Are you prepared for a potential lawsuit or government investigation involving your employment practices? Most employers know they have significant risk in this area, but do not know how to limit their legal exposure. To properly assess and improve its risk profile, and potentially avoid a legal dispute altogether, an employer should work with legal counsel to focus on the following key areas:
Policies: Assess and revise where necessary the Employee Handbook and other employment-related policies to ensure optimal protection and to avoid facial violations and other evidence of non-compliance.
Placement: Examine practices for recruiting, selecting, onboarding, and promoting employees to avoid potential claims of discrimination and ensure compliance with government regulations (EEOC, OFCCP, NLRB, ICE, and other agencies).
Pay: Ensure that compensation practices are sound and compliant with FLSA/DOL requirements (including classification of workers as exempt employees or independent contractors) and anti-discrimination laws.
Performance: Focus on effective methods for fair and consistent evaluation of performance and correction of disruptive workplace behavior, including best practices for investigation and documentation.
Accommodation: Educate and prepare managers to handle requests for job modifications or leaves of absence due to disabilities or serious health conditions under the ADA or FMLA.
Addressing Concerns: Establish and maintain channels for responding to internal complaints or reports of perceived harassment or other misconduct, including best practices for investigation, documentation, and avoidance of potential claims of retaliation under Title VII, ADA, ADEA, and other applicable laws.
Asset Protection: Consider the use of restrictive covenants, information security, and other means of protecting trade secrets and confidential information, important relationships, and other investments, particularly in light of new Georgia law.
These are just a few of the steps our attorneys can take to help you assess and improve your employment risk profile. If you might have needs in any of these areas, please do not hesitate to call for a “P4A3 Assessment.Read More
The Eleventh Circuit Court of Appeals recently held that an employer is not absolved from liability for unreported overtime under the Fair Labor Standards Act (FLSA) if it has actual or constructive knowledge that time records are inaccurate. The ruling in Bailey v. TitleMax of Georgia (No. 14-11747) reversed a lower court’s decision accepting the defense that an employee could not recover overtime pay because he underreported his own work hours.
In the TitleMax case, there was evidence that the employee’s supervisor encouraged the underreporting of hours to avoid paying overtime and occasionally edited time records after they had been entered. The Court of Appeals found that this showed the employer had either actual or constructive knowledge of the underreporting of work hours. According to the court, “[i]f an employer knew or had reason to know that its employee underreported his hours, it cannot escape FLSA liability by asserting equitable defenses based on that underreporting.”
The TitleMax case highlights the importance of maintaining accurate time records, ensuring that supervisors and managers are trained on FLSA requirements, and requiring non-exempt employees to accurately report all working time. This is one of the many areas in which our firm can provide guidance to reduce employers’ legal risk.Read More
What are you providing employees in exchange for their time and service? The answer many managers and supervisors probably would give is “a regular paycheck; insurance.” Unfortunately, most employees probably would give the same answer. Managers who want more from employees should consider what more they are doing (or should be doing) for employees, every day.
Managers and supervisors should view their roles as providing value to employees above and beyond monetary compensation. In many ways, a supervisor is a coach whose function is to get employees in optimal SHAPE to benefit the company and themselves. A good supervisor builds the following in each employee:
Skills: job skills are a true source of economic value and personal pride
Habits: good working habits allow employees to succeed in their current roles and beyond
Attributes: a healthy culture can help each employee develop valuable character traits
Purpose: a strong sense of mission is the foundation of accomplishment
Energy: constructive motivation provides intangible benefits on and off the job
With the right mindset, any supervisor can significantly improve employee engagement without necessarily increasing costs for the company. There are many ways to accomplish this, but it should start with a mindset of mutual exchange: “Ask not (only) what your employees can do for you, ask what you can do for your employees.Read More
The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued guidance regarding protections for pregnant employees under federal law. The guidance, published on the EEOC’s website and linked below, states that some temporary impairments arising out of pregnancy can be considered “disabilities” under the Americans With Disabilities Act (“ADA”) which employers must reasonably accommodate.
