Judicial non-solicitation provisions in LinkedIn Activity
It’s not un-common for employers to require employees to sign agreements containing non-solicitation provisions prohibiting employees from soliciting the employer’s workers and customers after termination of their employment. The traditional non-solicitation provision usually reads “employee agrees during his/her employment and for one year after any termination of his/her employment, employee will not directly or indirectly solicit or attempt to solicit, divert or hire away any person employed by the company or any customer of the company.”
While this standard non-solicitation provision may address the immediate issue at the time it was put into place, LinkedIn poses a number of challenges for which traditional provisions are not necessarily a good fit.
For example, what may happen when an employee leaves Company A to go to work for Company B, a direct competitor to Company A and updates his LinkedIn profile to reflect his new position with Company B? When this occurs a number of things are likely to bring the traditional non-solicitation provision into play, but when an employee updates his LinkedIn profile, the departed employee’s contacts will automatically get an “update” on their LinkedIn homepage indicating that the departed employee has a new job and suggesting that they “congratulate” the employee. Second, when the departed employee posts any messages, including messages about Company B, those messages will be automatically delivered to the employee’s contacts on their LinkedIn homepages. Third, similar information may also be included in emails LinkedIn automatically sends to its users on a regular basis about their contacts. Fourth, the departed employee may send messages through LinkedIn to individual recipients just like regular email. Lastly, the departed employee may seek to “connect” with the former employer’s employees and customers through LinkedIn.
So the question becomes what activity will the court find to be in violation of a non-solicitation provision? Unfortunately there is little case law providing guidance for when LinkedIn activity violates a non-solicitation provision. Regardless of there being no published court decision specifically addressing when LinkedIn activity may violate a non-solicitation agreement, employers must carefully consider how they want to handle their employee’s use of LinkedIn. An employer should consider such provisions or combination of provisions which:
1. Specifies the employers ownership of LinkedIn accounts and contacts;
2. Require departing employees to delete LinkedIn accounts, or to relinquish control over accounts to their former employers;
3. Impose limits on employee’s contacts with co-workers and customers through LinkedIn;
4. Require departing employees to delete LinkedIn contacts with co-workers and customers, and lastly;
5. Require departing employees not to establish or re-establish such contacts through LinkedIn.
But having said that an employer must be mindful at the risk of violating employee’s rights, including under the National Labor Relations Act and applicable state laws. Provisions that restrict employee’s mobility may not be enforceable and courts may impose liability for requiring employees to enter into invalid agreements as a condition of employment. For these reasons, employers would be wise to include severance clauses in their agreements in the event that any particular provision is held to be invalid.
Another area of concern is the applicability of the Federal Stored Communications Act of 1986 (“SCA”) when they discipline an employee based on the content on non-public Facebook “wall” postings – depending on how they obtained the information which serves as the basis for the discipline.
A district court recently explained that generally speaking the SCA covers non-public Facebook “wall” posts because they are stored electronic communications that are transmitted via an electronic communication service.
Post Leave Medical Examinations
With many complicated laws involved, i.e. the Family Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), Workers Compensation, it can often be difficult to determine what you should do, when you should do it and who needs to play a role in the decision making process regarding Post Leave Medical Examinations. The question is when may a company require an employee returning from a medical leave of absence undergo a medical examination? The answer to this question is subject to the applicable exceptions to the ADA’s general prohibition against medical examinations. Also, does the FMLA require entitlements for returning employees in the same manner it gives certain employees an entitlement to unpaid leave? What does the employer do with the information that it obtains if it conducts an examination? The basic inquiry is to determine if an employer needs such an examination to be performed. For a physically demanding position, it may be good to get assurance that the employee can safely perform a particular job after medical leave. However there are many positions where an employee’s health condition may have little impact on their ability to work upon his or her return i.e. a secretary.
The ADA generally prohibits medical examinations but not all examinations are treated equally. For example, physical agility and fitness tests are not medical examinations and may be lawfully required at any point in the application or employment process including upon an employee’s return to work following a leave related to the employee’s serious health condition.
Where an employee is returning from FMLA leave, the FMLA does not permit an employer to make its own determination regarding whether an employee is fit to return to work. For such an examination to pass legal muster, it must be permissible under the ADA i.e. meaning it needs to be job related and consistent with business necessity.
Employers may require employees coming back from FMLA leave due a serious health condition to obtain a fitness/return/duty certification as a condition to returning to work. This certification can be at the employee’s own expense from their own treating physician. It is most important that an employer uniformly administer any return to duty testing. In other words, all similarly situated employees returning to work (same occupation or same serious condition) should be subject to an equal requirement for an examination.
Methods to Avoid Termination Liability
It is suggested that to minimize risk involved in terminating employees the following steps are recommended.
1. Analyze the employee’s contract rights by reviewing the offer letter, employment agreements, employee handbook, and any and all written or oral statements made by supervisors and agents prior to the employee’s hiring and during employment.
2. Analyze the employee’s statutory rights under federal, state and local laws relating to wages and hours, discrimination and retaliation.
3. Analyze the employee’s tort rights under state law.
4. Determine if the company implemented a performance management system consistently and non-indiscriminately.
5. Take advantage of a resignation.
6. Determine if there are applicable rules and policies regarding termination procedures.
7. Investigate whether the employee knew the rules and violated the rules.
8. Put a lawful decision making process in place.
9. Conduct determination of the best way to protect the company
10. Respond in inquiries from former employees, their attorneys and government agencies to defend against a finding of liability.
The question is what is the best way to determine whether the employee is actually using FMLA for its intended purpose? To avoid the allegation of being accused of retaliation or interference with the processing of a claim, it is advisable:
1. Adopting a policy that permitted dismissal for fraudulent conduct, including misuse of FMLA;
2. Requiring employees provide medical certification for FMLA leave;
3. Analyzing patterns of FMLA abuse correlated with weekends, Fridays, Mondays and holidays and advance leave requests;
4. Hiring a private investigator to conduct surveillance;
5. Consulting with an outside medical professional who would review the file and provide an expert opinion concerning the employee’s use of FMLA leave;
6. Interviewing the employee to see if the employee has a credible explanation.
Under amendments to the Unemployment Insurance Integrity Act 2011 (UI) that took effect in October 2013, employers must now timely and adequately respond to a state employment agency’s information request about an employee’s initial insurance claim.
Consequences for violating this requirement vary from state to state but at a minimum an employer will not be relieved of charges to its account that result from the employer’s failure to timely or adequately respond to a request if the employer has established a pattern of untimely or inadequate responses. Fines and penalties may apply. Thus the amendment calls into question an oft used strategy for facilitating amicable employee departures, i.e. the employer’s agreement not to contest an unemployment insurance claim. Such an agreement could create conflicting obligations to the state agency and the departing employee.
