Your Employee Matters

Managers must often deal with an employee who is chronically absent, and claims that a disability is the cause of the absenteeism. The U.S. Court of Appeals for the Second Circuit (covering Connecticut, New York, and Vermont) addressed this issue with regard to an alcoholic employee. The Court held that the employee’s repeated absence from work meant that he was not qualified for the job, and that his termination had no relation to his FMLA-protected leave.

Facts of the Case: In Vandenbroek v. PSEG Power, the company fired a boiler utility operator after he violated the employer’s no-call/no show policy. His termination came shortly after he had taken FMLA-protected leave, allegedly to deal with his alcoholism. The employee sued the company, claiming that he was terminated because of a disability (alcoholism) and for taking medical leave to treat the condition.

The Court’s Ruling: The Court upheld the district court finding that the employee was terminated for violating the employer’s attendance policy, and not because of his disability or for taking FMLA-protected leave. The Court, noting that alcoholism could constitute a disability because the employee was substantially limited in his ability to work, found that the employee failed to adduce sufficient evidence to make out a prima facie case under the ADA. To do so, he would have had to show that he was “qualified” to perform the essential functions of the job with or without reasonable accommodation. “Essential functions” are duties that are fundamental to the job in question. In this case, the Court determined that reliable attendance at scheduled shifts was an essential function of a boiler utility operator. The employee had to be present at the plant to monitor the boiler, respond to any alarms, handle any power outage, or (if needed) respond to an explosion. With regard to the employee’s FMLA claim, the employee failed to show that he was terminated for taking FMLA-protected leave. There was no evidence of pretext; rather, the evidence showed that his violation of the no-call/no show policy led to his termination.

Lessons Learned: Most employers would agree that reliable attendance is an essential function of all jobs. While the Vandenbroek case provides a clear example of this principle, other instances might not be so clear. When alcoholism or another disability causes an attendance problem, employers must be able to show that regular and reliable attendance is an essential function for the specific position. One way of doing this is to have clear and detailed written job descriptions that describe the essential functions of the position, including regular and reliable attendance.

Article courtesy of Worklaw Network firm Shawe Rosenthal (www.shawe.com).

The Federal Fifth Circuit Court has held that a plaintiff could use a “mixed motive” theory in a retaliation case under Title VII. In Smith v. Xerox, the employee won a jury verdict against the company for her claim that she was fired for filing an EEOC charge. The employee was disciplined for her failure to meet sales goals and placed on a performance improvement plan. Before the time under the plan expired, she filed a charge of discrimination. The company began the process of termination seven days later. At trial, the jury was given a mixed motives instruction, and found that the company was motivated to terminate her in part by the EEOC charge. The jury awarded the plaintiff both compensatory and punitive damages. On appeal, the Fifth Circuit, relying on the U.S. Supreme Court’s Price Waterhouse v. Hopkins, reasoned that the mixed motive instruction was proper. A plaintiff can show that an adverse action was because of an impermissible factor by showing that factor to be a “motivating” or “substantial” factor in the employer’s decision. In this instance, the plaintiff met her burden of proof, and it was the company’s burden to show that it would have taken the same action even if she had not filed a charge. Xerox did not meet its burden.

The U.S. District Court for the Eastern District of Pennsylvania has green-lighted an employee’s FLMA claims against a company president, human resources manager, director, and the plant manager. In Narodetsky v. Cardone Industries, Inc., the company terminated a 12-year employee shortly after he requested FMLA leave for surgery to repair a leg injury. The day after learning that the employee needed leave, the company decided to conduct a forensic computer search of his computer and found a pornographic e-mail that he had allegedly forwarded to another employee more than a year earlier. After the company terminated the employee, he sued not only Cardone Industries but also the company president and several individual managers, alleging that they had violated the FMLA. The FMLA defines “employer” as “any person who acts, directly or indirectly, in the interest of an employer,” and FMLA regulations explain that individuals such as corporate officers can be found individually liable for any violations of the act. Thus, the Court concluded that the individual defendants were properly named in the lawsuit because each one was alleged to have played a role in the decision to terminate the plaintiff.

A recent case brought against Friendly’s Ice Cream in Maine shows the importance of having detailed job descriptions that include physical requirements.

In this case, plaintiff Katherine Richardson alleged that Friendly’s violated the ADA by failing to accommodate her shoulder impingement injury, which required her to undergo surgery. Apparently, she never fully recovered from the injury, which limited her ability to do some manual tasks. Even though Richardson was in a management position, she was expected to chip in and help with everything from doing the fries to cleaning up. Because she was limited in her ability to do these jobs, as the court stated, “Even assuming it is true Richardson’s “primary function” was to oversee restaurant operations, the point does not advance Richardson’s case. The essential functions of the position are not limited to the primary functions’ of the position.”

