The Occupational Safety and Health Administration (OSHA), a division of the Department of Labor, has issued an interim final rule implementing Section 1558, the Affordable Care Act’s (ACA) anti-retaliation provision. Section 1558 expressly prohibits an employer from retaliating against an employee for engaging in any of the protected activities under the statute, which includes, among other things, receiving a federal tax credit or subsidy to purchase insurance coverage. OSHA has also issued a fact sheet that outlines how employees may file a retaliation complaint under the ACA.
- Section 1558 provides that an employer may not discharge or in any manner retaliate against an employee because he or she:
- received a premium tax credit or a subsidy to purchase health care coverage;
- provided or caused to be provided (or is about to provide or cause to be provided) to the employer, the federal government, or the attorney general of a state information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of Title I of the ACA;
- testified, assisted, or participated, or is about to testify, assist, or participate in a proceeding concerning such violation;
- objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provision of Title I of the ACA, or any order, rule, regulation, standard, or ban under Title I of the ACA.
Title I of the ACA includes a range of insurance company accountability policies such as: the prohibition of lifetime dollar limits on coverage, the requirement for most plans to cover recommended preventive services with no cost sharing, the prohibitions on the use of factors such as health status, medical history, gender, and industry of employment to set premium rates, and, starting in 2014, protections against pre-existing condition exclusions.
The interim final rule establishes the procedures and timeframes for handling retaliation complaints, including OSHA’s investigation, hearing, and appeals procedures. The anti-retaliation provision adopts procedures similar to those used by OSHA to enforce other whistleblower statutes under its jurisdiction. Under the ACA, an employee has 180 days from the alleged retaliation in which to file a whistleblower complaint with the Secretary of Labor. The employee need only have a subjective, good faith, and objectively reasonable belief that the complained-of conduct violates the whistleblower protections. The employee does not, however, need to prove that the conduct complained of constitutes an actual violation of law.
Section 1558 also includes an employee-friendly burden of proof. The employee must prove by a preponderance of the evidence that his or her participation in a protected activity was a contributing factor to the employment action taken against him by the employer. The burden then shifts to the employer to prove by clear and convincing evidence—a much more difficult burden of proof—that the employer would have taken the same action against the employee if the employee had not engaged in the protected conduct.
OSHA will investigate the complaint and make a determination. OSHA’s findings become final unless appealed within 30 days. Either party may request a hearing before an administrative law judge, whose decision may be appealed to the DOJ’s Administrative Review Board. An employee would be entitled to file a complaint in federal court if a final agency order is not issued within 210 days of the filing of the initial complaint, or within 90 days after the employee receives OSHA’s findings.
If a violation is found, remedies include reinstatement, compensatory damages, back pay, as well as all costs and expenses (including attorney’s fees and expert witness fees) reasonably incurred in filing the complaint. If the Secretary deems the complaint to have been brought in bad faith, it may award the employer up to $1,000 in reasonable attorney’s fees.
Employee rights in Section 1558 cannot be waived and are not subject to arbitration, regardless of whether or not the employee has signed a mandatory arbitration agreement.
The ACA’s anti-retaliation provision adds another layer of concern to employers’ efforts to comply with the ACA’s confusing and often inconsistent obligations. Additionally, the recent trend has been for federal agencies to aggressively enforce and expand coverage under the respective statutes they administer. With healthcare being the Obama Administration’s leading policy initiative, this trend is likely to continue with enforcement of ACA protections.
For example, it is possible that the agencies will use this provision to combat employers’ attempts to reduce their workforce or reduce employees’ hours in an effort to manage employer mandate related costs. Because the ACA’s anti-retaliation provisions create additional classes of protected individuals who did not previously receive special protection, employers should make it a priority to train supervisors regarding the practical employee relations issues related to the ACA.
Article courtesy of Worklaw® firm Lehr Middlebrooks & Vreeland (www.lehrmiddlebrooks.com)
“Soon is not as good as now.” – Seth Godin, Poking the Box
This issue discusses:
- Editor’s Column: What’s Going on Out There and How it Affects Your Business
- Are Your Employees Worth What You’re Paying Them? Really?
- The Causes of Workers Compensation Retaliation Claims
- The Indirect Cost of Accidents and Lawsuits
- The “Going and Coming” Rule
- Failure to Communicate Ruins Employee’s FMLA Claim
We have also provided you with the Form of the Month
Please click here to view the newsletter in PDF.
Every week I read Time, Business Week, and The Economist, together with about a dozen other periodicals. I’d like to share a number of the main themes “going on out there” and how they might apply to running your business. Remember, what’s going on out there is a reflection of what’s going on “in here.”
1. Education equals wealth. All three magazines tend to piggyback stories from each other. All three have discussed recently how income disparities nationwide and worldwide are impacting society. Fact is, those with the greatest level of education also have the most amount of wealth. The U.S. remains a world leader in education. We have nine out of the world’s top 10 endowed universities and remain the primary source of global innovation. For example, Harvard faculty members have earned more Nobel prizes than either France or Russia.
According to one of the articles, the world’s standard for wealth remains at $1 million in the bank. Another article concluded that it takes approximately $70,000 per year to be happy (i.e., middle class).
How this applies to managing your business: The wealthiest companies will also be the most educated ones, with the most educated owners, managers, and employees. They will place a high value on constant training. Successful companies will give employees an opportunity to learn more so they can earn more.
2. Tiger moms, tiger bosses, and the tiger self. Battle Hymn of the Tiger Mother by Amy Chua, a book written by a controlling Asian-American parent, describes the strictness with which she raised her two daughters. It caused a lot of discussion online, in the media, and among my wife and her friends. Of course, the liberal reaction was that the parent was too harsh. By her own admission, this was sometimes true. However, look at the results. She has two highly talented, healthy, and well-behaved young adults who claim to have no regret with their mother’s tough parenting style. On the other hand, we have an entire generation of parents more interested in being their kid’s best friend than a parent. Many of these kids get to do whatever they want to do, including watching hours of TV, texting friends, or playing video games. These children are disconnected and will not be prepared to compete with the tiger children. Their only hope will be to be more innovative than their counterparts. Unfortunately, I don’t see how hours of TV or video games will help them to be more innovative.
Dan Kennedy reminds us that if we want to be rich, we shouldn’t do what the huddled masses do with their time – which includes watching TV, engaging in gossip, spending hours on social media, fantasy football, and anything to do with Kim Kardashian or Charlie Sheen. I believe that there will be a demarcation not just between the intelligent and the unintelligent, but also between the watchers and the doers.
How this applies to managing your business: Are you a tiger boss? Are you overly demanding of your employees? Do they appreciate or resent your strict ways? Do you have a tiger self? Are you tough on yourself? Are you unnecessarily tough on you? In my opinion, the workplace, like the home, requires a balancing act. I expect nothing but the best from myself and the people around me at work and home. Anything less than excellence is simply not acceptable. I understand the importance of discipline, planning, and process. I also understand that my employees need permission to think for themselves and not to be so afraid of punishment for making mistakes that they fail to push themselves to higher levels.
3. A continuing loss of faith in institutions. There’s a breakdown in confidence with our financial, educational, political, and business institutions. Politics and economics are transitory. Yesterday’s regime is not current enough to be trusted and today’s is not experienced enough to be trusted. As we lose faith in institutions, we’re gaining faith in communities. We trust those who are closest to us. Given the advent of social media, somebody can be very “close,” yet 6,000 miles away. On the other hand, you might connect with a political activist two blocks away from you that you’ve never met before.
How this applies to running your business: Business is an institution. Statistics have shown and common sense reveals that we’re less enamored with our institutions today than ever, whether it’s Congress, the local school board, GM, or your company. There’s less loyalty to business entities among consumers and employees than ever. Employees today trust in and are loyal to the communities that involve their work and personal activities. Today’s leader realizes that they have to foster those communities and motivate them toward profitable ends. You can entertain and talk with people all day long, but as the IBM commercial says, “How do you make money at this?” The answer is to build this community outside of your four walls with your clients, customers, and prospects. A recent book I read, Crush It, encourages us to talk about what we’re passionate about. Do your employees have permission to do this? This might be something as simple as an account manager talking about the passion she has for doing a great job for her clients every day.
4. Hard times for democracy. There’s been a decline in democratic governments. Certainly, imbalances in wealth could be one cause for this challenge. The age-old challenge of trying to get government to spread the wealth through capitalist and democratic means is falling prey to fear and greed. Even here at home, we’re losing faith in our democratic institutions, even as we continue to realize that they’re the least of all evils.
How this applies to your business: First, the workplace is not a democracy, even if it’s unionized; it’s a business. The challenge I see is that business owners in tough times who operate more out of fear than greed, can move toward an authoritative management style. This will produce short-term results at best and resentment and eventual overthrow at worst. Ask how you can be more “inclusive” of the thoughts and feelings of your workforce.
5. The Consumer Electronics Show. Listening to and reading about what went on in Las Vegas assures me that people are becoming increasingly detached from their natural environment. Whether it’s Apple TV, Wii games, or new tools for texting, it appears that the only way we’ll be connected in the future is through digital means. I saw a news video recently in which a woman, while texting to a friend at a mall, tripped over a knee-high wall and fell in to a water fountain in the middle of the mall. One of the employees released the video thinking it was hilarious, and it became a YouTube sensation. Of course, the woman expressed her outrage at this insensitive act and her lawyer had the guy fired! Amazing.
