SEC Blows the Whistle on Confidentiality Agreements

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Thanks to a recent enforcement action brought by the U.S. Securities and Exchange Commission (SEC), it may be time to review and revise the confidentiality provisions in employment agreements, severance agreements, employee handbooks, and other similar material.

What Happened?

As part of its regular compliance program, an employer routinely conducted internal investigations in response to allegations of potential illegal or unethical conduct. The SEC discovered that the employer conducted interviews with employees as part of the internal investigations and, in connection with the interviews, asked employees to sign form confidentiality agreements that: (i) prohibited the employee from discussing the interview without prior authorization from the legal department; and (ii) made it clear that unauthorized disclosures may result in disciplinary action, including termination of employment. The SEC determined that these confidentiality agreements violated whistleblower protections under federal securities laws and required the company to revise the confidentiality agreements as part of its settlement with the SEC to make it clear that nothing in the agreements would interfere with the employees’ ability to exercise their rights under whistleblower provisions of any federal law or regulations (what we’ll call a “whistleblower carve out”). Continue reading this entry

U.S. Army Loses Battle to Regulate Bathroom Selection of Transgender (Civilian) Employee

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On April 1, 2015, the EEOC ordered the Army to pay damages for discriminating against a transgender employee when it prevented her from using the common women’s bathroom and routinely demeaned her by calling her “sir” and other names meant to deprive her of equal status, respect, and dignity in the workplace.

The complainant is a transgender woman. She talked with her employer about transitioning her gender presentation/expression, and these talks initially went well. An agreement was reached that during transition, the employee would use a single-user bathroom rather than the common women’s restroom until she had undergone an undefined surgery. The plan was for the employee to start using the common women’s bathroom only after the surgery was complete. Continue reading this entry

Labor and Employment — The TMZ of Law

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We employment lawyer types proudly boast that no one has better legal stories to tell than we do (if only we could tell all of our stories). Some of our best stories were thrust into the media during the first quarter of 2015. Not only are these stories juicy, but they are cautionary tales and a learning experience for employers.

On February 5, 2015, a jury in Manhattan found the law firm of Faruqi & Faruqi, LLP, and one of the firm’s partners, partially liable for creating a hostile work environment. A former associate claimed that the partner, a reputed rainmaker, repeatedly spoke to her using crude and vulgar language, kissed her and touched her breasts without her consent, and propositioned her. She alleged his conduct culminated in a sexual assault following an office holiday party. The partner testified that the former associate voluntarily returned to the office with him, but that no sexual encounter ever occurred. Following a highly publicized three week trial, the jury found that the law firm and the partner did not violate the federal anti-harassment law. However, the jury did award the former associate $140,000 in damages, representing $90,000 in lost compensation, $45,000 in punitive damages against the partner, and $5,000 in punitive damages against the firm. Continue reading this entry

Summer Is Almost Here (Along With Casual Attire) — Time to Remind Employees of the Dress Code Before Office Resembles a Beach

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Easter Sunday just passed, so it is official —spring is here and, before we realize, summer will have arrived. With summer comes warmer weather and trips to the pool, lake, or beach. People exchange their jackets, sweaters, and boots for more casual clothing (such as flip flops, shorts, and tank tops). Often this overly casual attire makes its way into the workplace, notwithstanding dress code policies. Further complicating the matter, many employers institute “casual” dress days during the summer months. Therefore, this is a good time to remind employees and managers of the company’s dress code policy and the consequences for violating the policy. Continue reading this entry

Supreme Court Delivers New Life to Pregnancy Discrimination Act Claim

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In an eagerly awaited ruling expected to provide greater guidance on an employer’s obligation to accommodate pregnant employees, last week the U.S. Supreme Court established the standard an employee must meet to state a discrimination claim under the Pregnancy Discrimination Act (PDA) when an employer provides accommodations to non-pregnant employees, but does not provide the same accommodation for a pregnant worker. The case had generated significant attention over the last year, in part, because of the aggressive position taken by the employee and the U.S. Equal Employment Opportunity Commission (EEOC), claiming that any time an employer offered an accommodation to another employee with similar physical limitations, the employer had an absolute obligation to give the pregnant employee the same accommodation, without regard to the reasons the employer had provided the accommodation in one situation, but not the other. Though the Supreme Court rejected this aggressive position, it also rejected the employer’s position in the case and, accordingly, reversed the decision of the lower appellate court, which had affirmed the employer’s original victory on the employee’s claim of discrimination. Continue reading this entry