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Class Action Waivers No Longer Valid In Arbitration Agreements?
by Joseph "Trey" L. Wood, III
January 19, 2012

Earlier this month the National Labor Relations Board (NLRB) found that mandatory arbitration agreements which require employees to waive the right to bring class or collective actions are in violation of the National Labor Relations Act (NLRA).¹ This ruling means that any arbitration agreements which contain class action waivers and are required to be signed by employees as a condition of continued employment are no longer valid.

This is in direct contrast to what most employers felt following last April's ruling by the U.S. Supreme Court which validated the use of class action waivers in consumer arbitration agreements.² Following that ruling it was believed that companies could require employees to sign arbitration agreements in which the employees waived the right to bring class action actions against their employers. In fact, following that ruling this author opined the following:

Employers who use arbitration agreements with their employees may now wish to insert into their arbitration agreements language that prohibits employees from joining any class action against the company. For employers who do not use arbitration agreements but are fearful of the potential for class action matters, now may be the time to implement such agreements.

However, the NLRB held "an individual who files a class or collective action regarding wages, hours, or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by [the NLRA]." The Board continued, "When, as here, employers require employees to execute a waiver as a condition of employment, there is an implicit threat that if they refuse to do so, they will be fired or not hired."

The NLRB attempted to distinguish its decision from that of the Supreme Court by finding that class action arbitration in the employment context "is far less cumbersome and more akin to an individual arbitration proceeding." This plainly ignores the fact that many employment-related class actions involve thousands of employees. However, the Board emphasized that its holding was limited to only "employees" as defined by the NLRA. Accordingly, employees who act as supervisors or managers would not be affected. Finally, this decision involved the use of an arbitration agreement that was mandatory. If the agreement had permitted employees to sign or not sign the agreement without any fear of retaliation, the result may have been different.

What this Means for You
Certainly, if your company has arbitration agreements containing class action waivers that employees are required to sign as a condition of continued employment, this ruling jeopardizes the validity of the agreement. However, this case is not likely over and will, presumably, be appealed. What happens at the next level is anyone's guess. One alternative to class action waivers in the arbitration agreement may be to carve class action matters out of arbitration agreements, but require that the employee agree that any class actions be tried only before a judge, waiving a jury. At the end of the day, it will be important for all employers to weigh the potential risk of removing such waivers from agreements versus maintaining such clauses in the company's arbitration agreements.

¹ D.R. Horton, Inc.

² AT&T Mobility LLC v. Concepcion.

Supreme's Back Church's Employment Decision
by Joseph "Trey" L. Wood, III
January 16, 2012

On January 11, 2012, the United States Supreme Court ruled that a church that makes employment-related decisions with respect to its "ministers" is free from any employment discrimination suits brought by the affected employee. In a rare unanimous decision, the Court held that the ministerial exception acts as an absolute bar to such suits.⁽¹⁾

Background
Hosanna-Tabor Evangelical Lutheran Church and School is a member congregation of the Lutheran Church-Missouri Synod. The Synod classifies its school teachers into two categories: "called" and "lay." "Called" teachers are regarded as having been called to their vocation by God. To be eligible to be considered "called," a teacher must complete certain academic requirements, including a course of theological study. Once called, a teacher receives the formal title "Minister of Religion, Commissioned." "Lay" teachers, by contrast, are not required to be trained by the Synod or even to be Lutheran. Although lay and called teachers at Hosanna-Tabor generally performed the same duties, lay teachers were hired only when called teachers were unavailable.

After Cheryl Perich completed the required training, Hosanna-Tabor asked her to become a called teacher. Perich accepted the call and was designated a commissioned minister. In addition to teaching secular subjects, Perich taught a religion class, led her students in daily prayer and devotional exercises, and took her students to a weekly school-wide chapel service. Perich led the chapel service herself about twice a year.

Perich developed narcolepsy and began the 2004-2005 school year on disability leave. In January 2005, she notified the school principal that she would be able to report to work in February. The principal responded that the school had already contracted with a lay teacher to fill Perich's position for the remainder of the school year. The principal also expressed concern that Perich was not yet ready to return to the classroom. The congregation subsequently offered to pay a portion of Perich's health insurance premiums in exchange for her resignation as a called teacher. Perich refused to resign. In February, Perich presented herself at the school and refused to leave until she received written documentation that she had reported to work. The principal later called Perich and told her that she would likely be fired. Perich responded that she had spoken with an attorney and intended to assert her legal rights. In a subsequent letter, the chairman of the school board advised Perich that the congregation would consider whether to rescind her call at its next meeting. As grounds for termination, the letter cited Perich's "insubordination and disruptive behavior," as well as the damage she had done to her "working relationship" with the school by "threatening to take legal action." The congregation voted to rescind Perich's call, and Hosanna-Tabor sent her a letter of termination.

Perich filed a charge with the Equal Employment Opportunity Commission, claiming that her employment had been terminated in violation of the Americans with Disabilities Act. The EEOC brought suit against Hosanna-Tabor, alleging that Perich had been fired in retaliation for threatening to file an ADA lawsuit. Invoking what is known as the "ministerial exception," Hosanna-Tabor argued that the suit was barred by the First Amendment because the claims concerned the employment relationship between a religious institution and one of its ministers. The District Court agreed and granted summary judgment in Hosanna-Tabor's favor. The Sixth Circuit reversed the trial court's decision and recognized the existence of a ministerial exception rooted in the First Amendment, but concluded that Perich did not qualify as a "minister" under the exception.

Supreme Court's Decision and Significance to Religious Employers
Court's around the country widely accept the ministerial exception as a bar to employment discrimination suits by ministers. However, not all courts agree on who qualifies as a minister. The Supreme Court found that Perich was a minister, although not in the conventional sense of the word. However, the Court did not establish a bright-line test for who qualifies as a minister and, instead, indicated that a case-by-case approach must be used which looks at the totality of circumstances surrounding the individual's employment. While it is clear from this case that the ministerial exception applies to ministers, it does not apply to suits by other lay employees. Accordingly, religious employers must carefully analyze whether an employee qualifies as a minister before thinking that the ministerial exception will provide it with an absolute defense to any discrimination claims.

^{(1) Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission.}

Commercial Motor Vehicle Drivers Banned from Cell Phone Use
by Joseph "Trey" L. Wood, III
January 9, 2012

The Federal Motor Carrier Safety Administration's final rule prohibiting Commercial Motor Vehicle (CMV) drivers from using hand-held cell phones while operating their vehicles went into effect on January 3, 2012.

Through the Pipeline and Hazardous Materials Safety Administration (PHSA), drivers hauling hazardous materials within a state are also included in the ban. Drivers who violate the rule will face civil penalties of up to $2,750 for each offense. The rule also provides that the employers are liable for violations by their employees with civil penalties reaching up to $11,000 for each violation. Since the Federal Motor Carrier Safety Administration will hold employers responsible for violations by their drivers, it is recommended that employers immediately implement a policy prohibiting such conduct by drivers in order to try and reduce, if not avoid these penalties.

The new rule restricts a CMV driver from holding a mobile telephone to conduct a voice communication, dialing a mobile telephone by pressing more than a single button, or reaching for a mobile phone in an unacceptable and unsafe manner (e.g. reaching for any mobile telephone on the passenger seat, under the driver's seat, or into the sleeper berth). Thus, a driver of a CMV who desires to use a mobile phone while driving will need to use a compliant mobile telephone (such as hands-free) located in close proximity to the driver that can be operated in compliance with this rule. Thus, the ease of "reach" or accessibility of the phone is relevant only when a driver chooses to have access to a mobile telephone while driving. Essentially, the CMV driver must be ready to conduct a voice communication on a compliant mobile telephone, before driving the vehicle. The only exception to the rule allows CMV drivers to use their hand-held mobile telephones if necessary to communicate with law enforcement officials or other emergency services.

New Year, New Resolutions
by Joseph "Trey" L. Wood, III
January 3, 2012

It is once again that time of the year when we begin to look forward to a new year and new beginnings: Out with the old, in with the new. Something that is not so new is the federal government's increased scrutiny of the way employers treat their employees. From harassment and discrimination to wages and immigration, various government agencies have stepped up their enforcement efforts to prosecute non-compliant employers. That is an excellent reason why employers should resolve to provide EEO training for managers and supervisors in the new year.

In the voluminous pages of federal statutes and regulations dealing with the employer/employee relationship, you will not find anything that actually requires management training. However, some states, most notably California, do require training for managers and supervisors for illegal workplace harassment. Despite this absence of any federal regulatory law, there are many cases that have found that an employer's failure to provide such training was tantamount to a violation of the law itself. So, the assertion that EEO training for managers and supervisors is mandatory is not too far off-base.

The training itself should be provided to anyone with any supervisory authority over your company's employees. When supervisors and managers make decisions pertaining to employees, the law views those decisions as decisions of the company itself-not just the supervisor. Accordingly, supervisors and managers must be armed with an understanding, or at least an awareness of particular laws so that that the decisions they make in dealing with employees will be less likely to lead to potential liability for the company. The training should cover the basics such as:

What employees are protected under the law
How the law protects those individuals
Illegal harassment
Retaliation
Dealing with injured and disabled employees
Proper documentation and discipline

Certainly we cannot expect supervisors and managers to be experts on the law. However, with proper training we can expect those with supervisory authority to at least be able to spot tricky issues and ask for help in making decisions. That step alone makes the training process invaluable and will lead to a much happier, and prosperous, new year.

NLRB Again Postpones Effective Date of Posting Requirements
by Joseph "Trey" L. Wood, III
December 27, 2011

As a follow up to our previous posts, the NLRB has recently agreed to postpone the effective date of its employee rights notice posting rule at the request of a federal court in Washington, DC which is hearing a challenge to the rule. The Board has pushed back the effective date of the rule from January 31, 2012 to April 30, 2012. Hopefully prior to that date the court will provide some guidance on whether the rule will stick or not.

As you may recall, this rule requires most employers to post an 11- by-17-inch notice advising employees of the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints. The challenge to the rule filed in Washington, DC is one of several filed by business groups across the country.

NLRB Finalizes Rule for Quicker Elections
by Joseph "Trey" L. Wood, III
December 22, 2011

In our June 25 posting titled "NLRB Again Flex's Its Muscle," we made you aware of the NLRB's proposed changes to its rules governing union elections. The proposed rules would restrict an employer's ability to successfully stage its own campaign in opposition to a union's organizing efforts. As expected, on December 21 the NLRB published its final rule just prior to the Board's losing one of its most controversial, pro-union members, Craig Becker. While the final rule is not as punitive for employers as rules proposed in June, some key highlights to the rule include the following:

Employers will no longer be entitled to a hearing to determine who votes. This does away with the parties' right to a pre-election hearing to determine the voting unit. Under the new rule, challenges to voters would (most of the time) be challenged at the polls and then litigated afterward. This could potentially discourage voter turnout, particularly among those who tend to side with the company;
Eliminates the recommendation that regional directors should not schedule elections until at least 25 days after their decision to allow for sufficient time for review by the NLRB; and
Limits the bases upon which the NLRB will consider a request for special permission to appeal extraordinary circumstances when the issue of the appeal would otherwise evade review.

Given these changes, union elections will now take place within 21-25 days of the filing of a petition, rather than 42 days under the old rules. As a result of these changes, employers will need to be more proactive in educating their employees about the consequences of union representation, and educate supervisors to be more attentive to the signs which may point to union organizing activity. While certain trade organizations have sued the NLRB over the propriety by which the rules were enacted, the new rules are currently set to become effective on April 20, 2012.

2012 Limits on Transportation Benefits Issued by IRS
by Joseph "Trey" L. Wood, III
December 18, 2011

The Internal Revenue Service (IRS) has issued a new set of limits that are designed to assist employees with their daily commutes.

Parking
The monthly limit on the amount of parking benefits that can be excluded from employees' income for tax purposes will go up to $240, up from $230 in 2011.

Commuter Vehicles and Transit Passes
In 2011, the monthly benefit for those commuting in a highway vehicle/purchasing transit passes was $230. However, beginning in 2012, the amount drops to only $125 per month.

25 More Charges Filed in 2011 than 2010
by Joseph "Trey" L. Wood, III
December 16, 2011

The Equal Employment Opportunity Commission (EEOC) reported that there were a total of 25 more charges of discrimination filed in the fiscal year 2011 (October 1, 2010 through September 30, 2011) than in 2010. While that doesn't sound like much, the total number of charges filed amounted to another record year: 99,947 charges. The EEOC also indicated in its Performance and Accountability Report that it reduced its backlog of cases by 10 percent and collected over $346 million dollars on behalf of alleged victims of workplace discrimination. That is the highest level of monetary relief ever obtained by the EEOC through its administrative process.

The EEOC's report also revealed that at the end of FY 2011, it was working on 580 systemic (class action) cases. During the year, the EEOC field offices completed work on 235 systemic investigations. Also a trend of concern for employers is the EEOC's focus on building enforcement partnerships with other federal agencies including the Department of Justice and the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP).

Why You Should Be Concerned
It is evident that the EEOC is beefing up its arsenal against employers in an effort to increase the number of charges of discrimination that it handles. That means that complaints of discrimination that may have been looked at by the EEOC with a critical eye in the past, may now be more carefully evaluated. Accordingly, it is important for employers to understand that the EEOC is not a neutral governmental fact finder but, rather, an advocate for employees. If your company should receive a charge of discrimination, it is vitally important to treat the charge with a great deal of care and diligence in order to protect your rights.

USERRA Expanded to Include Harassment Claims
by Joseph "Trey" L. Wood, III
November 29, 2011

A new law signed by President Obama on November 21 will make it easier for individuals to sue employers for harassment on the basis of their military status. While the thrust of the Veterans Opportunity to Work to Hire Heroes Act is to reduce unemployment rates for veterans of the Iraq and Afghanistan conflicts, it also amends the Uniformed Services Employment and Reemployment Rights Act (USERRA) to specifically recognize claims of harassment (hostile work environment) on account of an individual's military status.

Prior to the passage of this legislation, courts were mixed on whether claims of harassment under USERRA were viable. However, by amending USERRA to include harassment claims, the Act has established the same standard for harassment claims for military status as those for sex, race, religion and other protected categories under most employment discrimination laws.

What you should do?
The passage of this law, coupled with the Supreme Court's ruling in Staub v. Proctor Hospital presents two significant protections afforded to those protected by USERRA. (You may recall in Staub that the Supreme Court recognized the Cat's Paw theory of liability to hold a company liable for discrimination even though the ultimate decision-maker harbored no discriminatory animus against the service member who was terminated.) Accordingly, it would be wise to invest in updating the training of your supervisors and revising any relevant policies to include the protection of those with military and veteran status.

