All posts by Vicki

Don’t Show a Texas Employee His File

Documentation, Employee Rights, Forms and Policies

Let me be clear: Private employers in Texas do not have to allow employees to see their personnel files. That’s right. I don’t care what other states do, or what they show on TV. The law in Texas is that the file belongs to the employer and the employee cannot demand to see it.

That being said, what does your personnel policy manual say? Many employers whom I help have policies that they copied from a generic software package or borrowed from a friend’s company with offices in another state. Those employee handbooks often say something like, “An employee may request to see his personnel file with 3 days written notice to the human resources department.”

If you have given your employees that privilege, it will appear discriminatory to deny them the opportunity to review their files if they make that request. So check your policy manual first. If you have a policy that promises that employees can see their files, you need to amend your policy to say, “Personnel records of the company belong to and are the property of the company. They are not available to an employee to review.” Then, whenever an employee asks to see her file, you can point to your policy and say, “no” without hesitation.

Why do I recommend that employers in Texas keep their files private? Because the most common mistake I see in my employment law practice is that employers do not document enough. They are scared to write anything down if they know that an employee can see it and question it at any time. The threat of employee litigation looms heavy over most of today’s managers.

I continually try to encourage supervisors to write down everything. I won a trial one time based solely on the informal, imperfect daily diary notes that a manager kept about any problems that he had during the day with his team. The employee who sued the company was mentioned so many times in the informal notes in the 3 months before his termination that it was clear that he was a problem employee and not the victim of discrimination or retaliation.

If you keep your employee files private and document consistently, you can avoid a lot of potential liability as an employer.

Controlling Absenteeism

Attendence

I often get questions from employers about firing employees for absenteeism. Like any good employment attorney, I ask the employer about the scope of the problem. How many absences has the employee taken? What were the reasons for the absenteeism? What sort of verbal and written warnings has the employee received for absenteeism?

Astonishingly, I usually discover that the employer hasn’t tracked the number of absences, issued any warnings to the employee to correct their behavior and doesn’t even know if the employee has used up all of his paid time off. Often, I am simply getting a call because the employee is absent that day and the boss is upset over it because the employee has missed “a lot”.

You can reduce absenteeism in your company, but it requires some consistent effort on your part. Here are some steps to consider:

  1. Give your employees a reasonable amount of paid time off (“PTO”) each year that can be taken for whatever emergency or need arises. Generally, for full-time employees that have been with the company more than one year,  a total of 15-20 days per year is sufficient to cover vacations, sick days, kids’ school activities, funerals, and all the other ways in which real life intrudes.
  2. Prepare a written policy that explains your PTO procedures. Include a statement along the lines of, “Employees are provided sufficient PTO for all foreseeable and unforeseeable reasons to be absent. Therefore, any absences that are not covered by the company’s PTO policy, other than Family and Medical Leave (“FMLA”) and civic duties like voting or jury duty, will be considered to constitute excessive absenteeism and will result in disciplinary action up to and including termination of employment.”
  3. Keep track of absences every single day. This seems so simple, yet is violated so often. If I can’t prove in court with clear documentation exactly how many days your employee missed, I can’t prove that the reason for her termination was absenteeism rather than discrimination based on age, sex, race, etc.
  4. Be prepared to enforce your policy, beginning with the first absence after all of an employee’s PTO is exhausted. I don’t care if the employee needs to go to the doctor (unless employee is on FMLA), has a flat tire or just can’t recover from last night’s binge, if he has exhausted his PTO, you need to start progressive discipline. Give him a verbal warning (which you document for your files). The next time he misses, give him a written warning that lets him know he is in danger of losing his job. With the third absence, suspension or termination should be imposed, after you call your employment lawyer to review the reasons for the absences and get the legal green light to fire.

Time for Servant Leadership

Management

In this time of economic shrinkage, it is tempting for employers to believe that any remaining employees should consider themselves “damn lucky to have a job” (as one of my former law partners used to say). This attitude can lead to subtle exploitation of employees who will do almost anything to keep their paychecks coming each month.

My 22 years of experience in employment law lead me to believe there is a better way to treat employees, even in poor economic times, or maybe particularly in poor economic times. That management style is frequently called “servant leadership.”

The few servant leaders that I know in Texas Panhandle businesses rarely have to worry about lawsuits filed by former employees, because even job terminations are performed with grace by servant leaders.  Meanwhile, many other local companies are seeing an increase in employment litigation.

