HR That Works Blog

“Stay current on your HR game. Just when you think you are winning the rat race, along comes faster rats.” —Alan Collins, Author, Unwritten HR Rules

This issue discusses:

• Editor’s Column: Four Big Questions
• What Employment Lawyers Are Learning
• New ADEA Regulations Focus on ‘Reasonable Factors Other Than Age’ Defense
• Who Owns Employees’ Social Media Accounts?
• HR: Getting Paid
• Temporary Workers, Temporary Risks
• Training Alone Doesn’t Meet FLSA ‘Learned Professional’ Exemption
• What’s the Verdict on Your Wellness Plan?

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Four Big Questions

During a recent webinar, I asked four polling questions. The responses reveal a lot about what’s going on at companies today.

1. Do you conduct traditional performance appraisals?
75% Yes / 25% No

Let me begin by saying I’m not a big fan of traditional performance appraisals. I believe that most companies continue to do them because they can’t think of an alternative. I have dug into performance management over the years and I agree with Dr. Deming, who stated that performance evaluations are more destructive to performance than beneficial. From a former trial lawyer’s perspective, they do little to protect a company when it comes to wrongful termination claims. Why don’t they work?

• Nobody likes to give them or likes to get them.
• All anybody really wants to know is if they’re getting a raise.
• If somebody gets a poor performance rating, it’s probably a management problem and not an employee problem.
• They’re too late — like telling a kid in December that they didn’t clean up their room in February.
• They’re never done honestly. Managers tend to slide to the comfortable middle or use evaluations as a tool of retribution and manipulation.
• Most importantly, they don’t improve performance. When I’ve surveyed employees and conducted focus groups, I’ve been told that what does improve performance is the dialogue entered into with the manager during the process. As I have preached, this dialogue should be an ongoing process and not a once a year event. Employees should know where they stand at all times.

What should you do instead? Start by making it a workshop for your entire company. What do the employees like about your current performance management process? What don’t they like? What would they like to see done instead? How can you present the performance management approach as something created through agreement?

Then make sure your process can answer the two most important questions of performance management:

• What are the most important things we do every day?(you’d be amazed at the variance in answers to that question)
• How do we know if we’re doing our jobs well without having to ask or without having to be told? (because we understand the benchmarks of quality so well)

Until you can ask these questions, circling 1 to 5 on some form is a waste of time.

I encourage all HR That Works members to watch the Performance Management Training Module video, as well as the ROWE (Results Only Work Environment) Webinar and others on performance management on the site. Please also look at the performance management personnel forms.

2. Is there anyone working at the company today who if they quit you would be relieved, as opposed to upset?
71% Yes / 29% No

This response doesn’t surprise me. I’ve asked this question in workshops hundreds of times. I always get a painful smile as an answer. So why are these people still at the company? Here are some possibilities:

• They’re related to ownership — the problem with nepotism.
• They’ve been there so long that ownership feels guilty about terminating them. The company is also afraid of age discrimination-type claims.
• Ownership or management might have formed a personal relationship with this person. Perhaps their families know each other. How can I fire Bob when we’ve been friends for 10 years?
• We’re afraid that the standard operating procedure will walk out the door with the employee. If we haven’t generated standard operating procedures and best practices then their intellectual capital leaves with this employee, even if they’re a poor one. This is one reason why it’s so important to build and document standard operating procedures as if you were trying to franchise your business.
• We fail to document their poor performance. This is one reason why lawyers tell employers to “document, document, document!” Make sure you train your management team on proper disciplinary and documentation procedures. To do this, see the Discipline and Termination Training Module on HR That Works.
• We don’t want be viewed as a bad person — nobody likes being a villain. We know that this person will be upset with us. We know they’re going to try to get other people upset with us. Heck, we might even be upset with ourselves, too.

Jack Welch famously cut out the bottom 10% of employees at GE every year while driving it to become the No. 1 company in its industry. He said it wasn’t being unkind to the 10%, but being kind to the other 90%. There’s wisdom in culling the herd, and any emotional baggage has to get out of the way if we want be a great company.

3. Do you have a written human resource plan for 2012?
64% No / 36% Yes

Chances are that your company has an overall business plan and, hopefully a sales and marketing plan as well. You might even have a plan for process improvement, etc. Why doesn’t the No. 1 line item at every company have a plan attached to it?

Understand this: If roughly two in three companies don’t plan HR practices then they’re putting themselves at a competitive disadvantage to the one in three who do! Who do you think will hire more effectively? Who do you think will have a higher employee retention rate? Who do you think will be the more productive workforce? Who do you think will conduct more training? Who do you think will get rid of dead weight more readily? Who will do a better job of limiting employment-related lawsuits?

So what’s stopping anybody? My answer: A misallocation of time and money. Having just completed the 2012 HR That Works survey, I can tell you that time is the overriding issue in this area. HR is an incredible opportunity that’s undervalued because we are stressed about our time. However, what we all know is that time and money aren’t true objections; they’re an allocation of resources. We tend to allocate our time and money where we get the highest return on investment. If you have any doubt about the return on investment of HR, then go through the HR That Works Cost Calculator.

4. Do you require employee suggestions?
67% No / 33% Yes

Imagine that. Two-thirds of companies not systemically tapping into the brilliance of their workforce! How many companies do you know with voluntary employee suggestion systems that work?

In my experience, none. Many years ago, Peter Drucker had lunch with a good friend of his, Martin Edelstein (the editor of Boardroom Classics). He asked Martin how his meetings were going. Martin answered, “Just like everybody’s meetings go.” Peter asked him if he requires his employees to provide suggestions at every meeting. His answer was, of course, “no.” Drucker suggested that he do so for his next meeting. That single suggestion changed the entire culture and business of Boardroom Classics to the point that they produced an excellent book and program called I-Power about it. We had them present a Webinar for us that is available to all HR That Works Members.

Dr. Deming taught that as a part of Total Quality Management, you need to have quality control circles that engage in what’s known as kaizen, or constant improvement. This suggestion revolutionized manufacturing worldwide. He also recommended that manufacturers build toward perfection, rather than toward a tolerance. This is one reason why Lexus brands itself as the “Relentless Pursuit of Perfection.”

Are you motivated to great HR practices? How long will it be until you start doing mandatory employee suggestions? Remember, none of us are as smart as all of us!

Conclusion
These four huge HR questions are related directly to the success of any business. They represent a competitive advantage and a provable ROI.

What Employment Lawyers Are Learning

Here’s a partial list of training topics available this year for California employment law attorneys. This list, which applies in every state, should give businesses fair warning about some types of litigation they might face:

• RIFS — How to Do It Right
• Insider Tips and Tactics — The Art of Taking a Killer Employment Deposition
• The NLRB: What Every Labor and Employment Lawyer Needs to Know
• Use of Liability Experts in Harassment Litigation
• Managing Leaves: A Practical Guide for Employers and Employees
• Wage & Hour Class Action Update
• Ground Zero: An Expert Approach to Interviewing Techniques
• Data Privacy: The New Frontier
• Tracking Them Down: Techniques for Finding Witnesses, Former Employees and Other Information
• Using Digital Evidence in Workplace Investigations
• The “New Hire” — Independent Contractor or Employee?
• ADR: Issues and Trends
• Litigating Harassment Cases: On the Job Harassment Because of Sex, Race or Other Protected Characteristics
• Wage & Hour Class Actions after AT&T Mobility v. Concepcion

Bear in mind that these are only a few potential sources of litigation.

New ADEA Regulations Focus on ‘Reasonable Factors Other Than Age’ Defense

In Smith v. City of Jackson, the U.S. Supreme Court found that the ADEA authorizes recovery in disparate-impact cases, but also decided that there’s no such liability when the impact is due to reasonable factors other than age. Thus, “reasonable factors other than age” can provide an important defense in an ADEA action. For several years, the EEOC has proposed rules and collected comments on regulations clarifying this defense. On March 31, 2012, the EEOC published its final Rule on the “reasonable factors other than age” defense.

The final Rule provides that a reasonable factor other than age is one that “is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.” Whether a non-age factor is the reason for differential treatment “depends on the basis of all the particular facts and circumstances surrounding each individual situation.” To prevail, the employer has the burden of persuasion and “must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known.”

Employers should note a non-exhaustive list of considerations set forth in the Rule itself that can be taken into consideration to determine if the employment decision was based on a reasonable factor other than age. These considerations include:

• The extent to which the factor is related to the employer’s stated business purpose.
• The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination.
• The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes.
• The extent to which the employer assessed the adverse impact of its employment practice on older workers.
• The degree of harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

The Rule clarifies, however, that the “reasonable factors” are not required elements, but rather, only “manifestly relevant to determining whether an employer demonstrates the RFOA defense.”

The final Rule takes effect on April 30, 2012.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Who Owns Employees’ Social Media Accounts?

There is a new type of lawsuit in town: Employers and employees are fighting over ownership of Twitter handles, LinkedIn connections, Facebook pages, and more. In one case, a company sued, claiming that an executive’s Twitter followers belonged to the business and had a value of $2.50 each (for a total of $340,000). Similar lawsuits focus on the ownership of Facebook and LinkedIn accounts. Whose property are the followers and connections that employees create in the course of their employment? To what extent can non-competition or non-solicitation agreements prevent these former employees from announcing their departures and then inviting their followers and connections to move to a new account?

Another sticky wicket for employers involves former employees who have received glowing recommendations from managers, vendors, and others, which they will use against their former employers in litigation or to compete against them.

To minimize your exposure, I would recommend adding this language to your social media policy (we have added this language to the Sample Social Media Policy on HR That Works):

“Ownership of Social Media Accounts
“Any social media accounts created or supported by the company are the property of the company (“Company Account”). If an employee wants their own private accounts for non-work related reasons, then they should maintain it separately from the Company Account. Employee understands that at time of termination that any Company Account remains the proprietary property of the company, and that other company policies or agreements apply, including any of those related to trade secrets, non-competition, or non-solicitation where allowed by law. Employee agrees to provide access during and after employment for the account passwords of any Company Account social media site(s).”

HR: Getting Paid

The Society for Human Resources Management (SHRM) has issued its summary of pay for common HR positions by company size. Because the vast majority of HR That Works member companies have fewer than 1,000 employees, I can tell you that the average full-time HR executive at these businesses make between $74,500 and $131,300. Approximately two-thirds of them are eligible for long-term incentives, and 95% of them for short-term incentives. These incentives should increase their payout by about one-third. Here’s the point: Many small and medium-sized companies pay their HR managers well. In case you’re curious, the top-end compensation for HR executives at companies with 10,000 or more employees averages $450,000, with additional incentive payouts of approximately 50%! For those who take HR seriously — there’s good money in HR!

Temporary Workers, Temporary Risks

An article in the February edition of the Corporate Counsel, reviews the potential liabilities of working with temporary workers. According to the article, in July, August, and September of 2011 alone, businesses hired 53,000 new temporary workers. The article identifies five risks in hiring temps:

1. Liability as a joint employer for numerous exposures, including wage and hour, discrimination and harassment, FMLA, ADA, and others.
2. Entitlement of temporary employees to benefits (understanding employee eligibility is the key).
3. Failure to provide temporary employees with reasonable accommodation.
4. Returning a temporary employee to work after FMLA leave.
5. Unsuccessful attempts to organize a bargaining unit that includes both regular employees and temps.

Every HR executive should read this well-written article. HR That Works Members should look at the Special Report on the Contingent Workforce, which includes a comprehensive checklist.

Training Alone Doesn’t Meet FLSA ‘Learned Professional’ Exemption

In the Ninth Circuit case, Solis v. the State of Washington, the U.S. Secretary of Labor filed a complaint against the Washington Department of Social and Health Services, alleging that the department failed to pay overtime to social workers. The DHS argument that these workers fell within the learned professional exemption failed because the degree requirements for social worker positions did not “plainly and unmistakably” include a specialized course of study related directly to these positions. The learned professional exemption applies to positions that require a “prolonged course of specialized instruction.” According to the court, if simply having extensive training sufficed to qualify as a specialized course of intellectual instruction, nearly every position with a formal training program would qualify. Businesses should construe these exemptions narrowly and the employer has the burden of showing the exemption applies.

See the FLSA Fact Sheet here.

What’s the Verdict on Your Wellness Plan?

Wellness plans have been all the rage for a number of years. Their ultimate goal is to reduce employer costs, while creating a more productive workforce. Otherwise, employers would have no interest in them. So how well are they doing? My personal experience working with many companies that either use or implement these programs tells me that it’s a mixed bag. Attempting to change long-standing health habits isn’t easy. Here are some of the challenges as I see them:

1. It’s a top-down idea. Anytime a wellness program is thrust upon employees it feels like manipulation, whether the program benefits them or not. How can you make it their idea, too?
2. Many employees don’t like being penalized for their personal habits, while their work habits are just fine. “I put in 50 hours a week, produce twice as much as anybody around here, and you’re going to make me pay more because I smoke a few cigarettes?” Tough case.
3. Penalties only generate more stress. There’s talk about expanding the types of penalties available under wellness programs. Now people will be stressed about their finances, as well as about their health. Rather than giving employees incentives toward good conduct, it might lead them into even more destructive conduct.
4. Leadership sets a bad example. An owner once complained to me about how expensive his healthcare was. An obese man, he then took me past the free vending machines in the lunchroom that provide his employees with candy, chips, and soda. How well do you think a wellness program will work at his company?
5. Make it a team effort. Healthy employees are, on average, better employees. They’re more productive, have lower absenteeism rates, and fewer medical expenses. Aren’t these the type of workers you want? Encourage them to provide an example to the rest of the workforce. Less fit workers will respond far better to someone they work with every day than they will to some wellness trainer. Give healthy employees incentives to get three other employees to go to the gym with them on a regular basis. There’s no law against doing that.

Wellness is a great idea whose implementation is still at the early phases. To make our wellness programs more effective, we’ll need to do a lot of experiments.

Form of the Month

Privacy Checklist (PDF) – Workplace privacy is a growing employer concern. While this list is not meant to be exhaustive, nor cover every regulation, it will help you to avoid the vast majority of claims filed in this area.

Podcast

Click here to to listen to this month’s newsletter podcast.

“If you are not prepared to be wrong you’ll never come up with anything creative.” —Sir Ken Robinson, author and educator

This issue discusses:

• Editor’s Column: Podcast Learning
• I-9 Employer Handbook
• How Companies Get Busted for Independent Contractor Violations
• Questions for Leaders
• Benefits and the Social Contract
• Inviting Employees to Leave
• IRAC – A Lawyer’s Way of Thinking
• EEOC Sues Trucking Company for Improper Pre-Hire Testing

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Podcast Learning

I’m a big fan of podcast learning. During the past four years, I’ve educated myself on a wide variety of subjects from business to personal growth, financial matters, and spiritual ones.

I would encourage all businesses to make their managers and employees podcast learners. For starters, your HR person should be listening to our monthly podcast. It’s not as fancy as the big guys’ podcast, but the information is there. I would then make sure all my managers listen to the Harvard Business Review podcasts, which provide an MBA-level education. They’re excellent — and they’re free. I would encourage you to consider TED videos and audios, which are outstanding. Pick out a few you think might apply to your business and encourage your team to watch them. They are 15 minutes long. Start one of your business meetings with one of them (maybe even every business meeting).

I also like the Stanford Entrepreneurial School podcasts. The Stanford graduate network has started more entrepreneurial businesses than anywhere else. Tap into this wisdom, even if you have a 50-year-old business. Podcast learning can stimulate thought and innovation at any company.

I’m most familiar with iTunes. Go there and check out all of their free podcasts. You can hire a high school intern to download about 20 podcasts each into a $50 player, so your employees can listen to them in their cars or at the gym. In the end, they will thank you for it.

Here are the links to the podcasts:

• HBR
• TED
• Stanford
• HR That Works

P.S. You can also develop a comprehensive leadership training program by taking advantage of the more than a dozen leadership webinars and podcasts stored on HR That Works. If you haven’t checked these out yet, do yourself a favor.

I-9 Employer Handbook

The government has an excellent publication covering everything about I-9s that all employers should know about. Here’s what it covers:

• Obtaining Forms and Updates
• Part One — Why Employers Must Verify Employment Authorization and Identity of New Employees
• Part Two — Completing Form I-9
• Part Four — Unlawful Discrimination and Penalties for Prohibited Practices=
• Part Five — Instructions for Recruiters and Referrers for a Fee
• Part Six — E-Verify: The Web-based Verification Companion to Form I-9
• Part Seven — Some Questions You May Have About Form I-9

Click here to access the handbook.

How Companies Get Busted for Independent Contractor Violations

Business owners love the idea of independent contractors. They afford flexibility, expertise, outside perspective, and of course, reduced insurance, benefit and tax burdens. Unfortunately, for these same owners, the Federal and state authorities are coming down big time on what they claim are independent contractor misclassification schemes. They don’t like the idea of you not collecting payroll taxes and not providing employees with Workers Comp, healthcare, and other benefits they might otherwise enjoy. Here are four of the more common ways employers get into trouble when they misclassify employees:

1. They get hurt on the job– Guess what? Since these people are not considered employees, your Workers Comp policy doesn’t cover them; which means they can sue you directly for negligence, expanding their recovery potential dramatically. What’s more, you might face a fine for not treating them as employees and providing them with Work Comp coverage.
2. They file for unemployment– A number of HR That Works Members have told us that because one person filed for unemployment, the authorities are trying to attack their independent contractor relationship with dozens of people. If a company in this situation comes out on the wrong side of a misclassification judgment, it could go out of business. Part of the thinking involved is that you can somehow “control” employees, but not independent contractors. For example, when I hire an independent contractor to paint my house, I pay them to get the job done and I don’t tell them how to apply the paint.
3. They didn’t pay self-employment taxes– When the IRS comes knocking on an independent contractor’s door and asks them about their tax payments and the work they did, they tend to conclude that they were an employee and you should have been withholding that 14% annually. If they can’t collect this from the independent contractor, they’ll try to collect it from you — not to mention fines and penalties. Some states, such as California, have kicked this up a notch and are making it a criminal offense to engage in intentional misclassification. Unsurprisingly, these bills are introduced into the legislature by the plaintiffs’ bar, which makes sure that the legislation includes handsome attorneys’ fees for enforcement.
4. Finally, the NLRB is getting interested too — Independent contractors don’t have the ability to organize the workplace, only employees do. This means that the National Labor Relations Board, which is very pro-union, doesn’t like it when you classify folks as independent contractors. Recently, because of one or two disgruntled employees, they ruled that independent contractors from a small orchestra were really employees, which will probably end up shutting down that business. I wrote an article about this called “The Day the Music Died.”

