Workforce Q&A
Bracewell & Giuliani LLP
Answer:
The Franken Amendment is a provision included in the Department of Defense Appropriations Act for 2010. Specifically, that federal statutory provision, which was sponsored by Senator Al Franken of Minnesota, requires any defense contractor that receives a contract awarded under the Defense Appropriations Act on or after February 17, 2010, to refrain from entering into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under (i) Title VII of the Civil Rights Act of 1964 or (ii) any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment or negligent hiring, supervision or retention. Further, the provision prohibits an employer with a covered contract from taking any action to enforce any provision of an existing agreement with an employee or independent contractor that mandates the employee or independent contractor to resolve any of the identified types of claims through arbitration.
Although many employers might assume the Franken Amendment is not a concern for them because they do not have a contract of over $1 million with the Department of Defense, this new law also provides that, beginning 180 days after December 19, 2009, defense contractors will be required to certify that their subcontractors with subcontracts of over $1 million on a defense project will also comply with these restrictions on arbitration agreements with employees and independent contractors.
Notably, while originally this legislation was characterized as just prohibiting employers from requiring employees making sexual assault allegations from arbitrating claims, the law appears to have much broader scope than that and extends to any (i) discrimination claim under Title VII and (ii) tort claims related not only to alleged sexual assault, but also to sexual harassment.
All employers should be concerned by the Franken Amendment because it demonstrates the widespread support in Congress for restrictions on workplace arbitration. There are bills currently pending in Congress that would broadly prohibit mandatory arbitration in the employment setting.
For the time being, those employers with significant defense-related contracts or subcontracts should evaluate whether they are covered by the Franken Amendment restrictions and, if so, modify any arbitration programs that may have to comply with these restrictions.
Bracewell & Giuliani, LLP
Answer:
An electronic signature by an employee acknowledging receipt of a policy should be sufficient to demonstrate the employee’s receipt and acknowledgment of the policy. There is no legal impediment under federal or Texas law for an employer to require an electronic signature to demonstrate receipt and acknowledgement of electronically delivered policies. However, it is recommended that employers provide employees with the option of acknowledging receipt of the policy in writing for employees who are unable to access the policy by computer or who require a reasonable accommodation under the Americans with Disabilities Act.
It should be noted that Texas has adopted a Uniform Electronic Transactions Act, which, like its federal counterpart, provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form. See Tex. Bus. & Comm. C. § 43.007 and 15 U.S.C. § 7001. Although these statutes do not specifically address the employment relationship, they provide additional support for instituting electronic signatures of policies.
Moreover, the HIPAA regulations provide guidance as to what is considered taking “reasonable measures” to ensure that an electronic system results in actual receipt of transmitted documents, including: (i) using return-receipt electronic mail features or notice of undelivered mail, and (ii) conducting periodic reviews or surveys to confirm receipt of transmitted information.
Finally, challenges have been raised by employees in cases involving electronic distribution of arbitration agreements. Based on these challenges, employers should consider taking measures to ensure that an electronic signature can be attributable to the employee. Some suggested measures include: (i) providing employees with clear written and/or verbal notice of the electronic distribution of the policy; (ii) ensuring that employees utilize unique passwords to access the employer’s computer system; (iii) tracking the date and time an employee opens the e-mail containing the policy; and (iv) providing a box for employees to check confirming that they have received the policy. See Kerr v. Dillard Store Services, Inc. 105 F.E.P. cases 1298 (2009); Campbell v. General Dynamics Government Systems, 407 F 3d. 546 (1st Cir. 2005).
FULBRIGHT & Jaworski
Answer:
The media coverage on H1N1 influenza has indeed been widespread, and many employers are confused about whether to dust off emergency response plans or to maintain business as usual. Despite this confusion, however, governmental agencies have weighed in on an employer’s obligations and best practices as they relate to influenza in the workplace.
For example, the Occupational Safety and Health Administration (OSHA) has restated recently with regard to H1N1 that an employer has a general duty to provide a workplace free of recognized hazards. With this obligation, an employer has a duty to take steps to protect his workforce from the spread of H1N1. For example, OSHA recommends that employers require employees to use appropriate hygiene and engage in social distancing. OSHA also strongly recommends that employers incentivize employees to stay home from work if they exhibit influenza-like symptoms. Examples of employee incentives include a culture of encouraging ill employees to stay home, relaxed leave and leave documentation policies, and compensation for time off.
Moreover, despite the potential for disability discrimination allegations, the Equal Employment Opportunity Commission (EEOC), in guidance released in early October (http://www.eeoc.gov/facts/pandemic_flu.html), encouraged employers to send employees home who report influenza-like symptoms. This encouragement is consistent with the Centers for Disease Control and Prevention’s recommendation that employers should send ill employees home. The EEOC reminds employers that sending an employee home because he or she reports influenza-like symptoms does not violate the Americans with Disabilities Act (even if the employee’s condition meets the definition of a disability) because the employee likely poses a direct threat to the safety of other employees in the workplace.
Littler Mendelson P.C.
I’m afraid my employees are Facebooking and Tweeting when they should be working. What can I do, and are there any legal risks or issues I should be concerned about?
