April 2011 Archives

Civil Unions: Federal Tax and Benefit Implications

Posted by Lauren Moak RussellOn April 28, 2011In: Wages and Benefits

Email This Post | Print this Post

Last week, we addressed some of the implications of Delaware's Civil Union and Equality Act (the "CUEA") of 2011, which will become effective on January 1, 2012. In this post, we will address the ways in which the bill may or may not affect employers whose benefit structure is governed by federal law.3D Figure Holding Hundred Dollar Bill

As a preliminary matter, it is important to recognize that the CUEA is a Delaware law, so it  has limited impact on matters governed by federal law. By contrast, the definition of marriage under federal law is governed by the Defense of Marriage Act ("DOMA"), which defines marriage as being between one man and one woman. While the Obama Administration has indicated that it believes DOMA is unconstitutional, and will no longer defend the statute in court, DOMA is still in effect. Consequently, for federal tax and ERISA purposes, the definition of marriage remains limited to heterosexual relationships.

Federal Employee Benefits

Many employers who provide benefits to their employees are governed by ERISA, not state law. ERISA governed benefits include both healthcare and retirement benefits, such as health insurance, life insurance, and 401k. If you are a private employer who pays for a portion of the benefits provided to your employees, chances are good that you are subject to ERISA. Because ERISA preempts state law, an employer subject to ERISA generally cannot be required to provide benefits to partners in a civil union.

There is an important distinction, however, between insured and self-insured plans. While self-insured plans are fully governed by ERISA, insured plans are subject to an exception that leaves them open to state insurance laws. Consequently, to the extent that Delaware's insurance code or regulations imposed by the Insurance Commissioner require coverage or benefits for married spouses and civil union partners, those laws or regulations will apply to insured ERISA plans.

It is important to remember, however, that just because you may not be required to provide such benefits doesn't mean you can't provide them. Many employers have determined that it is good policy to provide equal benefits to homosexual and heterosexual partners, regardless of marital status. If your business subscribes to that philosophy, there is no reason to change it now.

Taxation of Employee Benefits

Federal taxation of employee benefits will not be altered by the CUEA. Under federal tax law, insurance and other benefits provided to an employee's spouse are generally tax exempt. Similar benefits provided to a civil union or domestic partner are generally not tax  exempt. That will not change.

However, employers should be aware of an exception to this rule. Benefits provided to a civil union or domestic partner, where the partner is a tax dependent (i.e. the partner receives more than 50% of his or her support from the employee), are tax exempt regardless of marital status. For example, if an employee's partner stays home to care for children, and is covered under the employee's health insurance, the value of the insurance benefit to the partner is tax exempt, regardless of marital status. This exception does not apply to cafeteria or flexible spending plans.

Learn More!

The attorneys of Young Conaway's Employment Law Section will be discussing the contours of the CUEA and its employment law implications at the Annual Employment Law Seminar, on May 11, 2011. Please join us to learn more about this topic, which is sure to impact all Delaware employers directly or indirectly!

NLRB Takes Issue With Employers’ Response to Employee’s Tweet

Posted by Molly DiBiancaOn April 26, 2011In: Social Media in the Workplace, Union and Labor Issues

Email This Post | Print this Post

The National Labor Relations Board (NLRB), has made headlines yet again for its position on employee use of social media.  This time, as reported by the New York Times, the NLRB is up in arms over the termination of a New Jersey employee due to a comment she made on Twitter.  clip_image001

Thomson Reuters, the current target of the NLRB, asked employees to tweet ways that the company could be made a better place to work.  Deborah Zabarenko complied with the request and tweeted: “One way to make this the best place to work is to deal honestly with Guild members."  The reference is to the Newspaper Guild of New York, of which Zabarenko is a member.  The Union and employer have been engaged in contract negotiations for several months.

According to the NYT, an agent of the employer called the employee at home to remind her that the company’s policy prohibits employees from posting comments that would damage the company’s reputation.  She was not, however, subject to any discipline. 

The NLRB takes issue with the company’s call, threatening to file a complaint if the parties do not reach a settlement before April 29.  The problem, according to the Union? The employee’s tweet is, says the Union, protected by the National Labor Relations Act (“NLRA”).  The NLRA gives employees the right to discuss the terms and conditions of work and to act collectively to make changes to those terms and conditions.  Of the handful of cases in which the NLRB has pursued legal action in response to an employer’s social-media policy or the enforcement thereof, this case seems to have the most merit—at least based on this set of limited facts. 