Say "Cheese" — You're Fired!
by Joseph "Trey" L. Wood, III
November 16, 2011

In another example of why it is important for employers to consistently enforce company policy, the Fourth Circuit Court of Appeals recently enforced a decision by the National Labor Relations Board finding that an employer violated the National Labor Relations Act (NLRA) when it allegedly fired an employee for photographing other employees at work. The Court agreed with the Board that the employee was terminated for engaging in concerted protected activity.

In NLRB v. White Oak Manor, the employer had a policy that prohibited employees from wearing hats and taking photographs inside a long-term care facility. The employee, Nichole Wright-Gore, was embarrassed about a bad haircut and started to wear a hat to work, without comment from her supervisor. After a week, other supervisors told her to remove the hat. When she refused she was sent home. The next day, White Oak employees dressed up and wore costumes for Halloween. Wright-Gore had a costume that included a hat, but her supervisor made her remove it. The employee complained to her employer that the company was enforcing the policy unequally. Upon hearing the employee's complaint, her supervisor gave her a written warning for insubordination.

During the ensuing weeks, the employee photographed several employees – both with and without their permission – wearing hats and violating other White Oak dress code policies. She also shared the photographs with employees and discussed with them the unequal treatment of White Oak in an effort to gain their support. White Oak fired Wright-Gore for violating the company's policy prohibiting taking pictures in the facility. The employee then filed an unfair labor practice charge alleging that the employer interfered with her right to engage in concerted protected activity.

First, it is important to remember that the NLRA affects all employers-not just those with union representation. As you may recall from previous posts, Section 7 of the NLRA protects employees' "concerted, protected activity". Essentially, employees are allowed to communicate with co-workers about the terms and conditions of employment. An employer's attempt to hinder or interfere with those rights is a violation of the NLRA which could lead to an unfair labor practice charge being filed on the employees' behalf by the Board. In this case, Wright-Gore's complaints were protected concerted activity because she was attempting to have her employer enforce its dress code fairly. While White Oak Manor argued that her activity lost protection because she took pictures of employees without permission, there was evidence that other employees took pictures of each other without permission and displayed those photographs in the facility.

What does this mean to you?
This is another shining example of the National Labor Relations Board becoming more active in enforcing the NLRA against non-union employers the wake of declining union membership. This particular case should serve as a reminder of the importance of consistently and uniformly enforcing your company's policies.

Congress Again Mulls Employee/Contractor Classification
by Joseph "Trey" L. Wood, III
November 4, 2011

Introduced into Congress yet again is the new and improved Employee Misclassification Prevention Act. The bill is intended to punish employers who misclassify employees as independent contractors. The proposed legislation would impose the following requirements on employers:

Require every employer, within six months of enactment, to provide written notices to every worker who performs labor or services for it informing them whether they have been classified as an employee or "non-employee" (independent contractor) - and why they have been classified as such
Mandate that employers direct all workers to a Department of Labor (DOL) website, which would inform employees of their rights and encourage them to contact the DOL if they suspect they've been misclassified
Require employers to keep records of the hours, work and wages of employees and "non-employees" for the purpose of backing up workers' classifications
Impose penalties upon employers of $1,100 per worker for first-time violations and $5,000 per worker for repeat or "willful" violations
Make it illegal for employers to discriminate or retaliate against workers who exercise their rights under the bill
Allow the DOL and Internal Revenue Service (IRS) to share information on cases where employers misclassify workers
Amend the Social Security Act to create penalties for misclassifying employees - or paying unreported wages to employees - for unemployment compensation purposes
Direct the DOL to perform audits on employers in industries that frequently misclassify workers
Direct state unemployment agencies to conduct audits to identify employers who are misclassifying employees

While two previous versions of this bill failed to gain any traction, given the recent sensitivity of this subject, it will be interesting to see whether this go-around will have a different outcome. We will continue to monitor this and will let you know how the bill fares.

Antiquated Computer Employee Exemption May Get An Update
by Joseph "Trey" L. Wood, III
October 31, 2011

When it comes to technology, what was invented last week is seemingly an antique today. The same can be said for the Fair Labor Standards Act's test for employees who are exempt under the Computer Employee Exemption. Section 13(a)(17) of the FLSA has set out that for an employee to be exempt under that test, and not be entitled to overtime, the employee's primary duty must consist of:

The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
A combination of the aforementioned duties, the performance of which requires the same level of skills.

In an effort to update this test to reflect real world computer and information technology occupations, Senators Kay Hagan (D-NC), Johnny Isakson (R-GA), Mike Enzi (R-WY), and Michael Bennet (D-CO) introduced the Computer Professionals Update Act. This bill would apply the exemption to those who are "working in a computer or information technology occupation (including, but not limited to, work related to computers, information systems, components, networks, software, hardware, databases, security, internet, intranet, or websites) as an analyst, programmer, engineer, designer, developer, administrator, or other similarly skilled worker, whose primary duty is:

(A) the application of systems, network or database analysis techniques and procedures, including consulting with users, to determine or modify hardware, software, network, database, or system functional specifications;

(B) the design, development, documentation, analysis, creation, testing, securing, configuration, integration, debugging, modification of computer or information technology, or enabling continuity of systems and applications;

(C) directing the work of individuals performing duties described in subparagraph (A) or (B), including training such individuals or leading teams performing such duties; or

(D) a combination of duties described in subparagraphs (A), (B), and (C), the performance of which requires the same level of skill;

who is compensated at an hourly rate of not less than $27.63 an hour or who is paid on a salary basis at a salary level as set forth by the Department of Labor in part 541 of title 29, Code of Federal Regulations. An employee described in this paragraph shall be considered an employee in a professional capacity.

Wow, bipartisan legislation that actually makes sense! This bill has been referred to the Senate Committee on Health, Education, Labor and Pensions. We will continue to monitor this and keep you updated on its progress.

Excuses, Excuses, Excuses...
by Joseph "Trey" L. Wood, III
October 28, 2011

A nationwide study conducted by Harris Interactive from August 16 to September 8, 2011, and reported in Career Builder, reported some pretty zany excuses for why employees miss work. The study included more than 2,600 employers and 4,300 workers.

Here are some of the unique reasons employees called out sick:

Employee's 12-year-old daughter stole his car and he had no other way to work. Employee didn't want to report it to the police
Employee said bats got in her hair
Employee said a refrigerator fell on him
Employee was in line at a coffee shop when truck carrying flour backed up and dumped the flour into her convertible
Employee said a deer bit him during hunting season
Employee ate too much at a party
Employee fell out of bed and broke his nose
Employee got a cold from a puppy
Employee's child stuck a mint up his nose and had to go to the ER to remove it
Employee hurt his back chasing a beaver
Employee got his toe caught in a vent cover
Employee had a headache after going to too many garage sales
Employee's brother-in-law was kidnapped by a drug cartel while in Mexico
Employee drank anti-freeze by mistake and had to go to the hospital
Employee was at a bowling alley and a bucket filled with water crashed through the ceiling and hit her on the head

What would you do if one of your employees called in with an excuse as questionable as these. Certainly, it appears that most of these excuses could be verifiable, but what if they were not? In the same study, 15% of employers said that they have fired employees for calling in sick without a legitimate excuse. Also, 28% of the employers indicated that they have checked up on an employee who called in with a questionable absence. Of those employers, 69% required the employee to provide a doctor's note, 52% called the employee at home, 19% had another employee call the employee, and 16% drove by the employee's home.

At the end of the day, it is probably a good idea to have a consistently enforced policy that requires employees to provide some type of documentation to verify the reasons for their absences. If they fail to do so, look to your company's disciplinary policy on how they should be handled at that point.

Giving Employees a Lift: Must Employers Accommodate an Employee Who Commutes?
by Joseph "Trey" L. Wood, III
October 27, 2011

Employers are typically aware of the fact that they must reasonably accommodate employees with disabilities while at work, but does that mean that they have an obligation to help employees get to work? That issue has been coming up a lot recently and the courts that have examined the issue have given differing opinions on the subject.

Recently, the Second Circuit Court of Appeals (which covers New York, Connecticut and Vermont) found that employers may have such an obligation. In the case that they considered, the employee, who had a hearing impairment and also suffered from cancer, worked for the New York Department of Health and Mental Hygiene at their office in Queens. The Department reassigned her to work at its Manhattan office for nine months. The employee requested that her employer assist her with her commute to Manhattan during this time. While the district court found that commuting "falls outside the scope" of the employee's job and the employer's obligation to accommodate, the Second Circuit reversed finding that "there is nothing inherently unreasonable . . . in requiring an employer to furnish an otherwise qualified disabled employee with assistance related to her ability to get to work."

The case has been sent back to the district court with instructions to analyze whether it would have been reasonable for the employer to provide assistance with the employee's ability to get to work. The Second Circuit also listed the following as examples of what the employer should have considered as possible accommodations:

Transferring the employee back to Queens or another closer location;
Allowing the employee to work from home; or
Providing the employee with a car or parking permit.

The Court also listed the following as a non-exclusive list of factors for evaluating the reasonableness of possible accommodations including:

The number of employees employed by the employer;
The number and location of its offices;
Whether other available positions existed which the employee showed she was qualified to perform;
Whether the plaintiff could have been shifted to a more convenient office without unduly burdening the employer; and
Whether it would be reasonable for the plaintiff to work without on-site supervision.

While other Circuit Courts of Appeals have found that the duty to accommodate does not extend beyond the workplace, and consequently no duty to assist employees with their commute, this issue is bound to come up again and again as they struggle to interpret the requirements of the Americans With Disabilities Act Amendment Act.

Accordingly, if your company is facing a request by a disabled employee with a request to assist with his/her commute, the prudent course of action is to carefully weigh all factors and include competent counsel on the decision-making process.

Hiring 101: Tips to Avoid Legal Landmines
by Joseph "Trey" L. Wood, III
October 25, 2011

Choosing, hiring and retaining good employees is always of the utmost importance. Often, supervisors and managers have only one opportunity to evaluate and determine if a candidate is the right person for a particular job-the employment interview. Thus, managers and supervisors must have sufficient interviewing skills to obtain the information necessary to make a thoughtful and accurate evaluation of a candidate.

Learning basic interviewing techniques and ideas helps managers and supervisors gain the skills necessary to put the right people on the job and avoid various legal pitfalls involved with interviewing.

Recruiting Candidates
Federal and State law prohibit discrimination in hiring the same as they do during the employment relationship. Sometimes an employer's recruitment efforts have the unintended effect of illegal discrimination. For example, it is not uncommon for an employer to obtain job applicants through word-of-mouth, nepotism or unsolicited walk-in applications.

It is important to remember that even potential applicants who did not formally apply may be able to state a claim under Title VII if the recruiting methods used never brought the opening to their attention, or the employer's application methods "chilled" certain groups from applying.

Word-of-Mouth: While word-of-mouth recruiting is not illegal per se, there is an inference that when notifying people of job opportunities, employees will typically notify people of the same race and gender as the employees. To establish discrimination, however, it must be shown that the practice is part of a pattern of intentional discrimination.

Nepotism: Like word-of-mouth, nepotism is illegal only if it can be shown that its practice has an adverse impact against a protected classification of applicants.

Walk-in Applications: As long as there is no disparity between the employer's applicant pool and the relevant labor market, this recruiting method is generally lawful.

Help-wanted Advertisements: It is unlawful to indicate in job advertisements a preference for race, color, religion, sex, national origin, or age, unless one of these factors is a bona fide occupational qualification.

Legal Aspects of Interviewing
Now more than ever, a simple employment interview can be a potential minefield for supervisors and managers. Interview questions, in and of themselves, can form the basis of a lawsuit, no matter how innocent they seem. The law is constantly changing and anyone participating in an interview of a new employee must be certain to avoid questions which could be considered discriminatory. It is impossible to list every question which can be asked, but as a rule of thumb, if the question does not directly relate to whether or not the individual can do the job, DON'T ASK IT!!!

Avoiding the Grasp of the EEOC
Recently, the EEOC adopted the recommendations of an internal task force which recognized a "deficiency" in its investigation and litigation of "systematic" cases of discrimination: CLASS ACTIONS. The EEOC has publicly announced a new direction in its pursuit of discrimination claims, shifting its focus from individual charges to claims involving a "pattern or practice, policy and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic location."

Some of the recommendations made by the task force include:

Creation of incentives to encourage EEOC employees to identify, investigate, and litigate "systematic" cases;
Expanded investigations of individual charges which may lead to the discovery of "systematic" discrimination;
Shifting of resources from individual and small class cases to larger cases of alleged "systematic" discrimination; and
Creation of outreach programs to community organizations, workers, the plaintiff's bar, and state and local agencies to identify potential areas of "systematic" discrimination.

Last year, the EEOC reported that 99,922 claims alleging employment discrimination were filed against private sector employers. While the number of claims filed with the EEOC will likely not wane, there has already been a change in the way they are approached. These changes will have a substantial effect on hiring practices in the United States. As the EEOC intensifies its pursuit of "systematic" cases of discrimination, investigations are likely to intensify, and the plaintiff's bar is expected to respond accordingly. To avoid the possibility of facing a class action lawsuit challenging your company's hiring practices, the following tips should be considered:

Track your applicant flow data: This will help reduce our liability in potential hiring claims. If Insurance Agencies can show who applied for the job, we can better defend against lawsuits. Insurance Agencies should gather demographic data by attaching the Voluntary Applicant Data Request (VADR) form. This form is both EEOC and OFCCP compliant. A copy of this form may be found at http://www.ltd.org/pdf/Vol%20App%20Data%20Record.pdf. You should keep applicant flow data for a minimum of four years.
Do not use rigid cut off scores for employment tests: unless they have been properly validated by an expert in job selection procedures. Current tests should be used as one of many tools to make a decision on a given selection criteria. Avoid using the same or similar tests for both hiring and promotion decisions.
Job posting should state only the criteria that will be used in the selection process: Try and explain the process for job selection in the job posting. Limit the criteria on a posting to no more than 8 criteria. Try to list objective criteria in the job posting.
Interviews should assess defined criteria. There should be a defined set of questions for each interview. The questions should seek to determine whether the job applicant meets the defined criteria set for the job. The criteria should also have some type of rating system (i.e., if one criterion is more important than the rest, this should be documented). Notes should be taken on the job interview and kept for four years (preferably in job folder for each filled job). These notes should reflect how this person measures up to the specific criteria listed in the job posting. Remember, your notes can always be subject to review if a lawsuit is filed. Finally, always maintain annual training for all personnel involved in selection decisions.

Reasonable Accommodation in the Hiring Process
The Americans with Disabilities Act (ADA) prohibits employers from discriminating against qualified persons with disabilities who are able to perform the essential functions of the job, with or without reasonable accommodation, provided the accommodation does not place an undue burden on the employer. Depending on the pre-offer and post-offer stages of the interview and hiring process, the ADA limits an employer's ability to make disability-related inquiries or to require medical examinations. If an employee requests a reasonable accommodation during the interview process, employers are required to provide such accommodation unless it would cause an undue hardship. Some examples of what the EEOC considers to be reasonable accommodation in the interview process include:

Providing written materials in accessible formats, such as large print, Braille, or audiotape;
Providing readers or sign language interpreters;
Ensuring that recruitment, interviews, tests, and other components of the application process are held in accessible locations;
Providing or modifying equipment or devices; and
Adjusting or modifying application policies and procedures.

