Category: Risk Management
In the case of Gregory v. Cott, a California court had to decide whether a homecare worker attacked by an Alzheimer’s patient can sue the family for negligence. Two out of the three appellate judges deciding the case thought that homeworker had “assumed the risk” of that violence and that her only remedy would be workers’ compensation. The dissenting judge felt that this was going too far and essentially stated “Given the increased risk of harm to Ms. Cott’s in-home caregivers, fairness demands to caregivers bare responsibility for that risk, and not shift the burden of loss to the hapless worker who happened to be assigned to the home of one suffering from Alzheimer’s disease rather than, for instance, one recovering from foot surgery….[T]he claims at issue here should be subject to the usual laws of negligence, including the comparative negligence, if any, of plaintiff.”
My comment: What is interesting is that neither judge discussed the possibility that this claim was governed by workers’ compensation exclusivity. In addition, it’s very possible that the employee could have sued the employer for lack of proper training in how to deal with potentially violent Alzheimer’s patients.
We recently hosted a webinar with Rick Betterley of the Betterley Report. Rick is the foremost expert on Employment Practices Liability Insurance (EPLI) coverage. Here are some of the notes from our webinar with him as well as from the Betterley Report. To learn more about the Betterley Report, go to Betterley.com.
To begin with, there has been an increase in rates as well as in retentions (the deductible an employer has to pay). While there hasn’t been much change in coverage, underwriters are raising rates anywhere from 10-25%. The EPLI industry is a $1.6 billion business. According to Rick, underwriters are not very excited about insuring employee leasing and temporary staffing companies, educational and religious entities, public entities, law firms, investment banks, and the entertainment industries. Also considered undesirable employers are extended care (nursing home) facilities, real estate/property management companies, auto dealers, and technology companies. What this tells me is that all of the above mentioned entities could greatly benefit from using HR That Works!
One of the greatest concerns is the ability of an employer to select the counsel they would like to use should they get sued. Of course the insurance agencies would like to make their lives simple and work solely with one of the nationwide law firms and not with your local counsel. However, if they are qualified, chances are that during negotiation you can name those local attorneys as your panel counsel. As you can well imagine, we highly recommend you use one of the Worklaw® Network firms that helps support the HR That Works program.
One of the greatest concerns in terms of exposure are class action wage and hour claims. Most insurance companies have been very reluctant to underwrite these claims except for the cost of defense. They will not underwrite indemnification (payment of the underlying wage claim) because they feel that is greatly within an employer’s control (why bother paying for overtime when you can simply have the insurance company do so for you if ever get sued). In April, Aon announced a wage and hour coverage for large employers. Unfortunately, this coverage is not available yet for small employers, but perhaps Aon has kicked off a trend.
As Rick reminds us, most larger employers have EPLI coverage; however, for most HR That Works sized employers it’s more like a 50/50 proposition. Our advice is this: Don’t go bare and negotiate for some EPLI coverage and, if necessary, with a high retention rate.
According to the 2012-2013 Edition of Jury Award Trends and Statistics, now published by Westlaw, the median award of employment practice claim in 2011 was $325,000, up from $172,500 in 2010. The median award rose from $489,951 to $528,957. The amount of claims in the $250,000 to $1 million range rose from 34% to 56%. The award median for age cases was $247,800; disability $292,500; race $215,652; and sex $150,000. As a separate category, retaliation awards had an award median of $208,275 with an award mean of $741,971.
Consistent with past years, state verdicts are generally higher than federal court verdicts, averaging more than 1.5 times the average federal court verdict award.
The probability of the plaintiff winning a case at trial hovers at 51%. Age cases 40%, disability discrimination 44%, race 50%, and sex 64%.
Even the settlements of getting more expensive. The average employment practices settlement median was $100,000 with a settlement mean being $178,063.
Statistically, a company with 100 employees can expect to get hit with an employment practices claim once in every three years. All the above is plenty of reason to make sure you have your compliance act together and purchase employment practices liability insurance. To order your copy of the report, go to http://store.westlaw.com/employment-practice-liability-jury-award-trends-statistics-2012/186040/30089008/productdetail.
Join us Wednesday, January 23, at 2PM EST for the EPLI Trends: An Update from Betterley’s EPLI Market Survey 2012 Webinar presented by EPLI expert, Rick Betterley.
