuit alleging that they were hurt by their employer’s unreasonable carelessness) against their employer over a data breach that compromised their personal information.

The case involved more than 60,000 current and former employees of the University of Pittsburgh Medical Center (UPMC). Hackers broke into the UPMC’s computer systems and stole employees’ names, birthdates, Social Security numbers, salary records, bank information and tax information. The hackers then used this information to file false tax returns in employees’ names in order to receive tax refunds.

The employees brought a lawsuit against UPMC in state court seeking to be compensated for damages stemming from the fraudulent returns and the increased exposure to identity theft that the breach caused them. According to the employees, proper firewalls, data encryption and stronger authentication protocols could have prevented the harm. They also argued that they were required to provide information to the employer as a condition of employment, giving the employer a duty to safeguard the information.

UPMC moved to have the case thrown out, arguing that state law doesn’t recognize negligence claims by employees in situations that don’t involve any physical injury or property damage. Because this case only involved economic losses, it had to be dismissed, UPMC argued.

The trial judge agreed and dismissed the lawsuit, and a midlevel appeals court affirmed the decision.

But the Pennsylvania Supreme Court reversed the ruling and ordered that the suit be reinstated. According to the high court, the duty to act with reasonable care toward those who could foreseeably be hurt by your failure to do so applied to
this situation.

This is one decision by a court in one state. However, this reasoning could potentially apply elsewhere, too. Call an employment lawyer to discuss your own data-security issues and what kinds of legal exposure they could potentially create for you.

Workplace Conflict: Trick or Treat?

Conflict is ubiquitous – it permeates all aspects of our lives. We all have needs, desires, and aspirations that are not always consistent with those of our colleagues, yet we live in a finite world with finite resources. Moreover, we are each unique, and have perceptions of the world that are filtered through our personal life experiences, including our family history, education, and belief systems. It is thus not surprising that conflicts occur on a daily basis at work – at and between all levels and areas of an organization, both internally and externally.

Despite its pervasive nature, however, conflict itself is neither “good” nor “bad” – it depends on how it is managed. If managed well, it can be a creative force for organizational change and growth. If managed poorly, it can be very harmful and costly. Most organizational leaders know that improperly managed conflict can potentially explode into catastrophic legal disputes that consume organizational resources and strain public relations.

Nonetheless, the ongoing cost of poorly managed internal organizational conflict is often not readily apparent: It can manifest in many ways, including a hostile work environment, the lack of employee buy-in to organizational goals, lost productivity, employee absenteeism and turnover, increased workers’ compensation claims, and increased theft and vandalism. Organizational leaders are often surprised by studies showing that the average employee spends over two hours per week, and 10% of employees spend six hours per week, dealing with unproductive work-related conflict. It is a decisive factor in 50% of employee turnover, and it costs 70%- 150% of annual salary to replace a departing employee, and even more for highly trained staff. These “hidden” conflict costs can be staggering.

The key to managing conflict in your organization begins with an open acknowledgment by leadership that a problem exists, hopefully before there is a “fire” to put out. Proactive conflict management is ALWAYS more efficient than reacting after a full-blown dispute has arisen or an organization’s culture has become toxic.

The “gold standard” approach to the remediation of destructive organizational conflict parallels that found in medicine – diagnosis followed by prescription. A “conflict audit” should be performed by a specially trained conflict management systems designer working with organizational personnel to pinpoint the genesis of any ongoing problems. The conflict audit can include, among other methods, specially designed surveys, individual interviews, and facilitated group discussions.

Once problems are identified, and leadership buy-in is confirmed, the systems designer will help organizational personnel develop metrics to define and measure a success outcome. The systems designer will concurrently help the organization develop appropriate processes, or simply enhance, modify, or supplement existing processes, to heal or improve the organization’s culture, and restore stability and productivity in the workforce. Good systems designers work with organizational personnel, and serve as a bench-marking researcher, information resource, idea generator, project coordinator, cheerleader, and facilitative communicator: They help an organization design and implement a conflict management system by and for itself.

The hallmark of any good conflict management system design is the deployment of interventions at the earliest possible time, at the lowest possible levels, and for the least possible cost. It is critically important that personnel experiencing an issue have the freedom to choose among multiple system entry options without fear of reprisal. System entry points can include, for example, an effective open door policy, human resources designee, peer coordinator, and/or ombudsmen.

Successful conflict management systems focus on prevention. The cornerstones of prevention include a comprehensive on-boarding program that explains how the system works, together with conflict management and de-escalation training properly tailored and implemented for all levels of the organization. By improving or developing the ability of all members of an organization to listen, hear, process, and communicate effectively in a high conflict environment will improve a toxic organizational culture, as well as de-escalate conflict so that it can lead to transformative individual and organizational growth.

