Category Archives: Training

2011 Budget Means More Enforcement Against Employers

I’ve been trying to get the word out to employers for the last several months that the executive branch of the federal government has employers who violate any of the federal employment laws in its sights (click here for an earlier blog post on enforcement efforts). Money for enforcement is pouring into federal agencies like OSHA, which enforces health and safety regulations, the Department of Labor, which enforces compensation requirements like the overtime and minimum wage laws, and the EEOC, which enforces the discrimination laws.

Within the 2011 fiscal year budget proposed by President Obama last week, there is money for the hiring of 358 more Department of Labor employees, including 177 investigators and other enforcement staff, bringing the total proposed DOL workforce to nearly 18,000.

OSHA will add 25 more employees to inspect workplaces for safety violations, meaning that 42250 businesses will be subject to these inspections in FY 2011. “Today’s budget affirms this administration’s strong commitment to vigorous enforcement,” U.S. Secretary of Labor Hilda Solis said. “We are sending a strong message throughout industry that we will not tolerate the endangerment of workers.”

The budget also supports a joint effort of the Treasury Department and the DOL to identify employers who hire “contract labor” in an effort to avoid payroll taxes and skirt the overtime and minimum wage laws. For years, employment lawyers like me have been trying to warn employers that “contract labor” is illegal and that there is a very difficult test for employers to prove that any worker is actually an independent contractor. Those employers who still misclassify employees as contract laborers could face increased possibilities of federal investigators reviewing their books, requiring repayment and charging the businesses large fines.

As an employer, it is your responsibility to assure that you are complying with all the federal laws that will be enforced even more stringently if the 2011 budget passes. You are taking a grave risk if you believe that you are in compliance just because your pay, safety or firing practices are the same as everyone else’s in your industry (who often are doing it wrong too), or if you believe you are proceeding correctly because “that is the way we have always done it,” or if you believe that your employees are not dissatisfied so you must be doing something right. Many of these laws are counter-intuitive, meaning you are probably doing them wrong even if you are using common sense! Don’t assume that you are operating within the bounds of federal employment law unless you have a legal opinion from an experienced employment attorney confirming that.

Employee on Cell Phone in Car can be Costly for Employer

Debra Ford was driving on Interstate 16 in Georgia when her car was hit by a sedan driven by Vanessa McGrogan, an International Paper Company employee who was driving a company-owned car with the cruise control set at 77 mph in a 70 mph zone and according to a witness, talking on her company-issued cell phone at the time of the accident.

Ford’s car was overturned and slid along the asphalt and Ford’s arm got trapped between the car door and the pavement, leading to an amputation of her arm up to the shoulder.

Who do you think had to pay to settle the lawsuit that inevitably followed this horrific accident? International Paper, of course.

The employer-issued cell phone and company vehicle guaranteed that the party with the deepest pockets would be sued. McGrogan’s employer settled the case for $5.2 million in 2008.

Cell phone use also led to a woman who was severely injured by a salesman involved in an accident while he was talking on his cell phone being awarded $21 million by a Miami jury in a suit against lumber wholesaler Dykes Industries in 2001. The salesman was driving on company business at the time and talking on his cell phone.

In January 2010, a lawsuit in South Carolina was settled for an undisclosed amount just hours before trial. At stake was $55 million in insurance carried by the employer of Sharon King, who was not working at the time of the incident, but was driving a company vehicle and talking on her cell phone when she allegedly hit two bicyclists riding in a charity event. King pleaded guilty to a reckless driving charge.

The King case has received so much publicity in South Carolina that the legislature there is fast-tracking legislation to ban texting and talking on hand-held cell phones while driving. Some of that urgency may have resulted from the brilliant (and inflammatory) pretrial statement of one of the attorneys for the cyclist’s estate who called cell phone use in cars “the new DUI”.

Texas does not ban hand-held cell phone use for anyone other than bus drivers. What that means is that as a Texas employer, you have to take responsibility for training and monitoring your own employees who could put the company’s assets at risk by driving and talking or texting.

A texting driver is 23 times more likely to have an accident or come close to having an accident than a driver who is paying attention to her driving, according to a Virginia Tech study.