What this means for your business: First, it’s hard to fight today’s reality. Think Kung Fu. Go with the flow! We have to be willing to communicate through these tools as owners and employees. Sticking our head in the sand or playing dinosaur means going out of business. However, as John Naisbett warned more than 25 years ago, the more we go “high-tech,” the more we need “high-touch.” Today, the company that can go high touch will win not just people’s minds, but their hearts and wallets as well. Going high touch in a high-tech world is the single most powerful way to show you care.
6. Us versus Them. Where would the good ol’ plot be without “goodness triumphs over evil?” More than half of the content in these leading news magazines focuses on some type of conflict: Democrats vs. Republicans, North Sudan separating from South Sudan, Arabs vs. Jews, Libyan vs. Libyan, China vs. the world — and all of the violence, destruction, pain, and war that these conflicts create.
What this means for your business: No matter how hard you try to be a good boss, at some point you’ll need to deal with conflicts — employers vs. employees, like cats vs. dogs. As leaders, we need to acknowledge this fact, stand it on its head, and not let workers portray themselves as our victims. If you want to play us vs. them, then do it with the competition.
7. Increasing financial and environmental debt. It doesn’t seem that this trend is going to stop or go away any time soon. Grim realities such as the mortgage scandal, the oil spill, and global warming aren’t going away. In fact, there’s no reason for things not to get worse. We’ve been mortgaging our future for our present and will leave an awful legacy for our children and grandchildren.
What this means for your business: First, we have to teach employees financial literacy. HR That Works members can start by watching the Accounting Game Webinar. Then watch Coach George’s webinar on what you can do about the impact of financial stress on your workforce. You don’t have to become LEED-certified, but you can certainly attempt to recycle paper and reduce waste. Encourage your employees to come up with suggestions about how you can make a greener company. It’s a “cool” thing for them to do.
8. Sometimes the greatest risk lives next door. If the Tucson tragedy taught us anything, it’s that mayhem can show up anyplace at any time.
How this applies to your business: Sometimes we’re so busy looking at the risks we face from the “outside” we forget that the greatest risks that lie closest to home. For example, most auto accidents occur within a one-mile radius of our home or business. The greatest risks we face in our business generally come from the inside as well: The sales manager who did such a bad job that sales were cut in half; the marketing executive that endorsed a risky campaign damaging our brand for years; the driver addicted to crystal-meth who drove head-on into that family. In the end, the greatest risk to you or your business is … you and your business!
9. Last, but not least, there’s been a change in our Zodiac signs! Millions of new-agers have been thrown into psychic turmoil. Think of all the wasted horoscopes. The horror of it all.
What can you do about this at work? Absolutely nothing but to sympathize with those folks who thought that it meant anything in the first place.
That’s my report of today’s news and how it affects your business.
Are Your Employees Worth What You’re Paying Them? Really?
In an interesting Freakonomics podcast, authors Levitt and Levine discuss whether expensive wines are worth the price. Their conclusion: They are not. Here’s an example of an interesting experiment. Participants were asked to rate two different wines. All they knew was that one was a $10 bottle and one was a $50 bottle of wine, when in fact it was the same $20 bottle. The participants overwhelmingly chose the $50 bottle as having the better taste. Interestingly, some participants asked the testers if it could, in fact, be the same bottle of wine. When told that they’d have to decide for themselves, most of them reached the “logical” conclusion that they had to be different wines because of their different pricing – so they rated the more expensive wine as better.
Here’s the point: We often value things more simply because we pay more for them. If this holds true for wine and cars and dates, then why wouldn’t it be true for employees? Employers have tried to finagle with compensation systems from Day 1. What’s the right mix of compensation to help generate the greatest return on investment of an employee or workforce? Because it’s a mistake to underpay or overpay employees, how do we decide just how much to? Here’s an easy three-part solution:
- Identify the market rate. What does the “average” employer pay for a certain level of employee? You can learn this by going to the statistics at BLS.gov, your state labor agencies, sites such as Salary.com, or your local employers’ group. You might also have industry-related associations and can hire some competitive intelligence to provide these rates. In my experience and opinion. To pay anything more than 25% above grade is essentially throwing away money. For example, in the fast food industry if $8.50 is the norm, it might make sense to pay $10.50, as In-N-Out Hamburger does in California, or the premium Costco pays its employees. However, it doesn’t make sense to pay even 1% above grade if it’s not going to buy you a more productive employee. Perhaps there are other ways to attract productive employees. You might be able to attract them by being the most outrageous or flexible or cutting-edge workforce.
- Think team bonuses. When I perform employee surveys at companies, I always ask whether employees prefer incentives based on individual performance, on that of a team, or of the entire company. Over the years, I’ve found that where there’s a great deal of trust, people prefer team-based incentives. If trust is low, they prefer individual incentives. Of course, we trust those people to whom we’re closet. As an owner, if I wanted to help generate trust, I would offer team-based incentives. As the saying goes, “A rising tide floats all boats.” I would recommend a bonus (say 10% of net profits) and then distribute it based on employee’s gross compensation. For example, if one employee makes $50,000 per year and one employee makes $25,000, the person making $50,000 gets twice the bonus. This is a simple formula that avoids a lot of wasted time and energy trying to finagle 2% here, 4% there, etc. If an employee displays outstanding performance, the chances are that they’re in line for a raise or promotion. This is how you manage going forward.
- Award people immediately on an individual basis when they go the extra mile. According to Barber’s 1001 Proverbs, “The greatest benefit is the one last remembered.” Don’t underestimate the power of: (a) rewarding what you want to reinforce, and (b) doing it immediately. These rewards need not be expensive; they’re as much about acknowledgment as they are about money. Of course, a little bit of cash helps too.
The Causes of Workers Compensation Retaliation Claims
I conducted an examination of California Labor Code, Section 132(a) Workers Compensation retaliation claims filed over many years. When filing a Section 132(a) claim, “in addition to establishing that the industrial injury has resulted in some detriment, the worker must also prove that he or she was singled out for disadvantageous treatment because of the injury.” This is typical of how other states handle Workers Comp retaliation claims. Some states allow workers to bring separate claims outside the comp system. Here’s a summary of these cases:
Conduct that will not result in a 132(a) verdict:
- Where there is truly no work available.
- Where the employee is unfit for duty because they will risk further injury or aggravation to an injury.
- Where there are safety issues related to the employee or third parties.
- Where there’s a business necessity (such as lack of funds or a change in company direction).
- If they were terminated for cause (and consistently with how others were treated in engaging in similar wrongdoing).
- If there’s a layoff or reduction in force.
What’s not OK:
- If there/s a change in pay, hours or duties without a business justification.
- Where they were “singled out” or otherwise treated “differently” than others.
- Where the company makes return-to-work or light-duty decisions without medical proof.
Note that ERISA often preempts benefit discrimination claims in this area.
The Indirect Cost of Accidents and Lawsuits
Risk management experts, safety experts, accountants, actuaries, and other professionals make the distinction between direct and indirect costs of accidents, lawsuits, and so forth. For example, the cost of turnover in the HR That Works Turnover Cost Calculator includes the direct costs (such as paying for a Help Wanted ad) and indirect costs (such not growing the business due to lack of manpower). Two of the most commonly insured employee risks are those for work-related injuries and employment practice claims. This means that the direct costs associated with a Work Comp injury are those related to medical expenses and expense reimbursement, which the Workers’ Compensation carrier usually pays.
We usually recommend that our clients pay the compensatory portion of the claim because if they don’t, the insurance company will pay it and then get their money back by increasing your experience modifier over the next three years. In a sense, they don’t pay these claims, they finance them. In addition to the increase in the experience modifier (MOD) and cost of future insurance, there are also indirect costs:
- Damage to property (building, tools, machinery, etc.)
- Emergency supplies, cost
- Possible media exposure/brand change
- Investigation time, claim management time
- Affect on employee morale
- Overtime, costs of replacing employee
- Increased experience modifier
- Damage to client relations if accident is “on site”
- Injury to third parties
- Additional legal fees
Of course, these ratios depend on the type of claim or injury, type of business, days lost from work, and so forth. When it comes to an employment practices claim, direct costs are for attorney fees, litigation costs and any settlement or verdict payout. The indirect costs include: Loss of employee morale, damaged customer and client relations, copycat claims, loss of knowledge base, training, and experience.
The risk management literature offers a wide range expert opinion on the range of direct to indirect costs. Only one out of seemingly dozens of surveys identifies indirect costs as lower than a 1:1 ratio to the direct costs. Some go as high as 20 times the direct costs (for example, when an expensive piece of machinery is destroyed in the process). Based on my personal experience and that of experts I agree with, we can safely assume at least a 1:1 ratio in most circumstances. For example, you might have to pay out $50,000 to settle the lawsuit, plus another $50,000 to replace the employee! Unfortunately, these indirect costs are often uninsurable, and in many cases dwarf the insurable costs in a given risk scenario. Interestingly, the indirect cost ratio has been diminishing as medical and legal expenses continue to soar.
These ratios also depend on such factors as:
- Type of claim/injury
- Type of business
- Claim value
- Days lost from work
- Legal jurisdiction
- Management response
Finally, check out the $afety Pays e-tool.
