EMPLOYERS MUST BEAR THE RISK OF HR TECHNOLOGY

 

By Kate Bischoff, Attorney
tHRive Law & Consulting LLC

Technology is everywhere – on your wrist, in your pocket, on your nightstand, and in your car and office.  Depending on your relationship with technology, you either love or hate it – all while using it regularly.

Human resources is getting into the game with technology vendors promising to “find the BEST candidates,” “address ALL your compensation needs,” and “solve ALL your problems.”  (Well, maybe that last one is a smidge hyperbolic.)  While technology does offer HR some significant benefits, like getting great insights based on an employer’s own data or taking some tactical, paper-pushing activities off of HR’s desk, technology poses some risks.  It’s just that few vendors talk about those risks.

It is important to note that when your information is stored elsewhere (ie. within a vendor’s software platform or at their office), it remains the responsibility of the employer to bear the risk. You need to ensure that your providers have systems in place to not only protect the vulnerability of the data, but to assist in avoiding risk.

Tech vendors are not on the hook for decisions that employers make. The technology they create helps employers make decisions, it doesn’t make the decisions for them.  Your GPS may tell you where to turn, but you still make the decision where and when to turn.  Your GPS merely provides an option.  The same is true with HR technology.  Employers will be on the hook for their decisions and are not likely to be able to shift any blame onto the tech vendor.

Whether it’s artificial intelligence, analytics, machine learning, robots, chatbots, or any of the other multitudes of technology, here are but a few of the risks employers face when it comes to using technology:

  1. Discrimination.  Vendors may claim that their products can help reduce bias in decision making because of their algorithms, but it is nearly impossible for an algorithm to be bias-free or to remove bias from data.  Algorithms are created by people, feed data created by people, and people are biased.  When you use an algorithm (whether it is machine learning, AI, or analytics), the results produced can show evidence of bias.  This bias could result in a discrimination lawsuit.  Plaintiffs’ attorneys and groups are learning all they can about this, even creating their own technology that can detect discrimination.
  1. Fair Credit Reporting Act.  When technology gathers even publicly available data and analyzes it, and that data is then used to make an employment decision, the technology runs up against FCRA.  We know that FCRA has several notice provisions. Most analytic vendors don’t know of this law. Employers need to ask questions to gauge the vendor’s knowledge and applicability of these laws.
  1. Data security.  These days, technology is often resting in “the cloud.”  As the saying goes, “There is no such thing as the cloud.  It’s just someone else’s computer.”  This saying is true.  A tech vendor is housing and securing your employee’s personally identifiable information, including Social Security Numbers, W-2 data, and family information.  This is sensitive stuff that hackers are eager to get their hands on.  With W-2 information, they can file false tax returns and get refund checks. With direct deposit information, they could reach into employee bank accounts. And with family benefit enrollment information, they could apply for credit cards.  All of this is bad news for employers.  While courts are currently split on who bears the liability when there’s a breach, you can bet your bottom dollar on who is at fault.
  1. Failing to notice issues. HR folks know that when an employee utters a few magic words (like “leave,” “harassing,” “illegal,” or “accommodation”), a bunch of different laws are triggered requiring specific and targeted attention.  Failing to notice those words could be costly for an employer.  Technology might not be aware of these triggers and could miss the issues.  Take for example a chatbot that can provide information on PTO hours.  If an employee asks for leave, will the chatbot know that how the employee intends to use the leave could involve several different policies or laws?  Only if the employer and the tech vendor understands that it does.  In a recent demonstration by a high-profile vendor, its chatbot did not.  Missing an FMLA request is a costly lawsuit.

Technology is cool, amazing, and has lots of benefits to offer employers. But it carries risks that can be reduced by asking vendors the right questions, understanding how to use the tech in such a way that reduces the risk, and engaging vendors who understand the risks and want to help reduce those risks for the employer.  If employers don’t do these things, they could easily find themselves in a legal storm without an umbrella, raincoat, or rain boots.

