Top Small Company Workplaces 2010

Posted by Molly DiBiancaOn June 8, 2010In: Employee Engagement

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Some small businesses have managed to come out on top--despite the difficult economy. In this month's edition of Inc. Magazine 20 small businesses are celebrated as the Top Small Company Workplaces.  The winners and 20 finalists are selected by Winning Workplaces and are recognized for achieving business success through exemplary people practices and outstanding workplace cultures.image

Winning Workplaces reports some of the highlights of the 2010 award winners:

  • 100% of winners profitable in 2009
  • 90% of finalists profitable in 2009
  • 36% average revenue growth, 2007-09
  • Ability to weather bad times with the good: average of 28 years in business
  • High average employee tenure of 7 years
  • Low average turnover of 8% across 18 diverse industries

More information on the winners and finalists of this award is available at the following links:

June 8: Delaware SHRM Breakfast Meeting (Social Media)

Posted by Molly DiBiancaOn June 4, 2010In: Seminars, Past

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Join Molly DiBianca and Delaware SHRM at 7:30 am on June 8th for an interactive discussion of social media for hiring.  We'll discuss:

  • the impact of social media sites on recruiters and hiring managers;
  • how social media is changing the nature of recruiting; and
  • legal liability and exposure of using social media.

The impact of social media sites like Twitter, Facebook and LinkedIn is undeniable but, also, undefined. Hundreds of millions of Americans now use these sites and others like them for an expanding number of reasons. And it's not just the country's youth online, either. Twitter users are more likely to be Baby Boomers than they are to be youngsters in the 12-to-24 crowd.

So it's no surprise that social media is causing tremendous changes in the way employers recruit and hire new employees. Employers have to look beyond standard recruiting tactics if they hope to secure the most sought-after candidates. But the adventure into the social-media sphere is not without risks. Before you send a friend request to that job applicant, be sure you know how it could expose your organization to legal liability.

Whether you're a master of your Facebook page, or you're still wondering what a "tweet" really is, Molly DiBianca will guide you in the right direction when it comes to social media.

The session will be held at the Christiana Hilton in Newark, DelawareRegistration is $40 for members and $45 for non-members.

June 9: Unfair Competition Webinar

Posted by Molly DiBiancaOn June 4, 2010In: Seminars, Past

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The Employment Law Alliance is holding a webinar that will address the use of noncompete agreements in various jurisdictions, including Delaware. The panel of speakers includes attorneys from the U.S. and Canada, including our own Barry M. Willoughby.  The webinar will be held on June 9, 2010, 3-4:30 p.m. EDT.

In addition addressing the treatment of noncompete agreements, panelists will offer practical and concrete strategies on:

  • Drafting and enforcing restrictions on employee competition when doing business in multiple jurisdictions at one time
  • How the "duty of loyalty" can be used to stop employees from setting up competing businesses while still employed by you.
  • What employers can do to minimize the risk that your employees will walk out the door with your trade secrets
  • How to stop competitors from engaging in unfair competition.

Registration is free:  Your Top Talent Walks Out the Door: Now What? How to Stop Your Competitors from Raiding Your Workforce and Engaging in Unfair Competition in the U.S. and Canada

What Employers Can Learn from the Novartis Lawsuit

Posted by Adria B. MartinelliOn June 3, 2010In: Cases of Note, Gender (Title VII)

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Pharmaceutical giant Novartis recently defended a class action lawsuit filed by thousands of its female sales representatives alleging discriminatory treatment in pay and promotions. It was the largest gender discrimination case ever to reach a jury verdict.  green chalkboard and stacked books

Novartis might need to stock up on their in-house supply of Diovan – their top-selling drug, which treats hypertension -- as there are surely some Novartis executives with elevated blood pressure following the recent verdict. The jury awarded $250 million in punitive damages, $3.37 million in compensatory damages for the 12 named plaintiffs, with compensatory damages for the remaining members of the class to be determined separately. Experts estimate that Novartis could pay as much as $1 billion when all is said and done, and that doesn’t include legal fees expended to defend the mega-lawsuit.

Given the staggering nature of this award, an increase in employment class action lawsuits is almost certain. Class action suits are far more lucrative for plaintiff’s lawyers to take on, than a single employment discrimination lawsuit where damages rarely exceed a few hundred thousand dollars. In light of this new era which is sure to dawn : it is essential that employers examine their practices and consider their potential exposure in this area now.

