Tag Archives: Federal Employment Law

Wal-Mart’s Costly Wage and Hour Mistakes

Compensation

The big news recently in the employment law arena is that Wal-Mart Stores, Inc. has agreed to settle 63 wage and hour lawsuits in 43 states. The settlement of these class actions will cost Wal-Mart somewhere between $352 million and $640 million!

What the heck did Wal-Mart do wrong that could cost them a half billion dollars? The thousands of class action plaintiffs allege that Wal-Mart managers pressured employees not to record all their time actually worked or to work through hours that were recorded as unpaid meal and rest breaks. Employees who actually recorded the overtime hours they worked were allegedly disciplined and humiliated. For example, one store manager allegedly posted the names of employees recording overtime next to the time clock to remind others that overtime was against company policy.

For its part, Wal-Mart says that these are old allegations and not indicative of how Wal-Mart does business today. Unfortunately, it is the way many employers in the Panhandle still do business. Here are a few points to remember to avoid wage and hour liability in your business: Continue reading Wal-Mart’s Costly Wage and Hour Mistakes →

Congress Set to Consider Employment Laws

Compensation

It’s January after an election year, and things are going to start moving fast in the world of employment law. The 111th Congress of the United States convened this morning and by the end of this week two laws may have passed that drastically affect employers.

An entry on this blog dated December 1, 2008, predicted that a new Democratic administration and Congress would try to pass the Ledbetter Fair Pay Act and amendments to the Equal Pay Act. As expected, the U.S. House of Representatives is scheduled to vote on these laws in this first week. If you don’t like the proposed changes, you better contact your congressman quickly.

The Ledbetter Fair Pay Act, if passed, will override the U.S. Supreme Court’s decision in 2007 in Ledbetter v. Goodyear Tire & Rubber Co. The change will affect the statute of limitations on pay discrimination claims to allow employees to sue over discriminatory pay based on each successive paycheck in which the discriminatory pay is received. So if you decided to pay a woman less than a man for the same job in 1983, and that inequity still exists despite 25 years of raises and bonuses, you could still be liable as an employer for discrimination based on each new paycheck that she receives.

If the Paycheck Fairness Act, which amends the Equal Pay Act of 1963, is passed, it will require you to pay the same amount to any employee in your company if the job requires comparable functions, skills, effort and responsibility in the same working conditions. The problem that I foresee is that you may pay workers in other areas of the country differently because of different costs of living and different market factors. This would become illegal. This law could also bring into question whether your payment of different employees for the same job is really based on tenure and experience or discrimination.

The law also would make it illegal for employers to discipline or fire workers who publicly reveal their salaries. The National Labor Relations Act already frowns on employer policies that prohibit employees from discussing their salaries because such a policy is perceived to have a chilling effect on the formation of unions. The Paycheck Fairness Act will provide the final nail in the coffin for these types of salary discussion prohibitions.

Finally the Paycheck Fairness Act would lift the caps currently in place on compensatory and punitive damages under pay discrimination laws. This could create a powerful incentive for plaintiff’s employment lawyers to accept and file more employment discrimination cases.

The end result is that as an employer, your company will be more vulnerable than ever to discrimination lawsuits. That makes your preventative efforts all the more important. Delete any policy that prohibits your employees from discussing their salaries. Then get the rest of your employment policies and procedures, especially your pay practices, reviewed now if you want to avoid costly litigation against your company.

Smoking as a Hiring Disqualification

Discrimination, Hiring,

The latest employment controversy in Amarillo is Baptist St. Anthony hospital’s new policy of refusing to hire new employees whose pre-employment drug test shows the presence of nicotine. BSA is straightforward about its refusal to hire any new smokers for its non-smoking campus, in part because its sole mission is healthcare. Click here to read the original story from the Amarillo Globe-News. From the number of comments this story has generated on the Globe-News website, the KVII website and the letters to the editor it appears that many people have strong opinions on this subject, many believing that BSA’s policy is discriminatory.

