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HR SPECIALIST

FLORIDA Employment Law

Trusted compliance advice for Florida employers

In the News … Immigration crackdown targets employers—not illegal workers Fulfilling a pledge President Obama made during the 2008 campaign, the Department of Homeland Security (DHS) has announced its immigration enforcement activities will target employers that hire undocumented workers instead of focusing on arresting and deporting the workers. The new emphasis should put employers on notice: Expect to pay a high price if you shortcut employment eligibility verification processes. U.S. Immigration and Customs Enforcement (ICE) will focus on criminal prosecution of employers that knowingly hire illegal workers. A DHS statement said the goal is “to target the root cause of illegal immigration.” DHS statistics show that of the more than 6,000 people arrested in 2008 following ICE workplace investigations, just 135 were employers.

Florida ranks 6th on business tax index Florida ranked as one of the nation’s business-friendliest states in the Small Business and Entrepreneurship Council’s (SBEC) Business Tax Index for 2009. The SBEC annually assesses the tax climates for business and entrepreneurs in the 50 states and the District of Columbia. Continued on page 5

Florida Employment Law is published by HR Specialist and is edited by Ralph A. Peterson, a partner with Beggs & Lane RLLP, Florida's oldest law firm. He is a board-certified labor and employment lawyer. Contact him at (850) 432-2451 or RAP@BeggsLane.com.

(800) 543-2055

www.theHRSpecialist.com

July 2009 Vol. 4, No. 7

Editor: Ralph A. Peterson, Esq., Beggs & Lane RLLP, Pensacola

Counter bias claims with complete records T

hese are tough economic times, and employers can’t be blamed for costcutting measures such as reductions in force. But before you act to trim your labor burden, prepare solid evidence showing exactly why you must cut those costs. You need a clear, written record, since those who participated in the decision-making may not be around to testify if the layoffs are challenged in lawsuits. Recent case: Mary Cropsey worked as a teacher until the school system declined to renew her contract at the beginning of the new school year. She believed she had been singled out to

lose her job because she was older, not religious enough and too outspoken about safety issues. She sued for discrimination. The school district was wellprepared for the charges. It had carefully documented its layoff decision, which affected nine teachers. The district explained that it cut those teachers because another school had opened in the district. As a result, their school had lost 200 students. It countered the age bias complaint by showing that all the other teachers who lost their jobs were younger than Cropsey. The court said Cropsey didn’t Continued on page 2

Arbitrate FLSA claims? One court says yes Recent case: M any employers place arbitration clauses in their employment applications or handbooks. The idea is that forcing employees to arbitrate workplace disputes will be quicker and easier than going to federal court. Plus, arbitration may discourage classaction lawsuits, which can take one employee’s claim and multiply it across the workforce. A recent federal court decision by a Florida-based judge has upheld the right to take even Fair Labor Standards Act (FLSA) complaints over wage-and-hour law to arbitration.

Nizar Ghidon and a group of co-workers tried to sue their employer, a car dealership, in federal court. They charged they had been denied minimum wages and suffered retaliation when they complained. The dealership pointed out that each employee had signed an agreement stipulating that all employment-related disputes, including those involving federal employment laws, would go to arbitration. The employees argued that FLSA claims can’t be forced into arbitration, and that employees can’t Continued on page 2

IN THIS ISSUE

How to address harassment complaints . . . . . . . . . .2 Supreme Court on pregnancy discrimination . . . . . . .6 Don’t let accommodations compromise safety . . . . .3 Prevent lawsuits with an audit . . . . . . . . . . . . . . . . .7 Managing pregnancy and maternity leaves . . . . . . . .4 The Mailbag: Your questions answered . . . . . . . . . . .8 National Institute of Business Management


Records beat bias claims (Cont. from page 1)

offer any evidence that religion or free speech had anything to do with her selection as part of the cut group. It ruled the school district’s reasons were based on solid economic and student enrollment data, not age, religion or free speech. It dismissed the case. (Cropsey v. School Board of Manatee County, et al., No. 8:08-CV-519, MD FL, 2009) Final note: You simply will never know what lawsuits you’re going to have to deal with. Prepare for the worst by keeping great records and building logical explanations before the fact. For more on how to prevent lawsuits in this tough economic climate, see this month’s “Nuts and Bolts” on page 7.