The bottom line: This fight is not about common sense or economics. It’s about political power, plain and simple. The pendulum has swung and employers have been pushed up against a wall. The problem is that they’re powerless to do anything about this situation and have to change the way they do business, even when they don’t think it makes sense to do so. That’s the beauty of living in a democracy.

Questions for Leaders

The quality of our lives and of our companies depends on the questions we ask and the challenges we set for ourselves. For example, you might ask yourself “Do I dare to be great?” That’s a good question. You can also ask yourself what kind of nonsense would get in the way of believing that you can be great. That’s a good question, too! With this spirit in mind, here are questions that could open you up to higher thoughts.

1. How clear is the vision for your company? Does everyone at the company know what it is? Have you branded it in your employee literature, on your intranet, on your walls, and so on? Would I know it simply by walking into your place or visiting your website?
2. Is your vision for your company a big, hairy, audacious one? It’s better to really go for it and succeed at 50% than to shoot for average — and end up average.
3. Have you played the movie forward to the end? If you got everything you had hoped for, what would it look like? How would it feel? How would your life be different?
4. What personal sacrifices are you willing to make to create a great company or career?
5. What personal sacrifices are you willing to ask others to make to build a great company or career?
6. What effort have you made to guarantee you bring the right people on every seat of the bus?
7. How do you stimulate your workforce to think for itself?
8. How do you create an employee suggestion system that works?
9. What have you done to eliminate the possibility of people making unnecessary mistakes?
10. What “one big thing” could wipe out your business tomorrow?
11. How could your business die from a series of 1,000 cuts?
12. Do you really want to do this anymore? If not, what would you rather be doing instead?
13. How could you stay in your business/career and reinvent how you work in it?

Have fun with the answers!

Benefits and the Social Contract

In his book Predictably Irrational, Dan Ariely provided two interesting observations related to employee benefits. First, he pointed out that benefits are more of a social contract than an economic one. The distinction between the two is very powerful. For example, if you have a department with 15 employees and someone walks in with a tray of 15 cookies and says that she baked cookies for the department today, under a social contract analysis, most employees would realize quickly that they should take one cookie each. However, if that was now turned into an economic arrangement in which the person stated that those cookies were baked for her child’s fundraiser, there would be no guilt or judgment associated with someone who proceeded to gobble up half the tray. Ariely reminds us that social contracts are much more powerful than economic ones.

Second, Ariely argues that asking employees to chip in for the payment of benefits or providing total compensation statements (something that we’ve recommended for years) diminishes the cohesiveness of the social contract.

These are provocative thoughts — and surveys about employee motivators mirror them to a certain degree. Although book after book after book talks about the “work experience,” in reality, most people go to work to be paid. The other motivational factors kick only after they feel they’re being paid a fair days’ wage. In today’s economy, employees rank benefits over compensation as their top concern. Benefits fulfill a security need more than does straight compensation. In a sense, the workforce is telling us that a dollar spent on benefits (which is a tax-free payment) is worth more than a dollar spent on straight compensation. Consider this if you’re considering a cut in benefits.

Inviting Employees to Leave

During the past year, I’ve read at least a dozen articles citing statistics that anywhere from a quarter to 42% of employees intend to look for new jobs once the economy recovers. My reaction to these articles: Seriously? Where are these folks going to go? To the companies where one-third of their employees are leaving? I wonder how much energy employees who plan on leaving are putting into their current job. My bet is that if they took the energy they’re using to think about employment elsewhere and applied it in their current job, they wouldn’t need to go anywhere!

Management should take these surveys as a sign of dissatisfaction — which shouldn’t come as a surprise. By definition, half of your employees are always happier in their jobs than the other half. The solution: Try to limit your hiring to these happy folks and to do everything possible to keep them that way.

Suppose you were bold enough to invite your dissatisfied employees to quit? Zappos does this with its new trainees. After they complete training, the company offers them a $3,000 bonus if they decide to quit. Zappos CEO Tony Hsieh believes that he’s better off giving an employee who has only one foot in the door $3,000 to leave, rather than keeping them. Even if these dissatisfied workers were only 10% less productive than the other Zappos’ employees, this loss of productivity would cost the company far more than the $3,000 “quitting bonus,” over the long run.

Invite your employees to one-on-one conversations about job satisfaction. Chances are, if an employee believes something feels “unfair” in the relationship, you can deal with the situation like two adults who don’t need unnecessary dramas. If the employee would feel better leaving, that’s their choice. However, if they’d like to feel better about their job, and you want them to stay, make it clear that you’re willing to work with them.

As I discuss in the Victims, Villains and Heroes book, even though there are few real workplace victims today, there’s a growing victim mentality. Anyone who wishes to educate themselves and work hard can enjoy employment opportunities; your job is to keep only the best on the bus.

IRAC – A Lawyer’s Way of Thinking

At the beginning of law school, every student learns “the method” used to help clients solve problems. IRAC stands for Issue, Rule, Analysis, and Conclusion.

• Issue: Issue spotting is a lawyer’s tool in trade. Never assume you know what the issues are without changing viewpoints or getting outside input. For example, HR executives not highly experienced in the law might assume the issue might relate to a Workers Comp return-to-work situation when in fact it’s also related to both the ADA and the FMLA. They might assume that the issue is getting rid of a poor performing employee when the real issue is what the manager did to create this poor performance. One reason that appellate tribunals consist of multiple judges is so that there can be a variety of viewpoints, especially when establishing the true issue. The ability to spot issues is one reason you should have a lawyer check your head when you have a serious problem.
• Rule: Rules come in many forms. There are hard and fast rules, such as those promulgated by legislatures and the court system. Then there are softer ones, such as those that relate to culture or values. In many cases, a whole host of rules can apply to a situation. You might have a contract, policy, procedure, habit, government requirement, vendor requirement, or some other rule that applies.
• Analysis: Now that you know what the issues are, as well as the rules, it’s time to do your analysis. As lawyers know, tough facts make for tough cases. There are times when applying a rule is not in your best interest. For example, the normal rule of the road is that you walk facing traffic; however, there might be a situation in which it’s safer to walk with traffic. In this case, complying with the law would generate an unsafe outcome. Experts make their money by knowing how to judge a situation for what it is, and not for what you’d like it to be. Their detached analysis is your best friend.
• Conclusion: Last, but not least, you need to make a decision. Of course, doing nothing is a decision in itself (sometimes this is the best course of action). In other cases, you need to take swift and immediate action. One of the main questions in deciding what path to take is to ask “Is there a way to get to the outcome we’re seeking that benefits all parties?” When we come to a conclusion, we must consider all stakeholders to a situation.

After answering questions from professors and law school exams for three straight years, IRAC becomes part of who lawyers are. There are many ways to “frame” a situation; IRAC adds one more arrow in your problem-solving quiver. May you use it well!

EEOC Sues Trucking Company for Improper Pre-Hire Testing

According to the EEOC’s suit, Celadon, a trucking company headquartered in Indianapolis, performed medical examinations on applicants for driving positions before making conditional offers of employment to them. The agency alleged that Celadon conducted these examinations in a manner inconsistent with the standards set by the U.S. Department of Transportation / Federal Motor Carriers Administration, and then used the results of those non-compliant examinations to reject qualified applicants Celadon thought were disabled.

Such alleged conduct violates the ADA, which prohibits employers from subjecting applicants to medical examinations before making a conditional offer of employment, and also prohibits discrimination based on disability or perceived disability. The EEOC filed suit (EEOC v. Celadon Trucking Services, Inc., Cause No. 1:12-cv-0275-SEB-TAB) in U.S. District Court for the Southern District of Indiana, Indianapolis Division, after first attempting to reach a pre-litigation settlement through its conciliation process.

“Celadon and all motor carriers must conduct medical examinations in accordance with the ADA,” said Laurie Young, regional attorney for the Indianapolis District Office of the EEOC. “Under the ADA, an employer cannot conduct a medical examination of a job applicant until the employer has given the applicant a job offer conditioned upon the applicant passing the examination. The EEOC will enforce these obligations.”

The EEOC is seeking compensatory and punitive damages against the company, as well as other relief, including a permanent injunction to prevent Celadon from engaging in any further employment practice that violates the ADA.

Lesson to employers: If you’re going to do pre-hire physicals make sure to do so only after you make a conditional job offer. See the report and forms in HR That Works.

Form of the Month

Sage Advice for Managers and Leaders (PDF) – An issue of Volleyball USA shared sage advice from 12 of the top volleyball minds in the nation. As someone who has coached not only kids’ teams, but also many executives, I found valuable guidelines in this article that have helped me be a better manager and leader.

Podcast

Click here to to listen to this month’s newsletter podcast.

“All labor that uplifts humanity has dignity and importance, and should be undertaken with painstaking excellence.” — Martin Luther King, Jr.

This issue discusses:

• Editor’s Column: Seven Employment Practice Trends to Follow
• What Can Employers Do About Off-Duty Conduct?
• Ninth Circuit Overrules NLRB on Employee Protections
• Employee Loses FMLA Protection for Not Cooperating
• Why Are Employees So Unhappy?
• Online Time
• Play Social Scientist
• Form of the Month: HR That Works Mission Poster

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Seven Employment Practice Trends to Follow

The law is an evolving landscape. Here are some items to watch for in 2012.

1. The continued influence of the NLRB over the private workplace — Not only is the NLRB continually making it easier to organize; it has also ventured into the social media arena, and has begun reviewing independent contractor issues (the board focuses on these issues because independent contractors can’t unionize).
2. Continuing attack on the independent contractor classification — The IRS and state agencies want their tax dollars and are clamping down on 1099 misclassifications. See  www.dol.gov/whd/workers/misclassification/ and www.1099timebomb.com.
3. Increasing coordination among agencies — If you misclassified someone as an independent contractor, not only can they now organize your company, but the IRS and state agencies will probably be coming after you for back taxes, failure to supply Workers’ Compensation insurance, overtime, and other expenses. If you have independent contractors, I encourage you to look at the Independent Contractor Training Module, which includes a report, a checklist, and more.
4. Continued rise in disability accommodation claims — Because more and more Americans are becoming disabled, you can expect a continued growth in disability accommodation claims. Last year, the EEOC was very aggressive on failure to accommodate claims. For example, Verizon had to pay handsomely because its no-fault attendance policies violated both the ADA and FMLA. As always, you can get help from legal counsel and use the resources of the Job Accommodation Network.
5. An increase in benefits related claims — It seems as if every employer is looking for a plan to reduce its overall benefit costs. Over the year, we’ve been questioned about all sorts of carve-out schemes, the impact of putting employees onto somebody else’s payroll, giving one group one plan and another group of employees a different plan, asking people to use their Medicare instead of company benefits, and so on. This activity is sure to generate ERISA and discrimination claims. The DOL has just updated its Affordable Care Act pages. See www.healthcare.gov/law/index.html, www.dol.gov/ebsa/healthreform and Frequently Asked Questions from Employers Regarding Automatic Enrollment, Employer Shared Responsibility, and Waiting Periods.
6. Social media craziness — It’s only just begun. The risk implications can be severe and immediate. Not having a well-thought out policy is a big mistake. See the Sample Social Media Policy on HR That Works and have an attorney review it.
7. Restrictions on background checks — The EEOC and state agencies are clamping down on employers’ ability to obtain credit and criminal background information. Make sure you use a background check company such as Global HR Research that knows the law.

What Can Employers Do About Off-Duty Conduct?

In many states, the answer is nothing as long as the conduct is legal. Here’s an excellent summary of legislation protecting employees created by the Conference of Legislators.

Ninth Circuit Overrules NLRB on Employee Protections

The Ninth Circuit, known as the most liberal and employee-friendly federal circuit in the nation, recently overrode an NLRB ruling on employee protections. In this case, an employee complained legitimately about working conditions, but lost his protection when he started berating his manager, calling him plenty of F-word names we cannot repeat here and also telling him that he was stupid, nobody liked him, and that everybody talked about him behind his back. During the employee’s outburst, he stood up, pushed his chair aside, and told the manager that if he fired him the manager would regret it. The manager then fired the employee.

The Court reminded us that in order for an employee to lose NLRA protections, it would consider these factors:

1. The place of the discussion
2. The subject matter of the discussion
3. The nature of the employee’s outburst
4. Whether the outburst was in any way related to a fair labor practice

The Board is required to balance those factors carefully. In the end, the Act permits some leeway for impulsive behavior, which must be balanced against the employer’s right to maintain order and discipline. As the Court reminded us, if an employee is fired for denouncing his supervisor in obscene, personally degrading, and/or insubordinate terms, the employee may lose the protection of the National Labor Relations Act. When the Court looked at the language, the physically aggressive nature of the employee, and his flat-out belligerence, they decided that he had lost his protections.

As mentioned in previous posts, the NLRB has now waded into social media waters with these conversations. So far, its decisions have been very pro-employee, as was the underlying decision in this case. Click here to read the case.

Employee Loses FMLA Protection for Not Cooperating

After being terminated, a plaintiff filed an FMLA retaliation claim; however, she could not prove any improper employer conduct, only improper conduct on her part. The plaintiff’s untimely documentation under the FMLA resulted in her eventual termination, which the court then upheld. It also rejected any argument of “intermittent leave,” because this was not indicated in the FMLA certification or by agreement.

A note from the court to the wise:

“Employers facing questionable certifications have two preferable options: 1) they can require the employee to obtain a second opinion from a different provider at the employer’s expense; or, 2) after granting the employee the opportunity to correct any shortcomings, they can obtain the employee’s permission to clarify or authenticate a questionable certification with the original health care provider. Although these measures are discretionary, utilizing them would avoid the factual disputes and questions of reasonableness that conceivably arise from the employer’s decision to classify an FMLA request as facially invalid without first working with the employee to resolve any discrepancies.”

Click here to read this case, a classic example of the FMLA gone wrong.

Why Are Employees So Unhappy?

Poll after poll describes how dissatisfied today’s workers are. For example, in a recent poll by Staples, 33% of employees said they feel unappreciated at work, while 38% were searching for a new job. Likewise, in the annual Education and Work poll conducted by Gallup, dissatisfaction with healthcare benefits increased 11 points in the past three years, followed by a seven-point increase in dissatisfaction over the potential for promotion at work. According to the poll, job issues causing the most dissatisfaction were: On-the-job stress (34%), health insurance benefits (30%), compensation (30%), employer retirement plan (28%), chances for promotion (26%), vacation time (20%), recognition for work accomplishments (19%), job security (18%), and amount of work required on the job (17%).

What can we learn from this? Here are my observations:

1. Half of employees are more satisfied at work than the other half. This is the way it always has been and always will be.
2. Stressful financial times cause us to focus on productivity, efficiency, and running lean — which generates a lot of stress. As business owners and managers, we should do everything possible to acknowledge this stress and try to do something about it. For example, do you encourage your employees to take breaks or do you really keep your fingers crossed, hoping they’ll work through them at their desks? If you don’t already have a wellness plan, you should create one because it can help with stress management.
3. Health insurance benefits have greater meaning to employees than straight compensation. In his book, Predictably Irrational, Daniel Ariely explains that health care benefits are a social contract, while compensation is an economic contract. Apparently, a dollar spent on benefits is worth more in total impact than a dollar spent on compensation — something that you should bear in mind when gutting your benefit plans.
4. Years ago, the Gallup organization did the largest poll about employee retention ever conducted. It concluded that there were three main reasons for turnover:
   • The person in the job is a misfit; they don’t have the skills or personality profile to succeed in it. In a sense, both employee and employer are filling a gap that will be short lived.
   • A lack of perceived career growth or opportunity. Here’s where management has to step in with such tools as career ladders, career days, succession planning, and an overall discussion about finding the opportunity at your company.
   • The most important relationship an employee has is the one with his or her immediate boss. Guess what? Half of all bosses are above average and half of them are below average. Which half do you have managing for you? How much training do you offer managers on being better managers? Do yourself a favor and take advantage of the extensive training on HR That Works that will help them be better managers.
5. It’s essential for management not to crawl into a cave during stressful times. Rather, they need to stand out front, give honest information, and handle the tough questions. Unfortunately, at too many companies, people are surviving as individuals, rather than as a team.
6. As Steven Covey says, begin with your circle of influence. Start right where you are and focus on those people you work with or manage directly.

Online Time

According to a Nielsen poll, here’s how Americans spend their time online:

The chances are that when your employees access the Web at work, this is what they’re doing. The survey doesn’t break down the percentage of time in each of these categories that’s related to personal matters. However, you can assume that — unless you’ve encouraged or allowed your employees to go online for business purposes — most of their use is going to be personal.

As we discuss in the Social Media Training Module, this is a battleground in the workplace. Employees are demanding greater and greater freedom, flexibility, telecommuting, multitasking, etc. It’s how they were raised. Older managers who try to control this new workforce closely find themselves causing dissatisfaction and non-productivity in the process. They also have to consider that dissatisfaction can spread like wildfire through mobile devices and might be protected by the National Labor Relations Act and a variety of other laws.

Here’s the solution: Have a dialogue with your workforce about the use of the Web, social media, mobile devices, etc. Acknowledge that, although the workplace has changed, productivity remains the bottom line. This is another reason why the ability to benchmark performance results is more important than ever. Do you really care if employees spend half their day on their mobile devices, if during the other half of their day they meet or even exceed benchmarks? Although this might rub us the wrong way, is it really something that we should worry us? For example, I use a number of independent contractors through programs such as Elance. I don’t police any of them. I’m simply hiring them to produce results — which is exactly what you’re doing, or should be doing, with your employees. The question is, to what extent is that result clarified? To what degree can inappropriate use of mobile devices undermine activities that enhance your bottom line? Just as important, which employees are using mobile devices in a way that’s helping to grow your business? How can you learn from those employees?

As mentioned, the Social Media Training Module offers a one-hour webinar on this topic, as well as a shorter update video that explains NLRA constraints on social media use by employees. The personnel forms also include sample policies on the use of social media and mobile devices.