The National Highway Traffic Safety Administration says that 25% of all crashes are caused by distraction. Talking on a hand-held cell phone while driving has been shown to be significantly more distracting than eating or talking to a fellow passenger. And we can all agree that texting while driving is idiotic.

So how does an employer prevent its employees from exposing the company to enormous liability while driving?

Reconsider whether the liability associated with issuing company vehicles and company cell phones is worth the perk. Many companies would rather reimburse an employee his mileage for using his own car during work hours or pay a cell phone allowance than to assume the 24-hour per day liability that is associated with a company vehicle and a company cell phone.

You also need a written policy and extensive training of every employee followed by strict disciplinary enforcement of the policy prohibiting any use of a hand-held cell phone while driving on company business. Although a complete ban of cell phones in cars would be the safest policy, if that is impractical, you can at least buy Bluetooth headsets for your employees to discourage any hand-held cell phone use.

Finally, check your company liability insurance policies to make sure you are well covered if anything as horrendous as the King case happens to one of your employees.

Beware New ARRA Whistleblower Law

More than just Big Brother is watching you. Your employees are watching too, and can use the protections of a new whistleblower law to protect their jobs if they report any kind of wrongdoing by your business.

The new whistleblower law is included as a tiny piece of the massive American Recovery and Reinvestment Act (“ARRA”). Employees of any company that is a recipient of any stimulus money provided by ARRA are protected from job terminations if the employee discloses a problem involving stimulus funds to a supervisor or an enforcement agency. The protection applies when the employee reasonably believes he/she is disclosing a problem related to stimulus funds, such as:

  • Mismanagement or waste; or
  • Danger to public health or safety; or
  • Abuse of authority; or
  • Violation of a law or regulation governing a grant or contract relating to stimulus funds.

Companies that may receive stimulus funds include healthcare companies, especially technology providers in the healthcare field, airports, alternative energy companies, contractors rebuilding infrastructure, companies retrofitting closed industrial facilities, medical researchers, scientists, libraries, schools, shelters, and many other businesses. Therefore the employees of these companies may have a new and unprecedented level of employment protection from the ARRA whistleblower regulations.

What should a company expecting to or already receiving stimulus funds do in response to this whistleblower liability?

  • Hire and train a quality control expert or contract administrator to oversee the efficient and safe use of the stimulus funds.
  • Prepare ethics guidelines for the handling of funds and the work to be accomplished and have every employee sign off on them.
  • Train your managers and supervisors to immediately report any complaints about efficiency, public health, contractual violations, etc. from their employees to the quality control officer.
  • Be very careful about terminating employees. Document all reasons for terminations. If an employee has made complaints inside or outside of the company, talk to an employment lawyer about your company’s exposure to whistleblower liability before you terminate the employee.

Paying for Employee Training Time

Dow Chemical’s plant in Freeport, Texas recently had to pay a $861,647 settlement for back wages to 648 operating engineers who claimed they were not compensated for hours spent studying during mandatory training. The Department of Labor (“DOL”)investigated and found that the engineers should have been paid for the time spent in training required by the company.

If you want to make sure that you don’t get hit with penalties for the way in which you pay your employees for training and meeting times, here a few guidelines for paying your employees correctly :

  • The basic regulation states “”Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met: (1) attendance is outside of the employee’s regular working hours; (2) attendance is in fact voluntary; (3) the course, lecture or meeting is not directly related to the employee’s job; and (4) the employee does not perform any productive work during such attendance.”
  • Unless you can prove that the meeting or training course that your employee attends meets all four of these criteria, you must compensate the employee for the time in the meeting or the training. Most business meetings and trainings will not meet these criteria, so you will have to compensate your employees for them.
  • An example of meetings that would not have to be compensated would be nonprofit board meetings, which could benefit your employee’s career in the long run, but are usually voluntary on the employee’s part and not directly related to your business. Also “meetings” such as happy hours after work or playing on the company softball team, while indirectly involving working relationships, fit these criteria so do not have to be compensated.
  • On the other hand, a lunch time meeting to talk about staff assignments, a Saturday session for employees to pack up to move the business to a new location, or a nighttime cocktail hour to entertain prospective clients of the company are all the types of meetings that would require you to compensate your employees.
  • The DOL takes the position that training that is required by law to allow the employee to work for you, such as the 15 hours of annual training required of child care workers every year in Texas, is compensable because the training is directly related to the job and is not voluntary because the employee cannot work in that job without it. Interestingly, it is the DOL’s position that mandatory annual continuing education for professionals, such as accountants and lawyers, is of general applicability and is “portable” in that profession. Therefore, the employer doesn’t have to compensate the professional for that training time. Of course, the professional is probably exempt from the overtime requirements and paid on a salary, so no extra compensation would be due anyway.
  • If an employee decides to go back to college or trade school on his own initiative, the employer does not have to pay the employee for that time even if the courses are related to the employee’s work because the employer did not require the employee to go back to school or otherwise make going back to school a job requirement. The employer can even agree to reimburse those college courses that apply to the employee’s job, as long as the employee is voluntarily attending school on his own accord.

