Page 1

Iowa ®

What’s Inside

Part of your Iowa Employment Law Service

Greg Naylor, Editor

Vol. 17, No. 6 October 2010

Whitfield & Eddy, P.L.C.

Workplace Trends

Survey says worker morale and productivity top employer concerns ............... 2

FMLA Leave

Supervisor’s off-the-cuff response indicated approval of leave request ..................... 4

Agency Action

EEOC report says women and minorities saw small rise in federal jobs ............................. 6


Financial reform law has hidden diversity requirements for contractors . ...................... 7

Training Calendar

A rundown of upcoming HR-related seminars and conferences of note ............... 8

On Discrimination The American workforce is becoming more diverse, with people from all walks of life. It’s important to know the discrimination laws that protect your workers. At, you can find the following tools to ensure your policies are on the right path: • HR Sample Policy  Harassment and/or Discrimination, www. policies/204.html • HR Sample Policy  Respectful Workplace, policies/220.html © M. Lee Smith Publishers LLC

Hostile work environment

sh, t7, iacra, hwe, pp, empinv, empmis, supiss, evid

‘Mutual teasing’ is not illegal sexual harassment . . . Eighth Circuit denies employee’s claim based on sporadic incidents of horseplay . . . Title VII of the Civil Rights Act of 1964 and the Iowa Civil Rights Act prohibit sexual harassment. However, many of the courts addressing such claims don’t find sufficient evidence of severe or pervasive harassment. The following opinion from the Eighth U.S. Circuit Court of Appeals (which covers Iowa) discusses several important legal issues, including the distinction between illegal harassment and merely rude or unpleasant conduct.

Horseplay leads to harassment charge Lucy Cross worked at Prairie Meadows as a valet from August 2005 until September 2007. She and other valets at the casino, including Semsudin (Sam) Rizvic, reported to traffic supervisor Tony Fucaloro and the traffic manager, Bill Riddle. Prairie Meadows had a zerot­ olerance sexual harassment policy. It identified several avenues employees could take to get help if they experienced harassing or violent behavior. The policy required any member of management who received a complaint of sexual harassment to immediately forward the complaint to HR. An employee who was unhappy with the proposed resolution of the complaint could take her concerns to upper-level

management and even to the company CEO. Cross read the policy. She testified that she was aware of the various avenues for reporting harassment. About a year after she started working at Prairie Meadows, Cross began to experience a problem with Rizvic. According to her, he tended to pester her. He grabbed her ponytail, brushed the back of his hand across her chest in a purported attempt to wipe something off her shirt, and told her he wanted to be more than just friends with her. He became angry when she refused the overture, purportedly told another employee that she had oral sex with him, and then became angry with her after she confronted him about the lie. After she heard the rumor about oral sex, Cross reported the incident to Mike Russo, another traffic supervisor. Russo reported it to Riddle, who then forwarded Cross’ written complaint to HR. HR conducted an investigation and suspended Rizvic. He was ultimately terminated after it was determined that he violated the company’s workplace violence policy by threatening another employee for accusing him of starting the sex rumor. During the course of the investigation, HR learned that another employee didn’t believe that Rizvic actually made the comment about Cross. The same employee also stated that Cross regularly picked on Rizvic by tripping or slapping him.