Prevention is the Best Medicine

Audit pay classifications and EEO numbers.

Review your pay structure. Particularly in light of the Lily Ledbetter Act, which opens up exposure for employers potentially dating decades back, employers must be confident that their compensation structure does not reflect any trends that could be construed as discriminatory. Also, review your EEO numbers – this is one of the first things defense attorneys will do when their client is hit with a class action. Be aware, though, that if you run the numbers and they don’t look good, you’ve got to be willing to take action. Failing to take corrective action after a self-analysis could make the problem worse.

Outreach/Diversity in minority communities.

Fostering diversity programs within the workplace are good business and help to create a good corporate image while recruiting minority applicants. Because the recruiting/hiring process can be ripe ground for class action lawsuits, outreach is an important preventative step.

Hold managers accountable.

Make sure managers whose statements or actions result in company liability are held accountable. Where managers are appropriately trained, and take inappropriate actions nevertheless, one approach is to have litigation costs taken from the bottom line of the division for which the manager is responsible.

Have an internal EEO reporting procedure and train all employees.

Make sure you have an internal reporting procedure for any employee who has an EEO complaint, and that all employees understand that procedure. Handling any such complaints appropriately and with due diligence often can effectively head off future litigation.

Be Afraid – Be Very Afraid

The proactive steps outlined above will go a long way towards preventing a discrimination lawsuit, whether individual or class action. But sometimes even the most diligent of employers cannot avoid lawsuits. In light of the massive award in Novartis, class actions discrimination suits are sure to become more common. What signs should you look for to indicate you may be headed for a class action?

∙ For-Cause Findings by EEOC

Numerous charges with the same of similar allegations

∙ A pattern of irrelevant questions during management depositions

∙ Large numbers of employees asking for personnel files

∙ A significant increase in the number of internal complaints

If you observe any of these signs in your workplace, inform with your outside counsel immediately and brace for impact!

Bottom Line

No company is immune from a class-action lawsuit, and sometimes they are unavoidable. Nevertheless, taking the preventative steps and being attuned to the warning signs discussed above can significantly reduce a company’s risk of an employment class-action lawsuit.

Talk About Ego: Former Banker Says She Was Fired for Being Too Sexy

Posted by Molly DiBiancaOn June 3, 2010In: Gender (Title VII)

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Debrahlee Lorenzana has sued Citigroup, her former employer, alleging that she was unlawfully terminated because she was "too sexy for her job," to borrow a line from song by Right Said Fred. According to the New York Daily News, Lorenzana claims that she was subject to "improper comments" and reprimanded for dressing in a way that was "too distracting" to her male coworkers. She denies that she ever dressed inappropriately and complains that she's always been burdened with good looks--she draws attention from the opposite gender even when she's at the grocery store in sweatpants.

Oh, brother. Peacock

She is also quoted as saying that she refuses to "eat and gain 50 or 100 pounds because my job wants me to be the same size as everyone else."  Hmm.  I wonder if maybe she was fired for her inability to play well with others.  I mean, she sounds so charming, I can't imagine that all of the women in the office didn't adore her just as much as the men!

So what's the likelihood that her gender-discrimination claim actually has any merit?  Without having seen the complaint, I dare not even speculate.  On one hand, we've written previously about the increase of gender-discrimination suits brought by males and about how the courts seem to be expanding the protections of Title VII to include less traditional bases for such claims.  On the other hand, though, any perceived expansion has been in cases that evoke a great deal more sympathy than Ms. Beautiful's claims would likely evoke. 

It's one thing to have an individual who is tortured by co-workers for being too effeminate.  It seems that it would be altogether different to have an individual who has spent a lifetime fighting the heavy burden of being God's Gift to Men.  Maybe those of us not cursed with such beauty should just take a moment and count our lucky stars.

Trifecta of Employment Law Cases

Posted by Molly DiBiancaOn May 28, 2010In: Cases of Note

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Jon Hyman of the Ohio Employment Law Blog writes a weekly post in which he rounds up some of the most important stories from around the web. This week, I’m going to follow Jon’s lead with a “best-of-the-web” edition of my own. There is so much happening in the world of employment law and human resources, it’s hard to narrow down my top choices for the must-reads. But I’ll do my best. 

