Monday, April 25, 2016

Security Clearance Reform: Some Movement Forward

In 2015 the White House ordered the Security Clearance Performance Accountability Council (PAC), to undertake a ninety-day review of the reforms to the Federal background investigative process, assess ways of improving the security of information networks and systems, and determine improvements that could be made to the way the Government conducts background investigations for suitability, security, and credentialing.

The PAC is an interagency body created by George W. Bush in his 2008 Executive Order 13467 and chaired by the Deputy Director for Management, OMB. It comprises the Director of OPM, serving as the Suitability Executive Agent, and the Director of National Intelligence, serving as the Security Executive Agent as well as representatives of DOD, Treasury, DHS, State, DOJ, DOE, and the FBI. When created in 2008, the PAC was charged with ensuring the alignment of suitability and security investigative and adjudicative processes, the implementation of a standard set of procedures and methods, and the development of IT capabilities to facilitate the process.

In January the PAC announced the conclusions of the ninety-day review. See also:

The PAC recommended two major changes to advance the goals articulated in EO 13467 and address the growing threat of cyber security attacks. First, the Administration announced the creation of a new unit, called the National Background Investigations Bureau (NBIB), which would absorb the Federal Investigative Service (FIS) and take on its mission of performing background investigations for most federal agencies. The Administration explains that, although the NBIB will report to the OPM director (as did FIS), DOD will now take on responsibility for the design, security and operation of the background investigations IT system for NBIB. Further, the head of NBIB will be presidentially-appointed and a member of the PAC, giving this important office a voice in major decisions affecting cross-agency security clearance policy.

The second major change assigns to DOD the role of ensuring that computer technology is best used in the facilitating of security clearance investigations and adjudications, sharing of information among agencies, and securing all information from external attacks. OPM describes establishing NBIB as a priority for FY16 and FY17 and notes that it will “transfer responsibility for the IT infrastructure management for NBIB to the Department of Defense.” Id.

In February, the House Oversight Committee made clear it had some skepticism of the recommendations from the ninety-day PAC study.

Most concerning, it seemed from hearing questions, is the division of responsibility between DOD and OPM. Nevertheless, OPM recently named a transition team to head up the creation of NBIB out of the old Federal Investigative Service.

It may be noteworthy that the Deputy Manager, Christy Wilder, comes to the project from DNI’s Office of Legislative Affairs. Perhaps she will bring her experience there to persuading lawmakers of the value of the new structure.

Meanwhile, the 2016 Q1 report of the cross-agency group working to implement the PAC goals, registers that efforts to Improve Oversight and Quality of Background Investigations and Adjudications have missed a number of key milestones. An effort to “work with agencies to develop adjudicative quality standards, critically examine the existing process, assess the adequacy of oversight mechanisms in place, and share best practices” (2016Q1, p. 20) appears stalled while a survey tool is developed to poll the agencies. The development of tools, procedures and standards to improve oversight and quality of investigations and adjudications has been sidelined, in favor of other priorities. Id., p. 21.

The executive branch seems to take seriously the need to improve the security clearance process, to standardize the investigations, and to regularize the adjudication across agencies. It recognizes the benefits that IT may bring to the process but also the need to protect data from cyber threats digitally stored and transmitted. Nevertheless, what the reports of the ninety-day study group and the 2016 Q1 report tell us more than anything is that change comes slowly, and nowhere more so than to interagency efforts, like the present improvement of the security clearance process.

This blog was written by Mary Kuntz.

Wednesday, April 20, 2016

So Where Do I Fit In? The Angst of the Worker No One Wants to Claim

To add insult to their injury, Uber and Lyft drivers in San Francisco will soon receive notifications from the San Francisco City Treasurer’s Office, demanding they pay a $91 annual business license fee if they drove in the city for seven days or more each year. However, not only will the drivers be required to pay the fee for this year, but they will also be charged retroactively for any previous years they did not pay for a business license, plus penalties and interest. Taking its corporate responsibilities quite seriously, Uber provided a sober response to the announcement: “Uber partners with entrepreneurial drivers and as independent contractors, they are responsible for following appropriate local requirements.” Ah-hem. 