Arbitration of FLSA claims (Cont. from page 1)

waive their rights to have FLSA cases heard in court. The judge disagreed and dismissed the case, sending it to arbitration. (Ghidon, et al., v. Rick Case Hyundai, et al., No. 0960088, SD FL, 2009) Final notes: Stay tuned on this issue, as this case will probably be appealed to the 11th Circuit Court of Appeals. If you are considering including an arbitration agreement in your applications or handbook, have your attorney help draft the language. The agreement must be a valid contract. Be careful where you place the agreement. If you include it in the handbook, keep it separate from other policies. Specify that nothing else in the handbook is a contract. You want the arbitration agreement to be a valid contract, but not the rest of the handbook. Your attorney can help you get the language right. 2

Florida Employment Law • July 2009

Address harassment complaint with thorough investigation—and quick action to fix problems T

he U.S. Supreme Court hasn’t decided any big sexual harassment cases for several years. That doesn’t mean the problem has disappeared or that employers should slack off in their efforts to prevent and fix sexual harassment. Instead, review your training program to make sure sexual harassment gets the attention it deserves. Then be sure to investigate any harassment complaints you receive. Then fix them promptly. Recent case: Sheron Smith worked as a driver for a faith-based children’s agency, transporting children to and from foster-care facilities and home placements. She complained that one of her supervisors—with whom she only had occasional contact, since she spent almost all of her time on the road—had made sexual advances toward her. When Smith told HR about the problem, it immediately investigated her allegations. It concluded that, while the supervisor’s actions may have been inappropriate, Smith had participated in some “joking” behavior herself. Management suspended the supervisor for five days and had

him undergo sexual harassment training. Then it closed the case. Smith was not disciplined and there were no further problems. She sued anyway, alleging she had been forced to work in a sexually hostile environment. The court dismissed her complaint, explaining that the behavior she described, though inappropriate, was not severe enough to constitute sexual harassment. Plus, the court said the inappropriate behavior didn’t affect Smith’s ability to perform her job, since she spent almost all of her time driving. The court also noted that the company acted promptly to fix the problem. (Smith v. Family Enrichment Center, No. 8:08-CV-450, MD FL, 2009) Advice: Is your sexual harassment policy up-to-date? Is it displayed where employees can see it? Are the phone numbers, names and e-mail addresses for reporting alleged harassment still correct? Do you still include sexual harassment training in your training schedule? If not, now is a good time to update everything.

Asked to enforce civility, court demurs C

ourts don’t want to become micromanagers. Employers still get to decide how supervisors should treat subordinates, as long as they’re not biased and their behavior doesn’t cross the line into harassment. Recent case: Katherine Murphy had a difficult boss with a foul mouth. Over several years, he treated her and other subordinates to a stream of obscenities when he was displeased. However, most of his outbursts were not sex-based. When Murphy was terminated, she sued for sexual harassment.

But she had never complained that the supervisor’s vulgarity was sexual, so she didn’t get far with the court. Instead, the judge said that, while the supervisor’s conduct was immature and unprofessional, it was not sexual harassment. (Murphy v. City of Aventure, No. 08-20603, SD FL, 2009) Final note: Before giving a pass to supervisors who regularly curse like sailors, don’t just consider the lawsuit risk they pose. The hit to employee morale—and the resulting turnover—may make it worth giving them the heave-ho. www.theHRSpecialist.com


Don’t bend on disability accommodations if they could compromise safety t’s usually easy to accommodate employees’ everyday health problems, and employers should always be willing to consider making minor adjustments in work conditions. But be very cautious about making accommodations that could affect workplace safety. Allowing an employee to bypass safety procedures or have a co-worker help her with them is almost always a bad idea. For example, what if an employee’s need for assistance meant she wouldn’t be able to handle an emergency when no help was available? In one recent case, that was sufficient justification to eliminate an accommodation and insist that the employee show she could perform the function without help. Recent case: Catherine Armbrester worked as a school bus driver. As part of her morning work routine, she was

