Do you know? How to handle an EEOC or OCRC charge

It’s no secret that in a down economy, the number of employment-related claims rise. To file a claim under any of the federal employment discrimination statutes, an employee must first file a charge with either the EEOC or the OCRC. The same does not hold true under Ohio’s parallel statute. An employee can directly proceed to court under Ohio law without first stopping at one of the administrative agencies. Yet, more and more employers are receiving discrimination charges from these agencies.

Do you know what to do when you are served with such a charge? Today, I’m sharing Business Management Daily’s 10 tips to help guide you through your next EEOC or OCRC charge, hopefully to safe, no-probable-cause, landing (with my own editorial comments, for good measure):

1. Tell the whole story

For many disgruntled employees, an agency charge is the first and only step they take against a business. Often, employees simply go away if the agency dismisses their claim, and never resurface in court. Thus, it’s important to try to nip the claim in the bud painting as complete of a picture as necessary. The agency will want to see that a legitimate business reason existed for the challenged action.

2. Use documentation

Documents supporting your version of events should be included with the response. If you omit them, the agency will likely ask for them anyway, and may think that you had a motive for not originally including them. Any documents that can verify what you say happened actually did happen will go a long way to having the charge dismissed.

3. Verify the response’s accuracy

Anything you submit to an agency can be used in a later lawsuit, which can prove damaging if the employee’s attorney can prove an untruth.

4. Highlight consistent past decisions

One of the best ways to demonstrate that unlawful discrimination did not motivate a decision is to highlight the same actions against similarly situated employees outside of the charging party’s protected class.

5. Remember, the agency doesn’t know your business

In telling your story, details about your business will help the agency understand your actions. The decision maker may not be able to readily discern the reasons why the employee’s actions merited termination without some context about your business, its operations, and its policies.

6. Maintain confidentiality

Information about the charge should be on a need-to-know basis, especially if you still employ the charging party. If the agency plans on contacting current employees as part of its investigation, let them know that they should cooperate and be honest. It also is a good idea, though, to have your attorney sit down with any witnesses ahead of time so that you have some idea what they are going to say. Remember, though, it is illegal to retaliate against an employee for cooperating in an investigation, even if they sell you down the river.

7. Be prompt and cooperative

Don’t let the agency think that you are blowing them off or stonewalling. If you need an extension, ask for it.

8. Work with legal counsel

A discrimination charge is often the first step in a chain of legal events. What you tell the agency will not only be used by agency to adjudicate the charge, but also by the employee in a later lawsuit. If you are not going to have an attorney investigate the claim and prepare the response, at least have a lawyer review a draft before you file it.

9. Contact your insurer

If your employment-practices liability policy includes discrimination charges, failing to timely let the insurer know of a charge could result in denial of coverage for the charge and all subsequent legal claims.

10. Preserve all documents

Courts are increasingly less tolerant of companies that fail to adequately preserve relevant evidence. When you receive an administrative charge, collect and preserve all documents that could be relevant. You should also suspend any routine practices that could result in the destruction of relevant records, particularly electronic information like emails.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Senate considers compensatory time – a sensible alternative to paid sick leave

As the number of reported swine flu cases approaches 1,000 globally (a staggeringly low 0.00002% of the world’s population), Judith Warner, in the April 30 New York Times, opines that the current pandemic is exactly what we need to spur this country to adopting national mandatory paid sick leave for employees:

Our workplace policies have long been unsuited for our times…. And they’ve never looked more anachronistic than today, with more and more families forced to live on one income, and a possible pandemic in the making.

The Healthy Families Act, which would grant most workers seven paid sick days a year to care for themselves or sick family members, is soon to be re-introduced in Congress. I think it’s fair to say that it’s an idea whose time has come.

Let me suggest a real alternative to mandating that all employers grant employees paid sick days. Under current federal and Ohio wage and hour laws, it is illegal for most employers to grant non-exempt employees who work more than 40 hours in a work week compensatory time in lieu of overtime pay. Ohio Senate Bill 17 seeks to change this prohibition.

Senate Bill 17 would amend Ohio’s current wage and hour laws to “afford to private sector employers the option to offer and to employees the option to accrue and use compensatory time off.” It would give employers the ability to offer employees the choice to take compensatory time (i.e., banked time-off to use in the future) instead of being paid an overtime premium for hours worked in excess of 40 in a week. Other notable feature of this legislation include:

• An employer cannot require any employee to choose to receive compensatory time as a condition of employment, or require the use of any accrued compensatory time.
• The employee must voluntarily request to receive compensatory time.
• The request is not valid unless it is in writing or some other verifiable statement.
• The employee can withdraw the request at any time.
• Compensatory time accruals are capped at 240 hours per year.
• At the end of each year, employees must be paid an overtime rate for any unused compensatory time.

Because this change would only affect Ohio’s wage and hour laws, it would only reach those employers small enough not to covered by the federal Fair Labor Standards Act (generally those businesses with less than $500,000 in annual sales). This law would give those small businesses the ability to offer more flexible work schedules to retain or attract employees. This balanced law not only deserves serious consideration in Ohio’s legislature, but also on the federal level. If you are interested in voicing your support for this important piece of legislation, please call, write, or email your State Senator.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #77

Pennsylvania Senator Arlen Specter again dominates the news this week. His defection to the Democratic Party is the second biggest news story of the week. It will almost certainly provide the Democrats with the 60-member supermajority they need to defeat any filibuster for the next two years. What is less clear is whether this change will have any effect on the prospects for the EFCA, since Sen. Specter is already on record that his change is party does not equate to a change in his opposition to this controversial labor bill. For more coverage of this news, read Workplace Horizons. For a succinct but thorough summary of what exactly the EFCA is, check out Tim Eavenson at Current Employment. For news of other potential changes to federal labor laws, read Michael Fox’s Jottings By An Employer’s Lawyer on the Arbitration Fairness Act and the Fair Arbitration Now coalition that has formed to support it. And, as Christopher McKinney at the HR Lawyer’s Blog points out, the majority of American oppose forced arbitration.

Which leads us to the big (which coincidentally rhymes with pig) story of the week, the swine flu. I’ve already covered this issue, as have some of my fellow bloggers: Michael Moore at the Pennsylvania Labor & Employment Blog, Catherine Barbieri at the FMLA Blog, Michael Haberman’s HR Observations, HR World, The Word on Employment Law with John Phillips, and Dan Schwartz at the Connecticut Employment Law Blog (who I believe was first in bringing this issue to employers’ attention). CCH also has an excellent resource page covering this issue.