Whitfield & Eddy, P.L.C., is a member of the Employers Counsel Network

Iowa Employment Law Letter

WORKPLACE Trends Morale named biggest workforce challenge. A survey of HR managers shows morale and employee productivity are top concerns for the rest of this year. Thirty-one percent of the HR managers surveyed by ComPsych Corporation, a provider of employee assistance programs, named maintaining employee productivity and morale as their top concerns. Twenty-six percent said dealing with health care costs and new legislation, 16 percent said finding qualified candidates, 14 percent said handling organizational change, and 13 percent said retaining top performers. Moonlighting rate drops. The multiple jobholding rate — the proportion of total employment made up of workers who held more than one job — was 5.2 percent in 2009, according to figures from the U.S. Department of Labor. That’s below the levels recorded during the mid-1990s. Among most of the major demographic groups, “moonlighting” has become less common in recent years compared with the mid- to late 1990s. The multiple jobholding rate reached its most recent peak (6.2%) between 1995 and 1996. The rate began to recede and declined to 5.2 percent by 2002. Since the start of the most recent recession in December 2007, the multiple jobholding rate has hovered around five percent. Among the major racial ethnic groups in 2009, the multiple jobholding rate for whites was 5.4 percent, while the rates for blacks and Hispanics were 4.8 percent and 3.3 percent, respectively. The rate for Asians was 3.2 percent. Survey finds millions of older workers in physically demanding jobs. A study from the Center for Economic and Policy Research shows that 37 percent of male workers age 58 and older have physically demanding jobs. The center conducted the study to assess the impact of raising the retirement age. The report also said that among those age 58 and older, difficult jobs were held by 62.4 percent of Latino workers, 53.2 percent of black workers, 50.5 percent of Asian/Pacific American workers, and 42.6 percent of white workers. Older workers with less than a high-school diploma had the highest share of workers (77.2%) in difficult jobs. Preliminary figures show drop in fatal occupational injuries. A preliminary total of 4,340 fatal work injuries was recorded in the United States in 2009, down from a final count of 5,214 fatal work injuries in 2008. The 2009 total represents the smallest annual preliminary total since the Census of Fatal Occupational Injuries was first conducted in 1992. Based on this preliminary count, the rate of fatal work injuries for U.S. workers in 2009 was 3.3 per 100,000 full-time equivalent workers, down from a final rate of 3.7 in 2008. D


Cross eventually left Prairie Meadows in mid-­September 2007. She then filed a lawsuit alleging she had been sexually harassed during her employment. Prairie Meadows asked the court to dismiss the case. The district court ruled that the alleged harassment Cross reported was insufficiently severe or pervasive to establish a hostile work environment. Further, the court found she couldn’t show that her employer knew or should have known about several other previously unreported incidents of harassment. Cross appealed to the Eighth Circuit for review.

Allegations don’t meet ‘demanding’ sexual harassment standard On appeal, the Eighth Circuit first looked at whether Cross had provided sufficient evidence from which a reasonable jury could conclude that she was subjected to a hostile work environment based on sexual harassment. The court noted, “Title VII does not prohibit all verbal or physical harassment and it is not a general civility code for the American workplace.” According to the court, an employee must meet a “demanding” standard to prove sexual harassment. In fact, the court noted that any actionable conduct must be “extreme.” In reviewing the evidence offered by Cross, the court found that she essentially pointed to four discrete incidents that took place over two years. Even assuming the truth of her allegations about the hair pulling and touching, the angry response to her rejection of a relationship, and the sex rumor, the court noted, “Taken together, these four incidents over [her] two-year period of employment are insufficient to establish a work environment that was so permeated with discriminatory conduct that it altered a term, condition, or privilege of her employment.” Further, the court noted that its conclusion was supported by Cross’ statement in the record that she was able to perform her job well and her duties weren’t impeded by the alleged harassing conduct. Cross next argued that Prairie Meadows failed to follow its own harassment policy, pointing out that Fucaloro didn’t report some of the alleged incidents of harassment to HR. After the ponytail pulling, he brought all the valets together and admonished them to avoid horseplay, but he didn’t report the incident to HR. After Rizvic supposedly touched Cross’ chest, Fucaloro met with him but apparently accepted his explanation that he was only trying to brush something off her shirt. Again, Fucaloro didn’t report the incident to HR. Finally, after Cross complained that Rizvic angrily responded that he wanted to be more than friends when she rejected his overtures, Fucaloro purportedly said, “That’s just Sam” and again didn’t investigate or report the matter to HR. According to Cross, his failure to follow the company’s zerotolerance harassment policy by reporting every incident of alleged harassment supported her legal claim for relief. The court, however, looked at the issue from a different perspective. Initially, Cross failed to pursue multiple avenues available to her for reporting the incidents she felt violated the company’s policy. She knew about the policy and understood she October 2010

Iowa Employment Law Letter had several different options for reporting her concerns. In addition, Fucaloro did take action in response to her concerns, even if he didn’t report some of the horseplay to HR. According to the Eighth Circuit: The obligations of an employer under Title VII are not defined by the strictures of its own policy on harassment. Although an employer’s failure to adhere to its internal policies may be relevant in some cases, it does not follow that violation of an internal reporting procedure automatically establishes a failure to take appropriate remedial action under federal law. Largely because the court found that Rizvic’s conduct wasn’t severe and pervasive, it wasn’t troubled by the fact that Fucaloro took steps to address the conduct but didn’t report it directly to HR. According to the court, “Although Fucaloro would have been well advised to take these incidents more seriously, that evidence is not sufficient to establish a Title VII violation.”

