A cautionary lesson in litigation management

10 years ago, an Atlanta restaurant fired its highest ranking female manager. Last month, a federal jury finally dismissed her sexual harassment case. The latest verdict was the third handed down by a federal jury in the last five years. In the interim:

• The employer won the first jury trial in 2004.
• The employee appealed, and the 11th Circuit sent the case back down for retrial, but ordered a mediation before case could be retried.
• At the second trial, the employee won a $2.05 million verdict.
• This time, the employer appealed, and the 11th Circuit again sent the case back down for retrial, with yet another court-ordered mediation.
• Facing insurmountable defense costs and having to post a bond to secure the multi-million dollar verdict on appeal, the restaurant went into bankruptcy.

Law.com quotes the plaintiff’s lawyer, Edward D. Buckley III: “The moral of the story is that there is real value to settling these kinds of cases for both parties. That is something that there were many occasions when it could have occurred, but unfortunately it didn't. The 11th Circuit urged us to engage in meaningful settlement discussions. At least one of the district judges involved in the case urged us [to settle] and tried to facilitate that. Unfortunately, it didn't happen.”

Let this case serve a lesson for all businesses. This case spun out of everyone’s control – the lawyers and the parties. If everyone had put emotion aside (and their is no doubt that three trials and two appeals over 10 years is fueled purely by anger or spite, and not common sense and reason), the plaintiff would have realized that a guaranteed something is better than a roll of the dice, and the employer would have realized that paying a settlement is better than losing everything on principle.

I’m not arguing that the parties should have caved as soon as the case was filed. Indeed, some cases can only be resolved by a trial. After that trial, however, the parties should have listened to the court and viewed the verdict for what it was -- an opportunity to settle, not a reason to fight on.

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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 (im)morality of layoffs?

Money, not morality, is the principle commerce of civilized nations.

--Thomas Jefferson

In the May 24 New York Times, ethicist Randy Cohen argues that it is unethical for American businesses to engage in mass layoffs:

These days such mass layoffs are sadly unsurprising, but are they ethical?… They are not, at least until more benign tactics have been exhausted….

To deprive thousands of people of their livelihood can have a catastrophic effect on them, their families and their communities. For a company to get through a recession, suffering may be unavoidable, but ethical management means minimizing that hardship, spreading the pain equitably and bearing some responsibility for its consequences….

Before adopting the ethics of the overcrowded lifeboat, before tossing thousands of non-millionaires over the side, gentler — and more equitable — methods must be tried. Everyone’s hours might be reduced, diffusing the pain. Dividends to stockholders can be eliminated. Pay cuts can be instituted company-wide, with the deepest reserved for the highest paid (that is, those most able to endure them).

Mr. Cohen is selling employers short. I work with a lot of companies, many of which have, with much regret, been forced to downsize their workforces in the past few months. I can assure you it is never a decision taken lightly, or without careful deliberation. Certainly, layoffs are an opportunity for employers to shed some dead weight. Many good employees are also impacted, though. Those businesses that can offer economic help to severed employees do so, in varying sized packages. Others have considered alternate plans, such as furloughs, alternate work schedules, or wage reductions.

For some businesses, however, whether because of the need of their operations or the composition of their workforces, layoffs are the only viable option. A paycheck for some is better than a paycheck for none.

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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? When it is lawful to take deductions from an employee’s pay?

For an employer to claim that an a professional, administrative, or executive employee is “exempt,” and therefore ineligible to receive overtime compensation, the employee must be salaried. An employee is paid on a salary basis when the employee receives the same amount of pay each pay period, without any deductions.

Despite the general rule against deductions from salaries, the Department of Labor’s rules permits employers to make deductions without risking an employee’s exemption in seven specific instances:

1. When an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability.   
   
2. For absences of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.   
   
3. While an employer cannot make deductions from pay for absences of an exempt employee for jury duty, attendance as a witness, or temporary military leave, the employer can offset any amounts received by an employee as jury fees, witness fees, or military pay for a particular week against the salary due for that particular week.
   
4. For penalties imposed in good faith for infractions of safety rules of major significance.    
   
5. For unpaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules imposed pursuant to a written policy applicable to all employees.  
   
