Think Before You Post - Employment Discrimination and Confidentiality

Settlements are the grease that makes the wheels of justice run. Without plea bargains, the criminal court system would grind to a halt.  The civil justice system depends on reliable monetary settlements as well.  Lawyers are used to working within this framework, but every so often, some sand gets thrown in the machinery, and it grinds to a halt. 

With most civil settlements, particularly those involving employment law, confidentiality is key.  Employers don’t want others knowing the payout made to buy peace.  Exceptions may be specified for counsel and tax advisors, but generally litigants cannot discuss the facts or terms of a settlement even with a spouse unless the spouse agrees to maintain confidentiality as well. 

In the old days when oral rumors were the rule, it might be tough to prove a breach of confidentiality.  But in the 21st century, we have social media to establish beyond a reasonable doubt who spilled the beans.

In the age discrimination claim of Patrick Snay v. Gulliver Preparatory School, it was the daughter of the plaintiff who posted to her 1,200 Facebook friends:  “Mama and Papa Snay won the case against Gulliver. . . . Gulliver is now officially paying for my vacation to Europe this summer.  SUCK IT.”  The daughter was a student at the school her father had sued, so her post broadcast to current and former students that Gulliver had lost its case with its former headmaster.

Four days after signing an $80,000 settlement agreement, the school cried foul and refused to pay.  Now over two years later and after two court appeals, Florida’s Third District Court of Appeal sided with the school and refused to enforce the settlement agreement.  “Snay violated the agreement by doing exactly what he promised not to do. . . . His daughter then did precisely what the confidentiality agreement was designed to prevent,” said Judge Linda Ann Wells in her ruling on February 26, 2014.

Maybe this case will go back to court, and how much impetus will there be for the school to offer a voluntary settlement?  Lots of work for everyone involved just because of a slip of the mouse. 

Always take a confidentiality clause seriously and never document any breach on social media.

Christina Hausner is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, PA. She received her law degree from Duquesne University School of Law and has practiced in the area of employment law for over 25 years

From 'Philadelphia' to 'Modern Family'

Matt Grosh recently talked about Cam and Mitchell from Modern Family as a backdrop to the IRS's recent revenue ruling. That ruling recognized same-sex marriages for federal tax purposes even when a couple resides in a state that does not permit same-sex marriages.  The couple must only have been validly married in a state that recognizes same-sex marriage.

After last summer's Supreme Court decision analyzing the Defense of Marriage Act, numerous questions arose regarding legal treatment of same sex couples.  Employers were confused about their obligations regarding benefits such as health insurance and retirement plans.  After consultation with the Department of Justice and the Department of Treasury (Internal Revenue Service), the United States Department of Labor (DOL) issued Guidance to Employee Benefits Plans on the definition of spouse and marriage.

The DOL advised that employers are to recognize "spouses" and "marriages" based on the validity of the marriage in the state where the couple was married rather than the state where they reside.  The DOL concluded that such an interpretation would make it easier for employers to uniformly administer benefits to all employees, in addition to offering more protection to same-sex couples.  In effect, the Department of Labor Regulations, Rulings, Opinions and Exemptions will assume that the term "spouse" refers to any individual who is legally married under any state law. Consistent with the IRS ruling, the terms "spouse" and "marriage" will not include individuals in domestic partnerships or civil unions.  

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IRS Wage Garnishment and Employment

Wage garnishment – if you haven't heard of it before, you may picture crisp dollar bills surrounded by lettuce and tomatoes on a platter, or perhaps a paycheck "garnished" with a few extra zeroes. Unfortunately, wage garnishment is not typically a pleasant matter. It can occur in a variety of situations, including nonpayment of taxes. When the IRS garnishes a person’s wages, it can also impact his or her employment and, in certain cases, may raise concern in an employer’s mind.

What is Wage Garnishment?

When a person has fallen into certain types of debt, the law allows those who are owed the debt, i.e. the creditors, to obtain a court order requiring the employer of the debtor to withhold payments from his/her wages. The garnished wages are then paid directly to the creditor and are applied to the debt. IRS garnishment arises when it is determined, through the proper channels, that a taxpayer owes past due taxes. As a side note, another common area for garnishment to arise is with child support payments.

Can Garnishment Lead to Job Termination?

In my practice, I have encountered situations where employees had workers whose wages were being garnished by the Internal Revenue Service (IRS). In one instance, an employer asked whether the employee could be terminated because of the garnishment. Often, employees also wonder if the garnishment could jeopardize their employment. Many are surprised to learn that as long as the IRS garnishment is the only garnishment against an employee's wages, it would be illegal to terminate the employee for this reason.

The Law: Title III

With regard to the question at hand, IRS garnishments are surprisingly governed neither by the Internal Revenue Code nor the IRS. Instead, it is covered by Title III of the Consumer Credit Protection Act (Title III) and the United States Department of Labor’s Wage and Hour Division. More specifically, Title III states that “[no] employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness." Other related laws make it clear that Title III applies to the IRS’s tax collection process. Title III imposes a fine of no more than $1,000 or no more than one year of imprisonment on employer’s who willfully violate the requirements of Title III.

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Changes to PA Unemployment Compensation Law, Part 1

After the holiday season, there is typically a national spike in unemployment claims. This year is no exception. For employers and employees in Pennsylvania, 2012 also brings changes to the state's Unemployment Compensation (UC) laws. In a series of posts, we will discuss aspects of the amended UC laws that will impact both claimants and employers.

Is Your Job Search Meeting the UC Requirements?

Until 2012, Pennsylvania's Unemployment Compensation (UC) laws required claimants to "register" for work, then continue to "report" to an unemployment office to be eligible for benefits. As of January 1, 2012, only claimants who are "making an active search for suitable employment" will be eligible for UC benefits within the meaning of Section 401 of Act 6 of 2011, "Qualifications Required to Secure Compensation."

What does it mean to make an "active search," and what qualifies as "suitable employment"? At a minimum, the new requirements are:

  1. Registering for employment search services through Pennsylvania CareerLink within 30 days of the initial application for benefits.
  2. Posting a resume on CareerLink's database.
  3. Applying for positions that offer employment and wages similar to those that the claimant had prior to unemployment and which are within a 45-minute commuting distance.

The statute provides that an active search for suitable employment has been made "if the claimant's efforts include actions comparable to those traditional actions in their trade or occupation by which jobs have been found by others in the community and labor market in which the claimant is seeking employment."

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Dealing with Layoff and Recall in an Unpredictable Economy

We received a question relating to employment in the economic downturn.  Is it legal in Pennsylvania to layoff an employee for lack of work, and a month later, replace that laid off employee with someone new.  I thought this would be a good topic to address in our blog. Generally, in the absence of a collective bargaining agreement or employment agreement providing for limitations on termination of employment, such an action on the part of an employer does not violate the law.

However, further inquiry can be made as to the true motive of the layoff.  Was the employee terminated because of his/her membership in a class protected under Pennsylvania and federal discrimination statutes?  Is she being replaced with someone not a member of the same protected class?  For example, replacement by an individual under the age of 40 can establish a preliminary claim for age discrimination if the employee replaced is over 40.

While the employer's proffered reason for termination, economic necessity, can appear to be pretextual if the employer is hiring a replacement soon after the layoff, the employer may have a logical reason for the new hire if it has secured new orders or new business.  And absent an agreement to the contrary, the employer has no obligation to recall laid off employees if business does turn around.

Expanding the PA Human Relations Act

A lawsuit filed by the Greek Island of Lesbos wants to restrict the use of the word Lesbian. The island claims that Lesbians are the citizens of Lesbos and has no connection to the sexual orientation of a person. One plaintiff in the lawsuit claims that use of the word lesbian by the gay community is an insult to the identity of the inhabitants of Lesbos. While Andrea Gilbert, spokesperson for Athens Pride 2008 and a member of OLKE, told, "The claim is based in serious prejudice and hatred."

This is just one example of controversy surrounding issues of sexual orientation. On a local level, a recent poll in the Central Penn Business Journal revisited the House Bill 1400 and asked readers: Should Pennsylvania pass House Bill 1400, which would prohibit discrimination on the basis of sexual orientation and gender identity? Without providing the number of replies to the poll, the Journal reported that the reader response was 70% in favor and 30% opposed to passing the Bill. The reasoning and written feedback by readers in support of their position was widely varied.

House Bill 1400 proposes to expand the protections already offered under the Pennsylvania Human Relations Commission. The Pennsylvania Human Relations Act prohibits certain practices of discrimination because of race, color, religious creed, ancestry, age, national origin, handicap or disability and use of a support animal. House Bill 1400 proposes to include sexual orientation, gender identity or expression to the existing list.

This Bill defines "sexual orientation" as actual or perceived heterosexuality, homosexuality or bisexuality. "Gender identity or expression" is defined as actual or perceived identity, appearance, behavior, expression or physical characteristics whether or not associated with an individual's assigned sex at birth.

The Bill was co-sponsored by a record 70 members of the House, and in April 2007, the Senate sponsored a similar bill (SB761) with 22 co-sponsors. The Senate Bill remains in the Senate Judiciary Committee. The House Bill also counts among its sponsors Steve Glassman, Chair of the Pennsylvania Human Relations Commission.

Thirteen Pennsylvania municipalities have already enacted laws pointed at protections based on sexual orientation, gender identity or expression. House Bill 1400 was introduced on June 13, 2007, the matter was referred to the Committee on State Government on June 18, 2007, and the Bill continues to produce revolving rumblings from diametrically opposed factions.

Related Links on House Bill 1400:

Equality Advocates of Pennsylvania

Michael Mahler's Blog

American Family Association of Pennsylvania

Restaurants Face Unique HR Compliance Challenges

The EEOC announced a $505,000 sexual harassment settlement with a McDonald’s Franchise on behalf of a class of young female employees, including teens. The EEOC contended that a male supervisor engaged in serious harassment including physical contact, sexual comments and offers of favoritism. In addition to the monetary award, the franchisee was required to provide letters of apology to the victims, conduct training on sexual discrimination for its franchise locations, and post nondiscrimination notices in its workplaces.

The EEOC has a national initiative designed to educate young workers on their employment rights. There is a stand-alone website that has been featured on highlighting discrimination protections.

Restaurant operators face difficult HR compliance issues based on several factors including the following:

  • Workforce Demographics:  Diversity management is a challenge for the entire food service industry. EEOC workforce demographic information for the Accommodations & Food Service Industry reports a workplace composition for workers (operatives, laborers and service) that are 52% female and 47% minority. While managers for the same group are 68.8% male and 74% white. The prevalence of younger workers adds to the management challenge.
  • Wages and Employee Turnover:     Lower wage earners make for job hoppers. Pennsylvania reports food service worker wages ranging from $15.05/hr for serving workers to between $7.37 and $7.70/hr for fast food cooks and counter attendants.
  • Management Turnover:       The Restaurant Industry Blog by Kenneth Rexrode notes that turnover of managers and employees necessitate constant training and inhibit the development and continuity in a management staff.
  • Dispersed Operations:          Some restaurant operations, particularly franchised operations have multiple locations and depend upon managers traveling between locations. This can make for spotty supervision and training.

Solving compliance problems may be a matter of adopting effective policies on EEO compliance, training managers and educating employees. The most frequent misstep I see is concentrating too much control in a site manager so that employees feel they have no avenue to direct concerns to higher levels.

The Political Future of Affirmative Action

As Pennsylvania’s Primary Election approaches, one of the unexpected political issues is affirmative action.  Newsweek columnist Seth Colter Walls discusses the situation in Obama’s Postracial Test. The column describes the election battleground created by state ballot initiatives like California’s Proposition 209 and Michigan’s Proposal 2 that prohibit public institutions from considering race, sex or ethnicity in hiring, contracting for goods/services or college admissions. Similar ballot initiatives may appear in Arizona, Colorado, Missouri, Nebraska and Oklahoma.  For now, Newsweek's Dahlia Lithwick states in her column, A Complicated Record On Race, that both sides think Mr. Obama agrees with them.

The Timeline of Affirmative Action began with the Civil Rights Act of 1964 and has taken many forms since then. Most of us in the employment world are familiar with the Affirmative Action Programs created by Executive Order 11246. However, there are many other state and federal programs which create preferences based on gender and race. These programs have judicial approval provided the government can pass the “strict scrutiny test” by demonstrating that there is a compelling need for the program and the program is narrowly tailored to meet the need. As the economy contracts, the most contentious areas of debate may focus on government “set-aside” programs for purchased goods and services.

The United States Supreme Court has considered contracting programs in three of its decisions. In its 1980 decision in Fullilove v. Klutznick, the Supreme Court ruled that some modest quotas were perfectly constitutional. The Court upheld a federal law requiring that 15% of funds for public works be set aside for qualified minority contractors. The "narrowed focus and limited extent" of the affirmative action program did not violate the equal rights of non-minority contractors, according to the Court—there was no "allocation of federal funds according to inflexible percentages solely based on race or ethnicity."

In City of Richmond v. Croson, the Supreme Court went the other way ruling that an "amorphous claim that there has been past discrimination in a particular industry cannot justify the use of an unyielding racial quota." It maintained that affirmative action must be subject to "strict scrutiny" and is unconstitutional unless racial discrimination can be proven to be "widespread throughout a particular industry." The Court maintained that "the purpose of strict scrutiny is to ‘smoke out' illegitimate uses of race by assuring that the legislative body is pursuing a goal important enough to warrant use of a highly suspect tool. The test also ensures that the means chosen `fit' this compelling goal so closely that there is little or no possibility that the motive for the classification was illegitimate racial prejudice or stereotype." This case involved affirmative action programs at the state and local levels—a Richmond program setting aside 30% of city construction funds for black-owned firms was challenged. For the first time, affirmative action was judged as a "highly suspect tool."

In Adarand Constructors, Inc. v. Peña,  the Court again called for "strict scrutiny" in determining whether discrimination existed before implementing a federal affirmative action program. "Strict scrutiny" meant that affirmative action programs fulfilled a "compelling governmental interest," and were "narrowly tailored" to fit the particular situation. Although two of the judges (Scalia and Thomas) felt that there should be a complete ban on affirmative action, the majority of judges asserted that "the unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country" justified the use of race-based remedial measures in certain circumstances.

Retaliation Claims: Five Things Every HR Generalist Should Know*

The EEOC’s Report of Discrimination Charge filings notes that Retaliation claims rose 18% to a record high, doubling since 1992. There were 26,663 retaliation based charges filed in 2007 up from 22,555 the previous year. The trend might be explained, in part, by employees filing both a discrimination charge and a retaliation claim; increased awareness by employees, or employers mishandling employee internal complaints of discrimination.

Claims of retaliation take a very predictable path like the one recounted in a recent EEOC lawsuit. Vanguard Group settled a suit filed by the EEOC for a racial retaliation claim for a payment of $500,000.    The suit was based upon an employee’s complaint to management that he was being treated less favorably and discriminated against based on his race. Thereafter, the EEOC contended that the employee began to experience acts of retaliation, including unfavorable changes in his work conditions and assignments, from the managers he accused of race discrimination. The EEOC alleged that this pattern of retaliation resulted in the employee’s termination. The following may help HR Generalist avoid mishandling internal complaints.

