Who is Craig Becker and why should you care?

Craig Becker is President Obama’s nominee to the National Labor Relations Board. He is also the Associate General Counsel of the Service Employees International Union, the country’s fastest growing labor union. SEIU President Andy Stern is one of the most outspoken proponents of the Employee Free Choice Act.

Prior to being the SIEU’s in-house lawyer, Mr. Becker was a law professor at UCLA. During his academic life, he authored a 1993 article in the Minnesota Law Review, in which he argued:

• Traditional notions of democracy should not apply in union elections.

• Employers should be allowed to challenge union elections, even with evidence of union misconduct.

• Employers should be prohibited from placing observers at the polls to challenge ballots.

• Employer captive audience meetings should be grounds for overturning elections, and must grant unions equal access to company property.

It is unclear which of these ideas – including the EFCA for which the SEIU so strongly advocates – Mr. Becker things he could accomplish by administrative fiat as a member of the NLRB.

On February 9, Senate Republicans successfully filibustered Mr. Becker’s nomination, effectively blocking his appointment. In the words of Senate Republican Ben Nelson:

Mr. Becker’s previous statements strongly indicate that he would take an aggressive personal agenda to the NLRB and that he would pursue a personal agenda there, rather than that of the administration. This is of great concern, considering that the board’s main responsibility is to resolve labor disputes with an even and impartial hand.

Now word has come that President Obama may make Mr. Becker a recess appointment to fill the three-year-old vacancy on the NLRB. This news comes on the heals of Vice President Biden’s comments to the AFL-CIO that the administration will “get [the EFCA] done.”

All of these developments should be sobering to businesses. And, the fact remains that statistics show that labor unions don’t need the help. According to recent NLRB data [pdf], labor unions win-rates in secret ballot elections is at its highest level in decades, at 66%. If Mr. Becker is appointed to the NLRB, expect his number to increase dramatically.

What can you legally do to prepare for the wave of union organizing that is on the horizon? Consider that according to the AFL-CIO Union Handbook for Organizers, the following 6 factors are likely to lower the chance of a successful organizing campaign:

1. A belief by employees that the boss is not taking advantage of them.

2. Employees who have pride in their work.

3. Good performance records kept by the employer, which reinforces the recognition and appreciation of employees’ efforts and their feelings of job security.

4. No claims of high-handed treatment, but instead firm, fair, and warranted discipline.

5. No claims of favoritism, other than that is earned through work performance.

6. Supervisors who have good relationships with subordinates.

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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.

Avoiding shifting explanations avoids claim of pretext

Rep. Eric Massa resigned from Congress last week. Depending on the interview and the day, he either resigned: for health reasons, because of allegations he inappropriately touched a male aide, or because he, a Democrat, voted against the health care bill. Three very different reasons over the course of a week. Can we believe any of them, given these shifting explanations?

You may be wondering, what does Massa’s political downfall have to do with employment law? It serves as an excellent illustration of the dangers of shifting explanations in discrimination litigation.

For a plaintiff to succeed in a discrimination case, he or she must show that the employer’s stated reason for the challenged decisions was a pretext (i.e., a lie or a cover-up) for discrimination. One of the easiest ways for a plaintiff to establish pretext is to show that the employer’s explanation for the decision changed over time. Shifting reasons cast a cloud of doubt over the veracity of the explanation and the legitimacy of the decision. Once the fact-finder has reason to disbelieve the employer’s explanation, the case is sunk. As the United States Supreme Court stated in St. Mary's Honor Center v. Hicks, “the factfinder’s disbelief of the reasons put forward by defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may … show intentional discrimination.”

The takeaway – it is important to have your reason for the decision pinned down at the time the decision is made. Further, the reason must remain reasonably consistent for the lifespan of the case. You cannot offer the employee one reason, have another written in the personnel file, provide the EEOC another in the position statement, and have the decision maker tell yet another at deposition. At best, these shifting explanations will buy you a jury trial; at worst, they will result in a large jury verdict.

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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.

Hot off the press: 6th Circuit holds that discrimination laws apply to a teacher at a religious school

Certain employees of religious institutions are exempted from employment discrimination laws under what is known as the “ministerial exception.” It is an off-shoot of a religious institution’s constitutional right to be free from judicial interference in the selection ministerial employees. For this exception to bar an employment discrimination claim: (1) the employer must be a religious institution, and (2) the employee must be a ministerial employee. In EEOC v. Perich [pdf] (decided today), the 6th Circuit for the first time addressed the issue of the reach of this exception to a teacher at a religious school.

The court distinguished between an employee who primarily teaches secular subjects, and one who teaches primarily religious subjects or had a central role in the spiritual or pastoral mission of the church. The Court concluded that Perich –who only spent 30-45 minutes out of each 7-hour day on religious subjects – was not a ministerial employee. “The fact that Perich participated in and led some religious activities throughout the day does not make her primary function religious.” Thus, Perich was able to proceed with her ADA claim against her employer.

This case underscores that religious intuitions do not receive a free pass from discrimination laws. Instead, the application of these laws will depend on an individualized assessment of each employee’s job duties. Unless an employee’s primary function is “spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship,” that employee is entitled to the protections afforded by the discrimination laws.

