Connecticut Employment Law Blog

Insight on Labor & Employment Developments for Connecticut Businesses

Election 2016: Three Employment Law Debate Questions for Hillary Clinton

Posted in Highlight, Legislative Developments

clinton2013Yesterday, I offered up three questions for moderators to use during the Presidential Debates to question Donald Trump on employment law issues.

Today is Secretary Hillary Clinton’s turn.

  1. Secretary Clinton, the National Labor Relations Board has been quite active in the Obama years; in fact, despite the failure of Congress to pass the Employee Free Choice Act (of which you were an original co-sponsor), many of the ideas from that bill have made its way to regulations from the NLRB including new speedy elections.  You have indicated that you will “fight to strengthen the labor movement” on your website.  What additional changes would you like to see to the nation’s labor laws and why isn’t what we have now enough?
  2. You have indicated that you will also “protect workers from exploitation, including employer misclassification, wage theft, and other forms of exploitation.”  Yet our federal and state laws already prohibit the use of independent contractors as employees and cover the so-called “wage theft” examples. What are you going to do differently, if anything?
  3. In a speech yesterday, you spotlighted a constituency that we haven’t heard much about during this election cycle — those with disabilities.  And you have indicated that you want to fulfill the promise of the Americans with Disabilities Act.   Beyond eliminating the sub-minimum wage that is allowable under current law, would you make any changes to the ADA itself? And in “fulfilling the promise” of the ADA, would you ask the Department of Justice make enforcement a top priority of its strategic plan?

I’m under no illusion: These topics are unlikely to get discussed.  We’ll probably hear more about e-mails and taco trucks.  But perhaps someone somewhere will press the candidates on these important issues.

Election 2016: Three Employment Law Debate Questions For Donald Trump

Posted in Highlight, Legislative Developments

trumpphotoEach election cycle, I hope that employment law issues will move front and center to the Presidential campaign.

And each cycle, I’m slightly disappointed that such issues only get short shrift.  Sigh.

But as I’ve done before, it would be nice to fantasize about employment law questions that could be posed to the candidates at the upcoming Presidential debates.

So, just in case Lester Holt or the other moderators are brainstorming ideas on the internet, here are three questions I’d like to see asked of Donald J. Trump.

(I’ll have a followup post for Hillary Clinton.)

  1. The U.S. Department of Labor has recent proposed raising the salary threshold requirements for employees to receive overtime. As a result, millions more workers may start to get overtime in December of this year.  But this week, various states and business groups have filed suit to block its implementation. You have previously said that you support a rollback of these new rules.  Why? What specific changes would you propose to the overtime rules if you were going to roll back the current proposal.  Be specific.
  2. You recently said you would advise your daughter Ivanka to “find another career or find another company” if she faced the same harassment as alleged in the sexual harassment lawsuit against former Fox chief Roger Ailes.  Can you explain why you think your daughter should leave a company if faced with harassment? Doesn’t the company bear some responsibility to its employees to stop the harassment and ensure a safe working environment for its employees?
    Followup question: Given the allegations against Roger Ailes and Fox’s payment of $20M to resolve allegations by one of its former employees of sexual harassment, how do you justify consulting with him and what message (if any) do you think it sends to your female workers on your staff?
  3. States like Connecticut have passed a version of Paid Sick Leave. Do you support such a law? As a followup, you recently said you would support a six-week paid maternity leave program.  Why are fathers excluded from your proposal? Do you think fathers should have any paid time off after the birth or adoption of a child?

 

 

Guest Post: Getting The Most Out of Employees At Non-Profit Organizations – A “Total Rewards” Strategy

Posted in Highlight, Human Resources (HR) Compliance, Manager & HR Pro’s Resource Center, Wage & Hour

As I continue to reflect this week on nine years of blogging, it’s hard to recall that I started this before the Great Recession hit.  Since that time, all businesses have become more cost-conscious and creative in how they are structured and how they compensate their employees.  Non-profit organizations are no exception to that.  But how can these workplaces continue to “do good” while rewarding their employees?