During the hiring process, and prior to making an offer, an employer may not ask an applicant whether he or she needs a reasonable accommodation. When the employer knows that the applicant has a disability, either because it is obvious or is voluntarily disclosed, the employer may ask whether the applicant will need an accommodation. The employer may also ask for a demonstration as to how the disabled individual could perform the essential functions of the job, such as lifting certain weight.

Post-Offer Inquiries and Considerations
Once a job offer has been extended, the employer has much greater latitude. Employers may condition the start of employment on the successful completion of a medical examination, including a psychiatric examination if:

The examination or inquiry is required of all employees entering the same job category regardless of disability;
Information on medical conditions and history is maintained in a separate, confidential file; and
The results of the examination are used only in accordance with the ADA.

An employer who withdraws an offer of employment because the medical examination reveals that the applicant cannot perform the essential functions of the job, even with a reasonable accommodation must demonstrate either that (a) the criteria does not screen out or tend to screen out individuals with disabilities or (b) the criteria are job-related and consistent with business necessity and there is no reasonable accommodation that would enable the individual to perform the essential functions of the job without undue hardship on the employer.

Drug Testing
The ADA specifically states that, for purposes of the ADA, tests to determine the current use of illegal controlled substances are not considered medical examinations. Therefore, pre-employment drug tests are permissible for private employers.

What About Alcohol Testing? In an odd twist of logic, it is determined that tests to determine whether and/or how much alcohol an individual has consumed are medical and are, therefore, illegal during the pre-employment stage.

It is hard enough in today's economic climate to find qualified applicants for your company's needs. The last thing you need is to be tripped up by failing to identify and comply with the myriad of laws that govern the hiring process. However, with proper planning and training, even these hurdles can be rather easily overcome.

The Three C's of Discipline and Termination
by Joseph "Trey" L. Wood, III
October 19, 2011

I always preach that when employers are considering disciplining or terminating an employee, they best way to stay out of trouble is to should follow the three C's: Consistency, Communication and Common Sense.

Consistency
Employers must remain consistent in the way they enforce company policies and rules of conduct. Remaining consistent in making decisions promotes credibility while inconsistency suggests bias (discrimination) against individual employees. Consistency is not only important for supervisors within a particular department, but also company-wide.

Communication
Before disciplining an employee, ask yourself if the rule/expectation that the employee violated was actually communicated to the employee. After all, it's rather unfair to discipline an employee for breaking a rule if he/she didn't know the rule was in place. Certainly, this is not true for all instances of misconduct, but it is important for most. (Also, if an employer is going to try and dispute an unemployment claim, it is going to have to prove to the Workforce Commission that the employee knew about the rule before it was violated.)

Common Sense
Before disciplining or terminating an employee, the employer should step away from itself and view the entirety of the situation as objectively as possible. Does the punishment about to be imposed "fit the crime?" Certainly, factors such as seniority and culpability should factor into the decision making process.

I remind everyone of the three C's because of a recent case that came out of California. In the case, the ex-employee sued her employer, Nielsen Media Research, for age discrimination.¹ Christine Earl was hired in 1994 at the age of 47 and her employment progressed as follows:

August 2005: Verbal warning for leaving gifts at unoccupied households.
January 2006: Repeat violation.
February 2006: Placed in "Developmental Improvement Plan" after violating policy requiring the recruiter to keep a company map while recruiting targeted households.
September 2006: Performance review overall good, with need to follow policies.
September 2006: Ms. Earl diagnosed with "peripheral neuropathy" It is a nerve damage condition that worsens with age.
October 2006: Ms. Earl mistakenly wrote a household's address, failed to verify it, causing installers to go to the wrong address.
January 2007: Nielsen terminated Ms. Earl for violations of company policy listed above. She was age 59.

After the employee was fired, Nielsen hired five new employees with the same job title as the employee fired, all of whom were much younger. While the trial court originally dismissed the lawsuit, the California Court of Appeals is sending the case to a jury to decide because it found that a reasonable juror could find that the employer's reason for termination was false because the employee was able to show that the employer applied discipline in an inconsistent manner. In one example, a much younger employee received only discipline for the same type of conduct that Ms. Earl was allegedly fired for. The Court also found that Nielsen deviated from its own policy by terminating her when the policy indicated that she should have been placed on a performance improvement plan.

In the end, this is another fine example of an employer who did not follow the three C's and may, ultimately, have to pay for its mistake.

_{1 Earl v. Nielsen Media Research, Inc.}

NLRB Postpones Posting Requirements
by Joseph "Trey" L. Wood, III
October 6, 2011

As an update to our posts on August 26 and September 26, the National Labor Relations Board (NLRB) has announced that it has postponed the implementation date of its new posting requirement to January 31, 2012. As you may recall, on August 25 the NLRB issued a final rule that requires all employers subject to the National Labor Relations Act to notify employees of their rights under the National Labor Relations Act (NLRA).

A statement on the NLRB's website on October 5, 2011 announces the postponed implementation of the posting requirement indicating that there is a need "to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses." The statement goes on to state that the Board decided to postpone the rule's implementation date due to questions from businesses and trade organizations regarding which businesses fall under the Board's jurisdiction and to ensure "broad voluntary compliance."

What the Board failed to mention on its website are the numerous lawsuits filed by business groups challenging the validity of the rule. (But I'm sure those lawsuits had nothing to do with this decision.) We will continue to monitor the situation to let you know the latest on this topic when it happens.

Covered by EPLI? Better Think Again
by Joseph "Trey" L. Wood, III
September 30, 2011

Many employers purchase an insurance product known as Employers Practices Liability Insurance (EPLI) for coverage in the event they are sued for different types of employment claims such as harassment, discrimination and retaliation. One such employer, Cracker Barrel, had an EPLI policy with Cincinnati Insurance Company. Cracker Barrel was sued by the EEOC for sexual and racial harassment, racial discrimination, retaliation and discharge. Ultimately, the suit was settled for $2,000,000 plus $700,000 in attorneys' fees. There was no question but that the allegations made in the suit were of the type covered under the policy. Then why did the insurance company deny the claim?

Cincinnati Insurance Company stated that it properly denied coverage because the lawsuit did not fall under the definition of a "covered claim." The policy in question defined such a claim as:

"a civil, administrative, or arbitration proceeding commenced by the service of a complaint or charge, which is brought by any past, present or prospective employees."

Since the lawsuit against Cracker Barrel was brought by the EEOC and not employees, the company wasn't covered. In the end, a federal district court in Tennessee agreed. Cracker Barrel Old Country Store, Inc. v. Cincinnati Insurance Co., 3:07-cv-00303 (M.D. TN 8/11/11)

WHAT YOU SHOULD DO
While it is likely that this will be appealed to the 6^th Circuit Court of Appeals, the prudent employer with EPLI insurance should check the language of its policy and contact its insurance agent/ broker to make sure that it is covered for any charges or lawsuits brought by the government on behalf of employees.

Employee Rights Poster Now Available
by Joseph "Trey" L. Wood, III
September 26, 2011

As an update to our posting of August 26, the Employee Rights poster that is required of virtually all employers effective November 14, is now available on the NLRB's website at https://www.nlrb.gov/poster.

The 11-by-17-inch notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted.

EEOC Scrutinizes Criminal Background Checks
by Chris Hanslik & Joseph "Trey" L. Wood, III
August 30, 2011

In the past few years, the Equal Employment Opportunity Commission (EEOC) has renewed its focus on the hiring process, including Title VII protections for ex-convicts. For years, the EEOC's guidelines have disapproved of an employer's absolute ban on hiring anyone with a criminal conviction. Rather, they direct that if an employer's conviction-based screening policy causes a disparate impact against a protected class of individuals, the employer must show that it considered: (1) the "nature and gravity" of the applicant's offense; (2) the "time that has passed since the conviction and/or completion of sentence;" and (3) the "nature of the job held or sought."

EEOC guidelines do not have the force of the law. In fact, one federal court of appeals found that the EEOC guideline pertaining to criminal conviction bans "are not entitled to great deference."¹ The court went on to complain that the guideline does not explain how employers are supposed to consider the nature and gravity of the offense in crafting any bright-line policy on criminal convictions, nor do they address whether an employer can decide that certain offenses are serious enough to warrant a lifetime ban on not being hired.

In response to this criticism, the EEOC held a meeting in Washington D.C. on July 26 focusing on how the use of background checks, and in particular criminal background checks, adversely affect minorities. During the meeting the EEOC hinted that they plan to revise their 20-year-old background check guidelines. Given the fact that the EEOC has also held fairly recent meetings on the use of credit checks in the hiring process, to examine the treatment of unemployed job seekers, and regarding disparate treatment in 21st century hiring decisions, it is likely that revisions to these guidelines will be forthcoming.

What this Means for Employers
Given this recent flurry of EEOC activity, employers who conduct criminal background checks should continue to monitor further developments, not only on the federal level, but the state level as well. Many states have passed "ban the box" laws, which refers to removing check boxes on employment applications that ask if the applicant has ever been arrested or convicted of a crime.² In addition, employers who have concerns about their hiring practices may want to consider conducting a privileged review of their screening methods to help identify any areas of potential concern. Finally, and most importantly, consider whether the information that you are obtaining during the hiring process is job-related. In the end, if the information that you are asking for is not directly related to the job in question, it may be best not to ask for that information.

¹El v. South Eastern Pennsylvania Transportation Authority, 479 F.3d 232 (3^rd Cir. 2007).

²California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico all have versions of "ban the box" laws.

Employers May Have to Add to the List of Those Protected from Discrimination: The Unemployed
by Joseph "Trey" L. Wood, III
August 29, 2011

Most employers are aware that they may not discriminate against job applicants on the basis of their race, sex, national origin, religion, disability, veteran status, etc, etc. Adding to that already long list, a recent bill introduced into the U.S. House of Representatives and Senate would make it illegal for an employer to: (1) refuse to consider for employment or refuse to offer employment to an individual because of the individual's status as unemployed; (2) publish in print, on the Internet, or in any other medium, an advertisement or announcement for any job that includes any provision stating or indicating that an individual's status as unemployed disqualifies the individual for a job ("must be currently employed"); and (3) direct or request that an employment agency take an individual's status as unemployed into account in screening or referring applicants for employment.

The Fair Employment Opportunity Act was introduced as a result, in part, of the EEOC's public meetings to examine the practice by employers of considering only employed candidates for job openings and excluding the unemployed from consideration. Should the Act be signed in to law by President Obama, employers found to have violated the Act would be liable to the affected individual for any wages, salary, benefits, or other compensation denied or lost to the individual; or, in a case in which wages, salary, benefits, or other compensation have not been denied or lost to the individual, any actual monetary losses sustained as a direct result of the violation, or a civil penalty of $1,000 per violation per day, whichever is greater. In addition, there are provisions in the proposed Act for liquidated damages, interest, and attorney fees.

There is an exception contained within the Act. An employer may discriminate against the unemployed "where a requirement related to employment status is a bona fide occupational qualification reasonably necessary to successful performance in the job, and to eliminate the burdens imposed on commerce by excluding such individuals from employment." In other words, if the employer can show that an applicant's employment in a similar job, at the time of application, is necessary to successful performance for the job applied for, there is no violation. Stay tuned as we continue to monitor this Bill's progress.

Parental Bereavement Act May Amend FMLA
by Joseph "Trey" L. Wood, III
August 28, 2011

Kelly Farley faced one of the most tragic events any parent could face — the death of his daughter. In order to cope with the grief stemming from such a loss, he applied for Family Medical Leave Act (FMLA) leave only to find that such an event is not covered by the Act. Instead, he requested FMLA leave to care for his grieving wife, who was suffering from depression in the aftermath of the family's loss. Farley later went on to help found The Grieving Dads Project, a grass roots initiative that helps fathers deal with the loss of their children.

Out of the Project also grew the Farley-Kluger Amendment to the FMLA. Introduced on July 13, 2011 by Senator Jon Tester of Montana, the bill would allow a parent 12 workweeks of unpaid leave during any 12-month period due to the death of a child. The other provisions of the FMLA would remain unchanged. As of now, the bill has no co-sponsors and has been referred to the Committee on Health, Education, Labor and Pensions for review and consideration.

All Employers Now Required to Post Notice of Employees' Unionization Rights
by Joseph "Trey" L. Wood, III
August 26, 2011

On August 25, the National Labor Relations Board (NLRB) issued a final rule that requires all employers subject to the National Labor Relations Act to notify employees of their rights under the National Labor Relations Act (NLRA) by November 14, 2011.¹ The notice will be required to be posted where other workplace notices are typically posted. Also, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the Board's notice on those sites.

The notice states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints. The 11-by-17 inch notice is available for downloading from the NLRB's website. Translated versions will also be available and must be posted at workplaces where at least 20% of the employees are not proficient in English.

¹^{The NLRA applies to all employers with the exception of government or union employers, companies that primarily have a municipal function and religious schools.}

You're Fired! Insubordination Still Reason for Terminations
by Joseph "Trey" L. Wood, III
August 22, 2011

You hire a new employee with great hopes of a long lasting and productive relationship. However, after a very short while, co-workers begin to complain about your new hire and her attitude towards the staff. When you attempt to counsel the employee over the complained of conduct, she raises her voice, accuses you and others within the office of being unfair and refuses to accept any responsibility for her own actions. If there was ever conduct that met the definition of insubordination, this is surely it. But what to do? Should the employee be fired or given another chance?

Typically, employees are given a little latitude when it comes to resolving interpersonal conflicts with other staff members. Certainly a counseling session is called for, but when the counseling meeting gets off-track, it may mean that the employee has to go. However, employers are typically reluctant to pull the trigger under such circumstances for fear of a lawsuit. However, at least one court recently sided with an employer's decision to terminate an employee under a similar set of facts. In the case, the family-owned commercial trucking company hired a dispatcher who at the time of hire was 51 years old. Co-workers began complaining about the employee within the first couple of months of her employment. The company moved the employee to a newly created job with the same pay and hours, but with a more flexible schedule. In her new position, the employee worked in close proximity with a younger female employee who, according to the employee, overused the phone for personal calls. A meeting was called with the employee and the younger employee to try and fix the problem. By all accounts, the meeting did not go well. Upset by the older employee's antics, and concluding that she was insubordinate, the employer decided to terminate her employment. When the employer informed her of the decision, the employee threw a fit with much name calling. Later that evening the employee called asking for severance. The employer declined. The employee sued claiming that she was the victim of age and gender discrimination.