Unreported incidents also fail to raise harassment issues Cross also alleged that there were numerous incidents of harassment involving her coworkers, Fucaloro, and Riddle that supported her claim of sexual harassment. She asserted that her supervisors made sexual jokes, called her profane names, referred to women as “worthless,” and engaged in other conduct that was harassing and created a hostile and offensive work environment. However, in reviewing whether her claims could raise a genuine issue of fact for a jury, the Eighth Circuit noted that she didn’t identify those allegations until she left Prairie Meadows. Consequently, she failed to show that her employer knew or should have known about the incidents while she was employed.

Cross didn’t tell Fucaloro or Riddle that their behavior was objectionable. She didn’t complain to Prairie Meadows about the alleged harassment, despite her knowledge of the company’s policy. According to the court, “An employer is not liable for harassment by supervisory personnel if [it] can prove it exercised reasonable care to prevent and promptly correct the harassment and the employee unreasonably failed to take advantage of corrective opportunities.” Cross argued that the conduct she complained of was obvious to everyone. However, the evidence reflected conflicting reports from other valets about whether there was any obvious harassment. In fact, several of the valets claimed that Cross herself participated in some of the offensive conduct. As a result, the appellate court affirmed the district court’s dismissal of her sexual harassment claims. Cross v. Prairie Meadows Racetrack & Casino, Inc., 2010 U.S. App. LEXIS 16696 (8th Cir., 2010).

Employment tip Three points jump to the forefront in light of the Eighth Circuit’s review of Cross’ appeal. Each of them can be helpful to employers targeted by a sexual harassment claim. (1) Severe and pervasive is a “demanding” standard. This decision emphasizes again that proof of a hostile work environment on the basis of sexual harassment is, in fact, a demanding standard. Both federal and state law require that alleged harassing conduct be extreme in nature. Rude and unpleasant behavior doesn’t create a legal claim. The law doesn’t prohibit all verbal or physical harassment. Only conduct that is severe or pervasive and that unreasonably interferes with an employee’s job is actionable.

Don’t miss this important virtual conference

CONDUCTING EFFECTIVE WORKPLACE INVESTIGATIONS VIRTUAL SUMMIT December 15 Presented by attorneys Mark I. Schickman and Kara E. Shea


October 2010

When an employee comes to you with a complaint of discrimination, sexual harassment, retaliation, theft, inadequate security, or another serious issue, do you know what to do? If you don’t have an effective plan in place for investigating these complaints, you could be leaving your company open to litigation. In this all-new one-day conference, knowledgeable attorneys will provide step-bystep guidance on how to conduct legally compliant workplace investigations that will uncover the facts behind employee complaints.

For more information or to register, visit or call toll-free (800) 274-6774. Please mention CONFERENCE CODE P373 when calling.


Iowa Employment Law Letter In this case, Cross reported four discrete incidents of harassment by Rizvic over a two-year period. But she also testified that his conduct didn’t really interfere with her job. Her efforts to point to other offensive comments by supervisors and coworkers didn’t establish extreme behavior that should have come to the attention of her employer. Iowa employers do not face liability for occasional rude or unprofessional conduct, or for any type of verbal or physical harassment, unless it’s also severe or pervasive. Still, while the legal standard is a difficult one to meet, you should remain vigilant about eliminating any harassment in the workplace. Harassment interferes with employees’ productivity and job satisfaction, and it’s a drain on your efforts to grow your business.

he decided to handle on his own was actually deemed severe or pervasive harassment. In that case, the company’s failure to follow its own policies might well have served as additional evidence to push the claims toward a jury trial. Sexual harassment is hard to prove. However, it remains one of the most dangerous legal claims confronted by employers in the workplace. Take it seriously. Find out more about effective responses to sexual harassment complaints in HR Quick List, 3rd Edition. This handbook guides you to a fast, confident, legally compliant decision whenever you tackle any of 61 common HR dilemmas. For more information, call customer service at (800) 274-6774 or visit ✤

(2) Mutual horseplay is not illegal harassment. The evidence in this case tended to show that Cross may have engaged in conduct that could be considered horseplay, including both verbal and physical misconduct. In fact, the court ruled that she participated in some incidents that could be considered policy violations. Her involvement tended to indicate that the workplace conduct of which she complained may not have been unwelcome, which is a requirement for an employee seeking to establish a sexual harassment claim.

employee rights

An employer victory? Perhaps. Nonetheless, you should constantly monitor your workplace to ensure that employees don’t engage in unprofessional horseplay, regardless of whether it appears to be mutual. Horseplay and acting out interfere with your business mission and can lead to expensive legal claims such as sexual harassment. Monitor your work environment, and enforce a zero-tolerance rule on horseplay.

