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June 2015 Legal Report

​U.S. Judicial Decisions

Discrimination. The U.S. Supreme Court allowed a woman suing her former employer for pregnancy discrimination to take her case back to court. Justice Stephen G. Breyer wrote in the majority opinion that the woman deserved another chance to prove that the company had treated her differently from “a large percentage of nonpregnant workers” who might have been offered accommodations. 

Peggy Young was was a part-time driver for United Parcel Service (UPS) when she became pregnant in 2006 after several miscarriages. Young’s doctor advised her that she should not lift more than 20 pounds. But UPS required drivers to be able to lift up to 70 pounds, and told Young she could not work while under a lifting restriction.

Young decided to stay home without pay during most of the time that she was pregnant, eventually losing her employee medical coverage. She then filed suit against UPS, claiming that it acted unlawfully in refusing to accommodate her pregnancy-related lifting restriction.

Young claimed that her coworkers were willing to help her with lifting heavy packages, and that UPS accommodated other drivers who were “similar…in their inability to work,” according to court documents. 

However, UPS held that “other persons” that were accommodated were drivers who became disabled on the job, who had lost their U.S. Department of Transportation certifications, or who suffered disabilities covered by the Americans with Disabilities Act. Since Young did not fall within any of these categories, UPS claimed it had not discriminated against her based on her pregnancy.

Young’s initial suit was dismissed by the U.S. Court of Appeals for the Fourth Circuit, which said that the Pregnancy Discrimination Act of 1978 does not give pregnant women “a ‘most favored nation’ status,” according to the opinion written by Judge Allyson Kay Duncan. “One may characterize the UPS policy as insufficiently charitable, but a lack of charity does not amount to discriminatory animus directed at a protected class of employees.”

Young then appealed to the U.S. Supreme Court, which took her case and ruled to remand the case. In the majority opinion, Breyer wrote that the Fourth Circuit did not consider the combined effects of UPS’s accommodation policies or the justifications for them. 

“That is, why, when the employer ac­commodated so many, could it not accommodate pregnant women as well?” he asked. “Viewing the record in the light most favorable to Young, there is a genuine dispute as to whether UPS provided more favorable treatment to at least some employees whose situation cannot reasonably be distinguished from Young’s.” 

The case will return to the Fourth Cir­cuit for further proceedings. (Young v. United Parcel Service, Inc., U.S. Supreme Court, No. 12-1226, 2015)

Whistleblowers. A federal appeals court denied a man’s petition of a claim to a whistleblower award because he submitted information to the Securities and Exchange Commission (SEC) before the Dodd-Frank Act was enacted. 

Between 2004 and July 2009, Larry Stryker submitted information to the SEC’s Enforcement Division about alleged wrongdoing by Advanced Technologies Group LTD (ATG) and another individual. The SEC opened an investigation into the alleged misconduct in March 2009 and interviewed Stryker in April of that year. 

The SEC then filed an enforcement ac­tion against ATG and the individual, charging them with violating a section of the Securities Act of 1933, and settling with them in November 2010 for just over $19 million. During this process, the Dodd-Frank Act was enacted on July 21, 2010.

On January 11, 2011, Stryker submitted an application for a whistleblower award under Section 21F of Dodd-Frank. However, the SEC denied his award claim because Stryker did not submit “original information” after Dodd-Frank was enacted.

Stryker challenged the decision, which went to a federal appeals court. The court ruled in favor of the SEC. In his opinion, District Judge J. Paul Oetken wrote that “information submitted before July 21, 2010, does not qualify as ‘original information.’”

Oetken explained that Stryker’s “sub­mission…did not qualify as statutorily defined whistleblower information because it did not conform to the SEC’s rule…which disqualified information submitted prior to July 21, 2010; and did not fall within Congress’s safe harbor, which excluded from its protection information submitted prior to that date.” (Stryker v. SEC, U.S. Court of Appeals for the Second Circuit, No. 13-4404-ag, 2015)​

Regulatory Issues

Discrimination. The U.S. Equal Em­ployment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ) Civil Rights Division signed a new Memorandum of Understanding (MOU) to prohibit employment discrimination in state and local governments.

The MOU includes provisions to co­ord­i­nate the investigation of charges of discrimination on the basis of any characteristic protected by Title VII of the Civil Rights Act of 1964. The MOU also includes provisions allowing for information sharing among the EEOC, the DOJ, and third parties.

Information sharing. President Barack Obama signed an executive order that encourages the development of information sharing and analysis organizations (ISAOs) for cybersecurity information sharing and collaboration within the private sector and between the private sector and the government. 

Under the executive order, information sharing is expanded by encouraging the “formation of communities that share information across a region or in response to a specific emerging cyber threat,” according to the White House. ISAOs can be not-for-profit communities, a membership organization, or a single company acting as a facilitator between customers or partners.

Additionally, the executive order directs the U.S. Department of Homeland Security (DHS) to fund the creation of a nonprofit organization to create a common set of voluntary standards for ISAOs. It also clarifies DHS’s authority to enter agreements with information sharing organizations through the National Cybersecurity and Communications Integration Center (NCCIC).

The executive order further streamlines private sector companies’ ability to access classified cybersecurity threat information by adding DHS to the list of federal agencies that approve classified information sharing arrangements. The order also allows DHS to take steps to “ensure that information sharing entities can appropriately access classified cybersecurity threat information,” the White House said.​

State Legislation

Discrimination. Arkansas passed legislation that prohibits local governments from passing ordinances to protect LGBT people from discrimination. Gov. Asa Hutchinson did not sign the bill (S.B. 202) into law, but took no action on the legislation for five days, allowing it to be passed automatically.

The law will prevent counties and cities in Arkansas from enacting or enforcing laws that ban sexual orientation or gender identity discrimination. It also invalidates any existing LGBT-inclusive nondiscrimination ordinances within the state.

The law goes into effect at the end of August, making it the second state to enact this type of legislation following Tennessee, which adopted a similar law in 2011.

U.S. Legislation

Cybersecurity. The U.S. Senate In­telligence Committee passed a bill that would create incentives to increase cybersecurity threat information sharing and grant liability protections to the private sector.

The bill—the Cybersecurity Information Sharing Act of 2015 (S. 754)—would facilitate increased sharing of classified and unclassified information about cyber­threats with the private sector. It also authorizes private entities to monitor their networks and those of consenting customers for cybersecurity purposes. Companies can then share cyberthreat indicators with each other, or with the government.

Additionally, the bill creates liability protection for companies, allowing them to monitor networks for cybersecurity threats and share information about cyber threats between companies.

However, the bill does not require private sector entities to share cyberthreat information, restricts the use of cyberthreat indicators to specific purposes, and requires that companies remove personal information before sharing cyberthreat indicators. 

The bill is sponsored by Committee Chairman Sen. Richard Burr (R-NC) and has been placed on the Senate Legislative Calendar.​

Other Legislation

South Korea

Corruption. The National Assembly of South Korea passed anticorruption legislation that imprisons journalists, teachers, and public servants who accept single cash donations or gifts of more than 1 million won (approximately $910).

Under the new law, public servants, teachers, and journalists face fines or up to three years of prison for accepting gifts over the value limit, regardless of whether there is evidence of bribery or influence peddling. Spouses are also subject to the new law, and public servants, teachers, and journalists whose significant others accept gifts over the value limit from individuals that involve conflicts of interest can also be punished.

The new law goes into effect in October 2016 and the government is working to create a list of gifts that will be exempt from it, such as cash donations at weddings and funerals.