Will My Employment Law Claim Show Up In A Background Check?

I'm constantly asked about whether certain actions against employers for discrimination and other issues will show up in a background check. Other than a lawsuit, most probably will not. And now, even with a lawsuit, a court just allowed a plaintiff to go forward with a sex discrimination suit as "Jane Doe" so her reputation would not be damaged.

So, what kinds of actions will and won't show up on a background check? Here are my thoughts:

Severance agreements: Negotiating a severance agreement should be confidential. While most employers put in the agreement that employees will keep the agreement confidential, I ask that this be made mutual. I don't want employers getting cut and saying something like, "I need to look at the agreement to see what I'm allowed to say." One of the things you can negotiate is what will be said to potential employers in references.

EEOC: While EEOC is a government agency, EEOC charges of discrimination are not generally discoverable. Only the employer and employee are entitled to copies of the charge and responses. While some employers and employees wrongly say that they are in a lawsuit once the EEOC filing is done, this is incorrect. EEOC is not a lawsuit. It is not public record. If EEOC files a lawsuit on your behalf (don't hold your breath) then the suit is public record.

NLRB: The NLRB investigation process is confidential. Once it goes to an administrative law judge and/or court, it becomes public record.

Internal complaint to HR: HR is supposed to keep your complaint of discrimination, whistleblower retaliation or other legal issues confidential. That being said, they also have to investigate. So people who work with you will likely know you complained. Filing an internal complaint is not a public record (unless you work for government, and then sometimes it is). So your employer could retaliate against you by telling potential employers that you complained, but that would be illegal retaliation if you complained about something that is illegal like discrimination. However, if you complained about your boss being unprofessional, incompetent or a bully, your complaint is not legally protected against retaliation.

Lawsuit: If you file a lawsuit, it is public record. It will almost certainly turn up in a background check. However, the lawsuit I mentioned above may start a trend of Jane and John Doe filings to keep this from happening. For the most part, that may be effective. However, if a potential employer dug deeper into a litigation file, it would likely be able to uncover your name in deposition notices and other filings. An ordinary name search background check would be thwarted by a Doe filing. So if you're thinking about suing an employer or former employer, a Doe filing is something to think about.

9th Circuit Decision Proves Need For Laws Banning Prior Salary Inquiries

A few weeks ago I wrote that some states are passing laws banning prospective employers from asking applicants about their salary history. The reason lawmakers give for this law is that basing salary on an applicant's pay with another employer locks in discrimination. This practice particularly impacts women.

A recent case out of the normally very liberal 9th Circuit demonstrates the need for laws banning salary history inquiries. The Court found in Rizo v. Yovino that an employer may legally justify paying women less than men where it based pay solely upon 5% above prior salary. The Court said that, under the Equal Pay Act, prior salary could be a factor other than sex that justified a pay disparity. The appellate court overturned the district court's ruling in favor of the employee:

The district court determined that, under the Equal Pay Act, prior salary alone can never qualify as a factor other than sex, reasoning that “a pay structure based exclusively on prior wages is so inherently fraught with the risk . . . that it will perpetuate a discriminatory wage disparity between men and women that it cannot stand, even if motivated by a legitimate non-discriminatory business purpose.”

The appellate court analyzed the employer's justification for the pay disparity:

The County has offered four business reasons for using Standard Operation Procedure 1440, under which starting salaries are based primarily on prior salary: (1) the policy is objective, in the sense that no subjective opinions as to the new employee’s value enters into the starting-salary calculus; (2) the policy encourages candidates to leave their current jobs for jobs at the County, because they will always receive a 5% pay increase over their current salary; (3) the policy prevents favoritism and ensures consistency in application; and (4) the policy is a judicious use of taxpayer dollars. But, the district court did not evaluate whether these reasons effectuate a business policy or determine whether the County used prior salary “reasonably,” as required by Kouba.

The Court noted that other circuit courts had held, contrary to their ruling, that prior salary was not sufficient justification for gender pay disparities, citing Angove v. Williams-Sonoma, Inc., 70 F. App’x 500, 508 (10th Cir. 2003); Irby v. Bittick, 44 F.3d 949, 954 (11th Cir. 1995); Price v. Lockheed Space Operations Co., 856 F.2d 1503, 1506 (11th Cir. 1988); and Glenn v. Gen. Motors Corp., 841 F.2d 1567, 1570–71 (11th Cir. 1988). So yay for my own 11th Circuit.

Here's what the Court directed the district court to do on remand:

On remand, the district court must evaluate the four business reasons offered by the County and determine whether the County used prior salary “reasonably in light of [its] stated purpose[s] as well as its other practices.” Kouba, 691 F.2d at 876–77. We emphasize that because these matters relate to the County’s affirmative defense rather than to the elements of the plaintiff’s claim, the County has the burden of persuasion. See Maxwell, 803 F.2d at 446. Thus, unlike in a typical case under Title VII involving the burden-shifting method of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), the plaintiff does not have to present evidence that the County’s explanation for the pay differential is a pretext for intentional gender discrimination. Rather, it is up to the employer to persuade the trier of fact that its stated “factor other than sex” actually caused the salary differential, that the stated factor “effectuate[s] some business policy,” and that the employer used the factor “reasonably in light of [its] stated purpose as well as its other practices.” Kouba, 691 F.2d at 876–77. Of course, the plaintiff is free to introduce evidence of pretext (or any other matter that casts doubt on the employer’s affirmative defense) if it chooses to do so. Maxwell, 803 F.2d at 446.