If parochial schools believed they were exempt from anti-discrimination laws, they should be working with their employment attorneys to update their handbooks with EEO and harassment policies, and to train all of their employees as soon as possible on these issues.

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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.

Sniffing out the dangers of the new ADA

OnPoint News and Overlawyered report that the City of Detroit has settled a disability discrimination lawsuit brought by an employee with a perfume allergy. She had claimed that the city failed to reasonably accommodate her allergy after she complained that a co-worker’s perfume made it difficult for her to breathe. Per the settlement, the employee will receive $100,000, and the city will adopt a policy prohibiting employees from wearing scented products. Even though this lawsuit was brought prior to the ADA’s amendments took effect, it nevertheless serves as a good illustration of the breadth of the new ADA.

The ADA amendments are intended to make it much easier for individuals to demonstrate that they meet the definition of “disability.” To have a disability, an individual must be “substantially limited” in performing a “major life activity” as compared to most people in the general population. An impairment need not prevent, or even significantly or severely restrict, the individual’s performance of a major life activity The determination is supposed to be a common-sense assessment based on comparing the individual’s ability to perform a specific major life activity with that of most people in the general population. Major life activities include daily functions, as well as the operation of major bodily functions (which would include, for example, the respiratory system).

If an employee has a chemical sensitivity to certain smells, that allergy will likely substantially affect the employee’s respiratory system, thus rendering the employee “disabled” under the ADA.

The focus in ADA cases has shifted from the legal argument of whether an employee’s medical condition rises the level of an ADA-protected disability, to the factual issue of whether the employer reasonably accommodated that disability. Employers need to be very aware of this change in focus. Managers and supervisors should be trained in their obligations to engage in the interactive process with employees to determine what reasonable accommodations – if any – can be made to enable the employee to perform the essential functions of the job. Lots more employees will be able to claim the protections of the ADA for lots more medical issues. How managers and supervisors respond to requests for reasonable accommodations will dictate the strength of an employer’s position in ADA lawsuits going forward.

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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 #117

One story I missed this week was the extension of the federal and Ohio COBRA subsidies. These bloggers, however, are picking up the slack:

• COBRA Subsidy Extended...Again...And Again? – from Pennsylvania Labor and Employment Blog

• Obama Signs Bill Temporarily Extending COBRA, Unemployment Benefits – from Washington D.C. Employment Law Update

• President Signs Bill Extending COBRA Subsidy For One Month; To be Applied Retroactively – from Dan Schwartz’s Connecticut Employment Law Blog

• COBRA Subsidy Extended To March 31, 2010 and Retroactive to February 28, 2010 – from Minnesota Labor & Employment Law Blog

• Ohio extends State Mini-COBRA Health Insurance Continuation Coverage From 12 to 15 Months – from Employer Law Report

Wage & Hour

• Wage and Hour Litigation: Can Class Actions And Collective Actions Coexist? – from Hunton Employment & Labor Law Perspectives™

• Plaintiff’s Bar Seeks To Circumvent Class Action Fairness Act In FLSA Collective Actions – from Wage & Hour - Development & Highlights

• Tip Pool May Include Employees Not Customarily Tipped If No Tip Credit is Taken – from Wage & Hour Defense Blog

• Employers Should Conduct Internal Wage & Hour Audit: 250 New DOL Investigators Graduating – from Debra Reilly’s Workplace Investigations Blog

• Let's Stop Shooting Ourselves in the Foot, Compliance-Wise – from Ann Bares’s Compensation Cafe

Labor

• Recess NLRB Appointment Coming? – from Mark Toth’s Manpower Employment Blawg

• Union’s Win First Concession from Obama – from The Ohio Labor Lawyers

• The NLRA...Not Just for Unionized Workplaces – from Southwest Florida HR Law & Solutions

Litigation

• An Employer Cannot Control a Manager’s Lawyer – from Tom Crane’s San Antonio Employment Law Blog

• Perception and Third Party Retaliation Claims Still Alive in DC District Court – from Michael Fox’s Jottings By An Employer’s Lawyer

• Austin Surveillance Camera Maker Says “Hey, You Ripped Us Off When We Weren't Looking” – from Trade Secrets Blog

• SCOTUS Guns Down “Employment Law Blockbuster” – from Philip Miles’s Lawffice Space

• “Please Sue Me” (Your Managers Talking?) – from HR Daily Advisor

• Is The Recession Making Jurors More Anti-Plaintiff? from California Labor and Employment Defense Blog–

• Negotiating with Difficult People: Taking Your Own Part in It – from Victoria Pynchon’s Settle It Now Negotiation Blog

Human Resources

• What is email really costing your company? – from Jennifer Hays at Warren & Hays Employment Law Blog

• Tie handbooks’ rules and policies to underlying company values – from Work Matters

• Recruiting with Social Networking Sites: What you DO know can hurt you – from Nick Fishman at employeescreenIQ Blog

• Sign of the Economic Times: Firing Workers for Getting Snowed In – from The Business of Management

• Reasons Some HR Departments Make Disastrous Decisions – from Michael Haberman’s HR Observations

• If You Don’t Ask for Feedback, How Do You Know How You’re Doing? – from Molly DiBianca at Delaware Employment Law Blog

• Tiger, The Man Gene and ADAAA – from The Word by John Phillips

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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.

