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Archive for the ‘Employer-employee relations’ Category

What Can They Say?

10 May

I think one area of law that is particularly confusing to employers and employees alike is that of free speech in the workplace. Almost everyone is aware that the First Amendment provides certain protections for speech. For the record, the First Amendment prohibits the government from abridging the freedom of speech. Therefore, the First Amendment does not apply to speech in a private-sector workplace. Of course, that does not mean that certain speech in the private-sector workplace is not protected, nor does it mean that a private-sector employee can anything they would like without consequence. The answer lies somewhere in between.

The National Labor Relations Act has long provided protection to employees to discuss wages, hours and working conditions. Recently the NLRB has extended that protection to discussions on social media sites like Facebook or Twitter. For example, the NLRB has found violations of the NLRA where an employee was fired for criticizing his or her boss on Facebook.

However, the NLRB’s protection does not necessarily extend to an employee posting a rant on his or her social media page, or making derogatory comments about customers on their own. The NLRB, so far, has only protected activity where two or more employees were discussing the workplace. Employee comments on social media that are mere complaints about or general dissatisfaction with the job would not be protected.

Another example of unprotected speech occurred when an employee listed his occupation on LinkedIn as “f*cktard.” Clearly, the employee was not engaging in any discussion of workplace, so he was not under the NLRA’s protection. The NLRA will also not protect patently untrue, egregiously disloyal, threatening or harassing speech.

The NLRB has also made it clear that it will be closely reviewing social media policies for violations of the NLRA. The NLRB indicated that employers should not draft broad social media policies that could prohibit, discourage or chill discussions about wages, hours or working conditions. An appropriate social media policy will specifically discuss the conduct prohibited (e.g. do not discuss trade secrets), specifically inform the employees that they retain their rights under the NLRA and should not use vague terms like “appropriate” or “professional” without providing clear definitions.

The NLRB has a great deal to say about employee conduct and social media policies (which I plant to discuss in a future post), and any social media policy should be discussed with legal counsel before implementation.

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Posted in Employee Handbook, Employer-employee relations, NLRB, Social Media

 

Termination Time

23 Apr

No matter what, the time will come where you need to terminate an employee. The reason is generally immaterial, unless it is illegal or discriminatory, whether it is performance-related or simply a bad cultural fit, not every employee you hire will work out. The most important, and most often asked, question is: what do I need to do to fire this person?

Documentation is very important, and should begin when an employee is hired. Every employee should have a personnel file, and in that file you should document any warnings, discipline or efforts to improve employee performance. While many states have at will employment, it is still beneficial to have documentation of the reasons for the termination, preferably in advance. However, if your recordkeeping is lax, you should create a document outlining all of the incidents, problems and issues with the employee in as much detail as you can recall prior to termination.

Reviewing the employee’s personnel file prior to termination can also reveal some important details. For example, if the employee has filed sexual harassment complaints, filed a claim with OSHA or informed you of impending FMLA leave, you could face a claim for retaliation. Without a clear history of misconduct, your chances of prevailing in a retaliation lawsuit are much less likely.

As I have previously discussed, it is very helpful to have an employee handbook that clearly sets forth your policies. Particularly when the terminated employee is a member of a protected class, you are much more likely to prevail in a wrongful termination suit if you can show clearly written policies that the employee violated, rather than an informal set of unwritten rules.

You should always be truthful with the terminated employee regarding the reasons for termination, but avoid going into more detail than required. While providing a false reason for termination may seem to spare the terminated employee’s feelings, it can create significant issues if he or she files a lawsuit. A false reason for termination will likely be found out, and then your credibility will take an irreversible hit in the eyes of the jury.

Lastly, before informing the employee of the termination, you should have a plan in place regarding the employee’s access to the company computer system and other sensitive information. It is advisable to inform the IT department to revoke the employee’s access to the company computer system once the termination meeting is underway. Preventing access will prevent both the infamous angry departure email to the whole company and ensure that sensitive data is not transferred without your knowledge. Whether or not you realize it, your business may have trade secrets that a terminated employee could use against you. During the meeting you should also request the employee return any company equipment, keys, keycards and any other company property.

Each and every termination is unique, and retaining legal counsel to provide advice regarding terminations will help avoid many pitfalls, particularly with members of protected classes. Legal counsel can also help draft a termination letter, if you wish to utilize one, and a separation agreement, which can provide the employee financial support for a period of time after termination in return for releasing you from any liability.

