Sloan Work and Family Network published a list of the Top 10 Posts from its blog for 2009 and I am so honored that my post, The Four-Day Workweek and the Death of the Flexible-Workplace Initiative, ranked #1! The four-day workweek got a lot of publicity in the latter half of 2008 and early 2009 but lost its fizzle as the economy continued to worsen. Although the concept was touted by advocates as a way to promote a flexible work schedule, I argued that it served the exact opposite purpose and served to create an inflexible workplace.
GINA, the Genetic Information Nondiscrimination Law of 2009, is the first new federal discrimination law in decades.
Although EEOC regulations are promised (the proposed regulations were published back in March 2009 and the comment period has been closed since May 2009) , they have yet to issue, leaving employers on their own to interpret this brand new statute.
One area which presents an interesting question is the role of social media in GINA. Unlike other discrimination laws, GINA makes illegal the mere acquisition of genetic information, which is defined broadly to include, among other things, information about manifested diseases of family members. There are many exceptions to this rule, including “commercially and publicly available information,” such as newspapers, magazines, periodicals, and books. The EEOC specifically invited public comment on whether “commercially and publicly available information” should include personal Web sites or social networking sites.
If these are NOT included within the exclusions, it would mean that if an employer reviews an applicant or employee’s Facebook or MySpace page, and learns genetic information in the process, it is in violation of GINA. Given GINA’s broad definition of “genetic information,” this could easily occur. For instance, discovering on Facebook that an employee marched in a Susan G. Komen Race for the Cure on behalf of her mother would reveal genetic information.
If this advertent act (review of Facebook, Google name search, etc.) inadvertently produced genetic information – the employer would still be on the hook unless social media is included within the “publicly available” exclusion. Therefore, if information obtained from social media is NOT considered to be “publicly available,” employers will have to reconsider how they conduct background checks, since even the most rudimentary background checks currently include a “Google” search and review of any online information it turns up.
Even if the regulations specify that social media is excluded from the acquisition portion of the statute, the thornier issue is what happens after an employer has this information, whether deemed advertent or inadvertent under the statute. As a result of GINA, any adverse employment action which occurs after an employer has such information may be suspect. Just like any other discrimination, timing and stray comments may each play a role in developing causation between the membership in a protected class and the adverse employment action. As discussed in my previous post, Pink Ribbons and Yellow Bracelets, “genetic information” is everywhere. It will be hard for employers NOT to learn this type of information about their employees.
Thus, employers and their managers must understand the significance once this type of information is learned by the employer. It does not mean that the employee has to be treated better than other employers. It does mean, however, that employers need to be on alert once genetic information is learned about an employee. Like any other protected class, employers need to be cognizant of suspicious timing and mindful that documentation regarding any legitimate performance issues is in order, before taking any adverse employment action.
Want to learn more about GINA and its implications for employers? There are many opportunities: I will be presenting on GINA at the CUPA/SHRM conference on March 2; in an audioconference on May 4, sponsored by M. Lee Smith; and at the Annual Seminar on Employment Law hosted by the Delaware State Bar Association on May 11. Stay tuned for more details on the audioconference and DSBA event.
Until then, learn more about GINA with these earlier posts:
And, for more about the impact of social media on the workplace:
After months of moribundity, the Employee Free Choice Act (“EFCA”) is showing signs of life. Or at least alternative means of imposing some of the major changes included in EFCA, such as greatly decreasing the time of an election campaign and limiting employers’ ability to actively participate in union elections, are being considered. It all depends on the possible confirmation of Craig Becker, whose nomination to the NLRB has been stalled in the Senate but was recently voted out of committee on a party line vote.
The theory goes that if Becker, who is currently Associate General Counsel of the SEIU, is confirmed by the full Senate, giving former union lawyers a 3-2 majority on the Board, strange (and bad) things may occur. Becker’s past published writings include such one-sided suggestions as excluding employers from participating in pre-election hearings to determine an appropriate bargaining unit, preventing employers from alleging that union campaign conduct coerced employees, and prohibiting employers from conducting mandatory meetings of employees at any time during the campaign (instead of only during the 24 hours before the election, as at present).
