NLRB Finds Employee Arbitration Agreement Waiving Class Claims Violates Federal Labor Law
In DR Horton, a decision issued on January 3 and applicable to most private sector employers, whether unionized or not, the National Labor Relations Board (NLRB) held that federal labor law prevents employers from requiring their employees, as a condition of employment, to agree to broad waivers that would deny their right to pursue employment-related class actions both in court and in arbitration, leaving them no forum for pursuing class or collective claims. As a result, an important tool for managing the risk of employment-related litigation has been taken away (for now).
The facts of the case are straightforward. DR Horton, like many employers, required its employees to sign an arbitration agreement as a condition of employment. The agreement required employees to arbitrate all claims arising out of their employment, and precluded arbitrators from issuing class or group relief. As a result, employees were prevented from bringing class or collective actions in any forum. Relying on this agreement, DR Horton refused to arbitrate a class action alleging that it had misclassified certain employees as exempt from the protections of the Fair Labor Standards Act (FLSA).
Not so fast, according to the NLRB. Tracing federal labor law back to its origins, the NLRB found that the filing of a class action “to redress workplace wrongs or improve working conditions” is activity at “the core” of what Congress intended to protect when it enacted the National Labor Relations Act in 1935. This intent, the NLRB reasoned, is reflected in Section 7 of the Act, which gives employees the right to engage in “concerted activities” for the purposes of “mutual aid or protection.” Relying on Section 7, the NLRB found that Employers cannot compel their employees, as a condition of employment, to entirely waive the right to bring class or collective actions.
The NLRB’s ruling in DR Horton clashes with the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, which held that arbitration clauses that waive the right to bring class claims entirely (in the commercial contract context) may be lawful and enforceable. But unless and until the courts intervene to resolve this tension, requiring your employees to completely waive the right to bring employment-related class or collective actions - a common feature of arbitration agreements - is probably no longer permissible under federal labor law.
If You're Interested In Learning More, Sign Up For Our Webinar
Stoel Rives is hosting a webinar on January 11, 2012, to address employee arbitration agreements generally and the DR Horton decision in particular. Click here if you're interested in learning more or attending.
Stoel Rives World of Employment Voted a Top 25 L&E Law Blog!
The results are in, and based on the votes from you, our readers, Stoel Rives World of Employment was selected as a LexisNexis Top 25 Labor and Employment Law Blog of 2011! See here. We would like to take this opportunity to thank our readers for the initial nomination and the subsequent votes that made this distinction and honor possible. We hope you will continue to frequently check in on us as we continue to provide up to date and timely information, news items, expert anaylis, and helpful tips for employment and labor law practictioners.
Thanks again!
-Your Stoel Rives World of Employment Bloggers.
Thanks For Nominating Stoel Rives World of Employment As A Top 25 L&E Law Blog!
Based on feedback from you, our readers, LexisNexis has nominated the Stoel Rives World of Employment as a "Top 25" law blog in the Labor and Employment category! Thanks to those of you who nominated us to this elite group. Readers now have until September 12 to vote for their favorite blog. After voting is completed LexisNexis will announce which of the nominated blogs are selected to the final top 25.
Please Cast Your Vote For Us
At this point we'd like to engage in a bit of shameless self-promotion, and urge you to cast your vote for us before September 12. To do that, simply click here to vote, scroll to the very bottom of the page to the Add a Comment section, and add a comment. In the comment field, type something like "I vote for the Stoel Rives World of Employment blog." You can also view information about the competition and see the other nominated blogs on this page too. If you haven't already used the LexisNexis Communities feature, you may need to create an account to be able to vote.
Again, thanks for the nomination and support! (Here ends the shameless self-promotion...now we'll get back to blogging.)
- Your Stoel Rives World of Employment Bloggers
Why Should Employers be Fair?
Martha walks into your office and says she wants to fire her assistant, Roy, because he keeps sending emails with typos and it is embarrassing. Martha says, “We are at-will and I want him gone by the end of the day.” Like most others, Alaska is an “employment-at-will” state, which means that the employee and employer are free to end the employment relationship at any time and for almost any reason. But is there more to consider in terminating Roy?
