Category Archives: Documentation

Policy revision

Your Employee Policy Handbook Needs Revision (Again)

Because of a recent decision by the National Labor Relations Board (NLRB), your employee policies probably need a major rewrite to avoid an unfair labor practices charge. This decision applies to big and small companies, those that are unionized and those that are not.

In August 2023 in Stericycle, Inc., the Board adopted a strict new legal standard for reviewing workplace rules. In order to protect the employees’ right to organize and “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”, as Section 7 of the National Labor Relations Act requires, employers cannot promulgate, maintain or enforce work rules that tend to inhibit employees from exercising their rights under the Act.

What are those concerted activities that employees may engage in together? Just a few examples:

  • Employees discussing or complaining about their salaries, benefits, and other working conditions;
  • Employees refusing to work in unsafe conditions;
  • Employees complaining about unfair treatment by a supervisor;
  • Employees openly talking to each other, on social media, to the press or otherwise about their complaints about their employer;
  • Employees joining with co-workers to grieve any mistreatment, file claims with a governmental agency or otherwise protest any aspect of their jobs.

You as an employer cannot prohibit any of these activities or discipline an employee for engaging in them. Moreover, you cannot have policies that discourage these protected concerted activities.

Policy handbooks have come under scrutiny by the NRLB frequently in the last 10 years, but the Stericycle decision takes this scrutiny to a new level. If the NRLB finds that an employer’s policies have a reasonable tendency to chill employees exercising of their Section 7 rights, then it is presumptively an unfair labor practice.

The NRLB looks at the rules from the viewpoint of an employee who is economically dependent on the employer, rather than just applying a reasonable person standard. The employer can only rebut the presumption that the rule is unlawful by showing the policy serves a legitimate and substantial business purpose and it is as narrowly tailored as possible.

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Commission Pay Arrangements in Texas

If you as an employer pay any of your employees on commission, a recent Texas Supreme Court case makes it clear that your commission arrangement needs to be in writing.

The Court decided Perthuis v. Baylor Miraca Genetics Laboratories LLC in May 2022. In that opinion, the Court addressed the question of when a former employee has to be paid commissions collected by the company after the employee has left the job. In this case, the Texas Supreme Court determined that Brandon Perthuis, the former vice-president of sales at the company, would be entitled to a commission on the largest sale in the company’s history, even though he was terminated the day before the client signed the sales contract (but four days after Perthuis finalized the negotiations for the sale).

The Court reviewed the commission pay agreement and found that it was silent on whether the employee would get paid commissions after his employment was terminated. In the absence of a clear agreement, the Court followed the “procuring-cause doctrine,” meaning that if the employee was the reason the sale was procured, then he was entitled to the commission.

Perhaps the most important part of the Court’s opinion for any company that pays commissions is this: The procuring-cause doctrine provides nothing more than a default, which applies only when a valid agreement to pay a commission does not address questions like whether the  right  to  a  commission  extends  to  sales  closed  after  the  employment relationship ends.  

The procuring-cause doctrine is not a judicially created “term” for commission  contracts. It  does  not  add  anything  to  a  contract  or  take anything away. It does not restrict parties’ ability to modify their contractual  relationships  and  it  does  not  change  the  law  governing whether parties have entered into such a relationship in the first place. Parties certainly may condition the obligation to pay a commission on something  other  than  procuring  the  sale—they  need  only  say  so.

So the Court is saying that the company and the employee can negotiate any kind of commission pay agreement that they want. Or the company can just offer a commission arrangement and the employee can accept it. The courts will only intervene if your commission agreement is not in writing or if your written commission arrangement is silent as to an important term.

So what should a written commission pay arrangement include if any employee is paid fully or partly on commission?

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New Federal Vaccine Mandate Immediately Affects Employers with 100+ Employees

The Occupational Health and Safety Administration released its new vaccine mandate as an Emergency Temporary Standard today for employers who have at least 100 employees (“large employers”). The ETS is effective on November 5, 2021, and large employers only have 60 days to fully implement their vaccination plan, so time is of the essence.

