Documentation is key to dismissal of discrimination cases

While the laws under which employees can bring lawsuits are expanding, employees’ successes continue to retract, at least in federal court. Consider the following statistics, culled from an article in today’s Wall Street Journal on employers’ degree of success in federal court cases.

• From 1979 through 2006, federal plaintiffs won 15% of employment discrimination cases, as compared to a 51% success rate in all other civil cases.

• 12.5% of federal employment discrimination cases are terminated via summary judgment, with employers filing 90% of those motions. By comparison, only 3% of contract cases and 1.7% of personal-injury and property damages cases were summarily dismissed.

The explanation of U.S. District Court Judge David Hittner as to why employers enjoy this level of success in employment cases is very insightful: “Companies often have an extensive record that this [employee] was not doing their job well and that is the reason for the termination.”

Employers should heed Judge Hittner’s words. Success in discrimination cases is related to the employer’s ability to prove that it had a legitimate reason for the employment action taken. That reason will be much more believable, and much less likely to be criticized, if it is well-documented. Courts often remind us that they do not sit as super-personnel departments and will not second-guess employers’ reasoned business decisions. By having a historical paper trail to support all employment decisions, employers have taken the crucial first step toward the dismissal of any later challenges.

Five action points when your company is sued

Over the course of the past years, I’ve written a lot about best practices to prevent employee lawsuits. The fact remains, though, that no matter how good a company’s HR practices are, and no matter how proactive a company is with its legal compliance, a certain percentage of terminations and other employment decisions will turn into lawsuits. It is the simple the cost of doing business in 2009, especially as the economy worsens and more employees look to judges and juries for assistance.

The following are five things a company should be actively thinking about when it receives the inevitable lawsuit:

1. Relevant documents should be identified and preserved. Employment lawsuits are not as document intensive and some other disputes in which businesses are involved. Nonetheless, the documents are crucial. They provide a roadmap to the justification for the termination or other employment action, and the reasonableness of the employer’s actions. Key documents (personnel files, handbooks, other policies, investigative reports, emails, and other communications) should be gathered and set aside. Also, a litigation hold should be put in place to ensure that no relevant documents are accidentally destroyed.

2. Under Ohio’s discrimination law, managers and supervisors can be personally liable for their own individual acts of discrimination. Often, they are sued in their individual capacity along with the company. Potential conflicts of interest among any individual defendants and the company must be evaluated very early in the case to ensure that conflicts of interest do no exist. If they do, one attorney cannot represent all defendants. If conflicts are not identified until well into the case, the lawyer may have to withdraw, which could irreparably damage the defense.

3. Fight the urge to take it personally. When an ex-employee claims discrimination, companies can lose sight of the fact that lawsuits are part of doing business. Employer often shift into attack mode because they are accused of being bigots. There is a huge difference between aggressively defending a case and attacking for the sake of attacking. The former is smart strategy; the latter often leads to greater costs by losing focus. It also risks taking action that could be viewed as retaliatory and bring further claims. Extra care must be taken when the plaintiff is current employee, as opposed to an ex-employee.

4. If your company has Employment Practices Liability Insurance, timely file a claim with the insurer. If you have purchased a rider that permits you to select counsel, make sure you enforce that right. If you have not purchased that protection, consider having a candid conversation with the insurance company about the counsel they will choose for you.

5. Hire experienced employment counsel to defend the claim. Employment law is highly specialized. Retaining counsel that knows that ins and outs of this area of law is the best way to keep costs down as much as possible, while at the same time doing everything possible to aggressively defend the company.

Do you know? Agreements cannot waive future claims

Do you know? One of the mistakes that I see made over and over again in agreements I review is waivers of future claims. Take, for example, Hamilton v. General Electric Co. (6th Cir. 2/12/09), in which an employee had signed a “last chance agreement.” In exchange for reinstatement following an earlier termination, the employee agreed that he would not file legal action over any future termination. The 6th Circuit found that promise unenforceable because it amounted to a release of future claims.