Servant leadership has been preached in the secular business world for almost 40 years, beginning with an essay by Robert K. Greenleaf which advocated teamwork, ethics, and care of one’s employees. Greenleaf and his disciples identified certain characteristics of a servant leaders, including listening, empathy, stewardship, a belief in the inherent value of employees, and a commitment to building community. Many companies, such as Southwest Airlines, have discovered that this kind of servant leadership creates fulfilled employees who will go the extra mile for the company and for its customers.

For those of us who are Christians, we know that this concept of servant leadership is much older than 40 years. It was modeled for us 2000 years ago by the greatest leader of all, Jesus Christ. Jesus demonstrated true servant leadership after the Last Supper, when he washed the feet of his disciples.

When he had finished washing their feet, he put on his clothes and returned to his place. “Do you understand what I have done for you?” he asked them. “You call me ‘Teacher’ and ‘Lord,’ and rightly so, for that is what I am. Now that I, your Lord and Teacher, have washed your feet, you also should wash one another’s feet. I have set you an example that you should do as I have done for you. I tell you the truth, no servant is greater than his master, nor is a messenger greater than the one who sent him. Now that you know these things, you will be blessed if you do them.

John 13:12-17.

As an employer, you can do so much more than hire, discipline and fire your employees. You can encourage them, inspire them, hear them, heal them and lead them by the example you set. Look up the phrase “one another” in the New Testament and you will find the best management instructions ever published:

  • Be devoted to one another.
  • Honor one another.
  • Live in harmony with one another.
  • Accept one another.
  • Serve one another in love.
  • Be completely humble and gentle; be patient, bearing with one another in love.
  • Be kind and compassionate toward one another, forgiving each other just as in Christ God forgave you.
  • Submit to one another.
  • Encourage one another and build each other up.
  • Spur one another on toward love and good deeds.
  • Offer hospitality to one another.
  • Have fellowship with one another.

What does that look like in practical terms? Ask your new employee and his family to your home for dinner. Find out about his life, his needs, his dreams and then look for ways to help him fulfill them.

Arrange for your company to build a house for Habitat or to sort canned goods at the High Plains Food Bank together, and make sure you are the first one there and the last to leave. Organize the company softball team, provide the t-shirts, and if you don’t play with them, at least be there for the games and be the loudest cheerleader in the stands. Build a healthy community and your employees will work to improve it. Employees who are led by a servant will never want to disappoint you or leave the company that has become a family to them.

Accommodating Mental Disabilities

Discrimination

One of the inevitable problems that the Americans with Disabilities Act Amendments Act (ADAAA), which went into effect January 1, 2009, will cause employers will be the difficulty figuring out how to treat every disabled employee on a case by case basis while all other discrimination laws demand that you treat every one equally. That problem is exacerbated when the employer is trying its best to reasonably accommodate an employee or applicant with a mental impairment.

Let’s look at hypothetical situation: Your newest sales person, Anne, is a 25-year-old, high energy extrovert. She is great when sent out to call on customers. But Anne’s paperwork is a mess and her lack of time management drives you crazy. During organizational meetings, she continuously bounces her left leg and clicks her pen. Everyone on the sales team can pick up on her impatience with any planning process.

Despite Anne’s sales ability, you are about to decide that she is not the right fit for your organization, when Anne drops into a casual conversation the fact that she was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) when she was in middle school and has been off and on Ritalin ever since. This is not an uncommon situation, since 5.2 percent of the working adult population in the United States has ADHD, according to the World Health Organization.

Firing Anne outright for lack of organizational ability would be a mistake, now that you are aware of the disability. Continue reading Accommodating Mental Disabilities →

Cupid at Work? Bah humbug!

Discrimination, Forms and Policies, Management

Reuters published a story today about a CareerBuilders.com survey on workplace romances. Just in time for Valentine’s Day, 40% of American workers admit that they have dated a coworker. Another 10% say there is a coworker they would like to date. Interestingly only 5% of women want to date a coworker while 14% of men do. Can someone say “hostile environment”?

It gets worse: of those who dated a co-worker in the last year, a third of those relationships involved a coworker who was held a more senior position, including 42% that dated their boss. Can you say “quid pro quo sexual harassment”?

I know I should be all starry-eyed about all the wonderful sparks of romance lighting up American workplaces. But my 22 years of law practice always make me fast-forward to the part where the flames of love die and and out of the embers come the EEOC claims.