  1. What is Unlawful Retaliation?

An employer may not fire, demote, harass or otherwise "retaliate" against an individual for filing a charge of discrimination, participating in a discrimination proceeding, or otherwise opposing discrimination. The same laws that prohibit discrimination based on race, color, sex, religion, national origin, age, and disability, as well as wage differences between men and women performing substantially equal work, also prohibit retaliation against individuals who oppose unlawful discrimination or participate in an employment discrimination proceeding. Retaliation occurs when an employer, employment agency, or labor organization takes an adverse action against a covered individual because he or she engaged in a protected activity.

  1. What is “Adverse Action” by an Employer?

An adverse action is an action taken to try to keep someone from opposing a discriminatory practice, or from participating in an employment discrimination proceeding. According to the EEOC, examples of adverse actions include:

  • Employment actions such as termination, refusal to hire, and denial of promotion;
  • Other actions affecting employment such as threats, unjustified negative evaluations, unjustified negative references, or increased surveillance; and
  • Any other action such as an assault or unfounded civil or criminal charge that is likely to deter reasonable people from pursuing their rights.

On the other hand, the EEOC states that adverse actions do not include petty slights and annoyances, such as stray negative comments in an otherwise positive or neutral evaluation, "snubbing" a colleague, or negative comments that are justified by an employee's poor work performance or history.

  1. What is “Protected Activity” by an Employee?

Protected activity includes either opposing a practice reasonably believed to be unlawful discrimination or participating in a discrimination procedure. 

Opposition is informing an employer that you believe that he/she is engaging in prohibited discrimination. Opposition is protected from retaliation as long as it is based on a reasonable, good-faith belief that the complained of practice violates anti-discrimination law; and the manner of the opposition is reasonable.  The EEOC cited examples of protected opposition to include:

  • Complaining to anyone about alleged discrimination against oneself or others;
  • Threatening to file a charge of discrimination;
  • Picketing in opposition to discrimination; or
  • Refusing to obey an order reasonably believed to be discriminatory.

According to the EEOC, examples of activities that are NOT protected opposition include:

  • Actions that interfere with job performance so as to render the employee ineffective; or
  • Unlawful activities such as acts or threats of violence. 

Participation means taking part in an employment discrimination proceeding. Participation is a protected activity even if the proceeding involved claims that ultimately were found to be invalid. Examples of participation include:

  • Filing a charge of employment discrimination;
  • Cooperating with an internal investigation of alleged discriminatory practices; or
  • Serving as a witness in an EEO investigation or litigation.
  • A protected activity can also include requesting a reasonable accommodation based on religion or disability.
  1. Promptly Investigate Comments and Complaints Concerning Discrimination

Some HR action should be taken on all communications from employees that could later be “characterized” as either opposition or participation. At a minimum, get the facts underlying a comment about “unfairness” or “discrimination”. Obviously, you can spend your entire workday chasing down spurious remarks. You can circumvent a lot of problems merely by developing a practice of asking “what do you mean when you say it’s discriminatory?” Not taking complaints or comments seriously can be costly.

  1. Monitor Supervisors for Adverse Actions following an Employee Complaint

I would wager that most acts of “retaliation” go unnoticed on HR’s radar screen because no one is actively monitoring the situation. If someone has complained about discrimination by a supervisor, HR should follow up informally with the employee to make sure that there is no real or perceived retaliation. 

* Not meant to be exhaustive.

EEOC Reports 9% Increase in Discrimination Charges for 2007

The number of Discrimination Charges filed with the EEOC increased to 82,792 in 2007, up from 75,768 the previous year. Race, Gender and Retaliation charges were the most frequently reported charges.  The EEOC’s nonsensical reporting style makes it difficult to glean much more information since the report doesn’t account for individuals claiming multiple types of discrimination. Also irritating for employers is the EEOC’s explanation for the increase in the number of charges:

EEOC Commission Chair Naomi C. Earp chastised employers in her press release noting that “Corporate America needs to do a better job of proactively preventing discrimination and addressing complaints promptly and effectively. To ensure that equality of opportunity becomes a reality in the 21st century workplace, employers need to place a premium on fostering inclusive and discrimination-free work environments for all individuals.”

Jon Hyman’s Ohio Employer’s Law Blog correctly notes that the increased number of charges has many origins other than a lack of corporate commitment to equal employment opportunity. The unfortunate bias here seems to be the EEOC’s presumption that employers aren’t doing enough to prevent discrimination claims without regard to any evaluation of the merit of charges.


The subject of “ageism” is a hot topic in the press and among employment commentators. As Baby Boomers grow older so does the  percentage of the United State population perceived as old and protected by age discrimination laws.

According to AARP, the percentage of people 65 and older who work has grown from 10.8 percent in 1985 to 16 percent last year. For people ages 55 to 64, the numbers also are up, from 54.2 percent in 1985 to 63.8 percent in 2007. The statistics on the aging workforce are astounding as demonstrated by Ira Wolfe in his book  and blog called The Perfect Labor Storm 2.0. This effect is seen everywhere and plays out differently in different forums.

In politics age is a negative. Michael Hirsh of Newsweek writes about McCain’s Unseen Adversary: Ageism in which he cites some survey information and posits  that “Indeed, according to a survey done by the Pew Research Center, Americans are a lot less comfortable voting a man in his 70s into the Oval Office than they are voting for a woman or an African-American for president.”

In law, age is a positive. Mark Sherman of The Boston Globe notes that the Supreme Court considering 5 ageism cases the growing prevalence of which he attributes to the aging population. He also notes that it “There is only one antibias law - the one against discrimination based on age - that would cover all nine Supreme Court justices, if such laws applied to them.”

In the workforce age is both a positive and a negative. Kate Lorenz at opines that Ageism on the Job can be turned into an advantage by older workers because of their education, sophistication and clout.

The tension between “young” and “old” is summed up in Granny verses the Mercedes: 

EEOC Intake Questionnaire is a "Charge" according to the Supreme Court

In Federal Express Corp. v. Holowecki, the United State Supreme Court ruled that the EEOC’s Intake Questionnaire adequately meets the requirements of a “Charge” to trigger an employee’s rights to sue his or her employer in court. The plaintiff submitted to the EEOC an Intake Questionnaire with an affidavit contending that her employer was engaging in age discrimination. The EEOC did nothing with the Questionnaire for six months. The employer was not notified and no charge number was assigned. The employee subsequently filed a Charge of Discrimination and proceeded almost directly to court avoiding the EEOC’s conciliation process entirely. 

Justice Thomas the former Chairman of the EEOC points out the practical problems with the lack of a clear definition on what constitutes a Charge and the implications on notice to employers. His comments are somewhat ironic since the crux of the problem is the EEOC’s failure to turn the Intake Questionnaire into a Charge of Discrimination and mail it out to the employer. The Court does not hold the EEOC accountable for these administrative failings by allowing a vague assertions to trigger the judicial process:

The implications of the Court's decision will reach far beyond respondent's case. Today's decision does nothing—absolutely nothing—to solve the problem that under the EEOC's current processes no one can tell, ex ante, whether a particular filing is or is not a charge. Given the Court's utterly vague criteria, whatever the agency later decides to regard as a charge is a charge—and the statutorily required notice to the employer and conciliation process will be evaded in the future as it has been in this case. The Court's failure to apply a clear and sensible rule renders its decision of little use in future cases to complainants, employers, or the agency.

The EEOC issued a Memorandum addressing the timeliness of notice to employers noting that an Intake Questionnaire may constitute a Charge if it contains a “clear request for the agency to act.” The Memorandum also notes that notice of a charge must be sent to respondents within 10 days of receiving the charge.

Thanks to Jon Hyman at the Ohio Employer’s Law Blog who has a great analysis of the impact on employers who lose the ability to conciliate claims.

Supreme Court Restricts Evidence of Employer's Alleged Discrimination against other Employees

The United State Supreme Court issued its decision limiting the role of so called “me too” evidence in discrimination cases. In Sprint/United Management v. Mendelsohn, the Court ruled that an employee does not have an automatic right to introduce testimony by nonparties alleging discrimination at the hands of the company where the alleged discriminatory actions involve supervisors who played no role in the employment decisions related to the employee in the case.

The Ohio Employer’s Law Blog has a legal analysis of the ruling. The practical effect limits the types of evidence that courts (and hopefully administrative agencies like the EEOC) will consider in accessing the merits of a discrimination claim. Evidence of an employer’s treatment of “similarly situated employees” may be considered but must be closely related to the employee’s circumstances and theory of the case.   Who is “similarly situated” becomes the issue.

Romance in the Workplace: Happy Valentine's Day

I consulted the on line Encarta Encyclopedia for the origins of Valentine’s Day and found the following description:

The holiday probably derives from the ancient Roman feast of Lupercalis (February 15), also called the Lupercalia. In an annual rite of fertility, eligible young men and women would be paired as couples through a town lottery. Briefly clad or naked men would then run through the town carrying the skins of newly sacrificed goats dipped in blood. The women of the town would present themselves to be gently slapped by the strips and marked by the blood to improve their chances of conceiving in the coming year.

In one sense, the holiday’s evolution to cards and candy has been well received, at least by the goat population. I don’t think Lupercalis is celebrated at the EEOC. Nonetheless, workplace romance gone bad accounts for a significant number of sexual harassment claims as noted on my prior post Fishing off the Company Dock: A Legal Perspective. Similar advice and anecdotal observations appear at the Ohio Employer’s Law Blog’s post on When office romances go bad and the Washington Labor, Employment & Employee Benefits Law Blog’s post on Romance in the Workplace & “Love Contracts”.

So what are the legal ins and outs of office romance and how can a business employ prophylactic measures to protect itself. Here is a list of things I can recommend:

Implement a Strong Policy Against Sexual and other Harassment

The EEOC has issued extensive guidance on sexual harassment policies and there ability to reduce an employer's liability for harassment.   One of the most critical components of such a policy is an effective complaint procedure to redress claims of harassment.

Develop a Policy on Office Romance without calling it "Fraternization"

It doesn't take a NASA scientist to realize organizations may need a policy addressing workplace romance (or maybe it does). According to Office Politics, thirty-five percent of companies have no formal workplace romance policy. Develop a policy, but avoid overly broad definitions and in particular the word "fraternize' which was the court's primary objection in the in Guardsmark case.

Train Supervisors

Supervisory training on sexual harassment can demonstrate a company's good faith attempts to comply with the law. Such training should explain the types of conduct that violate the employer's anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

Proactively Evaluate and Confront Situations

Most employers are content to sit passively and watch "As the World Turns". Many will not act unless it "becomes a disruption". Consider some proactive steps. If the romance is between co-workers, make sure they understand that it cannot impact productivity. If it is between a supervisor and subordinate, evaluate whether there should be changes in the reporting structure. Don't automatically transfer or reassign the female in the relationship or you will risk a discrimination claim.

Employment Practice Liability Insurance: Five Things every HR Generalist should Know.*

Employment Practices Liability Insurance (EPLI) may be a relative bargain in the continued “soft” insurance market and employers should consider adding or increasing insurance coverage to protect against employment claims. EPLI insurance is somewhat quirky and the following are some considerations when evaluating policies:

  1. Coverage:  EPLI policies typically cover claims of wrongful discharge, workplace harassment and discrimination. Many offer a more comprehensive list of covered acts, including negligent hiring/supervision/evaluations, invasion of privacy, defamation and intentional infliction of emotional distress.  Coverage typically applies to claims made by full time employees so as to exclude those by part-timers, temporary, seasonal and independent contractors.  In comparing policies, look for one that has the most expansive coverage. 
  2. Exclusions.  EPLI policies exclude many claims based on the statute that creates the legal right or the activity that gives rise to the claim. Exclusions apply to the Fair Labor Standards Acts; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act (WARN); the Consolidated Omnibus Budget Reconciliation Act (COBRA); the Employee Retirement Income Security Act (ERISA); the Occupational Safety and Health Act (OSHA); the costs associated with providing "reasonable accommodation" under the Americans with Disabilities Act (ADA); as well as  claims arising out of downsizing, layoffs, workforce restructurings, plant closures or strikes. Punitive damages are always excluded. Carefully evaluate the excluded claims in light of your business practices. In the case of multi-state operations, be aware that some state laws create substantial employment rights that must also be evaluated under the policy language.
  3. Policy Limits and Deductibles: Policy limits and deductibles usually apply on a per claim and aggregate basis. For example, coverage may be limited to $250,000 for each separate claim with an overall aggregate cap of $1 million for all claims. Employers must formulate their insurance goals in setting the appropriate deductibles and limits. Some employers view EPLI insurance as catastrophic coverage and are willing to accept a high deductible that allows them to handle smaller claims themselves.  However, other employers are looking for more blanket coverage.
  4. Defense Costs, Selection of Counsel and Settlement: Defense costs are usually included within the EPLI policy’s limits, which has good and bad points. Many times, the legal expense is the largest cost to an employer in dealing with merit less claims. However, including defense costs means that every dollar an employer spends defending a claim reduces the amount available for settlement or to pay a judgment.  Since the existence of insurance coverage must be disclosed as part of discovery in most law suits, a plaintiff’s attorney will factor insurance coverage into his or her case evaluation. The defense cost feature may influence plaintiffs’ counsel to try to settle early, rather than force an employer to incur litigation costs that will only erode the insurance dollars available for potential settlement.  Employment claims often have significant employee relations ramifications making settlement a particularly important issue. Insurers view employment claims the same as any other insurance matter by evaluating only the potential for liability and the amount of damages. The employer and insurer may be at odds over settling a case. EPLI policies address this stalemate by either giving the insurer the right to settle without the employer’s approval or, more frequently, giving  an employer control over settlement, but adding a “hammer clause”. These clauses are designed to limit the insurer’s potential exposure if the policyholder passes up an opportunity to settle a claim recommended by the insurer.  Hammer clauses provide that if there is an offer to settle a claim that the policyholder refuses accept, then the insurer will not be liable for a subsequent settlement or judgment in excess of a rejected settlement amount.  
  5. Policy Types and Insurance Company Notification: EPLI policies are typically written on a “claims  made” basis meaning that the claim must be incurred during the coverage period and reported to the insurer during an extended reporting period. Since employment actions may take years to turn into a claims, an employer may be left with no coverage if the policy is dropped or tail coverage isn’t purchased.  Untimely notice to an insurance carrier can void coverage for and employment claim.

* Not intended to be Exhaustive.

Risk Management in Employee Terminations: Sometimes the How is as Important as the Why.

What motivates a terminated employee to sue his or her employer is a complex issue. In my experience, the manner in which an employee is “fired” is at least as likely to lead to a lawsuit as the “reason” given for his or her termination. Many lawyers spend all their time on justifying the reasons for why an employee is being let go which are important because they form the basis for the legal defense. However, I believe that not getting sued at all is better for my clients than having a great defense.

