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					                                           Employment Applications
                                   Fall 2004



                                                                                                          March 2006

Immigration                                  Foreign Workforce Capped Early
   If you heard a collective cry of        until October 1, 2006. For those who         petitions. However, the increase in filing
despair on August 12 of last year, you     have been mired in immigration               fees did not greatly diminish demand as
  were probably in an office that relies   bureaucracy before, this is old hat. For     demonstrated by last year’s surprise
    on foreign professionals to meet its   the uninitiated, this story borders on       early cutoff. On April 1, 2006, USCIS
    labor needs. On August 12, 2005,       incomprehensible.                            reopened the floodgates for jobs with
    the U.S. Citizenship & Immigration          H-1B is a nonimmigrant                  start dates in fiscal year 2007.
    Services (“USCIS”) announced           classification for aliens who will be        Immigration firms already have stacks
    that it had reached its limit and      employed temporarily in a specialty          of petitions which they began to file as
            would no longer be taking      occupation. A specialty occupation           soon as the USCIS gave its signal in
               petitions to employ         requires the theoretical and practical       the expectation that this year’s deadline
                  foreign professionals    application of a body of specialized         will come even earlier.
                   in the H-1B             knowledge along with at least a                   Businesses should take stock of
                    category until         bachelor’s degree or its equivalent. For     their workforce demands and check
                    Spring of 2006. It     example, architecture, engineering,          with their recruiting offices if they are
                   was the earliest date   mathematics, physical sciences, social       considering any foreign applicants. In
                  the USCIS had ever       sciences, medicine and health,               the H-1B race, the early bird truly does
                        met its cap, and   education, business specialties,             get the worm. For those who tend to
                              employers    accounting, law, theology and the arts       dawdle, let’s hope that their business
                                 used      are specialty occupations. The H-1B          needs can wait until October 1, 2007,
                                  t o      category does not require full-time          which will be the earliest that they’ll be
                                  filing   work, and this flexibility makes it highly   able to fill their positions if they are
                                  their    attractive to employers who have less        closed out this year.
                               petitions   than full-time needs. An alien can work
                            in      late   in the United States for up to six years
                            August or      in this category. H-1B is also employer-        INSIDE THIS ISSUE
                            e a r l y      specific and allows the beneficiary to
                            September      work only for a sponsor who has filed           Employees Make the
                            were left      the petition to employ him or her, which        Business World Go
                            hanging        greatly lessens an employer’s fear that
                                                                                           ’Round       Page 2
                             with their    an alien will leave for greener pastures
                              positions    as soon as he or she lands in the United
                               unfilled    States. For all of these reasons, the H-       It’s as Easy as OFCCP
                                 or on     1B category is probably the most                                Page 3
                                   hold    popular petition in the workforce.
                                                As alluded to earlier, this category      Federal Law Requires
                                             is subject to a numerical cap of             Companies to WARN
                                               65,000 per year. In recent years, the      Employees of a Layoff
                                               USCIS has increased filing fees in
                                               an effort to temper the number of                                    Page 4
                                                        NATIONAL RESOURCES, LOCAL RESULTS                              TM
                                                                Employees Make the
Computer Fraud                                                  Business World Go ’Round
     Employees provide employers with          CFAA by providing a civil remedy. 18         CFAA Have a Less Daunting Burden
resources needed throughout the                U.S.C. § 1030(g). Any person who             of Proof Than That Required by the
business cycle and aid in the further          suffered damages or loss under the then      Trade Secrets Act (Access Denied),
progression of business. As employees          Act, covering only government                Los Angeles Lawyer, February 2006,
foster growth in business, they obtain         computers,            could      recover     at 22.
access to a wide variety of business           compensatory damages and seek                     In order to benefit from the
information, much of which is available        injunctive relief. Id. Further expansion     protection of the CFAA, an employer
via computers. This information is often       took place in 1996 when Congress             “must show that the defendant
a source of an employer’s competitive          broadened the scope of the CFAA,             1) fraudulently or ‘intentionally’
advantage or provides access to                allowing a civil remedy for a violation      accessed a protected computer ‘without
customers and other profitable                 with respect to any “protected               authorization or [in excess of]
information. As such, it is important for      computer.” “Protected computer” has          authorized access,’ and 2) as a result
all employers to understand the benefits       been defined as any computer “which          of this conduct, caused damages of at
and risks associated with the relatively       is used in interstate or foreign             least $5,000.” Id. at 24 (citing 18
recent expansion of the Computer               commerce or communication.” 18               U.S.C. §§ 1030(a)(2)(c), 1030(a)(4),
Fraud and Abuse Act (the “CFAA”),              U.S.C. § 1030(c)(2)(A)(B). This              1030(a)(5)(C)).
especially as it relates to exiting and        definition is broad enough to include             For example, passive receipt of
entering employees. (Computer Fraud            virtually all business-related computers.    electronic information is not enough to
and Abuse Act, 18 U.S.C. §§ 1030 et            As a result, many employers, former          satisfy the “unauthorized access”
seq.)                                          and new alike, have experienced the          element. See Role Models America,
     Protection under the CFAA is no           impact of CFAA expansion. “Once              Inc. v. Jones, 305 F. Supp. 2d 564 (D.
longer limited to government computers.        confined to cases involving hackers and      Md. 2004). On the other hand, active
The Computer Abuse Amendments Act              viruses, in recent years the CFAA has        use of a “software program to
of 1994 extended the purview of the            become a powerful litigation tool for        methodically glean prices from a tour
                                                                          employers         company’s Web site, in order to allow
                                                                          seeking to        systematic undercutting of those prices”
                                                                          e x e r t         is enough to satisfy the requirement.
                                                                          continuing        Deborah F. Buckman, Annotation,
                                                                          control over      Validity, Construction, and
                                                                          departing         Application of Computer Fraud and
                                                                          employees         Abuse Act, 174 A.L.R. Fed. 101
                                                                          and subject the   (2001).
                                                                          h i r i n g            “Damage” is defined as “[a]ny
                                                                          practices of      impairment to the integrity or availability
                                                                          t h e i r         of data, a program, a system, or
                                                                          competitors to    information that causes loss aggregating
                                                                          judicial          at least $5,000 in value during any 1year
                                                                          scrutiny.” Paul   period to one or more individuals.” 18
                                                                          S. Chan &         U.S.C. § 1030 (e)(8). Notably, as one
                                                                          John        K.    former employer discovered the hard
To benefit from the protection of the CFAA, employers must show that R u b i n e r ,        way, even though loss includes the cost
defendants fraudulently or intentionally accessed a protected computer C l a i m s          of investigating or remedying damage
without authorization or in excess of authorized access and, as a result, B r o u g h t     to a computer, loss does not include “the
caused at least $5,000 in damages.
                                                                          Under The                               Continued on Page 3
 2 www.kutakrock.com
Continued from Page 2                        employer suing under the CFAA may              to “freely” hire.
international travel expenses that           1) bring its action in federal court 2) face        Employers should be encouraged
plaintiffs’ senior executives incurred to    more liberal pleading and proof                to use the CFAA as needed to protect
attend a meeting (One meeting was            requirements than under traditional            invaluable information. However,
held at the Le Cirque restaurant) with       unfair competition laws, and 3) obtain         employers should also use preventative
their customer’s senior executive, in        potentially broader injunctive relief.”        measures throughout the hiring process.
which no computers are said to have          Paul S. Chan & John K. Rubiner,                “The most effective way to prevent
been examined, and no computer               Claims Brought Under The CFAA                  CFAA claims is to limit the scope of
consultant said to have been present...”     Have a Less Daunting Burden of                 information ‘taken’ by a new hire from
Nexans Wires S.A. v. SarkUSA, Inc.,          Proof Than That Required by the                the former employee.” Id. at 26. This
319 F. Supp. 2d 468, 477 (S.D.N.Y.           Trade Secrets Act (Access Denied),             is especially true when hiring a former
2004).                                       Los Angeles Lawyer, February 2006,             employee of a competitor. Employers
    Employers can look at the CFAA           at 24-26. On the other hand, as a new          will continually wear both hats, former
from two viewpoints. When wearing the        employer, the CFAA increases potential         and new employer, and thus it is
former employer hat, the CFAA is a           for liability and may, to the extent the       important to be aware of the dynamics
good thing: “[a]mong other things, an        law allows, place restraints on the ability    associated with the CFAA.