Under the Family and Medical Leave Act (FMLA), an employee is required to give her employer adequate notice of the need for FMLA leave before the company’s duty to provide the leave kicks in. Further, if an employee requests leave, the employer is obligated to make a clear decision on her eligibility, including informing her of her FMLA status. Read on to learn how the Eighth Circuit dealt with those two issues in a recent case.

(3) Failure to follow company policy does not prove harassment. Finally, Cross asserted that Prairie Meadows’ failure to follow its own strict sexual harassment policy helped prove her Title VII harassment claim. The casino had a stringent policy requiring that any alleged harassment be immediately reported to HR. Fucaloro didn’t report each incident Cross complained of; he took matters into his own hands and investigated. Nonetheless, the court found that Prairie Meadows’ failure to follow its own reporting process didn’t prove the sexual harassment claim.

Employee requests leave to ‘take care of things’

You should be heartened by the Eighth Circuit’s position that a mere failure to follow company policies isn’t automatic evidence of harassment. Still, it’s best not to put in writing what you can’t put into practice. You never want to take a bullet because your supervisors haven’t followed the terms of your internal policies. Remember, if it’s worth writing down, it’s worth enforcing. In this case, we ended up with a “no harm, no foul” situation. Fucaloro took action to address the incidents even if he didn’t report Cross’ concerns to HR. Still, Prairie Meadows might not have fared as well if the conduct 4

fmla, eer, term, doc, stress, medin, en, comm

Reasonable reliance on FMLA promise leads to jury verdict for employee . . . Eighth Circuit affirms claim hinging on employer’s statements . . .

Susan Murphy worked for FedEx National LTL, Inc. On September 7, 2006, her husband died unexpectedly. The same day, she called her supervisor, Jeff Karnes, to notify him of her husband’s death and say that she was taking three days of bereavement leave to attend to his funeral. On September 11, she again spoke with Karnes, who asked how much more time she needed before returning to work. She said she needed 30 days to “take care of things.” Karnes apparently responded by saying, “Okay, cool, not a problem, I’ll let HR know.” At the time, Karnes didn’t indicate that Murphy needed approval from HR to take the leave. She didn’t seek any additional approval, nor did she seek ­medical certification. She later testified that she would have sought medical certification if she didn’t think that Karnes had already approved her leave request. Although she had been having a lot of emotional issues following her husband’s death, she didn’t tell her supervisor about her troubles. October 2010

Iowa Employment Law Letter On September 12, Karnes contacted an HR representative to inform her that Murphy had requested 30 days of leave “to put her affairs in order.” HR denied the request. On September 15, Karnes called Murphy to inform her that FedEx had decided to terminate her employment. Murphy then sued her former employer, claiming she was fired for being absent after she was told she could take FMLA leave. Murphy claimed that FedEx interfered with her rights under the FMLA by denying her leave and then terminating her employment. The district court submitted the case to a jury, which returned a verdict in favor of Murphy and found FedEx liable for interfering with her FMLA rights. Murphy prevailed on the theory that the company represented to her that it had granted her leave request, inducing reasonable reliance on its promise, but then terminated her a few days later. FedEx disagreed with the verdict and appealed to the Eighth Circuit, claiming the jury was improperly instructed on the law and Murphy didn’t prove her case.