For a waiver and release of claims to be valid, it only can release claims based on past conduct, and not future claims: As explained by the 6th Circuit in Adams v. Philip Morris, Inc.:

An employer cannot purchase a license to discriminate. An employment agreement that attempts to settle prospective claims of discrimination for job applicants or current employees may violate public policy … unless there were continuing or future effects of past discrimination, or unless the parties contemplated an unequivocal, complete and final dissolution.

If you are using any agreements for employees (such as severance agreements in connection with layoffs), be careful to ensure that they are not seeking to waiver any claims based on future conduct.

Stimulus Bill to provide for subsidized COBRA coverage for laid-off employees

COBRA provides workers and their families who lose health benefits the right to choose to continue group health benefits provided by their group health plan for up to 18 months. Historically, the cost of COBRA continuation coverage is borne 100% by the employee. Tomorrow in Denver, President Obama will sign into law the American Recovery and Reinvestment Bill of 2009, commonly known as the economic stimulus bill. This law will alter employers’ COBRA obligations by providing for subsidized COBRA premiums by employers.

The law will provide for a 65% subsidy of certain employees’ COBRA premiums for nine months. The subsidy will be available to any employee involuntarily terminated (except those severed because of gross misconduct, to whom COBRA does not apply) from employment between September 1, 2008, and December 31, 2009. The employer will pay 65% of the COBRA coverage premium, which would then be applied as a credit against payroll taxes. The employee would remain responsible for the other 35% of the COBRA premiums. Employers will have to amend their COBRA notices to include information about the availability of this subsidy.

Importantly, this subsidy is to be applied retroactively. Employees who were involuntarily terminated on or after September 1, 2008, but before the enactment of the stimulus bill, and who did not previously elect COBRA coverage, must be given an additional 60-day window to elect COBRA and benefit from the subsidy. If an employee elects COBRA after receiving the new notice, coverage would begin on February 17, not on the date of the actual termination.

Companies with 20 or more employees (COBRA’s coverage limit) must heed these changes. COBRA notices need to be amended for the remainder of 2009, and any employee involuntarily severed between September 1, 2008, and February 17, 2009, will have to be re-noticed to advise of the subsidy.

WIRTW #66

Overlawyered brings us the story of the week. File this one under what goes around comes around. A California attorney settled a consumer class action via the payment of gift cards for the class members. Since the class was being paid by gift cards, the court thought it was only fair that the lawyer be paid his fees the same way, 12,500 ten-dollar gift cards.

Gruntled Employees ticks off eight ways for a company to lose a non-compete case. Number 8 is the best tip, and its lesson translates to any employment case, not just non-compete cases:

Focus on the law instead of on the story. This is the most important lesson. Lawyers often fall in love with their legal arguments. But noncompete cases are equity cases, not law cases. To be sure, that distinction means less than it did a hundred years ago. But if you have a brilliant, clever, technical legal argument and an unsympathetic story, you are way more likely to lose.

Did you know that part of the Economic Stimulus Package will require employers to pay at least half of the COBRA premiums for involuntarily terminated employees? Me neither, until I read this article from HR Observations.

The Connecticut Employment Law Blog issue-spots the legal risks for employers using Google Map’s new locator service.

George’s Employment Blawg summarizes the FMLA’s new notice rules.

World of Work lists words to avoid in describing employees over 40.

The Delaware Employment Law Blog asks if the recession is going to put work-life balance initiatives at risk.

Trading Secrets correlates mass layoffs with the risk for mass theft of intellectual property.

Work Matters discusses the “one free dog bite” rule in retaliation cases.

Courts open Pandora’s Box in applying the Ledbetter Fair Pay Act

Today I am going to get technical and talk about statutory interpretation. Bear with me, though, because how some courts are incorrectly interpreting the Ledbetter Fair Pay Act has crucial implications for businesses

Michael Fox at Jottings by an Employer’s Lawyer highlights the following key passage in the Ledbetter Act:

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

Plaintiffs are arguing that the phrase “or other practice” covers the full panoply of employment decisions, such as promotions and demotions, and not just pay-setting decisions or policies. At least two courts have bought this argument:

• Bush v. Orange County Corrections Dept., (M.D. Fla. 2/2/09), which held that plaintiffs could timely challenge demotions, which resulted in reductions in pay, that occurred 16 years before earlier than their EEOC charges.