The ‘Going and Coming’ Rule
The theory of respondeat superior makes employers vicariously liable for wrongful acts committed by employees during the course and scope of their employment. However, the “going and coming” rule generally exempts employers from liability for wrongful acts committed by employees while on their way to and from work, because employees are said to be outside of the course and scope of employment during their daily commute. A well-known exception to the going-and-coming rule arises if the use of the car gives some incidental benefit to the employer. Thus, the key issue becomes whether the employer derives an incidental benefit from the employee’s use of the car. This has been referred to as the “required-vehicle” exception. The exception can apply if the use of a personally owned vehicle is either an express or implied condition of employment, or if the employee has agreed, expressly or implicitly, to make the vehicle available as an accommodation to the employer, and the employer has “reasonably come to rely upon its use and [to] expect the employee to make the vehicle available on a regular basis while still not requiring it as a condition of employment.”
For example, Section 401.011(12) of the Texas Labor Code, which codifies this general rule, states:
Course and scope of employment means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations. The term does not include:
(A) transportation to and from the place of employment unless:
- the transportation is furnished as a part of the contract of employment or is paid for by the employer;
- the means of the transportation are under the control of the employer; or
- the employee is directed in the employee’s employment to proceed from one place to another place; or
(B) travel by the employee in the furtherance of the affairs or business of the employer if the travel is also in furtherance of personal or private affairs of the employee unless:
- the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and
- the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel.
In insurance policies, the general definition describes coverage, and travel must meet both its components to be in the course and scope of employment. Subsections (A) and (B) are exclusions, each followed by exceptions. Subsection (A) has three, disjunctive exceptions; if any one is met, the exclusion does not apply, and travel to and from work is not excluded from the course and scope of employment. Subsection (B) has two, conjunctive exceptions and applies unless both are met. Subsection (B) is somewhat convoluted. More simply put, it does not exclude work-required travel from the course and scope of employment merely because the travel also furthers the employee’s personal interests that would not, alone, have caused him to make the trip.
A recent California case, Lobo v. Tamco, 182 Cal. App. 4th 297 (Cal. App. 4th Dist. 2010), interpreted this standard very broadly. Here are the facts of this case:
“Daniel Lobo, a San Bernardino County deputy sheriff, was killed on October 11, 2005, as the result of allegedly negligent operation of a motor vehicle by defendant’s employee Luis Duay Del Rosario, while acting in the course and scope of his employment by defendant Tamco. Del Rosario was leaving the premises of his employer, Tamco. As he drove his car out of the driveway and onto Arrow Highway, he failed to notice three motorcycle deputies approaching with lights and sirens activated. Deputy Lobo was unable to avoid colliding with Del Rosario’s car and suffered fatal injuries.
“Deputy Lobo’s widow, Jennifer Lobo, filed a wrongful death suit on behalf of herself and the Lobos’ minor daughter, Madison. Kiley and Kadie Lobo, minor daughters of Deputy Lobo, filed a separate wrongful death action through their guardian ad litem. Both suits alleged that Del Rosario was acting within the course and scope of his employment by Tamco at the time of the accident…..
“When Del Rosario left Tamco on the day of the accident, he was going home. However, if he had been asked to visit a customer site, he “would have gotten in [his] car and used [his] car to go to that facility,” just like on any other day. He kept boots, a helmet, and safety glasses in his car.
“This evidence is clearly sufficient to support the conclusion that Tamco requires Del Rosario to make his car available whenever it is necessary for him to visit customer sites, and that Tamco derives a benefit from the availability of Del Rosario’s car. Tamco, however, emphasizes that it was rare that Del Rosario visited customer facilities or jobsites, and contends that in all cases in which the “required-vehicle” exception to the going and coming rule has been found applicable, driving was an “integral” part of the employee’s job and that Del Rosario’s occasional use of his own car to visit customers is insufficient as a matter of law to invoke the exception.
“Tamco has not cited any case in which a court has addressed a contention that the employee’s use of his own car was too infrequent to warrant application of the exception and we have found none.”
Lesson learned: Realize that allowing employees to use their personal vehicles on company business can expose you to liability. Make sure that employees know the parameters and have good driving records, and make sure there is plenty of insurance to handle any possible claims.
Failure to Communicate Ruins Employee’s FMLA Claim
The Seventh Circuit Court of Appeals recently upheld the termination of an employee who sued, alleging FMLA interference and retaliation after termination for failure to contact his employer during a nine-day leave of absence to address a medical emergency involving his mother. In Righi v. SMC Corp. of America, a sales representative, while attending a mandatory training seminar, received word that his mother was experiencing a medical emergency. The employee left the training session and, despite informing a co-worker that he was leaving due to a family emergency, made no attempt to contact his supervisor. The next day, the employee sent his supervisor an e-mail stating that his mother, who was a diabetic, had slipped into a coma. After stating that he would need the next few days off to make arrangements for his mother’s care, he wrote: “I do have the vacation time, or I could apply for the Family Care Act, which I do not want to do at this time.” Upon receiving the e-mail, the supervisor repeatedly attempted without success to contact the employee by phone to inquire further about his need for leave.
Finally, after nine days of silence, the employee called his supervisor and was terminated the next day for violation of the employer’s leave policy, which provided that an unapproved absence of two or more consecutive days was grounds for termination. After the district court granted summary judgment on the employee’s claims of FMLA interference and retaliation, the employee appealed. The Seventh Circuit Court of Appeals held that the employee’s e-mail, in which he mentioned that his mother was in a diabetic coma, was sufficient to alert the employer that the employee might qualify for FMLA leave, and that the employer was obligated at that point to make further inquiry regarding the employee’s need for FMLA leave. The Court also found that the employer properly attempted to fulfill its obligation by making numerous calls to the employee and that the employee’s failure to respond to his employer’s calls caused his FMLA claims to fail. The employee was required under both the FMLA and his employer’s written policy, to contact his employer to let the employer know of the likely duration of his requested leave, which he failed to do.
Article courtesy of Worklaw® Network firm Shawe Rosenthal.
Form of the Month
Best Practices for Managing Confidential Client and Customer Information (PDF) - You don’t need to be a financial institution to develop these best practices.
(HR That Works Users can access this form in Word format by logging on to the site).
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On January 24, 2011, the United States Supreme Court unanimously held in Thompson v. North American Stainless, LP, that Title VII allows for “association retaliation” claims by individuals who have not themselves engaged in protected activity but are “associated” with someone who has. A cause of action for association retaliation has not been recognized previously, and this decision represents a fundamental change in the law.
FACTS OF THE CASE
Plaintiff Eric Thompson and his fiancée, Miriam Regalado, were employees of North American Stainless (NAS). In February 2003, the EEOC notified the employer that Regalado had filed a charge of discrimination alleging sex discrimination. Three weeks later, NAS fired Thompson. Thompson then filed a charge with the EEOC and, subsequently, a lawsuit, claiming that NAS fired him in order to retaliate against his fiancée. The trial court granted summary judgment in favor of NAS, concluding that Title VII does not permit third party retaliation claims. The Sixth Circuit affirmed that decision, and Thompson appealed to the U.S. Supreme Court.
THE COURT’S RULING
The Supreme Court held that Thompson can bring a cause of action for retaliation even though he was not the one who engaged in protected activity.
First, the Court held that NAS’s firing of Thompson constituted unlawful retaliation. Relying on the broad definition of retaliation set forth in Burlington N. & S. F. R. Co. v. White, the Court stated that a reasonable worker would be dissuaded from engaging in protected activity if she knew that her fiancée would be fired for her actions. The Court declined, however, to identify a fixed class of relationships for unlawful third-party retaliation claims and noted that “the significance of any given act of retaliation will often depend upon the particular circumstances.”
Then, the Court addressed the question of whether Thompson had a cause of action against NAS. Title VII provides that “a civil action may be brought . . . by the person claiming to be aggrieved.” The Court applied the common usage of the term “person aggrieved,” as interpreted in cases involving the Administrative Procedure Act. In those cases, the Court has held that a plaintiff may not sue unless he “falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” The Court concluded that Thompson fell within the zone of interests protected by Title VII because he was not an accidental victim of the retaliation; rather, injuring him was the employer’s intended means of harming the employee who filed the charge of discrimination.
Justice Ginsburg wrote a concurring opinion, joined by Justice Breyer, noting that the EEOC has a longstanding view that association retaliation is actionable under Title VII. Justice Kagan took no part in the decision.
Until this case, “association retaliation” was not recognized by the courts. This ruling opens the doors to additional claims of retaliation by employees who have not, themselves, engaged in any protected activity, but have some relationship to the an employee who has. Accordingly, employers should use caution when disciplining employees who are relatives, spouses, or even close friends of an employee who has exercised his or her rights under Title VII.
To read the case in it’s entirety go to http://www.supremecourt.gov/opinions/10pdf/09-291.pdf.
Article courtesy of Worklaw Network firm Shawe Rosenthal.
“Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man.” – Benjamin Franklin
This issue discusses:
- Editor’s Column: Big Time Liability for Small Company Harassers
- How Well is HR Doing?
- Three’s a Crowd, or Don’t Overload the Brain
- How Does Your State OSHA Plan Rate?
- Sexual Harassment and Young Workers
- Work is Hell
- Beware of FLSA Violations!
- Designing Your Office Environment
- OSHA Targets “Texting While Driving” on Company Business
- Future Risks
- Would You Be Prepared for an EEO Audit?