Natalie Beck at the Employeescreen IQ Blog has my favorite story of the week. If you are going to call off from work complaining of a migraine headache, don’t spend your day Facebooking.

Welcome to the Iowa Employment Law Blog, which this week discusses the recent EEOC guidance on caregiver discrimination.

Alaska Employment Law discusses a 9th Circuit case applying a caregiver responsibility theory to a stepmother.

Under the category, “what did you expect,” is this gem from Above the Law, detailing a former HR employee’s sexual harassment lawsuit against the publisher of Penthouse.

The Washington Labor & Employment Wire brings to everyone’s attention the Alert Laid off Employees in Reasonable Time Act, which, if passed, would amend WARN “to require notifications under the Act for mass layoffs that occur at more than one worksite for an employer.”

Frank Roche at the KnowHR Blog makes a compelling case for the softer side of human resources.

The Laconic Law Blog discusses a case dealing with the scope of Employment Practices Liability Insurance coverage.

BLR’s HR Daily Advisor advises that there are legal issues that employers must consider before implementing an employee reward program, specifically discrimination, wage & hour, and tax issues.

Richard Bales at the Workplace Prof Blog summarizes the proposed Restatement of Employment Law.

The Evil HR Lady offers some guidance on how to handle a poor-performing employee who takes FMLA leave. I’ve previously talked about how to layoff the protected.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Handling ex-employees’ data

In this morning’s Wall Street Journal, Joseph De Avila features me in an article on how companies handle a laid-off employee’s digital belongings. Mr. Avila’s article got me thinking about an interesting related issue. A business can buy a new computer for a thousand dollars. However, according to a recent five-month study commissioned by Intel, that same computer costs an average of $50,000 to replace. That Intel study found that 80% of the value inherent in a lost or stolen computer is attributed to the sensitive, confidential, and proprietary information stored on that computer.

The Business of Management reports on the the following findings from this Intel study:

• The individual losses varied from $1,213 to an astounding $975,527.

• The cost of recovery is directly related to how quickly the company learns of the loss. If the company discovers the loss the same day, the average cost is only $8,950. That average cost rises more than ten-fold, to $115,849, in the matter of just a week. 

These findings become even more important as more employees face the unemployment line through lay-offs and other job losses.

Because of the exponential increase in costs associated with even a week’s delay in recovering an ex-employee’s computer, it is incumbent upon employers to secure employees’ computers and data before they walk out the door. Some proactive steps for companies to take include:

1. Distributing to employees comprehensive electronic communication policies that cover all types of technology in use at the company (computers, voice mail, email, mobile devices, social networking, internet use, instant messaging, etc.). The policy is critical to establish employees’ expectation about proper uses for technology, and also what belongs to the employee and what belongs to the employer.

2. Once an employee leaves employment, voluntarily or involuntarily, immediately shut-off their network access and secure the return of all company-owned technology, files, and data.

3. Consider what information of the former employee is worth keeping and what can be destroyed. For example, in professions where communications with clients are important (like law, sales, or finance), companies might keep emails and contact data.

4. Lastly, to quote myself from Mr. Avila’s article: “If they think an employee has stolen anything, they will look for that…Companies fearing lawsuits from disgruntled former employees may have their IT department or an outside firm search through the emails, too.”

I generally do not preach draconian employment policies. A business, however, cannot be too careful with securing its data and information. Leniency and lax policies can result in the loss of information and data that can prove very costly to recover.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Swine flu: panic versus preparedness

There is nothing our media likes more than a good panic. So, it is somewhat with a grain of salt that I take a lot of this week’s coverage about the swine flu. Is it real disease? Yes. Are people getting sick? Yes. Are people dying? Yes. However, we must also place these broad-based realities into context. The United States has over 300,000,000 people. As of this morning, there have been a mere 65 confirmed cases. Each year, the regular flu kills 36,000 Americans. So far, the swine flu has resulted in only 1 fatality.

Instead of panicking about the swine flu, the best advice is to simply prepare your workforce to prevent its spread and assist employees who become ill. The Center for Disease Control recommends the following six-step protocol:

1. Plan for the impact of a pandemic on your business:

• Identify a pandemic coordinator and/or team with defined roles and responsibilities for preparedness and response planning. The planning process should include input from labor representatives.

• Identify essential employees and other critical inputs (e.g. raw materials, suppliers, sub-contractor services/ products, and logistics) required to maintain business operations by location and function during a pandemic.

• Train and prepare ancillary workforce (e.g. contractors, employees in other job titles/descriptions, retirees).

• Develop and plan for scenarios likely to result in an increase or decrease in demand for your products and/or services during a pandemic (e.g. effect of restriction on mass gatherings, need for hygiene supplies).

• Determine potential impact of a pandemic on company business financials using multiple possible scenarios that affect different product lines and/or production sites.

• Determine potential impact of a pandemic on business-related domestic and international travel (e.g. quarantines, border closures).

• Find up-to-date, reliable pandemic information from community public health, emergency management, and other sources and make sustainable links.

• Establish an emergency communications plan and revise periodically. This plan includes identification of key contacts (with back-ups), chain of communications (including suppliers and customers), and processes for tracking and communicating business and employee status.

• Implement an exercise/drill to test your plan, and revise periodically.

2. Plan for the impact of a pandemic on your employees and customers:

• Forecast and allow for employee absences during a pandemic due to factors such as personal illness, family member illness, community containment measures and quarantines, school and/or business closures, and public transportation closures.

• Implement guidelines to modify the frequency and type of face-to-face contact (e.g. hand-shaking, seating in meetings, office layout, shared workstations) among employees and between employees and customers (refer to CDC recommendations).

• Encourage and track annual influenza vaccination for employees.

• Evaluate employee access to and availability of healthcare services during a pandemic, and improve services as needed.

• Evaluate employee access to and availability of mental health and social services during a pandemic, including corporate, community, and faith-based resources, and improve services as needed.

• Identify employees and key customers with special needs, and incorporate the requirements of such persons into your preparedness plan.

3. Establish policies to be implemented during a pandemic:

• Establish policies for employee compensation and sick-leave absences unique to a pandemic (e.g. non-punitive, liberal leave), including policies on when a previously ill person is no longer infectious and can return to work after illness.

• Establish policies for flexible worksite (e.g. telecommuting) and flexible work hours (e.g. staggered shifts).

