Compliance August 10, 2006

Court: USERRA Doesn't Preclude Workplace Arbitration

August 10, 2006 (PLANSPONSOR.com) - A federal appellate court ruled employer arbitration policies may be used to settle employee complaints including potential violations of laws barring discrimination against military service members.
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In doing so, the 5 th US Circuit Court of Appeals threw out a decision favoring plaintiff Michael Garrett by a federal judge in the Northern District of Texas. The lower court judge agreed with Garrett that his former employer, Circuit City , had violated his rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA) as a member of the Marine Reserves. Garrett alleged the violation occurred when the electronics retailer insisted his dispute go to arbitration rather than to litigate it in court.

According to a the appellate ruling written by Chief Circuit Judge Edith Jones, disposing of the dispute between Garrett and the company via arbitration does not run afoul of USERRA rights granted to service members by Congress. “It is not evident from the statutory language that Congress intended to preclude arbitration by simply granting the possibility of a federal judicial forum,” wrote Jones in the ruling. “Congress took no specific steps in USERRA, beyond creating and protecting substantive rights, which could preclude arbitration.”

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Jones said Garrett joined Circuit City at a Texas location in 1994. In 1995 , the chain adopted a nationwide policy for dispute resolution­. Garrett signed his acknowledgment of receiving the notice and did not opt out of the policy during the 30-day period when it was possible.

According to the decision, by the December 2002 and March 2003 period, when the US was ramping up for the second war inIraq, Garrett was managing a Dallas regional service center. He claimed his supervisors, knowing his reserve status, began criticizing and disciplining him.In March 2003, Garrett was fired, which he attributes solely to his status as a Marine Reserve Officer.

Judges also noted that federal employees must take their complaints of USERRA violations to the Merit Systems Protection Board rather than to court, indicating that alternative methods are permissible under the law. Garrett must arbitrate his wrongful termination claim.

Finally, the appellate judges rebuffed Garrett’s argument that granting his appeal was the most patriotic thing for the court to do.

“Garrett finally argues that the important public policy interest behind USERRA, embodying the protection of soldiers and thus the enhancement of American security, necessitates denying the request for arbitration,” wrote Jones. “Although we agree that the interests USERRA protects are important, it is wrong to infer that the service members’ substantive rights are not fairly and adequately protected by arbitration proceedings under the FAA. USERRA’s purposes can be fully realized through arbitration.”

The case is Garrett v. Circuit City Stores, U.S. Court of Appeals for the 5th Circuit, No. 04-11360 (5/11/06). The appellate ruling is  here .

Compliance August 9, 2006

Court Denies Expectation of Privacy for Workplace Internet Access

August 9, 2006 (PLANSPONSOR.com) - The 9th US Circuit Court of Appeals has confirmed a lower court ruling that an employee accused of receiving child pornography had no reasonable expectation of privacy for his internet use on his workplace computer.
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In its opinion, the appellate court said other courts have consistently held that an employer’s policy of routinely monitoring employee internet use precludes a reasonable expectation of privacy. Employees of Frontline Processing were told of the company’s monitoring practices and warned not to use the company’s computer for personal activities.

Frontline employee Jeffrey Ziegler compared his workplace computer to a desk drawer or file cabinet, which were given Fourth Amendment protection in another court case. The government objected to that argument, saying Ziegler could not expect privacy on a computer paid for by his employer and installed with a firewall and a department of personnel to monitor internet activity, also paid for by his employer.

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The owner of Frontline’s internet service provider had contacted the FBI with a tip that a Frontline employee had accessed child pornography Web sites on a company computer. An FBI agent interviewed IT personnel at Frontline who confirmed they had seen instances of child pornography access by Ziegler in their routine monitoring activities.

The IT employees claim the FBI agent asked them to make a copy of Ziegler’s hard drive for use in a child pornography investigation, but the agent claims he did not make that request since one of the employees informed him that a backup had been made. The evening of the interviews, Frontline IT personnel obtained a key to Ziegler’s office and made two copies of his computer hard drive.

Frontline’s corporate counsel contacted the FBI and offered to cooperate and turn over Ziegler’s computer to the FBI, suggesting a search warrant would be unnecessary. Frontline provided the agent with the computer and one of the hard drive copies.

Ziegler was charged with a three-count indictment, including the charge of receiving child pornography. Ziegler filed a pretrial motion to suppress the evidence in the workplace computer, claiming his right to privacy under the Fourth Amendment. Ziegler cited the agent’s request to make a copy of his hard drive and the seizure of the computer without a warrant as violations of his Fourth Amendment rights. The district court in Montana denied his motion.

The opinion in USA v. Ziegler is here .

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