Given Becker’s extreme views, the theory goes, new NLRB Chairperson Wilma Liebman should have no trouble getting the majority of the Board to agree to embark on expanded rulemaking and in that fashion, impose many of the EFCA changes indirectly. Liebman has made no secret of her interest in having the Board expand its rulemaking activity, instead of limiting itself to ruling on cases presented to it.
CUPA-HR Eastern Pennsylvania and Delaware Spring Chapter Meeting
March 2, 2010 | 9:00 a.m.-3:00 p.m.
Registration Opens at 8 a.m.
Doberstein Academic Center
320 N. DuPont Highway, New Castle, Delaware 19720
The Eastern Pennsylvania CUPA-HR chapter invites you to join us for our annual Spring Meeting on March 2, 2010. For the first time, the Eastern Pennsylvania CUPA-HR chapter is partnering with the Delaware Chapter of the Society of Human Resource Management(SHRM).
Our topics will be related to Employment Law updates as well as other legal issues. Topics will include: Social Networking and the Workplace, Retaliation & Whistleblower Claims, FMLA/ADA Update, Avoiding Wage and Hour Claims, Getting to Know GINA. The discussions will be led by employment-law attorneys from Young, Conaway, Stargatt & Taylor.
CUPA-HR Eastern Pennsylvania Members: Free
CUPA-HR National Members: $15. Non-CUPA-HR Members: $30.
Cost includes continental breakfast, lunch and handouts.
Please RSVP to Vicki Stewart at vstewart [at] ycp.edu by February 20, 2010.
Delaware Department of Labor (DDOL), has published its yearly statistics for FY2009 relating to the charges of discrimination filed with its Office of Anti-Discrimination. Here are some highlights:
It may not come as a surprise that the most-often filed charge was a retaliation charge, making up just over 70% of all charges filed. Where a charge alleges more than one basis, each basis was counted separately, which explains why the total is higher than 100%. It also indicates that retaliation is very often added as a second basis to a charge that alleges other types of discrimination.
Again, not surprisingly, DDOL had a very busy year, with intakes at a five-year high.
Electronic monitoring is a very hot topic in employment law these days. But what about other types of electronic monitoring by employers? A case filed in the U.S. District Court for the Eastern District of Pennsylvania alleges a much more unusual sort of electronic monitoring. The suit alleges that Lower Marion School District distributed over 1,800 laptops to its students. So far, so good.
But, according to the Complaint (via Above the Law), the laptops were equipped with webcams.
How could this not end badly?
The suit alleges that school administrators remotely activated the webcams. One is alleged to have gone so far as to discipline a student for “improper behavior in his home." Funny, I've never seen that one in a student code of conduct. It is also alleged that the District was also tracking all the students' online activity.
Employers commonly provide employees with laptops for business-related use. If your organization is one such employer, maybe consider skipping the upgrade to the models with webcams.
Delaware employees are not very satisfied with their work. In fact, according to the results of a recent Gallup poll, Delaware workers are the least satisfied in the entire country. When Delaware reporter Eric Ruth alerted me to the poll results I was, admittedly, stunned. I never would have guessed that the employers in our State are failing so badly to keep their workforce engaged. Being a self-proclaimed evangelist for the workplace-engagement initiative, I feel compelled to do whatever I can to improve Delaware’s wretched statistics. But where to start? How about with the basics.
Employee engagement can be difficult to define. I’d suggest that it consists of two types of passion. The first passion is felt towards the employer; the second is towards the work. For example, a nurse may love her work (i.e., providing health care to those in need) but may detest her employer. A disengaged employee, on the other hand, also is passionate about his employer and about his work. The difference, though, is that the passion he feels is a negative one. In the worst case scenario, the disengaged employee is passionate about sabotaging his employer and its efforts.
As noted by Michael Fox in a recent post on his Employer's Lawyer blog,, an OFCCP Administrative Law Judge (ALJ) just released a 66-page decision in a case that began with an audit notice in 1993. The case was bogged down in large part due to the bank’s contention that it was not selected for audit in accordance with its constitutional right under the Fourth Amendment to be free from unreasonable searches and seizures. That claim was ultimately unsuccessful. As a result of the delay, though, the bank found itself litigating claims about hiring practices dating back to 1993. Not surprisingly, the recollections of key witnesses such as the recruiters were foggy on some points.
