“The speed of the boss is the speed of the team.” –Lee Iacocca
This issue discusses:
- Editor’s Column: Dealing with Speed
- How Do You Feel as You’re Going to Work?
- The Broad Possibilities of Reasonable Accommodation
- Gender Change and the Law
- The EEOC Systemic Expedition
- Are You Willing to Learn?
- The Aging Workforce and Disability Concerns
- Question of the Month
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: Dealing with Speed
I listened to an outstanding NYC Radiolab podcast on the subject of speed. To begin with, Radiolab is one of my favorite podcasts. The subjects are always interesting, but this was one of those episodes that causes you to really do some deep thinking. Many years ago the great thinker Buckminister Fuller coined the phrase “accelerated acceleration.” In a sense, things happen faster at an ever faster rate: Speed feeding on itself.
The podcast discussed relative aspects of speed; for example, how it affects stock trading. No longer are stocks traded on the floor, but through ten thousand servers, all connected to a motherboard on Wall Street. Trades are made in microseconds. This technology-driven speed has ended the career of many old school traders. While we might bemoan the good old days, this change has lowered the cost of trading for you and me.
The whole concept of speed is reengineering the workforce dramatically. Pretty soon, there will be an algorithm or program that solves just about every puzzle — the Watson computer being an excellent example. Our best and brightest will continue to create those tools and figure out how to put them to good use. Technology has driven the middleman out of stock trading, just as in many aspects of business and much of the retail sector.
- How is this affecting your company?
- Where will the speed of transactions have an impact on your career?
- Who will get squeezed out next?
- What new jobs will be created?
Speed is directly related to time. All of us feel the stress of this speed on how we manage our time. I describe it as running 75 mph. Many think they can outdo the other guy if they run 80 mph. Years ago this was termed the rat race – and as Lilly Tomlin reminded us, “even if you win the rat race, you’re still a rat.” Nothing less than a fundamental reexamination of how we do our work will be required to survive the speed of change.
I highly encourage you to listen to this podcast: www.radiolab.org/2013/feb/05/. The last part of it is amazing and will blow your mind. It certainly made me want to learn more about the latest discovery that is shared. I won’t spoil it by telling you what it’s about. I had to listen to it three times for it to fully sink in. I’d be curious to know what you think after listening to this podcast.
PS…If you haven’t yet done so, get thee to the Time Management Training Module on HR That Works. In order to manage the rate of speed better we have to better manage our time.
How Do You Feel as You’re Going to Work?
Do any of these sentences pop up into your head when you’re arriving at the workplace?
- I really dread coming in here today
- I’m afraid of that __________ today
- I feel tired just walking into this place
- This place is a disaster waiting to happen
- I wish it was Friday
- I wish I was anywhere but here
- I’m ready for the fight because I know I’m right
- I don’t care if they fire me today, they’re going to learn how I feel about it
- I have to get so much done and I don’t know when I’m going to be able to do it.
Guess what? These thoughts pop up in the heads of your employees, too. My question is what will you do to turn it around?
Many folks will wallow in a horrible complacency. Others will realize that if it’s going to change, they have to create this change. It’s both an inside and outside job.
Look at your situation like a new employee excited about the opportunity!
Also, take a look at the Creating a Fun Workplace Checklist.
The Broad Possibilities of Reasonable Accommodation
In managing today’s disability laws, attorneys advise you to not fight whether something is in fact a disability, but simply to worry about whether you can reasonably accommodate limitations to meet productivity standards. A variety of accommodations might be available, depending on the circumstances. Here’s a list of possibilities. To learn more we encourage you to visit the Job Accommodation Network www.askjan.org.
- Make existing facilities accessible. This might include access to break rooms, restrooms, training rooms, parking, furniture, equipment, etc.
- Allow applicants or employees to bring assistive animals to work (of course under limited circumstances).
- Transfer employees to a more accessible worksite.
- Transfer employees to a different job that they can, in fact, do. Note that you are not required to create a new job as an accommodation.
- Provide assistive aids and services such as qualified readers or interpreters to an applicant or employee.
- Restructure the job by the reallocating or redistributing of nonessential job functions in a job with multiple responsibilities.
- Provide a part-time or modified work schedule (not as a permanent solution, but only as an accommodation).
- Permit an alteration of when or how an essential function is performed (i.e. instead of being required to come to work at 9 they can come to work at 10).
- Provide an adjustment to modifications of exams, training materials, or policies.
- Allow an employee to work for from home (yes, disabled employees may have a greater right to do so than your nondisabled ones).
- Provide a paid or unpaid leave (no law requires you to offer an indefinite leave).
Of course, by now you’ve been drilled to understand that what’s a reasonable accommodation versus an undue burden varies on a case-by-case basis. You’ll need to consider the cost and nature of the accommodation, and the overall financial resources of the company, the type of operations, geographic location, and other factors. Take a look at the ADA forms and the checklists in HR That Works.