Play Social Scientist

I’ve coached many executives over the years. One of the questions I ask is whether they spend more time reading about other companies’ stories or creating experiments and stories of their own. More than half of the executives admit that they spend more time focusing on the outside than looking on the inside. To help executives, I encourage them to play social scientist.

1. Be a good observer.Step back and take a mile-high view of the environment. Look at the situation with fresh eyes. If you were a social scientist who walked into your company today, what would you observe about it? Simply being “present” in your situation is the best way to be an observer of it.
2. Conduct surveys. Social scientists love surveys. You can ask any question you want. Let your imagination be your guide. Consider creating a Survey Question of the Month all employees are required to answer. When this begins producing results, you might bump it up to two a month, or even one a week. Make sure that these surveys solicit ideas, as well as opinions.
3. Generate data.The next step is to translate your observations and survey results into data you can use. For example, what do your observations and survey results tell you are the 20% of critical factors that would generate 80% of the desired results? Usually this 20% consists of three things. What’s the data around it?
4. Run experiments to verify your data.Now that have some information, play with it. If employees tell you that what they want more than anything else are improved benefits, then dig deeper. Create experiments that compare the perceived value of improved benefits versus other equally attractive options.
5. Finally, publish your results. Educate your stakeholders on what you’ve learned and how using this valuable information can improve their career and the company. Of course, when you publish your results, you’ll be open to critical judgment, as well as praise and understanding. That’s what comes with sticking your neck out.

P.S. HR That Works Tools to consider using include a variety of employee surveys, HR department survey, benchmarking report, and tools.

Form of the Month

HR That Works Mission Poster (PDF) – This poster defines us — what we care about, who we are, what we do. How could you create a fun poster like this for your company?

Podcast

Click here to to listen to this month’s newsletter podcast.

“All anyone asks for is a chance to work with pride.”  — W. Edwards Deming

This issue discusses:

• Editor’s Column: Align Human Resources with Corporate Strategy
• Full Employment for Criminals: The State of the Law
• Drug Testing Protocols Update
• A Good Reason to Limit Internet Access
• Social Media and Disgruntled Employees
• Leave Abuse Results in Lawful Termination
• The Million-Dollar Problem with No-Fault Attendance Policies
• DOT Bans Cell Phone Use in Commercial Vehicles
• Form of the Month: A Dozen Ways to Show Employees You Care

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Align Human Resources with Corporate Strategy

If HR wants to “earn a seat at the table,” it has to justify its worth. For the most part, corporate executives view HR as an administrative function, not a strategic one. In most cases, this view is accurate. However, let’s assume for a moment that you want your HR department to be seen as strategic rather than merely administrative; in other words, HR should or help produce a profit, not just spend money. Here’s what it takes to align the HR function with corporate strategy:

1. Realize that how you run the HR function will have a significant impact on the execution of corporate strategy. Jack Welch famously used the HR function to drive profits at GE for many years.
2. Recognize that most small to medium-sized businesses don’t have much HR expertise. How many of those folks wearing the HR hat have made the effort to obtain their PHR or SPHR designation — the benchmark of a “serious” HR executive? A company without this expertise would be wise to seek it out, either through a part-time consultant or HR executive.
3. Make sure the company is hiring only the best. In each one of Jim Collins’ books (Good to Great, et. al.) he emphasizes the most important function of management is to put the right person on the right seat of the bus. Is this happening at your company? How is HR helping managers hire great employees?
4. Focus on boosting employee productivity without increasing the already high level of stress. How do you maintain a corporate culture in the process? In this squeeze economy, everyone is being asked to do more with less. To what degree have you helped the management team generate increased productivity?
5. Make sure that the best stay on board. Survey after survey indicates that as the recession eases, more and more employees are looking to move elsewhere. Many companies only have to lose a few critical employees to have a significant bottom-line impact. To what degree are you using available resources to make sure your best and brightest remain?
6. Be aware that hiring, productivity, and retentionare the greatest concerns of many HR professionals and CEOs I’ve spoken to because they flow through directly to the bottom line. Employers also tend to be concerned about training initiatives (especially low-cost ones), teamwork, motivation, letting go of poor performers, and compliance concerns. How is HR helping you meet these goals more effectively than the competition?
7. Finally, don’t forget the never-ending challenge of benefits management. How can you help reduce the overall cost of employee benefits, while improving employee health?

Of course, your company might have specific strategic objectives of greater importance. If so, work on those first. HR That Works Members should use the Strategic HR Tools area of the Web site to make sure that HR gets a seat on the bus.

Full Employment for Criminals: The State of the Law

Many of us behaved during our juvenile and adolescent years because parents and authorities told us that any transgression would “go on our permanent record.” This was usually followed by the reminder that “the world needs ditch diggers, too.” It turns out that few convictions pose an insurmountable obstacle to a career, including the practice of law — as I learned when an acquaintance with a breaking-and-entering conviction was admitted to the bar.

The government has an interest in preventing people, including criminals, from being unemployable. However, there have been so many cases involving employment of criminals recently that now is a good time to review the employment law regarding criminal acts.

Disparate Impact on Minorities. Because African-Americans and Hispanics have a higher conviction rate than other ethnic groups, a blanket no-conviction policy might result in the disparate exclusion of minorities from the workplace. Minority applicants screened out by these policies have the right to sue under Title VII and most state acts, including Michigan’s Elliott Larsen Civil Rights Act [ELCRA], even if there were no intent to discriminate. Although most cases have applied this doctrine to misdemeanors, the law has expanded to include felony convictions. The foundational cases during the 1970s and 1980s involved manual jobs for which the applicant pools represented a cross-section of the entire population. However, the U.S. Supreme Court has ruled that “figures for the general population might not accurately reflect the pool of qualified applicants,” In the Information Age, it would be interesting to see if the EEOC can produce data that African-Americans or Hispanics with college degrees have more convictions proportionately than their nonminority comparables.

EEOC policies disqualify those with convictions (and poor credit scores). The EEOC requires employers to give individualized attention to each conviction, weighing: (1) the nature and gravity of the offense; (2) the time that has passed since the conviction or completion of the sentence; (3) and the nature of the job. This can be time-consuming and costly, especially for large companies such as Walmart, which make thousands of employment decisions on an ongoing basis. However, less-costly, bright-line policies might result in litigation.

Statutory Limitations. Some states limit an employer’s consideration of convictions regardless of ethnicity. Washington and Hawaii prohibit considering convictions more than 10 years old for everyone. Washington, Pennsylvania, and Wisconsin prohibit employers from making decisions based on felony or misdemeanor convictions unless the conviction is job related. New York does the same, and requires employers to consider the timing of the conviction and the safety and welfare of individuals and the public. Hawaii is the most onerous in this regard, permitting an inquiry about convictions only after a conditional offer of employment, and precluding disqualification unless the conviction relates to the duties and responsibilities of the job.

Although job-relatedness might seem to make sense, managers and business owners face scenarios in which this requirement is unworkable. For example, the best mechanic available might be a convicted rapist, a crime which does not seem to be related to the duties of his job. In another context, must an employer hire a convicted pedophile for a job that does not involve contact with children, and (knowing the recidivism rates for pedophilia), hoping that he won’t commit another offense that might connect their business to the sordid news? Are drug convictions ever job related? The unfortunate effect of these laws is to empower convicted criminals to challenge hiring decisions, cast honest business people as evildoers, and put them to an expensive defense.

Criminal Acts That Did Not Lead to Conviction. As a former criminal prosecutor, I know that plenty of criminal acts don’t result in convictions. Diversion programs exist for offenders under the age of 21 and first-time drug offenders of all ages. If the police engage in an improper search or fail to read arrestees their Miranda rights, evidence is suppressed and the case dismissed. In other cases, witnesses can’t be located, or are intimidated (sometimes murdered or are otherwise too fearful to testify). In rare cases, the defendant is acquitted due to insanity, although he or she is not mentally ill, and must soon be released.

However, the behavior leading to the arrest might be significant in making an employment decision. For example, an applicant for a health care position with access to controlled substances might have recently gone through a drug diversion program. An applicant who avoided a home invasion conviction because the police botched a search might have left a career of theft only after learning the police have him under surveillance. If you knew about the home invasion, you would want to keep your distance from the perpetrator. However, many states have laws that effectively bring these people into the workplace.

Fortunately, the Michigan ELCRA is limited to a prohibition against requesting or making a record of a misdemeanor arrest that did not lead to conviction. Inquiries about past felony arrests are not mentioned and inquiries about pending felonies are expressly allowed.

Other states grant broader protection: Most states have provisions that applicants need not volunteer information about sealed records (which usually occurs after a diversion program). Colorado and Virginia prohibit disclosures of such sealed proceedings even upon inquiry; and Georgia and Illinois prohibit disqualification from employment based on them. California, Hawaii, Massachusetts, New York, Rhode Island, Washington, and Wisconsin all prohibit employers from asking about or making decisions based on of any arrests (felony or misdemeanor) that did not lead to conviction; only California provides an exception for health care employees with access to patients and medication.

Occasionally, court decisions permit employers to drill down and make decisions based on underlying conduct, even where no conviction resulted. However, if you face a hiring decision in one of the states mentioned, do your research to learn about one of these hair-splitting decisions.

Expunged Convictions. In Michigan, a conviction can be expunged after five years, if there are no further convictions other than minor misdemeanors. Only one conviction may be expunged. Almost all states provide that once an offense is expunged, an applicant need not identify the prior conviction, even if the response is under oath. Expungement renders the conviction a nullity. In general, sex crimes cannot be expunged. Victims must be notified and may contest expungement of those convicted of crimes related to assault. In general, the prosecutor can contest expungements, which a judge usually grants only after careful consideration.

Article written and contributed by William Pilchak of Worklaw® Network firm Pilchak Cohen and Tice, P.C.

Drug Testing Protocols Update

The Department of Transportation requires employers to test drivers for drugs — for good reason. There are highly specific guidelines for employers to follow. Whether you’re a DOT candidate or not, these are perhaps the best guidelines you can find and should help you think through your commitment to a drug-free workplace. Note that the laws surrounding DOT testing may not be permissible in all environments. For example, most states now prohibit random drug testing.

Click here to see the guidelines. You can find excellent help on creating a drug free workplace here.

A Good Reason to Limit Internet Access

While doing some SEO homework, I looked at a listing of the top 500 search terms. I don’t know about you, but it looks to me that most people waste a lot of time on the Internet, at work and at home. Given the search requests, it’s probably not a bad idea to add content blockers. Of course, the challenge is when employees are using their own smart devices (phone or tablet).

Personally, I don’t know who has time to spend on this junk! Celebrity gossip, porn, horoscopes, travel and shopping dominate the rankings — none of which do much to help a business or career. If you have such a habit, drop it! Quit wasting time and spending money you don’t have. Instead, focus on improving yourself and saving toward your retirement!

Social Media and Disgruntled Employees

I watched one public company’s stock valuation drop by more than $1 million in one day due to a social media post that one of its disgruntled employees had placed. I’ve seen cases in which employees have cursed at their bosses, spread ill-will about them through the Internet, and literally stuck out their tongues at their employers about working conditions — and, after their termination, the National Labor Relations Board forced their employers to rehire them.

Here’s the point: You cannot ignore social media risks. Disgruntled employees can release a barrage of sensitive information and demeaning statements with their employers left feeling helpless. HR That Works Members should check out the Social Media Training Module, which has both a video describing the National Labor Relations Board position on this issue and a sample Social Media Policy. One additional piece of advice: Get your employees involved in creating and enforcing these policies and train your managers accordingly.

Leave Abuse Results in Lawful Termination

An employee who had a suspicious pattern of using intermittent FMLA leave on Fridays and holidays could not state an FMLA claim after she was terminated for calling for FMLA leave while on a pre-planned trip to Las Vegas. In Crewl v. Port Authority of Allegheny County, the plaintiff had been certified for (and granted continuously) FMLA leave over a five-year period for migraine headaches and anxiety. A pattern of “Friday FMLA events” emerged (the plaintiff had missed 26 of 52 Fridays) so the employer invoked its right under the FMLA to have the plaintiff submit to a second-opinion medical examination. The plaintiff’s doctors were asked whether the leave pattern was consistent with her medical conditions. The doctor providing the second opinion concluded that the nature of the plaintiff’s conditions — unpredictable migraines and anxiety attacks — was inconsistent with a pattern of onsets on Friday. The doctor also concluded that the plaintiff could control her condition fully with medication. By contrast, the plaintiff’s doctors certified that the pattern was consistent with her condition.

Meanwhile, the plaintiff scheduled a trip to Las Vegas, for which she was granted leave until July 2, but denied it for July 3 and 4. She tried unsuccessfully to get someone to cover her other shifts. Thereafter, on July 2 the plaintiff called out sick for the next two days (July 3 and 4). This leave was credited as qualifying under FMLA, and the plaintiff was even granted holiday pay, despite her failure to work the day before the holiday, as required by the collective bargaining agreement. However, the employer later concluded that the plaintiff had used FMLA fraudulently to cover preplanned vacation days and terminated her. She sued, claiming interference under FMLA and retaliation.

The court granted the employer’s motion for summary judgment. The court noted that the nature of the employee’s condition — unpredictable migraine onset — made it clear that when she called in sick on July 2 for a two-day period, the act was fraudulent. By her own admission, she could never tell when a migraine would disable her. In addition, the fact that she called seeking FMLA while on vacation in Las Vegas and remained there through the July 4 holiday established fraud. Noting that FMLA status does not prevent termination of an employee for reasons unconnected with legitimate FMLA leave, the court held that the employer terminated the employee legitimately for fraudulent use of leave.

Article courtesy of Worklaw® Network firm Shawe Rosenthal.

The Million-Dollar Problem with No-Fault Attendance Policies

Verizon has learned the hard way about the problems associated with no-fault attendance polices. The bottom line: If you have such a policy, you might face unnecessary exposures in enforcing it. On July 6th 2011, the EEOC announced that Verizon settled a multi-million dollar case based on the company’s no-fault attendance policy. Here’s a summary of the settlement:

“Telecommunications giant Verizon Communications will pay $20 million and provide significant equitable relief to resolve a nationwide class disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. The suit, filed against 24 named subsidiaries of Verizon Communications, said the company unlawfully denied reasonable accommodations to hundreds of employees and disciplined and/or fired them pursuant to Verizon’s ‘no fault’ attendance plans.”

Then on December 8, 2011, Los Angeles Superior Court approved the $6,011,190 California Family Rights Act (CFRA) class action settlement in Dept. Fair Empl. & Hous. v. Verizon (Seales).

The class action lawsuit began with a more than two-year-long investigation by the EEOC Special Investigations Unit into Verizon’s practices under the California Family Rights Act (similar to FMLA). The lawsuit alleges that from 2007 to 2010, Verizon denied or failed to provide timely approval of class members’ requests for leave for their own serious health condition, to care for a family member with a serious health condition, or to bond with a new child. The company also allegedly fired some class members for violating Verizon’s attendance policy when they missed work for a qualifying reason.

The final settlement will result in payment of $4,490,041 from the maximum settlement amount to 687 qualified claimants:

• Tier 1: Claimants who experienced improper denial of their application for leave under the California Family Rights Act will receive a check for $3,000 apiece.
• Tier 2: Claimants who were subject to discipline for poor attendance due to absences under the California Family Rights Act will receive a check for $6,000 apiece.
• Tier 3: Claimants who were terminated or constructively terminated in violation of the California Family Rights Act will receive a check for $25,000 or more.

Bottom line: All of your attendance policies are subject to limitations imposed by disability accommodation law and the FMLA. This is how justice works today. Because there isn’t enough “juice” in these cases to bring them individually, plaintiffs file them collectively, thus upping the ante. The lawyers get the biggest chunk of the pie (usually in the millions), the regulators get fees and the claimants get $3,000 to $25,000 apiece.

DOT Bans Cell Phone Use in Commercial Vehicles

As of January 3, 2012, a new regulation from the U.S. Department of Transportation (DOT) prohibits drivers of commercial motor vehicles (CMVs) from using hand-held mobile phones while driving. The prohibition includes periods when the CMV is stationary at traffic lights, stop signs, or in heavy traffic.

CMV drivers may still use a hand-held mobile phone as long as they pull over to the side of or off of a public highway or street where the vehicle safely remains stationary. Additionally, hands-free cell phones such as speakerphones are still permitted while driving as long as the CMV driver can operate the device by pushing a single button which is within his or her reach. If the CMV driver must reach for the mobile telephone on the passenger seat, under the driver’s seat, or into the sleeper berth, it’s a violation. Moreover, drivers may use a hand-held mobile phone on a public highway or street to contact law enforcement or other emergency services for such purposes as reporting an accident or drunk driver. The new rule doesn’t affect communications with a Two-Way Radio/CB because the DOT lacks jurisdiction to regulate such devices.

This ruling follows previous 2010 DOT decision to mitigate risks associated with “distracted driving” by banning commercial drivers from texting while driving. The new restrictions apply to both intrastate and interstate drivers of CMVs. Drivers who violate the new regulations will lose their commercial license and pay a fine of up to $2,750 for each offense. Employers that require or allow their drivers to use hand-held mobile phones while driving could face a fine of up to $11,000 for each offense.

Employers should adopt a policy consistent with the new rule and train their drivers on what it does and doesn’t permit, as well as the consequences for violations.

Article written and submitted by Daniel Cohen of Worklaw® Network firm Pilchak Cohen & Tice, P.C.

Form of the Month

A Dozen Ways to Show Employees You Care (PDF) – Use this form to help strengthen relations with your employees.

Podcast

Click here to to listen to this month’s newsletter podcast.

“You’ve got to find what you love – and that’s as true for your work as it is for your lovers. Your work is going to fill a large art of your life, and the only way to be truly satisfied is to do what you believe is great work. The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle!”  —Steve Jobs

This issue discusses:

• Editor’s Column: Yesterday’s Over With, So Don’t Be a Dinosaur
• HR Wisdom
• Desperate Times Create Desperate Employees
• The End of the NLRB’S Reign?
• EEOC Sues Employers for Accommodation Violations
• EEOC Charges Hit Record Highs
• Making Your Next Hire
• The Ultimate in Religious Accommodation
• NLRB Poster Requirement … One More Time

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Yesterday’s Over With, So Don’t Be a Dinosaur

The past is gone. Poof. No mas! The challenge is that most of us are deeply rooted in the past and find a great deal of comfort in it – whether it was good or bad. We hear ourselves saying to both loved ones and people in the workplace, “When I was young…”

It’s frightening to go through today’s rapid change. As Buckminister Fuller stated, we’re going through a period of “accelerating acceleration” in which things are happening faster and faster — at a faster rate. Today’s rate of change is generating a significant amount of dislocation, uncertainty, and fear — and that doesn’t feel good.

