All posts by Vicki

Discrimination Filings Increase Dramatically

Discrimination, Documentation

You might think that by now all employers are careful and correct in their hiring and firing decisions, leading to a decrease in discrimination suits filed by employees and former employees, particularly since the Civil Rights Act has been around for 45 years. You would be wrong.

In 2007, the Equal Employment Opportunity Commission (“EEOC”) saw a 9% increase in the filing of discrimination claims based on race, gender, age, disability, etc. If that weren’t dramatic enough, in fiscal year 2008, the EEOC saw a 15.2% increase over 2007. And that was before the economy hit rock bottom and the  nationwide unemployment rate rose to its current rate of 8.5%. I think it is a safe bet to expect the charges filed with the EEOC in 2009 to increase even more.

What should these statistics say to you as a business owner or manager? They should tell you that you cannot afford to make mistakes in your employee hiring, compensation, evaluation, discipline and termination practices that could be interpreted as discriminatory. Don’t assume that you know what you are doing. Get an experienced HR expert or employment lawyer to help you review your policies and practices.

What should you be reviewing to assure that you have reduced your exposure to an employee lawsuit:

  • Documentation: I can’t say it enough in this blog–if it isn’t written down, it didn’t happen as far as the EEOC or a jury is concerned. Do you discriminate on the basis of race, religion, disability, national origin, age, etc.? You do unless you have a written policy stating that you don’t and you have documents supporting each employment decision you have made and showing that it was made for nondiscriminatory reasons such as performance deficiencies.
  • Written Policies: I still get questions about whether you need to have an extensive written policy manual that you provide to your employees. My final answer: YES, you need written policies! Lots of them! Every governmental agency, whether it is the Texas Workforce Commission investigating an unemployment claim, OSHA investigating a workplace injury or the EEOC investigating a discrimination charge, will first ask for your relevant written policies. Without these, the odds that the governmental agency will make a finding beneficial to your business are pretty close to zero.
  • Layoffs: The decisions you make about which employees to lay off in poor economic times cannot be explained simply by the financial well-being of the business. You won’t be questioned about why you had to lay off 20 employees, you’ll be questioned about why you picked the specific 20 that you picked. If you let your poor performers go, you better have documentation supporting the poor performance of each member of that group, as well as documents showing the outstanding performance of those that you retained. Layoff time is not the time to cherry pick the employees with whom you have the most in common or feel most comfortable, because it is almost a given that you will be explaining your choices to a governmental investigator or a jury at a later time.
  • Retaliatory actions: If someone cooperates with a governmental investigation or files a discrimination claim, you should not fire that employee any time soon thereafter unless you have rock solid documentation of a serious disciplinary violation that employee committed after the claim or the cooperation. Why? Because every claim filed with the EEOC is subject to a retaliation claim. Frequently, an employee who says she was discriminated against can be proved wrong, but if you fired her soon after she made her complaint, you will probably will lose the retaliation claim even as you win the discrimination suit. This would be a very hollow and expensive discrimination “victory”.

Contracts with My Teenager

Documentation

It is very hard to leave a legal job at the end of the day and not take it home with you. I watch TV and guffaw over the ridiculous courtroom scenes that never would occur in real life. I read and reread the fine print on every piece of mail (particularly from credit card companies!). I won’t let my husband sign his teaching contract for the next year without my approval.

But the one area where it has really paid off to be an attorney in my family life is in the area of contracts with my teenage son, Hart. A few years ago when he received his first cell phone, I considered all the horror stories I had heard about runaway bills due to teen texting or replacement phone costs due to teenage negligence. I’ve always been the kind of parent who believes in spelling out my expectations ahead of time and then encouraging my son to meet them. This has worked for grades, for manners and I figured it should work for cell phone ownership also.

So I drafted a simple, plain English agreement for Hart to sign when he received the cell phone. I let him know specifically how many minutes and text messages he could send per month. I explained the rules about free nights and weekends and what time those free periods started and ended under our plan. I let him know the cost of a replacement phone. I told him how much I would charge him for any excess minutes or texts. I emphasized how he would lose his phone privileges if he were to ever use it during class time. And I required him to get permission from the subject of any picture he took or conversation he recorded so as not to invade any other person’s privacy. If I were writing that contract today, I would also include a prohibition of sending or possessing sexually explicit photos with a cell phone, a practice known as “sexting” that can lead to a criminal conviction and sex offender status that could haunt a teen for the rest of his or her life.