Top Takeaways from the 2017 Background Screening Annual Conference

In our continuous effort to stay informed on industry trends, including upcoming legislation and case law affecting the industry, we recently attended the National Association of Professional Background Screeners (NAPBS) Annual Conference in Orlando. The theme of this year’s conference was Creating Magical Connections.

The conference kicked off with an inspirational keynote address by Lee Cockerell of Lee Cockerell, LLC, called Lessons in Leadership, Management and Customer Service. YOU Can Create Disney Magic Too! Following the keynote, a variety of educational session tracks were offered covering the areas of Legal/Compliance, Business, International, Drug Testing, and Tenant.

Hire Image CEO Christine Cunneen noted: “Attending this conference is an opportunity to further educate ourselves through informative sessions and meetings with other industry professionals. It fuels our commitment to our clients to stay informed, so that we can effectively and timely communicate any updates or changes relevant to their businesses.”

Top Takeaways:

  • The Federal Trade Commission, through Assistant Director, Robert Schoshinski, continues to educate consumer reporting agencies (background screeners) and end-users of consumer reports. The FTC is committed to learning about the issues faced by background screeners, such as the barriers created when access to data is limited.
  • The industry anticipates the increased introduction of legislation at the state and local levels impacting the use of background checks and the ability to access court documents. NAPBS has engaged Brent Smoyer, a state and local government relations director, to educate legislators of the unintended consequences of these restrictions.
  • Companies such as Boeing, Eli Lilly, and the University of Delaware presented, noting that while it is apparent their expectations include background screening reports being accurately and timely delivered, they would like to see additional collaboration and communication from their background screening providers throughout the process.
  • The freelance/gig economy continues to grow and is requiring a change in the way background checks are delivered.
  • The leading industry attorneys from around the country provided various sessions on compliance and trends impacting the industry, based on recent court rulings. They also reminded background screening attendees not to give legal advice and to encourage end-users to review their processes with their legal teams.

 

AR Takes Employer-Focused Approach to Medical Marijuana in the Workplace

Arkansas amended its Medical Cannabis Amendment in favor of employers

In November of 2016, Arkansas legalized medical marijuana in Initiative 6, the Arkansas Medical Cannabis Amendment (MCA). Since then, Arkansas has taken steps that demonstrate the state has an employer-focused approach to marijuana when it comes to the workplace.

The MCA allows “qualifying patients” with certain medical conditions to purchase cannabis from state-licensed dispensaries When it comes to employers, the MCA, like most legislation in other states, makes it unlawful for an employer to discriminate against an “individual” based on his or her past or present status as a “qualifying patient.”

In an effort to clarify the obligations and restrictions on employers, Arkansas recently amended the MCA. Some of the more significant changes include:

The MCA now only applies to employers with nine or more employees (employers with 8 or less are not subject to the MCA’s anti-discrimination provisions).

The anti-discrimination provisions now apply only to “applicants” and “employees,” not all “individuals.”

An employer now cannot be sued under the MCA in the following circumstances:

– if he or she is acting in accordance with a drug-free workplace program or policy

– if he or she is acting on a good faith belief the marijuana was possessed or used on the premises of the employer or during hours of employment.

– if her or she is acting on a good faith belief that the employee or applicant was under the influence of marijuana while on the premises of the employer or during hours of employment.

– if excluding or removing an employee or applicant from a “safety sensitive position” based on the employer’s good faith belief that he or she was engaged in the current use of marijuana.

The MCA has a one year statute of limitations.

Damages under the MCA are statutorily capped.

Individuals, such as managers or supervisors, cannot be individually sued under the MCA.

Employer Takeaway: Employers should update their written policies and implement new practices if operating in a state with a medical marijuana law. Drug testing policies and procedures should also be reviewed and updated and “safety-sensitive” positions should be identified, along with written job descriptions for them.