Eric B. Meyer reported on this story at the TLNT blog, as did Seth Borden on his Labor Relations Today blog.

See also, Social-Media Policies v. NLRB, Round II and Are Employee’s Facebook Posts Protected Activity? to read about two other cases involving the NLRB’s recent position on social-media policies.

Social Media Policies: Learn All About Them

Posted by Molly DiBiancaOn April 25, 2011In: Policies, Seminars, Social Media in the Workplace

Email This Post | Print this Post

Social-media policies are on the mind of employers everywhere. I taught my first social-media policy workshop in 2009 and have been talking about them ever since. It's only been in the last 12-18 months, though, that I've seen a real movement towards adopting and implementing social-media policies, as opposed to just talking about them. Public speaker

In the coming months, I will be giving a number of presentations about social-media policies. I'll be speaking to the Virginia Bar Association's Labor & Employment Section's annual CLE in Richmond on May 5 and just outside of D.C. on May 12. Then I'll be back in Delaware on May 18 for a CLE hosted by the Delaware Bar Association's Technology and Corporate Counsel. At each of these seminars, I'll be talking about social-media policies.

Although not specific to policy drafting, I will also be speaking about the ethical issues relating to social media for the Pennsylvania Bar Institute on April 21 in Pittsburgh and on April 27 in Philadelphia.

Although the sessions listed above are for legal professionals, human-resource professionals will have their chance, too. On May 11, at Young Conaway's Annual Employment Law Seminar, which is not to be missed for Delaware employers, Bill Bowser and I will be giving an encore presentation of our popular social-media policy workshop. (If you haven't registered yet, do it now--it looks like the event will likely sell out this year). Then, this Fall, I'll be speaking again at both of M. Lee Smith's Advanced Employment Issues Symposiums. The first one is in October in Nashville, Tennessee; the second is in Las Vegas in November.

For the next several months, I'll be living and breathing (and talking a lot about) social-media policies. To make it a truly well-rounded experience, I'll also be writing about them here on the blog. Specifically, I'll be writing an extensive series of posts about the specific considerations that are involved in drafting a social-media policy. These posts will address the details of social-media policies, as opposed to the big-picture considerations that I have written about in the past. All of the posts in this series will be titled, "Drafting Considerations for Social-Media Policies," making them easy to identify.

2011 Annual Employment Law Seminar

Posted by Molly DiBiancaOn April 19, 2011In: Seminars

Email This Post | Print this Post

Registration is now open for Young Conaway's 2011 Employment Law Seminar (PDF). It will be held at the Chase Center on the Riverfront in Wilmington, Delaware on May 11, 2011.  As in previous years, we have an outstanding line-up of topics and speakers scheduled.  The brochure has the full details but here's a quick preview:

  • Year In Review:  Discussion of the key developments in the law that affect employers both locally and nationally.
  • Looking Forward:  Pecha Kucha is back!  Attorneys keep it short and sweet as they present on upcoming issues to expect in the year ahead.

After the morning sessions, we are very pleased to welcome New Castle County Executive Paul Gregory Clark as this year's Keynote Speaker and to hear his thoughts on the County's recently promulgated $164 million operating plan.  Following lunch, attendees can attend the following break-out sessions:

  • How to Comply with the New GINA Regulations
  • Special Topics for the Public-Sector
  • Health Care Reform: Where are we in 2011?
  • New ADAAA Regulations
  • Social-Media Policy Workshop

We look forward to seeing you on May 11 at the Annual Employment Law Seminar!

Legal Ethics and Lawyers' Use of Social Media

Posted by Molly DiBiancaOn April 18, 2011In: Social Media in the Workplace

Email This Post | Print this Post

Readers interested in the various ethical implications relating to the use (and nonuse) of social-media by legal professionals also may be interested in a just-published law review article on the topic.  The article is published in the current edition of the Delaware Law Review, which is available here as a PDF:

Ethical Risks Arising From Lawyers' Use of (and Refusal to Use) Social Media

Same-Sex Civil Unions Recognized in Delaware

Posted by Adria B. MartinelliOn April 15, 2011In: Benefits, Delaware Specific, Discrimination, Legislative Update, Sexual Orientation

Email This Post | Print this Post

The Delaware House of Representatives voted yesterday in favor of Senate Bill 30, a bill that would create same-sex civil unions in Delaware, and recognize civil unions performed in other states. The bill also changes all sections of the Delaware Code where marriage is mentioned, by requiring that the word “marriage” be read to mean “marriage or civil union.”  Delaware Capitol Hill color

Senate Bill 30 was approved by the Delaware Senate on April 7, and Governor Markell has already declared that he will sign the bill into law “as soon as a suitable time and place are arranged.” The law will take effect on January 1, 2012.