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Posted in Employee Handbook, Employer Policies, Employer-employee relations

 

Anatomy of a Wage and Hour Complaint

20 Apr

When an employee believes that he or she has not been properly paid the minimum wage or overtime they may file a complaint for back wages under the Fair Labor Standards Act with the Department of Labor. The federal government set the minimum wage at $7.25 per hour. And when an employee works more than 40 hours in a week, he or she must be paid at a rate of 1 ½ times the regular rate of pay.

However, it is important to note that not all employees are subject to the wage and hour rules of the FLSA. The FLSA only applies to non-exempt employees. The FLSA exempts an employer from both minimum wage and overtime pay for certain categories of employees (executive, administrative, professional, computer and outside sales). In order to qualify for the exemption, the employee must meet certain requirements set forth by the FLSA and make a salary greater than $455 per week.

An employee exempted as a bona fide executive must primarily manage the enterprise or at least a department or subdivision of the enterprise, supervise and direct at least 2 or more full-time employees, and have the authority to hire and fire employees (or have their recommendations as to hiring and firing be given particular weight).

T o qualify for the administrative exemption the employee’s primary duty must be performing office or other non-manual work related to the management or business operations of the enterprise, and the employee must be allowed to utilize discretion and independent judgment with regard to significant work-related matters.

The FLSA recognizes two types of professional employees subject to the exemption. A learned professional must perform work requiring advanced knowledge in the field of science or learning which is acquired by attending a prolonged educational instruction. A creative professional must perform work requiring invention, imagination, originality or talent in a recognized filed of artistic or creative endeavor.

In addition, any employee who performs office or non-manual work and is paid total annual compensation of $100,000 or more is exempt if they regularly perform at least one of the duties of an exempt executive, administrative or professional employee.

A computer employee will be exempt if he or she is employed as a skilled worker in the computer field performing the application of systems analysis techniques and procedures or designing, analyzing, creating, documenting, modifying or testing computer systems, machine operating systems or programs.

The outside sales exemption requires the employee’s primary duty to be making sales or obtaining contracts or orders for services and the employee must be customarily and regularly working away from the employer’s place of business.

Once a complaint is filed with the DOL, the staff will review the complaint to determine if the employee was a non-exempt employee performing work covered by the FLSA and whether they were not properly paid in violation of the FLSA. If the DOL finds a reasonable belief that a potential violation occurred, an investigation of the employer will be conducted. In the event that the DOL is unable to find a violation, or if they cannot secure the back wages, the employee may then bring a lawsuit in federal court.

Once you have been notified of a wage and hour complaint, your first action should be alerting or securing legal counsel. Wage and hour lawsuits are often conducted collectively, allowing a number of employees to bring a suit together, which makes it easier for employees to bring the suit and can lead to a larger award of back pay overall. If legal counsel is brought in early, counsel can evaluate the employees’ claims and determine if settlement is your best option, particularly if settling will reduce costs and publicity.

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Posted in Anatomy Lessons, Department of Labor, Employer-employee relations

 

Anatomy of an EEOC Charge

11 Apr

When an employee believes he or she has been discriminated against at work because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information under a number of federal laws, they can file a Charge of Discrimination with the Equal Employment Opportunity Commission. All of the laws enforced by the EEOC, except the Equal Pay Act, require an employee to file a charge before filing a job discrimination lawsuit.

The employee must bring the charge within 180 days from the day the discrimination took place, or within 300 days if a state or local agency enforces a law that prohibits employment discrimination on the same basis. With allegations of age discrimination, the filing deadline only extends to 300 days if there is a state agency enforcing the law. The filing deadline applies to each incident of alleged discrimination, unless continuing harassment is alleged, in which case the employee must file within 180 or 300 days of the last incident of harassment.

Once the employee files the charge with the EEOC, you will receive a notice and copy of the charge within 10 days. At this point, it is advisable to retain legal counsel to represent you. Make sure that you, and any other employees, do not take any adverse action against the employee filing the charge, as retaliation can lead to additional liability. The EEOC will encourage you and the employee to attend a mediation session, where a mediator will try to help you reach a voluntary statement.

If mediation is not used or is unsuccessful, then the EEOC will investigate the employee’s allegations. The length of the investigation depends on the allegations and the amount of information needed. Depending on the charge, the EEOC may visit you in order to interview employees and gather documents. If you refuse to cooperate (which is not recommended), the EEOC can obtain a subpoena to require you to provide access to company property, obtain documents and compel testimony.

After the investigation is completed, if the EEOC finds a violation, it will attempt to reach a voluntary settlement with you. In the event that the settlement negotiations are unsuccessful, the agency will refer the case to its legal staff to file a lawsuit. The EEOC has limited resources, and only tends to file lawsuits in very serious cases. If the EEOC’s legal staff decides not to file a lawsuit or if the EEOC does not found a violation, it will send the employee a Notice-of-Right-to-Sue, which gives permission to file a lawsuit on their own. Once the employee receives a Notice-of-Right-to-Sue, they will have 90 days to file a lawsuit, which will begin the normal civil litigation process.

Where a violation is found, the employee may be entitled to reinstatement, promotion or back pay, and you will be required to remedy the discriminatory practices and take steps to prevent discrimination in the future. Employees are also eligible to recover attorney’s fees, expert witness fees and court costs. However, there are limits on the compensatory and punitive damages that an employee may recover depending on the size of your business:

  • 15-100 employees = $50,000
  • 101-200 employees = $100,000
  • 201-500 employees = $200,000
  • More than 500 employees = $300,000

And for intentional age discrimination or intentional sex-based wage discrimination, while compensatory and punitive damages are not available, the employee may be entitled to liquidated damages equal to the amount of back pay awarded.

The most important thing to remember is to seek legal counsel as soon as you receive the EEOC Charge. You may be able to have the charge dismissed quickly with an attorney’s assistance, which can discourage an employee (and more importantly the employee’s potential attorney) from filing a lawsuit in court.

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Posted in Anatomy Lessons, Department of Labor, Employer-employee relations

 

Got Trade Secrets?

09 Apr

Whether you realize it or not, there’s a good chance that your business has trade secrets that are protected under the law. The Uniform Trade Secrets Act, adopted by the majority of states, defines a trade secret as information, including a formula, drawing, pattern, compilation including customer list, program, device, method, technique or process which derives independent economic value from not being generally known or available, and is subject to reasonable efforts to maintain its secrecy. Essentially, the information is considered a trade secret if it provides competitive value to its owner and the owner takes substantial steps to keep it secret.

While most businesses do not possess trade secrets on the same level as the formula for Coke, it is still fairly common for most to possess trade secrets in some form or another. If your business has customer lists, a special method for performing a task or process for making a product, you could have a trade secret. Of course, for information to be considered a trade secret, the business must treat it as such.

Generally, the first step in protecting trade secrets is including a confidentiality policy in your employee handbook that sets forth the employees’ confidentiality obligations. The policy should that any trade secret information should be returned upon termination or retirement, and it should never be communicated to a third party without authorization.

Next, it is important that only employees who need to know the information have access to it. Any documents or other information stored electronically should require a password to access them. Password protection will limit the number of people with access and, if information is stolen, can help to determine the person that last accessed the information.

When employees have access to information that is extremely sensitive, it would be prudent to require a confidentiality agreement coupled with a non-competition agreement. It is important to remember that every state has different requirements for covenants not to compete, particularly with regard to the temporal period and the geographic scope. And a covenant not to compete, like any contract, requires some form of consideration. For example, an employee agrees to sign the covenant not to compete in exchange for the opportunity to work for the employer. The situation is more complicated if you are asking an employee to sign a non-compete after the hire date; in that case it is generally sufficient to offer a bonus payment or extra vacation days in return for signing the agreement.

If an employee leaves the company, particularly when they have regular access to trade secrets, it is a good practice to obtain records of their computer activity leading up to their departure. If you are forced to file a lawsuit, any suspicious activity prior to departure will work heavily in your favor.

The level of protection required for your trade secrets will vary depending on the type of trade secret, its usage and the size of your business, so its wise to seek legal counsel when developing or updating your confidentiality policy.

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Posted in Employee Handbook, Employer Policies, Employer-employee relations, Employment Agreements, Hiring and Recruitment

 

Vigilant Against Violence

02 Apr

Workplace violence is a subject that most people do not like to discuss. After all, most times when workplace incidents make the news, they are shocking and frightening, and it’s simply easier to say “That will never happen here.” Unfortunately, that’s not always true, as nearly 2 million workers reported having been victims of workplace violence each year, with even more going unreported.

Federal laws only provide general guidance, in the form of the Occupational Safety and Health Act of 1970, which requires employers to provide a safe workplace. While workplace violence is not always preventable, there are proactive steps you can take to reduce the risks and hopefully prevent a situation before it becomes dangerous, including:

  • Training managers and supervisors on the early warning signs of potential violence and how to address them
  • Implementing a comprehensive workplace violence prevention program
  • Clearly communicating to employees that the company wants to know when there are threats or incidents, and how serious the company is about handling issues
  • Making a good faith effort to investigate complaints where there is a reasonable concern that the employee’s behavior may cause harm to themselves or others
  • Considering additional security measures (sign-in desk, key-card systems, increased lighting, and video surveillance)
  • Identifying to all employees the contact person for communicating safety concerns or incidents

It is important to note, when preparing preventative measures, that workplace violence is not limited to employees; it also includes customers, clients and visitors.