Attorney Mike Young put together an excellent report on managing your lawyer. Here are his conclusions. To get the details in Mike’s report “7 Secrets Some Lawyers Don’t Want You to Know That Will Save You a Fortune”,
- Hire a qualified lawyer who focuses on the area of law in which you need legal representation (e.g. Internet business transactions) instead of a jack of all trades (everything from estate planning to criminal defense law).
- Don’t pay for your lawyer to sit in a fancy office and drive a luxury car. Hire a lawyer who doesn’t overcharge you to cover his outrageous expenses.
- If your attorney bills by the hour, make sure that you know what is covered as billable work. Insist on itemized billing that clearly describes what has been done.
- If your attorney delegates your work to another lawyer or a paralegal, make sure that person is qualified to do the work, you’re not paying for his education, and that you’re being billed at a lower rate for that work.
- Know your lawyer’s fees for travel time before you hire him. Keep his travel to a minimum if you’re paying for it.
- Keep friendship and business separate. When dealing with your lawyer, make sure that each of you knows whether or not what is happening is a billable event or something between friends. This saves you money and your friendship.
- Where possible, pay for your legal work by the project based upon a detailed scope of work that describes what professional services will be rendered. This avoids the pain of inflated billings by the hour.
If you apply these secrets to your business legal representation, you will save yourself tens of thousands of dollars in fees because of what you’ve learned.
Note: HR That Works Members can also access the special report on How to Choose, Hire and Manage an Employment Lawyer on the website.
Holiday Party Best Practices
Eggnog, latkes, old friends, parties – and a whole lot of beveraging! The holiday season is here! On behalf of everyone at HR That Works, let us be the first to wish you a safe and happy holiday!
To protect yourself and others follow these best practices:
- Make sure that attendance at the party is voluntary.
- Hire bartenders who are trained to spot intoxicated revelers and how to handle them.
- Provide non-alcoholic beverage options.
- Provide each guest with a limited number of drink tickets instead of an open bar.
- Have real food – not just chips and pretzels – served whenever alcohol is available.
- Stop alcohol service at least an hour before ending the function.
- Confront intoxicated guests immediately and cut them off; don’t wait until they are ready to leave the party.
- Don’t inquire of an apparently impaired guest whether they think they’re able to drive home. They can’t.
- Have a taxi service available for any guest who requires one.
- Call a friend or family member to pick up intoxicated guests.
- Arrange for discounted rooms at the event location (if possible) or a nearby hotel.
Don’t forget to have a fun party. Think Mr. Fezziwig!
Accommodating Religious Needs
The holiday season makes an ideal time to focus on the law regarding religion in the workplace. It’s also a great time to celebrate our religious differences! Title 7 of the Civil Rights Act of 1964 prohibits discrimination based on religion. There has been an increasing trends in these claims over the past years with over 4,000 claims being filed in 2011. Not surprisingly, many of these claims are combined with national origin discrimination allegations (i.e. someone alleges discrimination because they’re of Arab origin, as well as Muslim).
The EEOC makes this point about what a religion is:
“In most cases, whether or not a practice or a belief is religious is not an issue. However, the EEOC defines religious practices to include moral or ethical beliefs as to what’s right and wrong, which are sincerely held with the strength of traditional, religious views. The fact that no religious group espouses such beliefs, or that the religious group to which the individual professes to belong might not accept such belief, will not determine whether the belief is a religious belief of the employee or prospective employee. The phrase ‘religious practices’ includes both religious observances and practices.” Also, bear in mind that:
- It’s unlawful for an employer to fail to accommodate reasonably the religious practices of an employee or prospective employee, unless the employer demonstrates that accommodation will mean undue hardship in conducting its business.
- An employer may not ask about an employee’s religious background unless justified by business necessity.
Here’s an EEOC memo on accommodating religious expression.
Lastly, here’s a great link to the religious accommodation practices at the University of Missouri.