The question for most organizations isn’t whether they should examine the need for an integrated conflict management system, but whether they can afford not to do so.

About David M. Doto/Of Counsel
David M. Doto is the Alternative Dispute Resolution/Training Practice Group Leader at Hutchison & Steffen. Dave focuses on the areas of mediation, group facilitation, organizational conflict management training, and conflict management systems design. Further, he is an adjunct professor of law at Pepperdine University and UNLV, where he teaches mediation, negotiation, mediation advocacy, and conflict management systems design.

Creating Workplace Safety in an Active Shooter Era

Alex VeltoThis article originally appeared in Nevada Business Magazine's Legal Opinions Special Reports, October 1, 2019.

We live in an active shooter era. Society increasingly sees mass shootings as commonplace. The workplace is far from immune from this broader trend. Since 2006, there have been 11 workplace mass killings—defined as four or more people killed— resulting in the loss of 90 lives altogether. Active shooters in the workplace that do not result in mass killings are also on the rise.

The U.S. Bureau of Labor and Statistics found that workplace shootings increased more than 10 percent in recent years. And the trajectory only goes one way, with almost half of the “active shooter” incidents in the early 2000’s having occurred in the workplace, a far greater percentage than any other category.

The threat of workplace shootings is an unfortunate emerging issue employers face. It should not be overblown; workplace killings are rare compared to other forms of workplace violence. But the low likelihood that your company will fall victim to a rogue and disgruntled employee does not mean that your company should avoid pre-emptively dealing with the problem. Preparation and a plan are essential for the workplace to stay safe and for you, as the employer, to lower the risk that your company will become the next victim to an active shooter.

Be on the lookout for warning signs. There is a litany of indicators that a person may pose a risk to workplace violence. These include verbal statements of intent to harm co-workers, evidence that an employee intended to sabotage a fellow co-worker, an employee who shows an apparent obsession with a supervisor or coworker, and a number of other potential red flags to look for. Too often, an employer’s first reaction to a sign an employee may commit workplace violence is to justify the behavior within whatever workplace culture the employer has developed. In an active shooter era, the employer must do more. It is important to consider policies and procedures to address these concerns as soon as they arise. Employers should consider developing or updating their workplace violence prevention strategies, policies and practices.

The prevention strategy should seek to identify disgruntled employees and create a clear process for alerting management of any potential problems. The policies should help maintain a healthy culture of support to prevent employees from reaching a depth that could push towards violence, encourage help for employees at risk, and ensure employees know what to do if there is an active shooter on the premises. These practices should help ensure that these strategies and policies are abided by the employees and management of a company.

Employers need to be conscious of their duties to prepare for an active shooter. Under the Occupational Safety and Health Act (OSHA), employers have a general duty to protect employees from workplace hazards. This means that if there is a threat of workplace violence, or any indication of workplace shooting, an employer has a general duty to help minimize that risk. An employer’s failure to abide by this general duty could expose it to immense liability and threaten the entire future of the company.

Regardless of one’s view on the political solution, companies should have set in place a number of practical solutions in order to keep their workplace safe. Employers need to be vigilant and proactive. Company employees will appreciate the efforts. It may be the most important thing to maintaining a safe workplace. Proper planning and training can help a company stay safe in this active shooter era.

Will Your Non-competition Agreement Stand Up to a Challenge?

In the last two years, Nevada courts and the Nevada legislature have made significant decisions regarding non-competition agreements. It is well known that courts view non-competition agreements with a higher degree of scrutiny than other kinds of agreements because of the seriousness of restricting an individual’s ability to earn an income. Only restrictions that are reasonably necessary to protect the business and good will of the employer will be enforceable.

So, how do you know if your non-competition agreement will stand up to a challenge? Evaluate your non-competition agreement with the following questions in mind:

Is your agreement supported by valuable and appropriate consideration?

In other words, have you given the employee something valuable in exchange for the employee signing the agreement? Depending on the circumstances, this “something valuable” could be initial employment, continued employment, or a change in the terms or conditions of employment.

Does your agreement have a reasonable time limit?

Courts will evaluate the specific facts regarding your business to determine what is reasonable. In general, an agreement that restricts an employee’s ability to earn an income for 1-2 years is likely to be viewed more favorably than an agreement that imposes a 5-year restriction.

Does your agreement have a reasonable geographic scope?

The geographical scope of a restriction must be limited to only the areas where the employer can provide evidence of established business interests, i.e., areas where the employer has established customer contacts and good will. Courts will closely scrutinize evidence of those business interests and, generally, restrictions that are phrased in terms of miles will be more well-received than those phrased in terms of states. The Nevada Supreme Court has held that doing business in 33 states does not justify a nation-wide restriction, and has suggested that doing business in one city does not justify a state-wide restriction.

Does the restriction impose an undue hardship on the employee?

This is the flip-side of the above questions, viewing the matter from the employee’s perspective. Does the agreement prohibit the employee from working in his or her chosen profession? Require the employee to change professions? Require relocation? Arguably, any non-competition agreement is going to place a burden on the employee, and the focus should be whether therestraint is excessively burdensome.

Does your agreement prohibit a former employee from providing service to a client who chooses to follow the employee?

A new law that became effective in June of 2017 expressly states that if a client chooses to follow the employee, the employee does not solicit that client, and the employee is otherwise in compliance with the agreement, it is not a violation of the agreement to provide services for that client.

Does your agreement contain other provisions?

A comprehensive non-competition agreement may include other provisions such as non-solicitation of clients, non-solicitation of employees, and prohibitions on disclosure of trade secrets and confidential information.

Are there any other special circumstances you need to consider?

There are a host of other issues that come up related to drafting and enforcement of non-competition agreements. Take care to consider special circumstances your business may be facing, such as a reduction in force, reorganization, restructuring, asset sale, or other circumstance specific to your business.

Marijuana and Management

How your business can improve productivity, mitigate risk, and increase employee safety through drug screenings

A Growing Problem

For the past 40 years, the most significant threat to workplace safety and productivity has been substance abuse. Now, with the legalization of marijuana for recreational use in several states, including Nevada, employers can expect to struggle to recruit and retain a productive workforce and to maintain a safe work place. In this article, I will explain why employers must have policies to address workplace substance abuse. Recent trends and developments highlight the importance of having such policies in place, and case law provides guidance for employers seeking to navigate such issues. Thereafter, I will provide practical recommendations that employers and human resources departments can adopt to mitigate the risks and costs of workplace substance abuse.

Unfortunately, the prevalence of drug and alcohol abuse among employees is rising. More than 1 in 5 young adults (18-25) reported using an illegal drug in 2012 and 40.3% of those who reported using marijuana in the last 30 days also reported daily or nearly daily marijuana use. Of the 21.5 million current illicit drug users aged 18 or older in 2012, 14.6 million (67.9%) were employed either full- or part-time, roughly 1.5 million more than reported in the prior year.

Among employees, food service workers and construction workers are most likely to have used an illegal drug within the last month. In addition to the type of workplace, the nature of the workplace environment can also impact drug use. Drug users are more likely to work for companies that do not have drug-free workplace programs than those that do. A drug-free workplace can improve employee morale, decrease absenteeism, increase productivity, improve workplace safety, and positively impact costs.

Last year, Nevada legalized the use of recreational marijuana. People aged 21 years or older are permitted to buy, use, and cultivate limited amounts of marijuana; however, the ballot initiative permits employers to implement marijuana bans in the workplace.

Legalization of recreational marijuana will result in more work-related accidents and injuries. OSHA published an article1 validating this concern, stating: “Safety concerns are often a company’s primary reason for prohibiting marijuana in the workplace, and they are a valid basis for banning the drug. Marijuana use has been linked to an increase in job accidents and injuries, and the National Institute on Drug Abuse notes that the short-term effects of marijuana include impaired body movement, difficulty with thinking and problem-solving, memory problems, and an altered sense of time.”

Citing a May 2015 article in the Journal of Occupational and Environmental Medicine, OSHA explains: “There is a likely statistical association between illicit drug use, including marijuana, and workplace accidents. While some studies suggest that marijuana use may be reasonably safe in some controlled environments, its association with workplace accidents and injuries raises concern.”

Another report, released recently by major drug testing firm Quest Diagnostics, reveals a 47% spike in the rate of positive oral marijuana test results in U.S. workplaces from 2013 to 2015 — and more detailed data shows an incredible 178% rise in that rate from 2011 to 2015.2 The Quest study draws from over 900,000 oral workforce drug tests in 2015 alone. It also indicates that after years of declining drug use in the workplace, the percentage of employees in the combined U.S. workforce testing positive for drugs has steadily risen over the last three years to reach a 10-year high.

Among other clear and present dangers, OSHA is particularly alarmed about the impact marijuana use has on transportation safety. In this regard, marijuana impairs attentiveness, motor coordination, and reaction time and impacts the perception of time and speed. Studies from the National Institute on Drug Abuse have found that marijuana negatively impacts driving performance, and other researchers have found that acute use of the drug increases the risk of crashes and fatal collisions. In addition, the National Highway Traffic Safety Administration reports that, since medical marijuana was legalized in Colorado in 2009, the percentage of marijuana-positive drivers involved in fatal motor vehicle crashes there has increased significantly.

Employees using medical marijuana may claim that they are disabled, and thus entitled to protection from discrimination on the basis of their disability. Permitting them to use marijuana, they claim, is a reasonable accommodation of their condition as a matter of state law. Arizona, Connecticut, Delaware, Maine, and Rhode Island laws require employers to accommodate the use of medical marijuana by employees or applicants in certain circumstances.

Case Law

In Washburn v. Columbia Forest Products, Inc., the Oregon Supreme Court concluded that a construction worker terminated after testing positive for marijuana could not state a claim for disability discrimination under the state’s antidiscrimination laws. The claim was rejected because the employee failed to prove he was, in fact, disabled. The employer must consider each individual’s circumstances to determine whether a reasonable accommodation of the underlying disability is possible.

In Ross v. RagingWire Telecommunications, a job applicant challenged the decision of the employer to not hire him after he tested positive for marijuana. The court ruled that California employers have no duty to accommodate medical marijuana users. The act of “decriminalizing” the use of marijuana by residents with health conditions did not simultaneously modify the state’s employment laws. This case concluded that the California Supreme Court does not equate medical marijuana to prescription medicines.

Furthermore, in EEOC v. United States Steel Corp., the EEOC sought to prevent US Steel and its unions from implementing a policy that required suspicionless alcohol tests and sought to recover restitution for individual employees who were adversely affected by the policy. US Steel argued its work environment was hazardous enough that the law does not require it to wait until an employee appears to be impaired to test for the presence of alcohol. The court held, “There is no question that maintaining workplace safety is a legitimate and vital business necessity.”

Testing Methodology

There are several methods of drug and alcohol testing that employers should be aware of. First, urine testing is the most common, but it is particularly vulnerable to claims of invasion of privacy. Second, breath testing reveals volatile solvents that have reached the breath by diffusion from the bloodstream to the lungs. Third, blood testing is regulated by most state’s laws and is not a common element of a drug-testing program. It is usually employed for post-accident tests. Fourth, saliva testing can be used to detect alcohol, but a positive result from a breath test must accompany a positive saliva test for validity. Fifth, hair testing is used, but not to detect a recent use of drugs. Lastly, sweat testing is available; however, this practice is not widely used by employers.

Mitigating Employer Liability

There are several steps that employers should take when testing to minimize employer liability. Employers should provide formal training for supervisors and managers in the detection and recognition of drug abuse and alcohol misuse. Employees and applicants should be provided with a copy of the testing policy that clearly sets forth drug and alcohol prohibitions and consequences of violating the policy. An explanation of the testing protocols and the individual’s right to challenge adverse test results should be provided.

There are also many methods that employers can and cannot use to monitor workplace substance abuse that do not involve drug testing. Employers can implement anti-drug and alcohol policies and education in the workspace. Undercover agents pose as a liability threat when it comes to privacy invasions; however, dogs are used more and more and are generally not objectionable.

Employers should not monitor conversations between employees unless the employer previously has advised the employees that their conversations could be monitored and has obtained their written consent to the monitoring. However, surveillance of the physical premises is generally permissible, so long as cameras are not in places where employees have a reasonable expectation of privacy. A private employer will not violate employee privacy by searching desks and lockers, so long as they have established a clear policy that claims desks/lockers as company property that are subject to searches.

Lastly, employers can encourage rehabilitation and prevention. The FMLA requires employers to allow employees to take job-protected leave to seek treatment for drug addiction or alcoholism. In addition, some states (Maine, Minnesota, Puerto Rico, Rhode Island, Vermont, Iowa, and California) require an employer to permit an employee to enter into a rehabilitation program in lieu of termination following a first positive drug test. Employers not required by their state should still consider this policy. Employee assistance programs can provide treatment and counseling for a variety of personal problems. Some employers choose to have such programs in-house, while others refer to outside programs.

Types of Tests

Employers should understand that there are multiple types of tests that an employer could perform to evaluate compliance with its workplace drug and alcohol policies, but not all are legal. The following points explain each type and whether or not it is a legally supported method.

Pre-Employment Testing of Applicants

Pre-employment testing can be part of the application process before an offer of employment is made. The least controversial method is testing that is part of the hiring process after an offer of employment is made, but before actual employment begins. Employers can also test sometime soon after the individual begins work, however, it is recommended the employer inform the potential employee that passing the drug test is a condition of employment. Pre-employment testing is a common business practice; however, several states require that job applicants be extended a conditional employment offer before being asked to test.

Post-Accident Testing

Post-accident testing focuses on employees who have been involved in an on-the-job accident that may have involved human error, and that causes a fatality, a serious injury, or significant property damage. It is wise to test only those whose actions, or failure to act, caused or contributed to the accident and not to test injured employees who may not have had a role in the cause of the accident. The DOT’s Federal Motor Carrier Safety Administration requires testing after the following: 1) instances when there are fatalities, 2) instances when there is an injury requiring immediate treatment away from the scene and the driver receives a citation for a moving violation, and 3) instances when one or more vehicles incurs disabling damage and the driver receives a citation for a moving violation.

Periodic Testing

This type includes any drug test that is conducted on a periodic basis, most often in conjunction with an annual physical evaluation. Periodic testing can include unannounced suspicionless testing for a group too large for truly random testing (e.g., employees in safety or security sensitive positions). Given their scheduled nature, generally the tests do little to detect or deter substance abuse. Under the ADA, physical examinations must be voluntary or job-related consistent with business necessity. An employer choosing to do this should notify employees that drug and/or alcohol tests will be administered as part of physical examinations required for continued employment. The employer should advise employees that disciplinary action will be taken if they refuse to consent to a test.

Pre-Assignment Testing

This type of testing is part of assigning someone to a position or promoting someone. For example, it may be required by an employer’s customers as a condition of assignment to a project or account. Pre-assignment testing is becoming popular in circumstances when the employee will work at the customer’s or client’s worksite or even with prospective customers of the employer’s clients. Generally, state drug-testing laws make no provision for pre-assignment testing.

Reasonable Suspicion Testing

Reasonable suspicion testing includes those tests that are triggered by an employee’s specific, contemporaneous, and articulable observations of behavior, appearance, odors, and/or speech that suggest drug or alcohol use or where other credible factors suggest a violation of the company’s substance-abuse prevention policy. An employee’s mere association with another employee believed to be involved with drugs may not justify reasonable suspicion testing. Refusal to submit to suspicion testing has been upheld as an appropriate ground for termination.

Random Drug Testing

This involves selecting employees for tests at random, without suspicion and without advance notice of when the test will occur. This testing also may include the unannounced testing of all employees. Some industries (trucking, nuclear power, oil, gas, and airline) are required to conduct random drug and/or alcohol tests of designated classes of employees. Random testing in the private sector is legal in the vast majority of states. Some states restrict random testing to only employees in safety or security-sensitive positions.

Return-to-Work & Follow-Up Testing

Rehabilitation testing occurs during an employee’s participation in a rehabilitation program and is generally conducted by that program without employer involvement. Return-to-work testing occurs after an employee has tested positive or otherwise violated a company policy, following rehabilitation and prior to resuming work. Follow-up testing in post-rehabilitation is designed to encourage recovering addicts to stay “clean” and is usually administered by an employer after an employee has been cleared to return to work by a treatment professional.

Recommendations

In response to the foregoing threats to workplace safety, it is important for employers and human resources departments to take steps to mitigate those risks. In this regard, we recommend that employers adopt a policy prohibiting possession, use, distribution, sale, or purchase of drugs at any time, and the use or abuse of alcohol while at work, as well as offers to sell or distribute. Additionally, we recommend employers include in their policy documents a general statement giving management full discretion to determine whether an employee is fit to work.

In addition to a strong policy prohibiting possession, use, distribution, sale, or purchase of drugs at any time, regular training for managers and human resources professionals on the signs and symptoms of substance abuse should be facilitated by a competent trainer, and an overview of legal rights of both employer and employee should be reviewed. The training should provide guidance on when it is appropriate to test for substance abuse under state law.

While we strongly recommend the implementation of zero tolerance policies for substance abuse, we also recommend employers develop an employee assistance program providing treatment, counseling, or professional referrals. A zero tolerance does not necessarily have to mean automatic termination. Using zero tolerance policies to encourage drug abusers to get assistance can be an effective tool to helping an employee overcome addiction and return to the workforce as a productive contributor.

Footnotes:

1 Terri Dougherty, “Marijuana Use and Its Impact on Workplace Safety and Productivity,” Occupational Health & Safety, February 01 2016.

2 https://learnaboutsam.org/rate-workers-testing-positive-marijuana-use-47-since-2013-says-major-u-s-drug-testing-firm/