Accordingly before entering into any such agreement orally or in writing, employers should consult legal counsel to asses risk and prepare appropriate wording that preserves the employer’s ability to respond truthfully and completely to the state agency.
Termination of an employee while on FMLA leave
Suffice it to say terminating an under performing employee on leave or shortly after returning from leave is a situation that must be carefully managed. So how does an employer overcome the possible conclusion that it’s timing of FMLA leave and termination was based upon a decision that had nothing to do with the FMLA leave? Thus, an employer when terminating an employee who has recently been on or is on FMLA leave, it should:
1. Always perform a full and fair investigation when deciding to terminate an employee, especially when the employee is on FMLA leave;
2. Marshall all evidence that supports adverse employment decisions have been taken for non-discriminatory reasons;
3. Create a time line of events to establish that decisions were made prior to the decision to take leave and offer documentary evidence that was created contemporaneously with each of those decisions, and finally;
4. Have all termination decisions reviewed by legal counsel and other appropriate management personnel to insure unlawful retaliation is not involved in the decision.
State Minimum Wage Increases Effective January 1, 2014
Arizona – minimum wage increases from $7.80 to $7.90 an hour. Minimum wage for tipped employees increases from $4.80 to $4.90.
California – general minimum wage increases from $8 to $9 an hour effective July 1, 2014. Colorado – general minimum wage increases from $7.78 to $8 an hour. Minimum wage for tipped employees increases from $4.76 to $4.98 an hour.
Connecticut – general minimum wage increases from $8.25 to $8.70 an hour. Minimum wage for tipped bartenders will remain at $7.34 an hour and minimum wage for hotel and restaurant tipped employees other than bartenders remains at $5.69 an hour.
Florida – general minimum wage increases from $7.79 to $7.93 an hour. Minimum wage for tipped employees increases from $4.77 to $4.91 an hour.
Missouri – general minimum wage increases from $7.35 to $7.50 an hour. Minimum wage for tipped employees increases from $3.68 to $3.75 an hour.
Montana – general minimum wage increases from $7.80 to $7.90 an hour.
New Jersey – general minimum wage increases from $7.25 to $8.25 an hour. Minimum wage for tipped employees remains $2.13 an hour by virtue of federal law.
New York – general minimum wage increases from $7.25 to $8.00 an hour effective December 1, 2013.
Ohio – general minimum wage increases from $7.85 to $7.95 an hour. Minimum wage for tipped employees increases from $3.93 to $3.98 an hour.
Oregon – general minimum wage increases from $8.95 to $9.10 an hour. Rhode Island – general minimum wage increases from $7.75 to $8.00 an hour. Minimum wage for tipped employees remains $2.89 an hour.
Vermont – general minimum wage increases from $8.60 to $8.73 an hour. Minimum wage for tipped employees increases from $4.17 to $4.23 an hour.
Washington – general minimum wage increases from $9.19 to $9.32 an hour.
Additional State Labor and Employment Legislation
Employers with multi-state operations must be aware of differences among state and local wage and hour legislation. Also note that certain localities also have implemented minimum wage legislation – San Francisco, California, San Jose, California, Albuquerque, New Mexico. An employer would be required to meet the higher of the new minimum wage standards.
A. Sick leave – New York, Portland Oregon, San Francisco California, Jersey City New Jersey, Washington D.C. and the state of Connecticut now require sick leave for at least some workers. Similar legislation is currently pending in Vermont and Newark New Jersey.
B. States of Connecticut, Hawaii, Illinois, New York, Oregon and Rhode Island have enacted legislation protecting victims of domestic violence in the work place.
C. “Bring your gun to work” laws. There are now some 23 states, Illinois being the latest, to enact legislation relating to whether employees may bring a firearm to the workplace.
D. Personnel File Laws – Connecticut, Massachusetts, Delaware, Illinois, Maine, Minnesota, Nevada, Oregon, Pennsylvania, and Washington require private employers to allow employees access to their personnel files.
E. Ban Box – the “ban the box” movement has gained recognition in many states and cities. This movement seeks to eliminate the “Have you ever been convicted of a crime?” question from employment applications so as to allow a job application to be judged on merits of his or her application without permitting the employer to consider criminal convictions until later on in the hiring process. However, most of the laws pertain only to public employment. On the private employer side, Washington, Buffalo New York, Newark New Jersey and Philadelphia Pennsylvania laws apply to private employers. Only Hawaii, Massachusetts, and Minnesota’s legislation applies to both public and private employers.
F. Parental Leave – According to the EEOC if an employer offers temporary or short-term disability leave, Title VII requires that the employer treat pregnancy and related conditions the same as non-pregnancy conditions.
Accordingly employers should review their policies and be sure:
1. Its parental leave policies carefully distinguish between pregnancy related leave and other forms of leave.
2. Leave specifically provided to women alone should be limited to the period when they are incapacitated by pregnancy and child-birth.
3. To review its maternity and paternity leave policies annually
On December 12th, 2013, the 6th Circuit Court of Appeals held that an employer was the defacto employer for sub-contracted employees in the construction industry which has broad reaching implications for all employers with sub-contracted employees and independent contractors. In the case at issue was whether the employer could be held liable under Title VII on a “joint employer” theory as to employees directly employed by a subcontractor. To determine whether an entity is the plaintiff’s joint employer, courts will look to an entity’s ability to hire, fire or discipline employees, affect their compensation and benefits and direct and supervise their performance. An employer can be held to be the defacto employer of another entity’s employees despite what that contract between the employer and sub-contractor states.
This case has broad implications for companies that use temporary and contract workers, sub-contract workers, and independent contractors. Again in spite of what the contract language states, if the reality of the arrangement looks and feels like an employer/employee relationship the company could be liable as a joint employer for discrimination and other employment related claims by employees of a sub-contractor.
The EEOC cautions employers that individuals designated as “partners” or other owner type positions may in fact be employees for purposes of determining eligibility under the Age Discrimination in Employment Act (ADEA). While the number of required employees under the various statutes may differ, who are your employees under these various employment statutes may include individuals that you do not designate as such.
For example, there is no legal presumption that an individual who holds the title of “partner” is never an employee for purposes of the particular statute. The relevant question is whether the individual acts independently and participates in managing the organization (not an employee) or whether the individual is subject to the organization’s control (an employee). The EEOC has identified six non-exhaustive factors relative to making this determination;
1. Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work;
2. Whether and, if so, to what extent the organization supervises the individual’s work;
3. Whether the individual reports to someone higher in the organization;
4. Whether and, if so, to what extent the individual is able to influence the organization;
5. Whether the parties intend that the individual be an employee, as expressed in written agreements or contracts;
6. Whether the individual shares the profits, losses and liabilities of the organization.
This admonition while consistent with judicial guidance on this subject, should serve as a caution to professional service firms and other employers not counting certain individual as employees because they are partners or designated as partners or have some other owner type status all of which should be reviewed with counsel. The admonition also extends to employers who make use of volunteers, partners, independent contractors or otherwise, so to assess the correction of its current classifications.
