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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National Labor Relations Board Says Employee Facebook Posts About Employer Protected

I recently read an article on, Feds settle case of woman fired over Facebook comments, which discussed a settlement in Connecticut which will have a significant long-lasting impact on employers' policies regarding their employees' conduct on the internet. The National Labor Relations Board ("NLRB") reached a private settlement with American Medical Response of Connecticut, Inc. for the termination of an emergency medical technician who posted what the article called an expletive-filled posting which referred to the employee's supervisor as the company's code for a psychiatric patient. The ambulance company had an employment policy which prohibited employees from disparaging the company over the internet or depicting the company in anyway.

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Personal Financial Issues in the Workplace

In tough economic times, businesses tend to focus on larger issues such as their bottom lines, falling profit projections, and the streamlining of production. However a key component in the health of a business is often overlooked – the effects that economically stressed employees can have on their employers. Such effects include personal bankruptcies, wage attachments, theft and a decline in productivity caused by the psychological stress. Thus it is essential for employers to understand the key factors at play and implement sound policies to minimize damage.

  • Stress and Loss of Productivity   Like many other types of psychological stress, anxiety caused by economic problems prevents employees from focusing on their work. Simply put, employers are getting less production per dollar of wages or salary paid. While identifying those in need of psychological counseling will help, many businesses have had success providing economic counseling and education as well to make their employees more financially literate. Please click here for more detailed information from the Partnership for Workplace Mental Health on combating the effects of such stress.

Other issues that will arise more frequently in the coming months include:

We addressed these issues in a blog post in April 2008, when we still referred to the condition of our economy as only an “economic downturn” but the general principles still apply. Please review this post to learn more about legal limitations placed on employer actions with regard to an employee’s financial problems. 

What do you know about Employment References?


References may be the first and last thing you think about in an employment relationship. Are employers required to provide them, and what information regarding former employees may be communicated? 

There is no statute or law requiring employers to provide references. As a result, and due to fear of providing the "wrong" information, many employers adopt a policy of providing information limited to confirming dates of employment and position(s) held. What can happen if an employer gives out "wrong" information? It could be subject to a claim of defamation, if the statement is factually false and tends to blacken the character, such as alleging criminal behavior. Or it could be claimed to constitute the tort of intentionally interfering with prospective contracts, if the information is shown to have cost the employee a job. 

But several factors limit employer liability in the employer reference area. First, employment matters are often "privileged," meaning that employer's conduct and statements are excused because it falls within the employment context. Second, Pennsylvania law confers immunity from civil liability to an employer who discloses information about a current or former employee's job performance to a prospective employer, unless the employer disclosed information that the employer knew was false or materially misleading, or in the exercise of due diligence should have known was false, the information was false and rendered with reckless disregard as to the truth or falsity of the information, or was information which the disclosure was prohibited by contract, civil, common law or statutory right, 42 Pa. C.S. § 8340.1.

From my experience, the best course is for employer and departing employee to understand exactly what employer will do and say about the employee in response to inquiries from third parties. If the employer has no stated policy with respect to references, a letter can be drafted by the employer or the employee so that it is clear what will be stated. In addition, the employer should have procedures in place so that information is disseminated only by a limited number of people and that only the agreed upon information is released. In most cases, it is to the benefit of both employer and employee for the employee to be gainfully employed again as soon as possible.

Employer/employee issues can sometimes be complicated even under the best of circumstances. If you have questions regarding employment references or any other employment issues, please contact an employment attorney.

Interaction Between FMLA & ADA - Don't Get Tripped Up

The Family and Medical Leave Act (FMLA) turns 15 this year and workers’ rights advocates, the Bush Administration and the Labor Department are weighing in on proposed changes to the law. According to an April 24 article in the Washington Post,

“...workers would have to tell their bosses in advance when they take nonemergency leave, instead of being able to wait until two days after they left. They would have to undergo "fitness-for-duty" evaluations if they took intermittent leave for medical reasons and wanted to return to physically demanding jobs. To prove that they had a "serious health condition," they would have to visit a health-care provider at least twice within a month of falling ill. What's more, employers would have the right to contact health-care providers who authorized leave.”

As I reviewed these proposals it occured to me that some of these changes may serve to blur the distinction between the FMLA and the Americans with Disabilities Act of 1990 (ADA). It is not uncommon for employees to bring claims under both the FMLA and ADA. Avoid getting tripped up in the similarities of FMLA and ADA by understanding the distinctions between the two laws.



  • is enforced by the Department of Labor (DOL)
  • is enforced by the Equal Employment Opportunity Commission (EEOC)
  • applies to employers with 50 or more employees
  • applies to employers with 15 or more employees
  • eligible employees must have been employed for at least 12 months and worked 1,250 hours in the previous 12 months of employment
  • no eligibility restrictions
  • only requires an individual (or family member) to have a "serious health condition"
  • only covers individuals with a disability
  • there may be individual liability
  • no individual liability
  • no punitive or emotional damages can be awarded
  • punitive and emotional damages can be awarded

Managing Employees with Personal Financial Problems

The economic downturn affects businesses but also impacts the daily lives of employees. An employee’s personal financial problems can lead to bankruptcy, foreclosure and even divorce, any of which may impact his or her job and job performance.

Businesses must be prepared to respond to employee performance issues created by financial problems. Employers should be aware of legal limitations placed on their actions with regard to an employee’s financial problems. In addition, human resource professionals should appreciate the relationship between their performance management program and other resources to address employee issues created by financial distress.

Pennsylvania and federal laws limit actions employers may take against employees that file for bankruptcy or are subject to wage attachments. Many employers, particularly those in the financial sector, face customer relation problems when one of their employees doesn’t pay his or her bills or files for bankruptcy. Legal limitations on employer responses are as follows:

  • Employee BankruptcySection 575 of the Bankruptcy Act protects employees and applicants from discrimination if an individual:
    • is or has been a debtor under this title or a debtor or bankrupt under the Act;
    • has been insolvent before the commencement of a case under the Act or during the case but before the grant or denial of a discharge; or
    • has not paid a debt that is dischargeable in a case under this title or that was discharged under the Act.

Courts have limited the reach of this provision by requiring that the discrimination be "solely because" of the individual's bankruptcy participation.