Uber drivers have filed a class-action lawsuit in California federal court (O’Connor v. Uber Technologies, Inc.) alleging that Uber misclassified drivers as independent contractors, rather than employees. Being misclassified as independent contractors, the lawsuit contends, the drivers are required to pay their own business expenses, such as for their vehicles, gas, and maintenance, in violation of California Labor Code Section 2802. California law requires employers to reimburse employees for such expenses, which are for the benefit of the employer and are necessary for the employees to perform their jobs. In the Second Amended Complaint of the lawsuit, the drivers set forth facts which courts routinely consider when making the independent contractor/employee determination: “Although classified as independent contractors, Uber drivers are employees. They are required to follow a litany of detailed requirements imposed on them by Uber and they are graded, and are subject to termination, based on their failure to adhere to these requirements (such as rules regarding their conduct with customers, the cleanliness of their vehicles, their timeliness in picking up customers and taking them to their destination, what they are allowed to say to customers, etc…) In addition, Uber is in the business of providing car service to customers, and that is the service that Uber drivers provide. The drivers’ services are fully integrated into Uber’s business, and without the drivers, Uber’s business would not exist.” The drivers have further contended that Uber could terminate them if they did not accept a certain number of passengers. Uber countered that, even given its ability to terminate the drivers, Uber did not control the drivers, but rather, only provided a platform, or referral service, to connect drivers and passengers–even though the drivers are an integral part of its service.

Money is at stake for Uber in the lawsuit. If the drivers are found to be employees, rather than independent contractors, Uber will be responsible for paying the drivers at least minimum wage, reimbursement for expenses, overtime, and other benefits. That could add up to a significant sum of money. As of December 2015, Uber had more than 160,000 active drivers in 161 cities. The class-action lawsuit against Uber is set to go for a five-week trial beginning on June 20, 2016. The outcome of the lawsuit has far-reaching monetary ramifications not only for Uber, but also for companies like it that provide on-demand digital platforms (Lyft, Handy, Postmates, and Door Dash).

The contractor/employee classification dilemma reaches into federal sector employment issues, as well. Federal agencies often hire contractors instead of full-time employees to perform the work. When issues arise concerning potential discrimination under Title VII of the Civil Rights Act of 1964, it seems that both the contracting agency and the federal agency want to disclaim an employment connection to the worker. Title VII declares it is an unlawful employment practice for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” Title VII defines an employee as “an individual employed by an employer.” In a case arising under a statute with an identical definition of “employee” (the Employee Retirement Income Security Act of 1974 (ERISA)), the Supreme Court noted in Nationwide Mutual Insurance Company v. Darden that this definition of “employee” is “completely circular and explains nothing.” Finding no help from Congress in this definition devoid of actual meaning, the Supreme Court adopted the common law of agency test for determining who qualifies as an employee under ERISA.

Borrowing from Darden, the Equal Employment Opportunity Commission adopted the common-law agency test to determine whether an individual is an agency employee versus a contractor. Ma v. Dep’t of Health and Human Servs. The common-law agency test considers “all of the incidents of the relationship between the appellants and the agency.” In the EEOC Compliance Manual, the Commission set forth factors which essentially mirror those of the common-law agency test that indicate a worker is in an employment relationship with an employer, including the following:
  • The employer has the right to control when, where, and how the worker performs the job.
  • The work does not require a high level of skill or expertise.
  • The employer furnishes the tools, materials, and equipment.
  • The work is performed on the employer’s premises.
  • There is a continuing relationship between the worker and the employer.
  • The employer has the right to assign additional projects to the worker.
  • The employer sets the hours of work and the duration of the job.
  • The worker is paid by the hour, week, or month, rather than the agreed cost of performing a particular job.
  • The worker does not hire and pay assistants.
  • The work performed by the worker is part of the regular business of the employer.
  • The worker is not engaged in his/her own distinct occupation or business.
  • The employer provides the worker with benefits such as insurance, leave, or workers’ compensation.
  • The worker is considered an employee of the employer for tax purposes (i.e., the employer withholds federal, state, and Social Security taxes).
  • The employer can discharge the worker.
  • The worker and the employer believe that they are creating an employer-employee relationship.