Year End Reminder
1. Privacy policies and social media
A. Written policy and publish
B. Train employees
C. Consistent enforcement of the policy throughout the workforce
D. Tailor policy to business needs
E. Suggested policy provisions:
i. Notice to employees of no expectation of privacy when using employer networks or equipment
ii. Notice that any content published or communicated must not violate any of the employer’s policies, including and most importantly its anti-harassment and non-discrimination policies.
2. Use of publicly accessible content with regard to online searches, employers must consider:
A. Screen applicants in a uniform manor. To do this it is suggested the employer have a neutral party perform the search.
B. Never create a false persona to gain access to information that is private.
C. Do not “friend”
D. Create an internal procedure to standardize such media searches.
E. Document how and when search is performed. Preserve screen shots or internet history.
F. Never make any decisions based on an individual’s protected traits.
3. Media away from workplace are subject to additional statutes from “in the workplace” venue
(NLRB, ADEA, ADA, Title VII, ERISA, FSLA, False Claim Acts, FMLA, state Whistleblower statutes)
Regardless of the nature of your business and regardless of the nature of your premises, OSHA can visit your premises at any time. Lately OSHA has been focusing on egress issues because of recent disastrous fire and explosions in recent months.
Most employees in the nation come under OSHA’s jurisdiction. OSHA covers private sector employers and employees in all 50 states, the District of Columbia, either directly through federal OSHA or through an OSHA-approved state program.
Monitoring Employees E-Mails and Internet Usage.
While from a legal standpoint employees generally do not have a right to privacy when using the employer’s electronic equipment and systems, there are exceptions and limitations for an employee to succeed on an invasion of privacy claim, the employee must usually show that s/he had a reasonable expectation of privacy and that this privacy interest outweighs the employer’s stated legitimate business interest in monitoring or accessing the information.
What to do?
A. Implement a clear written policy;
B. Update investigation Policies and procedures to reserve the right to access and use employee electronic information on employer’s equipment; and
C. Ensure compliance with and use state and local laws.
EEOC Criminal Background Check.
The permissibility and extent of background checks is in a state of controversy. Nine (9) states, Alabama, Colorado, Georgia, Kansas, Montana, Nebraska, South Carolina, Utah and West Virginia have expressed strong opposition to the EEOC policies.
Employers should review its criminal background check policies and seek guidance with its employment counsel.
Intermittent FMLA leave is on the rise, so how to minimize the risk of FMLA abuse and thereby increase productivity by having an adequate workforce:
A. Carefully scrutinize the Medical Certification Forms;
B. Utilize the second opinion procedure;
C. Recertify and challenge employees;
D. Consider transfers;
E. Adopt anti-abuse strategies (surveillance).
The ADA does not mandate any specific time limit on the amount of leave a disabled employee may take as a reasonable accommodation. The courts have ruled that it cannot be indefinite.
So before an employee goes out on leave or during the reasonable accommodation interactive process with the employee, the employer has the right to ask when the employee anticipates returning to work. Any discussion must be documented including the anticipated return date.
If employee does not return by the stated date, s/he should not be automatically dismissed. Rather, written contact should be made and ask if s/he has a return date or could s/he immediately return with or without a reasonable accommodation. If s/he fails to respond or says no to both questions, the duty to accommodate may be fulfilled.
But be aware of the laws which may impact the situation such as Workers Compensation or FMLA.
1. United States Supreme Court Ruling on Same-Sex Couples.
The United States Supreme Court in ruling as unconstitutional the denying of the marital status of same-sex couples under Federal Law it expanded the class of employees entitled to leave under FMLA. The FMLA defines “Spouse” as a husband or wife. The department of Labor’s 2009 FMLA regulations provide that a “Spouse” is a “husband or wife” as defined or recognized under State Law for purposes of marriage in the State where it is recognized.
N.B. In the case of same-sex marriage, the FMLA focuses not on whether the marriage is lawful in the state where the employer is located, where the employee was, or where the marriage occurred, but whether it is recognized in the state in which the employee resides. At this writing, same-sex marriages are lawful or will be lawful soon in the District of Colombia, California, Connecticut, Delaware, Iowa, Massachusetts, New Hampshire, Maine, Maryland, Minnesota, New York, Rhode Island, Vermont and Washington.
Leave may be designated as FMLA leave only for the reasons specified in the statute and its implementing regulations. Accordingly if an employer designates leave as FMLA leave for one employee to care for a same-sex spouse, but the employer does not reside in a state that recognizes same-sex marriage that leave time will not reduce that employees 12 week allotment.
What does this mean?
An Employer can:
1. Determine leave related to same-sex spouse on an employee by employee basis; or
2. Treat every marriage equally.
Other Employees’ benefits affected by this Court decisions are:
(1) Welfare Plans
(A) End of imputed income
(B) Eligible reimbursement
(C) HSA limits apply jointly
(D) Default beneficiary
(F) Dependent Care
(G) Gift and Estate taxes
(H) Health coverage
(2) Qualified Retirement Plans
(3) Non-qualified plans
What to do?
1. Consider whether to continue offering same-sex domestic partner benefits in states which allow same-sex marriage.
2. Consider how the current provided benefits will be affected upon same-sex partners being transferred from a state which recognizes same-sex marriage to one that does not.
3. Consider whether to file for FICA tax refunds for prior years.
2. Notable Court Decisions Involving Contractual Non-Solicitation Clauses.
In a case styled B.G. Balmer and Co., Inc. vs. Frank Crystal and Co., while not a Tennessee case, it addresses an alleged violation of a non-solicitation clause as set forth in the employees’ contract.
In that case the employees contended that the clients who they serviced while previously employed, switched to them on their own volition. But the Court held against these former employees, finding that while an employee may freely switch position, he/she cannot do so in a fashion which violates their contractual and common law obligations to their former employer, such as: attempting to solicit clients shortly after switching jobs or joining with others to disrupt the business practices of the former employer.
3. Recent Title VII Decisions (Civil Rights ACT).
The Supreme Court of the United States recently issued two significant decisions which impact the definition of “Supervisor” and the standard a Plaintiff must meet to establish a charge of retaliation.
Before these decisions if a harasser was a “Supervisor”, the employer is strictly liable for his/her acts of harassment if those acts result in a tangible employment action and related damages. But if there is not a tangible employment action taken, the employer may defend that it exercised reasonable care to prevent/correct harassing behavior.