The court pointed to evidence showing “there were a limited number of employees among whom the performance of the manual tasks at the restaurant could be distributed … This evidence supports findings that these tasks were essential to Richardson’s position.” The court quoted an EEOC guideline, “If an employer has a relatively small number of available employees for the volume of work to be done, it may be necessary that each employee perform a multitude of different functions. Therefore, the performance of those functions by each employee becomes more critical and the options for reorganizing the work become more limited.”

In the end, Richardson’s case failed because even with modifications to her work, she remained unable to perform a number of tasks, including mopping the floor, lifting heavy trash bags, scooping ice cream, and unloading supplies from delivery trucks. This left her unable to perform a substantial number of manual restaurant tasks and therefore, her case failed. The court also stated that, “The law does not require an employer to accommodate a disability by foregoing an essential function of the position or by reallocating essential functions to make other workers’ jobs more onerous.”

Richardson also argued that Friendly’s violated the ADA by refusing to engage in an interactive process to determine whether any reasonable accommodations were available. This argument failed too because Richardson was not able to identify any such accommodation that would qualify. The two accommodations she did identify “performing tasks in a modified manner and delegating tasks to others” were inadequate to enable her to perform a sufficiently broad range of manual tasks.

Lesson learned: This is an insightful case, which you should consider reviewing in its entirety. It reviews the battle of job descriptions and accommodations in a way that provides many helpful hints to employers. Read the full case here. You can also access free job descriptions that have some physical requirements here.

I’m in a unique situation: I’m an experienced employment lawyer and an expert in HR practices. I’ve had the opportunity to give more than 250 presentations to CEOs through the Vistage organization. I also ran a monthly forum for senior HR executives for four years. In this mastermind group, all members had to be SPHRs (a high-end HR designation) make more than $80,000, and report directly to their CEO for at least seven years. So, given my expert background of knowing the law, the needs of business owners, and the human resource function, what am I looking for in great HR?

To begin with, I want somebody who’s excited about the job who wants to be really good, if not great at it. Someone who’s willing to give it their best every day and not settle for mediocrity. In many organizations, the person in the HR role doesn’t have a formal HR background. The CFO, bookkeeper, or owner might be managing the basic HR functions such as payroll and benefits administration. As companies grow toward the 100-employee range, they start bringing on full-time HR executives. I know companies with 25 employees that have a full-time HR executive, and I know companies with 300 employees that still don’t have one! Regardless of whether the HR person wears three hats or one, I also want them to think and act strategically.

To be strategic, the HR manager should follow these guidelines:

1. Be clear about ownership’s vision and goals for the organization. In turn, HR will work on those aspects of human resources that will help grow the company toward this vision or goal. Let me give an example: Perhaps cash is tight. There’s no forecast for hiring new personnel, at least for some time. Ownership is more concerned about survival than anything else. The main focus then becomes: How can we help our existing workforce become more productive and grow the bottom line? If survival is the primary concern of management, this has to be the primary concern of the human resource executive, too.

   On the other hand, perhaps your company is in growth mode with management focused on bringing on people in the right seat of the bus as quickly as possible to service growing demand. If that’s the case, then the HR executive has to focus itself on doing the best possible job of hiring. Quickly.

2. Focus on constant improvement. On average, the most educated HR executive is the best HR executive. So, the question becomes: How much time do you spend studying the HR function? If you’re doing HR full time, 50% of your educational efforts should be in this area. If you’re doing it a third of the time, then maybe 15% of your learning has to be in this area. So, while I might be preaching to the choir, how many of you read this entire newsletter every month? How many of you attend our excellent monthly Webinars? How many of the Special Reports and White Papers on HR That Works have you taken the time to read? All of the tools necessary to be a learned HR executive are readily available on HR That Works.

   Learning requires discipline. I’ve disciplined myself to read a book a week, review every case that comes out in the employment law field, read the newsletters and blogs of eight different employment law firms, and read a number of HR magazines every month. I do HR full time and that’s what someone who wants to become an expert has to do. To get this volume of reading done, I discipline myself to do it for an hour a night. It’s something I look forward to, realizing that, not only do I enjoy learning, but it will have a bottom line impact on my career. The most successful executives I’ve met over the years are voracious learners. That’s exactly what I want my HR executive to be.