  • Worries About Temptation for Theft. Businesses may become concerned that an employee in financial distress may be more likely to embezzle and react by trying to find out the scope of an employee’s credit problems. The Fair Credit Reporting Act limits an employers use of employee credit information. A business’ usual financial controls should be uniformly applied, but, if inadequate, should be revised for all employees.                                 

Financially distressed employees may exhibit other performance problems ranging from declining productivity to depression. The usual performance management system should be utilized to correct deficiencies; however, special attention should be paid to other resources like the EAP and  Debt/Credit counseling. Some businesses may wish to go further. Susan S. Windham believes that Financial Distress for Employees Means Lower Profits for Employers. She advocates workplace financial education as the answer.

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.

Scandal Management: Any Lessons for Human Resources?

Today’s headlines about Governor Eliot Spitzer’s link to a prostitution ring recount another scandal involving a high level government official. Spitzer attempted to “manage” the scandal by calling a press conference, his spouse at his side, apologizing for his behavior and describing the rest as a “private matter”.   After this "ritual of repentance", Spitzer is “weighing his resignation”. To this, I refer back to a statement attributed to  Representative Dick Armey who was asked if he had been in President Clinton’s place after the Monica Lewinsky scandal would he have resigned? He purportedly responded: “If  I were in the President’s place I would not have gotten a chance to resign. I would be laying in a pool of my own blood, hearing Mrs. Armey say : ‘How do I reload this damn thing?’”

While I don't advocate this approach, an organization's or individual's response to a scandal can make or break it.  Human Resources professionals may be called upon in times of turmoil to be the spokesperson for the organization. I have no training in public relations, but from a legal perspective here are some things I can say don’t play well for future litigation:

  • The “categorical denial” that proves otherwise like “I never had sexual relations with that woman”.
  • Legalistic answers like those that turn on the definition of “is”.
  • Opinions offered without facts or investigation.
  • Any comments made by a company official in handcuffs or an orange prison jump suit.

Occasionally, I will get contacted by a company facing adverse publicity.  Here are some general rules that I remind clients when they call in a crisis:

  • Consider the quick engagement of a PR firm.
  • You don’t have to say anything and that may be the best course.
  • Identify one spokesperson and tell everyone else to refer questions there.
  • Plan what you will say and provide a written press release
  • If you don’t know the facts, don’t speculate
  • If you don’t have something to say then don’t talk.
  • You don’t have to answer questions and be very careful if you do.
  • You can end a press conference of interview at any time, just try to do it gracefully.

Employee Cell Phone Use: Adopt a Policy on Talking, Texting, and E-mailing while Driving

We have all witnessed dangerous driving maneuvers by individuals talking on cell phones. What if this driver is one of your employees? What if the employee causes an accident while conducting company business on a cell phone?

Employers may be liable for accidents where an employee’s job-related cell phone use contributed to the accident. Whether the cell phone use is within the scope of employment depends upon many factors including such things as the employee’s job duties, who provided the phone, when the accident occurred, whether it was a business call, and whether the employee was complying with the employer’s policy on cell phone use.

Don Heyrich at the Washington Labor, Employment & Employee Benefits Law Blog notes a $5.2 million settlement by an employer whose employee caused a serious traffic accident while talking on her company-supplied cell phone. Details of the case appearing in a newspaper account describe a very typical scenario for employees who multi-task while driving. There is no mention as to whether the employer had a policy prohibiting or limiting employee cell phone use while driving, so the impact of such a policy on the employer’s liability is unclear.

  • Company’s can try to manage their liability by adopting a policy on cell phone use and then enforcing it. A policy should consider the following:
  • Directing employees to comply with all applicable state and local laws governing cell phone use. Banning cell phone use while driving.
  • Requiring employees to use hands-free devices while driving.
  • Providing company cell phones with hands free features.
  • Prohibiting the use of text message and e-mail features while driving.
  • Requiring employees to pull over to take phone calls.
  • Instructing employees to avoid or to terminate phone calls involving stressful or emotional conversations.
  • Limiting the scope of job descriptions for some positions exclude using cell phones while driving.
  • Prohibiting cell phone use in adverse weather or difficult traffic conditions.
  • Restricting driver cell phone use to brief conversations.
  • Emphasizing safety while taking phone calls on the road.

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.

Retention Bonuses: Talent Management Tool for Businesses in Transition

Microsoft Corp. tendered an unsolicited takeover offer of $44.6 billion for Yahoo, Inc. As with any acquisition/merger, both businesses need to calm the troops by making assurance of job security. In today’s world, every employee knows that the buzz words like “business synergies” and “market overlap” mean layoffs for employees whose jobs are “redundant”. As reported by MSNBC,  Microsoft said” it sees at least $1 billion in cost savings generated by the combination, and intends to offer significant retention packages to Yahoo engineers, key leaders and employees.”

Retention Bonuses are an important talent management tool for all size companies when the organization faces uncertainty due to merger, bankruptcy or other business transition that creates uncertainty for employees. I have seen retention bonuses used successfully by businesses in financial hardship because of the loss of a large contract, exiting form bankruptcy protection, or to counter a competitors raiding of its talent. However, the communications and documentation of a bonus program must be carefully managed to avoid unintended consequences.

Kate DCamp takes the contrary view in her posting “Do Retention Bonuses Work? She believes that the money motivator almost never works:

In most situations, what works is specific to the problem diagnosed. In a business turnaround, tripling communications and sharing some of the "upside" can be very effective to keep critical talent. An opportunity to have more impact on the business and a chance to earn extra money by achieving business goals sends a clear signal about someone's importance to the company.

Dr. John Sullivan posting on “Retention Bonuses – Are they a good idea?” has a great laundry list of “unintended consequences” including:

  • Creating uncertainty in those who are not offered the bonus
  • Exacerbating a we verses them mentality in the case of a merger of two companies
  • Having those employees who will depart anyway conduct their job search on your time
  • Denigrating the principle that performance matters
  • Creating job security for those who may not deserve it

From a legal point of view, any bonus plan should be in writing with specific eligibility and trigger requirements. Careful consideration must be given to selection criteria to defend against discrimination claims. Bonus payments are treated as wages and subject to payroll taxes.