Gender Change and the Law
According to the Human Rights Campaign (HRC), 17 states and D.C. prohibit discrimination based on sexual orientation and gender identity. Those states are CA, CO, CT, DE, HI, IA, IL, MA, ME, MN, NJ, NM, NV, OR, RI, VT, and WA. As of December 2012, 57% of the Fortune 500 companies prohibit discrimination based on gender identity. The EEOC has also argued that gender identity discrimination is covered under Title VII.
HRC states that employees who have gone through gender transition have found disclosing their new identity to be a fearful process. What they look for more than anything else is respect and acceptance of their new identity. These employees also want to be able to use the restroom appropriate to their transgendered identity. Creating a separate restroom for them singles out their difference.
Although the number of transgendered employees is small, their transition can cause a great deal of attention, fear, ridicule, and prejudice. Some workers and managers won’t find it easy to accept the transgendered for religious, moral, and other grounds. However, the law requires employers to tolerate these differences, without harming their transgendered employees. As good people, we can accept these differences and move on with life.
For more information, go to the Human Rights Campaign website at www.HRC.org.
The EEOC Systemic Expedition
In the April 2013 issue of Corporate Counsel an article entitled It’s a Systemic World Out There discusses the EEOC’s pursuing large “systemic” cases. For example, in fiscal year 2011 they conducted 580 systemic investigations, filed 84 systemic lawsuits, and settled 35 systemic cases for total $9.6 million. Although your company might not be large enough to be on the EEOC’s radar screen, I can tell you that attorneys are also suing small to midsized companies on a class basis. An employee walks into a lawyer’s office because they didn’t receive their final paycheck, and before you know it they’re filing a class-action lawsuit against your company for missed overtime and meal periods. The article provided a few golden nuggets of advice:
- When responding to an EEOC inquiry, don’t use the phrase “pursuant to our consistently applied policy.” This only invites a broader request for information.
- Do not submit more information than is necessary.
- Conduct your own statistical analysis before submitting data.
- Do preventative analysis looking for adverse impacts in the hiring, promotion, or termination practices.
- Validate pre-employment tests.
- Conduct preventative compensation analysis periodically.
- Cover all internal analysis with attorney-client privilege. This might be impossible in smaller organizations, but you can certainly retain outside counsel to instruct you on how to conduct such analysis and report back to them.
- Listen to your employees. As I have always recommended, you should survey your employees, including use of the Employee Compliance Survey that can be found in HR That Works.
- Invigorate that underutilized internal complaint system. Again, go one step further and ask if there’s a problem—don’t wait for them to tell you there is one.
- Stay current with legal trends. This is one reason why HR That Works membership is so valuable.
- Walk the talk. Are you sensitive to the potential for your practices to cause adverse impacts? Frankly, in my experience, I can tell you that some business owners could care less about whether a practice causes an adverse impact. All they care about is getting the best employees they can, damn the EEOC. Of course, few companies appreciate a risk until they’re hit with it.
Finally, the article points out how large corporations can gather the data requested by the EEOC easily because they have such large HRIS systems. However, most companies with less than 500 employees don’t have this data readily available, and collecting it can be an over-burdensome process. This is one reason to make sure that you hire an attorney any time you receive a communication from the EEOC or another regulatory agency.
Are You Willing to Learn?
“To those unwilling to learn I do not teach anything.“ – Confucius
You could take this quote in two different ways. Literally one could surmise that Confucius simply refused to spend any time even making an effort with non-learners. I think, however, this quote has a less obvious meaning—there are teachers all around us, but only those willing to learn will gain any wisdom from them. One of the greatest frustrations whether you’re a leader, boss, parent, or expert, is to want to help people who really don’t care to be helped or to help teach people who really don’t care to learn. For the person intent on learning and improvement, this type of person is unfathomable. How could they actually think like that? Why don’t they want to be a constant learner? Why don’t they want to know more, so that, in turn they can do more? Don’t they have a sense of achievement or personal accomplishment? Don’t they want to be awesome!?
Napoleon Hill, author of Think and Grow Rich and similar books surmised that only 2% of people are really willing to do what it takes to be highly successful. My own personal experience tells me that the ratio may be closer to 10 to 20%, which still leaves 80 to 90% of people behind.
This Pareto Principle is alive and well in the workplace. There are few natural learners. There are few driven to be highly successful. Most people seek out a life of comfort and stability. What many of these people fail to realize is that only the mediocre are truly ever comfortable. They don’t understand that when you seek out comfort and stagnation you’re ready to die – because, basically, you’ve already done so.
Although the Bible instructs us to be our brother’s keeper, many resent the fact they are asked to do for others what those others won’t do for themselves. I think our best chance is to be the influence in their lives that they don’t have any place else. Perhaps, these people aren’t being motivated at home or by coworkers or by their friends and so on. You can be that shining light in their life. You can turn them on to learning and the fruits of success!
