Head in Sand.jpgUsing independent contractors – sometimes referred to as freelancers – provides a compelling strategic opportunity for many employers for various tax and liability reasons. In fact, its reported that employers may save as much as 30% on wages by avoiding payroll taxes, unemployment insurance, worker’s compensation coverage, and benefits provided to regular W-2 employees. But these benefits are not without risks. 

One such risk arises under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. 

The FLSA requires employees – but not independent contractors – to receive no less than the current minimum wage and not less than 1½ times the regular rate of pay for all hours worked in excess of 40 hours per week. But merely identifying an individual as an independent contractor and even memorializing that relationship in a written agreement does not preclude a judge from later finding that an individual was actually an employee and not an independent contractor. 

Instead, determining whether an independent contractor or actual employment relationship exists under the FLSA depends upon the economic reality of the relationship and not the labels the parties place on their relationship. In making this determination, courts apply what is referred to as an “economic reality test,” which focuses on:

  1. The permanency of the relationship between the parties;
  2. The degree of skill required for the rendering of the services;
  3. The worker’s investment in equipment or materials for the task; 
  4. The worker’s opportunity for profit or loss, depending upon his or her skill; 
  5. The degree of the alleged employer’s right to control the manner in which the work is performed; and 
  6. The extent to which the employee’s service is an integral part of the alleged employer’s business. This is determined by analyzing “the worker’s economic dependence upon the business for which he or she is laboring, which is in turn analyzed by determining if similar work is available elsewhere, who controls the rate of pay and whether the employee is forced to work either long hours or for low pay.

The Importance of Getting “it” Right the First Time

Three additional considerations should give employers pause for concern that their independent contractor designation may be “second-guessed” by a judge and exposing the employer to liability: 

First, none of the preceding six factors are determinative.

Second, the remedial purposes of the FLSA require the courts to define “employer” more broadly than the term would be interpreted in traditional common law applications. 

Third, contractual intentions do not control whether a worker is considered an employee for FLSA purposes: A contractual arrangement may provide evidence of the economic relationship between parties, but the FLSA is designed to defeat rather than implement contractual arrangements.

The Take Away

Employers in general and, according to Businessweek, small companies especially, are likely to see the greatest scrutiny as government agencies crack down on independent contractors. And no company – large or small – can afford to make costly decision-making pitfalls when it comes to mis-classifying individuals as independent contractors rather than regular W-2 employees. Such mistakes may expose employers to liabilities that include back pay, liquidated damages, civil damages, attorney fees, or any combination of these remedies. It is, therefore, critical to revisit all independent contract relationships with experienced legal counsel. 

iStock_000011909666Small.jpgPeter Drucker noted that “The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong questions.” 

Mr. Drucker’s advice is particularly appropriate when it comes to legal issues involving social media and employees. In this regard, there is no shortage of general “answers” in the form of sites offering sample social media policies (over 170 policies and counting) and even the potential for very good answers in upcoming publications. 

But businesses should not make the mistake of focusing only on legal “answers” when it comes to benefiting from social media. This is because when social media policies and procedures are addressed strictly from a legal/attorney perspective, most businesses end up with a peanut butter solution, i.e., a social media policy to spread evenly over every possible risk and situation under the sun and several contingent provisions in the event the sun fails to rise.

Case in point, the American Institute of Architects (AIA) social media policy warns its employees to:

Be Sensitive to Antitrust Issues: There are stringent requirements by the AIA that you comply with antitrust laws. What’s antitrust? Antitrust laws promote vigorous competition and protect consumers from anti competitive business practices.

Who doesn’t know how to comply with antitrust laws?   

This example is not a knock against risk management, which should be a component of any business process. This social media policy, however, illustrates that managing social media risks requires realistic and practical considerations. Requiring employees to have a working knowledge of antitrust laws to comply with a social media policydoes not fall into either category. 

Two Questions To Ask Before Drafting a Social Media Policies 

Against this backdrop and returning to the importance of asking the right questions, there are numerous legal and business process-related questions that should be addressed. But two fundamental questions employers should ask before implementing a social media policy are as follows:

First, who or what is the first priority you want employees to consider with respect to social media? While this will generally be customers, it may also include a brand, a critical business relationship or products. Once this question is answered, employers are then able to specifically define what is unacceptable when it comes to using social media involving their number one priority. However, this question is answered, it provides a quick check-point for an employee to consider before digitally memoralizing a thought in a Tweet, blog post, Facebook update, or whatever is next. 

Second, what is the minimum level of responsibility your employees should have to your first priority? For example, Liz Heron, the director of social media at the New York Times, recently explained that “[w]e basically just tell people to use common sense and don’t be stupid.” Certainly “stupid” may be subject to varying interpretations. But policies like the New York Times can be effective when employees understand they are expected to not be stupid, i.e., do no harm, to the employer’s number one priority. 

Conclusion

There is no “cookie cutter” approach to drafting an effective social media policy. But having a multi-page dissertation of legalese and stock provisions intended to cover every social media situation and legal risk is far from a solution. In fact, such broadly written policies are actually coming under fire by an aggressive National Labor Relations Board.

