News and Articles

September 2015 NEWSLETTER

Yogi Patel - Wednesday, September 09, 2015

Dear valued clients and supporters: This month's newsletter will focus on: (1) the NLRB's restatement of the joint-employer standard, expanding the right to unionize; (2) the New York City ban on employers using or requesting credit information of employees and job applicants; and (3) Businesses' need to keep trade secrets safe, methods for protecting them, and actions to take when they are misappropriated.

NLRB Expands Right to Unionize 
Under the National Labor Relations Act, employees have the right to collectively bargain (unionize) only against their employer. The joint-employer doctrine recognizes that in circumstances where two separate entities each have the right to exercise a certain degree of control over a set of employees' working conditions, that both entities should be considered employers. In a recent decision, Browning-Ferris Indus., the NLRB "restated" its standard for evaluating the existence of a joint-employer relationship in a way that expanded its scope. The decision particularly impacts the franchise industry.  (FULL ARTICLE)
 

NYC Ban on Employer use of Credit Information 
As of September 3, 2015, NYC employers will be prohibited from using or requesting the consumer credit history of an applicant or employee pursuant to Local Law 37. Under the new law, it will be considered an unlawful discriminatory practice to ask applicants or employees about their credit information, such as their credit score, missed payments, and collections. Any use of such credit information with regard to hiring, compensation, or the terms, conditions, or privileges of employment will also be considered an unlawful discriminatory practice. Employees and applicants who suffer credit discrimination will be protected by New York City Human Rights Law, which allows them to file a claim against the employer and seek compensatory and punitive damages, as well as discretionary costs and attorney's fees. Employers should be aware of this development and work with their counsel to ensure their employment practices are not in violation of this new law.  (FULL ARTICLE)

Trade Secrets 
Trade Secrets are the key to many business's success, especially in the absence of a patent or other forms of intellectual property protections in place. Proprietary information that entities exclusively know and use is what allows them to compete in their industries. When trade secrets become publicly known or known to a competitor, an entire business may be at stake. That is why any business that operates in reliance upon trade secrets must take specific precautions to limit the number of people who access such information and to place restrictions on those with whom it is shared. Requiring employees to agree not to disclose trade secrets and to follow certain protocols when accessing or using trade secrets is vital to a business's security. When a business shares its secrets with potential investors or partners, the interaction should be subject to a non-disclosure agreement. Security measures are the front line defense against the leaking of trade secrets, and imposing affirmative obligations not to disclose or use trade secrets gives businesses specific remedies against those who misappropriate their proprietary information. (FULL ARTICLE) 

Readers are encouraged to follow us on Twitter (@lloydpatelllp) and Facebook to receive updates on this and other issues throughout the month.

New York City Bans Credit Checks By Employers

Yogi Patel - Tuesday, September 08, 2015

On May 6, 2015, New York City Mayor Bill de Blasio signed into law a general ban on employers from using or requesting the credit history of their employees or prospective employees. Local Law 37, which goes into effect September 3, 2015 as part of New York City Human Rights Law, specifically prohibits most employers with four or more employees from requesting or using an applicant or employees credit history for employment purposes. Employers may also not use the credit history of an applicant or employee to discriminate against her when it comes to hiring, compensation, or the terms, conditions, or privileges of employment. There are several exceptions to the prohibition, but employees and applicants should know their rights, and employers should take care to know their obligations as promulgated by the new law.

Local Law 37 adds language to Sections 8-102 and 8-107 of the administrative code of the city of New York, which incorporates the new prohibitions into New York City Human Rights Law and grants victims of credit discrimination its protections. Local Law 37 states:

[I]t shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to request or use for employment purposes the consumer credit history of an applicant for employment or employee, or otherwise discriminate against an applicant or employee with regard to hiring, compensation, or the terms, conditions or privileges of employment based on the consumer credit history of the applicant or employee.

The law defines “consumer credit history” to include “an individual’s credit worthiness, credit standing, credit capacity, or payment history, as indicated by (a) a consumer credit report; (b) credit score; or (c) information an employer obtains directly from the individual” regarding credit accounts, missed payments, collections, bankruptcies, judgments, or liens. Any written report or other communication made by a consumer-reporting agency bearing consumer credit information is considered a consumer credit report under the new law.

Exceptions to the new ban include:

-Jobs in the securities industry;

-Police and peace officers;

-Jobs that require a federal or state security clearance;

-Non-clerical positions that have access to trade secrets, intelligence information, or national security information;

-Positions (i) with signing authority over third party funds or assets of $10,000 or more; or (ii) involving a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more;

-Employees required to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.

-Requests for consumer credit information pursuant to a subpoena, court order, or law enforcement investigation.

What this all means, in effect, is that if an employer takes an adverse employment action against an applicant or an employee using or requesting the information protected by Local Law 37, then the applicant or employee would have the right to bring a complaint for discrimination against the employer under New York City Human Rights Law. An adverse employment action includes firing, reducing an employee’s pay, deciding to not hire someone, or otherwise discriminating against an employee or applicant because of his or her credit history. In a private action brought by an aggrieved party, he or she may recover compensatory and punitive damages, and upon prevailing and at the court’s discretion, costs and reasonable attorney’s fees.

Overall, employees and employers alike should seek to understand this new law, respectively to know their rights and to understand their obligations. Employers should work with counsel to review their hiring and other employment practices, including any forms they require applicants or employees to fill out to ensure they are in compliance before the effective date.

This article is not intended to be nor should it be construed as legal advice. Any employee who believes she has suffered a violation under this or any other law, or any employer seeking guidance should speak directly with an attorney.


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