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Most employees of private companies understand that they should not have an expectation of privacy on company-issued mobile devices or computers, and most companies have policies reminding employees of the company’s right to monitor communications on its systems. The U.S. Supreme Court has now made it clear in City of Ontario v. Quon, that regardless of the employee’s expectation of privacy, an employer’s search of an employee’s property at work is reasonable if the search is “justified at its inception” and “reasonable in scope.”  In Quon, a former SWAT team member for the City of Ontario, California sued the City for reviewing his unusually high number of personal communications on his work-issued pager, most of which were sexual in nature. Quon argued that his employer’s search violated his constitutional rights. In its first decision considering the privacy protections applied to text messages, the U.S. Supreme Court disagreed.

 What does this mean for employers?

• Update your policies to specifically address text messaging, the use of company-issued electronic devices, and the use of social networking sites both during work hours and while off-duty. The policy should specifically state that employees’ messaging and communications on electronic devices issued by the company are subject to monitoring, and employees have no expectation of privacy in the use of such devices.
• Make sure that your practices are consistent with the policy. One of the questions in the Quon case was whether a supervisor overrode the policy by promising not to monitor the pager use. Supervisors and employees must be trained not to make statements or promises that contradict the written policy.

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Creditworthiness is not protected under the civil rights laws, but it may serve as a basis for a discrimination claim when used in making employment decisions. In an advisory opinion published in March 2010, the EEOC opined that if an employer’s use of credit information disproportionately excludes African-American and Hispanic candidates, the practice would be unlawful unless the employer could establish that the practice is needed for it to operate safely or efficiently. The EEOC relied on Title VII’s prohibition against employment practices that disproportionately screen out racial minorities, women, or another protected group, unless the practice is job related and consistent with business necessity.

Many employers routinely conduct credit checks as part of pre-employment screening. While the EEOC acknowledges that credit checks may be appropriate for certain positions, such as where an employee handles large amounts of cash, it cautions that the discrimination laws may be triggered in some instances.

State and federal legislatures are considering laws that may restrict the use of credit checks. Congress is currently considering H.R. 3149, titled the “Equal Employment for All Act,” which would amend the Fair Credit Reporting Act to prohibit employers from using a credit reports for either employment purposes or for taking an adverse action. For private employers, the only exception would be for employees in a in a supervisory, managerial, professional, or executive position at a financial institution. In the meantime, pprudent employers may want to develop a rationale for why credit checks are needed for particular positions.

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So far, the courts have responded with a resounding no. Most recently, the Oregon Supreme Court held that an employer can fire a worker for using medical marijuana, even if he is legally authorized by the state to use. In Emerald Steel Fabricators v. Bureau of Labor and Industries, John Doe argued that he was disabled within the meaning of Oregon law and that Emerald Steel failed to accommodate his disability. Doe suffered from a debilitating medical condition for which marijuana was prescribed to relieve symptoms. Emerald hired Doe as a temporary worker and wanted to hire him full-time. Knowing that he would have to take a drug test for a full-time position, Doe explained his condition and medical marijuana use to his boss, and was fired shortly thereafter.

While fourteen states and the District of Columbia have passed laws legalizing the possession of marijuana for certain medical purposes, marijuana is still illegal under federal law, and courts have been hesitant to force employers to tolerate illegal behavior.  Even the most liberal states are coming down on the side of employers. But beware…California is considering a ballot initiative that would prohibit employers from firing a person who tests positive for marijuana if he has a medical marijuana card. In the meantime, employers need to be aware of the issue and keep an eye on legislation and litigation.

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Last year’s Amendments to the American with Disabilities Act (“ADAAA”) were intended to expand the scope of the ADA, essentially making it easier for plaintiffs to establish that they have a disability. The Amendments provide a non-exhaustive list of “major life activities” (which, when substantially limited, give rise to a disability), including the operation of major bodily functions like the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, circulatory, respiratory, endocrine, reproductive functions, hemic, lymphatic, musculoskeletal, special sense organs and skin, genitourinary, and cardiovascular.

In one of the first reported cases applying the ADAAA, which took effect on Jan. 1, 2009, a federal district court in Illinois held in Horgan v. Simmons that an employee who was fired after disclosing his HIV-positive status to the president of his company could pursue claims for discrimination and impermissible medical inquiry. Citing the EEOC’s proposed regulations to implement the amendments, the court held that HIV substantially limits a major life activity—the function of the immune system—and therefore constitutes a disability under the ADA. The court also held that the employer’s inquiry into the plaintiff’s medical status despite plaintiff’s repeated assurances that nothing was affecting his ability to work was an “impermissible medical inquiry” under the ADAAA, which prohibits “inquiries of an employee as to whether the employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.”  

The decision is a departure from earlier decisions, where courts had dismissed HIV discrimination claims by otherwise healthy men who could not show that their HIV infection had actually substantially limited one or more of their major life activities.  The amendments make clear that the immune system function is a “major life activity.” Managers and supervisors should be aware of the expanded scope of the ADAAA, and trained on best practices in handling employees with potential disabilities.  

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As we previously cautioned, unpaid internships can run afoul of the Fair Labor Standards Act, and the Department of Labor is stepping up enforcement efforts as more college grads are offereing their services for free in a tough job market.

The issue is whether the intern should be considered an “employee” under the FLSA and therefore subject to wage and hour laws like overtime and minimum wage. To aid employers in making this determination, the DOL recently issued Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, which sets forth 6 criteria employers must apply to determine whether an intern should in fact by paid as an employee:

• The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
• The internship experience is for the benefit of the intern;
• The intern does not displace regular employees, but works under close supervision of existing staff;
• The employer derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
• The intern is not necessarily entitled to a job at the conclusion of the internship; and
• The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you are uncertain as to whether the criteria are met, keep in mind that the DOL defines the employment relationship “broadly.”  

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Employers can take adverse action against difficult employees even when they fall within a protected class, according to a recent decision by the U.S. Court of Appeals for the Sixth Circuit. In Viergutz v. Lucent Technologies, Inc., the court held that Lucent had a legitimate, non-discriminatory reason for refusing to re-hire Mr. Viergutz due to his “bad reputation” and his inability to get along with others. Dismissing Mr. Viergutz’s claims for age discrimination and harassment, the court relied on the Affidavit of the hiring manager stating that she did not interview Mr. Viergutz because she knew from other managers that he had a poor reputation and needed to be closely supervised.

Lucent could not have prevailed if it weren’t for its solid documentation of both Mr. Viergutz’s problems with co-workers and the fact he wasn’t interviewed because of these issues. Of course, documentation is especially important when taking adverse action against a member of a protected class. The point being that an employer’s hand is not tied when dealing with a protected employee so long as managers understand and adhere to best practices in the hiring and performance management processes.

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The EEOC is seeing the first wave of claims under GINA. Title II of GINA, which went into effect in November, prohibits using genetic information in making employment decisions, restricts acquisition of genetic information by employers, and strictly limits its disclosure. Title I of GINA, which addresses the use of genetic information in health insurance, goes into full force at the end of May.

To date, the EEOC has received about 80 GINA-related claims. In one case, a Connecticut woman, Pamela Fink, has alleged that her employer violated the law when she was terminated after undergoing a preventive double mastectomy. The complaint states that Ms. Fink received consistently favorable performance reviews as a director of public relations and marketing communications at a Stamford, Connecticut-based employer. After learning she tested positive for BRCA2, the breast cancer Type 2 susceptibility protein, Ms. Fink took a medical leave to have a preventive double mastectomy last October. In January, the day before she was to have a second and final surgery related to her double mastectomy, she was given a midyear performance review that was “negative and scathing,” according to the complaint. In March, her employment was terminated and she was told her position had been eliminated. Ms. Fink claims the dramatic shift in her standing at work resulted from her revelation that she had tested positive for the BRCA2 gene. Ms. Fink said she told her employers about her genetic testing in August — shortly after her positive performance review and about two months before she had a double mastectomy as a preventative measure. When she returned from medical leave, that’s when her responsibilities began slipping away and the assessment of her work went from glowing to negative.

Employers need to make sure that their discrimination policies are updated to include genetic information. We also suggest reviewing all potential sources of genetic information, including hiring practices, employee screenings, wellness programs, and health insurance enrollment practices. A particular challenge for employers is what to do when genetic information is volunteered. One employment lawyer warns that employers have to be careful of being “set up” by employees volunteering genetic information and then alleging that was the cause of a subsequent adverse job action. While no one predicts that GINA will have the breadth or effect of other discrimination laws like Title VII of the Civil Rights Act, the ADA, or ADEA, employers must be primed for claims alleging GINA violations.