So instead, a universal goal for employers should be to cut through the clutter of confusing or overbroad restrictions and provisions to provide a social media policy employees are likely and even motivated to follow. Also such restrictions impose an opportunity cost on the employer in terms of trying to actually enforce the policy.

Social Media (2).jpgA Computer Fraud and Abuse Act Claim (CFAA) against a former employee based on “excessive Internet usage,” including visiting Facebook was recently dismissed by a Federal District Court in Florida. 

Specifically, in Lee v. PMSI, Inc., the former employer claimed Wendi Lee, engaged in “excessive Internet usage” and visited “personal websites such as Facebook” and sent and reviewed her “personal web mail account. PMSI filed the CFAA claim after Ms. Lee sued for pregnancy discrimination.

Before shooting down PMIS’s CFAA claim, the Court set the stage by noting: 

The CFAA is a criminal statute originally designed to target hackers who access computers to steal information or to disrupt or destroy computer functionality, as well as criminals who possess the capacity to “access and control high technology processes vital to our everyday lives …. Both the letter and the spirit of the CFAA convey that the statute is not intended to cover an employee who uses the Internet instead of working.

Against, this backdrop, the Court quickly picked apart PMSI’s claim:  

  • First, a critical element for a CFAA claim involves “unauthorized access.” PMSI, however, expressly admitted that it knew of Ms. Lee’s excessive computer/Internet usage while she was employed and never terminated her authorization to use her work computer. 
  • Second and building upon the preceding point, PMSI made no reference to any express computer policy that Ms. Lee violated. Instead, the employer compared Ms. Lee’s computer usage to two other employees in her department and argued that this discrepancy transformed acceptable Internet usage into a violation of the Computer Fraud and Abuse Act.
  • Third, another required element is a loss in excess of $5,000. PMSI argued “dubiously” (court’s description) that Ms. Lee caused PMSI “financial losses in excess of $5,000, due to her lack of productivity. The Court flatly rejected that “loss” under the CFAA should include lack of productivity.
  • Fourth, obtaining or altering information on a protected computer is also a required element. But Ms. Lee accessed her Facebook, personal email, and news websites, i.e., information not on PMSI’s computer system. Thus, Ms. Lee never “obtained or alter[ed] information” on a “protected computer.” 

Practical Considerations in Applying the Computer Fraud and Abuse Act to the Employment Relationship

From a practical perspective, one estimate has over 116,010,760 Americans on Facebook. Facebook itself estimates having over 500 million active users with 30% of this consisting of U.S. residents. Taking these numbers at face value, a recent survey identified that 77% of workers who have a Facebook account use it during work hours.

So following PMSI’s logic and only considering Facebook (as opposed to other non-work web browsing), at any given moment a significant number of American employees are violating a criminal statute while accessing Facebook at work. This remains true even if the number of Facebook users is lowered to account for those who are not employed. And if you include accessing and monitoring March Madness or Fantasy Football stats on employer time, well I would have to exercise my Fifth Amendment rights against self-incrimination. 

The Take Away for Employers and Employees

The bottom line is the CFAA is a criminal statute focused on hacking of computers for criminal purposes, e.g., stealing information or destroying functionality. This statute also includes civil provision applicable to certain situations. But as the Lee Court appropriately noted, employers and their attorneys should not fall into the lazy reasoning that the CFAA’s civil provision is applicable to the regulation of private sector employment relationships:

Extension of a federal criminal statute to employee misconduct in the private sector is a legislative responsibility and not a proper occasion for aggressive statutory interpretation by the judiciary.

There are certainly compelling factual situations where a Computer Fraud and Abuse Act claim against a current or former employee falls squarely within the scope and purpose of the statute. And Courts have reached a range of results favorable to employers when it comes to such claims involving employmee/employer related facts. PMSI’s CFAA claim, however, does not come within a gunshot of falling in that range. 

Whistle.jpgA recent opinion from the Michigan Court of Appeals illustrates the significant challenges employees have in successfully bringing a certain claim under the Michigan Whistleblowers’ Protection Act (WPA) and opportunities employers have for dismissing such claims. 

Challenges for Employees making an “About to Report” Whistleblowers’ Protection Act Claim

Under Michigan’s Whistleblowers’ Protection Act (WPA), MCL 15.361, an employer is prohibited from, among other things, discharging an employee because the employee “reports or is about to report” a violation or suspected violation of the law. 

One reason a Whistleblowers’ Protection Act claim based on an “about to report” theory is challenging for plaintiffs to successfully assert is because it requires a plaintiff to prove by clear and convincing evidence that he or she was about to report a statutory covered violation. MCL 15.363(4). A clear and convincing evidence is the most demanding standard applied in civil cases.  

Assessing “About to Report” Claims under Whistleblowers’ Protection Act

In assessing whether there is “clear and convincing evidence” that a plaintiff was “about to report” a violation covered by the WPA, Michigan courts will often look to the spectrum of activity leading up to the adverse employment action. 

