What Corporate Counsels Should Know About Employment Lawcorporatecounsel.utahbar.org/What Corp...

1

Copyright © 2019

What Corporate Counsels Should Know About Employment Law

Jonathan K. Driggs, Attorney at Law, P.C.Employment Law Consulting & Seminars

(801) 361-6706 | [email protected] | jkdlawpc.com


The Battle for the Heart and Soul of US Employment Law


When legal disputes occur…



Administrative Claims


The Role of Government Enforcement Agencies

• Administrative claims: a “half-way” step to a lawsuit

• No filing fee

• No attorney needed

• Enforce laws

• Issue regulations

• Equal Employment Opportunity Commission (EEOC)

• U.S. Department of Labor (DOL)

• National Labor Relations Board (NLRB)

• Occupational Safety and Health Administration (OSHA)

• Office of Federal Contract Compliance Programs (OFCCP)

4

1 2

3 4

5 6

2


Do you have “EEOC/DOL eyes?”


A Battle for the Heart & Soul of US Employment Law

• The battle is clearly drawn on political lines

• Two competing theories:

• Regulatory model

• Free market model

• Frustrations with a perceived lack of progress made under “first generations” of employment laws


When’s the last time the US Congress passed a major employment‐related bill?



Laws on Different Levels

• Federal

• State

• Local (county or city)


How Compliance Obligations are Created

• Statutory law• Created by legislative branch

• Case law• Created by judicial branch

• Regulations• Created by executive branch (government agencies)

• Executive Orders• Created by head of executive branch

• Referendums• The people!

7 8

9 10

11 12

3


Understanding the Interplay between Different Levels of Government

FEDERAL GOVERNMENT:• LB: Congressional gridlock• EB: Gov’t agencies and

Executive Orders• JB: Conservative majority

STATE GOVERNMENTS:• Response depends

upon political orientation• Liberal: Passing pro-Ee

laws they wish Congress would pass

• Conservative: Some trying to limit local gov’ts power to pass pro-Eeordinances

LOCAL GOVERNMENTS:• Response depends upon

political orientation• Liberal: Passing pro-Ee

laws they wish Congress would pass


My predictions…

• If Democrats win the White House and gain control of Congress in next election (Nov. 2020), legislative damn will break.

• Expect to see not only new laws, but these new laws will be stricter, more burdensome and intrusive.

• Enforcement agencies will become more aggressive towards employers

• Trend of states and municipalities passing their own employment-related laws will continue.


New Approaches: Examples of State and Local Laws that Could Eventually be Passed by US Congress

• Wage equity • “Paycheck Fairness Act” (CA, MA, MD, NE, NY)

• Federal version passed in the House in 2019

• Predictable scheduling

• Paid sick leave

• Minimum wage/living wage

• Paid family & medical leave (CA, NY, MA, NJ, NY RI, WA & DC)

Utah does not currently have laws on any of the above issues


Legal Trend: Some States & Cities Passing Laws Prohibiting Inquiries into Applicant Salary History

• Examples: California, Delaware, Massachusetts, Oregon, (cities: San Francisco, Philadelphia and others)

• CA Law:

• May discuss current salary if applicant brings it up

• Have to provide pay schedule if asked by applicant

• It is lawful to ask: “What are your salary expectations?”

Note: Utah does not currently have a law restricting salary history inquires, but because of multi-state operations and/or out of state applicants, many Utah employers no longer ask for salary history


Employment Relationships


At‐Will Employment

Either party may end the relationship:

• At any time

• For any reason

• With or without notice

13 14

15 16

17 18

4


Exceptions to At‐Will Employment

• Employment discrimination laws (EEO)

• Retaliation protections

• Implied contracts

• Public policy exceptions

• Covenant of good faith & fair dealing


At‐Will Employment (Revised)

Either party may end the relationship:

• At any time

• With or without notice

• For any reason that is not illegal• Discrimination

• Retaliation

• Breach of contract

• Public policy exceptions

• Covenant of Good Faith & Fair Dealing


Scenario

• Derek’s manager fires him on an “at-will” basis (no reason given, no documentation)

• Derek believes he was fired because of his age and files a discrimination claim with EEOC

• EEOC investigator interviews Derek’s manager and asks, “why did you fire Derek?”