Medical Marijuana Cases Impacting Employer Rights to Drug-Free Workplace

Recent court cases in Rhode Island and Massachusetts demonstrate that employers need to consider human resource and legal issues surrounding both applicants and employees who use medical marijuana. These cases not only complicate matters for employers who conduct drug testing for drug-free workplaces, but also create difficulty in reconciling their own safety policies with the courts’ decisions. With these decisions, an employer’s independent right to hire and fire become increasingly complicated when it comes to cannabis use.

Maintaining a safe and productive workplace is paramount for employers, and pre-employment and ongoing drug testing is key. However, tests for marijuana do not measure current impairment, making it nearly impossible for an employer to ensure a safe workplace. Some states significantly restrict the circumstances under which employers can drug test employees. As such, employers are increasingly finding themselves with no effective way to guard against impaired medical marijuana users and to protect not only that employee, but also those working with them.

In Rhode Island, a Superior Court Judge recently ruled on summary judgment that an employer violated the state’s medical marijuana statute when they refused to hire an applicant based on her use of medical marijuana. Callaghan v. Darlington Fabrics, C.A. No. P.C. 2014-5680 (May 23, 2017). The applicant disclosed to her prospective employer, Darlington, when she was applying for an internship that she was a medical marijuana cardholder and current user. She said she would likely fail the required drug test but would not use the substance on property. Darlington chose not to offer employment, stating that passing the drug test is a mandatory condition of employment since they have a drug-free workplace. The applicant sued under the Hawkins-Slater Act (Rhode Island Medical Marijuana Law) and the Rhode Island Civil Rights Act (RICRA).

The judge found that Darlington’s refusal to hire violated the Hawkin-Slater Act’s prohibition against refusing to “employ . . . a person solely for his or her status as a cardholder.” This finding differed from other recent opinions in which courts have rejected claims that refusing to hire a medical marijuana user constitutes disability discrimination. The judge rejected Darlington’s claim that RICRA excuses an employer from having to reasonably accommodate an applicant currently engaged in the illegal use of drugs as defined by federal law, and that they are not required to accommodate the use of medical marijuana among workers.

Other judges may interpret this situation differently and there is a chance that the Supreme Court of Rhode Island could overrule this decision. In the meantime, Rhode Island employers need to be aware of potential legal issues that can arise when dealing with applicants and employees using medical marijuana.

The Massachusetts Supreme Judicial Court recently heard oral arguments in Barbuto v. Advantage Sales & Marketing LLC et all, a case that questions an employer’s obligation to make accommodations for an employee’s off-site use of marijuana for medical purposes under the Massachusetts Anti-Discrimination and Medical Marijuana statutes.

The employee in the case started a new job and explained her use of marijuana in treatment of Crohn’s Disease to her new employer when asked to submit to a drug test.  She was terminated the following day after failing the test.  In making its decision, the employer reasoned that they follow federal law under which marijuana, for any use, is illegal, rather than state law.

The employee then sued alleging violations of the Massachusetts Anti-Discrimination law and the state Medical Marijuana law, as well as alleging claims of invasion of privacy and violation of public policy. The trial court dismissed all claims, other than her invasion of privacy claim and the employee appealed.

The employee argued that she “should not be faced with the cruel choice of treating her disability or earning a livelihood.”  The Massachusetts Commission Against Discrimination (MCAD) also filed a brief arguing that the Medical Marijuana statute is meant to be liberally construed in order to promote equal opportunities in employment. This could have an impact on the outcome, as the court has traditionally given a significant amount of weight to the opinions of the MCAD.

On the other hand, the employer in the case argues that they should be able to take steps, including termination, to ensure a drug-free workplace, especially since, under federal law, marijuana for any use is against the law.

The current law in Massachusetts, while specifically not requiring employers to accommodate for on-site use of marijuana for medical purposes, is silent as to an employee’s off-site use of the drug. As such, the decision in this case should clarify an employer’s obligation, if any, moving forward in these circumstances.  A decision is expected in the coming months. For additional information, download the parties’ briefs.

