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June 2018 Legal Report

​Judicial Decisions


The U.S. National Labor Relations Board (NLRB) upheld an employer's decision to discipline an employee, engaged in protected activity, who used a security passcode to allow nonemployees into a secure area.

Evan Demma, a server at the Atwood Café owned by KHRG and part of Hotel Burnham in Chicago, Illinois, attempted to organize the café and hotel's staff. As a member of UNITE HERE, Demma participated in dozens of union-organized demonstrations and protests outside the Atwood Café between 2014 and 2015.

In October 2015, Demma and roughly 100 other employees from various employers throughout Chicago participated in a union demonstration outside the hotel to make management aware of working conditions for housekeeping employees.

Once the demonstration began, Demma led a group of 20 people—six of whom were hotel employees—to deliver a petition to his general manager,

Tonya Scott. The group entered the hotel, where a security guard stopped them to say that only four employees could continue to the managers' offices.

"Although he was aware that nonemployees were in the delegation, Demma falsely replied that everyone in the delegation was an employee with the right to deliver the petition," according to court documents. "The security guard then allowed the entire delegation to pass."

The group had to pass through a secure area to enter the managers' offices. To do so, Demma entered a security passcode on a keypad. He then led the group to Scott's office—which was small, requiring some of the group to stand outside unattended, passing by several employees.

A restaurant manager later began an investigation into the petition delivery. At the same time, several employees emailed Demma and management to express their displeasure about nonemployees in the secured area of the hotel. The investigation resulted in a suspension for Demma, who was fired a week later for committing a "serious security breach."

UNITE HIRE filed a complaint with the NLRB, alleging that Demma's termination was a violation of the National Labor Relations Act (NLRA) because he was engaged in protected activity.

The NLRB, however, disagreed. In its opinion, the board said that while the delivery of the petition was protected concerted activity, Demma was discharged for lying and using a passcode to admit nonemployees into a secured area of the workplace.

"While the delegation's action was not disruptive, the dispositive point is that it advanced to the secure area only because Demma misrepresented to the security guard that the delegation consisted only of employees and the delegation was able to enter the secure area only because Demma used the passcode to provide the group unauthorized access," the board wrote.

These actions were "flagrant" violations of the hotel's security protocol, the board said, adding that the activity could not be dismissed as an impulsive act—which is protected under the NLRA—because Demma's actions were predetermined.

"Demma knew that there were nonemployee union representatives in his delegation and that, if he were to present the petition to Scott while she was in her office, he would have to breach the hotel's security protocol by improperly using the passcode to provide the nonemployee members of the delegation access to the secured area," the board explained. (KHRB and UNITE HERE, NLRB, No. 13-CA-162485, 2018)


An IT staffing firm will pay $50,000 and make remedial measures to settle an age discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC).

In its suit, the EEOC charged that Diverse Lynx violated the Age Discrimination in Employment Act when it told a job applicant he would no longer be considered for a position because he was "born in 1945" and "age will matter," according to a press release.

"A basic principle of anti-discrimination law requires that job applicants be judged on their individual qualifications," said EEOC Senior Trial Attorney Rosemary DiSavino in a statement. "Employers and employment agencies that consider an applicant's protected trait, such as age, violate federal law and will be prosecuted."

In addition to paying $50,000, Diverse Lynx is prohibited from considering an applicant's age when making hiring decisions and must provide its employees with live training that addresses U.S. federal anti-discrimination laws, as well as complaint and reporting procedures. Diverse Lynx also agreed that it will not retaliate against individuals who complain about discriminatory conduct. (EEOC v. Diverse Lynx, U.S. District Court for the District of New Jersey, No. 17-cv-03220, 2018)​



U.S. President Donald Trump authorized the U.S. National Guard to deploy to the U.S.-Mexico border to aid border patrol agents.

"America's Border Patrol agents work incredibly hard to do their jobs of enforcing our Nation's immigration laws and protecting our national security. These law enforcement personnel are tasked with securing thousands of miles of border…and often do not have the manpower or resources necessary to stem the tide of illegal immigration into the United States.

"Given the importance of secure borders to our national security, the National Guard, in coordination with governors, will remain in a support role until Congress takes the action necessary to close the loopholes undermining our border security efforts," the Trump administration said in a statement.