Today, I’m pleased to share this post from Marc Kroll, Managing Partner at Comp360 LLC.  Marc talks total about how non-profits can implement a “Total Rewards” strategy and earn a return on their investment. 

And what is “Total Rewards”? As the Houston Chronicle described it in a recent article: “Formerly referred to as simply compensation and benefits, total rewards takes on a more creative and broad definition of the ways employees receive compensation, benefits, perks and other valuable options. Total rewards include everything the employee perceives to be of value resulting from the employment relationship.”

Having a well-thought out compensation system is a key component to reducing liability and, hopefully, ensuring happy, productive employees.  If you’re looking for ways to avoid dealing with employment lawyers on issues, getting ahead of issues like this is a natural step in the right direction.  My thanks to Marc for his insights.  

Kroll_MarcAs a result of the slow growth economy, non-profit organizations are facing decreased funding due to federal and states’ fiscal deficits as well as a significant shift with grant-makers who are increasingly funding awards on a performance/return on investment basis.  In addition, the soaring costs of healthcare insurance are adding significant pressure to operating costs.

Without new revenue growth, many non-profits are looking for ways to measure and increase the value/return on their social mission and investments.

Consistent with these changes, some non-profits are responding by trying to increase the “return” on their services and programs in terms of program execution, utilization, and measurable results.  Given this environment, non-profits are being forced to examine the viability of their highest cost centers, most particularly, employee compensation and benefits for value against performance as well as market competitiveness.

Non-profit Boards and senior management are questioning what the appropriate compensation and benefit programs should be, at what levels they should be funded, and how to drive accountability and performance in the employee workforce.

While non-profit organizations have predominantly been about social service and charity with their cultures reflecting a “do-good” environment and a concern for employee welfare, present conditions have forced many to consider a culture shift toward performance and accountability as well as changes in their Total Rewards programs.  This delicate balancing act between affordability and the ability to attract and retain a stable and talented workforce presents challenges in nonprofits’ capacity to assure effective organizational culture, management practices, labor market relevance, and strategic/operational priorities.

To help navigate this challenge, the following insights to six key questions provide a prescription for change in Total Rewards:

  1. What should your Total Rewards strategy be?

This is a statement developed by your Board or management committee on how the organization’s compensation and benefits programs will support and relate to your operational objectives, culture, management practices, and employee performance.  It also describes both the labor market within which the organization wishes to compete and the level at which both compensation and benefit programs will be set and funded.

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Nine Years of Blogging on Employment Law

Posted in Featured, Highlight

DSC_0128Hard to believe, but this week marks the ninth anniversary of the Connecticut Employment Law Blog.

I’m pretty sure that’s 72 years old in “blog” years.  Or dog years. I forget which one.

Coincidentally, this week I stumbled across an old information sheet I filled out for LexBlog (my blog hosting company) in the summer of 2007 with my goals and vision for the blog.  I was asked to write about the “subject and purpose of the blog”.

Here’s what I wrote:

This blog will focus on new and noteworthy developments in the labor & employment law field in Connecticut.  While, at times, it may comment on national employment law topics that may be of interest to Connecticut audience, it will address employment law topics that may be of interest for employers in Connecticut.

The purpose of the blog is educate and inform individuals in the state, while providing a platform for  a discussion of new and noteworthy cases, decisions or statutes.  It will address federal and Connecticut laws, and will highlight decisions that discuss certain areas.

It will address wage & hour decisions, at-will employment employment, discrimination and harassment, and labor relations. While not providing specific advice, it may provide general commentary to employers on topics of interest, particularly to in-house employment lawyers, labor relations professionals and human resources personnel.

I have to say — nine years (and many hundreds of blog posts) later and I think this holds up very well! Nice to know I’ve remained true to my original vision.

Of course, in the interests of full disclosure and just in case you think I was doing this purely for unselfish reasons, I indicated that a “secondary” purpose of the blog was “to increase my exposure and profile in Connecticut.”