The Aging Workforce and Disability Concerns
Cornell University has published an interesting report outlining employer concerns about: an aging workforce. Absence and Disability Management Practices for an Aging Workforce: http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1320&context=edicollect. As you can see by their chart below, there’s reason for concern! For example, somebody still working at 73 has twice the likelihood of becoming disabled as an employee 10 years younger.
According to the report, concerned employers are looking at seven ways to manage this exposure:
- Maintaining and enhancing benefits
- Wellness programming
- Safety checks
- Stay-at-work and return-to-work programs
- Communication and recognition
If you have older employees I encourage you to read the entire report. Most importantly, don’t let older employees play dinosaur on you. Keep them sharpening their saw no matter what their age.
Question of the Month
I have an employee that was witnessed using alcohol during working hours. He was counseled approximately 2 weeks ago and advised that this was unacceptable behavior that could result in termination. Behavior improved for a few weeks, but now there is reasonable suspicion this employee is drinking alcohol again on the job. A decision to terminate may be forthcoming, however, before such decision is made, we are requesting support on the proper way to handle. We do have a Drug Free Workplace Policy and have the ability to send the employee for testing.
Answer: The general rule is you can fire somebody for active drug or alcohol use on the job. While current drinking is not protected activity, alcoholism is and it sounds to me like he may be an alcoholic. Most people won’t put their job at risk once warned to stop…unless they can’t. Here’s the JAN website info on it http://askjan.org/media/alcohol.html. As it states on that page:
Does an employer have to allow use of alcohol at work as an accommodation?
No. The ADA specifically provides that an employer may prohibit the use of alcohol in the workplace and require that employees not be under the influence of alcohol. The Act permits employers to ensure that the workplace is free from the use of alcohol and does not interfere with employers’ programs to combat the use of alcohol (EEOC, 1992).
Are tests for alcohol use considered medical tests under ADA?
Yes. Blood, urine, and breath analyses to check for alcohol use are considered medical exams, and therefore are subject to ADA limitations. According to the Equal Employment Opportunity Commission (EEOC), an employer’s ability to make disability-related inquiries or require medical examinations is analyzed in three stages: pre-offer, post-offer, and employment. …. At the third stage (after employment begins), an employer may make disability-related inquiries and require medical examinations only if they are job-related and consistent with business necessity (EEOC, 2000).
You can and should have somebody drive him to be tested if you reasonably believe he is currently intoxicated. There is really only one accommodation for alcoholism—stop drinking. If he needs time to get his act together, that is one example of a possible accommodation. If you haven’t had that conversation yet, now would be the time to do it; when he is sober. Terminating him for cause, if he has caused no harm to this point, may be a risky step without first considering the accommodation dialogue. Many companies have been sued for doing so. If he fails to sign up for and complete a program then he can be fired. The ADA does not require that you tolerate a relapse or refusal to obtain help when given the appropriate accommodation.
Lastly, has he been a good worker, a good person? If so, then work with him. Maybe he’s going through a tough time. We all do now and then. However, if he’s recalcitrant, belligerent, or denies he has a problem when you talk with him, then you can and should fire him.
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The Obama administration is getting pushed back in the courts. This time in the case of EEOC v. Freeman. The overly aggressive political stances of the EEOC and NLRB are taking a toll on employer sanity and the courts are beginning to call the administration on its non-sense. The judge in this case responded to the political agenda with a legal one. Basically that there are no facts to support the position that these background checks are not done for legitimate reasons, but for discriminatory ones. Even where they may be a disparate impact in result. I’ll be very curious to see where the case evolves from here. Someday we will have an administration that once again rewards those who act responsibly, without blame or justification. That day can’t come soon enough.
As stated by the Court:
“For many employers, conducting a criminal history or credit record background check on a potential employee is a rational and legitimate component of a reasonable hiring process. The reasons for conducting such checks are obvious. Employers have a clear incentive to avoid hiring employees who have a proven tendency to defraud or steal from their employers, engage in workplace violence, or who otherwise appear to be untrustworthy and unreliable…. “While some specific uses of criminal and credit background checks may be discriminatory and violate the provision of Title VII, the EEOC bears the burden of supplying reliable expert testimony and statistical analysis that demonstrates disparate impact stemming from a specific employment practice before such a violation can be found. For the reasons explained below, the EEOC has failed to do so in this case.”
I suggest any business leader or HR executive read this very insightful opinion. One reason is that the process the company followed in managing this challenge was laudatory. In a sense the EEOC picked on the wrong company.
The Worklaw® Network has put together excellent summaries of the recent US Supreme Court decision on same sex marriages and regarding supervisors and retaliation. These are must read articles. A few of my quick observations:
- These were all tightly contested 5-4 cases with Chief Justice Kennedy being the swing vote.
- The United States v. Windsor same sex marriage case simply means there must be equal benefits under federal law and some state laws. So if a state allows same sex marriage then they must get equal benefits. This will also affect the FMLA definition of what is a spouse.
