Do you know? Admissibility of settlement offers

Sometimes, employers are blindsided by a lawsuit. The first you might learn that an ex-employee is suing you is when you are served the complaint and summons. Other times, however, the filing of a lawsuit is preceded by a back-and-forth between attorneys hoping to resolve the dispute outside of court. To what extent can you freely communicate with an ex-employee’s attorney without fear that your words and statements will come back to haunt you in a trial if the negotiations break down? Eid v. Saint-Gobain Abrasives (6th Cir. 5/12/10) [pdf] provides some guidance.

After his termination from Saint-Gobain, Kenneth Eid retained counsel for the purpose of asserting an employment discrimination claim. Prior to filing a claim, Eid’s attorney sent a letter to Saint-Gobain announcing Eid’s intention to pursue a claim but inviting a negotiated resolution. Saint-Gobain’s associate general counsel responded in writing with a discussion of Saint-Gobain’s internal investigation into Eid’s allegations and witnesses interviews. The responses concluded that the “termination was handled in our judgment in an appropriate fashion,” and “[t]here is no basis for the organization to consider a settlement with your client.”

Prior to trial, the court excluded the general counsel’s letter under Evidence Rule 408. Following a defense verdict, Eid appealed that decision.

Evidence Rule 408 prohibits a party from introducing into evidence:

• offers to settle; and
• conduct or statements made in settlement negotiations regarding the claim.

The 6th Circuit found that the trial court properly excluded the letter, despite the refusal to engage in any further settlement negotiations:

A party will often adopt a hardline position at the beginning of negotiations in order to extract greater concessions from an opponent. It would ignore the realities of negotiation to hold that such a position necessarily means that the parties are not engaged in compromise negotiations. Such a rule would also run contrary to the purposes of Rule 408, as it would invite undue caution in settlement negotiations, and would facilitate the admission of communications that contain puffing, posturing, and various irrelevancies.

The 6th Circuit also found that the discussion of the internal investigation was within the protections of Rule 408.

In other words, you can respond to an employee’s pre-suit settlement overtures with a reasonable degree of confidence that a jury will not some day be reading your lawyers comments about the strengths and weaknesses of your case.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

What employers need to know about EEO

On Friday, I had the pleasure of appearing on Newton Software’s podcast, Equal Employment Opportunity & Affirmative Action: What Every Employer Needs to be Aware of and Why. For a half-hour, host Joel Passen and I talked about the proactive steps employers can take to stay ahead of curve on EEO compliance issues. If you missed it, you can catch up either on Joel’s blog, on BlogTalkRadio, or on iTunes. The latter two also allow you to subscribe to Joel’s excellent and informative weekly podcast.

Thanks to Joel for inviting me to appear, and I look forward to taking you up on your invitation to return.

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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 #127

The nomination of Elena Kagan to the Supreme Court was the top legal story of the week. Here’s a snippet of the blogosphere’s commentary on the nomination.

• The Employment Law Decisions of Supreme Court Nominee Elena Kegan – from Michael Fox’s Jottings By An Employer’s Lawyer

• Out-of-context quotes and Kagan (II): Miers, Media Matters, Jon Stewart, and Me – from PointOfLaw Forum

• A “Diverse” Supreme Court? – from Discriminations

• Constitution Requires Ivy Credentials – from The Word on Employment Law with John Phillips

• Kagan and the Magic Number Three – from Settle It Now Negotiation Blog

• It’s Official, It’s Kagan - New SCOTUS Nominee – from Philip Miles’s Lawffice Space

• Dumbing Down the Narrative – from Popehat

• Kagan the Next Supreme? – from Manpower Employment Blawg

As for the rest of the best of the week…

Social Media

• The NLRB and Social Media Policies – from Labor Relations Today

• Using Social Media for Selection – 3 Things Employers Should Consider – from Where Great Workplaces Start

• Facebook Privacy: More Changes & Controversy (Weigh In!) – from Megan Erickson’s Social Networking Law Blog

• 25 Things About Me (and My Visit to Facebook Headquarters) – from Dan Schwartz’s Connecticut Employment Law Blog

Discrimination

• Got Milk? Understand the Link Between Federal & State Breastfeeding Laws – from Mindy Chapman’s Case In Point

• Not Just Any Release Will Do: Drafting Valid Releases for a Reduction-in-Force – from New York Labor and Employment Law Report

• Accommodating family status in the workplace: the great prima facie case debate – from Donna Seale’s Human Rights in the Workplace

• Federal Bill Aims to Ban Credit Reports for Employment Screening – from Nick Fishman’s employeescreenIQ Blog

• Third Cir. Rules that Side Effects from Treatment May Be an ADA Impairment – from Maribeth Minella at the Delaware Employment Law Blog