This point was recently illustrated in the recent case of Pope v. Brinks Home Sec. Co. (2011) where the entirety of plaintiff’s evidence that she was “about to report” a violation of commission stealing and other alleged unethical behavior was her testimony that she told her supervisor that she was going to make a report to the EEOC and attorney general. Her supervisor denied this statement was ever made. Thus, plaintiff’s testimony raised a factual question that a jury would normally decide, it was not enough to meet the required “clear and convincing standard” called for under the WPA. 

In contrast, Michigan courts have found the preceding was established where an employee threatened to report violations covered by the WPA if the employer did not take corrective action, she actually discussed the violations with her supervisor and coworkers, and documented dates that she had discussions with others regarding the need to report.  

Take-Aways

Employees who believe they were fired or received other adverse treatment because they were “about to report” a violation covered by the Michigan Whistleblowers’ Protection Act need to understand that it is rarely going to be enough to claim “I was fired but only because I was about to report a violation.” Instead, courts are essentially looking for credible evidence that the employee actually intended to report violations independent of the employee’s own intent or testimony. Following through with reporting the violation after the adverse employment decision may provide some evidence of a pre-termination decision to make a report covered by the WPA. Also, documenting dates of discussions and who was involved with discussions about suspected violations also provides additional evidence supporting an “about to report” WPA Claim. 

For employers, the WPA does not prevent discharging an employee for legitimate, non-retaliatory reasons. But even with the high evidentiary burden employees may have to overcome in bringing a WPA claim, it is important to gather as much information to make an informed decision as to whether the discharge may violate the WPA. And it is important to make this assessment from the perspective of a judge or jury or may be “second-guessing” the employer’s decision.    

This post on the Michigan Whistleblowers’ Protection Act is only an overview of a very narrow aspect of the Act. And like many areas of employment law, the WPA has specific, complicated, and nuanced statutory requirements, which should be addressed with experienced legal counsel. Reading even a beautifully written post like this is not a substitute for an attorney’s independent judgment, experience, and research. 

Business professional in handcuffs.jpgA recent opinion from the Ninth Circuit Court of Appeals (PDF) confirms that the Computer Fraud and Abuse Act (essentially a federal computer hacking statute) continues to be a significant resource for employers to protect against the loss and damage of mission critical information due to departing or rogue employees.

To add the Computer Fraud and Abuse Act (“CFAA”) to your tool-box, however, requires careful planning and potentially retooling your company’s computer use policy. 

This is because in the context of the employment relationship, a violation of the statute turns on whether an individual “intentionally accesses a computer without authorization” or “exceeds authorized access” 18 U.S.C § 1030(e)(6). The CFAA defines “exceeds authorized access” as accessing a “… computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.” The CFAA does not define the phrase “without authorization” and courts have reached conflicting interpretations as to both of these phrases when it comes to the employment relationship.

Acting adversely to Employer’s Interest May Trigger Computer Fraud and Abuse Act Violation

Some Courts take an employer friendly approach and recognize that “unauthorized” or “exceeding authorized” access” is established if an employee accesses the employer’s computer for a purpose adverse to the employer’s interests, i.e., violates a duty of loyalty. A common fact pattern in these cases involves an employee obtaining company or proprietary information from the employer’s computers for use in a competing venture or on behalf of a competitor. Such action has been found to establish “without authorization” or “exceeding authorization” under the Computer Fraud and Abuse Act. See International Airport Ctrs., L.L.C. v. Citrin, 440 F.3d 418, (7th Cir. 2006) reversing dismissal of CFAA claims where employee went into business for himself and used “scrubbing” software to delete all of the files on his company-issued computer). 

The Computer Fraud and Abuse Act is concerned with access, not subsequent use or misuse of information.   

Another line of decisions distinguish between “exceeds authorized access’ and “exceeds authorized use.” What this boils down to is that employees are not acting “without authorization” in accessing company information when they have “permission to use” a company network even if that employee later misuses that information, e.g., to improperly compete against the former employer. See LVRC Holdings LLC v. Brekka (2009). This concept was explained in the case of U.S. v. Aleynikov (2010) where a New York Federal District Court dismissed claims against an employee and overturned his conviction under the CFAA for copying and removing software trading codes. The court reasoned that the statute should be restricted to prohibiting people from “hacking” into a computer system, not the subsequent use or misuse of information.

Violation of Computer Fraud and Abuse Act occurs when an employer’s express limitations for accessing company information are violated.   

A third line of cases focus on an employer’s express limitations as to accessing company data/networks. An employee accessing the employer’s computer in excess of the express limitations violates the employer’s access restrictions, which may include the use of the computer or of the information contained in that computer. This situation was illustrated in the recent Ninth Circuit’s Opinion in U.S. v. Nosal (2011) (PDF), which concluded: 

as long as the employee has knowledge of the employer’s limitations on that authorization, the employee ‘exceeds authorized access’ when the employee violates those limitations. It is as simple as that.

Take away for Employers

Certainly there is a robust debate as to how the Computer Fraud and Abuse Act should, if at all, be applied to the employer/employee relationship. But there are important steps employers should take to improve the likelihood that, if necessary, the CFAA will be available to protect competitive advantages and defend against unfair competition. 