Each large employer can decide if that company is going to (1) mandate that every employee gets vaccinated (while allowing limited religious and medical exemptions) or, instead, (2) mandate that its employees have a choice between vaccination and weekly testing. However, either way, large employers have to start requiring all unvaccinated employees to be masked at all times indoors as of December 5, 2021, except when they are alone in their own closed office. The new rules are summarized here.

Here are the highlights of the Emergency Temporary Standard mandate:

Does it apply to your company?

Do you have 100 names on your payroll (full-time, part-time, temporary or seasonal workers who perform work for your company at any point on or after November 5, 2021)? If so, this ETS applies to your company. “In determining the number of employees, employers must include all employees across all of their U.S. workplaces, regardless of employees’ vaccination status or where they perform their work,” according to the FAQs released by OSHA today.

The count of employees is corporate-wide, not by individual location. Even those who are working from home are counted (although some parts of the mandate do not apply to those workers who are exclusively remote workers). Similarly, those who work exclusively outside are counted when determining if you have 100 workers, but the mandate does not apply in the same way to outside workers.

Independent contractors are not included when you are counting to 100. Neither are temporary workers that you use who are actually employed by a staffing company.

Federal contractors were already subject to a separate vaccine mandate under Executive Order 14042. Healthcare employers who receive Medicare or Medicaid funds have their own stricter vaccination ETS also released today, which does not allow for testing as an alternative to vaccination. To make it easier for all employers to comply with the differing requirements, the deadline for the federal contractor vaccination requirement has been aligned with those for the healthcare entity rule and the large employer rule. Employees falling under the any of these rules will need to have their final vaccination dose – either their second dose of Pfizer or Moderna, or single dose of Johnson & Johnson – by January 4, 2022. 

But what about Gov. Abbott’s Executive Order Saying No Vaccine Mandates in Texas?

I won’t get into all of the politics of this, but this OSHA standard preempts Gov. Abbott’s order (which he couldn’t persuade the Texas Legislature to turn into law in the last special session). The U.S. Supreme Court has already backed vaccine mandates in at least three separate instances this year. I would not count on the Supremes ruling that Gov. Abbott’s executive order will prevent OSHA from enforcing this new Emergency Temporary Standard. And you probably don’t want the exorbitant legal expense for your company to be the test case for this political pissing match between the state and the feds anyway.

What are my next steps?

Continue reading New Federal Vaccine Mandate Immediately Affects Employers with 100+ Employees

How Employers Can Do Everything Right

University Medical Center in Lubbock won a big victory in an age discrimination case by doing everything right (suggesting to me that they followed the advice of their employment lawyers). Employers can learn eight important lessons from the Fifth Circuit Court of Appeals decision issued in the case of Salazar v. Lubbock County Hospital District d/b/a University Medical Center (opinion issued December 7, 2020).

Age discrimination cases are difficult for employers to win because the elderly make very sympathetic plaintiffs and the judges and jurors themselves are often older. But this case gives a blueprint to managers of how to dispassionately and carefully handle the termination of a poor-performing employee.

The allegations that plaintiff Rosemary Salazar asserted in this case sound really bad for the employer in an age-discrimination claim. Salazar had worked at the hospital for 27 years before she was fired in 2017 for poor performance and failure to change her behavior. She was 57 years old at the time of her termination and alleged not only was her firing discriminatory, but also that the same supervisor in her department fired three other long-time employees who were over the age of 60.

Salazar also claimed that she had been given good performance evaluations and that she had “received numerous raises for her job performance.” Finally she said that the employer did not follow its own progressive disciplinary policy in terminating her.

How did UMC manage to get a win the summary judgment motion and the appeal in this case? In a word: documentation.

Continue reading How Employers Can Do Everything Right

“No Vaccination Passports”: What Does Abbott Mean?

Texas Governor Greg Abbott signed an Executive Order on April 5, 2021, purporting to ban “vaccination passports” in Texas. But Texas employers are asking, “What does this mean for my business?”.