 

To give proper honors, I’ll give the first hat tip to Jon, who wrote about a family-responsibilities case (a rare breed, indeed), that resulted in a quarter-billion-dollar verdict.

 

Deliberations, the blog focused on how juries work, reports on an interesting gender-discrimination case  in Man Wins Pregnancy Discrimination Suit.

 

The U.S. Supreme Court has issued another important decision affecting employers in Lewis v. City of Chicago.  Generally speaking, the case involves the statute of limitations for disparate-impact claims.  For more specific details, see Daniel Schwartz at the Connecticut Employment Law Blog, Ilyse Shuman at the DC Employment Law Update, and Paul Mollica at Daily Developments In EEO Law.

New Information-Posting Requirement For Federal Contractors and Subcontractors

Posted by Teresa A. CheekOn May 26, 2010In: Legislative Update

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Federal contractors and subcontractors are subject to a new posting requirement.  Federal contractors and subcontractors (except for acquisition contracts worth less than $100,000 and subcontracts worth less than $10,000) have until June 21, 2010, to post a new notice telling their employees about their rights under the National Labor Relations Act (NLRA), the federal law that governs the relationships between private sector employers and unions. The posting describes the rights of employees to organize into unions and collectively bargain for a contract with their employer. It also describes union and employer conduct that is deemed to be unfair interference with employee rights, and tells employees to contact the National Labor Relations Board if they believe their rights have been violated.

Contractors will be able to download the notice from the Department of Labor’s website and print it out for posting. If the contractor also posts notices to employees electronically, it must also post this notice electronically through a link to the Department of Labor’s Office of Labor-Management Standards (OLMS) website. If a significant number of a contractor’s employees do not speak English well, the contractor must post translated versions of the notice, which will be provided by the OLMS.

The text of the notice and certain other provisions must now also be inserted into federal contracts and subcontracts. The text is available at 29 C.F.R. Part 471 Appendix A (scroll down to page 52).

The Department of Labor’s OLMS has published a Fact Sheet that explains the new posting requirements in detail. Contractors and subcontractors who fail to comply with the requirements risk suspension or cancellation of current contracts and debarment from future contracts

Tax Credits for Small Employers Under the Affordable Care Act

Posted by Molly DiBiancaOn May 21, 2010In: Legislative Update

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The IRS has issued a News Release explaining to small businesses how they can determine whether they qualify for tax credits pursuant to the Affordable Care Act. These credits are granted to small employers who provide health insurance, as well as additional coverage, such as dental and vision, to employees. The IRS also issued Notice 2010-44 (pdf), which provides more detailed information, including how the credit is calculated.  The Notice also provides more than a dozen examples demonstrating how the credit will work.

The tax credits granted pursuant to the Affordable Care Act are intended to provide tax incentives to small businesses, defined in this instance as having fewer than 25 full-time employees, whose employees earn, on average, less than $50,000 per year. These benefits are available to those small businesses who provide health insurance benefits for which the company pays at least half of the annual cost of individual coverage in 2010. Because the credits are based upon the number of full-time employees, employers with more than 25 employees, some of whom are part-time, may still qualify. Owners of the small business and their family members are not included in the definition of employees.

The credit will range from 25% to 35% of premiums paid by small business employers for tax years 2010 through 2013. Tax-exempt organizations that qualify may receive a credit of up to 25% of the premiums paid. The credit for small businesses will be included as part of the general business credit for 2010. The IRS is still working on the procedure by which tax-exempt entities may claim the credit.

 

See also, Summary of HIRE Act

This post was written by guest blogger, Jennifer R. Noel.  Jenn is an associate in Young Conaway's Tax, Trusts & Estates Section, where she advises clients with respect to local, state, federal, and international tax issues, the legal aspects of the formation and operation of small and emerging growth business enterprises, and the preparation and negotiation of commercial contracts.

Waitress Is Fired for Her Complaint on Facebook: Lesson Learned for Employers?

Posted by Molly DiBiancaOn May 18, 2010In: Social Media in the Workplace

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After waitress Ashley Johnson spent 3 hours waiting on a couple at the North Carolina pizza restaurant where she worked, she expected more than the $5 tip they left on the table.  According to the waitress, because the couple stayed so long, she had to stay on at work for an extra hour after her shift was over.  The 22-year old waitress was not happy about it.  And, as many 22-year olds are inclined to do, she talked about her unhappiness on Facebook. 