- In Vance v. Ball State the court ruled that an employee is a supervisor in Title VII harassment cases only if empowered by the employer to take a “tangible” employment action against the plaintiff (hiring, firing, etc.). The mere ability to direct the plaintiff’s tasks, and nothing more, does not make them a supervisor. The court drew a very narrow definition of a supervisor, which reduced the breadth of direct liability for the acts of these people. For example the California definition of supervisor is much broader under its laws. None of this matters of course until and unless somebody sues you. I will note that this is a “low level” discrimination case that was originally filed in 2006! I am sure it costs hundreds of thousands on both sides to get to this point, not including all the public resources utilized. How ridiculous. One reason why the conservative Supreme Court is looking to clamp down these cases. Note that they also threw the EEOC regulations/definitions under the bus.
- Lastly, in University of Texas v. Nassar, the court did some more narrowing saying that retaliation cases require a “but for” standard to show discrimination. What this means to you is this: In the past if somebody filed a complaint they would get a free pass on discipline for a few months so as to not trigger a retaliation claim. Now you don’t have to do that anymore, at least under Title VII. If you can prove that the action was in part motivated due to performance, then the employer wins. As in the Vance case, the court pointed to perhaps poor legislative drafting, not some moral imperative on their part. Of course the vigorous defense felt this undermined Title VII protections which it did.
- Looking at how deadlocked Congress has been you can expect these decision to avoid legislative cleanup for at least some time. You must also remember that in many states, like California, these decisions have no effect as broader state laws already apply.
In a recent Webinar I did with DFEH head Phyllis Cheng she shared this graph of claims filed in California in 2011. And it got me to thinking. It made me want to ask… just how bad is that?
There are roughly 16 million workers in California. In 2011 roughly 18,000 cases were filed with the DFEH (the new 2012 numbers will be closer to 21,000 but as of this writing were not published yet). Let’s assume that is one half the claims universe since claims like overtime, wrongful termination and the like don’t need to involve the DFEH. So… 16,000,000 divided by 42,000 gets you one claim per year, of some kind, per 380 employees. Many of the DFEH and other claims are dismissed as without merit. The really good cases get pulled out of the DFEH system and dragged into court. Employees win more than half the cases that go to trial with the average jury verdict hovering around $250,000, the average settlement around $75,000. And that doesn’t include attorney’s fees. Of course you can–and should–insure against these claims so that your exposure does not exceed your deductible limit of, say, $25,000. The cost of that insurance is approximately $150 per year per employee, which comes out to a $57,000 annual premium. Keeping on one poor manager you are afraid to fire due to a potential lawsuit will more than eat up that premium cost.
Note: The EEOC claims some 100,000 discrimination claims were filed with it in 2012.
While getting the stats for work comp claims was more difficult, what I could find indicated there roughly 780,000 workers’ compensation claims filed each year in California. Most claims (around two-thirds) are for medical care only, with no cash indemnity payments. Approximately 20 percent of claims are for temporary disabilities. Permanent partial disability claims account for about 14 percent of total claims – 10 percent are minor disabilities and four percent are major disabilities. Death benefits and permanent total disability benefits each account for about one-half of one percent of total workers’ compensation claims. According to the rating bureau, the average lost work claim cost roughly $68,000 (and there were roughly 260,000 of them.) Of course these claims are always insured and in 2010, employers paid an average of $2.37 per $100 of payroll for policies.
Bottom line with risk management is to analyze, mitigate, and insure against it where possible.
The U.S. Equal Employment Opportunity Commission (EEOC) has been busy updating its disability related regulations and materials. All employers should review the info here.
The EEOC has also released four revised publications on protection against disability discrimination in the workplace. The publications describe how the Americans with Disabilities Act (ADA) applies to job applicants and employees with cancer, diabetes, intellectual disabilities. You can find these documents on the EEOC website under “Disability Discrimination, The Question and Answer Series.”
Many people with common mental health conditions have a right to a reasonable accommodation at work under the Americans with Disabilities Act (ADA). When requesting accommodations, employees may sometimes need supporting documentation from their mental health providers. An EEOC fact sheet briefly explains the law on reasonable accommodation and the mental health provider’s role in the process. Click here to read more.
“You’re off to great places, today is the day: Your mountain is waiting, so get on your way!” –Dr. Seuss
This issue discusses:
- Editor’s Column: 10 Personnel Management Challenges for CEOs
- Make Sure Volunteer Workers Carry Workers Comp
- EEOC Credit Report Lawsuit Dismissed
- 2012 EEOC Claims Near 100,000 Mark
- An Employee Referral System That Works
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: 10 Personnel Management Challenges for CEOs
Over the years, I’ve had the chance to do hundreds of three-hour workshops for CEOs about personnel practices. In light of this experience, I’d like to share 10 challenges that CEOs and executives face when it comes to personnel management.