The U.S. State Department issued a rule for public comment that would require all U.S. visa applicants to submit social media information.

The rule would require that applicants submit social media usernames, previous email addresses, and phone numbers for the past five years. It would change the previous practice that required only applicants subject to extra scrutiny to submit such information.

The public had until May 29, 2018, to submit its comments before the U.S. Office of Management and Budget makes a final determination on the rule.



The U.S. House of Representatives passed legislation that would provide grant money for school safety measures.

The Students, Teachers, and Officers Preventing (STOP) School Violence Act (H.R. 4909) would authorize $750 million in U.S. federal funding for 10 years to train school personnel, students, and law enforcement to prevent student violence.

Grant money could also be used to develop anonymous reporting systems for threats, implement deterrent measures like metal detectors, or install technology for expedited notification of law enforcement during an emergency. The bill, however, prohibits funds from being used for firearms training.

The bill was sponsored by U.S. Representative John Rutherford (R-FL) and has 100 bipartisan cosponsors.

"I know from my time as sheriff that school and community safety requires a multi-layered approach," Rutherford said in a statement. "The STOP School Violence Act strengthens several vital layers of that security by giving students, teachers, and officers the resources and the training they need to identify warning signs and keep violence out of our schools and away from our children."

The bill now moves to the U.S. Senate Committee on the Judiciary for consideration.


A U.S. Senate committee approved a bill that would create a pilot program to explore protections for the U.S. electric grid.

The bill (S. 79) would instruct the U.S. Department of Energy's National Laboratories to study whether human-operated or analog systems would be more effective against cyberthreats to the electric grid.

The bill would also require the department to create a working group to evaluate the National Laboratories technology solutions and create a strategy to isolate the electric grid from cyberattacks. The department would then submit a report to Congress assessing the program.

U.S. Senator Angus King, Jr., (I-ME) introduced the bill, which has four bipartisan cosponsors. It now moves to the Senate Committee on Energy and Natural Resources.  ​

Other Legislation


NOTIFICATION. Alabama's Senate passed a bill that would set requirements for companies to notify individuals affected by data breaches.

S.B. 318 would require companies to notify any individuals who are affected by data breaches within 45 days of determining that a breach has occurred and if it is reasonably likely to cause substantial harm.

Companies that do not notify individuals would be subject to fines up to $5,000 per day, as issued by the state's attorney general's office.

The bill now heads to the Alabama House of Representatives. If enacted, Alabama will become the 49th U.S. state to enact a data breach notification requirement.​ 

Elsewhere in the Courts

 Insider Trading

The U.S. Securities and Exchange Commission (SEC) charged Jun Ying, Equifax's former chief information officer, with insider trading.

The complaint alleges that Ying "after being entrusted with material, nonpublic information about a massive cyber-intrusion and data breach suffered by his employer…exercised all his vested Equifax stock options and sold the shares prior to the public announcement of the breach," avoiding losses of more than $100,000. (SEC v. Ying, U.S. District Court for the Northern District of Georgia Atlanta Division, No. 1.18-cv-01069-CAP, 2018)


A company that transports nuclear materials to customers in the United States and abroad will pay a $2 million criminal penalty to resolve charges that it engaged in a bribery scheme.

The settlement is part of a deferred prosecution agreement the company entered into with the U.S. Department of Justice, which said the company bribed an official at a subsidiary of Russia's State Atomic Energy Corporation to secure a business deal. The company used terms such as "remuneration" and "commission" to document fraudulent payments to the Russian national. (Transport Logistics International, Inc., U.S. District Court for the District of Maryland, No. 8:18-cr-00011-TDC, 2018)


A U.S. federal appeals court rejected an employer's claim that its activity that may have discriminated against a transgender employee was protected by the Religious Freedom Restoration Act. Aimee Stephens, who had worked as a funeral director for six years, was fired two weeks after informing her employer that she is a transgender woman and intended to dress as a female.

The appellate court found that "discrimination on the basis of transgender and transitioning status" is a violation of Title VII of the Civil Rights Act. The court remanded the case to the district court level to consider whether the employee was discriminated against. (EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., U.S. Court of Appeals for the Sixth Circuit, No. 16-2424, 2018)