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Following up on last week’s post about recent legislative efforts to prevent misclassification of employees as independent contractors, employers should be aware that the U.S. Department of Labor has stepped up efforts to enforce the issue in conjunction with the IRS’s plan to audit employment tax payments at 6,000 randomly selected companies over a three-year period. The initiative is designed to address a perceived tax shortfall in the collection of employment taxes due primarily to misclassification of employees as independent contractors.  The IRS provides some guidance on classifying independent contractors online at: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Additionally, the Labor Department has added 250 new inspectors (a 1/3 staff increase) as part of a broader crackdown on companies that misclassify workers as “exempt” from FLSA wage and hour laws like overtime and minimum wage. At the same time, plaintiffs lawyers are targeting companies in class actions on a range of wage and hour issues including worker misclassification, overtime and minimum wage, rest periods, and off-the-clock (the blurring of work time and personal time).

We can’t overemphasize the importance of properly classifying employees!

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We counsel employers to leave their biases at the door when making employment decisions, be it recruiting, discipline, promotion or termination. But how reasonable is that instruction? Not very, according to a number of tests and surveys that show that each one of us carries biases and prejudices, many of which may be unnoticed, that inevitably play a role in our decisions.

For example, a 2003 study by sociologist Devah Pager measured the effect of a criminal record on a job search. Ms. Pager sent pairs of young, well-groomed, well-spoken college men with identical resumes to apply for 350 advertised entry-level jobs in Milwaukee. The only difference was that one said he had served an 18-month prison sentence for cocaine possession. Two teams were black, two white. A telephone survey of the same employers followed. For her black testers, the callback rate was 5 percent if they had a criminal record and 14 percent if they did not. For whites, it was 17 percent with a criminal record and 34 percent without. My guess is that most of the employers did not consider themselves racist.

Similarly, judgments based on a person’s appearance generally reveal prejudices about age, gender, and disability. This was precisely the case with Abercrombie & Fitch, which paid $50 million to settle the EEOC’s case resulting from Abercrombie’s “restrictive marketing image” (i.e. pretty young white people) and recruiting and hiring practices that excluded minorities and women. Also as part of the settlement, Abercrombie agreed to ensure that its marketing materials “reflect diversity.”

While it may be impossible to completely abolish our biases, being aware of the existence and extent of our own prejudices can weaken their influence on our decisions. Take a look at your own biases and prejudices by taking a test at Harvard University’s Project Implicit:  https://implicit.harvard.edu/implicit/demo/takeatest.html

You may be surprised by the results!

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“Sexting,” the practice of taking sexually explicit pictures and sending them to others, is a rapidly emerging workplace problem.  Almost every employment lawyer has at least one case involving an employee sexting an inappropriate picture to a coworker. And since it rarely matters in the harassment context whether the PDA is personal or company-issued, it is a misconception for employees to think they can do whatever they want on their personal phones. We recently investigated a case where a male employee sexted a female coworker from his personal phone giving rise to a harassment claim. People drop their guard with texting because they think texting is a more casual form of communication than e-mail. Most employees realize now that e-mails don’t go away. They also should know texts can be pulled from a phone number for documentation in a harassment case.

What’s an employer to do? At the risk of sounding like a broken record – policy and training. Make sure your technology use and harassment policies address the issue, which should also be part of harassment training.

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Do you require or expect your employees to check email after hours or on weekends? If so, you could be liable for violations of the Fair Labor Standards Act’s (FLSA) overtime provisions. While exempt (generally managerial) employees are not entitled to overtime pay, nonexempt employees are, and that includes time spent checking email and voicemail. For example, a nonexempt employee who works a 40-hour workweek and spends an additional eight hours a week reading and replying to work emails is entitled to overtime for those additional eight hours. More employers are requiring employees in nonexempt positions to carry PDAs with the expectation that the employee will respond to pages, emails or calls outside of normal working hours. As a result, the issue is gaining attention from employees, plaintiffs lawyers, and the federal and state agencies that enforce wage and hour laws.

In a recent dispute between ABC News and the Writer’s Guild, three new ABC writers refused to sign ABC’s standard waiver stating that they would not be paid for checking their company-issued Blackberrys while off duty. The issue was resolved when ABC agreed to clarify its waiver to make clear that writers would be paid for any significant work while off duty, but not for merely checking messages. There are other potential solutions available to employers to mitigate the risks, including:

• Provide PDAs and remote computer access to exempt employees only
• Require prior written approval for all overtime work
• Restrict after hour use of PDAs

Importantly, employers should review classifications, especially with respect to those employees required to carry PDAs; and implement policies governing the use of PDAs. Of course, overtime pay is not the only issue created by PDA use. Employers are facing liability as a result of employee texting (and sexting), social media use, driving while texting, and unlawful activities such as online gambling.

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We have seen an unprecedented rise in EEOC (and related state agency) claims in the first few months of 2010, which will certainly result in a rise in employment-related litigation. In many cases, employers could have avoided the claims had they been more proactive in removing sources of conflict in the workplace, implementing and following progressive disciplinary programs, and resolving disputes at the onset.

In our experience, employers can head off claims and lawsuits by following some fairly simple (not necessarily easy) strategies:

• Review and update your employee handbook – recent updates should include FMLA revisions, ADA amendments, Lily Ledbetter Fair Pay Act of 2009, FLSA safe harbor language, Genetic Information Nondiscrimination Act of 2009.
• Provide honest and accurate reviews and evaluations – sugarcoating often leads to or exacerbates employment-related claims.
• Have a clear complaint procedure – have a process in place that easily allows employees to make complaints (consider a hot-line), train employees on the process, and educate managers on how to handle complaints.
• Audit HR functions – it is important to know what you don’t know.
• Watch the clock – make sure that non-exempt employees are not working overtime by checking voice mail and email after hours and on weekends.
• Follow a progressive disciplinary system – this is the best way to ensure consistency in discipline and discharge decisions.

While some of these strategies may seem like common sense, they are precisely the areas that are overlooked or ignored in times of belt tightening and cost cutting. Given the direct and indirect costs of defending employment claims, however, the cost of acting proactively is money well-spent.

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Last week a New York federal appeals court determined that while alcoholism can be considered a disability under the Americans with Disabilities Act (“ADA”), the impairment cannot protect an employee from termination if it affects his ability to show up for work. Bruce VandenBroek sued his former employer, claiming he was terminated because of his alcoholism and for taking medical leave to treat his alcoholism. The court in VandenBroek v. PSEG Power CT LLC disagreed, holding that where regular attendance is an essential job function, the Americans with Disabilities Act and the Family and Medical Leave Act should not shield an employee from termination when s/he is chronically absent from work.

Although regular attendance is an essential job function for most positions, the court noted that it was particularly important to this employee’s job because “reliable employee attendance was . . . essential to ensuring against a power outage or even an explosion.”  Finding the employee failed to prove he was terminated for taking protected leave under the FMLA, the court further ruled he was terminated for violating the employer’s “no call/no show” policy. 

Nevertheless, employers must act with caution when disciplining or terminating a disabled employee for attendance reasons, and be prepared to demonstrate the specific reasons regular and reliable attendance are essential to job performance. The EEOC offers guidance on this specific issue in “The Americans with Disabilities Act: Applying Performance and Conduct Standards to Employees with Disabilities.”

This also serves as a reminder of the importance of accurate job descriptions. If regular attendance is an essential job function, it should be included in the job description.

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A significant loss in productivity. Some studies estimate that up to 50% of corporate email communications are non-business related, and are either spam or personal in nature. Frequently checking new email messages breaks concentration, changes focus, and elevates new email messages to the highest priority task regardless of what is, or should be, the actual highest priority task. The biggest problem appears to be the amount of time lost to reacting to new email messages. One study found that 70% of arriving emails were reacted to within 6 seconds. Once the email was addressed, it took an average employee 64 seconds to resume working at the same rate they were before the interruption. If an employee has set up the email application to check for email every 5 minutes then it is possible, if (s)he is a heavy user of email, that there could be 96 interruptions in a normal 8-hour working day, which is a substantial amount of time lost to business.