For the first time in generations, we’re looking to those younger than us for advice — primarily in technology. We’re living in a technological age. It’s not just about production and information, but how technology affects every aspect of our lives.

What are you or your company doing to drive past this fear of change? Have you set out to learn from younger workers? Have you invited them to educate and enlighten you on today’s technologies? Will you and your company embrace the need for this invitation or will lose out to competitors who do?

Change makes us uncertain about what we can contribute and how this contribution can create job security and personal growth. If we can’t do things the “old school” way, then what are we going to do? For example, many employees somehow feel affronted when their company decides to offshore everything, from data management to customer service. What’s left for us to do?

How do we drive past this fear? How do we choose not to play victim to the great change? Fundamentalist religion has blossomed worldwide as one answer. In a sense, we’ve decided to prohibit change. I’ve seen bosses and employees take a fundamentalist view about their work too, doing everything they can to block, sabotage, and resist change. The problem is that when we look backward hoping for a sense of security, we can turn into pillars of salt. Although we might not die physically, we’ve surrendered in our minds. Now all you have to look forward to is retirement — and it can’t come fast enough.

I remember speaking to a top executive at a billion-dollar organization about an opportunity in her business. Her entire conversation was about the lack of support she received from other corporate departments and the retirement she’s looking forward to with her husband. When I asked, “what’s your edge?” she didn’t have one. I can tell you that her department will be going in only one direction — and it’s not one that will please shareholders.

It’s very difficult to break up a relationship with another person, especially when this person is the “former me.” The past provides a false sense of strength in the familiar.

I was speaking with a 63-year-old human resource executive who was laid off from a major corporation and then hired by one of my business partners to help implement our program. This man called our customer support service because he didn’t know how to download and open a Word document. Two days later, he called me to ask a question he could have easily found the answer to on the HR That Works web site. When I began to try to show him where he could get the information, he cut me off and told me that he didn’t “like all this new technology” and wasn’t very interested in using it. He actually asked me if I could send him a three-ring binder with the materials from the web site!

The role of Wisdom within all of this change is to understand and communicate what is continuous or cyclical. For example, long-term investors warned novice dot-com and real estate investors about the rule that cuts across investing: “If it’s too good to be true, it probably is.” If these novices listened to the wisdom of the Warren Buffets, they wouldn’t be in a financial mess today. We need to listen to the wisdom that things will always change. Then we have to project our will firmly into the future. We must be open and invite new ideas. We have only begun our life’s story — and many exciting chapters lie ahead.

Here are some steps you can take to reach this goal:

1. Identify those things that you wish could have remained the same. You might wish there were no cell phones or electric cars, then recognize the past is over with, give it its proper funeral, and run like heck to embrace what has replaced it.
2. Invite an Innovation and Wisdom Dialogue among your workforce. What timeless lessons and cutting-edge technologies can be shared? How can we allow the people in our organization whose strength is wisdom to utilize this ability? How do we empower those whose strength is technology to make full use of those abilities?
3. Realize that if you don’t embrace change, you will — or should be — be let go. I’ve seen too many employers face paralysis in letting employees go because they were once productive in the old way of doing things.

We need to force the hand of change. You can create your own game plan for embracing change and moving forward, have your managers do it for you, or start planning an early and unfulfilling retirement. The choice is yours!

HR Wisdom

In light of the discussion about change and enduring wisdom, here’s what I consider the wisdom available to HR managers:

• Great HR practices generate a competitive advantage, whether you have five or 5,000 employees.
• The “tipping point” in human resources is the hiring process, which has a greater impact on productivity, teamwork, constant improvement, profitability, and compliance than any other factor.
• According to the HR That Works Cost Calculator, there’s at least a 10% cost or variance of payroll in your human resource practices. For example, if you have a $1 million payroll, your cost or variance is at least $100,000. You’ll need to bring in, at a minimum, $400,000 to put that $100,000 back to the bottom line.
• The greatest risks in employment practices are uninsurable. Despite all the noise of the legal community, poor hires, high turnover, and lack of productivity left on the table every day have the greatest impact to the bottom line. Every company should cap its employment practices liabilities by purchasing Employment Practices Liability Insurance (EPLI).
• You need to find HR exciting to be any good at it — even if it’s only one of three hats you’re wearing.

Desperate Times Create Desperate Employees

At a recent HR presentation for CEOs, three of the 15 executives present reported that an employee had embezzled from them or engaged in other financially destructive activity during the past few months. We’re getting similar questions on Hotline calls from Members. Here’s the reality: If you don’t have significant checks and balances around your money, you’re conducting a social experiment and making your business easy prey for the desperate, greedy and villainous.

In one of these cases, a new HR director told the payroll company that she was given a substantial raise only days after joining the company, the payroll company never questioned it, and she made off with thousands of dollars. As the Russian proverb states, “Trust, but verify.”

The End of the NLRB’S Reign?

Many employers, including Boeing (which the National Labor Relations Board blocked from moving to an aircraft assembly facility in Charleston, South Carolina), have been upset with the NLRB for the past few years. In this newsletter and our Webinars, we’ve discussed the Board’s efforts to make unionization far easier, as well as to expand the National Labor Relations Act to social media postings. The NLRB has not had a full complement of five board members for five years. When Craig Becker’s term expires this year, the Board won’t have enough board members to rule on labor disputes. Republican lawmakers will surely try to block any nominations President Obama appoints to the Board. Many employers feel that the NLRB is trying to do through administrative pressure what Congress would not do through legislation.

Expect the Board and Administration to push right up to Election Day.

EEOC Sues Employers for Accommodation Violations

According to a SHRM article, the EEOC has filed disability lawsuits against:

• Ford Motor Company for failure to allow an employee with a gastrointestinal condition to telecommute.
• Kohl’s Department Stores for refusing to accommodate a diabetic employee’s request for a regular schedule.
• SITA for rescinding a job offer when it found that an applicant who needed surgery for cancer asked to delay her start date.
• The Scooter Store for refusing to accommodate an employee’s request for a temporary leave of absence due to a knee injury and then firing him.

Here’s the point: The EEOC is on the warpath when it comes to disability accommodation. Go through the process. Take a checklist approach. Treat your people the way you would want to be treated. Get professional help if you need it. The HR That Works Hotline is a good place to a start for Members as is the Job Accommodation Network: http://askjan.org/.

EEOC Charges Hit Record Highs

The EEOC received a record 99,947 charges of discrimination in fiscal year 2011, which ended Sept. 30 — the highest number of charges in the agency’s 46-year history. EEOC staff also delivered more than $364.6 million in monetary benefits for victims of workplace discrimination. This is also the highest level obtained in the Commission’s history. The fiscal year ended with 78,136 pending charges — a decrease of 8,202 charges, or 10%. In previous years, the pending inventory had increased as staffing declined 30% between fiscal years 2000 and 2008. Comprehensive enforcement and litigation statistics for fiscal 2011 will be available in early 2012.

Making Your Next Hire

In this tight economy, many employers are reluctant to make any new hires. This is a big mistake. The first thing to consider is who it is that you should get “off the bus.” Our test has always been this: If the employee quit today, would you be relieved or upset? If the answer is “relieved,” then do what you have to do: Let this employee go or put them on some type of performance plan that guarantees their success or departure. One of the problems with trying to resurrect poor employees is that they tend to look for job security by filing claims, hoarding knowledge, or other conduct which will make their staying on board even more costly. In our experience, when you let these people go you really learn the truth about them.

Now that you’ve “culled the herd,” don’t replace them immediately with the same level of employee. Instead, take away the lowest value work of the existing team and hire an entry-level employee who you can groom in your way of doing business. How much $10, $15, or $20 an hour work can you take away from the existing team? Do they want it taken away from them or not? Instead of hiring an entry-level employee, many companies outsource administrative tasks to consultants and other third parties.

Taking this approach will increase workforce productivity and revenue per employee. You’ll also be able to give existing employees a raise because they’re adding more value to your organization.

Remember, when recruiting entry-level employees, provide them with a career map so they can see the opportunity in your business. HR That Works has sample “career ladders” to consider.

The Ultimate in Religious Accommodation

This summer, New York City enacted the most “progressive” statute on religious accommodation in the workplace. Follow these guidelines, and you’ll be “safe” in any jurisdiction.

According to the new law, the term “reasonable accommodation” means, “such accommodation that can be made that shall not cause undue hardship in the conduct of the covered entity’s business. The covered entity shall have the burden of proving undue hardship. In making a determination of undue hardship … the factors which might be considered include but shall not be limited to:

(a) the nature and cost of the accommodation;
(b) the overall financial resources of the facility or the facilities involved in the provision of the
reasonable accommodation; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such accommodation upon the operation of the facility;
(c) overall financial resources of the covered entity; the overall size of the business of a covered entity with respect to the number of its employees, the number, type, and location of its facilities; and
(d) the type of operation or operations of the covered entity, including the composition, structure, and functions of the workforce of such entity; the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the covered entity.

“In making a determination of undue hardship with respect to claims for reasonable accommodation to an employee’s or prospective employee’s religious observance … the definition of ‘undue hardship’ set forth in paragraph (b) of such subdivision shall apply.

“(b) ‘Reasonable accommodation,’ as used in this subdivision, shall mean such accommodation to an employee’s or prospective employee’s religious observance or practice as shall not cause undue hardship in the conduct of the employer’s business. The employer shall have the burden of proof to show such hardship.

“‘Undue hardship,’ as used in this subdivision shall mean an accommodation requiring significant expense or difficulty (including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system). Factors to be considered in determining whether the accommodation constitutes an undue economic hardship shall include, but not be limited to:

(i) the identifiable cost of the accommodation, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer;
(ii) the number of individuals who will need the particular accommodation to a sincerely held religious observance or practice; and
(iii) for an employer with multiple facilities, the degree to which the geographic separateness or administrative or fiscal relationship of the facilities will make the accommodation more difficult or expensive.

“Provided, however, an accommodation shall be considered to constitute an undue hardship, for purposes of this subdivision, if it will result in the inability of an employee who is seeking a religious accommodation to perform the essential functions of the position in which he or she is employed.”

This language should seem familiar because it matches that of disability accommodation. Of course, the definition of “reasonable accommodation” under the ADA is litigated on a case-by-case (Don’t you just love the uncertainty of it all?). To learn more, go to http://www.nyc.gov/html/cchr/home.html.

NLRB Poster Requirement … One More Time

With so many employers taken by surprise, the NLRB extended its poster requirement to April 30. As of April 30, 2012, most private sector employers are required to post a notice advising employees of their rights under the National Labor Relations Act. As a practical matter, the Board’s jurisdiction is very broad and covers the great majority of non-government employers with a workplace in the United States, including non-profits, employee-owned businesses, labor organizations, non-union businesses, and businesses in states with “Right to Work” laws. The notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted. Employers also should publish a link to the notice on an internal or external website if other personnel policies or workplace notices are posted there. You can get the poster, read a FAQ and learn more by going to https://www.nlrb.gov/poster.

This poster is an invitation for disgruntled employees to organize and otherwise complain about work conditions. The only defense is good personnel practices and readily available legal help if you need it. HR That Works Members should watch or listen to the recorded Webinars we did on NRLA requirements. You are also encouraged to post your literature on the wall. Let employees know the company vision, mission, goals and values. Share employee success stories. Remember, the workforce needs a drama. You have a choice of who will write the script.

Here is the poster language that employers should be concerned with:

Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
• Form, join or assist a union.
• Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
• Discuss your wages and benefits and other terms and conditions of employment or union organizing with your co-workers or a union.
• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
• Strike and picket, depending on the purpose or means of the strike or the picketing.
• Choose not to do any of these activities, including joining or remaining a member of a union.

Under the NLRA, it is illegal for your employer to:

• Prohibit you from talking about or soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
• Question you about your union support or activities in a manner that discourages you from engaging in that activity.
• Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
• Threaten to close your workplace if workers choose a union to represent them.
• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
• Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
• Spy on or videotape peaceful union activities and gatherings or pretend to do so.

Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:

• Threaten or coerce you in order to gain your support for the union.
• Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
• Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
• Take adverse action against you because you have not joined or do not support the union.

If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

Form of the Month

I-9 Compliance Frequently Asked Questions (PDF) – There were so many questions after our I-9 Webinar that we created this FAQ to help.

Podcast

Click here to to listen to this month’s newsletter podcast.

“All anyone asks for is a chance to work with pride.” —Dr. W. Edwards Deming

This issue discusses:

• Editor’s Column: Human Resource Information Systems (HRIS) – New and Improved
• Can You Cut Benefits Costs by Moving Employees to Medicare?
• Quantum HR
• Disability Employment Statistics
• Medical Documentation: Think About What’s Needed and Stop There
• ‘Bad Haircut’ and Unequal Policy Enforcement Lead to Trouble for Employer
• Leave as a Reasonable Accommodation

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Human Resource Information Systems (HRIS) – New and Improved

I see Human Resource Information Systems (HRIS) as the equivalent of “QuickBooks for managing the workforce.” They can handle employee data beginning with payroll right through to COBRA administration. Along the way, HRIS systems offer bells and whistles to help manage this data, including payroll, benefits administration, leave management, learning management, and more.

As a rule, companies with 100 employees or more have dominated the HRIS market, because these systems require a significant investment in time and money – with little short-term return. However, increasing competition in the upscale market means that HRIS providers are beginning to target smaller employers.

Here are some of the trends with these systems:

• Integration with social media platforms, including everything from Facebook to Twitter, et al.
• An improved interface that makes the system easier to use and more inviting for employees.
• Tie-ins to insurance billing (real time Workers Comp billing, benefits billing, etc.)
• Mobile access, including for time-keeping purposes, as well as integration with tablet accessibility (iPads, etc.)
• Greater assistance with online recruiting and link to recruiting portals.
• Increased use of “talent analytics” that help with recruitment, workforce planning, and succession planning, together with improved analysis of workforce facts, trends, etc.
• The “gamification” of these systems.
• Influence of “the cloud” — the storage of data maintained on secure third-party Web sites, rather than your own site (like HR That Works). Of course, you’ll have to make sure that these third-party sites are, in fact, secure.
• Integration of career planning “dashboards.”
• Increased usage of paperless technology for everything from submitting resumes to electronic signatures on documents.
• Integration with employee wellness programs.

The main advantage of an HRIS system, as with a QuickBooks program, is having well managed data. HRIS advertising stresses the time saved in pulling reports on such topics as turnover. However, most smaller companies already know their turnover level.

Second, bear in mind that companies using HRIS are already running at 75 mph. Where will they get more time to use the system? When analyzed properly, do these systems really save time? Are HRIS bells and whistles truly related to corporate strategy or are they nothing more than distracting shiny objects?

Can You Cut Benefits Costs by Moving Employees to Medicare?

Many employers are doing everything they can to reduce benefit costs. One of our HR That Works Members posed this question to Alan Levy, a benefits law expert in our network.

“Q: If an employee is eligible for Medicare, can we state/insist that they must leave our company plan and accept Medicare?”

“A: We had this question from a client recently. There are serious penalties for forcing an active employee to give up the employer’s plan and go to Medicare, and offering a personal incentive might pose a problem. However, an employee can change to Medicare voluntarily, without restrictions or charges for pre-existing conditions, etc. This also applies to Medicare supplements and advantage problems. Some employees make the change voluntarily to use the current rule’s automatic unqualified acceptance, as well as to assure any “grandfathered” rights if Congress reduces or alters the program in the future. (Every “reform” proposal seems to exempt anyone already on Medicare.) A bigger problem is what happens to an employee’s spouse who isn’t old enough for Medicare if the employee leaves the company plan and goes to Medicare. Although COBRA works for a while, extension of this period is problematic.

“Finally, an employer offering a Medicare supplement or advantage plan to all who could qualify is not considered an improper incentive; the danger comes when the employer offers an individual some extra amount. The only exception I know of in this regard is the Third Circuit rule (applicable only in PA, NJ, and DE), Erie County, which treats certain variations of this scenario as age discrimination under the ADEA. EEOC says it will not apply the Third Circuit rule anywhere else in the nation, which seems to support the idea that employers offering the supplement, etc. is permissible.”

This advice is limited to the facts of the situation. As Alan points out, the EEOC has not drawn a black and white line on permissible supplements. The Social Security Administration provides an excellent publication on the interplay between private insurance and Medicare payments. (See pages 13-14)

Quantum HR

Our understanding of the physical world grows ever deeper. Quantum physicists have taught us that simply observing matter can affect its activity. We know that bits of matter once bonded together remain “entangled” even when separated by great distances. We should remember from Physics 101 that matter likes to settle into its least active state (entropy).

What do these facts have to do with HR? It’s simple: How people think about doing their jobs has implications that might be far broader than realized. If we accept the teachings of quantum physics at face value, then:

• Due to entanglement, how you go through your day will have an invisible, but perceptible impact on how the people you bond with feel every day. If you’re having a bad day, at some point, many of your co-workers and loved ones will feel this fact.
• Much of our existence depends on what we choose it to be. The very concept of “making your day” has scientific backing. As the proverb says, “As you believe, so shall you achieve.”
• Finally, unless you’re excited, it’s natural to use the least amount of energy possible to do a job. If you want to move yourself to a higher frequency, you have to get excited. Although some of us do this naturally, most people need a little motivation to get going. Don’t underestimate the power of this motivation in your business and personal life.

Because any organization is a collection of individuals, these concepts apply to the group as a whole. A positive company culture means that there’s a positive vibration among the workforce.

Disability Employment Statistics

The Institute on Disability at the University of New Hampshire has just issued its Annual Disability Statistics Compendium. Here are some of the stats related to employment in 2010. Click here to see the entire report.