I advocate planning both the “How” and the “Why” of an employee termination.  Managing the manner of termination reduces the risk of lawsuits and incidents of workplace violence. The following are ten suggestions I have on handling a workplace termination:

  • Treat the employee with dignity and respect. Don’t get personal in the termination meeting.
  • Avoid humiliation. Don’t make the employee do the walk of shame or leave your business under circumstances that lead others to think he or she stole from you or committed some other serious misconduct. I have several cases where the employee’s major motivation for suing is being lead to an exit escorted by a security guard while carrying a cardboard box containing personal items. Allow the employee to come back later to collect personal affects or clean out an office or locker.
  • Select an appropriate time and location. Avoid times and locations that are highly visible to other employees. Many employers select the end of the business day at the end of the work week, but this may be the wrong time for employees who may need access to support services like the EAP.
  • Consider giving a reason. When asked in a deposition why an employee sued, the most common answer I hear is that “I was never given a reason for being fired.” There may be legal circumstances for avoiding an explanation, but they are rare. Formulate a reason and articulate it to the employee. Reserve some latitude to supplement the reason, but at least have some explanation. Once given, don’t debate its merits, but listen to the employee’s response. You might hear something that makes you reconsider your decision, like “this all started when I refused to sleep with my supervisor”.
  • Plan your communication. Consider scripting what you will say and formulate responses to typical questions, like “Can I resign.” Don’t text message termination or layoff decisions unless there is just no other way to communicate. Consider a follow up letter that gives your reasons and preserves your right to supplement it with additional reasons. Don’t blame the decision on others like the “home office” or “management”.
  • Agree on a Reference, if possible. If the employee knows what the company will say in response to a reference request, then he or she can address it in an interview or on an application. If the reference is inconsistent then the employee won’t get a new job and will be more likely to sue the company.
  • Offer Assistance like the EAP or Outplacement. Consider resources that may help an employee with emotional problems or assist them in a job search.
  • Protect your employees and business assets. Plan the termination to protect your employees from violence in the workplace and your business assets from sabotage or damage, but don’t overreact. Armed guards and lock changing may not be necessary. Retrieving keys, credit cards, passwords and canceling computer access are.
  • Communicate with remaining employees. Plan some formal communication with other employees and individuals outside the company. This is difficult and uncomfortable, but necessary.
  • Control the rumor mill. Don’t allow gossip to incorrectly communicate any information.

Let’s face it, it’s a bad situation. But it is one that can be made worse through poor communication. Respect and empathy go a long way. Take for example the infamous Cheers episode entitled the Executive’s Executioner in which Norm becomes his employer’s designated terminator because he is so empathetic. Since no YouTube clip is available, the following is the dialog between Norm and his boss:

[Mr. Hecht, Norm's boss, confronts him in Cheers' restroom]
Mr. Hecht: We want you to be our corporate killer.
Norm: The guy who fires people?
Mr. Hecht: That's right. You see, we decided that terminating employees puts too much stress on our executives. We think you'll be perfect.
Norm: Why me?
Mr. Hecht: Because studies have shown that, uh, it's particularly humiliating when you're fired by somebody who's clearly and markedly superior to yourself. And, uh, that just wouldn't be the case with you, Norman. See, uh, you're just an ordinary Joe. As a matter of fact, we, uh, we checked out your homelife. You have absolutely nothing anyone could possibly envy or resent.
Norm: I'm honored, sir. But I, this, this sounds like a horrible job, frankly.
Mr. Hecht: It's a 300% raise and if you don't take it you're fired.
Norm: Sir, I will have you know that I cannot be bought... and I cannot be threatened; but you put the two together and I'm your man.

Employer's Response to an "Inappropriate Remark" Can Avoid Legal Problems

In my previous post, I explained how a court can seize on one remark by a supervisor to infer a discriminatory motive for an employment decision. I have also commented that even a single remark, if sufficiently sever, can create a hostile work environment for the purposes of a harassment claim. What does this do to communication in the workplace? Perhaps The Boss on Dilbert could concoct a policy requiring legal pre-approval of workplace remarks. For the rest of us, we are better served by managing the situation after it occurs.

How an employer responds to an inappropriate remark can make all the difference in managing the legal fallout. I believe the ingredients of a response are (1) a succinct acknowledgement of the inappropriateness (but not necessarily the illegality) of the remark; (2) an apology from the company and the maker of the remark; (3) a reaffirmation that such conduct is not acceptable in the employer’s workplace; and (4) some appropriate remedial or disciplinary action.

Take for example, the Golf Channel’s suspension of anchor Kelly Tilghman for two weeks for saying that young players who wanted to challenge Tiger Woods should “lynch him in a back alley.” The Golf Channel’s Editor’s Note is a roadmap for handling the situation:

Editor's Note: The GOLF CHANNEL released the following statement on Jan. 9th:
The GOLF CHANNEL regrets the poorly chosen remarks made by Kelly Tilghman on a recent broadcast and, again, extends our apologies to anyone who was offended.
There is simply no place on our network for offensive language like this.
While we believe that Kelly's choice of words were inadvertent and that she did not intend them in an offensive manner, the words were hurtful and grossly inappropriate.
Consequently, we have decided to suspend Kelly for two weeks, effective immediately

Ms. Tilghman was completely contrite about her misstep, but some employees are not. Nonetheless, the employer must take action and oft times wade into difficult situations. Such an example is reported by Ann Belser in her Pittsburgh Post-Gazette article Ex-employee of Mellon loses religious bias suit.

The bank was sued for religious discrimination after it disciplined an employee for his offensive reply to e-mail sent by fellow employees inviting him to a luncheon hosted by Mellon’s gay, lesbian, bisexual and transgender employee group. His note stated that he did not want to be lumped in with other groups including those that “have this sickness called gay or lesbian.”

After a complaint to HR, the employee was told that his reply was offensive and that he was required to treat his co-workers with respect. He replied, “The true friend of gays and lesbians is the one who points them to help.” For this, the employee was disciplined. He then filed a religious discrimination claim based upon his Orthodox Jewish religious beliefs. The court dismissed the case, finding that the employee was disciplined because his actions were offensive, not because of his religion.

The Limits of Customer Preference in Hiring and Promotion Decisions and Helping Managers Communicate with Employees

A recent federal court of appeals decision in Simple v. Walgreens Company is a case study on two important points. First, how the pressures of marketing in a competitive retail environment can overtake the limits of discrimination laws. Second, how a supervisor’s communication with an employee can create an issue of discrimination.

Like many retailers, Walgreens tracks demographic data and relates it to each retail store. At issue in the case was whether the racial demographic data was used in promotion decisions to assign personnel to “black” or “white” stores depending on the race of the employee. The court noted as follows:

There is no evidence that [the successful white candidate] was more qualified to manage the store in Pontiac[, Michigan] than the plaintiff, who had twice her experience as an assistant manager, the mandatory stepping stone to store manager. But she is white, and the store is in a predominantly white neighborhood, while the plaintiff is black and so was twice offered a "black" store--and when the store manager's job at the "white" store fell vacant he was ignored.

The evidence of the company’s racial motivation was found in a supervisor’s comments to the plaintiff in an effort to make him feel better:

"I may have stated that Pontiac was possibly not ready to have a black manager. It is well known in this area that some of the smaller, outlying towns have some very racist tendencies, and I was simply trying to make [the plaintiff] feel better because my feeling was he may not have been very happy working there."

From this statement, the court concluded as follows:

The significance of [the supervisor's] remark about racism in Pontiac lies in the fact that as an experienced Walgreens store manager (it appears that she had been one for at least four years) she was undoubtedly aware of what [the district manager] was looking for in a store manager in Pontiac, and one interpretation of the remark is that the plaintiff's race would bar him from consideration…. The plaintiff would not feel "happy" among Pontiac's white racists, which is a standard euphemism for refusing a job to someone of a different race from the people he would be associating with. Racial segregation is obviously a form of racial discrimination.

The presumption underlying “customer preferences” is that people prefer to interact with those of the same race, gender, religion, or other characteristic. Employment decisions are justified by appealing to a target demographic group. Courts have universally rejected customer preference as a basis for employment decisions except in the narrow case where it is a Bona Fide Occupational Qualification (BFOQ).

The attorneys at Godfrey & Kahn have a great post analyzing the role of customer preference in health care marketing called Can We Use Gender in Our Hiring Decisions? The Discrimination Bona Fide Occupational Qualification (BFOQ) Applied to Health Care.  Fay Hansen’s post Recruiting on the Right Side of the Law describes the pressures of retail establishments to market an image through their sales associates and the resulting discrimination issues.

Ford Motor Company and UAW Settle Class Action Race Discrimination Suit based on Biased Testing Program

Ford Motor Co., along with two related companies and a national union, will pay $1.6 million and provide other remedial relief to a class of nearly 700 African Americans to settle a major race discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC had charged in the litigation that a written test used by Ford and the UAW, Visteon and Automotive Components Holdings (ACH) to determine the eligibility of hourly employees for a skilled trades apprenticeship program had a disproportionately negative impact on African Americans.

The EEOC in its Press Release  touts two of its initiatives. First, the E-RACE Initiative (Eradicating Racism And Colorism from Employment), a national outreach, education, and enforcement campaign to raise public awareness about new and emerging race and color issues in the 21st century workplace. Further information about the E-RACE Initiative is available on the EEOC’s web site. Second, the EEOC issued a new Employment Testing Fact Sheet which cites the Ford case.   The Fact Sheet is not particularly illuminating from a legal or policy standpoint, but it does highlight the agency’s interest in employer testing practices.

There are general legal restrictions on the use of employment testing (whether pre or post employment) in addition to the general prohibitions on discrimination found in Title VII and the Pennsylvania Human Relations Act. The Uniform Guidelines on Employee Section Procedures prohibit the use of a test or selection process that has an adverse impact on individuals in a protected class unless the test has criterion-related, content and construction validation studies. The validation studies must consist of empirical data demonstrating that the test is (1) predictive of performance of important elements of job performance; (2) contains content which tests important aspects of performance on the job; and (3) consists of procedures that assess identifiable characteristics that have been determined to be important to job performance.

We have previously blogged on the subject of Pre-employment testing at Employment Screening and Background Checks - Part III.

But Names will Never Hurt me...Not so for Racial Slurs

As to our previous post on taking seriously complaints of racial harassment, thanks to Jon Hyman at the Ohio Employer’s Law Blog who posted the EEOC’s press release and commented on the case. The press release details the types of harassment as follows:

The EEOC charged that Daniels [the employee] was the target of persistent verbal abuse by coworkers and a supervisor whose racial slurs and offensive language included calling him the “N-word” and saying “we should do to blacks what Hitler did to the Jews” and “if the South had won then this would be a better country.”  Daniels was also subjected to multiple physical threats, such as lynching and other death threats after he reported the harassment.

Commentators have observed that the settlement amount paid [$2.5 million] “seems excessive for someone who was subjected to words, no matter how offensive they might be”. I know what they are driving at because, in many contexts, the law expects people to have a thick skin as it relates to the free expression of ideas (no matter how offensive).   However, unlawful harassment  arises from conduct that is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.

The severity and the pervasiveness are the focus of the legal analysis. This is a very fact sensitive inquiry. For example, the New Jersey Supreme Court has held that some racial slurs are so historically offensive that their use in the workplace, even once, can lead to liability for an employer who doesn’t respond appropriately. A single utterance of an epithet can create a hostile work environment if it is view as “severe” and it is aimed at the individual rather than a generalized comment. I believe the weight of court authority would probably evaluate both the severity and the pervasiveness of the racial comments and that one comment might not be sufficient to create a hostile work environment. Certainly the use of racial slurs by a decision maker is evidence of discriminatory motive in adverse employment decisions as noted by the Supreme Court in Ash v. Tyson Foods.

Why did Lockheed pay $2.5 million to settle this case? The words were severe, the words were threats directed at an employee, and the company didn’t take appropriate remedial action.

Not Taking Complaints of Race Discrimination Seriously can be Costly

When an employee complains about how co-workers are treating him or her it is never appropriate to respond, “That’s just boys being boys, and that’s the way it is here at [insert defendant company’s name].”

According to media accounts that is how Lockheed handled complaints of racial harassment that included being called derogatory names and being threatened by co-workers.  Lockheed settled for a record $2.5 million (the largest settlement of an individual race discrimination case filed by the EEOC).

Discrimination claims involving harassment by co-workers are some of the more manageable HR situations. However, if the first point of contact for a complaint doesn’t treat the allegations seriously, the employer loses its ability to manage the situation. Employers have a good defense to harassment claims if the following are present: an effective complaint procedure; an adequate investigation into the complaint; and prompt and appropriate remedial action.

The effectiveness of the complaint procedure is greatly enhanced if first line supervisors and managers are trained to treat seriously conversations with or comments by employees that may later be characterized as complaints of discrimination.

NLRB Rules that Employees have No Right to Use Employer E-mail for Union Solicitations and Announces New Standard for Discriminatory Policy Enforcement Charges

One December 16, 2007, the Board issued its much anticipated decision in Guard Publishing Company d/b/a Register Guard and Eugene Newspaper Guild, CWA Local 37194 holding an employer did not violate section 7 by maintaining a policy that prohibited employees from using the employer’s e-mail system of any “non-job-related solicitations.”

The NLRB’s 3-2 decision also announced and applied a new standard for determining whether an employer has violated the act by discriminatorily enforcing its policies to disadvantage protected union-related activity. The new standard distinguishes between personal nonwork-related messages and “group” or “organizational” messages such as a union. Therefore, “discrimination under the Act means drawing distinctions along Section 7 lines.”

In Guard Publishing, the employer had a written policy prohibiting e-mail use for non-work-related solicitations. However, the employer allowed several such communications like jokes, party invitations, request for services such as dog walking, etc, but it never allowed e-mail use for solicitation by or on behalf of outside organizations other than the United Way. The employer issued two warnings to an employee who sent three union-related e-mails, which lead to the charge of discriminatory enforcement of the policy.

The Board majority held that two of the three e-mail communications were direct solicitations to join the union and violated the policy; however, the third message was not a solicitation, merely a clarification of events surrounding a union event. Therefore, under the newly announced standard, the employer did not discriminate along section 7 lines when it disciplined the employee for the two union solicitation e-mails since it had never allowed employees to use its e-mail system to solicit on behalf of any other outside group. However, the employer’s enforcement of the policy with respect to the third e-mail which was not a solicitation was unlawful.

The new standard should have an important impact on employer’s e-mail policies and charges related to discriminatory enforcement of employer’s policies.