Every employment relationship in Alaska contains an implied covenant of good faith and fair dealing. An employer can violate the covenant by acting with an improper motive, like firing an employee two weeks before he is tenured. The covenant also requires employers to treat employees in a way that a reasonable person would consider fair.
Violation of the covenant of good faith requires a very fact intensive inquiry, which often requires going through a trial with witnesses rather than resolving issues through a motion for summary judgment. Trial is incredibly expensive for employers, not only in court costs but also in terms of stress on staff and distraction from business. However, two Alaska Supreme Court cases issued in early July of this year, that you can see here and here, show that summary judgment is alive and well if an employer can adequately demonstrate it acted fairly and without improper motives in its termination process. The application of the implied covenant of good faith and fair dealing to the employment context varies from state to state, and clearly does not apply in some states, like Washington. Nonetheless these recent cases are a good reminder that fair and equitable treatment in discharging employees can help employers avoid costly and disruptive claims.
So what do we do about Roy? Here are five suggestions to help ensure compliance with the implied covenant of good faith and fair dealing:
- Follow a process. Require supervisors to provide good faith, fair reasons for discipline. Provide the employee an opportunity to respond to any allegations. Hear facts from Roy now, rather than for the first time in an EEOC proceeding or in court.
- Be fair. Enforce personnel policies in a way that a reasonable person would regard as fair. Follow personnel policies when disciplining employees. What policy is Roy violating? Is termination an appropriate response to Roy’s violations?
- Be consistent. Treat like employee alike, and justify any reasons for inconsistency in treatment. What type of conduct has resulted in other terminations? Have other employees received progressive discipline under similar circumstances, instead of termination? Treat Roy like other employees in similar situations.
- Act in good faith. Do not manufacture reasons to justify a termination. Is Martha frustrated with Roy for some other reason? Better to learn about it now.
- Document your process, fairness, consistency, and good faith.
Meghan M. Kelly also contributed to this post.
Ninth Circuit Holds Shareholder Hire Preference Not Facially Discriminatory
Meghan M. Kelly also contributed to this post.
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In an unpublished opinion in Conitz v. Teck Alaska Inc. the Ninth Circuit held that an Alaska Native corporation’s shareholder employment preference was not facially discriminatory because it was based on shareholder status, not racial status.
Teck employee Gregg Conitz works at the Red Dog Mine, which Teck operates and NANA Regional Corporation, an Alaska Native corporation, owns. Conitz alleged that he was passed over for promotions as a result of Teck’s policy favoring NANA shareholders in hiring – a preference Conitz argued was racially discriminatory because the majority of NANA shareholders are Alaska Native. The district court found that Teck’s employment preference for NANA shareholders was not a racial distinction and therefore did not violate either the Civil Rights Act or any other provisions of federal or state law. Given this, the district court declined to address Teck’s argument that as a joint venture between NANA and Teck, the Red Dog Mine is exempt from Title VII under a provision of the Alaska Native Claims Settlement Act. The district court also found that Conitz failed to show he was qualified for the promotion, and therefore failed to make out a case of discrimination under Title VII.
The Ninth Circuit affirmed, holding that a shareholder preference is not facially discriminatory because it favors candidates based on shareholder status, not race. The court also found that Conitz failed to show the elements of a prima facie case of discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Conitz did not demonstrate he was qualified for the supervisory position and was, in fact, not promoted because he was not qualified. The court declined to decide whether the shareholder preference policy constitutes racial discrimination since the policy did not affect Conitz.
Fred Has a Very Bad Day (Termination Checklist and Guide)
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Unless your life’s ambition is to reprise George Clooney’s role in Up In The Air, Part II, you probably don’t like having to fire people. But someone’s got to do it . . . and it has to be done right. Here are some things to consider before you step into that room to do the dirty deed. (Pronouns are a nuisance, so our terminated employee will be known as Fred .)
- Has the decision been properly vetted by everyone who should participate? You may simply be the “implementer,” not the “decider,” so make sure you have buy-in from all the relevant stakeholders.