In the three and a half years that Hart has had a cell phone, he has paid me $1.10 in overcharges. He has never lost or broken his phone, never had it taken away at school and seems to use it appropriately to keep me informed of his whereabouts. Granted, being a boy, he has little interest in sending thousands of texts in a month or spending every minute on the phone with friends. But I really think that spelling out the rules and the consequences of breaking those rules has helped him be more responsible with the cell phone.

Fast forward to last week, when Hart turned 16 years old. He obtained his driver’s license on his birthday after ten months of driving with a learner’s permit. We gave him my ten-year-old Toyota Avalon to use as his car from now on. Time for a driving contract.

Obviously, the consequences of irresponsibility with a car are much greater than with a cell phone, so the driving contract is longer and more detailed than the one page cell phone agreement. But again, I used plain English to convey important rules like wearing a seat belt, never using a cell phone while driving, and at least while he is in high school, getting permission before he drives the car out of Potter or Randall counties. Violating those kinds of rules results in a $100 fine (you gotta make it painful).

The most serious consequence is reserved for driving while impaired by alcohol or drugs. There is no penalty if he calls us to come get him and doesn’t get in a car. However, the penalty for driving while impaired is a loss of driving privileges for three months and no chauffeuring by a parent (catch a ride with friends, ride a bike or hoof it for three months). A second violation of that rule results in the car being sold and again, no chauffeuring by parents during the duration of high school.

The driving contract also sets out who pays for any traffic ticket he receives (he does), gas he uses (he does), getting oil changes and regular maintenance on his car (he does), insurance deductibles he incurs (he does) and increases in insurance premiums he causes (he does). I hope this will short-circuit any arguments that may arise over the significant costs of car ownership and irresponsible driving.

Let me say that I don’t think you can solve all teen problems with a contract. There was a lot of parenting that went on before these contracts. Hart is an excellent student, a polite, witty and responsible kid. While his parents are divorced, we have worked hard to achieve a friendly and cooperative relationship that allows us to consult with each other and enforce similar rules at both houses. So we have had few problems with Hart and don’t really anticipate any big issues with his driving.

But why wait until a problem arises to anticipate how to solve it, particularly if you could avoid the problem altogether? That’s what I spent three years in law school learning to do: prevent difficult legal problems or resolve them as painlessly as possible if they can’t be prevented. When it comes to my only son, I am definitely in favor of trying to prevent problems before they arise.

I heard the other day of a parent who required her daughter to sign a college contract, which reminded the girl about the expectations for her GPA, her financial contribution and her behavior if her parents were going to support her for four more years and pay for tuition, room and board and expenses. Looks like Hart has another contract in his future . . . !

Smoking Policy Suggestions

Personnel Policies

Since 1966, we have been warned of the dangers of smoking. Here is a brief history of the Surgeon General’s warnings on cigarette packages:

  • Caution: Cigarette Smoking May be Hazardous to Your Health (1966-1970)
  • Warning: The Surgeon General Has Determined that Cigarette Smoking is Dangerous to Your Health (1970-1985)
  • SURGEON GENERAL’S WARNING: Smoking Causes Lung Cancer, Heart Disease, Emphysema, And May Complicate Pregnancy. (1985-)
  • SURGEON GENERAL’S WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to Your Health. (1985-)

And yet, many businesses still wrestle with whether the company should have a nonsmoking policy for its employees and visitors. Legally, a company in Texas is free to make any policy it wants regarding smoking on the job or in its facilities.

Should your company have an anti-smoking policy? If you are paying all or part of your employees’ health insurance premiums, you should have a smoke-free workplace policy for economic reasons, if no other reason. A federal study based in Pueblo, Colorado, demonstrated that the rate of hospital admissions for heart attack declined 41 percent in the 18 months after a city smoke-free ordinance took effect compared to the 18 months prior to the ordinance. According to the Centers for Disease Control, smoke-free laws likely reduce heart attack hospitalizations both by reducing second-hand smoke exposure and by reducing smoking. Just think what that kind of reduction could do to your group health insurance premiums!

Since Amarillo and most Texas Panhandle towns have no city ordinances banning smoking, employers have to make their own decisions about what to do. Few employers allow employees to freely smoke in the building. Many Texas employers choose to create areas outside of the building and away from the entrances in which smoking is allowed. Others take it farther and ban all smoking on the premises. Baptist St. Anthony’s hospital in Amarillo created a brief uproar last year when it expanded its smoke-free campus policy to a blanket refusal to hire smokers at all. This is the most stringent smoking policy of which I am aware.