Answer:
Social networking websites like Facebook, Twitter, and MySpace are an unavoidable aspect of American social life. Without proper safeguards, they can also be a huge burden on businesses. Time spent by employees on such social networking sites can create a huge drain on productivity and divert valuable network bandwidth and computer resources.
Employees’ use of social networking sites in the workplace raises a number of potential legal risks for employers. For example, an employee’s posting of improper comments about his or her coworkers on such sites could give rise to state or federal law claims of discrimination, harassment, or retaliation, as well as defamation, intentional infliction of emotional distress, and other state law torts. An employee’s sharing of his employer’s non-publicly available financial or strategic information among Facebook friends or Twitter followers could give rise to liability for violation of insider trading laws, just as his unauthorized sharing or misuse of his employer’s (or its customers’) business information and intellectual property could result in lawsuits ranging from trademark or copyright infringement to trade secret misappropriation.
A few simple steps can help lessen these risks. Many companies are adopting, and requiring their employees to sign and acknowledge, “social networking policies” that restrict the time and manner in which employees can access such sites, remind employees of their responsibility to comply with other company rules and policies (including anti-discrimination/anti-harassment, confidential information, and privacy policies) when using social networking sites or personal blogs, and reaffirm the company’s expectations regarding non-work related use of company time and property. Others are utilizing internet “speed bumps,” which remind employees that when they are visiting web sites they must comply with company’s policies. Whether your business adopts such measures, or opts for the more extreme (and more risky from a legal perspective) measure of imposing a complete ban on such websites, it is very important to make sure that those limitations are applied equally to all employees. A private employer’s failure to ensure such equality can itself result in possible liability under labor and civil rights laws. Notwithstanding such policies, managers and human resources professionals may also incur liability by using improper or deceptive means in an attempt to monitor employees’ private accounts on social networking sites.
One final note: The spread of social networking sites like LinkedIn and Yammer, which are specifically aimed at businesses and employees, is a growing trend. Although such sites may yield benefits to workers and companies, it is important that employees using such sites be reminded of their general duty to follow all applicable laws and company policies.
I’m the new HR manager for a business with 30 employees. The owner told me there is no policy handbook, and that individual policy memos have worked fine for her. How important is it for my company to have a policy manual?
Answer:
Policies and procedures are generally up to the employer to define and enforce. The employment at will doctrine in Texas gives employers the right to set policies and change them at will depending upon the needs of the business. The only exceptions are so well-established that most employers do not even consider them to be policy areas, i.e., certain practices involving pay, discrimination, safety, and benefits that are regulated under specific statutes. Policies can be oral or written or both, but ideally, all important policies should be in writing. The best policies in the world will do no good at all if the employees are unaware of them. In Texas, policies are generally not regarded as binding employment contracts.
Along with required standards, communicate your company’s goals and culture in your policies. Assemble all previous policies and procedures, whether written or unwritten, and determine what will be continued or changed in the new policies. Get input from employees and managers. Have key company personnel review the draft, incorporate any needed changes, and have the final version reviewed by an employment law attorney. Have each employee sign a form acknowledging receipt. After giving all employees copies, train supervisory personnel in how to use the handbook.
Although employers have the right to change policies at will, always try to give advance notice. Try to anticipate potential problems and think of alternatives when amending policies. If a policy change alters an employee’s work relationship so adversely that a reasonable employee would quit under the circumstances, your company could risk losing an unemployment claim. Ill-advised or badly-timed policy changes could also present your company with drops in employee morale and productivity.
Above all, try to follow your own policies, especially with respect to disciplinary matters. Even-handed enforcement of fair policies helps show that a discharged employee either knew or should have known that a particular problem could lead to discharge, helps indicate that the employee was not singled out for discriminatory treatment, and can also help dispel the notion that an employee was somehow wrongfully discharged.
Frost Insurance
Answer:
Many employers, even small ones, are concerned about the increasing number of discrimination and employment lawsuits. Age discrimination filings last year increased 28.7%, and overall discrimination claims (age, gender, race, national origin, disability, etc.) during the same period were up 15%, according to the U. S. Equal Employment Opportunity Commission. So this is a serious question and, with the biggest driver of claims activity being unemployment, it’s not likely to go away in the near future. Your best defense is employment practices liability (EPL) insurance, though a recent survey released by the Chubb Group of Insurance Companiesindicates that a whopping 63% of companies do not have it. The three main reasons given by employers for declining this coverage are (1) the perception that their particular risk is low, (2) the assumption that they are covered under other policies, and (3) affordability. Risk is greater now than ever with increased attention being given to discrimination laws, widening employer liability and making it easier for employees to file claims. Employment practices are not generally covered by workers’ compensation, liability and umbrella policies, though many employers believe they are. And perhaps the biggest reason to consider EPL insurance is that you can’t afford not to. The average total cost of an EPL-related claim is $63,114. When a jury is involved, costs skyrocket to an average of $200,000. The good news is that EPL insurance comes with several options, and consultation with an experienced broker can help any company make smart, affordable choices. One way to limit the cost is by choosing lower limits of protection, though at least $100,000 in limits is often recommended. Another way to is to consider whether you need EPL as a standalone product, or if you would benefit from combining it in a package with other coverages, such as directors and officers liability, fiduciary liability, crime, fidelity and other employer risks. Perhaps the best way of limiting your exposure to employment practices claims is to prevent them with proactive, up-to-date human resource policies and loss prevention strategies, another advantage of seeking advice from a risk management professional. In today’s political and economic climate, better safe than sorry.
