Your Employee Matters

In Colwell vs. Rite Aid Corporation, defense counsel posed a unique argument that the court quickly dismissed. Essentially, a clerk at Rite Aid suffered from glaucoma and asked that she have her shift changed from nights to days since she felt it was dangerous to drive at night, given her vision problems. The manager refused to make the requested accommodation, saying it would not be fair to the other employees who would, of course, also prefer the day shift over the night shift There were also concerns that seniority and other factors justified not providing her the requested accommodation.

In a last-ditch effort to convince the court in the reasonableness if their denial, Rite Aid argued that she was fine while she was at work, where she did not need an accommodation, and that the act of getting her to work was not their problem. As you can imagine, the court made mincemeat of this argument, essentially saying that changing someone’s work schedule is a reasonable accommodation.

Here’s the specific language of the ADA

“The term ‘reasonable accommodation’ may include a) making existing facilities used by employees readily accessible to, and usable by, individuals with disabilities; and, b) job restructuring, part-time, or modified work schedules (emphasis added), reassignment to a vacant position, acquisition; or modification of equipment or devices; appropriate adjustments or modifications of examinations, training materials or policies; the provision of qualified readers or interpreters and other similar accommodations for individuals with disabilities.

As a side note, the employee quit, claiming a “constructive discharge: because of the failure to accommodate.” Although the court agreed with her accommodation argument, it did not agree with her constructive discharge case because she made little effort to resolve the accommodation issue.

Remember this: A company must engage in accommodation unless it creates an “undue burden.” The courts have reminded us that this does not mean an inconvenience for the employer; it means an “undue burden’ – a standard that Rite Aid could not meet. When discussing the breakdown in the interactive process which led to the workers constructive discharge, the court reminded us that, “A party who fails to communicate, by way of initiation or response, may also be acting in bad faith. In essence, courts should attempt to isolate the cause of the breakdown and then assign responsibility … the last act in the interactive process is not always the cause of a breakdown … the court must examine the evidence as a whole to determine whether the evidence requires a finding that one party’s bad faith caused the breakdown.”

Lesson: Don’t forget about the ADA language set forth above. The effort to make these accommodations is an employer’s obligation unless it results in an undue burden. Don’t give up on the interactive process. Employers run into trouble when they pre-suppose that something would be an undue burden to the company. Our advice is that unless safety, security, or other critical issues are involved, you should let the employee attempt the accommodation and only then determine if it is an undue strain on the employer.

A review of employment cases during one recent month included these topics:

1. Public policy violation/whistleblower
2. Breach of contract/implied covenant
3. Fraud
4. Defamation
5. Wage/hour
6. Discrimination
7. Harassment
8. Retaliation
9. Interference with contractual relations
10. Trade secret/non-competition agreements
11. Workers compensation/OSHA
12. Independent Contract
13. Respondeat superior
14. Privacy
15. Arbitration
16. Attorneys and attorneys’ fees
17. Statutes of limitation
18. And others

Here are a few recent employment litigation-related headlines:

• Sales Representatives $480,000 Wrongful Termination Award is Affirmed
• Evidence Supported Whistleblowers’ Discrimination Claim, but Not Sexual Harassment
• Undocumented Workers Had Standing to Assert Violation of Prevailing Wage Law
• Employee Who Was Threatened and Assaulted by Co-Workers Stated Wrongful Termination Claim
• Employer Could Recover Training Costs from Employee, But Can’t Recover Same from Final Check
• Housekeeper’s Award of $70,000 in Unpaid Wages Affirmed
• Employee Who Provided Customer Service and Training Related to Company Software Not Exempt from Overtime
• Employer Bears Burden of Showing Reasonableness of Layoff Criteria in Age Discrimination Case
• $1.8 Million Judgment Affirmed in Favor of Employee Discriminated Against on the Basis of Race and Gender
• Employee Who Requested Medical Leave for Depression While Working for Another Employer May Have Been Improperly Terminated
• Court Upholds $1.088 Million Verdict in Favor of Terminated Italian National

These are just a few example of the numerous, off-the wall HR exposures your business might face. None of these companies ever planned on getting in the headlines — at least not like this! As you can see from many of the titles, employment practice claims might not be frequent: but when you face one, they tend to be severe. By the way, I didn’t list headlines about case verdicts favoring employers. Although these are rare, they still end up costing companies tens of thousands, if not hundreds of thousands of dollars, just to be “right.”

In Arenas vs. El Torito Restaurants, a California appellate court ruled on the possibility of a class action lawsuit for the misclassification of all managers at the El Torito restaurants as exempt.