President signs Family Leave Provisions for Military Families

The White House announced that President Bush signed of the National Defense Authorization Act (H.R. 4986) which includes additional FMLA leave for military families.  Section 585 (full text set forth below) of the bill (similar to the one vetoed in December) adds two new FMLA-qualifying events, expanding FMLA to include employees caring for an injured service member as well as family members who have a family member called to active duty.

The DOL has summarized the provisions and indicated that the caregiver provisions of the law are effective immediately while the other provisions aren’t effective until DOL issued final regulations. The DOL is “working quickly” to prepare comprehensive guidance, and will require employers to act in good faith until guidance is issued. Employers should immediately adopt FMLA-type procedures for substitution of paid leave and notice as it applies to the new legislation.

Under the new law, FMLA-eligible employees will now be entitled to the following:

Caregiver Leave for an Injured Servicemember:  This benefit permits a “spouse, son, daughter, parent, or next of kin” to take up to 26 workweeks of leave to care for a “member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness.”

Family Leave Due to a Call to Active Duty:   This benefit provides 12 weeks of FMLA leave for “any qualifying exigency (as the Secretary [of Labor] shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation.”

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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.

EEOC allows Employers to Coordinate Retiree Plans with Medicare

The EEOC issued final regulations that create a specific exemption from the Age discrimination laws (ADEA) allowing employers to coordinate (meaning alter, reduce or eliminate) health benefits for retirees who become eligible for Medicare. The EEOC regulations describe the exemption as follows:

Some employee benefit plans provide health benefits for retired participants that are altered, reduced or eliminated when the participant is eligible for Medicare health benefits or for health benefits under a comparable State health benefit plan, whether or not the participant actually enrolls in the other benefit program. Pursuant to the authority contained in section 9 of the Act and in accordance with the procedures provided therein and in Sec. 1625.30(b) of this part, it is hereby found necessary and proper in the public interest to exempt from all prohibitions of the Act such coordination of retiree health benefits with Medicare or a comparable State health benefit plan.

According to the NY Times, 10 million retirees rely on employer-sponsored health plans as their primary source of coverage or as a supplement to Medicare. With the rising cost of healthcare, many employers were considering the elimination of retiree benefits. The motivation for employers to eliminate retiree health coverage was greatly increased following a ruling by the Third Circuit Court of Appeals in 2000. In its decision in Erie County Retirees Association v. County of Erie, the Court held that the ADEA required that health benefits offered to Medicare-eligible retirees must be the same, or have the same cost to the employer, as benefits offered to employees under age 65. The ruling prohibited an employer from taking into account Medicare coverage in providing health benefits to retirees. Employers scrambled to justify plan designs that almost universally coordinated with Medicare.

In 2004, the EEOC issued proposed regulations that created an exemption in response to the Erie County decision. The American Association of Retired Persons (AARP) filed suit and won an injunction barring the EEOC from implementing the exemption. On appeal, the same Third Circuit Court of Appeals that decided Erie County ruled that the EEOC had properly issued the exemption under its authority in the ADEA. AARP has sought an appeal to the US Supreme Court.

The EEOC exemption gives employers an important cost control option in designing retiree health benefit programs. Barring an unexpected ruling by the U.S. Supreme Court, the uncertainty created in this area should subside.

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.

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. 

OSHA Rule on Personal Protective Equipment Requires Employers to Pay.

The OSHA PPE Final Rule generally requires employers to pay for PPE, and sets forth specific exceptions where employers are not required to pay for such equipment.    Employers are responsible for paying for the minimum level of PPE required by the standards and must amend their policies within six months.  If an employer decides to use upgraded PPE to meet the requirements, the employer must pay for that PPE. If an employer provides PPE at no cost, an employee asks to use different PPE, and the employer decides to allow him or her to do so, then the employer is not required to pay for the item. The employer must also pay for the replacement of PPE used to comply with OSHA standards except in circumstances in which an employee has lost or intentionally damaged the PPE issued to him or her, an employer is not required to pay for its replacement and may require the employee to pay for such replacement.

The rule enumerates the following exceptions to the employer pay requirement:

1. Non-specialty safety-toe protective footwear and non-specialty prescription safety eye wear. Employers are not required to pay for ordinary safety-toe footwear and ordinary prescription safety eye wear, so long as the employer allows the employee to wear these items off the job-site.

2.   Metatarsal protection. Employers are not required to pay for shoes with integrated metatarsal protection as long as the employer provides and pays for metatarsal guards that attach to the shoes.

3.    Logging Boots. Employers are not required to pay for the logging boots required by 1910.266(d) (1) (v), but leaves the responsibility for payment open to employer and employee negotiation.

4.   Everyday clothing.  OSHA recognizes that there are certain circumstances where long-sleeve shirts, long pants, street shoes, normal work boots, and other similar types of clothing could serve as PPE. Nonetheless, employers are not required to pay for such everyday clothing. Similarly, employers are not required to pay for ordinary clothing used solely for protection from weather, such as winter coats, jackets, gloves, and parkas. In the rare case that ordinary weather gear is not sufficient to protect the employee and special equipment or extraordinary clothing is needed to protect the employee from unusually severe weather conditions, the employer is required to pay for such protection. However, clothing used in artificially-controlled environments with extreme hot or cold temperatures, such as freezers, is not considered part of the weather gear exception.

The most interesting part of OSHA’s final rule, as noted by Michael Fox at Employer’s Lawyer, is that it took 8 years to promulgate the rule.

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.

Options for Bridging the Funding Gap in a High Deductible Health Plan

Rising costs have motivated many employers to adopt High Deductible Health Plans (HDHP) increasing the amount paid by employees for health care coverage. The Towers Perrin 2008 Health Care Cost Survey notes that employees are responsible for 22% of the cost of coverage or about $2000 per employee plus the cost of deductibles and co-pays. The average out of pocket expense for an employee is has doubled in the last 5 years.

Employers face employee relations challenges when attempting to pass along the out of pocket increases to employees without offering some funding assistance on either a transitional or ongoing basis. There is a significant learning curve for many of the accounts both in terms of evaluating the amount of employee/employer contributions and navigating the claims/reimbursement process.