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required to lift the hood on her bus and inspect the engine for obvious problems. Because of a neck injury, she couldn’t easily do that. At first, a supervisor lifted the hood for her as a reasonable accommodation. Then someone questioned what would happen if Armbrester had to lift the hood along the side of the road, or lift children out of her bus during an emergency. The school system said she had to be able to lift the hood without accommodations. She sued after she was fired for unrelated reasons. Armbrester claimed that denying the accommodation was disability discrimination. The court tossed out her case, reasoning that the lifting requirement was legitimate—and that no accommodation was possible. (Armbrester v. Talladega City Board of Education, No. 08-12239, 11th Cir., 2009)

Retain notes on salary negotiations to protect against pay discrimination claims W

e all understand that in a freemarket system, it sometimes takes extra money to induce an applicant to leave one job for another. That’s all part of the hiring dance. But sometimes the end result is that an existing employee ends up earning less than a new employee who holds the same or a similar job. If that existing employee belongs to a protected class (and everyone belongs to at least one) different from that of the new hire, the existing employee may sue, claiming pay discrimination. That’s when interview notes documenting the salary negotiations come in handy. They are evidence that there was no discrimination going on—just the give and take of the free-market system. Recent case: Willie Drake-Sims, www.theHRSpecialist.com

a black woman, worked for the Burlington Coat Factory as an operations manager. When she was fired, she sued, alleging the company had paid her less than her white colleagues. The retail chain was prepared with interview and other records that showed each of the white co-workers Drake-Sims compared herself with had been hired from outside. DrakeSims had been promoted from within. The records showed that all of the out-side applicants had negotiated starting salaries higher than the ones they were earning at their previous jobs, and Burlington offered higher salaries to induce them to quit. The court said that was a legitimate, nondiscriminatory explanation for the pay disparities. (Drake-Sims v. Burlington Coat Factory, No. 0813618, 11th Cir., 2009)

Legal Briefs Tell bosses: Sexist comments can come back to haunt you If you haven’t recently reminded supervisors to keep anti-female comments to themselves, here’s a recent case you can cite. Such comments will be viewed as direct evidence of discrimination. That practically guarantees a lawsuit if the employee is ever fired. Recent case: Brenda Boutwell worked for Advance Construction Services. When her boyfriend, who also worked there, walked off the job, they were both fired. Boutwell sued for sex discrimination, claiming her supervisor had told her that women didn’t belong in construction and that she was just there as a favor to her boyfriend. She said he had also told her if her boyfriend ever quit, she would lose her job. That testimony was enough for a judge to let her lawsuit continue—the supervisor’s statement was direct discrimination evidence. (Boutwell v. Advance Construction, No. 3:07-CV-444, ND FL, 2009)

Good news: Courts reluctant to appoint free attorneys Even if it’s all in their heads, some employees think their co-workers and supervisors are out to get them. If they’re unable to find an attorney willing to take the case, they’ll often file the lawsuit themselves, asking the court to find and pay for an attorney. Fortunately, fewer and fewer judges are granting those requests. Recent case: Barbara Quering sued her employer over alleged sexual harassment she said had been perpetuated by a group of 21 co-workers. She said management ignored the problem. Her charges weren’t terribly specific, and she asked for a court-appointed lawyer. The judge denied her request, saying she had to amend her complaint with specifics or he would dismiss the lawsuit. (Quering v. Bank of Florida, No. 2:08-CV-627, MD FL, 2009) Final note: Don’t be tempted to handle such lawsuits without counsel, too. A good lawyer can hasten dismissal. July 2009 • Florida Employment Law

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Compliance Corner

Insight from TheHRSpecialist.com

How to legally manage pregnancy and maternity leaves Free maternity leave guidelines W

hen an employee announces she’s pregnant, it’s important for HR and supervisors to know what they must do—and what they can’t do (or say) —under federal anti-discrimination and leave laws. (For details about individual state family-leave laws go to www.ncsl.org/programs/employ/ Pregnancy Leave Statutes.htm.) No federal law requires you to provide paid maternity leave. Most employers must comply with the Pregnancy Discrimination Act (PDA) and the FMLA. The ADA may apply if pregnancy complications arise.

