The U.S. Court of Appeals for the District of Columbia Circuit held today, in Noel Canning v. NLRB, that President Obama's recess appointments to the National Labor Relations Board ("NLRB") on January 4, 2012 were unconstitutional because the Senate was not actually in "recess" at the time of the appointments.  At least for now (pending a likely appeal to the U.S. Supreme Court), this holding essentially means that every decision issued by the NLRB from January 4, 2012 to the present is invalid because the NLRB lacked a valid quorum of three members during this entire time.  This holding also means that the NLRB currently has only one properly appointed member (Chairman Mark Gaston Pearce), and therefore lacks authority to issue any decisions or take any action going forward.

On January 4, 2012, President Obama appointed three members of the NLRB:  (1) Sharon Block, who was appointed to fill a vacancy that had arisen on January 3, 2012; (2) Terence Flynn, who was appointed to fill a vacancy that had arisen on August 27, 2010; and (3) Richard Griffin, who was appointed to fill a vacancy that had arisen on August 27, 2011.  At the time of the purported recess appointments, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011 through January 23, 2012.  During its January 3, 2012 pro forma session, the Senate acted to convene the second session of the 112th Congress and to fulfill its duty under the Twentieth Amendment to the U.S. Constitution, which provides that "the Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day."

In general, the U.S. Constitution requires that members of the NLRB (as officers of the United States) must be nominated by the President and appointed "by and with the Advice and Consent of the Senate."  However, the Recess Appointments Clause of the U.S. Constitution permits the President to "fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."

At the time President Obama appointed Members Block, Flynn, and Griffin, Republican Senators complained that the appointments bypassed the Constitutionally mandated Senate confirmation process for Presidential nominees.  In Noel Canning, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit unanimously agreed that the appointments were unconstitutional.

The Court initially determined that the term "the Recess" in the Recess Appointments Clause applies only to recesses that occur in between sessions of Congress -- not to breaks in activity that occur during a session of Congress.  The NLRB conceded during oral argument that the appointments were not made during the intersession recess; instead, they were made on January 4, 2012, one day after Congress began a new session on January 3, 2012.

The Court also found it significant that the Recess Appointments Clause only permits the President to fill vacancies "that may happen during the Recess of the Senate."  The Court interpreted this provision to mean that the vacancy actually must arise during the Senate's intersession recess in order for the President to have the authority to fill a vacancy without going through the Senate confirmation process.  The Court determined that none of the three vacancies that President Obama sought to fill on January 4, 2012 arose "during the Recess of the Senate," and found that the appointments were unconstitutional for this reason as well.

There is no doubt that this decision will be appealed to the U.S. Supreme Court.  We will provide updates on this blog as they become available.

For nearly 35 years, employers in pre-arbitration discovery with a union have not been required to disclose witness statements obtained during internal workplace investigations.  However, consistent with its unabashedly pro-union year-end theme of overturning longstanding precedent, the National Labor Relations Board (“NLRB” or "Board") in American Baptist Homes of the West, d/b/a Piedmont Gardens abandoned this bright-line rule in favor of a fact-specific balancing test.  The balancing test will be applied to all information requests made after December 15, 2012.

Under Section 8(a)(5) of the National Labor Relations Act (“NLRA”), an employer must furnish a union with relevant information necessary to the union’s performance of its duties, including for grievance or arbitration purposes.  Under a rule established in its 1978 Anheuser-Busch decision, the Board had consistently applied a blanket exemption from disclosure for witness statements obtained during internal investigations of employee misconduct, reasoning that such an exemption was necessary to avoid coercion and intimidation and to encourage cooperation in internal investigations.

Finding its logic “flawed,” the Board in Piedmont Gardens explicitly rejected the Anheuser-Busch rule.  In its place, the Board held that the production of witness statements should be subject to the same standard as other union information requests and that any attempts to withhold disclosure should be analyzed using the test developed by the U.S. Supreme Court in Detroit Edison Co. v. NLRB.  Under this test, where requested witness statements may contain relevant information, an employer may refuse to produce them only if it can show that a legitimate and substantial confidentiality interest outweighs the union’s need for the information.  Additionally, in order to assert a valid confidentiality defense, an employer must raise its concerns to the union in a “timely manner” and offer an accommodation regarding the information requested before refusing to disclose the statement.