Workplace romances are fraught with sexual harassment and retaliation risks. If coworkers date and then break up, the gossip, name-calling, sexual jokes and scorn can easily be twisted into a claim that the workplace has become a hostile environment based on gender.

If a boss dates a subordinate, it gets even messier. The claim can become quid pro quo (loosely translated “this for that”), meaning that the subordinate may say that she was passed over for a raise or promotion or even fired because she wouldn’t give the boss what he used to get and still wants. Quid pro quo cases involving a tangible job detriment, such as a demotion, are the worst kinds of sexual harassment cases for an employer to try to defend.

Many employers are hesitant to get involved in their workers “private” lives. If it is developing in your workplace, it is hardly private. You may need a written policy to establish clear boundaries between business and personal interactions. It can include:

  • Instruction to keep interactions at work professional (no PDA, no long personal exchanges);
  • Requirement of prompt disclosure of a developing relationship, particularly if it involves a supervisor;
  • Removal of management authority from anyone over an employee involved in a personal relationship;
  • Requirement that the dating couple work with management to find an acceptable solution to any problems that arise, such as complaints of favoritism;
  • Requirement to accept transfers, changes in duties, or even voluntary termination of the more senior party if other measures don’t prevent or resolve problems.
  • Requirement that the end of any such relationship be reported to human resources so that future actions can be scrutinized for retaliation or harassment.

Sort of takes all the fun out of the romance, doesn’t it? I feel like Scrooge at Christmas, but I’ve seen too many of these relationships go bad and then the company has to pay the price. Better to nip it in the bud, red rosebud, that is, since ’tis the season for overpriced, underdeveloped blooms!

I-9 Cautionary Tale

Documentation, Hiring

If you like to rant and rave about the lack of government enforcement actions to stem the tide of illegal immigration, remember that you as an employer are primarily responsible for making illegal immigration unattractive by requiring every employee to demonstrate his eligibility to work in the United States. This is done by requiring every new hire to fill out an I-9 employment eligibility form within the first three days of employment. No documentation: no job.

What happens if your company is not diligent about filling out the I-9 forms completely and correctly or if your company just turns a blind eye towards an employee’s questionable legality? Ask Republic Services, Inc. in Houston. The waste management firm recently cooperated with Immigration and Customs Enforcement (ICE) and paid $1 million to the national treasury to avoid criminal prosecution for sloppy I-9 practices that led to hiring undocumented workers to make up 25% of its workforce. The federal government was not impressed with any excuses that Republic made.

What could you do differently to avoid such an outcome in your company? These are the changes that ICE required Republic to make and that you could be making right now:

  • Terminate any employee whom you know is undocumented.
  • Give others whose documentation is questionable a reasonable period to provide unexpired or otherwise genuine documents. If good documents aren’t provided, terminate that employee’s job.
  • Hire and train well one or two centralized human resources people to complete all I-9s and to verify that the documentation presented appears genuine.
  • Provide training for all supervisors or other employees with input into hiring to make sure they know the rules and don’t try to skirt them.
  • Implement payroll software that includes I-9 compliance measures, such as advance notification when an employee’s documentation is about to expire.
  • Keep copies of all eligibility documents presented by your employees, all letters you write about expired documents, and all of your efforts to keep employees in compliance.

Training Slashed Even As Employees File Lawsuits

Discrimination, Management, Training,

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.

Sexual Harassment for all Ages

Discrimination, Termination,

Texas courts have considered sexual harassment at both ends of the age spectrum lately. One case involved a teenager as a victim and the other involved a 62-year old harasser who claimed age discrimination when he was fired. Both cases have lessons to teach employers about sexual harassment, still one of the most common employment claims that companies face.

The case involving the teenager was tried in Houston last year. The EEOC filed the case on behalf of a 19-year-old who was hit upon by the owner of the dry cleaners in which she worked. The evidence showed that the owner inappropriately touched his young female employee, made many offensive comments, and held her against his will in her car while he graphically related his sexual desires and threatened her with sex against her will. The jury found that the owner had harassed the employee and awarded her $105,000.

A couple of things need to be learned from this case: Continue reading Sexual Harassment for all Ages →

Ledbetter Fair Pay Act Is Now Law

Compensation, Discrimination

As predicted in this blog and by most employment law pundits, President Obama is expected today to sign bill favoring employees as his first piece of major legislation. The Lilly Ledbetter Fair Pay Act overturns a U.S. Supreme Court decision from 2007, which restricted the statute of limitations on Equal Pay Act claims.