- The difficulty in finding new talent. The good news is that most of these employers expect to do more hiring than firing this year. The challenge is that most of the good employees are already taken. Perhaps the biggest mistake is thinking that you find these people, as opposed to attracting them. To attract talent, you have to position yourself as an employer of choice – a great place to work. Companies such as Costco, Southwest Airlines, and my beloved In-N-Out Burger do this so well that they don’t need to go find anybody.
- Problems in retaining top talent. This is the flipside of the conversation above. In the marketplace of talent swapping, some companies will win, while others lose. To what degree do you have a philosophy, strategies, and tools to make sure you are retaining top talent? Do you understand why people either come to work for you (through a post-hire survey) or why they leave you (an exit interview)? Do you tap into their opinions and concerns with surveys, focus groups, and one-on-one conversations? Remember: Turnover is contagious.
- Lack of managerial leadership. When we run 75 miles an hour and promote people into management, chances are that this happens with little or no training. Fact is, half of managers in your industry are above average and half are below average. Guess who gets more training? You need to train managers in business acumen, communication, basic compliance, team building, and systems understanding. Most important, they need training in time management so that they can spend 80% of their time adding the value they can – and only 20% doing administrative tasks.
- Low employee engagement. This is easy to understand when we’ve just gone through a difficult recession, which has limited raises, cut benefits, and stunted growth opportunities. On top of that, it feels that we have a federal government that fosters an us versus them mentality with the workforce. Perhaps the question for leadership is “how can we help our employees?” How can we help them become more productive so they can grow in their careers? How can we help them find greater meaning in the work they do every day? How can we help them gain more control over the direction of their career? As Shakespeare stated so eloquently, “To work we love with delight we go.” What would it take for your employees to love the work they do every day?
- Failure of management to benchmark or improve performance. Performance management is one of my favorite subjects. To begin with, do you have a specific goal for improving performance? Sure, you want sales to increase by 10%, but do customer service reps, the receptionist, and the CEO have a goal to increase their specific performance by 10%? The next question is: What are you trying to improve? What aspect of performance is most important? If you have a high growth company, perhaps what matters most is quick hiring, onboarding, and training performance. If you’re a restaurant, perhaps your food is great but your wait staff is abysmal. Focus on your strategic objective.
Here’s a question I encourage everyone to ask those who report to them and, if you’re the one doing the reporting, to ask yourself: “What are the three most important things this employee does every day?” What good is a performance management approach if you can’t be on the same page as this question? When you have determined this, ask: “How would you know if you were doing your job well without having to ask me or without my having to tell you?” Once the employee can answer this question to your mutual satisfaction, you have legitimate benchmarks. The question then becomes: How can you improve? What training, resources, support, etc. do you need to supply this employee so they can perform at their best? Remember, as both Peter Drucker and Dr. Deming said: Nine out of ten employees want to do a good job every day; it’s the system they find themselves in that creates problems.
- Misaligned compensation, benefits, and incentives. Here’s another of my favorite subjects. Exactly why do you have healthcare, 401(k) or other benefits? Do they help you to hire better talent? If so, how would you know? Do benefits help you retain talent and improve performance? How would you know? If these benefits don’t tie into your strategic objectives, the chances are that you’re wasting many of them – and at a hefty price tag. I’ve begun working with a genius who is turning the benefits sales process on its head. By running algorithms of employee data and healthcare expenses, he can define the optimum benefit mix for an employer, which it then takes to the marketplace – as opposed to the marketplace telling the employer what plans are available for their demographics. Finally, how benefits are managed can impact productivity. For example, sick pay can actually grow healthcare expenses and reduce productivity. Not surprisingly, San Francisco and now Portland actually require employers to offer sick pay. How about providing wellness pay or paying people for being at work? Bear in mind that any incentive you use has both negative and positive consequences.
- Failure to execute strategic initiatives. We live in a rapidly shifting business environment that requires us to manage change quickly and successfully. If you haven’t done so, please watch the recorded webinar I did on Change Management and have your entire management team do the same. (If you don’t have access to HR That Works, let me know and I’ll send you a link to it). The webinar makes two major points: First, one of the traps of the hero is over-commitment. This holds true of both individuals and the company as a whole. When we over-commit, we tend not to live up to our commitments – which generates mistrust. Secondly, strategic initiatives require buy-in. Just as in sales you want to make the purchase the buyer’s idea, when it comes to change management, you want it to be the idea of your supervisors and employees. Give them some ownership of the idea and you’ll find them onboard with it. Because change will remain a constant, we’ll need to keep, coaxing, encouraging, and inspiring each other towards growth. When we stop the over-commitment and focus on execution, we’ll keep growing the bottom line.
- Finding time for management. Too many executives and managers mismanage their use of time so badly that they’re on overload and unable to take on any growth objectives. Most top CEOs I know take at least a few days a month away from the job so that they can work on the business instead of just working in the business. Google is smart enough to allow its employees to do this one day a week. As Stephen Covey reminded us in the Seven Habits of Successful People, you need to keep sharpening the sword. Everyone in your company needs to understand and execute time management techniques. I’ve produced an HR That Works Time Management Training Module that can help you and your managers with this.