The coming months should reveal whether these cases in Rhode Island and Massachusetts courts will impact employers rights to a drug-free workplace and whether other states will follow. In the interim, employers should review all of their policies and procedures with regard to drug testing, hiring and termination. They should also keep informed of any additional rulings and cases on this matter. One thing is certain – the issue of medical marijuana in the workplace is here to stay.

5 Myths About Verifications and References

Although we like to believe that all job candidates are honest about their past experience and education, it’s unfortunately not the case. Resume fraud is rampant in today’s marketplace – from the CEO level to college graduates – and it’s important for employers to know who they are hiring.

Employment verification, reference checking and background screening are critical steps in the hiring process. These are a necessary investment that every company should make to protect itself from liability.

Here are five of the most common myths that people have about performing verifications and checking references:

MYTH #1
Verifying is Time Consuming or Expensive
REALITY #1
Proper Verification Saves Time and Money in the Long Run
The cost of a bad hire, whether fraudulent or just a bad fit, is quite high. You will have spent money on training and compensation. Mistakes, missed deadlines, alienated customers, theft, damaged equipment, and trouble with other employees can be costly and lawsuits are a possibility. Solving these problems can use up valuable time. Then there are the costs associated with terminating employment, re-advertising and re-filling the position. Meanwhile, customers flee and profits dwindle.

Hire Image has a network of resources, and a systematic process for verification and contacting and interviewing references with our team of skilled employment professionals. We verify through proper channels that all information provided by the candidate is accurate and truthful, and that the reference they designated is legitimate.

MYTH #2:
References Won’t Tell Us Anything Useful
REALITY #2:
You Need to Get the Right Answers
You do need to know if the prospective employee was actually employed in the specified position, at the stated salary, and for the dates claimed. You also need to know under what conditions the candidate left and ascertain that there are no contractual stipulations that would affect their ability to perform at your company. Most references will provide these answers.

Hire Image is experienced at handling all of your verification needs, especially when a reference is not willing to volunteer information. Asking the right questions can often elicit helpful information. Did the reference truly work with the applicant, or is he family or a friend? According to HR.BLR.com, one applicant actually included her dog as a reference!

MYTH #3:
People Wouldn’t Risk Lying
REALITY #3:
Applicants Do Embellish and The Risk is Yours
High unemployment and fierce competition are among the motivations for people to fabricate skills and credentials. Some lie to hide criminal activities. Chicago University economics professor and coauthor of Freakonomics, Steven D. Levitt, cites research suggesting that more than 50% of job applicants lie on their resumes. Other sources indicate that at least 30% of all job applications contain lies.

Imagine the repercussions if you hired a bookkeeper claiming to be a CPA who really wasn’t. How long would it be and how many mistakes would be made before the ruse was discovered? The damages, resulting stress, bad publicity and cost of legal liability could close the doors on your business for good.

MYTH # 4:
Does Education Verification Really Matter?
REALITY #4:
An Employee’s False Credentials Could Get You Sued
The National Credit Verification Service reports that 25% of the MBA degrees it examines on resumes are false. People often claim they have a high school diploma, undergraduate or even graduate degree that they did not get, or claim degrees from bogus institutions.

You could be at risk of litigation for “negligent hiring” if your employee is one of them. Hire Image can make sure they attended an accredited school and were awarded the degree in the field specified. We contact educational institutions and student record clearing houses and confirm accreditation with the U.S. Department of Education and other accrediting organizations to verify educational credentials. We check with state boards and licensing agencies and organizations to ensure any professional license claimed by the applicant is current and in good standing.

MYTH #5:
Verification Checks Can Be Done Informally
REALITY #5:
Following Correct Procedures Protects Your Organization
It is vital to keep proper records and to stay within legal guidelines when researching employee backgrounds. You could be sued for negligent hiring or for discrimination if you cannot document your process.

We keep meticulous notes of all phone calls and file all letters and records, as well as notes of any unsuccessful efforts to contact references or information – and we encourage our clients to do the same. This documentation should be retained for at least one year whether or not the individual is hired. The Equal Employment Opportunity Commission (EEOC) considers reference check documents as legal records of hiring decisions.