Estoppel theory questioned on appeal One of the first issues raised by FedEx on appeal was whether Murphy could prove an FMLA violation by claiming estoppel — that is, that the company should be stopped or prevented from denying that she was entitled to leave. According to Murphy, Karnes told her it was “cool” that she take leave and indicated that he would simply inform HR that the leave had been granted. Because she relied on that representation, she asserted that FedEx should be estopped from denying that her leave had been granted. In reviewing her claim, the Eighth Circuit stated that it would recognize the estoppel theory and its applicability to an FMLA claim. According to the court, “An employer [that] makes an affirmative representation that an employee reasonably and detrimentally believed was a grant of FMLA leave can be estopped from later arguing that the employee was not in fact entitled to that leave because she did not suffer a serious health condition.” Still, the court noted that it was important to make a distinction between an affirmative representation (such as Karnes’ alleged response to Murphy’s request for leave) and mere inaction by the employer. The court stated that when an employer takes no action to certify an employee’s FMLA request, its inaction cannot be used to support an estoppel claim. Estoppel requires an

October 2010

affirmative act on the part of the employer that leads the employee to reasonably rely on the representation. The second issue critical to the court’s decision was whether Murphy provided adequate notice of her need for FMLA leave. According to the court, the estoppel theory cannot succeed unless the employee first triggers FMLA protection by providing her employer with notice that she may need leave. While Murphy argued that she had given adequate notice to Karnes, the appeals court found that the jury wasn’t properly instructed about her obligation to provide clear notice of her need for FMLA leave. She wasn’t required to use the acronym “FMLA.” However, she was obligated to provide sufficient information from which her employer could understand that her own serious health condition or the serious health condition of a qualifying relative triggered the need for leave. If an employee has provided adequate notice, the employer has the option of requesting medical certification from a health care provider to verify the need for leave. An employer that doesn’t request certification doesn’t waive its right to challenge the existence of an FMLA-qualifying condition, however. FedEx had the right to seek medical certification if it had questions about whether Murphy actually needed the time off to cope with the emotional stress of losing her husband. The court ruled that a reasonable jury could find that Murphy had made an adequate request for leave. While she merely requested 30 days of leave to “take care of things,” her request was supported by additional circumstances, including the fact that: •

her husband had died unexpectedly a few days earlier;

she was noticeably distraught; and

she stated that she was unable to work the night shift because it reminded her too much of her husband.

According to the court, “A jury could consider the effect of Murphy’s mental state and FedEx’s awareness of that state and the impact [it] had on the objective sufficiency of [her] notice.” Since she had previously been granted FMLA leave to care for her husband, it would be reasonable for a fact-finder to interpret her request as one for additional FMLA leave when she needed more time off. At the same time, the Eighth Circuit found that the lower court needed to provide clearer instructions to the jury on the issue, so it sent the case back to the


Iowa Employment Law Letter

AGENCY ACTION Small changes noted in federal workforce. The Equal Employment Opportunity Commission (EEOC) has released its “Annual Report on the Federal Work Force for Fiscal Year (FY) 2009.” The report assesses the state of equal employment opportunity throughout the federal workforce, including trends in the composition of the workforce and data concerning employment discrimination complaints. Over the last 10 years, the EEOC has found that the participation rates of women, Hispanics or Latinos, and Asians have increased slightly. The number of women in the federal workforce rose from 42.3 percent to 44.06 percent, Hispanics/Latinos went from 6.81 percent to 7.9 percent, and Asian Americans went from 5.22 percent to 5.84 percent. In FY 2009, for the first time since FY 1995, the percentage of people with targeted disabilities in federal jobs held steady, halting a 13-year decline. The report also notes that in FY 2009, federal employees and applicants filed 16,947 complaints alleging unlawful employment discrimination. Final rule on cranes and derricks published. The Occupational Safety and Health Administration has issued a new rule addressing the use of cranes and derricks in construction. Approximately 267,000 construction, crane rental, and crane certification establishments employing about 4.8 million workers are affected by the rule, which was published in July. The rule is designed to prevent the leading causes of fatalities, including electrocution, crushed-by/struck-by hazards during assembly/disassembly, collapse, and overturn. It also sets requirements for ground conditions and crane operator assessment. Further, it addresses tower crane hazards and the use of synthetic slings for assembly/disassembly work and clarifies the scope of the regulation by providing both a functional description and a list of examples for the equipment covered. The previous rule, which dated back to 1971, was based on 40-yearold standards.

district court for another trial. Murphy v. FedEx Nat’l LTL, Inc., 2010 U.S. App. LEXIS 17834 (8th Cir., 2010).

