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Publications | February 12, 2018
3 minute read

HR Focus – News Digest – Winter 2018

    We often see policy shifts in administrative agencies when a new president is elected. The National Labor Relations Board (NLRB) is probably the most notable in this regard, and the Trump NLRB started that process with a vengeance. In December, the Board issued decisions reversing Obama-era precedent on issues such as employer work rules/policies, joint-employer status, unilateral employer action based on past practice and the standard for determining an appropriate bargaining unit. The Board’s general counsel also issued a memorandum which signals that many Obama-era rulings and interpretations will be reversed, and the Board published an information request regarding the so-called “quickie election rules,” which could signal that it intends to revamp or rescind them. Most of these changes have been and will be favorable for employers, so stay tuned.

      Employers who use third party agencies to run background checks on prospective employees are subject to a series of strict, technical requirements under the federal Fair Credit Reporting Act. Certain plaintiff lawyers make a living through identifying technical violations of these rules by suing the employer in a class action lawsuit on behalf of all applicants. Although a 2016 U.S. Supreme Court case, Spokeo, Inc. v. Robins, Inc. intended to make it harder to bring such suits, they continue to be filed. In November 2017, for example, car rental company Avis agreed to pay $2.7 million to settle a class action lawsuit regarding its background checks on job applicants. Accordingly, it remains as important as ever to ensure that your company has appropriate disclosure and authorization forms when it conducts these background checks, and appropriate notice forms when rejecting applicants based on the results of a background check. Even seemingly minor technical violations can result in expensive class action litigation.

        While a domestic relations order must “clearly specify” the content required by ERISA to be a qualified domestic relations order (QDRO), plan administrators should apply this standard with common sense and context according to the Sixth Circuit Court of Appeals. The Court noted that plan administrators should review all of the referenced divorce decree documents collectively and make inferences about information where its meaning is definite. To illustrate its point, the Court stated that if a document says the alternate payee is “Number 23 of the Cleveland Cavaliers,” then it “clearly specifies” that the alternate payee’s identity is LeBron James—even though it doesn’t expressly state his name. Plan administrators, particularly those in the Sixth Circuit, which covers Michigan, Ohio, Kentucky and Tennessee, should take note of this standard and ensure that they review domestic relation orders accordingly before deciding whether a QDRO exists.

          Having the correct person sign a plan amendment is essential, but identifying that person often causes confusion. Only the committee, officer or other individual who is a specifically delegated authority by the board should sign plan amendments. Otherwise, the amendment may not be enforceable, even though it looks valid on its face. Be proactive by determining whether your organization has a valid delegation of authority on file and, if so, only allow those authorized individuals to sign plan amendments.