• Gilmore v. Macy’s Retail Holdings, (D.N.J. 2/4/09), which held that the Ledbetter Act applies to a discriminatory promotion that would have been to a higher paying job.

Applying the Ledbetter Act to cases such as Bush and Gilmore, which  involved long-ago promotions and demotions, is misplaced. For “or other practice” to have the expansive meaning given by the Bush and Gilmore courts, a comma is missing. Because there is no comma between “decision” and “or other practice,” “or other practice” modifies “compensation.” Thus, the more reasoned interpretation of this provision of the Ledbetter Act is that the Act covers a discriminatory compensation decision or other discriminatory compensation practice. A promotions or demotion is a personnel decision, not a compensation decision or practice.

The overly broad interpretation applied by the Bush and Gilmore courts goes well beyond the issue in the Ledbetter decision that the Ledbetter Act intended to overturn. Every employment decision, whether a hiring, promotion, demotion, or termination, has some effect on compensation. The Ledbetter Act cannot be so broad as to cover any and every personnel decision. This broad of a reading of the statute will eliminate virtually every statute of limitations in federal discrimination claims, providing employees with an unlimited amount of time to file any discrimination claim. If the Ledbetter Act means what Bush and Gilmore say it means, the Ledbetter Act could prove to be devastating for employers.

No Ohio court has yet to apply the Ledbetter Act. Ultimately, the meaning of “or other practice” will be up to the courts of appeals and the Supreme Court. Nevertheless, it is important for employers to realize that only two weeks into its life, at least two courts have broadly applied the Ledbetter Act to cover much more than the Ledbetter decision it overturned.

A primer on employee polygraph testing

As I’ve previously reported, as the recession deepens, incidents of employee theft are on the rise. It should go without saying that just about any employee who steals should be fired. How can companies confirm that the theft actually occurred to support the termination? One available tool is a polygraph test. Employers who use polygraphs, however, must tread carefully to avoid running afoul of the specific requirements of the federal law that regulates their use in the workplace, the Employee Polygraph Protection Act of 1988.

The EPPA applies to the use of any device used to render a diagnostic opinion as to the honesty or dishonesty of an individual, such as polygraphs, deceptographs, voice stress analyzers, or psychological stress evaluators. It applies to private employers, but not federal, state, or local governments.

It prohibits employers from:

• Requiring, requesting, suggesting, or causing an employee or prospective employee to take or submit to any lie detector test.

• Using, accepting, referring to, or inquiring about the results of any lie detector test of an employee or prospective employee.

• Discharging, disciplining, discriminating against, denying employment or promotion, or threatening to take any such action against an employee or prospective employee for refusing to take a test, on the basis of the results of a test, for filing a complaint, for testifying in any proceeding, or for exercising any rights afforded by the EPPA.

Despite these strict prohibitions, there are limited exceptions when an employer can administer a polygraph test, but not other forms of lie detector tests. One exception covers prospective employees of armored car and other similar security companies. Another covers prospective employees of companies that manufacture controlled substances.

Of more general application to most employers, the third exception covers employees who are reasonably suspected of involvement in a workplace incident that results in economic loss to the employer and who had access to the property that is the subject of an investigation. Thus, the employer who reasonably believes that an employee has stolen is able to administer a polygraph to confirm the employee’s culpability.

Even if this exception applies, employers cannot use polygraphs carte blanche. There are certain key limits on their administration:

• The employee must be provided a written notice explaining the employee’s rights and the limitations imposed, such as prohibited areas of questioning and restriction on the use of test results.

• Prior to the polygraph test, the employee also must be provided a notice explaining the specific incident or activity being investigated and the basis for the employer’s reasonable suspicion of the employee’s involvement.

• The employee can refuse to take a test, terminate a test at any time, or decline to take a test because of a medical condition.