Employment tip This case raises a couple of important points that you should be aware of when you evaluate possible FMLA leave requests. (1) Take time to clarify the leave request. The law makes it clear that an employee need not request family or medical leave or even use the acronym “FMLA.” Still, the employee must provide sufficient information from which the employer can decipher her need for leave because of an FMLA-qualifying serious health condition. Because most employees don’t specifically request FMLA leave by name, you may have to ask a few additional questions to determine if a serious health condition is the reason behind the requested leave. Supervisors and HR representatives need to be tuned in to the FMLA’s legal requirements. The law permits you to make some additional inquiry into the need for leave, provided you aren’t soliciting unnecessary medical information or taking discriminatory action based on an actual or perceived disability. (2) Estoppel issues are not unusual FMLA issues. While the estoppel theory may seem unusual in this case, the situation is not that uncommon when employers are dealing with FMLA leave requests. All too frequently, supervisors and managers provide an “OK, it’s cool” type of response to an employee’s leave request without first taking the time to verify (a) whether the leave should be classified as FMLA and (b) whether an employee is even eligible for FMLA leave. After the request is granted, they may discover that the employee is ineligible, perhaps because she hasn’t worked for the company long enough or because she has already used her FMLA allotment for the year. A subsequent denial of leave can lead to an FMLA claim. Instruct your supervisors to request information about an employee’s need for leave and communicate with HR before making any statements regarding the employee’s eligibility. Educate your supervisors that an off-the-cuff response can lead to a lawsuit if FMLA leave is subsequently denied. It’s a matter of asking the right questions before eligibility is determined. ✤

DOL launches online H-2A job registry. The U.S. Department of Labor (DOL) in July launched an online registry allowing the public to retrieve information about temporary agricultural jobs that fall under the H-2A program. The tool was developed in compliance with regulations implemented by the department on March 15. The registry provides a searchable point of entry for the public to retrieve information about agricultural jobs filed under the H-2A program. It offers a range of customizable searches and gives users the ability to view, print, or download information about the jobs without the need to file a request under the Freedom of Information Act. The tool will display all active agricultural jobs until 50 percent of the period of employment has elapsed, and it will offer an archive of certified agricultural jobs for up to five years. D


October 2010

Iowa Employment Law Letter

government contractors October 2010 federal article. leg, gc, ds, drace, term

Financial reform’s hidden surprise: diversity requirements The Dodd-Frank Wall Street Reform and Consumer Protection Act (also known as “financial reform” or “the Wall Street bill”) made headlines when President Barack Obama signed it into law on July 21. However, many employers probably don’t realize the legislation contains diversity provisions that could affect them if they are contractors, subcontractors, or service providers for certain federal government agencies. More specifically, the diversity requirements found in the bill will affect financial industry organizations and those connected to them.

Office of Minority and Women Inclusion The federal financial regulatory agencies affected by the legislation will have to establish an Office of Minority and Women Inclusion. According to the legislation, each office is “responsible for all matters of the agency relating to diversity in management, employment, and business activities.” Each agency must establish an office no later than six months after the date of the bill’s enactment, and each agency administrator (head of the agency) will appoint an office director. • • • • • • • • •

The agencies subject to these requirements include: the departmental offices of the U.S. Department of the Treasury; the Federal Deposit Insurance Corporation; the Federal Housing Finance Agency; all of the Federal Reserve banks; the Board of Governors of the Federal Reserve System; the National Credit Union Administration; the Office of the Comptroller of the Currency; the Securities and Exchange Commission; and the Bureau of Consumer Financial Protection established by the legislation.

Office functions for:

Standards. Office directors must develop standards

(1) equal employment opportunity and the gender, racial, and ethnic diversity of the agency’s workforce and senior management; (2) the increased participation of businesses owned by minorities and women in the agency’s programs and contracts; and (3) evaluation of the diversity policies and practices of entities that are regulated by the agency. October 2010

Directors must also advise the agency administrator regarding the impact of the agency’s policies and regulations on businesses owned by minorities and women. Additionally, office directors must develop and implement standards and procedures to make sure the agency fairly includes and uses minorities, women, and businesses owned by minorities and women in all of its activities and business. That includes procurement, insurance, and all kinds of contracts. Contracts. The agency’s procedures for reviewing and evaluating contract proposals and for hiring service providers must include “a component that gives consideration to the diversity of the applicant.” Additionally, contractors doing business with the agencies must submit a written statement that they will make sure (to the maximum extent possible) that they (and their subcontractors, if applicable) fairly include women and minorities in their workforce. Termination. If a director determines that an agency contractor (or subcontractor) didn’t make “a good-faith effort” to include women and minorities in its workforce, the director will recommend contract termination to the agency administrator. After the administrator receives such a recommendation, she can: (1) terminate the contract; (2) refer the issue to the Office of Federal Contract Compliance Programs (OFCCP); or (3) take other appropriate action.

