Three recent rulings, one by the Internal Revenue Service, the second by the National Labor Relations Board, and the third by a court, provides some important guidance for employers.
An IRS Ruling on Credit Monitoring
The Internal Revenue Service has issued an announcement saying that the value of credit monitoring offered by an employer will not be viewed as income to an individual whose personal information may have been compromised in a data breach. In other words, if an employer experiences a breach of its employment records and employee confidential data has been accessed or compromised, the employer may offer credit protection services. The cost of those services will not be attributable as income to the employee. However, this ruling does not apply to cash received in lieu of identity protection services, nor does it apply to identity protection services received as part of a compensation benefit package.
Tip: Employers experiencing a data breach and offering credit protection services to their employees should not include the cost of these services in the employee’s income.
GINA Applies to Disciplinary Investigations
The Genetic Information Nondiscrimination Act makes it unlawful for an employer to request, require or purchase genetic information about an employee. The intent of the law is to prevent employers from asking about an individual’s propensity for a disease, and prohibits discrimination against applicants for employment and employees based on the perception that they are more susceptible to disease.
In a recent case in Georgia, however, the court held that GINA also precludes genetic testing for other purposes. In that case, two warehouse workers underwent cheek swabs to determine if they were the culprits in a series of defecation episodes at the warehouse where they worked. They were determined to be suspects based on logs and video that showed them entering the building. Ultimately, the DNA test results cleared both employees. The employees sued their employer claiming that the employer violated GINA. The court agreed, and a jury awarded them 2.2 million dollars in damages.
Tip: Employers investigating misconduct must use methods other than DNA testing to identify culpable employees.
The National Labor Relations Board Limits Confidentiality in Workplace Investigations
The National Labor Relations Board was recently faced with the question of whether an employer may instruct its employees not to discuss an ongoing investigation with co-workers. Generally, employees have a right under Section 7 of the National Labor Relations Act to discuss discipline or ongoing disciplinary investigations involving themselves or co-workers. The National Labor Relations Board held that an employer may restrict those discussions where it has a business justification that outweighs the employees’ Section 7 rights. Circumstances that permit an employer to request confidentiality include: (i) witnesses need protection; (ii) evidence is in danger of being destroyed; (iii) testimony is in danger of being fabricated; or (iv) there is a need to prevent a cover up.
Tip: Only where an employer determines that a corruption of its investigation would likely occur without confidentiality is the employer free to prohibit its employees from discussing the investigation among themselves.