The definition of “Supervisor” for purposes of vicarious liability under Title VII is one with the power to hire, fire, demote, promote, transfer or discipline.
As to retaliation claims, the “motivating factor” analysis does not apply. The Court found that the “motivating factor” set out in Title VII only applies to claims of discrimination.
What does this mean?
Employers charged with or sued based on retaliation claim can now prevail even if the employment action was motivated by retaliation by showing that it would have taken the action even without the impermissible motive.
What to do.
1. Review job descriptions and titles to make sure that employees who do not have the power to take tangible employment actions or to effectively recommend a tangible employment action, do not have such authority referred to in their job description or are labeled as managers.
4. Employer Use of Background Checks.
The EEOC has updated its policy finding that although Title VII does not ban the use of criminal background checks, employers may violate Title VII if, (1) their policies adversely impact a disproportionate number of individuals based on a protected characteristic and are not job related and/or consistent with business necessity; or (2) if they intentionally discriminate among individuals with similar criminal histories.
You may access the EEOC website, www.eeoc.gov which includes a question and answer document on this issue.
5. Confidentiality and Non-Disparagement Provisions in an Employment Agreement
A. As to confidentiality, the National Labor Relations Board (NLRB – Taft Hartley Act) has held that requiring an employee not to discuss wages and other benefits interfered with an employee’s rights to discuss wages and other terms and conditions of employment granted to them by Section 7 of the NLRA.
B. As to non-disparagement, the NLRB found that a reasonable employee could conclude that such a prohibition would restrict his or her rights to criticize the employer or its products which an employee is allowed to do within certain limits.
What does this mean?
The NLRB continues its efforts on behalf of employees by reviewing all employer documents – not just handbooks and policy statements, but employment agreements as well.
Employers must review all of its documents to be sure the documents are compliant with these recent NLRB decisions.
Also an employer must keep in mind that the NLRA and NLRB covers all private employers whose business impacts interstate commerce.
What to do?
1. Avoid broadly written proprietary and confidential information policies. Draft narrow policies tailored to the Employer’s specific needs and concerns and provide examples to give context.
2. Confidentiality provisions should not prohibit discussion of wages, benefits or other terms and conditions of employment either inside or outside the workplace unless there is some overwhelming legitimate business justification.
3. Emphasize that the policy is not intended to discourage concerted activity, that is, discussions or efforts to alter working conditions and terms of employment.
6. Successor Liability
Pursuing an asset sale does not necessarily avoid successor liability for all claims, especially labor and employment claims (Teed v. Thomas & Betts Power Solutions, LLC, 7th Cir.).
LABOR AND EMPLOYMENT SPECIAL ALERT
Key Affordable Care Act Deadline for Employers Extended by One Year
The Obama administration announced that it will allow employers with more than 50 employees until 2015 before they must either provide health care coverage to employees or pay penalties under the Affordable Care Act (ACA).
Under the ACA, employers with at least 50 full-time employees must either provide health benefits to at least 95 percent of their full-time workers or pay a penalty of $2,000.00 per year per full-time employee (excluding the first 30 employees) if one or more full-time employees receives a subsidy to buy coverage on a health insurance exchange.
Within the next week, the Treasury Department is expected to publish formal guidance describing the extended transition period.
For additional information on this late-breaking development, please contact us.
SUPPLEMENT TO MAY, 2013 LABOR LAW LETTER
When dealing with general labor law statutes, rules or regulations, OSHA (Occupational Safety and Health Administration) is often overlooked. One of the main purposes of OSHA is to ensure a safe work environment. In order for an Employer to meet this obligation, it must provide “training” or “instruction” and provide it in a manner that Employees are capable of understanding, which means in a language and vocabulary the Employee can understand.
What all this means is the Employer must provide or have access to a bilingual person.
Tennessee State Attorney General has issued an advisory opinion that Employees violating Company gun rules may be fired.
May 2013 Labor Law Letter
On April 9, 2013 a representative from Alabama introduced the Working Family Flexibility Act of 2013. HR1406 will allow private sector workers to receive paid time off or “comp time” for overtime hours worked. However, employees who want to receive cash wages would continue to do so. No employee could be forced to take comp time instead of receiving overtime pay under the Fair Labor Standards Act (“FLSA”). The objective of the legislation is to protect employees by requiring the employer and the employee to complete a written agreement to use comp time, entered into knowingly and voluntarily by the employee. In addition, the proposed legislation would permit employees to accrue up to 160 hours of comp time each year. An employer would be required to pay cash wages for any unused time at the end of the year. In addition, workers would be free to “cash out” any accrued comp time whenever they chose to do so.
Resources to Determine Various Aspects of Employment Discrimination
The Equal Employment Opportunity Commission (“EEOC”) maintains a website at www.eeoc.gov which provides a vast amount of information regarding federal laws (Title VII, et al.) covered by that agency. Accessing the website will also enable one to find links to numerous cases that have been filed, settled or litigated which link includes the name of the organization, the status of the case and any dollar amounts involved. This will give you some insight of the exact nature of discrimination claims and how the matters are pled and ruled upon. Also this link will give you an opportunity to examine the nature of the charges and findings in these cases, many of which prove to be very costly to the organization in term of time, monies, reputation and employee morale.
What are job accommodations?
Accommodations for qualified employees under the American Disabilities Act (“ADA”) are such things as new equipment, change to existing equipment, or change of work routine such as hours worked. For a person to come within the protection of the ADA, s/he must be able to perform the essential functions of the job. The ADA does not require employers to reduce essential job functions, but you should engage the employee as to how s/he performs an essential job function. However, employers decide which job functions are essential. Also, the employee’s input as to how to accommodate him/her is not a mandate. The employer has to provide an accommodation that is reasonable and effective if available.
Essentially for an employee to be entitled to a reasonable accommodation under the ADA is: 1) they work for an ADA covered employer (15 or more employees); 2) they are “qualified” as that term is defined in the ADA to do the job; and 3) they are a person with a disability as defined by the ADA. “Qualified” to do the job means that someone has the “skills, experience, education or other requirements” of the position and “can perform the essential functions of the position with or without reasonable accommodations.” You can find a Disability Law Handbook-Equipment in the ADA from www.swdbtac.org/htm1/publications/dlh/employment.html.
The new health reform act impacts employers with fifty (50) or more employees. So the question becomes how is a company with less than fifty (50) employees impacted, even though they are not mandated to comply with the Affordable Healthcare Act provisions.