6. For any time not actually worked during the first or last week of employment.
   
7. For any time taken as unpaid FMLA leave.
   

It is critical for businesses with salaried employees to familiarize themselves with these rules. A mistaken deduction could prove costly. Generally speaking, if an employer makes a deduction from the amount paid, the exemption will be lost during the time period during which the improper deduction was made. The lost exemption does not only apply to the affected employees, but also to all employees in the same job classification working for the same managers responsible for the actual deduction.

The Department of Labor also provides a safe harbor for employers that have a clearly communicated policy that prohibits the improper pay deductions, and which includes a complaint mechanism, reimburses employees for any improper deductions, and makes a good faith commitment to comply in the future.

Before you implement a policy or practice of docking the pay of salaried employees, it is best to consult with experienced employment counsel to evaluate employees’ job classifications and exemptions, to examine the proposed deductions, and to review or draft an appropriate safe harbor policy.

WIRTW #80

This week’s most popular topic is the Supreme Court’s AT&T v. Hulteen [PDF] decision. That case held: “An employer does not necessarily violate the PDA when it pays pension benefits calculated in part under an accrual rule, applied only pre-PDA, that gave less retirement credit for pregnancy than for medical leave generally.” I agree with Michael Fox that “[i]f the case had gone the other way, it is possible to imagine how it could have had broad ramifications. However, given its narrow holding, it seems unlikely to be very important beyond its impact on the parties.” For more details and commentary, click over to the following laundry list of employment blogs: California Workforce Resource Blog, Connecticut Employment Law Blog, Daily Developments in EEO Law, Delaware Employment Law Blog, Labor & Employment Law Blog, LawMemo Employment Blog, Nolo’s Employment Blog, SCOTUS Blog, Workplace Prof Blog, and World of Work.

Social networking and its impact in the workplace continue to be a hot topic among employment bloggers:

• Where Great Workplaces Start suggests that employees maintain separate on-line profiles for their personal and professional lives.

• BLR’s HR Daily Advisor provides a concise primer on workplace web 2.0 issues.

• HR World discusses the natural disconnect between employers and employees on the issue of social networking.

• The ABA Journal reports on the legal issues of Twitter.

• Dan Schwartz at the Connecticut Employment Law Blog compiled a list of 10 employment law twitterers to follow.

• For those that tweet, you can follow me @jonhyman.

In related news, Robert Ambrogi at the Legal Blog Watch notes that a New Zealand judge has okayed service of process by Facebook.

Sindy Warren at the Warren & Hays Employment Blog discusses the recent trend in courts protecting transgendered employees.

Donna Seale’s Human Rights in the Workplace gives the following very good advice – have regular harassment training.

Natalie Beck at the Employeescreen IQ Blog talks about the dangers that lurk when companies skip background checks.

Kris Dunn, The HR Capitalist, gives his very pro-business take on the EFCA’s binding arbitration requirements.

The Iowa Employment Law Blog lists some challenges HR will face this year.

Fair Labor Standards Act Law suggests that employers read the fine print in their EPL policies to check if wage and hour claims are covered. My guess, based on past experience, is that they are not.

Frank Roche’s KnowHR Blog asks, “How do you handle weirdos at work?”

Finally, Texas attorney Michael Maslanka at Work Matters quotes the Talmud for some words to live by for employers and employees alike: “What is hateful to you, do not to your fellow man. This is the law: all the rest is commentary.” In other words, follow the golden rule and all else should fall into place.

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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.

Supreme Court’s expanded pleading rules give employers added tool to combat lawsuits

Today, I am going to get a little academic, but I promise I’ll bring it back around at the end with some practical information for employers.

Two years ago, in Bell Atlantic Corp. v. Twombly [PDF], the U.S. Supreme Court ruled that to state a legal claim and survive a motion to dismiss, a legal pleading (the initial filing in a lawsuit) cannot simply recite the elements of a cause of action or make an unsubstantiated conclusion, but must set forth a claim that is “plausible on its face.” The Court explained:

Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the … claim is and the grounds upon which it rests. While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the “grounds” of his “entitlement to relief” requires more than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint’s allegations are true. (internal citations omitted).

For example, in discrimination case, I sometimes see complaints that simply say, “X was terminated because of his race in violation of Title VII.” While Twombly was an antitrust case, if it’s rationale extended to employment cases these types of pleadings would not suffice. Twombly, however, left open the question of whether it applied beyond the antitrust arena.