• Washington’s Next Acronym?: POWADA—the Gross v. FBL Financial Services, Inc. Override – from Fitzpatrick on Employment Law

• Title VII Sex Discrimination and Retaliation/Subject Matter Jurisdiction re Attorneys’ Fees – from The Labor and Employment Law Blog

Wage & Hour

• Plaintiff’s Attorney’s Fees Can be Very High – from San Antonio Employment Law Blog

• Increased DOL Enforcement Calls for Proactive Measures – from CPEhr

• DOL Plans To Amend Regulatory FLSA Recordkeeping Requirements – from Hunton Employment & Labor Law Perspectives™

• The Offer Of Judgment: Sometimes The Magic Works, Sometimes It Doesn’t – from Wage & Hour - Development & Highlights

Miscellaneous

• Are They or Aren’t They Confidential? Performance Review Content Now Under Public Scrutiny – from Becky Regan at Compensation Cafe

• Trade Secrets on Copy Machine Hard Drives? – from Trade Secrets Blog

• Big Brother, Big Implications: Creating an Employee Monitoring Policy Without Creating Additional Legal Liability – from Pennsylvania Labor and Employment Blog

• NLRB - The National Union Encouragement Board – from The ChamberPost

• DOL Announces “Plan/Prevent/Protect” Business Compliance Program – from Washington D.C. Employment Law Update

• Unauthorized Access Doesn’t Apply to E-Mail, Judge Rules – from Law.com

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Presenting: The Top 5 Issues Confronting Your HR Practices

Yesterday, KJK's Labor & Employment Group presented our first Breakfast Briefing of the year, The Top 5 Issues Confronting Your HR Practices. We had an ambitious agenda, covering the classification of employees, health care reform, workplace technology, the ADAAA, and hiring. Thanks to everyone who attended and helped make our event successful. For those that could not attend, below are the PowerPoint slides. Keep you eyes on this space for updates on our next Breakfast Briefing later in the year.

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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.

Battle of the accommodations

Almost a month ago, I wrote about how businesses should go about opening their doors to employees’ pets. At the time, I flagged potential ADA issues as one possible risk to having a pet-friendly workplace:

If an employee is allergic to animals, pet owners must understand that they may have to leave their animals at home as a reasonable accommodation. Other possible accommodations include creating sufficient separation between the allergic employee and the pet, segregating the pet to a specific part of the facility, or improving ventilation. Ignoring the pleas of an allergic employee, though, will open you up to potential ADA liability.

In response to my post, Stephanie Thomas, who follow each other on Twitter, asked the following question:

I dismissed it as an academic question. Perhaps I was being too hasty. Yesterday, Walter Olson’s Overlawyered brought us a story that illustrates this exact problem. According to an article by Steven Greenhouse in the May 10 New York Times, the city of Indianapolis has gotten itself into trouble with the EEOC for allowing a disabled employee to bring a service dog into work that caused a co-worker to have an asthema attack. From Mr Greenhouse’s story:

On the first day Ms. Kysel took Penny to work, one of her co-workers suffered an asthma attack because she is allergic to dogs. That afternoon Ms. Kysel was stunned when her boss told her that she could no longer take the dog to work, or if she felt she could not report to work without Penny, she could go on indefinite unpaid leave…. Ms. Kysel filed a complaint with the Equal Employment Opportunity Commission, asserting that her employer had discriminated against her by failing to accommodate her disability.

According to the EEOC (as quoted by Mr. Greenhouse):

When you have two people with disabilities … you don’t treat one as inherently more important than the other. What the employer has to do is work out some sort of balance between the accommodations needed.

In other words, not even the EEOC knows how to handle this perplexing situation. The lesson for employers is two-fold: 1) employment law is the land where bizarre happens; and 2) when in doubt, call your lawyer. We may not know the answer, but we can at least give you the peace of mind that you’re not totally crazy in not knowing what to do.

Do you know? Are your employees getting Unvarnished?

What is Unvarnished? It’s a website (currently in private beta) that you should be very concerned about. TechCrunch describes it as a website where “any user can create an online profile for a professional and submit anonymous reviews. You can claim your profile, but unlike LinkedIn, you have to accept every post, warts and all. And once the profile is up there’s no taking it down.” In other words, it's akin to a virtual bathroom stall wall, where anyone can write anything about anyone else, with a cloak of anonymity and without real fear of repercussion.

TechCrunch also nicely summarizes the dangers businesses face from this type of anonymity:

This could be the place to anonymously settle vendettas: co-worker swipes a promotion, go to Unvarnished, boss dishes out a small bonus, go to Unvarnished, the vice president makes an ambiguous pass at your girlfriend, go to Unvarnished…you get the idea.