In such a lawsuit, the employee is always required to show as part of her case that she is meeting the expectations of her employer. In this case, the court found that the employee's insubordination undermined her claims of discrimination in two ways:

Insubordination precluded her from proving that she "met her employer's legitimate job expectations"
Insubordination is a non-discriminatory reason for termination, which means that the employee was unable to show that her employer's actions were simply an excuse, or pretext, for discrimination

Although the employee claimed that she was treated differently than similarly situated male/younger employees, she was unable to show that anyone else had been similarly insubordinate and treated more favorably.

The problem with relying on insubordination as a reason for termination is because it is a very nebulous term. Typically, employers should only use insubordination as a reason for termination if the conduct clearly meets the definition of the word. Again, to avoid claims of discrimination, it is important for employers to remain consistent in enforcing a policy against insubordination, doling out similar discipline for similar conduct. The conduct in question should be documented contemporaneously and objectively. This will go a long way in defending any potential claims that may later arise.

Religious Discrimination Claims Rise
by Joseph "Trey" L. Wood, III
August 15, 2011

Several months after the 9/11 attacks, Alamo Car Rental fired one of its customer service representatives, a Muslim woman who refused to remove her head scarf during Islam's holy month of Ramadan. The U.S. Equal Employment Opportunity Commission (EEOC) in Phoenix filed a lawsuit claiming that Alamo committed backlash discrimination based on religion. Last year, a jury awarded more than $287,000 to the woman.

In this case, the judge decided that Alamo's religious discrimination against the woman was so clear cut that those allegations did not even go to the jury; the jury's only role was to decide how much money the ex-employee was entitled to. "For nearly six years, Alamo has continued to deny that it violated the law when it refused to accommodate Ms. Nur's religious beliefs and fired her," said Mary Jo O'Neill, regional attorney for the EEOC Phoenix District Office in a statement following the jury's ruling. "Title VII [of the Civil Rights Act of 1964] protects people of all religious beliefs, and no one should ever have to sacrifice her religious beliefs in order to keep a job."

Religious discrimination cases such as Nur's have been on the rise since 9/11. The number of cases that the EEOC, the federal agency responsible for enforcing the laws that prohibit employment discrimination, has received based on religious discrimination has increased from 1,939 in 2000 to 3,790 in 2010.

Of course, not all religious discrimination cases involve Muslims or what the EEOC calls other "vulnerable groups" post-9/11. The increased focus on religion has led to claims by members of other denominations as well. For example, in October 2007, a jury ordered AT&T Inc. to pay $756,000 in a religious discrimination lawsuit the EEOC brought on behalf of two male customer service technicians who were suspended and fired for attending a Jehovah's Witnesses Convention. And according to the Los Angeles Times, in July the Los Angeles Police Department was sued for religious discrimination after it disciplined an off-duty police sergeant who called homosexual acts "sinful" and an "abomination."

A Proactive Approach
In order to stave off potential religious discrimination claims by employees of all faiths, employers need to understand their duties under Title VII, and they need to communicate those duties and expectations to their employees.

Understand "Reasonable Accommodations"
Title VII requires that employers make reasonable accommodations for their employees' religious beliefs, but only if it doesn't cause undue hardship. It can be very complicated for organizations to determine what is reasonable, and what represents an undue hardship.
Educate Employees about their Responsibilities
While employers must try to resolve conflicts between religious needs and work-related duties, employees must do the same. They should offer as much notice as possible when they need to take time off for holy days, and they should work their vacation schedules or personal days around these times. Upon hiring or during job training, employers should communicate their expectations to employees; an annual refresher course for all employees, including managers, can help head off conflicts.
Consider Religious Clothing When Developing Dress Codes
Many religions require a particular type of dress or symbols, from tattoos for Coptic Christians to yarmulkes for devout Jewish men to hijabs, or head scarves, for devout Muslim women. Employers must factor these types of religious garb into their formal dress codes and informal expectations for what employees can wear.

One of the few relatively clear rules about religious symbols or clothing representing an undue hardship involves safety issues. If a particular type of religious garb could represent a safety risk for that particular employee's job, the employer generally has the right to dictate what the employee can or cannot wear.
Laws Apply to Applicants, Too
It is illegal to ask job applicants about their religion or observance of religious holidays during any point of the hiring process. Asking if an applicant's religion will prevent them from working holidays and weekends is not acceptable-rather, the employee must alert the employer about needed days off once he or she is hired. However, employers can describe the hours and duties that a job entails during the interview process.
"Joking" Comments
When someone in the workplace makes comments about a person's religion, or supposed religion, that can quickly cross the line into religious discrimination, even if they insist it was all in good fun. The company should clearly lay out what the boundaries are for unacceptable personal comments and enforce those as soon as they become aware of the comments or a compliant is filed.

The United States is on track to become more, and not less, religiously diverse. With the proper planning and policies, employers can create an environment where employees of all religions, as well as no religions, feel valued. This also helps the company minimize its exposure to potential religious discrimination lawsuits.

Another Reason to Classify Your Employees / Independent Contractors Correctly
by Joseph "Trey" L. Wood, III
July 25, 2011

The essence of any lawsuit seeking an injunction to enforce a non-competition agreement is breach of contract: The company seeking to enforce the non-compete is claiming that the violating party breached the non-compete. A defense often raised in these matters is that the company acted with "unclean hands," i.e., that the company breached the agreement too, so the non-compete should, likewise, be unenforceable. In one recent case, this very argument was used with success in terms of the independent contractor relationship.

In the case, Joseph Figueroa had an independent contractor agreement (ICA) with Precision Surgical, Inc., a medical equipment supplier. The agreement contained several restrictive covenants, including a non-compete agreement. Figueroa worked under the ICA for several years and Precision required him to, among other things, devote all of his time to selling Precision's products, report to Precision on a daily basis, attend monthly meetings, wear the company's logo, and obtain permission from the company before giving quotes to certain prospects. A dispute between them ensued and Figueroa left the company and filed suit to invalidate the non-compete. Precision filed a counterclaim to enforce the non-compete seeking an injunction to prevent Figueroa from working for a competitor.

Figueroa raised the "unclean hands" defense by claiming that Precision breached its agreement because the company had misclassified him as an independent contractor when he was really an employee. Both the trial court and the U.S. Third Circuit Court of Appeals agreed and the company's request for an injunction was denied.

What this Means for You
While the court's decision to deny the injunction was based on more than just the fact that the company misclassified the independent contractor, it is very likely that the contractor/employee would have prevailed under this theory alone. Accordingly, it is imperative that if you have Independent Contractor Agreements with restrictive covenants, such as non-competes, that the individuals working under those Agreements are properly classified as independent contractors and are not, in fact, employees.

Social Media Harassment?
by Joseph "Trey" L. Wood, III
July 18, 2011

The explosion of social media is no longer a headline grabbing phenomenon. In addition to Facebook, MySpace, Twitter and a plethora of other social websites, individuals have taken to creating and maintaining their own personal blogs. While most employers recognize that they have a duty to maintain a workplace atmosphere free of illegal harassment, what about the situation where one of your company's employees, on his own time and away from the workplace, starts to make fun of another employee's physical deformity on his personal blog? Does the company have an obligation to do something about it?

Recently, an Orange County California jury answered this question by awarding a Juvenile Corrections Officer over $1.6 million dollars on his claim that he was harassed at work due to his severely deformed right hand. In an unofficial blog about the juvenile detention center, comments were posted by an employee referring to Espinoza as "the claw" "rat claw" and "one handed commander." Espinoza alleged that the comments and harassment spilled over into the workplace. After Espinoza complained, he was transferred to an assignment he did not want, and sued. Defendant County of Orange alleged there were no suspects to investigate, and that there was no evidence that any coworkers harassed Espinoza in the workplace. The jury, on the other hand, disagreed and found in Espinoza's favor against the County. Espinoza v. County of Orange, et. al., (Orange County Superior Court Case No. 30-2008-00110643-CU-Wt-CJC).

This case certainly does not mean that employees should be banned from social media. However, it is important for the employer to recognize that it should take into account employees' use of social media when training supervisors and creating company policies. As an example, a Company's No Harassment policy should include state that pejorative comments about employees made in social media are not allowed and should be reported the same as any other harassing comments. Also, supervisors should be reminded that they should be very careful about what they post online so that any potentially discriminatory animus is not reflected or revealed. Then, train everyone about what is suitable and not suitable for posting online and what they should do if happens. Finally, if an employee complains about another employee's harassment through social media, take steps to immediately investigate and fix the problem. Only by taking these steps can you potentially fend off claims of online harassment.

Non-Compete Agreements in Texas More Enforceable than Ever
by Joseph "Trey" L. Wood, III
July 5, 2011

On June 24, the Texas Supreme Court made it easier for employers to enforce non-compete agreements with employees by holding that stock options can serve as consideration sufficient to support the agreement. Before this ruling it was generally accepted that only an employer's providing confidential information or "trade secrets" could suffice as consideration for a non-compete.

Retreating from years of previous case law, the Supreme Court stated, "Consideration for a non-compete that is reasonably related to an interest worthy of protection, such as trade secrets, confidential information or goodwill, satisfies the [statute.]" With this ruling, it does not seem too far-fetched to conclude that cash might even serve as valid consideration. We will have to wait and see how lower courts interpret this ruling.

A PDF copy of the Court's opinion is available at: http://www.noncompetenews.com/file.axd?file=2011%2f6%2fMarsh+USA+v.+Cook.pdf

NLRB Again Flex's Its Muscle
by Joseph "Trey" L. Wood, III
June 25, 2011

While the passage of the Employee Free Choice Act is seemingly dead, the National Labor Relations Board (NLRB) is still seeking to implement parts of the Act through administrative fiat. On June 21, the NLRB proposed changes to its existing rules governing union elections. If implemented, the new rules would significantly restrict an employer's ability to successfully stage its own campaign in opposition to a union's organizing efforts. Specifically, the new proposed rules include the following requirements:

Potentially cutting down the time that a representation election is held from 56 days to only about 26 days. Typically, the more time employees have to study the issues, the less likely they are to vote for a union.
Employers must provide the NLRB and unions more information about voters. The proposed rule would require employers to provide information on its employees' phone numbers, email addresses, job classifications, work location and shift. The current rules only provide that employers must give out home addresses. Under the proposed rules, unions will have much easier access to employees.
Employers will no longer be entitled to a hearing to determine who votes. Under current rules, the parties have a right to a pre-election hearing to determine the voting unit. The NLRB's proposal, challenges to voters would (most of the time) be challenged at the polls and then litigated afterward. This could potentially discourage voter turnout, particularly among those who tend to side with the company.

There is a 60-day comment period for these proposed changes, followed by agency review and consideration, before the rules are finalized and implemented. If passed, the rules are subject to court review. All of these potential changes mean that it is more important than ever for non-union employers to remain vigilant in their efforts to promote preventive labor relations in advance of union organizing efforts.

Dukes Not So Hazardous After All
by Joseph "Trey" L. Wood, III
June 24, 2011

As an update to our blog posting on April 6, the United States Supreme Court has ruled that a district court improperly certified a nationwide class of female employees of Wal-Mart who were claiming sex discrimination in the company's pay and promotion practices. In Dukes v. Wal-Mart, the Court unanimously ruled that the lower courts improperly certified the lawsuit under Rule 23(b), which relates only to class action claims for injunctive or declaratory relief, but was split along ideological lines (5-4) regarding the issue of whether the matter was improperly certified as a class action under Rule 23(a), which sets forth the four threshold class action requirements for certifying a class action of numerosity, commonality, typicality and adequacy of representation.

Writing for the majority, Justice Antonin Scalia explained that of Rule 23(a)'s four threshold requirements, the "crux" of the Dukes case turned on commonality — namely, whether there were "questions of law or fact common to the class." In addressing this question, the Supreme Court adopted wholesale the approach that it previously had taken in General Telephone Co. of Southwest v. Falcon, 457 U.S. 147 (1982), an approach which the Ninth Circuit, in its en banc opinion, had partially rejected as dicta. The Supreme Court's majority held that in order to certify a class, plaintiffs must "affirmatively demonstrate" and "be prepared to prove" with "significant proof" at the class certification stage that class members have "suffered the same injury," in that they have a common contention of fact or law, the determination of which "is central to the validity of each one of the [class members'] claims in one stroke."

At stake in this case was the possibility of the largest employment class action in history, with literally billions of dollars on the line. With this ruling, however, employers across the country can breathe a collective sigh of relief. While this case will certainly make it more difficult for employees to certify class actions for discrimination claims in the future, the Supreme Court's ruling does little to dissuade creative plaintiff's lawyers from trying to certify class claims based upon the disparate impact that certain company policies may have.

Employers Lose Fight Against Concealed Carry License Holder Employees in Texas
by Joseph "Trey" L. Wood, III
June 8, 2011

On June 2, the Texas Legislature passed S.B. 321, which prohibits employers from denying employees with concealed carry handgun licenses the ability to carry a firearm in a locked, privately owned automobile in a parking lot, garage or parking area that the employer provides to employees. Employers may still prohibit the possession of firearms within their offices or places of business, where the possession of a firearm is prohibited by state or federal law, or if the vehicle is owned or leased by the employer. The Bill also provides for exceptions pertaining to property subject to an oil, gas, or other mineral lease and property owned or leased by a chemical manufacturer or oil and gas refiners.

Opponents of the new legislation felt that it would increase greater workplace violence liability issues for employers. In response to this, the Bill grants immunity to employers, except in cases of "gross negligence," from civil actions for personal injury, death or property damages resulting from an occurrence involving a firearm that the employer is required to allow on the employer's property under the new law. This new Act will take effect on September 1 if it is signed by Texas Governor Rick Perry.

Supreme's OK Legal Arizona Workers Act
by Joseph "Trey" L. Wood, III
June 1, 2011

The Legal Arizona Workers Act (LAWA) requires the Attorney General or County Attorney to investigate all complaints made by anyone against an employer relating to the employment of unauthorized aliens. The U.S. Immigration and Customs Enforcement (ICE) agency and local enforcement will be informed of valid complaints, and the County Attorneys may file charges against the employer. The Act also provides for a progressive penalty system that depends on whether the violating employer "knowingly" or "intentionally" employed the unauthorized alien. The Act applies to Arizona employers of all sizes. The other major provision of the Act requires all employers use the federal E-Verify system to verify the employment eligibility of all new hires beginning January 1, 2008. LAWA was challenged by business and civil rights groups alleging that the Act was preempted by federal law and would lead to discrimination by employers.

Lower courts found that LAWA was not preempted by the Immigration Reform and Control Act of 1986 (IRCA) and that, specifically, the statute was a "licensing" statute that is expressly permitted by that law. On May 26, 2011, The United States Supreme Court affirmed the decisions of the lower courts noting that "Arizona has taken the route least likely to cause tension with federal law."