I’m very comfortable in acknowledging that has happened too.  (Thanks Google search!)

In the last week, I’ve gotten multiple e-mails from respected attorneys in the state (on both sides of litigation) thanking me for continuing to write. I love those e-mails.

Of course, I’ve also received such e-mails in the last week that said “Useful analysis! For my two cents , people are wanting a AZ CRF2M1 , my colleagues saw a blank form here!” And this classic e-mail, “firsttly thanks to all valuable information great post.nice post dfftheevege ssasup, opsappsmo”.

Ah, spam e-mail — don’t ever change.

And so, this post ultimately is nothing more than a sincere thank you post.

Thank you for continuing to read. Thank you for continuing to encourage me to write.

And a big thank you to my current law firm, Shipman & Goodwin, for being so supportive. And a thank you to my former colleagues who put up with my blogging when it was still this big unknown.

Finally, a thanks to my wife who has politely managed my endless droning on about the blog with a “uh-huh” more times than I can count.

Let’s say we continue on to a big ten year celebration next year and see where we go from there?

(If you really want to see something scary, check out this interview with Lexblog from December 2007 too.)

Maybe That Lawsuit Brought By Your Employee Isn’t So Frivolous

Posted in Discrimination & Harassment, Highlight, Human Resources (HR) Compliance, Litigation, Manager & HR Pro’s Resource Center

monkeyIn yesterday’s post, I talked about some of the reasons why an employee’s lawsuit against his or her employer was destined for failure.

But employers, I’m afraid you’re not off the hook that easily. This post is for any employer that just got sued or threatened with suit.

Maybe that lawsuit isn’t so frivolous after all.

Wait a second! You said yesterday that ‘Odds are, you probably weren’t discriminated against’!”  

Ah, but isn’t that rub? Odds. Statistics.  Yes, some (many?) lawsuits brought by employees are losing propositions. But some are not.

Here are some things I tell clients or prospective clients when I see a lawsuit filed or threatened as to why they should take the lawsuit seriously.

1. That frivolous lawsuit is still going to cost you thousands (if not tens of thousands) to defend.  But I thought you said this post was about non-frivolous lawsuits?  True. But for my first point, that’s beside the point entirely.  Whether a lawsuit is frivolous or not, the system of justice through our courts and administrative agencies moves slowly and with some cautiousness.  Even the frivolous ones need to be defended.  Court filings need to be, well, filed.  And court conferences need to be attended.  So your first point always is to recognize that all employment law cases have a cost associated with them.

And as such, all cases have what we call a “nuisance” value as well.  That is — you are going to spend X amount of dollars defending the lawsuit.  It may be cheaper to just pay a certain amount to avoid the cost of defense.  Now, there are business reasons why you won’t want to do so in all or even many cases, but the employer who fails to recognize the nuisance value of the case is destined to be disappointed in the long run.

It’s a bit of hyperbole to say that any person can sue anyone at any time for any reason. But not that much.  Lawsuits are a part of doing business.  Frivolous or not, you will still have spend money to defend your decision. Be prepared for this eventuality when making your employment decisions and deciding whether or not to offer severance in exchange for a release.

2. “At Will” Employment Is a Misnomer.   In Connecticut, the default employment relationship between an employer and employee is “at-will”.  As many offer letters suggest, that means either the employer or employee can terminate the employment relationship at any time for any reason or no reason at all.  And so, I sometimes hear employers exclaiming “Connecticut is at-will! We should be able to just fire them for any reason!  How can they still sue?

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Maybe That Discrimination Lawsuit Against Your Employer is Ill-Advised

Posted in Discrimination & Harassment, Highlight, Human Resources (HR) Compliance, Litigation, Manager & HR Pro’s Resource Center
Caution: You may not want to getg legal advice from Cosmo.

Caution: You may not want to get your legal advice from reading Cosmo.

As I approach the ninth anniversary of this blog this week (watch for that anniversary post soon), I’ve gotten a bit more reflective as well.  Some of that is personal circumstances I’ve mentioned before; perhaps some of it is age and experience.