Here's CNET's take on the dangers of Unvarnished:

The thing I dislike most about this idea is that it gives someone else all the power to exert his or her will or personal preference on the reputation of another. Just because you don't like your boss doesn't mean you should have the power to affect his or her future employment prospects. After all, it's possible you're the jerk, not your boss. And so what if you can counter a negative review? If it hasn't risen to the level of outright defamation, it's just a matter of opinion, and the presence of that opinion could cost you a job.

Here’s what a particularly scathing review on Unvarnished looks like (again, courtesy of TechCrunch):

Whether Unvarnished catches on remains to be seen. For now, it's still in private beta and not available to the general public. Yet, as employers try to navigate the daily changes of the social media landscape, they need to be aware that sites like Unvarnished exist. Employees are on the Internet, bad mouthing each other and their employers. Better to at least have a policy directing employees to the responsible use of these tools than having them posting, without regulation, from your workplace and about your 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.

Does the punishment fit the crime in your workplace?

Last week, this happened at a Philadelphia Phillies game:

 

A fan ran onto the field, and was promptly tasered by the police.

“What does this have to do with employment law,” you might be asking yourself? The Philadelphia police department is in he middle of a debate as to whether its use of a Taser was necessary or excessive. While your employees are likely at-will, you will be embroiled in the same debate when you defend a termination in court. While you have the legal right to terminate an employee at any time for any reason, juries will be asking themselves if the punishment fits the crime. If it does not, they will look for another reason for the punishment—such as discrimination.

When you make the difficult decision to terminate an employee, ask yourself: Do the actions really warrant termination? How have we treated other employees under similar circumstances? Is there a lesser punishment we can live with? Or, is the action so bad that termination is necessary? Judges and juries will be asking these questions when they decide your case. It is probably a good idea for you to also ask them of yourself.

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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 #126

Believe it or not, Sunday is the three year anniversary of the Ohio Employer’s Law Blog. Need proof? Here’s a link to my very first post, May 9, 2007: The Song Remains the Same – Has Burlington Northern Really Changed the Landscape of Retaliation Claims? I’ve since written 867 posts, a number that is hard even for me to comprehend. Maybe at the five year milepost I’ll compile my best posts into a book for those that have been with me from the beginning.

In the meantime, here’s post number 868—what I’ve been reading across the blogosphere this week.

Wage & Hour

• Employers Beware of the Misclassified Employee – from Jennifer Hays at the Warren & Hays Employment Law Blog

• President Obama’s Inaugural Year and Future Agenda: The Department of Labor – from Washington Labor & Employment Wire

• Clamping Down on Misclassification – from Human Resource Executive Online

• BNA: AFL-CIO Lawyer Highlights Government Focus on Misclassification of Employees, Independent Contractors – from Labor Relations Today

• PTO Passing the Tipping Point? Majority of Employers Report Pooled Leave Plans – from Ann Bares at Compensation Force

Social Media

• Do You Need to Use Social Media to Provide Legal Advice on It to Employers? No, But... – from Dan Schwartz’s Connecticut Employment Law Blog

• Social Media and the Hiring Process, Benefits and Risks – from the Iowa Employer Law Blog

• The Revolution Continues… Social Media Is Not a Fad – from Jennifer McClure’s Cincy Recruiter’s World

• Managing your Online Identity – from Marcia McCormick at the Workplace Prof Blog

• Panel Discussion on Social Media, Background Checks and Employment Screening – from Nick Fishman at employeescreenIQ Blog

Technology

• Survey says: most teens don't have a data plan, almost all send texts – from Engadget Mobile

• R.I.P. Floppy Disks (1981-2011) – from Inside Opinions: Legal Blogs

Trade Secrets and Competition

• San Jose Business Journal: “Trade Secret Theft By Rogue Employees On the Rise” – from Trade Secrets Blog

• First District upholds contempt sanctions for violation of non-compete agreement – from the FSSP Blog

EEO & Harassment

• The Un-pretty Protected Class? – from Philip Miles’s Lawffice Space

• EEOC Charge Filed for Illegal Firing Under GINA – from Nolo’s Employment Law Blog

• DOL Unveils Federal Disability Law Compliance Website for Employers – from Washington D.C. Employment Law Update

• “But they didn't ask”-The Interactive Process and ADA compliance – from HR Cafe

• Discipline of Employees Who Have Engaged in Protected Activity – from GT LE Blog

• Employees Harassed by Customers: When is the Employer Responsible? – from Fitzpatrick on Employment Law

• 4th Circuit Remands Discrimination Case For Trial – from Laconic Law Blog

• 3rd Court weighs in on what constitutes a hostile work environment – from Work Matters

• Combating “arbitrary discrimination based on appearance” – from Walter Olson’s Overlawyered

• Blown Up Breasts Blown Off by Jury – from The Word on Employment Law with John Phillips

Labor Relations

• A Good Catch: NLRB footnote may signal things to come – from LaborUnionReport.com

• Preparing For Democracy In The Workplace – from Hunton Employment & Labor Law Perspectives™

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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.