The most important step is to review the employer’s computer use policy and what it restricts. If an employer lacks a computer use policy or it is deficient, then the employer will likely be left to rely upon Citrin and the line of cases where liability under the CFAA depends upon a violation of a “duty of loyalty.”

But if you ask me, the reasoning in Citrin and similar cases is inherently unworkable. This is because it overlooks that an employee’s authorization to access a particular document on the same computer may change throughout his or her employment (It pains me to say that Citrin got it wrong because it was authored by the venerable Richard Posner, a judge on the Seventh Circuit Court of Appeals and a favorite jurist of mine).  

For example, an employee’s access rights to particular information would change if the employee began looking for employment. And in pursuing alternative employment if an employee accessed such information to assist in the job search – i.e., refreshing the employee’s memory about accomplishments or better describe skills and abilities on a resume or in an interview. Under Citrin, a violation of the CFAA arguably occurred because there was access for reasons adverse to the employer and thereby access without authorization. But if that same employee decided not to seek outside employment and accessed the same information for work related reasons, the employee’s interests would again be aligned with the employer and, therefore, access would be authorized. 

The better strategy is to make sure the computer use policy expressly restricts employees from using, copying, and accessing any information on the company’s computer systems for personal gain. Such a provision allows employers to argue that any access for personal gain is without authorization and thereby keep in play the Computer Fraud and Abuse Act claims without having to resort to Citrin’s duty of loyalty reasoning. 

Road Map.jpgA common issue under the Americans with Disabilities Act concerns asking for and responding to a request for a reasonable accommodation.

It is important for employers to understand their obligations in responding to such a request because under the ADA unlawful discrimination specifically includes “not making reasonable accommodations [for a] qualified individual with a disability…” 42 USC 12112(b)(5)(A).

Making and Responding to a Request for a Reasonable Accommodation

  1. An employee generally has the initial burden of putting the employer on notice that deficiencies in his or her performance are related to an ADA disability, proposing an accommodation, and showing that that accommodation is objectively reasonable. But this general rule has exceptions: Employers have been required to initiate the interactive process even if the employee does not request accommodation where the employee’s disability and its adverse impact on job performance are obvious. Brady v Wal-Mart Stores, Inc (2008) (Employee had cerebral palsy, which manifested itself in noticeably slower walking and speech).
  2. The EEOC Enforcement Guidance on Reasonable Accommodation and Undue Hardship provides that a: “… modification or adjustment is ‘reasonable’ if it ‘seems reasonable on its face, i.e., ordinarily or in the run of cases;’ this means it is ‘reasonable’ if it appears to be ‘feasible’ or ‘plausible.’ An accommodation also must be effective in meeting the needs of the individual.” 
  3. To determine the appropriate reasonable accommodation it may be necessary for the employer and employee to engage in an informal, interactive process. 29 C.F.R. § 1630.2(o)(3) (2010). The EEOC Regulations provide that this process should focus on: 
    • Analyzing the particular job involved and determine its purpose and essential functions;
    • Consulting with the employee with a disability to determine the precise job-related limitations imposed by the employee’s disability and how those limitations could be overcome with a reasonable accommodation;
    • Identifying potential accommodations and assessing the effectiveness each would have in enabling the employee to perform the essential functions of the position; and
    • Considering the preference of the employee to be accommodated and selecting and implement the accommodation that is most appropriate for both the employee and the employer.
  4. If the plaintiff establishes that a reasonable accommodation is possible, the employer bears the burden of proving how the accommodation would cause an undue hardship on the operation of the business. 42 U.S.C. § 12112(b)(5)(A). The ADA defines “undue hardship” to mean “an action requiring significant difficulty or expense, when considered in light of the [following] factors”: 
    • The nature and cost of the accommodation needed;
    • The overall financial resources of the facility or facilities involved in the provision of the reasonable accommodation; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such accommodation upon the operation of the facility;
    • The overall financial resources of the covered entity; the overall size of the business of a covered entity with respect to the number of its employees; the number, type, and location of its facilities; and
    • The type of operation or operations of the covered entity, including the composition, structure, and functions of the workforce of such entity; the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the covered entity. 42 U.S.C. § 12111(10). 
  5. Employers should carefully and critically assess whether an accommodation is an “undue hardship  because a court will often engage in an individualized inquiry to ensure that the employer’s justifications “reflect a well-informed judgment grounded in a careful and open-minded weighing of the risks and alternatives . . .”. Johnson v. City of Pontiac, (E.D. Mich. 2007). Also, courts will reject an employer’s “undue hardship” argument if it is not supported with specific facts. See Smith v. Henderson, (6th Cir. 2004) (employer failed to set forth “specific facts indisputably demonstrating that … the accommodation would have resulted in ‘significant difficulty or expense.”).

While these topics will be an important starting point for employees and employers to meaningfully participate in the interactive accommodation process under the ADA, any such issues should be addressed with competent legal counsel. 