And I find myself wanting to speak directly to employees who have brought suit against their employers.

But here’s the thing: I can’t.  The simplest of explanations is that ethics rules prohibit the attorney for one party from contacting the opposing party directly.

And so: End of the blog post.

Well, not quite.  As I’ve discovered over the years, I also get several phone calls from people looking to sue their employers for one reason or the other.

While I have to politely decline many of those requests, I sometimes wish that I could tell them a few things before they brought suit.

So here goes:

1) Odds are, your employer didn’t make the decision lightly.  Many of my days are spent advising employers on how to navigate employment laws while managing an employee’s performance.  Termination of employment is typically the last thing an employer wants to do.  It’s costly and, let’s be honest, no one really likes firing someone else (no matter what a certain candidate did on a reality TV show).  Yes, there are exceptions to everything, but in most situations the termination is the end result of a long process.

2) Odds are, you probably weren’t discriminated against. Again, I’ll state the obvious that discrimination still happens and if it does, it should be rooted out and stopped. Period. But in the overwhelming majority of employers I’ve dealt with, I just don’t see it happening. And, when I’ve been asked to provide advice on an employment situation that just feels off, I typically advise the employer to rethink its plans.  Most businesses I’ve dealt with just want to have solid employees and minimize issues in the workplace.  If your employer had legal counsel review the termination decision, it means the employer is trying to comply with the law — not find some legal loophole to get around it.

3) This is doubly true if the same person who hired you then fired you. Courts recognize the “same actor” defense is a strong one — that is, that it is unlikely that discrimination was the reason an employee was fired if he or she was hired by the same person.  In other words, it doesn’t make sense that your supervisor suddently became biased against African-Americans when the supervisor hired that same person.  So, if you’ve been fired after six months by the same boss that hired you, that supervisor probably isn’t discriminating against you because of your protected class.

4) Before pointing fingers, be introspective.  As a parent, we all recognize that our kids — however wonderful they are — are not perfect.  They are surprised when they find out that when they don’t study for a test, they may get a bad grade. And the hope of many parents is that our children become self-aware — that is, recognizing that they are not perfect too.

In litigation, however, I’ve seen too many instances of employees who were simply oblivious to how their actions were perceived by others.  They simply lacked the self-awareness of their own actions, or if they were self-aware, they denied it vigorously as if by telling themselves a lie enough times, it could become reality.  Before accusing your employer of discrimination, ask yourself — If I told my neighbor the story of my firing, whose side would he or she be on?

5) A difficult boss does not equal a “hostile work environment” under the law.  I’ve heard this phrase used with increasing frequency by employees these days.  But note that under the law, this phrase has a specific legal meaning.    Having a supervisor place you on a performance improvement plan because your performance, well, needs improving, is typically not a “hostile work environment”.  More often than not, it’s just a supervisor trying to manage the performance of his or her employees.  Before your throw around legal words and phrases, understand what they mean.

Closing Thoughts

Employment litigation is a messy endeavor. It’s time-consuming, costly, and often times, leads to imperfect results. Employees who are thinking of bringing suit against their employers should seek counsel that won’t sugarcoat their case for them.  Your case probably isn’t like Gretchen Carlson’s $20 million settlement.

So are all employers off the hook? Hardly.

Over the years, I’ve also seen employers who were far from blameless in employment situations. In tomorrow’s post, I’ll spread the criticism to employers to explain why that lawsuit brought by your employee may not be so frivolous after all.

Big Settlement, Big Issues: Sexual Harassment in the Workplace Isn’t Over.

Posted in CHRO & EEOC, Discrimination & Harassment, Highlight, Human Resources (HR) Compliance, Litigation

DSC03212$20,000,000.00.

That, as they say in the legal parlance, is a crooked number with a LOT of zeros behind it.

And that is also the reported amount of settlement between Gretchen Carlson and Fox News over her sexual harassment lawsuit.  Plus an unprecedented apology.  And it doesn’t take into account other cases of harassment that are allegedly being settled concurrently.