• The results of a test alone cannot be disclosed to anyone other than the employer or employee without their consent.

• The polygraph examiner must be licensed, and bonded or insured. Also, the examination is subject to strict conduct standards.

Polygraph examinations provide employers a powerful tool to confirm and confront employee theft. Employers must carefully follow the EPPA’s requirements so that a slam dunk termination does not turn into a sure-fire lawsuit for the employee.

Do you know? Unpaid internships

Do you know? There are specific standards that govern whether an unpaid internship passes muster under the Fair Labor Standards Act. If you business uses unpaid interns or externs, these rules are worth paying attention to.

The Department of Labor’s Wage and Hour Division uses a six-factor test to determine whether a trainee, intern, extern, apprentice, graduate assistant, or similar individual is an employee. If even one of these factors fails, then the individual is an employee and all of the regular minimum wage and overtime rules apply. The six factors are:

1. The training is similar to what would be given in a vocational school or academic educational instruction;

2. The training is for the benefit of the trainees or students;

3. The trainees or students do not displace regular employees, but work under their close observation;

4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion the employer’s operations may actually be impeded;

5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

In the typical internship or externship program (i.e., where the work is simply an extension of an academic program), these factors are usually met, an employer-employee relationship does not exist, and the business does not have to worry about minimum wage or overtime laws for the interns or externs. If you use interns and are concerned about whether they are considered employees that must be paid minimum wage and overtime, consult an employment attorney.

‘Tis better to have learned and lost

Brown v. Nutrition Management Services Co., from the Eastern District of Pennsylvania, is a good reminder that ignorance of the law is never an excuse. It also underscores the importance of training.

In Brown v. Nutrition Management Services Co., a jury awarded plaintiff Melissa Brown $74,000 in back pay. The federal judge doubled that award under the FMLA’s liquidated damages provision after deciding that an in-house lawyer’s failure to research whether a pregnant worker was covered by the FMLA showed a lack of good faith.

Under the FMLA a prevailing party is entitled to liquidated damages equal to the amount of damages awarded for lost compensation plus interest unless the employer proves that the violation was in good faith and it had reasonable grounds to believe that it was not violating the FMLA. Reasonable good faith requires an employer to take affirmative steps to determine the requirements of the law. The Court found Nutrition Management’s in-house counsel’s action in determining Brown’s FMLA coverage lacking:

Nutrition Management argues it had a reasonable belief that Brown’s termination would not violate the law because it believed Brown’s probationary status rendered her ineligible for FMLA benefits. Nutrition Management’s alleged good faith belief would only be reasonable if it took affirmative steps to determine the legal effect of Brown’s probationary status; it did not….

Scott Murray, an attorney with general knowledge about employment law and Nutrition Management’s director of human resources, testified at trial that he determined it was “okay” to terminate Brown because she was a “brand new employee.” … Nutrition Management’s reliance on Mr. Murray’s cursory determination was inadequate…. Nutrition Management presented no evidence that it researched or had an attorney research the requirements of the FMLA, or was otherwise aware of the factors governing whether the FMLA would apply to Brown’s request for leave. Nutrition Management, having made no legal inquiry into the requirements of the FMLA, had no reasonable ground to believe Brown’s termination was not a violation.

It didn’t help Nutrition Management’s good faith argument that when asked for a reason to document for Brown’s termination, its CEO said, “he wanted the fat bitch out of there.”

The new FMLA regulations drastically alter the landscape of how companies handle and process employee’s FMLA claims. If for no other reason than to avoid double damages when an employee’s FMLA claim gets botched, organizations should be educating themselves on how to implement these new rules.

WIRTW #65

This week’s review starts with a couple of follow ups on early posts. Wage and Hour Counsel reports on an 11th Circuit decision discussing the FLSA’s outside sales exemption (see Do you know? The FLSA’s exemptions for salespeople), and KnowHR provides some tips on drafting a snow day policy (see A primer on inclement weather policies)

The Delaware Employment Law Blog posts a very useful PowerPoint from a recent FMLA presentation.

