Seyfarth Synopsis: The ordinary headaches of responding to unemployment claims with the EDD do not have to bog down employers in 2018. Here, we provide recommendations for managers to consider before the ball drops in Times Square this New Year.

’Tis the season to be jolly, sing holiday songs with family by the fire, and aspire to reach new heights in the coming year. Employers, consider making it one of your New Year’s resolutions to reevaluate your approach to unemployment benefits claims. Certainly, more time and fewer headaches are things we can hope for in 2018.

Many of us are well-acquainted with the frustrations of defending unemployment claims made by employees recently fired for misconduct. Suppose an employee with a history of warnings for rude comments makes one final zinger on a conference call, forcing your hand to fire him. The resulting distraction and lost morale are bad enough, but next he hales your business into a claims process with the California Employment Development Department (EDD) for unemployment benefits. You spend the next few months answering questions from EDD agents and submitting detailed proof of the employee’s bad behavior. A manager and other witnesses take the day off to testify at the hearing. After all this, the employee is awarded benefits anyway and, worse, he now sues you for wrongful termination. This nightmare before Christmas is enough to make any employer a scrooge!

Our holiday gift to employers is a set of best practices to help you navigate the EDD’s blizzardy claims process, and to minimize any potential problems should a Grinch-y employee sue you later. We hope our recommendations result in many silent nights in the year to come.

Determine If The Employee Was Bad Enough For the EDD’s Naughty List

Employers do not need a shepherd or a shooting star to know that employment in California is at will. So long as the decision is not discriminatory or unlawful retaliation, managers may terminate employment because of misconduct, poor performance, for violations of company policy (even on first-time infractions), or, ultimately, for no reason at all.

But the EDD will deny a claim for unemployment benefits only if it finds a much narrower type of serious misconduct. The broken rule or policy at issue must be important to the business. If a misdeed did not harm the company, then the discharged employee will likely win an award of benefits. Also, a single, isolated mistake usually will not preclude such an award. Poor job performance—unless highly egregious and persisting after multiple warnings and a clear threat of termination—will probably not suffice either. What the employer needs to prove are acts of serious misconduct, such as embezzlement, workplace violence, or harassment, and EDD will demand real proof, such as documents and convincing testimony.

Remember, the EDD is in the business of awarding benefits, so expect that in most cases that is just what the EDD will do. That is, most terminations will not disqualify a former employee from an award of unemployment benefits. Employers should carefully evaluate the reason for the discharge, and the supporting evidence, before trudging down the icy path of litigating an unemployment claim. And if you do decide to challenge a claim, make sure to bring more than a Red Ryder BB gun to the hearing; the EDD will expect hard evidence and credible witnesses before it denies benefits.

Just As Santa Does With His List, Check Your Facts At Least Twice

Most disputed unemployment claims are contentious. No holiday carol extols the joy of getting fired, and that is for good reason. Opposing a former employee’s benefit claim is often like throwing gasoline on a fire, and lawsuits for wrongful termination are usually not too far away.

The EDD’s claims process is complex, so it is not uncommon for claimants to lawyer-up. None of the parties’ communications with the EDD are privileged, however; interviews, position statements, and the like are all discoverable, as are the documents submitted and the testimony given at the hearing. In a later lawsuit, a plaintiff’s lawyer can subpoena the EDD’s entire file, which frequently includes an audio recording of the hearing, and search for inconsistencies or admissions to use against an unsuspecting employer in litigation. Because companies often give EDD claims a low priority, statements made to the EDD often are not scrutinized by counsel or senior staff. Employers should carefully vet the facts of a termination before they are presented to the EDD. Otherwise, bad evidence, like the ghost of Jacob Marley, may just come back to haunt you.

Consult Your Trusted Magi On High Risk Terminations

In some cases, the likelihood of litigation over a termination is clear before or soon after the termination decision. A high-risk termination may be preceded by the threat of a lawsuit by an employee’s newly hired lawyer during the company’s investigation for misconduct. It may not be wise, depending on the circumstances and the employer’s ultimate goal, to oppose the employee’s unemployment claim. Or, conversely, it may be strategically sound to educate the employee’s attorney on the Gremlins hiding in the case from the outset.

Workplace Solutions: When litigation is on the horizon, we recommend that employers consult with their trusted counsel on these strategic decisions as early as possible. Our attorneys are ready to help guide employers through these dynamics, whether it be this holiday season or in the year to come.

 

Seyfarth Synopsis: With the availability of new vehicle GPS devices and smart phone tracking applications, employers need to be mindful of employee privacy rights when using location technologies in the workplace.