 So what is an employer to do? There are several ways to recover this loss. Consider the following:  

1.  Have email applications set up to check for email every 45 minutes (rather then every 5), reducing the number of possible interruptions;
2. Turn off the new email alert dialogue box and email sound alerts;
3. Train staff on effective and efficient use of email, such as setting email priority, email housekeeping with message rules, effective use of user groups, folders and address books;
4. Make sure your technology use policy adequately and accurately communicates the company’s rules regarding email use.

 A complete ban on using company email for personal reasons is typically unreasonable because it is difficult to monitor and virtually impossible to enforce; therefore efficient and effective use of email is critical.

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Yesterday the U.S. Senate passed H.R. 4691, which extends the ARRA COBRA subsidy through March 31, 2010. Compliance assistance for employers will be available at http://www.dol.gov/ebsa/COBRA.html once the President signs the bill. We recommend employers become familiar with the most recent notice requirements.

Currently there are efforts in Congress to extend the benefits through June 30, 2010. We will keep you posted.

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Thomas’s English Muffins (Bimbo Bakeries USA) has stopped a former V.P. from starting his job at competitor Hostess based on the V.P.’s knowledge of the invaluable trade secrets of Thomas’s English Muffins’ “nooks and crannies.” A Pennsylvania judge has ruled that V.P. Botticella cannot start his job until the legal issues are resolved, based on a confidentiality agreement Botticella signed. While some commentators have opined that the confidentiality agreement may not hold up under California law (where Botticella lives and works) if Botticella seeks a change in venue, his own actions do not help his case. Botticella advised senior management that he was retiring, so Thomas allowed him to continue to work for 2 weeks. During that time, he allegedly continued to have access to confidential trade secrets and attended several sensitive meetings. When rumors started to fly that Botticella was going to Hostess, Thomas’ confronted him and filed suit. In order to prevail, Thomas will have to show that it treated the nooks and crannies like trade secrets; e.g. the information was restricted to those who needed to know, it was protected as confidential, and not available for dissemination. But it is not looking good for Botticella. He was one of 10 people in the world that had access to the information, he signed a confidentiality agreement, and he was not honest about where he was going to work.

Even if your trade secrets are not as famous as Thomas’ nooks and crannies, you can prevent their disclosure by former employees with proper protections in place and a well-drafted confidentiality provision. In these circumstances, it is not necessary to have a non-compete agreement, which tend to be harder to enforce (and prohibited in some states like California).

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The EEOC recently reminded us that the Americans with Disabilities Act extends to employees associated with a disabled person. In its recent suit against The Timken Company for gender and disability discrimination, the EEOC alleges that Timken refused to hire an employee for a full-time position as a process technician because of her  gender and because she is the mother of a disabled child. The employee had worked at another Timken facility on a part-time basis before applying for the full-time position. The EEOC charges that Timken’s refusal to hire the employee due to concerns about her ability to work full-time and care for a disabled child violated the ADA and  Title VII.

This case raises several points:

• The EEOC is serious about protecting employees from discrimination based on their association with a disabled person (i.e. the employee need not be disabled to bring a claim);
• Employers need to focus not only on potential new-hires, but also on current employees to avoid denying employment benefits or accommodations based on the employee’s association with a disabled person; and
• Managers should be trained on their responsibility to avoid potential discrimination, to recognize the need for accommodations, and to avoid common stereotypes and assumptions (e.g. women with caregiving responsibilities can’t handle the fast-track).

In addition to a marked increase in EEOC claims, we are seeing evidence that the EEOC is devoting more time to investigations and stepping up enforcement efforts. It is critical that management and supervisor training include all possible forms of discrimination. A comprehensive training program is one of the most valuable defenses to a discrimination claim of any type.

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We’ve written about the hazards of employees using Facebook, and the potential liability of employers who use social media to screen applicants; but what about businesses doing business on Facebook and other social media sites? Apparently social media sites are emerging as a way for businesses to connect. Salon magazine recently listed popular guides to helping businesses effectively use social media:  

• 32 Ways to Use Facebook for Business
• 62 Ways to Use Twitter for Business
• 32 Ways to Use LinkedIn for Business
• 10 Golden Rules of Social Media
• 10 Tips for Becoming a Smarter, Social Business Person
• How to Build Conversations in Social Media
• Why Social Media is Still a Red-Headed Stepchild

All of these guides were published by WebWorkerDaily.com, an excellent technology resource for businesses.

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The President signed the COBRA subsidy expansion as part of the Department of Defense Appropriations Act, 2010, extending the COBRA subsidy and requiring employers to notify certain eligible individuals. Highlights of the new law include:

• Eligible individuals involuntarily terminated from employment on or before February 28, 2010 are eligible to receive the subsidy
• The premium subsidy period is extended from 9 to 15 months, maximum
• Employers must send a notice to eligible individuals who were on COBRA on or after November 1, 2009 and to those who became eligible due to termination on or after November 1, 2009

The law also allows for some retroactivity. The DOL has not yet issued requirements for the special notice. We will keep you updated.



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As anticipated, the House of Representatives voted last week to extend the COBRA/ARRA subsidy. 

Embedded in H.R. 3326, a measure appropriating funds for the Department of Defense, the nine-month, 65 percent premium subsidy would be extended by six months to a total of 15 months. It would apply to those who lose their jobs through February 28, 2010. Under current law, employees who lose their jobs after December 31 are ineligible for the subsidy. The measure, approved on 395-34 vote, also would provide an additional six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation would give beneficiaries whose subsidy ran out and who didn’t pay the full premium a second chance to opt for coverage. For example, a beneficiary whose nine months of subsidized coverage ran out November 30 and who didn’t pay the regular unsubsidized December premium could pay the 35 percent premium share in January and receive coverage for December.

The matter is now before the Senate, which is expected to act quickly before the premium aid program expires at the end of the year. We will keep you updated.

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How do you know when a workplace investigation needs an outside investigator? While we’d love to say “always,” many investigations can be handled internally by competent HR personnel or in-house counsel. There are, however, red-flags that indicate when an outside investigator is necessary:

• The government is involved (EEOC, SEC, DOL)
• There is a chance of a lawsuit or government investigation
• More then one employee complains about the same serious problem (e.g. systemic racism)
• The accused is a high-ranking employee
• The complaint is subject to media attention
• The complaining employee has hired a lawyer, filed a suit or a charge with a government agency (EEOC, OSHA, Wage and Hour Division)
• The accusations are extreme (allegations of rape, assault, threats, theft)
• There is a heightened need for objectivity and impartiality

In these situations, the benefits of an outside investigator are many: knowing how to prepare a report that will likely be evidence or a defense in litigation or a government investigation, less interruption to business, more effective interviews, and the perception that the company is taking the complaint seriously.  

When choosing an outside investigator, ask for credentials, references, whether he/she has served as a witness, and examples of prior investigations and the results.

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Very, according to The Wall Street Journal, calling HR professionals “suddenly hot.” Companies are recognizing the importance of experienced HR specialists on a range of hot button issues like executive pay, management succession, and integrating acquisitions. A good HR director with solid recruiting, hiring and performance management policies can shield a company from claims, as well as develop and nurture a productive workforce.

A competent HR professional is also a company’s front-line defense to claims of discrimination and harassment. Training programs and complaint procedures can offer legal defenses to discrimination and harassment claims. For all of these reasons, experienced HR executives are in high demand.

At least 65 current and former human resources managers serve as outside directors in 101 boards, a Wall Street Journal analysis found, up from probably a half dozen 10 years ago.  Starbucks recently plucked an HR expert/board member for an interim gig running HR while looking for a replacement.  When VR Corp. bought North Face, it was the outside director with HR experience who successfully melded the corporate cultures.

HR professionals are often undervalued and underpaid. We encourage employers to take a serious look at whether they have the appropriate HR support and make adjustments accordingly. An HR audit is a great way of gauging and evaluating the HR function and role in a company.

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The IRS is adjusting the standard-mileage-reimbursement rate for 2010…DOWN to 50 cents per mile (presently 55 cents). The mileage rate for 2010 reflects lower transportation costs compared to a year ago. Employers who use an amount at or below the IRS rate eliminate the need to maintain extensive records in order to exclude the reimbursement from employees’ taxable income.  Of course, employers should always require employees to provide proof of adequate liability insurance.  

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The COBRA assistance available under the American Recovery and Reinvestment Act of 2009 (ARRA) is scheduled to expire at the year-end. ARRA set up an assistance package to provide recently unemployed workers up to 65% of COBRA premiums to maintain health insurance. While popular with employees, the program has created an administrative headache and an unforeseen cost to employers seeking to survive by shedding payroll costs. The legislative subsidy will expire on January 1, 2010.