The Workplace Prof Blog [courtesy of Slate] reports on what may be the world’s worst HR department.

Human Rights in the Workplace gives some more tips on the use of social networking tools in hiring.

Evil HR Lady offers some information on how to deal with ill employees who are being laid off.

The Business of Management provides advice on handling employees and confidential information.

The Connecticut Employment Law Blog uses Joe Torre’s book as a springboard to talk about non-disparagement clauses.

Ohio Practical Business Law writes a primer on tortious interference.

The ChamberPost reports on a new academic study which that makes the case against the Employee Free Choice Act.

Employee Free Choice Act officially kicks off, but does anyone care?

Yesterday, the AFL-CIO delivered to Capitol Hill a petition of a claimed 1.5 million signature in support of the Employee Free Choice Act. The union also held a rally on the Hill in support of its cause that drew a crowd of thousands. The rally is meant officially to kick off the unions’ efforts to have the EFCA enacted.

The open question, however, is whether anyone really wants unions in the first place. According to the results of two different polls released yesterday, support for the EFCA may be waning, if it ever really existed at all.

The Coalition for a Democratic Workplace surveyed 1,000 likely general election voters, including 477 who voted for President Obama last November. The poll’s key findings are as follows:

• 73% of Obama voters are opposed to EFCA.

• 86% of Obama voters believe that a worker’s vote should be kept private in a union organizing election.

• 81% of Obama voters believe that secret ballot elections are the best way to protect the individual rights of workers.

• 81% of Obama voters believe that Congress should focus on other issues like jobs and health care before dealing with EFCA.

• 68% of Obama voters believe the binding arbitration provisions in EFCA are risky and unwise.

• 61% of Obama voters would be less likely to vote for a Member of Congress who voted to take away the secret ballot from workers.

The conclusion, by Brian Worth of the Coalition for a Democratic Workplace:

Obama voters did not go to the polls last November to eliminate the secret ballot, and Congress should think twice about taking it away from millions of American workers. This bill is opposed by Democrats, Republicans, Independents, rank and file union workers, and President Obama’s voters by roughly the same margins. The only support card check has is among the leaders of Big Labor who are willing to sacrifice worker privacy and put our economy at further risk to boost their membership roles.

Meanwhile, the Center for Union Facts released the findings from another poll, which found that 82% of non-unionized American workers do not want their jobs to be unionized. The poll of more than 3,000 people reported the following results:

1. Are you or someone in your immediate family in a labor union?
     YES 20%
     NO 79%

2. Would you like your job to be unionized?
     YES 13%
     NO 82%

Regardless of petitions, signature, or rallies, or polling data, businesses should be preparing themselves as if the EFCA is going to become law. Employers should foster open communication between employees and management, train managers and supervisors on how to effectively deal with employee issues, create an environment of inclusion of employees in corporate decision making, and implement or update non-solicitation policies.

Companies should strive to be workplaces of choice for employees and not workplaces of opportunity for labor unions.

3rd Circuit decision illustrates need for the Civil Rights Tax Relief Act

Damages in discrimination cases come is several shapes – economic damages for lost wages (back pay and front pay), compensatory damages, emotional distress damages, punitive damages, and attorneys’ fees. Because back pay and front pay represents lost wages, no one disputes whether the government should receive its fair share via income tax on those amounts.

There are two major sources of other taxes that apply in these cases:  taxation of damages for noneconomic harm; and taxation of lump-sum settlements or awards in one year. Critics argue that the former should not be taxed because it does not represent “wages.” Moreover, if the IRS does not tax noneconomic damages received on account of physical injury, why does it differentiate noneconomic damages received in discrimination cases. The latter greatly increases one’s tax liability by placing the employee in a higher-than-normal tax bracket based on the lump sum.

For employers, this tax treatment makes the settlement of discrimination disputes significantly more difficult. Because employees take tax liability into account when settling cases, the anticipated amount of tax to be paid drives up the cost of settlement. Often, this added cost is a serious impediment to the resolution of cases. Settlements that fall apart costs employers even more, through additional defense costs and the payments of judgments or even higher settlements down the road.

