There has been significant activity this spring at both the state and federal levels with respect to laws governing employers. The following alert provides a brief update with respect to some of these legislative developments that could have an impact on your organization’s policies and procedures.

Legislation Banning Employers from Asking for Social Media Account Passwords

Earlier this week, Maryland became the first state to pass legislation banning employers from asking for employees’ and job applicants’ personal social media site passwords. Other states have proposed similar legislation. In addition to barring employers from requesting or requiring usernames or passwords to personal online websites such as Facebook, Maryland’s legislation, which has been sent to the state’s governor for signature, prohibits employers from taking or threatening to take disciplinary action against employees or applicants who refuse to disclose such information. Notably, the legislation does permit employers to require that employees disclose log-in credentials “for accessing nonpersonal accounts or services that provide access to the employer’s internal computer or information systems” and contains protections for the employer’s proprietary data and the employer’s right to investigate to ensure compliance with securities and financial laws. If signed into law, the bill will become effective on October 12, 2012. Concern about the practice of requiring the disclosure of social media passwords has also reached the federal level, as United States Congressmen Charles Schumer and Richard Blumenthal have asked the Department of Justice and the United States Equal Employment Opportunity Commission (“EEOC”) to investigate whether requiring passwords for social media accounts violates federal law.

Wisconsin Repeals Right to Recover Compensatory and Punitive Damages for Violations of State Anti-Discrimination Law

Late last week, Wisconsin’s governor signed into law a reform measure that eliminates compensatory and punitive damages for acts of employment discrimination or unfair honesty or genetic testing under the Wisconsin Fair Employment Law. Under the prior version of the law, complainants who obtained such findings through the state agency process could then proceed to file an action for compensatory and punitive damages — which were not available through the agency proceedings — in state court. The new law repeals the complainant’s ability to seek compensatory and punitive damages in state court. It does not, however, change the traditional remedies of back pay, reinstatement, attorneys’ fees and costs available through the agency process or otherwise impact remedies that may be available under the federal anti-discrimination statutes.

EEOC Implements Final Rule on RFOA Defense in ADEA Disparate Impact Claims

The EEOC recently issued its final rule amending the regulation under the Age Discrimination in Employment Act (“ADEA”) addressing the “reasonable factors other than age” (“RFOA”) defense to disparate impact claims, i.e., claims that a facially neutral practice has the effect of harming older workers more than younger workers. The rule provides that an RFOA can exist when a practice is 1) reasonably designed to further or achieve a legitimate business purpose, and 2) administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances. The rule also sets forth a list of considerations relevant to assessing “reasonableness,” including such things as the extent to which the factor is related to the employer's stated business purpose; the employer’s application of the factor, including training for managers and supervisors; whether the employer limited supervisors' discretion to assess employees subjectively; whether the employer assessed the adverse impact of its employment practice on older workers; and the degree of harm to individuals within the protected age group and the extent to which the employer took steps to reduce the harm. At the same time, the regulation makes clear that no specific consideration must be present to establish the defense, and alternatively that the presence of these considerations does not automaticallyestablish the defense. The rule also clarifies that RFOA is an affirmative defense, and therefore, the employer has the burden of proving the defense once an employee has identified a specific employment policy or practice that harms older workers substantially more than younger workers. The rule is intended to conform the existing regulation to U.S. Supreme Court precedent. A link to the final rule can be found at: www.federalregister.gov/articles.