Several options exist for employers to bridge the funding gap created by migrating to a HDHP from a more traditional indemnity arrangement including the following:

Health Savings Accounts (HSA) HSAs can be funded by both voluntary tax deductible employee contributions and/or tax exempt employer contributions allowing the combination of employer employee contributions to fully fund the deductible (up to the IRS limit). The contributions remain in the HSA and accumulate interest on a tax free basis. Distributions are tax free as long as the funds are used for Qualified Medical Expenses. An HSA may be moved to successive employers or used in retirement. The advantages or an HSA are portability; tax-free contributions, accumulations, and distributions; ownership of the account by the employee. The disadvantages of HSAs are that they can only be used with a HDHP; must be uniformly funded by employers; may discourage employees from seeking medical treatment; and are limited in their use with other types of accounts like FSAs and HRAs. Other problems have been identified in a previous post.

Medical Savings Accounts (MSA) MSAs may be established by self-employed individuals or employees of small employers (less than 50). The MSA is a tax exempt trust held by a financial institution and operates like an HSA.  Employers may contribute to an Archer MSA, but if they do, the employee may not contribute for that year. Contributions are limited to 75% of the annual HDHP deductible. Employers must make uniform contributions to their employees if they choose to contribute. The additional advantage of an MSA is that it may be established by an employee without employer sponsorship.

Flexible Spending Accounts (FSA)  Employees may contribute to an FSA on a pre-tax basis as part of an employer sponsored cafeteria plan. Both employers and employees can contribute to an FSA.      FSAs fund Qualified Medical Expenses, except health insurance premiums and long term care expenses. The big disadvantage of an FSA is that any money remaining in the account that is not used to reimburse expenses is forfeited. There is no accumulation of money in the account from one year to the next.

Health Reimbursement Arrangements (HRAHRAs may only be funded by employers on a uniform basis for all participating employees. Employees may not contribute. There are no limits on the amount of employer contributions, but HRA funds may only be used for Qualified Medical Expenses which include health insurance premiums. HRA contributions are tax free and unused amounts may be carried over to subsequent years. HRAs are not portable and do not accumulate earnings on account balances. They compare favorably with FSA because there is no use it or lose it. An employer may offer both an HRA and FSA, but there are complex ordering rules coordinating the interaction of FSA and HRA payments and prohibitions on funding the HRA with FSA contributions.

Combined Accounts (MSA, HRA and FSA)   It is possible, but complex, to offer multiple arrangements in an attempt to bridge the funding gap. There is IRS guidance on the interaction of HSAs and other Health Arrangements.

Obviously, legal advise is paramount in plan design and drafting.

Health Plan Renewal Time: 2008 Employee Health Care Costs Expected To Exceed $9,300 Per Employee

The average corporate health benefit expenditure in 2008 will be $9,312 per employee—an increase of 7 percent over 2007—with annual per-employee contributions exceeding $2,000, according to Towers Perrin's 2008 Health Care Cost Survey. Some highlights of the survey are as follows:

  • Employers are expecting to subsidize 78 percent of next year's premium costs, and employees will have to cover the remaining 22 percent, plus usage-based co-pays, deductibles and co-insurance.
  • Employee contributions, on average, will jump by $156 per employee per year to $2,040, an 8 percent increase that is roughly twice that of annual employee merit increases.
  • Analyzing the data by coverage level, the average reported 2008 cost of annual medical coverage will be:
    • Employee-only coverage:              $4,704
    • Employee-plus-one coverage:       $9,660
    • Family coverage:                         $13,704

The Towers Perrin Survey also tracks the cost variations across “High-Performing” and “Low-Performing” Companies noting a cost disparity per employee per year of $8,844 and $10,320 which is explained as follows:

According to the Towers Perrin data, these [high-performing] companies have clear strategies in place to drive improvements in employees’ overall health and wellness, engagement in health care decisions and health-related behaviors, as well as to identify problems early and take advantage of opportunities for improvement by understanding the current state of their benefit program and the health care system overall.

To the extent that high performance is enhanced by plan design, I am seeing a strong trend to High Deductible Health Plans coupled with either Health Savings Accounts, Medical Savings Accounts or Health Reimbursement Arrangements. The pros and cons of some of these arrangements have been discussed previously in Problems with Health Savings Accounts (HSA)

There is also a clear trend among employers to adopt wellness programs with financial incentives for behavior changes.  Some of the issue surrounding wellness programs have been discussed in Wellness Programs Must Comply with HIPAA Restriction;Successful Wellness Programs Implemented by D&E Communications Sizing Up Obesity: Can Wellness Programs Curb BMI?

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.

What to Do when an Employee asks you about "Decertifying the Union"

The Lancaster New Era has an interesting article entitled "Worker strikes down union at Lancaster parts maker" which describes a twenty-three year old employee's motivations to decertify the Steelworker's union which had represented employees at the plant for 37 years. By a vote of 11-6, the employees voted to become nonunion for reasons which may be typical for many employees (particularly for Generation Yers):

The key issue in the 2005 strike was the Steelworkers' desire to keep Mac-It a "closed shop," meaning hourly workers who were covered by the union contract had to be union members.

Management wanted to delete the "closed shop" provision, contending it caused some workers to leave Mac-It and made it hard to recruit new ones.

"We wanted people to have a choice," Stillman said. "This is America. People should have a choice."

Walton concurred with management. He wasn't happy that he had to join the Steelworkers.

He wasn't happy that 1.3 percent of his gross pay, including overtime and bonuses, was deducted for union dues.

And he wasn't happy that the union contract, not his productivity, set his pay, and that the contract, not his willingness to take initiative, set what tasks he could perform.

"How to Guides" for decertification appear on several websites, like the National Right to Work Foundation. Union decertifying is governed by the National Labor Relations Act and begins with the filing of a decertification petition supported by 30 percent of the employees in the unit covered by the union. The NRLB imposes time frames on filing a decertification petition that generally coincide with contract expiration. The process of certifying and decertifying a union are almost identical, except for the role that an employer is permitted to take in the decertification process.