Jackson Walker L.L.P.
Answer:
The new FMLA regulations went into effect January 16, 2009. While the effect of these regulations is far beyond the scope of this article, there are several steps your company should take now, if you haven’t already, to comply with the new regulations. 1.Revise your current FMLA policy in your employee handbook. You need to ensure that the policy contained in your handbook is consistent with the new FMLA regulations, including the new types of FMLA military family leave. At a minimum, all of the information that is contained in the FMLA poster entitled “Notice to Employees of Rights Under the FMLA” should be included. 2.Post the new FMLA poster. The new regulations require employers to post this “Notice to Employees of Rights Under the FMLA” in a location where it can be easily seen by employees and applicants for employment. 3.Train supervisors and human resource personnel to be aware of new regulations. 4.Begin using the new FMLA forms. a.The Notice of Eligibility and Rights and Responsibilities form This notice must be given to employees within five (5) business days of an employee’s request for leave for an FMLA qualifying reason. b.The Certification form The Certification form should be provided to the employee, along with the Notice of Eligibility and Rights and Responsibilities form, within five (5) business days of an employee’s request for leave for an FMLA qualifying reason. Employees must be given at least fifteen (15) days to return a completed certification. c.The Designation form The Designation Notice notifies the employee whether the leave is FMLA qualifying or non-FMLA qualifying, whether the employee will be required to substitute paid leave, and whether a fitness for duty certification will be required to return from leave. An employer must provide a Designation Notice to an employee requesting leave within five (5) business days after the employer’s determination of whether the leave qualifies as FMLA leave. 5.. Improve and document communications with employees about leave-related issues. Finally, the new forms referenced above, are available on the Department of Labor website at www.wagehour.dol.gov.
Fulbright & Jaworski LLP, Houston
Answer:
An employee that is not exempt from the overtime provisions under the Fair Labor Standards Act (“FLSA”) is typically paid based on the quantity of work performed. Thus, an employer generally does not have to compensate an employee for time that an employee is away from the workplace not performing work. However, when an employee is paid on a salary basis and is exempt (e.g., executive, administrative or professional) from the overtime provisions of the FLSA, an improper deduction can jeopardize the exempt status of all employees in that job class. The most common appropriate full-day deductions from an employee’s salary include: •One or more full days for personal reasons other than sickness or accident •One or more full days for absences because of sickness or disability, if the employer has a plan, policy or practice providing compensation for loss of salary due to sickness or disability. •One or more full days for unpaid suspensions imposed in good faith for infractions of written workplace conduct rules applicable to all employees. Appropriate partial-day deductions include: •A set off of salary payments in a particular week with compensation paid for military duty or jury duty during that same week. •A deduction made as penalty imposed in good faith for violation of safety rules (of major significance). •A deduction made for any hours taken as qualified unpaid FMLA leave. Moreover, the Department of Labor has long held that an employer may deduct time from leave banks (such as vacation or sick leave) without regard to the rules set forth above, so long as an employer receives his guaranteed salary for that particular week. However, once an employee exhausts his leave bank—or even has a negative balance—the employer may not deduct from the salary unless it meets one of the tests set forth above.
Ogletree Deakins, Austin
Answer:
Generally speaking, it is legal in Texas for employers to require employees to take a forced vacation or unpaid sabbatical. From a business perspective, this may be a better alternative than more drastic measures such as layoffs, in terms of preserving employee morale and having enough employees when business picks up again. However, there are a number of legal implications employers should consider when implementing these measures. First, employers should make sure a forced vacation/sabbatical does not violate the terms of any employment agreement. Or if an employer has union employees, the employer should confirm the vacation/sabbatical does not run afoul of any union collective bargaining agreement. Second, employers should provide employees with clear notice that no work is to be performed during the vacation/sabbatical and take measures to ensure this directive is followed. Such measures might include requiring employees to return employer-owed remote access devices and prohibiting employees from accessing company e-mail while on vacation/sabbatical. Keep in mind that employees who perform work must be paid for that work, even if the work is not authorized. If employees are engaging in work while on vacation/sabbatical, this can undermine any cost savings to the employer, because the employer will have to pay the employees for the work or risk exposure to potentially significant liability. Engaging in unauthorized work should therefore be treated as a serious disciplinary issue. Third, because exempt employees must be paid their entire salary for weeks they perform any work, vacations/sabbaticals for exempt employees should be in full week increments. Finally, as with any employment decision, employers should select employees for vacations/sabbaticals based on objective business criteria, and the criteria used should not have an adverse impact on any protected group. Overall, forced vacations/sabbaticals can be an effective way for employers to manage costs in uncertain economic times if implemented in a considered, careful manner, ideally with the assistance of legal counsel.
Bracewell & Giuliani LLP