This ruling will have an impact beyond the borders of Arizona. Many states struggling with illegal immigrant issues have been awaiting this ruling in order to determine whether they should implement their own laws to help curb the hiring of unauthorized workers. However, it should be noted that this ruling does not address Arizona's other controversial immigration statute, S.B. 1070, which requires law enforcement officials to attempt to determine the immigration status of any person that they believe to be an alien unlawfully present in the United States. Stay tuned for updates on that incendiary topic.

OSHA Recordkeeping Site for Employers
by Joseph "Trey" L. Wood, III
May 20, 2011

You may have heard, or read in my last blog entry, that the Department of Labor (DOL) has come out with an "App" to assist employees in keeping track of their time for wage and overtime matters.

Not to appear too one-sided, the DOL just came out with a website to assist employers with recordkeeping for OSHA matters. This directly from the DOL's press release:

"The OSHA Recordkeeping Advisor helps employers and others responsible for organizational safety and health quickly determine whether an injury or illness is work-related; whether a work-related injury or illness needs to be recorded; and which provisions of the regulations apply when recording a work-related injury or illness. To help employers in making these determinations, the OSHA Recordkeeping Advisor relies on their responses to a series of pre-set questions."

The website may be found at http://www.dol.gov/elaws/osharecordkeeping.htm.

That's nice, but not as cool as an app.

SCOTUS UPDATE: Class ACtion Arbitration Waivers Valid
by Joseph "Trey" L. Wood, III
April 28, 2011

On In a bit of good news for employers, the United States Supreme Court on April 27, 2011 struck down a state law which prohibited arbitration agreement provisions waiving the right to participate in class action litigation. In AT&T Mobility LLC v. Concepcion, the Supreme Court considered the issue of whether parties can preclude class actions and class-arbitration by the terms of an arbitration agreement.

Facts: In 2002, Vincent and Liza Concepcion signed a two-year service contract with AT&T Mobility for wireless phone service. In exchange, they were provided two new cell phones "for free." However, AT&T charged the couple sales tax for the full value of the phones. In the contract between the parties there was a clause requiring the Concepcions to arbitrate any disputes with AT&T and prohibited them from participating in any class action against the company. The Concepcions sued AT&T claiming that the company had committed fraud by charging them sales tax on phones that were advertised as free.

Courts Rule: The California federal district court, and the Ninth Circuit Court of Appeals both found that California law invalidated the class action waiver as unconscionable. However, the Supreme Court found that the Federal Arbitration Act preempts state laws that discriminate against arbitration agreements and that the California law did just that.

What It Means: Employers who use arbitration agreements with their employees may now wish to insert into their arbitration agreements language that prohibits employees from joining any class action against the company. For employers who do not use arbitration agreements but are fearful of the potential for class action matters, now may be the time to implement such agreements.

"No Match" Letters Return
by Joseph "Trey" L. Wood, III
April 26, 2011

After a three-year hiatus, the Social Security Administration (SSA) recently announced that it will again begin sending "No Match" letters to employers.

These letters are used to advise employers that there is a discrepancy in the records of the SSA between the name of an employee and the Social Security number listed for that employee on the payroll taxes submitted by the employer. The SSA suspended sending out these letters for the past three years during litigation surrounding the Department of Homeland Security's (DHS) proposed regulation that would have provided a "safe harbor" for employers if they followed certain procedures in responding to "No Match" letters. The DHS has since withdrawn that proposed regulation.

If you receive a "No-Match" letter from the SSA, you should first check your own records to make certain that the problem does not stem from transposing a number or some other clerical error. If that is not the case, you should follow up with the employee to check to make certain that the information that he/she provided to you is correct. If the employee provided the information that is in question, you should inform the employee of the discrepancy and have the employee resolve the issue with the SSA within "a reasonable period of time." A reasonable amount of time is generally two weeks. After receiving the updated information from the employee, follow up with the SSA to verify any new information or documentation provided by the employee. If the employee fails to provide a satisfactory response, you, as the employer, arguably possess "constructive knowledge" that the employee may not be eligible to work in the United States. Accordingly, at that time the only option may be termination.

Yet Another Reason for Employee Handbook Audits
by Joseph "Trey" L. Wood, III
April 14, 2011

While union membership has declined steadily over the past several decades, it is clear that the current administration is an advocate for organized labor. President Obama has appointed two of the most overtly pro-union members to the National Labor Relations Board (NLRB) that we have seen in years. Craig Becker, one of Obama's early appointees who was rejected by the Senate but appointed during the 2010 Easter recess, serves as associate general counsel to the Service Employees International Union and the AFL-CIO. It is his stated opinion that employers "should be stripped of any legally cognizable interest in their employees' election of representatives." Translated — employers should not be allowed to oppose union organizing drives. While pro-union legislation has failed to garner adequate support in Congress, the NLRB has the authority to enact procedural changes that could short circuit what unions are clamoring for-greater employee rights at the expense of employers.

This fact is certainly being reflected in the NLRB's rulings. Recently, the NLRB found that the existence of three objectionable rules contained within an employee handbook were sufficient to overturn the results of a decertification election. In Jurys Boston Hotel, 356 NLRB No. 114 (2011), the employer had voluntarily recognized the union as its employees' bargaining representative. Two years later, the employees filed a petition seeking to decertify the union and the Board scheduled the requested election. The hotel had a 63 page employee handbook containing the regular rules and regulations that might be found in any typical handbook. However, after the election petition was filed, the union filed an unfair labor practice charge challenging three policies within the handbook: 1) No Solicitation Policy; 2) No Loitering Policy; and, 3) Grooming Policy banning wearing of buttons. Those policies had been in effect for two years without the union raising any complaints prior to the requested election. The employer, in response, voluntarily revised two of the policies and deleted one in its entirety. That should have fixed the problem, right? Wrong.

While the original hearing officer found that the policies were objectionable, they "did not require setting aside the election because they were promulgated before the employer recognized the union, were not enforced or cited by the employer during the critical [election] period, and were not shown to have deterred any employee from exercising Section 7 rights."

The NLRB majority overturned the hearing officer's ruling, finding that the policies in question were objectionable and that "[e]ach of these rules, in force during the critical election period, reasonably tended to interfere with employee free choice." The Board also found that the fact that the election was decided by a single vote proved that the rules could have affected the results.

This all points to the inescapable conclusion that the NLRB will do whatever it can to promote the growth of organized labor. Accordingly, employers should do whatever they can to ward off potential claims of unfair labor practices, including having their handbooks reviewed to make sure they are compliant with current labor laws.

The Hazard of Dukes
by Chris Hanslik & Joseph "Trey" L. Wood, III
April 6, 2011

On March 29 the United States Supreme Court heard oral arguments in Dukes v. Wal-Mart Stores, Inc. The class action lawsuit involves, potentially, 1.5 million female Wal-Mart employees and ex-employees claiming gender discrimination in terms of pay and promotions. The potential liability Wal-Mart faces is in the billions of dollars. However, the case is more significant for class action procedural issues than for any substantive employment-related issues.

The lawsuit has been certified as a class action under two different procedural rules. First, the suit was certified under Federal Rule of Civil Procedure 23(b), which relates only to class action claims for injunctive or declaratory relief. Wal-Mart has argued that the plaintiffs are seeking monetary damages which are clearly more important than any injunctive or declaratory relief which they are seeking. The Ninth Circuit Court of Appeals, which affirmed the class action, indicated that the plaintiffs' claims for monetary damages did not "predominate" over their request for other relief.

The Supreme Court also ordered the parties to brief and argue whether certification is consistent under Federal Rule of Civil Procedure 23(a), which sets forth the class action requirements of numerosity, commonality, typicality and adequacy of representation. It is difficult to conceive of a set of circumstances under which 1.5 million females, located in stores across the country and supervised by thousands of different managers, can meet the rule's requirement that their claims of gender bias all arose from some common plan or scheme stemming from Wal-Mart's corporate headquarters.

According to those who were present at the oral argument, the questions posed by the Justices to the attorneys for both sides seemed to be more sympathetic to Wal-Mart. Several justices sharply questioned whether such a large number of women could be discriminated against without a showing of an "unlawful" policy coming from corporate headquarters. The court is likely to issues a decision in the case prior to the end of its term in late June. We will be sure to update you as soon as the ruling is announced.

The Immigration Dilemma: Ways to Protect Yourself from Liability Under US Immigration Laws
by Joseph "Trey" L. Wood, III
March 30, 2011

Under the Immigration Reform and Control Act (IRCA) employers are often placed between a rock and a hard place when confronted with an employee who may be unauthorized to work in the United States. This article will explain what employers should do in situations where they suspect their employees may not be authorized to work in this country.

SITUATION 1: THE ROCK
In cases with suspicious circumstances or employee fraud, an employer is not liable for making further investigations of an employee's status. However, employers risk liability if they unreasonably investigate an employee's authorization status by requesting documents and verification without reason. To illustrate, the most common actions which may result in liability under IRCA are:

A request for specific documentation can be considered "document abuse" if the request is made for the purpose of discriminating against an individual on the basis of national origin or citizenship status
An employer's refusal to accept documents, during the employment eligibility verification procedure, that are acceptable verification documents under the law, and that appear on their face to be genuine
Re-verifying a permanent resident only because his or her green card has expired.

SITUATION 2: THE HARD PLACE
Despite the fact that employers may risk liability if they investigate employees without reason, employers still have a duty under IRCA to review work-authorization documents for fraud. Employers are also liable under IRCA for "knowingly" hiring unauthorized aliens, or for continuing to employ such aliens after learning that they are not authorized to work. Employer liability is not limited to those situations where it has actual knowledge that an employee does not have work authorization. "Knowledge" is defined under IRCA to include situations where the employer deliberately fails to investigate suspicious circumstances. The following are examples of constructive knowledge:

The employer fails to complete Form I-9 and it turns out the employee is unauthorized to work
The employer continues to employ the employee without re-verifying his or her employment eligibility after the expiration date for employment eligibility listed by the alien in Section 1 of the I-9 form
The employer has information available to it that indicates the employee is not authorized to work

AVOIDING THE ROCK AND THE HARD PLACE
A general rule of thumb is that employers should not make further inquiries regarding an employee's work authorization based on mere rumors around the workplace. However, if there is conflicting documentation or reliable information becomes available to the employer indicating immigration irregularities, further inquiries are permissible. Employers should remember that they are not expected to be detectives ferreting out all unauthorized workers from the work place. Therefore, when an employee presents documents evidencing employment eligibility from the acceptable list of documents and those documents appear genuine, employers can consider those documents as proof of the employee's eligibility to work in the United States. Absent clear evidence to the contrary, the employer should avoid inquiring further about the employment eligibility of a worker.

EEOC's ADA Amendment Act Regulations Finalized
by Joseph "Trey" L. Wood, III
March 29, 2011

On Friday, March 25, 2011, the EEOC published its finalized regulations governing the Americans with Disabilities Act Amendment Act (ADAAA). The final regulations may be viewed at www.ofr.gov. Briefly, the highlights of the new regulations are as follows:

"Substantially Limits": The new regulations significantly relax the definition of what impairments "substantially limit" major life activities. The Amendments Act also clearly stated that the Supreme Court's interpretation of the term "substantially limits" as meaning "severely restricts" was too high of a standard and the ADAAA intended to lower that standard. While the Act itself did not offer guidance as to where that standard should be, the proposed regulation specifically states that in order to be "substantially limiting" an impairment need not severely restrict or significantly restrict performance of a major life activity. Certainly, this is a far lower standard than that previously held by the Supreme Court and the EEOC. The proposed regulations do identify that temporary, non-chronic impairment of short duration with little or no residual effects such as a cold or common flu, a sprained joint or a broken bone that is expected to heal completely will usually not substantially limit a major life activity. These conditions could be viewed as both minor and transitory but under the language of the regulations, few other ongoing conditions will likely be excluded if they are found to limit a major life activity or bodily function. They require courts to ignore whether "mitigating measures," such as medication, ameliorate an impairment's effects. Going forward, the evaluation of a "substantial limitation" must be based on the individual's NON-MEDICATED condition. The regulations go on to state that an impairment does not have to "prevent, or significantly or severely restrict" a major life activity to be considered a disability.

Episodic Impairments: The proposed regulations also indicate that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active. The EEOC then goes on to list several examples such as epilepsy, cancer, depression, hypertension, asthma, bipolar disorder, and post-traumatic stress disorder.

Examples of Impairments Qualifying As Disabilities: The new regulations also list several impairments that will ordinarily qualify as disabilities. They include "deafness, blindness, intellectual disability (formerly known as mental retardation), partially or completely missing limbs, mobility impairments requiring use of a wheelchair (a mitigating measure), autism, cancer, cerebral palsy, diabetes, epilepsy, HIV/AIDS, multiple sclerosis, muscular dystrophy, major depression, bipolar disorder, post-traumatic stress disorder, obsessive-compulsive disorder, and schizophrenia." In the past, there were no "per se" disabilities.

"Major Life Activities": The EEOC's regulations incorporate the ADAAA's expanded definition of major life activities, but have also added reaching, sitting and interacting with others as major life activities. In addition, the regulations have expanded the list of major bodily functions to include hemic, lymphatic and musculoskeletal systems.

"Regarded As" Having a Disability: The proposed regulations provide several examples of transitory and minor impairments, such as a broken or sprained bone that is expected to heal normally. The regulations also provide examples of impairments that the EEOC would not consider minor and transitory, such as Hepatitis C or heart disease. The "regarded as" employee is not entitled to reasonable accommodation and must establish he or she is "qualified" to do the job.

Five Rules of Construction: The new regulations also detail five rules of construction for determining whether an impairment limits a major life activity.

1. Focus on discrimination-not disability. In ADA cases, the focus should be on whether or not discrimination occurred and not on whether the individual meets the definition of disability.

2. Rejection of Supreme Court. An individual whose impairment substantially limits a major life activity need not also demonstrate a limitation in the inability to perform "activities of central importance to daily life."

3. One impairment is enough. An impairment that substantially limits one major life activity need not limit any other major life activities or impact work to be considered substantially limiting.

4. Use your common sense. When comparing an individual's limitation to determine whether or not it is substantially limited, it should be compared to the general population and a common sense analysis without resorting to scientific or medical evidence may be followed.

5. What is transitory? The regulation clarifies that impairments that last for fewer than six months may still be substantially limiting. Therefore, it is clear that at this point in time, the EEOC is not adopting a bright line rule that conditions lasting six months are transitory in nature and therefore not covered.

The EEOC also explains that an employer may regard an individual as disabled if it takes an action based on a symptom of an impairment. The EEOC provides examples of how this applies. In one example, an employer refuses to hire someone with a facial tic who does not know the facial tic is cause by Tourette's Syndrome. The EEOC would consider the employer in this hypothetical to have regarded the individual as disabled even though it did not know the individual had Tourette's.