PDA: pregnancy discrimination The PDA prohibits discrimination against employees and applicants on the basis of “pregnancy, childbirth and related medical conditions.” It covers employers with 15 or more workers. The PDA says a woman can’t be denied a job because she’s pregnant or had an abortion. You can’t fire her because of her pregnancy or force her to go on leave as long as she’s physically capable of performing her job. In short, the law requires you to treat pregnant employees the same as other employees on the basis of their ability or inability to work. So you must provide the same accommodations—such as light-duty work—for

For detailed guidance on complying with federal pregnancy discrimination and state maternity leave laws, order your free copy of HR Specialist’s Maternity Leave Laws. It spells out the seven essential guidelines to follow and includes a roundup of relevant court decisions on pregnancy and maternity leave law. Order your copy at www.Business ManagementDaily.com/freereports.

expectant workers that you do for other employees unable to perform their regular duties. In addition, you must provide the same leave and disability benefits available to other employees who are granted leave for temporary disabilities.

FMLA leave: When does it apply? When an employee becomes pregnant, consider her right to take FMLA leave. Eligible employees can take up to 12 weeks of unpaid FMLA leave for the birth, adoption or foster care of a child, or to care for their own—or a family member’s—“serious condition.” Both mothers and fathers can take FMLA leave anytime in the first 12 months after a child’s arrival. What’s a “serious condition”?

Instant Online HR Answers 14-Day Free Trial Get FREE access to more than 5,000 HR articles plus a Free Bonus Report—“10 Employment Laws Every Manager Should Know.” You also get: • HR Law 101: a plain-English database of every important federal employment law • Sample policies, Q&As, customizable HR memos, self-audits and more • State-specific employment law advice. Start your free, no-risk trial today at www.theHRSpecialist.com/trial.

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Florida Employment Law • July 2009

Keep in mind that employees can also use their allowable FMLA leave if they suffer complications during pregnancy that constitute a serious condition. The FMLA defines a “serious health condition” as “an illness, injury, impairment or any physical or mental condition that requires inpatient medical care or continuing treatment by a health care provider.” Advice: When it comes to a pregnancy, approve any absences that are even remotely related to the pregnancy as FMLA-covered time off.

ADA: reasonable accommodations A normal pregnancy is not considered a disability under the ADA. An ADA disability is “a physical or mental impairment that substantially limits one or more major life activities.” But if a woman experiences pregnancy complications that substantially limit a major life activity, she may be considered disabled under the ADA and, therefore, entitled to a reasonable accommodation. So if a new mother still is unable to return to work after exhausting her 12 weeks of FMLA leave, you should evaluate her condition under the ADA and state laws to determine whether additional time off is a reasonable accommodation for her. STAFF

Editor: Ralph A. Peterson, Esq., Beggs & Lane RLLP, (850) 432-2451 Contributing Editor: Anniken Davenport, Esq., HRFLeditor@NIBM.net Editorial Director: Patrick DiDomenico Senior Editor: John Wilcox, (703) 905-4506, jwilcox@NIBM.net

Publisher: Phillip Ash Associate Publisher: Adam Goldstein Copy Editor: Cal Butera Production Editor: Nancy Asman Customer Service: (800) 543-2055, customer@NIBM.net

Vol. 4, No. 7 HR Specialist: Florida Employment Law (ISSN 1934-1636) is published monthly by the National Institute of Business Management LLC, 7600A Leesburg Pike, West Building, Suite 300, Falls Church, VA 22043-2004, (800) 543-2055, www.theHRSpecialist.com. Annual subscription price: $299. © 2009, National Institute of Business Management. All rights reserved. Duplication in any form, including photocopying or electronic reproduction, without permission is strictly prohibited and is subject to legal action. For permission to photocopy or use material electronically from HR Specialist: Florida Employment Law, please visit www.copyright.com or contact the Copyright Clearance Center Inc., 222 Rosewood Dr., Danvers, MA 01923, (978) 750-8400. Fax: (978) 646-8600. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal service. If you require legal advice, please seek the services of an attorney.