Responding to EEOC and State Agency Discrimination Charges: Five Things Every HR Generalist should know.*

The EEOC receives over 75,000 discrimination charges annually each of which requires a response by an employer.   How companies respond to charges varies greatly. In the legal community there are two schools of thought on the scope of EEOC responses. The first approach follows a minimalist path under the rationale that anything sent to the EEOC is “free discovery” or commits to a defense before all the facts are fully developed. The second approach provides a more detailed response with the goal of getting rid of the claim more quickly. The approach chosen will depend on an evaluation of the claim and the employer’s defenses. The following should be assessed in determining how your company will respond to an EEOC charge or state commission claim:

1.      Time Limitations for Charges and Lawsuits: It can take years for a charge to turn into a lawsuit. During this time, potential back pay is mounting, witnesses are disappearing, and memories are fading. EEOC discrimination charges must be filed within 300 days of the discriminatory action (or 180 days in states do not have discrimination statutes and investigatory agencies). Lawsuits must be filed by the employee within 90 days after the EEOC issues a right to sue letter. It is impossible for me to interpret the EEOC’s data on charge resolutions, but my experience is that the EEOC does not decide many cases and charges remain dormant for long periods of time when the parties don’t move them forward. The delay can work to the advantage of an employer if the employee (or his or her attorney) loses interest in the charge. When the EEOC ultimately closes the case and issues a right to sue letter, the employee may never act on it by filing a lawsuit. In Pennsylvania, the PHRC has a similar track record. Likewise, an employee must file a lawsuit within 2 years of the PHRC’s closing of the complaint.

2.      Shaping the Defense: An investigation of the charge should lead to formulation of a strategy for responding to the EEOC. At that point your defense is limited by your prior response. Inadequately investigated charges and poorly written position letters can severely hamper an employer’s defense. I have seen situations in which “home made” responses gave away or limited important legal defenses.

Information sent to the EEOC may be disclosed to the employee in the course of the investigation and the entire file may be subpoenaed once a lawsuit is filed. The minimalist approach might be appropriate if the facts are bad and you are looking for a quick settlement. A detailed response may be right if you want to convince the EEOC or the employee’s attorney that the case has no merit. I personally don’t like to “lie in the weeds” and hope the employee will go away.

3.      Using Affidavits to Preserve Evidence: Creating an institutional memory of the facts underlying your defense to an EEOC charge is worth considering. People come and go with amazing frequency. So, tracking them down (years later) and hoping they will remember the events with great detail is a risk. If a witness’s recollection is important to your defense, have them sign an affidavit.  Affidavits also keep witnesses from changing their stories as their allegiances change.

4.      Record Retention: Once a charge is filed, a company has an obligation to preserve tangible and electronic records that relate to the employee’s claims. The scope of records may include e-mails, personnel file and other records for the employee and comparable employees. Inadvertent destruction of records even pursuant to a policy can have grave consequences to an employer’s defense including court sanctions, prohibitions on presenting a defense, and jury instruction allowing an adverse inference to be drawn from the absence of the record. The jury may be allowed to presume that a missing or destroyed record would have favored the employee.

5.      Trial Use of EEOC Determinations: Many employers are surprised to learn that an EEOC’s finding of probable cause may be admitted as evidence in a discrimination trial and considered by a jury. As noted by Michael Fox at Jottings by an Employer’s Lawyer, some courts recognize the imperfection of allowing jury consideration of EEOC determinations. Nonetheless, it is powerful evidence when a government agency believes that an employer engaged in discrimination, making it all the more important to carefully tailor your response.

* Not meant to be exhaustive.

Mere Presence of Pornography in the Workplace: I never tell war stories, except one.

There is only one war story I ever tell because I don’t talk about my client’s problems with anyone no matter how humorous they might be.   The Connecticut Employment Law Blog and  Ohio Employer’s Law Blog have postings on an employer’s liability for the “mere presence” of pornography in the workplace. All I can say is sometimes the most obvious things are overlooked.

About ten years ago, I  was asked by corporate counsel to conduct sexual harassment training at a series of distribution centers. At one remote location space was tight so the plant manager had set up rows of chairs in the receiving department. What had escaped his notice was on the wall of the receiving department behind the podium from which I was to make my presentation was a collage of every Playboy Centerfold for the preceding 20 years. The pin up shrine went from floor to ceiling and encompassed an area about 40’ X 40’.  I thought I was on candid camera.

My first reaction (well maybe my second) was to cancel the training, but it was obvious that this company was in dire need of it.  In any event, I also realized that I had hit the mother lode of future business in defending  this company from discrimination claims.  I decided to orient the chairs in the other direction and go on with the training. Admittedly, I downplayed some training materials on the problems with sexually explicit materials in the workplace.

The training went surprisingly well, with no mention of the “wall”.  Perhaps it had been there so long, no one even notice it anymore, but you can bet it would have been the centerpiece of any sexual harassment claim.  After the training was over, I read the plant manager the riot act.

The next time I was in that plant, no mention was made of the shrine but it was gone.  In its place was one of those signs detailing the number of days since the last lost time accident.   I wasn't sure I had gotten my point across to this company until I drove out of the parking lot.  It was then that I saw the three guys from the  receiving department  standing in an open garage bay giving me the finger. I thought again about the mother lode of future business.

Corner Office No Place for Workplace Romance: The Legal Risk of Sexual Favoritism

The CEO of the American Red Cross resigned after disclosure of a relationship with an employee.  The Red Cross Board of Governors stated that his resignation was requested for using “poor judgment” that “diminished his ability to lead the organization in the future”.   It amazes me that this type of leadership gaff can be repeated across so many organizations.

Strictly speaking, “sexual favoritism” is not unlawful sex discrimination so long as the relationship is consensual and does not discriminate against other men and women in the workplace. The EEOC’s Guidance on Employer Liability for Sexual Favoritism which was last updated in 1999 states as follows:

It is the Commission's position that Title VII does not prohibit isolated instances of preferential treatment based upon consensual romantic relationships. An isolated instance of favoritism toward a "paramour" (or a spouse, or a friend) may be unfair, but it does not discriminate against women or men in violation of Title VII, since both are disadvantaged for reasons other than their genders.

Strictly speaking, sexual favoritism by a high level executive is an employee relations problem and an unacceptable legal risk. Organizations cannot rely on the relationship remaining consensual and hazard the legal and public relations consequences.

Nonetheless, office romance is more prevalent than I ever appreciated until I researched a prior post on Fishing off the Company Dock: A Legal Perspective. Here are some of the proactive steps an employer can take to anticipate and manage the situation:

Implement a Strong Policy against Sexual and other Harassment

The EEOC has issued extensive guidance on sexual harassment policies and there ability to reduce an employer's liability for harassment.   One of the most critical components of such a policy is an effective complaint procedure to redress claims of harassment. Obviously, the avenue for making a complaint cannot be exclusively with a supervisor.

Develop a Policy on Office Romance without calling it "Fraternization"

According to Office Politics, thirty-five percent of companies have no formal workplace romance policy. Develop a policy, but avoid overly broad definitions and in particular the word "fraternize' which was the court's primary objection in the in Guardsmark case.

Train Supervisors

Supervisory training on sexual harassment can demonstrate a company's good faith attempts to comply with the law. Such training should explain the types of conduct that violate the employer's anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

Proactively Evaluate and Confront Situations

Most employers are content to sit passively and tolerate the employee relations fall out of an office romance. Many will not act unless it "becomes a disruption". Consider some proactive steps. If the romance is between co-workers, make sure they understand that it cannot impact productivity. If it is between a supervisor and subordinate, evaluate whether there should be changes in the reporting structure. Don't automatically transfer or reassign the female in the relationship or you will risk a discrimination claim. 

Layoffs and Reductions in Force: Five Things every HR Generalist should know.*

As credit related losses ripple through the financial and construction sectors, many organizations will be forced to consider job cuts. Selecting employees for lay off must be collaboration between managers and human resources. HR must be able to influence the process to reduce legal risks and assuage the anxiety of remaining employees:

1)     Establishing Business Justification and Layoff Selection Criteria:

The business justification for the reduction in force or layoff must be established. The justification for layoff typically gives rise to the selection criteria. For example, if a large contract was lost, the production and support functions related to the lost contract will be the focus or the layoff.

Layoff decisions may be challenged under discrimination laws, so it is advisable to develop selection criteria that support the business reasons for selecting one employee over another. Unless dictated by union contract, employers have discretion in developing the selection criteria which can include factors like, seniority, relative skills, performance, and/or disciplinary record.  More than one factor may be used.

Forced Ranking Systems are sometimes utilized to rank employees against one another from the top down based on performance criteria. The subjectivity in forced ranking can be challenged as discriminatory unless uniformly and rationally applied.

2)     Evaluating Impact of Selection Criteria including Bumping, Transfer and Recall Rights:

Once employees are identified for layoff, the results of the section criteria must be assessed in terms of disparate impact and other special circumstances. A disparate impact analysis should be conducted to assess whether the selection criteria have resulted in the disproportionate layoff of members of a protected class. Likewise, special circumstances should be evaluated such as employees with recent employment complaints, union activity, FMLA leaves, etc.  Consider documenting the final layoff decisions, but not the deliberations leading up to them.

Thought must be given to collateral job rights employees may have under employment policies and practices. Typical areas involve shift or department transfers, supervisor demotion in lieu of layoff, and voluntary layoffs. Likewise, the parameters of recall, if any, should be described.

3)     WARNA Obligations:

Federal and state plant closing/mass layoff laws must be considered. Although Pennsylvania has no state law equivalent to WARNA, employers with multi-state operations must assess the application of such laws. Coverage under WARNA can be complex as it has look back rules which aggregate layoffs for determining triggering events. WARNA coverage will trigger the sixty notice period which has a tremendous impact on layoff planning raising issues of pay in lieu of notice, retention, and publicity.

4)      Severance Benefits and Releases:

Careful consideration must be given to describing the benefit package, if any, offered to employees. If an employer is offering benefits that exceed those already provided by policy or mandated by law, it should consider obtaining a release. The federal Age Discrimination in Employment Act (ADEA) contains special rules for waivers of rights of claims of age discrimination including a 45-day consideration and seven day revocation period for such releases. Furthermore, the ADEA contains informational requirements that mandate publication of summary of employee demographic information in connection with the release.

5)     Communications Plan:

Effective communication is paramount in reducing employee legal claims and assuaging the anxiety of remaining employees. Everything that is said about the reasons for the layoff will be scrutinized in litigation. Consider scripting communications for group meetings and avoid individual discussions of the reason for selection. Large layoffs may generate news media interest for which a press release is a helpful way to influence the message.

*Not meant to be exhaustive.

Sexual Harassment Policy & Practice

The Ohio Employment Law Blog has a couple of posts that highlight court decisions involving the employers’ sexual harassment policies and practices. The posts put bring home the “real life” implications of an employer’s actions.

In EEOC v. V&J Foods, the court considered the language of an employer’s sexual harassment policy and found it to be “unreasonable” thereby invalidating the employer’s defense to a hostile environment sexual harassment claim. The case makes several good points about sexual harassment policies. The policy must be reasonable in light of the employment circumstances which means cookie cutter policies may not be enough. The policy must be tailored to the employer’s business. The court noted several problems:

  • A policy is not effective for those employees who do not speak English unless it is translated into a language that can be understood.
  • A policy must be tailored to the educational level of the average employee such as part timers, high school students, etc.
  • There must be more than one individual or class of individuals with whom a complaint may be filed so that a victim’s sole remedy doesn’t begin with the alleged harasser.
  • For a toll free hot line reporting mechanism to be effective, it should be answered by trained personnel who identify themselves as part of the human resource department.   

I have review hundreds of these policies in employee handbooks.  I almost always find some important deficiencies that need to be addressed.   Here are the typical problems I see:

  • Lack of dual avenues for filing complaints including one outside the chain of command.
  • Requirements that the complaint be in writing in order to be investigated.
  • Failure to advise complainants and witnesses that they will be protected from retaliation.
  • Assurance about confidentiality of the allegations, to the extent possible, while conducting an effective investigation.

The EEOC has scant guidance on the content of sexual harassment polices; however, there is one controversial position taken by the EEOC with regard to informing employees of their legal rights to file a complaint:

It also is important for an employer's anti-harassment policy and complaint procedure to contain information about the time frames for filing charges of unlawful harassment with the EEOC or state fair employment practice agencies and to explain that the deadline runs from the last date of unlawful harassment, not from the date that the complaint to the employer is resolved.

In Engle v. Rapid City School District, the Court reviewed an employer’s response to a complaint of sexual harassment, specifically, the adequacy of the remedial action. This post lists factors to consider upon receipt of a complaint.

I have previously posted on sexual harassment issues as follows:

High Profile Sexual Harassment: Outsiders must Investigate

Sexual Harassment Complaints require Prompt and Carefully Planned HR Actions

The Interviewing and Hiring Process: Five Things every HR Generalist should know*.

Many managers view the efforts of HR to bring order to the hiring process as meddlesome, bureaucratic and dilatory. “Just find me someone to fill this position” is the usual approach. There are several things that an HR generalist can bring to the table in terms of education and organization without slowing the process:

Uniformity of Process: Companies should develop an interview process and follow it. Haphazard hiring practices are difficult to defend from discrimination claims. Every interview process includes the following actions:

  • Identify in writing the minimum qualifications of the position and review the job description.
  • Establish criteria for an “applicant” including whether you will consider unsolicited resumes, internet inquiries, and recruiter referrals.
  • Identify the qualified applicants and the process for selecting the most qualified.
  • Develop a base set of job related questions for interviewers.
  • Develop a simple applicant assessment form.
  • Document the reasons for selection of the successful candidate.
  • Make sure the process is followed.

Documentation:   In response to any government investigation or as part of discovery in litigation, an employer will be required to turn over its written documentation of the hiring and interview process. To the extent possible, I recommend controlling the documentation that is created so that there are no smoking guns. Many legitimate hiring selections are called into question because of things that are written by interviewers in the margins of resumes. Try to review the interview forms for inappropriate comments and send them back for revision, if necessary. Furthermore, an “institutional memory” is created by written documentation that survives the departure of interviewers and other personnel.

Prohibited Questions:   Many state anti-discrimination laws and regulations prohibit certain types of employment inquiries. For example, the Pennsylvania Human Relations Act (43 P.S. Section 955 (b) (1)) prohibits employers from eliciting information or using any form of application that contains questions or entries concerning race, color, religious creed, ancestry, age, sex, national origin, past handicap or disability. Federal law prohibits asking for disability information except as part of a voluntary questionnaire under an affirmative action plan for the purpose of applicant tracking.  Otherwise, it is unlawful to discriminate and ask for medical information prior to an offer of employment under federal law.  There is not an absolute prohibition on soliciting other protected class information, but it should be done only as to a bona fide occupational qualification.

Applicant Communication:   Many organizations take a minimalist approach to communications with applicants foregoing acknowledgment of applications and rejection letters. While this correspondence may seem like a recruiting nicety, it serves a legal purpose by defining the applicant pool for a particular position.   If the parameters of consideration are not defined, enforcement agencies will look to all applicants to analyze discrimination claims.  At a minimum an employer should identify who was considered for a position and how long an individual’s application will remain active for future consideration. This exercise is very important for government contractors that may face OFCCP audits; particularly in light of the agency’s definition of “internet applicant”.