• Establish policies for preventing influenza spread at the worksite (e.g. promoting respiratory hygiene/ cough etiquette, and prompt exclusion of people with influenza symptoms).

• Establish policies for employees who have been exposed to pandemic influenza, are suspected to be ill, or become ill at the worksite (e.g. infection control response, immediate mandatory sick leave).

• Establish policies for restricting travel to affected geographic areas (consider both domestic and international sites), evacuating employees working in or near an affected area when an outbreak begins, and guidance for employees returning from affected areas (refer to CDC travel recommendations).

• Set up authorities, triggers, and procedures for activating and terminating the company's response plan, altering business operations (e.g. shutting down operations in affected areas), and transferring business knowledge to key employees.

4. Allocate resources to protect your employees and customers during a pandemic:

• Provide sufficient and accessible infection control supplies (e.g.hand-hygiene products, tissues and receptacles for their disposal) in all business locations.

• Enhance communications and information technology infrastructures as needed to support employee telecommuting and remote customer access.

• Ensure availability of medical consultation and advice for emergency response.

5. Communicate to and educate your employees:

• Develop and disseminate programs and materials covering pandemic fundamentals (e.g. signs and symptoms of influenza, modes of transmission), personal and family protection and response strategies (e.g. hand hygiene, coughing/sneezing etiquette, contingency plans).

• Anticipate employee fear and anxiety, rumors and misinformation and plan communications accordingly.

• Ensure that communications are culturally and linguistically appropriate.

• Disseminate information to employees about your pandemic preparedness and response plan.

• Provide information for the at-home care of ill employees and family members.

• Develop platforms (e.g. hotlines, dedicated websites) for communicating pandemic status and actions to employees, vendors, suppliers, and customers inside and outside the worksite in a consistent and timely way, including redundancies in the emergency contact system.

• Identify community sources for timely and accurate pandemic information (domestic and international) and resources for obtaining counter-measures (e.g. vaccines and antivirals).

6. Coordinate with external organizations and help your community:

• Collaborate with insurers, health plans, and major local healthcare facilities to share your pandemic plans and understand their capabilities and plans.

• Collaborate with federal, state, and local public health agencies and/or emergency responders to participate in their planning processes, share your pandemic plans, and understand their capabilities and plans.

• Communicate with local and/or state public health agencies and/or emergency responders about the assets and/or services your business could contribute to the community.

• Share best practices with other businesses in your communities, chambers of commerce, and associations to improve community response efforts.

A business’s size and the nature of its operations dictate the need for any or all of these steps. For more information on preparing your business for cases of the swine flu, I recommend the CDC’s micro-site on workplace planning for pandemic flu and OSHA’s Guidance on Preparing Workplaces for an Influenza Pandemic.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Charging for work uniforms

More and more businesses are looking to cut costs anywhere they can. Many require their employees to wear a certain uniform. Can they pass on the costs of the uniforms to their employees?

Generally speaking, there is no law that forbids an employer from mandating that its employees pay for required work uniforms. There are two important exceptions to this general rule: minimum wage and OSHA.

1. Minimum Wage.

The added expense from the uniforms cannot reduce the employee’s effective hourly rate below the minimum wage. Currently, Ohio’s minimum wage is $7.30 per hour. For example, if an employee is paid $8 per hour, and works a 40-hour week, the employer could charge up to $28 that week for uniforms. Any charge greater than $28 would illegally reduce the employee’s hourly rate below $7.30 for the week.

2. OSHA and Personal Protective Equipment.

Employers must also be careful if the uniforms include items that are required for employees’ personal safety. Recently enacted OSHA rules prohibit employers from requiring employees to pay for required personal protective equipment. Employers must pay for most required safety equipment. The only exceptions are non-specialty safety-toe protective footwear (including steel-toe shoes or steel-toe boots), non-specialty prescription safety eye wear, logging boots, and everyday clothing.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

What’s your five? A question for my readers and fellow bloggers.

As a member of the Ohio Chamber of Commerce’s Employment Law Committee, I was asked to respond to the following questions:

What would you say the top 5 labor & employment issues are that HR professionals and employers (large and small) would like to know more about or are struggling with in this economy?

What can be changed/done to make such labor & employment issues less onerous for employers?

Here’s my list:

1. Job losses, job creation, and managing workforces to ensure, as best as possible, as much work as possible for as many people.

2. The risk of increased unionization in the face proposed federal legislation and a down economy.

3. Layoffs and the litigation risks that flow from them.

4. The threat and proliferation of wage and hour litigation.

5. Rising health care costs.

Figuring out what can be done to fix these problems is a much harder question to answer. Any program designed to aid employers has to start and end with training and education. Being proactive is the best measure to guard against these potential problems.

To my readers and fellow bloggers, if you had to list the top 5 labor and employment issues facing employers in 2009, what would they be? Perhaps more importantly, what can be done to limit or temper these issues for businesses? I’m very interested in what everyone has to say. Please comment. If you post on your own blog, please email a link. I’d like to update this post next week with everyone’s thoughts.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #76

Courtesy of Anthony Zaller at the California Employment Law Report, the link of the week is How to Nail and Interview. The author of that site posted a fake job on craigslist for a marketing position and recorded the interviews. Hilarity ensued. My personal favorites are #9, in which the applicant is caught off-guard when pressed on her inappropriate Facebook page, and #13, where the applicant hoped her willingness to “do anything” would score her the job. It is definitely clicking over and watching some of the videos.

In other news, from Martha Neil at the ABA Journal is a story about two Dominos Pizza employees who thought it was a good idea to perform inappropriate acts on customers’ food and post the videos on YouTube. Not only were they fired, but they are also facing criminal charges for food tampering.

Nick Fishman at the EmployeescreenIQ Blog has more on Ohio’s attempt to ban the use of credit reports in employment decisions.

George’s Employment Blawg reports on a $17.5 million verdict in a trade secret theft case.

The Laconic Law Blog tells how an employee’s use of profanity directed at his employer cost him any protection against retaliation.

Tim Eavenson at Current Employment uses news of 2 recent EEOC settlements to instruct on preventing HR catastrophes.

Michael Haberman at HR Observations makes an observation workplace privacy and social networking.