• Manager says, “it was an at-will termination—we exercised our rights under at-will”

• EEOC investigator says, “now I am even more suspicious, tell me your real reason for firing Derek… what are you trying to hide?”


Thoughts on “Reasons” for the Termination

• “At-will” is never a reason for termination!

• Always have legitimate, non-discriminatory reasons for terminations that are appropriately documented• The ethical thing to do

• Provides defense if legal challenge is pursued

• Generally, employees should be informed of reasons• What’s the big secret?

• Layoff exception

• Other exceptions?

• Never lie: if an employer’s reasons for the termination are discovered to be untrue, the employer’s credibility is seriously damaged


Documentation Problems

• No documentation

• Poor documentation:• Pore spelin n’ other erors (e.g. incorrect facts)

• Makin’ it personal: “this is the WORST employee ever!!!!!!!!!!!”

• Legal and psychological conclusions

• Problems with informal or unintended documentation: emails, text messages, managerial notes, recordings• Nearly everything can be subpoenaed!

• Shifting explanations• Is all of the documentation consistent? (notes, performance

evaluations, warnings, etc.)


Problems with Severance Agreements

• Release is overly-broad• Employees always have right to file with gov’t agencies

• Lack of consideration

• Difficult to understand (overly-legalistic)

• Non-disparagement clauses and the NLRA

• Adding non-competes/NDA provisions

• Not complying with ADEA (OWBPA) requirements for valid waivers for employees 40+

• Poor delivery

19 20

21 22

23 24

5


Wage & Hour Laws


The Fair Labor Standards Act

This federal law sets the standards for:• Minimum wage

• Overtime pay requirements and exemptions

• Recordkeeping requirements

• Child labor requirements

Each state also has their own wage & hour laws (some go beyond FLSA requirements)


Compliance with Wage & Hour Laws is Challenging!

• Many W&H laws are “Black & White”• Strong public policy re protecting employee wages

• Some W&H laws are CONFUSING

• Ex: overtime exemptions

• Burden of proof usually on employer• Few if any “good faith” defenses for non-compliance

• Employees may not waive rights!

• Easy for employees to pursue claims• US DOL doesn’t just investigate, they audit!

• Potential for “collective” (class) actions


Penalties for violating FLSA

• Back pay and overtime (2 – 3 years)

• Liquidated (double) damages • Ee owed $1,000 in wages; gets an additional $1,000 as

penalty

• Interest

• Attorney and witness fees

• Equitable relief (e.g., job reinstatement)


Common Wage & Hour Compliance Problems

• Failure to pay minimum wage

• Failure to pay overtime

• Miscalculating regular rate

• Untimely wage payments

• Under-reporting work hours

• Exempt misclassifications

• Breaks & meal periods

• Travel time issues

• Independent contractor misclassifications

• Variable pay

• Failure to execute garnishments

Caution: wage & hour laws can vary from state to state. Be sure to confirm you are in compliance with the laws for the applicable jurisdiction!


FLSA White Collar Overtime Exemptions:Update on Efforts to Increase Minimum Weekly Salary (MWS)

• Obama-era DOL rule quashed by court end of 2016• Current level: MWS $455 ($23,660 annual)

• Would have raised MWS to $913 a week ($47,476 annual)

• On March 7, 2019, DOL proposes to raise the salary threshold to $679 per week ($35,308 per year)

• Allows employers to include “certain nondiscretionary bonuses and incentive payments” up to 10% of MWS

• Raises the total annual compensation requirement for “highly compensated” employees – which are subject to a minimal duties test – from $100,000 to $147,414

• Could go into effect early 2020?• But anything could happen, including reviving Obama-era rule!

25 26

27 28

29 30

6


Variable Pay Complexities: FYI, Not all Termination Claims are About the Termination Itself

• Employees often sue for unpaid commissions and bonuses (unpaid PTO too!)

• UT law generally allows employers to set the terms for variable pay programs (including how & when they end)• But! See: Vander Veur v. Groove E. T. (2018 UT App 148)

• Review variable pay policies for clarity on:• How calculated? (including factors that could reduce amount

owed)

• How and when does it end upon termination?