Training:   Very few managers and supervisors are good interviewers. Asking irrelevant questions, seeking unlawful information, or alienating good prospects are only some of the problems. Without training, many managers do not obtain enough information to critically evaluate the abilities of the applicants they have interviewed. Training on the interview process and techniques might prove invaluable to reducing turnover created by poor hiring decisions.

*Not meant to be an exhaustive list.

High Profile Sexual Harassment: Outsiders must Investigate

Yesterday’s $11.6 million jury verdict in the Isiah Thomas/New York Knicks sexual harassment case is generating tremendous blog commentary. Here’s what some are saying about the Knicks’ lawsuit and its “Wake-Up Call” potential:

Kris Dunn at HR Capitalist has a post on Fire, Suspend or Play On?... Isiah Thomas Trial Verdict.... Since the start of the trial, Kris has been soliciting opinions on how the Knicks should address Mr. Thomas’ employment. Now that the verdict is in, it is easier to address his employment and many sports analysts are calling for his termination.

Rush Nigut at Rush on Business has a post on Could the Knicks Have Avoided Sexual Harassment Claims? Rush gives some good advice on avoiding sexual harassment claims in the context of Knicks approach to the sexual harassment claim.

Daniel A. Schwartz at Connecticut Employment Law Blog has a post on Sexual Harassment Prevention Checkup - The Basics of Training and Posting Dan highlights the importance of supervisor training.

Michael Fox at Jottings by and Employer’s Lawyer has a post Isn't It Time for Basketball Yet?. Michael analyzes the jury’s deliberations.

What I take away from this case is that the investigation was botched because a high level executive used his power to derail or dissuade the company from doing an adequate investigation. When a company’s executives or board members stand accused of harassment, the investigation needs to be done by outside experts. Only an experienced outsider can effectively accomplish what needs to be done to protect the company and manage the whole situation including the following:

  • Taking company management out of the hot seat by planning and conducting an appropriate, unbiased, and comprehensive investigation.
  • Squelching the accused executive’s ability to influence, obfuscate, or bully the investigator.
  • Asking all the hard questions of both the accuser and the accused without fear of reprisal. (You might lose a client, but that’s part of deal).
  • Mitigating the emotion involved in accusations of misconduct to avoid really bad reactionary decisions. (Like firing the accuser or accused before conducting an investigation).
  • Preserving relationships among and between executives and the board by adding independence to the conclusions of the investigation.
  • Advising the decision makers (typically the board of directors) on the import of the facts, necessity of confidentiality, appropriateness of prompt remedial action, and prohibition on retaliation.

Gender Stereotyping: Disparate Treatment of Workers with Caregiver Responsibilities

The Sunday News features an article In job searches, women take hit that discusses the gap in legal protections under federal and Pennsylvania law for women when it comes to prohibitions against discrimination based on marital status or family status. The article contains the following legal summary that screams out for context and clarification:

When you apply for a job in Pennsylvania, an employer is prohibited from asking you about, among other things, your age, race, religion or ancestry.

But he can ask you if you have children. He can ask you when and if you plan to have kids. He can ask if you're married, single, separated or divorced.

And he can refuse to hire you on the basis of your marital or familial status.

In Pennsylvania, there is nothing illegal about treating employees and prospective employees differently, based on marital or family status. You can be refused a job or refused a promotion simply because, for instance, you're a single parent.

While it is technically correct that it is not unlawful to discriminate based on marital or family status, there are legal prohibitions against employment practices that have a disparate impact against individuals based on their gender or disability.  Gender Stereotyping is a recognized and growing basis for discrimination claims.  An employer’s gender stereotyping can be demonstrated by interview questions, workplace comments and attitudes about a woman’s role in family matters.  For example, in Back v. Hastings on Hudson Union Free Sch. Dist., the court ruled that comments made about a woman's inability to combine work and motherhood -- in particular, that a woman cannot "be a good mother" and have a job that requires long hours or that a mother who received tenure "would not show the same level of commitment [she] had shown because [she] had little ones at home," constituted direct evidence of sex discrimination under a stereotyping theory. Other cases follow similar reasoning.

The EEOC is also seeking to fill this void with its recently published Enforcement Guidance on Unlawful Disparate Treatment of Workers with Caregiving Responsibilities in which the agency acknowledges that there are no express protections from discrimination based solely on parental or caregiver status. However, unlawful disparate treatment may arise when a caregiver is subject to discrimination based on sex and/or race or because of his or her association with an individual with a disability. The Guidance highlights some common circumstances that the EEOC believes might constitute unlawful disparate treatment:

The EEOC is serious about its enforcement actions.  On September 27, 2007,  the EEOC announced that it has filed suit against Bloomberg L.P. for demoting a class of women and reducing their pay after they announce pregnancies and after they took pregnancy leave.  An EEOC trial attorney is quoted in the announcement  concerning sexual stereotyping:  "This case exemplifies an increasing trend where employers engage in stereotyping of female caregivers and act to limit their employment opportunities.  Pregnant women and mothers who work hard and perform well should be valued for their work, not penalized for their gender."

Employers should ask only job related interview questions, treating male and female applicants identically. Avoid stereotyping the roles of men and women in your interview, evaluation and promotion procedures. Don’t get caught off guard with a claim of family responsibility discrimination.

The Ultimate Interview Question may Lead to the Ultimate Deposition Question: How is this Job-related?

Frank Roche of the KnowHR Blog posits his ultimate interview question: “Do you recline your airplane seat? Explain.”  While not listed as one of the top 15 interview questions, I found his inquiry rather interesting.  I followed the links to find that there are a number of interview chat forums that highlight the off-beat interview questions of companies like Google, Microsoft and eBay. These job applicants face question like how many golf balls can fit inside a school bus. Or how much you would charge for washing all the windows in Seattle. Or why, exactly, manhole covers are round and not, say, square.

I wondered if this was the product of a slow day in the recruiting department or if there was some method to this madness. According to a article Want a job at Google? Try these brainteasers first, there is a rationale:

Seemingly random questions like these have become commonplace in Silicon Valley and other tech outposts, where companies aren't as interested in the correct answer to a tough question as they are in how a prospective employee might try to solve it. Since businesses today have to be able to react quickly to shifting market dynamics, they want more than engineers with high IQs and good college transcripts. They want people who can think on their feet.

Most behavioral based interviewing techniques are not quite as far out, but they still ring of subjectivity in assessing an applicant’s fitness for a particular job. How do these far out interview questions bode from a legal perspective?

Commentaries on Best Practices for Interviewing identify both job relatedness and uniformity as hallmarks of an appropriate process. These are also paramount in defending legal claims arising from a selection process. The key for employers is to demonstrate that the questions are accurate predictors of job performance and that all applicants had the same chance to succeed. Obviously, the more preposterous the question, the more a judge or jury might question a company’s hiring practices and infer discrimination.

Unsuccessful applicants often point to the subjectivity in an interview process as a basis of discriminatory treatment. Courts note that subjective considerations are not unlawful per se, but obviously subjective decision making provides an opportunity for unlawful discrimination.  See, e.g., Santana v. City and County of Denver. Furthermore, the OFCCP and EEOC abhor subjectivity as a basis for employment decisions because of its potential to have a disparate impact on a protected class. This has been noted in previous postings. Systemic Discrimination: EEOC's Latest Tactic to Redress Discrimination and OFCCP Audits Focus on Systemic Discrimination.

So, if you are an interviewer who wants to find out whether an applicant reclines his or her airplane seat and why, be prepared to explain [in court] how the inquiry might be job-related and ask the same question to everyone you interview.

Freedom of Speech in the Workplace: Think again.

The United States Constitution is often invoked as a source of workplace rights, particularly as it relates to freedom of speech, freedom from unreasonable search and seizure, and even the right to bear arms. A quick civics lesson reveals that the Bill of Rights creates limits on the government’s actions to curb constitutional rights but does not typically restrain private employers from trampling constitutionally guaranteed freedoms.

Generally, employees of private sector employers have no constitutional “free speech” rights in the workplace, so take pause before you wrap yourself in the flag and speak your mind. In both Geary v. U.S. Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974) and Wagner v. General Elec. Co., 760 F.Supp. 1146 (E.D. Pa. 1991), Pennsylvania courts rejected wrongful discharge claims based on First Amendment protects asserted by employees who were terminated for criticisms of their employers.

Gary Huber of the News Journal has an article on Freedom of speech? ... better ask your boss which explores the circumstances of  firings for employees expressing their opinions. Employee comments need not be made at work. Employees have been fired for blogging and posting on MySpace.   Some sites offer advice on how to avoid termination for blogging.

An employer’s power to terminate an employee for expressions of opinion is not absolute. Notable exceptions exist for “union activity”, anti-retaliation provisions of discrimination laws, and Sarbanes-Oxley Act compliance. An excellent discussion of the law in these areas appears in a New York Law Journal article by Jeffery S. Klein and Nicholas J. Pappas entitled When Private Sector Employer Fires Worker for Blogging.

Many employers have chosen to adopt policies on employee communications for a whole range of purposes. Policies can be helpful in defining an employee’s actions in the following areas:

  • Authority to comment to news media on official matters
  • Authority to communicate with or about customers and vendors
  • Use of work time
  • Use of employer’s computer and other resources
  • Disclosure of confidential or proprietary information
  • Prohibition on content of communication that is disloyal, discriminatory, inflammatory, threatening, or disparaging of the company, its employees, customers, products, etc.

Since many corporations have blogs, they have also developed blogging policies and guidelines. IBM’s Blogging Policy is an excellent example of one employer’s approach.

Sexual Harassment Complaints require Prompt and Carefully Planned HR Actions

As noted by the hr capitalist, sexual harassment complaints can lead to adverse publicity, undermine management's effectiveness, and cost companies big bucks. Although this situation cannot be entirely avoided, it can be managed with effective investigation of complaints.

Complaints directed at high level executives present particular problems for HR.  The executive absolutely cannot have any direct or indirect control over the investigation.  Claims involving the company's CEO may require HR to go directly to the board of directors to protect the company.  Obviously, such action puts HR in an impossible position, so consider using outside counsel to manage the situation.

The EEOC's Questions & Answers for Small Employers on Employer Liability for Harassment by Supervisors has the following summary about what an employer should do when it receives a harassment complaint:

How should an employer investigate a harassment complaint?

An employer should conduct a prompt, thorough, and impartial investigation. The alleged harasser should not have any direct or indirect control over the investigation.

The investigator should interview the employee who complained of harassment, the alleged harasser, and others who could reasonably be expected to have relevant information. The Guidance provides examples of specific questions that may be appropriate to ask.

Before completing the investigation, the employer should take steps to make sure that harassment does not continue. If the parties have to be separated, then the separation should not burden the employee who has complained of harassment. An involuntary transfer of the complainant could constitute unlawful retaliation. Other examples of interim measures are making scheduling changes to avoid contact between the parties or placing the alleged harasser on non-disciplinary leave with pay pending the conclusion of the investigation.

The Link in EEOC's Q&A takes you to the EEOC's Enforcement Guidance which provides a rudimentary outline for an effective investigation, including Questions to Ask Parties and Witnesses, making Credibility Determinations, and Taking Corrective Action.  It is a good starting point for formulating your investigation strategy.

A recent appellate court decision in Dominic v. DeVilbiss Air Power Co., makes clear that an employer's "good faith" efforts in investigating a complaint can limit its liability. The court enumerated good-faith efforts engaged in by the company:

  • Adopted a formal zero tolerance anti-harassment policy.
  • Launched a total of four separate investigations into the employee’s claims.
  • Limited the direct communication between the employee and the offender.
  • Encouraged the employee to report any incident of retaliation to management
  • Requested a written statement from the employee and a witness list.
  • Questioned all the employee’s witnesses.
  • Consulted with outside counsel to ensure that it was adequately investigating the employee’s claims.
  • Counseled the offender.
  • Set up sexual harassment training requiring all salaried personnel to participate.

Strictly Speaking Equal Employment Opportunity Means Neutrality

Certainly the Congressional policy underlying Title VII encourages efforts to improve employment conditions for minorities and women.  However, sometimes employers lose sight of the fact that the discrimination laws are written to prohibit employment decisions based on factors such as race, gender, age, religion, disability, etc.  Instead of being a neutral factor, these protected classifications can end up playing a role in employment decisions under the auspices of voluntary affirmative action plans, diversity programs, or even "risk management".   The result can be a claim for "reverse discrimination".

There are legal restrictions on preferences that take into account race, sex and national origin under employment policies like voluntary affirmative action and diversity programs. EEOC regulations outline the circumstances under which an employer may undertake a voluntary affirmative action program. Courts typically apply a three-part test to evaluate voluntary affirmative action plans under Title VII. First, there must be a manifest imbalance in the relevant workforce. Second, the plan must be temporary, seeking to eradicate traditional patterns of segregation. Finally, the plan cannot “unnecessarily trammel the rights” of non-beneficiaries. See, e.g., Johnson v. Transportation Agency, Santa Clara County.  Recently, in Decorte v. Jordan,  a federal appeals court ruled that a cultural-diversity report constituted  a voluntary affirmative action plan which was evidence of reverse discrimination because the plan had a 'focus on race in employment decisions and an intent to achieve a desired racial balance."

Favoring a protected class under notions of "risk management" is reverse discrimination.  It is true that reverse discrimination cases constitute only a small fraction of total discrimination complaints received by the EEOC, but that doesn't make this practice legal. I am surprised by how many companies will select non-minority employees for layoff in a reduction in force or discipline believing that they have eliminated potential discrimination claims.  See, e.g., McDonald v. Santa Fe Trail Transp. Co.   Likewise, hiring only employees in a protected class doesn't avoid discrimination litigation.  For example, the EEOC sued L.A. Weight Loss Centers alleging that the company engaged in a pattern or practice of disparate treatment against men in its recruiting, hiring, and assignment of employees. In its suit, the EEOC also charged that LAWL disciplined and ultimately terminated an employee, a trainer with the company, in retaliation for attempting to hire male applicants and for her complaints that LAWL failed to hire qualified male applicants because of their gender.

There are even a small number of cases where outright discrimination is alleged. Two recent cases involve white employees successful discrimination claims based on a demotion and racially motivated verbal harassment.

The Collision of an Employee's Work and Personal Lives: The Role of the EAP Referral

Kris Dunn at the HR Capitalist has a thought provoking post on the value of EAPs that includes the following comment:

Want to get a bunch of HR people nodding their heads?  Make a statement about the value of the Employee Assistance Program (EAP) our companies offer, usually as part of the Life Insurance suite.  It's true, it's a great product and every once in a while we get a great chance to refer someone to it and it does some good.  Much patting on the back usually commences...

Before we start the head nodding and the back patting, consider also the limits of EAPs. Many serious and festering situations aren't appropriately handled by saying "Hey buddy, you know the company has an EAP." This approach is a product of not wanting or knowing how to get involved. It is rationalized by the misapplied legal advice that states "keep it job-related".