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In the News ... EEOC gets crabby with Pembroke’s Club Gabys According to an EEOC lawsuit, when new management took over Club Gabys in Pembroke Pines in 2007, it stated its intention to “get rid of all the old and ugly people” and presumably replace them with young, beautiful and charming people like themselves. Well, the old folks lowered the baby boom on the upstart Gen X’ers who manage the restaurant and nightclub. They filed age discrimination and hostile work environment complaints against Club Gabys. The case will now go to court.

Labor union steps up Wal-Mart organizing campaign The United Food and Commercial Workers Union (UFCW) has sighted Wal-Mart in its cross hairs. The union has sent 60 organizers to more than 100 Wal-Mart stores in 15 states to try to crack the nation’s largest employer. The organizers will be circulating union authorization cards bearing President Obama’s

Florida business taxes (Cont. from page 1)

Florida’s No. 6 ranking means only five states have better tax environments for business. The index included rankings of the top personal income tax and individual capital gains rates in each state. Florida doesn’t have either, tying it for first. Also rated were top corporate income tax rates (Florida came in 15th at 5.5%), top corporate capital gains tax rates (17th at 5.5%) and sales, gross receipts and excise taxes as a share of personal income (43rd at 4.39%). Other factors included unemployment tax rates as a share of state average pay (Florida ranked fourth at 0.94%), state gas taxes (48th at 34.5 cents per gallon), and diesel taxes (38th at 29.8 cents per gallon). www.theHRSpecialist.com

Labor Department seeks more funds to boost enforcement U.S. Secretary of Labor Hilda Solis’ budget request to Congress includes funds to hire nearly 1,000 new employees, 670 of whom will be investigators. The plan calls for 200 more wage-and-hour investigators and 160 additional Occupational Safety and Health Administration gumshoes. Should Solis get everything on her wish list, the department’s Wage and Hour Division will see a $35 million increase in funding in FY 2010. OSHA would get $51 million more, while an additional $27 million would go to the Office of Federal Contract Compliance Programs. That office would pick up an additional 213 employees under the proposed budget. In particular, the Department of Labor seeks bilingual investigators who can easily communicate with immigrants. According to the department’s web site, Solis wants to return funding and staffing for enforcement efforts to 2001 levels. Note: Now is the time to monitor your wage-and-hour and workplace safety practices to correct problems before the federal government comes barging in. Contact your attorney to run audits so that any deficiencies uncovered are protected by attorney-client privilege.

picture and a quote from a 2007 speech in which he said, “I don’t mind standing up for workers and letting Wal-Mart know they need to pay a decent wage and let folks organize.” The cards also symbolize the union’s push for passage of the Employee Free Choice Act (EFCA), which would allow workers to choose union representation by completing an authorization card rather than by secret ballot. The UFCW plans to fly 100 prounion Wal-Mart workers to Washington to lobby members of Congress to pass the bill. For its part, Wal-Mart remains steadfastly anti-union and anti-EFCA. The nation’s largest retailer warns unionization will lead to higher operating costs and less flexibility when managing employees. Both sides agree the EFCA will make it easier to organize Wal-Mart employees.

Looking for work? NLRB has openings Cushy government jobs, but a lot of headaches await the successful applicants for two key government jobs. Years of political infighting may be coming to an end soon, as President Obama has sent two names to Congress for confirmation to become

members of the National Labor Relations Board. The board supposedly has five members, but only two—Chairwoman Wilma B. Liebman and Peter C. Schaumber—had been doing all the work for 16 months while Congress and the Bush administration wrangled over potential new members. The situation got so bad that several entities challenged the board’s right to render decisions, claiming it lacked a quorum. Most recently, the District of Columbia Court of Appeals ruled the board could not issue rulings. Two other appeals courts had ruled for the board. In addition to administrative headaches, the board also faces labor strife. Unionized staffers working for the board’s general counsel claim they have been miscategorized for collective-bargaining purposes and have appealed to, you guessed it, the NLRB. The board sought to have the Federal Labor Relations Authority, the body that handles federal government labor issues, review the complaint.

