Texas Employers Can Pay Employees in Bitcoin, But Why Would You?

According to a recent article by DLA Piper, more employees are requesting to be paid in Bitcoin. Bitcoin is a virtual or digital currency usually used for online payments. Although Bitcoin has only been around for five or six years and I doubt it will ever be used for the widespread payment of wages, Texas law currently allows for this form of payment. 

Texas law requires that employees be paid in U.S. currency, written instrument issued by the employer that is negotiable on demand at full face value for United States currency; or by the electronic transfer of funds.  However, Texas law allows for flexibility in the payment of wages and employers and employees may agree in writing to receive part or all of the wages in kind or in another form, including Bitcoin or even Euros.   

When a Texas employer pays an employee in any form other than U.S. currency, it takes a risk that any interruption in that payment can result in the potential liability for unpaid wages.  For example, if payment is refused for any reason, the payment attributable to the employer does not constitute the payment of wages.  Given the novelty of Bitcoin payments and the potential for security breaches involving Bitcoin payments and accounts, an employer takes unnecessary risks in making payments in anything other than U.S. currency or more traditional negotiable instruments (e.g., checks).

While there does not appear to be a significant demand for payment of wages by Bitcoin, at least one payroll processing company is experimenting with processing payroll using Bitcoin.

To the extent that employees are increasingly requesting payment by Bitcoin, I speculate that the reason for those requests stem from a belief that those payments may be tax exempt or less likely to be reported to the IRS.  The IRS has clearly stated that Bitcoin payments are taxable as wages, just as more traditional payments, and must be reported by employers on Form W-2 and employees on their annual return.

Until Bitcoin has a longer track record of success and is used on a more widespread basis by employers, most Texas employers would probably be better served compensating their employees using more traditional forms of payment.

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EEOC Issues New Enforcement Guidance on Reasonable Accommodation of Pregnant Employees

Several weeks ago, I wrote that the Supreme Court's decision to grant certiorari in Young v. UPS (the case about an employer's reasonable accommodation obligation to pregnant employees under the PDA) might end up signaling the end of light duty policies that limited  light duty availability to employees with worker's compensation injuries or illnesses.  (post here). 

Today, the EEOC issued new enforcement guidance on employer's reasonable accommodation obligations to pregnant employees that specifically addresses light duty policies.  According to the new guidance, the EEOC states that:

[A]n employer cannot lawfully deny or restrict light duty based on the source of a pregnant employee's limitation. Thus, for example, an employer must provide light duty for pregnant workers on the same terms that light duty is offered to employees injured on the job who are similar to the pregnant worker in their ability or inability to work.

Employers utilizing light duty policies in their workplaces should have their policies reviewed by their labor counsel.  You can access the full EEOC Guidance here and the FAQ issued by the Commission here.  

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Employers Should Dot Their I's and Cross Their T's When Using Consumer Reporting Information

According to Law360, Home Depot has been sued in a Georgia federal court in a putative class action alleging violations of the Fair Credit Reporting Act (FCRA) for improperly using consumer reports and background checks. Law360 reports (subscription required) that the suit alleges that the retailer uses consumer reporting information to make employment decisions on applicants and employees without properly disclosing that it will obtain consumer reporting information and without providing copies of the reports before taking adverse action against the applicants and employees in violation of the FCRA.

As I wrote almost five years ago, employers should strictly comply with the provisions of the FCRA when using consumer reporting information to make employment decisions.  Those provisions can be generally summarized as:

  • Disclose, in writing, your intent to obtain consumer reporting information before requesting the information;
  • Obtain written authorization to obtain the consumer reporting information before requesting the report;
  • Prior to taking an adverse employment action, provide the applicant/employee with pre-adverse action notification containing a copy of the report and a summary of rights under the consumer reporting act;
  • After taking the adverse employment action, provide the applicant/employee with post-adverse action notification that contains the name and contact information of the consumer reporting agency (CRA) that prepared the report; a statement that the CRA did not make the decision and advising the individual of his or her right to dispute the information in the report with the CRA within 60 days.

Failure to follow these basic steps can result in suits by individual appliants and employees, or as desmonstrated by the suit against Home Depot, even class actions.

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Breaking News: U.S. Supreme Court Agrees to Hear Important Case on Reasonable Accomodation for Pregnant Employees

The U.S. Supreme Court just concluded its 2013-14 term and is already creating a buzz over the cases it will hear when it convenes again this October.  Today, the Court agreed to hear a case involving whether and to what extent pregnant employees are entitled to reasonable accommodations for conditions related to their pregnancy.  The case is Young v. UPS

Since the passage of the ADA Amendments Act in 2008, there have been an increasing number of pregnancy discrimination cases filed under the ADA.  However, Young's claim accrued prior to the passage of the ADAAA and therefore should only implicate the Pregnancy Discrimination Act.  

