Embrace the Madness

Stanford v TexasA few years ago, I wrote about the effect March Madness has on productivity and your options for mitigating the inevitable distractions.  Apparently not many of you were listening, because the Society for Human Resources Management reports that 81 percent of employers do not have a policy regulating office pools.

Allowing, or turning a blind eye to, March Madness pools makes sense because it is extremely unlikely that the IRS or local authorities are going to come knocking just because your employees created an office pool.  So instead of telling you all the possible negative consequences resulting from March Madness, let’s find some positives.

Employee Bonding

March Madness pools bring employees together.  As long as you can avoid arguments and fights, employees can bond over a shared love of sports and good-natured competition.  March Madness may provide a means to encourage different departments, and even office locations, to interact, particularly in larger companies.

Productivity Gains

While it is almost inevitable that March Madness will cause a dip in productivity, of some degree, the increase in employee bonding and engagement may lead to greater productivity overall.  Employees that are allowed to have a little bit of fun at work will be happier employees. And happy employees will produce a better work product and will be less likely leave to look for other jobs.

Questionable Effect

The effect of March Madness on work productivity may actually bit a bit overstated, according to a 2013 study by OfficeTeam.  The study found that only one in five workers were distracted at work by major sporting events, which is good news with the FIFA World Cup approaching in a few months as well.  Even those workers who are somewhat distracted will simply just work harder once the tournament ends to catch up on work.

In short, a little March Madness may not be so bad and allowing your employees to indulge a bit could be beneficial.  Maybe this year you can relax, put your feet up and join in the fun.  Or, at the very least, you can limit your enforcement to large wagers, body paint and those clearly not getting any work done, whatever you feel comfortable with.

Dnt Txt N Drv

While many states, including Pennsylvania, have implemented laws the ban texting while driving, the federal government has also thrown its hat into the ring. The Occupational Safety & Health Administration (OSHA) has implemented a Distracted Driving Initiative, which will focus on texting while driving.

OSHA calls upon all employers to ban texting while driving and remove any practice or policy that requires or encourages workers to text while driving. The first part of OSHA’s call to action is certainly easy to implement. Simply add a section in your employee handbook prohibiting texting while driving (and maybe take it a step further by prohibiting cell phone use in general while driving) and ensure that all of your employees are aware of the policy.

The second part, removing practices or policies that require or encourage texting while driving, is a little more confusing and, possibly, more difficult to implement. If your policies and practices require texting while driving, create incentives that encourage it or if work is structured so that texting is a practical necessity for workers to carry out their job, you may be subject to an OSHA fine.

For example, if your employee is required to make a certain number of deliveries each day and must stay in contact with other employees or customers via text message or email, you could be fined by OSHA And in this case, the employee would not even need to have an accident for you to be fined, OSHA could find the violation due to an employee complaint or an inspection.

If OSHA does find a violation, it will issue a General Duty Claus citation, which carries a maximum penalty of $70,000 per Willful or Repeat violation or $7,000 per Serious Violation. Given the announcement of this Initiative, expect OSHA to respond aggressively to any accident where distracted driving may have been a factor or if an employee complaint is lodged.

Employers should implement policies that clearly prohibit texting or emailing while driving any company vehicle or while driving on the job. The policies must be communicated to all employees. Any practice that requires or encourages employees to text or email while driving, even if the encouragement is indirect, should be removed or rewritten so that it clearly forbids texting while driving. Erring on the side of caution now may save you thousands of dollars, and potentially employee lives, in the future.

EEOC Offers Guidance on Using Arrests and Convictions in the Hiring Process

The EEOC voted 4-1 to release enforcement guidance regarding the use of arrest and conviction records in the hiring process. With the easy availability of criminal records today, and a population who is increasingly coming into contact with the criminal justice system, particularly African-American and Hispanic men, the EEOC determined that updated guidance was needed. While acknowledging that having a criminal history is not a protected class under Title VII, liability may lie where an employer’s reliance on a criminal record to deny employment treats an employee differently due to his or her protected status or disproportionately screens out a protected group without relation to the position and business necessity.