The advantages of the policy for BSA are obvious: adherence to its mission of promoting health, improved morale of persons bothered by the smell of smoke, less absenteeism and eventually decreased health insurance premiums and claims. While the policy may also shrink the pool of qualified job applicants, I would bet that in the current economic crisis BSA is not too concerned about that problem.

But can BSA legally enforce this policy? In the Globe-News story, I was quoted as saying that there is no federal or state discrimination law that is violated by BSA’s new policy. I stand by that quote. Jeff Blackburn, another local attorney who tends to take the employee’s side of things, apparently disagrees with me and says that it is a violation of a person’s civil rights to deny a smoker employment. Click here for his comments on KVII TV’s website. I don’t know of any Texas or federal law that supports Jeff’s argument, so Jeff and I will just have to agree to disagree on this point. It might be different if smoking were like race or age, a protected characteristic that you can’t change and which should not put you at an employment disadvantage. However, smoking is a choice, and one of the consequences of that choice now will be that you cannot be hired at BSA.

Other states handle this issue differently.

According to the National Workrights Institute, 30 states and the District of Columbia currently have some form of smokers’ rights laws on the books. These so-called “lifestyle antidiscrimination” laws protect employees and applicants from discipline or other adverse employment actions either specifically because they smoke or generally because the persons use a lawful product, such as tobacco, outside of work.

Legal Trends: Smelling Smoke, HR Magazine (December 2006).

Since there is no lifestyle antidiscrimination law on the books in Texas and since Texas courts generally uphold the “at will” employment rights of businesses to fire someone for good reason, bad reason or no reason at all, I think Texas courts would support BSA on this one. Texas employers, in my opinion, are free to screen for nicotine just like any other drug at the pre-employment stage and free to refuse to hire anyone who fails that drug test.

I am interested in your opinion on this matter, so feel free to click the word “comment” below and tell me what you think.

Employer’s Ten Commandments

Management,

If you are a Texas employer, you may be wondering whatever happened to the concept of employment at will, where you could hire, discipline and fire an employee for a good reason, a bad reason, or no reason at all. You are worried that the pat on the back that you once gave for encouragement is now considered sexual harassment. You may feel like you are fighting a workplace war and you seem to be losing.

You have good reason to be worried. Jury Verdict Research reports that the median discrimination verdict in the United States was $252,000 in 2007. In 2008, we saw the largest single plaintiff employment law verdict ever–$46.6 million awarded to a supervisor who refused to fire three employees in their 60s and was then fired himself. With the economy in the toilet, more employees will lose their jobs, which always results in an increase of employment litigation for wrongful termination of some sort.

But the business owners and managers that I talk to everyday as an employment lawyer can’t keep up with the new laws and regulations that they have to follow. They understand that the laws are designed to bring fairness and equality to the jobsite, but unless the laws are merged into some kind of simplified and usable form, they find compliance almost impossible.

How can you run your business without spending all your time on employment issues? These are the ten basic principles that you and your managers need to follow to comply with most employment laws and avoid a costly lawsuit: Continue reading Employer’s Ten Commandments →

You Can’t Ask That!

Hiring,

Here’s a quick list for you to print out and slide under the glass on your desktop. These are the questions that you can’t ask an applicant when you are interviewing them. Okay, you can ask them. Nobody’s stopping you. But you won’t ask them if you are smart, rational, prudent and consider a discrimination lawsuit against you or your company a big waste of your valuable time, money, energy and emotion.