When approached by an employee who asks "how to get ride of the union" employers must contain their glee and realize their role is limited as follows:

  • An employer may not initiate, instigate, solicit, encourage or actively assist in the filing of a decertification petition. Promoting decertification is impermissible because these activities interfere with employees' free choice.
  • An Employer may provide "Ministerial Assistance." If an employee asks a management representative how to remove the union, the representative may lawfully inform the employee of the decertification process.
  • Once a petition has been filed, an employer may actively campaign to decertify the union. An employer may give employees arguments for voting against the union; communicate its views in writing, including handouts, posters and letters; and otherwise do anything it is permitted to do in a recognition campaign. 

Employers must tread carefully in the decertification process so as not to invalidate the efforts of their employees.   A union may challenge a decertification vote on the basis of employer interference. The decertification petition may trigger other employer rights associated with the withdraw of recognition of the union as the bargaining agent for the unit. These are complex legal issues that depend on careful evaluation of the facts and circumstances.

Employment Law Forms: Not so Hidden Dangers

Rush on Business has a good post on "Copy Another Company's Handbook at Your Peril" that summarizes several postings on the downside of adopting employment policies when you don't fully appreciate their applicability to your business. We all like to save time and money by not reinventing the wheel; however, the risks of these shortcuts are amply demonstrated in the case law.

Employers who adopt or copy policies may find themselves covered by laws and regulations that wouldn't otherwise require their compliance. One example cited in a post by Eric Swenson at Managing People in the 21st Century involves a case in which an employer included an FMLA provision into its handbook without appreciating the fact that the company didn’t meet the statutory threshold for coverage at a particular facility. A federal court held that an employer can be bound by "misrepresentations" in its employee handbook that lead workers to believe they are eligible for FMLA benefits - if an employee reasonably relies on the misrepresentation and is harmed as a result. Michael Fox at Jottings from an Employer's Lawyer follows similar case results in which an employer with less than 20 employees became covered by COBRA because of an employee handbook statement.

The other area of risk involves an employer's misunderstanding of the copied policy or its failure to follow the policy at all because its not part of their normal business practice. In both situations, employers can be held liable for their employment policies or statements about what the policy means even with a strong handbook disclaimer. Pennsylvania courts almost never give contractual status to employee handbooks, if a disclaimer is present. However, a handful of cases have held a company liable when it violates its handbook provisions.

A balance can certainly be struck between a form handbook and one made from scratch. When working with businesses on developing or reviewing an employee handbook, it is important that the lawyer understand the company's business in terms or its size, locations, and activities. Of course there are certain generic policies, but most policies on benefits, operational procedures, and work rules must be customized. Many employment lawyers can provide you with a checklist of the types of policies that businesses should consider adopting and even some sample language. However,  there is no substitute for individualized policies and a legal review of the policy manual. Many businesses also find audits of their existing practices to be helpful in terms of legal compliance and best practices.

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.

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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Ten Reasons to have an Employee Handbook

Some businesses are loath to write things down because of a fear that it may "come back to bite them later". In the case of an employee handbook, I think exactly the opposite is true. 

  1. Marketing Your Business Culture: Employers can present a professional image to their employees and prospective employees through a well written employee handbook.
  2. Economizing on Explanations: I can't imagine being responsible for explaining every benefit and work rule to every employee. More importantly, I would be scared to death over what supervisors were saying and what employees were hearing.
  3. Avoiding Contradictory Communication: Uniform administration of policies is the hallmark of good employee relations and legal compliance. Written communication memorializes what is being said, leaving to argument only what it means. In court, an employee can deny he or she was told something unless it is in writing.
  4. Thinking it Though: David Gray at Communication Nation observes that "writing things down forces you to think them though". Looking at the whole work environment, benefit package, and company culture by writing down your policies can give a business valuable introspection.
  5. Establishing Work Rules: Knowing the rules makes for a more harmonious work environment. It also helps in court when you don't have to prove what the rules were and that the employee actually knew them.
  6. Summarizing Employee Benefits: Disputes over benefit eligibility can be avoided or quickly resolved when communications are clear and in writing. Make sure references are made to insurance policies and benefit plans that establish the terms on which benefits are offered.
  7. Notifying Employees of Legal Rights and Obligations: Particularly in the area of sexual and other harassment, having a policy and complaint procedure provides an employer with a defense that is not otherwise available. There are other laws that give employer's more protection if they adopt policies.
  8. Protecting Employment at Will Presumption: Pennsylvania is one of a dwindling number of states that has a strong employment at will presumption. Take advantage of it by having an at-will statement. Also make sure to disclaim contractual status of your handbook.
  9. Complying with Certain Laws: The FMLA is one of the few laws that must be addressed in an employer's handbook, if the business has one.
  10. Defending Against Legal Claims: Legal decisions usually come down to fairness. Most judges, administrative agencies, and juries that evaluate employee claims against companies expect that, at a minimum, employers will have reasonable workplace rules, communicate the rules in an understandable manner, and then uniformly follow them. What will you say on the witness stand when the employee's lawyer asks you, "Well if it was so important, why didn't you just write down the policy?"

Reconciling Hazelton's Illegal Immigrant Ordinance and the Nation's Predicted Worker Shortage

A federal judge struck down the City of Hazelton's ordinance which was enacted to combat criminal and social service problems blamed on the influx of "illegal immigrants" into the area. The court's 206 page opinion ruled that the ordinance violates federal constitutional protections and was pre-empted by federal immigration laws.

The ordinance call the "Illegal Immigration Relief Act" prohibited employment and apartment rentals to illegal immigrants. It subjected anyone who hired an illegal immigrant or rented an apartment to loss of their business license and significant fines. The ordinance also required Hazleton landlords to present the  City with a passport, birth certificate or immigration documents or citizenship to show that he renter was in the country legally. The names were then checked against a federal data base to determine their immigration status.

The City of Hazelton's frustration is a microcosm for the national immigration debate. According to news reports, these types of ordinances are being adopted by localities out of frustration with the lack of Congressional action to address issues created by the estimated 10 million illegal immigrants now living in the U.S.  In late June, Congress rejected the controversial Immigration Reform legislation. Cited as reasons for the bill's failure were the grant of amnesty for current illegal immigrants and the resulting cost increases in government spending (estimated at $126 billion).