Read the current issue of Florida Employment Law and more advice online at www.theHRSpecialist.com. July 2009 • Florida Employment Law

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In the Spotlight

by Ralph A. Peterson, Esq., Beggs & Lane RLLP, Pensacola

Supreme Court decides Hulteen pregnancy discrimination case What Hulteen means for HR C

laims of pregnancy discrimination have gained attention again with U.S. Supreme Court’s recent decision in AT&T Corp. v. Hulteen (07-543, U.S., 2009). In Hulteen, a current employee and other retired employees who had taken pregnancy leave while employed by AT&T, alleged in 1998 that the company violated the Pregnancy Discrimination Act (PDA) when it paid pension benefits calculated in part under an accrual rule that gave less retirement credit for pregnancy leave than for general medical leave. This differential treatment of pregnancy leave had been AT&T’s policy before the PDA was enacted in 1978. In 1976, the Supreme Court—in General Elec. Co. v. Gilbert (429 U.S. 125, 1976)—found that kind of treatment to be nondiscriminatory and lawful under Title VII of the Civil Rights Act. When the PDA took effect in 1979, AT&T adopted a new disability plan that modified its provision of service credit for pregnancy leave to be determined “on the same basis as leave taken for other temporary disabilities.” AT&T, however, did not retroactively adjust the service credit calculations for women who had been subject to the earlier policy. The employees in Hulteen contended that AT&T violated Title VII and the PDA when it calculated the current, post-PDA retirement eligibility by incorporating the pre-PDA accrual rules that had differentiated on the basis of pregnancy.

High Court: no discrimination The Supreme Court rejected that assertion, ruling that “reliance on a prePDA differential accrual rule [based in part on reduced service credits for pregnancy leave] to determine pensions benefits does not constitute a current violation of Title VII.” 6

Florida Employment Law • July 2009

The Hulteen decision is a strong reminder to employers and HR professionals that now is the time to conduct an audit of their practices, policies and plans to make sure they comply with the PDA’s requirements. The decision also underscores the widespread implications of the Lilly Ledbetter Fair Pay Act. As we advised in the June 2009 edition of Florida Employment Law (see “Better heed Ledbetter: Audit pay policies to ensure equal pay” on page 7), the best way to ensure compliance is to conduct a thorough review of your compensation and benefits programs to confirm that they do not discriminate in any way.

In reaching its conclusion, the Supreme Court noted that employers can defend against discrimination claims by showing that “[b]enefit differentials produced by a bona fide seniority-based pension plan are permitted unless they are ‘the result of an intention to discriminate.’”

‘Given the law at the time’ Although the employees asserted that the current use of the pre-PDA accrual rules, which clearly violated the PDA, demonstrated “an intention to discriminate” and perpetuated the effects of the pre-PDA actions, the Supreme Court held that AT&T’s plan nevertheless was bona fide and had no discriminatory terms, because the pre-PDA accrual rules were not discriminatory as a matter of law under Gilbert before the PDA was enacted. The court said that, “given the law at the time, … the calculations of credited service that determine pensions are the results of a permissibly different standard ... today.” The

court also noted that had AT&T not changed its service credit rules in 1979 to eliminate the differential treatment based on pregnancy, the result would have been different because such conduct could be regarded as an intention to perpetuate what was currently unlawful.

Hulteen & the Ledbetter Act The Hulteen case was the Supreme Court’s first opportunity to review the applicability of the recently enacted Lilly Ledbetter Fair Pay Act of 2009. The Ledbetter Act allows a discrimination claim to proceed as being timely when an employee is paid a wage or benefit and can show that, at some time during the worker’s employment, the employer engaged in a discriminatory act or decision that affected pay or benefits, even if the alleged unlawful act or decision was made earlier than the 180-day filing limitation period in which the pay or benefit was received. (There is a 300day limitation in states like Florida that have state anti-discrimination agencies.) The employees in Hulteen argued that the payment of the pension benefits under the AT&T retirement plan marked the moment at which they were affected by a discriminatory compensation decision. They asserted that the Ledbetter Act prohibited the “decision or practice” of applying the pregnancy leave differential from being used to their disadvantage. Significantly, the Supreme Court implied that this argument might have had merit if it were not for the facts that prior to 1979, AT&T’s failure to award the employees full-service credit for pregnancy leave was not unlawful discrimination as a matter of law and that upon the effective date of the PDA, AT&T changed is practice to comply with the PDA’s new requirements. www.theHRSpecialist.com