Don’t ask:

  • Where are you from? Where did you grow up? What kind of accent is that? (national origin discrimination)
  • When were you born? When did you graduate from high school? How old are you? What is your birthdate? (age discrimination)
  • Where do you go to church? Do you believe in Jesus? What do you do with your Sundays? (religious discrimination)
  • Are you married? Do you have kids? Where does your husband work? Who takes care of your kids after school? (gender discrimination)
  • Have you ever been arrested? What for? (possible racial discrimination)
  • Are you a U.S. citizen? (national origin discrimination)
  • Have you ever made a worker’s compensation claim? Have you ever been injured on the job? How’s your back? (disability discrimination)
  • Do you belong to a union? Have you ever belonged to a union? Are you sympathetic with union members? (violation of the National Labor Relations Act)
  • Have you ever used illegal drugs? Have you ever had a problem with alcohol? What medications are you on? Do you have any physical or mental impairments? What’s wrong with your arm, leg, hearing, speech, etc.? (disability discrimination)
  • Are you pregnant? Are you planning on having kids? (pregnancy and/or gender discrimination)
  • Have you ever declared bankruptcy? (discrimination under the Bankruptcy Act)
  • What clubs and organizations do you belong to? What causes do you support? (this could reveal illnesses, religious beliefs, family issues, marital status, race and other grounds on which you could be accused of discriminating)
  • Is English your first language? Do you know that we have an English-only policy? (national origin discrimination)
  • Do you have elderly parents or an illness in the family that would take you away from work? (disability discrimination)

If this seems like a whole bunch of rules to remember, try focusing on this one rule: If your question isn’t related to how the applicant could perform the job, don’t ask it.

Preparing for Possible Changes in Employment Laws

Discrimination, Personnel Policies

The elections are over and it is clear that with the Democrats in charge of the White House and Congress, things are going to change. Whether you celebrate or mourn that fact, if you are a business owner or manager, you need to prepare your business for some of those changes.

There are a number of laws affecting employers that have a good chance of passing after the new government takes office in January. These include:

  • The Employment Nondiscrimination Act, which would amend Title VII to add sexual orientation as a protected class, much like religion, age, national origin, race, disability and gender. President-Elect Obama’s transition team has already added sexual orientation as a protected class in their hiring, along with gender identity.
  • The Fair Pay Act, which will negate a 2007 U.S. Supreme Court decision that substantially crippled the filing of any Equal Pay Act claims by imposing a draconian statute of limitations. The Fair Pay Act would again ensure that women are paid the same rate as a man for performing a job that requires the same skill, effort, responsibility and working conditions.
  • The Healthy Families Act, which will require employers with 15 or more names on the payroll to provide full-time employees with 7 or more days of paid sick leave per year. This would be the first paid leave ever required of employers by the federal government. Obama and Vice-President-Elect Joe Biden cosponsored this bill while they were in the Senate, so passage of this act or a similar one is likely.
  • The Equal Remedies Act and Civil Rights Act, which could remove the current caps on damages in discrimination cases and prohibit the employer from making the employee agree to arbitrate these claims before the dispute arises.
  • The Employee Misclassification Prevention Act, which would raise the penalties for employers who call their employees “contract labor” or “independent contractors” to avoid paying taxes and benefits on their workers.
  • The Occupational Safety and Health Administration is expected begin enforcing ergonomic regulations that were written during the Clinton years. These regulations would affect white-collar workplaces that have seldom had OSHA on their radars at all.

Many other laws affecting employers are expected to be introduced and passed while the Democrats are in power for at least the next two years. That information should light a fire under you to audit your employment practices now to make sure that they are currently compliant and as forward-thinking as possible.

For example, take a look at your pay policies. Are women in your workplace paid less than similarly qualified men? Do you pay anyone on a “contract labor” basis?

Do you shy away from hiring anyone that “seems gay”? Do you fire in haste or anger without clearly documenting all of the nondiscriminatory reasons? Do you rely on an arbitration agreement that you force all of your employees to sign and think that agreement will protect you from a runaway jury?

If you answered any of these questions “yes” or if you suspect any of your other employment practices may be questionable, this is the time to have someone knowledgeable about employment law conduct an audit of your practices and policies to correct the mistakes you are making now and to prepare for the changes to come.

FMLA Revisions

Attendence

In one of the Bush administration’s final regulatory acts, the U.S. Department of Labor has issued 762 pages of revisions to the Family and Medical Leave Act. The changes have been two years in the making and not unexpectedly are more favorable to employers than employees. Family advocacy groups are pretty unhappy with the new regulations. But that doesn’t mean that the FMLA will ever be easy to apply in your workplace.