The bottom line is, your bottom line will benefit from a thorough background screening of all potential employees.

– UPDATE – GOING GREEN: MORE STATES INTRODUCE MEDICAL MARIJUANA REGULATIONS AND LAWS

The following is an update to our January 21, 2015 blog post  (see below)

May 24, 2017

In 2014, we reported on a pending medical marijuana case we were watching, as the outcome was expected to affect employer rights to a drug-free workplace: Callaghan v. Darlington Fabrics Corporation (RI; November 2014).

Yesterday, a Rhode Island Superior Court judge ruled in favor of the woman who sued the corporation for not hiring her as an intern because she was a registered medical marijuana user. Although state law* protects users from employment discrimination, Darlington’s lawyer argued that this law “forces companies to condone an act that the federal government considers illegal” and argued further that the corporation utilizes a uniform ‘neutral policy’ of drug testing everyone thereby treating all applicants the same. The judge wrote that the law is premised on the idea that the state should distinguish between the medical and nonmedical use of marijuana, since every medical marijuana patient could be screened out by a neutral drug test.

Darlington was disappointed by the ruling and plans to appeal to the state Supreme Court.

With an increasing number of states legalizing medical marijuana, employers are legitimately concerned about what this means for their desired drug free workplace. While the laws and policies in place are far from clear, employers have the right to perform drug screening on both their current employees and prospective applicants. We support Darlington’s fight for their right for a drug-free workplace and will continue to monitor the legal developments in this and all related cases.

*The law states that “no school, employer or landlord may refuse to reenroll, employ or lease to, or otherwise penalize, a person solely for his or her status as a cardholder.”

 


-UPDATE – GOING GREEN: MORE STATES INTRODUCE MEDICAL MARIJUANA REGULATIONS AND LAWS

January 21, 2015

Back in February, we reported on two cases involving employee medical marijuana usage for which the California and Washington Supreme Courts ruled in favor of the employer. There are two other pending medical marijuana cases which bear watching, as the outcomes may affect employer rights to a drug-free workplace: Coats v. Dish Network, LLC and Callaghan v. Darlington Fabrics Corporation.  While Colorado courts have ruled in favor of the employer in Coats v. Dish Network, LLC , the case is now on appeal at the Colorado Supreme Court.  Additionally, a new medical marijuana case, Callaghan v. Darlington Fabrics Corporation, was filed in November 2014 in Rhode Island. As these cases develop, we remind employers to work closely with their legal counsel in ensuring that company drug testing policies are structured in a way that protects their company from such lawsuits. Medical marijuana laws can be found in over 20 states and each state varies in its rules and coverage. Recreational marijuana laws (AK, CO, OR, WA) also vary by state. It is important for employers to be aware of the laws where they operate and to watch the legal developments in these cases, as well as those to come.

In the case of Coats v. Dish Network, LLC, Dish Network allegedly fired a quadriplegic Law and Marijuanaemployee who had a medical marijuana card and tested positive for the drug. There were no allegations the employee was high at work, but Dish Network had a zero-tolerance policy on drug use. When the employee sued Dish Network, arguing that his termination violated the Lawful Activities Statute of the Colorado Civil Rights Act, the trial court sided with the employer and the appeals court agreed. The case was heard by the Colorado Supreme Court in September 2014 and a decision is expected very soon. The rulings in this case will impact employers in regard to both medical and recreational marijuana usage among employees and applicants (Colorado’s recreational marijuana law passed in 2012).

In the case of Callaghan v. Darlington Fabrics Corporation, the ACLU filed a lawsuit against Darlington Fabrics Corporation on behalf of a University of Rhode Island graduate student. The student, who possessed a medical marijuana card, was allegedly denied a paid summer internship by Darlington Fabrics after testing positive for marijuana. The ACLU’s lawsuit argues disability discrimination in violation of the state Civil Rights Act and medical marijuana law. In Rhode Island, the law legalizing medical marijuana states that “No school, employer, or landlord may refuse to enroll, employ, or lease to, or otherwise penalize, a person solely for his or her status as a cardholder.”  Many states that have legalized medical marijuana have no such language in their laws.