The new law raises several questions for employers.  For example, the law cannot, and does not, alter federal non-recognition of civil unions. So how will the new law impact employers?

Right to Employment Benefits

As we have previously indicated, the most significant impact of Senate Bill 30 is likely to be on employment benefits. When the law takes effect, employers will be required to provide partners in a civil union with the same benefits that they provide to partners in a marriage. The Act would not cover those currently not protected by the Delaware Discrimination in Employment Act (DDEA): (a) employers with less than 4 employees; or (b) religious corporations with respect to discrimination based on sexual orientation

Equality of Benefits

Employers should also be aware that equality of benefits is a two-way street. Many employers previously offered employment benefits to unmarried same-sex partners, but not to unmarried heterosexual partners. Now that same-sex couples have access to civil unions that are substantively identical to marriage, employers may be open to claims of reverse discrimination if they continue to offer benefits to same-sex partners who have not entered into a civil union, but do not offer the same benefits to unmarried heterosexual partners.

Employers should also be careful to impose the same requirements for receipt of benefits upon same sex civil union partners as they do upon married partners. While it is perfectly acceptable to ask an employee to verify his or her marital status before extending benefits, the same requests should be made of both same-sex and heterosexual partners. If you do not require a copy of a marriage certificate to establish benefits, you should not require a copy of a civil union certificate.

Discrimination Protection

As we have previously reported, the DDEA already protects Delaware employees from discrimination on the basis of sexual orientation. Keep in mind that homosexual individuals who may not have previously chosen to disclose that fact may, as a result of the new law, disclose that information so that their partner may enjoy benefits. Therefore, employers may possibly have knowledge of an employee’s protected class they might not otherwise have had – and should proceed cautiously with any adverse employment actions, particularly ones that may follow closely on the heels of such disclosure.

This post was authored by Adria B. Martinelli and Lauren Moak.  Adria will be speaking about the implications of Delaware's Civil Union and Equality Act of 2011 at our upcoming Annual Employment Law Seminar on May 11, 2011. 

Screening Job Applicants with Facebook: Part 3

Posted by Molly DiBiancaOn April 15, 2011In: Hiring, Social Media in the Workplace

Email This Post | Print this Post

Part 1 of this series addressed what employers should avoid when using Facebook or other social-networking sites to screen potential employees.  In Part 2, we looked at some of the steps employers should take to minimize the legal risks associated with this practice. In this final part of the series, we look at two more steps that employers should consider implementing into their best-practice routine. find with magnifiying glass

Start Searching

Once your list is created, the rest is easy--but equally important. Designate an individual  who will perform the actual search (i.e., the "Searcher"). Here is the key: the Searcher must not be involved in the hiring decision. Human Resources can perform the search, for example. In smaller organizations without a dedicated HR staff, the manager of one department may be the Searcher when a different department is hiring, and vice versa.

Once the appropriate person is designated, the search may begin. If any of the items on the list are found, the Searcher documents them on the form and, preferably, prints or makes a copy (i.e., with the print screen feature) of the offending material. That information and only that information may then be turned over to the hiring manager for consideration.

The reason this step is so critical is that it effectively prevents the hiring manager from learning information that cannot be used in the hiring process--such as religion, sexual orientation, or other protected characteristic. This separation of knowledge can be a key component to defending against a failure-to-hire lawsuit.

Start Talking (Again)

In the event that a hiring manager is inclined not to hire a candidate as a result of what turned up during the online search, there are a few additional steps that should be taken. First, the hiring manager should present the candidate with the information. Identify the basis for concern and provide the candidate with a meaningful opportunity to explain. There is, after all, more than one John Smith registered with Facebook . And, since the Searcher has no interaction with the candidate, mistaken identity is not out of the realm of possibility.

Finally, make sure that everyone in the organization with any connection to the hiring process is aware of and understands the new practice. Make it clear to supervisors that they are not to search the Internet for information about a candidate prior to the decision to hire. Have supervisors acknowledge the policy in writing and review it periodically to ensure compliance.

Screening Job Candidates With Facebook: Part 2

Posted by Molly DiBiancaOn April 14, 2011In: Social Media in the Workplace

Email This Post | Print this Post

Part 1 of this series addressed what employers should avoid when using Facebook or other social-networking sites to screen potential employees.  In this post, we look at some of the steps employers should take to minimize the legal risks associated with this practice. 