The issue of whether an employer’s policy disparately treats a protected group is usually much easier to determine. Essentially, if an employer’s background check process treats an applicant from a protected group differently than an applicant outside that group (regardless of whether the other applicant is also in a protected group), then a finding of disparate treatment is likely.

However, determining whether a facially neutral criminal background check policy disparately impacts applicants in a protected group requires significantly more analysis. If an applicant can show that the employer’s policy eliminates members of a protected group more than applicants that are not part of the protected group, which may be as simple as showing that members of the protected group are arrested and convicted at a higher rate, the policy likely has a disparate impact. The employer must then show that the policy is justified in light of the job requirements and the necessities of the business.

In determining whether the policy is job related and consistent with business necessity, the EEOC emphasizes that arrests and convictions must be treated differently. An arrest is not sufficient to deny employment, but an employer may make the employment decision based upon the conduct underlying the arrest, if the conduct makes the applicant unfit for the job. The important distinction is the focus on the conduct, not the arrest. In short, the conduct may be considered if it would be sufficient to deny employment if the applicant had not been arrested.

Conviction records tend to be more reliable, and therefore, may be acceptable grounds for denying employment. However, the Commission does recommend that employers refrain for asking about convictions on job applications and limit any inquiries to those related to the position. To show that the policy operates to deny employment only to those applicants whose criminal conduct, and the dangers it indicates, are linked to the risks of the position, employers should either:

  • create a screening process that is narrowly tailored, with the process validated per the Uniform Guidelines on Employment Selection Procedures or
  • develop a screening process where, upon screening out an applicant, an individualized assessment is conducted

The individualize assessment requires notifying the applicant and allowing him or her to demonstrate that they should not be excluded. The employer should consider a number of factors during the assessment, including: the circumstances of the conduct, the number of convictions, whether the same time of work was performed post-conviction, the employment history before and after the conviction, rehabilitation efforts and character references. While quite onerous, if the applicant does not cooperate with the employer’s efforts to gather information, a decision may be rendered with the information the employer was able to gather. While not mandatory, the Commission does note that a screening process with an individual review will be less likely to violate Title VII.

Where federal laws and regulations disqualify convicted applicants from certain occupations, the employer is entitled to deny employment based on applicable convictions. However, state and local laws that limit or prohibit the employment of applicants with certain criminal convictions are preempted by Title VII and are not a viable defense.

In light of this new guidance, employers would be wise to eliminate policies where applicants are excluded for any negative criminal history, in favor of a policy that is narrowly and specifically tailored to the open position, with an individual review process. In order to narrowly and specifically tailor the policy, the employer should consider the requirements of the job and the liability risks that the job entails, and then determine the specific offenses that indicate unfitness for performing job. Consideration must also be given to the duration of the exclusion based on the available evidence. Finally, and of great importance, managers and other hiring decision-makers must receive training regarding the new hiring procedure in order to ensure that the criminal background check policy is implemented as intended and in compliance with Title VII.

Termination Time

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.

Anatomy of a Wage and Hour Complaint

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.

To Handbook or Not to Handbook

Terrible Shakespeare paraphrasing aside, the question of whether or not an employee handbook is necessary has been discussed, sometimes heatedly, on a number of occasions. It is easy to see why the employee handbook is ostracized, many are long, boring, heavy and complicated, to the point where an employee needs to hire his or her own legal counsel to parse through the legalese. This assumes, of course, that the employee is even reading the handbook.

I count myself as a proponent of employee handbooks, and not because I write them. If you have read any of my other blog posts, you will notice that I am a firm advocate of clear communication with employees.

Many employee handbooks forget the main purpose of a handbook, to communicate the policies to the employee. For example, your vacation policy should only require a few sentences: how many days they get, the way vacation is accrued, and the policy for requesting vacation.

The contents of an employee handbook will always differ from business to business. Most employers want policies regarding time off, discrimination, and harassment. Your business may want or need to have a dress code, or a computer/social media policy; and the bulk of a handbook’s content should be specifically tailored to your business. However, one rule should govern handbook drafting: keep it as simple as you can. And I would be happy to discuss your particular handbook at any time.

Anatomy of an EEOC Charge

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.

Got Trade Secrets?

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.

Vigilant Against Violence

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

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

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.