- Particularly when the decision is prompted by misconduct, poor performance or something else Fred did, have you gotten his side of the story? Even if you end up finding Fred’s version a little less than credible, wouldn’t you rather know now what he has to say for himself, rather than read it for the first time in a Summons and Complaint?
- Has the basis for the decision been properly documented? Most, if not all, employment lawsuits could be avoided if the employer took the time to properly document the performance faults, the efforts made to remedy performance (i.e., notice to Fred of his poor performance), and the legitimate business reasons for the termination decision.
- Have you reviewed Fred’s file to determine whether he has any post-employment obligations such as a covenant to not compete, or to not solicit your customers or your employees, or a confidentiality agreement? If such agreements exist, be sure to give Fred another copy of the document and remind him of his continuing obligations.
- Will you offer severance? If so, more often than not, you will want to have an appropriate release to give Fred to consider. There are occasions when you will want to offer severance but not require a release of claims, but that rarely happens these days.
- If you are going to have a written separation agreement (and you don’t have to have one), have you considered other provisions that might induce Fred to sign the release, like:
- A letter of recommendation;
- An agreement to not oppose an unemployment benefits application;
- An agreement to reimburse Fred for a certain amount of COBRA expenses, etc?
- Similarly, if you are going to have a written agreement, have you included all the provisions you need, in addition to the release of claims, like:
- A non-disparagement clause;
- An agreement to not reapply (watch out – these clauses can be tricky);
- An acknowledgement of continuing confidentiality duties;
- A promise to return all company property;
- If Fred is over forty, all of the provisions necessary to comply with OWBPA?
- Will you conduct the termination meeting alone or with a witness? The advantage of having a witness there is that he or she can take notes and be the corroborating witness should things go south. The disadvantage is that the presence of the silent witness may irritate Fred. Nine times out of 10, you’ll want the witness.
- Have you advised your trusted IT person to sever Fred’s computer access (including remote access) during the time that you will be meeting with him? Rarely will you want the employee to work at all after the termination meeting. If the meeting is delayed, be sure to tell the IT person.
- Have you considered when to schedule the meeting? Best is near or at the end of the day. Your office or Fred’s office is fine, but it might be easier to meet in Fred’s office or a conference room so that you can leave if Fred wants to argue and you need to end the meeting. It is easier to leave Fred’s office than to try to make him leave your office. Wherever you choose, make sure it is private.
- During the meeting: Don’t beat around the bush. Be direct, but gentle. Give a reason, but don’t go into detail. Resist being drawn into an argument. State that the decision has been made, is final, and won’t be reconsidered. Acknowledge Fred’s pain. Sensitive, caring companies get sued less often than cold, heartless ones.
- If Fred claims he is being or has been discriminated or retaliated against for some unlawful reason, (as opposed to just complaining that the decision isn’t right or isn’t fair) ask him to tell you very specifically why he says that, make careful notes of what he says, tell him that you will investigate the claim and get back to him, but that the decision stands. Call your lawyer.
- Tell Fred that his computer access has been cut off. Explain that you will work with him to get any personal information off his computer.
- Ask for Fred’s keys, card access, phone, laptop, thumb drive, or whatever other company property he has. Ask him if he has any company property or documents at home. Ask him if he ever emailed himself company documents. If he has materials at home, arrange a time to pick those things up. If he sent himself documents at home, get his assurance that he will delete those emails. You may need to take more serious steps than these if you suspect that Fred is not being straight with you.
- Decide in advance how Fred will collect his personal items. Will you walk him back to his desk and watch him pack? Will you agree to meet him at the office on the weekend?
- Regardless of whether you offer benefits in exchange for a release, give Fred a letter that says he has been terminated and reminds him of any post-termination obligations, if any. (Some states require that you state the reason for the termination.)
