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The Pivotal Law Blog

When Can Employers Rely On Employees’ Criminal Background Checks In Making Employment Decisions?

Posted Wednesday, February 7, 2018 by McKean J. Evans

Many employers routinely run background checks, including for criminal history, as part of screening prospective employees. Washington and federal law require employers follow specific procedures when performing background checks, and give employees specific rights in this respect. Employers and employees benefit from understanding their rights and responsibilities regarding employment background checks.

The Washington Administrative Code limits employers’ inquiries into prospective employees’ arrest history, on the basis that arrests, standing alone, are not a statistically reliable indicator of criminal behavior and may disproportionately impact some racial and ethnic minorities. Accordingly, employers asking about prospective employees’ criminal history must also ask whether charges are still pending or have been dismissed, whether the arrest led to conviction of a crime involving behavior that would adversely affect job performance, and whether the arrest occurred within the last ten years. Similarly, employers’ inquiries regarding prospective employees’ criminal convictions must reasonably relate to job duties and be limited in time to the last ten years. These requirements do not apply to law enforcement and state agencies, school districts, or organizations responsible for the care of children or vulnerable adults.

Employees may find it wise to request copies of their criminal history, especially if they plan to apply for new jobs. That enables job-seekers to be informed, answer questions accurately and correct any mistakes in the employer’s background check. Regardless of their criminal history, employees should always answer employment application questions accurately, including with regards to criminal history. Generally, employers can lawfully decline to hire, or terminate, employees or prospective employees who lie on job applications.

Besides Washington law limiting employers’ criminal history inquires, the federal Fair Credit Reporting Act (“FCRA”) applies to employer background checks utilizing consumer reporting agencies. The FCRA requires employers requesting consumer reports obtain the applicant’s advance written consent, as well as notice that the report may be used as the basis for making employment decisions. If the employer takes an adverse action (e.g., declining to hire, refusing to promote, or terminating employment) based on the background check from the consumer reporting agency, the employer must notify the applicant or employee that its adverse action was based on the background check. This rule applies regardless of whether the background check was the ultimate or definitive reason for the adverse action, as long as the employer relied on the background check to at least some degree. Further, employees are entitled to obtain a copy of their background check performed by a credit reporting agency if their employer takes adverse action based on the report.

Employees or employers with questions regarding their rights and obligations about employment background checks may contact Pivotal Law Group attorney McKean J. Evans for a free consultation.

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CASE LAW UPDATE: City liability for sewer back up

Posted Wednesday, January 31, 2018 by Christopher L. Thayer

In Acosta v. Mabton, the Court of Appeals (Division III)(No. 35159-9, 2018), recently addressed whether a property owner had a claim against the city (Mabton, WA) when sewage backed up and flooded their residence. In Acosta, on the morning of January 12, 2015, the Acostas woke up to find their basement flooded with sewage. The Acostas called the city who sent out public works employees to investigate. The city employees were able to clear the blockage, though contemporaneous reports do not reference the cause of the blockage. Photos showed large amounts of grease in the line, and at a City Council meeting the mayor of Mabton noted: A lot of times we have grease problems. Everybody knows that. We know that when it does get backed up, it is … it ends up right there for whatever reason. That’s where it ends up in the system … it’s on B Street and Sixth … near Sixth Street. And that’s where everything tends to end up and it starts to back up from there.

The Acostas sued the city. In depositions, city employees claimed, for the first time, that when the blockage was cleared the employees saw a partially deflated 8 ½ inch basketball in the sewer line, which they think may have caused the blockage. The Acostas argued there was no evidence of a ball, nor any reference to a ball in the contemporaneous reports by the city workers on site. The city employees also testified that the city had problems with grease clogging sewer lines. Until 1-2 years before the Acosta’s problem, as part of a maintenance plan, the city had annually jetted out its sewer lines or used a special product designed to melt fat deposits.

The trial court dismissed the Acostas’ claim, based on the City’s argument that a ball had blocked the sewer line, and not faulty or poor maintenance by the city. The Acostas appealed.