The public sentiments reflected in anti-immigrant legislation will be difficult to reconcile with the predicted labor shortage in the U.S. Many groups have already bemoaned worker shortages, particularly among skilled workers. One of the best resources for putting the whole problem in perspective is Ira Wolfe's book entitled the Perfect Labor Storm, an update of which is due out in October. It is a compilation of facts about demographic trends in the global and U.S. economies in the areas of worker shortages, aging, employee turnover, obesity, education, literacy and others. Some of the many facts can be found on his website.

Juxtaposing the lack of national immigration reform, the backlash of public sentiment against immigrants and the demographic analysis of the U.S. labor market leads to very troubling conclusions which cannot be addressed by one judge's opinion striking down a local ordinance.

Drug Testing: One in Twelve Employees Admit Illegal Drug Use

A recent government survey revealed that 8.2 percent of full-time workers admit illegal drug use during the preceding month. Use rates are even higher for some industries: restaurant workers, 17.4 percent, and construction workers, 15.1 percent.

Estimates vary on the percentage of employers that conduct drug testing. The Society for Human Resource Management said in a 2006 report that 84 percent of private employers conduct pre-employment testing, 39 percent conduct random screening of employees, 73 percent conduct for-cause testing, and 58 percent require drug tests after on-the-job accidents. On the other hand, a recent article entitled "Whatever Happened to Drug Testing" states that "Despite the growing demand for drug tests in sports and other fields, the percentage of employers with testing programs has dropped steadily since 1996, from 81% to 62% in 2004, according to the American Management Association, which sees the trend continuing."

Other commentators question the drug testing return on investment (ROI) given multiple factors like a tight labor market, the cost of testing and the pervasiveness of test beating tactics. On balance, I still recommend that employers strongly consider pre-employment drug testing for the following reasons:

  • The deterrent effect that testing has on applicants; particularly, if you advertise that drug testing is a part of the application process.
  • The statement it makes about your company culture: Drug Free Workplace.
  • The safety, wellness and attendance benefits (although the ACLU argues that this is illusory).

Implementing a drug testing program involves a careful balance of legal and employee relations considerations. I will be developing a series of white papers for downloading from this site which outlines considerations for this and other employment issues.

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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Protecting Your Business with Noncompetition Agreements

The incidents of corporate raiding and mass employee defections to competitors are on the rise as businesses scramble to find and retain high quality employees. Under any business model, it is far easier to recruit away a group of experienced employees with a "book of business" than it is for an employer to start from scratch.   Whether or not these actions are "illegal" or just aggressive competition primarily turns upon the existence of any contracts limiting competitive activities by employees and former employees.

Corporate raiding isn't just a Wall Street phenomenon. It was recently reported that Resource Bank, a Virginia based subsidiary of Fulton Financial Corporation, was hit with a defection of nearly its entire mortgage company staff to a rival lender. The employees allegedly followed two executives who are now accused of orchestrating an employee raid. The former Resource Bank executives signed employment agreements containing restrictions on soliciting employees on behalf of a rival business. This good business practice will undoubtedly form the primary basis for legal claims by Resource Bank against its competitor.

Noncompetition Agreements are invaluable in protecting legitimate business interests provided they are carefully drafted and properly executed. Such agreement typically contain some or all of the following clauses:

  • Prohibitions on a former employee's competition by working for or starting a competitive business.
  • Restrictions on soliciting, selling to, or providing services to customers and prospective customers of the former employer.
  • Restrictions on soliciting employees of the former employer.
  • Prohibitions on using or disclosing confidential business information of the former employer.

There are special legal requirements for noncompetition agreements under Pennsylvania law. As restrictions on free trade, these agreements must be:

  • Necessary to protect an employer's legitimate business interest
  • Entered into at the commencement of the employment relationship or supported by "additional consideration" in the form of a promotion or payment
  • Reasonably limited in duration and geographic scope

On the other hand, prohibitions on disclosure of confidential information need not be supported by consideration or limited in duration. However, it is essential for an employer to define the scope of what is confidential by delineating the specific categories of material and taking steps to keep it from entering the public domain.

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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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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Legal Issues arise when Helicopter Parents act as Helicopter Managers

Helicopter parents may hover over their children, but what's their management style in the workplace when it comes to other people's kids and their peers? Phyllis Weiss Haserot on her Blog "Practice Development Counsel" posted a set of questions concerning how Helicopter Parents operate as managers in the workplace some of which are as follows:

  • Do the helicopter parents (those that hover too much and interfere) exhibit similar behavior with their juniors as they do with their children? Do they bring their parenting style to the workplace to over-protect and push their people ahead?
  • Or do they take an opposite approach and expect great results without giving the guidance and support they want for their children?
  • Are Baby Boomer managers (only some of whom are "helicopter parents") hard on younger generation workers because they are demanding the results they would like to see from their children, but without the coddling they give their kids?
  • Is it because many Boomers are so competitive and status conscious that they want everyone (children, junior people on their work teams, etc.) to make them look good?

If we assume that Helicopter Parents operate as Helicopter Managers too, what impact will that have on the workplace culture and risks of litigation?

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Mentoring or Meddlesome: Human Resources Needs to Decide

The Today Show featured a story on "Helicopter Parents : Helping Your Child Get a Job" which was an interesting foil to our recent posting.   Matt Lauer's guest was Dr. Michele Borba (whose blog appears on iVillage website). Dr. Borba referred to some helicopter parents as 'Blackhawks" and said  that these parents haven't struck the correct  balance between "mentoring and meddlesome". However, the show noted that many large companies like General Electric are embracing helicopter parents by inviting them into the recruiting process and targeting them with advertising. I think  employers will need to be flexible in their approach to parents in the recruiting phase. Human resource professionals face the challenge of drawing the boundary at the workplace once the recruit is hired.

HR's Response to the Helicopter Parent

Imagine that your company has decided to make a job offer to a very promising Ivy League MBA candidate. You call the candidate to communicate your company's very generous offer and what's the response?

"My mom will call you back to negotiate my compensation package". Welcome to your first encounter with a "Helicopter Parent". For the moment, let's leave aside the issue of whether this level of parenting does more harm than good and focus on the issue as framed by Stephanie Armour in her recent USA TODAY article:

Employers are finding that parents are increasingly involved in their children's job choices, as "helicopter parenting" extends to the workplace.