Among the 19,048,426 individuals with disabilities ages 18 to 64 years living in the community, 6,368,644 were employed — an employment rate of 33.4%. In contrast, among the 172,089,634 individuals without disabilities ages 18 to 64 years living in the community, 125,358,735 were employed — an employment rate of 72.8%. The employment rate for people with disabilities was highest in North Dakota (54%) and lowest in Kentucky (25.7%).

The employment rate for individuals with disabilities ages 18 to 64 years living in the community was 33.4% while the rate for individuals without disabilities ages 18 to 64 years living in the community was 72.8% — an “employment gap” of 39.4%. The employment gap was greatest in Maine (48.9%) and smallest in Wyoming (27.7%).

The employment gap between individuals with and without disabilities ages 18 to 64 years living in the community was 39.4%, compared with 39.1% in 2009.

Among the 19,048,426 individuals with disabilities ages 16 to 64 years living in the community, 3,834,727 were employed fulltime, year-round — a full-time, year-round employment rate of 20.1%. In contrast, of the 172,089,634 individuals without disabilities ages 16 to 64 years living in the community, 88,683,091 were employed full-time, year-round — a full-time, year-round employment rate of 51.5%. The full-time, year-round employment rate for people with disabilities was highest in North Dakota (32.1%) and lowest in Maine (15.2%).

Finally, the full-time, year-round employment rate for individuals with disabilities ages 18 to 64 years living in the community was 20.1%, while the full-time, year-round employment rate for individuals without disabilities ages 18 to 64 years living in the community was 51.5% — a full-time, year-round employment gap of 31.4. The full-time, year-round employment gap was greatest in Maine (38.8%) and smallest in Utah (24.1%).

What can an employer take away from this?

• Obtaining gainful employment can be a real struggle for people with disabilities.
• Some communities are more “open” to employing the disabled. Some of this difference has to do with the types of jobs available, employment programs, and incentives.
• As “good people” we can rise above any perceived limitations and employ those with disabilities based on the results they are capable of producing.

To help with accommodation ideas go to http://askjan.org/.

Medical Documentation: Think About What’s Needed and Stop There

In our experience at JAN, there seems to be a great deal of confusion about medical documentation under the ADA. Employers aren’t sure what they can ask for, when they can ask for it, or whether the ADA Amendments Act has changed the rules for medical documentation. Employees aren’t sure what medical information they have to provide or how much to disclose. Medical professionals aren’t sure what documentation will be most helpful in getting their patients the workplace accommodations they need. Most of these questions come up when an employee requests an accommodation.

The good news: The medical inquiry rules that apply when an employee requests an accommodation are less complicated when they might seem. The general rule is that when the disability or need for accommodation is not obvious, an employer may require an employee to provide documentation that can substantiate that s/he has an ADA disability and needs the reasonable accommodation requested, but can’t ask for unrelated documentation. So when thinking about what medical information to request or to provide, think about what is needed and stop there!

Let’s start with the documentation needed to substantiate that the employee has a disability. The definition of disability for accommodation purposes is “a physical or mental impairment that substantially limits a major life activity or a record of such an impairment.” To determine whether an employee has a disability, the employer can ask whether the employee has (or had) an impairment. If yes, you can ask whether the impairment affects (or affected) a major life activity. You can also ask whether the impairment substantially limits (or limited) the major life activity.

This is where the ADA Amendments Act has made some changes. Although the definition of “disability” remained unchanged, the threshold for showing substantial limitation is much lower than before. This means that the documentation needed to show that an employee has a disability should be far less extensive.

What about the documentation needed to substantiate the need for an accommodation? The ADA Amendments Act did not change the reasonable accommodation provisions of the ADA, so the rules for medical documentation likewise remained unchanged. An employer may verify that the accommodation is needed, ask questions about the employee’s limitations that are causing the problem, and get other relevant information about the request to help determine effective accommodations.

For more information, see recently updated JAN publications related to medical documentation, including:

• How to Determine Whether a Person Has a Disability under the Americans with Disabilities Act Amendments Act (ADAAA)
• Medical Inquiry in Response to an Accommodation Request
• Sample Medical Inquiry Form
• Practical Guidance for Medical Professionals: Providing Sufficient Medical Documentation in Support of a Patient’s Accommodation Request and Sample Accommodation Support Letter

- Linda Carter Batiste, J.D., Principal Consultant

‘Bad Haircut’ and Unequal Policy Enforcement Lead to Trouble for Employer

In NLRB v. White Oak Manor, the Fourth Circuit Court of Appeals enforced a decision by the National Labor Relations Board finding that an employer violated the National Labor Relations Act when it discharged an employee for allegedly photographing employees at work without permission. The Court agreed with the Board’s findings that the employee was actually discharged because of protected concerted activity and that the employer had not enforced its photography and dress code policies consistently.

Nichole Wright-Gore worked as a supply clerk for White Oak Manor. White Oak’s policies prohibited employees from wearing hats and taking photographs inside the long-term care facility. Wright-Gore was embarrassed about a bad haircut and started to wear a hat to work, without comment from any supervisor. After a week, however, when supervisors told her to remove the hat, she refused and was sent home. The next day, White Oak employees dressed up in costumes for Halloween. Wright-Gore’s costume included a hat, but her supervisor made her remove the hat pursuant to company policy. Wright-Gore complained that White Oak was enforcing the hat policy unequally, but her supervisor told her to worry only about herself and gave her a written warning for insubordination because she had refused to remove her hat the day before.

During the next few weeks, Wright-Gore photographed several employees wearing hats to work and violating other White Oak dress policies, such as failing to cover up their tattoos. She photographed some employees with their consent, but also took photographs of employees without their consent. She also shared the photographs with other employees and discussed the unequal treatment with them in an attempt to build support for her argument. White Oak eventually discharged Wright-Gore for violating the photography policy.

She then filed an unfair labor practice charge alleging that White Oak interfered with her right to engage in protective concerted activity. The Administrative Law Judge (ALJ) found that Wright-Gore’s complaints became protected concerted activity when they evolved into an effort to have White Oak enforce its dress code policies fairly. Another important issue was whether she lost protection of the Act by taking pictures of other employees without permission, in violation of White Oak policy. The ALJ held that she did not, in part, because there was evidence that other employees took pictures of each other without permission, and even displayed the pictures around the facility, without repercussion. The Board affirmed the ALJ findings.

On appeal, White Oak argued that Wright-Gore could not have engaged in protected concerted activity because she initially acted out of pure self- interest, and did not intend to act on behalf of a broader group. The Fourth Circuit rejected this argument and enforced the Board’s decision. As the court noted, “[t]hat an employee’s self-interest catalyzed her decision to complain about working conditions does not inexorably bar a determination that her actions were protected and concerted.” Thus, the fact that Wright initially acted out of her own self- interest did not remove her actions from the protections of the Act. Moreover, the court’s decision emphasized the fact that White Oak had not enforced its photography or dress code policies consistently.

This case reinforces the importance of employers enforcing workplace policies consistently and the reality that seemingly individualized complaints can lead to employer decisions which conflict with the National Labor Relations Act.

Courtesy of Worklaw® Network firm Franczek Radelet.

Leave as a Reasonable Accommodation

One of the more vexing issues facing both employers and employees involves leave time related to a medical condition, especially when the period of leave exceeds an employer’s permitted leave allowance or otherwise violates an established attendance policy. Although such situations might be challenging and confusing, employers must confront them directly because using leave necessitated by an employee’s disability constitutes a “reasonable accommodation” under the ADA.

The U.S. Equal Employment Opportunity Commission’s (EEOC) Reasonable Accommodation Guidance provides examples of some of the reasons an employee with a disability might require leave:

• Obtaining medical treatment or rehabilitation services related to the disability.
• Recuperating from an illness or an episodic manifestation of the disability.
• Obtaining repairs on prosthetic device or other equipment such as a wheelchair.
• Avoiding temporary adverse conditions in the work environment (for example, an air-conditioning breakdown causing unusually warm temperatures that could seriously harm an employee with multiple sclerosis).
• Training in the use of a service animal or assistive device.
• Training in the use of Braille or sign language.

Here’s a discussion of some frequent and confusing leave-related issues that employers and employee have presented to JAN.

How Much Leave Is Reasonable? The ADA does not set a specific amount of time relative to the use of leave as a reasonable accommodation. As with any accommodation situation, you should consider a period of leave for an employee with a disability on a case-by-case analysis. If an employee needs a leave of absence that exceeds his or her accrued paid leave, the employer should permit the employee to exhaust the paid leave and then allow the use of unpaid leave absent undue hardship.

Although there’s no limit on the amount of leave used as a reasonable accommodation under the ADA, the EEOC has held that employers need not grant indefinite leave as a reasonable accommodation (see the EEOC Guidance on Applying Performance and Conduct Standards, Question 21). However, the employee need not provide a specific, fixed date of return. A request for leave is acceptable with an approximate date of return (e.g., around the end of August) or a range of dates for a return to work (e.g., sometime between August 24 and September 23).

ADA and the Family and Medical Leave Act (FMLA). An employee’s rights under the ADA and the FMLA are separate and distinct. The EEOC has ruled that when an employee is entitled to leave under both laws, the employer should allow leave under the law providing the employee with the greater rights (see the EEOC Fact Sheet on the FMLA, ADA, and Title VII). Additionally, employers should note that the ADA might require them to grant leave beyond the 12 weeks allowed under the FMLA as a reasonable accommodation. In this case, an employer can consider the FMLA leave taken in determining whether the requested leave time poses an undue hardship.

Erratic or Unreliable Attendance. The ADA can require employers to modify attendance policies as a reasonable accommodation in the absence of undue hardship. This does not mean that employers must exempt an employee from time and attendance requirements completely or accept irregular and unreliable attendance unquestionably. Frequent occurrences of tardiness or absenteeism, particularly during an extended period and without adequate notice, could certainly impose an undue hardship in many situations. See the Commission’s Guidance on Applying Performance and Conduct Standards for a detailed discussion with examples of specific scenarios.

Alternative Accommodations. Although it makes sense for employers to give an employee’s choice of accommodation primary consideration when more than one reasonable accommodation is possible, they can ultimately choose the accommodation to be implemented, assuming that it’s equally effective. Accordingly, under the ADA an employer can offer a reasonable accommodation that requires an employee to remain on the job, as long as it’s effective and doesn’t interfere with the employee’s medical needs.

Holding the Employee’s Position. The ADA requires an employer to consider returning the employee to his or her same position in the absence of undue hardship. If undue hardship applies, the employer must consider reassignment to a vacant, equivalent position for which the employee is qualified.

Undue Hardship. As with any other reasonable accommodations, whether an employer should allow the use of leave as an accommodation will sometimes come down to an undue hardship analysis. In the case of leave, undue hardship will generally relate to a possible disruption in operations of the entity. For instance, the absence of an employee who performs highly specialized duties might create legitimate undue hardship issues, as might leave that occurs in a frequent and unpredictable manner. Generalized assessments are not adequate, because undue hardship must be determined based on individual and specific circumstances. Additionally, the EEOC has ruled that an employer cannot base an undue hardship claim on the argument that a reasonable accommodation might affect the morale of other employees negatively or that other employees might have to cover for the employee who is on leave.

What to Remember. Ultimately, much of the confusion involving leave as an accommodation occurs when there are no clear and open lines of communication. Lack of communication is usually the major obstacle to executing an effective accommodation solution. All parties need to be aware of any relevant updates or concerns, and everyone should make an effort to keep the information flowing. If you need ideas on how to encourage ongoing communication during the accommodation process, contact JAN.

- Bill McCollum, MPA, Consultant

Form of the Month

I-9 Guidelines Audit (PDF) – Use this form for auditing your I-9 Forms, which verify the citizenship status of employees.

Podcast

Click here to to listen to this month’s newsletter podcast.

“Being the richest man in the cemetery doesn’t matter to me … Going to bed at night saying we’ve done something wonderful … that’s what matters to me.”  — Steve Jobs (1955-2011)

This issue discusses:

• Editor’s Column: Improving Employee Productivity
• Oklahoma Health Care Workers Get More Than $244,000 in Back Wages
• Sage Advice
• Do You Have a Funny Human Resource Story You’d Like to Share?
• When to Use Experts in Trials
• The Reality of Retirement Planning
• Exclusions from Coverage Under EPLI Policies
• IRS Issues Rules for Employer-Provided Cell Phone

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Improving Employee Productivity

Over the years, I’ve written and spoken about performance improvement/ productivity many times. Here’s what I’ve come to notice and believe:

• People can only perform as well as the system within which they work. As Dr. Deming said, “Most employee failures are management failures.”
• People can’t perform beyond their abilities. This “Peter Principle” means we have to be very clear in testing and assessing folks’ natural abilities and desires.
• We need a clear definition of “good performance.” This involves two questions: What are the most important things you do every day? And, how would you know if you were doing them well without having to ask me or without my having to tell you because the benchmarks are clear?
• Create 90-day goals, weekly To-Do lists, and daily task lists. Share your goals, discuss them, support them, and reward them.
• Praise specifically and as often as possible. Instead of saying “You did a good job today” say, “I particularly like how you handled that customer when … “
• Nurture and support your best performers. Unfortunately, because these folks are too busy to generate drama, managers often ignore them to focus on people more interested in being right about things than getting work done.
• Surprise people. Hand them a gift card for dinner, put an article about them in the paper, nominate them for a reward, throw a surprise birthday party for them, etc.
• Don’t hang on to losers or victims. If people aren’t performing after you’ve done your best and they seem more interested in drama than productivity, you must let them go. If you don’t, you’ll undermine your culture and goals in the process. Make sure to deal with poor performance now, and follow the lawyers’ recommendation to document any significant concerns.

Oklahoma Health Care Workers Get More Than $244,000 in Back Wages

Health Management Associates Inc., which operates Midwest Regional Medical Center (Oklahoma City, OK), has paid $244,341 in overtime back wages to 1,064 registered and licensed practical nurses and certified medical assistants. Wage and Hour Division investigators found violations of the Fair Labor Standards Act, including deductions that were made for lunch breaks when employees were not taking an uninterrupted lunch and failure to maintain required record keeping. The company cooperated with the investigation, and agreed to pay back wages and comply with the FLSA in the future. For more information, read the News Release.

Sage Advice

A recent issue of Volleyball USA shared wise advice from 12 of the top volleyball minds in the nation. As someone who not only has coached kids’ teams, but also many executives, I found valuable pearls of advice in the article that can help all of us to be better managers and leaders:

• Control the controllable. Don’t spend time dwelling on the last play – good or bad. This holds true of the workplace. What was not controllable is what Dr. Deming would call a general variation. Eliminating general variations is the responsibility of management. Trying to control uncontrollable or special variations is extremely difficult and tends to be a waste of time. Don’t dwell on mistakes made. Correct the problem and move on.
• Pursue perfection. It’s unattainable, but striving for it will bring out the best in your players. Again, Dr. Deming would say “Amen.” He taught Japanese industry to manufacture toward perfection, not toward a tolerance. This is one reason why the Lexus brand is “the relentless pursuit of perfection.” Do your best to generate perfect hiring, retention, performance, motivation, teambuilding, and compliance practices. Settling for anything less is a mistake.
• Have fun! The team has to be able to laugh, and sometimes it’s at the coach’s expense. Life is too short to not have fun managing and working with employees. Having fun is a choice. So is being a fun boss – or employee.
• When under stress, call a timeout. I’ll often call a timeout and gather my work team to do a head check, outside of our “normal schedule.” Owners and coaches have to be sensitive to when it’s time for a timeout.
• Coaching and functional teams are about relationships of trust. If you want to develop trust in your team, you have to prove yourself to be trustworthy. I believe that trust is the single most important factor in the workplace. People who trust each other perform better. People who trust each other don’t sue each other. The basis for trust lies in both the ability and the desire to perform. That’s true of you and anyone you manage. One of the best ways to know that you can trust somebody is to test their skills and assess their character.
• Talent isn’t rare. What’s rare is a talented athlete who has the work ethic to become the player they’re capable of becoming. We’ve all seen “talented” employees underperform just because they’re not driven toward excellence. In a sense, they’re wasting their talent. There are also times when management can dampen the desire to perform, especially when most of the energy focuses on pointing out mistakes rather than acknowledging victories.
• Championship teams find ways to win when it’s difficult to do so. Things aren’t going to be rosy all the time – just ask anyone who’s been in business for the past three years. However, even in a recession many companies have survived and thrived. As the saying goes, “when the going gets tough, the tough get going!”
• Although coaches are change agents, they need to buy in before there can be any significant change. Bosses are change agents, too! How well are you selling your vision and getting buy-in? How can you make the notion of change something that people embrace rather than try to protect themselves against?
• Design your offensive and defensive system around your athletes, not your athletes around your system. Determine the strengths and weaknesses of your employees and design a system that plays to their strengths. Again, there’s a consistent theme of being clear about employee skill sets and affinities. None of us are good enough to guess at these things – that’s the value of using testing and assessment tools. Ultimately, you need to put a square peg into a square hole.
• Winning is a by-product of taking care of your players. Focus on helping them become better people and they will become better players. I’m always amazed how many employers don’t understand this. Very few employers are willing to invest in their employees and prefer to squeeze what they can out of them. If you’re not engaging in education, teambuilding, and other ways of growing your people, there’s no way you’ll be a long-term winner.
• The worst mistake you can make is being afraid to make mistakes. Amen! In fact, we have to make mistakes faster than our competition. We try to mitigate against the potential of making a mistake. See the Webinar I did on “Stop Making Mistakes!”
• As a coach, you get what you tolerate, whether errors, technique, or behavior. As the Buddha said, “What comes to you comes from you.” What are you tolerating in yourself or others? Are you the type of coach/boss who settles for mediocrity because demanding excellence might require a different quality of effort on your part?
• The “we” is greater than the “me.” Business is a team sport. As they say, there’s no “I” in team. Are you focused on providing incentives for the team first or individuals first? Remember, a rising tide floats all boats. Check out the five-minute video I did on a powerful team-building technique.
• Don’t allow your people into the game until they’re ready to play. Do your employees come to work ready to perform? How many employees prefer to begin the workday by gossiping? As one of the coaches stated, “Once they walk in, it’s time to go to work.” They should do their talking, texting, and lounging elsewhere.
• Get the best athletes who qualify for your program. There’s no substitute for getting the right person in every seat on the bus. Great coaches know this – and so do great business leaders. The book Good to Greatmakes this point loud and clear.
• If players have excellent results using their own style, do not change their technique. This is always a Catch-22, especially in the sales arena. For example, you might want your salespeople to sell a certain way that goes against the grain of how a very successful person is selling currently. Remember, what matters most is producing results.
• Select the skills to teach by identifying the most athletic movements, and copying the great players. This idea of “modeling” applies to successful people and companies. What’s the most important activity or function that your most productive employees perform? What is it about the “how” of their performance that all people who perform this function should consider a “best practice” (bearing in mind the advice about letting top performers stick to their own style)?
• Enter the gym with the beginner’s mind. Every day offers an opportunity to improve, as long as players remain open to learning. The same thing holds true for coaches and bosses. Do you come to work every day with a “beginner’s mind”? Conversely, do you think you’ve figured it all out already? A great question to ask yourself is: “What can I learn today?”

To what degree are the owners, managers, and supervisors at your company following these well-tested bits of coaching wisdom?

Do You Have a Funny Human Resource Story You’d Like to Share?

Human resources can tend to be a “heavy” subject. It’s seldom about fun and games; However, I’ve also experienced the humor in HR over the years. Please share with us any fun anecdotes/stories about the human resource process, including those in these areas:

• What bosses and others have said to you about human resources in general, or the fact you’re in HR in particular.
• The hiring experience.
• Employee performance or nonperformance.
• Compliance concerns (believe it or not, there are some funny stories).
• The termination process.
• Any other wacky HR/personnel-related stories.

In an effort to keep us all sane, I’ll combine and publish the best of these stories and share them with our HR That Works members. Remember, if you provide us with a story, you also give us permission to use that story.

When to Use Experts in Trials

A recent article in the California Labor Employment Law Review discussed the dos and don’ts of using HR experts in trial. Here’s a list of “appropriate” uses:

• Common techniques of employee screening and selection.
• Methods of employee evaluation.
• Techniques for selection of employees for promotions.
• Operation of seniority rules in a unionized workforce.
• Processes for employee discipline.
• Adequacy of policies prohibiting harassment and procedures for reporting it.
• The “interactive process” of accommodating an employee with a disability.
• The reasonableness of a proposed accommodation in a specific business context.
• Adequacy of investigations into workplace misconduct or “whistleblower” complaints.
• Management of employees with work-related illnesses or injuries.
• Design and application of employee compensation and benefit plans.
• Design and application of ethics codes.

What you are doing to bring this level of expert knowledge into your company proactively – thus avoiding the need for an expert at trial?

The Reality of Retirement Planning

In August 2011, CNNMoney.com polled more than 8,000 individuals asking whether their retirement plans are on track. More than half (51%) said “Yes,” 29% said “Not quite but we’ve got a plan,” 12% said “Retire? I’ll be working forever,” and 8% said “Haven’t got a clue.” This is consistent with other polls I’ve seen about how people manage their finances. For example, roughly half of Americans have a personal budget and the other half don’t. Chances are that the half with budgets has their retirement plans on track. Many employees will be working much longer than expected, in large part, due to their financial ignorance.

What implication does this have for employers? Consider this:

• More than one in three workers (36%) say they expect to retire after 65, and one in four workers (25%) actually do so. How do you expect to manage this fact? How will it affect any succession planning? What will be its impact on productivity and customer relations? If you’re an HR That Works user, please watch our Webinar, Rehirement vs. Retirement! Understanding, Attracting and Retaining the Mature Workforce, presented by Gail Geary.
• Don’t underestimate the importance of financial education. Two years ago, we did a Webinar that remains relevant today with Dave Ramsey’s business coach, George Campbell. This Webinar explained how the financial stress of individual employees compounds to affect a company as a whole. We’ve also brought in the nation’s top teachers of accounting to do a Webinar on The Accounting Game. We’re currently setting up a Webinar with the Certified Financial Planner Organization to teach basic financial planning on the home front.

As employers, we have to acknowledge that if we don’t address the two greatest concerns of our employees – how they handle their health and how they handle their money – the impacts of those challenges will fall on our organizations. Please make sure to attend the Webinar on Financial Planning.

Exclusions from Coverage Under EPLI Policies

In addition to General Liability, Errors and Omissions (E&O), and Directors and Officers (D&O) policies, some employers also buy Employment Practices Liability Insurance (EPLI). An EPLI policy usually covers claims by employees and former employees under federal, state, and local discrimination laws, including Title VII, the Americans with Disabilities Act (ADA), etc. EPLI policies usually exclude claims arising under the National Labor Relations Act (NLRA), the Employee Retirement Income Security Act (ERISA), and sometimes the Fair Labor Standards Act (FLSA).

A recent federal district court ruling, that an EPLI policy did not cover a lawsuit brought by the Equal Employment Opportunity Commission (EEOC), reinforces the need for employers to do a careful review of possible exclusions in their EPLI policies.

In Cracker Barrel Old County Store, Inc. v. Cincinnati Insurance Co., the EEOC sued the employer alleging systemic sexual and racial harassment based on ten EEOC charges. The employer settled the lawsuit and signed a consent agreement with the EEOC to pay $2 million. The company had an EPLI policy and submitted the claim to its insurer. However, the insurer refused to cover the costs of the settlement, arguing that a suit filed by the EEOC was not a “claim” against the employer under the EPLI policy, which defines “claim” as “a civil, administrative, or arbitration proceeding commenced by the service of a complaint or charge, which is brought by any past, present or prospective employee(s).” The employer sued the insurer for indemnification. The trial court dismissed the company’s suit, holding that because the EEOC, rather than an employee, filed the suit, the EPLI policy did not cover the claim.

This case highlights the potential cost when an employer does not understand the scope of insurance coverages. Employers should review their policies to ensure that they have a complete understanding of what their EPLI policies will and will not cover. Although this review should occur when the policy is purchased, at a minimum, the employer should review its coverage with the insurer after a lawsuit so that it has a full understanding of what will be covered.

Article courtesy of Worklaw® Network firm of Shawe Rosenthal.

IRS Issues Rules for Employer-Provided Cell Phones

The Internal Revenue Service has issued guidelines to clarify the tax treatment of employer-provided cell phones. The guidance relates to a provision in the Small Business Jobs Act of 2010, which removed cell phones from the definition of listed property, a category under tax law that normally requires additional recordkeeping by taxpayers.

The Notice provides guidance on the treatment of employer-provided cell phones as an excludible fringe benefit. According to the Notice, when an employer provides an employee with a cell phone primarily for non-compensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive this tax-free treatment.

Simultaneously, an IRS memo to its examiners announced a similar administrative approach that applies to arrangements common to small businesses that provide cash allowances and reimbursements for work-related use of personally owned cell phones. Under this approach, employers that require employees, primarily for non-compensatory business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees’ expenses for reasonable cell phone coverage as nontaxable. This treatment does not apply to reimbursements of unusual or excessive expenses or to reimbursements made as a substitute for a portion of the employee’s regular wages.

Under the guidelines, when employers provide cell phones to their employees or reimburse employees for business use of their personal cell phones, tax-free treatment is available without burdensome recordkeeping requirements. The guidance does not apply to the provision of cell phones or reimbursement for cell-phone use that is not primarily business related, because such arrangements are generally taxable.

Details are in the memo and in Notice 2011-72, posted on IRS.gov.

Form of the Month

Guidelines for the Secure Use of Social Media (PDF) – Use these legal recommendations to develop your social media usage policy.

Podcast

Click here to to listen to this month’s newsletter podcast.

“Sandwich every bit of criticism between two heavy layers of praise.” – Mary Kay Ash, Founder, Mary Kay Cosmetics

This issue discusses:

• Editor’s Column: Managing the Second-Greatest Risk at Your Company
• Frequent Absences from Work Don’t Necessarily Render an Employee Unqualified Under the ADA
• Doctrine of “Unclean Hands” Bars Employee from Recovery
• Court Limits Reinstatement Obligations After 12 Weeks of FMLA Leave

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Managing the Second-Greatest Risk at Your Company

The greatest risk any business, including yours, faces is lack of proper sales and marketing. With today’s commoditization of products and services, it’s the experience that tends to matter most. Those companies that produce the best sales and marketing experience will usually be the most profitable. That’s why roughly half of all training dollars go for sales and marketing training. If one salesperson outsells another one 2 to 1, you have a 100% variance. That’s a good reason to spend money on sales training. The remaining training dollars go toward everything else: From operations, technology, customer service, finances, to — you guessed it — HR!

The second greatest risk your company faces is not having quality HR practices. Most companies have randomized ones. Do you? Anytime I’ve run the HR That Works Cost Calculator for a client, the “variance,” cost, or risk associated with the company’s HR practices come to at least 10% of payroll. This figure combines a company’s hiring practices, employee productivity, turnover, teamwork, time management, safety record, employment practice exposures, and other factors. When you think about it, the only other area of your business with this high a variance might be customer service. This means that sales, marketing, human resources, and customer service have the greatest variance within an organization – and, thus, the greatest amount of risk. Unfortunately, few businesses can insure themselves against these risks. It’s Darwinism at its best.

If any other part of your business had a 10% or greater variance, you’d be in a heap of trouble. If you have a 10% variance in how you manage your financial books, you’d probably be in jail. A 10% variance in product quality would mean you’d be facing liability suits regularly. A 10% variance in how you deliver your professional services would lead to a high frequency of E&O claims.

I’ll be the first to admit that HR isn’t sexy. However, my point is that it can be and should be! Sales and marketing is all about “them.” HR is about “us” – about who we are as human beings, not just human resources. I’m amazed that more HR professionals don’t take greater advantage of the HR opportunity. Perhaps you’re primarily engaged in administrative or financial functions and have been handed the HR role. That’s awesome. If you don’t like the idea of HR, then call it something else, such as the “People Excitement” role. Call it whatever will work. However, don’t underestimate the opportunity you’ve been handed.

One of the roles of HR is to make sure that our employees are promise keepers. They have to live up to the promises our sales and marketing communications make. Ultimately, the sales and marketing promise means delivering great client or customer experiences. That’s what matters now more than anything else. How can you, as an HR manager, help employees deliver great customer experiences?

If neither you nor anybody else in the company wants to jump on this opportunity, hire somebody part-time to help you do it. Think about it this way: How would you like to have poor hiring practices, high employee turnover, low productivity, poor teamwork, lousy training, high Workers Comp and Employment Practices claims, misuse of benefits — and a ton of unnecessary and expensive and destructive drama? All of a sudden, having good HR practices doesn’t seem like such a bad idea.

What’s most important is what needs to be done now. Where’s the stress in your organization? What feels unfair to people? We can certainly try to help eliminate some of the victimization in the workplace. At the same time, we have to ask, “What’s going exceptionally well?” How can we support getting twice of that? How can this provide a model for other departments or functions?

The unfortunate truth is that most people who wear the HR hat in small to mid-sized companies aren’t really excited about their job; in a sense, they got the job by default. Chances are that they didn’t say, “I can’t wait to get a hold of this and kick you know what!” Let’s hope that you or your HR manager isn’t that kind of person. Don’t give up on trying to make a difference just yet. Focus on the value to help generate greater productivity, profitability, and joy on a daily basis. Focus on the potential that exploiting such an opportunity can provide, not just for the company, but for the manager’s career and well-being.

How can you start being this person if you wear the HR hat? My answer: Begin by doing at least one proactive thing every month to improve some part of the HR function. Don’t have a narrow view of what HR can stand for. It’s not just about payroll, benefits administration, and making sure that you’re compliant. It’s about tapping into people’s heads and hearts so that you can create something special together. There are plenty of tools on HR That Works to support you on this journey. Begin to educate yourself by reading the newsletter or listening to podcasts, and then you tackle one proactive strategy a month. Take a look at the HR Implementation Plan to give you some great ideas. Do this for a year and you’ll be able to look back and be proud of the body of work you’ve generated. Also, make sure to report to ownership or management the strategy you’ve developed and how it will impact the company (a one-page memo will suffice). Here are 10 quick steps you can take to start making a difference today:

1. Make sure your employee handbook is up to date. Have an attorney review it. Then bring it to life. To see the sample employee handbook we did for the San Gabriel YMCA, click here. Now that’s an awesome employee handbook!
2. Skill-test all your employees. Go to www.Previsor.com to see what test(s) they offer for each one of your positions. The cost will probably come to $20 to $50 per employee – an investment that’s more than worth it. The test results will give you facts, rather than assumptions, letting you know which employees have the skill sets and which need some training.
3. Make sure everyone—managers and rank-and-file employees alike—has gone through sexual harassment training. They need to know the company’s policy and acknowledge it annually. When I spoke to a CEO group recently, one of the participants told me that her company had just settled a sexual harassment case that she felt was frivolous for $350,000! Fortunately, the company had Employment Practices Liability Insurance, which offset much of the settlement cost. HR That Works offers a variety of lawsuit prevention tools and training.
4. Create your team rules. Look at the sample Team Rules template on HR That Works and tweak it to work for your company. Make the rules something in which you can take pride. Once you finalize it, go down to Kinko’s, have it blown up and laminated, and then have all your employees sign it so that they can walk by and have an attachment to it every day.
5. Require use of the Overtime Authorization Form. One of our printing press clients with 80 employees saved roughly $100,000 in one year by using it. “Unwarranted” overtime fell by $5,000 the first month they used the form – a $60,000 annual saving. Next, the company analyzed those clients who were causing “legitimate” overtime and realized that it wasn’t passing along this added expense to them – which meant that the firm was barely breaking even or losing money on these jobs. They let their clients know about the costs of last-minute demands and told them they would charge them a premium in the future. The company sent clients who didn’t want to go along with this program off to its competitors. Finally, to minimize overtime stemming from poor internal practices, the company applied TQM to these activities.
6. Set up a lunch-and-learn program (preferably monthly) for your management team. Use these programs to do “workshops” in which you set a theme, present a challenge, and work as a team to come up with some solutions. Other meetings can focus on a learning mode. Watch one of the excellent HR That Works leadership Webinars — any one of them will suffice as a start. Most managers outside of the sales arena get very little training, perhaps because businesses are concerned about its time and cost. If you have employees who are classified as exempt, you’re certainly allowed to have them eat a healthy lunch and hold a one-hour training session or workshop. You might get so excited about the idea that you even start doing these on a bi-weekly basis.
7. Join a “mastermind group” with other HR executives. These groups support each other, challenge each other, and put your feet to the fire. All the successful executives I know are in mastermind groups. I ran a group for senior HR executives because they realized that had a personal need for it. If you’re an HR That Works Member and would like to start such a group, e-mail me, and I’d be happy to send you a whole protocol and process that will help you get started.
8. Distribute the Employee Compliance Survey. This is the single most powerful compliance form ever designed. Plaintiff’s lawyers don’t want you using it because it can cut the amount of employment law litigation in half. Because I no longer litigate, I have no qualms about making sure you use this powerful document. I don’t know of a single company using this tool that has suffered an employment verdict. An attorney from Tennessee told me that his client had won a summary judgment using the form; I also had a call from a company in Fort Lauderdale who said that after employees wrote “Fifth Amendment” across the form they did an investigation and found a serious sexual harassment situation that was about to evolve into an employee lawsuit. I would suggest distributing the form twice a year.
9. Run your numbers in the HR That Works Cost Calculator by clicking here. I’d encourage you to watch my explanatory video first. These numbers will help you identify your HR story from a bottom-line perspective, and provide all the ammunition you need to liberate some of your time so you can do a better job of working on HR – not just in HR.
10. Survey your management team by using the HR Department Survey. Don’t guess at what types of support the rest of the management team needs from HR. Survey them to find out. I find that in companies where HR is not strategic in nature, it will receive good scores for payroll and benefits administration and low scores for hiring, performance management, or training.

Conclusion: Those are a handful of ideas to help get moving on doing something with this opportunity. There’s magic in doing one of them today!

Frequent Absences from Work Don’t Necessarily Render an Employee Unqualified Under the ADA

The U.S. Court of Appeals for the First Circuit ruled recently that an employee who frequently missed time from work due to chronic fatigue syndrome had the right to present her Americans with Disabilities Act (ADA) claims to a jury. The Court found significant the fact that the employee had been accommodated in the past through a flexible work schedule that allowed her to work regularly.

Facts of the Case: In Valle-Arce v. Puerto Rico Ports Authority, the employee, who worked in the human resources department of the Puerto Rico Ports Authority, suffered from chronic fatigue syndrome (CFS). Her symptoms included insomnia, joint and muscle pain and weakness, and headaches.

To accommodate her insomnia, her doctor had suggested changing her work start time from the employer’s standard 7:30 a.m. start time to 9:00 a.m., and she communicated this to her employer. For two years, the employee’s supervisor accommodated her request by allowing her to come in to work later, as long as she completed the requisite 37.5 hours per week or accounted for any shortfall with vacation or sick leave.

Subsequently, the employee was assigned a new supervisor who began to question her flexible schedule almost immediately and monitor her entry and exit times. In addition, the employee alleged that her new supervisor harassed her by, for example, reprimanding her for late arrivals, telling her that insomnia was not an excuse for absences and, sometimes requiring her to obtain doctors’ notes covering absences of one or two days, when the employer’s policy required such notes only for absences of three days or more. Over time, according to the employee, her new supervisor’s alleged harassment caused her CFS symptoms to worsen, to the point that she needed to take two extended medical leaves.

After she returned from her first period of leave, the employee’s supervisor recommended disciplining her for mishandling the reasonable accommodation request of a coworker. The company eventually terminated the employee because she allegedly violated confidentiality rules in handling an employee’s reasonable accommodation request and used her work computer and other work resources for a personal matter during work time. At trial, the lower court granted the employer’s motion for judgment as a matter of law, finding that the employee was not a qualified individual under the ADA because attendance was an essential function of her job. The employee then filed an appeal.

The Court’s Ruling: On appeal, the U.S. Court of Appeals for the First Circuit vacated the lower court’s decision. Although acknowledging that attendance is an essential function of any job, the Court noted that the employee presented evidence that the flexible work schedule she had requested as an accommodation would have allowed her to fulfill the essential function of attendance. The employee testified that she had never been reprimanded during the time her former supervisor had allowed her to work a flexible schedule; and that the stress caused by her new supervisor’s alleged haranguing about her attendance led to her having to take extended medical leave, leading to the long absences on which the trial court based its ruling that she was unqualified.

The Court also held that a jury might have considered the employee’s testimony regarding poor treatment by her new supervisor to be evidence of disability discrimination or retaliation for her requests for a reasonable accommodation.

Finally, the Court noted, the employee presented enough evidence for a jury to question whether her termination was retaliatory, as she testified that other employees used their computers for personal matters and that she did not violate any agency policies in her handling of her co-worker’s reasonable accommodation request.

Practical Impact: The ADA Amendments Act of 2008 makes it far easier for employees to show that their health condition qualifies as a disability. In this case, the employee was accommodated under the regime of a prior supervisor, but her new supervisor was less willing to accommodate her request for flexible work hours.

Although new supervisors are generally free to enforce attendance standards that a prior supervisor did not, if the new supervisor rejects a prior accommodation that allowed the individual to meet the essential functions of their position, as was the case here, the employer could face liability under the ADA.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (http://www.shawe.com/).

Doctrine of “Unclean Hands” Bars Employee from Recovery

In the California case of Salas v. Sierra Chemical Co., the court denied an ADA and Workers Comp retaliation claim when the employer discovered after the fact that the Social Security number that Salas had used to secure employment with the company belonged to a man in North Carolina! In making its ruling, the court noted that Immigration Reform and Control Act of 1986 (IRCA), requires that employers refrain from knowingly hiring or continuing to employ unauthorized aliens.

However, the IRCA also “prohibits aliens from using or attempting to use “any forged, counterfeit, altered, or falsely made document” or “any document lawfully issued to or with respect to a person other than the possessor for purposes of obtaining employment in the United States.”

“These facts, if not genuinely disputed by Salas, would entitle Sierra Chemical to judgment as a matter of law based on the complete defense of the after-acquired-evidence doctrine … Salas misrepresented a job qualification imposed by the federal government, i.e., possessing a valid Social Security number that does not belong to someone else, such that he was not lawfully qualified for the job. Further, Salas placed Sierra Chemical in the position of submitting a perjurious I-9 form and filing inaccurate returns with the Internal Revenue Service and the Social Security Administration. In these circumstances, Salas should have no recourse for an allegedly wrongful failure to hire.”

The court further ruled that the “unclean hands doctrine” barred the plaintiff’s wrongful discharge and contractual claims because “[p]laintiff’s misrepresentations went to the heart of the employment relationship and related directly to her wrongful discharge and contractual claims … In light of the nature of the misrepresentation, the fact that it exposed Sierra Chemical to penalties for submitting false statements to several federal agencies, and the fact that Salas was disqualified from employment by means of governmental requirements, we conclude that Salas’s claims are also barred by the doctrine of unclean hands.”

As a last-ditch effort to continue his case, the plaintiff tried to rely on a California bill passed to provide broader protections to workers under state law. The court dismissed this effort as well, stating that, “the provisions of SB 1818 make explicit California’s preexisting public policy with regard to the irrelevance of immigration status in enforcement of state labor, employment, civil rights, and employee housing laws. Thus, if an employer hires an undocumented worker, the employer will also bear the burden of complying with this state’s wage, hour and Workers Compensation laws.”

“However, while SB 1818 provides that undocumented workers are entitled to [a]ll protections, rights, and remedies available under state law, the enactment does not purport to enlarge the rights of these workers, instead declaring that its provisions are declaratory of existing law. Existing law precluded an employee who misrepresented a job qualification imposed by the federal government, such that he or she was not lawfully qualified for the job, from maintaining a claim for wrongful termination or failure to hire … This rule applies regardless of immigration status. Moreover, it does not frustrate the purposes of SB 1818 because it allows undocumented immigrants to bring a wide variety of claims against their employers as long as these claims are not tied to the wrongful discharge or failure to hire … Accordingly, at the time SB 1818 was enacted, an undocumented immigrant possessed no right under state law to maintain a claim for an allegedly discriminatory termination or failure to hire when the claim would otherwise be barred by the after-acquired-evidence or unclean hands doctrines.”

Bottom line for employers: Make sure that you do proper immigration and other background checks and act on any misrepresentations. (We recommend you use http://www.globalhrresearch.com/ for this purpose). Also, have a policy that declares that any misrepresentations in the hiring process will result in termination of employment. Add this policy to your job applications. Remember, nobody has a right to lie their way into a job. Also, bear in mind that this is a “narrow” decision, and there are many circumstances (such as wage payments or Work Comp coverage) in which immigration status is not a factor under California law.

Court Limits Reinstatement Obligations After 12 Weeks of FMLA Leave

In the case of Rogers v. County of L.A., the court ruled that an employee who was out on more than 12 weeks of leave no longer enjoyed protection under the FMLA for job reinstatement. Here’s the court’s ruling (edited for brevity):

First, the CFRA statutory language (which mirrors the FMLA) expressly allows an employee “to take up to a total of 12 workweeks in any 12-month period.” The statute also requires an employer to provide “a guarantee of employment in the same or a comparable position upon the termination of the leave.”

Second, other obligations under the CFRA are tied expressly to the 12-week protected leave policy. For example, the employer may require the employee to use accrued sick leave “during the period of the leave.” The employer is only required to maintain and pay for coverage in a Group Health plan “for the duration of the leave, not to exceed 12 workweeks in a 12-month period.” Under certain circumstances, the employer can recover premiums paid for maintaining coverage for the employee under the Group Health plan if the employee “fails to return from leave after the period of leave to which the employee is entitled has expired.”

Third, other courts interpreting the CFRA and the FMLA have concluded that the statutes only ensure protected leave for a 12-week period. In the Neisendorf case, the court cited three federal cases holding that an employer does not violate the FMLA when it fires an employee who is unable to return to work at the conclusion of the 12-week protected period.

Finally, policy considerations underlying the FMLA, which closely parallels our CFRA, support our conclusion. In enacting the FMLA, Congress was concerned about “inadequate job security for employees who have serious health conditions that prevent them from working for temporary periods. “The purposes of the FMLA are: “(1) to balance the demands of the workplace with the needs of families, (2) to entitle employees to take reasonable leave for medical reasons, and (3) to accomplish [these] purposes … in a manner that accommodates the legitimate interests of employers.”

Bottom line: Let employees know that there is no ADA job protection after 12 weeks of leave. Also, remember that you might still have an accommodation obligation under the ADA to do the job for which you hired them, unless doing so constitutes an undue hardship (which was not argued in this case).

Form of the Month

Creativity Checklist (PDF) – Use this list to stimulate your (and your employees’) creative juices.

Podcast

Click here to to listen to this month’s newsletter podcast.

“What really impresses me is when someone organizes the decision process and then clarifies what they need from me before I’m even on the scene … To have people who can really clarify the key points and make those decisions, I think, is the most valuable. They’re not wasting my time.”

– C.J. Buck, President, Buck Knives

This issue discusses:

• Editor’s Column: Is Your Workplace Engaged?
• What We Fear Most …
• Three Oldest Employees Selected for RIF Failed to Prove Age Bias
• Take Note!
• Decision-Maker’s Lie Leads to Loss in Employment Discrimination Lawsuit
• HR and The Four Agreements

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: Is Your Workplace Engaged?

The idea of employee “engagement” remains a corporate buzzword. I find it interesting that the term “engagement” implies only a willingness to commit, without consummating this commitment. Webster’s defines “engage” as:

1. Involved an activity
2. Pledged to be married
3. Greatly interested
4. Involved especially in a hostile encounter

None of the above has anything to do with productivity. For example, you can be involved in your work without being motivated to do anything about it! Likewise, you can be greatly interested but inept. Interestingly, the word derives from the French word “gage,” which means something thrown down by a knight as a token of challenge to combat. Historically “engagement” means to be in the process of battle. True to the “at will” nature of employment, it seems that we’d rather have engagement than true commitment.

My diatribe on word choice aside, the 50 Most Engaged Workplaces Award identifies these eight criteria as the foundation for generating employee engagement:

• Leadership
• Communication
• Culture
• Rewards and recognition
• Professional and personal growth
• Accountability in performance
• Vision and values
• Corporate social responsibility

Essentially, this is a checklist of good management practices. You might as well cross out the word “engaged” and substitute “profitable.”

Noticeably absent from that list is any mention of compensation. I continue to believe that pay is the No. 1 reason why people go to work every day. However, once employees earn what they perceive to be a fair day’s wage, then these other factors come into play. Of course, another way is to look at what drives “engagement,” or its older equivalent, “motivation,” in Maslow’s Hierarchy of Needs, which focuses on the need for survival, security, belonging, ego gratification, and self-actualization.

After surveying numerous organizations and speaking in confidence with thousands of business owners and employees, I can tell you that the No. 2 concern at work is also the No. 2 concern at home: The quality of communication. Ultimately, we’re looking for some financial security at work and at home and then communication that’s clear, caring, and allows a safe place for dialogue. When you do a good job of communication, you support all the other factors mentioned.

Although all of the award criteria mentioned are great, your primary concern should be what matters most to your company and its employees. One way to learn this is to ask questions. Of course, unless you’re deaf, dumb, blind, or uncaring, you usually realize the major concerns. The question is, do you really want to do anything about it?

What We Fear Most …

Things can look great on the surface. However, dig a bit deeper and all of us share at least some of these fears:

• The fear that we won’t live up to our expectations of ourselves.
• The fear that we won’t live up to expectations of someone else.
• The fear that while we are successful, we’re doing the wrong thing. As the saying goes, we might have climbed to the top of the ladder, but it’s leaning on the wrong wall.
• The fear that no matter how successful we might be now, it’s still not enough.
• The fear that we aren’t always a good person.
• The fear that we aren’t attractive or well liked.
• The fear that we’re disconnected with ourselves.
• The fear that we’re disconnected from family members and other loved ones.
• The fear that there has to be more, but we’re not sure what it is.
• The fear that we might fail.
• The fear that our “secret” might be disclosed.
• The fear that we have to do it all alone.
• The fear that we’re exhausted and out of balance.
• The fear that people will leave us.
• The fear that we’ll waste what we’ve accomplished because we have no loved ones with whom to share it.
• The fear that we’re out of control.
• The fear that our time and health are slipping away.
• The fear that we’ll become obsolete and put out to pasture.
• The fear that our children would rather have more of us than the money we earn or, conversely the fear that they would rather have our money instead of us.
• The fear that our greatest successes lie in the past.
• The fear we won’t be able to afford retirement.

Although I focus on the word “fear,” the term “unfair” also applies. What feels unfair to you? Why is that the case? What is it that you fear related to the unfairness? For example, if an employee doesn’t hand a project in on time, this feels unfair. However, it goes deeper than that. What lies behind the unfairness is fear that the employee is incompetent or doesn’t care, that you have misjudged or mismanaged them or will end up doing their work, or that your customer or client will misjudge you.

What does this have to do with management and HR? Absolutely everything!

Here’s the point: Nobody escapes feelings of unfairness or fear. Dr. Deming preached that one of the 14 Principles of Management is to drive fear out of your company. Acknowledging the fact that something feels unfair and then finding the fear behind it can be a powerful source of revelation. In my experience, the answer is to remain grateful and find the lesson that you need to learn. This is the ultimate responsibility; the source of growth that gives you the opportunity to let go without guilt and move on, knowing you’ve done your best. What more can you ask for?

Three Oldest Employees Selected For RIF Failed to Prove Age Bias

The U.S. Court of Appeals for the Eighth Circuit has ruled that an employer had legitimate, non-discriminatory reasons for laying off its three oldest employees through a reduction in force (RIF). The Court found that the employees, who sued their employer for age discrimination under the Age Discrimination in Employment Act (ADEA), failed to prove that the employer’s stated reason for the RIF and the criteria it used to determine which employees to let go were pretextual.

The Case: In Rahlf v. Mo-Tech Corp., Inc., after a manufacturer of molds for the automobile, medical, consumer products, and computer industries laid off its three oldest employees as part of a RIF, the employees sued for age discrimination under the ADEA. The employer claimed that the RIF was necessary due to a change in client needs and anticipated reductions in workload and profitability. The employer further explained that technological advances in the mold-making process reduced the company’s need for manual mold makers such as the plaintiffs. To determine which mold makers to lay off, the employer ranked each based on several factors, including their proficiency with the new computerized manufacturing process, general mold-making efficiency, and management’s personal knowledge of each employee’s work performance. Based on these criteria, management agreed that the three plaintiffs should be let go.

The Ruling: The Eighth Circuit upheld the district court’s grant of summary judgment in favor of the employer, rejecting the plaintiffs’ claim that the employer’s stated reasons for the RIF were meant to conceal the real, discriminatory reasons for their terminations. The employees argued that the RIF was not necessary because within a year after they were fired, the employer hired five new employees. The court, however, noted that none of the new hires were mold makers. Rather, the new employees filled lesser skilled positions or were skilled in the computerized manufacturing process. The court also held that the fact that the remaining mold makers were busy and the company’s sales increased after the three employees were terminated did not support an inference that the RIF itself was pretextual. The court ruled that an employer does not have to demonstrate financial distress to justify its RIF decision, and then rejected the employees’ attack on the employer’s methods to determine which mold makers to terminate.

The employees contended that the employer’s failure to review positive performance evaluations and its reliance on the subjective evaluations of management were evidence of pretext. However, the court noted that given the small number of mold makers considered for the RIF (11) and management’s close involvement with the daily operations, subjective knowledge of each employee’s work performance and skills was relevant to the ultimate termination decision. Moreover, the employer relied on both objective and subjective criteria. The company measured each employee’s productivity and profitability objectively, based on whether hours budgeted for particular jobs were met or exceeded. The employer also consulted a computer program that assessed each employee’s performance. As for the employer not considering positive performance reviews, the Eighth Circuit held that it was not required to consider them in making its RIF decision because it had many other relevant factors under consideration. Finally, the court dismissed the employees’ argument that the employer provided inconsistent rationales for the layoffs, where there was no evidence to support the claim. Indeed, the Court of Appeals found that the employer maintained consistently that the reason for the RIF was shifting client needs and an anticipated decrease in workload and profits.

Lesson Learned: Because reductions in an employer’s workforce often give rise to litigation, it’s important to establish legitimate, business-related reasons for the move in advance. Although using objective criteria provides the best defense against a discrimination claim, the Rahlf decision shows that subjective factors can also be relevant. Whatever your reasons for doing an RIF, identify them clearly and base them on documented facts in case the reduction leads to litigation. See the RIF Checklist and Report In HR That Works.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Take Note!

Confidentiality Provision in Employment Agreements. In NLRB v. Northeastern Land Services, a non-union temporary staffing agency terminated an employee in violation of the confidentiality provision in his employment agreement after he complained to a client of his employer about the amount of pay he was receiving for the use of his personal computer for work.

The Court of Appeals for the First Circuit upheld the NLRB’s decision that the confidentiality provision, which prohibited the employee from discussing the terms of his employment, as well as his compensation with “other parties,” was overly broad and a per se violation of Section 8(a)(1) of the NLRA. Section 8(a) (1), which bars employers from interfering with employees’ right to discuss the terms and conditions of their employment with others. The NLRB had found that employees could reasonably understand this provision as prohibiting from discussing their compensation with union representatives.

The First Circuit held that the NLRB did not have to consider the employer’s justification for enforcing the confidentiality provision, which the employer stated was to prevent employees from disclosing its labor costs — one of the key components of its bid to clients.

The court held that when a discipline is imposed pursuant to an overly broad rule, this discipline is unlawful, regardless of whether the conduct could have been prohibited for lawful reasons.

If the employer had not relied on the confidentiality provision, but instead on the employee’s disruptive conduct, the employer probably would have been within its right to terminate him.

However, by relying on the overly broad provision, the employer lost any defense against the termination.

Decision-Maker’s Lie Leads to Loss in Employment Discrimination Lawsuit

For an employer embroiled in a discrimination lawsuit, summary judgment is usually the last opportunity to get the case dismissed before going to trial. A decision by the District of Columbia Court of Appeals demonstrates how lying about the reason for an adverse employment action can torpedo an employer’s defense to a claim of discrimination on summary judgment and allow the case to proceed to trial.

The Case: In Colbert v. Tapella, a 30 year-old African American female employee of the federal Government Printing Office sued her employer for race and gender discrimination after she was passed over for two different promotions that were filled by white males. The decision-makers for the positions did not interview the candidates. Instead, they evaluated each on their written applications, respective qualifications, responses to a questionnaire, and any personal knowledge of the candidates’ work performance. During the initial EEO investigation, one of the decision-makers told the investigator that he did not select the plaintiff, in part, because she “wandered.” When the decision-maker was later deposed, he admitted that he did not tell the truth when he said that the plaintiff wandered. Despite the employer’s attempt to downplay the admission, the decision-maker’s stated rationale for passing over the plaintiff was called into question.

The Ruling: The D.C. Circuit overruled the district court’s grant of summary judgment in favor of the employer, finding that the lower court erred when it required the plaintiff to prove both that the employer’s reason for not promoting her was pretext, and that race and gender bias was the actual reason she was passed over. The Court of Appeals held that “a jury can conclude that an employer who fabricates a false explanation has something to hide; that ‘something’ may well be discriminatory intent.” Although a plaintiff cannot always avoid summary judgment by showing that the employer’s explanation to be false, the evidence in this case demonstrated that the employer’s proffered non-discriminatory reasons for the non-promotion was unfounded. The court found that the evidence in the record did not support the decision-maker’s statements that the plaintiff was less qualified and lacked the same experience as the white male applicants who were selected for the positions. The Court further noted that there was insufficient, independent evidence that no discrimination had occurred. Instead, the decision-maker’s lie about the plaintiff wandering, his lack of knowledge about the plaintiff’s actual experience, and the employer’s record of failing to promote minorities, provided enough evidence of discrimination to defeat the employer’s motion for summary judgment.