While there are reports of efforts to extend the assistance past December 31^st, at present the date stands. This means employees laid off after January 1, will not receive the 65% premium subsidy. And, with a 9.8% unemployment rate, this translates into many laid off workers unable to maintain health insurance coverage without some assistance.

The U.S. Department of Labor has posted on its website some answers to common questions being raised as the year comes to an end:

Q: If an employee is involuntarily terminated prior to December 31st, but is not eligible for COBRA until after January 1st, is the employee eligible for ARRA premium assistance?

A:No. An individual who does not become eligible for COBRA until after December 31, 2009 does not meet the qualifications for assistance. The date of eligibility for COBRA coverage is determinative.

Q:What about employees who are currently receiving the subsidy or who become eligible no later than December 31^st? Will they continue to benefit from the subsidy in 2010?

A: Yes. Eligible individuals are entitled to receive the full 9 months of premium assistance as long as they remain eligible. For example, if an assistance eligible individual started COBRA on November 1, 2009, they would be entitled to 9 months of ARRA premium assistance from November 1, 2009 through July 31, 2010 as long as they remained eligible.

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With all due respect to our FABULOUS technology/media guru, Jamie Ginsburg, I’m still a fan of old-fashioned face-to-face networking. The Wall Street Journal recently ran an article about the Wednesday 10, a social/business networking group started by William Safire in 1930 that still exists today. The members of the Wednesday 10 (all males, self-made, and primarily Jewish) described the advantages of old school networking: When member Mort Janklow made a career switch from corporate attorney to literary agent, fellow member columnist William Safire offered himself as a famous first client. When Robert Menschel, a senior director at Goldman Sachs, was considering deals involving large consumer companies, he would pick the brain of fellow club member Ed Meyer, the former chief executive of Grey Advertising.

“The Wednesday 10 comprised, at various points, more than 20 men; the goal was a number small enough to maintain intimacy yet large enough to ensure that at least 10 members would show up for each of the monthly Wednesday-night meetings. No more than two representatives of any one industry were permitted. The idea was to combat insularity, to keep the men connected to people and events outside their own professions.”

While criticized by some for the homogenous nature of the group, the lesson is not lost that networking is not only a way to keep socially connected, but it is a significant component in business/client development, marketing and keeping abreast of the quickly changing business environment.

I find this topic of interest because I struggle with mixing business and “friendship” online…do my Facebook “friends” really want to get my blog posts? Is it appropriate to “friend” a client, etc… While I tend to be somewhat old school in this area, I was recently reminded that there is a place for both old-fashioned and online networking when I was approached at a face-to-face networking event by an online friend who told me that he was a fan of the Warren & Hays Facebook page and would not have otherwise known what I did professionally. So while the etiquette is still somewhat murky, it appears that business is best served by a combination of online and good ole-fashioned networking.

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This past Saturday, November 21^st, the antidiscrimination laws were extended to a whole new group of people when the Genetic Information Nondiscrimination Act (“GINA”) became effective. (See our previous post on October 16, 2009.) In an editorial on Sunday, The New York Times called GINA an important step in protecting people who have inherited a predisposition to disease by removing a significant obstacle to genetic testing, which can help prevent and treat serious illnesses.

Under the new law, employers are prohibited from asking for genetic tests or taking into account an employee’s genetic background in hiring, firing or promotions. Discrimination is also banned in individual and group health insurance plans. The New York Times sites a survey where 63% of respondents said they would not submit to genetic testing if employers or health insurers could see the results.  By passing the law, legislators are clearly hoping to clear the way for genetic testing, which can warn people that they have a disposition for diseases like cancer, and help doctors adapt courses of treatment to particular patients.

Employers should take several steps now to comply with GINA:

1. Post the EEOC’s new “EEO is the Law” poster, available at: http://www.eeoc.gov/employers/poster.cfm
2. Update discrimination policies in include GINA
3. Review medical forms (FMLA, leave certifications) for compliance with GINA
4. Review wellness programs to ensure they don’t violate GINA

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According to EEOC data, the percentage of men filing sexual harassment charges nationwide has increased over the past decade from 12 to 16 percent of all charges involving sexual harassment. The EEOC recently got significant settlements in two lawsuits brought on behalf of men – one involving harassment by male co-workers, the other harassment by a female co-worker.

Cheesecake Factory agreed to pay $345,000 to settle a claim where, according to the EEOC, the evidence overwhelmingly showed that the men suffered sexually abusive behavior, including abusers directly touching victims’ genitals, making sexually charged remarks, grinding their genitals against them, and forcing victims into repeated episodes of simulated rape. Managers witnessed employees dragging their victims kicking and screaming into the refrigerator, the EEOC charged. in addition to the monetary relief for the six victims, the consent decree calls for the company to specifically train its employees and managers about sexual harassment and institute an ombudsman to field and address sexual harassment complaints by employees.

In the second lawsuit, the EEOC charged that the Regal Entertainment Group subjected a male employee to sexual harassment by a female co-worker and then retaliated against him for complaining about the unlawful conduct – along with two supervisors who tried to help. This case also involved “crotch grabbing.” The alleged retaliation consisted of unwarranted discipline, unfairly lower performance evaluations and/or stricter scrutiny of performance. The consent decree settling the case requires Regal Entertainment Group to provide annual anti-discrimination training to its employees; closely track any future discrimination complaints; and provide annual reports to the EEOC regarding its employment practices.  Additionally, Regal Entertainment paid $175,000.

What can employers can learn from these cases?

• Touching is never acceptable in the workplace
• Managers must be trained to identify and report harassing behavior
• All employees should be trained annually on sexual harassment
• Managers must be trained not to retaliate

While it is not known what type of policies Cheesecake Factory and Regal Entertainment had in place, it can safely be assumed that both had written anti-harassment policies. But having a policy is never enough. Employers must publicize and adhere to the policy, train on the policy and investigate claims promptly and thoroughly.

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On Friday, November 20th, Sindy and Jennifer will be speaking at the Taft 9th Annual Labor and Employment Law Update at the Embassy Suites Cleveland – Rockside on the topic of Dealing with Problem Employees.

Every organization has them – workers who are not productive, chronically complain, engage in bullying behavior, leave managers frazzled and frustrated, or are otherwise “problem employees.”  Their effect on the workplace is all too well-known.  They intimidate others, stimulate the proverbial grapevine, and generally distract from the business at hand.  Friday’s session will help identify the various types of problem employees and provide practical advice for how to deal with them.  We will provide employers with the knowledge necessary to legally and effectively minimize the effects of problem employees by not hiring them to begin with, managing their performance, applying disciplinary measures, and terminating them when necessary, all while avoiding any legal landmines that might arise.

Warren & Hays has helped employers with problem employees by training, conducting one-on-one sensitivity sessions, and mediating workplace dynamics.

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Employers need to be extra vigilant in reviewing their hiring and firing policies in preparation for the year ahead. Lawsuits and agency charges are on the rise due to increased government initiatives including:

• The Obama administration has declared the enforcement of workplace laws a high priority.
• Workplace discrimination claims jumped 15% in 2008, the single biggest year-to-year jump in EEOC history.
• The EEOC and the Department of Labor are using hefty increases for enforcement activities in 2010.
• The EEOC plans to grow its staff by 300 employees including investigators, attorneys and mediators.
• Systemic discrimination, which is more difficult and expensive to defend, is a primary focus.

We recommend an annual review of hiring and firing policies. This can be part of an HR self-audit, which is a relatively inexpensive way to avoid potentially staggering costs. Sindy and Allison West, our colleague on the west coast, are speaking in a Webinar on Thursday, November 19th, at 2:00 eastern time: HR Self-Audits: Spot and Fix HR Practices That Lead to Lawsuits. Sindy and Allison will lay out a blueprint for hitting the most important areas of vulnerability and conducting a rock-solid audit. The 60-minute session will cover:

• How to review particular areas of vulnerability, ranging from:
  • anti-discrimination policies
  • hiring and firing procedures
  • compensation plans
  • wage-and-hour policies
  • documentation practices

• A step-by-step guide of what a solid audit should include;
• Developing a comprehensive audit strategy, including gaining executive buy-in;
• Best practices in documenting the audit results; and
• Next steps once the results are in.

Employers who are diligent in reviewing and training will avoid claims and maintain a more efficient and productive workplace.