Of course, while all of these measures will raise costs, it will likely be less expensive than the costs of a workplace violence incident. A 2006 study by Liberty Mutual reported assaults and violent acts as the 10th leading cost of non-fatal occupation injuries, at a cost of $400 million. Indirect costs, though difficult to quantify can include diverted attention and resources, loss of public trust, and reputational damage. Workplace violence can result in a number of legal actions against employers, including civil litigation, OSHA citations or fines and workers’ compensation. The key, as always, is finding a balanced approach that works for your particular business.

A breakdown of the types of workplace physical violence

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Posted in Employee Handbook, Employer Policies, Employer-employee relations

 

Will a BYOD Policy W-O-R-K for You?

29 Mar

One of the most popular trends in the IT world right now is the bring-your-own-device (BYOD) approach, where employees use their own mobile device at work. Its another case of new technology creating new problems. Before implementing a BYOD policy, you need to weigh the risks against the cost benefits.

IT departments have spent years working on desktop security and trying to prevent data loss via web and email, but employees are increasingly accessing corporate data with their own smartphones and tablets. As a result, employers have much less control over the security protecting their corporate data. Unlike desktops, very few people have protection against viruses and malware on their smartphones and tablets. Thirty-seven percent of IT decision makers reported that their business had unintentionally exposed corporate data through theft or loss of removable devices in the past two years.

From a legal standpoint, ownership of the smartphone or tablet is irrelevant in case of a lawsuit. Current discovery rules require litigation parties to preserve all relevant electronic data, which will include information stored on employee devices. Employees will need make any personal information stored on their devices accessible, including the history of the websites visited, songs and movies downloaded and played, copy of financial transactions or statements, the list of personal contacts and electronic communications including personal emails, personal phone call, text messages and various social media activities including Facebook, Twitter and VoIP services such as Skype.

While employees may initially be happy to choose their own device for work, that happiness may fade when the reality of the BYOD policy sets in. The IT department may restrict access to certain device features, like the application store, camera and media tagged as explicit. Employees may lose personal information if their device has to be remotely wiped. Employees may also be concerned that the IT department could access their personal data, even though most device management solutions do not allow such intrusions. Finally, if an employee is on a business trip, and loses their smartphone or tablet, there will likely be some confusion as to who is responsible for replacing the device.

Despite the risks, a BYOD policy may be the right choice for your business. You can adopt certain policies, which must be clearly communicated to employees, to help mitigate the risks. Any lost personally-owned or personally-owned devices belonging to a terminated employee should be remotely wiped. Employees should be prohibited from storing confidential corporate data or credit card data on unencrypted devices. Employees should also be prohibited from conducting any company business through the use of personal accounts, such as text messaging or email. And, as with all technology-based policies, it’s important to remember that the policies must evolve and change along with the technology, as it seems like smartphones and tablets have new features every day.

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Posted in Employee Handbook, Employer Policies, Employer-employee relations, Technology

 

Background Checks Aren’t for Everyone

26 Mar

Employers routinely use background checks when hiring new employees, without considering the consequences of using them on every applicant. The EEOC’s current standing policy provides that criminal background checks should be limited to only those positions where such information is “job-related and of business necessity,” and should only seek information about convictions, not arrests.

The Fair Credit Reporting Act, in addition to providing rules regarding credit checks, imposes a number of requirements on employers seeking to obtain a criminal background check.  Before obtaining a criminal background check, an employer must disclose in writing to an individual that the report may include in-depth information about his or her character, general reputation, personal characteristics, mode of living, criminal, driving and work history.  The disclosure must be delivered no later than three days after the report was first requested and include a statement informing the individual of their right to request additional disclosures and receive a written summary of legal rights. If an individual requests additional information about the investigation, the employer must mail or otherwise provide the information within five days of receipt of the written request, or the request date of the report, whichever is later. Employers must take “reasonable measures” to protect against unauthorized access to or use of information in connection with the disposal of consumer information.

In order to prevent legal trouble, employers can take a few easy steps. Employers should have a clear reason for requiring a criminal background check, relating to the open position. For example, a position where the applicant will have access to the employer’s or customer’s money could require a background check to ensure that the applicant does not have any fraud convictions. In addition, employers should discuss the information they are allowed to consider with legal counsel, and then limit the background check to that information, so that no improper information is included in the background check, which ensures that there is no chance that improper information would be considered during the hiring process. Finally, blanket policies, where every applicant is given a background check, should be avoided. A discussion with legal counsel can provide specific guidance on when criminal background checks are appropriate, and what information can be sought.

