Page 1

Indiana ®

www.HRhero.com

What’s Inside

Part of your Indiana Employment Law Service

John T. Neighbours, Editor

Vol. 20, No. 10 October 2010

Baker & Daniels

Workplace Trends

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

Retaliation

Seventh Circuit reverses jury’s $1 million award for retaliation ......................... 3

IN News in Brief

Layoffs from auto supplier are set for November and December ............................... 3

Question Corner

How much do you know about FMLA qualifying exigency leave? . .................... 4

Legislation

New law encourages employees to report fraud — but at what cost? ................... 6

On HRhero.com 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 www.HRhero.com, you can find the following tools to ensure your policies are on the right path: • HR Sample Policy  Harassment and/or Discrimination, www. HRhero.com/lc/ policies/204.html • HR Sample Policy  Respectful Workplace, www.HRhero.com/lc/ policies/220.html © M. Lee Smith Publishers LLC

reporting requirements err, regs, cr, facta, eer, en

New FTC regulations apply to certain employers by Tareen Zafrullah The Fair and Accurate Credit Transactions Act of 2003 (FACTA) amended the Fair Credit Reporting Act (FCRA). FACTA required the Federal Trade Commission (FTC) and certain federal agencies to issue regulations addressing the accuracy and integrity of the consumer information that “furnishers” provide to consumer reporting agencies and the circumstances under which a furnisher must investigate disputes over the accuracy of information upon direct request from a consumer. Depending on the circumstances, an employer may be a “furnisher.” This article summarizes the new FTC regulations, which went into effect on July 1, 2010.

When do the regs apply to employers? A “furnisher” provides information about consumers to one or more consumer reporting agencies for inclusion in a consumer report. An entity isn’t a furnisher when it provides information to a consumer reporting agency solely to obtain a consumer report. However, if an employer provides consumer information to a consumer reporting agency because, for example, it uses the consumer reporting agency to administer its unemployment compensation claims, it’s a furnisher. Because the regulations don’t apply only to employers and employees, this

article uses the terms “furnisher” and “consumer” instead of employer and employee.

What policies and procedures do the regs require? The regulations require furnishers to establish and implement reasonable written policies and procedures to ensure the accuracy and integrity of the consumer information they furnish to consumer reporting agencies. In developing policies and procedures, furnishers must consider the guidelines in Appendix A to the regulations. The policies and procedures must be appropriate to the nature, size, complexity, and scope of the furnisher’s activities. Furnishers must review their policies and procedures periodically and update them as necessary to ensure their continued effectiveness.

How must furnishers respond to direct disputes? Currently, consumers may submit to consumer reporting agencies disputes regarding the accuracy of information in consumer reports. Under the regulations, a consumer may also submit a dispute directly to the furnisher to challenge the report’s accuracy. The consumer must include in the dispute sufficient information to identify his

Baker & Daniels is a member of the Employers Counsel Network


Indiana 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

2

relationship with the furnisher, the specific information he is disputing, an explanation of the basis for the dispute, and all supporting documentation or other information reasonably required by the furnisher to substantiate the basis of the dispute. If a furnisher receives a direct dispute, it must conduct a reasonable investigation to determine the validity of the dispute, including a review of all relevant information the consumer submitted. The furnisher must complete the investigation and report the results to the consumer within 30 days of receiving the dispute. An additional 15 days is allowed if the consumer provides additional information relevant to the investigation during the 30-day period. If the furnisher determines that the information it reported to the consumer reporting agency was inaccurate, it must promptly notify each consumer reporting agency that received the information and provide any necessary corrections. The regulations do not require a furnisher to investigate all disputes that a consumer submits. For example, a furnisher isn’t required to investigate if any of the following situations apply: •

The consumer disputes his identifying information, such as name, date of birth, social security number, telephone number, or address.

The consumer disputes the identity of past or present employers.

The consumer doesn’t provide sufficient information to allow the furnisher to investigate.

The dispute is substantially the same as a dispute previously submitted by or on behalf of the consumer and for which the furnisher has already complied with the regulations.

Under those circumstances, the regulations consider the dispute frivolous or irrelevant, and the furnisher has five business days after reaching that determination to provide the consumer written notice. The notice must inform the consumer of the reason for the furnisher’s determination that the dispute is frivolous or irrelevant and identify any information required to investigate the disputed information.