Essentially, a longstanding bright-line rule has been replaced with a test that will force employers to make a case-by-case prediction of how the Board will apply a subjective balancing of interests.  This unclear standard is almost certain to extend the grievance process as parties engage in lengthy proceedings to resolve confidentiality claims.  Lone dissenting member Brian Hayes expressed these very concerns, and he also noted that the production of witness statements is inconsistent with existing guidance from the Equal Employment Opportunity Commission regarding confidentiality in connection with an investigation of an employee’s harassment complaint.

When this decision is combined with the NLRB’s Banner Health decision (previously reported here), which found that an employer’s rule requiring confidentiality during an internal investigation was an unfair labor practice, the effect is a major shift in the law that impedes an employer’s ability to conduct effective and meaningful internal investigations.  In light of these decisions, employers should reassess their current investigatory practices, including whether to continue to produce witness statements, and if so, how best to protect employees from legitimate confidentiality concerns regarding the disclosure of those statements.

With 2012 now behind us and the start of a new year firmly underway, employers should be aware of the heightened possibility of an unexpected visitor showing up in the workplace in 2013.  Under President Obama’s Administration, the U.S. Immigration and Customs Enforcement (“ICE”) has dramatically ramped up I-9 audits and enforcement actions, conducting more than 3,000 audits in fiscal year 2012, as compared to only 250 conducted in fiscal year 2007.  With four more years on the horizon for this Administration, one New Year’s resolution that all employers should make is to ensure that their Form I-9s are in compliance before ICE comes knocking.

ICE serves as the principal investigative arm of the U.S. Department of Homeland Security (“DHS”).  One of ICE’s primary purposes is to police the Immigration Reform and Control Act (“IRCA”).  Under IRCA, employers are prohibited from knowingly hiring or employing unauthorized workers.  Employers are required to complete Form I-9s for all employees, including U.S. citizens, hired after November 6, 1986, to verify an employee’s identity and to confirm that the individual is authorized to accept employment in the United States.  Employers are also prohibited from discriminating against employees on the basis of national origin, citizenship, or immigration status, which includes engaging in “document abuse” (i.e., demanding that certain employees show specific documents because of the individual’s national origin, citizenship, or other protected status) or requiring “indemnity bonds” guaranteeing that the individual is authorized to work in the United States.  For record-keeping purposes, an employer is required to retain completed Form I-9s for the later of three years after an individual’s date of hire or one year after the employment relationship ends.

Along with the steady increase in the number of audits conducted, the dollar value of penalties assessed for IRCA violations has also significantly escalated under the Obama Administration.  Specifically, penalties have increased from $1 million in fiscal year 2009 to $13 million in 2012.  Employers who knowingly hire or continue to employ unauthorized workers can expect monetary penalties to begin at $375 per violation and reach as high as $16,000 for repeat offenders.  Employers may also be fined for errors found on the Form I-9s.  Fines for substantive violations and uncorrected technical violations range from $110 to $1,100 per violation.  In addition, ICE may also subject an employer to debarment, whereby the employer is prevented from participating in future federal contracts or prohibited from receiving other government benefits.  Criminal penalties may also be imposed under certain circumstances.  In the 2012 fiscal year alone, ICE arrested approximately 238 corporate managers and officers.

Taking affirmative steps prior to receiving a government audit notice or an on-site visit from ICE could mean the difference between a verbal warning, a monetary fine, or a criminal penalty, particularly if an employer chooses to contest the issuance of any ICE fines.  Therefore, employers are encouraged to take proactive measures, which may include the following:  (1) implementing a written I-9 policy, which includes anti-discrimination protocols and/or Social Security “no match” letter resolution procedures; (2) utilizing voluntary programs such as E-Verify (mandatory for federal contractors) and Social Security Number Verification Services (“SSNVS”) provided by DHS and the Social Security Administration to confirm employment eligibility; (3) training designated Human Resources personnel on proper I-9 verification procedures; (4) having an outside third-party or properly trained employee (who was not involved in the original I-9 process) conduct self-audits of I-9 records; (5) immediately correcting and documenting mistakes on Form I-9s; (6) instituting a confidential tip line for employees to freely report I-9 and/or work eligibility issues; and (7) avoiding any conduct that could be interpreted by ICE as encouragement of, acquiescence in, or constructive knowledge of, fraudulent I-9 documentation.

As reported on this blog in August 2012, employers should also be aware that a new Form I-9 is in the works.  For now, employers should continue to use the Form I-9 that contains an August 31, 2012 expiration date.  We will continue to monitor the availability and issuance of any updates pertaining to a new Form I-9 and will provide additional details on this blog when further information becomes available.