Government                                      It’s as Easy as OFCCP
Contracts
    There is a government agency out         any experience with it, then you know          you are a nonconstruction “contractor”
there that has the authority to “surprise”   from the heading what it is, and you           with at least 50 employees, and one of
employers, and it is not the IRS. (That’s    could provide some insight to the              the following statements is true:
another story.) The agency we are            following questions: What is the
                                                                                            • You have a government contract for
speaking of provides a relatively            OFCCP? Why is it randomly selecting
                                                                                              at least $50,000;
welcome surprise to employers, as the        me?
                                                                                            • You have government bills of lading
authority to “surprise” is conditioned           The Office of Federal Contract
                                                                                              which can total $50,000 within a year;
upon a preexisting business relationship.    Compliance Program (the “OFCCP”)
                                                                                            • You serve as a depository of
If you, as an employer or as an              is a part of the U.S. Department of
                                                                                              government funds; or
employer’s representative, have had          Labor’s Employment Standards
                                                                                            • You are a financial institution which is
                                                                 Administration.
                                                                                              an issuing and paying agent for U.S.
                                                                 The       OFCCP
                                                                                              savings bonds and savings notes. 41
                                                                 monitors certain
                                                                                              C.F.R. § 601.40 (2005).
                                                                 construction and
                                                                 nonconstruction                Once an employer within the
                                                                 companies that do          OFCCP’s jurisdiction is selected for
                                                                 business with the          review, the employer must submit an
                                                                 f e d e r a l              Affirmative Action Program (the
                                                                 government. If, as         “AAP”). The OFCCP reviews the AAP
                                                                 an employer, you           to determine whether the employer has
                                                                 have         been          complied with laws requiring equal
                                                                 randomly selected          employment opportunity. During its
The OFCCP monitors certain construction and nonconstruction
                                                                 by the OFCCP or            audit, the OFCCP is looking to enforce
companies doing businesss with the federal government, ensuring are soon to be, it          laws requiring equal employment
compliance with approved Affirmative Action Programs.            could be because                                Continued on Page 4