(Really, let's not make too much out of this conduct, though. There was a time, after all, when waiters and waitresses agonized over similar experiences in the restaurant's kitchen or at the server's station, even at the local bar following their shift.  Now, though, the entire digital universe can be privy to their stories of cheap patrons and similar frustrations.)image

Johnson was subsequently fired for violation of the restaurant's policy banning workers from speaking disparagingly about customers on a social-networking site.  Brixx Wood Fired Pizza, Johnson's former employer, it appears, did the right thing--it thought ahead and implemented a social-media policy to address just this sort of situation.  And, it would seem to me, that a prohibition against disparaging patrons in a public forum is probably a pretty reasonable idea.  

So why is Brixx getting such negative feedback about the decision?  The Huffington Post posted a sampling of the comments from Brixx's Facebook page, which support Johnson and disagree with her termination.  Does the negative press seem to indicate that employers just have no recourse--with or without a social-media policy, they can't fire employees who speak badly about the organization or its customers?  Well, maybe.  But maybe not.

The comments ask the same questions that came to my mind as I read this story.  First, whose Facebook page did Johnson post her rant to?   Was it hers?  If so, was it private?  Second, did she identify herself as a Brixx employee?  Or just as a waitress?  Third, did she name the patrons or identify them in any way?  Fourth, how did Brixx learn about the rant?  If it found out "innocently," i.e., without coercing an employee to give management access to the employee's Facebook page as a way to covertly see Johnson's page, that's more problematic. 

Not that any of these will make or break the decision to terminate but they may be influential.  And, let's face it, these are questions that employers should be asking under similar circumstances. 

I say, good for Brixx to respond to the post by enforcing its policy.  That, after all, is why policies exist.  I also commend Brixx for using its Facebook page as a way to respond to those who may disagree with its decision.  Finally, I'd suggest that employers not be discouraged by the somewhat negative response Brixx has gotten.  These stories will continue to show up in the news for a long time to come.  So long as you have a clear policy that is communicated to employees and is enforced fairly and consistently, then employers shouldn't be deterred by a few individuals who may disagree. 

Related stories about social media in the workplace:

Employee Fired When Her Sex Blog Is Discovered by Her Boss

Why the Philadelphia Eagles (Still) Need a Social-Media Policy

Eagles Employee Gets Benched for Comment on Facebook Page

Judge Shows Why Employers Should Consider Prohibiting Employees From Posting Anonymously Online

Breach of Noncompetition Agreement Via LinkedIn

Sure, You Can Use Facebook at Work . . . We’ll Just Monitor What You Post

 

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May 21: Same-Sex Harassment Podcast

Posted by Molly DiBiancaOn May 17, 2010In: Seminars, Past

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Same-sex harassment is on the rise. Labor and Employment law attorney Teresa A. Cheek will be speaking about same-sex harassment, and about discrimination and harassment based on sexual orientation and gender identity on May 21, 2010, on  The Proactive Employer Podcast.

Listeners can hear the show live via internet streaming on Blog Talk Radio on Friday, May 21, 2010, beginning at 8:30 a.m., or listen to a recorded copy of the podcast later, either at The Proactive Employer website or podcast site, or via iTunes.

New Amendments to the Federal Rules Approved by Supreme Court

Posted by Molly DiBiancaOn May 16, 2010In: Purely Legal

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The U.S. Supreme Court approved the most recent set of amendments to the Federal Rules of Civil Procedure.  Here’s a copy of the transmittal letter and the changed rules (PDF).

Employee Fired When Her Sex Blog Is Discovered by Her Boss

Posted by Molly DiBiancaOn May 13, 2010In: Off-Duty Conduct, Privacy Rights of Employees, Social Media in the Workplace

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Should employers conduct online searches of job applicants? That's one of the questions I'm asked most often by employers when talking about social media.  One of the less commonly asked questions is whether employers should conduct the same type of online search after the hiring decision has been made.  In other words, should employers monitor their employees' online activities during employment?  porn keyboard

There are good arguments for and against this practice. For me, the most persuasive argument is logistics--it just doesn't seem realistic for most employers to dedicate the resources required to monitor employees' online habits.  But here's a recent story that shows why employers may want to run a search of current employees on Google. 

