A recent Federal Court case State of Arizona v. ASARCO (9th Cir. 11-17484 10/24/13) points out just how bad supervisors can get and what can happen to an employer who looks the other way. Apparently the Plaintiff, Ms. Aguilar, got hit on by her bosses a lot. For example, in her lawsuit she claimed that on June 18, 2006, Aguilar became a rod and ball mill person, which took her from the filter plant to the main mill building. In Aguilar’s crew was Julio Esquivel, a “distributed control systems operator.” Although he was not her direct supervisor, Aguilar reported to him and he maintained some authority over her day-to-day work.
Before Aguilar even had started in her new position, Esquivel warned, “your ass is mine” and told her that he would be spending more time with her than his “lady.” According to Aguilar, Esquivel was often giving her conflicting orders, snapping his fingers at her, telling her to “watch herself,” yelling at her, and threatening her with termination. ASARCO responded to this testimony at trial by attempting to show that, as awful as Esquivel was toward Aguilar, it was not motivated by her sex but instead by his general boorishness.
As a result of Esquivel’s reputation as a “rude bully” who “yelled at everybody,” at least one manager at ASARCO did not feel the need to act in response to Aguilar’s complaints. In July, Aguilar asked for a leave of absence to deal with personal problems relating to the custody of her children. She took that leave in September of 2006 and did not return until November 1st. When she returned, she was placed on a different crew. Aguilar worked four more days and then quit ASARCO for good.
The jury found ASARCO liable on the sexual harassment claims but not on the constructive discharge or retaliation claims. Critically, the jury did not find any compensatory damages for Aguilar, instead awarding her one dollar in nominal damages for the sexual harassment claim. The jury then awarded her $868,750 in punitive damages!
Fortunately for the company, that verdict was reduced on appeal. Unfortunately, ASARCO and/or their EPLI carrier (if they had one) will have to dish out at least $125,000 plus in damages and easily over $150,000 in legal fees, if not twice that amount.
Moral to the story: Don’t let jerks, bullies, and other miscreants work for you!
“Great work is at the edge of your confidence.” – Michael Bungay Stanier, Box of Crayons
This issue discusses:
- Editor’s Column: What Can Employers Do to Prevent Psychiatric Stress Claims?
- Assessing the Effectiveness of Wellness Programs
- Workplace Harassment: Can’t We All Just Get Along?
- What’s Most Important in HR?
- The ADA After FMLA
- Eight Key Provisions in Your Sales Commission Agreement
- California Auto Dealer Must Pay for Waiting Time of Repair Staff
- 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: What Can Employers Do to Prevent Psychiatric Stress Claims?
According to the California Department of Industrial Relations, Division of Workers Compensation, employers can and should try to prevent these unwanted exposures. Here’s what they recommend…which just so happens to be good management practices, period:
For victims of traumatic, violent or frightening events, critical incident debriefings and trainings are appropriate as soon as possible after the incident. Post-trauma support groups and individual counseling might also be helpful.
Employers can reduce stress from changes in the workplace by ensuring effective communication with employees by:
- Using newsletters, staff meetings, and individual contact between managers and workers.
- Establishing internal complaint procedures and informal dispute resolution systems as outlets for employees to have their concerns heard and addressed.
- Soliciting formal and informal input from employees about ways to make the work environment more productive and less stressful.
Managers can also improve the management of job-related injury cases so that physical injuries don’t lead to psychiatric stress injuries. The same principle applies to dealing with employees who have pre-existing mental problems or stress issues that might be subject to complications in the workplace.
In addition to considering modified duty adjustments and rehabilitation needs for injured workers, supervisors can help resolve problems or personal issues that don’t relate directly to the injury, but can impact employees’ readiness to return to work.
Firms should implement confidential employee assistance programs that acknowledge the interrelationship between personal and work problems and encourage stressed employees to seek help.
Be sure to provide managers and supervisors with training on the basics of effective supervision. Here are some helpful tips:
- Set realistic goals for workers.
- Make sure that workers have the resources and authority to meet assigned responsibilities.
- Give individuals an opportunity to offer input on actions that affect their jobs.
- Monitor and document worker performance.
- Let workers know how they’re doing and what the expectations are for improvement.
- Reinforce and reward good job performance.
- Learn how to cooperate with resolution efforts.
- Maintain confidentiality.
- Learn constructive confrontation with troubled employees.
- Identify behavior patterns that might indicate problems requiring professional assistance.
- Make effective referrals to employee assistance programs.
- Comply with legal restrictions against any form of sexual harassment or discrimination.
Sounds like common sense to me.
Assessing the Effectiveness of Wellness Programs
The jury is still out on whether wellness programs generate a significant return on investment. The fact is that getting people to change their behavior is difficult – which reminds me of an old joke I’ve changed for these circumstances:
Question: How many wellness coaches does it take to change a light bulb?
Answer: Only one, but the light bulb really has to want to change!
Those who promote wellness programs claim that they’re the be-all and the end-all of healthcare problems. This is clearly an overstatement: there has been little evidence of these programs dramatically reducing the costs of healthcare (See the Rand Report). Of course, there are other reasons for businesses to encourage wellness programs for their workers—reduced absenteeism/ increased presenteeism, higher productivity, less use of sick pay, etc.