In 2013 employers with twenty-five (25) or less employees may receive tax breaks up to thirty-five percent (35%) of the cost of their employees’ insurance premiums. In 2014 it increases to fifty percent (50%). Employers with more than fifty (50) employees must insure their workers or pay a tax much like the current state-run unemployment and workers compensation programs. For the small employer with less than fifty (50) employees, and so as to not cross the threshold of fifty (50) or more employees, subjecting them to the Affordable Healthcare Act provisions, consider hiring more contract labor to stay below the fifty (50) employees minimum. The downside of engaging in more contract labor has its pitfalls such as lack of control over how an independent contractor performs the jobs. Additionally, contract labor will not likely have the best interests of the company in mind. And utilizing independent contractors may interfere with the employer’s ability to attract and retain workers.
Health Wellness Plans
Tennessee has several statutes which allows insurers to offer premium discounts and other rewards for employers who creating and offering to its employees programs which promote health and prevent disease. Insurers may also offer rewards for participation in voluntary programs (T.C.A. § 56-8-112).
These wellness programs are in addition to those programs which address Workers Compensation issues, (T.C.A. § 50-6-110 (a) (6)). This statute provides that Workers’ Compensation benefits are not allowed for an injury or death under certain circumstances when participation in the program is voluntary.
It must be kept in mind that employees are not just restricted to filing workers compensation claims or law suits under federal discrimination, labor and leave laws. There are many state law employment torts that employees and even non employees can pursue when they believe an employer has wrong them. This is an ever evolving area of law in Tennessee especially because Tennessee, unlike some of its neighboring states, recognizes a wider variety of employment torts. For example when an employee has filed a workers compensation claim at or about the time that cause exists to terminate that employee. Also in every situation it is important to determine whether the employee is really in hand a real employee or does s/he have an employment contract. This inquiry has become mandatory because plaintiffs are exploring employment torts as claims in addition to the more typical harassment or discrimination claims.
Among the most notable state torts is Retaliatory Discharge. Tennessee has two (2) distinct causes of action for Retaliatory Discharge: 1) a common law tort remedy and 2) a statutory remedy under the Tennessee Protection Act more commonly known as “whistle blowing.” Another tort is Fraudulent Misrepresentation and Promissory Fraud. This often arises in a situation where an employer extends, but later rescinds an offer of employment and the prospective employee has relied upon the offer to his or her detriment.
However there are situations where this tort may arise after the employment relations has begun. For example employers often communicate with their employees through newsletters, bulletin board postings, mass emails and office memorandum. At other times the communications is orally through supervisors and managers. What this suggests is that communication whether in writing or orally must be consistent with one another and consistent with any written policies in a handbook.
Another tort is by Vicarious Liability-for Battery. Vicarious Liability or respondent superior is a theory used to impute liability for the actions of an employee upon his employer. Vicarious Liability opens employers to a wide variety of claims but most often it is in connection with physical injuries resulting from employee’s battery or assault. However this tort is limited to claims of injury caused by an employee while engaged in his employers business and acting within the scope of his employment.
Another tort is Negligent Hiring Supervision Retention and Training. Negligence difference from a Vicarious Liability because an employer can be independently liable for the intentional acts of its employees even when those acts occur outside the scope of employment. This liability can come from the employer’s “negligent” decision to hire, retain or properly supervise an employee after the employer has notice of the employee’s propensity for injury causing behavior.
Another tort is Emotional Distress. Under this tort employees and non-employees can sue for emotional injuries as well as physical ones. Tennessee recognizes two (2) forms of emotional distress injuries: 1) the intentional infliction of emotional distress; and 2) the negligent infliction of emotional distress. In reference to both these forms, there must be a serious mental injury.
Another tort is Civil Malicious Harassment. Discrimination claims based on race, color, creed religion or national origin maybe refashioned as “Civil Malicious Harassment.” However claims based upon “Civil Malicious Harassment” is based on the state’s criminal malicious harassment or “hate crime” statute. (Tenn. Code Ann. Section 39-17-309.) Such claims may be a part of a discrimination suit or may be brought where the plaintiff cannot bring a traditional title VII claim.
Another tort is the tort of Invasion of Privacy. Here an employer can invade another’s privacy either by its own actions or by those of its employees and thus so when it is physically or otherwise intrudes on the solitude or seclusion of an employee. However the intrusion must be highly offensive to a reasonable person. These sorts of claims most often arise when medical personal information is somehow disclose in the work place.
Another tort is False Imprisonment and Malicious Prosecution. These two torts often go hand in hand. The circumstances leading to these suits typically involve retail clients and either customers or employees who are accused of shoplifting (Tenn. Code Ann. § 40-7-116.) a merchant can determine and detain and individual for suspected shoplifting. Those susceptible to shoplifting should carefully design their loss prevention policies around the statute.
Another tort is Defamation which can be based on most normal everyday interactions such as comments made in a staff meeting, gossip in the break room, or statements made when giving an employment reference or during a termination session.
Another tort is The Procurement of Breach of Contract. This tort usually arises in a situation when an employee leaves an employer for a competitor and is subject to a non-compete agreement. This cause of action requires a three (3) party relationship 1) the employer; 2) the employee; and 3) “third party” who induces the breach of contract and becomes a defendant in the employee’s suit. The suit is essentially aimed at the employer but however if the third party is a corporate office, liability may be found if the termination was motivated by interest other than the corporations i.e. in other words for reasons outside of the corporate office duties.
To avoid exposure to this large variety of torts, an employer should; 1) Run back ground checks before and during employment. While there are legal issues associated with running a proper back ground check, it is still a good idea to do one before a job offer is extended. Back ground checks may also on employees after they have been hired and particularly when there is a suspicion that the employee is involve in criminal misconduct. There are both Federal State Laws on back ground checks, including the fair credit reporting act which has numerous procedures and which may deviate among states The Tennessee Lawful Employment Act (“TLEA”).
(Tenn. Code Ann. § 66-13-101.) This statute grants that all employees and laborers of any Corporation or firm shall have “… a lien upon the corporate and firm property … for any sums due them for labor and services performed for the corporation.” A corporation’s “managing officers” are not “employees” as defined by this statute.
The USCIS issued a revised Employment Verification form on March 8, 2013. This new form took effect upon publication in the Federal Register and will become the only acceptable version of the form as of May 7, 2013. In the interim the USCIS has provided for a sixty (60) day grace
period during which the current version will be acceptable. New forms need not be completed for current employees.
Reminder, under Tennessee Law the THRA extends liability to individual supervisors or co-workers.
Social Media Policy.
To withstand a challenge by the NLRB to the Employers’ Social Media Policy:
1. Advise employees that there is no expectation of privacy.
2. Refine terms, use approved language.
3. Protect confidential information and trade secrets.
4. Do not use language restricting the employees’ rights to discuss wages and other terms and condition of employment.
October 10, 2012 Labor Law Letter
This is the October letter to bring to you helpful, recent labor and employment information so you can stay abreast of day to day requirements.