Caregiver discrimination, three years later

It’s been nearly three years since the EEOC published its Enforcement Guidance on Unlawful Disparate Treatment of Workers with Caregiving Responsibilities. According to a recent report published by the Center for WorkLife Law, employers that have not yet paid attention to this issue should start. The Center for WorkLife Law’s Family Responsibility Discrimination 2010 Litigation Update [pdf] paints a grim picture for employers that ignore caregiver issues or have to defend their employment practices in court. Here are the highlights:
Key Case Trends.

1. New Supervisor Syndrome—new supervisors canceling flexible work arrangements, changing shifts, or imposing new productivity requirements, with the intent of pushing family caregivers out.
2. Second Child Bias—mothers report little discrimination until they have their second child, at which point they report preemptive personnel actions based on assumptions about their commitment to their growing families over their jobs.
3. The Elder Care Effect—employers acting preemptively against employees who have to care for aging parents, again because of assumptions about the employee’s work commitment.

Types of Cases Filed

• pregnancy and maternity leave—67%
• elder care—9.6%
• care for sick children—7%
• care for sick spouses—4%
• time off for newborn care by fathers or adoptive parents—3%
• association with a family member who has a disability—2.4%

Number of Cases Filed

• The number of cases filed nationwide has increased from 13 in 1983 to 269 in 2008, with a 400% increase from decade to decade (1989 – 1998 as compared to 1999 – 2008).
• Ohio has the 4th highest number of caregiver discrimination cases filed.
• 88% of the cases are filed by females.

Success Rates

• Overall, employees win 50.4% of the time.
• But, in the Midwest, employees win 48.9% of the time.
• And, in Ohio, employees only win 46% of the time.
• The national average verdict or settlement is $578,316.

The conclusion of the Center for WorkLife Law:

This report is a warning siren for employers. The increase in family responsibilities discrimination cases indicates that employers do not yet understand their legal risks in this area. Blatantly discriminatory comments made by supervisors show a lack of recognition of employers’ obligations to treat caregivers equally, which in turn suggests a lack of direction from management and a lack of training.

Given Ohio high number of filed cases and the risk of a large damage award or settlement, this report is a warning that Ohio’s businesses should take seriously. What can companies do?

1. Ensure coverage of caregiver and family responsibity discrimination in EEO, harassment, and other policies.
2. Train supervisors and managers on how to recognize and avoid this breed of discrimination.

Common sense interview questions

Most businesses know that there are certain topics that simply are off limits during job interviews. Questions about race, sex, age, religion, disability, and marital and family status, for example, are EEO no-nos. Yet, some illegal questions are not all that obvious. “What year did you graduate high school?” might seem like innocuous small talk, but such a question could lead to an illegal inference about a candidate’s age.

Some illegal questions, though, are so obviously illegal that you have to question to sanity of the interviewer. Take, for example, the case of recent NFL draftee Dez Bryant. Mr. Bryant’s and his family’s checkered past notwithstanding, why in his right mind did Miami Dolphins GM Jeff Ireland think it was a good idea to ask Bryant during a pre-draft interview if his mother was a prostitute?

For more on subtle and not-so-subtle EEO interview traps, I recommend the following:

• Avoid hidden interviewing traps
• Common stereotypes to avoid during job interviews

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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? DOL to require “compliance plans”

Now we know what the Department of Labor plans to do with the 250 new investigators it recently hired. They are going to sifting through mandatory employer compliance plans looking for violations. Here’s the details, from Steven Greenhouse in last Thursday’s New York Times (with a tip of the hat to Mark Toth’s Manpower Employment Blawg and Philip Miles’s Lawffice Space):

In a move that will affect most American corporations, the Labor Department plans to require companies to prepare and adopt compliance plans aimed at ensuring they do not violate wage, job safety and equal employment laws.

The effort, aimed in part at reducing the incidence of employers not paying overtime and improperly classifying workers as independent contractors, will require them to document many of their decisions and share that information with their workers and the government….

Deputy Labor Secretary Seth Harris said … many specifics of what companies would be required to do had yet to be worked out. The department’s proposed rules are still being drafted, and businesses will have a chance to respond before any final rules are issued. The process is likely to take more than a year.

I have to say, this one caught me completely off-guard. If businesses are not taking wage and hour compliance seriously, they better starting thinking about it now.

One more thought—this plan will be a boon to all management-side labor and employment lawyers. This story is developing, and bears further monitoring as the DOL works out the specifics. If you want to get a head-start on compliance, let me suggest KJK’s proprietary 200-point HR and employment practices audit.