Now I’m sure the settlement had all the disclaimers that Fox News was not admitting liability as part of the settlement.

But you don’t need to be a lawyer to know that you aren’t paying a $20M settlement as “nuisance” value.  I have little doubt that the investigation that Fox News conducted turned up some pretty egregious evidence of something and the company figured that paying the settlement was STILL a lot cheaper than having the case go forward.

It’s a big deal in a lot of respects.

First, by my back of the napkin recollection, it has to be one of the largest single-plaintiff sex harassment settlements ever inked. (If there were ones much larger, it’s been kept pretty confidential.).

Second, it demonstrates — as if the allegations didn’t already — that despite pervasive training and years of awareness, that some workplaces are still riddled with sexual harassment.  I noted as much in a prior post back in July but back then it was tough to figure out what was happening.

A $20M settlement sort of avoids any doubt as to what was happening.

Third, companies need to be vigilant and if the CEO/President is condoning the behavior (or worse, is the one engaging in harassing behavior), then it’s up to the Board of Directors to take a stand.

Fourth, it’ll likely be used as a benchmark for other cases of harassment in settlement negotiations. You can just hear it now: “Well, if Gretchen Carlson got $20M, my client’s case is worth at least half as much….”

Lastly, it should put to bed the notion that we are in an environment where sex harassment just isn’t a problem any more.  Back in 2011, there was a notable column in The New York Times that suggested that was the case and I highlighted it in a discussion about this very issue.

Gretchen Carlson will now join the pantheon of people who spoke up when it would’ve been more convenient to remain quiet.  And everyone — employers and employees alike — ought to appreciate the sunlight she has brought to the issue.  Whether this case is a harbinger of more things to come or not, use this case as an opportunity to test your own practices.

Shoddy Harassment Investigation Can Still Lead to Liability, Court Rules

Posted in Discrimination & Harassment, Highlight, Litigation

starrWelcome back from summer! Today, my colleague Gary Starr and I bring you the story of an employer that thought that it had done everything right — only to see it all go wrong. 

Imagine this scenario: You, the employer, think you’ve taken all the right steps when hearing about a harassment complaint. You encourage the employee to file a written complaint. You conduct an investigation. You take “prompt remedial action”. What could go wrong?

Well, in a recent case at the Second Circuit, Vasquez v. Empress Ambulance Service, the employer later discovered it had been snookered by the alleged harasser. As a result, its investigation did not uncover what really happened. In fact, the employer — according to the court — had so messed up the investigation that it had charged the victim with actually being the harasser. This should serve as a cautionary tale for employers that investigations need to do more than simply weigh the proverbial “he said/she said” arguments.

What was the case about? 

A recently hired EMT complained she was being harassed by the Company dispatcher. The dispatcher repeatedly asked her out, even after she kept telling him that she was not interested and had a boyfriend. He would put his arm around her whenever he had the chance. He even sent her an “Anthony Weiner” picture of himself. She became fed-up and went to her manager, who asked her to write a formal complaint, which the company would investigate.

The dispatcher learned that she was complaining about him. He then went into his cellphone and changed text messages and included a revealing picture from a woman with whom he had a consensual relationship. He made the materials look like they came from the EMT. He then took screen shots of the doctored texts and photos and presented them to the Company when he was contacted as part of the investigation.

The investigators believed the co-worker’s account. When they met with EMT, she offered to show her phone with the texts and photos, but they declined. Instead they terminated her for sexually harassing the dispatcher.

What happened next?

She sued the employer claiming that she was retaliated against for raising her concerns about being harassed. The employer sought to have the case dismissed because it claimed it acted in good faith, its managers and supervisors were not involved in any harassment, and the decision-makers conducted an investigation and believed what they were told by the co-worker. The Company also argued that there were no allegations that the Company had a discriminatory motive to terminate the employee.