Although the court gave a lengthy analysis about the appropriateness of the class action case, for our purposes, what’s important was that it warned employers that just because managers might be exempt at one store they might not be exempt at another store. It depends on the circumstances

At some El Torito restaurants, many of the managers also did work performed by the staff or busboys. In other larger, busier restaurants, they did less of this work. Employers should determine whether managers are exempt on a case-by-case basis unless there’s complete uniformity in operations.

The plaintiff’s complaint also lays out the laundry list of exposures employers face by misclassifying managers as exempt; violation of wage and overtime regulations, failure to furnish wage and hour statements, or not providing rest and meal periods.

In light of recent U.S. Supreme Court cases, the EEOC has proposed regulations to address the scope of the “reasonable factors other than age” (RFOA) defense available to employers under the Age Discrimination Employment Act (ADEA). According to the EEOC, there are six non-exhaustive factors to consider in determining whether an employment practice is reasonable.

1. Where the employment practice and manner of its implementation are common business practices.
2. The extent to which the factor is related to the employer’s stated business goals.
3. The extent to which the employer took steps to define the factor accurately and apply it accurately and fairly (e.g., training, guidance, instruction of managers).
4. The extent to which the employer took steps to assess the adverse impact of its employment practices on older workers.
5. The severity of the harm to the individuals within the protected age group, in terms of both the degree of injury and number of persons affected adversely, and the extent to which the employer took preventative or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps.
6. Whether other options were available and the reasons the employer selected the option it did

The EEOC said that it also looks into whether supervisors (a) have unchecked discretion to assess employees subjectively;( b) evaluate employees based on factors known to be subject of age-based stereotypes; and (c) receive guidance or training about how to apply the factors and avoid discrimination. To avoid unnecessary disparate impact and other discrimination type claims, consider these factors whenever you make an employment-related decision, especially if you terminate a group of employees.

Since I hadn’t been to a SHRM convention in a number of years, I felt it was my duty to attend one since it was occurring here in San Diego. After poring through the workshops, speaking to dozens of HR professionals and vendors, and roaming the entire exhibit hall, here’s what I observed:

1. HR is BIG business. There are approximately 10,000 attendees and the convention takes up the entire San Diego Convention Center (which is quite large). There were more than 150 concurrent sessions over the four days of the convention. The keynote speakers were Al Gore and Steve Forbes, (neither of which I had any interest in listening to- and neither of whom have anything to share about HR. Just ask the folks who heard them!). Other well- known names included Marcus Buckingham, Dave Ramsey, and David Ulrich.
2. I’m sure many of the attendees were there to earn up to 29 recertification credits in one lump toward their PHR, SPHR, or GPHR certifications (60 are required every three years).
3. The convention discussed a wide variety of subjects, broken down into: * Employment law and legislation * Strategic management * International management * International HR * Total rewards * Personal and skilled development
4. The breadth of workshops offered was as broad as the HR experience itself: Everything from hiring employees to letting them go and everything in between. Frankly, I didn’t see much new except everybody’s increased panic on how to manage healthcare benefits.
5. For an HR professional to attend the program it cost at least $1,200 in registration fees, plus $750 on room and board, and $500 in plane fare unless they drove here. This expense alone rules out many small company practitioners.
6. The company size of attendee broke down this way:
   • Fewer than 100: 16.59%
   • 101-499: 22.90%
   • 500-999: 12.25%
   • 1,000-9,999: 27.09%
   • Greater than 10,000: 21.80%

When it comes to the “weight” of the total employee population, companies with more than 1,000 employees dwarfed the conference.

I spent time going through the enormous vendor floor. According to SHRM, there were more than 565 executive exhibitors in a variety of groups:

• Compensation and benefits
• Employee relations
• Employee selection/staffing
• Health, wellness, and safety
• HRM services * HR information and systems
• Training and Development

By far, the largest vendors were the recruitment sites (Monster, Yahoo, HotJobs, etc.) and the Payroll/PEOs vendors (ADP, Ceridian, PayChex, etc.).

In trying to get a sense of where the “buzz” was, the longest line I witnessed was roughly 30 women waiting for Erik Estrada’s (yes, that Erik Estrada from CHIPs) autograph.

Experts were doing live presentations to small audiences, some with very interactive screenings of their programs, and there were surprisingly large number of educational providers. All in all, the experience reminded me very much of the last convention I attended in San Diego.

The reality is that most of the companies in the HR That Works range of 15-500 employees get very little play at this conference. There’s certainly plenty geared toward large organizations. I can see every reason why vendors have an incentive to focus there. Not a single vendor said that they focus on smaller employers.