But, in essence, the trial boiled down to a battle of the experts, who each advocated his or her own method of statistically analyzing the hiring data. The analysis of the OFCCP’s labor economist/statistician disregarded several of the bank’s legitimate business reasons for rejecting applicants because of evidence provided by the recruiters regarding how they coded applicants.
For each applicant, the recruiters were to use a code to indicate the outcome of the application. For example, they used a certain code to indicate that the applicant was not interested in working the hours that were available, and another code to indicate that the applicant had failed the credit check. Unfortunately, the recruiters testified that they did not use the code consistently.
If someone told the recruiter that her or she was not interested in the hours and/or the wages being offered, the recruiters sometimes used the code for “no position available” rather than the code used to indicate that the hours or wages were not acceptable to the applicant. To the OFCCP’s expert, this justified treating the hours code as entirely unreliable.
He also disregarded the code the recruiters used to indicate that the applicant was rejected based on his or her credit report for several reasons: (1) the recruiters did not have a consistent system for screening based on a credit report, (2) there was no evidence validating the use of credit reports as a test for success in the job, (3) the bank stopped using credit reports in 1994, and (4) the use of credit reports as a screening device adversely impacted African-Americans. The bank had not retained copies of the credit reports, so it was not possible to determine whether the recruiters used the credit reports in a consistent way as between white and African-American applicants.
When the employer’s expert analyzed the hiring decisions and excluded the people who had been rejected based on hours preferences or the credit check, the outcome was that there was no statistically significant evidence of discrimination. When the OFCCP’s expert analyzed the same hiring decisions but included the applicants who had been rejected based on the hours and credit check results, there was strong statistical evidence of discrimination.
The ALJ also rejected the bank’s expert’s opinion that the bank had hired more African-Americans for the jobs in question than would be predicted if the analysis had been based on the overall availability statistics for the Charlotte metropolitan statistical area for 1993. The ALJ wrote that “it is well established that the applicant flow data, which documents the actual labor pool relevant to the hiring decisions at issue, is ‘highly relevant evidence of an employer’s labor market.’”
This proposition is one that, in my experience, is theoretically appealing but completely out of sync with reality. The reality is that applicants’ self-identification of race and gender by applicants is voluntary, and a large number of them do not self-identify. Consequently, the employer, the courts and labor economists running statistical analyses will never have an accurate picture of the racial characteristics of the “applicant pool” from which the hires were made. Given that the information about the race and gender of the “applicant pool” is always incomplete and inaccurate, it is difficult to understand how applicant flow data can be more relevant and reliable than census data.
Anyway, this case still is not over. The ALJ has to decide what the damages number will be, and after that, if the case does not settle, appeals seem likely.
The February 2010 issue of Law Practice Today, the webzine published by the ABA's Law Practice Management section, is now available and can be read in its entirety at the Law Practice Management section's website. I was the issue editor for this edition, which focuses on the Human Resources side of management. The articles are great and offer lessons that apply to all industries. They include:
All of the articles are excellent but I want to give an extra-loud "thanks" to fellow employment-law bloggers, Jon Hyman of the Ohio Employment Law Blog, and Phil Miles of Lawffice Space, who each wrote features for the webzine. John authored Avoiding Retaliation Liability, which deals with the hottest topic in employment litigation these days and gives great advice on how not to become a defendant in a retaliation lawsuit. And Phil wrote Fostering an Entrepreneurial Spirit in Associates, which reminds us of the undeniable link between engagement, motivation, and success.
Employers' use of independent contractors instead of traditional employees has been on a steady incline over the past 20 years. Some employers feel that they can save money by using independent contractors instead of full-time employees. The contractors themselves may value the autonomy and economic perks that the status provides. Also, the specific skills and knowledge that independent contractors can bring to a short-term project can be critical and, therefore, worth a premium but not sustainable in the long term. But the use of independent contractors is not as perfect as these mutually beneficial points may seem.
A report prepared by the U.S. Government Accountability Office (GAO) in the Fall of 2009 concluded that employee misclassification is a “significant problem” with “adverse consequences” because it reduces tax revenues flowing to the government. In fact, the misclassification of employees as contractors is estimated to cost the Treasury Department over $7 billion in lost payroll tax revenue over the next ten years.