Supreme Court Ruling Bolsters Need For Thorough Investigations and Training
by Joseph "Trey" L. Wood, III
March 7, 2011

Last week the Supreme Court held that an employer may be liable for the discriminatory motives of a supervisor, even when the individual making the employment decision had the purest of motives. The Court's ruling will trigger human resources departments everywhere to reconsider employment-related decisions where supervisors influence or even provide input into the ultimate decision.

The Court's decision in Staub v. Proctor Hospital involved what is known as the "cat's paw" theory in which many courts have found liability against an employer even when the ultimate decision maker is admittedly unbiased, if the affected employee's supervisor harbors discriminatory animus. Staub actually involved a claim of discrimination under USERRA, the law protecting employees from discrimination based upon their service in the military. In the case, the employee's immediate supervisor engaged in a course of conduct against the employee which clearly showed his anti-military feelings. When the employee violated one of the supervisor's warnings to report to him whenever the employee had completed a task, the human resources manager terminated the employee with little investigation into the matter, relying upon a review of the employee's personnel file and recommendations from the supervisor. The employee's involvement with the military played no role in the human resources manager's decision to terminate Staub. However, the Supreme Court found that under such circumstances, the employer may be held liable for discrimination.

This decision serves as a sobering reminder that it is imperative that supervisory personnel be adequately trained on what laws protect employees from discrimination. It also means that the job of human resources professionals has gotten much harder. While the Supreme Court refused to adopt a steadfast rule immunizing employers who perform independent investigations of the conduct that led to the adverse employment action, it did provide some guidance:

"Thus, if the employer's investigation results in an adverse action for reasons unrelated to the supervisor's original biased action (by the terms of USERRA it is the employer's burden to establish that), then the employer will not be liable. But the supervisor's biased report may remain a causal factor if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor's recommendation, entirely justified."

Accordingly, human resources will now, apparently, have to question the motives of any supervisor or supervisors who are claimed to have made, caused or influenced an adverse employment-related decision to be made.

Update: Employers' Regulation of Employees' Social Media Use
by Joseph "Trey" L. Wood, III and Chris Hanslik
March 1, 2011

Our November 17, 2010 blog entry titled "NLRB's After Us and We're Not Even Unionized" indicated:

In a recent, somewhat frightening development, the NLRB has recently filed a complaint alleging that American Medical Response of Connecticut, Inc. (AMR) violated Section 7 of the act by terminating an employee for posting negative comments about her supervisor on her Facebook page. AMR has a social media policy that prohibits employees from disparaging the company and its supervisors in social media posts, even when posting while off-duty and using a personal computer. Apparently, the policy did not include a disclaimer that the policy would not be construed or applied in a manner that interferes with employees' rights under the NLRA. The Board's complaint is also noteworthy because of the fact that it appears to allege that merely having an anti-disparagement social networking policy violates Section 7 even if the employer does not actually apply the policy and impose discipline.

As an update to this, the NLRB and the employer, AMR have settled the matter prior to it being heard by an administrative law judge. Therefore, we will not know which direction the ALJ would have ruled.

In another recent case, the Eleventh Circuit Court of Appeals has upheld an employer's right to regulate the type of material that an employee posts on her Myspace page. In Marshall v. City of Savannah, the female firefighter employee posted some questionable photos of herself on the internet. Her employer, being informed of this by a co-worker, was able to view the photos because her status on the site was not "private," allowing anyone to see them. The employer decided to issue the employee an oral reprimand, the lowest form of punishment available, based on the photos' bringing "discredit to the City and Savannah Fire Department." During the counseling session, the employee became very abusive and hostile and was, accordingly, terminated. She sued her employer claiming sex and race discrimination. While the Court sided with the employer, it did so only because the female employee was unable to show that men were treated more favorably than she was.

While this case is less about an employer's right to regulate an employee's social media content and more about the individual's inability to prove any discrimination, it is a helpful ruling for employers. However, we can be certain that the NLRB, which will not be bound by the 11th Circuit' ruling, will continue to push the boundaries of the National Labor Relations Act, especially Section 7 of the Act which protects employees' concerted protected activities. Given the fact that the Board now enjoys a Democratic majority along with an Administration that is pro-labor, employers, both unionized and non-union, would be wise to pay careful attention to which way the wind is blowing.

Workplace Romance: Avoid Problems-Send in the Love Contract
by Joseph "Trey" L. Wood, III
February 7, 2011

In honor of Valentine's Day, when love is "in the air," it seems fitting to address an issue that affects employers every day: workplace romances.

At some point, an office or workplace romance will flourish at your place of business, if it has not already. It seems only logical since people spend large amounts of time together at work (most employees spend at least 160 hours per month at work), that relationships may develop outside the scope of normal business duties. The question then becomes, as an employer, how should a company handle these types of relationships?

First, as a rule of thumb, employees at the managerial and/or supervisor level should avoid office romances with subordinates. As with any romantic relationship, the odds that it will sour are high, and additionally, your company risks serious exposure to a sexual harassment lawsuit, even if the relationship was consensual. For instance, a subordinate employee could allege that she was afraid to lose her job if she did not participate in the relationship, regardless of whether that claim is true or not.

The most sensible position for any employer should most certainly be that employees should not engage in non-professional, romantic relationships with co-workers. To get this point across, many companies maintain an "anti-fraternization" policy to discourage these types of relationships. Despite best efforts, however, these types of policies do not always work. Although it can be helpful to have an anti-fraternization policy, it will not serve as a deterrent to individuals that are truly serious about exploring a non-work-related relationship with a co-worker.

Anti-fraternization policies may be totally disregarded by employees, and are difficult for employers to enforce. What then is the point of including such a policy in an employee handbook? At the very least, employers have a clear policy that has been communicated to employees which states that romantic relationships are discouraged (or forbidden entirely, depending on the policy language) and are a violation of company policy. If this does not work, what other options do you have as an employer to prevent a workplace romance from potentially leading to a lawsuit? The answer can be found in a newly developed idea that is becoming more common each day: the "love contract."

Employers are aware that workplace romances can, and in most instances, will cause problems. As such, when management learns of a workplace relationship, it is a good idea to have the employees involved sign what has become commonly known as the "love contract." This type of contract allows employees to put into writing the understanding that they are engaged in a consensual relationship. In addition to allowing employees to confirm that their relationship is consensual, it allows them to agree in writing that they will follow all company guidelines and policies dealing with harassment and discrimination. Further, the employees can agree that they will conduct themselves professionally at work, will not play favorites (particularly with each other at the expense of other employees), and will refrain from engaging in behavior that has no place in a work setting.

Workplace romances will happen, at some point or another. Incorporating anti-fraternization language into your policies, although a good idea, will not necessarily curb a relationship that does not want to be curbed. In extremely rare instances, your employees may even do a very good job of keeping the relationship a secret from everyone else, including management, and there will be no noticeable problems caused that can be attributed to the relationship. In a majority of cases however, the relationship will become common knowledge, and when that happens, consider sending in the "love contract" to protect yourself, especially once the love is gone.

Supreme's Give Not to Third Party Retaliation
by Joseph "Trey" L. Wood, III
January 26, 2011

In a rare unanimous decision, the United States Supreme Court has ruled that Title VII of the Civil Rights Act of 1964 covers retaliation claims filed by third-parties who are considered to be "aggrieved persons" because they are "within the zone of interests sought to be protected by Title VII." Thompson v. North American Stainless, LP, No. 09-291, U.S. Supreme Court (January 24, 2011).

Background: Eric Thompson and his fiancé, Miriam Regalado, were employees of North American Stainless, LP. Three weeks after Regalado filed a sex discrimination charge against the employer with the Equal Employment Opportunity Commission (EEOC), the company fired Thompson. Thompson filed suit against the company alleging his termination was to retaliate against Regalado for filing her Charge. The District Court for the Eastern District of Kentucky and the Sixth Circuit Court of Appeals both found in favor of the employer finding that Thompson was not "in the class of persons for whom Congress created a retaliation cause of action."

Supremes Reverse: The first issue that the Supreme Court had to decide was whether Thompson's firing was unlawful retaliation. They concluded it is "obvious that a reasonable worker might be dissuaded from engaging in protected activity (i.e., filing a Charge of discrimination) if she knew that her fiancé would be fired."

The second issue to be resolved was whether Thompson could sue under Title VII for third-party retaliation. The Court declared, in a decision written by Justice Antonin Scalia, that a plaintiff may sue if he/she "falls within the 'zone of interests' sought to be protected by the statutory provision whose violation forms the legal basis for his complaint." However, a person may not sue if his/her interests are "marginally related" or "inconsistent" with the purpose intended by Congress.

What this Means to You: While the meaning of the phrase "zone of interest" was not defined, it is obvious that employers will have to be careful in taking any adverse employment actions against employees who have a unique relationship with an employee who has taken protected activity, such as filing a Charge of discrimination, or complaining of illegal workplace harassment.

Return to Work "Without Restrictions"
by Joseph "Trey" L. Wood, III
January 21, 2011

Many employers have policies that state that employees who wish to return to work following an illness or injury must be able to do so "without restriction" or for "full duty." It now appears that those types of policies are seen as red flags by the Equal Employment Opportunity Commission (EEOC) when employees are terminated for not being able to meet these requirements. Earlier this month the EEOC announced a $3.2 million settlement in a lawsuit against Jewel-Osco, alleging that the grocery chain fired disabled employees who could not return to work without restriction rather than seeking to find them reasonable accommodations.

While the company has denied any wrongdoing and has indicated that it chose to settle the case to avoid litigation costs and put the matter behind them to focus on current business initiatives, it is clear that the EEOC's suit had some merit. Part of the consent decree governing the settlement requires Jewel-Osco to engage a consultant to review and recommend changes to its current job descriptions to make sure that they accurately describe physical requirements for the job. It also requires the company to obtain recommendations from the consultant regarding possible accommodations to common work restrictions in various positions within the store.

What should you do?
For most companies, best practices include having up-to-date job descriptions in order to make decisions about accommodating an employee's medical restrictions. Accurate job descriptions can be the lynch pin to defending a disability claim as the employer is given a great deal of deference in deciding what the essential functions of a particular job are. In addition, when an employee is unable to return to full duty, it is the employer's obligation to engage in the interactive process to determine if a reasonable accommodation can be found. While employees are never required to create a job for an employee, it should be determined if the employee's condition truly limits him/her from the essential functions of the job, or just peripheral job tasks that can be easily delegated to others without any undue hardship. Finally, it is strongly recommended that employers review their return to work policies to make sure they include a disclaimer that the provisions of the Americans with Disabilities Act (ADA) will be complied with in making the determination of returning the employee to work.

New Year's Resolutions
by Joseph "Trey" L. Wood, III
January 5, 2011

New Year's Resolutions — we make them every year: lose weight, exercise more, spend more quality time with the family, etc., etc. But have you ever decided to resolve to create a work environment that fosters greater employee productivity and loyalty, and reduces potential employment liability? Why not try it this year?

Sometimes, employers feel that the solution to any employee problem is to apply a monetary poultice. With the economy the way it has been lately, this is increasingly difficult and is rarely the solution. While employee compensation is important, a study was conducted to find out what managers thought was important versus what their employees thought was important.¹ Here are the findings:

What Managers Think Employees Want (in order)

1. Good wages
2. Job security
3. Promotion/growth opportunities
4. Good working conditions
5. Interesting work
6. Personal loyalty to workers
7. Tactful discipline
8. Full appreciation for work done
9. Sympathetic help on personal issues
10. Feeling 'part' of things.

What Employees Say They Want (in order)

1. Full appreciation for work done
2. Feeling 'part' of things
3. Sympathetic help on personal issues
4. Job security
5. Good wages
6. Interesting work
7. Promotion/growth opportunities
8. Personal loyalty to workers
9. Good working conditions
10. Tactful discipline

Is it surprising that the top three things that employees say they want from their managers are at the bottom of what managers think employees want? In order to turn this around, it is important for employers to make the following resolutions:

Train Managers and Supervisors
In addition to training management personnel about the importance of spotting employment issues before they become lawsuits, it is also important that they understand that to foster a more productive and cohesive workforce, they should be attuned to what employees want from their employer. Accordingly, train managers to pay attention to those three things above that are most important to employees so that they may modify their own behavior to make the workplace more harmonious.

Audit Employee Handbooks and I-9 Forms
Employment laws change daily, and ICE (Immigration Customs and Enforcement) raids are becoming more commonplace. To avoid potential liability for failing to have proper policies and completed paperwork, make sure to have your employee handbook reviewed by a qualified professional, and conduct an internal audit of the company's I-9 forms.

Regularly Distribute Harassment/Discrimination Policies and Obtain Signed Acknowledgments
Nothing is more frustrating than facing an employee in a harassment suit who claims that he/she was never told about the company's harassment policy. To avoid facing this dilemma, distribute these policies at least once a year and make sure that all employees sign a document acknowledging their receipt of the policy. In addition, make sure that you have a signed acknowledgment from each employee that he/she has received a copy of the employee handbook.

Making these three simple resolutions for your company, and sticking to them, will go a long way in making the New Year very bright and promising!

¹ ^{Foreman Facts, from the Labor Relations Institute of NY. This study was replicated with similar results by Ken Kovach (1980); Valerie Wilson, Achievers International (1988); Bob Nelson, Blanchard Training & Development (1991); and Sheryl & Don Grimme, GHR Training Solutions (1997-2001).}

EECO Has Banner Year
by Joseph "Trey" L. Wood, III
December 23, 2010

The Equal Employment Opportunity Commission (EEOC) has reported that for FY 2010, which ended September 30, a record 99,922 charges of discrimination were filed. That is the largest number in the 45-year history of the Commission. The agency also recovered more than $319 million in monetary benefits for individuals-its highest level ever. Other achievements include:

The mediation program ended the year with a record 9,370 resolutions, 10 percent more than FY 2009 levels, and more than $142 million in monetary benefits.
The EEOC also expanded its reach to under-served communities by providing educational training and public outreach events to approximately 250,000 persons.
The agency continued its concerted effort to build a strong national systemic enforcement program. At the end of the fiscal year, 465 systemic investigations, involving more than 2,000 charges, were undertaken.
The EEOC resolved a total of 7,213 requests for hearings in the federal sector, securing more than $63 million in relief for parties who requested hearings. The agency also timely resolved more than 66 percent of federal sector appeals.

Key factors for this third straight year of record, or near record, charges include layoffs and cutbacks by employers. While some may believe that the shift in control of the U.S. House of Representatives will stem the rising tide in discrimination claims made with the EEOC, this is likely not true. While there has been a shift in the legislative branch, the current administration and administrative agencies like the EEOC do not need the approval of Congress to enforce existing laws.

The most important thing that employers can do to try and avoid this trend affecting their companies is to train managers and supervisors in what is required of them by various employment laws so that they may spot potential issues before they become problems.