The Young case deals with the accommodations and light duty UPS makes available for employees suffering from on-the-job injuries, ADA disabilities or drivers who are no longer qualified under DOT regulations to operate a federal motor carrier because of an impairment (or otherwise required by a Collective Bargaining Agreement).  According to Young's allegations, UPS did not make reasonable accommodations for her lifting restrictions caused by her pregnancy that she claims were similar to the lifting restrictions imposed on non-pregnant employees who suffered on-the-job injuries thereby treating her differently than similarly situated non-pregnant employees.  The Solicitor General recommended that the Court pass on hearing this particular case.  Nonetheless, at least four justices voted to hear the case next session.

I expect that the outcome of this case will have substantial effect on a number of employer policies including, but not limited to, employer light duty policies that limit light duty availability to employees who have suffered a workplace injury.

The Supreme Court of the United States blog has a lot of useful information on this case here.

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What's the Difference Between "I Don't Recall" and "That Never Happened"?

Recent video clips posted at Page One Kentucky of the deposition of Kentucky State Rep. Will Coursey in a sexual harassment suit emphasize the difference between “I don’t recall” and “That never happened/I never said that.”  First, the clip. 

As this clip demonstrates, there is a difference between “I don’t recall” whether something happened and “That never happened” or "I never said that."  Testifying that one doesn’t recall demonstrates a “failure of memory” or “an inability to remember.” It does not foreclose the possibility that the act or event actually occurred and the witness is now unable to remember it.  Ensuring that witnesses know the difference between “I don’t recall” and “that never happened” is important in giving clear deposition testimony.

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DOL Proposes Rule to Extend FMLA Benefits to Same-Sex Spouses in Texas

Last week the U.S. Department of Labor published a proposed rule to extend FMLA benefits to same-sex spouses on the same terms as spouses of other legally recognized marriages.   This will confirm, if passed, that FMLA benefits must be provided to all eligible employees to: care for their legally married spouses who have a serious health condition; take military exigency leave for spousal military service; take military caregiver leave to care for their same-sex spouse servicemember. This is significant in that Texas is a state that does not recognize same-sex marriages.

The FMLA allows eligible employees to take job-protected leave for specified family and medical reasons –including leave to care for a spouse with a serious health condition. In determining who is a “spouse” under the FMLA, the regulations currently provide a “state of residence” test whereby the employee is eligible to take FMLA leave for the serious health condition of a same-sex spouse if the employee resides in a state recognizing same-sex marriage. The continuing viability of this regulation and a Texas employer’s obligation to extend FMLA leave to employees to care for same-sex spouses has been in doubt since the U.S. Supreme Court struck down similar U.S. Treasury guidance defining spouse in such a way as to exclude same-sex spouses in the 2012 case U.S. v. Windsor –the Defense of Marriage Act case

Under the proposed rule, a “state of celebration” test will be used where the marriage is recognized for FMLA purposes if it was performed in a state that legally recognizes same-sex marriages. Assuming that this regulation becomes final (and it most certainly will after a public comment period and publication in the Federal Register as a final rule), it will confirm that Texas employers must recognize all legal marriages (including same-sex marriages) for FMLA purposes.

You can download a copy of the proposed rule here

Access to the DOL’s FAQ page is available here.

Download the DOL Fact Sheet on the Proposed Rule here.

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Fifth Circuit Holds, in Issue of First Impression, that But-For Causation Applies to Claims Arising Under the Jury System Improvement Act

Both federal and Texas law prohibit discrimination against employees for participating in various types of jury service. Imagine an employer defending itself from the accusation that it terminated an employee because of her jury service and then looking across the courtroom to see the individuals who will most likely decide the merits of its case –a jury of citizens who, if employed, are away from their jobs due to jury service. An employer based in the Fifth Circuit was almost in this situation.

In a case of first impression in the Fifth Circuit, the Court of Appeals held that a “But-for” causation standard applied to claims arising under the federal Jury System Improvement Act –the federal law that prohibits discrimination against employees for participating in the jury service for any U.S. court. Texas has a similar provision that prohibits discrimination against employees for participating in state court jury service.

In Rogers v. Bromac Title Services, LLC, Wanda Rogers was a closing officer for Bromac. She was summoned and eventually selected to serve as a grand juror. Her grand jury service ran from to August 19, 2011, through February 19, 2012. That service was ultimately extended to August 19, 2012.

Rogers was terminated on April 20, 2012. The stated reason for Roger’s termination was two comments she made to a group of co-workers deemed inappropriate by the employer –the second of which was made two days before the termination. Rogers sued and the employer moved for summary judgment. The trial court, utilizing the McDonnell-Douglas burden shifting analysis applied a but-for causation standard and dismissed Rogers’ claims because she could not create a fact issue on whether she would have been terminated but-for her jury service and also concluded that she created no factual issue on the veracity of Bromac’s legitimate non-discriminatory reason for its decision.

On appeal, the Fifth Circuit Court of Appeals affirmed the trial court’s ruling. The appellate court held that in evaluating claims arising under the JSIA, the plaintiff must prove that she would not have been subjected to the adverse employment action but-for her federal jury service. The Court also agreed with the trial court that Rogers’ evidence was insufficient to create a genuine issue of material fact that Bromac’s stated reasons were false or pretextual.