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Employers are asking how to keep employee morale and motivation up in the face of pay-cuts, lower (or no) bonuses and continued pressure to keep costs down.  One of the most effective ways of keeping employees happy is RECOGNITION. Employee recognition shows employees that their work is valued and appreciated, which is key to morale, motivation and retention. Not only does an employee recognition program generate results for the people who win awards, but it also tends to increase productivity and drive employees to give their most to the company.

An effective employee recognition program must have at least three components: (i) fairness (ii) visibility and (iii) consistency. To be fair, a program must not favor one employee over another, merely because of his or her position within the organization, or his relationship with his supervisor. Making certain that a program is highly visible helps to ensure consistent implementation. Consistency ensures credibility, which is crucial to a program’s success.

While the creation of an employee recognition program warrants more attention than we can provide here, we can offer some low-cost and no-cost ideas for awards:

• A reserved parking space
• “Top Achiever” recognition on the company intranet or newsletter
• Pizza party or ice cream for a high-achieving group
• An extra paid day off
• A trophy or plaque
• Movie passes
• Gift certificates to local restaurants or stores

As the holiday season and year-end approach, now is the perfect time to design and implement an employee recognition program.

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Inspired by lawyer Jon Hyman’s weekly wrap-up on his Ohio Employer’s Law Blog, following is a recap of some of this week’s employment-related news:

1. The Emergency Influenza Containment Act was introduced in the U.S. House of Representatives. The legislation, applicable to employers with 15 or more employees, would require employers to provide up to five days of paid sick leave per year to workers afflicted with influenza or other, similar contagious illness.
2. President Obama signed legislation that expands coverage of “exigency leave” and “servicemember caregiver leave” under the Family and Medical Leave Act. The National Defense Authorization Act for Fiscal Year 2010 extends coverage for exigency leave to the family of all active-duty servicemembers who are deployed in a foreign country. The legislation also extends coverage of “servicemember caregiver leave” to include caring for a veteran who is undergoing medical treatment, recuperation, or therapy, for a serious injury or illness and who was a member of the Armed Forces (including a member of the National Guard or Reserves) at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.
3. A Cuyahoga County jury has reminded local employers that retaliation will not be tolerated. (Recall last year’s $42 million jury verdict.) After a two-week trial, a former Dix & Eaton executive was awarded just over $1 million on her claim that she was fired in retaliation for complaining to HR that she believed she was being set up for a wrongful discharge claim because of her age. All supervisors should be trained on the importance of not retaliating, i.e. managing employees who have filed a claim or engaged in other protected activity.
4. Employers must post a revised EEO poster by November 21, 2009. The EEOC’s revised “Equal Employment Opportunity is the Law” poster reflects current federal employment discrimination law (including the Americans with Disabilities Act Amendments Act of 2008) and adds information about the Genetic Information Nondiscrimination Act of 2008, which is effective November 21, 2009. The poster is available at: http://www.eeoc.gov/posterform.html.

Have a great weekend!

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If you have 15 or more employees, you better find out! On November 21, 2009, the Genetic Information Nondiscrimination Act goes into effect. GINA, which prohibits the use of genetic information in employment decisions, is intended to encourage individuals to take advantage of genetic testing without fear that the information will be used against them. GINA regulates the acquisition and use of genetic information in the following ways:

• Prohibits the use of genetic information in employment decisions;
• Restricts deliberate acquisition of genetic information;
• Requires that genetic information be maintained as a confidential medical record; and
• Places strict limits on the disclosure of genetic information.

So how does this affect employers? What if you are provided genetic information in connection with an FMLA certification? What do you do with genetic information that is disclosed in a wellness program?

Fortunately, GINA contains exceptions for inadvertently acquired genetic information, an employee’s knowing and voluntary participation in a wellness program, acquisition of family medical history to comply with FMLA certifications, etc.  Nevertheless, genetic information, however acquired, must be maintained and treated as a confidential record under the Americans with Disabilities Act.

Though the EEOC is still in the process of drafting final regulations for the implementation and enforcement of GINA’s employment provisions, there are steps employers can take now:

• Post new GINA poster to be issued by the EEOC;
• Update nondiscrimination policies to include genetic discrimination;
• Review documents that request medical information and revise accordingly;
• Properly maintain genetic information currently on file;
• Review wellness programs to ensure compliance with GINA;
• Become familiar with the EEOC regulations once they are issued; and
• Train supervisors and management on GINA compliance.

We expect to see some interplay between FMLA, ADA, GINA and Workers’ Compensation. And we predict issues will arise most likely in the context of managing workplace leaves and accommodations.

We will further advise when the final regulations are issued.

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A former pharmacist at Wal-Mart Stores who claimed she was fired after asking to be paid the same as her male colleagues was awarded $2 million in damages ($1 million in compensatory and $1 million in punitive). 

In upholding the award, the Massachusetts Supreme Judicial Court explained: ”There was evidence that Wal-Mart paid the plaintiff substantially less than less-experienced male pharmacists, refused to pay the plaintiff the pharmacy manager salary differential that it paid to male pharmacists, and terminated the plaintiff purportedly for a single policy violation but did not terminate male pharmacists for that or for more serious infractions involving violations of State and Federal law,” Justice Judith Cowin wrote for the court in the unanimous, 7-0 ruling.

Wal-Mart claimed that the pharmacist was fired because she left the pharmacy unattended and allowed a technician to use her computer security code to issue prescriptions during her absence.  Considered alone, these would appear to be valid, non-discriminatory reasons for termination; however, the jury found that Wal-Mart’s stated motive for Haddad’s firing was a pretext and that Wal-Mart acted with a “discriminatory animus.”

This case highlights the importance of consistency – consistency in compensation and consistency in the enforcement of company policies.  An annual HR audit should look at both of these issues and recommend any necessary changes.

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Northeast Ohio employers are increasingly using fitness reimbursement programs to save healthcare costs in the long run. These programs reimburse employees (and sometimes covered family members) for costs incurred in engaging in healthy activities on the theory that regular physical activity can protect against diseases such as cancer, heart disease and high blood pressure as well as contribute to healthy bones, muscles, joints and improved mental health.

In a recent survey of 23 Northeast Ohio companies, the Employers Resource Council (ERC) reports that employers are reimbursing for a variety of healthy activities, including:

• Membership to fitness center (83%)
• Weight loss programs (39%)
• Fitness classes (30%)
• Community health programs (13%)
• Personal trainer (9%)
• Exercise equipment purchase (9%)

ERC reports that the average amount of reimbursement is $178.

While research on the impact of health promotion programs on productivity-related measures such as absenteeism, disability, turnover, and retention has been quite limited, preliminary studies are reveal that participation in a reimbursement-based health promotion program had a significant impact on short-term disability use. For example, the College of Occupational and Environmental Medicine reports that employees receiving STD who were participants in a health promotion program used an average of 6 fewer net disability days than similar employees receiving STD who were not participants in a program. The analyses also showed that average net STD days for non-participants significantly increased during the study period. From this standpoint alone, employers should appreciate the return-on-investment in the long-term.

We encourage wellness programs not only for their cost-saving benefits, but also for the positive affect on employee productivity and morale. Physically and mentally healthy employees are good for the bottom line.

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An hour before President Obama appeared at the AFL-CIO convention last week to reaffirm his support for the EFCA, Arlen Specter told hundreds of cheering union officials that by year’s end Congress would pass labor law legislation that “will be totally satisfactory to labor.”  Following his speech, Specter stated that he had been working on the package with other Senate Democrats, and went on to outline its major components:

1. Dropping the Card Check provision and replacing it with short election time frames;  
2. Giving union organizers equal access to workplaces if an employer wants to hold a mandatory meeting to discuss union issues on company time; and 
3. Imposing forced government arbitration if parties do not reach a contract within 120 days, but using the “last best offer” model in which arbitrators pick between the two final positions of the union and the employer. 

The bill sharply limits the time between the organizers’ declaration that they have enough support to call an election and the day of the vote, making it imperative that employers have in place a plan for an effective and legal campaign against unionization.  In fact, labor lawyer James Stone of Jackson Lewis recently suggested at a seminar on the issue that employers should engage in a full-time, low grade campaign.  

As we have written in the past, employers are not entirely helpless. There are many strategies that can promote an employee-friendly (i.e. union-free) workplace including: open communication, well-trained supervisors, an open door policy, and familiarity with the rights of employers when faced with an organizing effort.

Please let us know if we can help your company remain employee-friendly/union-free.