1. The Tennessee Lawful Employment Act
On June 7, 2011, Tennessee enacted the Tennessee Lawful Employment Act (TLEA) which modified existing Tennessee Immigration Law. The TLEA imposes eligibility verification requirements and becomes effective on staggered dates during 2012 and 2013.
Tennessee Law provides additional requirements to those embodied in applicable Federal statutes (IRCA). In addition to the requirement of verification of employment eligibility, a Tennessee employer must continue verification of employment eligibility through the completion of the I-9 Form.
The TLEA requires employers to verify the employment eligibility of all new employees. For employees, the employer may do this by using one of two methods i.e.: 1) verify each new hire in the Federal E-Verify System; or 2) obtain and maintain a copy of an acceptable identification document for each new hire. However, an employer must select the same method of compliance for all new employees i.e., it cannot E-Verify a portion of its employees and obtain an acceptable identification document for others. For guidance in enrolling in E-Verify, the Tennessee Department of Labor and Workforce Development can provide assistance. You may also access its website at www.tn.gov/labor-wfd.
Of particular note is that the employer must verify the employment eligibility for such nonemployees as independent contractors. Such individuals cannot be confirmed using E-Verify and therefore the employer must obtain and maintain an identification document for those independent contractors. In contrast, Federal I-9 Regulations do not require employment verification of independent contractors. Should an employer contract for services from an outside entity, such as, a corporation or a limited liability company, as opposed to an individual, then no action is required to verify that company’s employees. Many of the acceptable documents under TLEA are those documents that are acceptable for compliance with I-9 requirements; however, an employer should not assume a document collected for compliance with the TLEA will also satisfy I-9 requirements.
The timeline for obtaining documents is 3 work days within which to verify the employee, much as it does under Federal E-Verify Regulations.
The TLEA becomes applicable in phases depending upon the size of the employer. Employers with five or fewer employees are exempt. Other employers must comply by: 1) January 1, 2012- government (state and local) employers and employers with 500 or more employees; 2) July 1, 2012- employers with 200 to 499 employees; and 3) January 1, 2013- employers with 6 to 199 employees. A note of caution: It is undetermined at this time whether employers total number of employees includes not only those employees working in Tennessee, but also those employees employed at the employers operations in other states, if any.
The TLEA mandates that the Tennessee Department of Labor and Workforce Development oversee compliance with the TLEA through inquiry investigation and inspection. In other words, this is much like the Fair Labor Standards Act and does not require a specific complaint. However, when so requested by the Tennessee Department of Workforce Development, employers must submit documented proof of compliance. Failure to respond within 30 days will result in the issuance of an initial order of non-compliance.
The penalties upon a Tennessee Department of Workforce Development issuance of an order of non-compliance are as follows: 1) First offense- $500.00 penalty, plus $500.00 per employee or non-employee not verified, or for whom a copy of identification of documents is not maintained; 2) Second offense- $1,000.00 penalty, plus $1,000.00 per employee or non-employee not verified, or for whom a copy of identification documents is not maintained; and 3) Third offense- $2,500.00 penalty, plus $2,500.00 per employee or non-employee not verified, or for whom a copy of identification documentation is not maintained.
An employer’s failure to submit evidence of compliance to the Tennessee Department of Workforce Development within 60 days of the final order of non-compliance could result in suspension of the employer’s business license until it remedies the violations.
The paying of overtime hours and the recording of same continues to be a hot issue because “smart phones” and Blackberries enable work to be performed anytime and anywhere. Why? Because the line between work and personal life is bleeding into one which raises the issue of when overtime is owed to non-exempt employees. What the effect is of employers giving hourly employees Blackberries or access through I-connect, for example, is the implicit message the employee is to work. What is the bottom line? Aside from having a strong clear policy as to the use of cell phones in general is not to allow hourly employee and others who qualify for overtime to use Blackberries or remote access to their work computers unless they are instructed to record time when using the devices and the employer has a system in place to record the hours.
For policy verbiage, do not hesitate to contact us.
July 25, 2012 Labor Law Letter
This is the July letter to bring you helpful, recent labor and employment information so you can stay abreast of day to day requirements.
1. Use of Criminal back ground checks.
The EEOC on April 25, 2012 approved an updated guidance as to using criminal back ground checks in an employer’s employment process. It is entitled “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964.”
You may access the EEOC Website, www.eeoc.gov, which includes a question and answer document.
2. The National Labor Relations Act (NLRA)
The National Labor Relations Act (NLRA) recently ruled that an employer commits an unfair labor practice (ULP) when the employer requires employees “as a condition of their employment, to sign an agreement that precludes them from filing joint, class or collective claims addressing their hours or other working conditions.” (D.R. Horton, Inc.)
3. In another “first” decision, the NLRB revised procedures for pre-election hearings by promulgating six (6) procedural amendments.
4. Use of independent contractors as part of the workforce.
The use of independent contractors is a common practice, (to avoid paying payroll taxes, or for relief from the mandates of the Fair Labor Standards Act) (FLSA), if used improperly could subject an employer to significant financial exposure and liability.
There are thirteen states (but not Tennessee, Arkansas, or Mississippi) which have entered into agreements with the Department of Labor to share information and coordinate enforcement efforts against employers’ misclassifying workers as independent contractors. In order to minimize a company’s exposure a company should consider (1) an audit of its classification of independent contractors; (2) have all written independent contracts reviewed; (3) train its supervisors as to the law and regulations governing the difference between “employees” and “independent contractors”; (4) be sure an independent contractor receives a 1099, not a W-2.
The Department of Labor is charged with the duty, among other duties, to enforce the minimum wage and overtime law (wage hour) when employees are misclassified. The Internal Revenue Service is also intimately involved and the 20 factor test which both labor and IRS use to analyze classifications of employees is utilized. The mantra is that businesses should only issue form 1099s, not W-2s to contractors. The importance of appropriately classifying an employee is most particularly the basis if properly done, for a business to escape unemployment, social security and Medicare taxes and overtime pay. Be mindful that additional taxes, penalties and interest result from worker misclassification.
The recommendation is that businesses should conduct a comprehensive audit of the written independent contractor agreements in place and those agreements should contain provisions covering the day to day operations, who does what, who’s in charge, equipment, policies, and procedures.
For further information, do not hesitate to contact us.
5. Unlawful medical inquiries (ADA).
As a reminder:
(A) There is no exception to the rule that disability-related inquiries or medical examinations are prohibited in the pre-offer stage of the application process.
(B) If applicants must fill out any medical questionnaires prior to receipt of a conditional job offer, use of the forms violates the ADA (and the Rehabilitation Act).