- Lack of commitment to or interest in human resources. I realize that many business owners and executives feel that HR is boring, or worse. They didn’t have to know anything about it to start a business. Even though they often have little or no idea on how to run an HR department or function, in one-on-one meetings with their peers in Vistage, executives usually describe personnel issues as the major challenge facing them. The fact that employee relations just isn’t their thing provides an incredible opportunity for HR professionals to offer the expertise needed.
- Failure to understand the bottom line potential of HR. Business owners are revenue animals who often don’t see personnel practice as generating revenue. This has been a long-standing uphill battle for HR. There’s a reason why Fast Company magazine years ago published an article, “Why I Hate HR.” In reality, many companies have great HR practices which form the foundation of their bottom line success. For example Jack Welch stressed the importance of HR practices as an economic driver in his years at GE. In fact, he’s still talking about it.
If you own, run, manage, or advise a company, addressing these HR challenges provides a unique competitive advantage!
Make Sure Volunteer Workers Carry Workers Comp
The California case of Diane Minish v. Hanuman Fellowship carries a valuable lesson for anyone involved with nonprofit organizations.
After Diane Minish, a volunteer worker with the nonprofit Hanuman Fellowship was accidentally thrown from a forklift, she sued the organization for negligence. Hanuman argued the exclusivity of Workers Compensation as a remedy, claiming that its Comp policy covered the plaintiff. Although Minish did receive comp benefits, she felt they were too low – and so she sued for more. As in many states, under California law, “private, nonprofit organizations are not required to provide [Workers Compensation] coverage for volunteers (see §§ 3700 [requiring coverage for employees]; 3352, subd. (i) [volunteers are not employees]), section 3363.6 allows them to do so if they choose.” Although the statute is awkward and disjointed, it provides, in essence, that a volunteer becomes a covered employee if the board [of the nonprofit] so declares in writing before any work-related injury.
Minish argued that she had not agreed to this arrangement:
“Plaintiff contends that under section 3363.6, a declaration rendering volunteers covered employees does not become effective unless and until an affected volunteer has notice of the declaration and voluntarily accepts Workers Compensation coverage before any injury. Thus, because the undisputed evidence establishes that she did not receive such notice and did not voluntarily accept Workers Compensation coverage before the accident, the Act was inapplicable. “
The court disagreed, ruling that
“Here, of course, without the slightest advance warning, Hanuman plunged Minish into the toils of the Workers Compensation system not only without her knowledge, but – as soon as she learned of it – very much against her will. Section 3363.6 does not explicitly require notice to volunteers that they have been deemed volunteer/employees. Nor does the statute provide that such status must be accepted by each volunteer individually…. In short, we reject the plaintiff’s claim that section 3363.6 imposes a notice and acceptance requirement.”
However, the court dismissed the argument that Minish was “estopped” from denying the exclusivity because of the fact that she used the Workers Comp system. So, although the suit will go back to court, chances are that she will lose in her attempt to claim negligence.
The bottom line: Whether you sit on a non-profit board, run a non-profit, or advise one, make sure you do what’s required under state law to make sure that your volunteers: a) sign liability waivers and b) get Workers Comp coverage. Doing so will help avoid an ultra-expensive negligence claim. Also, make sure that your insurance coverage addresses such claims where the doctrine of workers comp exclusivity does not apply.
EEOC Credit Report Lawsuit Dismissed
The EEOC received plenty of publicity from its 2010 lawsuit against Kaplan Higher Education (EEOC v. Kaplan Higher Educ. Corp., N.D. Ohio), alleging that the company’s use of credit reports as a factor in hiring decisions for financial aid positions had a discriminatory impact based on race and, thus violated Title VII of the 1964 Civil Rights Act. A federal district court dismissed the EEOC suit on January 28, 2013.
Kaplan did not track the race of its applicants, and was not required to do so. To show a discriminatory impact based on race, the EEOC hired expert “raters” to determine the race of applicants by pictures and other information, and thus evaluate whether Kaplan’s practice had a discriminatory impact. In dismissing the case, the court held that the commission failed “to present sufficient evidence that use of ‘race raters’ is reliable.” The court also chastised the EEOC saying that, “It is clear that EEOC itself frowns on the very practice it seeks to rely on in this case and offers no evidence that visual means is accepted by the scientific community as a means of determining race.” The court concluded that because EEOC’s expert “relied on data obtained by unreliable means … whether the jury could ultimately ‘correct’ the process employed by the ‘race raters’ is irrelevant.”
The court ultimately dismissed the case because the EEOC did not provide sufficient evidence to make its case.
Don’t be surprised if the commission keeps pursuing claims that the use of tests, credit reports, and other background checks has a discriminatory impact on blacks, Hispanics, women, and others. The EEOC will simply look for another case and try to correct the evidentiary issue that resulted in the dismissal of its claims against Kaplan.