Death of the Employee Free Choice Act No Deterrent to National Labor Relations Board
by Joseph "Trey" L. Wood, III
December 22, 2011

While the last election may have sounded the death knell of the proposed Employee Free Choice Act (EFCA), it does not mean that the current administration is rolling over on the issue of organized labor. In a startling new maneuver, the National Labor Relations Board (NLRB) has issued a proposed regulation that would require most employers to post a notice advising employees of their rights under the National Labor Relations Act (NLRA), how an employee can file an unfair labor practice complaint, the right of employees to collectively bargain and elect a union, etc. The language of the proposed poster is set out below. It is certain that there will be a public outcry over this proposed regulation, but in the end, if the regulation is passed by the Board, expect the amount of union activity to increase significantly.

Employee Rights Under the National Labor Relations Act
The NLRA guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA* are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the NLRB, the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

Under the NLRA, you have the right to:

Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
Form, join or assist a union.
Bargain collectively through representatives of employees' own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
Discuss your terms and conditions of employment or union organizing with your co-workers or a union.
Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
Strike and picket, depending on the purpose or means of the strike or the picketing.
Choose not to do any of these activities, including joining or remaining a member of a union.

Under the NLRA, it is illegal for your employer to:

Prohibit you from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
Question you about your union support or activities in a manner that discourages you from engaging in that activity.
Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
Threaten to close your workplace if workers choose a union to represent them.
Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
Spy on or videotape peaceful union activities and gatherings or pretend to do so.

Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:

Threaten you that you will lose your job unless you support the union.
Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
Take other adverse action against you based on whether you have joined or support the union.

If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the
violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency's website at www.nlrb.gov.

You can also contact the NLRB by calling toll-free: 1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired.

*The NLRA covers most private-sector employers. Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the NLRA may be covered).

This is an official Government Notice and must not be defaced by anyone.

Department of Labor Now In the Attorney Referral Business
by Joseph "Trey" L. Wood, III
December 7, 2010

As most of you know, overtime wage claims and FMLA claims have sky-rocketed. The Department of Labor (DOL), which is responsible for handling these types of matters, has now announced that if they are too busy to handle one of these claims, a new federal program will help make sure the employee is referred to a lawyer who is qualified to pursue the complaint on behalf of the employee. The referral program is part of the Obama administration's Access to Justice Initiative. The following is a description of the program from the White House press release:

"The Department of Labor and the American Bar Association (ABA) (have) announced a collaboration to help workers resolve complaints received by DOL's Wage and Hour Division (for) not getting paid the minimum wage or not being paid overtime, or being denied family medical leave.

Beginning on December 13, 2010, complainants whose cases cannot be resolved by DOL because of limited capacity will be given a toll-free number to a newly created system where they are connected to an ABA-approved attorney referral provider if there are participating attorneys in their area.

In addition, if DOL has conducted an investigation, the complainant will be given information about the findings to provide to an attorney who may take the case, including the violations at issue and any back wages owed.

DOL has also developed a special process for complainants and representing attorneys to obtain relevant case information and documents when available."

The bottom line is this: the current administration is making a clear statement that laws protecting employees will be strongly enforced. The best thing for employers to do is to make sure that their employees are properly classified and being paid overtime and to review their leave policies to make certain they are compliant.

Mandatory Health Risk Assessments Violate the ADA
by Joseph "Trey" L. Wood, III
December 2, 2010

An Equal Employment Opportunity Commission (EEOC) Informal Discussion Letter reveals the EEOC's opinion that health risk assessments (HRA) are invalid as long as they are mandatory. In other words, an employer could be sued under the Americans with Disabilities Act (ADA) for refusing health care coverage to an individual because he or she failed to participate in an HRA.

An HRA is a type of medical examination to determine an individual's overall level of wellness. It includes a questionnaire asking about lifestyle, diet, exercise choices and biometrics testing cholesterol and blood pressure. After completing the assessment, the individual is given a score and practical ways of improving their health. In answering the HRA questionnaire, however, the individual may disclose information related to disability or medical examinations or both. This information is protected under the ADA and employers may not ask for this type of information unless it is job-related and consistent with a business necessity. Requiring employees to complete an HRA is not considered job-related and consistent with a business necessity because it is not related to an employee's ability to perform an essential job function. An HRA is too general and too subjective for such a purpose.

An HRA is mandatory if non-participating individuals are penalized compared to participating individuals. For example, the denial of health care coverage or other benefits would constitute a penalty, but the forfeiture of an inducement to participate in an HRA is not a penalty, as long as the inducements meet certain criteria set by HIPAA. The value of the participation rewards may not exceed 20% of the total health insurance coverage for the individual employee or the employee and dependent. In addition, the reward must be reasonably designed to prevent disease or promote health, employees must be given the opportunity to participate in the program at least once a year, and similarly situated employees should receive the same reward.

As long as the HRA is part of an employer's voluntary wellness program, the HRA is legal. But, when the HRA is a prerequisite for health insurance coverage, it is a violation of the ADA. Additionally, employers should look at their HRA incentives to make sure they do not violate HIPAA.

Paycheck Fairness Act is Dead — For Now
by Joseph "Trey" L. Wood, III
November 18, 2010

On November 17, the Senate voted 58-41 against proceeding to a floor debate on the Paycheck Fairness Act. That means that the legislation, which had the support of President Obama and was previously passed by the House of Representatives, is dead. As you may recall from my October 10 posting (Paycheck Fairness Act - Fair to Who?), the Act would have made employers liable for unlimited punitive damages under the Fair Labor Standards Act for even unintentional pay disparities, and would have eliminated current limits for back pay as well as for compensatory damages. It would also have made class actions against employers much easier by eliminating a requirement under current law that employees must give their written consent to be included in a class action case. If passed, it would also have hampered an employer's ability to compensate its employees based on criteria such as cost-of-living differences among geographic locations, different work responsibilities within similar job categories, or prior salary history.

With this vote it is clear that the effects of the November election are beginning to reverberate throughout Capitol Hill.

The NLRB's After Us and We're Not Even Unionized!
by Joseph "Trey" L. Wood, III
November 17, 2010

Many employers think that the National Labor Relations Board is the government's agency responsible for dealing with union issues. While that is true, the NLRB is actually charged with protecting employee rights whether the employer is union or non-union. All employees and employers are covered by the National Labor Relations Act. Section 7 of the NLRA protects employees' "concerted, protected activity". Essentially, employees are allowed to communicate with co-workers about the terms and conditions of employment. An employer's attempt to hinder or interfere with those rights is a violation of the NLRA which could lead to an unfair labor practice charge being filed on the employees' behalf by the NLRB.

As an example, many employers believe that information about their employees' rate of pay is a private matter between the employer and its employees. Accordingly, the employer may have a policy in place indicating that employees should not discuss their rate of pay with anyone. Such a policy would have the effect of preventing employees from discussing their rate of pay, or one of the terms and conditions of their employment, with other employees. Accordingly, the NLRB has taken the position that such a policy is a violation of the NLRA.

There is still a long way to go to see if the Board's position will be upheld. Unless the parties settle the AMR matter, the complaint will first have to be heard by an administrative law judge, after which an appeal can be taken to the NLRB and then to a federal court of appeals: something that could easily take more than two years.

What Should Employers Do?
Employers should be cautious about terminating an employee for posting negative comments about the employer on social networking sites, especially when the content of the posting is concerted, protected activity. In addition, it may be wise to review your social media policy to add a disclaimer such as the one mentioned above.

Final Regulations for GINA Released
by Joseph "Trey" L. Wood, III
November 14, 2010

At long last, the EEOC has published final regulations that interpret and implement the non-discrimination provisions of the Genetic Information Non-Discrimination Act of 2008 (GINA). The regulations may be found at http://www.federalregister.gov/articles/2010/11/09/2010-28011/regulations-under-the-genetic-information-nondiscrimination-act-of-2008.

Of particular interest to employers is disclaimer language that the EEOC has drafted that all employers should insert into any of their medical exam and medical inquiry forms. Such forms are frequently used for post-offer medical exams, FMLA medical certifications and ADA medical information requests. The specific language offered by the EEOC reads as follows:

The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of employees or their family members. In order to comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information. 'Genetic information,' as defined by GINA, includes an individual's family medical history, the results of an individual's or family member's genetic tests, the fact that an individual or an individual's family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual's family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.

Employers who insert this language into their medical certifications and requests will be alleviated from liability under GINA in the event that a medical provider discloses genetic information in spite of the warning.

Top 10 Mistakes Made by Employers
by Joseph "Trey" L. Wood, III
November 5, 2010

Frequently, a disgruntled employee will talk to a plaintiff lawyer about perceived harassment or discrimination in the workplace. The plaintiff lawyer may find that the complaint that the employee comes calling about is much ado about nothing. However, crafty plaintiff lawyers are always on the lookout for different ways to trap an unwary employer and, by questioning the employee in depth, they may uncover violations that the employee had no idea was occurring.

Here are some of the top mistakes made by employers that could lead to costly awards to employees or ex-employees:

1. Poor Policy Management
Employers without employment policies in place (or out-of-date policies) and managers who don't know the company's policies or apply them inconsistently are two reasons employers are found to illegally discriminate against employees.

Fixing the Problem: Create, or update, an employee handbook. Then, educate managers and supervisors about the policies and make certain that the policies are applied consistently and fairly.

2. Lack of Proper Training, Resources and Tools for Managers
It is difficult enough for managers to handle their employees, but if they are expected to do so without proper training and resources, it is almost an impossible task.

Fixing the Problem: Provide managers and supervisors with periodic training on policies and procedures as well as a basic understanding of the principles of discrimination, harassment and retaliation.

3. Lack of Clarity
Problems can arise if an employee's performance expectations are misunderstood, or the employer makes promises that it does not keep.

Fixing the Problem: Clear communication is critical. Be clear in general communications with all employees, as well as with communications to individual employees. Finally, make only promises you intend to keep.

4. Poor Recordkeeping
If an employer fails to document performance or disciplinary issues, in the eyes of a jury the problems never existed.

Fixing the Problem: Keep proper factual documents on performance reviews, attendance, time records/tardiness, disciplinary issues and requests for accommodation. For key documents, make certain to document that the employee received a copy.

5. Lack of Objectivity and Patience
All employers have their favorite employees. But failing to be objective with those employees, while being impatient with other employees, may be perceived as illegal discrimination.

Fixing the Problem: Don't be "trigger happy" when it comes to terminating employees. Treat everyone the same - both good performers and bad. Finally, take a deep breath and see the big picture of the climate of the workplace.

6. Acting In a Way That Seems Punitive
The goal of progressive discipline is to rehabilitate a poor performing employee. Discipline, or treatment that seems like punishment, may push an otherwise non-litigious employee into the hands of a lawyer.

Fixing the Problem: Don't threaten employees lightly or act in a way that seems punishing. When counseling an employee, do not make personal or unprofessional comments. Finally, do not submit performance information on employees on uncontested claims for unemployment.

7. Failure to Guard Against Retaliation Claims
Terminating an employee shortly after the employee has made a complaint of harassment or retaliation is frequently a recipe for disaster. Such a step should only be taken if it can be backed up by documentation or if it involves verifiable misconduct on the employee's part.

Fixing the Problem: Be very careful with impacting the employment status of any employee who has taken "protected activity," that is, complaining of harassment or discrimination, or who has filed a charge of discrimination or lawsuit against the company.

8. Lack of Thoroughness and Follow-Through
If the employer provides a mechanism for employees to complain, make sure to take all complaints seriously and follow through with a proper investigation and resolution of the complaint.

Fixing the Problem: Investigate complaints thoroughly and promptly. (The investigation should begin no later than 24 hours after the complaint has been made.) Also, take decisive action in response to the complaint and follow up with the complaining employee once the investigation is complete.

9. Overloaded Managers
Many of the mistakes above are not the result of intentional neglect or inattention, but rather managers and supervisors with too many irons in the fire.

Fixing the Problem: Keep a pulse on your managers' and supervisors' workloads and make sure your staffing levels can handle your volume of work.

10. Improper Handling of Termination
Very often, the way you handle a termination dictates whether an employee will leave quietly, or run to the nearest lawyer.

Fixing the Problem: Rather than try to spare the employees feelings, be honest with the reason for termination. The termination meeting should be brief and to the point and do not argue with the employee - you don't need to feel victorious after the termination meeting. Finally, if you decide to offer the employee severance, only do so in exchange for a written release.

Little mistakes can add up and land you in court, so it is best to avoid them altogether with a strategy to follow a proper HR plan.

Wait Before You Terminate: FMLA Lessons
by Joseph "Trey" L. Wood, III
November 2, 2010

One of your employees calls in sick on November 6 and 7 saying she needed to care for her sick son. On November 8 and 9 she calls in saying that now she is sick and has an appointment with a doctor. She finally forwards to you a doctor's release indicating that she will return to work on November 14. That day comes and goes and the employee never shows up. On November 20 you call the employee to let her know that her job would be in jeopardy if she could not produce documents that confirmed her need to be off of work. She tells you that she sent you the wrong medical certification and would send you one from her primary care physician. On November 24, after you have received nothing, you decide to terminate her under the company's absence policy. On November 28 you send her a termination letter dated the 24th informing her of the decision. You also decide to contact her personally on the 28th to let her know that she was being terminated. That evening you receive a fax FMLA medical certification signed by a nurse practitioner stating that the employee would not be able to return to work for a month. Is this a story of too little, too late for the employee? Not according to the Sixth Circuit Court of Appeals¹.

In Branham v. Gannett Satellite Information Network, Inc., the court found that the employee under these facts had established that she was entitled to FMLA leave. The court held that employees are entitled to the full 15-day certification period to provide a medical certification supporting the need for FMLA leave. That means that even though the employer received a note from a doctor indicating that the employee could come back to work, the employee was still entitled to the full 15 days to seek a medical certification that supported the leave. The company's mistake was assuming that the first doctor's note was the only paperwork that they would receive from the employee. In addition to this, the Sixth Circuit also found that the company could not deny FMLA leave to the employee because there was no evidence that it ever formally requested the employee to provide a medical certification in accordance with FMLA regulations.

Lessons learned:

Follow the FMLA regulations to the letter when requesting medical certifications from employees

Allow employees all the time that they are entitled under the FMLA to return a medical certification

¹The Sixth Circuit covers Kentucky, Michigan, Ohio and Tennessee.

ADA Tool Kit
by Joseph "Trey" L. Wood, III
October 26, 2010

Given the (over) breadth of the Americans with Disabilities Act Amendment Act (ADAAA), almost any given condition may be found to be a covered disability. The emphasis for employers now shifts to an inquiry as to whether the employee is a "qualified individual with a disability." In other words, can the employee perform the essential functions of the job with or without reasonable accommodation.