Lesson Learned: An employer must base its reason for taking an adverse employment action on a legitimate, non-discriminatory reason that should be supported by facts and not change over time. Changing the articulated reason for taking the adverse action only reveals that it might not have been the real reason for the action. Bear in mind that the people who evaluate your responses might have a different perspective from you. What you might see as a benign misstatement can be perceived by a jury as evidence of a malicious, discriminatory act. It might be trite, but honesty is always the best policy.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

HR and The Four Agreements

One of my favorite books is The Four Agreements by Don Miguel Ruiz. I’ve read it a couple of times and listened to the audio book more than once. It offers unique insights. Ruiz believes that we have been “domesticated” — to the extent that we base much of our thinking and activity on the story that we’ve been handed or have developed without full awareness. To live to our fullest potential, we need to avoid disempowering agreements by empowering ourselves through The Four Agreements.

I’d like to give my insight on how each one of these agreements can affect the HR function.

1. Be impeccable with your Word. It’s a gift from God. How we use our Word defines our lives. It’s not just about what we say, but who we are. We can use our Word with others as well as with ourselves. Unfortunately, such factors as fear and greed can have a negative impact on our Word.
   How can we be impeccable with our Word when it comes HR? Begin by clarifying expectations for ourselves. Do we really want to be great HR executives? Have we committed our Word to this fact? Do we have the integrity to follow up and keep the promises we make to ourselves and to others? Are we willing to expose those who are less than willing to have integrity?
2. Don’t take things personally. Ruiz tells us this is the main reason for conflict at home, work, and on the world stage. It dovetails with my scenarios concerning Victims, Villains and Heroes. When we play Victim, we can’t wait to take things personally. When we take things personally, there’s always the potential of turning a molehill into a mountain. Of course, the person that we attack or blame will begin with their justifications, launch a counter-attack — and then the drama really begins! Here’s my question: Where are you taking things too personally? Are you taking the lack of support for the HR department personally? Do you take things the owner or managers say to you personally?
3. Don’t make assumptions. You know what the word “assume” means. However, we’re assuming all the time. It would be hard to run your life without making some assumptions along the way. For example, we assume that when we step on the gas that the car will move forward. We also assume that when the light is green nobody will be traveling through the intersection from the cross street. If we move blindly forward with our assumptions, we might be hit by someone who ran the red light. We have to watch the assumptions or stories that we place on people or circumstances — often without even knowing them. I have an assumption about this person, and they’re upsetting me by not living up to the assumption. As the fox said in Aesop’s fables, “I was just being a fox.”
   Where do you make too many assumptions? Do you assume that you have your HR act together? Do you assume you have the best possible employees on every seat of the bus? Do you assume that the recession is now history, and we won’t have to worry anymore about layoffs or RIFs any time soon?
4. Do your best. This is all we can ask of ourselves and anyone else. Do your best and then let go. Of course, the question is are you doing your best or is something else happening? Are you really making an effort to improve your value to the company or are you stuck on auto-pilot? Are you willing to take a risk and do something new, or will you remain rooted in your comfort zone? Doing our best requires us to stretch ourselves and make mistakes, like toddlers who fall down repeatedly before they learn how to walk and run. So, here are my last questions: Where can you honestly say you’re not doing your best? Where are you trying to ignore, bury, or deny the fact you’re not giving it your best? How will you feel when you’re finally “found out” about this known area of weakness?

Do yourself a huge favor and pick up a copy or audio book of The Four Agreements. You’ll be glad you did!

Form of the Month

Great HR Practices Checklist (PDF) – Mine this checklist for valuable Human Resources content.

Podcast

Click here to to listen to this month’s newsletter podcast.

“There is magic in doing.”  – George Gurdjieff

This issue discusses:

• Editor’s Column: The Three Ways to Manage Your Employees
• Understanding the Value of Great HR
• What Wal-Mart v. Dukes Means for Wage & Hour Law, and Employers
• Employer Responsible for Worker Who Trips on Dog While Working at Home
• Setting Up a Sales Compensation Plan
• Recent DOL Disability Violation Enforcement Activities: Employers, Beware!
• Tough Days Ahead for Managers Who Don’t Want to Be Learners

Please click here to view the newsletter in PDF.

Editor’s Column: The Three Ways to Manage Your Employees

I recently went through an excellent session using the ZeroRisk HR assessment to help me become a better manager of my own employees. One of the most insightful things I learned was to distinguish when to direct employees, when to coach them, or when to delegate to them. This is a major distinction.

Directing – When you have an employee new to a job function or business in general, you might have to direct their activities until they meet the necessary learning curve. This is, of course, a control-based approach to management that makes sense at times, especially if you’re a control freak or you’re managing people who have control issues. For example, Bob Hurley, the well-known coach of the St. Anthony’s High School basketball team in Jersey City, NJ, focuses on directing his young men, not just on the basketball court, but in their lifestyle in general. As a result, he has a 100% graduation rate – practically unheard of for an inner-city basketball team. The idea of directing employee behavior was the basic principle of Scientific Management made famous by Frederick Winslow Taylor in the early 1900s. Because most jobs at that time were manual in nature and easy to perform, this approach used time and motion studies to analyze job tasks, and then told workers the best way to stack the bricks, shovel the coal, or pull the loom. Managers didn’t want employees to think for themselves. The Catch-22 today is that the person you can control you generally don’t want working for you – and the less you control, the more you accomplish! So use control as a management style only when absolutely necessary.

Coaching – This is more about empowerment than micromanagement. The best coaches ask questions and allow employees to discover the answers for themselves. When they attempt to frame the employees’ efforts, they do so from “their side of the line,” providing insight as opposed to control. This is akin to teaching people how to fish. The best coaches expect and foster taking action and moving past blockages. They know when to push or to back off. Remember this: If your coaching feels too much like control to employees, you’ll generate a flight or fight response – even if everything you are trying to say is completely logical.

Delegating – Over the years, I’ve learned to delegate effectively. This is one of the most important skill sets for a manager. Of course, the danger of delegation is that the employee will make a mistake and suffer the consequences. I try to mitigate the possibility of mistakes by delegating through writing, otherwise known as a standard operating procedure (SOP). I won’t just write down what I do, but my best practice on how to do it. I then make sure that the employee understands the SOP and see if they have any questions. I’ll also provide them with any time and training necessary. When I delegate, I have a “one-mistake rule.” Because I learned my skills by making mistakes, I realize that my employees will have to do the same. However, there’s absolutely no reason to make the same mistake twice. Allowing employees to do so is a management failure.

The work we did with ZeroRisk coaching went into these areas far more deeply and challenged us in other areas as well. This process produced some of the most effective communication with employees I’ve worked side-by-side with for many years. To learn more about the ZeroRisk HR program, contact Mike Poskey (Mike.P@zeroriskhr.com) or call him at (800) 827-5991.

Understanding the Value of Great HR

One of the career challenges HR executives face is being able to articulate the bottom line difference they can make. In part, this is because very few of them focus on making those types of distinctions as their activities are non-strategic in nature. I recently became engaged to help hire a high-end HR executive who will make at least $150,000 per year. The reality is out of the 3,000 small to midsized companies that use our program, I’d be surprised if as many as five HR executives earn that type of income. Larger organizations justify the expense because they can spread it over a greater number of employees. Actually, the larger the organization, the lower the HR expense ratio per employee. According to Berntson and Associates, HR costs the average employer $1,000 to $1,500 per year. In a sense, if you have 50 employees, you have a $65,000 HR executive.

So here’s the challenge: Even if you’re a small to midsized company that doesn’t have $150,000 per year to pay an HR executive, you still need strategic HR initiatives! Otherwise, internal pressures will undermine your sales and marketing efforts.

If you doubt the return on investment of good HR practices, run your numbers on the HR That Works Cost Calculator. Even a conservative analysis will show the incredible opportunity available. However, you’ll need to make a commitment of both time and money to make it happen. Think of it this way: Suppose you remain “nonstrategic” in your HR practices. So what if you have poorly trained managers, below average employees, high claims, low productivity, and a ton of drama? Perhaps you’re familiar with this situation. In any case, there’s no reason not to “get” the importance of working on HR instead of just being in HR. Whether you have 10, 100 or 1,000 employees the need remains the same.

There are only three solutions:

1. Use a program such as HR That Works and commit to a schedule to implement it.
2. Hire a coach to help you implement a program such as HR That Works.
3. Have third parties come in and do things for you (otherwise known as “fractional” HR).

What will be your next strategic HR objective – and how will you achieve it?

What Wal-Mart v. Dukes Means for Wage & Hour Law, and Employers

By now, most of you who follow employment law have heard about and possibly read the U.S. Supreme Court’s decision in Wal-Mart v. Dukes, which overturned certification of a class action sex discrimination case brought on behalf of 1.5 million current and former female Wal-Mart employees. (If not, this recent FR Alert on this case will bring you up to speed.) Although Dukes is a sex discrimination case, it will probably have a major impact on class actions in other areas of the law, including wage and hour lawsuits.

• Dukes will likely make it more difficult for plaintiffs to argue that large classes should be certified absent concrete evidence of a common corporate policy or practice tying the claims of class-members together. This will be particularly important in cases where the actions of individual managers are at issue, such as plaintiff allegations that employees were required to work “off the clock” contrary to established policies.
• It’s unsure how the courts will apply Dukes to collective actions under the Fair Labor Standards Act. The Dukes decision dealt with a class action certified under Federal Rule of Civil Procedure 23, which governs most class actions in federal court. In contrast, FLSA collective actions proceed under a different set of rules specific to the FLSA. The standards for certifying a class or collective action are similar – Rule 23(a)(2) requires questions of law or fact common among the class members, while a collective action under 29 U.S.C. § 216(b) requires class members to be “similarly situated.” However, there are subtle but potentially important differences, and the standard for preliminary certification of a collective action is generally a lower bar than for certification of a Rule 23 class action. That being said, although Dukes might not apply directly to FLSA collective actions, it will probably exert a significant influence over courts’ analysis of such cases.
• One likely effect of Dukes will be to push more wage and hour class action lawsuits into state court. Because Dukes governs class certification in federal courts, plaintiffs’ attorneys in states with more liberal class certification rules now have a strong incentive to file their cases in state court under state minimum wage and overtime laws, without reference to the FLSA and federal law. Although the impact of this shift will vary from state to state, federal courts are frequently regarded as a more favorable jurisdiction for employers than their state counterparts. Thus, while Dukes is a victory for employers, it might simply shift the wage and hour fight to less favorable ground.

Insights for Employers:

Although the esoteric procedural issues raised in Dukes will be of great interest to wage and hour litigators, what, if any, practical implications does the decision have for employers? Although the ruling does not usher in any sweeping changes for how employers conduct their day-to-day compliance activities, it does emphasize the importance of organization-wide policies and practices as both a tool for defending against wage and hour claims and a potential source of vulnerability.

Dukes strengthens the case for employers to adopt and effectively implement strong policies prohibiting wage and hour violations. For example, a company policy that strictly prohibits off-the-clock work and requires accurate recording of work hours, combined with an effective training and compliance program, might go a long way toward heading off class or collective action claims alleging that individual managers violated the policy by requiring or permitting off-the-clock work.

At the same time, Dukes might place an even brighter spotlight on cases based on a widespread company policy or practice. For example, claims alleging that an employer systematically misclassified specific job titles as exempt might have the necessary element of commonality among members of the class that the Supreme Court found lacking in Dukes.

The bottom line: Be sure to review and update your wage and hour policies, regularly, train supervisors, and audit compliance.

Article courtesy of Worklaw® Network firm Franczek Radelet.

Employer Responsible for Worker Who Trips on Dog While Working at Home

In the recent case of In Re: the Compensation of Mary S. Sandberg, an Oregon court overruled the Workers Comp Board and held that a JC Penney decorator, who was allowed to work from home, was covered by her Workers Comp policy when she tripped over her dog unloading a van.

Because she could not safely store all of the items in the vehicle at one time, she stored the excess items in her home garage. Her employer instructed Sandberg not to store these excess products at the studio, but to keep them at her home or any other place where they would be safe and dry. Thus, she used her home garage to store samples that from time to time she would need to exchange with other samples and materials that she kept in her van.

On the Saturday before the date of injury, a sale collection had ended, with a new collection beginning the next day. Because of the fabric sale change, Sandberg needed to remove the “old” fabrics from her van and replace them with fabrics for the new sale that were being stored in her garage. She was walking out her back door toward the garage to change the fabrics when her foot came down and she “felt something move.” Noticing that her dog was underfoot, she shifted to her other foot, lost her balance, and fell, sustaining a right distal radius fracture.”
Sandberg also regularly performed some work tasks, such as preparing bids and other paperwork, in her home. The employer denied her claim for compensation for the injury, a decision approved by the administrative law judge (ALJ) affirmed the denial, as did the Workers Compensation board.

When Sandberg appealed this decision, the court ruled that:

“In order to be compensable under Oregon law, an injury must ‘aris[e] out of’ and occur ‘in the course of’ a claimant’s employment; ORS 656.005(7)(a). Because the board did not determine whether claimant’s injury occurred in the course of her employment, that issue is not before us. The only issue on review is whether claimant’s injury arose out of her employment. Thus, our focus is on whether claimant established a causal connection between her injury and her employment, that is, whether claimant’s injury resulted from a risk connected to either the nature of her work or her work environment. ….

“[O]nce it is established that the home premises are also the work premises * * *, it follows that the hazards of home premises encountered in connection with the performance of the work are also hazards of the employment. [Editors Note: such as a dog lying around.]

” * * * That the employee is a telecommuter or other home-based worker should not, in and of itself, make any difference. Was the risk of injury a risk of this employment? So long as the employment subjects the employee to the actual risk of injury, the argument follows that the injury should be compensable.

“Here, claimant was walking to her garage for the sole purpose of performing a work task. She fell while moving about an area in which she had to move about in order to perform the work task, given the conditions of her employment. Therefore, we conclude that claimant’s injury resulted from a risk of her work environment. As such, it arose out of her employment.”

The bottom line for employers: make sure that telecommuting employees have safe workplaces and proper insurance coverages. HR That Works Members should use the Home Based Worker Checklist.

Setting Up a Sales Compensation Plan

Sales compensation can be a tricky affair to master. Any plan should answer these basic questions:

• What is your overall goal?
• What is working and not working about the current plan?
• What do you need to eliminate or improve and what should you exploit further?
• Who is involved in designing the plan? Who can impact the plan and how will they be treated?
• What math will you use to establish a base salary, commission, bonus, any caps on income, frequency requirements, etc. – a percentage of what, when, how, where, etc.?
• How can you test the plan before you roll it out?
• Where can the plan be manipulated or even sabotaged?
• How does your plan compare to that of the competition?
• Who can review or provide a second look at your plan?

Recent DOL Disability Violation Enforcement Activities: Employers, Beware!

Here are four recent cases in which the Department of Labor went after companies for ADA violations. These settlements are far lower than if private counsel were litigating the suits and interested in a big jury verdict (which average more than $200,000):

1. EEOC Sues Tideland EMC for Disability Discrimination
   The U.S. Equal Employment Opportunity Commission (EEOC) filed a disability discrimination lawsuit against the Tideland Electric Membership Corporation for not accommodating an employee, and then firing him because of his disability. The employee takes a legally prescribed narcotic medication to manage a chronic pain condition. After learning about this, Tideland EMC terminated the employee, without giving him time to change his medication regimen to keep his employment. The Americans with Disabilities Act outlaws discrimination against an employee based on a disability.
2. ENGlobal to Pay $100,000 to Settle EEOC Disability Discrimination Suit
   ENGlobal Engineering, Inc., a Texas-based engineering firm, will pay $100,000 and additional remedial relief to settle a disability discrimination lawsuit by the EEOC. ENGlobal unlawfully fired an employee because it mistakenly assumed that his multiple sclerosis would limit his ability to work.
3. Retailer Finish Line Settles EEOC Disability Discrimination Lawsuit
   Indiana-based retailer Finish Line, Inc. agreed to settle a disability discrimination lawsuit by the EEOC. Finish Line refused to grant an employee with a physical impairment a transfer to an available CSR position as a reasonable accommodation. The Americans with Disabilities Act requires employers to accommodate employees reasonably with disabilities, as long as the accommodation doesn’t cause an undue hardship.
4. Surveying Company to Pay $77,000 to Settle EEOC Disability Discrimination Lawsuit
   Fisher, Collins & Carter, Inc. (Ellicott City, MD) will pay $77,000 and other remedial relief to settle a disability discrimination lawsuit filed by the EEOC. The company illegally discriminated against and fired an employee of 15 years after finding out that the employee had diabetes and high blood pressure.

The first thing to notice about these cases is the breadth of claims: A change in medication, a perceived MS disability, a shoulder injury, and diabetes. What’s more, the courts rejected the employers’ argument that many of the workers involved were “poor performers.”

Bottom Line: Learn how to manage poor performers who might have a disability, in a way that doesn’t land you in court!

Tough Days Ahead for Managers Who Don’t Want to Be Learners

Today’s “squeeze economy,” in which we’re trying to get more out of everybody and everything, without having to pay for it, put managers under overwhelming pressure to perform. What can you do about it?

• Keep growing and pushing yourself to work on your “highest and best use.” Focus on those “A activities” that produce bottom-line results. Next, delegate or outsource the B level activities (administrative functions) to the extent possible. Finally, ditch the C activities, which are simply time-wasters. Be a freak about doing this if you want to survive without burning out.
• Become a great communicator. Whether you’re passing along the leadership vision, mission, goals, and values of your organization; working on an individual employee’s performance; or trying to learn more about what motivates employees, train yourself in communication. To be great at managing conflict, change, performance, engagement, career paths, strategic planning, and so forth without studying these disciplines, you’ll need more than experience or osmosis. So turn off your TV or computer game, ditch that fantasy league or online gossip, and pick up a book or program that will help you learn in these areas. Of course if you have access to the HR That Works program, the special reports, training modules and webinars would be a good place to start.
• Learn what employees want from you:
  • Be clear with them
  • Don’t play favorites
  • Do what you say you’re going to do, when you said you’ll do it
  • Provide feedback on a regular basis
  • Help define their career path
  • Keep yourself emotionally balanced

Remember, a poor relationship with managers is one of the top three reasons for employee turnover. Managers also influence the other two reasons (hiring a misfit, or failing to provide career growth and opportunity).

A word to the wise …

Form of the Month

The Seven Commandments of Social Media Use (PDF) – Use this tool as a starting point for defining your basic commandments. Once it’s done, go down to Kinko’s, blow it up, and place it where everyone can see it!

Podcast

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