Bottom line The first step is to determine whether you are a furnisher. If you aren’t, the regulations don’t apply to your company. If you are a furnisher, you must (1) establish and implement reasonable written policies and procedures to ensure the accuracy and integrity of the consumer information you furnish to consumer reporting agencies and (2) investigate and respond to direct disputes from consumers challenging the accuracy of the information you provided. In developing policies and procedures to ensure accuracy and integrity, you must follow the guidelines from Appendix A to the regulations. You can research credit reports or any other employment law topic in the subscribers’ area of www.HRhero.com, the website for Indiana Employment Law Letter. Access to this online library is included in your newsletter subscription at no additional charge. ✤ October 2010


Indiana Employment Law Letter

employer retaliation

retal, EL, drace, reld, cd, volres, protected activity, st, disc, pd

Avoiding retaliation claims: Case highlights proper planning and preventive measures by Amanda L. Asbury Retaliation claims are on the rise. As a recent decision from the Seventh U.S. Circuit Court of Appeals (Indiana’s federal appeals court) illustrates, even if an employee’s discrimination claims have no merit, he may find success with a related retaliation claim. However, proper planning and preventive measures can lessen the likelihood of retaliation claims.

Facts An employee sued his employer, alleging it retaliated against him because he filed a charge of race and religious discrimination with the Equal Employment Opportunity Commission (EEOC). The employee, a Caucasian Christian, had worked for the employer as a used-car sales manager. Following a change in leadership in April 2004, he began reporting directly to a Pakistani Muslim general manager. In less than one month, the general manager discharged the employee. Less than two months later, in June, the employer rehired the employee as a used-car sales manager at a different dealership and under different supervision. He worked without incident until February 2005. On February 10, the employee filed a charge of discrimination with the EEOC alleging that his termination

had been based on his race and religion. On February 28, his supervisor asked to speak with him. He met with the supervisor and several others and surreptitiously recorded their conversation. During the conversation, the supervisor asked in reference to his charge, “What the hell is your mentality? Did you have a brain fart or what?” The supervisor also stated, “If I wanted to work here on the floor, I wouldn’t file suit against [the general manager],” and “[Y]ou need to f___ing reverse the claim right away, and it needs to be done right away.” Despite those instructions, the employee didn’t withdraw his charge. The employee left his job and didn’t return. Following the meeting, the supervisor made multiple calls to the employee and sent several letters in which he made it clear that the employee was still employed and should return to work, which he didn’t. Instead, the employee filed a lawsuit alleging race discrimination and retaliation. Although the jury returned a verdict for the employer on the race discrimination claim, it awarded the employee $100,000 in compensatory damages and $1 million in punitive damages on his retaliation claim. The employer appealed, and the Seventh Circuit reversed.

Court’s decision The Seventh Circuit found that the employee’s retaliation claim failed because he couldn’t establish that he had suffered an adverse employment action. He hadn’t been terminated or constructively discharged, according to the court. The employer didn’t actually terminate him continued on pg. 5

Indiana NEWS IN BRIEF Auto supplier plans 202 layoffs. International Automotive Components Group, a supplier of automotive door trim, has notified the state that it will lay off 202 employees from its Greencastle plant in November and December, according to an Indianapolis Business Journal report. The layoffs are set for November 10 and December 13. A company spokesman said two contracts are ending, meaning there won’t be work for the laid-off employees. But another contract being negotiated could result in some employees being called back. After the layoffs, the company will have approximately 350 employees at the plant. Employer fined over hazardous dust. In September, the Occupational Safety and Health Administration (OSHA) cited U.S. Minerals LLC of Dyer for willfully exposing its workers to dangerously high levels of hazardous dust and not providing adequate breathing protection at its Baldwin facility. The company, which manufactures abrasive blasting and roofing materials October 2010

from slag produced at coal-fired power plants, has been issued 35 health and safety citations with proposed penalties of $466,400. OSHA issued 10 willful citations, 15 serious citations, six repeat citations, and four other-than-serious citations. State sees decrease in workplace fatalities. Indiana saw a decrease in fatal occupational injuries in 2009, according to preliminary figures from the U.S. Bureau of Labor Statistics. Preliminary figures show there were 123 fatal occupational injuries in 2009. Revised figures indicate there were 143 in 2008. According to the statistics, in 2009, there were 47 fatalities resulting from transportation incidents, 20 from assaults and violent acts, 25 from contact with objects and equipment, 20 from falls, nine from exposure to harmful substances or environments, none from fires and explosions, and two others. The figures also show a national decline in fatalities from 2008. Across the nation, preliminary figures indicate there were 4,340 workplace fatalities in 2009, down from 5,214 in 2008. ✤ 3


