Saturday, October 15, 2011
Sunday, September 18, 2011
Wednesday, July 6, 2011
The Wage Game
I confess to being a fan of the old sitcom Roseanne. One of my favorite episodes involves her approach to paying the family’s bills. She sends the water company a check made out to the electric company and vice versa. She sends in a check to the landlord but “forgets” to sign it. She sends the phone bill without a check in it but doesn’t seal it, so they will think it just fell out. You get the idea. ”This will buy us another month,” she tells Dan, her husband.
Of late, and often out of necessity, many small businesses are playing a similar game. Their own clients are behind in paying and so they themselves can pay only the most immediate bills. There are obvious risks here but many businesses are unaware of how perilous this sitution can be if the invoices that go unpaid are employee wages or benefits.
Last week, I had a call from a law school classmate whose corporate client was being sued by two employees who had allegedly agreed to work for free for some undefined period of time until the company’s clients paid their invoices. Nothing was in writing, just a conference room agreement. Employment law is not my colleague’s forte and he wanted me to clarify his reading of the statute. Unfortunately, he understood it all too well.
Washington State has a statute, RCW 49.52, focused on the “willful withholding of wages.” It entitles any employee to double damages plus attorney fees when his employer “willfully” withholds any portion of his wages. The presumption is that such witholding is always willful and “willful” is defined as “knowing and intentional, … neither accidental nor as a result of bona fide dispute.” Double damages and fees may only be avoided where lack of payment was due to carelessness (rather than being volitional), or where a “bona fide” dispute existed regarding the payment of wages. Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 160-61 (1998).
Financial inability to pay is also insufficient to prevent a finding of willfulness and avoid double damages. Id.
Further, company officers and senior managers can be held personally liable for these sums if the company’s coffers are empty. The statute specifically includes “[a]ny employer and any officer, vice principal or agent of any employer who shall violate any of the provisions” of RCW 49.52.
Even bankruptcy won’t save you. In 2009, the Washington State Supreme Court held that corporate officers and senior managers (eg., the CEO and the CFO) continue to face personal liability for unpaid wages, even when the corporation is liquidated in bankruptcy court. The Court reasoned that prior to bankruptcy, the officers controlled the payment of wages. Thus, it was appropriate for them to be personally liable. Further, because the officers controlled how the corporation’s money was used, and made such decisions as whether to file for bankruptcy or close the business and pay debts, the Court held that the choice not to pay wages was willful and intentional. See Morgan v. Kingen, 166 Wash.2d 526, 535 (2009).
Can Employers, Officers and Senior Managers Do Anything to Protect Against Liability for Unpaid Wages, Penalties and Fees?
So, when things are so bad that the company doors will close unless employees forego some or all of their salary, how does an employer handle the situation? Well, the statute does allow for “authorized withholding” such that an employer can “withhold or divert any portion of an employee’s wages when … [the] deduction has been expressly authorized in writing in advance by the employee for a lawful purpose accruing to the benefit of such employee … [as long as the] employer derives no financial benefit from such deduction and the same is openly, clearly and in due course recorded in the employer’s books.” RCW 49.52.060.
My suggestion is that the writing be as specific as possible and that a new agreement be entered into for every pay period in which the employer is asking the employee to agree to the withholding. Further, I find that there is a great deal of good will incurred when there is full disclosure to the employees and when the senior officers and managers themselves are also entering into such an agreement with the company. Nothing goes over more poorly than when the sacrificing employees find out the company president is still buying a new yacht with his annual bonus.
Some additional thoughts:
Of late, and often out of necessity, many small businesses are playing a similar game. Their own clients are behind in paying and so they themselves can pay only the most immediate bills. There are obvious risks here but many businesses are unaware of how perilous this sitution can be if the invoices that go unpaid are employee wages or benefits.
Last week, I had a call from a law school classmate whose corporate client was being sued by two employees who had allegedly agreed to work for free for some undefined period of time until the company’s clients paid their invoices. Nothing was in writing, just a conference room agreement. Employment law is not my colleague’s forte and he wanted me to clarify his reading of the statute. Unfortunately, he understood it all too well.
Washington State has a statute, RCW 49.52, focused on the “willful withholding of wages.” It entitles any employee to double damages plus attorney fees when his employer “willfully” withholds any portion of his wages. The presumption is that such witholding is always willful and “willful” is defined as “knowing and intentional, … neither accidental nor as a result of bona fide dispute.” Double damages and fees may only be avoided where lack of payment was due to carelessness (rather than being volitional), or where a “bona fide” dispute existed regarding the payment of wages. Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 160-61 (1998).