Security Padlock.jpgA 2011 Sixth Circuit Court of Appeals opinion, underscores the importance of the Computer Fraud and Abuse Act plays in combating disgruntled employees who steal company data. This case also highlights important steps employers should take in protecting company IT infrastructure and digital information from internal threats.

In that case, the former employer worked in the IT department of Campbell-Ewald, a Michigan advertising company. During his employment, the former employee accessed Campbell-Ewald’s computer server and copied confidential computer files belonging to its CEO without authorization.  

Campbell-Ewald strategically responded by firing the individual, contacting the authorities, hiring a security investigation firm, and retaining legal counsel. 

The FBI investigated and determined:

  • The former employee had accessed Campbell-Ewald’s confidential files no fewer than twenty-one times after his firing, twice through a Campbell-Ewald server and nineteen times through the email account of another employee, “SM.” 
  • The files the former employee accessed consisted of “confidential pieces of information . . . including executive compensation, financial statements of the firm, goals and objectives for senior executives of the company reporting to the chairman, and some strategic plans.” These files were normally stored on the CEO’s desktop computer but had been moved by the company to its server.
  • The former employee admitted that he had learned of employee SM’s username and password in the course of his employment. While SM had slightly altered his password after the former employee was fired, he was able to guess the new password through trial and error.

The former employee was eventually convicted under the Computer Fraud and Abuse Act, 18 U.S.C.S. § 1030(a)(2)(C) and (c)(2)(B)(iii). The court also awarded the former employer restitution in the amount of $47,565 for private security investigation costs. This decision from the United States District Court for the Eastern District of Michigan was upheld on appeal. 

Protecting Company Information Before it is Compromised

The former employee’s conviction under the Computer Fraud and Abuse Act is significant with respect to a number of legal issues. But for employers focused on preventing a similar IT disaster from happening, the following are important take-away points to consider: 

  1. Computer security is often an “all or nothing” process in that if you miss a single link in your security chain you leave the network vulnerable. Consider implementing the topics in this Employer’s Technology Checklist for Departing Employees to minimize your company’s vulnerable spots; 
  2. Before a theft or a data breach occurs, employers should coordinate with IT, human resources, legal and business units to carefully and critically draft computer/network policies clearly defining the permitted access to sensitive company data and customer information. Further, employees must understand that exceeding their authorized access is strictly prohibited and subject to discipline, including termination; 
  3. Information should be segregated so that employees have access only to data relevant to their jobs and this segregation should be routinely audited to confirm data remains accessible only by those who have a business-related need for access;
  4. Additionally, it is essential to properly draft employment policies to trigger the Computer Fraud and Abuse Act. This is not always possible as Courts do not agree how critical issues such as “unauthorized access” or “exceeding authorized access under the Computer Fraud and Abuse Act should be applied in the context of the employment relationship. Strategic drafting can greatly increase the chance of having a viable Computer Fraud and Abuse Act claim if an employee compromises or steals corporate data; and 
  5. Properly securing and preserving computer-related evidence must be a top priority in responding to potential computer misconduct. Otherwise, companies run a significant risk of compromising or outright destroying computer evidence, which may result in its exclusion at trial. Consider U.S. v Khoo (Oregon Dist. Court 2011) where the court excluded computer evidence in a federal criminal matter involving the theft of corporate data (Khoo Order.pdf) (Court excluded forensic image after the company owner inadvertently compromised / tampered with evidence while investigating an employee’s suspicious activity on a company laptop. See Susan Brenner of CYB3RCRIM3 for a full explanation of this case. Also, see this prior write-up about investigating and preserving company computer data with contributions from the Michigan State Police Computer Crime Unit.  

Marijuana Leaf.jpgRecently a Michigan federal court judge dismissed a case brought by a former Wal-Mart employee of five years and associate of the year in 2008, after he was terminated when a drug test was positive for marihuana. (Reported by Larry Gabriel of the Metrotimes). Mr. Casias had previously registered under Michigan’s statute to use marihuana in connection with his sinus cancer and a brain tumor (Michigan spells marijuana with an “h” rather than a “j”). 

Following his termination, Mr. Casias sued Wal-Mart claiming he was wrongfully terminated in violation of an implied right to use marihuana for medicinal purposes during off-duty hours and in violation of public policy as set forth in the Michigan Medical Marihuana statute. The court disagreed and concluded that the statute protects against prosecution or other potential adverse state action but did not create “a new protected employee class” insulated from private sector disciplinary actions. The Casias case is on appeal to the Sixth Circuit.  

Does the Americans with Disability Act Allow for an Employee’s Use of Medical Marihuana? 