The guidance also states that an employer’s failure to reasonably accommodate a pregnancy-related impairment could be a violation of the Pregnancy Discrimination Act (“PDA”), which is incorporated within Title VII of the Civil Rights Act (“Title VII”), to the extent the employer accommodates employees with similar limitations that are not pregnancy-related.
The EEOC’s guidance notes that pregnancy itself is not a disability covered by the ADA, but that impairments arising out of pregnancy are not necessarily excluded from coverage. The threshold inquiry is whether the impairment substantially limits a major life activity (such as standing, sitting, walking, lifting, etc.) or bodily functions or organs. However, in keeping with the mandate of the ADA Amendments Act of 2008, the EEOC’s guidance urges employers to focus on reasonable accommodations rather than on whether the impairment or condition might not be covered. Examples of reasonable accommodations listed by the guidance range from allowing the employee to take more frequent breaks, to keep a water bottle handy, or to use a stool, to temporarily reassigning the employee or altering the way the job is performed.
Of course, employers must be wary of imposing job restrictions on pregnant employees—in the absence of a request—if such restrictions could limit job opportunities. Title VII and the PDA have been interpreted to prohibit an employer from excluding an employee from a job or assignment based on pregnancy, even if the action is intended to protect the employee or her unborn child.
The timing of the EEOC’s guidance is somewhat controversial, in light of the fact that the U.S. Supreme Court recently agreed to hear a case that could decide the extent to which an employer must accommodate a pregnant employee. Nevertheless, the guidance signals clearly that the EEOC intends to make pregnancy-related job decisions a priority in its enforcement of Title VII, the PDA, and the ADA. As a result, employers should exercise caution and consult qualified employment law counsel on decisions involving pregnant employees.
The full Guidance is available here.Read More
Although the Obama Administration announced last week that it will delay implementation of some employer mandate and penalty provisions of the Patient Protection and Affordable Care Act (ACA) until 2015, other requirements remain in place and on schedule.
For example, by October 1, 2013, all employers who are subject to the Fair Labor Standards Act (FLSA) (which applies to virtually all businesses with $500,000 or more in gross annual revenues) must provide a written, individualized notice to all employees advising them of the existence of and benefits available through government-sponsored Health Insurance Marketplaces (or “Exchanges”). Open enrollment for the Exchanges is still scheduled to begin on October 1, 2013.
The “Exchange Notice” must be sent to all employees, full-time or part-time, regardless of whether the employer is subject to the health insurance mandate (now delayed) and must contain certain information regarding the Exchanges, including a description of services provided and contact information. The notice also must inform employees that they may be eligible for a premium tax credit if they purchase a qualified health insurance plan through an Exchange. In addition, the notice must state that, if the employee purchases a qualified plan through an Exchange, the employee may lose any employer contribution to any employer-offered health benefits plan and all or a portion of such contribution may be excludable from federal income tax. Model language for the Exchange Notice is available on the Department of Labor website at www.dol.gov/ebsa/healthreform.
Employers must provide notice to current employees not later than October 1, 2013, and to new employees at the time of hiring beginning on that date. Beginning in 2014, the notice will be considered timely if provided within 14 days after the date of hire.
Employers also will be subject to other requirements regarding benefits and reporting, including health plan coverage and design mandates, provisions for pre-existing conditions and waiting periods, distribution of benefits and coverage summaries, and W-2 reporting of insurance benefits provided. So far, these requirements remain on schedule for 2014.
For more information, contact Chris Arbery.Read More
The most recent term of the U.S. Supreme Court yielded a number of key decisions affecting employment law. Following is a brief summary of a few of these decisions with the key legal points they establish or affirm.
University of Texas S.W. Med. Ctr. v. Nassar: An employee claiming retaliation under Title VII of the Civil Rights Act must show that the adverse employment action would not have occurred “but for” the protected activity engaged in by the employee. This holding is based on a strict reading of the statutory language providing a more rigorous standard of proof for retaliation claims than for discrimination claims, which require a showing that the protected factor was only a “motivating factor” in the employer’s decision.