Financial inability to pay is also insufficient to prevent a finding of willfulness and avoid double damages. Id.
Further, company officers and senior managers can be held personally liable for these sums if the company’s coffers are empty. The statute specifically includes “[a]ny employer and any officer, vice principal or agent of any employer who shall violate any of the provisions” of RCW 49.52.
Even bankruptcy won’t save you. In 2009, the Washington State Supreme Court held that corporate officers and senior managers (eg., the CEO and the CFO) continue to face personal liability for unpaid wages, even when the corporation is liquidated in bankruptcy court. The Court reasoned that prior to bankruptcy, the officers controlled the payment of wages. Thus, it was appropriate for them to be personally liable. Further, because the officers controlled how the corporation’s money was used, and made such decisions as whether to file for bankruptcy or close the business and pay debts, the Court held that the choice not to pay wages was willful and intentional. See Morgan v. Kingen, 166 Wash.2d 526, 535 (2009).
Can Employers, Officers and Senior Managers Do Anything to Protect Against Liability for Unpaid Wages, Penalties and Fees?
So, when things are so bad that the company doors will close unless employees forego some or all of their salary, how does an employer handle the situation? Well, the statute does allow for “authorized withholding” such that an employer can “withhold or divert any portion of an employee’s wages when … [the] deduction has been expressly authorized in writing in advance by the employee for a lawful purpose accruing to the benefit of such employee … [as long as the] employer derives no financial benefit from such deduction and the same is openly, clearly and in due course recorded in the employer’s books.” RCW 49.52.060.
My suggestion is that the writing be as specific as possible and that a new agreement be entered into for every pay period in which the employer is asking the employee to agree to the withholding. Further, I find that there is a great deal of good will incurred when there is full disclosure to the employees and when the senior officers and managers themselves are also entering into such an agreement with the company. Nothing goes over more poorly than when the sacrificing employees find out the company president is still buying a new yacht with his annual bonus.
Some additional thoughts:
- Train those responsible for payroll functions to make sure that paychecks are timely issued, particularly when an employee is resigning or being terminated, or when the company is downsizing.
- Adopt a policy requiring employees to promptly report any problems with paychecks.
- Unless a bona fide dispute exists over the payment, promptly correct any payroll problems by paying the employee to avoid liability for penalties and attorney’s fees. (As an aside, the bona fide dispute agrument is limited and usually only successful with discretionary bonuses or commissions or the like.)
- Carefully evaluate whether the company’s current insurance policies would provide a defense if the company or its officers and managers were sued for failure to timely pay wages. If the company has no coverage, consider whether to purchase such coverage.
- If the company is having financial difficulties, consider whether the company’s governing documents (such as articles or bylaws) address whether the company is responsible for defending and indemnifying managers who are sued personally for failing to pay wages.
Thursday, June 9, 2011
Disabled or Not Disabled: That Is The Question...
When the ADAAA (Americans with Disabilities Amendments Act) went into effect January 1, 2009, the Equal Employment Opportunity Commission (EEOC) was directed to amend the ADA’s implementing regulations to reflect the changes of the new law. On March 25, 2011, those Final Regulations went into effect, changing the focus for employers and accommodations for employees with disabilities.
Perhaps the largest impact of the new law will be that the issue of whether an individual has a “disability” is likely an analysis of the past. The Final Regs make it clear that the focus must shift to whether there has actually been a violation of the ADAAA, rather than whether an individual is merely protected by the ADAAA.
My clients are inquiring about other aspects of the ADAAA and the New Regs as well. Here are some of the more common inquiries:
Q: We have a small company. Are we required to comply with the ADAAA?
A: Like the ADA, the ADAAA and the Final Regs apply to all private companies with 15 or more employees. It is important to note, however, that state statutes protecting individuals with disabilities may apply to companies with as few as one employee and are often interpreted in much the same way as their federal counterpart. So, for example, under the Washington Law Against Discrimination, the employer need only employ 8 individuals and, if the situation involves a termination related to a disability, state common law basically removes the WLAD from the analysis.
Q: How does the ADAAA affect courts’ and the EEOC’s interpretations of the ADA?