2012 EEOC Claims Near 100,000 Mark
The Equal Employment Opportunity Commission handled nearly 100,000 claims in 2012. According to the commission’s press release, “The U.S. Equal Employment Opportunity Commission (EEOC) …received 99,412 private sector workplace discrimination charges during fiscal year 2012, down slightly from the previous year. The year-end data also show that retaliation (37,836), race (33,512) and sex discrimination (30,356), which includes allegations of sexual harassment and pregnancy were, respectively, the most frequently filed charges. The fiscal year 2012 enforcement and litigation statistics, which include trend data, are available on the EEOC’s website.
The press release added that:
“In fiscal year 2012, the EEOC filed 122 lawsuits, including 86 individual suits, 26 multiple-victim suits (with fewer than 20 victims) and 10 systemic suits. The EEOC’s legal staff resolved 254 lawsuits for a total monetary recovery of $44.2 million. EEOC also continued its emphasis on eliminating systemic patterns of discrimination in the workplace. In fiscal year 2012, EEOC completed 240 systemic investigations which in part resulted in 46 settlements or conciliation agreements. These settlements, achieved without litigation, secured $36.2 million for the victims of unlawful discrimination”
What the EEOC didn’t mention is that it’s backing off a bit on its aggressive litigation stance due to a combination of tight budgets and mixed courtroom results. For example, as mentioned in the previous article, a federal district court recently dismissed the commission’s well-publicized credit background lawsuit.
I for one, hope the EEOC focuses more on education and conciliation, rather than litigation.
An Employee Referral System That Works
Although referral programs can provide a valuable source of new workers, many employees are reluctant to provide referrals because they’re afraid that they’ll take the blame if the new hire doesn’t work out.
Here are a few ways to reduce this fear:
- Provide a worthwhile financial incentive for referrals. Money can do wonders to overcome the fear of embarrassment.
- Consider a mix of contests, raffles, etc. in addition to cash making referrals more fun and competitive.
- Think in terms of the new employee’s lifetime value. If a worker can earn the company $50,000 per year for an average of three years, how much would you be willing to invest to get this return? If you pay recruiters 10% to 30% of the new hire’s annual salary, does it make sense to pay an employee only 1 or 2% for a referral?
- Space out the referral bonus in quarterly payments, based on specific benchmarks. For example, you can give an initial payment for the referral, a second if the employee is hired, another one at six months, and the final one on the new hire’s anniversary date.
- Train employees on how to approach prospects and make it easy for them to tell the prospect your company story. Give them a pamphlet, some type of document, or a web page link that defines the business and the opportunity the position offers the prospect.
- Finally, measure the program’s results on a regular basis so that you can keep improving it.
Form of the Month
Workplace Violence Assessment Survey (PDF) – There’s no doubt that violence has raised its ugly head in the workplace. Here’s a form to help you assess the exposures at your company.
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On April 25, 2012, the EEOC issued updated Enforcement Guidance regarding an employer’s use of arrest and conviction records in making employment decisions. The agency also issued a Question and Answer (Q&A) document that helps explain the Guidance.
According to the EEOC, a policy or practice that excludes everyone with a criminal record from employment will not be job related and consistent with business necessity and therefore will violate Title VII, unless it is required by federal law. The Enforcement Guidance explains how the EEOC analyzes the “job related and consistent with business necessity” standard for adverse employment hiring decisions based on criminal records, and provides hypothetical examples interpreting the standard.
Arrests and convictions are treated differently for purposes of Title VII, since the fact of an arrest does not establish that criminal conduct has occurred. The EEOC acknowledges that an arrest may in some circumstances trigger an inquiry into whether the conduct underlying the arrest justifies an adverse employment action. The Guidance notes, “[a]lthough an arrest standing alone may not be used to deny an employment opportunity, an employer may make an employment decision based on the conduct underlying the arrest if the conduct makes the individual unfit for the position in question. The conduct, not the arrest, is relevant for employment purposes.”
In examining whether an employer’s policy of screening individuals based on criminal convictions violates Title VII, the EEOC will look to see whether the employer’s policy provides an opportunity for an individualized assessment for those people identified by the screen in order to determine if the policy as applied is job related and consistent with business necessity. Under the new enforcement rules, the following should be considered by an employer when screening based on criminal convictions:
• The Nature and Gravity of the Offense or Conduct. The Guidance notes: “Careful consideration of the nature and gravity of the offense or conduct is the first step in determining whether a specific crime may be relevant to concerns about risks in a particular position. The nature of the offense or conduct may be assessed with reference to the harm caused by the crime (e.g., theft causes property loss). … With respect to the gravity of the crime, offenses identified as misdemeanors may be less severe than those identified as felonies.”
• The Time that Has Passed Since the Offense, Conduct and/or Completion of the Sentence. The Guidance points out that the amount of time that had passed since the applicant’s criminal conduct occurred is probative of the risk he poses in the position in question. For example, the Guidance notes that the risk of recidivism may decline over a certain period of time.