                                                           NATIONAL RESOURCES, LOCAL RESULTS                               TM     3
Continued from Page 3                        b u s i n e s s u n i t s . 4 1 C . F. R .   business activities is more likely to avoid
opportunity regardless of the following      § 602.1(d)(2)(2001).                         the consequences of not complying with
attributes: race, religion, sex, national         Regardless of how an employer           OFCCP regulations. No employer
origin, disability or protected veteran      chooses to submit its AAP, there are         desires more than an OFCCP desk
status. Section 503 of the Rehabilitation    several components, many technical           audit in which the OFCCP reviews the
Act of 1973, as amended, Executive           and some not, which make up an AAP.          AAP without having to come on site.
Order 11246 and provisions of the            Generally, these components include: an      However, an onsite review may become
Vietnam Era Veterans’ Readjustment           organizational profile, job group            necessary when an insufficient AAP is
Assistance Act of 1974, as amended           analysis, incumbent placement,               submitted. Not only that, an AAP that
(“VEVRAA”), are the three laws that          availability determination, comparison       is lacking may result in canceled
provide the foundation for equal             of incumbency to availability, placement     contracts, hearings before a Department
protection regardless of the above-          goals, designation of responsibility for     of Labor administrative law judge and
mentioned attributes.                        implementation, identification of            perhaps debarment, in which an
     An employer, specifically a             problem areas, action-oriented               employer is declared ineligible for future
nonconstruction contractor, is required      programs and periodic internal audits.       government contracts.
to submit an AAP for each of its             41 C.F.R. § 602.10 (2005).                        Many components of an AAP can
establishments. Usually, each employee            In addition to the above                be technical, and interpretation of
must be included in the establishment        requirements, as many employers may          pertinent regulations can be confusing.
where he or she works, but there are         already be aware, all employers that are     Employers should be encouraged to
exceptions. The exceptions to the rule       government contractors, regardless of        establish and maintain the foundation for
include the following: 1) employees who      whether or not they are required to          an AAP early so that an audit can end
work at an establishment other than that     maintain an AAP, must comply with            ideally, with the OFCCP issuing a letter
of the manager to whom they report are       federal law requiring record retention.      of compliance to the employer. The
included in their manager’s AAP, 2) if       41 C.F.R. § 601.12 (2005). An                foundation for a compliant AAP includes
an establishment employs fewer than 50       OFCCP-covered employer should                maintaining accurate records and
people, the contractor has the following     consistently maintain accurate records,      providing proper training to those
options available to it: create a separate   as this data must be made available to       involved with the application, promotion
AAP for the establishment, include the       the OFCCP upon request to provide a          and termination processes, while at the
establishment in the AAP of the location     basis for statistical analysis throughout    same time establishing and evaluating
of the personnel function which              the audit. Several types of records must     goals. Employers should not be afraid
supports the establishment, or include       be maintained, including records that        to seek outside help. This is especially
the establishment in the AAP of the          show gender, race and ethnicity for the      true when compiling the more complex
official to whom the establishment           recently defined “internet applicant,”       portions of the AAP or if the review
reports, 3) employees selected at a          which has been the subject of much           process takes an unfortunate turn
higher level establishment within the        controversy. (See https://www.dol.gov/       toward an onsite review.
organization should be included in the       esa/regs/fedreg/final/2005020176.pdf              Kutak Rock LLP has unique
AAP where the selection decision is          for a copy of the new rule, effective        OFCCP qualifications. The National
made, and 4) a contractor can establish      February 6, 2006, regarding internet         Employment Group has extensive
an AAP other than by establishment if        applicants.)                                 experience with affirmative action plans
the contractor reaches an agreement               An employer that adequately             and advising employers that contract
with the OFCCP to submit an AAP              prepares its AAP by incorporating what       with the government.
based on, for example, functional or         is written in the plan into its everyday