So the theory goes, since independent contractors are, by definition, self-employed, they are not considered “employees” and thus not covered by various tax withholding laws. Independent contractors also are not subject to most employment laws, so in addition to avoiding taxes, some employers may reclassify employees as independent contractors in order to avoid payment of overtime and benefits, and workers’ compensation liability.
And, thus, the crackdown on the misclassification of employees as independent contractors began. he U.S. Department of Labor (DOL) has made the proper classification of employees and independent contractors one of its "top priorities." The agency’s 2011 budget includes an additional $25 million for what it calls the “Misclassification Initiative” designed to target misclassification of independent contractors. Approximately 100 additional DOL enforcement personnel will be added to investigate employers.
The Internal Revenue Service (IRS) is in the middle of a similar misclassification crackdown. Beginning in February 2010, the IRS will commence intensive audits of randomly selected employers. One of the focal points of the audits is whether the employers are improperly misclassifying workers as independent contractors to save on taxes and employee benefits.
There’s also new federal legislation on the horizon. Congress is expected to take up legislation that will penalize employers for employee misclassification. One proposed piece of legislation, known as the Independent Contractor Proper Classification Act, was sponsored by President Obama when he was a member of the U.S. Senate.
States are getting into the enforcement act as well. New York and Massachusetts have created task forces to locate employees who are misclassified. Other states such as Maryland and Colorado have enacted new laws that impose harsh penalties on employers who misclassify employees as independent contractors.
Here in Delaware, the General Assembly passed its own law last year imposing stiff penalties on construction industry employers who improperly classify employees as independent contractors to save on business costs and avoid paying appropriate taxes. In addition to penalties of $1,000-$5,000 per misclassified employee, employers who fail to produce requested records can be issued a stop-work order by the Delaware Department of Labor and fined up to $500 per day for each day during which the requested records are not produced.
Compliance, though, presents its own difficulties. The tests used to determine whether someone is an independent contractor or an employee are fact intensive and differ among government agencies. In addition, each state may have its own unique test to determine a worker’s proper status.
Still, the penalties for non-compliance make this a treacherous area for the unwary employer. In addition to federal and state governments seeking unpaid payroll taxes and associated penalties, employment lawsuits in this area are becoming increasingly common. Claims from misclassified workers range from those seeking unpaid wages and overtime, to multi-million dollar class actions lawsuits. Misclassified employees have also successfully recovered retirement benefits, medical coverage for injuries they sustained on the company’s property, and rights to employee stock options and bonuses.
Given the increased attention to this area, the time to act is now. An internal review and audit of worker classifications should be a crucial component for any company that currently employs independent contractors.
Delaware Governor Jack Markell declared a state of emergency and instituted a driving ban limiting driving to emergency vehicles only as a result of the record-setting snow storms that hit the Northeast this week. While State government strongly urged employers to consider their employees’ safety and close their businesses for the duration of the state of emergency, nothing prohibited employers from opening for operation during the storm.
But employers should consider more than employee safety when choosing to open their businesses during a state of emergency. At least one case, decided by the Delaware Superior Court after the blizzard of 1996, noted that an employer could be liable for an employee’s injuries if the employee was called in to work during a state of emergency.
While the general rule is that an employer is not responsible for an employee’s injuries if those injuries are sustained outside of the employer’s property, there are exceptions. One such exception is that an employer may be liable for an employee’s injuries, sustained while travelling to the employer’s property, if the employee is called to work when he was not otherwise expected at work. This exception has not yet been applied to a case where an employee is injured coming into work during a state of emergency.
In the end, while it may be financially costly, employers will garner employee good will and avoid liability for employee injuries by closing during a state of emergency.
Garrison v. State, No. 96A-05-004, 1996 Del. Super. LEXIS 443 (Del. Super. Ct. Oct. 8, 1996).
Restrictive covenants include agreements by an employee not to compete, not to disclose confidential information, and not to solicit an employer’s clients. Based on a recent decision from Delaware’s Court of Chancery, these agreements are more valuable than ever. Deciding a novel issue in Delaware, the Court held that, absent a provision to the contrary, restrictive are assignable from one employer to another, so long as both employers are engaged in the same business. This means that when businesses merge, employees who are already subject to restrictive covenants with the acquired business do not have to execute new agreements with the acquiring business. In addition, the Court reminds us that contracts defining the employer-employee relationship, are the only way to prevent a competitor from poaching employees in an at-will employment state, like Delaware.