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Northeast Ohio employers are using Facebook, LinkedIn and other social media sites to enhance marketing, networking, relationship building, and recruiting, reports the Employers Resource Council (ERC) in its recently released survey of how Northeast Ohio organizations are using social media in the workplace. According to the survey, 49% of employers use social media for networking and relationship building, LinkedIn being the most popular site.  A significant industry distinction: non-profits and non-manufacturing companies use social media to a much greater degree than manufacturers.

Not surprisingly, most organizations (60%) are discussing using social media to enhance external operations with customers and fewer (33%) are considering ways of using social media to enhance internal operations with employees. Forty-six percent of employers informally monitor the use of social networking tools by employees and 44% have at least one policy regarding employee use of social media in the workplace.

As we previously blogged, it is imperative that employers have a policy that is reasonable and capable of being monitored and enforced. Employers also need to carefully consider the use of social media in the recruiting and hiring process, where an employers’ net surfing can result in exposure to discrimination claims.

We recommend that employers recognize and accept the use of social media in the workplace and implement a policy that is consistent with company operations, culture and goals.

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Women with advanced degrees are faring just as well as men in the economic downturn. Citing a report by the New York nonprofit research group Catalyst, The Wall Street Journal reports that women and men with M.B.A.s were roughly equally likely to be promoted or laid off. Among men, 36% were promoted and 10% lost jobs; among women, 31% were promoted and 12% lost jobs (the report considers the differences statistically insignificant).

This equality did not, however, extend to top-level executives where women senior leaders were more than three times as likely as their men counterparts to have lost their jobs because of company downsizing or closure. Gender-based stereotypes about leadership during tough times and limited access to informal networks and mentors may be partly responsible for the disparity, says Catalyst president and CEO Ilene H. Lang.

As a result, companies that pay a premium to recruit up-and-coming talent may not be effectively leveraging their investment in the leadership pipeline. Employers can protect their investment in recruiting and retaining high-potential male and female employees with effective performance management programs, sensitivity training, and keeping the focus on objective criteria rather than gender-based stereotypes.

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1.   You’re not Sure what your HR Department Does and You Don’t Care

One of the key areas of an HR audit is evaluating whether your organization has allocated an appropriate level of resources to HR issues and making sure the HR function is aligned with the organization’s strategic business principles. A well functioning HR department can be critical to your organization’s overall success.

2.   You Like Spending Money Defending Employment-Related Claims

Regular HR audits result in fewer employment-related claims, including EEOC complaints and lawsuits.

3.   Compliance with Federal, State and Local Laws is not a Top Priority

One of the primary focuses of an HR audit is your organization’s compliance with employment-related laws relating to discrimination, harassment, FLMA, disabilities, and benefits.

4.   Employee Morale is not a Concern

An important function of the HR department is to serve as a resource for employees and to gauge employee morale and satisfaction. A well-run HR department that is trusted and open to employee complaints and concerns not only minimizes liability, but results in a more satisfied and productive workforce.

5.   The Hiring and Retention of a Top-Quality Workforce is not Important

An HR audit will analyze your organization’s hiring, on-boarding, performance management and termination procedures in order to ensure that you are hiring and keeping the best employees.

The point is that every dollar spent on an HR audit will save you several in risks avoided. Your organization can use the audit information to correct deficiencies that can lead to lawsuits, increased turnover and other liabilities. If your organization is sued, a properly executed HR audit can provide a valuable defense. Last, but certainly not least, effectively implementing the results of an HR audit will have a positive and lasting effect on your organization’s overall performance and culture.

Warren & Hays conducts thorough and effective HR audits for all sizes and types of organizations.

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Increased scrutiny of worker classification, overtime pay calculations, family and medical leave practices, and record keeping. Under the new administration, the U.S. Department of Labor’s Wage and Hour Division is expected to receive a substantial increase in funding, which will be used to enhance investigation and enforcement efforts. Particular areas that warrant attention include:

• Employee classifications (exempt and nonexempt)
• Payment of minimum wage
• Overtime pay
• Payroll deductions
• Paid and unpaid leave
• Payment of discharged employees
• Payroll policies and practices
• Record keeping  

We believe the time and expense of conducting an annual wage and hour audit is well spent in light of the advantages an audit can provide employers facing an investigation.

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The Centers for Disease Control and Prevention, anticipating a wider and more serious spread of the H1N1 flu this season, has released new guidelines (available at http://www.flu.gov/plan/workplaceplanning/guidance.html) to help businesses and employers prepare now for the impact seasonal and H1N1 flu could have on employers, employees and operations. 

The CDC recommends that employers take the following actions now:

• Review or establish a flexible influenza pandemic plan and involve your employees in developing and reviewing your plan;
• Conduct a focused discussion or exercise using your plan, to find out ahead of time whether the plan has gaps or problems that need to be corrected before flu season;
• Have an understanding of your organization’s normal seasonal absenteeism rates and know how to monitor your personnel for any unusual increases in absenteeism through the fall and winter.
• Engage state and local health department to confirm channels of communication and methods for dissemination of local outbreak information;
• Allow sick workers to stay home without fear of losing their jobs;
• Develop other flexible leave policies to allow workers to stay home to care for sick family members or for children if schools dismiss students or child care programs close;
• Share your influenza pandemic plan with employees and explain what human resources policies, workplace and leave flexibilities, and pay and benefits will be available to them;
• Share best practices with other businesses in your communities (especially those in your supply chain), chambers of commerce, and associations to improve community response efforts; and
• Add a “button” to your company Web page or employee Web sites so employees can access the latest information on influenza: www.cdc.gov/widgets/ and www.cdc.gov/SocialMedia/Campaigns/H1N1/buttons.html

The guidelines also discuss the important components of an influenza pandemic plan and recommended employer responses for the upcoming flu season. As we wrote previously, however, employers should take care not to discriminate based on the virus. (The EEOC has cautioned against national origin and disability discrimination in the face of a flu pandemic.) Warren & Hays can help create a pandemic plan and appropriate responses to help employers maintain the highest level of productivity throughout the flu season.

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While hope is generally a good thing in life, it can be problematic when managers use it as a performance management strategy. An all too common scenario: manager hires someone who never should have been hired, or keeps someone around who should have been terminated long ago.  The manager hopes the employee will get better but never clearly communicates expectations.

Usually, the manager wants to avoid conflict, or hopes the employee will improve, or hopes the employee  will leave on his own, or hopes the employee switches departments.   Inevitably, however, after months (or years) of failed expectations, the manager gets fed up and fires the employee.  The result is a big problem for the employer if the employee brings a claim. It is hard to say the termination was performance-related when the employee was never told of the issues, and presumably the documentation is lacking or non-existent. 

This scenario came to mind while Sindy and I were preparing a performance management training program for a client. While performance management can’t be summed up in a blog entry, we have found that the following principles are key to a solid performance management program:

1. Avoid the element of surprise
2. Document, document, document
3. Be thorough
4. Give honest feedback (the good, the bad and the ugly)
5. Avoid making promises you may not be able to keep
6. Avoid biases and stereotypes
7. Set goals
8. Be honest, yet respectful, at all times

A successful performance management program can be one of an employer’s most valuable productivity tools.

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Officers and managers fall within the FLSA’s definition of “employer” and thus can be personally liable for unpaid wages, says the 9^th Circuit Court of Appeals in a recent decision. In Boucher v. Shaw, No. 05-15454 (9th Cir. Jul. 27, 2009), the court held that “the [employer’s] bankruptcy has no effect on the claims against the individual managers at issue here.”  Pointing out that the FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee,”  the court found that the company’s Chief Executive Officer, Chief Financial Officer, and a manager responsible for labor and employment matters could be held independently liable for unpaid wages, even thought the company was dissolved.

What does this mean for employers? Officers and managers must be trained on FLSA issues such as proper classification of employees as exempt or non-exempt, and payment of overtime and minimum wage. We also recommend an annual wage and hour audit to insure compliance with the FLSA and corresponding state laws.

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Conventional wisdom tells bosses to take a clinical approach to firing employees: say little, don’t answer questions and have the employee escorted out of the building…on a Friday. This approach, however, often results in a surprised, angry, hurt and resentful former employee…one who is much more likely to sue. Executive coaches and HR specialists are counseling employers to have a heart when terminating or laying off an employee. By humanizing the process, employers can avoid unpredictable behavior including violence and lawsuits.