                                             Federal Law Requires Companies
WARN Act                                     to WARN Employees of a Layoff
   The Worker Adjustment and worker’s equivalent of business employees to certain protections when
Retraining Act (“WARN”)—“a wage interruption insurance”—entitles                Continued on Page 5
 4 www.kutakrock.com
Continued from Page 4                         Employers are encouraged by WARN’s           preexisting legal obligation. Similarly,
an employer shuts down a facility,            civil penalty provisions—$500 per day        courts in many instances have found that
initiates a “mass layoff” or, in certain      of violation—to compensate employees         payments tied to settlements of potential
circumstances, consolidates with              who do not receive the Act’s required        lawsuits do not constitute allowable
another company. The Act’s purpose            notice. These civil penalty provisions do    deductions. In a complicated case
“is to ensure that workers receive            not apply if an employer, rather than        arising in Nevada, a casino could not
advance notice of plant closures and          giving notice, compensates employees         deduct severance payments paid to only
mass layoffs that affect their jobs. This     for back pay and benefits that would         those employees who agreed to remain
provides workers with time to adjust          have been earned during the 60-day           on the job until the casino closed its
to their loss of employment, to seek and      period. If a civil action is necessary to    doors. The court rightly found the
obtain alternative jobs, and where            recover what is due, a court may also        payments were not unconditional:
necessary, to seek retraining to allow        award the attorneys’ fees.                   employees had to continue working in
successful competition in the job                  It is usually obvious that an           order to receive them. Examples of
market.” Companies employing 100 or           employer failed to give notice as required   allowable deductions under this second
more employees are covered by                 by WARN. Litigation arises and               prong include such things as vacation
WARN; governmental entities,                  WARN becomes tricky when                     pay voluntarily converted into a cash
however, are not.                             employers claim they are entitled to         payment (without an existing agreement)
     With few exceptions, employers           deduct certain amounts from their            and severance benefits paid with no
must give at least 60 days’ notice of their   back-pay liability. By the terms of the      obligation to do so.
intentions prior to closing a facility or     Act, an employer’s liability to an               WARN is commonly called the
executing a mass layoff. The notice must      employee is discounted by (1) any            “plant closing bill.” Yet all large
comply with statutory requirements and        wages paid by the employer to the            employers—even those without
contain certain essential elements,           employee during the period of violation;     “plants” or even blue collar workers—
including the name and address of the         and (2) any voluntary and unconditional      must remember the Act. Companies
affected facility, the nature of the          payment by the employer to the               should seek the advice of an attorney
anticipated action, a listing of employee     employee that is not required by any         thoroughly familiar with WARN
representatives and unions and a              legal obligation. 29 U.S.C.                  whenever making large-scale,
delineation of how many employees             § 2104(a)(2).                                fundamental business decisions that
within each job title will be affected.            The contours of the first allowable     affect employees.
     An employer can avoid WARN’s             deduction are easily derived from the
notice requirements when a business           text of the Act. If the employer pays
closure is caused by sudden and               wages to the employee during the
unexpected conditions outside the             60-day period—even if the wages were
employer’s control, when a natural            earned at one of the employer’s other
disaster leads to a closing or layoff or      facilities—the employer may deduct
when a faltering company is pursuing a        such wages from its back-pay liability.
pivotal business opportunity and              However, the employer cannot benefit
providing the required notice would           from wages paid by other companies
have a detrimental affect on the              to the employee during the 60-day
company’s chances of securing the             period.
business opportunity.                              When litigation arises, it usually
     An employer that closes a plant or       relates to the second allowable type of
engages a mass layoff without providing       deduction: voluntary, unconditional
notice is liable for back pay to affected     payments to the employee not required        The WARN Act protects employees from
employees for each day of the violation,                                                   mass layoffs. Companies are generally
                                              by any legal obligation. Therefore,
                                                                                           required to provided 60 days’ notice before
up to the required 60 days, and for any       severance payments required by an            closing a facility or executing a mass layoff.
benefits that would have been owed            employment contract are not allowable        If it cannot, the company is liable for back
under an employee benefit plan.               deductions because they stem from a          pay and benefits for each day of the violation.