Finally, this week brought us oral argument in Ricci v. DeStefano, which will decide whether the city of New Haven violated Title VII when it declined to certify the results of an exam that would have make disproportionately more white applicants eligible for promotion than minority applicants. In layman’s terms, is it discriminatory to void a test that disproportionately favors white applicants over minority applicants. For very detailed analysis of these issues and the Supreme Court oral argument, read Dan Schwartz at the Connecticut Employment Law Blog and Marcia McCormick at the Workplace Prof Blog.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Employers should be planning for the Employee Free Choice Act

Even the most ardent supporters of the Employee Free Choice Act agree that passage in its current form is unlikely. The Cleveland Plain Dealer quotes Ohio Sen. Sherrod Brown:

Although Brown backs the legislation in its current form, he says it won’t get enough votes for passage in the Senate now that former backers including Pennsylvania Republican Sen. Arlen Specter have withdrawn their support.

He said he expects a compromise will be reached to continue the secret-ballot elections, but require them to be conducted swiftly and handled in a way that doesn’t inordinately favor businesses.

Despite these delays and possible changes, employers should be vigilant about preparing for its passage in one form or another. As Texas attorney Michael Maslanka points out on Law.com, “Some version of EFCA will be the law no later than next year at this time. Advice: Avoid ostrich-like attitudes of self-delusion.”

What can you do, as employers, do to keep your heads out of the sand? Plan on attending KJK’s next Breakfast Briefing, How to Stay Union Free in a Union-Friendly World. The event will be held May 13 from 8 a.m. to 10 a.m., and it is totally free. If you would like to attend or for more information, please contact Andrea Hill, (216) 736-7234 or ach@kjk.com.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

EEOC releases “Employer Best Practices for Workers with Caregiving Responsibilities”

It’s been almost two years since the EEOC released its Enforcement Guidance on Unlawful Disparate Treatment of Workers with Caregiving Responsibilities. Since that time, buzz words such “work-life balance,” “family-friendly,” and “family responsibilities” have been put to use in companies all across America, and juries have continued to punish businesses that punish employees who prioritize their families over their work.

To help employers navigate these dangerous waters, today the EEOC published its Employer Best Practices for Workers with Caregiving Responsibilities. While these “Best Practices” are couched in terms of discrimination against caregivers, the tips offered by the EEOC, while not groundbreaking, are universally applicable to any employment practice. Some of the more important tips are:

• Develop, disseminate, and enforce a strong EEO policy that provides examples of illegal conduct and identifies a contact person for questions or complaints.
  
• Ensure that managers at all levels are aware of, and comply with, the organization’s policies.
  
• Respond to complaints of discrimination efficiently and effectively.
  
• Protect against retaliation.
  
• Focus on qualifications, not characteristics.
  
• Develop specific, job-related qualification standards for each position that reflect the duties, functions, and competencies of the position.
  
• Identify and remove barriers to re-entry for individuals who have taken leaves of absence from the workforce.
  
• Ensure that employment decisions are well-documented and transparent (to the extent feasible).
  
• Monitor compensation practices and performance appraisal systems for patterns of potential discrimination.
  
• Reassign job duties that employees are unable to perform because of pregnancy or other caregiving responsibilities.
  
• Provide reasonable personal or sick leave.

Do you know? A company cannot represent itself in an Ohio court

In the April 9 New York Times, Jonathan Glater reported that more and more people are turning to self-representation during the current economic downturn. In Ohio, individuals may be able to do it themselves without lawyers, but businesses cannot.

If a business appears in court without an attorney, the representative is illegally engaging in the unauthorized practice of law. Under Ohio law, a corporation or other business only can maintain litigation or appear in court through an attorney. It may not do so through an officer of the corporation or some other appointed agent or representative. At least in Ohio, there is no such thing as a business appearing pro se (without a lawyer).

The only exception exists in small claims court, where a corporation can bring a claim based on a contract to which it is a party, as long as the representative does not “engage in cross-examination, argument, or other acts of advocacy.” For example, without a lawyer a company can file a claim in small claims court to recover an unpaid account. If the individual disputes the amount due, however, a non-lawyer cannot cross-examine the individual or argue to the magistrate.

Next time your business thinks about going it alone in court to save a few dollars, think about whether it worth the likely risk of a default judgment or dismissal of the case for not being represented by an attorney.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Senate seeks to ban use of credit in employment decisions

There is little doubt that the current economic crisis has caused havoc on a lot of good intentioned people’s credit scores. During the good old days , people over-extended their credit, bought houses they can no longer afford, and otherwise lived beyond their means. With the retraction of the credit market and the exponential rise in home foreclosures, many people’s credit histories and FICO scores have suffered.

Ohio Senate Bill 91, however, is a reactionary move to this crisis that simply goes too far. This bill proposes to prevent employers considering people’s credit histories when makes an employment decision:

It shall be an unlawful discriminatory practice for an employer to use a person’s credit rating or score or consumer credit history as a factor in making decisions regarding that person’s employment, including hiring, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment.

Jim Siegel, a reporter for The Columbus Dispatch, quotes Tony Fiore of the Ohio Chamber of Commerce:

Senate Bill 91 will face opposition from business groups that want flexibility in how they determine whether someone is right for a job.

“Do you want someone with a bad credit history managing the company’s money, or yours?” said Tony Fiore, a lobbyist for the Ohio Chamber of Commerce.

“The employer needs that ability because they want to make sure they’re putting the best people forward, not only to help the company, but help the people relying on the company.”

Aside from the concerns voiced by Mr. Fiore (which I wholeheartedly echo), there is also a bigger issue at play here. There already exists a federal law the gives employees significant protections in how employers use credit information. The Fair Credit Reporting Act [PDF] make it illegal for any employer to obtain or use one’s credit for making an employment decision without the individual’s written authorization. And, an employer cannot take an adverse action (such as firing, or refusing to hire) based on information contained in a credit report without first giving the individual a reasonable amount of time to dispute the accuracy of the information or otherwise offer an explanation. With these federal protections in place for employees and applicants, Ohio’s businesses do not need to be prohibited from using this important tool.

[Hat tip: employeescreenIQ Blog]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #75

The employment law story of the week is courtesy of Overlawyered and OnPoint. The Poplar Bluff, Missouri, library has agreed to pay a former library assistant $45,000 to settle her religious discrimination claim. She resigned after refusing, on religious grounds, to participate in an event promoting the publication of a new Harry Potter book. OnPoint provides additional details:

Library director Jacqueline Thomas had offered to let Smith help out behind the scenes at the Harry Potter celebration “in a way that Plaintiff’s church community would not know she had participated.” Smith alleged she was “constructively discharged” from her job after she “vehemently objected to participating in Harry Potter Night in any role.”