(C) After a conditional offer is made, an employer may ask disability related questions and require medical examinations as long as it does so for all entering employees in the same job category.
(D) Once employment commences, an employer generally may make disability-related inquiries and require medical examinations only if they are job related and consistent with business necessity.
6. Unlawful Medical Inquiries (GINA).
Title II of GINA prohibits an employer from requesting, requiring or purchasing genetic information – including family medical history – from applicants or employees except under very limited circumstances.
7. Unlawful Medical Requirements (Title VII, ADEA).
If part of the application process includes post-offer questionnaires required of any applicants in certain protected groups, such is facially discriminatory, as Title VII prohibits, among other things Sex Discrimination and the ADEA prohibits discrimination against persons of age 40 and over.
8. Offer Withdrawal.
Under the ADA Amendments Act, withdrawing an offer based on the information obtained from a past health history inquiry could be interpreted as “regarding” the employee as having a disability. Accordingly the burden is on the employer to establish that the particular impairment renders the individual unqualified to perform the essential functions of the job or where it is determined that safety issues are of significant concern.
9. Employee Handbooks.
Employers much make sure that its handbook complies with the different state and local requirements of each location in which it operates.
Periodic review is warranted to ensure compliance with any changes in the law or business policies and practices.
10. Social Networking Policy.
It is imperative that an employer have a social networking policy in place in light of the proliferation of iPhones, Smart Phones, Blackberries, Android, Tablets and other personal devices that employees bring to the office, especially when the same device is used for both business and personal matters.
Social networking sites include Facebook, Twitter, Linked In, among others. Regardless of whether there is a union that represents the employer’s employees, the National Labor Relations Act (NLRB) has extensively addressed employer discipline of employees for comments on social media sites and the lawfulness of employers’ social media policies. Circumstances are usually when an employer disciplines or terminates an employee for an off duty posting on a social media site that disparages the employer including its management and supervisors. The NLRB has taken the position that if the employee’s posting meets the definition of “concerted” activity which is “protected” by the act, the employers’ action is unlawful. In determining whether an employer’s social media policy violates the Taft Hartly Act, the Board considers whether it would “reasonably tend to chill employees in their exercise of their Section 7 rights.”
To prevent any adverse findings by the NLRB employers should keep the following in mind:
(1) Be sure that the employers’ internet and social media policy is not “overbroad” and make clear that the company is not prohibiting protected activity.
(2) Avoid disciplining employees whose conduct on its face involves “concerted” activity or could be construed as acting on behalf of other employees.
(3) Activity that is engaged in on or with the authority of other employees is considered concerted activity even if the employer is unaware of the activity.
(4) Individual activity that in fact arises out of prior “concerted” employee action will be considered “concerted” even if the employer is unaware of the prior activity.
(5) Recognize that statements critical of management or supervision are still protected if they can be considered “concerted” activity involving labor policy wages, benefits or working conditions.
(6) Making statements that are highly critical of management or supervision even when using profanity, will likely not be considered to have lost the protection of the Act.
(7) Defamatory statements will not lose protection unless they are not only false but maliciously false.
Employers’ social media policy should be carefully evaluated so the language is not overly broad and could “chill” the employee’s right to engage in “protected” “concerted” activity; the employer should ensure that the policy focuses on legitimate business interest unrelated to its terms and conditions of employment; the policy should avoid containing rules that use vague terms and over broad language such as prohibiting employees from “inappropriate discussion” or “offensive conduct”; descriptive examples should be utilized specific to the employer’s business, of prohibitive activities while being sensitive to protected “concerted” activities; to contain language such as “in no way does this policy limit your rights, as an employee, under the National Labor Relations Act or any other applicable Federal or State law. The policy should focus on prohibiting social media activities unrelated to wages or working conditions.
(8) Smart phone, iPhones, Blackberries, and other devices.
Most recent personal devices that employees bring to the office carry on array of potential liability and other risks, particularly when the same device is used in business and for personal matters.
Aside from the data security issues at stake, any benefit analysis must take into consideration possible employment related liability. For example;
1) Discrimination. Should the information contain medical related information there is a great possibility that a violation of Title VII, ADA, ADEA could come about.
2) If the employer owns the device used by the employee, the employer can more readily exert control over its usage. But a greater danger is faced when that employee’s prejudice may make their way into the work place, in which employers have an obligation to maintain an environment free from harassment.
3) Privacy concerns are also an issue especially where the employee owns the device because it limits the employer’s ability to lawfully access or delete company data when stored there. Federal laws including the Computer Fraud and Abuse Act, Stored Communications Act restrict unauthorized access to computers and emails. Workplace safety is another concern because employers who would not have been liable for injuries suffered or caused by employees whose attention is being diverted because of their texting on their own personal devices while driving could cause the employer to be responsible for Workers Comp costs or defending against significant third party claims when the device is also used for business purposes.
Perhaps the greatest issue that employers will face is that under the FLSA’s minimum wage provisions employers may be required to reimburse employees for the personal cost of their own devices, such as their monthly phone bill if they can be construed as employer business expenses and the cost factored into the wage rate which may bring their pay below the statutory minimum wage. In addition and most notably these portable devices enable work anytime, anywhere and thus raises the issue of when overtime is owed to workers. The situation is particularly acute for employees who qualify for overtime. A suggestion is that employers not allow hourly employees and others who qualify for overtime to use or remote access their work computers unless they are told to record times when using the devices and the company has a system in place to record the hours.
11. Patient Protection and Affordable Care Act (ACA).
There are new ACA requirements for 2012 and 2013 such as providing benefit summary disclosures, providing the cost of health coverage on employees’ W-2 and complying with new dollar limits on health care flexible spending arrangements. The ACA requires employers with more than 200 full time employees who offer enrollment in one or more healthcare plan to automatically enroll new employees in one of the plans offered. Employees will be automatically covered unless they take action to opt out. This provision is expected to increase the roles of the insured employers.
As always, if you have any questions or would like more information regarding any of the topics in this Labor Law Letter, please do not hesitate to contact me.
June 4, 2012 Labor Law Letter
This is the June letter to bring to you helpful, recent labor and employment information so you can stay abreast of day to day requirements.
1. Use of Criminal back ground checks.
The EEOC on April 25, 2012 approved of an updated guidance as to using criminal background checks in its employment process. It is entitled “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964.”
You may access the EEOC Website, www.eeoc.gov which includes a question and answer document.
2. The National Labor Relations Act
There is a very useful website regarding various aspects of employment discrimination. The website is www.eeoc.gov. This site provides a vast amount of information regarding federal laws covered by the EEOC. A section designated as the “Newsroom” contains press releases that provide insights into the agency’s enforcement and other activities. Employers can stay abreast of announcements by reviewing these updates on a regular basis.