Employers who have employees in New York are required to issue annual notices under the Wage Theft Prevention Act ("WTPA") to all New York employees between January 1 and February 1, 2013.  Although a bill was introduced in the New York State Legislature to repeal the annual notice requirement in early 2012 (which was the first year that the annual notice requirement was in effect), the bill passed in the Senate but remains dormant in the Assembly.  Therefore, the WTPA annual notice requirement continues to be in effect.

As we have summarized in previous blog posts, the annual notice must contain the following information:

• the employee's rate or rates of pay (for non-exempt employees, this must include both the regular rate and overtime rate);
• the employee's basis of pay (e.g., hourly, shift, day, week, salary, piece, commission, or other);
• allowances, if any, claimed as part of the minimum wage (e.g., tips, meals, lodging);
• the regular pay day; and
• the name (including any "doing business as" name), address, and telephone number of the employer.

The annual notice must be provided to each employee in English and in the primary language identified by each employee, if the New York State Department of Labor ("NYSDOL") has prepared a dual-language form for the language identified by the employee.  At this point, the NYSDOL has prepared dual-language forms in Chinese, Haitian Creole, Korean, Polish, Russian, and Spanish.  The English-only and dual-language forms created by the NYSDOL are available on the NYSDOL's web site.  If an employee identifies a primary language other than one of the six languages for which a dual-language form is available, the employer may provide the annual notice in English only.  Employers are not required to use the NYSDOL's forms, but employers who create their own forms must be sure that all of the information required by the WTPA is included.

Employers are required to obtain a signed acknowledgment of receipt of the annual notice from each employee.  The acknowledgment must include an affirmation by the employee that the employee accurately identified to the employer his/her primary language, and that the notice was in the language so identified.  Signed acknowledgments must be maintained for at least six years.

The National Labor Relations Board (“NLRB”) continues to issue rule-changing decisions that create troubling results for employers.  We recently reported, for example, on the NLRB’s reversal of decades-old precedent when it ruled that a dues checkoff provision survives the expiration of a collective bargaining agreement.  Two days after issuing that decision, the NLRB issued a decision in Alan Ritchey, Inc., holding that an employer must bargain with a union under certain circumstances prior to imposing discretionary discipline on an employee who is represented by a union.

This new rule will apply only in the absence of a binding agreement between the employer and the union to address discipline, such as a grievance-arbitration procedure.  Therefore, as the NLRB explained, this obligation to bargain over employee discipline will typically arise only after a union is newly certified, but before the parties have agreed to a first contract.

In Alan Ritchey, Inc., after the union was certified and while negotiations were being conducted for a first contract, the employer continued to rely on its pre-existing five-step progressive disciplinary system set forth in its employee handbook to discipline several employees for absenteeism, insubordination, threatening behavior, and failure to meet efficiency standards.  Pursuant to the handbook, the employer reserved the right to exercise discretion in the enforcement of policies, and the employer admittedly exercised this discretion in setting the levels of discipline with regard to the employees in this case.  For example, when imposing discipline for failing to meet performance standards, three employees were treated leniently because of extenuating circumstances -- one employee’s husband died, another worked in a low volume area, and another was unable to work consecutive days in the same position.

The Union filed unfair labor practice charges to challenge these disciplinary actions, taking the position that it should have first been notified and given an opportunity to bargain.  The NLRB agreed.  It held that even though the employer’s existing discipline system represents the status quo that can and must be continued during bargaining for a first contract, the employer was not privileged to exercise any discretion with regard to that discipline system without negotiating with the union.  Rather, the employer was required to provide the union with notice and an opportunity to bargain each time it seeks to exercise any discretion with regard to employee discipline.  Recognizing that it had never articulated this requirement before, the NLRB opted to apply the rule only prospectively.

The NLRB set forth a few limiting principles in laying out this rule:

• First, the employer will only be required to provide the union with notice and an opportunity to bargain prior to implementing the discipline where it seeks to impose a suspension, demotion, or discharge.  For lesser forms of discipline, such as warnings and counselings, there is still a bargaining obligation, but the employer can delay providing the notice and opportunity to bargain until after the implementation of the discipline.
• Second, where there is an obligation to provide pre-implementation notice and opportunity to bargain, the employer need not bargain to agreement or impasse at this stage.  The employer need only provide sufficient notice, and provide responses to union information requests, if any.  If the parties cannot reach an agreement, the discipline can be imposed, and the bargaining obligation continues after imposition (albeit with the possibility that the discipline may have to be rescinded or altered).
• Third, no prior notice is required where “exigent circumstances” exist.  The NLRB defines this as a reasonable, good faith belief that “the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel.”  This includes situations where the employer believes the employee is engaging in unlawful conduct, is posing a significant risk of imposing legal liability on the employer, or threatens safety, health, or security inside or outside the workplace.