In light of a 2012 study of client outcomes by Wellness Coaches of USA, which paints a much rosier picture than does the Rand report, health care cost expert Wendy Lynch recommends that businesses ask these questions in evaluating the effectiveness of wellness programs:
- How much money did the program spend on people who didn’t change?
- How many people gained weight or increased their health risk?
- To what extent were any improvements in health sustained?
- What was the control group or company used to compare results? Would the impact have been any different without the program?
- Which risk factors changed (i.e. did employees have more servings of vegetables?)
- What was the cost per risk change?
As Wendy reminds us, every dollar spent on benefits (and wellness programs) comes from the employees’ pocket—which means that you’re substituting these programs for better wages, training, bonuses, or new equipment/technology. Ask yourself if investing in these areas will be more cost-effective in helping employees do their jobs than offering them wellness programs.
Although I’m a great believer in wellness, I believe that people are primarily self-motivated. I live a healthy life because I am personally motivated to do so, but most people don’t have the same motivation. As Wendy Lynch will tell you, factors such as management of sick leave, compensation plans, and return-to-work programs play a far greater role than wellness programs in curbing employer health care costs.
Wendy also noted that the Wellness Coaches study compares 2012 client outcomes to those of 2009. We all remember 2009 as one of the most stressful years in recent memory, which had a significant effect on the health, exercise level, and general disposition of employees. It’s like saying that a company made more money in 2012 than in 2009, while ignoring the impact of the recession. Sometimes variables completely outside of your control have a greater impact than those you can manage.
Join us on August 1st at 2PM EST for a webinar with Wendy entitled Winning the Race to Optimal Performance: Best Practices in Policy Alignment & Transparency.
Workplace Harassment: Can’t We All Just Get Along?
This case reminds me of the Bronx neighborhood where I grew up, except that it happened in upstate New York. The employer was a door-to-door transport company for the elderly and disabled. Apparently the Italian-American managers and workers gave their Black and Puerto Rican workers a hard time. The question in the case was whether their conduct, as boorish and bullying as it was, constituted racial harassment.
The court decided that there was enough evidence of racial hostility to take the case to trial in Rivera v. Rochester Genessee Regional Transportation Authority.
Comment: One has to believe that management had a good idea that this conduct was going on and chose to look the other way. It could be Christians abusing Muslims, men harassing women, or straights hassling gays. The point: Whenever you have a mix of cultures, races, genders, or sexual orientations in the workplace you have the potential for poor conduct. Smart employers will recognize this challenge and meet it head on by banning abusive behavior. I encourage HR That Works Members to review the Diversity and Discrimination Training Module and related materials.
What’s Most Important in HR?
Here’s the answer to this question by more than 200 companies in the 2013 HR That Works Member Survey.
This is one of my favorite questions because helps clarify what is really most important to companies about HR. (Unlike a competitive program, which claims that the No. 1 job of HR is preventing lawsuits!) Interestingly, retention squeaked back into second place for the first time since 2008, which means that the economy is improving and employers are concerned about turnover as jobs begin to open up. As in past years, employers are highly concerned about training. HR That Works has more than 130 training titles, as well as a Learning Management System (LMS).
Of course, employers remain concerned about getting poor performers off the bus and dealing with the Affordable Care Act. Again, HR That Works offers tools, webinars, etc. and other programs to help with these concerns.
P.S. Although legal exposures tend to get all the press, preventing lawsuits came within All Other Responses. This is just one reason why HR That Works is unique—we encourage practices that help grow companies, not just protect them!
The ADA After FMLA
In Sanchez v. Swissport, Ms. Anna Sanchez was employed by Swissport from August 2007 until July 14, 2009 as a cleaning agent. Around February 27, 2009 she was diagnosed with a high-risk pregnancy that would require bed rest. To help, Swissport provided her 19 weeks of leave, consisting of accrued vacation time, in addition to the time allowed by the California Family Rights Act (FMLA equivalent) and the California Pregnancy Disability Leave Law (which offers four months of leave). Essentially, Sanchez told the company that she would be able to come back to work after delivering her baby on October 19. Instead, the company terminated her on July 14, claiming that it had exhausted all its legal obligations.
The question in the case is whether The Fair Employment and Housing Act (the ADA equivalent) applies even after the plaintiff had exhausted all of her leave and—big surprise—the answer is yes. Essentially, Swissport had to show that keeping her job open for another 12 weeks or so would have been an undue burden. Unfortunately, because the company never entered into an accommodation dialogue with Sanchez, the case was allowed to continue to trial.
The lesson for employers is clear: No matter the state you are in, you must continue the accommodation dialogue. If an extended absence would pose an undue burden, you had better be able to prove this; guessing will only get you in trouble.
Eight Key Provisions in Your Sales Commission Agreement
Many an employer has engaged in litigation with current or former salespeople who claimed that they were not paid commissions earned. Some states, such as California, require companies to put commission agreements in writing, which is a good idea, whether or not it’s mandatory. Here are provisions that should be found in most all commission agreements.