Earlier this week, the Supreme Court decided Ashcroft v. Iqbal [PDF], which extended the Twombly pleading rules to an unlawful detention case. In the wake of the Court’s expansion of Twombly outside the antitrust context, it is likely that its pleadings requirements will apply in all civil litigation. In other words, a discrimination plaintiff should no longer be able to simply speculate that discrimination occurred, or make bald, unsubstantiated conclusions. A discrimination plaintiff will have to plead sufficient, specific facts to at least put the employer on notice of what is alleged to have actually happened.

The Ashcroft decision has three big practical implications for employers:

1. Employees will be required to file much more detailed complaints, and employers will know at the earliest stages of the lawsuit exactly what is being alleged. Employers will no longer have to engage in expensive discovery just to learn the theory of the plaintiff’s case.

2. Employers will be able to make more accurate analyses of cases earlier. Earlier analysis of a case’s strengths and weaknesses will allow employers to decide early in the litigation whether a case is worth fighting, or should be settled earlier. Thus, companies should save defense costs.

3. More lawsuits should be dismissed for failing to state a claim. In theory, the less meritorious lawsuits will fall by the wayside, saving businesses the cost of defending nuisance lawsuits.

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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.

Alternative compensation plans pose wage and hour risks

Employees can be paid in many different ways: an hourly rate, an annual salary, by commission, by piece, a flat rate, with additional established or discretionary bonuses, or in some combination of any of the above. The more creative an employer becomes in how it compensates its employees, the more risks it takes under the wage and hour laws. Baden-Winterwood v. Life Time Fitness, Inc., decided earlier this week by the 6th Circuit, provides a good illustration of how certain alternate compensation schemes can jeopardize employees’ exemptions and render an employer liable for unpaid overtime.

Life Time Fitness paid its employees a pre-determined, semi-monthly base salary, in addition to monthly bonus payments based on year-to-date performance as set forth in a written bonus plan. For the years 2004 and 2005, the bonus plan permitted Life Time Fitness to make deductions from employees’ salary to recover prior bonus overpayments. In 2006, it amended the plan to provide that while it could still make semi-monthly salary deductions for overpayments, “[o]n an annual basis, in no case will the Guarantee Pay be lowered.”

The Sixth Circuit found that the 2004 and 2005 plans violated the FLSA, which does not permit salary deductions “for the reduction of guaranteed pay under a purposeful, incentive-driven bonus compensation plan.” Because the deductions were illegal, the employer could not claim the benefit of the FLSA’s exemptions for its employees during those years.

The loss of the exemptions in this case opened the employer to significant exposure for unpaid overtime. If you are considering implementing an alternate compensation scheme for your employees, also consider a review by experienced employment counsel to avoid a similarly expensive wage and hour miscue.

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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? Adopt the TEAM approach to fight unions

Whether the EFCA will become law, and in what form, is very much up in the air. Democratic support for the measuring is waning, and business organizations have united in an unprecedented level of opposition. There is no doubt that if card-check becomes law, labor unions will have a much easier time becoming certified in workplaces. Yet, it is unclear whether unions even need the EFCA. In 2007, unions won 60.1% of elections, compared to a mere 51.5% in 1997. In the first half of 2008, the number of elections won by unions increased to 66.8%.

Because unions have become increasingly aggressive, even without the EFCA, I recommend that employers adopt the T.E.A.M. approach to union avoidance:

Train supervisors
Educate employees
Accessibility
Modernize policies


1. Train Supervisors. If a union is organizing, supervisors are likely to be the first people to know. They will also be the people that rank-and-file employees will come to with questions or concerns. Thus, supervisors need to know how to report, monitor, and legally respond to union activity.


2. Educate Employees. Employees should not be told that the company is anti-union, but why it is anti-union – competitive wages and benefits; positive communication between management and employees; history of peaceful employee/management relations; management’s openness to listen to employees and handle their concerns without an intermediary; and an unwillingness to permit a third-party to tell the company and employees how to do their jobs.


3. Accessibility. Management should routinely round its employees to learn what is happening and what they are thinking. Management should walk the floor on a daily basis. It should also hold regular meetings with employees, whether in small sessions with HR or large town hall-style meeting.