While the fundamental rules still apply (i.e. stick to the facts, do not negotiate), taking the following steps can leave an employee with dignity and self-respect, lessening the chance of a claim:

• Be Truthful about the Reason for Termination: tell the employee whether it is performance, lay-off, elimination of position
• Show Empathy: it’s o.k. to let the employee know that the decision was a difficult one (if it was)
• Consider Severance: whether or not the employee is entitled, especially in exchange for a release
• Help the Employee Move On: offer assistance, contacts, and a good reference (if warranted)
• Allow for Transition: if appropriate, give the employee time to find a new job and announce their departure to colleagues
• Communicate with Remaining Employees: if the termination is likely to affect morale, openly address employee concerns

Of course, there are many circumstances that warrant a quick discussion and escort out of the premises, but more often there is an opportunity to lessen the severity of a termination by incorporating some humanity. There is no question that a terminated employee who is treated with dignity and respect is less likely to pursue a claim.  

Warren & Hays assists employers with all aspects of performance management from hiring through termination.

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This Wednesday, July 29th, Sindy and I will be presenting separately at the Cleveland HR Star Conference on Dealing with Problem Employees and The Golden Rules of Workplace Investigations.  The agenda for the Conference contains the following descriptions of our programs:

Dealing with Problem Employees
Sindy Warren, Esq.
Partner, Warren & Hays LLC
Every organization has them – employees who are not productive, who chronically complain, who engage in bullying behavior, or who are otherwise “problem employees.” Their effect on the entire workplace is all too well-known. They leave managers frazzled and frustrated. They intimidate others. They stimulate the proverbial grapevine, and they generally distract from the business at hand. This session will help you identify the various types of problem employees and – more importantly – it will provide you with practical advice for how to deal with them effectively. By attending, participants will gain the knowledge necessary to legally and successfully minimize the ill-effects of problem employees. Topics covered will include: avoidance through pertinent hiring practices, managing performance, applying disciplinary measures, terminating when necessary, and avoiding any legal landmines that might arise.

The Golden Rules of Workplace Investigations
Jennifer Hays Gorman, Esq.
Partner, Warren & Hays LLC
It is critical that employers respond promptly and thoroughly to employee complaints of harassment, discrimination and other unlawful workplace conduct. This session will take an in-depth look at what “prompt” and “thorough” really means as well as what the courts are now expecting. Attendees will walk away with a blueprint for effective and successful investigations, including tips on how to get the most from every witness and how to create bulletproof documentation. Additionally, this session will address:
• When the duty to investigate is triggered.
• How to define the scope and strategy of an investigation.
• The advantages and detriments of using investigators.
• The role of confidentiality, including privilege and work product issues.
• Appropriate interim measures.
• Keeping proper documentation.
Now more than ever courts and juries are scrutinizing workplace investigations, and they expect to see certain t’s crossed and i’s dotted. Even when litigation does result, the investigation still can be an employer’s best defense. Find out how an effective and well-executed investigation will help resolve workplace conflicts and minimize litigation risks by attending this incisive session.

For information on how to register for the Conference, visit the HR Star Conference site at: www.hrstarconference.com/register.html

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It looks like the Senate may drop the controversial card check provision from the EFCA. With protection for the secret ballot in place, an amended EFCA may get pushed through faster than employers expected. (Although in the Ohio Employer’s Law Blog, Jon Hyman suggests that Senate democrats may have floated the story to the NY Times as a trial balloon to see whether enough moderates will bite.) If the card check provision is indeed dead, it is likely that organized labor will be placated in other ways. One possibility is faster union elections after the union presents authorization cards. Currently, elections take place within 40 – 45 days of the petition. Some suggest the time period may be shortened to 10 days, which would leave very little time for employers to present their view to employees.

We previously wrote about how employers are not entirely helpless in the face of union-friendly legislation; now it is imperative that employers are prepared to address organizing activity. To begin with, employers should be open about their views on unions and why they believe employees are better off without one. It is critical that supervisors are trained on what they can and cannot say, as they are the first line of defense. The ERC recently summed up what employers cannot do, using the acronym TIPS:

• Threaten (e.g. to close the facility if union elected)
• Interrogate
• Promise (e.g. promising benefits to employees if they oppose)
• Spy – no surveillance

Despite these limitations, employers can discuss facts, experiences and their opinion about unions:

• A union will not guarantee better wages
• Unions limit interaction between employees and management, requiring negotiation of even routine issues
• Unions charge dues
• Employees will lose the ability to deal one-on-one with management to resolve grievances
• Actual experience with union (i.e. that wages actually decreased)

We recommend that any employer who could be vulnerable to organizing activity communicate its position on unions and train supervisors on how to deal with union efforts. Warren & Hays helps employers by developing union-free policies and training supervisors and managers on how to deal with union activity.

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Only a person who has personally engaged in a protected activity may bring a retaliation claim under Title VII of the Civil Rights Act of 1964, according to the Sixth Circuit’s recent decision in Thompson v. North American Stainless, No. 07-5040 (6th Cir. June 5, 2009). Under Title VII, employers are prohibited from retaliating against an employee who has opposed an unlawful employment practice or who has made a charge, testified, assisted or participated in an investigation, proceeding or hearing.

In Thompson, the plaintiff Eric Thompson claimed that he was fired as a result of his fiancé’s filing of an EEOC charge against their mutual employer.  The EEOC issued a probable cause finding on Mr. Thompson’s own charge; however, the Sixth Circuit held definitively that the plain language of Title VII does not extend to associational retaliation claims. In so holding, the Sixth Circuit has protected employers from retaliation claims by friends, relatives, and close associates of the discrimination claimant.

Nevertheless, managers and supervisors must be trained on Title VII’s anti-retaliation provision, as those claims are common and costly. We consider it a critical component of our harassment, discrimination and performance management training programs.

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Knowing when and how to conduct an investigation can be an employer’s most important tool in avoiding and minimizing work-related claims. Not only are employers legally required to investigate claims of discrimination and harassment, investigations are often mandatory under company policies and, importantly, critical to employee relations, i.e. creating and maintaining the perception of a fair and equitable workplace.

In the past few months, we have conducted several substantial investigations for clients involving: harassment/bullying by a top-level employee, sexual harassment, employee theft, and ethical misconduct. While the subject matter is always unique, the same guiding principles apply to all investigations:

1. Know When to Investigate – employers must investigate all claims or incidents of  harassment, discrimination and violations of law or company policy, even in the absence of a formal complaint.

2. Determine the Scope and Extent of the Investigation – establish who will be interviewed and what documents are relevant (capture electronic data).

3. Choose the Right Investigator – impartiality and lack of bias are critical. If there is a possibility that the claim will go to court, choose an experienced investigator who will make a good witness.

4. Investigate Promptly – start the investigation as soon as possible and notify employees of any necessary delays.

5. Take Immediate Interim Action If Necessary- place employee on leave, temporarily change lines of reporting.

6. Investigate Thoroughly – interview all witnesses, review relevant documents, follow up if warranted.

7. Document the Investigation – keep objective, fact-based notes of witness inteviews. The written report should contain an accurate, unbiased recitation of facts and conclusions. Recommendations can be included, if they will be followed.

8. Follow up and Follow Through – take appropriate disciplinary action, notify regulatory or law enforcement agencies if required, prevent retaliation, and bring closure.

Conducting a prompt and thorough investigation can prevent claims from going to court, establish a solid defense and bolster an employer’s credibility.

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Lack of internships, elimination of “feel good” benefits, mandatory wellness programs…these are some of the unexpected consequences of the current economic times. The Wall Street Journal reports today that support for adoptive parents (surprisingly one of the most popular feel good benefits prior to the recession) appears to be the first to fall under the ax, along with child and elder care referral services, matching of charitable contributions, and academic scholarships. Employers report that they are avoiding lay-offs by cutting back on these types of benefits.

Well-paying summer jobs and high-profile internships for college and graduate school students are disappearing as well. The National Association of Colleges and Employers reports that internships available to college students have fallen by 21%.  Not only are employers and government agencies  scaling back on summer programs, parents are not as willing or able to underwrite them.

And what about healthcare costs? Employers are implementing mandatory wellness programs that require employees to get annual physicals and regular screenings. In many cases, an employees’ failure to abide by the program results in the loss of insurance.  One survey found that 45% of companies are planning on or considering penalties for employees who do not participate in wellness activities. Not surprisingly, organized labor opposes mandatory programs and, as we pointed out previously, wellness programs and health assessments can be problematic under the disability and discimination laws.

Whether eliminating programs or implementing new ones, employers are well-served by considering the legal ramifications along with HR issues like employee morale.