“Plaintiff has a bona fide religious belief stemming from her Christian identity and membership in a Southern Baptist church that she sincerely believes prohibits her from being involved in promotion of the worship of the occult, especially to children,” the complaint said.

Rush Nigut, of Rush on Business, on the efficacy of non-solicitation agreements, as compared to broader non-competition agreements.

Teri Rasmussen at Ohio Practical Business Law provides a very helpful FAQ on Ohio’s new Business Docket, which is being given a test run in Cuyahoga, Franklin, Hamilton, and Lucas counties. Of particular interest to employers, this new docket covers non-competition and trade secret cases, but not other employment disputes such as discrimination claims.

Molly DiBianca at the Delaware Employment Law Blog discusses DuPont’s decision to use voluntary unpaid leave to try to stem the need for layoffs.

Michael Maslanka at Work Matters reports on a case which held that that an employee’s intent to become pregnant (such as telling a supervisor you want to start a family) is protected by the Pregnancy Discrimination Act.

The Evil HR Lady has some advice on whether an employee who is not entitled to FMLA leave under the statute could otherwise obtain leave rights through misstatements by management.

Ginni Garner at COSE Mindspring gives the top 10 trends in the employee screening industry.

The Washington Labor & Employment Wire has information on the choice to head the Department of Labor’s Wage and Hour Division.

Finally, Bob Sutton’s Work Matters illustrates how not to do a layoff with a real-life example.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio makes significant changes to its mini-COBRA law, effective April 1, 2009

More ink has been spilled about COBRA in the past two months than was written about it in total since its passage in 1985. And, the hits keep on coming. On April 1, 2009, Governor Strickland signed Sub. H.B.2, which amended Ohio’s mini-COBRA law, which makes health care continuation coverage available to employees of businesses with less than 20 employees.

Under the amended law, group health policies that are issued, delivered, or amended on or after April 2, 2009, must include the following changes:

• Continuation coverage is extended from 6 months to 12 months.
• Entitlement to unemployment compensation is no longer required to be eligible for continuation coverage .
• Employees merely must be involuntarily terminated, other than for gross misconduct (mirroring the federal COBRA requirement).
• If the group coverage includes prescription drug coverage, the continuation coverage must also include it.

Because continuation coverage has been extended to up to 12 months, Ohio employees of small businesses will now be eligible to receive the entire 9 months of federal subsidy under the federal stimulus bill. Small employers are not responsible for paying any portion of the premiums. The ex-employee will pay 35% out of pocket, and the insurance company will claim the IRS payroll tax credit for the remaining 65%.

For more information, the Ohio Department of Insurance issued detailed guidance. It has also available for download a model Continuation Coverage Election Notice.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

EEOC settlement highlights red flags for English-only policies

The EEOC announced that it settled a national origin discrimination claim against a California nursing home company for $450,000. The lawsuit arose from a charge of discrimination filed by a Hispanic janitor who only spoke Spanish. The nursing home terminated him for violating its English-only policy. By contrast, employees who spoke other languages at work, such as Tagalog, were not disciplined or terminated. According to the EEOC, it identified a total of 53 current and former Hispanic employees who were prohibited from speaking Spanish to Spanish-speaking residents, or disciplined for speaking Spanish in the parking lot while on breaks.

The Los Angeles Times further discusses some of the affected employees:

Shilo Schilling, a 40-year-old certified nursing assistant, said she was emphatically told at orientations … that only English would be allowed. In one case … she said a resident told her in Spanish that she needed to use the restroom. When Schilling responded in Spanish, she said, she was told by a supervisor that she would be written up or fired if she continued to speak that language….

Jose Zazueta, a Mexico native who worked as a janitor at the Royalwood facility, filed the original complaint alleging that he was fired because he could not guarantee he would speak only English. Anna Park [the EEOC’s regional attorney] said Zazueta was a monolingual Spanish-speaker who warned a colleague in Spanish to watch out for the wet floor he had just mopped. When a supervisor heard him, Park said, he was asked to pledge to use only English but could not and was fired.

Despite this lawsuit, there is nothing inherently illegal about English-only policies. Generally speaking, an English-only rule is okay if supported by a legitimate business justification such as promoting communication with customers, coworkers, or supervisors who only speak English, enabling employees to speak one language to promote safety or cooperation, or facilitating supervisors’ ability monitor job performance. The employer in this case made a few critical errors:

1. It applied the rule during employees’ breaks.
2. It selectively applied the rule to certain nationalities, but not others.
3. It prohibited employees from communicating with patients in their native tongue.

As this case illustrates, employers should be careful to limit the reach of an English-only requirement only as far as it necessary to reach the articulated business rationale for the policy. Businesses should also consult with employment counsel before implementing any English-language requirements in the workplace to ensure that the policy is not discriminatory as written or as applied.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

The worst television show ever? FOX to air corporate layoffs

From the network that brought us reality TV gems such as The Littlest Groom, Who Wants To Marry a Millionaire, and My Big, Fat, Obnoxious Fiance comes the next awful idea to grace our airwaves: Someone’s Gotta Go. If you’ve yet to hear about this atrocity, here’s the premise of this in production FOX show, courtesy of Juju Chang and Kelly Hagan at ABCnews.com:

The show will highlight a small business that needs to downsize because of the economy, but instead of the bosses deciding who gets the axe, co-workers must choose who among them has to go. Workers will have to defend themselves, justifying their work habits, all leading to a group discussion to determine who gets dumped.

To help make their decision, employees will have access to each others' usually private records including budgets, human resources files and salaries.

This show is just plain wrong. First, the set-up has myriad legal risks for the employer. Having co-workers instead of management make the decision will not insulate the employer from potential liability. Risks abound for coworker harassment, coworker retaliation, or discrimination courtesy of the cat’s paw. Moreover, the inevitable release that employees will have to sign to appear on the show might insulate the producers from liability, but likely will not protect the employers. (As a side-note, I wonder if the show runners are indemnifying participating employers from any lawsuits that result from the layoffs).

More fundamentally, however, I question the corporate integrity of any company that would agree to take part in this freak show. Except in the most egregious of cases, terminating an employee is the worst thing an employer has to do. Why turn this into public humiliation? Maybe the winner in all of this is the laid-off employee, cast free from a company callous enough to televise his or her termination to millions.

