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Hospitality Industry: Mediation of Golf Industry Disputes Alert - January 31, 2012

Golf clubs and their developers, owners, builders, operators, managers and members are still taking their disputes to court to duke, or "club" it out. This trend continues even when there are readily available options to full-blown litigation, such as alternative dispute resolution (ADR).

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Construction: Alert - January 30, 2012

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Labor, Employment and Benefits
Newsletter - January 2000
 
In this Issue...
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FTC Says Fair Credit Reporting Act Applies To Work Harassment Investigations By Outside Firms
 
January 1, 2000
 

An advisory opinion issued August 31, 1999, by the Federal Trade Commission provides guidance to employers on complying with the notification requirements of the Fair Credit Reporting Act (FCRA) in connection with workplace harassment investigations conducted by outside investigative firms and attorneys.

As first reported in the September 1999, edition of the Employment Law Letter, the FTC issued a staff opinion letter in April 1999, in which it opined that the FCRA, a federal law governing the acquisition and use of "consumer reports" and "investigative consumer reports," applied to workplace harassment investigations conducted by outside attorneys and investigators.

In order to comply with the FCRA's notification requirements, employers must obtain the written consent of the accused harasser prior to undertaking the investigation, and must provide the accused a copy of the investigative report prior to taking any disciplinary action.

In the wake of the FTC's April 1999, advisory opinion, employers and management attorneys cried foul, claiming that application of the FCRA to harassment investigations could interfere with employers' efforts to comply with federal and state antiharassment laws, which generally permit employers to escape liability for co-worker harassment where they can show that they conducted an effective investigation and took prompt remedial action once they received notice of the improper conduct. They protested that, if employers must abide by the FCRA's notification requirements, employers may be tempted to forego hiring investigative firms or attorneys to conduct these investigations, and thus, potentially increase their exposure to liability under antiharassment laws.

The advisory opinion subsequently issued in August 1999, while reiterating the FTC's stance that the FCRA applies to workplace harassment investigations conducted by outside firms and attorneys, provides important guidance on handling these practical problems.

The FTC instructs that an employee's consent to procurement of a report can be obtained routinely at the start of employment, "thereby relieving the employer of the awkward prospect of having to ask a suspected wrongdoer for permission" to allow a third party to provide an investigative report to the employer.

The FTC also instructs that employers can meet the disclosure requirements of the FCRA in a similar fashion, or by asking all current employees to sign a consent form, and providing them any required notice, at the same time, so as not to alert a suspected wrongdoer.

To assist an employer who will be required by the FCRA to provide a copy of a report to an employee prior to adverse action, the FTC notes that the investigative agency may draft its report to the employer to minimize risks attendant to such disclosure, most importantly by not naming parties that provide negative information regarding the employee.

While the notification requirements of the FCRA will remain in tension with employer obligations under anti-harassment laws, the guidance provided in the recent FTC advisory opinion should assist employers in meeting their legal obligations when presented with an employee complaint of harassment.

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