Legal Update: including Big Data, Transgender Workers, and Intern Pay

“Big Action” on “Big Data” in Employment Contexts

Several recent Federal government activities have shown an increased concern over the use of big data. In May, the White House issued a report Big Data: Seizing Opportunities, Preserving Values which detailed the results of a 90-day study examining how big data will transform the way we live and work, altering the relationships between government, citizens, businesses, and consumers. A significant finding of the report was that big data analytics have the potential to eclipse longstanding civil rights protections pertaining to how personal information is used in housing, credit, employment, health, education, and the marketplace.

In September, The Federal Trade Commission (FTC) hosted a public workshop entitled Big Data: A Tool for Inclusion or Exclusion? While no obvious policy initiatives came out of the conference, it seems clear that regulators such as the FTC and EEOC are paying close attention to big data. During the work shop the EEOC’s Assistant General, Carol Miaskoff, noted that big data is not inherently discriminatory. However, she went on to say that if measures or factors used to analyze that data are not job-related and consistent with business necessity, and they create a disparate impact on protected classes, an employer’s personnel decisions based on big data analytics can violate the law. Ms. Miaskoff also cautioned that employers that look at social media, which could be considered a source of big data, in the screening process might put themselves “in a vulnerable position” because social media offers “a plethora of information about protected statuses.” The Chairwoman of the FTC, Edith Ramirez, noted that the FTC is already looking for ways in which employers’ use of big data might violate the Fair Credit Reporting Act (FCRA). She cited an $800,000 fine against Spokeo for violating FCRA by selling profiles on millions of consumers without verifying that the information it sold would be used for legally permissible purposes. Spokeo is a data broker that collects and aggregates data about consumers from a wide range of sources such as phone books, real estate listings, government records, and social media. In this case, Spokeo targeted the sale of these reports to employers and recruiters.

Interestingly, in contrast to the above, in late October the Washington Post reported that the Director of National Intelligence is considering social media in the security clearance process. The DNI is looking into whether the government should do Google searches on people who hold security clearances. They want to determine if publicly available information, such as Google searches, could tip off investigators that someone with access to sensitive government information my turn violent or become a spy. The Washington Post reported that approximately 5 million people hold security clearance and the government is moving toward evaluating security clearance holders all the time rather than checking up on them every few years. Collectively, all of the recent action on big data could be a sign of things to come on the employment law side and users should monitor developments in this area.

EEOC Files Historic Sex Bias Suits for Transgender Workers

In September, the EEOC filed its first ever lawsuits over alleged sex discrimination against transgender individuals. The suits were brought under Title VII of the Civil Rights Act. According to EEOC, Title VII prohibition on sex discrimination includes discrimination based on gender stereotyping. The EEOC filed two separate suits, one in Michigan and one in Florida. In the Michigan case, a funeral home allegedly fired a funeral director and embalmer (who had been with the company for several years) after the individual told her employer and colleagues that she was transitioning to a woman and would start dressing in female attire (EEOC v. R.G. & G.R. Harris Funeral Homes). The Florida case involves an Eye Clinic that fired an individual after she started dressing as a woman. The clinic hired the individual when she presented as a man. Allegedly the clinic said it was eliminating her position but hired a male to replace her two months later (EEOC v. Lakeland Eye Clinic).

 Pay Your Interns! (Said in Your Best Chris Farley SNL Matt Foley Voice)

A number of lawsuit have been filed against companies with unpaid internship programs after a June 2013 ruling by a Federal district judge in New York found that Fox Searchlight Pictures should have compensated two unpaid production interns for the 2010 movie Black Swan. The two interns had performed basic tasks such as answering phones, getting coffee, and taking out trash. The judge ruled that “Searchlight received benefits of the intern’s unpaid work, which otherwise would have required paid employees.” The Judge relied heavily on the Department of Labor’s guidelines on internships under the Fair Labor Standards Act.

In 2010, the Department of Labor’s Wage and Hour Division issued a fact sheet on internships that established internship criteria. The criteria are as follows:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Since the Fox Searchlight Pictures ruling, several settlements have been reached in recent months. In October 2014, NBC Universal agreed to a $6.4 million settlement involving nearly 6,000 unpaid interns. In the suit filed in Manhattan Federal court, interns who worked on Saturday Night Live and other shows brought a class action suit claiming that NBC Universal violated the law by classifying them as non-employee interns and paid them nothing or less than minimum wage when they were actually doing employee work.

In November 2014, Condé Nast agreed to pay $5.8 million to settle a lawsuit brought by 7,500 former interns. The interns worked at magazines including the New Yorker, Vogue and Vanity Fair. The interns alleged the publisher failed to pay them minimum wage. The magazine’s internship program was canceled soon after the lawsuit was filed.

The result seems to be that, in the last several years, for-profit companies are reviewing their internship programs and eliminating unpaid internships or revising the programs so they are paying minimum wage. It should be noted that unpaid internships in the public sector and non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible according to the Department of Labor.

Co-Author: Brian O’Leary U.S. Government Retired, Independent Consultant

Reprinted with permission from the Personnel Testing Council of Metropolitan Washington


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