• The Nature of the Job Held or Sought. Linking the criminal conduct to the essential functions of the position in question may assist an employer in demonstrating that its policy or practice is job related and consistent with business necessity because it “bear[s] a demonstrable relationship to successful performance of the jobs for which it was used.”
The Guidance also lists examples of employer best practices for considering criminal records in connection with employment decisions. Among other examples, the Guidance advises employers to (1) develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct, (2) identify essential job requirements and the actual circumstances under which the jobs are performed, (3) determine the specific offenses that may demonstrate unfitness for performing such jobs, (4) determine the duration of exclusions for criminal conduct based on all available evidence, and (5) record the justification for the policy and procedures.
Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).
The Equal Employment Opportunity Commission recently issued an opinion concluding that under Title VII, employees may bring discrimination claims based on their transgendered status or gender identity.
Mia Macy was a male police detective in Phoenix, Arizona. In 2010, Macy decided to relocate to San Francisco and pursue a position with the Bureau of Alcohol, Tobacco, Firearms, and Explosives. After the interview process, a local director for the Bureau informed Macy that she would be able to fill the position provided that she passed a background check. While her background check was pending, Macy informed the third-party contractor responsible for filling the position that she was in the process of transitioning from male to female. The contractor relayed this information to the Bureau. Five days later, the Bureau notified Macy that the position had been cut due to budget restrictions. An EEO counselor at the Bureau, however, told Macy that another applicant had been hired for the position because that individual was farther along in the background investigation process. Macy filed a discrimination charge against the Bureau, alleging sex discrimination, and discrimination on the basis of gender identity (as a transgender woman) and sex stereotyping. When only her sex discrimination claim was accepted, however, Macy appealed.
The Commission reversed the decision, concluding that discrimination claims based on transgender status or gender identity are covered under Title VII. The Commission based its conclusion principally upon the United States Supreme Court’s decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and subsequent decisions by federal courts. In Price Waterhouse, the Supreme Court held that discrimination on the basis of gender stereotype (e.g., a woman denied partnership in a company because she was too “macho” and not “feminine” enough) is sex-based discrimination prohibited under Title VII. Several United States Circuit Courts of Appeals have subsequently held that under this holding, Title VII bars “not just discrimination because of biological sex, but also gender stereotyping—failing to act and appear according to expectations defined by gender.” Following this approach, the Commission reasoned that when an employer discriminates against someone because the person is transgender, the disparate treatment is “related to the sex of the victim.” According to the Commission, this includes a person allegedly discriminated against for expressing his or her gender in a non-stereotypical fashion, and a person allegedly discriminated against because an employer is uncomfortable with or dislikes the fact that he or she has or is transitioning from one gender to another.
Going forward, employers should assume that the Commission’s opinion is legally correct. While the Supreme Court has not specifically addressed whether transgender or gender identity discrimination claims are covered under Title VII, many lower courts have held that this is a protected class. Therefore, given the current trend in federal courts to recognize the validity of such claims, the Commission’s opinion will certainly bolster an employee’s ability to bring gender identity and transgender discrimination claims under Title VII.
In 2009 the US Supreme Court pretty much cut out “mixed-motive” cases in the age arena. Meaning you now have to show that “but for” age discrimination you would have suffered that loss of job, etc. If there is any legit reason for your termination then you lose. In response to this ruling the legislatures are busy trying to work their way around it and the EEOC has updated its regulations as follows (underlining mine):
§ 1625.7 Differentiations based on reasonable factors other than age (RFOA).
(b) When an employment practice uses age as a limiting criterion, the defense that the practice is justified by a reasonable factor other than age is unavailable.
(c) Any employment practice that adversely affects individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a “reasonable factor other than age.” An individual challenging the allegedly unlawful practice is responsible for isolating and identifying the specific employment practice that allegedly causes any observed statistical disparities.
(d) Whenever the “reasonable factors other than age” defense is raised, the employer bears the burdens of production and persuasion to demonstrate the defense. The “reasonable factors other than age” provision is not available as a defense to a claim of disparate treatment. (Meaning individual harassment, discrimination, etc.)
(e) (1) A reasonable factor other than age is a non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances. Whether a differentiation is based on reasonable factors other than age must be decided on the basis of all the particular facts and circumstances surrounding each individual situation. To establish the RFOA defense, an employer must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.
(2) Considerations that are relevant to whether a practice is based on a reasonable factor other than age include, but are not limited to:
(i) The extent to which the factor is related to the employer’s stated business purpose;
(ii) The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
(iii) The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
(iv) The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
(v) The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.
(3) No specific consideration or combination of considerations need be present for a differentiation to be based on reasonable factors other than age. Nor does the presence of one of these considerations automatically establish the defense.
Word to the wise: Make sure you can fit any promotion, termination, or layoff type decision into the guidelines set forth above.