Mr. Casias did not challenge his discharge under the Americans with Disabilities Act (ADA) as a failure to accommodate his disability. And an ADA claim would have made for an interesting analysis as to whether a violation of the ADA occurred. Consider the following: 

  1. Certainly under the ADA anyone who is currently using drugs illegally is not protected by the ADA and may be denied employment or fired on the basis of such use. Further, the ADA does not prevent employers from testing applicants or employees for current illegal drug use, or from making employment decisions based on verifiable results.
  2. But under state law, Mr. Casias was not using a drug illegally. And while under federal law, marihuana is an illegal schedule 1 drug, the U.S. Department of Justice announced in 2009 that it did not consider state legalized medical marihuana use a crime to be prosecuted. So does this change the analysis? Probably not – a schedule 1 drug is a schedule 1 drug, whether there is enforcement or not.
  3. But I suspect that Mr. Casias was not fired per se for using a schedule 1 drug. Rather he was fired for having a by-product associated with a schedule 1 drug that showed up in his drug test. As noted in an earlier post, Michigan’s highest (pun intended) court in People v. Feezel, (2010) expressly held that (at least certain) by-products are not a schedule 1 drug in the context of operating a motor vehicle. In the Feezel case, the Michigan Supreme Court reversed a criminal defendant’s conviction for operating a motor vehicle with the presence of a schedule 1 controlled substance in his body, causing death.
  4. Notably, the Feezel Court referenced the Medical Marihauna Act and highlighted that without its limitation, “individuals who use marijuana for medicinal purposes will be prohibited from driving long after the person is no longer impaired …” Further, Feezel noted that at the time the issue was considered, no federal courts had concluded that by-products were “a controlled substance.” 

So returning to the ADA, as a reasonable accommodation, what if Mr. Cassia asked to be exempted from drug test screening for marihuana “by-products” only as opposed to actual marihuana or other illegal substances? 

Also, assuming marihuana is not addictive, is the preceding accommodation made more compelling in light of the risks involved with addiction to prescription pain medication? For example, the Washington Post reported a 2010 government substance abuse study found substance abuse treatment admissions involving prescription narcotics increased more than fourfold between 1998 and 2008, from 2.2 to 9.8 percent. 

Does Michigan’s Persons with Disability Act Allow for an Employee’s Use of Medical Marihuana? 

Also, how would the result have changed if Mr. Cassias filed suit under Michigan’s Persons with Disabilities Civil Rights Act, MCL § 37.1101, which is the state equivalent to the ADA. Under Michigan’s Persons with Disability Act, there is no provision defining “reasonable accommodation” and the only limitation on an accommodation is the requirement that the accommodation may not impose an “undue hardship” on the employer.

There is an argument to be made that nothing in the text of Michigan’s Persons with Disability Act to support the proposition that a requested accommodation is unreasonable if it involves off-duty conduct by the employee away from the job site that is expressly protected from criminal sanction under state law but is criminal under federal law. Conversely, there is nothing in the text of the statute to support the proposition that an employee’s accommodation to use an illegal (under federal law) schedule 1 drug is a reasonable accommodation.  

It should be noted that the few decisions outside of Michigan that have addressed the issue of whether an employer must accommodate an employee’s use of marihuana for medicinal purposes have sided in favor of the employer. See e.g., Ross v Ragingware Telecommunications, Inc. (California 2008) (Plaintiff did not state a claim under the state’s employment discrimination laws based on the employer’s refusal to accommodate use of medical marijuana); Johnson v Columbia Falls Aluminum, Co., LLC (Montana 2009) (employer’s failure to accommodate use of medical marijuana did not violate Montana’s Human Rights Act). 

Closing Thoughts

The above issues have simply not been addressed in Michigan: Cassias was the first case to address the interplay of Michigan’s medical marihuana statute and the employment relationship, but it did not involve any ADA or Michigan Persons with Disabilities Civil Rights Act claims. Therefore, trying to offer a meaningful discussion and analysis on these issues was probably best summed up by Yogi Berra: “It’s tough to make predictions, especially about the future.” For all I know, a Judge hearing these legal theories may wonder if I was high in coming up with them in the first place (I wasn’t … really).

If I was a betting man, based on decisions from outside of Michigan addressing the interplay of employment and use of medical marijuana, I think employers have the upper hand. Still, there are a number of issues that employers should continue to monitor. And in the meantime, if you’re a certified medical marihuana patient, “smoke ’em if you got ’em” but you may not have a job afterwards.  

Porn Keyboard.jpgPossession of child pornography often involves a computer and is a serious crime. But what happens when that crime takes place on an employer’s network or company computer?

The thirteenth-century Spanish King Alfonso X said, “Had I been present at the creation, I would have given some useful hints for better ordering of the universe.” Based on prior experience counseling employers and insight from Detective Thomas Kish of the Michigan State Police Department’s Computer Crime Unit – but with a little more modesty than the King – the following points are offered to employers for responding to computer misconduct, including criminal misconduct, in the workplace. 

1. Investigate and Confirm the Facts Before Reporting Suspected Child Pornography.

Before reporting suspected child pornography, it is absolutely critical employers make certain the material is actually child pornography. From law enforcement’s perspective, it is important to minimize expending resources on investigating material that – while offending or in poor taste – does not rise to the level of criminal possession of child pornography.  

Further, the stigma of possessing child pornography certain to follow the accused and the potential negative publicity to an employer are also equally compelling reasons to be certain that the offending material rises to the statutory definition of child pornography.  