You can download a copy of Rogers v. Bromac Title Services, LLC here.

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Two Recent "Yawn" Employment Cases from the Texas Supreme Court

There have been two employment cases decided by the Texas Supreme Court in the last several months. However, because I expect them to have little impact on Texas jurisprudence, I have not been compelled to write about them before today. However, in the interest of keeping the blog up-to-date with each of the employment cases from the Supreme Court of Texas, I will briefly cover them.

In City of Houston v. Proler, the Court held that a firefighter who had the inability to overcome his fear of running into a burning building was not disabled. Because of the unique set of facts and that the case involved the pre-2007 version of the Texas Commission on Human Rights Act and pre-amendment Americans with Disabilities Act, I do not think this case will get much use in Texas employment law disputes.

Similarly, in Sawyer v. E. I. du Pont de Nemours & Co., the Court held that a plaintiff-employee cannot make out a fraud claim when the misrepresentation on which the fraud claim was based was the promise of continued at-will employment. The Court reasoned that since no employee has any right to continued at-will employment, no employee could justifiably rely on a representation or promise of continued at-will employment and therefore could have no viable fraud claim arising from such misrepresentation. The Court also held that employees covered by a collective bargaining agreement that contains exclusive remedies for wrongful termination were limited to those exclusive remedies and could not bring common law claims for fraud. Most Texas employees are not covered by collective bargaining agreement and of those that are, I doubt most of their CBA contain exclusive remedies for wrongful termination claims. For that reason, I expect this case to have little impact on Texas law.

You can access each of these opinions here:

City of Houston v. Proler

Sawyer v. E. I. du Pont de Nemours & Co.

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Investigation Closure Letters "Close the Loop" on Workplace Investigations

One thing often overlooked in conducting workplace investigations is reporting back to the complaining party at the end of the investigation. I have seen many cases where the employer conducted a thorough investigation and took prompt remediation action but never communicated to the employee that it had done so.  From the employee's perspective, he or she may believe that the employer took no action.

While detailed findings and conclusions do not necessarily need to be communicated, it is important to report back on the general conclusions of the investigation. This is important particularly where the allegations are not corroborated or the remedial action taken by the employer may not be readily apparent to the complaining party. Getting back to the reporting party at the end of the investigation lets the complainant know that the complaint was acknowledged and investigated thereby preventing the party from later complaining that the employer ignored the complaint or took no action to investigate the allegations. It also allows the employer the opportunity to remind the employee about the employer’s policies against retaliation and reminding the employee to bring any future complaints or concerns to the employer’s attention.

So, remember to send an investigation closure letter or some other communication to the reporting party of the general conclusions of the investigation at the end of employer’s prompt and thorough investigation.

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Fifth Circuit Holds Confidential Information Policy Protecting Company Financial and Personnel Information Violates the NLRA

In an opinion likely effecting many Texas employers, the Fifth Circuit Court of Appeals held that an employer's confidentiality policy that prohibited employees from disclosing all company financial and personnel information without a carve-out for employee wage information violated the National Labor Relations Act.

Flex Frac, a non-union employer, required all of its employees to sign the following confidentiality policy:

Confidential Information

 

Employees deal with and have access to information that must stay within the Organization. Confidential Information includes, but is not limited to, information that is related to: our customers, suppliers, distributors; Silver Eagle Logistics LLC organization management and marketing processes, plans and ideas, processes and plans, our financial information, including costs, prices; current and future business plans, our computer and software systems and processes; personnel information and documents, and our logos, and art work. No employee is permitted to share this Confidential Information outside the organization, or to remove or make copies of any Silver Eagle Logistics LLC records, reports or documents in any form, without prior management approval. Disclosure of Confidential Information could lead to termination, as well as other possible legal action.

 

Following her termination, a former employee filed a charge with the NLRB and the Acting General Counsel for the Board issued a complaint charging the employer with maintaining a rule prohibiting employees from discussing employee wages.  The ALJ found that while there was no specific prohibition against employees discussing their wages with one another, the policy might be reasonably interpreted as restricting employees' right to discuss their wages with one another and therefore violated Section 7 of the NLRA.

On appeal to the federal court of appeals, the court restated the long-standing, well-established rule that "a workforce rule that forbids the discussion of confidential wage information between employees" violates the NLRA.  In analyzing the confidentiality provision at issue, the court concluded that it could be reasonably construed to prohibit employee discussion of wages both inside and outside the company and ordered that the NLRB's order prohibiting Flex Frac from promulgating and maintaining its confidentiality policy be enforced. 

There are likely many Texas employers that have confidentiality policies that cover and protect company financial and personnel information but do not explicitly carve out employee wage information from the definition of that protected information.  Employers with simiar confidentiality provisions may want to consider revising those policies to explicitly exclude employee wages from coming within the scope of their policies so they are not subject to a charge that they have committed an unfair labor practice.

You can download the full copy of Flex Frac v. NLRB here.