                                                           NATIONAL RESOURCES, LOCAL RESULTS                                  TM      5
                                     Kutak Rock LLP’s law practice embraces a wide array of legal disciplines, including
                                 general corporate practice, litigation, tax, government relations, corporate finance, banking,
                                 real estate, telecommunications, health care, bankruptcy, insurance, public finance and
                                 environmental law. Founded in Omaha in 1965, the firm has expanded to 16 offices
                                 nationwide.
                                     The firm’s more than 325 attorneys direct their individual professional skills toward the
                                 common goal of providing the firm’s clients with excellent, comprehensive legal services.

               For more labor news and information, check our Web site: www.KutakRock.com
    This newsletter is a publication of Kutak Rock LLP and is intended to alert the recipients to new
    developments on specific issues. It is not intended to provide legal advice or constitute a legal opinion on
    any national labor circumstance, transaction or matter. The content of this newsletter is intended as
    general information only and may be considered advertising in some states.

    The determination of the need for legal services and the choice of a lawyer are extremely important
    decisions and should not be based solely upon advertisements or self-proclaimed expertise. For
    further information regarding this newsletter or any specific legal questions, please contact the firm
    or a Labor & Employment Group member, including those identified below:

        Atlanta
        Gregory R. Crochet ---------------------- 404.222.4600 ---------------- Greg.Crochet@KutakRock.com
        Joyce Mocek ------------------------------ 404.222.4600 ----------------- Joyce.Mocek@KutakRock.com
        Denver
        Heather M. Davis ------------------------- 303.297.2400 --------------- Heather.Davis@KutakRock.com
        Des Moines
        Norene D. Jacobs ------------------------ 515.224.1266 -------------- Norene.Jacobs@KutakRock.com
        Fayetteville
        Robert W. George ----------------------- 479.973.4200 -------------- Robert.George@KutakRock.com
        Debby Nye --------------------------------- 479.973.4200 --------------------Debby.Nye@KutakRock.com
        Michael R. Bond -------------------------- 479.973.4200 ---------------- Michael.Bond@KutakRock.com
        Irvine/Los Angeles
        Paul F. Donsbach ------------------------ 949.417.0999 -------------- Paul.Donsbach@KutakRock.com
        Grace Y. Horoupian---------------------- 949.417.0999 ----------- Grace.Horoupian@KutakRock.com
        Little Rock
        John D. Coulter --------------------------- 501.975.3000 ----------------- John.Coulter@KutakRock.com
        Omaha/Chicago
        Marcia Washkuhn ------------------------ 402.346.6000 ---------- Marcia.Washkuhn@KutakRock.com
        Scottsdale/Chicago
        Michael W. Sillyman --------------------- 480.429.5000 ------------ Michael.Sillyman@KutakRock.com
        Paul S. Gerding -------------------------- 480.429.5000 ------------- Paul.Gerding.Sr@KutakRock.com
        Paul S. Gerding, Jr. ---------------------- 480.429.5000 ------------- Paul.Gerding.Jr@KutakRock.com
        Washington, D.C./Richmond
        Nancy E. Nunan -------------------------- 202.828.2415 ---------------- Nancy.Nunan@KutakRock.com
        Wichita/Kansas City/Oklahoma City
        Alan L. Rupe ------------------------------ 316.609.7900 -------------------- Alan.Rupe@KutakRock.com
        S. Douglas Mackay ---------------------- 316.609.7900 ---------------- Doug.Mackay@KutakRock.com
    For Employee Benefits issues, please contact :
        John Schembari -------------------------- 402.346.6000 ------------ John.Schembari@KutakRock.com
    The material in this publication may be reproduced, in whole or in part, with acknowledgment of its source and
    copyright.
    The material in this publication may be reproduced, in whole or in part, with acknowledgment of its source and copyright.

6     www.kutakrock.com                                          NATIONAL RESOURCES, LOCAL RESULTS                              TM

				
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