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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.

Your business is behind the 8-ball if you don’t have an email policy

Here’s some sobering stats on employees’ personal use of corporate email, courtesy of the Ruth Mantell at the Wall Street Journal:

• 71% of full-time employees with a company-assigned email account at least sometimes use it for personal communications.
• 89% of workers say admit to sending email from work to an outside party that contained jokes, gossip, rumors, or disparaging remarks.
• 14% sent messages that contained confidential or proprietary information.
• 9% admitted to sending sexual, romantic, or pornographic text or images.

In other words, you employees are likely using email and other corporate technologies inappropriately. Yet, according to a 2009 survey by the the American Management Association, only 80% of organizations have written email policies, and only 47% of employers train workers about policies, risks, and appropriate use.

Are you one of the 20% of employers that does not have a policy to cover email and its appropriate use? Do you want to trust the common sense of your employees not to spend all day reading personal emails, or, even worse, divulge confidences or sexually harass coworkers?

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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.

Of course racism is wrong, but at least it gives me job security

It amazes me that people could still think mocking a black co-worker with a life-sized robotic chimpanzee is funny. Yet, as I come across stories like this, I am thankful that such ignorance provides me some degree of job security in my chosen practice area.

Fox 29 in Philadelphia has the details (sorry about the ad before the video plays – I can’t do anything about it):

 

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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 #125

This week brought three big stories that I just have not had time to cover. Thankfully, my fellow L&E bloggers are here to pick up the slack.

On Monday, the 9th Circuit permitted a monstrous sex discrimination class action lawsuit against Wal-Mart to proceed. And by monstrous, we’re talking potentially billions of dollars of exposure. For thoughts on this case, I recommend the following: The Word on Employment Law with John Phillips, California Labor and Employment Defense Blog, Class Action Defense Blog, Manpower Employment Blawg, What’s New in Employment Law?, Daily Developments in EEO Law, PointOfLaw Forum, Michael Fox’s Jottings By An Employer’s Lawyer, LawMemo Employment Law Blog, and Workplace Prof Blog.

Also on Monday, the Supreme Court held oral argument in Rent-A-Center v. Jackson, which will decide the issue of whether an arbitrator or a court should decide the threshold issue of the validity of an arbitration agreement. This decision will impact all employers that require employees to sign arbitration agreements. For thoughts on this case, I recommend the following: SCOTUSblog,Philip Miles’s Lawffice Space, How Appealing, and Fitzpatrick on Employment Law.

On Wednesday, the Supreme Court ruled in Stolt-Nielsen S.A. v.AnimalFeeds Int'l Corp., another non-employment arbitration case that has significant implications for employers. In this case, the Supreme Court held that non-parties to an arbitration agreement cannot be compelled to arbitrate their disputes in a class action. For thoughts on this case, I recommend the following: SCOTUSblog, Fitzpatrick on Employment Law, Washington D.C. Employment Law Update, The Word on Employment Law with John Phillips, Alaska Employment Law, What’s New in Employment Law?, Texas Employment Law Update, LawMemo Employment Law Blog, Workplace Prof Blog, and Michael Fox’s Jottings By An Employer’s Lawyer.

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

Family Responsibility Discrimination & Family Leave

• What, That Was a Request for FMLA? – from HR Daily Advisor

• Pick On Mom At Your Own Peril: The Emerging Trend Of Family Responsibilities Discrimination – from Hunton Employment & Labor Law Perspectives™

• It’s Better to Avoid Litigation Than to Win Litigation – from Arkansas Employment Law

• First Comes Love, Then Comes Marriage, Then Comes Flex-Time and a Baby Carriage – from Delaware Employment Law Blog

Labor Law

• Obama: “I’m a Pro-Union Guy”… and here are some union stereotypes – from Work in Progress

• EFCA Comes Tumbling Down – from The ChamberPost

• Waste Management’s Contract Talks Stink – from Workplace Diva

• New NLRB Issues Third Decision, First Involving Charges Against Employer – from Labor Relations Today

Pleading

• Democratic representative opposes Iqbal/Twombly bill – from PointOfLaw Forum

• Plausibly Pleading Employment Discrimination Part I, Part II, Part III, Part IV, and Part V – from Workplace Prof Blog

Wage & Hour

• Key FLSA Issues Featured in DOL’s Spring 2010 Agenda – from Prima Facie Law Blog

• An FLSA Primer – from Rob Radcliff’s Smooth Transitions

• Employee Versus Independent Contractor: EMPA – from Stephanie R. Thomas, Ph.D.