Inc.com reported the story about a single mother in St. Louis who, during the day, worked for a non-profit.  At night, though, she wrote an anonymous "sex blog" called "The Beautiful Kind."  She'd managed to keep her online identity a secret until Twitter came along. 

When she created her Twitter profile, she used her real name, thinking that only her handle would be visible. When she realized that her name actually appeared in her profile, she immediately removed it and adjusted the name field of her handle accordingly.  Immediately, however, was not quickly enough. 

Thanks to Topsy, a Twitter search engine, her original profile was cached and her real name was displayed next to her user handle. According to the blogger, senior management suggested that supervisors search the web for information about their employees.  When the blogger reported to work, she was fired by her boss, who had found out about her extracurricular "activities" on Topsy. The nonprofit claimed that it could not justify the risk to its public image caused by an employee's racy blog.

The interesting point to this story, aside from the idea of supervisors being encouraged by senior management to spend time surfing the web, is that the employee was terminated as a result of conduct that did not involve her job.  She was blogging during nonworking time on a computer not owned by her employer or connected to her employer's network.  In some states, where off-duty conduct is protected to varying degrees, the termination may be unlawful.  But, in Missouri, which does not have any laws offering such protection to employees, it would appear that the termination is entirely lawful.

And, if nothing else, this story is an excellent example of the principle that, if you put it on the Internet, you'd better assume that your boss is going to see it and is going to hold you accountable.

See these related posts for more about the impact of social media on employers and employees:

Judge Shows Why Employers Should Consider Prohibiting Employees From Posting Anonymously Online

Breach of Noncompetition Agreement Via LinkedIn

Sure, You Can Use Facebook at Work . . . We'll Just Monitor What You Post

More Employers Searching Online for the Dirt on Candidates

Sample Social-Media Policy

5 Non-Negotiable Provisions for Your Social-Media Policy

State Off-Duty Conduct Laws and Facebook-Friending Policies

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Pending Delaware Legislation May Affect Employee Credentialing

Posted by Maribeth L. MinellaOn May 13, 2010In: Legislative Update, Locally Speaking

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Delaware’s legislature has bills pending which may change how some employers credential their employees.

First, there is a bill pending (Senate Bill No. 236) which will remove the provision that allows for the registration of psychological assistants who hold a master’s degree that is “based on a program of studies that is psychological in content and specifically designed to train and prepare psychologists but who is not working toward full licensure as a psychologist.” Pursuant to the bill, a psychological assistant must have completed all the course requirements for a doctoral degree in psychology. A grandfather provision is included for existing registered psychological assistants who maintain their registration. The change limits psychological assistants to those people who meet the experience requirement under §3508(a)(2) for full licensure as a psychologist. The bill was reported out of committee on May 12, 2010.

Second, there is a bill pending (House Bill No. 377) for all state contractors in the plumbing and heating, ventilation, air conditioning and air refrigeration (“HVACR”) fields. Currently a licensed contractor from any state can obtain a Delaware plumbing or HVACR license by simply paying a fee and proving that the contractor is licensed elsewhere. Some states do not offer the same reciprocity, and instead require Delaware contractors take a written test, pay a fee, and satisfy all licensing criteria for that state.  This bill eliminates the existing disparity between Delaware and out of state reciprocity requirements.   If an out of state contractor’s home state has provisions similar to Delaware’s, the contractor may obtain a Delaware license through the reciprocity provisions.  If the other state does not offer reciprocity, that state’s resident plumbing and HVACR contractors must go through the full process of becoming licensed in Delaware. The bill was reported out of committee on May 12, 2010.

Third, pending Senate Bill No. 246 would create a Delaware Board of Examiners of Bail Enforcement Agents empowered to enforce standards upon bail enforcement agents. This 9 member board will supplant the primary responsibility of the Secretary of the Department of Safety and Homeland Security regarding licensure and disciplinary regulatory authority. Regulations proposed by the Board would still be subject to the approval of the Secretary. The Bill also requires that licensees operating a bail enforcement company obtain insurance and file proof of insurance with the Board. The bill was reported out of the Senate’s sunset committee on May 12, 2010.

Employers can find out more about pending state legislation and how the legislative process works at http://legis.delaware.gov.