Training Slashed Even As Employees File Lawsuits

One of the ironies of recession is that businesses tend to cut back their training of their employees at the same time that layoffs are spawning the filing of higher numbers of employee lawsuits. This is happening again during the present deepening economic crisis. Unfortunately, this is one of those situations of businesses “cutting off their noses to spite their faces.” (Do people still say that or am I showing my age?).

During 2008, studies show that average training expenditures in U.S. businesses decreased 11%. The studies don’t pinpoint which types of training, i.e. safety, skills or sexual harassment prevention, are being cut, but I can guess. Few companies understand the incredible effectiveness of providing employment law training to defeating expensive and time-consuming litigation. Therefore, if they ever offered training to their supervisors on avoiding discrimination or to their staffs on recognizing and preventing harassment or violence, they probably will slash that expense this year.

At the same time that the finance department is telling their bosses that the training budget has to go, employees are being terminated in record numbers. The national unemployment rate for January, which will be released tomorrow, will probably be around 7.5%, a 17-year high.*

And what do employees do after they are fired? They look for someone to blame, which in many cases will be the company that fired them. So they file unemployment claims, discrimination complaints, and lawsuits. During the fiscal year 2008, the Equal Employment Opportunity Commission already experienced a 15.2% annual increase in charges of discrimination and retaliation filed. Just wait until FY 2009.

I can already tell from my own law practice that even in the Texas Panhandle, which has been unusually sheltered from the current economic storm, employee complaints and lawsuits are increasing. Many of my clients are starting to face the investigative powers of the EEOC or the Texas Workforce Commission’s Civil Rights Division. Many of those charges will turn into lawsuits alleging discrimination and retaliation.

If you are regular reader of this blog, you know I always advocate written policies and employee training as your first line of defense against an employee lawsuit. If you start cutting your budget for those things, you may see short-term financial relief, but in the long run you are leaving your company very vulnerable to very costly employment lawsuits.

*Note from February 6, 2009: As it turned out today, the national unemployment figure was even higher: 7.6% for January 2009. That means that almost 600,000 jobs were lost in January. That is the worst showing for number of job losses since 1974. In all, 3.6 million Americans have lost their jobs since this recession started 13 months ago.

Understanding Changes in Disability Discrimination Law

2009 is going to be remembered as the year that the Americans with Disabilities Act (“ADA”) became the full employment act for employees’ lawyers. That’s because dramatic changes to the ADA went into effect on January 1, 2009. No longer can an employer assume that the ADA is an concern only if an applicant shows up in a wheelchair or with a seeing eye dog. The ADA now will significantly affect every workplace (except those small businesses with less than 15 employees) and employers need to be educated and ready to respond appropriately.

Briefly, the ADA protects mentally or physically impaired individuals who are qualified to perform a job from discrimination because of their disability. Sounds good, and it is. But for employers, the devil is in the details. The ADA Amendments Act (“ADAAA”) passed last year by the 110th Congress expanded the definition of disability in a way that I believe makes virtually every Baby Boomer a potential plaintiff in a disability discrimination lawsuit. Why? Because most of us born between 1946 and 1964 are starting to feel some of the aches and pains of middle age and that is about all that is required to claim a disability under the ADA. In addition to the 70 million Baby Boomers in the workforce, there are many younger workers who are also physically or mentally disabled.

