How To Avoid Holiday Party Pitfalls (and Liability)

According to recent poll by the Society of Human Managers (SHRM), fewer employers are foregoing holiday parties this year than in 2009. Although the economy continues to sputter, many employers likely see the traditional holiday party as a relatively inexpensive way of boosting morale and creating good will among their employees. 

Some employers approach party planning with trepidation, fearful that too much holiday cheer will lead to problems. Here are some tips for planning a successful employer-sponsored event while avoiding some common holiday party pitfalls:

  • Remind employees, and especially supervisors, that the holiday party is a work event, and policies regarding appropriate workplace conduct are in effect 
  • Enlist supervisors in maintaining appropriate conduct standards
  • Recognize diversity by celebrating the season or the end of the year, without reference to specific holidays or religious traditions
  • Choose a venue at which all employees will be comfortable (i.e., probably not the sports bar with the skimpy server outfits), and that will be accessible to employees with disabilities
  • Invite spouses or partners to attend
  • If alcohol will be served, limit its consumption through tickets or a cash bar and have a third party, not employees or supervisors, serve the drinks
  • Make arrangements for taxi service to get impaired employees home and be proactive in assessing those who should not drive
  • Clearly conclude the party when it is over to avoid lingering or post-party activities where control will be difficult
  • If complaints about conduct at the party surface, address them promptly

With a little planning, the workplace holiday party can be a success. Even the HR department will be able to relax and have a good time!  

Supreme Court Lets Stand Ruling Allowing EEOC to Issue Subpoenas After Right-To-Sue

Yesterday the U.S. Supreme Court declined to review a Ninth Circuit Court of Appeals decision that allows the Equal Employment Opportunity Commission (EEOC) to continue investigating allegations of employment discrimination, and even to issue subpoenas to employers, after issuing a right-to-sue letter to the employee who filed the initial complaint.  Click here to read the Ninth Circuit decision in Federal Express Corp. v. EEOC

In order to file a lawsuit under Title VII of the Civil Rights Act of 1964, an employee must first file a complaint of discrimination with either the EEOC or an analogous state agency, a process known as "exhausting administrative remedies."  Only after the EEOC issues a "right-to-sue letter" may the employee then file a lawsuit.  It is not uncommon for an employee to file a complaint with the EEOC and withdraw it almost immediately, obtain the right-to-use letter and file a lawsuit, all before the EEOC has had a chance to investigate.  In Federal Express, the employee did just that in order to join a pending class action lawsuit.  The employer expected the EEOC to drop its investigation, but instead EEOC continued to investigate and issued a subpoena to the employer. 

The Ninth Circuit enforced the subpoena, writing:  "By continuing to investigate a charge of systemic discrimination even after the charging party has filed suit, the EEOC is pursuing its obligation to serve the public interest."  The Ninth Circuit's decision is in line with a decision from the Third Circuit, but contrary to decisions from the Fifth, Seventh and Tenth Circuits.  The Supreme Court will often take a case like Federal Express to resolve such splits between the circuit courts, but declined to do so in this case.  As a result, the EEOC's investigatory powers will continue to vary depending on where a complaint is made. 

Given the Supreme Court's ruling in Federal Express, employers can no longer safely assume that the EEOC will drop its investigation once it issues a right-to-sue letter.  The EEOC may choose to continue investigating charges of discrimination, especially in cases involving allegations of systemic or widespread violations of anti-discrimination law.  Employers (at least those in the Ninth and Third Circuits) should be prepared to comply with EEOC investigations even after the right-to-sue letter has issued. 

E-Verify Implementation on Track for September 8, 2009

Starting September 8, 2009, employers receiving federal contracts will be required to use the new E-Verify system to check their employees' authorization to work in the United States.  This announcement comes after several delayed attempts by the Bush and Obama administrations to implement the E-Verify rule; however, their efforts were thwarted by a stay issued as part of a lawsuit blocking implementation of the E-Verify rule.  However, the stay has been lifted, the Obama administration has announced its support for the rule, and it appears that it really will go into effect this time.  Really.  We're not kidding.

Employers take note:  the new E-Verify rule will only affect federal contractors and subcontractors who are awarded a new government contract after September 8, 2009 and that includes E-Verify clause.  Federal contractors may NOT use E-Verify to verify current employees until they receive a contract with the E-Verify clause.

For more information on E-Verify, click here to visit the U.S. Citizenship and Immigration Service's E-Verify Website.

Managers Individually Liable for Unpaid Wages Despite Employer's Bankruptcy

A recent case should strike fear into the hearts of all upper-level managers and human resources professionals:  in Boucher v. Shaw, the Ninth Circuit ruled that individual managers were liable for their subordinates' unpaid wages, even though the employer company filed for bankruptcy. 

In Boucher, a group of former casino employees sued the CEO, CFO and the labor relations manager of their former employer, the Castaways Hotel, Casino and Bowling Center.  The three managers moved to dismiss, arguing that they were not "employers" that could be liable for unpaid wages under the Fair Labor Standards Act (FLSA), and that they should receive protections from the Castaways' bankruptcy filing. 