- The date of earning commissions. Is it the time the sale was made, the money was collected, etc.?
- The date of paying commissions. This is usually the next available pay period.
- The management of draws against commissions. How long does the draw last? What if commissions never exceed the draw?
- Dealing with commissions when employment is terminated.
- The treatment of commission reductions when a customer fails to pay or returns an item.
- The commission split if the sale involves more than one person.
- The level of profitability required for a sale to earn a commission.
- The period of commission payments if the sale involves ongoing payments (i.e. a service contract) For example, a salesperson might receive commissions for six months, after which the item becomes a house account).
HR That Works has an extensive Employment Agreement which includes commission provisions.
California Auto Dealer Must Pay for Waiting Time of Repair Staff
In Gonzales v. Downtown LA Motors, a California appeals court ruled that the employer’s method of compensation violated minimum wage law because state law prohibits an employer from paying employees for all hours worked by averaging total compensation over total hours worked in any period. The court ordered the auto dealer to pay minimum wage for the waiting time of repair mechanics.
Most auto repair facilities pay mechanics a flat rate for a repair job based on its “book value.” This piecework approach satisfies minimum wage obligations if the total compensation paid over the pay period averages at least minimum wage both for repair and waiting time. However, the California statute differs from federal law because it requires paying minimum wage for “each and every separate hour worked.”
The court noted that this requirement is distinct from the federal statute, which “requires payment of minimum wage to employees who in any workweek are engaged in commerce.”
You can imagine the potential exposure to similar claims for auto repair facilities in California. For example, in this case, the trial court indicated that the plaintiffs lost $553,653 in uncompensated time—and that the value of the waiting time, including interest was $1,555,078. The ruling also awarded penalties of $237,840 for the willful failure to pay all wages owed at the time the employees were terminated.
The Gonzalez case included amici curie briefs filed by the California Employment Lawyers Association, the National Automobile Dealers Association, the California Automotive Business Coalition, the California New Car Dealers Association, and the Alliance of Automobile Manufacturers. This decision will remain the law unless the California Supreme Court overturns it (which is unlikely), or the state legislature changes the existing rule. Either way, it represents an enormous windfall for auto repair workers in the state and their attorneys.
Question of the Month
How would you deign a compensation package for a self-directed work team in an office setting?
- Understand what you would have to pay to hire these folks today. The market determines their going rate, not you.
- Pay up to 15% above market grade in total compensation to attract top 10% employees. I find that paying more returns little value.
- Reward what you want to incentivize…team play. Offer a bonus of 10% to 15% based on the team’s productivity. Let them own the benchmarks where possible. Publish progress reports where everyone can see it.
- When employees or the entire team go the extra mile, give them “spot rewards:” tickets, cash, an afternoon off, etc. Surprise them and you will motivate them.
- Give rewards for new ideas generated at monthly suggestion meetings.
Do this, and you’ll be far ahead of most. I don’t like making things complicated—the above suggestions are about as simple and straightforward as possible.
Is there anything you would add to this list? Please e-mail your answer to email@example.com.
Form of the Month
Employee Value Checklist (PDF) – In our hypercompetitive and stressed work environment, there’s no substitute for an employee understanding how they bring value to your company. Smart companies will actually help to identify the benchmarks supporting any one of these value propositions.
Click here to to listen to this month’s newsletter podcast.
REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:
©2013 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.
Pipefitter Otto May, Jr., employed at one of Chrysler’s assembly plants, filed a hostile work environment lawsuit claiming he was subjected to racist and anti-Semitic harassment from his co-workers. The jury awarded May $750,000 in compensatory damages and $3.5 million in punitive damages after a week-long jury trial. Click here to read the article in its entirety.
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!
ELK GROVE, CA — The California Department of Fair Employment and Housing (DFEH) today announced the $70,000 settlement of a workplace sexual orientation harassment case against Limited Brands Store Operations, Inc., and Bath & Body Works, LLC. A manager of a Bath & Body Works was accused of harassing her co-manager because of his sexual orientation.
The DFEH filed an accusation with the Fair Employment and Housing Commission after investigating a complaint from the co-manager, who began working at Bath & Body Works in August 2007. The complainant claimed that from his first day on the job, his female supervisor referred to him multiple times a day using slurs based on his sexual orientation, drew pictures of male genitals, which she hung in the store’s back room, told his co-workers that he liked kissing boys, and falsely claimed that his attitude was affecting the work environment. The Department’s accusation further alleged that, although another store manager witnessed the harassment and the employee complained to the district manager, Bath & Body Works failed to stop the harassment, ultimately forcing the complainant to quit.
“The Department of Fair Employment and Housing takes great pride in leading the enforcement of California’s civil rights laws,” said DFEH Director Phyllis Cheng. “This compelling case should remind employers that they must have policies in place to prohibit discrimination and harassment against employees—and employ managers who can enforce those policies.”
As part of the $70,000 settlement, Bath & Body Works, LLC agreed to provide discrimination and harassment prevention training to its supervisors and managers, provide training to all new hires within 60 business days of hire, display posters informing employees of their right to report discrimination to the DFEH, and retain copies of all complaints of discrimination and harassment made by employees alleging a violation of the Fair Employment and Housing Act. Bath & Body Works did not admit to any liability in the agreement to settle.