These same criteria apply when determining whether an individual is jointly employed by the federal agency and the contracting company. “A determination of joint employment requires an examination of the amount and type of control the staffing firm and the agency each maintain over the Complainant’s work, whether or not the individual is on the federal payroll.” Baker v. Dep’t of Army. “For example, the Agency is an employer of the Complainant if it supplies the work space, equipment, and supplies, and if it has the right to control the details of the work performed, to make or change assignments, and to terminate the relationship.” EEOC’s Enforcement Guidance: “Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms.”

In the March 2016 edition of the EEOC’s Digest of Equal Employment Opportunity Law, the Commission noted the following recent cases in which it found joint employment:
  • Cortez J. v. Dep’t of Navy: Even though the staffing firm completed Complainant’s performance appraisal, the Agency provided input for the appraisal, and had significant input into the decision to terminate Complainant.
  • Letty K. v. Dep’t of Defense: While the Agency did not provide Complainant with retirement benefits or leave, or pay social security taxes, the Agency maintained the ability to terminate Complainant.
  • Nannette T. v. Dep’t of Army: Although the contractor provided Complainant with her leave and benefits and withheld taxes, and Complainant referred to herself as a contractor, she performed duties related to military intelligence in a top-secret Agency facility, using tools, equipment, and materials provided by the Agency.
  • Jesse R. & Arthur F. v. Dep’t of Justice: Notwithstanding that the Complainants worked on premises provided by the staffing firm, performed work requiring a high level of expertise, and received wages and benefits from the staffing firm, the record showed that an Agency manager routinely assigned one Complainant projects and duties, and dictated the other Complainant’s schedule, travel, and contacts.
Cases in which the Commission found the individual was a contractor, and thus not jointly employed with a federal agency, include:
  • Jared F. v. Dep’t of Defense: Even though the Complainant used equipment provided by the Agency, and he had worked on the Agency’s premises for 15 years, his position did not require a high level of skill or expertise, nor was he supervised by Agency staff or compensated by the Agency.
  • Erick N. v. Nuclear Regulatory Comm’n: The Agency’s staff gave Complainant his assignments, designated his hours and where his work was performed, and provided him with the tools and equipment needed to perform his duties. The staffing firm, though, handled Complainant’s pay and benefits. After the Complainant had an altercation with an Agency employee, the Agency asked the staffing firm to find a resolution other than to terminate the Complainant. In response, the staffing firm conducted its own investigation, and decided to reassign Complainant to other clients. The Commission regarded this as an indication that the staffing firm retained full power over the Complainant’s employment and significant enough to deem him a contractor, rather than an Agency employee.
  •  Aracely J. v. Dep’t of Navy: Although the Complainant performed work at an Agency work space, using Agency equipment, the Complainant was supervised by an employee of the contractor. Additionally, in finding that the individual was a contractor, the Commission relied on the fact that the contract between the Agency and the contractor provided that the contractor was responsible for developing the framework for the program, providing training, and ensuring that personnel completed all necessary functions.

As these cases show, the contractor/employee classification is not always self-evident, but the classification determinations tend to have serious consequences for all parties involved. Unfortunately, it is the workers in these “grey areas” who find themselves at the greatest peril of erroneous classifications, not only in terms of losing the benefits afforded to those classified as employees, but also with regard to not being afforded the same legal protections as employees.

This article was written by Valerie Chastain.

Thursday, April 14, 2016

North Carolina’s Bathroom Law and the Loss of State Civil Rights Protection

North Carolina’s much-talked-about Public Facilities Privacy & Security Act (HB2) has been much in the news for its attack on the rights and dignity of the transgendered.  But the larger effect of the law on civil rights more generally in that state remains to be tested.  The provision that mandates that people use the public restroom that corresponds to their sex as specified on their birth certificate has been well publicized, and constitutional challenges are already underway to that part of the law.  

But civil rights lawyers from North Carolina have sounded the alarm regarding another provision of the law that substantially reduces the legal rights of all North Carolina employees to sue for discrimination. The law provides that even those covered under North Carolina’s Equal Employment Practices Act (EEPA) (NCGS 143-422.2) (limited expressly to “race, religion, color, national origin, age, sex, or handicap”) have no private right of action to sue an employer for discrimination under that law.  This means that now, although North Carolina’s state law prohibits employers that regularly employ 15 or more employees from discriminating in employment based on these specifically enumerated categories, employees no longer have the power to enforce their rights under this law.  