Nuts & Bolts

Lawsuits on the rise: Audit your policies to prevent litigation Conducting a do-it-yourself T employment audit

he economy is a shambles, and employers are doing everything they can to stay in business. That includes terminations, salary and wage cuts and temporary furloughs. Nearly every one of those moves carries litigation risk. With little to lose, more and more employees are willing to stake bias claims, hoping to score a big settlement. Their allies are attorneys who will look for any reason to sue. Need convincing? The dramatic increase in EEOC complaints rose 15.2% from 2007 to 2008, illustrating the risk employers take with every layoff decision.

What employers should do Have your company’s personnel policies and practices had a checkup lately? A comprehensive audit is one of the easiest ways to spot problems. A labor and employment audit covers all of an employer’s personnel policies and practices. Typically a labor lawyer conducts an on-site review of your personnel and payroll records, as well as your personnel policies. He or she usually interviews executives and managers concerning practices that appear to be out of compliance. The reviewer then issues a detailed, confidential report to management discussing the status of the company’s compliance. Where necessary, he or she recommends corrective action. The audit mirrors what an employer could expect if a government inspector walked through the door. But there’s a big difference: Results are reported only to management, which then can take corrective action before any government agency learns of the problems.

Wage-and-hour laws The Fair Labor Standards Act (FLSA) is a complex statute that contains many categories of exempt employees— some of whom are exempt from both the minimum wage and overtime provisions, and some of whom www.theHRSpecialist.com

are exempt only from overtime. It’s your responsibility to classify your workforce by determining who is exempt and who is nonexempt. Sounds simple, but if the Department of Labor finds out years later that you incorrectly classified your workers, you could owe thousands of dollars in back wages, damages and penalties. FLSA record-keeping is another potential problem. Employers must maintain pay records of all hours worked. Time clocks can simplify this task. When paper time sheets are used, detail is important. For example, be sure to use a form that clearly sets out the unpaid lunch breaks. Ensure that employees are completely released from their duties during their meal breaks to avoid later claims that they were required to work through lunch. That brief lunch period, 30 or 60 minutes, can add up to a lot of hours and money if the DOL determines that the time is compensable under the FLSA.

Occupational safety issues A review of workplace safety and health issues should include the “OSHA 200” or injury log book that many employers are required to maintain. If you are required to maintain the log, you must post a copy in the workplace each year throughout the month of February. You must keep information regarding hazardous chemicals in the workplace—on Material Safety Data Sheets —on the premises. You must also have appropriate safety measures in place, such as first aid kits, to protect workers. A good audit will review your past OSHA experience and methods of abating hazards that are discovered.

Discrimination and leave issues Employers with 15 or more employees are subject to many federal employment discrimination laws. Employers with 50 or more employees must

If you don’t want to hire a lawyer to audit your employment policies, do it yourself. Here are some topics to review to ensure you’re in compliance: ✓ Employee classifications ✓ Job descriptions ✓ Interview policies ✓ Immigration paperwork ✓ Performance reviews ✓ Promotion policies ✓ Bias and harassment policies ✓ Pay periods ✓ Meal and break periods ✓ Disciplinary rules ✓ Benefits, COBRA policies ✓ E-mail, Internet policy ✓ Safety, record-keeping rules ✓ Termination, resignation policy ✓ Dress code ✓ Personal use of company property ✓ Employee privacy

comply with the FMLA. Then there are protections for military personnel and their families. An audit will include reviewing your personnel policies, forms and legally required posters, and evaluating personnel practices to determine whether there are any compliance issues. This is important, since many of the rules have changed in recent years. Many employee handbooks have not kept pace. It’s impossible to eliminate the risk of a government agency or private litigant finding some violation of a federal or state law, but an investment of time to audit your policies and practices can pay big dividends. Coming next month:

FMLA—Calling doctors Coming in September: Mandated benefits July 2009 • Florida Employment Law