[Hat tip: The Business of Management and Overlawyered]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Employees have no right to access to personnel files

There is no law in Ohio that requires an employer to grant an employee access to his or her personnel file. There are, however, two key exceptions: medical records and wage and hour records.

1. Medical Records

Ohio Revised Code 4113.23(A) covers employees access to their own medical records. It provides:

No employer … shall refuse upon written request of an employee to furnish to the employee or former employee or their designated representative a copy of any medical report pertaining to the employee. The requirements of this section extend to any medical report arising out of any physical examination by a physician or other health care professional and any hospital or laboratory tests which examinations or tests are required by the employer as a condition of employment or arising out of any injury or disease related to the employee’s employment.

Thus, employees have a right to see the medical records from a physical examination that is required for employment or stemming from a job-related injury or disease. Employers can charge employees for these records, up to 25 cents per page.

2. Wage & Hour Records

Ohio Revised Code 4111.14(G) covers employees access to their own wage and hour records. It requires an employer to provide the following information to an employee or person acting on an employee’s behalf (union representative, attorney, or parent, guardian, or legal custodian) upon request:

1. Name

2. Home address;

3. Occupation;

4. Rate of pay, which means an employee’s base rate of pay or annual salary, but does not include bonuses, stock options, incentives, deferred compensation, or any other similar form of compensation;

5. Each amount paid, which means the total gross wages paid to an employee for each pay period; and

6. Hours worked each day, which means the total amount of time an employee works during a day in whatever increments an employer uses for its payroll purposes (except for exempt employees).

An employer may require that the request be in writing, signed by the employee, notarized, and that it reasonably specifies the particular information being sought. The employer cannot charge the employee for this information, and typically an employer has 30 days to produce the records following a request..

It is not a bad idea for employers to review their current handbooks and other policies to check whether they allow for the disclosure of these two classes of information.

Guarding against defamation liability

Courtesy of my friends at PointofLaw.com is the story of the dangers that lurk when distributing information about an employee’s termination.

Staples fired one of its salesmen, Alan Noonan, after an internal audit discovered he had deliberately falsified expense reports. The day after his termination, Staples’s Executive Vice President sent the following email to all of the company’s North American employees:

It is with sincere regret that I must inform you of the termination of Alan Noonan’s employment with Staples. A thorough investigation determined that Alan was not in compliance with our [travel and expenses] policies. As always, our policies are consistently applied to everyone and compliance is mandatory on everyone's part. It is incumbent on all managers to understand Staples[’s] policies and to consistently communicate, educate and monitor compliance every single day. Compliance with company policies is not subject to personal discretion and is not optional. In addition to ensuring compliance, the approver’s responsibility to monitor and question is a critical factor in effective management of this and all policies.

Noonan sued Staples for defamation based on the content of the email. Even though the contents of the email were truthful, the court, in Noonan v. Staples, Inc. (1st Cir. 2/13/09), still found that Noonan could proceed to trial on his claim because a jury could conclude that the email was sent with what is called “actual malice.” The court focused on three key facts:

1. In his 12 years with Staples, it was the first post-termination email in which the Executive Vice President ever referred to the terminated employee by name.

2. The EVP could have sent the email to cover his own misfeasance in failing to detect widespread expense report abuses.

3. Because many of the employees who received the email did not travel, they had no reason to be advised of the travel policy or its enforcement.

Ohio law grants employers a privilege to make truthful disclosures about an employee’s job performance. Ohio’s statute, however, has an exception for the disclosure of information “with the knowledge that it was false, with the deliberate intent to mislead the prospective employer or another person, in bad faith, or with malicious purpose.” The Noonan case provides insight in how to avoid an inference of a malicious purpose when giving job performance information.

1. Consistency. If your company has a policy or practice in what types of information it discloses, stick to that policy or practice. Giving more than what is customary for your business, even if truthful, could lead one to conclude that some ulterior motive to harm motivated the disclosure of additional information.

2. Narrowness. Information should only be disclosed on a need-to-know basis. If information is sent to people who have no reason to receive it, one could infer a motive to smear one’s reputation, even if the information is truthful.

As PointofLaw.com makes clear, “in the down economy, workplace defamation lawsuits are on the rise.” Being truthful and consistent, in what you say about employees, and narrow in to whom you say it, is the best defense against such a claim.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #74

Yay! I’m number 71, alphabetically, on the Delaware Employment Law Blog’s list of the top 100 employment law blogs. Seriously, this list is a great resource if you are looking for more employment law information. Take a few minutes to add a few of my blogging colleagues to your feed reader. If you don’t know what a feed reader is, Problogger has a very good explanation. Then, add my feed also.

This week brings us some thoughts on social networking in the workplace. Rob Radcliff at Smooth Transitions gives some ideas on appropriate social networking policies. Nolo’s Employment Law Blog reminds everyone to behave on spring break lest embarrassing pictures end up online. Molly DiBianca at the Delaware Employment Law Blog has some thoughts on whether Facebook makes employees more productive.

The Trade Secrets Blog reports that the Ohio Supreme Court will decide whether standardized tests qualify as a school district’s trade secrets.

Alaska Employment Law itemizes ways plaintiffs can prove pretext in discrimination cases.

ScotusBlog analyzes the Supreme Court’s opinion in 14 Penn Plaza, LLC v. Pyett, which held that mandatory arbitration clauses in collective bargaining agreements can cover statutory discrimination claims.

Michael Maslanka’s Work Matters, on how to handle violent employees.

Michael Fox at Jottings By An Employer’s Lawyer looks at a 1st Circuit case holding that a mother of triplets was entitled to a jury trial on her sex discrimination claim based on her employer’s stereotyping of working moms.

Finally, the EFCA Report (PDF download) has put together an excellent white paper on what lies ahead for the EFCA in Congress.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Preparing for the golden age of labor and employment law

As an employment lawyer, my practice has a lot of different aspects. I’m a counselor, helping clients tame workplace issues before they become problems. I’m a drafter, writing employee handbooks, policies, contracts, and forms. I’m an investigator, questioning employees involved in harassment and other complaints. I’m a trainer, guiding workforces, managers, and supervisors through the alphabet soup that makes up our labor and employment laws. I’m a negotiator, trying to amicably resolve employee disputes before they become fights. And, I’m a litigator and  trial lawyer, navigating companies through our state and federal courts and administrative agencies.