A: When Congress enacted the ADAAA, it rejected both the EEOC’s and many courts’ narrow interpretations of the term “disability.” Under the Final Regulations, individuals who wish to seek the law’s protection will be able to much more easily demonstrate that they have a “disability.” As a result, the EEOC anticipates that the focus of ADA claims will shift to the merits of the case itself, rather than an analysis of the threshold question of whether a particular individual can satisfy the definition of the term “disability.” Thia is a huge shift in how employers should approach disability accommodations.
Q: How is “disability” defined under the Final Regulations?
A: The ADAAA and the Final Regs define “disability” as follows:
1. A physical or mental impairment that “substantially limits” one or more major life activities (i.e., an “actual” disability), or
2. A record of a physical or mental impairment that “substantially limited” a major life activity (i.e., a “record of” a disability), or 3. When an individual is subjected to an employment action prohibited by the ADA because of an actual or perceived impairment, regardless of whether that impairment “substantially limits” a major life activity (i.e., “regarded as” having a disability).
Q: How do the Final Regs define “major life activities”?
A: The ADAAA includes a specific (but non-exhaustive) list of “major life activities,” including seeing, hearing, eating, sleeping, walking, standing, sitting, breathing, learning and reading, as well as “major bodily functions.” The EEOC’s Final Regs go even further, including a non-exhaustive list that is more expansive than that found in the text of the ADAAA, including sitting, reaching, interacting with others and “operation of an individual organ within a body system.”
Q: Do the Final Regs offer any guidance regarding what it means for an impairment to “substantially limit” a major life activity?
A: Just as the ADAAA expanded the definition of “major life activities,” it also expanded the definition of “substantially limits.” The Final Regs set forth “rules of construction” to be applied when determining whether an impairment “substantially limits” a major life activity, including the following:
1. The term “substantially limits” requires a lower degree of functional limitation than the standard previously applied by the courts.
2. An impairment does not need to prevent or significantly restrict a major life activity to be considered “substantially limiting.” However, not every impairment will constitute a “disability.”
3. The term “substantially limits” should be construed broadly in favor of expansive coverage, to the maximum extent permitted by the terms of the ADA.
4. The determination of whether an impairment “substantially limits” a major life activity requires an individualized assessment, just as it did under the ADA.
5. With one exception (ordinary eyeglasses or contact lenses), the determination of whether an impairment “substantially limits” a major life activity must be made without regard to the ameliorative effects of mitigating measures, such as medication, hearing aids and prosthetic limbs.
6. An impairment that is episodic (such as epilepsy, hypertension, asthma, diabetes or major depressive disorder) or in remission is a “disability” if it would “substantially limit” a major life activity when active.
7. In keeping with Congress’s direction that the primary focus of the ADA is on whether discrimination occurred, the determination of whether an individual has a “disability” should not require extensive analysis.
With these changes in mind, employers should shift their focus to the following main considerations:
1. Engaging in an interactive process with an individual who asks for reasonable accommodation,
2. Documenting the interactive process, all accommodations requested and made, and any assessment that the accommodation requested by the individual poses an undue hardship, and
3. Documenting legitimate, non-discriminatory reasons for adverse actions in employment (e.g., terminations and demotions).
Perhaps the largest impact of the new law will be that the issue of whether an individual has a “disability” is likely an analysis of the past. The Final Regs make it clear that the focus must shift to whether there has actually been a violation of the ADAAA, rather than whether an individual is merely protected by the ADAAA.
My clients are inquiring about other aspects of the ADAAA and the New Regs as well. Here are some of the more common inquiries:
Q: We have a small company. Are we required to comply with the ADAAA?
A: Like the ADA, the ADAAA and the Final Regs apply to all private companies with 15 or more employees. It is important to note, however, that state statutes protecting individuals with disabilities may apply to companies with as few as one employee and are often interpreted in much the same way as their federal counterpart. So, for example, under the Washington Law Against Discrimination, the employer need only employ 8 individuals and, if the situation involves a termination related to a disability, state common law basically removes the WLAD from the analysis.
Q: How does the ADAAA affect courts’ and the EEOC’s interpretations of the ADA?
A: When Congress enacted the ADAAA, it rejected both the EEOC’s and many courts’ narrow interpretations of the term “disability.” Under the Final Regulations, individuals who wish to seek the law’s protection will be able to much more easily demonstrate that they have a “disability.” As a result, the EEOC anticipates that the focus of ADA claims will shift to the merits of the case itself, rather than an analysis of the threshold question of whether a particular individual can satisfy the definition of the term “disability.” Thia is a huge shift in how employers should approach disability accommodations.
Q: How is “disability” defined under the Final Regulations?