In its decision, the NLRB expressed its view that this new bargaining obligation will not “unduly burden” employers.  It is difficult to agree with this assessment.  This new obligation presents a significant impediment to an employer's ability to manage its workforce while bargaining for an initial contract.  Although the employer need not complete bargaining regarding the discipline before imposing the proposed discipline, the obligation to provide meaningful notice and to respond to union information requests prior to imposing the proposed discipline will certainly create significant delays in the disciplinary process.

On December 18, 2012, the Equal Employment Opportunity Commission ("EEOC") announced the approval of its 2013-2016 Strategic Enforcement Plan.  The Plan’s purpose is to “focus and coordinate the EEOC’s programs to have a sustainable impact in reducing and deterring discriminatory practices in the workplace.”  The Plan sets forth six agency priorities:

• Eliminating Barriers in Recruiting and Hiring.  The EEOC will target discriminatory policies and practices that still exist at the hiring stage, such as exclusionary policies and procedures, the practice of steering individuals into certain jobs based on their status in a particular group, and the use of certain screening tools (pre-employment tests, background checks, and date-of-birth inquiries).
• Protecting Immigrant, Migrant, and Other Vulnerable Workers.  This priority will focus on practices that affect groups of vulnerable workers who are often unaware of their rights, or reluctant to exercise them.  The Plan specifically identifies disparate pay, job segregation, harassment, and trafficking practices as issues faced by this population of workers.
• Addressing Emerging and Developing Issues.  The Plan identifies several priority issues under this heading, including coverage and reasonable accommodation under the Americans with Disabilities Act ("ADA"), accommodating pregnancy-related limitations under the ADA, and coverage of lesbian, gay, bisexual, and transgender individuals under Title VII.
• Enforcing Equal Pay Laws.  The EEOC will focus on compensation systems that discriminate based on gender.
• Preserving Access to the Legal System.  This priority includes policies and practices that discourage or prohibit individuals from exercising their rights under the law, or impede the EEOC’s enforcement efforts, such as retaliatory actions, overly broad waivers, settlement provisions that prohibit filing charges or providing information to the EEOC, and failure to retain records required by EEOC regulations.
• Preventing Harassment Through Systemic Enforcement and Targeted Outreach.  The EEOC identifies harassment as one of the most common workplace complaints, and will continue to focus its efforts in this area.

The Plan reflects a targeted approach that will place a greater share of the EEOC’s resources on these six priority areas.  Charges that fall within these six areas will be given priority attention.

One key theme that can be discerned from this Plan is the EEOC’s strong interest in cases that could potentially affect more than just the charging party.  The EEOC intends to take the greatest investigative interest in charges that reference or otherwise involve employment policies or practices with potential class-wide impact -- even if the charging party does not specifically allege that more than one employee has been affected.  In assessing the risk or exposure associated with any given EEOC charge, employers must consider the possibility that the EEOC will broaden its investigation beyond the particular employee who filed the charge.  The EEOC's Plan serves as another reminder that employers should periodically evaluate whether their standard employment policies and practices might unintentionally have a discriminatory impact on any protected group, or might otherwise need to be improved or amended.

Although public employers may be aware of their obligation to provide certain types of employees with an opportunity for a hearing prior to imposing discipline (such as a written reprimand), the line between a non-disciplinary counseling memorandum and a disciplinary reprimand is not always clear.  The New York State Court of Appeals' recent decision in Matter of Michael D’Angelo v Nicholas Scoppetta serves as an important reminder that the term “reprimand” may be interpreted more broadly than public employers anticipate.

In the D'Angelo case, the Court of Appeals held that a letter informing a firefighter that he had violated the Fire Department’s Code of Conduct and Equal Employment Opportunity (“EEO”) Policy, following a detailed and lengthy investigation, constituted a “reprimand” that could not be placed in his file without affording him the opportunity for a hearing and other due process rights.  The firefighter was accused of yelling a racial epithet at an emergency medical technician, also employed by the Fire Department, while responding to a motor vehicle accident.  The EMT filed a police report, notified his supervisor of the incident, and complained to the department’s EEO office.  After a two-year internal investigation, a finding was made that the firefighter had used the racial slur as alleged.  A final report summarizing the findings and recommendations resulting from the investigation was issued, and the report was approved by the Commissioner of the Fire Department.

The Assistant Commissioner of the Fire Department then sent the firefighter a letter regarding the determination that he had “exercised unprofessional conduct and made an offensive racial statement.”  The letter instructed him to read and sign an attached Advisory Memorandum and informed him that he would receive additional EEO training in the future.  The Assistant Commissioner characterized the letter as a “formal Notice of Disposition of the filed Complaint” which would be placed in the firefighter's permanent file.

The firefighter objected to the placement of the letter in his file without the opportunity for a hearing and commenced an Article 78 proceeding to challenge the Fire Department's placement of the letter in his file.  The trial court annulled the determination and expunged the letter from the firefighter's file, holding that the letter was a disciplinary reprimand and, therefore, the firefighter was entitled to a formal hearing and other due process safeguards.  The decision was subsequently affirmed by both the Appellate Division and the Court of Appeals.

In reaching its decision, the Court of Appeals focused on several key facts to distinguish the letter issued to the firefighter from counseling letters issued to teachers which were found to be non-disciplinary “critical evaluations” in a 1981 Court of Appeals decision.  Specifically, the Court noted that the letters to the teachers, although “sharply critical,” were not intended to punish the teachers, but rather were intended to identify relatively minor breaches of school policy and to encourage future compliance.  In contrast, the Court held that the determination that the firefighter had used a racial epithet could not be considered a “minor breach” of the EEO policy.  In fact, the Fire Department conceded during oral argument that it was serious misconduct which could negatively affect the firefighter’s eligibility for future promotion.  Further, the requirement that the firefighter participate in additional EEO training was determined by the Court to be a form of discipline.

Additionally, the letters to the teachers in the 1981 case were sent by the individual school administrator, who was the teachers’ direct supervisor.  In contrast, the letter in the D’Angelo case was sent to the firefighter following a two-year formal investigation conducted by the Fire Department’s EEO office with approval from both the Fire Department’s Assistant Commissioner and Commissioner.

In light of these specific facts, the Court of Appeals concluded that the letter was a formal disciplinary reprimand, and that the firefighter was entitled to a hearing to protect his due process rights prior to placement of the letter in his permanent file.

The D’Angelo decision serves as a good reminder to public employers to consider the manner in which employee performance and conduct problems are addressed, and to be prepared to follow applicable due process requirements when appropriate.

The National Labor Relations Board ("NLRB") recently re-examined the issue of whether an employer's obligation to check off union dues from employees' wages terminates upon the expiration of a collective bargaining agreement that contains a dues checkoff provision.  This issue was seemingly resolved more than 50 years ago, in the NLRB's Bethlehem Steel decision.  However, on December 12, 2012, in its WKYC-TV, Inc. decision, the NLRB reversed its 50 year-old precedent and held that an employer's obligation to check off union dues continues after the expiration of a collective bargaining agreement that establishes such an arrangement.

In its 1962 Bethlehem Steel decision, the NLRB considered the issue of whether the employer had violated its obligation to negotiate in good faith by unilaterally refusing to honor the union security clause and the union dues checkoff provisions contained in an expired collective bargaining agreement.  Although the NLRB found that both union security and dues checkoff provisions are mandatory subjects of bargaining, the NLRB held in Bethlehem Steel that the employer did not violate the National Labor Relations Act ("NLRA") by unilaterally refusing to honor the union security clause and discontinuing union dues deductions from employees' pay checks.  The NLRB determined that the language of Section 8(a)(3) of the NLRA, which permits employers and unions to make an "agreement" to require union membership as a condition of employment, means that parties cannot enforce a union security provision after the collective bargaining agreement containing such a provision has expired.  The NLRB further reasoned that dues checkoff provisions are intended to implement union security clauses, and that an employer's obligation to continue deducting union dues from employees' pay checks ceases upon the expiration of the collective bargaining agreement.

According to the three NLRB members who comprised the majority in the WKYC-TV decision, the reasoning contained in the Bethlehem Steel decision is flawed.  The three-member majority disagreed with the premise that dues checkoff provisions are intended to implement union security clauses, and stated that "union-security and dues-checkoff arrangements can, and often do, exist independently of one another."  The three-member majority also found that employees cannot be required to authorize union dues deductions as a condition of employment even if the collective bargaining agreement contains a union security clause that requires them to be a member of the union.  Although employees generally choose to sign authorizations allowing the dues deductions as a matter of convenience, employees retain the option of transmitting their union dues directly to the union instead of consenting to automatic deductions.  The three-member majority observed that employees who sign dues checkoff authorizations are free to revoke those authorizations upon the expiration of the collective bargaining agreement if they no longer wish to continue those automatic deductions.