There is a dangerous trap created by compartmentalize an employee's "work life" and "home life". It may be appealing, but many times this dichotomy is wholly impractical. The two personas of work and home are inextricably tied and that's what makes mental health and other personal problems one of the biggest challenges facing employers. The challenge often cannot be met by a chance interaction with the EAP (no matter how well it is promoted).

One in five American workers suffer mental illness which makes the odds high that an employer will need to manage such a "personal problem". A difficult task given the stigma attached to mental illness which is made harder by the high level of expertise needed to manage performance issues with a mental health aspect. The result of a mismanaged situation is at best a poor performing employee, possibly an ADA claim, or at worst an act of violence in the workplace.

Statistics on the effectiveness of EAPs are scant, possibly because of the confidentiality that surrounds them. I applaud what EAPs seem to do well: facilitate referral/intake for employees who choose to continue participation beyond the three or so free session provided under the typical plan. I caution on what EAPs don't do at all: absolve employers from liability for ADA and other workplace claims.

Employers may need to consider mandatory referral to a health care professional or EAP. There is a distinct difference between management referrals vs. mandatory referrals. Typical situations may involve alcoholism, drug abuse, or risks of violence in the workplace. A mandatory referral requires that the employee consult a healthcare provider as a condition of continued employment. It may be used in compliance with the ADA Guidelines on Medical Exams when an employer "has a reasonable belief, based on objective evidence", that: (1) an employee's ability to perform essential job functions will be impaired by a medical condition; or (2) an employee will pose a direct threat to himself of others due to a medical condition.

The medical information obtained from the EAP referral is not confidential and needs HIPAA consent. It can be a part of the "interactive process" mandated by the ADA for assessing disability-related accommodations and/or as part of the employer's performance management-disciplinary process. The referral generates an assessment that determines whether the employee is able to perform the essential functions of a position, evaluates accommodations, recommends follow up treatment, and may set conditions on the return to work. It may implicate FMLA leave.

Mandatory referrals are high-stakes, high-energy actions that bring workplace issues to a head. They give an employer the medical information to achieve a positive result with legal protections. If done with honesty, dignity and compassion, they can be very successful. However, success doesn't always equate to a happy ending for everyone.   Sometimes employers are left in the unenviable position of deciding which lawsuit they would rather defend: the one that says   "The Company cared too much, and got too involved" or the one in which you are left saying, "Did I mention he could have gone to the EAP?"

Seven Ways to Avoid Whistleblower Lawsuits

A jury ruled in favor of two former Detroit police officers Tuesday, awarding them $6.5 million in a whistleblower lawsuit that focused on allegations of misdeeds by the mayor's staff and extramarital affairs by the mayor himself. One officer alleged he was fired because of his investigation into the mayor's security detail's cover up of mayoral misconduct. The other officer alleged he was demoted because he was the member of the security detail who was named in a police report as the source of information about the mayor's activities. Both officers' claims were based on Michigan's Whistleblower Protection Act.

When you look at this news report, you are left wondering how the city's HR department could have blown it so badly and why their lawyers would have taken a jury trial on these seemingly horrible facts. The city apparently defended the cases based on documented performance problems by both employees arguing that the alleged whistle blowing was no more than a political hack job. The jury thought otherwise.

Whistleblower type claims are difficult for employers to confront for several reasons. First, an obvious whistleblower claim puts and organization on the defensive because it implicates managers in "wrongdoing". As a manager, it is difficult to work with someone who has accused you of violations of law, regulations or code of ethics; particularly, if you view the accusations are chronic, "half-baked", or concocted  to deflect employee performance issues.  So naturally, that manager want to get rid of that bothersome employee.

Second, whistleblower-type cases don't usually present themselves as such at the time of separation. They are typically amorphous and only crystallize post-termination when the former employee consults an attorney. Very few cases involve clear connections between an employee's opposition to an employer's (alleged) illegal conduct and his or her termination from employment. In the vast majority of situations, "whistle blowing" is raised by employees to rebut an employer's explanation for the discharge or under a theory of retaliation.

To avoid making the headlines for a whistleblower claim, I suggest some up front action as follows:

  • Ask the Question: Specifically determine whether the to-be-terminated employee has ever made any complaints or comments about the company's business practices such as safety, environmental, employment law compliance, or other legal-regulatory-ethical violations.
  • Investigate even the Half Baked Complaints: Hindsight is 20/20 and its what employers are judged by in court. If an employee takes the time to complain about "illegal actions" then you take the time to make an investigation. First, ask the employee make a complete report of his suspicions. If the complaint involves you, let someone else do the investigation, please.
  • Chronic Complainers are Occasionally Right: The boy who cried "wolf" was ultimately right much to the chagrin of the sheep.
  • Take the Accused Manager out of the Decision Making Process: Bias and retaliation arise when the decision maker is accused of wrongdoing or complacency.
  • Make a Written Finding: In the event of whistleblower type complaints, make a written finding that they were investigated and played no part in the termination decision and why.
  • Manage the Appearance of Retaliation: Examine the timing of the whistleblower complaints and any discipline or termination decisions.
  • Don't be intimidated into Inaction: Don't tolerate the chronic, half-baked complainers who deflect performance criticisms by accusing others of misconduct, if that is in fact what they are.

Four Reasons to take a "Wait and See" approach to using E-Verify

Remember the old adage that "No good deed goes unpunished?" I think it applies to voluntarily using the various electronic verification systems available in E-Verify and SSNVSAlthough there are electronic resources to assist employers in complying with the I-9 verification requirements, I don't think employers should jump to use them until they are forced to which is clearly on the horizon. Federal Contractors will be forced to use the E-Verify system under administration proposals.

My reasons for taking a "wait and see" approach are as follows:

  1. Using the E-Verify does not provide safe harbor from worksite DHS enforcement.   It only protects the employer from assertions by DHS that the employer actual knowledge knowingly hired an unauthorized alien and that only applies if the social security and e-verify documents match to the employee. If the documents don't match, the employer has actual knowledge of a potential unauthorized employee and cannot continue to employee that individual. There is no protection from the employee's claims that the employer engaged in immigration-related discrimination.   Although ICE takes the position that an employee is not liable for employee terminations under the safe harbor, that doesn't apply to E-Verify and doesn't stop an employee from filing a claim.
  2. Data base inaccuracies and limitations can put employers at risk for immigration claims. If the data base is inaccurate, which whole justification for the No-Match letters, then employers are inviting immigration complaints by employees terminated for E-Verify problems.   Statistically, the E-Verify system states that participating employers matched 92% of employment inquiries. Of the remaining 8%, one percent of the employees contested the E-Verify results. To me, that's the number of potential claims against employers who couldn't hire the employees. That doesn't even include employees who provide one of the myriad of other documents used for I-9 authentication that are not in the data base.
  3. Sources predict the E-Verify system will be overwhelmed when estimated 200,000 government contractors are required to use it. DHS states that the system can handle 25 million inquiries annually. It currently has 19,000 registered employers increasing at a rate of 1000 per month. Employers have only three days to verify I-9 documents and, once they elect E-Verify, they must use it for all employees (not only those who may have immigration issues).
  4. Changes in I-9 documentation requirements will make compliance simpler and E-Verify more effective. The number of Form I-9 documents used to establish identity and employment eligibility will be reduced from the current 29 categories. Employers have little capacity to verify the authenticity of these current documents, and the sheer quantity of accepted documents is an invitation to fraud. This regulation will reduce unlawful employment by weeding out insecure documents now used often for identity fraud. Simultaneously, the government will enhance the E-Verify System to include 14.8 million images stored on the DHS database including green cards. Passport and VISA data will also be added.

Until the system proves its reliability and demonstrates responsiveness, employers could experience unacceptable delays and errors leading to litigation and staffing problems.

Religious Discrimination: Employer's Responses to Workplace Issues

The Pittsburgh Post-Gazette is featuring an article entitled Religion at work: A growing number of discrimination cases center on employees' beliefs noting that a post 9/11 world has increased the number of religious harassment and discrimination claims. Religious accommodations can be difficult for employers to handle because they may pit one group against another.

Both Title VII of the Civil Rights Act and The Pennsylvania Human Relations Act prohibit religious discrimination and harassment. The EEOC has issued Guidance on Religious Discrimination obligations of employers including the following:

  • Employers must reasonably accommodate employees' sincerely held religious practices unless doing so would impose an undue hardship on the employer. A reasonable religious accommodation is any adjustment to the work environment that will allow the employee to practice his religion. An employer might accommodate an employee's religious beliefs or practices by allowing: flexible scheduling, voluntary substitutions or swaps, job reassignments and lateral transfers, modification of grooming requirements and other workplace practices, policies and/or procedures.
  • An employer is not required to accommodate an employee's religious beliefs and practices if doing so would impose an undue hardship on the employers' legitimate business interests. An employer can show undue hardship if accommodating an employee's religious practices requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees' job rights or benefits, impairs workplace safety, causes co-workers to carry the accommodated employee's share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation.
  • Employers must permit employees to engage in religious expression, unless the religious expression would impose an undue hardship on the employer. Generally, an employer may not place more restrictions on religious expression than on other forms of expression that have a comparable effect on workplace efficiency.
  • Employees cannot be forced to participate -- or not participate -- in a religious activity as a condition of employment.
  • Employers must take steps to prevent religious harassment of their employees. An employer can reduce the chance that employees will engage unlawful religious harassment by implementing an anti-harassment policy and having an effective procedure for reporting, investigating and correcting harassing conduct.

There is also specific EEOC Guidance on Workplace rights of Muslims, Arabs, South Asians, and Sikhs.

Protections from discrimination based upon religion can pose a challenge for employers for the following reasons:

Defining "Religion"

The law protects any "religious practice or belief" which is defined to include any "moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views". Advocacy sites exist for many nontraditional Religions. Don't dismiss an employee's request simply because they involve views that aren't main stream religions.

Accommodating Religious Practices

An employer must consider reasonable accommodations that do not pose an undue hardship. The employer can evaluate different alternatives to accommodations and may reject any that has more than a de minimis cost. However, providing voluntary swaps for scheduling accommodations is required even if it results in administrative costs.  Claims by coworkers might be "upset" or "uncomfortable" when they see the religious expression (like a turban)  is not an undue hardship. The key to an employers approach to an accommodation request is to evaluate its impact and not to dismiss it out of hand.

Balancing Competing Workplace Religious Practices

Employers struggle when forced to balance workplace exercises of religion that conflict with each other. For example, pro-life verses  pro-choice or Anti-Gay religious practices have factionalized workplaces over religious accommodation. In addition, employers can become involved in disagreements stemming from workplace proselytizing. Employers must carefully balance workplace religious expressions and refrain from treating them differently than other speech.

After the original publication, I came across a very expansive summary of religous accommodation situatations perpared by Vadim Liberman in his article "What happens when an employee's freedom of religion crosses paths with the company's intereest?"

No-Match Letters Place Undue Burden on Employers

The so called safe harbor from prosecution/sanction for immigration law violations arising from an employer’s handling of No-Match letter places a heightened burden on employers and may only exacerbate an already growing worker shortage. It is a poor effort to solve the problems created by a lack of consensus on a national immigration policy. It has collateral effect of heightening employer’s liability for immigration-related discrimination and employee relations problems.

Many Commentators believe that No-Match letters are not an effective mechanism for ferreting out illegal immigration, so granting a safe harbor to employers for playing along is meaningless. Some of the facts that lead me to this observation are as follows:

  • The I-9 Form process is complicated with  a maze of documents that can be used to authenticate work eligibility and identity . Some are temporary and require re-certification when they expire.
  • Employers  face liability for actual and constructive knowledge of employment of unauthorized workers. The actual knowledge standard can make HR managers avoid answering employee questions when it comes to immigration status. It can also make HR Managers rumormongers and workplace immigration police when they must reasonably investigate third party comments on immigration status. The constructive knowledge standard is addressed in the safe harbor.
  • Placing onuses on employees to resolve no match discrepancies within 90 days is untenable. My limited experience with SSA and Immigration leads me to believe that almost nothing can happen in 90 days.

My conclusion is that employers will be whipsawed  by worker shortages, immigration sanctions for hiring illegal workers, discrimination claims by fired workers who lack documentation and employee relations issues including unionization. 

I received several questions about  my contrast of the No-Match safe harbor and  a perfect storm. I borrowed the “perfect storm” allusion from my friend Ira Wolfe who has written a book entitled The Perfect Labor Storm which highlights the impact of demographic trends on national employment.

When is a "Safe Harbor" not so Safe: New Immigration Regulations for No-Match Letters

The Department of Homeland Security (DHS) issued new regulations that create a "safe-harbor" for employers who either receive a (i) no-match letter from the Social Security Administration or (ii) written notice from DHS questioning an I-9 Form. Employers who follow the protocol and timeline set forth in the regulations will not be charged with "constructive knowledge of employment of an unauthorized worker"; hence, being shielded from civil and criminal sanctions in a subsequent DHS audit. However, when one examines the safe-harbor, it clearly puts the employer in a position of terminating employees who cannot meet government requirements and time frames thereby facing discrimination claims and employee backlash.

The safe-harbor protocol requires that the employer complete the following steps within the prescribed time frames:

  • Within 30 days of the letter, check employer records to determine if there is an employer error like a typo or transcribed number/misspelled name.
  • If unresolved, employers must ask the employee to confirm accuracy of records. (Employers may wish to immediately inform employees about their obligation to resolve the disparity explaining that resolution of the mismatch could take time…. a lot of time).
  • If the employer is able to resolve the mismatch, the employer should follow the instruction in the No-Match letter.
  • If unresolved, the employer should inform the employee that the employee has 90 days from the date the employer received the No-Match letter to resolve the matter with SSA.
  • If the discrepancy is not resolved within 90 days of receipt of the No-Match letter, the employer should complete, within three days, a new I-9 Form as if the employee in question were newly hired, except that no document may be used to verify the employee's authorization for work that uses the questionable Social Security number. Additionally, the employee must present a document that contains a photograph in order to establish identity or both identity and employment authorization.

Completing a new Form I-9 without reliance on the old disputed documents or social security numbers, will be difficult if not impossible. Furthermore, reliance on the government's voluntary E-verify system provides no safe harbor for I-9 compliance. If the employee is unable under such circumstances to provide satisfactory documentation, the I-9 instructions state that "employment should be discontinued."    In the case the employee provided false information but somehow manage to comply with the Form I-9 requirements the second time, the same instruction suggest an employer follow its policy on employees who provide false information.

In either case, an employer is prohibited from discriminating against applicants or employees based on their national origin. Employers must also manage the perception among employees that this bureaucratic approach to national immigration policy isn't the employer's doing. The new regulations create a "safe-harbor" from DHS prosecution and an employee relations perfect storm.

Appearance Bias: It's what's in the wrapper that counts?

An Associated Press article by Lindsey Tanner reports that McDonald's wrapper tricks kids' taste buds:

Anything made by McDonald's tastes better, preschoolers said in a study that powerfully demonstrates how advertising can trick the taste buds of young children.

Even carrots, milk and apple juice tasted better to the kids if it was wrapped in the familiar packaging of the Golden Arches.