A: The ADAAA and the Final Regs define “disability” as follows:
1. A physical or mental impairment that “substantially limits” one or more major life activities (i.e., an “actual” disability), or
2. A record of a physical or mental impairment that “substantially limited” a major life activity (i.e., a “record of” a disability), or 3. When an individual is subjected to an employment action prohibited by the ADA because of an actual or perceived impairment, regardless of whether that impairment “substantially limits” a major life activity (i.e., “regarded as” having a disability).
Q: How do the Final Regs define “major life activities”?
A: The ADAAA includes a specific (but non-exhaustive) list of “major life activities,” including seeing, hearing, eating, sleeping, walking, standing, sitting, breathing, learning and reading, as well as “major bodily functions.” The EEOC’s Final Regs go even further, including a non-exhaustive list that is more expansive than that found in the text of the ADAAA, including sitting, reaching, interacting with others and “operation of an individual organ within a body system.”
Q: Do the Final Regs offer any guidance regarding what it means for an impairment to “substantially limit” a major life activity?
A: Just as the ADAAA expanded the definition of “major life activities,” it also expanded the definition of “substantially limits.” The Final Regs set forth “rules of construction” to be applied when determining whether an impairment “substantially limits” a major life activity, including the following:
1. The term “substantially limits” requires a lower degree of functional limitation than the standard previously applied by the courts.
2. An impairment does not need to prevent or significantly restrict a major life activity to be considered “substantially limiting.” However, not every impairment will constitute a “disability.”
3. The term “substantially limits” should be construed broadly in favor of expansive coverage, to the maximum extent permitted by the terms of the ADA.
4. The determination of whether an impairment “substantially limits” a major life activity requires an individualized assessment, just as it did under the ADA.
5. With one exception (ordinary eyeglasses or contact lenses), the determination of whether an impairment “substantially limits” a major life activity must be made without regard to the ameliorative effects of mitigating measures, such as medication, hearing aids and prosthetic limbs.
6. An impairment that is episodic (such as epilepsy, hypertension, asthma, diabetes or major depressive disorder) or in remission is a “disability” if it would “substantially limit” a major life activity when active.
7. In keeping with Congress’s direction that the primary focus of the ADA is on whether discrimination occurred, the determination of whether an individual has a “disability” should not require extensive analysis.
With these changes in mind, employers should shift their focus to the following main considerations:
1. Engaging in an interactive process with an individual who asks for reasonable accommodation,
2. Documenting the interactive process, all accommodations requested and made, and any assessment that the accommodation requested by the individual poses an undue hardship, and
3. Documenting legitimate, non-discriminatory reasons for adverse actions in employment (e.g., terminations and demotions).
Please Note: This Blog is made available by the lawyer publisher for educational purposes only as well as to give information and a general understanding of the law, not to provide specific legal advice. By using this Blog site you understand that there is no attorney client relationship between you and the Law Office of Elizabeth Van Moppes. The Law Office of Elizabeth Van Moppes is not in control of the linked sites and is not responsible for the contents of any linked site. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Elizabeth Van Moppes is licensed to practice law in the State of Washington only.
Wednesday, May 11, 2011
What Not To Do In A Performance Review: The Rules
I “coffee shop” commute from time to time. This morning, I had the unfortunate opportunity to overhear a disciplinary discussion at a table less than 2 feet from me. I could not not listen. At first I just thought it rude that the manager didn’t give her junior an opportunity to get a latte first since she herself was drinking one. But as the conversation went on, I became more and more appalled by what I was hearing. I listened to a manager chew out an employee in a public place, with emphatic hand gestures and all, for close to an hour. So, instead of working on a project at hand, I thought it an opportune moment to blog on what I call The Rules of how not to have a disciplinary discussion.
Rule #1. First among my guidance to clients on performance and disciplinary conversations is to do it in a non-public place where the conversation will be undisturbed and the recipient will not be embarrassed by the lack of privacy. Seems like common sense to me but here I am listening to this conversation so clearly it’s not. Additionally, these two I am hearing must work for a nearby business so the odds of a co-worker coming in and seeing this are high.
Rule #2. STEEL yourself. This applies to planned and unplanned performance management conversations. STEEL stands for: Specific, Timely, Explain, Empathy and Listen.
Your discussion should include specific exmaples of objective facts, not just conclusions. Telling an employee that you do not like their attitude is not nearly as effective as telling them that you consider a particular comment or action to be unprofessional. Additionally, focus your comments on performance or conduct, not the person.