The background in Great American Opportunities, Inc. v. Cherrydale Fundraising, LLC, is one that will be familiar to many employers. Three businesses were competing in the surprisingly cut-throat world of third-party fundraising (selling fundraising materials to non-profit organizations such as schools and churches, who then sell the materials to their communities to raise money). Two of the businesses, Great American Opportunities, Inc. (GAO) and Kathryn Beich, Inc. (KB) merged, leaving GAO as the surviving business. At the same time, the third business, Cherrydale Fundraising, saw an opportunity to expand its market presence by hiring away several of KB’s sales representatives. GAO discovered what was going on shortly after the merger.
To KB’s credit, it had been a careful employer and almost all of its employees were subject to the trifecta of restrictive covenants: non-competition, non-disclosure, and non-solicitation contracts. However, GAO was not a party to any of these contracts. Faced with a complicated situation, GAO filed a lawsuit alleging that Cherrydale tortiously interfered with the contractual relationship between GAO and its employees, leaving the Court to sort out the details.
Before it could address Cherrydale’s activities in poaching KB’s employees, the Court had to decide if there was any formal relationship between GAO and KB’s employees as a result of their merger. Cherrydale argued that Delaware’s doctrine of at-will employment prohibits a claim of tortious interference with a contractual relationship. But KB’s employees were subject to a contract, as they had signed non-competition, non-disclosure, and non-solicitation contracts. Thus, Cherrydale’s first argument was unsuccessful.
The Court next had to determine whether KB could lawfully assign its rights under the employees’ restrictive covenants to GAO, in conjunction with the sale of a business. Surprisingly, this was an issue that had not been thoroughly analyzed under Delaware law. Adapting the general rule that contract rights may be assigned absent a provision prohibiting assignment, the Court held that an employer’s rights under a restrictive covenant may be assigned, in conjunction with the sale of a business, so long as the former employer and the current employer engage in the same type business.Bottom Line For employers who have workers with specialized skills, restrictive covenants, including non-competition, non-disclosure, and non-solicitation contracts, are as important as ever. In Delaware and other at-will states, such contracts are the only thing preventing your competitors from poaching your employees and their valuable know-how. But restrictive covenants are now more valuable because they can be assigned from one employer to another in a merger or asset sale. So if your employees are not subject to restrictive covenants, now is a better time than ever to consider whether they may be right for your business’s circumstances. Great American Opportunities, Inc. v. Cherrydale Fundraising, LLC, C.A. No. 3718-VCP (Del. Ch. Ct. Jan. 29, 2010)
I talk a lot about how Human Resource professionals can use social media for a variety of workplace initiatives, ranging from recruiting, to engagement, to internal communications. For the uninitiated, though, the topic "social media" may have little real resonance. If you're an HR pro new to social media, there are three key types of social media that you need to understand at a bare minimum. Here's a primer on each.Blogs
The word blog is short for “web log.” The author writes about topics he is passionate about, topics he wants others to learn about, or just his daily thoughts. The frequency of blog entries, called posts, depends on the topic and the blogger, and can range from multiple times daily, to weekly, to far less often.
In the hiring context, organizations can use blogs for several purposes, including: (1) improving the organization’s web presence (also known as search engine optimization or SEO); (2) humanizing the organization by projecting a public but personal voice; and (3) advertising particular job openings.
Microsoft Job’s Blog is an outstanding example of a recruiting blog done right.
Social-networking sites allow people to share information about themselves and to search for others with whom they can share information and form beneficial relationships. These sites are the modern version of the Kiwanis Club, the Rotary Club, Junior League, and local country clubs.
Facebook and LinkedIn are currently the most popular sites for recruiting efforts. LinkedIn targets professionals, particularly in knowledge industries, such as the information-technology, management, financial, and legal sectors. LinkedIn also targets an older demographic, though the average age of Facebook users continues to rise.
In the hiring context, organizations can utilize social-networking sites as a way to: (1) attract individuals who are not necessarily looking for employment (i.e., “passive candidates”); (2) provide current candidates with an inside look at working life inside the organization; (3) locate potential candidates for particular job openings; and (4) actively recruit high-potential candidates who may or may not be looking for employment. Another, increasingly common but less known use of social-networking sites by employers is keeping ties with former employees, known as alumni.