Affected employers Employers that deal with the above agencies may be affected by these new diversity requirements. According to the legislation, these requirements apply to the following service providers: • financial institutions; • investment banking firms; • mortgage banking firms; • asset management firms; • brokers; • dealers; • financial services entities; • underwriters; • accountants; • investment consultants; and • providers of legal services. Additionally, the term “contracts” includes “all contracts for all business and activities of an agency, at all levels, including contracts for the issuance or guarantee of any debt, equity, or security, the sale of assets, the management of the assets of the agency, the making of 7

Iowa employment law letter Training Calendar Call customer service at (800) 274-6774 or visit us at the websites listed below. FULL-DAY WEB SEMINARS 10-21 “Unionized Employers Virtual Summit: Negotiating CBAs and Mastering Other Labor Challenges,” presented by attorneys James F. Kilcur, Christoper J. Murphy, and Robert C. Nagle. 12-15 “Conducting Effective Workplace Investigations Virtual Summit,” presented by attorneys Mark I. Schickman and Kara E. Shea. Watch for details at www.HRhero. com. AUDIO SEMINARS — events/audio-conferences-webinars Also available on CD and audio stream after the broadcast. 10-5 “Independent Contractor or Employee? Avoid the Misclassification Crackdown,” presented by attorney Kara E. Shea. 10-7 “Conducting Firings and Managing Termination Pay: Legal Guidance for Employers,” presented by attorney Brian R. Garrison. 10-12 “High-Performance Performance Reviews: How to Take Employees to the Next Level,” presented by Jay Forte, Humanetrics.

equity investments by the agency, and the implementation by the agency of programs to address economic recovery.”

What you need to know If you’re a federal contractor, subcontractor, or serv­ice provider for one of the federal agencies listed above or you expect to become involved with one of those agencies, you may be facing more regulatory review of your organization’s employment practices. However, exactly what these regulations will entail isn’t clear yet since each agency’s office will develop its own standards. Even though the agencies haven’t yet developed the new standards, if you think you may be subject to this legislation, it’s a good idea to start planning ahead. More specifically, you should: •

Determine whether your current contracts, subcontracts, or service agreements would cause you to fall under the legislation.

Review your current diversity programs and practices.

Review the OFCCP’s standards and determine how your organization’s practices and programs compare (since many speculate the new standards will be similar to OFCCP standards).

Decide whether you think you will need to implement new diversity programs and practices to comply with the new standards. D

10-13 60-MINUTE SKILL BUILDER: “Help! They Made Me the HR Manager: How to Survive and Thrive on the Job,” presented by Teri Morning, MBA, MS, SPHR, Teri Morning Enterprises. 10-14 “Silent Raids and Other New ICE Tactics: Immigration Compliance Best Practices,” presented by attorney Christopher L. Thomas. 10-18 “Monitoring Employee E-Mail, Texting, and Facebook: What’s Off Limits?” presented by attorney Margaret (Molly) DiBianca. 10-19 “Doing Business in China: What HR Needs to Know,” presented by attorney Robert L. Brown. D Iowa EMPLOYMENT LAW LETTER (ISSN 1075-962X) is published monthly for $447 per year by M. Lee Smith Publishers LLC, 5201 Virginia Way, P.O. Box 5094, Brentwood, TN 37024-5094. Copyright 2010 M. Lee Smith Publishers LLC. Photocopying or reproducing in any form in whole or in part is a violation of federal copyright law and is strictly prohibited without the publisher's consent.

Editorial inquiries should be sent directly to Greg Naylor at Whitfield & Eddy, P.L.C., 3737 Woodland Avenue, Suite 400, West Des Moines, IA 50266, (515) 558-0111, fax (515) 222-0318, or e-mail at Iowa EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual legal problems nor does it provide legal advice. The newsletter provides general information on current developments on Iowa employment

issues. Questions about individual legal problems should be addressed to the attorney of your choice. For questions concerning your subscription,, or Corporate MultiUser Accounts, contact your customer service rep­r e­s en­ tative at (800) 274-6774 or ®


Training Calendar Discrimination Contractors Greg Naylor, Editor Whitfield & Eddy, P.L.C., is a member of the Employers Counsel Network...