The Second Circuit found that the employer did not have to have a discriminatory motive to be liable for the harassment and retaliation. This was because the co-worker had manipulated the decision-makers so that the Company ultimately ended up being the means by which the co-worker fulfilled his unlawful design. The Court found that that the Company could be liable because it was negligent in the way in which it handled the investigation.

The investigation itself became a vehicle for the harassment to continue, says the court.

The court concluded that the investigation was conducted in such a way that it allowed the dispatcher to significantly impact the outcome. For example, the investigators did not allow the EMT to present evidence that would support her claim that she was the victim. The allegations in the complaint revealed that the dispatcher had tried unsuccessfully to have another employee lie on his behalf about the relationship he had with the victim, which the investigators did not learn. The Court noted that the investigation also failed to identify serious flaws in the dispatcher’s evidence, including the fact that one of the text messages he provided was sent to someone who was asleep, even though a reading of the text showed it was sent during the shift being worked by the EMT.

The Court recognized that a Company would not be liable if it had just got the decision wrong. However, the court found that the employer should not be shielded from liability when it acts negligently and allows a supervisor or a lower ranked employee with a discriminatory or retaliatory prejudice to influence the adverse decision. The flawed investigation undermined the Company’s defenses.

The investigators failed to permit the employee to present evidence that would call into question the documentation submitted by the co-worker. They failed to account for the likelihood that the co-worker might lie to protect his job and paint the woman was the perpetrator and not the victim of harassment. And they treated the dispatcher more as an informant, rather than as a potential suspect. They did not carefully review the timing of the charges and the evidence presented by the co-worker, including the fact that the morning the complaint was filed, he already had printed copies of amorous texts from the woman to substantiate his position.

Quite simply, the sloppiness of the investigation allowed the harasser to manipulate the process.

What’s the takeaway from the case?

Employers faced with charges of harassment or discrimination need to take their investigations seriously. It is not enough simply to talk to the individuals involved, but a thorough review of the statements made and the documents presented must be undertaken and then preserved.

Giving the complaining person an opportunity to respond to the defense being offered against her, is important so that the investigator can fairly weigh the information presented. The company should provide the complaining employee the assurance that the allegations are being taken seriously and that the process has been fair and thorough.

Examining what is presented in a skeptical light is important as is being sure that there is a legitimate basis for the action taken. Employers who do not take harassment and discrimination allegations seriously or who do not conduct thorough investigations will find themselves later trying to explain away their actions.

Why Do We Celebrate Labor Day?

Posted in Highlight, Labor Law & NLRB

2016labordayWhy do we celebrate Labor Day?

And should it be celebrated on a Tuesday instead?

It’s one of those holidays that we celebrate, but my guess is that most people have no idea on the answer.  But several (many?) years ago, I touched on this on the blog and I thought it would be fun to resurrect some of those facts.

Indeed, Slate magazine had a good explainer way back in 2010 on the subject.  Turns out Grover Cleveland has a lot to do with it but its origins go back even further than that.

Though President Grover Cleveland declared Labor Day a national holiday in 1894, the occasion was first observed on Sept. 5, 1882, in New York City. A parade was organized by the city’s Central Labor Union, a branch of the Noble Order of the Knights of Labor, a secretive labor union founded in 1869 by a clique of Philadelphia tailors. Historians still debate over whom, specifically, to credit with the idea of a holiday dedicated to the workingman. Some say that Labor Day was the brainchild of Peter J. McGuire, co-founder of the American Federation of Labor. Others argue that Matthew Maguire, the CLU’s secretary, was the holiday’s mastermind and that he doesn’t receive proper credit because he ticked off the mainstream labor movement by running for vice president on the National Socialist Labor Party ticket in 1896.

According to Ted Watt’s The First Labor Day Parade, the September date was chosen because it coincided with a Knights of Labor conference in New York, thus guaranteeing a sizable turnout for the festivities. Though the event wasn’t particularly festive, at least by today’s standards: It resembled a protest far more than a parade, with CLU members required to march in support of the eight-hour workday. (Those who ditched faced fines.)

The U.S. Department of Labor’s website delves into the controversy over how the holiday started as well with this background explainer page too.