• Employer Sued for Violating RICO by Knowingly Hiring and Assisting Illegal Workers – from Fitzpatrick on Employment Law

• Gas station attendants strike oil in wage and hour lawsuit – from Sindy Warren at the Warren & Hays Employment Law Blog

• DOL Releases Semiannual Regulatory Agenda – from Washington D.C. Employment Law Update

Miscellaneous

• EEOC Expects Final GINA and Revised ADA Rules Soon – from Washington Labor & Employment Wire

• School District’s Woes from Using Webcams to Track School-Issued Laptops Should Be an Eye-Opener for Employers – from Workplace Privacy Counsel

• Handbooks: Email and Porn Forever – from The Word on Employment Law with John Phillips

• Stray Remarks Doctrine Still Lives – from San Antonio Employment Law 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 your employees really know what they are signing? Enforcing waivers of judicial rights

In 2004, in Thurman v. DaimlerChrysler, the 6th Circuit upheld an employers right to contractually limit an employee’s timeframe to file a discrimination claim in court. On Monday, in Alonso v. Huron Valley Ambulance, the same court held that such waivers and limitations must be knowing and voluntary to be valid.

Huron Valley Ambulance used two tools to attempt to limit exposure to discrimination and other employment-related claims: a four-step internal grievance process and a six-month statute of limitations. Both are set forth in the employment application:

PLEASE READ THE FOLLOWING BEFORE SIGNING

Any dispute arising out of or in connection with any aspect of my employment by the Company, or termination thereof, including by way of example but not limitation, disputes concerning alleged civil rights violations, breach of contract or tort, shall be exclusively subject to review by the Grievance Review Board. Any decision of the Review Board shall be binding to both parties, and enforceable in circuit court….

I further recognize that if employed by the Company, I agree, in partial consideration for my employment, that I shall not commence any action or other legal proceeding relating to my employment or termination thereof more than six months after the termination of my employment and agree to waive any statute of limitations to the contrary.

Upon starting employment, HVA provided all employees a copy of its Operations Policies and Procedures Manual, which described the Grievance Review Board and its process in detail.

Alan Alonso and Kimberly Alonso both worked for HVA. They read and signed the employment application, and received copies of the Operations Policies and Procedures Manual, for which they signed a receipt. Nevertheless, the 6th Circuit held that HVA could not bind the Alonsos to either the grievance process or the shortened statute of limitations because the waivers of their rights were not “knowing and voluntary.”

The 6th Circuit took no issue with the language used in the waivers or the Alonso’s ability to understand what they signed. Instead, the 6th Circuit was troubled by the lack of information and detail about the Grievance Review Board given to the Alonsos at the time they signed the employment application:

At the time the Alonsos signed waivers of their rights to a judicial forum, they had no idea what the Grievance Review Board process entailed. They were never informed of their right to revoke their waiver. They were not given any documentation regarding the process until almost a month after they began their employment with HVA. Even then, the document they were given described the process in general terms, and pointed them to a website where they could find additional, more detailed information. They cannot be said to have knowingly and voluntarily waived their right to a judicial forum when they were not informed of the alternative procedures until a month after they began working for HVA.

The court glossed over the question of the enforceability of the shortened statute of limitations, simply finding:

Because we have already found that the Alonsos did not knowingly, intelligently, and voluntarily sign the waivers included in their employment applications due to the fact that they were not given any information regarding the Grievance Review Board procedures, we hold that their statute of limitations waivers were, likewise, invalid.

Given the scant analysis of the statute of limitations issue, Thurman v. DaimlerChrysler is likely still good law. Employers should still be able to limit the time in which employees can bring a lawsuit, provided that the waivers meet the requirements of being knowing and voluntary.

What other lessons can employers learn about waivers of judicial rights in employment agreements?

1. Waivers should be obvious and conspicuous. Both the Thurman court and the Alonso court pointed out that the waivers were set off by headings in all caps and bold type, letting the employees know what they were about to read was important and should be read with care before signing.

2. Employees should be given time to consider the waiver before signing it, should not be pressured or required to sign the waiver on the spot, and should not be denied the right to seek legal counsel before signing, if they choose.

3. Waivers should be understandable to those signing them. They should be written plainly and without legalese. Also, employees should be provided waivers in their primary language, or with the services of someone who can translate.

4. If you are requiring employees to submit disputes to an internal dispute resolution process, you must provide detail about the process at the time the waiver is signed for the waiver to be valid and enforceable.

Waivers remain an effective tool to limit your risk from lawsuits by employees. The Alonso case just creates more work for you and your lawyers in making sure that they will withstand judicial scrutiny.

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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.

Tweeting away your job

Before yesterday, former major league pitcher was likely most famous for giving up Barry Bonds 756th homer. This morning, he is perhaps more well known for the racially insensitive tweet that has cost him his sports radio hosting gig in Dallas.