The Office of Disability Employment Policy (ODEP), which is part of the Department of Labor, has developed a "tool kit" to try and help employers (and employees) with ways to understand how to return employees back to work following an injury or illness that qualifies as a disability. The tool kit is especially helpful for employers who may be struggling to come up with ways to reasonably accommodate an employee. The tool kit also guides employers on how to increase the effectiveness of their return to work strategies by developing an integrated disability and absence management (IDAM) program, which the ODEP believes will enable an employer to reduce job-related injuries and accommodate employees. The employer tool kit also provides overviews of employers' obligations under workers' compensation laws, the FMLA, ADA, and the Rehabilitation Act of 1973.

To access the tool kit, click HERE.

How Bullying Bosses Could Bring Liability
by Joseph "Trey" L. Wood, III
October 19, 2010

Did you know that October 17-23 is Freedom from Workplace Bullies Week? While many still associate bullying with overgrown kids taking lunch money on the school playground, the issue of bullying in the workplace is also serious and prevalent. More than a third of American workers have been bullied at work, and nearly half — 49 percent — say they have been affected by bullying, either through experiencing it or witnessing it, according to a recent survey by The Workplace Bullying Institute.

Workplace bullying damages morale, can lead to workers' compensation claims, hampers productivity and can force high employee turnover. While employers have not often been taken to court for bullying behavior, since it is generally not illegal, that could change soon as several states consider legislation that would hold employers liable for allowing bullying on the job.

The liability could be even greater when employers tolerate, or at least ignore, bullying by bosses. And most bullying is done by bosses, according to the Institute. The survey found nearly three-quarters of those who bully at work are in supervisory positions, and they are most likely to bully the most vulnerable employees, the rank and file workers. When it comes to being bullied, non-supervisory employees account for 55 percent of those who are bullied. Those who are less dependent on an employer or who rank highest in an organization are less likely to be bullied, the survey found. Temporary employees and contractors represent only 5 percent of the bullied, and less than 5 percent of executives, board members and owners are among the victims.

Men are more likely to be bullies — 60 percent of bullies are men, and 40 percent are women. Women are more likely to be targeted for mistreatment, the survey found — 57 percent of victims are female, and 43 percent are male. "The bully boss stereotype is real," the survey's authors reported. "Bullies operate with confidence that they will not likely be punished because they enjoy support from higher-ups who can protect them if and when they are exposed." Workplace bullies do tend to get away with it, the survey found. In 62 percent of cases, employers either escalated the problem or did nothing at all when they learned about the bullying. Less than a third of the time did employers help the bullied employee.

The Workplace Bullying Institute defines bullying as repeated, health-harming mistreatment of one or more persons which takes one or more of the following forms:
verbal abuse; threatening, humiliating or offensive behavior/actions; and work interference — sabotage — which prevents work from getting done. Bullying may resemble such clearly illegal acts as discrimination and harassment; but in some ways is an even greater risk since it can be committed against any employee, not just those in protected classes, such as minorities and the disabled. Employers should begin to take bullying as seriously as the more recognized forms of harassment and discrimination, since at least 17 states have introduced legislation that would provide legal recourse for abusive workplace behavior.

States Taking Action
The bill that Washington State has considered but not yet passed offers one example. According to House Bill 2142 which was introduced in 2008, the state legislature intends, among other things to "provide legal redress for employees who have been harmed, psychologically, physically, or economically, by being deliberately subjected to abusive work environments..." The legislation would also offer legal incentives to employers to prevent and respond to their employees' mistreatment at work. The bill would hold employers liable for up to $25,000 in emotional distress even if the victim was not demoted, fired or otherwise suffered a "negative employment decision" as part of the bullying.

Besides Washington, other states that have introduced anti-workplace bullying legislation are New Jersey, Vermont, New York, Oregon, Illinois, Wisconsin, Utah, Nevada, Montana, Connecticut, Hawaii, Oklahoma, Kansas, Missouri, Massachusetts and California.

Are the Feds Next?
U.S. Senator Frank Lautenberg (D-NJ) said on Wednesday, Oct. 6 that he would introduce federal legislation requiring colleges and universities to adopt policies or codes of conduct that prohibit bullying and harassment in the wake of the suicide of a Rutgers University student, freshman Tyler Clementi, whose gay sexual encounter in his dorm room was streamed online by his roommate, Dharun Ravi and Molly Wei. However, at this point, no legislation has been introduced that would offer recourse against employers.

What Employers Should Do
While workplace bullying is not yet "illegal," it is easy to see how it may affect the morale of a workplace. In today's economy, employers should be doing everything they can to promote a productive environment in the workplace. By developing and enforcing strict policies and training, companies can better protect themselves from potential liability if they are ever faced with an accusation of workplace bullying. Employers should clearly define what types of behavior are unacceptable and cross the line into bullying. When it comes to workplace behavior, it's not always clear when a boss is simply aggressive or has become abusive. After all, any boss can have a bad day and become frustrated with an employee. The severity and consistency of behavior are identifying characteristics of a bully. If a supervisor makes a habit of screaming, insulting or intentionally putting down employees, that can indicate that bullying is taking place.

Employees who feel bullied should have a reporting process where they can register complaints; this is particularly important when an employee's immediate supervisor is the one doing the bullying. Employers should also outline specific steps to take when an employee has been accused of bullying and apply them consistently.

As they did on the playground, bullies in the workplace are often trying to exert their control, and they often target one or two specific people. Unlike the schoolyard bully, though, a bully boss will frequently publicly question the competence of the victim. Supervisors and managers should be trained to recognize when a boss's legitimate criticism crosses the line into bullying. Beyond having a policy, it is imperative that employers create a company culture that is free of any type of harassment and bullying. That will create a more productive workforce, and ultimately help stave off liability and litigation from unhappy employees.

Independent Contractor or Employee: The Stakes Are Getting Higher
by Joseph "Trey" L. Wood, III
October 18, 2010

The U.S. Department of Labor and the Internal Revenue Service are actively searching for and prosecuting companies which misclassify employees as independent contractors. The federal government claims that such misclassifications cost the government billions of dollars in revenue each year. In fact, Congress has recently re-introduced legislation seeking to increase the stakes for employers who continue with the practice. The Employee Misclassification Prevention Act seeks to deter employers from improperly classifying employees, including drivers, as independent contractors versus employees by:

Ensuring that employers keep records that reflect the accurate status of each worker as an employee or non-employee and clarifying that employers violate the Fair Labor Standards Act when they misclassify workers.
Increasing penalties on employers who misclassify their employees and are found to have violated employees' overtime or minimum wage rights.
Requiring employers to notify workers of their classification as an employee or non-employee.
Creating an "employee rights web site" to inform workers about their federal and state wage and hour rights.
Providing protections to workers who are discriminated against because they have sought to be accurately classified.

In addition to legislative efforts to curb this practice, the courts have been coming down hard on companies who misclassify employees. Last July, the Ninth Circuit Court of Appeals, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington ruled against EGL Inc. in a case in which EGL, a Texas corporation, classified its drivers as independent contractors. EGL even had written independent contractor agreements in which the drivers agreed that they were independent contractors and that any questions about the agreement were to be settled by Texas law. Some of the drivers claimed that they were actually employees who were entitled to overtime as well as benefits under the California Labor Code. If the language of their contracts ruled and Texas law were to be applied, they would not be able to recover. The Ninth Circuit ruled against EGL finding that the California Labor Code, not the contract, was at issue. The Court then found that under California's multi-faceted test for determining employee/contractor status that the drivers had produced enough evidence of an employment relationship to justify a jury trial on their claims.

What This Means for Employers
Companies that employ "independent contractors" will want to closely examine the true nature of their relationship to determine if they have been properly classified. This may mean reviewing and possibly revising independent contractor agreements and staying away from "form" agreements. Also, reconsider any automatic renewal/termination provisions in those agreements as they may be interpreted to more closely resemble an "at-will" employment relationship. Finally, you should carefully evaluate any forms, training materials, or policies that you provide to independent contractors to ensure independent contractor status.

All Atwitter Over Twitter (and Other Social Networking Concerns)
by Joseph "Trey" L. Wood, III
October 14, 2010

When it comes to marketing a company and/or its products, employers want their employees to spread the word. But employees doing so via blogs, social-networking sites (like Twitter) may pose potential liability concerns for their employers. This is because recently the Federal Trade Commission (FTC), which has had little to do with the employer/employee relationship, has issued Guidelines which restrict the representations that may be made in on-line postings.

The New Guidelines
The FTC's new Guidelines establish that liability can be imposed on companies who fail to make required disclosures that exist between on-line posters and the companies upon which they were commenting. An obvious relationship that must be disclosed is the employment relationship between the on-line writer and the company. So, if an individual is misled by the on-line author into purchasing a defective or dangerous product or service, not only would the on-line author be liable, but also the Company, regardless of whether the communication was known or not. No industry is exempt from these guidelines.

Solving the Problem
One way to become more aware of what your employees are doing is to monitor their work activities and take action against those who use social networking sites in a way that could raise legal problems. Generally, employers may discipline employees who use company equipment (computers, smart-phones) inappropriately. Federal and state laws limit how far an employer can go to monitor their employees' social networking activities. For the most part, courts try to seek balance between the employer's interest in objecting to the employee's conduct (the potential harm to the employer) with the employee's expectation of privacy. A way to reduce this risk is to advise all employees in writing that the employees should have no expectation of privacy in using any company owned equipment and that their use of the equipment will be monitored.

An additional step should be the implementation of a "Blogging and Social Networking Policy." Such a policy should instruct employees that any on-line communications are subject to the company's policies and procedures. It should also prohibit employees from posting any confidential or proprietary information, forbid employees from using the name, trademark or logos of the company, and require employees to make it clear in their postings that the views and opinions they express about work-related matters are their own and not those of their employer. Finally, before disciplining or terminating an employee for use of social networking sites, consider the potential legal consequences of such actions.

Failure to Post May Lead to Lost Defense
by Joseph "Trey" L. Wood, III
October 13, 2010

The Civil Rights Act of 1964 requires employers to post a notice describing the law's provisions in an accessible format. The posting must be conspicuously posted in the same place where other employee notices are customarily kept. The notice must also be prepared by or approved by the EEOC.

Failing to post such a notice may be mean that employers could lose a defense that untimely claims should fail. In a recent New York federal district court case, an employee of a hotel-casino in Atlantic City filed a complaint alleging that she had been discriminated against and fired because of her race, sex and/or national origin. The statute of limitations for filing such complaints is 300 days from the discriminatory act. The employee did not file her claim until 364 days following her termination. The employer, understandably, filed a motion to dismiss the claim as being barred by the statute of limitations. However, the employee countered this argument by stating that her claims were saved because the employer failed to post the required Title VII notices and that, therefore, she was unaware of her rights and responsibilities under the law. The Court found that the employer's failure to post the notice excused the two month delay.

The moral of the story: You can save your statute of limitations defense every easily and cheaply by complying with the mandatory notice requirements. You can go to http://www.eeoc.gov/posterform.html and order up to 10 posters in four different languages from the EEOC.

Paycheck Fairness Act (Fair to Who?)
by Joseph "Trey" L. Wood, III
October 10, 2010

The Paycheck Fairness Act is back. Previously passed by the House of Representatives, the Act was introduced in the Senate in early 2009 but never came to a vote. Now, Senate Majority Leader Harry Reid (D-NV) has placed the proposed legislation on the legislative agenda.

Why should business owners worry? Well, for one, the bill would make employers liable for unlimited punitive damages under the Fair Labor Standards Act for even unintentional pay disparities, and eliminate current limits for back pay as well as for compensatory damages. It would also make class actions against employers much easier by eliminating a requirement under current law that employees must give their written consent to be included in a class action case. If passed, it would also hamper an employer's ability to compensate its employees based on criteria such as cost-of-living differences among geographic locations, different work responsibilities within similar job categories, or prior salary history.

The bill is being attacked by business groups including the U.S. Chamber of Commerce. One labor attorney giving testimony during hearings last March said the Act has the potential to cripple companies, particularly smaller businesses. This begs the question, if this legislation would have the effect of driving some companies out of business, displacing those employees, how fair is it?

Nursing Mothers: Give them a Break!
by Joseph "Trey" L. Wood, III
August 20, 2010

The Patient Protection and Affordable Care Act (PPACA) was one of the laws that was enacted as part of President Obama's healthcare reform initiative. Contained within the thousands and thousands of pages of the law's text is a provision that amends the Fair Labor Standards Act (FLSA), which governs wages and hours work, to provide a break time requirement for nursing mothers. This law provides that employers must provide reasonable break time for an employee to express milk for her nursing child for one year after the child's birth each time such employee has the need to express the milk. Employers with fewer than 50 employees are not subject to the law if compliance would impose an undue hardship. However, all employees who work for the employer must be counted — not just those at a particular work site. Also, employees who are exempt under the FLSA are excluded from the break time obligation.

Recently, the Department of Labor has attempted to provide guidance to employers on complying with the Act. Contained within one of the DOL's informal "Fact Sheets" it indicates that the law became effective when the PPACA was signed into law on March 23. While the DOL did not specify any minimum number, frequency or duration for the breaks, it does indicate that the employer must provide a place other than a bathroom as a location for the break. The location need not be reserved exclusively for a nursing employee's use and it may be a location that is temporarily created or converted for this purpose. The location must be:

Functional as a space for expressing breast milk;
Shielded from view; and,
Free from any intrusion by co-workers or the public.

Employers are not required to treat these breaks as compensable time, or hours worked. However, if the employer allows paid breaks, it must compensate a nursing employee in the same way it does other employees if she uses it for the purpose of expressing breast milk. Also, the time for the break must be paid if the employee is not completely relieved from duty during the break. So, for example, if the nursing employee is on a business telephone call while expressing breast milk, that time is compensable.

While this new law is untested, and the guidance provided by the DOL is informal, the prudent course of action is for all employers covered by the act to follow these pronouncements pending further developments of the law.

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¹El v. South Eastern Pennsylvania Transportation Authority, 479 F.3d 232 (3^rd Cir. 2007).

²California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico all have versions of "ban the box" laws.

¹^{The NLRA applies to all employers with the exception of government or union employers, companies that primarily have a municipal function and religious schools.}

¹The Sixth Circuit covers Kentucky, Michigan, Ohio and Tennessee.

Biography

Representative Matters

Education

Affiliations

Community

Representative Matters

Press Releases

August 02, 2010

Other News

Publications

Presentations

Alerts

1El v. South Eastern Pennsylvania Transportation Authority, 479 F.3d 232 (3rd Cir. 2007).

2California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico all have versions of "ban the box" laws.

1 The NLRA applies to all employers with the exception of government or union employers, companies that primarily have a municipal function and religious schools.

1The Sixth Circuit covers Kentucky, Michigan, Ohio and Tennessee.

¹El v. South Eastern Pennsylvania Transportation Authority, 479 F.3d 232 (3^rd Cir. 2007).

²California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico all have versions of "ban the box" laws.

¹^{The NLRA applies to all employers with the exception of government or union employers, companies that primarily have a municipal function and religious schools.}

¹The Sixth Circuit covers Kentucky, Michigan, Ohio and Tennessee.