Lilly Ledbetter worked for Goodyear Tire & Rubber Co for 19 years before she found out that she was the lowest paid supervisor there, even though she had more experience than some of her male counterparts. She sued for pay discrimination based on gender, and the jury agreed with her. But the case was appealed all the way to the Supreme Court, which decided that the 180-day statute of limitations for complaining about discrimination had run out when 19 years before, when the pay inequity first occurred, regardless of when she found out.

The new law, which will go into effect tomorrow, clarifies that each new paycheck is a discriminatory act that starts the 180-day clock running again if an employee is being paid less because of her gender, race, age, disability, or national origin. An employee can now claim discrimination on the basis of pay when he discovers the inequity and seek two years of back pay for the amount he should have been paid.

What can you do as an employer to prevent an Equal Pay Act suit? Senator Barbara Mikulski, who sponsored the bill, had a point: “If you don’t want to be sued, don’t discriminate,” she said.

The Equal Pay Act has been around since 1963, enacted even before Title VII of the Civil Rights Act of 1964 outlawed other types of discrimination. It has helped women go from earning $.62 for every dollar a man earned for the same job to earning $.80 for his dollar. But there is still obviously some subtle discrimination or women and men would both earn the same amount for performing the same job. Since the law has been around since most of us who are business owners and managers were in elementary school or even diapers, maybe it is time that we learned to comply with it.

How do you do that? Look at what every employee performing the same job is earning. For example, if you have five engineers working for you, pull out your payroll and figure out if you really could justify their salary discrepancies and the demographics. If Engineer Bill has 30 years experience and Engineer Tiffany has 10, that is a pretty convincing justification for Tiffany making less than Bill. But if they both have about 10 years of experience and he is still paid more, you may have some explaining to do. He may actually perform much better than Tiffany, but you better have lots of paper to back that theory up.

I know this evaluation will take some time ( probably a day) and will be a PITA (as my teenage son says). But as I always say, you can either spend a day now to prevent a suit, or spend weeks or months in investigations, discovery, depositions, mediations and trial with a disgruntled employee, her lawyer and me later.

Final Paychecks in Texas

Compensation, Forms and Policies

I get lots of questions about final paychecks in Texas, so I thought I would give you a quick review of the Texas Payday Law.

Your employees must receive their final paychecks on the sixth calendar day after they are laid off, discharged, fired or otherwise terminated involuntarily, or on the next regular payday if they voluntarily quit. So if you mail the final paychecks, you must mail them early enough that they are available to your former employees by the deadline.

Do you have to include pay for accrued but unused vacation and/or sick leave in the employee’s final paycheck? Not in Texas. The employer can have a written policy or a standard practice of not paying unused vacation, sick leave or paid time off, or paying them only for employees who leave in good standing (two weeks notice and no disciplinary problems), or paying them to everyone who leaves. Just be consistent and put your policy in writing with distribution to every employee and the Texas Workforce Commission will back you up if a complaint is made.

Can you “hold” an employee’s final paycheck past the sixth day or the next regular payday because he still hasn’t turned in his uniforms, his keys or other company property? In a word, “NO”. Texas law does not allow any holding of paychecks. As an employer, you have an obligation to pay every time, on time.

So what do you as an employer do to make sure that equipment, uniforms, or store inventory don’t disappear when the employee leaves your company? And what if the employee still owes you money for a salary advance?

Long before the employee is terminated, you must get his written permission to make deductions from his final paycheck for items that can be lawfully withheld, such as uniforms, salary advance repayment, personal charges on company accounts, damaged or lost equipment, etc. If you have a wage deduction authorization agreement signed by the employee ahead of time, you may withhold the items enumerated in the agreement from that final paycheck. The Texas Workforce Commission has even drafted a form for you to use, which you can access by clicking here.

If you don’t have a written authorization or if the final paycheck won’t cover all of the amounts owed to you by the employee, you cannot hold his paycheck hostage until you receive repayment. You must send him his final paycheck on time and then turn around and sue him in small claims court to get the amounts owed to you repaid.

If you pay an employee bonuses or commissions, you must have a written agreement with the employee outlining how those bonuses or commissions will be paid if they are collected and due after the employee leaves your employment. A simple written agreement regarding commissions can help you avoid fighting a Payday Law claim with the Texas Workforce Commission which will ensue if your terminated salesperson disagrees with your interpretation of how much he is owed in commissions after he leaves your company.