All these roles will be tested over the next several years. A liberal Congress, a Democrat President, and the worst economic downturn in 80 years have combined to create a world of problems for our nation’s struggling employers. The Ledbetter Fair Pay Act has already increased pay discrimination liability, and myriad layoffs have heightened the risk for age and other discrimination lawsuits. If Congress has its way, over the next several years the Employee Free Choice Act will make it significantly easier for unions to organize and bargain favorable first contracts, the FMLA will be expanded to cover smaller employers, and paid sick leave will become a reality. For these reasons, we may be at the dawning of the golden age of labor and employment law.

In light of all of these changes, it is critical that businesses not be caught unprepared. According to April 8th’s Wall Street Journal, “U.S. businesses, fearful of rising union influence and a crackdown by the Obama administration on workplace practices, are scrambling for legal advice and training.” Luckily for my readers, KJK is offering some of this advice and training for free. On May 13, my colleagues and I will present How to Stay Union Free in a Union-Friendly World, a free seminar on how to best position your non-union business to stay that way. Feel free to contact me for more information, or if you would like to attend.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Announcing the next KJK Breakfast Briefing: How to Stay Union Free in a Union-Friendly World

Join KJK’s Labor & Employment attorneys to learn How to Stay Union Free in a Union-Friendly World. Capitol Hill is gearing up for one of its most contentious fights in decades as Congress takes sides over the Employee Free Choice Act. If passed, the EFCA will radically alter our labor laws by making it much easier for unions to be certified (whether the change in law authorizes certification by way of a simple majority of signed authorization cards and without a secret ballot election, by an election after a much shortened period of time for the employer to campaign against the union, or otherwise). Even if the EFCA never becomes law, there are a lot of lessons to learn about how best to position your business to keep unions out.

We will not only discuss what the EFCA is and how it will affect your business, but also offer some essential tips on how to effectively manage your workforce to make union penetration less likely, no matter what form the new law ultimately takes. This free Breakfast Briefing is crucial for any business that is and wants to remain union free.

• Date: Wednesday, May 13, 2009

• Time: 8:00-8:30 Continental Breakfast
               8:30-9:30 Presentation
               9:30-10:00 Q&As

• Place: The Club at Key Center, 127 Public Square, Cleveland (on-site parking is free)

If you are interested in attending this free seminar, or for more information, please contact Andrea Hill, (216) 736-7234 or ach@kjk.com, by May 11, 2009.

Errata: Ohio does prohibit cost-shifting for pre-employment medical exams

Famed columnist William Safire once said, “Nobody stands taller than those willing to stand corrected.” I hope he’s right, because I feel pretty small right now.

Last week I stated that Ohio law is silent on the issue of whether an employer can charge an employee for a pre-employment medical exam. As it turns out, I was wrong. A colleague directed me to Ohio Revised Code 4113.21, entitled, “Employee shall not be required to pay cost of medical examination.” It provides:

No employer shall require any prospective employee or applicant for employment to pay the cost of a medical examination required by the employer as a condition of employment.

In other words, Ohio employers are absolutely forbidden from passing on the cost of pre-employment medical examinations to employees.

The penalty provision of this statute is also worth taking a look at:

Any employer who violates this section shall forfeit not more than one hundred dollars for each violation.

Assuming a routine physical costs more than $100, what is an employer’s incentive not to violate this provision by passing the cost onto employees and paying whatever lesser fines may come later?

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Legal risks in considering cancer survivors for employment

Cancer survivors are 37% more likely to be unemployed than their healthy counterparts. (See Cancer Survivors Struggle to Find Jobs, Study Finds). There are two likely explanations for this disparity: some cancer survivors are simply not healthy enough to return to work, while others become too expensive to employ because of the added health care costs. It is the treatment of the latter category that concerns me as an employment lawyer.

Pre-screening applicants with a history of cancer from consideration for positions raises two huge red flags: disability discrimination based on a record of an impairment or perceived impairment, and genetic information discrimination. Refusing to hire an applicant based solely on a history of cancer would almost certainly violate both the Americans with Disability Act (and its Ohio counterpart), and possibly the Genetic Information Nondiscrimination Act.

The best defense against this type of claim is not to gather medical information at the application or interview stage. Yet, even when an employer tries to avoid the topic, it can innocently arise. For example, when someone has a two-year gap on his or her resume, it is necessary to ask, “What were you doing for the two years you weren’t working?” For someone who was away from the workforce because of cancer treatments, the answer likely will reveal information that could lead to an inference of discrimination if the applicant is not hired. The best defense against these problems is two-fold:

1. Meaningful and effective training of interviewers so that they do not fall into these potential traps. For example, instead of asking, “Why weren’t you working?” ask, “What did you do during your gap in employment to keep your skills current?” The latter question will not only avoid the potential disclosure of medical information, but also provide some useful information about the applicant’s skill-set.

2. Ensuring that the best, most qualified person is hired to fill any vacancy, regardless of medical history and gaps in employment.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

More on laying off the protected

Last month I provided some tips on how to properly layoff employees who happen to fall into a protected class. Last week, in Bell v. Prefix, Inc., the 6th Circuit helped drive home my point, and teaches some important lessons on proper layoff techniques.

Jonathan Bell claimed that Prefix included him a layoff in retaliation for a recent FMLA leave of absence he took to care for his dying father. Between July 22 and August 5, 2005, Bell took 3½ days of approved FMLA leave while his father was hospitalized for heart surgery. At the same time, Prefix’s new general manager began an ad hoc termination of employees to save money during a substantial downturn in business. Bell’s termination came August 8, just two weeks after the start of his FMLA leave and three days after his last FMLA absence.

In reinstating Bell’s FMLA retaliation claim for a jury trial, because a reasonable jury could conclude that Prefix held a retaliatory motive in terminating Bell. The court focused its decision on the collective strength of five pieces of evidence:

1. When Bell had to leave work after receiving an emergency call from the hospital, the general manager belittled him in front of his co-workers, and in a raised voice “accused him of ‘abandoning’ Prefix when there was work to be done.”

2. In discussing Bell’s termination, the general manager commented that he needed to work more hours.

3. The general manager’s comments about poor work quality are directly contradicted by Bell’s only written performance review.

4. The close temporal proximity between Bell’s FMLA leave and the termination.

5. The lack of any formal structure for the RIF, or the use of any objective process or criteria in selecting employees for inclusion.

This case teaches employers some very important lessons in how to conduct a RIF.

1. It is important to have some structure for the RIF, whether it is written criteria (objective or subjective), past performance, ranking of employees, or some other basis. A rationale that can be justified is needed for why one employees was RIFed over another.