Most of the companies that use our program don’t send their employees off for MBA programs, buy FMLA tracking software, use elaborate employee incentive programs, recruit globally, or need an elaborate performance management system. What these companies do need is to be great at HR basics — the blocking and tackling stuff:

• Hiring the right people
• Knowing how to make them productive
• Making sure that you can keep productive and trustworthy employees
• Training them to ratchet up their performance
• Getting them to play team ball
• Keeping your managers and employees from doing anything stupid that would get you sued

I came away from this convention ever more assured that we’re going down the right path by focusing on the needs of companies with 15 to 500 employees. Let me know how we can help your company!

EDUCATION REIMBURSEMENT AGREEMENT
(PDF)

Training is the lifeblood of many companies today; everything from extensive on-boarding to paying for expensive MBA programs. To protect from an employee getting educated and then immediately leaving, many companies use a Reimbursement Agreement such as this one. One caveat: Make sure that your state law and contract allows you to offset any monies owed from a final paycheck. Some states, such as California, do not allow a “self-help” remedy. You would have to go to court to enforce the terms of the contract.

The fundamental character or spirit of a culture; the underlying sentiment that informs the beliefs, customs, or practices of a group or society; dominant assumptions of a people or period.
What is the ethos of your company?

All families, no matter what they look like, are protected by the Family and Medical Leave Act (FMLA). “Workplaces have changed over the last ten years and how we view families has evolved as well,” said DOL Secretary Solis. That message was solidified when the department announced this week that an employee who assumes the role of caregiving for a child is entitled family leave regardless of their legal or biological relationship to the child. This clarification of the law is a victory for many non-traditional families, including families in the lesbian, gay, bisexual, and transgender community, who have often been denied family leave. The FMLA allows workers to take up to 12 weeks of unpaid leave during any 12-month period to care for loved ones or themselves.
Read the News Release here.

Read the Administrator’s Interpretation here.

For many years, we’ve recommended that employers conduct credit histories on all job applicants and post-hire in specific categories. The fact is, someone with a poor credit history is a greater risk than someone who has a good record. However, to protect workers impacted by the recession, Oregon, Washington, and other states have begun passing laws that narrow the scope of these inquiries. The EEOC is also raising numerous concerns in this area. The Oregon statute limits the inquiry to cases in which a person’s credit is “substantially job-related,” which is defined as:

• An essential function of the position at issue requires access to financial information
  not customarily provided in a retail transaction that is not a loan or extension of credit. Financial information customarily provided in a retail transaction includes information related to the exchange of cash, checks, and credit or debit card numbers.
• The position at issue is one for which an employer is required to obtain credit history
  as a condition of obtaining insurance or a surety or fidelity bond.

Click here to see the Oregon statute.

Here’s what the EEOC says:

“Pre-Employment Inquiries and Credit Rating or Economic Status
“Inquiry into an applicant’s current or past assets, liabilities, or credit rating, including bankruptcy or garnishment, refusal or cancellation of bonding, car ownership, rental or ownership of a house, length of residence at an address, charge accounts, furniture ownership, or bank accounts generally should be avoided because they tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the particular job in question.”

Here’s some data gathered in an effort to encourage these regulations.
Here’s a suit filed by the EEOC. Since at least 2001, the EEOC said, Freeman has rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions. The EEOC lawsuit charged that this practice has an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity.
Click here to see the FTC site on credit rating.

The Bottom Line: Asking for credit backgrounds poses risks for employee and employer alike. Make sure that you work with a company such as www.globalhrresearch.com that helps keep you abreast of the rapidly changing legal requirements in this area.

The U.S. Court of Appeals for the Second Circuit (covering Connecticut, New York, and Vermont) has ruled that an employer’s deliberate failure to investigate a complaint of discrimination does not constitute a stand-alone act of retaliation. In Fincher v. Depository Trust and Cleaning Corp., the plaintiff alleged that she complained to a human resources manager about what she believed was racially biased treatment toward black employees in her department. The plaintiff claimed that the human resources manager told her that he was not going to open up an investigation of her claim of race discrimination. The plaintiff resigned and filed claims under federal, state, and local laws for retaliation.

The Court of Appeals affirmed summary judgment in favor of the employer, finding that the employer’s alleged failure to investigate discrimination was not in itself a “materially adverse action” which could subject the employer to retaliation liability. The court noted that under the seminal case Burlington N. & Santa Fe Ry. Co. v. White, “a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The court held that an employee’s knowledge that her employer has declined to investigate her complaint does not ordinarily constitute a threat of further harm.

Above articles courtesy of Worklaw® Network firm Shawe Rosenthal.