Fact is many people in the HR role do not do the job full-time and very often do little or no proactive compliance efforts. One way to begin learning these laws is to watch or read the info generated by the government and lawyers on behalf of employees. For example, the DOL has just released and employee video education series. Minimum wage, regular pay, overtime, off-the-clock, child labor, independent contractor, migrant worker and how to file a claim videos are presented. We have training on each of these subjects for employers on HR That Works. A few more:
- OSHA on how they conduct inspections: http://www.osha.gov/SLTC/video/oshainspection/video.html
- Resources on workplace violence: http://www.osha.gov/SLTC/workplaceviolence/evaluation.html
- Memos and more on discrimination: http://www.eeoc.gov/laws/types/index.cfm
- Overtime: http://www.dol.gov/compliance/topics/wages-overtime-pay.htm#.UKErLobNnsk
- The plaintiffs lawyers association: http://www.nela.org/NELA/
Those are just a few examples. Where the government has done a good job of creating materials (like in the health and safety area) we have pointed to those tools on HR That Works too.
Bottom line: Don’t let your employees know more than you do about the law!
The U.S. Supreme Court opened its 2012-2013 term on October 1st. The Court is likely to hear a number of cases with significant implications for employers. Already selected to hear this term are the following key labor and employment cases:
- Vance v. Ball State Univ
- Genesis Health Care Corp. v. Symczyk
- U.S. Airways, Inc. v. McCutcheon
- Comcast Corp. v. Behrend
Please click here to read more about each of these cases and how the outcomes may affect your business.
AB 1844 (Passed): This bill would prohibit an employer from requiring or requesting that an employee or applicant disclose user name or password information for personal social media, or to divulge any personal social media.
Chapter 2.5. Employer Use of Social Media
980. (a) As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.
(b) An employer shall not require or request an employee or applicant for employment to do any of the following:
(1) Disclose a username or password for the purpose of accessing personal social media.
(2) Access personal social media in the presence of the employer.
(3) Divulge any personal social media, except as provided in subdivision (c).
(c) Nothing in this section shall affect an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.
(d) Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.
(e) An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.
SB 1255 (Signed): This bill would specify circumstances under which “injury” would be presumed to an employee as a result of an employer not providing wage statements, or providing incomplete wage statements. Presumed injury would allow the employee to recover penalties and/or actual damage. Presumed injury could be shown by the failure to provide a wage statement at all, or by the failure to include the employee’s name and last 4 digits of the social security number. It could also be shown by failing to provide complete wage information, causing the employee to be unable to determine (from the statement alone) gross and net wages earned, deductions therefrom, and the name and address of the employer.
“An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.
AB 1744 (Signed, effective July 1, 2013): This bill would require temporary services employers to include additional information on itemized wage statements for employees, including the rate of pay for each assignment, the name and address of the entity that secured the services and total hours worked for each entity.
AB 2103 (Signed): Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary.
AB 2674 (Signed): This bill would amend section 1198.5 of the Labor Code relating to employee rights to inspect personnel files. The bill would require employers to maintain employee personnel files for at least 3 years following termination of employment, and to permit current and former employees (or their designated representatives) to inspect and copy personnel records, within 30 days of a request to do so by the employee. The bill specifies that an employer is not required to comply with more than 50 requests for copies of personnel records by a representative of employee(s) in one calendar month.
And of course, HR That Works!
I was browsing on the internet looking for employee complaints about HR for a piece I’m writing. There’s a ton of it out there. In the process, I ran across what most business executives would consider a nightmare-employees fighting internal battles online. Take a look at this doozy out of L. A. involving the city’s corrupt Section 8 housing authority, of which HR was a full participant.
Looks like these folks had a good ol’ time at taxpayer expense a search shows much worse than that. The HR director was fired last December.
What lessons can be learned from a crazy story like this?
- You can’t trust anyone blindly; even HR. Checks and balances are a must in ANY organization.
- Bad HR can create far more liabilities than it is hired to prevent.
- There is no hiding your dirty laundry anymore.
- Set Google alerts for your company and employees. Just stay out of private, non-work-related activities.
- Deal with internal conflicts now…before they spill out onto the internet.
Apparently France now thinks so, as reported in the Huffington Post. In fact, sexual harassment can be a crime in the U.S. if it involves a battery, assault or false imprisonment. Times have certainly changed. I can remember the French scoffing at U.S. sexual harassment laws claiming that flirting was the French national pastime. Now that pastime can land them some jail time!