- Discrimination Claims Keep Coming
- Getting the Accommodation Right
- The Broad Scope of Retaliation
- Accommodation Ideas: Common Sense, Low Cost common Sense, Low Cost
- Career Ladders
- Tips on Communicating with Coworkers about Disability and Accommodations
We have also provided you with the Form of the Month.
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Editor’s Column: Big Time Liability for Small Company Harassers
In a case brought by the EEOC against the Fairbrook Medical Clinic, the plaintiff, Dr. Deborah Waechter, alleged four years of harassment by the sole owner of the family medical center in Hickory, NC. Apparently, the owner created a hostile work environment by routinely making vulgar and sexually explicit comments, repeatedly showing an X-ray of his torso; discussing his sex life, and telling Dr. Waechter’s patients that they could follow up with her when she “return[ed] from screwing.” There were also stupid comments about her breasts, and other rude behavior.
Interestingly, the company tried to defend itself by claiming that because the doctor was a jerk of a boss to all of his employees he didn’t discriminate against any of them.
However, most courts don’t buy this argument, especially if it involves gender-specific comments. The court held that even though the defendant was the plaintiff’s immediate supervisor and sole owner of the clinic, the HR manager and the office manager should have investigated the alleged misconduct. (In the real world, how can you punish your boss?)
My two cents: It’s important for business owners to understand that no matter the size of their company, they can face discrimination and sexual harassment claims at any time. Protect your business against any possible claim by making sure that you have EPL insurance.
On the other hand, I wonder why this professional woman continued to work in an environment where she was not treated properly for four years. The last time I looked, it was called work, not jail. Did she attempt to send out her resume during this time? Was she afraid that her skill set wasn’t good enough to get a job elsewhere? There’s a responsibility on her part, too.
A man once told me that his boss discriminated racially against him for three years. When I asked if he ever took his resume for a spin, he told me he had not. When I asked why he put up with the discriminatory conduct for as long as he did, he stated that “I didn’t want to leave the company because I loved playing on their softball team.” That’s how ridiculous some of these stories can get.
Click here to read the case.
How Well is HR Doing?
Measuring HR success isn’t easy. You can and should run your HR figures on the HR That Works Cost Calculator, a tool that will probably show the variance in your HR practices to be at least 10% of payroll. So, if you have $1 million in payroll, the variance will be at least $100,000. That’s one way of looking at HR dollars. Another approach is to determine “HR costs per employee.” These costs might include compensation, benefits, recruitment costs, outsourcing costs, as well as office space and equipment. Many companies will look at revenue per employee. Although this is certainly important, it also includes many variables that have nothing to do with HR effectiveness. For example, in a poor economy, revenue per employee will initially go down and then after cost-cutting, layoffs, etc., might well rise past previous levels. Consider what happened during the recent recession. Ultimately, the question remains, what information are you seeking and what will you to do with it? HR That Works members should review the Benchmarking Worksheet to generate some ideas.
Three’s a Crowd, or Don’t Overload the Brain
An article in the September/October 2010 Scientific American Mind discussed research that explains why multitasking doesn’t work. When test subjects had to deal with two activities, the brain divided the work between each hemisphere. The study explained this is precisely why people are notoriously poor at doing three or more things at a time. “After two tasks, we run out of hemispheres.”
How Does Your State OSHA Plan Rate?
OSHA conducts an annual evaluation of the 27 approved State Plan States each fiscal year. See how your state stacks up here.
A survey by Men’s Health magazine, asked 20 corporate bosses (including the likes of Mark Cuban, owner of the Dallas Mavericks) to rank which employee time-wasters upset them the most. Number one was “clicking out of a screen just as I walk by” (71.6%). When an employee did this to me, I chose not to confront him because I wanted to trust him. Stooopid! Turns out he was running his own business on my dime and failed to deposit required tax payments, which was part of his job. I should have addressed his actions immediately and placed monitoring software on his computer. Keeping employees honest is even harder when they’re on their iPhone or other smart-phone, rather than your computer. How can you monitor this? In fact, controlling today’s worker is a struggle you can’t and don’t want to “win.” The only alternative is to invite them into the conversation, set reasonable expectations, and create a culture of excellence in which employees police each other. Also, make sure that a third party is double-checking your books!
Sexual Harassment and Young Workers
We’re seeing more teenagers than ever reporting sexual harassment cases. In New York State, a telemarketing company had to pay more than $500,000 in damages and interest to satisfy a claim brought by 13 women, most of whom were teenagers. The managers made numerous sexual jokes and remarks and, on occasion, promised a raise in return for sexual acts.
Because the company was an “affiliate franchise,” the franchisor argued that the affiliate was not part of the company. The Second U.S. Court of Appeals rejected this argument and affirmed the jury verdict, including an award of punitive damages.
Lesson to learn: Have managers and employees trained in sexual harassment issues and make sure they know where and how to complain. You might go one step further and distribute the Employee Compliance Survey.
What’s more, franchisors that traditionally have stayed away from employee relations to avoid “co-employment” liability will have to offer their franchisees HR training. This is both a legal and a competitive issue.
Work is Hell
I’ve noticed a rash of victimization hitting center stage. Business Week recently ran a long article about workplace bullying. The Obama administration has become adept at finding workplace victims like never before. How is a business owner or manager supposed to deal with all of this? Don’t let employees play victim on you! Challenge them to participate and come up with solutions to known problems. Allow them to become directly responsible for what they can control. It’s hard to cause problems when you’re responsible for making things happen. Nobody has time for emotional nonsense at great companies.
Beware of FLSA Violations!
Have you audited your practices for these common wage and hour exposures?
- Exempt vs. non-exempt. Have you classified your exempt employees properly or are you risking an overtime exposure?
- Rest and meal period violations. Is the employee truly relieved from work and are your time-keeping clocks tracking meals accurately?
- Travel time. Many workers who start from their home and then go to multiple locations fall under “portal-to-portal laws.”
- 1099 misclassification. As indicated on the blog site, www.1099timebomb.com, this is a significant exposure. The IRS and state agencies are looking to find as many people as they can who are classified as employees.
- Failure to pay prevailing wage. If you’re working a government or quasi-government project, make sure you’re complying with all wage requirements.
Designing Your Office Environment
An article in the September/October 2010 Scientific American Mind discussed why some office spaces alienate office workers, while others make them happier and more efficient.
The bottom line: Let your employees have input in “decorating” their environment. According to survey responses, giving workers a say in the physical aspects of their workspace reduced the negative effects of noise and distractions. The article also warned employers that efforts at making “hangout rooms,” etc. will fail if you don’t include employees in designing these environments.
OSHA Targets “Texting While Driving” on Company Business
A recent OSHA press release advised companies that an employer who requires employees to text while driving or organizes work so that “texting is a practical necessity” are violating the Occupational Safety and Health Act. In its news release, OSHA further states that it will investigate complaints about these practices promptly and if it concludes that an employer has compelled employees to text while driving, issue citations and penalties to end the practice. OSHA explains that employers have the “responsibility and legal obligation to create and maintain a safe and healthful workplace” – and this includes having a clear, unequivocal, and enforced policy against the hazard of texting while driving. Companies are violating the Occupational Safety and Health Act if, by policy or practice, they require texting while driving, create incentives that encourage or condone this, or they structure work so that texting is a practical necessity for workers to carry out their job. Employers who have not already done so should set a policy on the use of electronic devices while driving and make sure employees understand that texting while driving is prohibited.
Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).
In a Business Week interview, Vinay Mistry of AON stated that the company’s management team covers more than 370 risks, from nanotechnology through climate change. They have designed and implemented realistic disaster scenarios for the top 20 exposures, from hurricanes to plane crashes and earthquakes.
The emerging risk areas discussed included synthetic biology, digital risk and cybercrime, “space risk,” which is based on the impact the solar cycle has on satellites, as well as the impact of climate change.
What can we learn from this? First, identify the dozens of risk exposures that apply to your company. Work with your insurance broker and legal counsel to make sure you do this the right way. Then focus on the most likely scenarios and have a plan for preventing and dealing with each of them. The risk exposures your company faces are both insurable and non-insurable and include, but are not limited to:
- IT systems and their ability to handle hurricanes, power outages, hacking attempts, etc.
- Employment Practice Liability exposures
- Errors and omissions exposures
- Health and safety exposures
- Work Comp exposures
- Product Liability
- Environmental liabilities
- Rapid loss of clientele
- Poor vendor or supplier relations
- Economic pressures, including diminished markets
- Exposure to competition, including offshore activity
- Financial exposures lacking proper checks and balances
- Lack of available capital
- Cyber-liability and social media exposures
- Turnover and morale problems
This is, of course, a short list that applies to most companies. If you’re an HR That Works member, take comfort in knowing that we can help you with your HR risks!
Would You Be Prepared for an EEO Audit?
Click here to see a typical request from an EEOC office when investigating a claim of discrimination. To what degree would you be able to comply with, or fear such a request? Just looking at the amount of information requested can make your head spin.
P.S. If you ever get such a request, contact your employment law attorney and insurance company immediately!
Discrimination Claims Keep Coming
An EEOC press release has announced an increase in discrimination claims in FY 2010. This comes as no surprise, given record unemployment rates, and the fact the commission invites more claims than ever and has expanded its jurisdiction. Here’s the point: Be prepared! Have the right policies and procedures, basic training for managers and rank and file, Employment Practices Liability Insurance (ask your broker about EPLI), and legal support when you need it. The HR That Works program provides all of these tools.