For these reasons, the three-member majority reversed the Bethlehem Steel decision and held that employers are required to honor dues checkoff provisions in an expired collective bargaining agreement until the parties have reached a new agreement or until a valid impasse has been reached that permits unilateral action by the employer.  This new rule will only be applied prospectively, and will not be applied to any pending cases.

Not surprisingly, Member Hayes wrote a strong dissenting opinion.  Member Hayes found no adequate justification for the NLRB to abandon more than 50 years of precedent.  Member Hayes stated that a union security clause operates as a powerful inducement for employees to authorize union dues deductions, and "it is unreasonable to think that employees generally would wish to continue having dues deducted from their pay once their employment no longer depends on it."  Member Hayes also responded to the majority's view that employees can simply revoke their authorizations, stating that "it is unlikely that employees will recall the revocation language in their authorizations, and less likely still that they will understand that their obligation to pay dues as a condition of employment terminated as a matter of law once the contract expired."  Member Hayes also recognized that an employer's ability to cease collecting union dues from employees upon the expiration of a collective bargaining agreement is "a legitimate economic weapon in bargaining for a successor agreement" and accused the three-member majority of deliberately stripping employers of this weapon to provide more leverage to unions in negotiating for successor agreements.

It is not clear at this point whether the NLRB's WKYC-TV decision will be appealed.

This article, authored by Mark Moldenhauer, originally appeared in the December 10, 2012 issue of the Buffalo Law Journal.

With calendars flipped to December, many companies are putting the final touches on holiday party plans.  These celebrations offer an opportunity to unwind, socialize, and reflect on the achievements of the past year, all outside of the hectic business environment.  Employers need to be aware, however, that holiday functions also raise a host of potential legal problems, especially when alcohol is served.  So while the trimmings and trappings deserve due attention, prudent employers should also consider ways to minimize the chance for a legal hangover.

1.  Boughs of Holly Are Fine -- Forget the Mistletoe!

Some people tend to exude an excessive amount of cheer during the holiday season.  Stories abound about executives dancing provocatively with interns or messengers flirting with the CEO’s spouse.  While no one wants to bah-humbug the festivities, it is important for employers to keep in mind that many of the same rules that apply in the workplace must be enforced at holiday parties.  This includes policies that prohibit sexual and other forms of harassment.

If you rely on a vendor or banquet facility to coordinate the event, be explicit that you intend this to be a professional function (yes, ask the DJ for a set list).  While gag gifts and "roasting" speeches might be popular, a fine line exists between good-natured ribbing and public humiliation.  Ideally, any gifts and planned remarks should be vetted and approved in advance.  Few things ring in the New Year worse than a hostile work environment or discrimination lawsuit.

2.  Take It Easy on the Eggnog

Whether it is loosening inhibitions or causing problems after-the-fact, alcohol is frequently the cause of holiday party problems.  As the sponsor, an employer must be keenly aware of the risks posed by serving alcohol and consider different options to reduce those risks.

In New York and several other states, “social hosts” are generally not liable for alcohol-related accidents or injuries suffered off-premises by third parties.  This is not the case in every state, so an employer should familiarize itself with the applicable law where the function is being held.  Also keep in mind that when revelers cross state lines, a claim might arise in one jurisdiction even though the host would not be liable to third parties in the state where the party actually occurred (for instance, a party in New York followed by an accident in New Jersey).  In addition, employees and guests under the age of 21 must never be served alcohol.  Many states, including New York, specifically allow claims against social hosts when alcohol is served illegally.  For this and other reasons, employers should insist that bartenders check ID or use some other system to ensure that they are not giving alcohol to underage attendees.

As for injuries suffered after the party by inebriated employees or guests, courts will typically find that a person’s voluntary intoxication caused his or her injury.  This includes situations where an employee or guest gets hurt in a motor vehicle accident.  Of course, this does nothing to lessen the non-legal consequences of someone becoming injured or worse while driving home from a holiday party.

On-premises injuries are a different story.  An employer has a duty to prevent harm to those on its property and in areas under its control, which could include an off-site facility that the employer leases for its holiday party.  If the employer learns that an employee or guest is intoxicated or otherwise acting inappropriately, reasonable steps should be taken to prevent the situation from escalating.

An employer-sponsored holiday party will almost certainly be considered as relating to employment, even if attendance is voluntary.  As a result, the exclusive remedy for an employee who suffers an injury at the party will normally be workers’ compensation benefits.  That said, injuries caused solely by alcohol consumption are normally deemed non-compensable under most workers’ compensation laws, including New York’s.  Also, injuries suffered in a car accident during an employee’s drive home will not likely be covered since commuting is generally considered outside the scope of employment for workers’ compensation purposes.