4. Modernize Policies. In an ideal world, employee handbooks and other corporate policies should be reviewed and updated annually. I’ve yet to come across a company that does so this frequently. The threat of the EFCA is a perfect excuse to take a good, hard look at current policies. Do you have a written statement on unionization? An open door policy? An issue resolution procedure? Peer review? An employee bulletin board? An electronic communications policy? Most importantly, do you have a no solicitation policy? It is the single most important policy to help fight labor unions.
No program is foolproof. No matter what steps are taken, no matter the quality of employee relations, every company is at risk for a union organizing campaign. Businesses should strive to be an employer of choice for employees, and not an employer of opportunity for labor unions.

How to Stay Union-Free in a Union- Friendly World: PowerPoint now available

For those who were unable to attend last week’s Breakfast Briefing, you not only missed a free meal, but you also missed a timely discussion on union avoidance. The PowerPoint slides are below. You’re on your own for breakfast this morning.

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

View more presentations or Upload your own.

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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 #79

The newly launched Warren & Hayes Employment Law Blog, written by the Cleveland-based HR consulting company of the same name, discusses the discrimination liability risks inherent in searching employees’ on-line profiles. In other social networking news, Robert Ambrogi at the Legal Blog Watch discusses the Wall Street Journal’s recently drafted social networking policy for its employees. Workplace Privacy Counsel discusses whether there are any limits on how far employers can go in regulating employees’ private social networking profiles. Business Management Daily warns employers against overreacting to employees’ online presence.

Overlawyered let’s us know that academics are debating whether “heightism” should be added to the list of protected classes. (ugh).

WorkplaceHorizons reports on two recently-introduced bills that would amend the FMLA – one to repeal this year’s new regulations, and other to expand the permissible reasons for FMLA-leave.

Current Employment details the EEOC’s position that employee health risk assessments violate the ADA.

Molly DiBianca at the Delaware Employment Law Blog shares her thoughts on the effects of caregiver discrimination on dual-income households.

Dan Schwartz at the Connecticut Employment Law Blog, on issues to consider when settling employment disputes.

Bob Sutton, with some outside-the-box ideas on curbing employee theft.

PC Magazine’s Eric Griffin presents the 25 golden rules of e-mail.

Christopher McKinney at the HR Lawyer’s Blog digests a half-million dollar verdict for a transgendered employee whose job offer was rescinded after he showed up on the first day of work as a she.

The Evil HR Lady opines on the evils of draconian vacation policies.

The Washington Labor & Employment Wire reports on the EEOC’s recently announced regulatory agenda for 2009 and 2010. The highlights include regulations for GINA and the ADA Amendments Act.

Finally, the U.S. Chamber of Commerce’s Chamber Post discusses Ohio’s recent growth despite the stale economy.

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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.

“Who wants to see a 56-year-old stripper?”

Those were my wife’s words when I told her last night what I’d be writing about today. The EEOC is suing a Houston strip club for firing a 56-year-old dancer. According to the Houston Chronicle [h/t: ABA Journal]:

Mary Bassi, who was 56 at the time of her termination, worked at Cover Girls, where she was allegedly subjected to disparaging remarks. According to the lawsuit, which was filed last week in federal court, she was frequently called “old” by managers and endured comments about experiencing menopause and showing signs of Alzheimer’s disease.

According to Connie Wilhite, the EEOC lawyer in charge of the case, “It doesn’t matter what industry you work in. You are still protected by anti-discrimination laws.” While I agree that every individual has the right to be free from unlawful job discrimination regardless of one’s chosen occupation, I seriously question whether this lawsuit is a judicious use of our government’s resources. After all, to translate my wife’s question into legal terms, can anyone really dispute that age is a bona fide occupational qualification for a strip club employee?

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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 recover a stolen computer in four easy steps

Law.com reports that 60% of employees who are laid-off, fired, or quit  admit to stealing company data. I previously reported that it costs an average of $50,000 to replace a stolen computer, with 80% of that value coming from the recovery of sensitive, confidential, and proprietary information. When you put these two pieces of information together, it becomes increasingly apparent that businesses must take proactive steps to protect their technology and data.