Start Talking

Before you start surfing the Web, first gather the key decision makers to discuss whether the organization should adopt this practice at all. Exchange ideas about the potential benefits and concerns associated with searching for information on Facebook or Google. Consider including as many stakeholders as practicable, including members of senior management, Human Resources personnel, and hiring managers.  facebook icon

Some organizations feel that a Facebook search does not comport with their culture or core values and, as a result, have decided not to use such searches as part of the hiring process. This question does not have a “right” answer but should be given significant consideration before implementing an official policy or practice. 

Assuming the discussion results in the decision to incorporate Internet searches into the background-check process, you should next discuss, in detail, exactly what it is that you’ll be looking for in your search. Aim to identify up to 10 specific things that would give you cause for alarm if seen on a candidate’s online profile.

Common red flags for many employers include the candidate’s use of or promotion of the use of illegal drugs, any type of language or imagery that promotes hate, threats of physical violence or other hostile or aggressive comments. There may also be legitimate concerns about a candidate who posts negative comments about his former employer or co-workers or who discloses inappropriate information belonging to a former employer or customers.

You also can identify some positive online activities, as well, such as if the candidate maintains a blog, which is well written or, even better, related to his professional interests. Once you’ve finalized your checklist, put it in writing. Create a form that lists the various items (good and bad) that you’ll be looking for. Leave a space for the name of the company representative who will be performing the search, the date the search was conducted, and the name of the candidate.

Stay tuned for the final part in this series, when we will address some additional (and important) best practices for employers who decide to conduct an online search as part of the hiring process.

Screening Job Candidates With Facebook: Part 1

Posted by Molly DiBiancaOn April 13, 2011In: Hiring, Social Media in the Workplace

Email This Post | Print this Post

The popularity of social-networking sites, such as Facebook and LinkedIn, has exploded in the last several years. Facebook boasts more than 600 million users. Facebook has become a treasure trove of information for anyone looking to discover the “truth” about an individual’s private life. Divorce attorneys report that Facebook is the single best online source for information to be used in divorce or custody proceeding. Law –enforcement agencies across the country turn to Facebook to locate suspects and gather evidence. And insurance investigator have put their telephoto lenses away—today they can find out all about a beneficiary’s activities from anywhere with an Internet connection.

So it only makes sense that employers, too, would want to put Facebook to work. More and more employers report that they’ve eliminated a candidate from consideration after viewing something negative in the candidate’s Facebook profile. But this practice does have legal risks. The good news, though, is that those risks can be avoided by following the steps discussed below.
What Not to Do

As an initial matter, employers should be aware of what they should not do when surfing the Web. First, do not ask anyone—including current employees and job applicants—for his Facebook password or other log-in credentials. The town of Bozeman, Montana instituted a policy that required applicants to turn over their passwords. Bloggers, tweeters, and Facebookers across the globe united in online protests and Bozeman quickly cancelled its policy. In February 2011, the Maryland Department of Corrections suspended a similar policy when the ACLU campaigned against it on its blog and on YouTube.

Second, do not try to gain access to a candidate’s profile indirectly. For example, don’t ask another employee, who is Facebook friends with the candidate, to show you the candidate’s profile. Last year, the New Jersey Supreme Court upheld a jury verdict against an employer for similar conduct, finding that such tactics constituted a breach of the employee’s privacy.

Third, do not send a Facebook friend request to the candidate without disclosing the real reason for the request. Similarly, do not instruct or permit anyone else to do the same on your behalf. If a candidate’s privacy settings prevent you from accessing his profile, the better idea is to tell the candidate in advance that you want him to accept your friend request but only for 24 or 48 hours. And be clear about what it is that you’ll be looking for once access is granted, as discussed in the following sections.

Stay tuned for Parts 2 and 3, when we’ll discuss best practices for using Facebook and other social-networking sites in the job-screening and hiring process.

Update: Delaware's Civil Union Bill

Posted by Adria B. MartinelliOn April 8, 2011In: Delaware Specific, Legislative Update

Email This Post | Print this Post

I reported last week that the Delaware Senate was considering a bill that would recognize civil unions.  The Wilmington News Journal reports that the State Senate voted to approve the Civil Union and Equality Act of 2011 yesterday.  The House is expected to vote on the legislation on Thursday, April 15, so stay tuned.