2. Discussions about who will or will not be included should be kept to a minimum. This point rings even more true if the decision is solely based on some objective criteria.

3. Assume that any comments that can in any way be twisted to appear discriminatory or retaliatory will come back to haunt you in later litigation.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #73

After last week’s glut of posts on the Employee Free Choice Act, I bring you this week’s EFCA-free WIRTW.

This week the Supreme Court held oral argument in Gross v. FBL Financial Services, which will hopefully give some much needed clarity on the proper standard for obtaining a mixed-motive jury instruction in discrimination cases. For details and analysis, read Marcia McCormick’s thoughts at the Workplace Prof Blog. Dan Schwartz at the Connecticut Employment Law Blog shares his insight as well.

Mark Toth at the Manpower Employment Blawg reports on the illegality of a policy that prohibits employees from working overtime while on light duty.

The Word on Employment Law with John Phillips provides some additional thoughts maternity and layoffs.

Eric Welter at the Laconic Law Blog reports on a poll finding that the FMLA is HR’s biggest headache.

Where Great Workplaces Start looks into the future and makes some predictions about the future of HR.

Christopher McKinney at the HR Lawyer’s Blog and Diane Pfadenhauer at Strategic HR Lawyer discuss careless twittering.

Finally, two blogs give their takes on The Office and the Michael Scott Paper Company: Rob Radcliff at Smooth Transitions and Michael Elkton at Trading Secrets.

 

 

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Think before having employees sign that arbitration agreement

Yesterday, the Supreme Court issued its opinion in 14 Penn Plaza v. Pyett, which enforced a provision in a collective-bargaining agreement that required union members to arbitrate statutory discrimination claims. My fellow bloggers have already provided some thoughtful analysis of this opinion – Michael Moore at the Pennsylvania Labor & Employment Blog, Michael Fox at Jottings By An Employer’s Lawyer, and Richard Bales at the Workplace Prof Blog.

The bigger question for employers to think about, though, is whether arbitration of employment claims makes business sense. Companies and their lawyers often use mandatory arbitration of employment claims for two reasons: (1) as a cost-effective alternative to court; and (2) as an insurance policy against runaway jury verdicts.

In my experience, however, arbitration can prove just as costly as court. More and more arbitrators are allowing plaintiffs to engage in discovery that is nearly as expansive (and expensive) as what is permitted by trial courts. Additionally, employers have to add into the equation the cost to file the claim, which the employer usually shares. With the American Arbitration Association, these fees can run anywhere from $950 to a cap of $65,000. These fees do not include the arbitrators’ time, which often exceeds $500 per hour, and includes all pre-hearing conferences, discovery and motion practice, the actual hearing time, and the drafting of the opinion. It is not hard to see how in many cases the defense costs associated with arbitration outweigh defense costs in a traditional court proceeding.

Given these high costs, there is a much better alternative to hedge against a runaway jury verdict – contractual jury trial waivers. A properly drafted jury trial waiver accomplishes the following goals:

1. No appeal rights are lost. Judicial review of arbitration awards is very narrow. An appellate court, however, will have a much wider scope of review of a bench trial.

2. A bench trial eliminates the risk of a runaway jury awarding obscenely high damages.

Before asking your employees to sign that arbitration agreement, consider whether there are other viable alternatives to reach the same goal, such as a jury trial waiver.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Poor communication of layoffs raises significant risks

According to CNN, French workers are holding management hostage over their refusal to negotiate severance:

Hundreds of French workers, angry about proposed layoffs at a Caterpillar factory, were holding executives of the company hostage Tuesday, a spokesman for the workers said….

The workers were angry that Caterpillar had proposed cutting more than 700 jobs and would not negotiate, said Nicolas Benoit, a spokesman for the workers’ union….

Benoit said all the workers wanted to do was negotiate with Caterpillar and they were upset that the company did not show up to two earlier scheduled negotiating sessions.

In the face of a layoff, your workers likely will not take the drastic step of physically taking people hostage. They are much more likely to take your business hostage in another way – through costly and time-consuming litigation.

The only insurance policy against a laid-off employee filing suit is a well-drafted severance agreement. The key to getting an employee’s signature on that agreement is treating the employee with dignity. Don’t let an employee find out that he or she is going to be included in a layoff by email, text message, or workplace gossip. As difficult as it will be, have a face-to-face conversation with each laid-off employee:

1. Script out what you plan to say ahead of time. The message should be clear yet compassionate.

2. Have an HR representative or other witness present in the room, just in case any dispute arises down the road as to what was said.

3. Keep the lines of communication open, both for the laid-off and those left behind. Both groups will likely have questions. Being available to answer them is crucial.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Charging for pre-employment medical exam

The Americans with Disabilities Act sets limits on when and how employers can ask applicants or employees medical questions. At the pre-employment stage, an employer is allowed to ask any medical questions and conduct medical examinations, as long as two conditions are met: 1) it does so for all entering employees in the same job category; and 2) the applicant has been provided a conditional job offer and has not yet started working.

A question sometimes arises to whether an employer must pay for a pre-employment medical exam. The ADA and Ohio’s parallel law are oddly silent on this issue, which leads me to conclude that an Ohio employer can require an applicant to bear the cost of the medical exam.

The bigger question, though, is whether you want to charge job applicants for medical exams in the first place, of if you want to eat those costs as part of recruitment and hiring. Because the overwhelming majority of employers choose the latter, passing the costs onto applicants could pose real problems in recruiting quality employees.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

How to layoff the protected

Sunday’s New York Times ran an articles called When the Stork Carries a Pink Slip. It makes the point that there is nothing illegal about including pregnant women or women on maternity leave in a layoff. The same holds true for minorities, those over 40, the disabled, those out on FMLA leave, or anyone who happens to find themselves in any of the other groups protected by state or federal discrimination laws. What is illegal, however, is to include a pregnant women in a layoff because she’s pregnant.

Layoffs are supposed to be blind at to issues of race, sex, age, etc. But, if you are making these decisions in the dark, you are making a big mistake that could prove very costly. Before a layoff is implemented, it is crucial to review the demographics of who is staying and who is leaving:

1. You want to make sure that neutral selection criteria do not have a disparate impact on a particular protected group.

2. You want to make sure that it does not look like the layoff targeted a particular protected group.

3. You want to identify those risky inclusions (such as the new mom on maternity leave or the employee with a history of FMLA-leaves) who may need some additional incentive to sign off on a severance agreement and release.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.