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This week on the popular Ohio Employer’s Law Blog, lawyer Jon Hyman writes about what employers need to consider when drafting a social networking policy. In his “7 considerations,” Hyman points out the difficulties of drafting a policy that is reasonable and capable of being monitored and enforced.  We previously wrote about the difficulties employers can face when they check out potential employees on social networking sites. Hyman addresses such questions as whether you even want to allow employees the right to access social networking sites; whether you do or don’t, how will you monitor it; and do you want your employees to identify with your business (e.g. many employers encourage their employees to join LinkedIn). Importantly, how will your social networking policy intersect with other corporate policies such as harassment or personal use of company technology. 

We typically recommend that employers recognize that employees will use company computers and telephones for personal use.  So instead of trying to implement prohibitions that can’t be enforced, employers are better off with policies that allow reasonable use and are capable of being monitored. Whenever new policies are put into place, employers should take the opportunity to review all HR policies.

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“The Employee Free Choice Act: Piercing the Rhetoric” is the title of the U.S. Chamber of Commerce’s recent publication supporting its position that no part of EFCA can be justified and that it is in the best interests of employees and employers alike if the bill is never enacted.

The publication analyzes the EFCA’s three main provisions (card check certification for union organizing, compulsory arbitration of first contracts, and increased penalties on employers), explaining each provision and rebutting  common rhetoric used by organized labor in supporting the EFCA.  The publication responds directly to organized labor’s relentless efforts to get the EFCA or some version of it passed.

The complete publication is available for downloading on the U.S. Chamber of Commerce website:

http://www.uschamber.com/publications/reports/0906efca.htm

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As Sindy packs for France, I find myself daydreaming about the viability of taking our business across the pond. A quick internet search leads me to two conclusions: (1) we wouldn’t have a clue because the laws are so drastically different and (2) our employer clients should feel very fortunate to be located here in the U.S., even in the face of union and employee friendly legislation.

The employee-friendly nature of Canadian employment laws is well-known. French law is Canadian law on steroids. A few examples:

·         There is no employment at-will in France. Employment contracts are required for all employees, at whatever grade or level. The term of employment is often indefinite and specific agreements for short limited term employment are tightly regulated.

·         Terminations are subject to stringent, procedural statutory constraints. Very formal, very proper and very convoluted, particularly in the case of lay-offs.

·         A number of French State Agencies have a statutory right to be advised of, and in some cases to authorize, proposed dismissals by private sector employers.

·         It is easy and inexpensive for an employee to start a lawsuit against his/her former employer and it is rare that a claim is dismissed without an award against the employer.

While U.S. employers are facing increasing restraints on the right to terminate employment by virtue of expanding discrimination laws and exceptions to employment at-will, we are far from the absolute protections afforded to French employees.

Bon Voyage to Sindy!

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With summer approaching, employers and parents alike are asking about the rules governing the employment of teens. (Having a 15 year old daughter with a sudden passion for international travel, I am particularly interested in the topic.)

The regulations set forth in Ohio Revised Code Chapter 4109  include a number of requirements that employers in particular need to be aware of: 

• Work Permit: Minors must be at least 14 years old to obtain a work permit. Work permits must be authorized by the school superintendent. A new work permit must be issued each time the minor changes employment.
• Record and Posting Requirements: Every employer shall post, in a conspicuous place frequented by minors, a printed abstract of the minor labor laws, furnished by the Wage and Hour Division, and a complete listing of all minor employees that contains, at a minimum, the minor’s name, age, date of birth, and occupation.
• Minor Age Agreement: An agreement, prepared in duplicate, as to the wages and/or compensation the minor shall receive for each day, week, month, year, or per piece. Sample agreements are available from the Bureau.
• Break Requirement: All minors are required to have a 30-minute uninterrupted break when working more than 5 consecutive hours.
• Employment Hours for 14 and 15 year olds: When school is in session, no employment before 7:00 a.m. or after 7:00 p.m.  Limited to 3 hours a day and 18 hours a week.  When school is out of session, no employment before 7:00 a.m. or after 9:00 p.m. Limited to 8 hours a day and 40 hours a week.
• Employment Hours for 16 and 17 year olds: When school is in session, no employment  before 7:00 a.m. or 6:00 a.m. if not employed after 8:00 p.m. the previous night, nor can they work after 11:00 p.m. on any of Sunday through Thursday. There is no limitation in the number of hours per day or per week. When school is out of session, no limitations as to the starting and ending times, neither do they have any limitations in the number of hours per day or per week.

While the regulations may seem onerous at first, the purpose of protecting teens from abusive work environments is certainly worth the effort for employers, parents and teens.

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Traditionally, older workers have feared for their jobs during uncertain economic times. It appears, however, that younger workers should be more concerned.  The unemployment rate for employees between the ages of 25 and 34 was 9.6% in April 2009, up from 4.9% a year earlier. For those ages 55 and older, the unemployment rate was 6.2% in April 2009, compared with 3.3% a year earlier.

The fear of facing age discrimination claims has prompted many employers to institute layoffs and RIFs based on seniority even though retaining  younger, lower paid employees may be better for the bottom line.  Employers have reason to be wary. EEOC statistics reveal that age-bias claims are soaring despite the fact that the unemployment rate for those 40 and up is below the rate for younger workers.

The ”last one in, first one out” approach  can adversely affect younger, childless professionals who are claiming that they are being unfairly targeted. Of course, younger people  are a lot less of a risk for lawsuits, since federal and the majority of state laws protect only employees 40 and over.

But employers should not feel forced to make a choice between their younger and older employees. Layoffs based on solid, objective criteria can withstand age discrimination claims. Employers are reminded to document employees’ work performance and to apply RIF criteria consistently.  Proper communication of layoff or RIF criteria also helps minimize the risk of age discrimination claims.  

As always, documentation and communication and invaluable tools for employers.

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That’s the message I walked away with after attending Korman Jackson & Krantz’ recent employment law breakfast briefing. While employers wish it weren’t so, it is likely that some form of the EFCA will pass, making it easier for unions to organize. But employers need not stand by helplessly. Now is the time to assess the company’s risk and create an environment that lessens vulnerability to unionization. Surprisingly, unionization efforts are twice as likely to be successful when focused on lack of respect in the workplace, poor communication between the workforce and management, and perception of unequal treatment, as opposed to wage and benefit issues.

There are a number of ways employers can minimize the risk and at the same time improve the overall workplace environment:

•  Open communication. Is there an open door policy and do employees have faith in it?
• Train supervisors. Are supervisors aware of the company’s position on unionization and are they trained to identify signs of organization and respond to worker questions?
• Engage employees. Survey employee opinions, engage employees in initiatives and involve them in decision-making processes.
• Consider no-solicitation and union-free workplace policies.

These proactive measures not only help avoid union activity, but improve employee morale, thus creating a more effective and efficient workforce.

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Former employees of Houston’s are suing the restaurant for violating federal wiretapping laws and for breach of privacy after they were fired for their musings on a password-protected MySpace page. The employees set up a MySpace forum as an avenue for venting about their supervisors and restaurant clientele. After a supervisor gained access to the forum by demanding an employee’s password, two employees were fired. Houstons claims that the employees violated the employee handbook, which requires professionalism and a positive attitude. The employees counter that they had an expectation of privacy for their on-line activities (including making fun of Houston’s decor, patrons and supervisors) outside of work on a password-protected site. The case is set for trial in a New Jersey federal court on June 9th. In the meantime, employers might ask themselves whether they really want to know what their employees are saying on-line!

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According to a recent NPR piece, one out of five employers are trolling social network sites like Facebook and My Space to check out potential employees. And why not? On-line name searches and profiles on social media sites reveal all kinds of information that can be help vet potential employees. (Is it understandable that a meat packing plant wants to weed out PETA activists?) But those same sources also divulge information like age, race, religious views, disabilities and military status. The discrimination laws dictate that much of this information cannot be considered in hiring decisions.  When an applicant is rejected, what evidence does the employer have that the decision was based on objective job criteria and not one of the categories protected by law? And what about inadvertent violations of the Fair Credit Reporting Act, which requires employers to notify applicants and obtain their consent before conducting background checks?

Even employers who refrain from on-line searches are faced with the proliferation of social media resumes. On-line sites like Visual CV offer free multimedia resume building where job-seekers can include photographs, videos, work samples and links to social media and professional networking sites. So what is an employer to do? We suggest employers implement a comprehensive policy and practice on how and when on-line searches are performed, including proper documentation that hiring decisions are based on non-discriminatory job criteria.

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