As Generation Y enters the job force, parents of new hires are calling employers to negotiate salary and benefits, and some are even showing up at job fairs. It's a new dynamic that has some employers responding by training recruiters and managers how to handle "helicopter parents," who hover over their children's lives.

Here are some considerations that I think are worth evaluating in anticipation of Mom or Dad's call:

  • Temper your Gut Reaction: The almost universal reaction of most Baby Boomers and Gen X'ers to this scenario is shock and aghast. How can this seemingly bright candidate allow parents to run his or her life? However, this is a value judgment that ignores the sociological and demographic facts. The real questions are: Do you want the candidate or not? Are you willing to negotiate under these terms?
  •  Balance the Pushback: Hey why not? Professional athletes and Hollywood stars, have agents do their negotiations and no one considers that a poor reflection on their future job performance. Evaluate whether parental involvement at the recruiting stage is really indicative of an inability to perform in the job. Obviously, these three-way conversations will have to stop once the candidate becomes an employee because that truly relates to job performance.
  • Consider the Sociology: Generation Y also called the Millennials has already been labeled with there own set of workplace attitudes which may not respond well to the traditional recruiting model. Gen Y'ers collaborative relationship with others including their parents may make others a natural part of their decision making process. But where does it stop? Certainly parents cannot become an ongoing collaborator in workplace performance and personnel issues. Undoubtedly taking a cue from the academic world ,which is ahead of the curve on this one, would be appropriate. Academia's approach has been to develop a hard line in keeping parents out of the classroom.
  • Recognize the Demographics: Following the acclimation of Gen-X'ers into the workforce, demographics have become a worthy consideration for HR professionals in sculpting corporate culture. The challenge becomes integrating the next generation of Helicopter Parents and Boomerang Kids. As noted by Carolyn Tang in her article "The Great Divide":

Traditional suit-and-tie Baby Boomers are interacting with denim-clad colleagues from both Generations X and Y. Disparities in career expectations and attitudes between the old guard and the new are causing subtle, yet significant shifts in corporate culture and the working environment. And perhaps some tension as well.

So what's the recommendation on HR's approach to helicopter parenting?

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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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When Psychopaths Go to Work

As a follow up to the previous posting, Dr. Ira Wolfe offers his thoughts on Psychopathy in the Workplace based in part on his experience with personality assessments conducted through his business Success Performance Solutions. Thank you Ira for your contribution. 

When Psychopaths Go to Work 

We may never know the final diagnosis that drove Cho Seung-Hui to his mass murder spree at Virginia Tech but one thing is for sure: our desire to know "What on earth is wrong with that guy?" will continue. 

Fortunately most of us will never have to face what the students and faculty did on April 16, 2007. What many of us have and will experience are our interactions with an equally destructive and dangerous group that lurks behind many resumes and executive desks. Specifically I'm writing about psychopaths who are walking and working among us every day.

Many of you will likely have the same reaction as I did when I picked up a copy of a new book, "Snakes in Suits: When Psychopaths Go to Work": you're thinking serial killers and stalkers or picturing Hannibal Lecter, Freddy Krueger, and Dr. No. Reality however paints a far different picture. Psychopathic behavior is not illegal. It is not in fact even classified as a mental illness. Psychopathy is a personality disorder and hiring managers today often confuse its symptoms with success attributes.

Psychopaths live and work freely among us. In fact in today's dog-eat-dog world where greed is good and the survivor of the fittest earns the most riches, psychopathic behavior is innocently recognized as talent. For example, how many rising stars have you known who are driven, ambitious, resilient, charming, articulate, intelligent, and charismatic? Their mere presence disarms the most skeptical while their supporters fawn and idolize them. Now remove a moral conscience and the incapability of empathy, guilt or loyalty to anyone but themselves and viola - you have a psychopath. What interviewers see is not always what they get.

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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. 

Wellness Programs Must Comply with HIPAA Restrictions

Design of an effective wellness program requires collaboration between insurance brokers, benefit providers and legal advisors in light of limitations placed on certain aspects of their design by HIPAA's Nondiscrimination Requirements.    Under the final regulations that take effect for plan years beginning after July 1, 2007, HIPAA impacts the design of wellness programs that take into account "health factors" when providing incentives under the program. Programs such as the following that do not take into account a participant's health factors when a reward is given or withheld for participation by an employee or beneficiary:

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Successful Wellness Programs Implemented by D&E Communications

As Steve Buterbaugh noted in the previous post, successful Wellness Programs need specific goals and top level support. These two factors play out in the design and implementation of the programs.

Wellness Programs have been successfully implemented by many central Pennsylvania companies.  One successful program was highlighted by David Wenner in a recent article about D&E Communications.  D&E's Wellness Program likely succeeded because it had a specific goal (90% employee participation in a health assessment) and it had a commitment from the top of the organization(CEO personal appeals).  These aspects are outlined in Mr. Wenner's article as follows:

D&E had been looking for a way to hold down health insurance premiums, which had risen 12 percent in 2005 and 20 percent in 2004, said Judy Naylor, vice president of human resources.

Highmark Blue Shield recommended its wellness program, Lifestyle Returns. The insurer offered D&E a 2 percent premium reduction this year if 90 percent of employees participated in the first two steps of Lifestyle Returns, Naylor said. Employees had to pledge to become more health conscious and complete an online health risk assessment.

D&E qualified for the premium reduction, which amounted to about $100,000. It divided the money among participating employees, giving each a $200 reward.

 Participation reached 65 percent after about six months, then stalled.  CEO James Morozzi begin visiting each work site and making personal appeals. In the end, 96 percent of employees completed the health risk assessment, which asks about their health-related habits.

Benefits of a Company Sponsored Wellness Program

Design of an effective wellness program requires collaboration between insurance brokers, benefit providers and legal advisers. There are particular considerations relating to HIPAA's Nondiscrimination Requirements which I will discuss in my next post. Before we get to that, I am pleased to share the following contribution from Steven P. Buterbaugh, CPCU, AAI of E.K. McConkey & Co. Insurance. Thank you to Steven for being our first guest blogger. 