How do you institute a smoking policy at your company? Here’s a good lawyerly response: in writing, of course. Add a policy like this one from the Texas Workforce Commission’s publication, Especially for Texas Employers, to your employee handbook and post it in break rooms and on the employee bulletin board or intranet:

The Company maintains a smoke- and tobacco-free office. No smoking or other use of tobacco products (including, but not limited to, cigarettes, pipes, cigars, snuff, or chewing tobacco) is permitted in any part of the building or in vehicles owned, leased, or rented by the Company. Employees may smoke outside in designated areas during breaks. When smoking or otherwise using tobacco or similar products outside, do not leave cigarette butts or other traces of litter or tobacco use on the ground or anywhere else. No additional breaks beyond those allowed under the Company’s break policy may be taken for the purpose of using tobacco or similar products. Dispose of any litter properly in the receptacles provided for that purpose.

Or if you want a more restrictive policy that bans tobacco everywhere on your premises, here is the TWC’s suggestion:

The Company maintains a smoke- and tobacco-free office. No smoking or other use of tobacco or similar products (including, but not limited to, cigarettes, pipes, cigars, snuff, or chewing tobacco) is permitted at any point during a workday, while on company business, while in transit between work locations or assignments, while at client locations, in any part of a company building or within “x” feet of such buildings, or anywhere on or in company parking areas. There are no designated smoking areas inside or on Company premises, nor does the Company allow smoking breaks during the workday, i.e., no additional breaks beyond those allowed under the Company’s break policy may be taken for the purpose of using tobacco or similar products. If returning from a meal break during which you have used tobacco or similar products, do not leave cigarette butts or other traces of litter or tobacco use on the ground or anywhere else. Dispose of any litter properly in the receptacles provided for that purpose.

Weathering the Recession Without Extra Burden of Litigation

Termination

As an employment lawyer, I frequently am asked the question that all business people are asked these days: “How is your business faring in these troubled economic times?” I am personally happy that I can say, “My business is booming.” What I am not happy about is the reason for my current volume of business: more companies are being sued by their former employees, probably because the recession has created more “former employees”.

There are two approaches I recommend to prevent becoming just another company involved in expensive and frustrating employment litigation during this economic downturn:

  1. Don’t cut back on the practices that help prevent employee lawsuits. That means keeping your policies updated, training all of your managers annually on employment law issues like discrimination, continuing to use progressive discipline, and carefully documenting every employee interaction, particularly ultimate employment actions such as hiring, promotions, demotions, reduction in force and terminations. You’ll find lots of postings on this blog giving you more information about how to take these measures if you are a Texas employer.
  2. Prevent lawsuits by using severance agreements when you have to terminate employees. That’s what I want to discuss today.

Texas law is supportive of severance agreements, which are contracts between the exiting employee and the company giving the employee more pay than he is due in exchange for a release of most possible employment law claims. In 2008, 93 percent of U.S. companies who paid any additional severance pay to a departing employee required that employee to sign a release, according to a new study by consulting company Lee Hecht Harrison.

The study found that the traditional idea of severance pay based on tenure (one week for every year worked, for example) is being replaced by packages negotiated by the employees themselves, sometimes before they are even hired. The study found that nationwide, the minimum number of weeks paid in 2008 for all executive employees was 13 and the maximum was 38.

These figures are higher than what I see in the Texas Panhandle. I find that generally my clients are willing to pay 3-6 months of severance to key executives who are departing, while 4-12 weeks of severance compensation is much more commonly paid to lower-level employees when the company doesn’t want to mess with litigation.

Not every departing employee needs to be paid severance compensation, because you do not need a release from every terminated employee. If you have paid attention to the preventative actions described above, have strong written policies, used progressive discipline and documented everything, you may be able to terminate a low-performer without fear of litigation.

However, there are many instances where the firing is not so neat and clean, where the employee is known to be litigious, or where your gut (or your lawyer) just tells you that you need an extra measure of protection when letting a particular employee go. That’s when the severance agreement is helpful.

A severance agreement is a contract which has certain legal requirements to make it enforceable. So kids, don’t try this at home. Call an experienced employment attorney in the state in which the employee is located to help you draft an agreement that will relieve your company of liability and protect the business from the cost and burden of a lawsuit.

Beware New ARRA Whistleblower Law

Management, Termination, Training

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.

COBRA Changes Affect Employers

Benefits
  • Do you provide group health, dental or vision insurance or a Health Reimbursement Account to your employees?
  • Do you have at least 20 employees, whether they are on the group health insurance or not?
  • Have you laid off or fired any employees since September 1, 2008?

If you answered these 3 questions “yes”, you are required to act immediately under the American Recovery and Reinvestment Act of 2009 (“ARRA”) to notify your former employees of subsidies available for their COBRA premiums (and those of their dependents). In addition, you as an employer have to advance that subsidy and then recoup it through payroll tax deductions.