Eshelman v. Agere Systems (3d Cir. Jan. 30, 2009) illustrates this problem in action. In Eshelman, the Third Circuit grossed-up an employee’s back pay award to ensure that the employee did not face any added tax liability as a result of the lump sum award:

We hold that a district court may, pursuant to its broad equitable powers granted by the ADA, award a prevailing employee an additional sum of money to compensate for the increased tax burden a back pay award may create. Our conclusion is driven by the “make whole” remedial purpose of the antidiscrimination statutes. Without this type of equitable relief in appropriate cases, it would not be possible “to restore the employee to the economic status quo that would exist but for the employer’s conduct.” …

[A]n award to compensate a prevailing employee for her increased tax burden as a result of a lump sum award will, in the appropriate case, help to make a victim whole. This type of an award … represents a recognition that the harm to a prevailing employee’s pecuniary interest may be broader in scope than just a loss of back pay.

The Civil Rights Tax Relief Act, which had been introduced in both the House and Senate in 2007 but went nowhere, goes a long way to curing the problem of the IRS’s current treatment of discrimination awards, which Eshelman partly illustrates. The CRTRA would amend the Internal Revenue Code to:

1. exclude from gross income non-economic damages in discrimination cases (back pay, front pay, and punitive damages would still be taxable); and

2. allow income averaging for back pay and front pay received from such claims, limiting an employee’s tax liability for the year in which the money is received to the total amount received divided by the number of years it represents.

There has been lots of talk by lots of people about lots of different pieces of employment legislation that will be passed in the coming years. The Civil Rights Tax Relief Act is one change that makes sense for employees and businesses. By lowering employee’s potential tax liability, it decreases settlement values of discrimination cases. It makes cases easier for employers to settle. If Congress is going to focus on passing pro-employee legislation during these trying times for businesses, it should focus on pro-employee legislation that makes some sense for employers as well.

[Hat tip: Daily Developments in EEO Law]

Do you know? The FLSA’s Computer Employee Exemption

Do you know? One of the FLSA’s lesser-known exemptions is the Computer Employee Exemption.

For an employee to qualify for the computer employee exemption, the employee must either be paid a salary of at least $455 per week or an hourly rate of at least $27.63. The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field.

Additionally, the employee’s primary duty must fall into one of the following four categories:

1. The application of systems analysis techniques and procedures, including consulting with users, to  determine hardware, software or system functional specifications;

2. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

This exemption does not include:

• Employees engaged in the manufacture or repair of computer hardware and related equipment.

• Employees whose work is highly dependent upon, or facilitated by, the use of computers and computer software programs (such as engineers, drafters, and others skilled in computer-aided design software), but who are not primarily engaged in computer systems analysis and programming.

As with the FLSA’s other exemptions, determining whether an employee or group of employees falls under this classification is very fact-specific, and it is often worth obtaining a professional opinion.

For information on some of the FLSA’s other exempt classifications, see:

• Do you know? The FLSA’s exemptions for salespeople

• Do you know? The FLSA’s Administrative Exemption

• Do you know? The FLSA’s Executive Exemption

  
  

Layoffs = lawsuits

This headline from the New York Times says it all: “Layoffs Herald a Heyday for Employee Lawsuits.”

More workers are being let go as corporate layoffs that began in earnest last year have accelerated in recent weeks. And more often, people are looking around and complaining that they have been unfairly or improperly dismissed.

Potential lawsuits from layoffs come in all shapes and sizes: WARN Act violations for lack of notice, discriminatory selection for the layoff, or the use of selection criteria that discriminatorily impacts one group over another. According to the New York Times article one plaintiffs firm in New York has started its own WARN Act practice group that has filed two dozen different cases against employers in the last 18 months.