Vance v. Ball State University: In order for an employer to be vicariously liable for the acts of a supervisor (such as sexual harassment), the supervisor must have authority to take “tangible employment actions” such as hiring, firing, promoting, or demoting employees. This decision rejected the view of the Equal Employment Opportunity Commission (EEOC), which promoted a much broader definition of “supervisor” for purposes of establishing employer liability.
Genesis Healthcare Corp. v. Symczyk: Dismissal of a collective action under the Fair Labor Standards Act was upheld, affirming the appellate court’s ruling that the claims were rendered moot by the employer’s offer of judgment before the filing of a motion for conditional certification. However, in order for an offer of judgment to render a case moot, it must include the entire amount of the plaintiff’s unpaid wages, attorneys’ fees, costs, and expenses (potentially a substantial amount), and even then dismissal is not guaranteed.
American Express Co. v. Italian Colors: An agreement with an arbitration and class action waiver clause may be enforceable under the Federal Arbitration Act (FAA) even if the cost of arbitration exceeds the potential recovery. This decision (not an employment case but potentially applicable in such cases) continues a trend upholding enforcement of agreements between consenting parties to arbitrate claims arising under state or federal law. However, this does not guarantee that every arbitration agreement will be enforced; some agreements could be deemed “unconscionable” under state law.
For more information, contact Matt Gilligan.Read More
As of July 1, 2013, all private employers in Georgia with 11 or more employees must use E-Verify, the federal online system for confirming whether new hires are legally authorized to work in the United States. This requirement has been in place for the last year and a half for larger employers, following passage of Georgia’s Immigration Reform and Enforcement Act of 2011 (IREA). All employees who work at least 35 hours per week count toward the new coverage threshold of 11 employees.
The Georgia legislature also recently expanded the IREA to require the use of E-Verify by private employers contracting with public entities to provide labor or services of $2,500.00 or more, regardless of the number of employees. By adding “or services” to the statute’s original language, the legislature expanded the law’s reach beyond providers of physical labor and construction to providers of services such as information technology, accounting, or auditing. The requirement also applies to all subcontractors and sub-subcontractors.
The new Georgia law states that a public employer shall not enter into a contract with a private company unless the company registers and participates in E-Verify. To ensure compliance, the private employer’s bid or contract to provide labor or services must include a signed, notarized affidavit attesting that it uses E-Verify, that it will continue to use E-Verify, and that it will ensure that all sub-contractors will do the same. The affidavit must include the company’s federal work authorization user ID number and date of authorization.
Lastly, before any county or municipality in Georgia issues a business license, occupational tax certificate, or other document required to operate a business, the business applicant must provide an affidavit that it uses E-Verify, employs fewer or 11 employees, or is otherwise exempt from the E-Verify requirement. The affidavit also must include the affiant’s work authorization user ID number and date of authorization.
For more information, contact Chris Arbery.Read More
Many employers would be surprised to learn not only that undocumented workers can sue for unpaid overtime under the federal Fair Labor Standards Act (FLSA), but also that company supervisors, officers, directors, and owners can be personally liable for such damages. In Lamonica et al. v. Safe Hurricane Shutters, Inc. et al. (No. 07-cv-61295), the federal 11th Circuit Court of Appeals (covering Georgia, Florida, and Alabama) recently held that two salaried workers were entitled to recover back pay, liquidated damages, and attorneys’ fees from their employer, a hurricane shutter installer, and two of the company’s owners. At trial, the plaintiffs were found to be non-exempt workers who were entitled to overtime.
The Court rejected arguments by the employer and two individual owners that the workers should be precluded from recovering back pay because one or both were undocumented aliensand allegedly used false social security numbers to obtain the jobs. Regardless of any alleged wrongdoing by the workers, the Court held, the employer still was responsible for payment of wages under the FLSA for work already performed. The Court distinguished a previous decision by the U.S. Supreme Court, Hoffman Plastic Compounds, Inc. v. NLRB (2002), which held that undocumented workers could not recover back wages for wrongful termination because they were not entitled to the job in the first place. In that case, the 11th Circuit observed, the workers had not already performed work for which they were seeking compensation.