3. Become proactive. In my experience, most HR functions are reactive: We need to do payroll, hire and terminate employees, issue a COBRA notice, etc. Proactively, we should be engaging in compliance, communication, and skills training, surveying, auditing, and similar activities that will help to strengthen and grow the department and company over time. How many proactive projects has your HR department done during the last year? My mantra is simple: Start with one proactive item a month not something you “have” to do, but something you
   “should” do to help improve the company.

   If you face any challenges in meeting these goals, don’t hesitate to contact me. Because I usually spend my time on hotline calls dealing with negative scenarios, I enjoy helping our Members create positive outcomes for their company and careers. Got a bright idea? Want to get your head checked? Then give me a call at (800) 2324-3304, toll free.

The EEOC has announced that Outback Steakhouse will pay $19 million to settle a nationwide class action suit alleging that the company maintained a glass ceiling to keep women from obtaining management positions. Outback required kitchen management experience as a pre-condition to advancement, but in a Catch-22, failed to hire women into these positions. See the EEOC’s News Release here.

In the Ninth Circuit Nevada-based court case of Boucher vs. Shaw, three former employees of The Castaways Hotel Casino and Bowling Center, as well as their local union, sued individual managers for unpaid wages under the Fair Labor Standards Act. The court ruled that the chairman, CFO, CEO, and HR head two of whom were also owners could also be considered employees under the FLSA and thus be held personally liable for the damages. (572 F.3d 1087) (9th Circuit 2009)

In Stewart v. RadioShack Corp., (US District Court Northern District 07-4499) the court held that an employee’s expense reimbursement rights can’t be waived because they failed to follow internal company procedures for requesting reimbursement. According to the court, as long as an employer knows, or should know, that employees are incurring work-related expenses, the employer has a duty to ensure that employees are being reimbursed for their expenses. This right to reimbursement does not expire until the statute of limitations for filing a lawsuit.

Bottom line: Instead of refusing late expense reimbursement requests, encourage employees to get their expenses in, and have documentation in which the employee acknowledges that all expenses have been reimbursed.

If you’re responsible for the HR functions at your company, you face a variety of challenges. To get the job done, follow these guidelines:

1. Keep job descriptions up to date. Job descriptions often come up in litigation whether discussing disability accommodation, quality of job performance, essential job functions, and so on. The best starting place is O*NET. Look for the relevant job and then cut and paste those provisions that relate to the position at your company. Have both the manager and the employee review the description for accuracy.
2. Stay on top of wage and hour issues. Make sure that everybody gets paid properly and takes their vacation and sick days. Manage time and attendance, overtime obligations, exempt classifications, and perhaps sales commissions as well.
3. Update policies and procedures. This involves not only legal compliance issues, but keeping up with the times. For example, yesterday’s performance evaluations just don’t work in today’s responsibility-based environments. Update such tools as leave notices, FMLA, ADA, hiring forms, and the like. One of the great things about being an HR That Works member is that we do much of this work for you.
4. Develop training plans. Make sure your managers are getting proper training in such areas as sexual harassment, hiring, motivation, discipline, workplace injuries, and termination– as well as requests for disability accommodations, family, and medical leave.
5. Maintain proper records. Retain personnel records for the time required and then no longer. Remember the importance of electronic storage as well.
6. Get feedback. Ask your fellow managers and the rest of the workforce how you can help improve HR practices. Use the HR Department Survey in HR That Works.
7. Put out fires. By definition, HR folks deal with a lot of employee drama. This means that you must be a good communicator; know when to solve problems yourself or when to speak to upper-level management or seek professional advice. If you’re unsure, call our Hotline for advice.
8. Finally, align your HR practices with the company’s strategic objectives. Are you clear about what strategic objectives the ownership would like from HR? If they haven’t told you, ask! Are you focused on meeting these objectives like a laser beam?

According to SHRM, turnover rates have dropped in half since 2007, from 16% to 8%, with voluntary turnover dropping from 10% to 9%. To avoid the loss of top talent, companies are offering valued employees salary increases (49%), cash retention awards (32%), stock retention awards (26%), and higher bonus payouts (25%).

However, what do you do if your company doesn’t have the money to fund these types of efforts? There is only one answer brutal honesty. Open your books, let employees know what the real deal is, what your plans are for moving forward, and how they can profit from contributing to this growth. I believe that instead of throwing money at the situation, businesses should give employees the opportunity to produce outstanding results and get paid for their efforts. Here’s a formula that makes sense:

1. Pay at least the average wage rate.
2. Give employees incentives with team bonuses. Remember, a rising tide floats all boats.
3. Create individual incentives. Remember the importance of frequency and high touch.

To learn more about compensation strategies, watch the Webinar we did on Straight Talk About Employee Pay with Chuck Czismar.