Getting the Accommodation Right
Dept. Fair Empl. & Hous. v. Avis Budget Group (Reed)
Complainant Eleanor Reed was a customer service representative for Avis Budget Group (Avis) at its San Francisco Airport location. In June 2006, she requested a reasonable accommodation of a six-hour shift for her mental disability (post-traumatic stress disorder). She previously had been granted the accommodation without any problems, and had succeeded in performing her essential functions with the accommodation. Avis decided to place her on unpaid leave and thereafter requested medical documentation. Reed provided the documentation requested, including the diagnosis, the reasons for the accommodation, and why it would allow her to perform the essential functions of the job. However, she refused to agree to a blanket release of her medical records, including several years of psychiatric records that detailed decades of sexual and other physical and mental domestic abuse, or to provide unfettered access to her treating psychiatrist.
Avis decided that the doctor’s documentation was inadequate, and requested that she provide the full medical records release and access to her doctor or submit to the company’s physician for evaluation. Avis did not engage with Reed about the purported inadequacies or give her an opportunity to augment the doctor’s information to support the request for accommodation. Approximately five months after placing Reed on unpaid leave, Avis finally obtained an independent medical opinion that agreed with the opinion of her doctor. Even though it provided no further information as to the reason for the accommodation, Avis finally accepted the opinion and agreed to grant an accommodation. However, it looked at its “seasonal” need and placed Reed on a severely reduced work schedule that removed her from eligibility to bump another employee with less seniority when Avis laid off four employees, including Reed, the following month.
The Fair Employment and Housing Commission ruled in favor of the Department and against Avis for unlawful inquiries about the employee’s disabilities, failure to engage in the interactive process, denial of reasonable accommodation, and failure to take all reasonable steps necessary to prevent discrimination. The Commission ordered an award of $89,863.70 ($14,863.70 in back pay and $50,000 in emotional distress damages to Reed; and $25,000 in an administrative fine to the General Fund), plus affirmative relief of postings and training for management personnel on reasonable accommodation.
Lessons to learn:
- Limit the medical information you request or receive to that which relates directly to the accommodation issue. Asking for anything more only invites problems.
- Never, ever, give up on the accommodation dialogue. Whoever quits first loses.
- Make sure not to “penalize” someone who has requested an accommodation.
- Realize that there is often “something else” going on with a person that’s none of your business! Focus on their productivity and disability, not the cause of their disability.
Click here to read the case.
The Broad Scope of Retaliation
In Smith v. Hy-Vee, Inc., Drew Smith brought sexual harassment and retaliation claims due to conduct caused by Sheri Lynch, a tech cake decorator, who engaged in rude, vulgar, and sexually charged behavior toward Smith, and apparently all the other employees. The court stated that since Lynch did not seem to be “sexually motivated” toward Smith or any of the other employees, but simply out of control with all of them, there was no sexual harassment. (Many courts or juries will conclude otherwise – see the “Editor’s Column” in this newsletter.) The issue in the case, however, was whether or not Smith had a reasonable belief that it was against the law and if the company retaliated against her because of her complaints. The court ruled that because she had to show the “good faith” nature of her belief, the facts from the underlying claim would be admissible at the retaliation trial. (What lawyers call having to “try a case within the case.”)
This case carries two lessons for employers:
- If the crazy facts in this case are even slightly true, how did an employee like Sheri Lynch stay employed at Hy-Vee? Smith stated she reported incidents of harassment to at least 12 different managers and co-workers, making 66 to 101 complaints to management. Interestingly, Hy-Vee denies Smith ever complained. The company claimed that there were a number of incidents in which Smith herself did not act appropriately or questioned the authority of supervisors. She was also written up for making mistakes in cake and bagel orders during her final weeks of employment.
- Although rude, vulgar, and obnoxious bosses might not end up generating a harassment or discrimination claim, they easily can trigger a legitimate retaliation case and expensive litigation. (Think about it — thousands of dollars in lawyers’ fees over cakes and bagels.) Remember that when employees bring these underlying complaints, they don’t have to use magic words like “harassment,” “discrimination,” or “retaliation” in order to trigger protection.
Accommodation Ideas: Common Sense, Low Cost
Here’s a list of inexpensive accommodation examples published by the Job Accommodation Network (JAN):
Situation: A production worker with mental retardation, who has limited fine motor dexterity, must use tweezers and a magnifying glass to perform the job. The worker had difficulty holding the tweezers.
Solution: Purchase giant tweezers. Cost: $5.
Situation: A teacher with bipolar disorder, who works in a home-based instruction program, experienced reduced concentration, short-term memory loss, and task sequencing problems.
Solution: At one of their weekly meetings, the employee and the supervisor jointly developed a checklist that showed activities for both the week’s work and the following. The company adapted forms so that they would be easy to complete, and developed structured steps so that paper work could be completed at the end of each teaching session. An unintended bonus to the company was the value of the weekly check-off forms in training new staff. Cost: $0.
Situation: A garage mechanic with epilepsy was unable to drive vehicles.
Solution: The employer negotiated with the employee’s union and reached an agreement that any qualified employee, regardless of job held, could drive the vehicles to the mechanic’s work station. Cost: $0.
Situation: An individual with a neck injury, who worked in a lab, had difficulty bending his neck to use the microscope.
Solution: Attach a periscope to the microscope. Cost: $2,400.
Situation: A catalog salesperson with a spinal cord injury had problems using the catalog, due to difficulty with finger dexterity.
Solution: The employer purchased a motorized catalog rack, controlled by a single switch via the mouth stick, and provided an angled computer keyboard stand for better accessibility. Cost: $1,500.
Situation: A field geologist who was deaf and worked alone in remote areas was unable to use two-way radio communication to report his findings.
Solution: The company installed text telephone technology which allowed the geologist to communicate using a cellular telephone. Cost: $400 plus monthly service fee for the phone.
Situation: A saw operator with a learning disability had difficulty measuring to the fraction of an inch.
Solution: The company gave the employee a wallet-sized card that listed the fractions on an enlarged picture of an inch. This allowed the employee to compare the card with the location on the ruler to identify the correct fraction. Cost: $5.
Situation: An accountant with HIV was experiencing sensitivity to fluorescent light, which kept her from seeing her computer screen or written materials clearly.
Solution: The employer lowered the wattage in overhead lights, provided task lighting and a computer screen glare guard. Cost: $80.
Situation: A custodian with poor vision was having difficulty seeing the carpeted area he was vacuuming.
Solution: The company mounted a fluorescent lighting system on his industrial vacuum cleaner. Cost: $240
Here’s the point: Accommodations don’t have to be expensive. Remember to engage in a true dialogue involving the employee, his or her physician, and any support you might need from the HR That Works hotline, Job Accommodation Network, or your own attorney.
According to a nationwide Gallup survey on the reasons for turnover, the second-leading reason for losing employees was lack of a career path (i.e., I’m OK today, but where’s my future in this job?). The DOL has done an excellent job of creating a tool that can create competency models for different careers, as well as supporting career ladders or lattices. You can use these resources (click here) for recruitment and hiring purposes as well as career planning. We also provide a number of career ladders created by the South Florida Manufacturers Association, which you can use as templates for any job. You’ll find them at the end of the hiring forms in HR That Works.
Tips on Communicating with Coworkers about Disability and Accommodations
The Americans with Disabilities Act (ADA) prohibits employers from telling coworkers anything about an employee’s disability, including the fact that an employee is receiving an accommodation. However, in some cases, the employee might want to educate coworkers voluntarily about the disability and accommodation, especially if their coworkers are going to notice the accommodation anyway. For example, if an employee with a disability is using a service dog at work, it might be useful to educate coworkers about service dogs. Or, suppose an employee has severe allergies and needs to avoid inadvertent exposure at work. Here are some general guidelines for employees with disabilities communicating information about their disability and accommodation to their fellow workers:
- Keep the conversation work related.
- Let coworkers know why you’re telling them about your disability.
- Don’t assume that they know anything about your disability; be prepared to provide general information if relevant.
- Let coworkers know what you need from them and why you need it.
- Explain to them what accommodations you’ll need and how they will help you perform your job.
- Be positive and open, but limit the information you provide to the amount that you’re comfortable sharing.
- Linda Carter Batiste, J.D., Principal Consultant, Job Accommodation Network (JAN)
Form of the Month
ADA Compliance Flowchart (PDF) – This tool helps identify the step-by-step process to follow when managing an ADA accommodation.
Click here to listen to this month’s newsletter podcast.
Reprints are welcome! All you have to do is include the following notation with reprinted material:
©2011 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.
“The things to do are: The things that need doing, that you see need to be done, and that no one else seems to see need to be done.”
- Buckminster (“Bucky”) Fuller, Inventor and futurist
This issue discusses:
- Editor’s Column: Faking It
- FMLA Clarification Ensures All Caregivers the Right to Family Leave
- Ex-Felons: What’s Their Story?
- Healthcare Reform Concerns
- Word of the Month: “Ethos”
- Privacy Rights in Personal E-mail
- Failure To Perform Eliminates Right to FMLA Leave
- Failure To Investigate Does Not Give Rise to Stand-Alone Retaliation Claim
- The NLRA and Federal Contractors
- Clamping Down on Credit Histories
We have also provided you with the Form of the Month
Please click here to access the newsletter in PDF format.