According to the Dallas Morning News, Bacsik said he drunkenly tweeted, “Congrats to all the dirty mexicans in San Antonio” after watching the Spurs beat the Mavs on Sunday night. To his benefit, Bacsik at least realizes his mistake. He has removed the offensive tweet, and replaced it with the following apology on this Twitter account.

ESPN.com quotes Bacsik’s words of wisdom for all employees:

When you tweet like I did, you can’t see the sarcasm. It’s not a good joke. You can’t tell if it was pure hate or sarcasm. I never got to say anything. My tweets were talking for me. When you tweet like that, it’s not a playful, harmless thing. It’s not what it was meant to be.

A disciplined or terminated employee may not be as understanding or remorseful as Bacsik. So that employees understand your expectations about responsible social networking, it is best to have a policy. That policy should spell out to employees that what they post online is public, that anything in cyberspace can be used as grounds for discipline or termination, and that there are consequences for posting anything that negatively reflects on your business.

For more on drafting a social networking policy, see 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.

Do you know? Paying overtime to salaried, non-exempt employees

In my never-ending quest to show you how many different ways you can screw up paying your employees under the federal wage and hour laws, today I am going to talk about how to properly calculate overtime payments for salaried, non-exempt employees.

An employer has two choices in how to pay overtime to a salaried non-exempt employee: by a fixed work week or based on a fluctuating work week. For reasons that will be illustrated below, the latter is a much more cost-effective option for most employers.

By a Fixed Work Week

1. If the employee is paid solely a weekly salary, his regular hourly rate of pay—on which time and a half must be paid—is computed by dividing the salary by the number of hours that the salary compensates. For example, If an employee is hired at a weekly salary of $525, which is intended to be compensation for a regular 35 hour work week, the employee’s regular rate of pay will be $15 per hour ($525 / 35). If that employee works overtime (more than 40 hours in a given work week), he or she will have to paid $22.50 for each overtime hour worked. Thus, in a 45-hour week, the employee would be paid $637.50.
   
2. Where the salary covers a period longer than a work week, such as a month, it must be reduced to its work week equivalent. Thus, for example, a monthly salary can be converted to a weekly salary by multiplying it by 12 and dividing by 52. Once the regular weekly salary is calculated, the analysis is the same as #1 above.
   

On a Fluctuating Work Week

1. Often times, the number of hours a salaried employee works will vary from week to week, depending on the given needs of the job. One might work 40 hours one week, 45 the next, and 38 the week after that. An employer and employee can agree that a salary will cover all straight time pay for all hours worked in a given week, no matter how few or how many. Payment for overtime hours at one-half such rate satisfies the overtime pay requirement because such hours have already been compensated at the straight time regular rate as part of the salary. And, that overtime premium will vary from week to week depending on the number of hours worked.
   
2. To use this method of overtime calculation, there has to be a clear mutual understanding of between the employer and employee that the fixed salary is compensation (apart from overtime premiums) for the hours worked each work week, whatever the number.
   
3. This “fluctuating workweek” method of overtime payment may not be used unless the salary is sufficiently large to ensure that there will be no work weeks in which the employee’s average hourly earnings from the salary fall below the minimum wage.
   
4. For example, taking our $525 salary from above, in a 45-hour work week, the hourly rate would be $11.66 ($525 / 45). But, for the extra 5 hours the employee would only be owed an additional $29.15 ($5.83 * 5), for a total weekly compensation of $554.15. The fluctuating work week saves this employer $83.35 in wages for the week. Thus, it is easy to see why the fluctuation work week is the preferred method for calculating overtime premiums for salaried non-exempt employees.

Wage and Hour audits are not without their risks (but are still necessary)

I’ve long preached the benefits of proactive wage and hour audits. In fact, in the nearly three years I’ve been writing this blog, I’ve written at least 10 different posts on this issue. (For a summary and list of links, jump here). A story posted last week at Wage & Hour—Developments & Highlights caught my eye. It illustrates that wage and hour audits have a downside of which employers must be aware, but should not deter employers from implementing this important proactive measure.

In Wlotkowski et al. v. Michigan Bell Telephone Co., a federal judge conditionally certified a class of workers who claim they are owed overtime as a result of being misclassified as “exempt”. The class is comprised of employees who are currently classified as “non-exempt.” They are suing to recover unpaid overtime for the time during which their employer had previously allegedly misclassified them as exempt. Because their job duties didn’t change when their pay classification changed, they questioned why they had been working for years without being paid overtime.

Employers may read this case and decide that they are better off burying their heads in the sand and ignoring wage and hour violations. This is a bad idea. Here’s what happens. A terminated employee goes to see a lawyer about a wrongful discharge lawsuit. The lawyer then asks this question: “Tell me about how you were paid.” The next thing you know, you are defending a class action and spending hundreds of thousands, if not millions, of dollars in legal fees, back wages, and potential liquidated damages and the plaintiffs’ attorneys’ fees. A wage and hour audit conducted by an experienced attorney can help stop this scenario from ever happening.