Have this conversation in a timely manner. Addressing performance issues quickly, both good and bad, has the most potential to correct or encourage a situation. I once won a major summary judgment for a client. The client was ecstatic and sent me flowers and a gift card. My supervising attorney said nothing… until performance review time three months later. It was listed among my accomplishments for the year. His office was right next to mine. He knew about the win and saw the flowers. What would it have hurt if he had stuck his head into my office and said, “Congratulations. Great job.” Instead, a decade later, the issue still sticks in my craw.
Next, be certain to explain to the employee your specific expectations. Vague statements like, “You need to improve your sales” are not as powerful as “I want to see you get these numbers up by 10 percent this quarter.” Have a positive plan formulated, including corrective action to enhance performance.
Have some empathy. Remember that the person you are speeaking with is, hopefully, trying to meet your expectations. Don’t paint them into a corner by telling them their performance in the worst you’ve seen in 15 years.
And, finally, listen. The truth is that people often have legitimate explanations for the reason they are doing what they’re doing. Sometimes, their reason may even trump your discipline. Given an opportunity, in a performance discussion about attendance, an employee with a disability will reveal their situation. This is a good thing. You need to take that fact into consideration. An employee who leaves the warehouse floor may have done so because he had been made aware of a potential safety hazard in the backroom. Again, this is the kind of employee who needs to be heard, not simply disciplined.
Rule #3. In a planned evaluation discussion, I advise preparing a written evaluation in advance of the conversation. Provide the employee with a copy. Select a time (and a place!) where you will not be interrupted. Ensure that not all of your evaluations are the same! If every employee receives an evaluation of “exceeding expectations” then that rating obviously carries no weight. Finally, if you anticipate any problems with how the discussion will transpire, review the issues is advance with your Human Resources professional.
Rule #4. Avoid the Halo Effect. Do not let your positive feedback in one area of performance effect your evaluation of another area. The salesperson with high production but rotten interpersonal skills still needs to be advised on improving her people skills. Expect the whole package from your employees in every evaluation and tell them you do.
Rule #5. Avoid the Horn Effect. Do not let your negative opinion of one area impact your review of the other areas of performance. An employee with great leadership skills and a notable devotion to their work should have that acknowledged and not hear only about their marketing failures.
Rule #6. Don’t let the employee’s length of performance impact their evaluation. Just because they have been an employee for ten years and have “always done it this way” does not mean it is something that should be tolerated. Likewise, if an employee is a new employee, do not let issues go unaddressed until the next review. By then, the employee will only have built up another year of bad habits.
Rule #7. Anticipate responses to your evaluation. Why am I just hearing about this now? Amy got a second chance, why not me? Is this because I complained? Can I appeal this? Is my job on the line? These are all legitimate questions. Think through the answers in advance of the conversation. And if you do not know the answer, talk to your HR professional. In particular, prepare yourself for the comparator question: what about Amy? In the conversation this morning, the manager told the employee that another employee was not going to be written up for her conduct. I’d have advised her to instead tell the employee that Amy’s situation is separate from her own and that she was not there to discuss Amy’s performance with her.
These are basics. When I provide performance management training, I go into more detail and provide more examples. It’s important to remember that performance reviews are emotional, especially when they are negative. This makes them fodder for lawsuits. A poorly handled disciplinary discussion (in, for example, a local coffee shop) is humiliating. Juries do not like it when employees are humiliated, whether their performance is up to par or not.
Rule #1. First among my guidance to clients on performance and disciplinary conversations is to do it in a non-public place where the conversation will be undisturbed and the recipient will not be embarrassed by the lack of privacy. Seems like common sense to me but here I am listening to this conversation so clearly it’s not. Additionally, these two I am hearing must work for a nearby business so the odds of a co-worker coming in and seeing this are high.
Rule #2. STEEL yourself. This applies to planned and unplanned performance management conversations. STEEL stands for: Specific, Timely, Explain, Empathy and Listen.
Your discussion should include specific exmaples of objective facts, not just conclusions. Telling an employee that you do not like their attitude is not nearly as effective as telling them that you consider a particular comment or action to be unprofessional. Additionally, focus your comments on performance or conduct, not the person.
Have this conversation in a timely manner. Addressing performance issues quickly, both good and bad, has the most potential to correct or encourage a situation. I once won a major summary judgment for a client. The client was ecstatic and sent me flowers and a gift card. My supervising attorney said nothing… until performance review time three months later. It was listed among my accomplishments for the year. His office was right next to mine. He knew about the win and saw the flowers. What would it have hurt if he had stuck his head into my office and said, “Congratulations. Great job.” Instead, a decade later, the issue still sticks in my craw.