Editor’s Column: Faking It
I just listened to a great Freakonomics podcast, in which the authors discussed “faking it:” Everything from saying, “I’m sorry” to “I love you,” as well as “Yes, I’m happily married with kids and I play golf” in order to land a sales job. Of course, there’s a fine line between innocence and manipulation when we fake it. We figure that it’s OK to lie about family life because if it helps you to get the job, you know you’ll perform when you get there and then your employer will have no regrets. So what’s the harm? We say we’re sorry, even though we don’t mean it because we still want the other person to like us – and, in the end, we want to be able to like ourselves.
One of my favorite questions when I’m recruiting someone is, “What felt unfair to you in your last job?” This is where “faking it” meets the road. How we respond to this question provides a good measure of our integrity or personal culture. Will we always answer with 100% honesty? Really? Even if doing so could hurt you or someone else? Is brutal honesty always worth the price paid?
Of course, where to draw this line is never the same for two people. In large measure, it’s about having enough self-confidence to handle things in a way that would make you proud – to perhaps mitigate, but at the same time accept, any discomfort the honest answer might cause.
Unfortunately, there’s a lot of faking it in the workplace, caused by any of Maslow’s Hierarchy of Needs: Survival, security, belonging, ego gratification, and self-actualization. It’s easy to see how we might lie for survival purposes (“I really need this job”). However, it’s more difficult to justify faking it for self-actualization (“This little white lie might spur this person toward positive action”).
As the podcast noted, everybody fakes it. In the end, nobody is responsible for the consequences of our faking it except us. Even if the outcome is positive, it can put a dent in our soul, somehow cheapening the experience. The end, of course, does not always justify the means.
So what lesson can we learn? Create a work environment that diminishes the need for faking it. It’s about communicating expectations, ethics, vision, and the other variables that come in to play. In Four Arguments, Don Miguel Ruiz says that we need to be impeccable with our word – without exception. As a manager, we don’t BS people hoping we can gain their loyalty or productivity. On the other hand, if people aren’t performing on the job, we need to be honest about saying so, despite the fact that this might not feel fair to the other person. As employees, we can be honest about our commitment to an organization, our work ethic, and our long-term plans. We can make sure that we don’t place ourselves in situations or with companies where we can’t be honest.
One of the podcast authors asked what would happen if we had a “National No Faking It Day,” where people decided to be brutally honest for 24 hours. In response, the other authors predicted “a jump in the homicide rate.”
In the end, the authors thought that, in order to survive, we need to fake it. For example, it probably wouldn’t make sense for a manager to say exactly what’s on her mind at the moment she’s upset with someone she dislikes. We might not want to speak truthfully about how we feel about a client while they’re in front of us. Or we might not want to punch that guy in the nose – even if he deserves it.
Finally, bear in mind that we have been conditioned to believe that we should “fake it until we make it” by pretending that we like an unpleasant person or situation until we really do or the problem goes away.
FMLA Clarification Ensures All Caregivers the Right to Family Leave
All families, no matter what they look like, are protected by the Family and Medical Leave Act (FMLA). “Workplaces have changed over the last ten years and how we view families has evolved as well,” said DOL Secretary Solis. That message was solidified when the department announced this week that an employee who assumes the role of caregiving for a child is entitled family leave regardless of their legal or biological relationship to the child. This clarification of the law is a victory for many non-traditional families, including families in the lesbian, gay, bisexual, and transgender community, who have often been denied family leave. The FMLA allows workers to take up to 12 weeks of unpaid leave during any 12-month period to care for loved ones or themselves.
Ex-Felons: What’s Their Story?
In my workshops, I joke that it “only takes one felon to ruin a day.” This isn’t funny, especially if such a person has victimized you. Unfortunately, despite the recommendation that employers should do criminal background checks on all employees, most still don’t, either because they think that bad things only happen to other companies or they claim that they don’t have the time or money. This is a huge mistake. Remember, felons have sold drugs, defrauded, robbed, assaulted or killed people, embezzled, or engaged in many other criminal acts. I’m not saying that you should never hire ex-felons. I have some printing company clients who run their presses 24/7. Most of their third shift have criminal records. At least they know what type of person they’re dealing with!
Remember this too: If you use a temporary firm, recruiter, leased employee, etc. make sure that whoever provides you with this person has done their criminal background checks.
Consider using HR That Works partner www.globalhrresearch.com for your criminal background checks.
Healthcare Reform Concerns
In their recent Webinar on Healthcare Reform, attorneys Doug Seaton and Emily Ruhsam focus on nine key changes that take effect on January 1, 2011 (for calendar year health plans):
- Non-grandfathered plans must provide for certain internal appeals procedures (including an external review process).
- Non-grandfathered plans must cover certain preventative services (i.e., immunization and infant screenings) without cost sharing.
- Non-grandfathered, fully insured plans must undergo non-discrimination testing (currently a requirement for self-insured plans only). This is similar to the top-heavy discrimination testing for 401(k) plans.
- Plans that offer dependent coverage must offer coverage until age 26 (grandfathered plans must cover such dependents only if the dependent is not eligible for other employer-sponsored coverage).
- Prohibits pre-existing condition limitations for children under 19.
- Abolishes lifetime limits on minimum essential benefits.
- Prohibits “unreasonable” annual limits on minimum essential benefits.
- Prohibits recession (cancellation) of participants.
- Prohibits reimbursement of over-the-counter medications (without a physician prescription through a Health Flexible Spending Account, Health Reimbursement Account, Health Savings Account, or Archer Medical Savings Account).
HR That Works members can watch the Webinar and read the complete report on HR That Works.
Word of the Month: Ethos
The fundamental character or spirit of a culture; the underlying sentiment that informs the beliefs, customs, or practices of a group or society; dominant assumptions of a people or period.
What is the ethos of your company?
Privacy Rights in Personal E-Mail
In Stengart v. Loving Care, the New Jersey Supreme Court held that an employee had a reasonable expectation of privacy in e-mails she sent to her attorney via a personal, password protected e-mail account on a company computer. As part of her employment, Loving Care issued Ms. Stengart a laptop computer. Loving Care’s electronic communications policy stated that the company had a right to review and access all material kept on its electronic media systems at any time, with or without warning. The policy also allowed employees to use its servers and computers for occasional personal email or other use.
Ms. Stengart used her company-issued laptop computer to access her personal Yahoo! E-mail account and to correspond with an attorney regarding her allegations of harassment and discrimination by Loving Care. She eventually resigned her position and sued Loving Care. The company hired a computer specialist to retrieve files from Ms. Stengart’s laptop. The specialist found her correspondence with her attorney, which the laptop had automatically saved in a “cache” folder of temporary Internet files. Loving Care argued that Ms. Stengart’s e-mails were not privileged or confidential because she had no expectation of privacy in communications on its media systems.
The New Jersey Supreme Court disagreed, holding that Loving Care’s communications policy was too broad to encompass private, password protected e-mail communications, especially where the content was attorney-client communication. Loving Care’s failure to include personal, password protected e-mail in its electronic communications policy specifically, as well as its allowance of occasional personal use created a reasonable expectation of privacy. Although recognizing a company’s ability to enact policies that protect its assets, reputation, and productivity, and to ensure compliance with company policy, the court held that Loving Care had no legitimate purpose in reviewing the content of attorney-client communication.
Employer Tip: Although this is a “narrow” decision that applies only in New Jersey to communication with counsel, it sends a clear warning to all employers about diving too deeply into employee e-mails, etc. Employers should also heed a warning that they “specifically include personal, password protected e-mail in its electronic communications policy,” and beware of any “allowance of occasional personal use creating a reasonable expectation of privacy.”
Article courtesy of Pettit Kohn Ingrassia & Lutz.
Failure to Perform Eliminates Right to FMLA Leave
The U.S. Court of Appeals for the Eleventh Circuit (covering Alabama, Florida, and Georgia) has held that an employee does not have the absolute right to commence FMLA leave. In Krutzig v. Pulte Home Corp., the plaintiff, who at the time was on a performance improvement plan, requested FMLA so that she could have surgery on her foot. On the same day that the plaintiff requested leave, a customer filed a complaint with a company vice-president against the plaintiff. The next day, Pulte Home Corp. terminated the plaintiff, based on her failure to address the issues raised in her performance improvement plan and the complaint made by the customer. The plaintiff sued, claiming that her termination was in retaliation for taking FMLA leave and that her employer interfered with her right to take leave under the FMLA. However, the company vice-president who terminated the plaintiff testified that he was not aware that the plaintiff had requested leave at the time he made his decision. Based on these facts, the trial court granted summary judgment in favor of the employer and dismissed the plaintiff’s lawsuit.
The Court of Appeals affirmed the trial court’s decision, holding that “[a]s with the FMLA right to reinstatement, the FMLA right to non-interference with the commencement of leave is not absolute, and if dismissal would have occurred regardless of the request for FMLA, an employee may be dismissed, preventing her from exercising her right to leave or reinstatement.” The Eleventh Circuit joined the Sixth, Eighth, and Tenth Circuits in holding that “an employee who requests FMLA leave has no greater protection against her employment being terminated for reasons unrelated to an FMLA request than she did before submitting her request.”