This Wlotkowski case teaches a very important lesson. When you audit your wage and hour practices, you should be prepared to pay for any mistakes that you find. It is much less costly to pay off a discovered mistake to than to defend a lawsuit in which you have, in essence, admitted 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 #124

This week brought us two huge employment law stories, one of which I covered this week and one which I’ve covered in the past.

On Monday, the Supreme Court agreed to review the issue of the applicability of the “cat’s paw” to discrimination cases. For my thoughts on this issue, jump over to The Return of the Cat’s Paw. For others’ thoughts, I recommend: Fitzpatrick on Employment Law, Maryland Employment Law Developments, World of Work, SCOTUSblog, Washington D.C. Employment Law Update, Daily Developments in EEO Law, Workplace Prof Blog, Michael Fox’s Jottings By An Employer’s Lawyer, and LawMemo Employment Law Blog.

Also on Monday, the Supreme Court heard oral argument in Quon v. Arch Wireless, which may decide the issue of an employee’s right of privacy in non-work related emails and text messages on employer-owned and issued equipment. I covered this case last June, with the 9th Circuit’s original decision, and will cover it again when the Supreme Court issues its decision. In the meantime, the following blogs covered the oral argument: Rob Radcliff’s Smooth Transitions, Abovethelaw.com, How Appealing, SCOTUSblog, Philip Miles’s Lawffice Space, Dan Schwartz’s Connecticut Employment Law Blog, LawMemo Employment Law Blog, Workplace Prof Blog, and Workplace Privacy Counsel.

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

Discrimination

• Frivolous Litigation and the EEOC – from The ChamberPost

• Sexting at Work: What is an employer to do? – from Jennifer Hays at the Warren & Hays Employment Law Blog

• Colwell v. Rite Aid Corp.: Employer May Be Required To Modify Work Schedule to Accommodate Commuting Difficulties – from A Case of the Mondays

• The ADA: Headaches or a Litigation Perfect Storm? – from GT LE Blog

• Male Sexual Harassment Claims On The Rise – from Wyatt Employment Law Report

Wage & Hour

• Today is Equal Pay Day – from Stephanie R. Thomas, Ph.D.

• Obama Establishes National Equal Pay Day – from Washington D.C. Employment Law Update

• NPR on the Paycheck Fairness Act – from Workplace Prof Blog

• FMLA Right to Commence Leave is Not Absolute, 11th Circuit Holds – from The FMLA Blog

• Health Care Reform -- What Employers Need To Know Now – from Hunton Employment & Labor Law Perspectives™

• New Federal Workplace Lactation Law–Why It’s Good for Families, Good for Business – from Corporate Voices for Working Families

• Pick Your Poison: An IRS Audit or Visit to the Proctologist? – from Compensation Cafe

• House Committee Holds Hearing on Work-Life Balance Award Act – from Washington D.C. Employment Law Update

Social Networking

• The backstory on the lost iPhone 4 – from The Apple Core

• Social Media Revolution & What it Means for Employers – from Defending The Digital Workplace

Labor Relations

• Shock! Not all unions like card-check... – from LaborUnionReport.com

• SEIU’s Anna Burger: Push NLRB to Regulate, Congress to Use Reconciliation to Push EFCA – from Labor Relations Today

• The Future of Unions: A Key Question – from Michael Fox’s Jottings By An Employer’s Lawyer

• President Re-Submits NLRB Nominations of Becker, Pearce to Senate – from Labor Relations Today

Background Checks

• Boy Scouts Hit With $1.4 Million Plus Another $25 Million (Maybe) – from The Word on Employment Law with John Phillips

• Report: Disney Bus Driver Arrested on Child Pornography Charge – from StitchKingdom.com

• Negative Employment Verification Leads to Multimillion Dollar Judgment – from Nick Fishman at the employeescreenIQ Blog

• The Use of Credit Checks by Employers is Under Attack on Many Fronts—Oregon Statute is but One Example – from Fitzpatrick on Employment Law

Miscellaneous

• 75 Online Legal-Writing Resources, Just in Time for Summer Associates – from Molly DiBianca’s Going Paperless

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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.

Today is “Take Our Daughters and Sons to Work” Day

I’ve brought my daughter to work before, but at not yet 4 years old, an entire day in the office might be a little much for her (and me). So, instead of taking her to work today, I’m posting the video of her all-time favorite song, Seven Days of the Week (I Never Go to Work), by They Might Be Giants. Bonus points for me because it actually has something to do with employment.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.