Wellness Programs Have Positive Impact on Group Health Insurance and Overall Company Productivity

Businesses are under constant and increasing pressure to find ways to manage and reduce health benefit expenses while maintaining or improving employee morale and productivity.

Benefit redesign and changing employee contributions are often the first options to consider, but these can strain the important relationship between employer and employees. Significant long term savings will only occur when member health is actually improved, and this is where a wellness initiative can make an impact.

There is a wide disparity between the average claims and cost/person for someone who has a chronic illness and the average claims and cost/person for someone with non-chronic illness.  (See Chart) 

As we often are reminded through the media, there has been an increasing prevalence of chronic illness in our society including Obesity, Diabetes, and Heart Disease. Following are some compelling statistics:

  • Obesity- The CDC’s Health-E Stats for 1999-2002 show that 64% of adults in America age 20 and over are overweight or obese.
  • Diabetes- the National Diabetes Information Clearinghouse states that:
    • Each year, approximately 798,000 people are diagnosed with diabetes
    • Diabetes is a leading cause of death and disability and costs $92 billion per year in direct medical costs.
  • Heart Disease- in 2002, there were 23 million adults diagnosed with heart disease according to the Centers for Disease Control Summary Statistics for U.S. adults. The CDC also reports heart disease as the number one cause of death in the United States.

While these “big three” chronic health conditions are to some extent preventable and/or treatable, current health protocols can only do so much to address these problems.

Long term, the most effective way to control claims costs and keep insurance premiums down is to prevent claims from being incurred through health improvement.

The positive effects of a wellness initiative are cumulative. The longer the company participates, the greater the impact you should see. Taking action now could help stave off the development of future chronic conditions that will inevitably affect your bottom line and productivity in the future.

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FMLA, ADA, COBRA, OSHA . . . is your workforce covered?

Who's an Employer?  In the past week, I've had occasion to talk to several HR professionals about how the number of employees can define whether various employment laws apply, and that just a few employees either way can make a big difference, particularly for small employers.  Pay attention to the following shortlist, particularly if you have turnover and frequent changes in the number in your workforce.  Remember that how part time employees are counted also changes from statute to statute.  There may also be exemptions from coverage for certain industries like agriculture.    

      Total Number of Employees:                          Subject to the following employment laws:

  • All employers regardless of size . . . . . . OSHA, Equal Pay Act (EPA), Immigration Reform and Control Act (IRCA)
  • You have 4 or more employees . . . . . .  Pennsylvania Human Relations Act, Lancaster County Human Relations Ordinance
  • You have 15 or more employees . . . . . . Title VII,   Americans with Disabilities Act (ADA)
  • You have 20 or more employees . . . . . .  Age Discrimination in Employment Act, COBRA  
  • You have 50 or more employees . . . . . . Family and Medical Leave Act (FMLA)
  • You have 100 or more employees . . . . . . Worker Adjustment and Retraining Notification Act

The above is a partial list of statutes and law that apply to employers in Pennsylvania. For more information federal discrimination laws, consult the EEOC website.

Union Card Check Legislation: A Big Deal to Non Union Employers

The U.S. House of Representatives voted 241 to 185 to pass H.R. 800 which is a bill that would change the process for unions to organize a workforce.  The bill would require the NLRB to certify a union when a majority of workers sign authorization cards that designate the union as their bargaining representative.  The card check process would eliminate the secret ballot election traditionally used to determine union representation. 

Under the current law, union organization of a workforce occurs after a showing of interest to the NLRB by the presentation of authorization cards together with a recognition petition identifying what the union believes to be an appropriate unit for organizing.  The employer may contest the appropriateness of the unit by demanding a hearing before an NLRB representative.  After the unit is certified as appropriate by the NLRB, a secret ballot election is held (generally within about 30-45 days after the petition was filed).  If the union receives a majority of the ballots cast by employees in the unit, it wins the right to represent the employees in an appropriate bargaining unit.

Eliminating the secret ballot has a tremendous impact on an employer's ability to combat organizing attempts.  The following is a partial list of problems created by the card check process:



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Daylight Saving Time Move Up: The New Y2K?

The change to Daylight Saving Time a few weeks early this year has caused some internet buzz including discussions of the myriad of computer related problems that might result.  Fortunately, I still have the  stock pile of bottled water and cases of canned food that I purchased for the impending doom prophesized by the Y2K pundits. I came across an InformationWeek article that I thought put the issue into perspective. 


The change will certainly require some attention from your IT Department and may impact some things you will need to deal with personally.  I have taken the precaution of noting times in the text of my appointments on my Outlook calendar, just to be sure that I am where I need to be at the correct time in March.  I have also reviewed the Microsoft Daylight Saving checklist to be sure that I don't have any surprises on my personal computer.    


Some employee communications might make the HR department look good.  You might consider sending a reminder to your employees via your company intranet or in a mass email.  It is likely that the early time change may take some by surprise. 

Employer's Liability for Holiday Parties

'Tis the season for human resources professionals to fret over an employer's liability for alcohol-related mishaps stemming from too much holiday cheer at the office party. Before you say "bah humbug" to the whole idea, you might want to weigh your return on investment from a year end boost in employee morale versus the specter of alcohol induced accident or incident.


Mixing alcohol and employees can result in a wide spectrum of possible outcomes ranging from mildly embarrassing to catastrophic. Like all good lawyers, we'll focus on the catastrophic: the automobile accident and the discrimination lawsuit.


In Pennsylvania, there is little difference in liability between an employer/host and the social host of a private party in a home. Whether the party is thrown by an employer or an individual, there is generally no liability for an adult host when an adult employee, guest or someone else is injured by an adult drunk driver who may have been served at the party. Courts reason that "it is the consumption of alcohol rather than the furnishing thereof, that is the proximate cause of any subsequent damage". However, there is liability for any host (whether an employer or a private person) who knowingly serves alcohol to anyone under age 21.


Employer's may also face claims from employees injured by the consumption of alcohol under employee benefit programs like workers' compensation insurance, medical and accident policies. Employee benefit plan and insurance exclusion for injuries arising from operating a vehicle while intoxicated are generally upheld. 

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