In all layoffs, companies should consider paying some amount of severance to affected employees in exchange for a release of claims. It’s painful for some businesses to consider paying severance to a group of employees being let go because the company can no longer keep them as employees. And, the higher up the corporate ladder the layoff reaches the greater amount of severance pay will be necessary to buy an employee’s release. The alternative, however, is potentially exponentially more expensive – years of protracted litigation brought by employees or groups of employees.

If a company is going to offer severance, it should insist on receiving a signed release in return. Just make sure that the release complies with the Older Workers Benefit Protection Act (OWBPA). Otherwise, at least as far as far as a federal age discrimination claim, the release will not be worth the paper on which it is written.

For more on releases under the OWBPA, see:

• Refresher on age discrimination waivers

• Defining the proper "decisional unit" is key in legitimacy of RIFs

[Hat tip: Minding the Workplace]

WIRTW #64

It’s been a very busy week. We had the first employment law Supreme Court decision and the first new employment law of the new year. And, we had a lot to read from a lot of excellent bloggers.

The ChamberPost refers to the Ledbetter Fair Pay Act as a scam.

Human Rights in the Workplace discusses the legal risks associated with social networking in the workplace.

The Connecticut Employment Law Blog gives insight on President Obama’s choices to run the EEOC and the NLRB.

George’s Employment Blawg provides a thorough analysis of the Employee Free Choice Act.

What's New in Employment Law? spots a huge faux pas by Starbucks’s CEO. As a PR move, he cut his own salary from $1.2 million to $10,000 annually, lowering his pay below the threshold to qualify as an exempt employee.

Bob Sutton coins the phrase Asshole Collar, bosses with a white collar and colored shirt.

The Ohio Labor Lawyers provide some insight on what to do when a union business agent shows up with signed authorization cards.

Where Great Workplaces Start give some examples of alternatives to layoffs, such as wage reductions or reduced work schedules.

The HR Capitalist shows everyone what a strip club’s employee handbook looks like.

Gruntled Employees gives a grammar lesson on the difference between to lay off (a verb), layoff (a noun), laid-off (an adjective).

World of Work reports on the 10th Circuit’s dismissal of a WARN Act case.

The Evil HR Lady on email etiquette.

LawMemo Employment Law Blog discusses a case that could potentially come before the Supreme Court, on the issue of what qualifies as a mixed-motive discrimination case.

On.point presents the story of a dismissal of a sex discrimination lawsuit brought by a transsexual.

Workplace Privacy Counsel points out that under GINA, one could be held liable for the disclosure of genetic information even if it was made inadvertently.

Materials from KJK’s Breakfast Briefing are available

Yesterday, blizzard and all, KJK held its inaugural Employment Law Breakfast Briefing. We covered the Top 10 Labor & Employment Issues for Businesses in 2009. For those who could not attend or are interested, the PowerPoint slides from the presentation are available for download. It’s a big file (over 1.5M), so please be patient with the download.

As promised, President Obama signs Ledbetter Fair Pay Act

http://www.cnn.com/2009/POLITICS/01/29/obama.fair.pay/index.html for the details.

6 tips to avoid an employment lawsuit

For the past two days, BLR’s HR Daily Advisor has been looking behind enemy lines and providing tips from a plaintiffs lawyer on mistakes employers make that generate litigation (A Peek into Enemy Camp – Plaintiff’s Lawyer Spills Secrets and How to Grease the Skids for Your Employee's Attorney). I culled the following six from those articles, and are designed to point your business in the right direction with some proactive steps you can take to handle employees and policies and help avoid future employment claims.

1. Discounting damages and potential liability. Managers and supervisors often underestimate their own liability. People with decision-making authority need to keep in mind that in Ohio they can be held personally liable for their own discriminatory actions. It’s not just the company that can be held liable. If people stopped and considered that they could be equally liable for back wages, compensatory, and even punitive damages, they might tread more cautiously when dealing with protected employees.

2. Omitting a Reason for Termination. Companies often believe that it is better not to provide a reason for a termination than to give a reason that can be used as potential ammunition against the company. The converse is usually true. The lack of a reason is often the spark that fires the weapon. If an employee is not given a reason, he or she will assume that there is no good reason, and seek help from an attorney. However, if the employee is given a reason that is backed up by prior discipline, reviews, and other communications, the employee is much more likely to understand and move on. The keys are proper prior communication and accuracy.