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Posted in Employer Policies, Employer-employee relations, Hiring and Recruitment

 

The Cost of Curiosity

21 Mar

In a growing trend, employers are asking job applicants and employees to provide login information to their Facebook pages and other social networking accounts. Many are questioning the propriety of asking for login information, particularly because an applicant or employee may believe refusing will cost them a job. However, even reviewing social media profiles, or utilizing a third-party application, to obtain information about applicants and employees may expose employers to legal liability.

Facebook has already confirmed that password sharing is prohibited under its Terms of Service. Facebook’s “Statement of Rights and Responsibilities” Section 4(8) explicitly prohibits password sharing:   “You will not share your password, (or in case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account.” While violating the letter or spirit of the Facebook Rights and Responsibilities can lead to deletion of the user’s Facebook account, there are few real legal consequences for such violations. The Department of Justice regards entering a social networking site in violation of the terms of service to be a federal crime, but admitted that they would not prosecute offenders.

There are real legal dangers in asking an applicant or employee for login information, or even reviewing their social media accounts.  Many people post information on social media sites that may show a protected status (age, sex, religion, disability, genetic information, race, national origin and pregnancy), lawful off-duty conduct (alcohol or smoking), or criminal history.  Such information may be, albeit unintentionally, factored into hiring or workplace decisions. It could be particularly damaging if an employer requested access to social media accounts, and then makes a decision that detrimentally affects the applicant or employee. It simply creates more fodder for a potential lawsuit.

Employers that insist on reviewing applicant or employee social media profiles should take steps to maintain objectivity. Assigning a non-decision-maker to review the social media profiles, before passing on relevant information onto the hiring personnel, can help to prevent those making the hiring decision from relying on improper information. Employers may also want to limit their social media search to LinkedIn, because it is a professional site, which is much less likely to display improper information.

In the end, employers are generally better off not trying to obtain information about applicants and employees via Facebook and other social networks. The possibility that important information may be unearthed is greatly outweighed by the potential legal pitfalls and lawsuits a search may create.

Hat-tip and thanks to Susan Stobbart Shapiro

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Posted in Employer-employee relations, Hiring and Recruitment, Social Media, Technology

 

Classification Crackdown

19 Mar

The United States Department of Labor estimates that 30% of employers are misclassifying employees as independent contractors, which results in billions of dollars in lost revenue every year. Citing a desire to minimize losses in contributions to unemployment insurance funds, protect workers’ rights and “level the playing field” for employers that abide by the law, the DOL has launched the Federal Misclassification Initiative, where they are partnering with the IRS and a number of state governments to share information. The memoranda of understanding contain an agreement to share information, in order to determine when workers are being misclassified.  The cooperative efforts will likely lead to multi-pronged scrutiny and enforcement proceedings.

The initiative will ensure that a worker classified as an independent contractor does not have to bring a claim against his or her employer to allege misclassification.  Instead, the DOL, IRS and/or state agency may initiate directed investigation which could lead to an audit of the employer’s payroll practices.  The DOL expects this initiative will increase the percentage of DOL-directed investigations to approximately 35% of all its investigations.  In particular, the DOL stated that they will be targeting certain industries, including delivery companies, construction companies, companies with installation workers, sales organizations, companies that provide on-site computer technicians and those companies that hire them, and cleaning franchises.

The difficulty comes in defining an independent contractor, because no unified definition exists. Despite the difficulty in defining independent contractor, the pitfalls are significant. Employers who misclassify their employees as independent contractors risk numerous potential claims including tax claims (state, federal, and FICA); wage (e.g., overtime), indemnification, and benefit claims,; claims for civil penalties, including penalties for failing to withhold taxes or pay final wages, or failing to provide itemized wage statements; unanticipated tort claims to third parties and wrongful discharge claims; and criminal investigations.

There are a number of steps that employers can take to prevent misclassification. Most importantly, employers must show that they do not exercise direction or control over their independent contractors. Employers should negotiate the rate of payment, require a signed agreement stating the independent contractor status, and require the worker to provide transportation, tools and equipment. Employers should never require reporting, issue handbooks, provide evaluations or prohibit the worker from working for or with others.

If you believe that employees may be misclassified, or you have any questions regarding classification in general, you should contact legal counsel as soon as possible.

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Posted in Department of Labor, Employer Policies, Employer-employee relations

 
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