Job applications Archives - Employing Alabama

Alabama Supreme Court Allows “At Will” Employee to Sue Based Upon Promises Made During Interview Process.

March 18, 2016Robert C. Lockwood

Fraud

The Alabama Supreme Court recently upheld an award of $600,000 in compensatory damages to an “at will” employee who sued his employer for fraud. See Farmers Insurance Exchange v. Morris, No. 1121091, 2016 WL 661671 (Ala. Feb. 12, 2016). In Morris, the employee was working as an independent insurance agent at his father’s insurance agency. He wanted to continue working for his father, but also join Farmers Insurance Company as an agent. He repeatedly asked Farmers representatives if he could work for both his father and Farmers. He was told that such a relationship was permissible. Although there was conflicting evidence, the jury found that the employee was ultimately terminated by Farmers because of a conflict of interest policy which actually prohibited the employee from working for both Farmers and his father.

The employee argued that Farmers fraudulently induced him into giving up business with his father’s agency — business which Farmers retained after termination. A crucial element of fraud is detrimental reliance — the recipient of a promise takes detrimental action in reliance on the promise. In this case, the employee claimed that he detrimentally relied upon Farmers’ promise that there was no conflict of interest.

Farmers argued that the employee was an “at will” employee of Farmers, who could be terminated from employment at any time. As a result, he could not rely upon his belief that he would continue to work at Farmers and receive payment from Farmers in the future. The Alabama Supreme Court rejected that argument: “When an employee leaves one job for another based on a representation by the new employer regarding the new job that is not true at the time it is made, the new employer cannot hide behind the fact that Alabama law enforces or reads into the new employment contract an ‘at will’ clause to avoid the consequences of its fraud.”

The key lesson for employers is to attempt to learn all of the promises made to potential employees in the course of interviews. This can be a difficult task, but the key is documentation. In the course of interviews, executives need to make comprehensive notes of the questions asked by applicants and the answers given by the executive. With that documentation, employers can better defend potential claims for fraud based upon the interview process.

President Obama’s Executive Order on Pay Transparency Became Effective January 11, 2016

February 17, 2016Robert C. Lockwood

An Executive Order prohibiting federal contractors from engaging in retaliation became effective January 11, 2016. That order provides that federal contractors and subcontractors cannot discharge or otherwise discriminate against employees and job applicants for discussing, disclosing or inquiring about compensation. In short, covered employers cannot tell employees or applicants: “Don’t talk to each other about how much you are paid.”

Among other things, the order requires that covered employers adopt a pay transparency policy statement. The Department of Labor has provided a model statement, which can be found here: Pay Transparency. Contractors must modify their policy manuals, provide employees with an electronic or physical posting of the requirements of the rule, and implement the new “EEO Is the Law” poster, which can be found here: Poster

The order has many requirements and you should consult with counsel to ensure you are in proper compliance.

Birmingham Bans Inquiries on Criminal Convictions

February 5, 2016Robert C. Lockwood

It appears that job applications to work for the City of Birmingham will no longer require applicants to disclose criminal convictions. Yesterday, Birmingham Mayor William Bell issued an executive order which modified the City’s hiring practices and adopted the “Ban the Box” movement. Here’s a link to the Al.com article. Article

Most employment applications ask if the applicant has been convicted of a crime, and contain a “box” to check “yes” or “no.” The “Ban the Box” movement seeks to remove that “box,” and other conviction inquiries, from job applications. In concept, the “Ban the Box” requirement prevents employers from automatically weeding-out employees with a criminal history, which gives applicants a better chance at a job, and decreases the chances that they will commit another crime.

Mayor Bell’s executive order follows an executive order issued by President Obama on November 2, 2015. In that order, President Obama directed that the “box” should be removed from applications for federal employment. Here’s a link discussing that action and providing more information on the “Ban the Box” movement. Obama Article

One of the central tenets of “Ban the Box” is that inquiries about criminal convictions should occur “later” in the hiring process. Unfortunately, there is not a lot of clarity on when such inquiries should be permitted. Can they be made before a job offer? Or after?

Mayor Bell’s order does not provide much insight. In fact, it adopts a broad policy to “implement hiring policies and procedures intended to encourage the full participation of motivated and qualified persons with criminal histories in the workforce, reduce recidivism and ensure public safety.” It also “prohibit[s] the use of a criminal record as an automatic bar to employment” and requires that applicants receive an opportunity to “contest the content and relevance of a criminal conviction”.

Importantly, the executive orders from Mayor Bell and President Obama apply only to applications to work for the City of Birmingham or the federal government. Private employers can still use job applications that ask about criminal convictions.

Nevertheless, there is a growing movement for Congress to pass “Ban the Box” legislation which would, at a minimum, apply to federal contractors. Similarly, the City of New York has already imposed such legislation on private employers.

The devil is in the details with such legislation. If Birmingham’s executive order was used as a starting point for legislation, the burdens on employers could be onerous. What happens if an employer uses a criminal record as an “automatic bar to employment,” even in the post-offer stage? How extensive must the opportunity be to allow applicants to “contest the content and relevance of a criminal conviction”? What is the penalty for violations?

Employers should keep an eye on the “Ban the Box” movement and work to ensure that any new regulations do not impose requirements that are unworkable in the private sector.