Indiana Employment Law Letter

Question Corner Military qualifying exigency leave: Test your knowledge by Susan W. Kline

Military qualifying exigency leave was added to the federal Family and Medical Leave Act (FMLA) as of January 2008. Now that it has been around for a while, are you up to speed on how it works? Test your knowledge below.

Q Which military family members can make an employee

eligible for qualifying exigency leave? A The military member must be the employee’s spouse, son or daughter, or parent. For qualifying exigency leave, “son or daughter” is defined as the employee’s biological, adopted, or foster child, stepchild, legal ward, or child of any age for whom the employee stood in loco parentis (in place of the parent). “Parent” means a biological, adoptive, step, or foster father or mother or any other individual who stood in loco parentis to the employee. Neither definition includes inlaws.

Q What sort of military service by the family member

might qualify an employee for leave? A The National Defense Authorization Act of 2010 expanded qualifying exigency leave to cover active duty in the regular armed forces by an eligible spouse, child, or parent of an employee. Before this legislation, qualifying exigency leave was available only if the employee’s relative was a member of the reserves or National Guard.

Q How much FMLA leave is available for qualifying

exigencies? A An employee may take up to 12 workweeks of FMLA leave for qualifying exigencies during the 12month period you establish for FMLA leave. Qualifying exigency leave may be taken on an intermittent or reduced-leave schedule if needed. If a covered military member’s active duty or call to active-duty status spans more than one FMLA leave year, an eligible employee would be allowed to take qualifying exigency leave in each FMLA leave year. Moreover, an eligible employee could take qualifying exigency leave in a subsequent FMLA leave year for a different covered military member. Finally, if the same covered military member returns from deployment and is subsequently redeployed, the eligible employee would again be entitled to qualifying exigency leave.

Q What types of activities qualify as exigencies? A The U.S. Department of Labor (DOL) has com-

piled a list of qualifying exigencies that includes: 4

• •

issues arising from a covered military member’s short-notice deployment (i.e., deployment with seven or fewer days of notice); military events and related activities such as official ceremonies, programs, or events sponsored by the military or family support or assistance programs, and informational briefings sponsored or promoted by the military, military service organ­ izations, or the American Red Cross; certain child-care and related activities arising from active duty or a call to active-duty status of a covered military member, such as arranging for alternative childcare, providing childcare on a nonroutine, urgent, immediate-need basis, enrolling or transferring a child in a new school or daycare facility, and attending certain meetings at school or a daycare facility if they are necessary because of circumstances arising from the active duty or a call to active-duty status of the covered military member; making or updating financial and legal arrangements to address a covered military member’s absence; attending counseling provided by someone other than a health care provider for oneself, the covered military member, or the child of the covered military member, the need for which arises from the active duty or a call to active-duty status of the covered military member; taking up to five days of leave to spend time with a covered military member who is on short-term temporary rest-and-recuperation leave during deployment; for a period of 90 days following the termination of the covered military member’s active duty status, attending to certain postdeployment activities, including arrival ceremonies, reintegration briefings and events, and other official ceremonies or programs sponsored by the military and addressing issues arising from the death of a covered military member; and any other event that the employee and employer agree is a qualifying exigency.

Q So can an employee take exigency leave to pick up a mil-

itary family member’s child from school or attend the child’s school event?

A The DOL says the answer is yes in certain lim-

ited circumstances. An eligible employee caring for October 2010


Indiana Employment Law Letter a covered military member’s child may use qualifying exigency leave to provide childcare on an urgent, immediate-need basis if the need to provide the care arises from the active duty or a call to active-duty status of the covered military member, but not on a routine, everyday basis. Accordingly, an employee could use qualifying exigency leave to provide childcare in an emergency situation such as a school closure due to inclement weather if the employee’s need to provide the care arises from the active-duty status of a covered military member. Qualifying exigency leave couldn’t be used on a routine basis to provide daily after-school childcare, although it could be used temporarily to help with making arrangements for such care.