Some excellent examples of Facebook pages for recruiting include Hyatt Hotels and Resorts, the U.S. Army, and the CIA.
The HP Alumni group on LinkedIn, is an example of how organizations can leverage their alumni employees. There are also groups devoted specifically to HP alumni in certain geographic regions, as well as groups just for certain job types, such as sales.
Audio and Video
Posting videos online, either on your website or on sites like YouTube gives candidates a real-world preview of the work environment. Videos also can humanize your organization by putting a real employee as the public face for potential candidates.
KPMG’s branded YouTube channel, is one example of how to use video effectively. Google, not surprisingly, also puts YouTube to great use with its “Life at Google” channel, one of 27 channels it maintains on YouTube.
Learn more about social media in the workplace.
With the weather forecast predicting record-setting snowfall in the Northeast, many employers are preparing to close operations again tomorrow. But how to handle snow days when it comes to calculating payroll? Here's the run-down.
The Fair Labor Standards Act (FLSA) prohibits employers from reducing the pay of any exempt employee based on the quantity or quality of his work or when he is ready, willing, and able to work but no work is available. Applying that basic principle, the U.S. DOL has taken the position that employers that decide to close because of weather conditions must pay exempt employees their regular salaries for any shutdown that lasts less than one full week.
On the other hand, nothing prohibits an employer from requiring employees, including exempt ones, to use accrued vacation time or other time off to cover the missed work. The FLSA doesn't require you to provide vacation or leave time at all, so there's nothing to prevent you from giving your employees vacation or paid time off (PTO) but then requiring them to take it on certain days. A private employer may therefore deduct the period of absence due to bad weather from an employee's remaining vacation or leave time, whether the absence is a full day or a partial day, so long as you pay exempt employees their regular salaries for that time.
The practical problem, of course, is that when bad weather hits, some exempt employees may not have any vacation or leave time left. Or they may have already scheduled to take off — and received approval to use — whatever vacation or leave time they have remaining. Even if an exempt employee has no time off remaining, she still must be paid her regular salary when the organization is closed because of bad weather for less than a week. The DOL has made it clear that you must pay employees in those circumstances, even if you offer no vacation or PTO benefits at all and even if you provide those benefits but the employee has no remaining accrued leave available.
There's no legal prohibition against applying PTO to days missed because of a facility closure and canceling part or all of approved vacation time for exempt employees who have time remaining but have approved plans to use their PTO on other days. You should first consider the inevitable negative effect of that practice on employee morale, however.
In today’s culture of pink ribbons, yellow bracelets, and fundraising walks, it is not hard to imagine the multitude of ways an employer might learn about the genetic test or manifestation of a disease by a family member. Loved ones often become involved with organizations specific to the disease of their family member, and even sometimes starting their own. The employee’s membership in or leadership role in such organizations might well be reflected on their resume or application. Such relationship is likely to be disclosed on an employee’s Facebook, Twitter, or MySpace page. A quick Google search on an application, now typically performed in the most rudimentary background check, would reveal this information.
As noted in Parts 1 and 2 of this series, GINA’s inclusion of a “manifested disease” of a family member does not limit diseases to those with a genetic component. Therefore, an adult employee caring for a parent with lung cancer (which is generally accepted to be caused by environmental, not genetic influences), would be covered by GINA if he could show that his employer knew about the manifested disease of his parent, and treated him differently as a result. So would a parent with a child recently diagnosed with leukemia.
Health care coverage for a dependent in the face of a crippling diagnosis for a child is understandably, among the top concerns for any employee faced with this situation. There is a tremendous amount of fear in losing that coverage and an employer’s response to the knowledge that the employee may cause the employer to incur hundreds of thousands of dollars in healthcare costs. For an employee who is terminated in close proximity to a child’s diagnosis, one can easily appreciate the conclusion such employee may draw about the cause of the termination.
GINA is likely to be a valuable add-on to existing statutes applicable in caregiving situations. These scenarios present highly sympathetic plaintiffs, and juries ready to find employers culpable of economic incentives. GINA may just be the hook many caregivers need to grab onto a claim, and its reach in this regard should not be underestimated.
Parts 1 and 2 in the series: