Delaware Employment Law Blog

Maury Povich has made a good living hosting a TV show which often focuses on determining paternity. The show follows a familiar pattern. A woman comes on and declares that a man, waiting back stage, is the father of her baby. The child is then shown on the screen for the audience in the studio and at home to adore. The putative father is then marched onstage to loud boos.

He, of course, vociferously denies paternity using a series of arguments used by men through the ages like “the kid don’t look like me” or “she slept with lots of other men.” The man and woman then go back and forth for a bit. No physical violence. This isn’t Jerry Springer. The crowd loves it anyway.

Maury then produces a manilla envelope with the result of a DNA test. After the requisite commercial break, Maury dramatically reads the results of the test. The studio audience erupts. If the man is the father, he pledges to live up to his obligations. Sure, buddy. If he is not, the mother runs off the stage to his taunts. The whole sad affair is wrapped up in ten minutes.

Determining parenthood often critical under the FMLA. The FMLA entitles an eligible employee to take up to 12 workweeks of job-protected leave, “[b]ecause of the birth of a son or daughter”, “[b]ecause of the placement of a son or daughter with the employee for adoption or foster care,” and “to care for a son or daughter with a serious health condition.”  See 29 U.S.C. 2612(a)(1)(A)-(C).

Fatherhood, or motherhood, for that matter, is not always clear under the Family and Medical Leave Act (“FMLA”). While in Maury’s world, a child has only one father, under the FMLA there can be many. A parent is defined as “a biological, adoptive, step or foster father or mother or any other individual who stood in loco parentis” to a child.

While Maury uses a DNA test to determine a biological father, it is not necessary for FMLA purposes. Under the FMLA, a birth certificate will suffice. Similarly, court documents will work for adoptions and foster care. But what about “in loco parentis”? Now that’s a tough one. The U.S. Department of Labor recently issued an Administrator’s Interpretation that may make it even tougher.

The FMLA regulations state that “[p]ersons who are ‘in loco parentis’ include those employees with day-to-day responsibilities to care for and financially support a child….” The Interpretation, however, sees this definition as providing only an example of an “in loco parentis” arrangement, not establishing the requirements. Despite the use of word “and” in the regulation, the Interpretation states that an employee need not establish both day-to-day care and financial support. Rather, it sufficient for an employee to provide only day-to-day care. The Interpretation also gives a series of other scenarios which may qualify for in loco parentis status. For example, an employee who will be raising an adopted child with a same sex partner, but who does not have a legal relationship with the child, will still be eligible for FMLA. Good luck confirming these relationships.

The Interpretation concludes by stating the determining whether an employee stands in loco parentis to a child “will depend on the particular facts.” Unfortunately, those particular facts may be hard for an employer to determine or confirm.

It now appears the Conan and NBC saga is coming to the end. It is being reported that Conan will leave NBC with a boat load of cash and will be free to have a new show on another network in the Fall. The specific terms of the deal have not yet been released, but they will definitely be detailed in a contract between Conan and NBC. Such a contract, often called a severance agreement, is used in high risk terminations as a means of avoiding costly and distracting litigation.

The key elements of a severance agreement include:

• A provision detailing the nature of the separation. Employees usually want it characterized as a resignation. This allows the employee to search for new work without the stigma of a termination on his or her record. This provision should, of course, describe the last day of work.
• A discussion of how much money is going to be paid to the employee and how it is going to be paid. This is obviously a key provision for both the employee and employer. While it is unlikely that an employee will be receiving $33 million like Conan, it is likely that some payment will be made. Such a payment may be in a lump sum or paid on some schedule agreed to by the parties.
• A release of all claims the employees may have against the employer. This release must be broad enough to ensure that the settlement is truly the end of the matter. As a result, it should be drafted in a way that covers all entities and people who may be the target of a lawsuit. It should also cover any particular state or federal statute or claim that can be brought by an employee against a former employer. Special care must be given when drafting a release involving a claim under the Age Discrimination in Employment Act (ADEA). A federal law, the Older Workers Benefits Protection Act (OWBPA), requires that the employee: be provided notice that ADEA claims are being released ; allowed at least 21 days to consider the release; be given 7 days to rescind the release; and be advised that they should consult an attorney.
• A provision detailing payments for any accrued but unused sick or vacation pay.
• Provisions detailing the treatment of confidential and proprietary information. It is crucial that the obligations of the employee be spelled in a way that both parties know what is expected of them. For example, it is reported that Conan will be required to leave behind the various characters he and his team developed through their years at NBC. All employees should be required to return any company papers, computers, and the like.
• Terms describing when and how the departing employee can compete with his old employer. Key employees, like Conan, often have an employment agreement containing a restrictive covenant limiting their ability to work in the future. The scope of such a covenant is often modified during the negotiations involving the employee’s departure. In Conan’s case it appears that he will be able to launch a new show sometime in September. You can bet, however, that there was a lot of discussion over what Conan could do in the interim.
• A term discussing whether the employer will oppose the employee’s unemployment compensation claim
• A discussion as to whether the employer will continue the employee’s health care coverage and for how long. Such continuation may be for a number of months or until the employee obtains new coverage from an new employer.
• A discussion of how the employer will respond to requests for references from potential new employers. Consideration should be given requiring the employee to direct all such inquiries to a specific person who will respond in an agreed upon way.
• The agreement should require that the terms of the agreement remain confidential or, at a minimum, provide what will be provided to the press or public. Such a provision is especially important in high profile terminations in which each party will need to “save face.”

To catch up on the Conan/NBC saga, see my previous posts, Why NBC Should Have Used Delaware Law In Conan O’Brien’s Employment Contract, and What Can Employers Learn From Conan O’Brien and NBC?

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Yesterday, I wrote that NBC’s dispute with Conan O’Brien might turn on an interpretation of his employment contract. If NBC’s actions were in breach of its agreement, any restrictive covenant preventing Conan from moving to Fox would likely be unenforceable.

Since that post, several commentators have opined that any such restrictive covenant would be unenforceable under either New York or California law—both states have passed statutes prohibiting restrictive covenants in employment contracts.

NBC’s legal position would probably be much stronger if it had included both “choice-of-law” and “choice-of-forum” provisions requiring that Delaware law be used to interpret the agreement and that Delaware courts interpret the agreement. Teresa Cheek’s recent post on this topic details the real advantages of using Delaware law in employment contracts involving executives or key employees.

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Just a few days ago, NBC announced that it was moving the Jay Leno Show from its current 10 p.m. starting time to 11:35 p.m. This move was prompted by complaints from NBC affiliate stations that the Show’s poor performance was damaging the ratings of their local news programs and their profits. The move of Leno’s show, however, will require moving the start of the Tonight Show to 12:05 a.m. Yesterday, Conan O’Brien released a statement objecting to the changes and threatened to leave the show. What can employers learn from this high profile, high-stakes predicament?

Conan and Leno are employees of NBC and their rights and obligations are governed by employment agreements. As a result, the options of all three parties will be determined by the terms of these agreements.

Conan’s threat to bolt from NBC is likely based on a basic tenet of contract law: a party to a contract is relieved of the duty to perform (no pun intended) if the other party to the contract materially breached the contract first. While I have not seen the terms of Conan’s agreement with NBC, the final resolution of this highly public squabble may well turn on whether NBC’s actions are in breach of its agreement with Conan.

But how does the Conan-NBC contract apply in the real world? Well, Conan’s agreement with NBC, like many employment agreements, probably contains express restrictions on Conan’s ability to jump to another employer. Indeed, rumors are flying that Fox may be interested in bringing his talents to that network. If Conan can show that NBC actions materially breached his contract, he could be relieved his contractual obligation to provide a show for NBC and any restrictions preventing him from jumping to another network.

As a result, an employer should always make sure that any material changes affecting a key employee are in compliance with the terms of any employment agreement with that employee. If not, a court may refuse to enforce any non-competition provisions contained in the agreement.

As 2009 winds down, it’s a good time to reflect on the most important employment law developments in what has been a very busy year. Here are my top 10:

Continue reading "Top 10 Employment Law Developments of 2009" »

According to a report released today by the FDIC, a shocking 26 percent of U.S. households have little or no access to banking service, and the problem hits poor and minority families the hardest. As a result, these individuals must often pay to have their payroll checks cashed.

Delaware employers should be aware that payroll debit cards may be a good way  to help  "unbanked employees" to avoid check cashing charges.

For many years, efforts to use payroll debit cards were thwarted by Delaware law. Under the Delaware Wage Payment and Collection Act, employers must pay all wages "in lawful money of the United States or checks provided suitable arrangements are made by the employer for cashing such checks for the full amount of the wages due at a bank or other business establishment convenient to the place of employment." The Act further defines a check as being "a draft drawn on a bank and payable on demand." In combination, those provisions appeared to preclude the use of payroll debit cards for wage payment.

Delaware Department of Labor regulations interpreting the DWPCA, however, were amended in 2004 to specifically authorize the use of payroll debit cards. The regulations state that an employer may issue "a payroll debit card which provides the functional equivalent of cash or a check."  It is the employers' responsibility "to effectuate a payroll debit card system which will allow full payment of wages on the employee's regular payday and without cost to the employee."

I had the privilege of speaking on recent ADA and FMLA developments at breakfast seminar this morning. The event was presented by the Delaware Employer Council and held at Delaware Park’s beautiful facilities. Over 50 HR professionals attended.

This morning's topic included the regulations proposed last month by the EEOC as a result of the Americans with Disabilities Amendment Act of 2008 (“ADAA”). I also talked about last weeks’ expansion of FMLA military leave by the National Defense Authorization Act of 2010 (“NDAA”).

Highlights of the presentation included:

· The vast expansion of the scope the ADA by lowering the standard for establishing whether an individual has a disability.

· The prohibition against considering the effect of medication or other mitigating measures in determining whether a person is disabled.

· The six rules of construction in determining whether a person is disabled under the ADA

· The ability of families of injured veterans to take FMLA “military caregiver” leave under the NDAA.

· The ability of families of active members of the Armed Forces to take “qualifying exigency” leave under the NDAA.

As promised, my materials are linked below.  ADA FMLA Update

What Can Employers Learn From Obama and the Nobel Peace Prize?

Last week’s announcement that President Barack Obama would receive the Nobel Peace Prize ignited a firestorm of criticism in this country and across the world. Many felt that Obama had not yet achieved sufficient tangible results to warrant receiving the award. Maybe so.

But in rushing to condemn the Nobel Committee, they may be missing the message that Committee was trying to send. It is clear that the it was trying to reward behavior that it saw as positive and to encourage such behavior in the future. Employers do this every day – in pay raises and performance evaluations. But many go much further. Why? Because positive reinforcement works.

How should you go about rewarding and recognizing the employees? Here are five tips:

First, take the time to figure out what type of recognition best motivates each of your employees. Some employees like public recognition, while others value informal pats on the back, personal gifts, or social activities.

Second, make the recognition timely. Just as inappropriate behavior should be corrected immediately, excellent behavior should be rewarded promptly. Don't delay in recognizing employees' achievements.

Third, tailor the level of the recognition to the performance. An employee who performs well on one day should not be recognized in the same way as the employee who has performed at an exceptional level all year. This can lead to bad feelings on the part of those who have worked the hardest but receive the same reward.

Fourth, encourage your supervisors to seek out and reward good behavior. Give them concrete examples of the kinds of behavior you are trying to encourage and ways that it can be recognized.

Fifth, remember that a heart felt thank you given face to face can be just as powerful as a written memo, a plaque, or a party. As my mom always says, “It’s the thought that counts."

In sum, recognition, individually tailored and timely offered, is a powerful motivator for employees to achieve excellent performance. If you don't take your employees for granted, they won't take their jobs for granted.

Last night’s shocking revelations by David Letterman about an extortion plot threatening to expose his affairs with subordinates reveal to the larger public something human resources professionals have known for years: Romantic workplace relationships can lead to trouble, legal and otherwise. As a result, you should review your policies and practices to ensure that a failed romance ends with only a broken heart, not an empty bank account.

Workplace romance

The typical scenario unfolds like this: A supervisor begins to date a subordinate. They go out, have a good time, and continue to see each other socially. The two employees interact every day at work, and as the relationship grows, some of their romantic behavior seeps into the workplace. They are frequently together behind closed doors, e-mails are exchanged regularly, other employees take notice and begin talking about their questionable conduct, and the office suffers decreased efficiency and productivity.

When two employees having a romantic relationship are in the position of supervisor and subordinate, others become resentful and charges of favoritism arise. The couple may have sexual contact at work or elsewhere, sometimes with embarrassing consequences.
After a few months, one of the employees decides things aren't working out and breaks it off, much to the other's chagrin. The supervisor then unsuccessfully attempts to pick up their business relationship where it left off before the affair or to retaliate against the subordinate.

Things get out of hand, and the subordinate files a sexual harassment claim.
Sexual harassment claims can be extremely expensive, even if you eventually prevail. They're also divisive and sabotage productivity. For an individual employee — victim or accused — a sexual harassment claim can be "professional suicide." Since as many as a third of all consensual romantic relationships begin at the workplace and many end badly, what's a beleaguered employer to do?

 

When romance sours

Most employees instinctively know when to draw the line on behavior that could be viewed as sexual harassment toward people they know only casually at work. The line gets blurry for some, however, when the questionable behavior was at one time consensual.
Your obligation to stop harassment in that situation is clear. You have no responsibility to seek out a dating couple daily and inquire about the status of their relationship to determine if it's still consensual. But the minute one of them indicates he or she wants the other to stop the contact and makes that known to the company, your duty to stop what has arguably become sexual harassment begins and the liability meter starts ticking. Just because the victim consented to the same or similar conduct at one time, that doesn't absolve your company from liability. The troublesome aspect is, you often may not fully appreciate the fact that the relationship has now become sexual harassment.

Other concerns include the sexual favoritism claims that frequently follow on the heels of a workplace affair. Those claims involve a type of sex discrimination that stems from one employee being treated unfavorably because he or she isn't in a personal relationship with the supervisor. The employee who's involved with the supervisor receives favorable treatment to the detriment of other employees in the department.

Continue reading "Not So Funny Business: What Employers Can Learn from the David Letterman Affairs?" »

Last night, the Philadelphia Eagles announced that they had signed quarterback Michael Vick to a two-year contract. Vick, of course, is returning to football after serving time for running a dog-fighting ring. The move by the Eagles, of course, is fraught with risk. Vick’s inhumane treatment of animals has made him one of the most controversial and hated figures in all of sports. This could lead to deteriorating team morale and loss of fan support. The addition of Vick also has the potential for great reward. He is an exceptional talent and his addition to the roster could be enough bring the Super Bowl victory that the City of Philadelphia craves.

The signing of Vick, however, stands in stark contrast to the image that Coach Andy Reed and the Eagles have always tried to portray. They have always proclaimed “character” as the most important attribute in a player. This move makes their public pronouncements seem hollow. Is “character” less important when a special talent is involved? It seems so. This move, and the earlier signing of Terrell Owens, seems to signal that the team will relax it’s rules and it’s team culture for special athletes. In the words of Bill Murray, as Dr. Peter Venkman in Ghostbusters: “Actually, it’s more of a guideline than a rule…”

The Eagles would not be the first employer to abandon its culture for short-term gain. The case law is full of situations where workplace rules were ignored because the violator had too much power or made the company too much money. Think of the top selling salesman or rainmaking partner who is allowed to sexually harass. The money rolls in, but later roll out in the form of a large judgment or settlement.

The Eagles are a good football team, with or without Vick. And, I suppose a Super Bowl win will make the fans of Philadelphia forgive the Eagle’s willingness to sacrifice its team culture for the ultimate prize. In a championship-starved city, that’s understandable. Forgive, maybe. Forget, never.