According to a case recently decided by a Missouri federal court, employers can use the Computer Fraud and Abuse Act (CFAA) to recover a stolen laptop. The CFAA is a federal law that creates a private causes of action for individuals or businesses damaged by computer fraud. In Lasco Foods v. Hall & Shaw Sales & Marketing, the district court permitted the employer to pursue a claim under the CFAA against two ex-employees who failed to return their laptops after resigning to start a competing enterprise. The ability to use the CFAA in this context is an important weapon for employers, because it allows for the recovery of a variety of damages and costs, including forensic investigation fees incurred in examining the computer after its return.

Yet, litigation is just one step in an overall four-step plan I recommend to secure corporate technology from ex-employees:

1. Institute a strong Electronic Communication and Technology Policy, making clear that all data and equipment belong to the company, and must immediately be forfeited upon the end of employment.

2. Remind employees upon termination or resignation of their duty to return all data and equipment, including laptops.

3. If any data or equipment is missing, enlist the aid of an attorney to send a friendly, yet clear message that unless everything is returned immediately, the company will enlist the aid of a court.

4. Sue.

Notice that a lawsuit against the employee is step four, not step one. Going to court is the last resort. It should always be the last resort. It is expensive and time consuming. Yet, it many instances it is unavoidable. The CFAA, at least as some courts are interpreting it, provides employers with a key weapon in combating employee theft of computer equipment if one is left with no choice but to sue.

[Hat Tip: EBG Trade Secrets & Noncompete 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.

Do you know? Volunteerism under federal wage and hour laws

According to EVliving.com, one employer has come up with a creative idea to combat the current economic downturn. The CEO of Greenleaf Book Group, a publishing company, has decided that instead of laying off any employees, his company will simply require its employees to volunteer one hour of time per week to the company.

“Cutting one person from the team is losing one invaluable resource that helps make this entire company tick,” he said. “In the short term, it’s hurting morale and lowering the productivity of a department. In the long run it means the entire company’s time and money spent trying to make up for the loss-redistributing tasks and overburdening departments, struggling to make up the slack, dealing with the paperwork, and eventually putting additional man-hours toward rehiring and retraining. And of course, the toll layoffs take on the economy are tremendous.” … 

“Essentially, every employee is putting in one voluntary extra hour per day at work,” he explained “One extra hour to be used in the most advantageous way possible: finishing up projects, having a meeting with a client or vendor, assisting a coworker, getting hands dirty working in another department. Even cleaning a desk or organizing files, if it helps improve efficiency.” 

The numbers work, he said:

• 30 employees x 1 hour per day
• Multiplied by a 5 day workweek
• Equates to 150 extra hours
• Divide that number by 40 hours per standard workweek
• The result is 3.75, the equivalent of almost 4 full time employee work weeks
• For any company, an extra hour increases the work week from 40 to 45 hours and is a simple 12.5% increase. 

Before you decide to copy Greenleaf’s idea in your own workplace, consider that it almost certainly violates federal wage and hour law. The FLSA requires employees to be paid for all hours worked. Requiring employees to work an hour without pay violates this law. For private employers, there is no such thing as a volunteer employee. All work hours must be paid hours.

To demonstrate the anachronistic nature of the FLSA, however, consider that Greenleaf could have achieved the exact same goal without violating any laws. Instead of asking for an hour of work without pay, it could have simply reduced each employee’s effective weekly rate of pay by one-fortieth. In other words, one could figure out what hourly rate of pay would get an employee to 39 hours worth of pay for 40 hours of work. There is nothing illegal about prospectively reducing pay, as long as the hourly rate is above the minimum wage.

[Hat tip: Workplace Prof Blog]

Sleeping on-the-job costs security guard his disability discrimination case

You would think that the ability to awake on one’s watch is an important attribute for a security guard. One security guard working for a Cleveland hospital believed that his employer had a duty to reasonably accommodate the side effect of his heart medication by permitting him to sleep during his shift. Rongers v. University Hospitals of Cleveland (Cuyahoga County Court of Appeals, 5/7/09) [PDF] concluded differently.

Rongers, a night-shift sergeant at University Hospitals, was prescribed a beta blocker following a heart attack. According to Rongers, the medication “made him light-headed and tired. He had difficulty sleeping during the day and difficulty staying awake during his work hours.” Thus, he took naps “when needed.” He admitted that he napped while on duty five or six times, sometimes for as long as two hours at a stretch. When the hospital caught time on tape, it fired him. The court subsequently dismissed his disability discrimination lawsuit, a decision that the court of appeals affirmed:

Rongers admitted sleeping on the job meant that he was not performing his essential duties as a security guard. Rongers testified that an employer should not tolerate sleeping on the job. He said that he never held a job where it was acceptable to sleep while on duty and understood that when he did sleep on the job, he was not working. He further conceded that when he performed part-time security work outside of UH he actually discharged a member of his team for being asleep on the job. This evidence shows, as a matter of law, that Rongers could not safely and substantially perform his job duties when he required periods of sleep while on duty…. [A]n employee who requires extended periods of sleep while on the job cannot be performing the essential duties of the job.

It’s hard to argue with the result in this case, but it nevertheless makes an important point. Just because an employee has a medical condition does not mean that the employer must make an accommodation for that employee. Many conditions simply cannot be accommodated, given the nature of the job and the issue that must be addressed.

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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 #78

Tomorrow marks the Ohio Employer’s Law Blog’s two-year anniversary. In those two years, I’ve written 604 posts (a number that looks ever more amazing to me now that I’m looking at it on the screen), amassed more than 100,000 readers, hundreds of subscribers, and made countless friends. Thanks to everyone who’s taken the time to subscribe, read, comment, email, call, link, and even disagree with me. I look forward to continuing to bring everyone the latest employment law news and information from an unabashedly pro-business slant.

My favorite story of the week comes from Jeffrey Hirsch at the Workplace Prof Blog. I’ve written before about some alternatives to layoffs, including salary reductions, reduced work schedules, and furloughs. It seems one employer has taken this idea to the extreme. Facing a need to layoff employees, and blaming President Obama for his problems, this boss selected employees for layoff by whose cars had Obama bumper stickers.

Philip Gordon at the Workplace Privacy Counsel has a Q&A on the intersection between the swine flu and workplace privacy rights.

Dan Schwartz at the Connecticut Employment Law Blog shares his own thoughts on responding to an administrative charge, which differ from mine.

The EFCA Report reports on a compromise that may be in the works, removing the controversial card check provision from the EFCA and replacing it with a shortened 21-day election period, and requiring first-contract mediation instead of binding arbitration. Also, LaborPains.org digests George McGovern’s opposition to the EFCA’s arbitration provision.

Molly DiBianca at the Delaware Employment Law Blog summarizes the new notice requirements under the FMLA’s recent regulatory change.

Where Great Workplaces Start posts some information on implementing a drug-free workplace policy.

Paul Mollica’s Daily Developments in EEO Law, discussing a recent 6th circuit disparate impact case.

Kris Dunn, The HR Capitalist, attempts to answer an age old question – when an employee resigns, should you accept or reject a two-week notice?

The Word on Employment Law with John Phillips has an interesting take on whether an employer’s refusal to hire a white supremacist would violate Title VII’s prohibition against religious discrimination.

The FMLA Blog answers whether you can terminate an employee who has asked for FMLA-leave. Point of Law succinctly provides its own answer to this question, “offer them bigger exit packages.”

Nick Fishman at the Employeescreen IQ blog discusses a potential problem in hiring – what if you cannot obtain a timely verification of prior employment because the prior employer downsized and has no one to respond to your request?

The Business of Management discusses whether management can ever really quell an employee rumor mill about layoffs.

Today’s Workplace, on the Arbitration Fairness Act and ending forced arbitration of claims.

HR World reports on the challenge of work-life balance for working moms. Meanwhile, Carolyn Elefant at the Legal Blog Watch alerts everyone to a piece that will air on 20/20 tonight about “whether the Pregnancy Discrimination Act actually hurts women by deterring businesses from hiring them to begin with.”

Finally, since Sunday is Mother’s Day, I’m sharing Michael Mislaka’s piece about how his mom made him into the employment lawyer he is today.

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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 chimes in on swine flu with guides on how to prepare and remain Title VII/ADA compliant

We’re well into week two of the swine flu, and this story continues to have legs. Now, the EEOC is offering its opinion on how employers can prepare for a workplace outbreak while remaining compliant with employment discrimination laws. It released two documents: Employment Discrimination and the 2009 H1N1 Flu Virus (Swine Flu) and ADA-Compliant Employer Preparedness For the H1N1 Flu Virus.

The former simply reminds employers, “Title VII of the Civil Rights Act prohibits employment discrimination on the basis of national origin, for example, discrimination against Mexicans.” In other words, do not discriminate against Mexicans simply because there is a slight chance they might be carrying the virus.

The latter goes more detail about how to prepare a workplace for an outbreak within the limits of the ADA. In addition to running through the general rules dealing with disability-related medical inquiries and medical exams, the agency also provides a brief, but helpful FAQ on issues such as how to ask employees about exposure, infection control practices, personal protective equipment, and telecommuting.

The most useful aspect of the EEOC’s guidance is a sample ADA-Compliant Pre-Pandemic Employee Survey. It is designed to assist employers in asking employees about factors, including chronic medical conditions, that may cause them to miss work in the event of a pandemic:

Directions:  Answer “yes” to the whole question without specifying the reason or reasons that apply to you.  Simply check “yes” or “no” at the bottom. In the event of a pandemic, would you be unable to come to work because of any of the following reasons: If schools or day-care centers were closed, you would need to care for a child; If other services were unavailable, you would need to care for other dependents; If public transport were sporadic or unavailable, you would be unable to travel to work, and/or; If you or a member of your household fall into one of the categories identified by CDC as being at high risk for serious complications from the pandemic influenza virus, you would be advised by public health authorities not to come to work (e.g., pregnant women; persons with compromised immune systems due to cancer, HIV, history of organ transplant or other medical conditions; persons less than 65 years of age with underlying chronic conditions; or persons over 65). Answer:   YES __________   NO __________

 

As I said last week, businesses should prepare for an infectious disease outbreak, but not panic over the possibility. This EEOC guidance, while not groundbreaking, does provide employers another arrow in their quiver of preparedness.

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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.

Dealing with the AWOL employee: What is “reasonable” employee notice for FMLA leave?

Lots of businesses have zero-tolerance no-call/no-show policies. Under such a policy, if an employee is AWOL from work for a predetermined number of consecutive days, that employee is considered to have abandoned his or her job and is terminated. Under such a policy, an employee is typically considered AWOL if he or she fails to call-in and report the absence prior to the start of the scheduled shift.

What happens, though, if an employee’s absence is caused by an unforeseen medical condition (to be topical, for example, the swine flu)? If the employee wants these absences to be protected by the FMLA, how much notice does the employee have to provide an employer? Or, to examine this question from the other side, when can an employer discipline or discharge an AWOL employee?

The recent amendments to the FMLA’s regulations answer these questions and provide employers with some guidance. According to section 825.303 of the FMLA’s regulations:

When the approximate timing of the need for leave is not foreseeable, an employee must provide notice to the employer as soon as practicable under the facts and circumstances of the particular case. It generally should be practicable for the employee to provide notice of leave that is unforeseeable within the time prescribed by the employer’s usual and customary notice requirements applicable to such leave….

When the need for leave is not foreseeable, an employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances.

A recent opinion letter drafted by the Department of Labor’s Wage and Hour Division [PDF] explained how these rules apply to enforcing call-in procedures:

Where an employer’s usual and customary notice and procedural requirements for requesting leave are consistent with what is practicable given the particular circumstances of the employee’s need for leave, the employer’s notice requirements can be enforced…. Thus, in the example … of an employer policy requiring employees to call in one hour prior to their shift to report absences and an employee who is absent on Tuesday and Wednesday, but does not call in on either day and instead provides notice of his need for FMLA leave when he returns to work on Thursday, it is our opinion that unless unusual circumstances prevented the employee from providing notice consistent with the employer’s policy, the employer may deny FMLA leave for the absence.

What does all this mean for your business’s call-in procedures and no-call/no-show policy?

1. Reasonable, non-discriminatory policies will be enforced.

2. Unless an employee is completely incapacitated or otherwise unable to call-in or have someone else call-in for him or her, an employer does not have to excuse a failure to abide by the policy.

3. Call-in procedures should allow for someone other than the employee to call-in and report an unscheduled absence.

4. If an employee legitimately cannot call-in because of “unusual circumstances,” the employee must do so as soon as reasonably practical.

5. If the employee fails to follow these rules, the employer can deny FMLA leave for the absences, and discipline or discharge accordingly pursuant to its own internal rules and policies.

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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? 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.