This case was not a disparate impact case, so I wonder what would happen if the same set of facts were raised under the theory that a facially neutral practice of basing pay on prior salary alone has a disparate impact on women.

In the meantime, this case should give the legislators and lobbyists who are pushing laws to ban salary history inquiries some ammunition to prove that salary history inquiries are bad for women and are thus bad public policy.

Dear Business Lawyers: Stop Trying To Get Employees To Waive Their Unemployment Benefits

Things you didn't think you had to say but apparently do. In Florida it is still illegal to try to get an employee or former employee to waive their right to apply for unemployment. It's a crime. Yet I've seen a couple of draft releases in proposed severance agreements attempting to do exactly that. And I also recently got a demand email complaining that a client had signed a release and was therefore breaching by filing for unemployment.

Let's be clear. You can't ask an employee to release or waive their right to unemployment in my home state of Florida. Period.

Here's what the statute says if you don't believe me:

443.041 Waiver of rights; fees; privileged communications.—
(1) WAIVER OF RIGHTS VOID.—Any agreement by an individual to waive, release, or commute her or his rights to benefits or any other rights under this chapter is void. Any agreement by an individual in the employ of any person or concern to pay all or any portion of any employer’s contributions, reimbursements, interest, penalties, fines, or fees required under this chapter from the employer, is void. An employer may not directly or indirectly make or require or accept any deduction from wages to finance the employer’s contributions, reimbursements, interest, penalties, fines, or fees required from her or him, or require or accept any waiver of any right under this chapter by any individual in her or his employ. An employer, or an officer or agent of an employer, who violates this subsection commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.

After a brief bout of research, it looks like lots of other states also prohibit this practice. I've found laws prohibiting such waivers in New York, Texas, Minnesota, Maryland, California, North Carolina, and Missouri. That's a pretty good sampling of pro-employer and pro-employee states, so I'm guessing your state may prohibit this as well.

For some reason I have to say this about every ten years or so. The management-side employment lawyers know better. It's the employers who handle business/corporate law who decide to dabble in employment law who need to be reminded.

Therefore, I am saying it. Now cut it out and stop torturing people who have lost their jobs.

Rant over.

If You Have A Preexisting Condition, Choose COBRA or ObamaCare Over Your Mortgage

It used to be that when people lost their jobs, there was only one way to keep insurance coverage, and that was COBRA. The only problem is that when you lose your job, you have to pick and choose what bills to pay and COBRA is crazy expensive. Most people had to go bare. If they had preexisting conditions, it was literally a matter of life and death because they would never get insurance again.

Then came the Affordable Care Act, which is the same as ObamaCare if you haven't already figured that out. The ACA allowed people who lost their jobs to get alternative insurance that was much cheaper than COBRA. Plus, it both banned insurance companies from denying coverage due to preexisting conditions and also from charging more to those with preexisting conditions. So, yes, insurance rates went up for those who were healthy, but it saved billions in government-subsidized healthcare. The reason being that anyone who was uninsured had to go to publicly funded hospitals for all their healthcare needs.

Since the election, I've been warning people who lose their jobs to make sure they elect either ACA or COBRA, and under no circumstances to lose coverage if they have a preexisting condition because I thought preexisting condition coverage would be lost when Trump and the Republicans started to gut the ACA.

I've been accused of being an alarmist, but that's exactly what the latest proposal would do. While it would still prohibit insurers from denying health insurance to those with preexisting conditions, it allows them to raise premiums. A recent study made these findings:

Based on our analysis, we estimate that individuals with even relatively mild pre-existing conditions would pay thousands of dollars above standard rates to obtain coverage. For example, because an individual with asthma costs an issuer 106 percent more than a healthy 40-year-old, she would face a premium surcharge of $4,340. The surcharge for diabetes would be $5,600 per year. Coverage could become prohibitively expensive for those in dire need of care: Insurers would charge about $17,320 more in premiums for pregnancy, $26,580 more for rheumatoid arthritis and other autoimmune disorders, and $142,650 more for patients with metastatic cancer.

Because there are few things that can bankrupt you as quickly as medical bills, if you lose your job and have to choose between paying your mortgage and paying for insurance, the wise decision might just be to pay for insurance. While your mortgage company may work with you to allow you time to catch up, losing your coverage if the Republicans manage to repeal preexisting condition coverage may literally kill you.

If you care about this, call your Congress member and Senator now and tell them to stop this folly before they kill a bunch of people.