It’s time to bring Ohio’s discrimination law in line with its federal counterparts

At Jottings By An Employer’s Lawyer, Michael Fox discusses pending legislation in Missouri that would bring that state’s employment discrimination laws into line with their federal counterparts. Ohio needs the same reforms.

There are at least four key areas in which Ohio law is out of line with its federal counterparts. This dissymmetry creates an uneven playing field, in which employees are encouraged to forum shop their claims.

1. Exhaustion of administrative remedies. Under Ohio law, a plaintiff can proceed directly to court without first filing any claims with the state or federal agencies. The federal statutes require that an employee file a charge with the EEOC before filing a complaint alleging discrimination in court.
   
2. Time periods for filing claims. Under Ohio law, an employee has 6 years to file all types of discrimination claims except age claims, for which they have 180 days to file. Under federal law, an employee has 300 days to file an agency charge, and an additional 90 days to file a lawsuit after final disposition by the agency.
   
3. Supervisor and manager individual liability. Under Ohio law, managers and supervisors can be held personally liable for their own acts of discrimination. This type of liability does not exist under federal law.
   
4. Damage caps. Damages for employment discrimination claims are uncapped under Ohio law. Under federal law, compensatory and punitive damages are capped based on the size of the employer, and max out at $300,000 for each.
   

These reforms are needed to: i) eliminate the confusion that exists between two different procedural schemes to remedy the same alleged conduct; ii) remedy the problems created by employees shopping their claims between state and federal forums; and iii) remove disincentives for businesses to choose Ohio as their place of operations.

Employers often don’t stand alone in lawsuits – let’s talk about manager and supervisor liability

Ohio’s discrimination law is quirky when compared to its federal counterparts. For one thing, an Ohio employee does not need to exhaust his or her remedies with the Civil Rights Commission before filing a discrimination lawsuit in court. Also, under Ohio law, supervisors and managers can be held personally liable for their own acts of discrimination.

Discrimination laws, however, are not the only laws that provide for this individual liability. Other federal statutes – namely the FLSA, the FMLA, and the Equal Pay Act – also provide for manager and supervisor liability. The FMLA’s regulations [section 825.104(d)] explain why managers and supervisors can be personally liable under these statutes:

An “employer” includes any person who acts directly or indirectly in the interest of an employer to any of the employer's employees. The definition of “employer” in section 3(d) of the Fair Labor Standards Act (FLSA), 29 U.S.C. 203(d), similarly includes any person acting directly or indirectly in the interest of an employer in relation to an employee. As under the FLSA, individuals such as corporate officers “acting in the interest of an employer” are individually liable for any violations of the requirements of FMLA.

This week, a Pennsylvania federal court explained the scope of this individual liability. In Narodetsky v. Cardone Industries (as discussed on law.com), the federal court permitted FMLA claims to proceed against the defendant’s HR manager, benefits manager, and plant manager, as well as its president and CEO. The court concluded that anyone who exercises control over plaintiff in the termination or medical leave decisions can be liable under the FMLA. At least one Ohio federal court – in Mueller v. J.P. Morgan – reached this same conclusion. Extrapolating this rule to the FLSA, individual liability would extend to anyone who exercises control over a pay decision.

Individual liability has significant implications for how employers litigate FMLA and FLSA cases. If a supervisor, manager, or executive is named in a lawsuit, you and your counsel need to determine quickly whether the individual(s) can be represented by the same lawyer as the company, or if there is a conflict. This issue is complicated when an individual has left your organization, and exponentially complicated when the departure was on bad terms.

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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? The duty of loyalty: illegal competition vs. legal preparation

There are right ways and wrong ways for an employee to leave your company. Just because an employee is not subject to a noncompetition agreement does not mean that he or she cannot be liable for mistakes made on the way out the door. In fact, each and every employee owes his or employer a duty of loyalty up to the moment he or she ceases employment.

Your employee may prepare to compete against you while still in your employ without violating this duty of loyalty. There are many reasons why an employee may choose to prepare to compete while still employed. Some need the income provided by ongoing employment. Some want a degree of certainty that their new competitive venture will be ready to operate. Some may derive an eventual competitive advantage from continued association with their present employer (such as knowledge of pricing or business plans, or ongoing associations with key employees, customers, and vendors).

There are certain steps that an employee can legally take to prepare to compete without violating this duty of loyalty, even while still employed and even if done stealthily:

• Incorporating the new firm.

• Arranging for space and equipment.

• Securing financing.

• Making future business plans.

But, those preparation are subject to certain legal limits while still employed. The duty of loyalty prohibits employees from doing any of the following while still your employee:

• Using your property (computers, for instance) to prepare to compete.

• Using confidential information or trade secrets to prepare to compete.

• Starting the competing operation.

• Soliciting employees or customers for the new enterprise.

• Holding back business opportunities or diverting them to the new enterprise.

What can you do to prevent employees from engaging in these illegal activities? Consider these 6 ideas.

1. Require that key employees sign noncompetition agreements.

2. Consider requiring a wider subset of employees sign non-solicitation agreements.

3. Have all employees sign confidential information and trade secret policies, or, at a minimum, incorporate these policies into your employee handbook.

4. Incorporate statements about employee loyalty into the handbook.

5. Do not accept notice periods upon resignation for any employee who you think is a risk to compete.

6. Consider forensic examinations of computers and email accounts for any employee you reasonably believe was engaging in unlawful conduct during his or her employment.

These tips will not magically transform a disloyal employee into your lap dog. They will, however, place you in a position to hold the disloyal employee accountable for his or her actions.

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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.

Is it wrong to “friend” your boss on Facebook?

Mashable reports on a recent survey conducted by Liberty Mutual’s Responsibility Project, in which 56% of Americans reported that “it’s ‘irresponsible’ to friend your boss on Facebook, while 62% of bosses agree it’s wrong to friend an employee.” These numbers simply beg the question – what does your social media policy say about this issue? Here’s 5 suggestions (with attribution for the first three to Molly DiBianca at the Delaware Employment Law Blog):

1. Anything goes. Any employee can friend any other employee regarding of rank or position.

2. Supervisors are prohibited from friending direct reports, but employees can friend their supervisors (who can choose whether to accept the request).

3. Supervisors and their reports cannot be Facebook friends, regardless of who initiates the request.

4. Employees are only permitted to be Facebook friends with their peers. No one can friend anyone higher or lower on the org chart.

5. Employees are expressly prohibited from being Facebook friends with any co-workers, regardless of position.

The option you choose has a lot more to do with your corporate culture than what is legal or illegal. Your choice, however, will impact certain legal issues, such as harassment liability.

Regardless of which option you choose, you should choose one to incorporate into your social media policy. You don’t have a social media policy? To get started, I suggest Drafting a social networking policy: 7 considerations.

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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 #116

This morning on The Proactive Employer I had an engaging chat with Stephanie Thomas on the topic of statistics and reduction in force. To listen to or download Stephanie’s podcast, you can visit The Proactive Employer’s website. I also understand that Stephanie’s podcasts are available on iTunes. I also recommend reading Stephanie’s thoughts on Planning and Executing a Reduction in Force: A 10-Point inspection.

Here’s the rest of the best I read this week:

Discrimination & Harassment

• Ricci redux? Supreme Court hears another fire department race case – from Sindy Warren at the Warren & Hays Employment Law Blog

• Family Responsibilities Discrimination Litigation Update 2010 – from WorkLife Law Blog

• Sexual Harassment Investigation: Preserve the Evidence – from Debra Reilly’s Workplace Investigations Blog

• Second Circuit Addresses Effectiveness of Sexual Harassment Policy – from Employer Law Report

Competition & Trade Secrets

• Preparing to Compete with a Former Employer – from Trade Secrets and Noncompete Blog

• Steps to Minimize Chances of a Noncompete Fight – from Employment Law Blog

• Eight ways to guarantee yourself a noncompete lawsuit – from Jay Shepherd’s Gruntled Employees

• Average Trade Secrets Data Theft Costs $2 Million – from Trade Secrets Blog

Wage & Hour

• 5 Tips For Avoiding Wage & Hour Lawsuits – from Becky Regan at Compensation Cafe

• You Can’t Avoid Paying Overtime Wages By Splitting Up An Employee’s Tasks – from Overtime Advisor

• Unclassy Action Lawsuit? – from Abovethelaw.com

• Business Under Assault: Increased Regulations and Enforcement Proposed – from Michael Haberman’s HR Observations

Social Media

• GINA and Social Media – from Adria Martinelli at Delaware Employment Law

• More Jury Instructions to Deal With Social Media in the Courtroom – from Molly DiBianca’s Going Paperless

• Social Media Guidelines and Policies: Do Your Employees Know the Ground Rules Too? – from Dan Schwartz’s Connecticut Employment Law

• Americans time spent on social media sites up 210% in 2009 – from Real Lawyers Have Blogs

Background Checks

• Oregon Legislature Bans Workplace Credit Checks – from Dennis Westlind’s World of Work

• Cleveland Heights Women Forges Background Checks – from Jason Morris at employeescreenIQ Blog

Human Resources

• Two Predictors of a Good Hire: Passion, and How They Treat the Receptionist – from The Business of Management

• The Giving Tree: Treating Talent You've Outgrown with Respect – from Kris Dunn, The HR Capitalist

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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.

Access to federal court just got a little bit easier for corporations

Employers like to be in federal court. According to a recent study by the American Constitution Society, plaintiffs only win 15% of the time on employment discrimination suits in federal court. Thus, it is often critical for employers to have their cases heard in federal court.

Federal courts, however, are courts of limited jurisdiction. There are two main avenues to get a case into federal court—lawsuits premised on a federal statute (known as federal question jurisdiction), and lawsuits with more than $75,000 in controversy where no defendants hail from the same state as any plaintiff (known as diversity jurisdiction). Whenever a party is sued in state court, that party may remove the suit to federal court, provided the federal court would otherwise have jurisdiction.

For purposes of diversity jurisdiction, a corporation is a citizen of its state of incorporation and the state where it has its principal place of business. When a large corporation does business in a number of states, however, determining its “principal place of business” often presents courts with a challenge. On Tuesday, in Hertz Corp. v. Friend, the United States Supreme Court decided what “principal place of business” means:

We conclude that “principal place of business” is best read as referring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. It is the place that Courts of Appeals have called the corporation’s “nerve center.” And in practice it should normally be the place where the corporation maintains its head-quarters—provided that the headquarters is the actual center of direction, control, and coordination, i.e., the “nerve center,” and not simply an office where the corporation holds its board meetings (for example, attended by directors and officers who have traveled there for the occasion).

Why is this case important to employers?

1. As noted above, employers like to be in federal court. This case expands employer’s access to federal court by limiting the number of states in which it can be found to be a citizen for diversity purposes. By limiting a corporation’s principal place of business to the corporate nerve center, corporations will be able to remove a greater number of lawsuits.

2. Employers only have 30 days after receipt of a state court lawsuit to remove the case to federal court. The determination of whether to remove a case has to be made quickly. Therefore, it is important to get counsel involved in the litigation as early as possible so that the removal date—which cannot be extended under any circumstances—is not missed.

For additional analysis of this opinion, I suggest the following:

• Identifying corporate “nerve centers” – via SCOTUSBlog

• U.S. Supreme Court Breathes Life Into Removal Statute – via What’s New in Employment Law?

• Today, all 9 Justices embrace a clear rule over a more nuanced and litigation-breeding interpretation – via Althouse

• Nine-Zip for Common Sense – via The California Civil Justice Blog

• Supreme Court Applies "Nerve Center" Approach to Diversity Jurisdiction – via Washington DC Employment Law Update

• The Supreme Court and Federal Jurisdiction Law – via ChamberPost

• High Court Makes it Harder for Plaintiffs to Avoid Federal Court in Contract Cases – via Point of Law

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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.

Calculating the rolling 12-month FMLA leave entitlement

As I’ve previously discussed, the FMLA allows for 4 different ways for employers to calculate its employees’ 12-week leave entitlement:

1. Based on a calendar year.
2. Based on some other defined and fixed 12 month period.
3. Based on the 1st day an employee uses FMLA leave.
4. A rolling 12-month period, measured backward from the date an employee uses any FMLA leave.

There is no doubt that for employers the last option – the rolling 12-month period – is both the administratively burdensome and the most advantageous.

Under this “rolling” 12-month period, each time the employee takes FMLA leave, the remaining leave entitlement is the balance of the 12 weeks that has not been used during the immediately preceding 12 months. The FMLA’s regulations provide some insight into how this works in practice:

For example, if an employee has taken eight weeks of leave during the past 12 months, an additional four weeks of leave could be taken. If an employee used four weeks beginning February 1, 2008, four weeks beginning June 1, 2008, and four weeks beginning December 1, 2008, the employee would not be entitled to any additional leave until February 1, 2009. However, beginning on February 1, 2009, the employee would again be eligible to take FMLA leave, recouping the right to take the leave in the same manner and amounts in which it was used in the previous year. Thus, the employee would recoup (and be entitled to use) one additional day of FMLA leave each day for four weeks, commencing February 1, 2009. The employee would also begin to recoup additional days beginning on June 1, 2009, and additional days beginning on December 1, 2009. Accordingly, employers using the rolling 12-month period may need to calculate whether the employee is entitled to take FMLA leave each time that leave is requested, and employees taking FMLA leave on such a basis may fall in and out of FMLA protection based on their FMLA usage in the prior 12 months. For example, in the example above, if the employee needs six weeks of leave for a serious health condition commencing February 1, 2009, only the first four weeks of the leave would be FMLA-protected.

Choosing the rolling 12-month period will add some administrative burden to your FMLA management, but you will be repaid by the fact that employees cannot double-dip by taking more than 12 weeks of contiguous leave because there should not be an overlap of leave years.

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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? Administrative employees vs. the administrative exemption

Nothing in employment law has a more misleading name than the administrative exemption in the Fair Labor Standards Act. Employers routinely mis-believe that if an employee performs administrative tasks, that employee is exempt from being paid overtime under the FLSA. In fact, the administrative exemption only applies to a narrow group of employees – those whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and which includes the exercise of discretion and independent judgment with respect to matters of significance.

The following story from the National Law Journal illustrates the risks of confusing employees who perform administrative functions and employees who are exempt under the FLSA:

When legal secretary Karla Osolin used to work at Jones Day, she was paid a salary and overtime.

That's what caused red flags to go up when she took a job in September 2008 with Ohio intellectual property boutique Turocy & Watson. Now the firm faces a suit alleging wage-and-hour violations and stands accused of misclassifying Osolin and many others to avoid paying overtime.

Examples of some professions that the Department of Labor has found could qualify for the administrative exemption include mortgage loan officers, insurance agents, sales managers, marketing analysts, purchasing agents, financial services registered representatives, and loss prevention managers.

These categories are merely guidelines to observe, and not dogma to follow. Whether an administrative employee is administratively exempt is determined on an employee-by-employee basis, even within the same job category within the same organization. The analysis is fact-specific, and should be done by a professional well-versed in these issues.

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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 avoid employee lawsuits (in 4 easy steps)

Today’s Wall Street Journal offers the following three tips to small business owners to avoid lawsuits by employees:

1. Classify employees properly.
2. Maintain an antidiscrimination and harassment policy.
3. Document, document, document.

These are all excellent points, each of which I have covered here in depth in the past. Let me suggest, however, that each of these considerations are meaningless unless you add a 4th step to this list – Training. Your supervisors and managers need to know:

1. What your overtime policy is and how employees are supposed to be paid.

2. What discrimination and harassment mean, how to recognize them, and what to do upon witnessing it or receiving a complaint.

3. In a judge’s or jury’s eyes, an empty personnel file means that there are no problems with the employee. A blank slate will lead to search for an illegal reason for the termination.

Without this crucial 4th step, you leave a gaping hole to be exploited by employees in the lawsuits that are certain to be filed as a result of mistakes made by your management. Consider hiring a professional to train your managers and supervisors on an annual basis. The training costs are a drop in the bucket as compared to potential legal fees defending lawsuits and funding settlements or judgments.

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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 #115

This week, the EEOC published proposed regulation on the reasonable factors other than age defense under the ADEA. The regulations (available for download as a PDF from Regulations.gov) suggest that the following 6 factors are relevant in
determining whether an employment practice is reasonable:

1. Whether the employment practice and the manner of its implementation are common business practices;

2. The extent to which the factor is related to the employer’s stated business goal;

3. The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);

4. The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;

5. The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and

6. Whether other options were available and the reasons the employer selected the option it did

Factors relevant in determining whether a factor is ‘‘other than age’’ include:

1. The extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;

2. The extent to which supervisors were asked to evaluate employees based on factors known to be subject to age based stereotypes; and

3. The extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

For more on these new regulations, check out the following:

• EEOC’s Proposed Age Discrimination Regulation Introduces Practical Significance –Stephanie R. Thomas

• EEOC Proposes New Age Discrimination Regulations – Dennis Westlind’s World of Work

• Proposed EEOC Rule on ADEA Defenses – Workplace Prof Blog

• EEOC Addresses Scope of Reasonable Factors Other than Age Defense Under the ADEA – Washington D.C. Employment Law Update

As to the rest of the week’s best employment-related thoughts…

Non-Competition Agreements

• Do You Know the Muffin Man? Bimbo Prevents Him From Switching Jobs – Dan Schwartz’s Connecticut Employment Law

• Dunkin’ Donuts Sued by Alleged Drunkin’ Ex-Exec – Philip Miles’s Lawffice Space

• Rethinking noncompetes – Jay Shepherd’s Gruntled Employees

• Burning Bridges Upon Departure: It May Feel Good, but It’s Bad Form – The Business of Management

Disability (and related) Discrimination

• An Employee Need Not be Disabled to Pursue ADA Claim – Warren & Hays Employment Law Blog

• Proposed Changes to Psychiatric Manual Stir Lawsuit Fears – Walter Olson’s Overlawyered

• The 7 Most Common Mistakes Employers Make Under GINA – Greg Gordillo

Miscellaneous

• Here’s a Novel Idea: Read Your Own Company Handbook – Mindy Chapman’s Case In Point

• Personnel Files: Review Before or After Interview, or Not at All? – Debra Reilly’s Workplace Investigations Blog

• Use the anchoring bias to buoy up performance in mediation – Work Matters

• Waiting Time is Often Work Time … and Must be Paid – Overtime Advisor

• Privacy in the Workplace: E-Mail Does Not Equal Texting – Michael Haberman’s HR Observations

• Alabama Shooting and Background Checks – The Word by John Phillips

• Model Jury Instructions Deal With Social Media Head On – Molly DiBianca’s Going Paperless

• In federal employment discrimination claims, race and sex of judges matter (a lot) – David Yamada’s Minding the Workplace

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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’s efforts to create its own WARN Act hit all the wrong notes

Ohio House Bill 434 – which would require employers to give advanced notice of mass layoffs, worksite closings, and transfers of operation – is currently pending in the House Commerce and Labor Committee. The bill would create a maxi-WARN for Ohio employers, and goes above and beyond the requirements of the federal WARN statute:

• Where WARN requires 60 days notice of mass layoffs of plant closures, HB 434 requires 90.

• HB 434 requires 120 days notice for employment losses of 250 or more employees.

• HB 434 defines “affected employee” and “employment loss” more broadly than the federal WARN Act.

• HB 434 expands the depth of information require in the written notice, including  to the written notice required by the federal WARN Act.

The killer provisions in the bill, however, are the damages and penalties, which are severe:

• Double back pay for each calendar day of the violation, plus

• The value of benefits from the employer’s employee benefit plan for the entire advance notification period, including the cost of medical expenses that the employee incurred during the employment loss that would have been covered under the employee benefit plan if the employment loss had not occurred, plus

• Other economic damages and exemplary damages suffered by the affected employee and caused by the violation, plus

• Reasonable attorney’s fees and costs, plus

• Civil penalties of $500 for each calendar day of the violation multiplied by the number of employees who suffered an employment loss, increased to $1,000 if the employer acted in bad faith through intentional, willful, or reckless conduct.

Moreover, under the federal WARN Act, an employer can pay in lieu of giving notice. In other words, instead of giving 60 days notice, the employer can simply pay the affected employees 60 days of severance pay, and effectively avoid liability. HB 434 limits an employer’s ability to pay in lieu. An employer cannot pay in lieu (and avoid liability) if:

1. The payments were voluntary and unconditionally paid in an amount that is less than the value of the wages and benefits to which the affected employee was entitled during the notice period; or

2. The payments were made pursuant to contractual obligations of the employer.

If passed, this bill would be disastrous for Ohio’s efforts to recover economically. As the last 18 months have shown us, businesses sometimes have to layoff employees or close their doors. Because this law will make it impossible for businesses to do so without a severe economic penalty, it will act as a strong disincentive for businesses to open in, expand in, or relocate to our state.

Everyone feels badly about good people losing jobs because of the economy. The answer, though, is to create an environment to fosters job growth, not one that erects a fence at our border to keep businesses – and jobs – out.

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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.

“Sue first” mentality costs EEOC $4.5 million in sanctions, yet I question whether this is a good thing

Shoot first and ask questions later, and don't worry, no matter what happens, I will protect you.
—Hermann Goering

In EEOC v. CRST Van Expedited (N.D. Iowa 2/9/10) [pdf] (courtesy of Ross Runkel and Workplace Prof Blog), a federal judge tagged the EEOC with $4,467,442.90 in attorneys’ fees and costs for its “sue first, ask questions later litigation strategy” in pursuing a systemic sex discrimination case. What did the EEOC do (or, more accurately, what didn’t it do) that led to this huge fine?

• Following summary judgment 67 of the original 270 plaintiffs remained in the case. Those 67 claims, however, never made it to trial.

• The court dismissed the claims of the remaining 67 plaintiffs because the EEOC “did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it seeks relief at trial before filing the Complaint—let alone issue a reasonable cause determination as to those allegations or conciliate them.” Indeed, “the EEOC did not even interview any witnesses or subpoena any documents to determine whether any of their allegations were true.”

• The EEOC did not make a reasonable cause determination as to the specific allegations of any of the 67 allegedly aggrieved persons prior to filing the Complaint. In fact, 27 of the women alleged they were sexually harassed after the lawsuit was filed, and the EEOC did not learn the substance of the allegations of another 38 until after it filed its Complaint.

• The court concluded that the EEOC’s failures prejudiced the employer: “The EEOC’s failure to investigate the claims of the 67 allegedly aggrieved persons deprived CRST of a meaningful opportunity to engage in conciliation and foreclosed any possibility that the parties might settle all or some of this dispute without the expense of a federal lawsuit.”

My first instinct is to applaud this court for holding the EEOC’s feet to the fire. It’s comforting to witness governmental accountability for a lack of diligence in an era of increased vigilance in the enforcement of EEO laws.

Yet, I think this decision will have deeper implications for the agency and businesses. While it will act as an important check on the EEOC’s recent run of federal filings, it will also cause the EEOC to dig deeper and wider at the investigatory stage to support the lawsuits that it does file. The agency now has a roadmap from a federal court setting forth what is necessary pre-suit: complainant and witness interviews, document reviews, reasonable cause determinations, and an offer of conciliation.

In other words, applaud the visceral appeal of seeing the EEOC take one on the chin, but be very wary of the increased administrative burden this decision will likely place on your business in future EEOC investigations.

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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? Unsupervised waivers of federal wage and hour claims

Generally, courts recognize only two ways for an individual to release or settle a claim for unpaid wages under the Fair Labor Standards Act: 1) a DOL-supervised settlement under 29 U.S.C. § 216(c), or 2) a court-approved stipulation of settlement. Failing to use of these two options for the approval of a waiver will likely result in the invalidity of the waiver an the employee being able to sue for any unpaid balance.

If you are engaged in active litigation with an employee, the latter option is easy to achieve. You simply submit the settlement agreement to the assigned judge for his or her approval. Similarly, a DOL investigation will culminate in some combination of both options.

What are your options, though, if you are not in on-going litigation or already part of a DOL investigation? As I see it, you have 2 choices:

1. If you intend to pay less than the full amount owed, you can ask the employee to file a lawsuit for the sole purpose of judicial approval of the settlement; or
   
2. If you intend to pay the full amount owed, you can pay the employee in full for any wages owed and forego the release and waiver. This leaves a slight risk that the employee(s) could still bring a suit for unpaid liquidated damages (the FLSA provides for double back pay as liquidated damages for willful violations). Your voluntary mitigation, however, will go a long way to deterring any future lawsuits.
   

What shouldn’t you do? Contact the DOL for its supervision of the settlement. That is a radar that you do not want to be on. The supervised settlement will beget a full-blown wage and hour audit, which will beget an OSHA on-site, which will beget an OFCCP inquiry, which will beget an ERISA audit…. You get the picture. With the Obama administration pumping more funds into the DOL and promising increased enforcement, there is no need to throw yourself under its bus.

6 universal truths about avoiding retaliation liability

According to French philosopher Albert Camus, “Retaliation is related to nature and instinct, not to law. Law, by definition, cannot obey the same rules as nature.” In other words, it is human nature to retaliate, and if accused of wrongdoing, a natural response is to get even.

This month’s issue of the American Bar Association’s Law Practice Today contains my thoughts on what law firms can do to curb this natural instinct and limit potential liability for retaliation claims by employees. While the article’s intended audience is law firm partners and managers, its message is universal:

Retaliation claims are among the biggest risks facing employers in every industry…. It is the quickest way to turn to a defensible employment claim into a liability problem. It is incumbent upon everyone in your organization to take personal responsibility to suppress the natural urge to retaliate, and incumbent upon every firm to educate lawyers and staff about this critical responsibility.

For my 6 best-practices for avoiding retaliation within your organization, click over to Revenge Is a Dish Best Never Served to Employees: Avoiding Retaliation Liability.

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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 #114

The big story this week is the Senate's successful blockage of NLRB nominee Craig Becker. Becker was potentially dangerous for businesses because of his fringe views on labor unions, and the risk that he would try to circumvent Congress by implementing the Employee Free Choice Act administratively.

• Nominee Craig Becker's Appointment to the NLRB is Blocked in Senate from Hunton Employment & Labor Law Perspectives™

• Outlook Not So Good Becker Recess Appointment from Jeffrey Hirsch at the Workplace Prof Blog

• Out in the Cold? Becker not confirmed, Labor not affirmed from LaborPains.org

• Article Paints Grim Picture for Labor Agenda from Washington D.C. Employment Law Update

• Senate Blocks Nomination of Craig Becker to NLRB from Washington Labor & Employment Wire

• 52- 33; Becker Loses from Michael Fox’s Jottings By An Employer's Lawyer

• Meyerson in WaPo: EFCA is Dead from EFCA Report

“Undercover Boss”

• “Undercover Boss” has lessons for upper management from Warren & Hays Employment Law Blog

• ‘Undercover Boss’: A Fairy Tale That Ignores Grim Reality from Workplace Fairness

• Undercover Boss: You Wish That's All It Took to Change Your Business... from The HR Capitalist, Kris Dunn

• What Kind of Boss Are You? from Minnesota Labor & Employment Law

• Why employment lawyers screamed more than those Denny’s chickens from Jay Shepherd’s Gruntled Employees

Wage and Hour

• Is It Working Time Or Not? Employer Compulsion Is The Key Element from Wage & Hour - Development & Highlights

• Staples, Inc. Settles Assistant Store Managers' Overtime Claims for $42 Million from WorkplaceHorizons

• President Obama Backs Department of Labor Misclassification Fight from Florida Employment Law Blog

• Don't Forget: States Have Penalties for Overtime Violations Too from Overtime Advisor

• Sales rep falls within FLSA’s “administrative” exemption because of independent strategic planning responsibilities from Employment Law Matters

Social Media

• Employment Law Blog Maven in 5 Easy Steps from Philip Miles’s Lawffice Space

• Social Media & HR Primer: 3 Key Tools from Molly DiBianca’s Delaware Employment Law

• A Tale of Two Reference Check Responses — Liability for One, But Not the Other from George's Employment Blawg

• Social Media: Your Best Offense or Your Best Defense? from HR Daily Advisor

• Employment Background Checks on Facebook from employeescreenIQ Blog by Nick Fishman

ADA

• $6.2 Million Settlement in EEOC Complaint Against Sears, Roebuck & Company Re: Inflexible Leave Exhaustion Policy Violates ADA from The Labor and Employment Law Blog

• The ADA Trumps Absence Policies at Sears from by Mary Keating’s Maryland Employment Law Developments

• An Important Step in the ADAA: The Interactive Process from Michael Haberman’s HR Observations

Statistics

• Including Statistical Analysis Into Your Employment Litigation Risk Management Plan from Stephanie Thomas

• Survey Statistics: Are You a Mean or a Median Aficionado? from Ann Bares’s Compensation Force

Miscellaneous

• (It's) Snow Joke: Weather Plays Games with Employers -- A Recap from Dan Schwartz’s Connecticut Employment Law

• It's not that hard to say you’re sorry from Michael Maslanka’s Work Matters

• Pitfalls to Avoid in Workplace Investigations from Debra Reilly’s Workplace Investigations Blog

• Another Valentine’s Day, Another Rant on Why Workforce Romance Is a Bad Idea from The Business of Management

• Conan Versus NBC Fiasco Illustrates Contract Law at Work in “Real Life” from Teri Rasmussen’s Ohio Practical Business Law

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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.