Abbott has said that in Texas “vaccinations are voluntary and never forced.” He continued by saying:

Government should not require any Texan to show proof of vaccination and reveal private health information just to go about their daily lives. That is why I have issued an Executive Order that prohibits government-mandated vaccine passports in Texas. We will continue to vaccinate more Texans and protect public health — and we will do so without treading on Texans’ personal freedoms.

https://gov.texas.gov/news/post/governor-abbott-issues-executive-order-prohibiting-government-mandated-vaccine-passports

Of course, that press statement only addresses the government’s role and says nothing that clarifies how private Texas businesses are supposed to respond.

“Vaccination passports”, in the form of written documentation of having received a vaccination, have been used for years to prevent global travelers from spreading diseases. They are also required in most public schools (although Texas allows parents to sign an written opt out form because of vaccination objections).

Your college student probably had to prove vaccination for meningitis before moving into a dormitory. Few Texans cried “governmental overreach” when that meningitis vaccination requirement assured that their 18-year-old son or daughter would be protected from a potentially fatal disease that rapidly spreads in communal environments such as dorms.

Indoor sports arenas, performing arts centers, and live music venues have been hoping that vaccination passports would allow those venues to assure the public that they are once again safe to come back to live performances while sitting 18″ from the person in the next seat for a couple of hours.

But like masks, COVID-19 vaccinations have become a political hot potato. Gov. Abbott, seeking to appease a very vocal minority, generated headlines that proclaimed “Abbott Bans Vaccination Passports”. Once you dig down into the actual wording of Gov. Abbott’s Executive Order, you find that only these actions are prohibited:

Continue reading “No Vaccination Passports”: What Does Abbott Mean?
Employees and Covid-19

Ten Ways to Get Sued by Employees During a Pandemic

Even though the idea has been in the news recently, at the current time there is no absolute liability immunity for Texas employers from COVID-19-related claims made by employees who are exposed to the virus in your workplace or otherwise harmed during the pandemic. You can be sued for many different legal failures as an employer during this crisis, so you should know what the law expects of you right now.

The law firm of Fisher Phillips is maintaining a fascinating database of COVID-19-related cases filed so far in 2020. Their database shows that 38 COVID lawsuits have been filed in Texas for claims such as unsafe workplaces, discrimination, paid leave violations, retaliation and even wrongful death. I have no doubt those claims will continue to increase as employers struggle with all of the safety guidance and other rules burying them during this crisis.

I’ve narrowed the possibilities of a Texas employer getting sued during this global pandemic down to these ten mistakes:

Continue reading Ten Ways to Get Sued by Employees During a Pandemic

Supreme Court Outlaws Discrimination Against LGBT Employees

The United State Supreme Court ruled today in Bostock v. Clayton County that employers may be sued for sex discrimination by LGBT employees under Title VII of the Civil Rights Act of 1964. This opinion resolves a long-time disagreement between the various federal circuit courts and unwieldy patchwork of laws that had protected LGBT employees in some states but not others, and Texas cities like Austin, Dallas and Houston, but not Amarillo.

The Court combined three cases, one in which a male county employee was fired for conduct “unbecoming” a public employee when he joined a gay softball league, one in which a private employer fired an employee just days after he mentioned he was gay, and one where a funeral home fired an employee who presented as male when hired, but later stated that she was going to live, dress and work as a female going forward.

After reviewing each of these job terminations, the Court decided 6-3 in an opinion written by Trump-appointee Justice Neil Gorsuch that an employer who fires an individual based in part on being gay or transgender (and by natural extension, bisexual or lesbian) violates Title VII’s prohibition on discrimination on the basis of sex. “An employer who fires an individual merely for being gay or transgender defies the law”, Gorsuch wrote.

The Court pointed out several important rules for employers to know (these apply to any discriminatory job decision, whether it is based on race, age, national origin, disability, religion, etc.):

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SBA Finally Provides PPP Forgiveness Guidance

Late last week, the Small Business Administration posted interim rules and the application for employers to complete when seeking forgiveness of their Paycheck Protection Program (“PPP”) loan. This guidance, which for many businesses comes almost at the end of the 8-week covered period for spending PPP funds, provides employers with many of the answers we have been waiting for since the CARES Act was passed in March.

Of course, that means that this guidance may be too late for some of us to correct actions we already took when we first received the PPP funds. But there are some strategic decisions that you can still make if you act quickly.