Hire Image will continue to monitor the outcome of these cases and explain how they may impact the workplace.


Original Post:

GOING GREEN: MORE STATES INTRODUCE MEDICAL MARIJUANA REGULATIONS AND LAWS

February 24, 2014

leavesThere are a number of reasons for upholding a drug free workplace. Increased productivity, fewer errors, and a safer working environment are just a few of them. With an increasing number of states passing laws legalizing medical marijuana, employers are raising a number of questions and showing various concerns about what this means for their desired drug free workplace. While the laws and policies in place are far from clear, employers do still have the right to perform drug screening on both their current employees and prospective applicants.

Marijuana is legal or decriminalized in twenty states, and twenty-one states and territories in the US have medical marijuana laws in place. As more states begin to follow this growing trend, we will see more and more employers facing the complicated features surrounding the issue. Even though the use of marijuana is legal on some statewide levels, it is still illegal under federal law. Federal law supersedes state law, allowing employers to terminate an employee after a drug screening reveals THC in their system, regardless of the state law. These situations are arising all over the United States, including Colorado, which is the first state to legalize both recreational and medicinal use of marijuana.

In the 2013 case Ross v. Ragingwire Telecommunications, the California Supreme Court ruled that it is not a violation of California law to dismiss an employee for testing positive for marijuana, even if the individual was recommended marijuana for medicinal purposes. More often than not, courts rule in favor of the employer in these types of cases. In the Roe v. Teletech case, the Washington State Supreme Court upheld the fact that “an employee discharged for her use of medical marijuana, properly authorized, has no cause of action under either the Medical Use of Marijuana Act (MUMA), Chapter 69.51A RCW or on public policy grounds.” While employees may take legal action against employers if terminated for use of medical marijuana, current trends show that courts typically rule in the employer’s favor.

Legalization of medical marijuana does not affect the right of employers to maintain a drug free workplace, thus workers can still be terminated for violating a company’s drug policy. These violations commonly include being in the workplace under the influence of marijuana or using marijuana while at work. However, employees might assume that they no longer need to abide by these policies if they have a medical recommendation for the substance. It is important for employers to be upfront and inform their current and prospective employees of the rules in place, and when any changes are made to these rules. It is also vital that human resources personnel monitor any legislative and legal developments, and review policies to ensure their compliance with the law.

Drug screening policies already in place do not necessarily need to be adjusted or changed. Employers may choose to make medical marijuana exceptions to their current drug policies, but are not required to. There are also options for employers who may wish to be a bit more lenient in their drug screening policies due to recent developments in the law. For example, a policy might include that if the person tests positive for marijuana but has a recommendation from a doctor, the result may be ignored provided the person does not have a safety sensitive position.

If your drug tests are processed through a Medical Review Officer (MRO), find out how results are reported when ‘authorized’ marijuana use is detected. In such cases, the MRO may report negative results, but may also include a special note on the report to differentiate this from a typical negative test. It is important to pay attention to the drug test reports to see if there are any notes from the MRO; a final negative determination may not always mean that nothing was found.

Employers should check references to ensure they know who they are hiring, and also perform background checks. References may reveal absenteeism and productivity issues, and criminal record checks may disclose previous abuse issues, DUIs, etc. A thorough background check may reveal an ongoing substance abuse problem. The more knowledge you have, the easier it will be for you to make an informed hiring decision. In non-regulated industries and states that allow for random drug screening, job description and duties should be considered when determining how often to conduct such screenings.

As an employer, you have the right to a drug free workplace. The choice is yours in deciding to change drug screening procedures or to continue on with the procedures already in place. Click here for more information about specific statewide medical marijuana laws.