A municipality has a duty to exercise reasonable care in the repair and maintenance of its sewage systems. Kempter v. City of Soap Lake , 132 Wn. App. 155, 158, 130 P.3d 420 (2006). This ’”duty to keep its sewers in repair, is not performed, by waiting to be notified by citizens that they are out of repair, and repairing them only when the attention of the officials is called to the damage they have occasioned by having become dilapidated or obstructed.’” Vittucci Importing Co. v. City of Seattle, 72 Wash.192, 195, 130 P. 109 (1913) (quoting McCarthy v. City of Syracuse, 46 N.Y. 194, 197-98 (1871)). ’”Where the obstruction or dilapidation is an ordinary result of the use of the sewer, which ought to be anticipated and could be guarded against by occasional examination and cleansing, the omission to make such examinations and to keep the sewers clear is a neglect of duty which renders the city liable.’” Id. at 196 (quoting McCarthy, 46 N.Y. at 198).

The Court of Appeals ruled it was error for the trial court to dismiss the Acostas’ case, and that a trier of fact could find the City breached its duty, based on the testimony of the city employees regarding the lapse in maintenance procedures and reversed the trial court.

Proving the cause of a sewer back up can be tricky. It is important to have a camera run up the line to document the cause, if possible, of the blockage. In general, a property owner is responsible for maintaining their sewer line out to the point where the line connects with the main line. If you have questions, or need assistance in determining whether you might have a claim, please feel free to contact Managing Member, Chris Thayer, at (206) 805-1494 or CThayer@PivotalLawGroup.com.

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Federal Judge Rejects Requests to Throw Out Verdict Against Lakewood Police Officers Over Jurors’ Alleged Ulterior Motives

Posted Wednesday, January 24, 2018 by McKean J. Evans

U.S. Federal District Judge Barbara Rothstein recently upheld a $15.1 million jury verdict against the city of Lakewood and three Lakewood police officers over the 2013 killing of an unarmed man. In her 69-page order, Judge Rothstein repeatedly criticized the attorneys representing Lakewood and the officers for suggesting the jury’s verdict was improperly motivated by fear of racial backlash.

Lakewood police officers fatally shot Leonard Thomas in 2013 during a domestic dispute. In upholding the jury’s verdict, Judge Rothstein found the evidence supported the jury’s conclusion that the Lakewood officers acted outrageously and with malice. The judge observed that every step the officers took during the incident made it more likely that Thomas would die. Among other things, Judge Rothstein noted the evidence showed the police overreacted to a minor domestic squabble by sending a full SWAT team and hostage negotiator. Despite the hostage negotiator’s apparent resolution of the dispute, the officers fatally shot Thomas.

Lakewood’s attorneys asked Judge Rothstein to throw out the jury’s verdict. They argued that the jury was improperly influenced by community perceptions about police officers’ excessive use of force against African Americans. Lakewood’s attorney argued the jury only found in Thomas’ favor because they were afraid to tell people in their communities that they exonerated white police officers who shot an unarmed African American man.

Judge Rothstein rejected the claim the jury’s verdict was improper, finding there was no evidence the jury found Lakewood and the officers liable merely to protect the jurors’ individual reputations. The judge noted that argument was particularly unpersuasive because the attorneys representing Lakewood and the officers had successfully argued against showing prospective jurors a video about unconscious bias.

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Case Law Update – Court Rules School Buses are Not “Automobiles” Under State Farm Insurance Policy Fine Print

Posted Thursday, January 18, 2018 by McKean J. Evans

On January 9, 2018, Washington’s Court of Appeals issued a ruling that significantly limits policyholders’ coverage under many automobile insurance policies. In Koren v. State Farm Fire and Casualty Company, Case No. 34723-1-III, the court interpreted State Farm’s insurance policy as excluding coverage for injuries Mrs. Koren’s son sustained in a school bus crash.

Mrs. Koren’s State Farm policy covered harm “caused by an automobile accident.” After Ms. Koren’s son was injured in a school bus crash, Mrs. Koren submitted a claim under her State Farm policy. State Farm denied coverage, claiming school busses are not “automobiles” under State Farm’s policy.