Failure to Investigate Does Not Give Rise to Stand-Alone Retaliation Claim
The U.S. Court of Appeals for the Second Circuit (covering Connecticut, New York, and Vermont) has ruled that an employer’s deliberate failure to investigate a complaint of discrimination does not constitute a stand-alone act of retaliation. In Fincher v. Depository Trust and Cleaning Corp., the plaintiff alleged that she complained to a human resources manager about what she believed was racially biased treatment toward black employees in her department. The plaintiff claimed that the human resources manager told her that he was not going to open up an investigation of her claim of race discrimination. The plaintiff resigned and filed claims under federal, state, and local laws for retaliation.
The Court of Appeals affirmed summary judgment in favor of the employer, finding that the employer’s alleged failure to investigate discrimination was not in itself a “materially adverse action” which could subject the employer to retaliation liability. The court noted that under the seminal case Burlington N. & Santa Fe Ry. Co. v. White, “a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The court held that an employee’s knowledge that her employer has declined to investigate her complaint does not ordinarily constitute a threat of further harm.
The NLRA and Federal Contractors
The U.S. Department of Labor (DOL) has issued a final rule that requires federal contractors and subcontractors to post a notice advising employees of their rights under the National Labor Relations Act (NLRA), the primary law governing relations between unions and employers in the private sector. This notice advises employees of their rights under the NLRA to form, join and assist a union, and to bargain collectively with their employer. It also lists examples of illegal conduct by employers and unions, and provides contact information to the National Labor Relations Board. Federal contractors and subcontractors must post the prescribed notice conspicuously in plants and offices where employees covered by the NLRA perform contract-related activity, including all places where notices to employees are customarily posted, both physically and electronically. Employers that fail to comply with these notice requirements may be subject to sanctions, including suspension or cancellation of the contract and debarring them from future federal contracts. For more information and to obtain copies of the prescribed notice, visit the DOL Web site.
Above articles courtesy of Worklaw® Network firm Shawe Rosenthal.
Clamping Down On Credit Histories
For many years, we’ve recommended that employers conduct credit histories on all job applicants and post-hire in specific categories. The fact is, someone with a poor credit history is a greater risk than someone who has a good record. However, to protect workers impacted by the recession, Oregon, Washington, and other states have begun passing laws that narrow the scope of these inquiries. The EEOC is also raising numerous concerns in this area. The Oregon statute limits the inquiry to cases in which a person’s credit is “substantially job-related,” which is defined as:
- An essential function of the position at issue requires access to financial information not customarily provided in a retail transaction that is not a loan or extension of credit. Financial information customarily provided in a retail transaction includes information related to the exchange of cash, checks, and credit or debit card numbers.
- The position at issue is one for which an employer is required to obtain credit history as a condition of obtaining insurance or a surety or fidelity bond.
Click here to see the Oregon statute.
Here’s what the EEOC says:
“Pre-Employment Inquiries and Credit Rating or Economic Status
“Inquiry into an applicant’s current or past assets, liabilities, or credit rating, including bankruptcy or garnishment, refusal or cancellation of bonding, car ownership, rental or ownership of a house, length of residence at an address, charge accounts, furniture ownership, or bank accounts generally should be avoided because they tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the particular job in question.”
Here’s a suit filed by the EEOC. Since at least 2001, the EEOC said, Freeman has rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions. The EEOC lawsuit charged that this practice has an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity.
Click here to see the FTC site on credit rating.
The Bottom Line: Asking for credit backgrounds poses risks for employee and employer alike. Make sure that you work with a company such as www.globalhrresearch.com that helps keep you abreast of the rapidly changing legal requirements in this area.
“Son or Daughter” Defined for FMLA Enforcement
On June 22, the U.S. Department of Labor issued an interpretation letter (No. 2010-3) clarifying the definition of “son or daughter” under the Family and Medical Leave Act (“FMLA”), as it relates to whether leave may be taken by employees raising children “in loco parentis” (where they lack a biological or legal relationship to a child). In determining whether an employee is eligible for FMLA leave, the interpretation provides that “the employer may require the employee to provide reasonable documentation or statement of family relationship. A simple statement asserting that the requisite family relationship exists is all that is needed in situations such as in loco parentis where there is no legal or biological relationship.” The letter also states that “regulations do not require an employee who intends to assume the responsibilities of a parent to establish that he or she provides both day-to-day care and financial support in order to be found to stand in loco parentis to a child.”
The letter specifically mentions its application to unmarried partners and same-sex partners, and adds that the fact that a child has a biological parent at home or has both a mother and a father does not prevent a finding that the employee with a non-biological relationship is eligible for FMLA leave.
To read the Opinion Letter go to http://www.dol.gov/whd/opinion/adminIntrprtn/FMLA/2010/FMLAAI2010_3.pdf.
Form of the Month
Education Reimbursement Agreement (PDF)
Training is the lifeblood of many companies today; everything from extensive on-boarding to paying for expensive MBA programs. To protect from an employee getting educated and then immediately leaving, many companies use a Reimbursement Agreement such as this one. One caveat: Make sure that your state law and contract allows you to offset any monies owed from a final paycheck. Some states, such as California, do not allow a “self-help” remedy. You would have to go to court to enforce the terms of the contract.
(HR That Works Users can access this form in Word format by logging on to the site).
Please click here to listen to the July Compliance and Culture Podcast.
“Happiness [at work] pays, especially when you are under pressure. It’s a valuable resource, which not only generates career success, but differentiates you from your colleagues, too.”
- Jessica Pryce-Jones
Author, Happiness at Work
This issue discusses:
- Editor’s Column: What I’m Looking for in Great HR
- The Importance of Job Descriptions
- Got an Opinion?
- FMLA and Your Personal Exposure as a Manager
- Harassment from the Get-Go
- Retaliation and Mixed Motives
- ADA – Side Effects of Medication
- Alcoholism No Excuse for Poor Attendance
We have also provided you with the Form of the Month
Please click here to view the newsletter in PDF format.
Editor’s Column: What I’m Looking for in Great Human Resources
I’m in a unique situation: I’m an experienced employment lawyer and an expert in HR practices. I’ve had the opportunity to give more than 250 presentations to CEOs through the Vistage organization. I also ran a monthly forum for senior HR executives for four years. In this mastermind group, all members had to be SPHRs (a high-end HR designation) make more than $80,000, and report directly to their CEO for at least seven years. So, given my expert background of knowing the law, the needs of business owners, and the human resource function, what am I looking for in great HR?
To begin with, I want somebody who’s excited about the job – who wants to be really good, if not great at it. Someone who’s willing to give it their best every day and not settle for mediocrity. In many organizations, the person in the HR role doesn’t have a formal HR background. The CFO, bookkeeper, or owner might be managing the basic HR functions such as payroll and benefits administration. As companies grow toward the 100-employee range, they start bringing on full-time HR executives. I know companies with 25 employees that have a full-time HR executive, and I know companies with 300 employees that still don’t have one! Regardless of whether the HR person wears three hats or one, I also want them to think and act strategically.
To be strategic, the HR manager should follow these guidelines:
Be clear about ownership’s vision and goals for the organization. In turn, HR will work on those aspects of human resources that will help grow the company toward this vision or goal. Let me give an example: Perhaps cash is tight. There’s no forecast for hiring new personnel, at least for some time. Ownership is more concerned about survival than anything else. The main focus then becomes: How can we help our existing workforce become more productive and grow the bottom line? If survival is the primary concern of management, this has to be the primary concern of the human resource executive, too.
On the other hand, perhaps your company is in growth mode – with management focused on bringing on people in the right seat of the bus as quickly as possible to service growing demand. If that’s the case, then the HR executive has to focus itself on doing the best possible job of hiring. Quickly.
Focus on constant improvement. On average, the most educated HR executive is the best HR executive. So, the question becomes: How much time do you spend studying the HR function? If you’re doing HR full time, 50% of your educational efforts should be in this area. If you’re doing it a third of the time, then maybe 15% of your learning has to be in this area. So, while I might be preaching to the choir, how many of you read this entire newsletter every month? How many of you attend our excellent monthly Webinars? How many of the Special Reports and White Papers on HR That Works have you taken the time to read? All of the tools necessary to be a learned HR executive are readily available on HR That Works.
Learning requires discipline. I’ve disciplined myself to read a book a week, review every case that comes out in the employment law field, read the newsletters and blogs of eight different employment law firms, and read a number of HR magazines every month. I do HR full time – and that’s what someone who wants to become an expert has to do. To get this volume of reading done, I discipline myself to do it for an hour a night. It’s something I look forward to, realizing that, not only do I enjoy learning, but it will have a bottom line impact on my career. The most successful executives I’ve met over the years are voracious learners. That’s exactly what I want my HR executive to be.
Become proactive. In my experience, most HR functions are “reactive:” We need to do payroll, hire and terminate employees, issue a COBRA notice, etc. Proactively, we should be engaging in compliance, communication, and skills training, surveying, auditing, and similar activities that will help to strengthen and grow the department and company over time. How many proactive projects has your HR department done during the last year? My mantra is simple: Start with one proactive item a month – not something you “have” to do, but something you “should” do to help improve the company.
If you face any challenges in meeting these goals, don’t hesitate to contact me. Because I usually spend my time on hotline calls dealing with negative scenarios, I enjoy helping our Members create positive outcomes for their company and careers. Got a bright idea? Want to get your head checked? Then give me a call at (800) 234-3304, toll free.