For North Carolina, this means in practical terms that employees in that state may sue for discrimination only under federal anti-discrimination laws.  The effects of this new restriction are felt from the start of a claim, when the employee no longer has a generous three years to bring a claim, as before in North Carolina.  Instead, she or he must file with the EEOC within 180 days, as provided under Title VII.  It is likely that the significantly more restrictive time to file will reduce the number of claims for employment discrimination brought in North Carolina.  Claims brought to court under federal laws must be filed in federal court: North Carolinians suing for employment discrimination will no longer have access to the friendlier, faster, and significantly less costly state courts for their discrimination complaints.  Finally, should they prevail in federal court, their damages will be subject to the federal cap on compensatory damages (presently $300,000 for the largest corporations) – North Carolina’s law had not capped damages previously and juries were free to decide compensatory damages based solely on the facts of the case.  Proponents of North Carolina’s new Bathroom Law defend this little-talked-about provision by holding up the federal protections that North Carolina workers continue to enjoy.  Civil rights attorneys in the state, however, are more conscious of what workers have lost when this new law denies them the right to enforce their rights under the state anti-discrimination law.

State anti-discrimination laws matter, even when they at most echo the protections offered under federal law.  In most states — Mississippi has been the exception until now – employees bringing a discrimination claim against their employer have a choice to address discriminatory employment practices under either state anti-discrimination statutes or federal – or both.  At a minimum this means they may choose to pursue their claim through the state court system rather than filing in federal court.  Still more, most states with their own anti-discrimination enforcement regime have arranged with the federal Equal Employment Opportunity Commission to provide an office or offices to serve as Fair Employment Practice Agencies (FEPA) to help process discrimination complaints in the state.  What this means for workers is more time to file a complaint: states with FEPAs allow 300 days for the filing of a claim of discrimination, rather than the statutory 180.  Thus, even if the state laws do not significantly expand the categories accorded civil rights – even if, most significantly, protections is not given to sexual orientation and gender identity – the existence of a state anti-discrimination law and a right to bring a claim under it can significantly enlarge the protections available to employees.   

In our region, Virginia, Maryland, and D.C. all have state human rights laws that expand to some degree the protections offered under federal law and provide a way for workers to bring a claim in state court.  The three states provide agencies that serve as FEPAs with the EEOC, giving  workers 300 days to file their claim of discrimination with the EEOC. Individuals in these states have the right to proceed to court, state or federal, on their claims.  

The protections offered by the three states vary widely: both Maryland and D.C. protect sexual orientation and gender identity, whereas Virginia does not.  Virginia, on the other hand, expands protection to businesses employing five or more employees (Title VII covers employers with 15 or more employees whereas the ADEA covers employers employing 20 or more.), whereas Maryland’s law covers only those employers with 15 or more employees.  D.C. insists that every employer, with few exceptions, is subject to the law.   Of the three, D.C. offers the most expansive list of protected categories:  Race, color, religion national origin, sex, age, marital status, personal appearance, sexual orientation, gender identity or expression, family responsibilities, political affiliation, physical or mental impairment, matriculation and genetic information. 

Without cataloguing the differences between the separate state laws that govern civil rights protections in Virginia, Maryland, and D.C., what is clear are the benefits enjoyed by workers in our region because they are covered by state civil rights statutes as well as by federal law.   These laws have expanded rights, with some employees gaining  coverage for statii not covered under federal law, such as sexual orientation while others, who work for a business too small to fall under the federal law, find they have protection under their state statute.  All have available to them a process through state agencies and state courts that is closer to home, easier to access and generally less daunting.  

Those who argue that the change to the North Carolina law is insignificant given protections available under federal law, put too little value on the local.  They do not reckon on the effect of taking from employees the right to sue for discrimination by going to a local agency, filing a claim under state law, in state court, at much lower cost.  The North Carolina law will affect more than public bathrooms or even the rights of the transgendered.  It will burden every worker in the state who now may not protect his or her rights without, as they say, making a federal case of it.

This blog was written by Mary Kuntz