3.  Make Your List . . . and Check it Twice

 Without a doubt, holiday parties have their advantages, including the positive impact on employee morale.  Employers are encouraged, however, to do some advance planning in order to at least reduce potential risks.  Taking proactive steps will hopefully allow everyone to enjoy themselves, both during and after the party.

In addition to the measures discussed above, consider taking the following steps to help ensure that your festivities remain safe and jolly:

• Arrange transportation to and from the event or notify employees and guests that the company will cover cab fare;
• Coordinate discounted rates for employees and guests with nearby hotels;
• If the party is on the employer’s premises, hire a professional bartender or caterer and confirm that they carry sufficient liability insurance;
• Instruct bartenders to serve conservatively, “cut off” anyone who appears intoxicated and prohibit employees and guests from serving drinks;
• Limit the amount of alcohol served by providing non-alcoholic options, reducing the hours of open bar, giving attendees vouchers for drinks or using a cash bar;
• Recruit spotters to watch for excessive drinking and other inappropriate behavior;
• Serve foods that are rich in starch or protein to slow the absorption of alcohol and avoid salty foods that encourage people to drink;
• Contact your insurance carriers to discuss whether current policies provide sufficient coverage and, if not, purchase a product that will;
• Consider alternative formats which discourage heavy drinking, such as a breakfast or lunch function or a party with significant others and children;
• Advise employees that attendance is strictly voluntary and refrain from activities that can be viewed as compensable work under the Fair Labor Standards Act;
• Schedule the party on a day that will not conflict with any employee’s religious observances; and, last but not least,
• Remember:  “Holiday Party” not “Christmas Party”!  Most workplaces are incredibly diverse and comprised of individuals who celebrate a variety of religious and secular holidays.  Do not engender feelings of exclusion by emphasizing one particular set of traditions or beliefs.

It is commonly accepted by employment law practitioners that Fair Labor Standards Act settlements must be approved by the United States Department of Labor or court-supervised to be enforceable.  However, the U.S. Court of Appeals for the Fifth Circuit recently rejected this prevailing belief and upheld a private settlement on the grounds that it resolved a “bona fide dispute as to the number of hours worked,” rather than constituting a waiver of plaintiffs’ substantive FLSA rights.

In Martin v. Spring Break ’83 Productions, LLC, the plaintiffs, who were represented by a union, claimed they were not properly paid overtime while working on the set of a movie.  The union filed a grievance on the plaintiffs’ behalf claiming they had not been paid for all hours worked and conducted an investigation that concluded it would be impossible to determine whether plaintiffs actually worked on all the days claimed.  Plaintiffs subsequently filed a lawsuit in June 2009.  In November 2009, the defendants and plaintiffs’ union representatives entered into a settlement agreement resolving plaintiffs’ FLSA claims.  Because the settlement was not approved by the USDOL or a court, the plaintiffs argued that the FLSA releases were not enforceable.

The district court granted the employer’s motion for summary judgment finding the FLSA releases to be valid and the Fifth Circuit affirmed.  In so holding, the Circuit Court held that the plaintiffs were bound by the terms of the settlement agreement even though they did not sign it because both the settlement and the collective bargaining agreement stated that the union was the plaintiffs’ authorized representative.  The Court further noted that the plaintiffs accepted and cashed their settlement checks, and the fact that the plaintiffs were represented by a union and the settlement was reached during the course of pending litigation minimized any suggestion of unequal bargaining power between the parties.

Employers are often confronted with the issue of how best to resolve an FLSA claim out of court, and specifically whether it should obtain a release knowing that such a release would most likely be unenforceable.  The Fifth Circuit decision is encouraging as it may pave the way for other courts to enforce private FLSA settlement agreements using the specific factual findings there as a road map for employers to follow, particularly in the unionized setting.

The case also serves as a good opportunity to remind New York employers that private settlement agreements releasing minimum wage and overtime claims under the New York Labor Law are generally enforceable.  Furthermore, even if an FLSA release may be deemed unenforceable, there may be certain provisions an employer may want to include in a private settlement agreement that might be helpful in defending any subsequent litigation.  For example, it may be helpful to include certain affirmative acknowledgments with respect to the employee's duties and/or the employee's hours worked depending on the type of claim being asserted.