Further, even though the two owners were minority shareholders and were not present in the workplace for more than a few days or weeks each month, the Court held that they had “sufficient control of the company’s financial affairs to cause the corporation to compensate or not to compensate employees in accordance with the FLSA,” and therefore they could be deemed “employers” along with the company. As a result, the Court held that the owners/board members were individually and personally liable to the plaintiffs.
This case highlights the importance to business owners and managers alike of ensuring that all employees are properly classified (as either exempt or non-exempt from overtime requirements) and compensated under the FLSA. Overtime pay requirements are applied rigidly and are the source of a surprisingly large amount of employment litigation. The best way to avoid such litigation is to have a qualified employment attorney conduct a privileged audit of pay practices, including an evaluation of all positions as either exempt or non-exempt.Read More
In what is likely to be one of the more important decisions in the employment law arena this year, the U.S. Supreme Court will hear a case in which it will decide whether, in a Title VII retaliation action, a plaintiff employee must prove that the employer would not have taken an adverse employment action but for the employee’s protected activity, or instead need only prove that the protected activity was just one of the motivating factors for the adverse action.
In University of Texas Southwestern Medical Center v. Nassar, 674 F.3d 448 (5th Cir. 2012), cert. granted, 81 U.S.L.W. 3234 (U.S., Jan. 18, 2013) (No. 12-484), the plaintiff was a university faculty member who alleged that he was constructively discharged as a result of workplace harassment and discrimination based on his Middle Eastern ancestry. He also claimed that, after resigning his position, the University retaliated against him by blocking his employment at a hospital affiliated with the University. A jury found that the university retaliated against Nassar and awarded him close to $4 million in back pay, compensatory damages, attorneys’ fees, and costs. The trial court had instructed the jury that retaliation could be found based on a “mixed-motive” theory (i.e., that the employee’s protected activity was one of several motivating factors). The university appealed, and the Fifth Circuit Court of Appeals affirmed, finding no error in the instruction. Citing a split in the circuits, the Supreme Court granted certiorari.
In a “mixed motive” case, an employee may prove discrimination even if the employer simultaneously possessed a legitimate, nondiscriminatory reason for taking adverse action against the employee. In other words, the employee need only demonstrate that retaliation was one of the motives for the adverse action. On the other hand, if the “but for” standard applies, the employee must demonstrate that the adverse action would not have occurred but for the employer’s discriminatory motive. In Nasser, although the University presented evidence of a legitimate, non-retaliatory reason for blocking Nasser’s subsequent job opportunity, Nasser offered evidence that the University’s action was in retaliation for asserting a claim of harassment. Instructed on the “mixed motive” theory, the jury found that the University illegally retaliated against Nasser in violation of Title VII.
The Supreme Court’s decision will have broad implications. The Court has announced that it will consider not only whether Title VII’s retaliation provision requires “but for” causation, but also whether “other similarly worded employment statutes” (e.g., the Americans With Disabilities Act, etc.) require this level of proof. The “but for” standard is preferred by employers, since it requires a plaintiff to demonstrate that retaliation was the only reason for the adverse action. According to the Supreme Court’s website, oral argument in this case will be held on April 24, 2013.Read More
Employers often ask whether an employment action would comply with employment laws. Often, that is the wrong question. Ultimately, whether a decision is lawful often depends on motive, which can be a matter of dispute. Employers should ask, “In the event of a legal dispute regarding this decision, who would be believed, and why?”
Even better, before taking a significant action, an employer should ask the following question: “How can I support the decision, avoid an unnecessary dispute, and improve our business?”
While each employment action may have a different level of risk, employers can reduce their overall risks by keeping in mind a general framework for decision making. Just remember the familiar phrase from childhood piano lessons for the notes on the treble clef: “Every Good Boy Does Fine.”Read More