Q What are the certification requirements for qualifying exigency leave?

A The first time that an employee requests qualifying exigency leave, you may require a copy of the covered military member’s active-duty orders or other documentation issued by the military that indicates the covered military member is on active duty or is being called to active-duty status in support of a contingency operation and the dates of the covered military member’s active-duty service.

take FMLA leave due to a qualifying exigency?

In addition, when an employee first requests exigency leave, you may require certification of the exigency that necessitates leave. That certification would consist of appropriate facts supporting the need for leave, including any available written documentation supporting the request, the date on which the qualifying exigency began or will begin and the end date, the frequency and duration of the expected absences if leave will be needed on an intermittent basis, and appropriate contact information if the exigency involves meeting with a third party. The DOL has developed an optional request form (WH-384) that meets qualifying exigency leave certification requirements. The form is available on the agency’s website at www.dol.gov/ whd/forms/WH-384.pdf

A An employee must provide notice of the need for

Q Can an employee take qualifying exigency leave when

Qualifying exigency leave may also be used to meet with school staff when necessary due to the active duty or a call to active-duty status of the covered military member. For example, qualifying exigency leave could be used to meet with a teacher to discuss behavioral problems related to the child’s parent being deployed. Qualifying exigency leave may not be used for attending routine school events such as birthday parties or plays.

Q What type of notice must employees provide in order to exigency leave as soon as practicable depending on the circumstances leading to the need for leave. For example, if an employee receives notice of a qualifying ceremony a week in advance of the event, she should be able to provide notice of the need for leave that same day or the next business day. When a need for leave is not foreseeable, the employee must follow the employer’s normal call-in procedures absent unusual circumstances. An employee doesn’t need to specifically assert rights under or even refer to the FMLA in providing notice of a need for leave. All the employee must provide is sufficient information to make you aware of the need for FMLA leave and its expected timing and duration.

a covered military family member returns from deployment and is no longer on active duty?

A Yes. An eligible employee is entitled to take qualifying exigency leave for qualifying postdeployment exigencies, including reintegration activities, for 90 days following the termination of the covered military member’s active-duty status. Susan practices labor and employment law with Baker & Daniels. She has given numerous presentations on FMLA issues as well as other employment law topics. You may contact her at (317) 237-1059 or susan.kline@bakerd.com. ✤

continued from pg. 3

Bottom line

because after his initial conversation with the supervisor, the employer continually encouraged him to return to work.

Although the employer ultimately prevailed on the employee’s retaliation claim, its time and resources may have been better spent in implementing preventive measures rather than paying for its defense. Nonetheless, the court’s decision illustrates several valuable lessons.

The employee also wasn’t constructively discharged because “no reasonable employee standing in [the employee]’s shoes would believe that had he not resigned, he would have been immediately fired.” As the court stated, “[The employee] quit after the axe had been put away.” In other words, the court refused to find that one threat, followed by multiple reassurances that the employee retained his job, constituted constructive discharge. Chapin v. Fort-Rohr Motors, Inc. October 2010

Be aware that your actions toward an employee who previously complained may be scrutinized by investigators, attorneys, juries, and judges, so you should be prepared to provide support for your employment decisions. To mitigate the potential for retaliation claims, consider the following: 5


Indiana 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. 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

6

✓ Include a no-retaliation policy in your employee handbook. ✓ Train managers on responding to complaints, and alert them

about actions that can constitute retaliation.

✓ Before taking any adverse action, have it reviewed by an

outside source (e.g., another member of HR, legal counsel, or an appropriate member of management).

Finally, remember that you are allowed to take any action that has a legitimate business purpose and lacks discriminatory or retaliatory intent. That’s true regardless of whether the employee has filed a complaint. However, whether an action was for a legitimate business reason may be subject to inquiry and debate. Therefore, to ensure that your decision addresses a business need and isn’t a pretext for retaliation or discrimination, carefully consider your options for disciplining or discharging an employee, especially if he has recently filed a complaint. ✤

legislation

wb, leg, retal, protected activity, fraud, sol, sox, subsidiaries, af, sen, employ

New worry for employers: whistle-blowing bounty hunters by Rozlyn Fulgoni-Britton If one of your employees thought she could earn over $100,000 for reporting a securities law violation, even if she wasn’t sure a securities law violation had been committed, do you think she would try to obtain a windfall? The recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act has many employers asking themselves that question. Not only does the Dodd-Frank Act provide bounties and protection for some whistleblowers in order to encourage employees to report on their employers, but it also strengthens existing whistleblower retaliation laws.