The basics of the loan forgiveness have been explained in more detail and in layman’s language in the U.S. Chamber of Commerce’s Guide to PPP Loan Forgiveness, which I highly recommend that you download. But here are some basic forgiveness criteria that we have been waiting on:

Continue reading SBA Finally Provides PPP Forgiveness Guidance

When an Employee’s Social Security Number is Incorrect (or Fake)

In 2019, the Social Security Administration (“SSA”) is again starting to send “No Match” letters after a seven-year hiatus to employers who reported payroll taxes for an employee under an incorrect (or fake) Social Security number.

What are the legal do’s and don’ts when the company receives an “Employer Correction Notice” (more commonly known as a No Match letter) from the SSA or otherwise finds out that an employee’s Social Security number isn’t accurate?

  1. Don’t overreact. There are a number of reasons that an employee’s Social Security number may have been reported incorrectly, the most common being a transposition of numbers in the company’s system or a name change. Your responsibility as an employer is to carefully address this matter so you don’t violate any discrimination laws, but you also protect the company now that you know there is a problem.
  2. Don’t ignore. You have to act in response to a No Match letter or other knowledge that a Social Security number is invalid. But what actions you need to take should be discussed with your employment lawyer, who you should call immediately upon receipt of the No Match letter.
  3. Don’t fire anybody (yet). The letter itself will say, “You should not use this letter to take any adverse action against an employee, such as laying off, suspending, firing or discriminating against that individual just because his or her name or SSN does not match our records.”
  4. Don’t confuse the Social Security Administration with Immigration and Customs Enforcement (ICE). No match letters come from SSA and must be addressed through the SSA system. There may be a connection between the incorrect Social Security number and the employee’s eligibility to work in the United States, but you are a long way from making that determination yet when you have just received the No Match letter. On the other hand, ICE may regard a failure on the part of the company to act correctly in response to a No Match letter as an indication of guilt in employing undocumented workers, which is why having an employment lawyer walk you through this process is essential.
  5. Do check your records. Make sure the mistake is not on your end—check that you correctly reported the name and Social Security number that your employee provided to you. If the mistake was yours, notify SSA of the correction.
  6. Do ask the employee to address the problem. After you confirm that the mistake is not on your end, you need to notify the employee in writing that he/she has the responsibility to clear up any discrepancy with SSA by a reasonable deadline (at least 90 days).  Advise your employee that failure to act immediately, to provide the corrected documents in a reasonable time or to provide a good-faith explanation of the problem could later be grounds for termination.
  7. Don’t make an employment eligibility decision yet. There is a dangerous tendency for Texas employers to suspect a Hispanic employee with an incorrect Social Security number might be ineligible to legally work in the United States. This bias could quickly get you sued for discrimination. Give every employee with a mistaken Social Security number a chance to correct that mistake through the SSA procedures. Don’t require an employee to fill out a new I-9 employment eligibility form until the SSA procedure is complete and then only if the employee used the incorrect Social Security number on the first I-9 that the employee filled out.
  8. Don’t turn a blind eye to an affirmative statement of ineligibility by the employee. On the other hand, employees will sometimes tell you when confronted with Social Security number mistake that the employee doesn’t have a Social Security number. Your response should still be, “Talk to SSA and get this corrected.” But if the employee actually says, “I’m not in the United States legally and can’t get a Social Security number because I’m not eligible to work here,” you have to take that admission of ineligibility to work seriously. There is a requirement that employers must terminate any employee immediately upon receiving actual knowledge that the employee is not authorized to work, such as when the employee admits to having submitted false documents for I-9 purposes or to entering the country illegally and never applying for a work permit. This is a red flag warning to call your employment attorney.
  9. Do consider if you need to adopt verification procedures at time of hiring. The SSA provides a verification service that you can use to check Social Security numbers for payroll purposes only (not I-9 purposes) at the time of hiring. Many background checking services will also offer this as part of their criminal background check. But if you are going to start verifying Social Security numbers with new hires, you must be consistent and verify every single employee to whom you make a job offer or your inconsistency can be considered discrimination.
  10. Don’t mistake SSA verification for E-Verify. E-Verify is the federal database for verifying employment eligibility for I-9 purposes. This is where you can find out if your employee really is legal to work in the United States. However, at the present time, there are so many red-tape and technical problems with E-Verify, which has been known to mistakenly block eligible workers, that I do not recommend that employers enroll in that system if you don’t have to (enrollment is mandatory for some employers, such as federal contractors).