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The Mailbag

by Ralph A. Peterson and John F. Windham, Esqs., Beggs & Lane RLLP, Pensacola

When can a Florida state agency terminate an employee for ‘disloyalty’? Our state agency’s board is considering terminating a legal secretary who seems to have been a supporter of one of our attorneys who was discharged for both performance problems and being disloyal to our board. The secretary is a close friend of the discharged attorney, may have been dating him and sat next to him at the hearing on his dismissal. We understand that, under the patronage dismissal doctrine, we can terminate employees who supported the political opponent of our agency’s elective head. Can the board likewise discharge the legal secretary for her seeming disloyalty? The patronage dismissal doctrine can provide immunity from claims of violations of First Amendment speech and association claims. It normally applies when a newly elected or appointed public officer fires existing employees on the basis of their political beliefs or loyalties. A nonpolicymaking, nonconfidential government employee who otherwise satisfactorily performs her duties, however, cannot be discharged or threatened with discharge solely because of her political beliefs. The circumstances you describe raise concerns about the secretary’s personal rather than political loyalties. The patronage dismissal doctrine is not extended by the courts to matters of personal loyalty, such as that of the legal secretary’s otherwise constitutionally protected association with the former agency attorney.

Q

A

Can we get this suit dismissed? A former employee sued us and then filed for bankruptcy One of our former employees filed a discrimination lawsuit against the company. She subsequently filed for bankruptcy, but failed to include the pending lawsuit as an asset in the bankruptcy estate. She eventually obtained a bankruptcy discharge. Will the company now be able to have her discrimination lawsuit dismissed? Most likely, no. Both federal and Florida courts have consistently held that, once a bankruptcy petition has been filed, a discrimination claim routinely becomes an asset of the bankruptcy estate. In turn, the bankruptcy trustee becomes the real party in interest in the discrimination lawsuit. The fact that the discrimination claim might have inadvertently been left out of the bankruptcy proceeding before the discharge (e.g., because of a mistake by the employee, causing the trustee to be unaware of it) will

Q A

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Florida Employment Law • July 2009

not generally preclude it from the bankruptcy estate. Thus the trustee will be allowed to reopen the estate to prosecute the monetary claims, settle them for the benefit of the creditors or determine the discrimination was not of sufficient economic value and abandon it as an asset. Under these circumstances, courts have not been inclined to involuntarily dismiss pending discrimination claims that are assets of a bankruptcy estate, even if a bankruptcy discharge is initially obtained before the lawsuit is included as an asset.

OK to fire a bankrupt financial manager? We fear his ineptitude will chase customers One of our financial managers has filed for bankruptcy, and our directors now want to terminate him because they doubt his financial judgment. They’re also worried that customers will react negatively to the news that one of our finance people is going bankrupt. Can we lawfully discharge him? Under the U.S. Bankruptcy Code (11 U.S.C. § 525(b)), such a termination is illegal only if the bankruptcy filing is the sole reason for discharge. If there were evidence that the employee has engaged in misconduct or has performed his work poorly, a discharge based at least in part on those grounds would not be unlawful. In the situation you have described, dismissing this employee would likely result in a claim that you violated the Bankruptcy Code, because an employer cannot discharge an employee simply because the employee has filed for bankruptcy. It makes no difference that the employer has a reasonable fear that directors, fellow employees or customers may react negatively to news of his filing. There must some other reason to justify the firing.

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Ralph A. Peterson is a Florida Bar-certified labor and employment lawyer and a senior partner in the law firm of Beggs & Lane RLLP in its Pensacola office. In addition to representing management in a variety of local, state and nationwide employment matters, he is an arbitrator and speaks regularly before HR and employer groups. You can contact him at (850) 432-2451 or rap@beggslane.com. John F. Windham is a partner with Beggs & Lane who specializes in workers’ compensation matters. Florida Employment Law does not attempt to offer solutions to individual problems, but rather to provide information about current developments in Florida employment law. Questions about individual problems should be addressed to the employment lawyer of your choice. The Florida Bar designates qualified attorneys as board certified in labor and employment law. www.theHRSpecialist.com


HR Specialist: Florida Employment Law