The Importance of Job Descriptions
A recent case brought against Friendly’s Ice Cream in Maine shows the importance of having detailed job descriptions that include physical requirements.
In this case, plaintiff Katherine Richardson alleged that Friendly’s violated the ADA by failing to accommodate her shoulder impingement injury, which required her to undergo surgery. Apparently, she never fully recovered from the injury, which limited her ability to do some manual tasks. Even though Richardson was in a management position, she was expected to chip in and help with everything from doing the fries to cleaning up. Because she was limited in her ability to do these jobs, as the court stated, “Even assuming it is true Richardson’s ‘primary function’ was to oversee restaurant operations, the point does not advance Richardson’s case. The essential functions of the position are not limited to the ‘primary functions’ of the position.”
The court pointed to evidence showing “there were a limited number of employees among whom the performance of the manual tasks at the restaurant could be distributed … This evidence supports findings that these tasks were essential to Richardson’s position.” The court quoted an EEOC guideline, “If an employer has a relatively small number of available employees for the volume of work to be done, it may be necessary that each employee perform a multitude of different functions. Therefore, the performance of those functions by each employee becomes more critical and the options for reorganizing the work become more limited.”
In the end, Richardson’s case failed because even with modifications to her work, she remained unable to perform a number of tasks, including mopping the floor, lifting heavy trash bags, scooping ice cream, and unloading supplies from delivery trucks. This left her unable to perform a substantial number of manual restaurant tasks and therefore, her case failed. The court also stated that, “The law does not require an employer to accommodate a disability by foregoing an essential function of the position or by reallocating essential functions to make other workers’ jobs more onerous.”
Richardson also argued that Friendly’s violated the ADA by refusing to engage in an interactive process to determine whether any reasonable accommodations were available. This argument failed too because Richardson was not able to identify any such accommodation that would qualify. The two accommodations she did identify —performing tasks in a modified manner and delegating tasks to others — were inadequate to enable her to perform a sufficiently broad range of manual tasks.
Lesson learned: This is an insightful case, which you should consider reviewing in its entirety. It reviews the battle of job descriptions and accommodations in a way that provides many helpful hints to employers. Read the full case here. You can also access free job descriptions that have some physical requirements here.
The DOL has plenty of them, and they can offer great guidance for employers. To learn more, click here. Note: The Bulletins and Field Operations Handbook at the bottom of this link are also very helpful!
The U.S. District Court for the Eastern District of Pennsylvania has green-lighted an employee’s FMLA claims against a company president, human resources manager, director, and the plant manager. In Narodetsky v. Cardone Industries, Inc., the company terminated a 12-year employee shortly after he requested FMLA leave for surgery to repair a leg injury. The day after learning that the employee needed leave, the company decided to conduct a forensic computer search of his computer and found a pornographic e-mail that he had allegedly forwarded to another employee more than a year earlier. After the company terminated the employee, he sued not only Cardone Industries but also the company president and several individual managers, alleging that they had violated the FMLA. The FMLA defines “employer” as “any person who acts, directly or indirectly, in the interest of an employer,” and FMLA regulations explain that individuals such as corporate officers can be found individually liable for any violations of the act. Thus, the Court concluded that the individual defendants were properly named in the lawsuit because each one was alleged to have played a role in the decision to terminate the plaintiff.
Harassment from the Get-Go
The Federal Fourth Circuit Court has ruled that a plaintiff could proceed to trial on her claim of sexual harassment and constructive discharge after she had worked with the alleged harasser for only two days. Whitten v. Fred’s, Inc. involved an employee transferred to the Fred’s store in Belton, SC, where she worked as an assistant manager for two days. During those two days, the store manager made it clear he was unhappy that the plaintiff had been transferred to his store, repeatedly called her dumb and stupid, and told her he didn’t want her working in his store. He also told her to “be good to [him] and give [him] what [he] wanted,” adding that he would make her life a “living hell” if she ever took work matters over his head. On two occasions, he walked behind her and pressed his genitals against her back. Two days after she started this assignment (on a Sunday), the plaintiff told three company officials about the conduct and said she was going to quit. However, she got nowhere, with one manager telling her she had overreacted. She quit that day and reported the matter to the company’s corporate office the following day. The company investigated but took no action. Although the district court granted the employer’s motion for summary judgment, the Court of Appeals reversed, ruling that the plaintiff had a prima facie case of sex harassment, including her claim for constructive discharge, and remanded the case for trial.
The Federal Fifth Circuit Court has held that a plaintiff could use a “mixed motive” theory in a retaliation case under Title VII. In Smith v. Xerox, the employee won a jury verdict against the company for her claim that she was fired for filing an EEOC charge. The employee was disciplined for her failure to meet sales goals and placed on a performance improvement plan. Before the time under the plan expired, she filed a charge of discrimination. The company began the process of termination seven days later. At trial, the jury was given a mixed motives instruction, and found that the company was motivated to terminate her in part by the EEOC charge. The jury awarded the plaintiff both compensatory and punitive damages. On appeal, the Fifth Circuit, relying on the U.S. Supreme Court’s Price Waterhouse v. Hopkins, reasoned that the mixed motive instruction was proper. A plaintiff can show that an adverse action was “because of” an impermissible factor by showing that factor to be a “motivating” or “substantial” factor in the employer’s decision. In this instance, the plaintiff met her burden of proof, and it was the company’s burden to show that it would have taken the same action even if she had not filed a charge. Xerox did not meet its burden.
The Federal Third Circuit Court has held that limitations on life activities caused solely by the side effects of medication do not give rise to a disability claim under the ADA. In Sulima v. Tobyhana Army Depot, the plaintiff claimed that he was forced to accept a voluntary layoff because his employer did not accommodate the side effects of medications he was taking to treat obesity and sleep apnea. The district court ruled that medication side effects may, under certain conditions, constitute a disabling condition under the ADA, but that the side effects experienced by the plaintiff did not rise to that level. The Circuit Court agreed. The plaintiff, who was morbidly obese and suffered from sleep apnea, was taking several medications related to those issues at the time of his layoff. The medication caused the plaintiff to need to use the restroom frequently for extended periods. The employer decided to transfer him, but had no other work available at the time. The plaintiff accepted the voluntary layoff in advance of layoffs scheduled for the following month. He did not present any evidence that his obesity or sleep apnea directly and substantially limited a life activity, and instead focused on the side effects of the medication. To prevail under this theory the plaintiff needed to show that: (1) the treatment is required “in the prudent opinion of the medical profession;” (2) the treatment is not just an “attractive option;” and (3) that the treatment is not required solely in anticipation of an impairment resulting from the plaintiff’s voluntary choices. The plaintiff could not meet this test because his doctor had discontinued the medications, thus refuting part (1) of the test that the treatment be required “in the prudent opinion of the medical profession.”
Article courtesy of Worklaw® Network firm Shawe Rosenthal (http://www.shawe.com/).
Managers must often deal with an employee who is chronically absent, and claims that a disability is the cause of the absenteeism. The U.S. Court of Appeals for the Second Circuit (covering Connecticut, New York, and Vermont) addressed this issue with regard to an alcoholic employee. The Court held that the employee’s repeated absence from work meant that he was not qualified for the job, and that his termination had no relation to his FMLA-protected leave.
Facts of the Case: In Vandenbroek v. PSEG Power, the company fired a boiler utility operator after he violated the employer’s no-call/no show policy. His termination came shortly after he had taken FMLA-protected leave, allegedly to deal with his alcoholism. The employee sued the company, claiming that he was terminated because of a disability (alcoholism) and for taking medical leave to treat the condition.
The Court’s Ruling: The Court upheld the district court finding that the employee was terminated for violating the employer’s attendance policy, and not because of his disability or for taking FMLA-protected leave. The Court, noting that alcoholism could constitute a disability because the employee was substantially limited in his ability to work, found that the employee failed to adduce sufficient evidence to make out a prima facie case under the ADA. To do so, he would have had to show that he was “qualified” to perform the essential functions of the job with or without reasonable accommodation. “Essential functions” are duties that are fundamental to the job in question. In this case, the Court determined that reliable attendance at scheduled shifts was an essential function of a boiler utility operator. The employee had to be present at the plant to monitor the boiler, respond to any alarms, handle any power outage, or (if needed) respond to an explosion. With regard to the employee’s FMLA claim, the employee failed to show that he was terminated for taking FMLA-protected leave. There was no evidence of pretext; rather, the evidence showed that his violation of the no-call/no show policy led to his termination.
Lessons Learned: Most employers would agree that reliable attendance is an essential function of all jobs. While the Vandenbroek case provides a clear example of this principle, other instances might not be so clear. When alcoholism or another disability causes an attendance problem, employers must be able to show that regular and reliable attendance is an essential function for the specific position. One way of doing this is to have clear and detailed written job descriptions that describe the essential functions of the position, including regular and reliable attendance.
Article courtesy of Worklaw® Network firm Shawe Rosenthal.
Violence Policy (PDF) – According to numerous polls, violence in the workplace is one of the top risk management concerns. Consider using this policy from OSHA as part of your prevention program. Click here for more information.
(HR That Works Users can access this form in Word format by logging on to the site).
Please click here to listen to the June Compliance and Culture 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.