You are disabled under the ADAAA if you have an impairment that substantially limits one or more major life activities.  “Major life activities” now include walking, seeing, hearing, and breathing, as you would expect, but also sleeping, bending, learning, reading, concentrating, thinking, communicating and working. The term also includes the operation of any major bodily function, such as respiratory and circulatory, as you would expect, but also, reproductive, digestive, and immune system.

If an employee is disabled or even regarded as disabled because of past problems (such as drug addiction that is now under control), you as an employer must provide reasonable accommodation of that employee’s disability if necessary to allow the employee to perform the essential functions of his/her job. Some employment lawyers believe that the “regarded as” component could mean that any employee who ever had a serious medical condition will always be regarded as disabled and protected by the ADA, even if the disease is now in remission.

You can expect to deal with the ADA when an infertile female employee wants to take time off as an accommodation so that she can receive fertility treatments. An employee who needs a 25-inch computer monitor because his poor vision makes it hard for him to read even with his eyeglasses may now need to be accommodated. An employee who is bi-polar may be able to request moving away from an annoying coworker if she says the coworker is a depression trigger. The fact that the employee could take mitigating measures to fix or control the problem, such as taking her medications to prevent depressive episodes, can no longer be considered to determine whether the employee is actually disabled.

What can you as an employer do to keep your company out of legal hot water with the ADA? Continue reading Understanding Changes in Disability Discrimination Law

What Every Supervisor Must Know

Most employee lawsuits are caused by the actions of a first-line supervisor. In other words, that woman that you just promoted from cashier to assistant manager is the one most likely to get your company sued by a disgruntled employee or former employee. Why? Because the first-line supervisor has the most day-to-day contact with your employees. And during that contact, the first-line supervisor may make racist comments, forget to accommodate the disabled, show favoritism to those of his/her own religion, or make an employee work “off the clock”.

Remember that your lowest-ranking supervisor still represents “the company” and can make your business liable for discrimination, retaliation, compensation errors and other legal violations.

So from a preventative viewpoint, the selection and training of a new supervisor involves much more than just taking your hardest-working employees and giving them a raise and the keys to the storeroom.  Here are some of the things to consider when promoting an employee to a supervisory role: Continue reading What Every Supervisor Must Know

Employees Required to Prevent ID Theft

A CVS pharmacy employee threw prescription forms in the dumpster behind the store in Houston. A Radio Shack worker in Corpus Christi dumped customer credit applications. EZPAWNS employees throughout Texas threw away customers’ bank statements. And the Levelland police found more than 4000 customer records in the garbage containers behind Select Physical Therapy. These were not isolated incidents, because according to the Federal Trade Commission, Texas ranks fourth in the nation in identity theft.

The Texas Attorney General, Greg Abbott, was not pleased by these incidents and has started prosecuting these businesses and others under Texas’ new Identity Theft Enforcement Act and other recently-enacted laws to protect people from identity theft. Businesses like yours can be fined between $500 and $50,000 for improperly disposing or disclosing sensitive customer information, such as

  • Credit and debit card numbers
  • Social Security numbers
  • Bank account information
  • Mother’s maiden name or other personal identifying information
  • Tax forms
  • Passwords
  • Dates of Birth
  • Account numbers

These types of information often appear on receipts, applications, bank statements, checks, personnel files, medical forms, and in discarded computers.

What should you do to protect your business from identity theft exposure? As I often say in this blog and in my training presentations to businesses throughout the Panhandle of Texas, as with most legal problems in your business, you have to take four steps to avoid litigation and prosecution for identity theft exposure: Continue reading Employees Required to Prevent ID Theft

Training your Employees

How about some sobering statistics for employers?

  • The average jury verdict for sexual harassment cases nationwide was found to be $1 million in a 2002 study titled “The Changing Nation of Employment Insurance”.
  • That same study found that the average jury verdict for wrongful termination cases (such as discrimination) is $1.8 million.
  • The average cost to settle any lawsuit is $300,000, according to that same study.

Granted, these numbers include verdicts from states, such as California, where the juries have apparently never met a plaintiff they don’t want to reward with a big verdict. But even in Texas Panhandle, the land of more conservative jurors, it is clear to me after almost 20 years of practicing employment law that employers are at risk in the courthouse.

Continue reading Training your Employees