It Doesn’t Take A Magellan To Map Routes Anymore

Employers now have available the technology that concerned parents of wayward teenagers have often wished for. Thanks to technological advances, one can now monitor another’s movements in ways that could only be imagined a couple of decades ago.

The benefits of tracking employee activity through GPS (Global Positioning Systems) include: (i) verifying routes and locations for mobile employees, particularly in the transportation or delivery industry, (ii) ensuring that employees are not violating traffic laws, (iii) monitoring employee overtime, (iv) verifying that employee time records are accurate, (v) locating company-owned stolen vehicles, and (vi) verifying that employees are not misusing company vehicles by, for example, driving to inappropriate locations or at inappropriate times.

With the advent of GPS smart phone applications, companies have begun to install GPS tracking apps on company-issued smart phones, which monitor not only the employees’ transportation in vehicles, but may allow for out-of-vehicle monitoring as well.

So with all of this great new technology, where (if at all) must employers draw the line when it comes to tracking employee mobility?

Navigating The Nexus of Privacy and Employer Needs

At the center of the debate on the lawfulness of tracking employees via GPS is the employee’s right to privacy vs. the employer’s need for productivity and business-related information. California has a strong tradition of protecting individual privacy rights. Article I, Section 1 of the California Constitution provides that “all people” have an inalienable right of privacy. This provision applies to private as well as public employers. California employers thus must be wary of infringing on employee privacy by learning too much about private time and lawful off-duty activities.

Litigation Beginning To Moovit Related To GPS Tracking

Of major importance is whether the GPS tracking information is related to job performance: if it is not, then cataloging off-duty activities may violate constitutional rights to privacy. Consider this recent cautionary tale: In Arias v. Intermex Wire Transfer, an employee sued her former employer, claiming she was fired for uninstalling a GPS tracking app from a company-issued smart phone that was tracking her movements even when she was off the clock. The employee objected to being tracked on her own time and compared the GPS to the ankle bracelet placed on someone under house arrest. She sued for wrongful termination, invasion of privacy, unfair business practices, retaliation, and other claims, seeking over $500,000 in damages. This suit, privately settled, is likely not the last of its kind.

An additional source of legal restriction on remote employee monitoring is California Penal Code section 637.7, which prohibits the use of “an electronic tracking device to determine the location or movement of a person” via a “vehicle or other moveable thing” unless “the registered owner, lessor, or lessee of a vehicle has consented to the use of the electronic tracking device with respect to that vehicle.” So while an employer arguably can install GPS tracking on company-owned vehicles, and even on employee-owned vehicles used for work purposes (with advance consent as we’ve blogged previously), there is currently no such carve-out allowing employers to require GPS tracking through smart phones.

In What Waze Should Employers Be Mindful About Using GPS?

A California employer using GPS to monitor employees should have policies carefully considering employee privacy issues. As with other kinds of workplace monitoring (e.g., cameras in the workplace, use of email and Internet systems), we recommend (a) full disclosure to employees, and (b) obtaining employee consent, including implementing a separate GPS tracking policy. The policy should:

  • Outline the legitimate business reasons for using GPS tracking (e.g., increasing operational efficiencies, improving customer service, maintaining accurate timekeeping records, improving safety).
  • Provide clear notice of the company’s right to monitor employee locations while the employee is using company-owned property, describe when and how employees should expect to be monitored, and tell employees they should have no expectation of privacy while using the company property.
  • Explain how the employer will use and safeguard data collected.
  • Notify the employee of the consequences that could lead to discipline for disabling a GPS device without the employer’s permission.
  • Communicate the policy to all employees, and have them provide written acknowledgement of their receipt and understanding of the policy.

Other best practices to consider include:

  • Limit monitoring of activity to work hours, and monitor an employee’s location only for a specific business purpose in compliance with the GPS tracking policy. The collected data should not reveal details of the employee’s private life.
  • Limit access to the GPS tracking information to company personnel who have a clear business need to know that information.
  • Make sure that you store any GPS-related data securely.
  • Where employees are unionized, consider whether there is a duty to bargain before implementing the use of GPS tracking, depending on the language of the contract and the parties’ course of dealing. The NLRB has advised that a complaint would issue when an employer failed to bargain before unilaterally implementing a vehicle data recorder system to monitor employee compliance with driver safety rules.

Workplace Solution: Because this area of law is still developing as new technologies emerge, employers should continually revisit their GPS policies for compliance. We monitor developments in this area and will provide our readers with further information as it becomes available. In the meantime, if you have any questions, please contact the author or your favorite Seyfarth attorney.

Edited by Coby M. Turner.