Next, be certain to explain to the employee your specific expectations. Vague statements like, “You need to improve your sales” are not as powerful as “I want to see you get these numbers up by 10 percent this quarter.” Have a positive plan formulated, including corrective action to enhance performance.
Have some empathy. Remember that the person you are speeaking with is, hopefully, trying to meet your expectations. Don’t paint them into a corner by telling them their performance in the worst you’ve seen in 15 years.
And, finally, listen. The truth is that people often have legitimate explanations for the reason they are doing what they’re doing. Sometimes, their reason may even trump your discipline. Given an opportunity, in a performance discussion about attendance, an employee with a disability will reveal their situation. This is a good thing. You need to take that fact into consideration. An employee who leaves the warehouse floor may have done so because he had been made aware of a potential safety hazard in the backroom. Again, this is the kind of employee who needs to be heard, not simply disciplined.
Rule #3. In a planned evaluation discussion, I advise preparing a written evaluation in advance of the conversation. Provide the employee with a copy. Select a time (and a place!) where you will not be interrupted. Ensure that not all of your evaluations are the same! If every employee receives an evaluation of “exceeding expectations” then that rating obviously carries no weight. Finally, if you anticipate any problems with how the discussion will transpire, review the issues is advance with your Human Resources professional.
Rule #4. Avoid the Halo Effect. Do not let your positive feedback in one area of performance effect your evaluation of another area. The salesperson with high production but rotten interpersonal skills still needs to be advised on improving her people skills. Expect the whole package from your employees in every evaluation and tell them you do.
Rule #5. Avoid the Horn Effect. Do not let your negative opinion of one area impact your review of the other areas of performance. An employee with great leadership skills and a notable devotion to their work should have that acknowledged and not hear only about their marketing failures.
Rule #6. Don’t let the employee’s length of performance impact their evaluation. Just because they have been an employee for ten years and have “always done it this way” does not mean it is something that should be tolerated. Likewise, if an employee is a new employee, do not let issues go unaddressed until the next review. By then, the employee will only have built up another year of bad habits.
Rule #7. Anticipate responses to your evaluation. Why am I just hearing about this now? Amy got a second chance, why not me? Is this because I complained? Can I appeal this? Is my job on the line? These are all legitimate questions. Think through the answers in advance of the conversation. And if you do not know the answer, talk to your HR professional. In particular, prepare yourself for the comparator question: what about Amy? In the conversation this morning, the manager told the employee that another employee was not going to be written up for her conduct. I’d have advised her to instead tell the employee that Amy’s situation is separate from her own and that she was not there to discuss Amy’s performance with her.
These are basics. When I provide performance management training, I go into more detail and provide more examples. It’s important to remember that performance reviews are emotional, especially when they are negative. This makes them fodder for lawsuits. A poorly handled disciplinary discussion (in, for example, a local coffee shop) is humiliating. Juries do not like it when employees are humiliated, whether their performance is up to par or not.
Tuesday, March 1, 2011
Can An Employee Be Fired For Calling Her Employer A 'Scumbag' on Facebook?
The answer is not as obvious as previously believed. On Feb. 7, 2011, the National Labor Relations Board (NLRB) and American Medical Response of Connecticut, Inc. (AMR) settled a charge related to this very issue. The fact of settlement is a signal to employers that their social media policies need to be clearly communicated and in compliance with NLRB regulations.
In this matter, an AMR employee posted derogatory comments about her employer on Facebook from her home computer. Specifically, she referred to her supervisor as a “scumbag” and compared AMR management to psychiatric patients. AMR fired the employee citing its policy prohibiting employees from disparaging the company or commenting on the company online without permission.
The NLRB characterized AMR’s nondisparagement policy as “overbroad” because it potentially infringed on an employee’s right to discuss working conditions with other employees. Such a restraint on employee activity is prohibited under federal labor law. The NLRB also claimed that AMR’s termination of the employee was illegal because she was complaining about the general terms and conditions of her employment and her co-workers had been prompted by her posting to respond.
The NLRB considers such “water cooler conversations” about shared working conditions “protected concerted activity.” For an employer this means that Facebook complaints may be deemed protected speech – especially where more than one employee is involved in the “conversation.” The NLRB’s position is that taking adverse action against an employee under such circumstances is unlawful. This means that “overly broad” social media policies create potential liability for employers under the NLRB.