- Know what final pay is due and when it is due. State rules vary a lot. Do you have to pay out unused vacation upon termination? Depends. Do you have to pay out unused sick leave? Depends. When is the final paycheck due? Depends on whether Fred quits with or without notice or is fired or leaves by mutual agreement. In Oregon, because he was fired, Fred is entitled to receive his final pay no later than the end of the first business day following his termination. During the termination meeting, you should ask Fred whether he will come in to pick up his check or whether he wants you to mail it to him.
- Do your final paperwork or take steps to see that it gets done.
- Go home. Have a drink.
Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice
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The Supreme Court today issued a judicial smackdown to the Seventh Circuit Court of Appeals, unanimously reversing its decision in Lewis v. City of Chicago (as we suggested it should when we reviewed the details of this case back in October!). Briefly put, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their application test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The Seventh Circuit held that the “discrimination was complete when the tests were scored...and the applicants learned the results.”
Justice Scalia, writing for the entire Court, stated that because there is no dispute that the claim was filed within 300 days of the hiring of the new class, the issue in this case is not “whether a claim predicated on the [on the hiring of the new firefighter class] is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all.” (Emphasis in original.) In other words, while the parties agreed that the adoption of a practice had a disparate impact, the real question was whether a cause of action can arise from the application of that same practice. The Court held that it could. Citing its recent opinion in another firefighter test case—Ricci v. DeStefano, the court noted that “a plaintiff establishes a prima facie disparate-impact claim by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases.”
Per the Court, the City believes that this decision “will result in a host of practical problems for employers and employees alike,” in that it may subject employers to an increased number of disparate-impact lawsuits based on long-stranding practices. That may, in fact, be true. Following this decision, any employer engaging in a practice whose application may result in a disparate impact on some protected classification of employees should take the time to reevaluate that practice. While there may be a legitimate business defense for the practice (as remains to be seen in the Lewis case on remand), it’s going to be easier for employees to get their foot in the door and state a claim.
President Obama to Sign Jobs Bill Today
President Obama is today expected to sign the Hiring Incentives to Restore Employment (HIRE) Act, which in its final form passed The House of Representatives 217-201 on March 4 and the Senate 68-29 on March 17. Click here to download the final version of the HIRE Act.
Key provisions of the HIRE Act include:
- An exemption from Social Security payroll taxes for private employers for each worker hired in 2010 who previously had been unemployed for at least 60 days;
- A $1,000 income tax credit, or a credit of 6.2% of total wages paid, for private employers for each new employee hired in 2010 and retained for at least 52 weeks and claimed on the employer's 2011 income tax return;
- An extension of the small business “expensing” tax break for one year, allowing small businesses to continue writing off up to $250,000 of certain capital expenditures instead of depreciating them over time;
- A $4.6 billion Build America Bonds program, which would provide an optional direct subsidy payment in lieu of a tax credit for tax credit bonds issued for certain school and energy projects; and
- Expanded federal aid for highway programs estimated to save or create 1 million jobs.
As previously reported in the Stoel Rives World of Employment, a slightly different version of the HIRE Act passed through the Senate on February 24. While the bill was in the House, several changes were to the Act, including increased funding to the Build America Bonds program and greater flexibility to the hiring tax credit program.
Despite Assertions to Contrary, Employment Laws Do Exist
On my way in to work this morning, I was listening to NPR’s Morning Edition, and caught an interview with Lewis Maltby, president of the National Workrights Institute. The interview was ostensibly to promote Mr. Maltby’s new book, “ Can They Do That?” in which he discusses employment termination cases that were deemed legal, but seem, in his opinion, to be disproportionately severe or unjust.
What Mr. Maltby appeared to decry (without using the proper terminology) is the American presumption of “at will” employment—the notion that an employer may terminate an at will employee’s employment for any reason or no reason, so long as it’s not otherwise illegal. A couple of Mr. Maltby’s examples demonstrate that concept well. For example, he mentioned instances where it was permissible for an employer to terminate an employee based on the political bumper sticker on the employee’s car, and for a school to terminate an overweight teacher’s employment because the teacher did not project the correct image. As there are no laws that specifically protect individuals from discrimination based on political affiliation or weight, these terminations were in fact permissible. (I would caution, of course, that terminating an overweight employee does carry risk to the extent the employee might be considered to have a disability under state or federal law.)