• Example: “annual bonus is not earned until the following requirements are met: 1) still employed with the company as of February 1 of the following calendar year….”


Scenario

Sara is fired and believes she was terminated because of her sex/race.

She goes to her local “plaintiff attorney” to discuss her case. After reviewing the situation, the attorney tells her that she probably doesn’t have a discrimination case and declines to represent her.

As she is about the leave, the attorney asks, “did your employer treat you as exempt or non-exempt?” Sara responds, “exempt.”

The attorney says, “sit back down, your type of position wouldn’t seem to qualify as exempt… tell me more about your job duties.”


Complying with Americans with Disabilities Act


EEOC Charge Statistics for FY 2018

• Sex 24,655 (32.3%)

• Disability 24,605 (32.2%)

• Race 24,600 (32.2%)

• Age 16,911 (22.1%)

• Nat’l Origin 7,106 (9.3%)

• Color 3,166 (4.1%)

• Religion 2,859 (3.7%)

• Genetic Info 220 (.3%)

• Total Charges: 76,418

38% of lawsuits filed in 2018 by EEOC in federal court were ADA cases!


ADA Compliance Risks

• ADA is the most technically demanding EEO law• Congress greatly expanded the definition of disability in 2008

• Case by case analysis required

• Manager must be trained to recognize potential disability issues and get help!

• Managerial “poor handling” cases

• Failure to engage in interactive dialogue

• Failure to reasonably accommodate/provide leave

• “FMLAADA” – increased interaction between FMLA & ADA


Scenario

Sara has ongoing performance problems,… but she also has a lot of medical problems.

As a result, her manager is afraid to apply corrective action.

31 32

33 34

35 36

7


Case Law: Failing to Discipline is Disparate Treatment Discrimination

Employer may have discriminated against disabled employee by not counseling him for performance problems, when non-disabled employees were counseled and therefore given the opportunity to improve.

--Caldwell v. KHOU TV, 5th Circuit, 2017


Suggestions for Minimizing ADA Claim Risks

• Get compliance help!

• www.askjan.gov

• Proactively coach the manager

• All communications must be respectful!


Scenario

During a meeting in which Mike is issued a written warning for poor performance, he discloses that he suffers from depression and claims that his poor performance is the result of his doctor adjusting his medications.

• Should the written warning be retracted?

• Is this a request for reasonable accommodation?


Suggestions for Minimizing ADA Claim Risks

• Two tracks: manage performance and reasonably accommodate

• Document interactive process and go the distance!

• Trial basis

• Measure performance

• Create robust job descriptions and protect integrity of the job

• In a consistent manner, respond to policy violations and performance shortcomings (but don’t be opportunistic)

• Use severances to help transition?


Scenario

Tia takes full-time FML and uses up all 12 weeks.

Right before her scheduled return date she submits a letter from her doctor stating that she needs one more month of leave and then she should be able to return to work.

Is time off a reasonable accommodation under the Americans with Disabilities Act?

The answer is often “yes” when:

• Duration of leave is known

• Prognosis for recovery and return is good

• No undue hardship is created


Retaliation Claims

37 38

39 40

41 42

8


EEOC Charge Statistics for FY 2018

• Retaliation 39,469 (51.2%)

• Sex 24,655 (32.3%)

• Disability 24,605 (32.2%)

• Race 24,600 (32.2%)

• Age 16,911 (22.1%)

• Nat’l Origin 7,106 (9.3%)

• Color 3,166 (4.1%)

• Religion 2,859 (3.7%)

• Genetic Info 220 (.3%)

• Total Charges: 76,418


Retaliation Defined

1. The employee engages in a “protected activity”


Protected Activity

THE ACTIVITY:

• Making a complaint

• Acting as a witness

• Opposing an unlawful practice

• Exercising a right

PROTECTED UNDER:

• Employment discrimination laws

• Workplace safety laws

• Wage & hour laws

• Leave laws (FMLA)

• National Labor Relations Act (NLRA)

• Other laws


Retaliation Defined

1. The employee engages in a “protected activity”

2. Employee suffers a “harm”

3. Causal link between #1 & #2 is found


Scenarios

• Two employees call OSHA about a safety violation without giving their employer an opportunity to fix the problem. They do this in bad faith (they are upset about something else). The manager wants to fire them for “disloyalty.”