“The closest to perfection a person ever comes is when he fills out an employment application.” – Stanley J. Randall
This issue discusses:
- Editor’s Column: Suicide Nets
- Opposing Unemployment Claims: Managers, Beware
- AARP Helps Employers With Older Workers
- Five Year Plan for the Workplace
- Alliances That Make Employers Nervous
- Criminal Records: No Employer Policy, No Employee Claim
- Mini-Medical Plans May be Eligible for Exemption
- Religious Expression and Workplace Harassment
- Stupid E-Mail Tricks
- Auto-Forwarding Employee E-Mails Presents Risk
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: Suicide Nets
I read an interesting but disturbing article in Business Week magazine that talked about Foxconn, the world’s largest manufacturer of electronic components. What was startling was the picture of suicide nets hung outside its company dormitories. Apparently, 12 workers have leapt to their deaths within the past year.
When we see pictures of assembly factories and hear stories about suicide nets, it’s easy for us to point fingers at the Chinese and their inhumanity toward the working masses. However, the U.S. underwent a similar revolution 100 years ago. I can show you pictures of injured children who worked in factories 12 hours a day, six days a week. If they were injured, they were fired. There was no medical coverage or Workers’ Comp. We also went through an incredible labor/management struggle, which continues to this day. You can bet that China will go through its labor struggles as well. Fortunately, and perhaps in part due to global pressure, Foxconn has raised salaries and benefits.
Experts attribute the high suicide rate to repetitive stressful work environments and detachment from the familiar—whether it’s friends, family, or countryside. There’s a deep sense of isolation despite the sea of humanity—a disconnect, if you will.
Let me ask you a question: Isn’t that the condition here as well? Many of us remain equally chained to our desks or cubicles, even if they’re larger or have a better view. Americans work insane hours. In a study we did of HR That Works members, most respondents take fewer than two weeks of vacation per year. At least China mandates two weeks of vacation a year. In France, it’s eight weeks, and in England six weeks.
Where are the safety nets at your company? Is it the EAP? Is it a wellness program? Is it incredible support and flexibility? How do we keep ourselves and the people we work with sane when we’re all running 75 mph? That’s the question, whether you’re in the U.S., Russia, China, Pakistan, or Brazil. How do you make sense of this thing we label as “work” in a way that nurtures us instead of tearing us down?
As with the immigrants who came to the U.S. and continue to do so, the Chinese who immigrate to their cities will reconnect and form associations, special interest groups, sporting teams, non-profit organizations, and find other ways to build their community.
Perhaps our greatest export will be helping emerging economies accelerate through struggles that took us dozens of years to resolve. Workplace struggles surrounding access to work, pay, safety, and the sharing of power will continue to affect today’s workplace, both here and abroad.
Opposing Unemployment Claims: Managers, Beware
Many employers misunderstand the standard unemployment claims. The bottom line: Even a claimant who has performed horribly on the job is eligible for unemployment benefits, unless they leave under these circumstances:
- Voluntary departure without good cause.
- Discharge for misconduct connected with their work.
- An irresistible compulsion to use or consume drugs, including alcoholic beverages.
- Return to school (for students employed temporarily).
- Joining a spouse or domestic partner at a place from which it’s impractical to commute to employment, to which a transfer of the claimant by the employer is not available.
- Protection of the employee or their family from domestic violence abuse.
If you decide to oppose an unemployment claim, it makes sense to get help from an expert in this area.
AARP Helps Employers With Older Workers
The changing demographics of the workforce have gathered much attention. The AARP has done an excellent job of providing insight and tools for employers to help manage the older-than-50 workforce. Click here to view this information. The older workforce will be with us for some time. The proper “retirement age” has been a source of intense debate, due to its impact on the ability to fund pensions and Social Security. The combination of low birth rates and rising life expectancy will transform the demographics of the workplace.
Five Year Plan for the Workplace
The Secretary of Labor has issued “The Strategic Plan” for fiscal years through 2016. As you can see in the diagram, the essence of this plan consists of work-life balance, health care, income security, and advocacy – all noble goals. The challenge: Defining a context or meaning for these terms.
Here’s what The Plan states:
Strategies for Reforming Worker Protection
- Target the most egregious and persistent violators.
- Protect the most vulnerable populations while assuring broad-based compliance.
- Regulate to eliminate or reduce the hazards with the broadest and most serious consequences based on sound science.
Evaluation. Establish regular processes for evaluating the success of enforcement and regulatory strategies in helping achieve desired outcomes.
- Foster a culture that emphasizes continuous improvement in regulatory and enforcement programs.
- Shift the burden of compliance to the employer or other regulated entity, rather than relying exclusively on enforcement interventions to eliminate “catch me if you can” regulation and enforcement.
- Emphasize organization-wide enforcement and other strategies for leveraging limited resources to accomplish the broadcast possible compliance.
- Use openness, transparency, and effective press and communications strategies to help ensure broad-based and continuing compliance.
- Implement collaborative enforcement strategies with other DOL, federal, state, and local agencies to leverage limited resources and ensure broad compliance in the entire workplace.
- Establish and maintain an effective partnership among worker protection agencies, the Solicitor’s Office, and the Policy Office in all aspects of regulation and enforcement.
- Impose penalties and other remedies which are consistent with the seriousness of the violation and act as effective deterrents, including identifying and aggressively pursuing appropriate cases for criminal prosecution.
- Partner with worker and community-based organizations to identify likely violations and educate workers, small businesses, and others about the law’s requirements.
- Involve workers and worker organizations in the workplace to prevent, identify, and remedy violations.
- Provide meaningful compliance assistance and engage the regulated community in designing and implementing compliance assistance.
Learn more on the DOL website.
Alliances That Make Employers Nervous
The U.S. Department of Labor’s Wage and Hour Division is holding a series of discussions with the National People’s Action Network (NPA). The goal is to explain worker rights and how to file a complaint against rights violations with the Labor Department. At a recent discussion in Rhode Island with the Fuerza Laboral organization, more than 100 workers and stakeholders spoke with Wage and Hour officials and garnered information on finding help when denied the wages they deserve.
According to the NPA Web site affiliates entered into a partnership with the US Department of Labor. DOL representatives in NPA affiliate states will attend field meetings to help local organizations expand their campaigns on Wage Theft, misclassification, and other labor violations.
Conclusion: These types of partnerships make business owners nervous. The Bush Administration was one of the most pro-employer on the books. Employers recognize that the pendulum has swung 180° in the opposite direction. The Department of Labor, EEOC, OSHA, and NLRB are in business to help employees – not employers. Whining about this won’t do any good. Engaging in sound HR risk management practices is the only thing that can or will work.
Criminal Records: No Employer Policy, No Employee Claim
The case of EEOC v. Conway Express, Inc. (8th Cir. September 26, 2010) involved an employer’s use of conviction records as a practice, but not a written policy. The EEOC sued on behalf of the charging party, Roberta Hollins, who claimed she was not hired based on her race. Hollins applied for a part-time position at the company’s Poplar Bluff, MO, office. The company’s service center manager, Kenneth Gaffney, interviewed her and recommended to his boss that the company hire her.
However, Gaffney’s boss expressed reservations about hiring her due to race. Gaffney told Hollins that if the company were to hire her, it would “open a can of worms” and “my boss told me not to hire you because if I hired you that was just asking for the NAACP.” This looks like a clear-cut case of racial discrimination, but that’s not how it turned out.
Answering a question on the employment application about prior convictions, Hollins wrote that she twice was convicted for shoplifting. Gaffney offered to employ Hollins, but failed to follow the company’s protocol, which involved obtaining approval from Human Resources before extending an offer. Gaffney was terminated and when Hollins told Gaffney’s supervisor about the employment offer, the supervisor said that he knew nothing about it and he would not hire her. The company hired a white male for the position, and stated that Hollins would not have been offered employment based on her prior convictions.
The EEOC argued that a jury should decide the question of whether Hollins was not hired based on her race because the employer’s background check policy was unwritten. The court ruled that it was irrelevant that the policy was unwritten. The company provided evidence that during the 18 months before Hollins applied, the company disqualified 28 applicants based on their criminal conviction history and no current employee had a criminal conviction. Said the court: “the [EEOC] argues that a reasonable jury could conclude that the policy did not exist because it was not in writing, but they do not cite any legal authority for the proposition that a policy must be in writing to be effective.”
The court got it right: An employer’s practice need not be in writing to be a bona fide, nondiscriminatory reason for an action taken.
Furthermore, although the manager’s supervisor expressed reservations about hiring Hollins because of her race, she would not have been hired anyway due to her conviction record – a factor that the employer applied consistently to applicants.
Article courtesy of Worklaw® Network firm Lehr Middlebrooks Vreeland. (www.lehrmiddlebrooks.com)
Mini-Medical Plans May be Eligible for Exemption from Health Care Reform Law
Employers offering limited health benefit plans (“mini-med” plans) can do so without modifying them to comply with the Affordable Care Act, provided they obtain a waiver from the Department of Health and Human Services (HHS).
Many of the companies who offer mini-med plans are applying for these exemptions on behalf of their customers.
The mini-med plan market, which by some estimates covers more than 3 million Americans, has been rocked by the requirements of the Affordable Care Act. Mini-med plans, which offer limited benefits but low deductibles and co-pays, have become a cost-effective way for employers with high turnover and low wage earners to provide their employees with basic health insurance. If mini-meds were forced to comply with the Affordable Care Act’s rules, including those that impose “minimum essential coverage” requirements or eliminate lifetime or annual caps on benefits, the entire market would dissolve, leaving 3 million Americans without even the most basic coverage.
As a result, mini-med plans have prevailed on HHS to grant them an exemption from the Affordable Care Act in order to protect basic coverage for their insureds. Employers must submit waiver applications at least 30 days before the beginning of the plan year for plans starting between September 23, 2010 and September 23, 2011. For calendar year plans, the deadline to apply for a waiver is December 1. Plans receiving a waiver must re-apply each year until the waiver program ends in 2014.
Any plan – not just mini-med plans — can apply for a waiver from the Affordable Care Act, provided they can show that:
- The plan covers both full-time and part-time workers.
- Without a waiver, premiums would rise so much that employers would drop the plan or workers would refuse to buy into them.
If you offer a min-med plan, contact your plan’s insurance carrier or your benefits broker to see if the plan has applied for or obtained an exemption. Note, however, that the exemptions are only a short-term fix. HHS will have some tough decisions to make about these plans when the exemption period ends in 2014. Ultimately, mini-meds might be the type of Health insurance coverage that dooms the Affordable Care Act’s requirement that all American citizens carry “minimum essential coverage” by 2014.
Article courtesy of Worklaw® Network firm Lehr Middlebrooks Vreeland. (www.lehrmiddlebrooks.com)
Religious Expression and Workplace Harassment
In Mitchell v. University Medical Center, Inc., the U.S. District Court for the Western District of Kentucky addressed a sensitive issue: The tension between an employer’s need to maintain a professional, harassment-free workplace and an employee’s right to voice her personal religious conviction on the job. The plaintiff, a staff nurse at the University Medical Center hospital, was a devout Christian. Based on her readings of the Bible, she believed that she had calculated the date for the end of the world or the coming of the Antichrist. She shared her calculations and revelations with co-workers. Several of her co-workers were uncomfortable with these conversations and reported them to a supervisor, who gave the plaintiff a verbal warning not to discuss religion at work or face discipline, up to and including termination. Upset about the meeting, the plaintiff resigned at the end of the day, and filed a religious discrimination claim against her employer.
The court decided in favor of the employer, ruling that although the plaintiff wanted the right to have religious conversations with co-workers, these conversations were offensive and troubling to them and violated the hospital’s harassment policies. The court noted that any accommodation of the plaintiff would necessarily infringe on the rights of other employees, and ruled that she could not establish a claim for disparate treatment because she failed to show that she received treatment different from that of other employees in similar situations. The Court reasoned that she was not treated differently because of her religion, but because of how her religious beliefs and actions affected others.
For guidelines on dealing with religious discrimination issues in the workplace, see the Form of the Month below.
Article courtesy of Worklaw® Network firm Shawe Rosenthal. (www.shawe.com)
Stupid E-Mail Tricks
An excellent article in the October 2010 Corporate Counsel magazine discussed mistakes executives continue to make using e-mail. The author offered these common-sense guidelines.
- Use company email accounts appropriately.
- Don’t e-mail inside jokes or nicknames for clients or employees.
- Don’t e-mail when angry.
- Don’t e-mail potential ammunition for opposing counsel.
- Avoid using such phrases as “Don’t tell them” or “They’ll never find out” in your e-mails.
This list is far from exhaustive. The article provides excellent job examples of how unwise e-mail conduct on the job has resulted in a significant exposure to the employer. Bear in mind that these guidelines also apply to using such social media as Facebook, LinkedIn, and YouTube. We encourage HR That Works users to examine our Electronic Use Policy, as well as the Social Media Policy.
Auto-Forwarding Employee E-Mails Presents Risk Under Federal Wiretap Act
Employers’ ability to monitor e-mails sent by employees at work is a hot topic being addressed by courts nationwide as privacy laws work to catch up with technology. In United States v. Szymuszkiewicz, the Seventh Circuit Court of Appeals provides a different perspective on this issue, finding that an IRS agent violated the Wiretap Act by secretly setting up his boss’s e-mail account to forward all received e-mail messages to his own account.
David Szymuszkiewicz worked as an IRS agent whose job required him to visit delinquent taxpayers’ homes. After losing his driver’s license for driving while drunk, he became concerned that he might lose his job and decided to secretly monitor all e-mails sent to his supervisor. The Wiretap Act makes it unlawful to “intercept” electronic communications. Szymuszkiewicz argued that he did not violate the Act because he did not intercept any communications during transmission as one might intercept a telephone call by tapping a phone line. The court rejected this argument, holding that an interception need not be contemporaneous and that Szymuskiewicz’s use of the auto-forward feature in Outlook met the statutory definition. The court also stated that its analysis applies equally to digitally transmitted telephone calls, which are sent in a manner similar to e-mail transmissions.
Although this decision offers a reason for caution, it does not mean that employers must abandon their existing communications policies. Courts have ruled that employers are not subject to liability under the Wiretap Act for monitoring employees suspected of violating company policy if the monitoring serves to protect the company’s “rights and property.” Employers also have a legitimate argument under the Act that they are not liable for monitoring employee communications if the monitoring occurs in connection with “an activity which is a necessary incident to the rendition of [the employer’s] service.”
Nevertheless, it’s wise to act carefully when monitoring employees’ electronic communications, because this area of the law is developing rapidly and the rules vary from jurisdiction to jurisdiction. Be sure to have up-to-date policies notifying employees that their communications may be stored, monitored and reviewed. You might also strongly consider requiring all employees to acknowledge such policies as a condition of employment.
Article courtesy of Worklaw® Network firm Franczek Radelet. (www.franczek.com)
Form of the Month
Religious Accommodation Flowchart (PDF)
This chart outlines the proper steps to take when considering a religious accommodation issue.
Click here to listen to this month’s newsletter podcast.
“Objectives are not fate; they are direction. They are not commands; they are commitments. They do not determine the future; they are means to mobilize the resources and energies of the business for the making of the future.”
- Peter Drucker
This issue discusses:
- Editor’s Column: Asking the Right Questions
- Labor History Quiz
- Diploma Mill Scams
- Beware of Punishing Employees Who Complain About Wages Owed
- Create a Fun Workplace
- Moving Down Maslow’s Hierarchy of Needs
- A Review of the 2008-2009 Supreme Court Term
We have also provided you with the Form of the Month
Editor’s Column: Asking the Right Questions
My years as a litigation attorney provided me with excellent insight into failed business and employment relationships. Here are a few critical questions business owners, managers, and employees can ask themselves to make sure that their thinking is on the right path:
- Is it in the best interest of the team? There’s no substitute for playing with a win/win attitude. As they say, “A rising tide floats all boats.” Putting the team first does not mean that you have to settle for mediocrity – or that you decide simply on a consensus basis. Putting the team first means that you ask the critical question: “Is this in the best interest of the team (or company, nation, family, etc.)?”
- Will this increase or decrease the level of trust in the environment? I’ve never seen a failed relationship where the parties trusted each other. Trusting partners even dissolve their relationships in an amicable manner. To make a trustworthy decision means that you have the skills or critical thinking necessary to make this decision and that you do so with good intent. That’s what makes anybody trustworthy to me. They have the skills and desires I can trust.
- Is it in alignment with our vision, mission, and goals? Sometimes there can be a true conflict among these outcomes. For example, NASA wanted to launch its shuttles in both a timely and safe manner. When the goal of timeliness overwhelmed the goal of safety, it resulted in an ethical violation – and lost lives. Because it’s very hard to know if you’re in alignment if you haven’t clearly identified your vision, mission, or goals, you might want to throw in values, commitments, and anything else on which you intend to focus.
- How does the approach feel? Often we make poor decisions because we’re running so fast that we can’t feel what’s going on. This is one reason why I often sleep on major decisions, perhaps even for a few days, before making a major decision. If after three or four days it still feels right, I’ll go for it. Unfortunately, when I forget this lesson, I end up paying the price.
- Is it legal? Are you sure or just guessing about it? What further research should you conduct?
- Should I get outside advice? There’s no substitute for professional help when making decisions. People rely on the Worklaw® Network and I try to answer their Hotline calls as part of the HR That Works program. Knock on wood, but from what I can tell, not a single one of these calls has turned out poorly for a client who followed the advice. It’s important to be able to get outside your own head when making critical decisions.
Conclusion: Follow these steps and you’ll avoid a variety of risk management problems.
Labor History Quiz
Enjoy this fun and informative quiz on labor history, created by the Alabama Department of Labor.
Diploma Mill Scams
The FTC has issued helpful guidelines to help employers avoid the pitfalls of false degrees.
Click here for more information.
Beware of Punishing Employees Who Complain About Wages Owed
IMPCO Technologies found itself in a no-win situation. Just after having moved over to a new time-clock program, two employees approached their manager, Manuel Barbosa, claiming that they were not paid overtime for a couple of hours. Since their manager was also paid on an hourly rate, he realized that if they hadn’t been paid, neither had he — so he submitted a claim for overtime to human resources. An investigation determined that the employees did not work overtime. When confronted with this finding, the manager maintained his good faith belief that he was entitled to overtime. The company, which, in fact, had paid the overtime, dismissed the manager for intending to defraud the company. He promptly sued for wrongful termination.
When the case made its way to trial, the court ruled that the company had terminated the employee for his dishonesty, not for making a claim for overtime. On appeal, the court ruled that if an employee brings forth a wage and hour complaint in “good faith,” they are thereafter protected from termination even if, in fact, they prove to be wrong. The case was reinstated, with instructions to determine if the manager had acted in good faith.
Lesson to employers: Think twice about firing any employee who complains about anything. If such a situation arises, contact the HR That Works hotline or your attorney before making a decision. Remember that, in general, if the matter complained about affects public policy (health, safety, labor laws, tax laws, etc.) the employee is generally protected from a retaliatory discharge.
To read the case (Barbosa v. IMPCO Technologies), click here.
Create a Fun Workplace
Life is short. There’s absolutely no reason why we can’t have fun while making money every day. What follows are 13 suggestions that you might want to employ at your company.
- Set up a fun committee. Put some of the “funniest” people at your organization in charge. Give them a budget — maybe $10 per employee per week and see what they can do with it for a couple of months.
- Have a community service day. Giving back to the community is fun. Whether you coordinate an event for the Boys and Girls Club, a homeless shelter, senior citizen home, a group cleanup project, etc, giving back on a group basis is even more fun.
- Set a red noses day. Whether you wear red noses, Groucho glasses, or silly hats, it’s fun to have a day like that. You simply can’t take each other seriously when you do (I can hear the chorus now, “But I want to be taken seriously!”).
- Ask for kids’ pictures. A number of companies have encouraged their employees’ children to produce pictures that they can hang up in a hallway. One company specifically created slot-like frames for 8.5” x 11” paper, which made it very easy for the parents and kids. You can’t stay in a funk very long walking past a bunch of pictures drawn by kids.
- Bring in a magician. Let them walk around and do some magic tricks for your employees. Sure, they might be distracted for all of five minutes, but they’ll have fun doing it — which is exactly the point!
- Hold theme days. Whether it’s Country/Western, 60s, 70s, or otherwise, it’s fun to not only dress up employees, but the environment as well. This goes great for St. Patrick’s Day, Fourth of July, Veterans Day, and of course, Halloween.
- Require people to provide a joke with their résumé. When one CEO told us about this, we thought it was a brilliant idea. He said reading résumés is one of the most boring things you can do. Requiring a joke certainly makes it more fun. Second, if people can’t follow instruction he won’t hire them. And third, you get an idea of what type of sense of humor they have.
- Run a cartoon caption contest. Get a cartoon, blank out the caption, and then have a contest for your employees to fill in.
- Hold food events. Eating with your friends and colleagues can be fun. Many companies will have food events around a holiday theme. Encourage people to bring a dish native to their heritage. We’ve tasted some of the best — and most unusual — food at these events.
- Stage a murder mystery. A body was just found by the water cooler. Who did it? You can easily hire actors who perform these skits in the evening to come into your company and spend an hour or two some afternoon.
- Throw a sundae party. Bring in a boatload of ice cream, nuts, and cherries and engage in some sugar overload. What could be more fun than that?
- Have story day. Have folks share a humorous workplace story either at your company or a previous employer. Issue some basic guidelines, such as no obscenities and no ridiculing any current employees, to avoid offending them. Keep a time limit of, say, five minutes.
- Get out and do something physical together. Whether it’s a ropes course, bowling, or miniature golf, it’s fun to engage in physical activity. Many companies also have softball, soccer, basketball teams, and the like as well.
There are dozens of other ways to have fun, limited only by your imagination!
Moving Down Maslow’s Hierarchy of Needs
The recent Internet Labor Outlook Survey by the Society for Human Resource Management (SHRM) included a question about the most important aspects of employee job satisfaction. The results, in order, were:
- Job security (63%)
- Benefits (60%)
- Compensation/pay (57%)
- Opportunities to use skills and abilities (55%)
- Feeling safe in the environment (54%)
- Relationship with immediate supervisor (52%)
- Management recognition of employee job performance (52%)
- Communication between employees and senior management (51%)
- The work itself (50%)
- Autonomy and performance (47%)
At the bottom of the list came items such as being in a green workplace, networking opportunities, career development, social responsibility, and so on.
These results show that when we hit tough times, our needs move down the Maslow Hierarchy.
In today’s economy, it’s very difficult to self-actualize when you’ve just been laid off from a job. Survival, security, and belonging are what employees need right now. Their egos are in check — and trying to save the world might have to wait until another day. This is one reason why I continue to support the notion of open-book management. It’s about having an authentic and honest conversation about money (an item in great demand today). Show your employees the black and white of their futures and understand how they can shape it to the benefit of all.
A Review of the 2008-2009 Supreme Court Term
Worklaw Network Member Firm Franczek Radelet’s has provided us with a great summary of recent U.S. Supreme Court cases. Labor and employment-related cases figured prominently in the U.S. Supreme Court’s recently concluded 2008-2009 term. The Court’s conservative Justices continued to play a dominant role, with Justice Kennedy often casting the deciding vote. This trend will probably continue at least through the next term, despite the replacement of Justice Souter by Justice Sotomayor.
During the 2008-2009 term, the Court took these actions:
- Considered whether an employer’s well-intentioned decision to disregard promotional test results and avoid claims of disparate impact discrimination violated Title VII.
- Held that “mixed motive” jury instructions applicable to cases arising under Title VII may not be given in discrimination cases pursued under the Age Discrimination in Employment Act (ADEA).
- Found that a pension plan qualified as a bona fide seniority system and did not violate the Pregnancy Discrimination Act by giving less credit for maternity leave taken before that law took effect than for other medical leave in calculating pension benefits.
- Determined that Title VII prohibits retaliation against employees who participate in an employer’s harassment investigation.
- Held that a collective bargaining agreement can waive employee rights under the ADEA.
- Found that a local union’s charge of litigation fees to nonmember employees was constitutional.
- Addressed the constitutionality of a state law that prohibited the use of union dues deducted from public employees’ paychecks for political purposes.
- Adhered to the “plan documents” rule under ERISA requiring that plan administrators follow the express language of plan documents in all but a very few, narrowly defined circumstances.
Read the entire report here.
Form of the Month
Independent Contractor Agreement (PDF)
If you’re sure you have a proper 1099 arrangement, use this agreement to get it in cement.
(HR That Works Users can access this form in Word format by logging on to the site).
Please click here to listen to the February 2010 Podcast.