Employees Secretly Recording Workplace Conversations

Is it legal for one of your employees to secretly record your conversations with that worker for the employee to use as evidence in a discrimination case? If you are a Texas employer, the answer is “yes”.

Texas is a “one-party” consent state, meaning that as long as one party to the conversation knows about the recording, the recording is legal. This can lead to your employee secretly starting the video app on his smartphone in his pocket just before he walks into your office for a disciplinary meeting. He knows the conversation is being recorded, so as the supervisor, you don’t have to be informed in a one-party consent state like Texas.

More than 30 states have the one-party consent rule, while California, Washington, Florida and a few other states require that every person being recorded give permission to the recording. These “all consent” states make it impossible for a supervisor to be secretly taped when talking to an employee. Making a recording without permission in one of those all consent states can lead to both criminal liability and exclusion of the tapes as evidence in the employee’s discrimination or other lawsuit.

In Texas, however, when an employer is taped, the recordings can be material evidence when an employee sues for discrimination. The Houston Chronicle reported in 2011 that one-third of the discrimination complainants who reached out the Equal Employment Opportunity Commission office in Houston brought audio tapes from their workplace to play for the EEOC investigators.

If there is a recording with you as a supervisor using a racial slur, firing an older employee while saying that the company needs “fresh and energetic workers” or suggesting to a subordinate that he/she can expect a raise if the employee will accompany you to a hotel, you might as well get your checkbook and pen out now to facilitate the inevitable settlement.

Besides the obvious – THINK BEFORE YOU SPEAK, here are some other steps you as an employer can take to protect yourself and the company from employees taping all of your interaction:

  • Adopt a written policy banning recording: As of June 2018, the National Labor Relations Board has newly declared that employers may prohibit employees using recording devices and cameras at work. This is a change from a 2015 NRLB opinion that such policies had a chilling effect on employees asserting their rights to document poor working conditions. In 2018, it was decided that no-photography/no-recording rules have little impact on NLRA-protected rights and could actually improve working conditions by forcing supervisors and subordinates to have open discussions and exchanges of ideas.
  • Ask employees if they are recording: Before you have a hard discussion with an employee, such as a disciplinary warning, ask the employee if he/she is recording the conversation. Make a written note of his response (juries don’t like liars who produce recordings when they stated they weren’t taping). You can remind the employee about the company policy prohibiting such recordings. Ask the employee to set his phone on your desk so you can assure that he isn’t recording or, even better, have him leave it at his desk before coming into your office.
  • Be careful about disciplinary actions for recording: If an employee does record in your workplace, don’t automatically warn or fire that employee even if it violated your policy. You need to know what the employee recorded, so ask to listen to the tapes. If the employee did record or photograph unsafe workplace conditions, sexual propositions, racial epithets, etc., then you need to do a formal investigation and apply effective remedial measures to fix the problem the employee’s recordings uncovered. Then carefully decide with your legal counsel whether disciplining the employee who violated your recording policy could lead to an unfair labor practice, retaliation or whistleblower claim.
  • As the employer, don’t audiotape others in the workplace without consent: While you may have video cameras in the non-private areas of your workplace for safety purposes or to monitor productivity, it becomes more complicated to make audio recordings. Wiretapping (recording the conversations of others without consent when you are not a party to the discussion) is illegal under several statutes. So, you would need permission of every employee as well as the consent of every vendor or guest who comes into your business if you were going to wholesale audiotape all the interactions in your workplace. It can be done, but it is complicated to do correctly, and the wiretapping law is easily violated. And personally, in more than 30 years of practicing employment law, I’ve only seen a handful of situations where widespread audio recording was helpful to a lawsuit defense, much less positive employee relations.