If you have a knowledgeable group health insurance agent like my great friend, Julie Hulsey at Neely, Craig & Walton, LLP, in Amarillo (who supplied me with all of the information for this post), you probably have already been contacted about complying with these COBRA subsidy requirements.

If not, here is some very basic information that you need to digest quickly and an action plan for complying immediately (for example, Friday, April 18, 2009, is the deadline to mail notices to your former employees and their dependents).

Continue reading COBRA Changes Affect Employers →

Is There a Union in Your Future?

Employee Rights, Management

Across the country, approximately 8% of the workforce is unionized. Speculation is that if the Employee Free Choice Act (“EFCA”), the union-backed legislation making its way through the Democratic-controlled Congress, passes, that number could double.

This is causing concern for many employers, who fear that a unionized workforce makes the company less flexible, innovative and responsive to a rapidly-changing global economy, in which customers only care if your product is feature-packed and low-priced. Union contracts and the rigid rules they impose can possibly turn a company into a slow-moving and out-of-date giant like GM or Chrysler.

How would the EFCA increase your chances that your workers would be unionized? The bill would allow workers to sign cards with a check-off box saying that they want to be represented by a union. If 51% check off the “yes” box, then you will have a union in your workplace. This method is currently allowed, but employers don’t have to recognize the check-cards and can demand a secret ballot election, which provides the employer time to counter the unionization attempt. Requiring an employer to recognize the check-card election alone as controlling does increase the chance that a union will start representing your workers in negotiating all terms and conditions of employment.

The EFCA would also require the company and the union to submit to binding arbitration if a union contract could not be negotiated in 90 days. This provision could increase the chance that a National Labor Relations Board arbitrator will be determining your wages, vacation policies, attendance policies, etc., instead of you as the owner or manager of the business.

The chance of passage of the EFCA in the Senate decreased in late March when moderate Republican Sen. Arlan Spector announced that he would not support the legislation with his swing vote in these difficult economic times. However, there will probably be some sort of compromise bill that passes, so you can’t totally ignore the possibility that a union may soon be coming to a workforce near you.

If you want to decrease your chances of ever facing a union election in your business, here are some proactive steps that you can and should take right now:

Continue reading Is There a Union in Your Future? →

Paying for Employee Training Time

Compensation, Training

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.

Time to Change I-9 Forms (Again!)

Documentation, Hiring

As if employers didn’t have enough to keep up with, it is time to throw out your old blank I-9 employee eligibility forms (for immigration compliance) and adopt the new form as of Friday, April 3, 2009.

Click here to download a copy of the new required form. The form is available on the United States Citizenship and Immigration Services website.

Don’t blame this one on the Obama administration. The regulation for the new form was written during the waning days of President Bush’s term. President Obama delayed its enactment for 60 days, as he did with all of Bush’s pending regulations, but unless something changes this week, you must make the switch to the new form for anyone whom you hire on Friday or thereafter.

Texas’ Group Health Insurance Problem

Benefits

There was a very informative article in Time Magazine last week called “The Health Care Crisis Hits Home”. The author, a journalist with 15 years covering health policy, wrote of her brother in Texas whose kidneys are failing. He had been insured for 6 years with one company, buying a new individual short-term policy each six months because group health insurance wasn’t available through his employer. After being diagnosed, he found out that the short-term policies he purchased were “junk”. One expert said, “No one should ever buy them. It is false security that is being sold”.

This article demonstrates the catch-22 which we face in Texas. None of us want our employees to face overwhelming medical bills. However, many of us as employers feel like we can’t afford to provide health insurance for our employees. In fact, the Time article says that only 37% of small companies in Texas (less than 50 employees) offer group medical coverage. As a result though, 1 in 4 Texans is without health insurance. Even more are underinsured, like the author’s brother, who have some type of coverage but find out when they become sick that their policy is insufficient.

What can you do about this as a small Texas employer? Talk to your employees about whether health insurance is important to them and if they want to make a sacrifice to obtain it. More and more surveys that I see in my human resources and employment law trade magazines indicate that benefits are equally as important to an employee as the salary offered. I know of many employees, such as my husband and his fellow high school teachers, who are highly motivated by the benefits that their jobs provide to them and their families, particularly since their salaries are nothing to get excited about considering the importance of the work they perform.

In Texas, you can obtain a group health insurance policy as long as the employer pays 50% or more of the employee’s premium. Because the group rates are so much lower than the rates for an individual policy and the coverage is so much more complete, your employees may be willing to pay for as much as half of their premiums in order to be protected. This could also mean that you and your own family could obtain decent coverage.