With a weekend of football championships behind us, this post tackles the privacy developments that employers here in Connecticut need to run down.  Indeed, while I could just pass off two recent posts from my colleagues, it’s worth going through a progression of options.

One development is for the U.S. “patriots”, while another

hermanMy colleague Marc Herman returns today to bring back the story of wellness programs and whether they will continue to pass legal muster. In the first post of a two-parter, Marc updates us on some litigation. Read on.  

Here’s one for you:  Did you hear the one about the employee that turned down the

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.
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As I said before, the notion that this might be a quiet year for employment law legislation at the Connecticut General Assembly has long since left the train station.

Indeed, we’ve appear to be swinging completely in the opposite direction. Anything and everything appears up discussion and possible passage this year — including items that really stood no chance in prior years.

GA2I’ll leave it for the political pundits to analyze the why and the politics of it all. But for employers, some of these proposals are going to be very challenging, at best, if passed.

One such bill, which appeared this week on the “GO” list (meaning its ready for considering by both houses) is House Bill 6850, titled “An Act on Pay Equity and Fairness”.  Of course, you won’t find those words in the bill itself which is odd.  There is nothing about pay equity in the bill; indeed, it is much much broader than that.

It stands in contrast to, say, the Lilly Ledbetter Fair Pay Act, which tried to tackle gender discrimination in pay directly.

This bill would make it illegal for employers to do three things. If passed, no employer (no matter how big or small) could:

  • Prohibit an employee from disclosing, inquiring about or discussing the amount of his or her wages or the wages of another employee;
  • Require an employee to sign a waiver or other document that purports to deny the employee his or her right to disclose, inquire 1about or discuss the amount of his or her wages or the wages of  another employee; or
  • Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses, inquires about or discusses the amount of his or her wages or the wages of another employee.

You might be wondering: Isn’t this first bill duplicative of federal law? And the answer is yes, and then it goes beyond it.  Federal labor law (the National Labor Relations Act) already protects two or more employees discussing improving their pay as a “protected concerted activity”.  It’s been on the books for nearly 80 years. So, as noted in an NPR article:

Under a nearly 80-year-old federal labor law, employees already can talk about their salaries at work, and employers are generally prohibited from imposing “pay secrecy” policies, whether or not they do business with the federal government.

This provision goes beyond that by making it improper for an employer to prohibit an employee from even disclosing another employee’s pay.


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