Knowing, however, what is or is not “child pornography” may not always be straightforward. For example, it is generally more than an image of a nude child. Instead, under Title 18 United State Code (USC) § 2252, “child pornography” refers to the knowing possession of: 

books, magazines, periodicals, films, video tapes, or other matter which contain any visual depiction that has been mailed, or has been shipped or transported in interstate or foreign commerce, or which was produced using materials which have been mailed or so shipped or transported, by any means including by computer, if—

(i) the producing of such visual depiction involves the use of a minor engaging in sexually explicit conduct; and

(ii) such visual depiction is of such conduct …

Because any statutory definition may contain hidden nuances or must be applied to factual circumstances that are not always clear-cut, it is important to consult with a competent attorney in assessing your obligations under this statute.    

2. IT Must be Included in an Employer’s Response Team.

A critical component of an employer’s response team will be IT professionals. IT – along with anyone investigating the matter – must understand that confidentiality is a must because of the sensitive subject matter of the investigation.

Among the tasks IT should address are identifying user log in dates, preserving server logs, and preserving any Internet cache (A cache is a storage mechanism designed to speed up the loading of Internet displays. When a user views a Web page, the Web browser stores a copy of the page on the computer’s hard drive in a folder or directory) or other images that relate to the suspected child pornography.

Such evidence is especially critical in determining the identity of the suspect where a computer used to facilitate the possession of the offending material may be shared by employees or is otherwise unsecured.

Additionally, IT will also want to focus on making sure nothing is done to damage, taint or destroy potential evidence.

3. Do Not Forward, Delete or Try to Erase the Offending Material.

Certainly a common response to discovering child pornography in any setting is disgust. But don’t let this response motivate your company and its employees to destroy the offending material. Destroying child pornography could lead to criminal charges for having reviewed or possessed child porn, or for obstruction of justice. Additionally, criminal liability could result with each forward, view, or distribution. It is, therefore, important to isolate the suspected child pornography and refrain from intentionally making any copies or inadvertently making copies by forwarding the material.  

4. Limiting Business Interruption

A point that employers often overlook is that once child pornography is discovered and reported to law enforcement, the storage medium – whether it is the hard drive of a company PC, laptop, portable storage, etc. – will be seized by law enforcement. Such storage medium will also be eventually purged of illegal content as well as any business related content.

For this reason, it is important to work with your IT professionals to determine what business-critical information may reside on the storage medium subject to confiscation and that this loss will be a moot issue because the information is backed-up. Alternatively, your attorney may need to work with law enforcement to try and “carve-out” preservation of the business related information that would be permanently lost if it is purged.   

5. Report Actual Child Pornography to Law Enforcement – No Exceptions.

There may be reluctance to report the discovery of child pornography due to any number of reasons, such as potential embarrassment or because it belonged to a key employee or executive. In addition to the potential criminal liability discussed above, a recent decision from the Sixth Circuit Court of Appeals (the federal circuit that Michigan is in) offers a cautionary illustration why employers must resist this temptation.

In Doe v. Boland (2011) an attorney was acting as defense expert witness in a child pornography prosecution. As part of the defense, the expert morphed, i.e. digitally altered, non-child pornography images into images seemingly depicting actual child photography. The attorney/expert – after having his home searched and computers seized by the FBI – was eventually charged with possession of child pornography. As part of a pretrial diversion agreement with the US attorneys office, the attorney/expert admitted criminal wrongdoing for possession of child pornography. The take-away from this case is that there is no exception – even in a judicial setting – making the possession of child pornography acceptable.

In addition to the criminal prosecution, the Court held that the defendant in Boland could be civilly liable to the minor children whose images were altered. Other courts have also concluded that a company could be liable for damages suffered by innocent third parties where the company failed to investigate reports that an employee was viewing child pornography online at work. See Doe v. XYC Corp. (New Jersey 2005). 

An employer’s Computer/Internet Use Policy should also specifically explain to employees their obligations when it comes to reporting suspected child pornography or other inappropriate computer/Internet usage and that failing to do so is subject to discipline.

6. Do not overlook offensive content that does not meet the definition of child pornography.

Additionally, it is important for employers to proactively respond to offending material that does not meet the statutory definition of child pornography. This is because employers still run the risks of not properly responding or failing to take appropriate steps when it comes to such material found in the workplace. For example, in a 2009 case out of the Sixth Circuit (Gallagher v. C.H. Robinson Worldwide, Inc.) the decision to dismiss a sexual harassment claim by the trial court was reversed (The court noted that Plaintiff testified that co-workers used Internet to view sexually explicit pictures on their computers, along with other conduct compared to a “guy’s locker room.”). See also a 2007 case (Avery v Idleaire Technologies Corp.) out of Tennessee, where the Court allowed a plaintiff’s hostile work environment claim case to go to a jury because a jury “could find it to be objectively offensive for an employer to permit employees to use a company computer terminal on company time to actively seek pornographic material … to be left for the plaintiff and other employees to see.” 

7. Closing Recommendation

For any employer responding to the discovery of pornography, especially child pornography, in the workplace, the preceding points should be discussed with competent legal counsel. Beyond my pitch for job security, legal counsel will be critical for evaluating and explaining the company’s legal obligations, meeting those obligations, and implementing a workable strategy to minimize the interruption to the business operations.