The Court of Appeals agreed with State Farm. State Farm had added to its policy a limited definition of “automobile,” which meant, under the policy, only automobiles “designed for carrying ten passengers or less.” Mrs. Koren relied on existing Washington Supreme Court precedent holding that the term “automobile accident” in an insurance policy may be broader than the definition of the individual term “automobile.” The court rejected this argument, noting that Washington’s insurance statutes had a similar definition of “automobile” to State Farm’s.

Most policyholders would likely be surprised to learn a school bus or Port Authority bus is not an “automobile” covered under their insurance policy. Perhaps recognizing this, the court noted Mrs. Koren’s “concerns must be raised with the legislature.” Unless and until the legislature acts or the Washington Supreme Court reverses this ruling, policyholders should carefully review the terms and fine print of their policies to make sure their coverage comports with their own understanding.

If you have questions regarding an automobile or other insurance policy, contact Pivotal Law Group attorney McKean J. Evans for a free consultation.

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Can a Marijuana Business Get Bankruptcy Relief?

Posted Wednesday, January 10, 2018 by Kim Sandher

Marijuana is regulated as a dangerous drug by Congress. The U.S. Supreme Court recognizes that the federal prohibition takes precedence over any state law that says otherwise. The United States Trustee Program (USTP) has to respect this. Thus, the answer to whether a marijuana business can file bankruptcy here in Washington and get relief should be an easy “no.”

There are two principles the USTP relies on in its role of “regulator” of the bankruptcy system when it moves to dismiss a Chapter 11 or 13 case:

1. The bankruptcy system may not be used as an instrument to commission of a crime – reorganization plans that allow or require continued illegal activity may not be confirmed; and

2. The bankruptcy trustees and other estate fiduciaries shouldn’t be made to administer assets if doing so means they would violate federal criminal law. Thus, the answer seems to be that a marijuana business cannot get bankruptcy relief in Chapter 11 or 13 because that would mean that the trustee is supervising and running a federally illegal business. However, there are cases with potential grey areas where the trustee isn’t doing this. For example:

  1. What if the trustee doesn’t have to sell marijuana, but it’s still marijuana-derived property that the trustee is selling? For example, products used to grow the marijuana.

  2. What if the debtor isn’t actually a participant in the marijuana business, but leases out his building to a marijuana dispensary? Or is simply an investor? The income is still related to marijuana.
    These too seem to give the same answer though. The Controlled Substances Act (CSA) doesn’t distinguish between the seller and grower of marijuana, nor does it distinguish “downstream” participants like the business owner that leases his building to the marijuana growth operation. The CSA actually prohibits knowingly renting, managing, or using property “for the purpose of manufacturing, distributing, or using any controlled substance.” It also makes it a crime to sell, or offer to sell any drug paraphernalia, which includes “equipment, product, or material of any kind which is primarily intended or designed for use” in manufacturing a controlled substance. It further provides for a fine against anyone that “derives profits or proceeds from an offense of the Controlled Substances Act.” Therefore, not only would a trustee who sells marijuana violate the law, so would a trustee that liquidates fertilizer or other equipment used to grow marijuana, as well as a trustee that collects rent from a marijuana business tenant or profits from a marijuana investment.

What about the Ponzi scheme cases or the ones with other criminal activities? How come they get relief?

Big cases like In re Enron Corp. and In re Bernard L. Madoff Investment Securities LLC deal with the aftermath of fraud. Typically, the individual offenders have already been removed from the business. The other difference is that they don’t deal with property similar to that described in the Controlled Substances Act, where mere possession of it is a federal crime. Nor did either of these cases involve a proposed Chapter 11 or Chapter 13 plan where the feasibility of the plan depended on the continued profits of an illegal enterprise. In a marijuana case, the illegal activity is continuing through the bankruptcy administration and bankruptcy relief might actually further the illegal business.

Conclusion: The USTP enforces the legislative judgment of Congress. Since Congress had determined marijuana businesses illegal, these businesses are illegal for bankruptcy purposes too and likely cannot be granted bankruptcy relief.

Kim Sandher will be hosting a free bankruptcy education seminar on January 27, 2018 from 3-5pm at the Youngstown Cultural Arts Center in Seattle. For more information or to RSVP please email Andreka Jasek.

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