The New York Court of Appeals recently found that a municipality’s unique and local interest in maintaining strong disciplinary authority over its police force outweighs the policy of the State to support public employees’ collective bargaining rights.  This means that critical issues involving the manner in which police disciplinary investigations, charges, and hearings are conducted may not be subject to either the negotiation process or, perhaps more importantly, interest arbitration.  These matters are prohibited subjects of bargaining.

In Town of Wallkill v. Civil Service Employees Association, which was decided on October 25, 2012, the Court of Appeals upheld a local law passed by the Town of Wallkill in 2007 under authority provided by New York Town Law Section 155.  The local law gave the Town Board the power to make a final determination on police disciplinary charges and to impose a disciplinary penalty.  The local law was adopted without the agreement of the Town of Wallkill Police Officers' Benevolent Association ("PBA").  The PBA preferred to maintain the neutral arbitrator disciplinary process which had been in its collective bargaining agreement with the Town since 1995.

The Court of Appeals found its 2006 decision in Matter of Patrolmen’s Benevolent Association of City of New York v. New York State Public Employment Relations Board to be dispositive in the Town of Wallkill case.  In Matter of Patrolmen’s Benevolent Association, the Court of Appeals held that "police discipline may not be a subject of collective bargaining under the Taylor Law when the Legislature has expressly committed disciplinary authority over a police department to local officials.”  Prior to Town of Wallkill, the Court of Appeals' 2006 decision had been mainly applied to special State law disciplinary constructs that pre-dated the enactment of New York Civil Service Law Sections 75 and 76 -- the general statutory mechanism for public employee (including police officer) discipline.

In Town of Wallkill, however, the Court of Appeals utilized its rationale and policy from Matter of Patrolmen’s Benevolent Association, as well as statutory language found in Civil Service Law Section 76(4), to hold that New York Town Law Section 155, a general State law that was enacted prior to Civil Service Law Sections 75 and 76, gives towns "the power and authority to adopt and make rules and regulations for the examination, hearing, investigation and determination of charges, made or preferred against any member or members of such police department."

Thus, where, as in Town of Wallkill, a town enacts a local law which sets forth disciplinary procedures for members of its police force, such enactment can take place without negotiation with the local union and/or without regard to procedures which may already exist in a collective bargaining agreement.  A question can now be raised as to whether the rationale of the Court of Appeals’ decision in Town of Wallkill can also be applied to many New York State villages, as New York Village Law Section 8-804 is nearly identical, in relevant part, to New York Town Law Section 155.

Guidance from the U.S. Equal Employment Opportunity Commission, issued on October 12, 2012, cautions employers that federal employment discrimination laws such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act may apply in certain situations involving applicants or employees who experience domestic or dating violence, sexual assault, or stalking.  This guidance, which is provided in a Q&A format, contains examples of such employment situations.

As employers are aware, Title VII prohibits employment discrimination based on race, color, sex, religion, or national origin, and the ADA prohibits employment discrimination based on disability.  These laws do not specifically protect individuals who experience domestic or dating violence, sexual assault, or stalking.  In its guidance, the EEOC recognized this, but cautioned that "potential employment discrimination and retaliation against these individuals may be overlooked.”

In the Q&A, the EEOC addresses three protections under Title VII which may be implicated in a situation that may involve domestic or dating violence, sexual assault, or stalking:  (1) disparate treatment based on sex (including treatment based on sex-based stereotypes); (2) sexual or sex-based harassment; and (3) retaliation for engaging in protected activity.  The guidance provides several illustrations of employment decisions that may violate Title VII, including:  an employer terminating an employee who was subjected to domestic violence because the employer fears the “drama battered women bring to the workplace”; and an employer declining to hire a male applicant after learning he had obtained a restraining order against his male domestic partner because the employer believes that men should be able to protect themselves.

The EEOC also addresses a number of protections under the ADA, including the prohibition against different treatment or harassment at work based on an actual or perceived impairment that may result from domestic or dating violence, sexual assault, or stalking.  As an example, the EEOC guidance provides that an employer who refuses to hire an applicant after finding out she received counseling for depression due to a sexual assault might be found to be in violation of the ADA.  The EEOC guidance also reminds employers that reasonable accommodations must be made for any disabilities that result from domestic or dating violence, sexual assault, or stalking.

The EEOC guidance does not change the existing protected categories or prohibitions under Title VII or the ADA.  Instead, the EEOC guidance provides employers with a reminder that those laws may be implicated in situations where an employee or applicant is a victim of domestic or dating violence, sexual assault, or stalking.  Employers in New York should also be aware that the New York Human Rights Law was amended in 2009 to include a specific prohibition against discrimination based on domestic violence victim status.