Under the terms of the settlement, the company agreed to revise its social media policy to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions. Because part of the allegation was that the employee was denied union representation during an investigatory interview before she posted the Facebook comments at issue, AMR also agreed that employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation. http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments
The lesson from this case is to consider whether your company’s social media policy restricts off-duty conduct. Relevant case law suggests that employers need to be cautious when attempting to restrict what an employee can or cannot say about the company off-the-job. One key suggestion is to avoid policies that overrun areas where employees have a high expectation of privacy (e.g., personal e-mail and password-protected Web pages like Facebook). Also avoid penalizing employees for engaging in protected concerted activity (e.g., discussing working conditions with co-workers, no matter the forum). Importantly, a policy prohibiting employees from denigrating the employer’s product or services on a social media website would likely be enforceable.
Remember that a policy addressing employee use of social media is not a “one-size-fits-all” endeavor and if you are using a handbook found online it is vital to review it with an eye towards the ever-changing laws on these issues. I advise my clients to ensure that an experienced employment lawyer reviews their handbooks. Your social media policy is not the only policy that may be subject to legal constraints. Different employers bring different legal considerations to that review and the lawyer reviewing your handbook needs to be well-versed in those considerations.
As always, any policy should reflect the unique needs and values of the company and its core values and mission statement. These tend to set the tone for the employer-employee relationship and the social media policy should reflect these ideals just like every other policy in your handbook.
Finally, consider how the policy will be communicated to employees. Ensure that employees and supervisors are educated about the new policy and provide training, if needed. Review the policy on a regular basis to make sure it effectively addresses the world of social media and its evolving landscape.
In this matter, an AMR employee posted derogatory comments about her employer on Facebook from her home computer. Specifically, she referred to her supervisor as a “scumbag” and compared AMR management to psychiatric patients. AMR fired the employee citing its policy prohibiting employees from disparaging the company or commenting on the company online without permission.
The NLRB characterized AMR’s nondisparagement policy as “overbroad” because it potentially infringed on an employee’s right to discuss working conditions with other employees. Such a restraint on employee activity is prohibited under federal labor law. The NLRB also claimed that AMR’s termination of the employee was illegal because she was complaining about the general terms and conditions of her employment and her co-workers had been prompted by her posting to respond.
The NLRB considers such “water cooler conversations” about shared working conditions “protected concerted activity.” For an employer this means that Facebook complaints may be deemed protected speech – especially where more than one employee is involved in the “conversation.” The NLRB’s position is that taking adverse action against an employee under such circumstances is unlawful. This means that “overly broad” social media policies create potential liability for employers under the NLRB.
Under the terms of the settlement, the company agreed to revise its social media policy to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions. Because part of the allegation was that the employee was denied union representation during an investigatory interview before she posted the Facebook comments at issue, AMR also agreed that employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation. http://www.nlrb.gov/news/settlement-reached-case-involving-discharge-facebook-comments
The lesson from this case is to consider whether your company’s social media policy restricts off-duty conduct. Relevant case law suggests that employers need to be cautious when attempting to restrict what an employee can or cannot say about the company off-the-job. One key suggestion is to avoid policies that overrun areas where employees have a high expectation of privacy (e.g., personal e-mail and password-protected Web pages like Facebook). Also avoid penalizing employees for engaging in protected concerted activity (e.g., discussing working conditions with co-workers, no matter the forum). Importantly, a policy prohibiting employees from denigrating the employer’s product or services on a social media website would likely be enforceable.
Remember that a policy addressing employee use of social media is not a “one-size-fits-all” endeavor and if you are using a handbook found online it is vital to review it with an eye towards the ever-changing laws on these issues. I advise my clients to ensure that an experienced employment lawyer reviews their handbooks. Your social media policy is not the only policy that may be subject to legal constraints. Different employers bring different legal considerations to that review and the lawyer reviewing your handbook needs to be well-versed in those considerations.
As always, any policy should reflect the unique needs and values of the company and its core values and mission statement. These tend to set the tone for the employer-employee relationship and the social media policy should reflect these ideals just like every other policy in your handbook.
Finally, consider how the policy will be communicated to employees. Ensure that employees and supervisors are educated about the new policy and provide training, if needed. Review the policy on a regular basis to make sure it effectively addresses the world of social media and its evolving landscape.