3. Ignoring the EEOC Response. By ignoring, I don’t mean failing to respond at all (which is also a big mistake). Instead, I mean not taking the time to draft a thorough, proper, and accurate response that gives the EEOC or OCRC sufficient detail to issue a “no probable cause” finding. Be mindful of accuracy, however, as inconsistencies will likely come back to bite you in subsequent litigation.

4.Terminating Employees with Good Evaluations or Scant Documentation. It’s very difficult to justify the termination of an employee for performance problems if the employee has glowing performance reviews and no history of written documentation outlining the problems. The less paper that exists, the more a termination looks like pretext.

5. Ignoring Your Own Policies. Managers and supervisors should be trained in what your policies are and how they should be applied. While policies should state that they are not contracts, they do set standards of conduct that should be met in most cases. Consistency avoids the appearance of pretext, which in turn avoids summary judgment denials and jury trials.

6. Delaying Policy Changes. Laws change frequently. New laws are passed (the FMLA’s military leave amendments, the Genetic Information Nondiscrimination Act), old laws are changed (the new FMLA regulations and the recent ADA amendments), and courts write opinions that reinterpret laws (the Supreme Court’s inclusions of internal investigations in retaliation liability). Companies that are slow to react to incorporating these changes into their policies risk liability. Policies must be well drafted, reviewed by lawyers, and updated frequently.

There is no sure-fire method to prevent a lawsuit from being filed. No company is bulletproof, and there is no guarantee against a terminated employee filing a lawsuit. This list, however, is a good first step to helping put your organization in the best position to dissuade lawsuits from being filed and successfully defending against them when they are.

A primer on inclement weather policies

It seems appropriate as today’s snowstorm plays havoc on KJK’s inaugural Breakfast Briefing to spend some time talking about inclement weather policies.

There is no law that governs whether businesses must, or even should, stay open during bad weather. Instead, it is simply a matter of policy for each company to decide for itself. Like all policies, communication is the key to ensuring that employees are all on the same page when it comes to whether a business is going to open or shut down to account for bad weather.

Bad weather will affect different employees differently. Commute times and distances, methods of transportation, and school closings will all impact whether a certain employee will be able to make it to work when bad weather hits. In drafting a policy for inclement weather, consider the following:

1. Communication. How will your business communicate to its employees whether it is open for business or closed because of the weather? Are there essential personnel that must report regardless of whether the facility closes? If an employee does not get word of a closure and reports to work anyway, will the company pay that employee for reporting?

2. Early closing. If a business decides to close early because of mid-day snowstorm, how will it account for the orderly shut-down of operations on that day? Which employees will be able to leave early and which will have to remain to ensure that the facility is properly closed? Is there essential crew that must stay, or is there an equitable means to rotate who can stay and who can leave?

3. Wage and hour issues. To avoid jeopardizing exempt employees’ status, they should be be paid their full salary when a company closes because of weather. For non-exempt employees, however, it is entirely up to the company whether to pay them for a full day’s work, for part of the day, or for no hours at all. Will employees have to use vacation or other paid time off if they want to be paid for the day, or will the company consider it a freebee?

4. Attendance. Will the absence be counted against employees in a no-fault or other attendance policy, or defeat any perfect attendance bonuses?

For more on inclement weather polices take a look at the Pennsylvania Labor & Employment Blog.

Note the effective date of the Ledbetter bill

From PointofLaw.com, on the effective date of the Ledbetter Fair Pay Act:

SEC. 6. EFFECTIVE DATE.

This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.

May 28th? The Supreme Court issued its Ledbetter ruling on May 29, 2007, so Lilly Ledbetter's suit was still pending then. So does she get another shot at her lawsuit?

It looks like the Ledbetter bill will completely wipe away the Supreme Court’s Ledbetter decision, as if it never even happened. President Obama has promised to sign this bill into law on Thursday, January 29.