The study had youngsters sample identical McDonald's foods in name-brand or unmarked wrappers. The unmarked foods always lost the taste test.

This doesn’t surprise me or others one bit. The Evil Hr Lady take is that the wrapper perception created by titles pervades corporate decision-making. The result is that good ideas in the wrong wrappers don't get their just due.  I took a different direction.  When I saw the same article, I thought of appearance bias.

We are about due for another round of surveys or articles about how good looking people get better jobs, raises, and service for no other reason then they are attractive. Some older articles make this point like CNBC's Hidden Camera investigation entitled "Face Value", Catherine Kaputa's Why Attractive People Get Paid More and What You Can Do About It, or Kate Lorenz's Do Pretty People Earn More?

To use a cliché, perceptions are reality. The concept of evaluating people and their ideas on their merits is intellectually unassailable. However, if it were universally practiced, society wouldn't need laws against discrimination and job bias. Discrimination is, at least partially, a bias based on the wrapper, rather than the content. Certainly, "unattractive" is not a protected class. However, unattractive can be a code word for appearance prejudices that are legally prohibited such as those based on race, sex, national origin, age, and disability.

No where is the difference between the wrapper and its contents more important than in the defense of a discrimination claim. TheMcDonnell Douglas Test uses a three step legal standard for evaluating such claims. In the first step, the employee/applicant must show they are in a protected class, are qualified for a job and suffered some adverse employment action. In the second step, the employer must that it had a legitimate business reason for its decision. In the third step, the employee may show that the employer's "reason" is a pretext for discrimination.

Don't let the McDonald's/kid's eating habits analogy trivialize my point, employment decisions must be based on content and qualifications. When evaluation of the content involves subjective assessments make sure that decisions aren't influenced by stereotypes or biases resulting from perceptions.  Interviewers should be trained to appreciate the legal importance of job content in their evaluations of candidates.  Everyone should assess the role of their own hidden biases and their impact on workplace decisions.

Working at Home as a "Reasonable Accommodation" under the ADA

Telecommuting (a.k.a. working at home) has been buffeted about in a whole host of recent surveys which are nicely summarized in a SHRM article by Kathy Gurchiek entitled Upper Management Distrusts Telecommuting but Cites Benefits.   There is a mixed perception of the work at home world the travails of which are discussed at the Telecommuting Journal, a blog dedicated to the subject. Many employers believe that that there is no substitute for face to face communication. It may come down to "trust" with telecommuting still viewed as a "perk" that may hold back a career.

Despite these management perspectives, an employer's reluctance to allow telecommuting may be trumped by the American's with Disabilities Act's provisions on reasonable accommodation. The EEOC has published guidance stating that "allowing someone with a disability to work at home may be a form of reasonable accommodation." The EEOC's Fact Sheet explains issues ranging from whether a particular job can be performed at home to the frequency with which work at home must be offered.

Courts reviewing employee claims for a work at home accommodation focus on many things to determine the feasibility including the following:

  • The employer's ability to supervise the employee adequately.
  • whether any duties require use of certain equipment or tools that cannot be replicated at home.
  • whether there is a need for face-to-face interaction and coordination of work with other employees.
  • whether in-person interaction with outside colleagues, clients, or customers is necessary.
  • whether the position in question requires the employee to have immediate access to documents or other information located only in the workplace.

Employers should not summarily deny a work at home disability request. They must engage in an "interactive process" with the employee to assess the reasonableness of the requested accommodation.

Employment Record Retention/Destruction Policies: What not to do.

Electronic discovery promises to be a real brier patch for employers. It has already sprouted several blawgs dedicated to e-discovery topics. There are some good resources on eDiscovery Source, Electronic Discovery Law, and Sound Evidence: E-Discovery Simplified.

I have traded a series of posts and comments with fellow lawyer and blogger Rush Nigut at Rush on Business. We have both exposed the merits of a thoughtfully developed record retention policy. We have begun to explore the "what ifs" in the context of business litigation.

Employment discrimination cases will undoubtedly have a component of electronic discovery in terms of e-mails between the "key players". When an employer has a threatened claim, it has an obligation to preserve electronic and other evidence even before a lawsuit is filed. Intentional or inadvertent destruction of this evidence can result in sanctions such as loss of the case, monetary sanctions or an adverse inference instruction to the jury. These sanctions can occur even if records were destroyed pursuant to a valid record retention policy.

For example, a recent court decision involving a common factual scenario highlights the issues involving record retention and destruction. In Floeter v. City of Orlando, a female employee filed an internal complaint of sexual harassment including allegations of pornographic e-mails. She later filed a lawsuit in which the pornographic e-mails were subpoenaed. Because of the application of a record retention policy, the employer could not produce or unequivocally state that the e-mails did not exist. After considering a variety of sanctions, the judge ruled that the jury might receive an "adverse inference" instruction which allows the employee to argue that the e-mails existed and the employer intentionally destroyed them.

The employer's predicament was caused, in part, by its record retention policy including:

  • Failure to put a hold on electronic records when litigation was possible, i.e., the filing of an internal complaint.
  • Failure to preserve computer records when new computers are issued or employees leave and their computers are reassigned.
  • Routine erasure of back up tapes pursuant to policy.

When and employer has a threatened legal claim there are several things it should not do as demonstrated by excerpts from these real cases:

  • Don't send out an e-mail reminding the IT department and employees of the company's heretofore unenforced record retention policy. Arthur Anderson took this tact and ended up in the United States Supreme Court arguing about overturning criminal convictions.
  • Don’t adopt a record retention policy and schedule a Shredder Day

Fishing off the Company Dock: A Legal Perspective

There is an interesting post by Kate Lorenz at asking the question "Is Workplace Romance Really Taboo?" Ms. Lorenz observes that "society no longer frowns upon romance that blooms between co-workers." The ups and downs of office romance are even recounted in articles on

There is evidence that the taboos are truly gone. According to a 2007 Vault Survey, sixteen percent of employees confess to getting caught canoodling at the office. Office romance is embraced by all three branches of government (executive, legislative, and judicial). In fact the D.C. Court of Appeals in Guardsmark v. NLRB overruled an employer's no fraternization rule because it violated the rights of employees to engage in concerted activities. News outlets publish "How to Strategies". The Workplace Fairness Blog has some provocative comments in a post called "Love and Marriage at Work (and a Little Sex Too)"

While taboos may have eased, legal problems persist.   David Javitch notes in his post on "Dealing with an Office Romance", there may be even bigger workplace risks for morale problems created by perceived favoritism and the looming sexual harassment claim. Courts have found employer's liable for the sexual favoritism created by a supervisor's romantic involvement with subordinates. Sexual harassment claims remain high with the EEOC reporting over 12,000 claims filed in 2006 resulting in EEOC settlements totaling almost $50 million. Million Dollar verdicts are common.

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Employment References In Pennsylvania: The Truth or Nothing at All

I received a call from a very irritated client who just hired a new book keeper only to find out the new hire had just been arrested for embezzling from the same prior employer who gave her a glowing reference. Ethics aside, what are the legal parameters for giving a reference?

Frankly, misleading references involve a developing area of the law that is based on negligence theories. To be liable for negligence, you must owe a duty to someone, breach that duty, and the breach must cause damage. The best way to avoid being sued for a reference is not to give one.

No state imposes a duty on an employer to provide a reference on behalf of an employee. However, if a business chooses to provide a reference, it must do so uniformly and may be liable to the employee, other businesses or third parties if the reference is negligent. Negligent references are either inaccurate, materially incomplete, or both.

Pennsylvania law gives employers some protection in lawsuits by employees; provided, the employer acts in "good faith" when it discloses information. Lack of good faith must be established by clear and convincing evidence that the employer disclosed information:

  • Knowing it was false or should have known it was false
  • Knowing it was materially misleading
  • With reckless disregard of the truth or falsity.
  • In violation of some other contract or legal right of the employee.

However, the employer's "opinions" about the quality of work are not generally considered to be slanderous or libelous, unless the opinion implies undisclosed defamatory facts as the basis for the opinion. For example, stating that someone is dishonest is an "opinion" which implies undisclosed and potentially defamatory facts. Stating that someone did "poor quality work" does not.

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Rating Your Boss: When does the Lawyer see the Feedback?

It won't surprise you that I read other Blogs. There is a posting on Evil HR Lady about a new website called eBoss Watch where you can anonymously rate your boss and search other employee's ratings. I think the sight is largely an effort to capitalize on wave of "bullying" articles that have appeared lately.

The Evil HR Lady doesn’t like the site and I agree. These anonymous ratings are purely cathartic and usually don't have enough structure to give meaningful feedback. I tried to take the eBoss survey, but it was blocked by the office firewall. Major marketing oversight.

There are a whole host of management assessment tools that include employee feedback. Whether its called 360 degree feedback or some other name, it sometimes finds its way to a lawyer's desk as evidence in a termination case.

The peer feedback and evaluation contained in a 360 feedback can be powerful evidence in employment discrimination cases arising from a performance termination or reduction in force. Although the opinions expressed are entirely subjective, the structure of a 360 evaluation makes it seem objective. In the cases that I have presented 360 evaluation evidence to a judge or jury, it has been a powerful persuader because 360 feedback:

  • Demonstrates that the employer had a process that was designed to help the employee improve performance.
  • Includes both a numeric rating and anecdotal comments.
  • Usually isn't all negative.
  • Bases its assessment on a broader group of people.
  • Communicates clearly and in writing.

On the other hand, I can't imagine relying on anonymous website gossip to convince someone that my boss's performance was good or bad.

OFCCP Audits Focus on Systemic Discrimination

The OFCCP reports coordination of EO Surveys with statistical analysis techniques to predict "systemic discrimination" in order to target its compliance audits. The result from using data from 3,723 establishments that responded to the EO Survey, together with the findings from 2,651 completed compliance evaluations was that 89 cases of systemic discrimination were found.  In 2006, the OFCCP recovered a record $51.5 million for over 15,000 workers. Of the recovery, 88% was collected for cases of systemic discrimination in the application process because of unlawful employment policy or practice.

Government contractors are selected for audit in several ways including the use of a mathematical model that predicts the likelihood of a finding of systemic discrimination. The model analyzes data from five years of OFCCP compliance evaluations to formally identify and characterize relationships between reported EEO-1 workforce profiles and findings of discrimination.

I have been involved is several of these style OFCCP audits and the approach is the same. The audit is triggered by an anomaly in a business' EO Survey which shows a statistical disparity in either hires or terminations. For example, the percentage of minority applicants differs by more than 80% from the percentage of minorities hired (the four-fifths rule). The investigation into the disparity in the hiring process follows the road map set out in the OFCCP's Compliance Manual as follows:

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Systemic Discrimination: EEOC's Latest Tactic to Redress Discrimination

The EEOC announced a $20 million settlement with Walgreens based upon "systemic discrimination" against African American retail management and pharmacy employees in promotion, compensation and assignment. In addition to the monetary relief for an estimated 10,000 class members, the consent decree prohibits store assignments based on race.

The EEOC's lawsuit is part of its Systemic Initiative launched in April of 2006 based on a Systemic Task Force Report. The Report recommends, among other things, that the agency make a "top priority" the following:

  • Developing of systemic investigation plans for each District Office.                                  
  • Staffing systemic investigations and litigation with agency members with specialized training.
  • Creating "incentives" through performance plans to encourage investigators to "successfully identify, investigate, and litigate systemic cases."
  • Linking agency charge data with EEO-1 Survey and using technology to trigger investigatory efforts and litigate cases.

According to the OFCCP Blog Spot, both the OFCCP and EEOC have made systemic discrimination and testing top enforcement priorities. However, the EEOC doesn't have a formal definition of "systemic discrimination" but enforces it as a hybrid of traditional "pattern and practice" discrimination and disparate impact

No matter how the EEOC tries to repackage it, pattern and practice or disparate impact discrimination cases are not new. Most cases involve a single employee or a class of employees claiming that a facially neutral employment practice had a significant discriminatory impact on a protected class of individuals. In these situations, the Supreme Court has stated that the employee must point to some specific aspect of the employment process and then must prove that the processes caused disparate impact on the protected group.

What is new is the method that the EEOC and OFCCP are going about pursuing the claims. A rudimentary statistical review of employment data provided in the EEO-1 Report or EO Survey can now lead to a government investigation and a potential class action for systemic discrimination. Some, like Mary Swanton in her article "Offensive Measures" theorize that the EEOC (not unlike the plaintiff's employment bar) is trying to get more bang for its buck by taking on larger class action type suites. When you combine this trend with the audit tactics that I will outline in my next posts, it looks ominous for employers.

The Art of Employment Releases

Obtaining a release from an employee that waives the myriad of federal and state employment law claims is an art and not a science. It requires balancing contradictory government regulations, harmonizing competing employee relations goals, and cajoling, a more than likely, disgruntled employee.

When a business pays money to a departing employee, it wants the matter over. However, the patchwork of government regulations and varying court decisions interpreting them make it difficult to obtain that degree of certainty. Sometimes employees challenge the validity of a release and try to pursue their claims. In some cases, regulations even allow an employee to keep the money while suing the employer.

The legal standard for obtaining a valid release generally involves assessing whether the employee's waiver of claims was "knowing and voluntary". In the case of claims under the Age Discrimination in Employment Act (ADEA), the U.S. Department of Labor used 9 pages of regulations to define when a waiver is knowing and voluntary. In other cases, Pennsylvania courts assess the knowing and voluntary release of discrimination claims based on the following factors:

  • The clarity and specificity of the release language
  • The employee's educational and business experience
  • The time given the employee to deliberate before signing the release
  • Whether the employee knew or should have known what rights he or she was giving up
  • Whether the employee was encouraged to seek or sought legal counsel
  • Whether there was an opportunity to negotiate over the terms
  • Whether the employee was given consideration exceeding the benefits he was already entitled to receive.
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English-Only Rules: New Immigration Battleground?

The immigration reform battle on Capital Hill turned into a skirmish over the EEOC's enforcement of to English-Only rules in the workplace. By a narrow 15-14 margin, a Senate Appropriations Committee voted June 28 to approve an amendment designed to prevent the EEOC from bringing new lawsuits against companies that adopt English-Only workplace rules. As is often the case, Congressional policy disputes find their way into agency funding bills.

The EEOC views English-Only Rules as potential national origin discrimination and has adopted regulations prohibiting them unless the employer can show that the rule is justified by business necessity.   According to the EEOC's COMPLIANCE MANUAL, an English-only rule is justified by "business necessity" if it is needed for an employer to operate safely or efficiently. The following are some situations in which business necessity would justify an English-only rule under the EEOC's view:

  • For communications with customers, coworkers, or supervisors who only speak English
  • In emergencies or other situations in which workers must speak a common language to promote safety
  • For cooperative work assignments in which the English-only rule is needed to promote efficiency
  • To enable a supervisor who only speaks English to monitor the performance of an employee whose job duties require communication with coworkers or customers
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Perfume Sensitivity: ADA Claim or Office Nonsense?