Please Note: This Blog is made available by the lawyer publisher for educational purposes only as well as to give information and a general understanding of the law, not to provide specific legal advice. By using this Blog site you understand that there is no attorney client relationship between you and the Law Office of Elizabeth Van Moppes. The Law Office of Elizabeth Van Moppes is not in control of the linked sites and is not responsible for the contents of any linked site. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Elizabeth Van Moppes is licensed to practice law in the State of Washington only.
Tuesday, February 22, 2011
Is It Illegal To Refuse To Hire The Unemployed?
I’m re-posting an online article that I found interesting.
When speaking to the unemployed, discrimination is usually the last thing on their mind. After all, they’re not employed, right? But once they settle in and start browsing the web for that next job, things change. Inevitably, they come across a promising ad, only to be devastated when the ad lists “currently employed” under qualifications. Discrimination has taken on new meaning.
Discrimination against the unemployed has finally come to the attention of the Equal Employment Opportunity Commission, which has just announced that it is now investigating whether the practice is as widespread as anecdotal evidence suggests, and whether the practice of requiring current employment is illegal. Employment law experts are unsure what the EEOC will do, reports The Wall Street Journal.
Businesses Refuse to Hire Unemployed, EEOC says
by Stephanie RabinerWhen speaking to the unemployed, discrimination is usually the last thing on their mind. After all, they’re not employed, right? But once they settle in and start browsing the web for that next job, things change. Inevitably, they come across a promising ad, only to be devastated when the ad lists “currently employed” under qualifications. Discrimination has taken on new meaning.
Discrimination against the unemployed has finally come to the attention of the Equal Employment Opportunity Commission, which has just announced that it is now investigating whether the practice is as widespread as anecdotal evidence suggests, and whether the practice of requiring current employment is illegal. Employment law experts are unsure what the EEOC will do, reports The Wall Street Journal.
While the EEOC seeks evidence, it’s still possible to consider the legal side of the issue. Is it even legal to discriminate against the unemployed?
This is actually a tough question that requires a lot of statistical evidence. As it stands, employment discrimination laws do not explicitly protect the unemployed. Discrimination laws do, however, outlaw discrimination on the basis of race, color and age (over 40 years old).
Title VII and the Age Discrimination in Employment Act outlaw seemingly non-discriminatory selection policies that disproportionately affect protected classes of persons. This is referred to as a disparate impact.
As of January, the unemployment rate for African-Americans was 15.7%, 11.9% for Hispanics, and only 8% for whites. Not only that, one in every three short- to medium-term unemployed person was over 40, while over half of all long-term unemployed persons were also above 40. One expert also estimates that the anti-unemployed policies lower the chance of a minority being hired by 1/3.
Clearly an overwhelming proportion of unemployed persons are racial minorities or over the age of 40. And clearly these policies have a disproportionate impact on these legally protected groups. But that doesn’t make the policy illegal. The law also takes into consideration whether current employment is a necessary qualification, if there’s a less discriminatory alternative, and whether the policy is reasonable. So until there’s a final decision answering these questions, for those that are unemployed, discrimination will just have to be part of the game.
Related Resources:
This is actually a tough question that requires a lot of statistical evidence. As it stands, employment discrimination laws do not explicitly protect the unemployed. Discrimination laws do, however, outlaw discrimination on the basis of race, color and age (over 40 years old).
Title VII and the Age Discrimination in Employment Act outlaw seemingly non-discriminatory selection policies that disproportionately affect protected classes of persons. This is referred to as a disparate impact.
As of January, the unemployment rate for African-Americans was 15.7%, 11.9% for Hispanics, and only 8% for whites. Not only that, one in every three short- to medium-term unemployed person was over 40, while over half of all long-term unemployed persons were also above 40. One expert also estimates that the anti-unemployed policies lower the chance of a minority being hired by 1/3.
Clearly an overwhelming proportion of unemployed persons are racial minorities or over the age of 40. And clearly these policies have a disproportionate impact on these legally protected groups. But that doesn’t make the policy illegal. The law also takes into consideration whether current employment is a necessary qualification, if there’s a less discriminatory alternative, and whether the policy is reasonable. So until there’s a final decision answering these questions, for those that are unemployed, discrimination will just have to be part of the game.
Related Resources:
- EEOC Asks: Are Employers Discriminating Against The Jobless? (Huffington Post)
- Speakers at EEOC Meeting Say Ban on Unemployed Job Applicants Could Discriminate Illegally (ABA Journal)
- Unemployed need not apply (Kansas City Star)
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