Congress gives employees substantial incentives to blow the whistle Just as it passed some whistleblower laws after Enron’s business practices received national attention, Congress has created new whistleblower incentives to entice employees to report potential securities law violations to the Securities and Exchange Commission (SEC) in an attempt to prevent another market crash like the one in 2008. In the Dodd-Frank Act, Congress has created a generous award system for whistleblowers. To qualify for the award, an individual must provide “original information” to the SEC, which is defined as information that is (1) derived from a whistleblower’s independent knowledge or analysis, (2) not known to the SEC from any other source, unless the individual is the original source of the information, and (3) not exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information. If the “original information” an individual provides to the SEC leads to a successful judicial or administrative action under the securities laws that results in monetary sanctions exceeding October 2010


Indiana Employment Law Letter $1 million, he is entitled to an award of between 10 percent and 30 percent of the monetary sanctions imposed — resulting in a minimum award of $100,000 to $300,000. While the potential bounty is available only to employees who provide information that results in a successful action by the SEC, many employees will not understand what conduct could result in a securities law violation. With such a substantial award seemingly within reach, employees may report any conduct they feel violates federal law or is otherwise fraudulent. Strikingly, the new law doesn’t even require employees to “reasonably believe” a securities law violation has occurred, which is a requirement in some whistleblower protection laws. While erroneous reports may not subject an employer to SEC sanctions, they could create increased scrutiny from the SEC and unwelcome attention from other federal agencies.

New whistleblower protection Congress must have recognized that once employees disclose information to the SEC, they may be subject to adverse action from their employers. In response, the Dodd-Frank Act explicitly prohibits retaliating against whistleblowers who provide information to the SEC as part of the bounty program or make disclosures protected under various laws within the agency’s jurisdiction. In contrast to whistleblower retaliation claims under the Sarbanes-Oxley Act (SOX), the Dodd-Frank Act allows individuals to file a complaint in federal court immediately without first exhausting any administrative remedies. The statutes of limitations are very generous: An employee has six years after the date on which the violation occurred or not more than three years after the date on which he should have known the material facts related to retaliation to file a claim. All claims must be filed within 10 years of the date on which the violation occurred, which gives employees seven years to learn about the facts surrounding retaliation. Potential relief for the retaliation provision is substantial. Relief could include (1) reinstatement with the same seniority status the employee would have had but for the retaliation, (2) two times the amount of back pay owed to the individual, with interest, and (3) compensation for litigation costs, expert witness fees, and reasonable attorneys’ fees. The possibility of recovering attorneys’ fees will have many plaintiffs’ attorneys exploring this new retaliation claim.

Proemployee amendments to Sarbanes-Oxley In addition to creating possible awards in excess of $100,000 and related protection for employees who attempt to cash in, the Dodd-Frank Act amends SOX’s whistleblower provisions. Since its passage in 2002, SOX October 2010

has prohibited retaliation against an employee of a publicly held company who provides information about or participates in an investigation into conduct the employee reasonably believes constitutes mail fraud, bank Employees may fraud, wire fraud, report any conduct securities and comthey feel violates modities fraud, any federal law or is rule or regulation of the SEC, or any fedotherwise fraudulent. eral law related to shareholder fraud when the information is provided to or the investigation is conducted by a federal agency, Congress, or a person with supervisory authority over the employee. During the past eight years, SOX’s antiretaliation provision hasn’t resulted in many employee-friendly decisions. Courts have narrowly construed SOX’s protections and created so-called “loopholes” in its coverage. Most significantly, the majority of courts have held that subsidiaries of publicly held companies do not fall under SOX if they are separate entities. The Dodd-Frank Act closes that loophole and attempts to make SOX’s antiretaliation provision stronger.