The Ninth Circuit noted that under the FLSA, the term "employer" is to be construed broadly to include individuals who have “control over the nature and structure of the employment relationship,” or “economic control” over that relationship.  It concluded that the three executives, two of whom were also alleged to be co-owners of the casino, fit that definition of "employer."  The court also found that because the three executives were not parties to the bankruptcy proceeding, they were not entitled to any bankruptcy protections. 

As the Stoel Rives World of Employment reported earlier this month, the Washington Supreme Court reached a similar ruling based on almost identical facts in Morgan v. Kingen.  These cases should serve as a reminder to managers everywhere:  if your business is failing, you may want to prioritize paying your employees' wages over everything else.  Failure to do so may lead to personal liability. 

How Employers Can Reduce Litigation Costs

Employment litigation dominates court dockets around the country. And the swing to the left in the political arena is not likely to put a damper on the number of filings. Everyone knows that litigation is expensive. So . . . what can the employer do to reduce its expenses if it finds itself on the receiving end of an administrative charge or a lawsuit? 

1. Early Case Assessment


            Ask your attorney to provide you with an early comprehensive analysis of the case after he or she has interviewed key witnesses, reviewed key documents and researched legal issues. Doing so will give you important information about whether an early settlement is likely to save you money in the long run and give you a good idea of what you are in for if you don’t settle.


2. Manage your documents


            Use your in-house IT staff to image hard drives to save the cost of outsourcing. Do a thorough job of collecting documents from all relevant players so that your attorneys and their paralegals don’t have to charge you to do this work.


3. Decipher your documents


            Provide your attorney up front with a descriptive list of key players, identify key documents and provide a written narrative of the events in question. Anything you can do to compile information at the outset will save your attorney time.  Saving attorney time saves you money.


4. Consider early resolution


            Leave your pride and your principles at the door and consider an early, cheaper resolution. Yes, employers often say, “I’d rather pay my attorneys than the plaintiff,” but that sense of outrage wears off as litigation wears on.


5. Be open to technology


            Good attorneys use document management systems and other tools to help manage cases internally. Ask if you can be included in such systems to reduce the attorney’s need to communicate with you. For example, can you receive docketing notices automatically so that your attorney doesn’t have to send them to you?


6. Check your insurance


            Some employers carry employment practices liability coverage. It won’t cover all types of claims you might face (for example, a wage claim wouldn’t be covered and intentional conduct is typically excluded), and you may lose your right to select your own attorney, but, if you have it, you should notify your broker or carrier immediately by providing a copy of the charge or complaint. Other coverage (D&O, GCL) might also be in play.


7. Ask how you can save attorney time!


            Don’t hesitate to ask your attorney if there are tasks you can perform in-house to reduce attorney time.

Feisty, Spry and Grandmotherly: Ageist Terms to Avoid?

What do terms like "feisty," "spry," "elderly" and "grandmotherly" have in common?  Yes, they are commonly used to refer to older people; but they can be used to express derogatory stereotypes about someone because of age. 

An article in today's New York Times, "Goodbye Spry Codgers, So Long Feisty Crones," reports that two groups, the International Longevity Center in New York City and the Aging Services of California, have put together a stylebook to guide media professionals through the minefield of politically correct and politically incorrect ways of identifying and portraying the elderly.  Among the potentially unwelcome terms identified are “senior citizen," “golden years," “feisty,” “spry,” “feeble,” “eccentric,” “senile” and “grandmotherly.” Likewise, it can be viewed as patronizing to call someone “80 years young.”  As for what's on our coffee mug? Don't even go there. 

Is this another example of "political correctness" run amok, and can we just ignore it?  Probably not.  As previously reported here in the Stoel Rives World of Employment, ageist remarks like "grandma" can form the basis of an age discrimination lawsuit.  Employers should be careful about how age-related terms are used in the workplace.  It is unlikely that using a term like "senior citizen" by itself will lead to a lawsuit, but using it in the context of a performance review or a termination meeting might. 

Time Out for E-Verify: Mandatory Use Rule Suspended Until February 20

Federal contractors take note:  the rule requring mandatory use of the E-Verify system has been suspended until at least February 20, 2009.  

As previously reported in the Stoel Rives World of Employment, President Bush's executive order would make using E-Verify mandatory starting January 15, 2009 for federal contractors with projects exceeding $100,000 and for sub-contractors with projects exceeding $3,000.  A coalition of employer's groups sued, seeking an injunction against the rule. 

The parties reached an agreement with the U.S. Department of Justice to delay the effective date of the new rule until February 20, 2009 – allowing time for an expedited hearing on the merits of the plaintiffs' legal case.  The Federal Court has accepted that agreement on January 12, and set up a briefing schedule that should have everything worked out by the new implementation date.  If you like reading legal documents, click to read the court's order.  And as always, watch the Stoel Rives World of Employment for more updates. 