• Eli is accused of sexual harassment by his employee, Zoe. The allegations prove to be false. Eli is upset that his reputation has been damaged. He withholds a pay increase Zoe otherwise deserved.


Employees always have the right to…

• Call government agencies

• Make internal and external complaints alleging their employment law rights have been violated

• Act as witnesses to those doing the above

• Engage in “concerted activities” under NLRA

• Exercise rights under the law

Retaliation protections apply regardless of the validity of the complaint!

43 44

45 46

47 48

9


Excerpts from EEOC’s Retaliation—Making it Personal ‐‐ Employers Should…

Talk to the manager who has been accused:

• Acknowledge the potential emotional response involved with being accused of a discriminatory action

• Discuss the problematic implications of seeking to avenge any perceived offense

• Review examples of both constructive and problematic responses with the manager


Sexual Harassment


Any of these faces look familiar?


#MeToo Takeaways

• The entertainment industry is abnormally high-risk• But examples are nonetheless instructive!

• Most federal law and state laws haven’t changed • But society’s expectations certainly have!

• Greater expectations of employers (and managers!)• “High value” harassers no longer excused

• Tougher questions asked:

• Why did employer allow the situation to continue?

• Why was the investigation so limited?

• Why didn’t employer take more serious remedial action?


#MeToo Takeaways

• The “silence” has been broken (tipping point)• #MeToo movement is largely a social media (SM)

movement

• Employers have a new risk to manage:• Negative publicity via SM

• Bypassing employer: employees may publicize on SM when trust is low

• The big question: did employer take the complaint at face value and appropriately investigate?• Message of #MeToo: don’t be dismissive of complaint


Wrong Takeaways from #MeToo Movement

• Complaints don’t need to be investigated anymore • Guilt should be assumed and penalties applied

• Any and every employee who violates policy must be fired regardless of severity• “Zero tolerance” ≠ automatic termination

• Limiting interaction between the sexes as a way to minimize risk of sexual harassment claims

49 50

51 52

53 54

10


Wrong Takeaways from #MeToo Movement

• “I’m being a lot more careful now. Specific changes that I have made: No meetings with women in my office. No one-on-one meetings with any women. No more walk-and-talk meetings with women to the coffee shop.” – 38 year old male, San Francisco, Tech Industry

• “Back in November, management had a meeting where we decided that travel needs to be limited to people that are not potential HR problems. So no more young people of any gender can go on trips with management. People who do travel together must also be the same gender. We also cannot sit next to each other on the plane, so there is no way to work on the flights.” –53 year old male, Wash. DC, Consultant

#ChangedbyMeToo, NBC News, May 30, 2018

https://www.nbcnews.com/specials/changed-by-me-too#slide-1


Assessing Threat Level: Is Your Workplace “High‐Risk” for Sexual Harassment?

High-risk workplaces include:

• Restaurant, fast food

• Retail

• Younger demographic

• Construction

• Manufacturing

• Agriculture

• Sales

• Industry/culture/workplace-specific

• Entertainment, beauty, modeling

• Relationship-driven, highly social (e.g., MLM)

• Isolated workplaces

• Vulnerable workforce populations

• Lots of first-time supervisors


Responding and Resolving Complaints

• Train managers on how to receive complaints

• Investigation should be done by HR (not manager)

• Investigative process should be thorough but discreet

• Standard of proof: “good faith belief”

• Smoking gun evidence not needed, but be fair!

• Managing complainant and accused

• Retaliation prevention


Questions?


Disclaimer

THIS PRESENTATION IF FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO BE A SUBSTITUTE FOR LEGAL ADVICE.

55 56

57 58

59

What Corporate Counsels Should Know About Employment Lawcorporatecounsel.utahbar.org/What Corp...

Documents

Transcript of What Corporate Counsels Should Know About Employment Lawcorporatecounsel.utahbar.org/What Corp...