You can find links to numerous cases that have been filed, settled or litigated, from which there are many lessons to be learned to assist you in preventing charges being filed with the EEOC or the EEOC making adverse findings against your business. Once charges are filed and decisions are rendered, employers are required to take actions, such as instituting policies and training which could have been implemented proactively to prevent adverse consequences; and employers may be bound by reporting and other burdensome requirements that are required to settle the charge beyond affording remedies to the complaining employee(s).
Most importantly, it is not enough to have policies prohibiting sexual harassment, for example, when such a policy is hidden among the many pages of a handbook. It is most important that employers assure that employees are adequately informed of all of its anti-discrimination policies and of procedures for making complaints about discrimination.
A particular practice that should be noted and has come into recent growth is a background check policy. The EEOC advises that the employer take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of sentence, and the nature of the job sought with the employer in order to be sure that the exclusion is important for the particular position; otherwise, such exclusion can create an adverse impact based on race, in violation of the anti-discrimination statutes.
In reference to the American Disabilities Act (ADA), which has become the “in” basis of charges with the EEOC and/or lawsuits, there is a requirement that the employer distinguish between the essential and non-essential functions of the job; then identify a reasonable accommodation for the employee’s disability; participate in interactive communication with the employee claiming the disability, so the employer can show that it has considered options for reasonable accommodation of the disability, which will result in its being in compliance with the ADA.
3. Tennessee Lawful Employment Act.
Note on February 7, 2011, the Tennessee Lawful Employment Act requires verifying the eligibility of all newly hired employees to the online E-Verify program (www.uscis.gov/everify) or request all newly hired employees to provide one of the following identity and employment authorization documents as required:
• Valid Tennessee driver’s license or photo identification;
• Valid driver’s license or photo identification from another state where the license requirements are at least as strict as those in Tennessee;
• Birth Certificate issued by a U.S. State, jurisdiction or territory;
• U.S. government issued Certified Birth Certificate;
• Valid, unexpired U.S. passport;
• U.S. Certificate of Birth Abroad;
• Report of Birth Abroad or a Citizen of the U.S.;
• Certificate of Citizenship;
• Certificate of Naturalization;
• U.S. Citizen identification card; or
• Lawful permanent resident card (green card).
This law also requires employers to obtain and maintain one of the above listed identification/employment authorization documents for all non-employees as well. A “non-employee” is defined as any individual other than an employee paid directly by the employer in exchange for the individual’s labors or services.
On January 4, 2012, the Commissioner of the Tennessee Department of Labor and Workforce Development announced these new requirements. The requirements are being phased in: for a state or local government agency or a private employer with 500 or more employees (January 1, 2012); all private employers with 200-499 employees (July 1, 2012); all private employers with 6-199 employees (July 1, 2013). Also note that the Tennessee Department of Labor does have the authority to impose penalties for non-compliance. The first violation is $500.00 for each employee or non-employee not verified; $1,000.00 per employee/non-employee not verified for a second violation; and $2,500.00 per employee/non-employee not verified for a third violation.
4. NLRB and Social Media.
The National Labor Relations Board (NLRB) has recently found that social media websites, when used by employees, either among themselves or third persons, which conversations concern terms and conditions of employment, including job performance and criticism of supervisors, is protected, concerted activity under the act. This applies to both union and non-union employees. If you have a social media rule/policy, you must be sure that it is properly constituted, and should you terminate an employee because he or she used social media, such as Facebook, concerning working conditions, criticisms, and the like, it will be deemed concerted protected activity, and that employee will be reinstated with back-pay. The NLRB expressed that employers cannot simply prohibit employees from communicating through social media sites, such as Twitter and Facebook, finding that these sites are the modern day equivalent of conversations around the water cooler.
5. NLRB “Notification of Employee Rights under the National Labor Relations Act.
This rule was first published in August 2011. It requires all employers subject to the NLRA “to post notices to employees … informing them of their NLRA rights … and information concerning basic enforcement procedures.”
Most businesses which are engaged in services or sell products which cross state lines are more than likely subject to the NLRA. Further, the NLRA (Taft Hartley) applies regardless of whether a union represents its employees.
Failure to post notice subjects an employer to a cease and desist order, requiring a posting, and further could postpone the running of the six (6) month limitation period within which an unfair labor practice must be filed and/or be evidence of anti-union animus during unfair labor administrative proceedings or in regard to petitions by unions for representation.
6. Voluntary Classification Settlement Program.
Another item of note is the initiative launched by the Internal Revenue Service (IRS) to assist employers in resolving past worker classification issues and achieve certainty under the tax law by reclassifying their work as voluntary. The Voluntary Classification Settlement Program (VCSP) was unveiled in September 2011, and this program will allow employers to resolve compliance issues by making a minimal payment covering past payroll or tax obligations rather than waiting for an IRS audit. The VCSP is designed to increase tax compliance and to provide greater certainty for employers and workers as to the proper classification, i.e., employee or independent contractor.
To be eligible for the VCSP, an employer must have treated its workers consistently in the past as non-employees; have filed all required Forms 1099 for the workers for the previous 3 years; and not be under an audit by the IRS or the Department of Labor or a state agency concerning the classification of these workers. Interested employers can apply for the program by filing Form 8952 at least 60 days before they wish to begin treating the workers as employees.
7. Wage Payment Law.
Effective July 1, 2011, Tennessee has amended its wage payment law (T.C.A. § 50-2-110) to specify when an employer may offset employee wages. An employer may offset wages for an amount the employee owes the employer if:
1. An employer enters into an agreement with an employee to advance the employee wages prior to the date the wages are due and owing, agrees to otherwise lend the employee money, or permits the employee to charge personal items on the business or corporate credit card issued to the employee;
2. The employee signs a written agreement prior to any actions occurring pursuant to item #1, above, allowing the employer to offset the employee’s wages for any amount the employee owes to the employer, and the employer has in its possession at the time of the offset a copy of such signed agreement;
3. The employer notifies the employee in writing fourteen (14) days prior to the payment of wages due and owing that:
a. There is an amount the employee owes the employer;
b. The employee’s wages may be offset if the amount owed is not paid prior to the payment of wages due and owing; and
c. The employee may submit an affidavit as described just below.
4. The employee has not paid the amount owed to the employer that was described in the notice sent by the employer.
The employer cannot offset wages if the employee sends a sworn affidavit to the employer, and a copy of such affidavit to the Tennessee Department of Labor and Workforce Development, no later than seven (7) days after receiving notification from the employer, contesting the amount owed. If an employee contests an amount owed, then the employer may commence an appropriate civil action to recover the amount the employer alleges the employee owes to it.
As always, if you have any questions or would like more information regarding any of the topics in this Labor Law Letter, please do not hesitate to contact me.