Business Groups Sue to Block E-Verify Rule

The Society for Human Resource Management, the U.S. Chamber of Commerce, and three other groups filed a lawsuit late last month challenging the legality of an executive order that requires federal contractors to use E-Verify, the federal government's Web-based system that uses Social Security files to ensure that employees are legal immigrants or citizens eligible to work in the United States.  Click here to read a copy of the complaint:  Chamber of Commerce of the United States of Am. v. Chertoff, D. Md., No. 8:08-cv-03444-AW (12/23/08).

President Bush signed an executive order in June that made E-Verify mandatory starting January 15, 2009 for federal contractors with projects exceeding $100,000 and for sub-contractors with projects exceeding $3,000.  The lawsuit seeks an injunction against the January 15 implementation of the executive order. 

According to SHRM's press release, the system isn't ready for widespread use and would place an unreasonable burden on employers.  “This massive expansion of E-Verify is not only bad policy, it’s unlawful,” according to a U.S. Chamber of Commerce's press release.  “The Administration can’t use an Executive Order to circumvent federal immigration and procurement laws. Federal law explicitly prohibits the secretary of Homeland Security from making E-Verify mandatory or from using it to re-authorize the existing workforce.” 

The Stoel Rives World of Employment will be watching this lawsuit, and we'll post updates as they occur.  For now, it's safest to assume that the order will take effect January 15 and that contractors will be required to use the system.  If that changes, we'll let you know.

Minnesota Wal-Mart Employees Get $54 Million Christmas Present

Wal-Mart Stores Inc. announced yesterday that it will pay $54.25 million to settle a class-action lawsuit over allegations that Wal-Mart made its employees work during break time and off the clock after regular working hours.  The class consists of approximately 100,000 current and former hourly employees who worked at Minnesota Wal-Marts and Sam's Clubs between September 11, 1998 and November 14, 2008.  Click here to read MSNBC's coverage of the settlement

This isn't Wal-Mart's first major settlement, and it might not be the last:  according to Wal-Mart's 10-K filings with the SEC, it has to date settled 76 similar class-action lawsuits across the country.  The lesson for employers?  Carefully follow the wage and hour laws of each state in which you do business.  If you have employees in Minnesota, the state's Department of Labor and Industries has a great website with lots of valuable compliance tips and information. 

Salvation Army Settles "English Only" Lawsuit with EEOC

A Massachusetts federal court last week approved a consent decree settlement of an Equal Employment Opportunity Commission (EEOC) lawsuit against the Salvation Army over the firing of two Spanish-speaking employees who failed to adhere to the employer's "English only" policy.  To read the consent decree in that case, click here

In that suit, the EEOC had accused the Salvation Army with national origin discrimination under Title VII for enforcing an English-only policy that required its thrift store employees to speak only English in the workplace, even when on breaks.  The EEOC argued that the English-only policy violated Title VII because it was not justified by “business necessity," as it was used to terminate two clothes sorters who had no customer contact.  

Under the consent degree, the Salvation Army will adopt new policy that employees shall use English in the workplace “to the best of their abilities when speaking to any other employee, beneficiary, customer, or a supervisor"--however, the policy will allow non-English speaking employees to speak their native language during work breaks and to use languages other than English with customers who speak the same foreign language.   

This case is a reminder to employers that English-only policies may only be used and enforced if English is a "business necessity."  Requiring employees to speak English during working time when speaking to customers, supervisors and coworkers is generally accepted.  However, requiring employees to speak only English during breaks or in private, or requiring employees to demonstrate English proficiency when English is not a bona fide job requirement is highly risky.  If you have or are considering an English-only policy for your workplace, you may want to ask your employment attorney to review that policy.  To read the EEOC's guidance on English-only policies, click here.   

New Study Suggests Defendants Should Try More Cases

According to a recent study, plaintiffs in civil lawsuits should be more willing to settle their cases, and perhaps defendants should stick to their guns and take more cases to trial. 

The study (as reported in this New York Times article), concludes that when plaintiffs reject the defendant's settlement offer and go to trial, they end up with a worse result 61% of the time.  Defendants fare far better:  only 24% of the time do defendants receive a worse result at trial than they would have had the plaintiff taken their last settlement offer.  In 15 percent of the cases, both sides were right to go to trial — the defendant paid less than the plaintiff demanded but the plaintiff won more than the defendant offered.

The full results of the study will be published in the September Journal of Empirical Legal Studies.  We'll be waiting to see if the full published study makes any recommendations specific employment litigation. 

Former Official Sues NASCAR for Race, Sex Harassment

Today's big news:  Former NASCAR technical inspector Mauricia Grant filed suit against the auto racing league for sexual and racial harassment, discrimination and retaliation, seeking $225 million dollars.  According to Grant's complaint,  she was referred to as "Nappy Headed Mo" and "Queen Sheba" by co-workers, was often told she worked on "colored people time" and was frightened by one official who routinely made references to the Ku Klux Klan.  In addition, Grant said she was subjected to sexual advances from male co-workers, two of whom allegedly exposed themselves to her, and graphic and lewd jokes.  Two weeks after Grant complained about this treatment, she was terminated. 

If Grant's claims have merit, she's certainly entitled to just compensation.  But whenever I see a plaintiff ask for huge sums of money (and for an employment case, $225 million is "huge"), this is the image it conjures in my mind.