On December 21, the National Labor Relations Board (NLRB) did something it rarely does: it indicated its intent to change labor law requirements through the regulatory process, rather than its normal process of case-by-case adjudication.

See full text of NLRB’s proposed rule on employee rights notice posting, including introductory commentary. NOTE: This is just a proposed rule at this time, with a sixty-day comment period now open.

NLRB Press Release Summary of Proposed Notice-Posting Rule

The NLRB press release states:

The rule would require employers to notify employees of their rights under the National Labor Relations Act.

[T]he Board “believes that many employees protected by the NLRA are unaware of their rights under the statute. The intended effects of this action are to increase knowledge of the NLRA among employees, to better enable the exercise of rights under the statute, and to promote statutory compliance by employers and unions.”

Private-sector employers (including labor organizations) whose workplaces fall under the NLRA would be required to post the employee rights notice where other workplace notices are typically posted. If an employer communicates with employees primarily by email or other electronic means, the notice would be posted electronically as well. The notice would be available from the agency’s regional offices and could also be downloaded from the NLRB website.

The proposed notice is similar to one recently finalized by the U.S. Department of Labor for federal contractors. It states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to choose not to do any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.

Key Elements of NLRB’s Proposed Employee Rights Notice-Posting Rule

• All employers subject to National Labor Relations Act (NLRA) must post notice.
• Employers must post the required notice of employee rights conspicuously, including all places where notices to employees are customarily posted.
• Electronic posting by email or on internet or intranet is also required if employer customarily communicates with employee by such means.
• Translated version may be required if significant portion of workforce is not proficient in English.
• The NLRB will enforce the new rule by processing alleged failure to post the employee rights notice as an unfair labor practice charge.
• In addition to remedy of order requiring posting along with a remedial notice, NLRB may enforce rule by tolling statute of limitations for filing an unfair labor practice charge and treating willful failure to post as evidence of unlawful motive in case in which motive is at issue.

Full Text of Proposed Notice

The National Labor Relations Act (NLRA) guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the
National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
• Form, join or assist a union.
• Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
• Discuss your terms and conditions of employment or union organizing with your co-workers or a union.
• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
• Strike and picket, depending on the purpose or means of the strike or the picketing.
• Choose not to do any of these activities, including joining or remaining a member of a union.

Under the NLRA, it is illegal for your employer to:

• Prohibit you from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking
  lots or break rooms.
• Question you about your union support or activities in a manner that discourages you from engaging in that activity.
• Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
• Threaten to close your workplace if workers choose a union to represent them.
• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
• Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
• Spy on or videotape peaceful union activities and gatherings or pretend to do so.

Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:

• Threaten you that you will lose your job unless you support the union.
• Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
• Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
• Take other adverse action against you based on whether you have joined or support the union.

If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the
violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency’s website: www.nlrb.gov. You can also contact the NLRB by calling toll-free:1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired.

The National Labor Relations Act covers most private-sector employers.Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the
NLRA may be covered).

This is an official Government Notice and must not be defaced by anyone.

EEOC Files Disparate Impact Lawsuit Based on Use of Credit Records in Hiring

In a press release today, the EEOC (Equal Employment Opportunity Commission) announced the filing of a nationwide hiring discrimination lawsuit against Kaplan Higher Education Corp.

The EEOC alleges that Kaplan’s use of applicants’ credit history discriminates because of race, under the disparate impact theory of employment discrimination.

In the lawsuit, filed by the EEOC’s Cleveland Field Office in the U.S. District Court for the Northern District of Ohio, the EEOC alleges that Kaplan engaged in a pattern or practice of unlawful discrimination by refusing to hire a class of black job applicants nationwide. The core allegation is that:

Since at least 2008, Kaplan Higher Education has rejected job applicants based on their credit history. This practice has an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity.

The national scope and “pattern-and-practice” allegation virtually guarantee that this will be a very costly case to defend.

Applicable Law on Disparate Impact, Generally

The EEOC press release states the law simply:

It is a violation of Title VII [of the Civil Rights Act of 1964] to use hiring practices that have a discriminatory impact because of race and that are not job-related and justified by business necessity.

More Precisely, Title VII, as Amended by the Civil Rights Act of 1991, Provides:

An unlawful employment practice based on disparate impact is established . . . if:

(A)(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity; or

(ii) the complaining party makes the demonstration described in subparagraph (C) with respect to an alternative employment practice and the respondent refuses to adopt such alternative employment practice.

(B) (i) With respect to demonstrating that a particular employment practice causes a disparate impact . . . , the complaining party shall demonstrate that each particular challenged employment practice causes a disparate impact, except that if the complaining party can demonstrate to the court that the elements of a respondent’s decisionmaking process are not capable of separation for analysis, the decisionmaking process may be analyzed as one employment practice.

(ii) If the respondent demonstrates that a specific employment practice does not cause the disparate impact, the respondent shall not be required to demonstrate that such practice is required by business necessity.

(C) The demonstration referred to by subparagraph (A)(ii) shall be in accordance with the law as it existed on June 4, 1989, with respect to the concept of “alternative employment practice”.

(2) A demonstration that an employment practice is required by business necessity may not be used as a defense against a claim of intentional discrimination under this subchapter.

More Detail on Credit Reports and Disparate Impact From EEOC Informal Discussion Letter

In a letter dated February 14, 2005, the EEOC stated this explanation:

Rejecting applicants on the basis of financial criteria such as poor credit ratings has sometimes been found to disproportionately exclude minority groups. For example, in United States v. City of Chicago, 385 F. Supp. 543, 557 (N.D. Ill. 1974), the court held that a police department could use financial information in background checks of applicants only if using the information does not have an “adverse impact” or is job related and consistent with business necessity. Note that courts will not assume that an employer’s exclusion based upon financial criteria disproportionately excluded a protected class. That would have to be proved.

Even if such “adverse impact” on a protected group is proven, Title VII is not violated if the employer can show that requiring the financial criteria is job related and consistent with business necessity. For example, in EEOC v. United Virginia Bank/Seaboard National, 1977 WL 15340, 21 FEP Cases 1392 (E.D. Va. 1977), the court concluded that a bank had a business need to conduct pre-employment credit checks because employees handle large amounts of cash.

The Bottom Line on Lawfulness of Employer Use of Credit Record in Hiring

The answer here is the famous lawyer non-answer: “It depends.”

If a very strong correlation between credit history and job performance can be established, as in the case of the bank example above, then the potential of liability for disparate impact can be overcome.

But in many situations, if not most, using credit records as a selection tool in hiring is very risky.

Relatively well-off business owners and managers may think that financial problems necessarily show irresponsibility and reflect poorly on character and integrity, but they don’t necessarily show that at all. People may have trouble paying bills for many other reasons, including having no or inadequate medical coverage and getting hit with high medical bills, one of the most common causes of personal bankruptcy.

The Bigger Lesson About Disparate Impact

Regional Attorney Debra Lawrence of the EEOC’s Philadelphia District Office, which oversees Pennsylvania, Delaware, West Virginia, Maryland, and portions of New Jersey and Ohio, said: “Employers need to be mindful that any hiring practice be job-related and not screen out groups of people, even if it does so unintentionally.”

Fair Credit Reporting Act Adds Further Challenges

Aside from the above discrimination issues, employer use of credit reports implicates the Fair Credit Reporting Act (FCRA) and its detailed consent and notification requirements.