Third Cir. Rules that Side Effects from Treatment May Be an ADA Impairment

Posted by Maribeth L. MinellaOn May 10, 2010In: Cases of Note, Disabilities (ADA)

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The Third Circuit Court of Appeals recently ruled that side effects from medical treatment may constitute an impairment under the Americans with Disabilities Act (the “ADA”). The 3d Circuit's decision in Sulima v. Tobyhanna Army Depot is clear that, under limited circumstances an employee-plaintiff may have a cause of action under the ADA if he can prove that the effects of medical treatment are truly disabling, even if the underlying condition is not.

Facts

The employee-plaintiff worked for Defense Support Services, a defense contractor which provided workers at the Tobyhanna Army Depot. The employee was morbidly obese and suffers from sleep apnea. At the time, the employee was taking weight-loss and related medications which caused him to take frequent restroom breaks. When asked about the frequent breaks, the employee told his supervisor that they were the result of his medication. He later provided his supervisor with a doctor's note, which stated that the employee may need to use the restroom frequently due to a “gastrointestinal disorder.” The employee told his supervisor that he was not sure how long he would need the medication and that he was going to find out if he could take an alternative medication.

After employee continued to take frequent restroom breaks (some days for a total of two hours during his shift), a supervisor asked that he be transferred to a different work area. When he found out about the transfer, the employee submitted another note from his treating physician, which indicated that his mediation had been changed and that he no longer needed frequent restroom breaks. The decision was made to transfer him anyway but there were no available positions at the Army Depot and the employee accepted a voluntary layoff.  He later filed a claim in federal court, alleging violations under the ADA and the Rehabilitation Act.

[read on to learn how the Third Circuit ruled. . . ]

Continue reading "Third Cir. Rules that Side Effects from Treatment May Be an ADA Impairment" »

Turns Out FTC Actually Expects You to Follow Its Rules

Posted by Molly DiBiancaOn May 6, 2010In: Social Media in the Workplace

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The Federal Trade Commission updated its Guides Concerning the Use of Endorsements and Testimonials in Advertising to require employees to disclose their employment relationship when "endorsing" their employer or the employer's goods or services, or even defending the employer online.  The "Endorsement Guides" have real implications for employers in today's Web 2.0 world, where CEOs blog, customer-service representatives tweet, and everything in between.  If you're not familiar with the endorsement guides, you can get up to speed by reading this post, Another Reason Employers Need a Social-Media Policy: New FTC Regulations.ftc logo

In that post, I cautioned readers that the FTC appeared to mean business with these rules and that we could expect some enforcement efforts shortly.  Looks like I wasn't far off--and Ann Taylor Loft has the unlucky honor of being the first high-profile enforcement story.

Mashable.com reported this about the incident:

Ann Taylor invited bloggers to preview its Summer 2010 LOFT collection, promising attendees a "special gift" and entry into a "mystery gift-card drawing" for those who submitted [blog] posts to the company within 24 hours of the event. Ann Taylor avowed to reveal the value of the gift cards, which ranged from $50 to $500, to bloggers after receiving their posts. . . .

A sign was posted at the event advising bloggers to disclose the proffered gifts, however the FTC expressed concerned about the number of bloggers who actually saw the sign.

The Endorsement Guides states that bloggers must disclose "any material connections they share with the seller of the product or service" when writing about it.  Failure to comply can carry a hefty penalty, including a fine of $11,000 for disclosure violations.  FTC has indicated that it's not as interested in the individual bloggers as it is in the organizations and brands whose goods and services are being endorsed.   Ann Taylor received a letter but no fine was issued. 

Employers should be proactive with social media, especially if making a conscious effort to encourage employees to engage online for their employer.  Even those organizations that do not necessarily encourage employees to participate in online brand building should review their social-media policy and follow up with meaningful education of employees to ensure compliance.

Judge Shows Why Employers Should Consider Prohibiting Employees From Posting Anonymously Online

Breach of Noncompetition Agreement Via LinkedIn

Sure, You Can Use Facebook at Work . . . We'll Just Monitor What You Post

More Employers Searching Online for the Dirt on Candidates

Sample Social-Media Policy

5 Non-Negotiable Provisions for Your Social-Media Policy

State Off-Duty Conduct Laws and Facebook-Friending Policies

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