Most HR professionals abhor their role as "fashion police" and arbiter of seemingly childish workplace skirmishes over perceived wardrobe malfunctions, odoriferous perfumes/colognes and other personal hygiene gaffs. However, ignoring these matters can land an employer in court for an alleged violation of the American's with Disabilities Act ("ADA").

A recent AP article entitled "Eau de Lawsuit: Woman sues over scent" describes an employee in the Detroit planning department who claims she is severely sensitive to perfumes and other cosmetics. She has sued the city, saying a co-worker's strong fragrance prohibits her from working. Her lawsuit under the ADA claims that her employer failed to accommodate her disability by banning perfumes in the workplace.

Seem odd? A quick review of the ADA case law shows no less that 18 reported court decisions with similar facts. In Davis v. Utah State Tax Commission, the employer was held liable for an ADA violation because it failed to engage in the interactive process to evaluate possible accommodations. In Kaufmann v. GMAC Mortgage Corp., the employer prevailed because it took steps to accommodate and the court recognized that providing a completely scent-free environment was unreasonable.

The difficult employee relations issue presented is the balancing of one employee's ADA rights with other employees' personal rights. As many employer's have learned, the ADA rights trump personal rights in the workplace. Nonetheless, employer's must avoid disclosing too much confidential medical information or allowing the disabled employee to be ridiculed or harassed for the requested accommodations.

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Immigration Law Compliance: How good are your I-9s?

It starts out as a normal workday in the HR department of XYZ company…You just deleted 54 spam e-mails, listened to 27 inane voice messages, and refilled the empty coffee pot (again). You look out the window to the parking lot (because those are the types of scenic views HR managers get in the corporate hierarchy). You notice several buses surrounded by black clad, gun wielding figures with the letters "INS" on their jackets. This can't be good. You look over to the file cabinet with the drawer labeled "I-9 Forms". Your next thought… "I hope I'm not Paris Hilton's cell mate?"

This may have been how it went down at Iridium Industries' Artube Division in East Stroudsburg, Pennsylvania when 81 employees were arrested in an immigration raid. Fortunately for them, the target was a temporary agency operating in the area. The subject of immigration compliance for temporary agencies has been covered by me in a previous post.

The immigration raids are conducted by the U.S. Immigration and Customs Enforcement (ICE) as part of its "Worksite Enforcement Initiative". These raids target "egregious employers involved in criminal activity or worker exploitation." However, the scope of ICE operations might suggest more as it operates 17 teams making 15,049 immigration arrests.

The INS has several mechanism to discover the employment of illegal workers including the following:

  • Social Security Mismatch Letters: Coordination between the IRS and the SSA began in 2002 with the issuance of "mismatch letters" that require an employer to check and report on discrepancies between SSN# and W-2 forms. The SSA process and ramifications are summarized in a posting by Linda S. Husar.
  • DOL and OFCCP Audits: Several government agencies conduct random audits of employer's I-9 forms as a part of their other audit activities.
  • Proposed Electronic Employment Verification System (EEVS): The White proposal for an electronic verification system under the Immigration Reform Bill is likely to succeed. Under this system, employers will be required to verify the work eligibility of ALL employees.

The consequences to a business and individuals for noncompliance with immigration laws including correct I-9 reporting are significant. The following is a partial list of penalties:

  • For employers who fail to properly complete, retain, or make I-9 Forms available for inspection, fines range from $100 to $1,100 per individual I-9.
  • For employers who knowingly hire or knowingly continue to employ unauthorized workers, civil penalties range from $250 to $11,000 per violation.
  • For employers engaging in a pattern or practice of knowingly hiring or continuing to employ unauthorized workers, fines can be as much as $3,000 per employee and/or 6 months in imprisonment.

Revised EEO-1 Report Required Starting September 2007

Beginning September 30, 2007, Employers who are required to submit EEO-1 Reports to the Equal Employment Opportunity Commission (“EEOC”) must do so on a new form. The EEO-1 Report collects annual data on the race, sex, and ethnicity of the workforce of private employers with 100 or more employees and certain federal contractors.

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Converting to a Paid Time Off System: Practical and Legal Pointers

Merrill Lynch tried to prevent abuses in sick time by clamping down on the reasons for sickness related absences and disciplining employees for excessive absenteeism. Many employers have decided to get away from policing the circumstances of an employee's absence by just creating a bank of paid time off that can be used for any reason. Once PTO is exhausted, time is unpaid and subject to the attendance discipline policy. This certainly sounds like a great idea, but here are some practical and legal considerations in converting from a traditional sick pay program to a PTO plan:

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Abuse of Sick Days: Analyzing the Merrill Lynch Response


Merrill Lynch is reportedly cracking down on time off abuses through new attendance guidelines that provide for a verbal warning and possible loss of pay after use of four sick days and termination after use of nine sick days without valid excuse. The new corporate policy is purportedly designed to reign in workers who misuse sick days by playing hooky on nice summer days, extending weekends, etc. The new policy replaces a program that providing up to 40 sick days per year.

Sick day programs are one of the most fretted over of all employment policies because they involve so many management and legal issues. Sick time is disruptive to the workplace because it is almost always unscheduled. Misuse of sick time has a dramatic impact on employee morale because of work inequity perceptions. Employers must manage abuses within the legal parameters imposed by the wage & hour laws, disability discrimination protections, Family and Medical Leave Act compliance, and wage payment regulations.

Almost every employer offers some form of sick time benefit.   Statistics show that the average business offers 8.1 sick days per year, but employees use only 5.2. However, the growing trend is away from traditional sick days to creating a paid time off bank (PTO). PTO programs combine into one pot all categories of time off, like vacation, sick days, personal days, and floating holidays. Some of the advantages and disadvantages of PTO are as follows:

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Violence in the Workplace: Observations and Recommendations

There are psychological tests and assessment tools that are predictive of violent behavior, but there are significant legal restrictions on their use. Assessments that are not "medical tests" may be used on a pre-employment basis, but should not be used as the principal reason for a hiring or promotion decision.

There is no profile of a potential workplace violence perpetrator; however, there are traits when coupled with at risk situations that increase the likelihood of violent behavior. Sheryl and Mark Grimm of the Workplace Violence Headquarters have developed a Formula for Workplace Violence that includes a list of traits as follows:

  • Previous history of violence, toward the vulnerable, e.g., women, children, animals
  • Loner, withdrawn; feels nobody listens to him; views change with fear
  • Emotional problems, e.g., substance abuse, depression, low self-esteem
  • Career Frustration, either significant tenure on the same job of migratory job history
  • Antagonistic relationships with others
  • Some type of obsession, e.g., weapons, other acts of violence, romantic/sexual, zealot (political, religious, racial), the job itself, neatness and order .

There is a major legal distinction made between an employer's treatment of an applicant with a potentially violent personality and the treatment of employee conduct that exhibits violent behavior. The EEOC has stated that its position on the distinction between perception and conduction in its  Enforcement Guidance for Individuals with Psychiatric Disabilities :

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Did You Know? Pennsylvania Law Highlights Section

The Pennsylvania Employment Law Blog has added a new section which highlights and/or discusses legal situations which commonly confront human resource professionals. Click on the link titled "Did You Know? PA Employment Law Highlights" on the upper right side of the page. The short informational postings address Pennsylvania law's impact on specific HR activities to promote compliance, proactive risk management, and issue identification.   The postings will be made on a regular basis and archived in this special section of the blog for our reader's reference and review. 

Genetic Information Nondiscrimination Act passes in U.S. House of Representatives

The Genetic Information Nondiscrimination Act of 2007 (GINA) was passed in the U.S. House of Representatives on Wednesday, by a vote of 420-3. The act will protect individuals against discrimination based on their genetic information when it comes to health insurance and employment.  Title II addresses employment and provides that it shall be an unlawful employment practice for an employer--

  1. to fail or refuse to hire, or to discharge, any employee, or otherwise to discriminate against any employee with respect to the compensation, terms, conditions, or privileges of employment of the employee, because of genetic information with respect to the employee; or
  2. to limit, segregate, or classify the employees of the employer in any way that would deprive or tend to deprive any employee of employment opportunities or otherwise adversely affect the status of the employee as an employee, because of genetic information with respect to the employee.
  3. to request, require, or purchase genetic information with respect to an employee or a family member of the employee.

Powers, remedies and procedures are patterned after the Civil Rights Act of 1964 (42 U.S.C. 2000e-4 et seq.) and section 1977A of the Revised Statutes of the United States (42 U.S.C. 1981a), existing anti-discrimination federal legislation. 

The Act is available online at The Library of Congress site.  The National Human Genome Research Institute has also posted information on their website. 

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Employment Screening and Background Checks - Part III

Many employers utilize some form of pre-employment testing to assist them in hiring decisions. A 2000 study by the American Management Association reported that 69% of firms used some form of job skills testing and 33% used psychological testing. 

There are general legal restrictions on the use of pre-employment testing in addition to the general prohibitions on discrimination found in Title VII and the Pennsylvania Human Relations Act. The Uniform Guidelines on Employee Section Procedures prohibit the use of a test or selection process that has an adverse impact on individuals in a protected class unless the test has criterion-related, content and construction validation studies. The validation studies must consist of empirical data demonstrating that the test is (1) predictive of performance of important elements of job performance; (2) contains content which tests important aspects of performance on the job; and (3) consists of procedures that assess identifiable characteristics that have been determined to be important to job performance.

Both the ADA and the Pennsylvania Human Relations Act prohibit the use of "medical tests" prior to an employer extending a conditional offer of employment. A medical test is generally one that seeks information about an individual's physical or mental health or impairments. Courts examining whether a test is "medical" have looked at the following factors: (1) administration or interpretation of the test by a medical professional; (2) intent of design of the test to reveal a medical or mental impairment; (3) conducting the test in a medical setting; (4) measurement of the individual's psychological responses to performing a task; (5) necessity of medical equipment to perform the test; and (6) invasive nature of the procedure.

Following is a summary of some of the more popular pre-employment tests employed by businesses to assess applicants:


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Employment Screening and Background Checks - Part II

Newspaper headlines are replete with cases of embezzlement by employees and violence in the workplaceGovernment statistics note alarming trends for increases in criminal activity at the workplace. To stem this tide, employers have turned to Credit Reports and Criminal Record Checks as two sources of information they may legally obtain about prospective and existing employees.  However, there are statutes that govern the use of the data employers obtain.


  • Credit reports - The Fair Credit Reporting Act, 15 U.S.C. § 1681, (FCRA) requires employee consent and disclosure.  Employees or applicants must be notified of the existence of a report, consent to the disclosure of the report and be provided with a copy of the report if it results in an adverse personnel action.  The employer must certify that it is requesting the credit report for employment purposes, that it has made the required written disclosure to the individual, and that it has obtained the individual's written authorization permitting the procurement of the report.  The employer must also certify that it will provide the required disclosures if any information in the report results in adverse action against the individual. 

Be aware in using credit reports to evaluate candidates that the Federal Bankruptcy Act prohibits an employer from discrimination in hiring or retaining an employee solely because the employee or someone associated with him/her has filed for bankruptcy or has not paid a debt dischargeable in bankruptcy, see Thomas v. Dennis Real Estate, 1989 WL 114165 (E.D. Pa. 1989). Many employers question the benefit of credit checks since they are prohibited from using bad credit as a reason for not hiring someone when the individual his filed for bankruptcy. The result is only those individuals with late payment histories and charge offs can be weeded out, while those with bankruptcies can not be treated discriminatorily.


  • Criminal Record Check - A Pennsylvania employer's use of criminal history record information must be in compliance with the Criminal History Record Information Act.   Felony and misdemeanor convictions may be considered only to the extent to which they relate to the applicant's suitability for employment in the position for which he/she has applied, 18 Pa.C.S.A. § 9125(b).

If the employer's decision not to hire the applicant is based in whole or in part on criminal history record information, the employer must notify the applicant in writing, 18 Pa.C.S.A. § 9125(c). 

By implication the Act appears to prohibit consideration of arrests, or convictions of summary offenses.   Therefore, consider only felony and misdemeanor convictions, not summary convictions or charges without a conviction.


These are examples of issues of which you should be aware when doing any employment screening.  You should consult with an employment law attorney before you begin a screening program.  There are numerous issues that must be considered. 

Pre-Employment Screening and Background Checks - Part I

There is a growing trend among employers to use various pre-employment testing and background checks. Screening can range from credit reports and criminal checks to education and reference verification or motor vehicle records checks. I frequently answer questions for employers who are concerned about the legal issues related to obtaining this information. In my next few posts I will address some frequently asked questions.

What is an Employer's obligation to obtain background information on prospective and existing employees?

  • Employers are under a common law duty to exercise reasonable care in selecting, supervising and controlling employees.
  • The duty includes reasonable investigation into the prospective employee's work experience, background, character and qualifications.
  • Look at the relationship between your customers and employees - is the potential for harm foreseeable? What kind of work and contact with the public do your employees have?
  • Look at relationships between employees - has any conduct or history made the potential for harm foreseeable?

How can I minimize the risk of being sued when using background information?

  • Apply the same procedure to all employees and/or applicants to avoid claims of discrimination in evaluation.
  • Observe the requirements imposed by the statutes governing the data you obtain.

In my next post we will review some of the statutes that apply to some of the more commonly used reports. 

Developing a Record Retention Policy

Last week we discussed some of the new issues that arise regarding electronic records. I summarized the results of a pre-federal rule amendment case, Zubalake v. UBS Warburg.

If you've decided to do your best to protect yourself from similar circumstances, consider developing and implementing a written record retention policy. Following are some things to keep in mind:

  • Identify the types and sources of both electronic and hard copy documents;
  • Evaluate the business need for the various types of electronic records and documents. Keep in mind that some records have mandatory retention periods.
  • Determine the retention or destruction period for classes of records.
  • Anticipate the arguments that may be made and inferences that could be drawn from the destruction of certain documents and weigh it against the expense of retaining and producing the documents.
  • Establish a storage and retrieval system for retained records evaluating its cost and efficiency.
  • Develop, communicate, and enforce a policy on record retention.
  • Establish a system for placing a "litigation hold" on records when a claim is threatened, administrative claim commenced, or a law suit filed. This will protect your company against sanctions for destroyed documents.

Record Retention in an Electronic World: Time to Clean House?

Most Human Resource professionals tend to be pack rats. When documentation is typically hard to come by, no one in his or her right mind would put it in the shredder. In fact, the inclination might be to keep it forever. Recent changes in court procedures may require re-evaluation of company record retention practices, particularly when it comes to "electronically stored information". It's time for all employers to get a handle on the sources of electronic information and develop a record retention policy for its preservation, production and destruction.

On December 1, 2006, the Federal Rules of Civil Procedure were amended to address court procedures for disclosing electronic information during the discovery phase of litigation. The new court rules begin to apply to a company when litigation is "reasonably anticipated". At that point, a company must put a "litigation hold" on its electronic and other records that may be discoverable in litigation. Companies that take this step will be protected against court sanctions, so long as they take reasonable steps to protect and preserve information.

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