Again, a special thanks to Detective Thomas Kish of the Michigan State Police Department’s Computer Crime Unit for his insight. The public and employers are certainly better off having dedicated, experienced individuals like Detective Kish and his colleagues who are willing to share their experience in order to protect children from being exploited. 

Medical Marijuana.jpgThe Detroit Free Press reported on April 21, 2011 (by Dawson Bell and John Wisely) that approximately 63,735 Michigan residents had registered to use marihuana for medical purposes under Michigan’s Medical Marihuana Law (Michigan spells marihuana with an “h”, rather than a “j”). There is also over a five-month backlog in issuing registration cards. 

Based on the numbers, it is likely that among those registered or waiting to become registered to use marijuana for medicinal purposes at least a few are employees. And this raises a number of issues central to the relationship between employers and employees.

Michigan’s Medical Marihuana Act (the Marihauna Act), however, does not necessarily answer these issues. This is because it is both a relatively new statute – meaning many issues have yet to be resolved – and it has been widely criticized for its lack of clarity and contradictory provisions. See Judge Peter D. O’Connell’s thorough analysis of these problems in his concurring opinion in People v Redding.

Nonetheless and to paraphrase the former Secretary of Defense Donald Rumsfeld: “There are known knowns … [and] There are known unknowns …” that are important to consider for both employers and employees. 

Known Knowns Employers Should Consider 

First, the starting point for what is “known” is the Marihauna Act and what it actually provides: 

A qualifying patient who has been issued and possesses a registry identification card is not subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege including, but not limited to, civil penalty or disciplinary action by a business or occupational professional licensing board or Bureau for the medical use of marijuana in compliance with the Act.

Second, an employer is not required to accommodate the ingestion of marijuana in any workplace or any employee working while under the influence of marijuana.

Third, marijuana is classified as a schedule I Drug under federal law. 21 § USC 812(c). This, ironically, means there is no accepted medical use for drugs in this category. Thus, federal law prohibits the manufacture, distribution, and possession of marijuana – regardless of a contrary state law like Michigan’s Medical Marihuana Act. 

Fourth, in February 2009, the U.S. Justice Department directed federal prosecutors to discontinue prosecuting individuals who use or supply marijuana for medical use in compliance with their state’s law. 

Known Unknowns Employers Should Consider

As noted above, an employer is not required to accommodate the ingestion of marihauna in any workplace or any employee working under the influence of the substance.

But what does “under the influence” mean? It is not defined under the statute. And a “hypothetical” situation highlights this problem.

Consider John Doe employee who works Monday through Friday, as a sales associate in a big-box retail store, who happened to be employee of the year in 2008, but has since been diagnosed with sinus cancer and a brain tumor.

Now consider John Doe tokes up a joint over the weekend to alleviate his pain. Experts have testified in court that on average certain marihauna by-products could remain in a person’s blood for 18 hours and in a person’s urine for up to 4 weeks. Now consider a week later Mr. Doe is given a drug test by his employer. Not surprisingly the drug test is positive for marihuana use. Is that under the influence?

While not an employment case, People v. Feezel, (2010) potentially offers some insight as to what “under the influence” means. In that case, Michigan’s highest court (pun intended) reversed a criminal defendant’s convinction for operating a motor vehicle with the presence of a schedule 1 controlled substance in his body, causing death.

The reversal was required because the defendant did not actually have a schedule 1 drug in his system but rather “11-carboxy-THC, a byproduct of metabolism created when the body breaks down the psychoactive ingredient of marijuana.” The Court concluded that this by-product was not a schedule 1 controlled substance under Michigan’s motor vehicle statute and, therefore, a person cannot be prosecuted for operating a motor vehicle with any amount of 11-carboxy-THC in his or her system.

Notably, in reaching its decision, the Court referenced the Medical Marihauna Act and highlighted that without its distinction between marihuana and by-products, “individuals who use marijuana for medicinal purposes will be prohibited from driving long after the person is no longer impaired …” 

So under Feezel, the presence of – at least – certain by-products does not equate to marihuana or impairment. What does this conclusion mean for drug test screening the same or similar by products? Also if the presence of a marihauna related by-product in a person’s system is not criminal impairment in the operation of a motor vehicle, what about an impairment in the employment context? Does it matter if the employee is a receptionist, data processor, or operating power machinery?  

No Michigan state court has addressed the issue of “under the influence.” And the few cases outside of Michigan (California, Montana, Oregon, and Washington) that have generally considered the issue of whether an employer must accommodate an employee’s use of marijuana for medicinal purposes have gone in favor of the employer, including the February 2011 opinion from a Michigan federal district case in Cassias v Wal-Mart.     

Conclusion

For both employers and employees with serious illnesses, having to make the choice of how to respond to these unsettled issues is challenging to the say the least. And from an individual’s perspective, it certainly seems unfair to be in a position to have to choose between discontinuing marijuana treatment that may be the only alleviation of pain or continued employment.