If you don’t know the basics of FMLA, it entitles employees to take 12 weeks unpaid leave to deal with the birth or adoption of a child, the employee’s serious health condition, a family member’s serious health condition, or a parent, child or spouse’s military deployments, including 26 weeks if a military family member is wounded. FMLA protects the employee’s health care benefits while on leave. Once the employee has used up his twelve weeks, you must return him to his old position or an equivalent position with the same benefits, compensation and status.

By the way, if you have less than 50 employees (full- or part-time), you can stop reading right now. FMLA only applies to companies that are larger than yours.

For those of you who have more than 50 names on your payroll, here are a few of the numerous changes you must understand by the time the new FMLA regulations go into effect on January 16, 2009: Continue reading FMLA Revisions →

Policy Manual Blunders

Personnel Policies,

Like all good employment lawyers, I encourage my clients to have an employee policy manual that outlines, among other things, the company’s expectations regarding employee performance, explaining the available benefits, setting guidelines for using the company technology and prohibiting harassment, violence and drug abuse.

I regularly draft new policy manuals for my clients or review and revise their old manuals. There are several serious blunders I often run across in the employee handbooks I review. If you are a business owner or supervisor, pull out your handbook now, blow the dust off the top of it and crack it open to see if you have made similar mistakes in your manual: Continue reading Policy Manual Blunders →

Employees Who Lie

Discrimination, Documentation, Termination,

Have you ever discovered that an employee lied about something important at work? For example, what would you do if an employee called in sick on two scheduled workdays and then you found out she had really been in Las Vegas during her sick leave?

The Third U.S. Circuit Court of Appeals ruled that a city’s discharge of a worker for dishonesty about her sick leave was a valid reason for discharge even though she produced a doctor’s note confirming her illness. Hughes v. City of Bethlehem (October 2, 2008). The city suspended her without pay while they investigated her sick leave excuse and confirmed her little gambling jaunt. Since the investigation confirmed the employer’s suspicions of dishonesty, the city terminated her job.

She, of course, sued for everything but the kitchen sink, including gender discrimination, disability discrimination, unlawful retaliation for seeking accommodation under the Americans with Disabilities Act, violation of Family and Medical Leave, and deprivation of procedural due process, since she was employed by a governmental agency.

Fortunately, the Third Circuit was able to see through all the allegations to the main point: Continue reading Employees Who Lie →

Health Care Dilemmas for Employers

Benefits

Several items about employer-provided group health care benefits have crossed my desk lately. In light of the presidential election next week, all of these items could be addressed soon under a new administration. But it is important to understand the scope of the problem that group health insurance has become for employers.

The rising cost of health care benefits is the issue that will have the biggest impact on the workplace in the years ahead, according to a recent survey of human resource professionals by the Society for Human Resource Management. The HR professionals surveyed believe that health care costs not only have the biggest impact on the bottom line but will affect our global competitiveness.

The national concern over rising health care premiums is echoed in Texas for good reason, according to an October 23 article in the Dallas Morning News:

Texans earn more than they did eight years ago, but their health insurance premiums have jumped six times faster than their wages and gone up faster than the national average, according to a study to be released today.

In its study, “Premiums versus Paychecks,” Families USA, a Washington, D.C., nonprofit consumer advocate, found that health care premiums rose 86.8 percent from 2000 to 2007 – from $6,638 to $12,403 – while median earnings rose just 15 percent – going from $23,032 to $26,484.

“[Texas] earnings were actually a little better than the rest of the nation [14.5 percent], but health care premiums increased faster,” said Ron Pollack, executive director of Families USA.

In my part of the country, those rising health care costs are causing many employers to drop group health care coverage completely as a benefit. Only high paying white-collar jobs, government jobs and the largest employers in the area still consistently provide group health care benefits, and many of them are requiring their employees to share in the cost of the premiums.

Apparently that trend is not just local. Continue reading Health Care Dilemmas for Employers →