More than 100 years after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers.

The most fascinating part to me was that it was first celebrated on a Tuesday!

But now, every year, the USDOL devotes new webpages to this day.  And it even posted a video about the work it is doing on the subject. 

And how did such a holiday then become the traditional end to the summer season? Well, I’ll leave that to the experts. But in the meantime, enjoy this list of top 10 workplace songs (plus some alternates).  And be sure to check out the comments on the post where my labor law friends post a “union-friendly” list too including “Bread and Roses”.  

How to Avoid Discrimination in Hiring, While Complying with Export Laws

Posted in Discrimination & Harassment, Human Resources (HR) Compliance, Laws and Regulations

ashleymendoza1alfredoMy colleagues, Ashley Mendoza and Alfredo Fernandez, return today for a guest post today that shows that employment law issues can sometimes present themselves in different formats.  My thanks to the both of them in presenting a fairly advanced topic in a form that will hopefully be of interest to a few of you out there.

Imagine your company has employed a research scientist to support your technology programs.  The scientist is a citizen of the People’s Republic of China and holds an H-1B visa, but is not authorized to view certain export-controlled technical data.  Unclear of the restrictions in place, other company employees provide the foreign scientist with technical data related to a military program in the course of his job duties.  This real life scenario recently resulted in a $100,000 settlement penalty with the U.S. State Department this summer.

It appears that a company policy to screen out foreign candidates for job openings of this sensitive nature would have prevented this violation and penalty, but a company also faces the challenge of avoiding discrimination in its hiring practices.  Is this a lose-lose scenario?  Not quite, but companies must pay close attention to recent guidance and regulatory revisions to understand their compliance obligations.

The Tricky Intersection of Legal Obligations

On March 31, 2016, the U.S. Department of Justice Office of Special Counsel for Immigration-Related Unfair Employment Practices (the “OSC”) released its most recent guidance to employers to aid them in navigating the murky waters where export regulations meet immigration antidiscrimination regulations.

These two regulated areas may contradict each other when it comes to the hiring practices of U.S. companies soliciting candidates for a position where the job duties impose compliance with export control laws. Unfortunately, the limited governmental guidance confounds some employers when it comes to complying with both sets of regulations in certain scenarios.   The OSC’s recent guidance and upcoming definitional changes within the export control laws do provide some general direction for employers; however several ambiguous issues remain unresolved.

IMG_7083What We Know About the Export Regulations in this Context

Exports are commonly associated with the shipment of a tangible item to a foreign country, but the U.S. export regulations have a much broader application.  An export also includes the transfer of controlled technical data or technology to foreign persons, even when the transfer takes place within the geographic territory of the United States.  Such a transfer is “deemed” to be an export to the country of the foreign person and is referred to as a “deemed export.”

Although not the only federal agencies administering export control laws, the U.S. State and Commerce Departments manage the two broadest export control systems.  The U.S. State Department’s Directorate of Defense Trade Controls administers the International Traffic in Arms Regulations (“ITAR”), found at 22 C.F.R. §§ 120-130, which control defense articles and services.  The U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) administers the Export Administration Regulations (“EAR”), found at 15 C.F.R. §§ 730-774, which control commercial and dual-use items,  as well as limited low-sensitivity military items.  Generally speaking, all articles controlled under the ITAR and many articles controlled under the EAR require an export license before the export, including a deemed export, occurs.

Each set of regulations accounts for deemed exports but have slightly different definitions of key terms.  In fact, new and revised definitions under both regulations become effective September 1, 2016.  One primary intention of the definitional changes is to better harmonize the analogous definitions in both systems. Under both regulations, the deemed export rule applies only to foreign persons and, by definition, does not apply to U.S. citizens, persons lawfully admitted for permanent residence in the United States (e.g., green card holders) or to persons who are protected individuals under the Immigration and Nationality Act (“INA”)(e.g., certain refugees and asylees).

The below table showcases a few of the new definitions, including the improved harmonization for key terms such as export and release. Continue Reading