Announcing must-attend audio conferences for all employers, presented by the editors of Indiana Employment Law Letter:

October 7

Conducting Firings and Managing Termination Pay: Legal Guidance for Employers

Presenter: Baker & Daniels attorney Brian R. Garrison

November 18

Paperless HR Presenter: Baker & Daniels attorney Jeffrey S. Beck www.HRhero.com/events/ audio-conferences-webinars/

www.HRhero.com/events/ audio-conferenceswebinars/terminations

®

For more information, to register without risk, or to purchase the CD, visit the website listed above or call (800) 274-6774.

7


Indiana 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. http://store.hrhero.com/unionized 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 — http://store.hrhero.com/ events/audio-conferences-webinars Also available on CD and audio stream after the broadcast. 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. 10-21 “How to Conduct Internal Investigations Without Risking Serious Legal Trouble,” presented by attorney Francine Esposito. 10-26 “2011 Recruiting: Find the Best Talent Cost Effectively Using Facebook, Linkedin, Twitter, Skype, and More,” presented by Dan Ryan, Human Capital Group. 10-27 “Essential Function: Writing ADA-Compliant Job Descriptions,” presented by attorneys Audra K. Hamilton and Jonathan R. Mook. 10-28 “Control FMLA Abuse: Documentation Tactics to Deter Employees Who ‘Work the System,’” presented by attorneys James F. Kilcur and Christine Kenny. 11-1 “Union Avoidance Strategies,” presented by attorney Bonnie Glatzer. 11-3 “Doing Business in Canada,” presented by attorneys Brian Smeenk, Derek Knoechel, and Louise Béchamp. D Indiana EMPLOYMENT LAW LETTER (ISSN 1053-6191) 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.

The most significant amendment involves subsidiaries. The Dodd-Frank Act amends SOX to cover “any subsidiary or affiliate whose financial information is included in the consolidated financial statements of such [publicly traded] company.” Employers lose a popular defense with this amendment, and publicly held companies should increase compliance efforts at their subsidiaries in response to SOX’s expanded coverage. SOX’s statute of limitations also receives an employeefriendly expansion. Before passage of the Dodd-Frank Act, employees had only 90 days after the date of the violation to file a complaint alleging retaliation with the U.S. secretary of labor. That relatively short time frame barred many employees’ claims. Under the new amendments, employees now have up to 180 days to file their complaints. Significantly, the clock begins to run either 180 days from the date of the alleged violation or 180 days after the date on which the employee became aware of the alleged violation. The latter of these two triggering events could result in an employee filing a timely claim after substantially more than 180 days have passed if he can show he wasn’t aware of the alleged violation at the time it was committed. Lastly, the Dodd-Frank Act allows employees a trial by jury in SOX retaliation claims. If an individual files a retaliation complaint under SOX and the secretary of labor hasn’t issued a final decision within 180 days of the filing of the complaint, he may initiate a lawsuit in the appropriate U.S. district court. Some district courts have held that the right to a jury trial doesn’t exist for these claims, but because of the explicit amendment, employees with SOX claims are now entitled to a jury trial if they file an action in court after the secretary of labor’s inaction.

Bottom line Employees are already responding to the possibility of a six-figure windfall and are making reports to the SEC. Even if an employee’s complaint doesn’t result in an SEC action against his employer, it could have other unfortunate consequences. Additionally, such a report will likely result in an employee falling under whistleblower protection laws, which will force you to tread lightly when dealing with the employee to avoid a retaliation claim. Publicly held companies should increase compliance efforts and encourage employees to report internally rather than run to the SEC. Focusing on employee relations and fostering company loyalty could also help prevent your employees from joining the whistle-blowing bounty hunters lined up in front of the SEC. ✤

Editorial inquiries should be directed to John T. Neighbours at Baker & Daniels, 300 North Meridian St., Suite 2700, Indianapolis, IN 46204, (317) 237-0300. Indiana EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Indiana employment law. Questions about individual

problems should be addressed to the employment law attorney of your choice. For questions concerning your subscription, www.HRhero.com, or Corporate Multi-User Accounts, contact your customer service rep­ re­sentative at (800) 274-6774 or custserv@mleesmith.com. ®

INEMP-20-10  

IN News in Brief Discrimination article uses the terms “furnisher” and “consumer” instead of employer and employee. Retaliation Legislation...

Read more
Read more
Similar to
Popular now
Just for you