Mr. Maltby’s credibility, however, ends there. Mr. Maltby incorrectly made the assertion that there are no laws at all to protect employees—and his other examples demonstrate a lack of understanding of the law. For instance, he implied that there is no recourse for an employee whose employment is conditioned on having sexual relations with a superior. That is, of course, false. Such behavior constitutes impermissible quid pro quo sexual harassment under federal law and the laws of nearly every state (if not all of them). He also cited an example of an employee who was seen by his boss drinking beers at a bar after work, and where the boss fired the employee because drinking is “a sin.” While the outcome of a lawsuit would depend on the specific facts, such a scenario could constitute discrimination based on religious belief—another category protected by federal law and the laws of most if not all states. Every state and locality has a variety of employment laws already in place that protect employees from a wide range of impermissible employer conduct. Rather than engaging in hyperbole by stating that no laws exist to protect employees, a more useful discussion revolves around whether, as a policy matter, it makes sense to pass new laws protecting additional personal characteristics or affiliations. The challenge, of course, is striking the right balance between protecting those few things we all (or mostly) agree should be protected, with the interests of employers who should have the right to conduct their businesses as they see fit. A copy of the NPR story is available here.
New Salt Lake City Ordinances Prohibit Housing and Employment Discrimination Based on Sexual Orientation
Yesterday the Salt Lake City Council unanimously passed ordinances prohibiting discrimination on the basis of sexual orientation and gender identity. Click here to download a copy of the City Council's Staff Report on the ordinances, along with full text of the new laws. Highlights of the employment discrimination ordinance include:
- Forbids employment discrimination based on a person's sexual orientation or gender identity in Salt Lake City.
- "Sexual orientation" is defined as "a person’s actual or perceived
orientation as heterosexual, homosexual, or bisexual." - "Gender identity" is defined as "a person’s actual or perceived gender identity, appearance, mannerisms, or other characteristics of an individual with or without regard to the person’s sex at birth."
- "Sexual orientation" is defined as "a person’s actual or perceived
- Creates a complaint and investigation process. The complaint could be resolved through mediation or a fine of up to $1,000.
- Does not create a "private right of action" to sue over alleged discrimination.
- Exempts religious organizations, the State of Utah, and businesses with fewer than 15 employees.
- "Does not create any special rights or privileges," because "every person has a sexual orientation and a gender identity."
- Requires annual reports by the city's Human Rights Commission on the effectiveness of the ordinances.
- Takes effect on April 2, 2010.
In case you were wondering, the ordinances passed with the full support of the LDS Church. "The church supports these ordinances," LDS spokesman Michael Otterson told the City Council, "because they are fair and reasonable and do not do violence to the institution of marriage." For more coverage of the SLC ordinances, read this article from the Salt Lake Tribune, or this article from the Deseret News.
SLC employers should review the new laws and review existing policies and procedures to ensure compliance. Many states, counties and cities across the country have adopted similar ordinances. To check the state of the law in your location, check out this handy list of state and local sexual orientation and gender identity laws from the Human Rights Campaign.
The First Monday in October: Supreme Court Roundup
The first Monday in October traditionally marks the beginning of the United States Supreme Court's yearly term - and it provides an excellent opportunity to look at the cases the Court will be hearing this year. In an earlier post, the World of Work brought you detailed discussion of the Court's only Title VII case this term: Lewis v. City of Chicago. Here's a sampling of other labor and employment-related cases to watch for throughout the term:
This morning, in Mohawk Industries, Inc. v. Carpenter, the Court will consider whether an employer's attorney's investigation of an internal complaint is protected by the attorney-client privilege. The internal complaint alleged that the company was conspiring to hire individuals who were not authorized to work in the United States. The case involves a former employee's claim for witness tampering; a separate lawsuit involving the alleged conspiracy is proceeding on a separate track.
On October 7, the Court will hear a case involving the Railway Labor Act. The issue in Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers is whether the Seventh Circuit Court of Appeals had the power to overturn, on due process grounds, an arbitration award in the railroad's favor.
On October 14, in Perdue v. Kenny A., the Court will consider whether attorney fee awards under 42 USC 1988 can be enhanced when the lawyer does a particularly good job. Section 1988 is a common basis for fees in employment-related lawsuits.
On December 9, the Court will hear Stolt-Nielsen SA v. AnimalFeeds International. This case asks the Court to decide whether an employee bringing a claim under an arbitration agreement may sue, not only on his own behalf, but on behalf of a class of similarly situated employees. In this case, the arbitration agreement did not specifically allow class claims, but the arbitrators allowed those claims anyway.
Finally, on a date to be announced, the Court will hear Granite Rock Co. v. International Brotherhood of Teamsters. This case again involves questions about arbitration. Here, the issue is whether an arbitrator (not a court) may decide whether a valid collective bargaining agreement exists.
Supreme Court to Decide Title VII Statute of Limitations Question
The U.S. Supreme Court agreed yesterday to hear a challenge to a Seventh Circuit Court of Appeals decision in a case with similar factual overtones to the Ricci case decided earlier this year. Like Ricci, this case involves a firefighter qualification test that had a disparate impact on black applicants; unlike Ricci, at issue here is the statute of limitations on a Title VII claim.
In this case, Lewis v. City of Chicago, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The trial court held that the hiring of each new firefighter was a new violation of Title VII, so the EEOC charges were timely filed. On appeal, the Seventh Circuit reversed, holding that the “discrimination was complete when the tests were scored...and the applicants learned the results.” At issue for the Supreme Court is whether the limitations period for a Title VII claim begins to run when an employer announces the results of a test that could violate Title VII’s disparate impact provision, or if the right to sue begins only once the employer has acted on that policy.
At face value, it seems that the trial court probably got this one right and the Supreme Court should reverse the Seventh Circuit. How can an employee know what the actual disparate impact will be until the employer’s hiring decisions are actually made? If, for example, the employer’s business needs ultimately dictate that it need hire nobody, there has been no harm done regardless of the results of the test. An actual harm needs to occur before the right to sue accrues. Notwithstanding that analysis, and given the current makeup of the court, however, it is unclear which way the Court will go on this one. The Stoel Rives World of Employment will let you know when a decision is reached and how that decision may impact your workplace.
Oregon Court Of Appeals Holds Non-Disabled Employees Are Protected When Requesting Accommodations
On Thursday, in Herbert v. Altimeter, the Oregon Court of Appeals held that an employee does not need to actually be disabled in order to be protected from retaliation for requesting an accommodation under Oregon’s disability anti-discrimination law. The case serves as a useful reminder that anti-retaliation protections, like those in the Oregon disability law, can be very broadly applied and protect many types of employee requests or complaints. Employers should be careful when disciplining or terminating any employee who has recently made some kind of arguably protected request or complaint.
Sherrie Herbert was terminated from her truck-driving job with Altimeter shortly after she became ill, allegedly from exhaust fumes in the cab of her truck, and she reported those problems to her boss. She sued under various retaliation theories, including that she was terminated in retaliation for her having requested an accommodation for a disability (i.e., requesting to be reassigned to a different truck). The trial court granted a directed verdict for Altimeter at the close of Herbert’s case at trial and dismissed all claims.
The Court of Appeals reversed. Altimeter argued that it couldn’t have retaliated against plaintiff for requesting an accommodation as a matter of law, because she was not disabled and therefore not protected under the Oregon disability law's anti-retaliation provisions. The court rejected that argument, noting that while the law requires Oregon employers to provide a reasonable accommodation to a “person with a disability,” the anti-retaliation provision, ORS 659A.109, protects any “worker” who requests an accommodation. So, the court reasoned, by its plain terms the statute protects a broader class of employees (all of them) who make protected requests for accommodations, even though those employees may not be entitled to an actual accommodation.
The opinion also contained an illustrative reminder about the importance of well-drafted written responses filed with the Equal Employment Opportunity Commission (“EEOC”), the Oregon Bureau of Labor and Industries (“BOLI”), and similar agencies. Those written position statements are admissible later; if they’re not carefully drafted they could come back to bite the complainant. In Herbert, Altimeter’s BOLI position statement included several damaging admissions, the worst of which essentially stated that she was terminated because she insisted she be reassigned to another truck, i.e., requested an accommodation. Despite a general lack of other evidence of retaliation presented by Herbert at trial, the Court held that Altimeter's admission in the BOLI statement alone was enough to allow that claim to go to a jury.
Oops! While there are no easy, hard-and-fast rules about how to draft effective BOLI or EEOC position statements, generally you want to say as little as possible while still making your case, and above all, you don't want to provide the only evidence a plaintiff will need to take his or her case all the way to a jury!! Those kinds of careless statements early on can make litigating employment discrimination lawsuits very expensive for employers, because they become much harder to get dismissed before trial.
Fake Job Reference Site Highlights Importance of Verifying Applicant References
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As if navigating the world of employment issues was not hard enough already, today's Consumerist highlighted a new service that purports to provide, among other things, fake job references. While I have not formed a conclusion as to whether the site is real or a sham (many of the internal links on the site don't work, but there is an actual recording identifying the company when you call the number), such services--the sole function of which is to perpetrate a fraud--highlight the importance of verifying the authenticity and experience of applicant references.
If you are suspicious about an applicant's job history or references, there are several steps you can take decrease your chances of being duped.
- First, if the company name is unfamiliar to you, look it up online. Is there a website? Can you find a phone number? If so, call it and ask to speak to someone who covers the human resources function. It is, of course, possible to fake all of these things (and a service like the one linked to above is paid to cover them), but chances are that someone who is lazy enough to fake a job reference isn't going to cover all of his or her bases.
- Second, don't rely on the information provided. If the applicant states that he or she worked at a major corporation and provides the number for someone to contact at the corporation, don't call the number. Instead, go to the website, call the main number, and ask to speak to the person in the reference. If that person doesn't exist, it's a good sign that the reference is not legitimate.
- Third, as the Consumerist post notes, make use of services provided by the phone company such as reverse lookup. The number may not show up for a legitimate reason (such as it's a direct dial line), but the failure to authenticate should still be considered a reason to proceed with caution.
- Fourth, if you are instructed to contact a reference at home that's fine, but try to otherwise authenticate the reference as discussed above.
- Fifth, you may want to include a policy in your handbook indicating that subsequent discovery of false information on an employee's application is grounds for immediate termination.
Once you verify that the reference is legitimate, be mindful that all references were not created equal. Make sure to establish that the reference interacted with the applicant in significant ways or over a substantial period of time. Many applicants provide otherwise legitimate references who, for example, left the prior employment long before the applicant did. Those references are less likely to have any useful information, and won't be able to discuss why the applicant left the prior employer.
Many employers don’t check references at all, or just do a cursory review. The lesson here is that due diligence checking references can go a long way toward avoiding significant problems down the road.
Judge Sotomayor's Record Shows Even-Handed Approach to Employment Law
President Obama recently nominated Judge Sonia Sotomayor to replace outgoing Justice David Souter on the United States Supreme Court. If you're like us, you're wondering what her nomination might mean for employment law. While it's never easy to predict how a nominee will rule once on the Supreme Court (just ask George H.W. Bush), early indications are that Judge Sotomayor takes an even-handed approach to employment law issues.
In her 16-year career on the bench, first as a District Court Judge and then as a Judge on the Second Circuit Court of Appeals, Judge Sotomayor has been involved in over 100 opinions on employment cases. She's ruled in favor of both employers and employees, and her decisions do not seem to be skewed one way or the other. Click here for a list of of Judge Sotomayor's employment law decisions.
If you look through this list, you'll see that she's made several rulings in favor of employers. While some conservatives are already attacking Judge Sotomayor for "judical activism," they will find no support for those charges in her employment law record. Assuming she takes this same approach on the Supreme Court, we can expect her to be a critical swing vote on future employment cases.
Tomorrow: Judge Sotomayor's Labor Record
