Thursday, October 27, 2011

Miracles Still Occur

In our memories especially.  Today is the fourth anniversary of one of the strangest plays in college football history, the Trinity-Millsap Lateral-fest.

Feast your eyes here.

Wednesday, October 26, 2011

Why You Should Actually Read Your Employment Practices Liability Insurance Policy

Important safety tip: all of you with EPLI insurance should run, do not walk, to where your policy is stored, and read the policy carefully. Pay particular attention to the scope of coverage, because if it says you are covered for charges or lawsuits brought against you by an employee, you are not going to be covered in a suit brought by a federal agency, such as the EEOC. At least, that's what Cracker Barrel discovered recently, to the tune of $2 million plus.

What happened in the case was that 10 current or former employees brought employment discrimination charges against the company over a period of several years. The EEOC consolidated the charges into one lawsuit, and transformed it into a wide-ranging class-action. Years later, the case settled for some $2 million in damages and more than $700,000 in attorneys fees.The company's EPLI insurer refused to pay the settlement, citing language in the policy that defined a covered claim as "a civil, administrative, or arbitration proceeding commenced by the service of a complaint or charge, which is brought by any past, present or prospective employee(s)."

The court backed the insurer, noting that the plain language of the policy does not apply to litigation brought by a federal agency, which is clearly not a "past, present or prospective employee" of the company.

So, a quick suggestion-make sure your EPLI policy covers not just actions brought by current or former members of your workforce, but also addresses those situations where your company is the luckless target of federal, state, or local agency legal attention.

Monday, October 24, 2011

The Wage Implications of Obamacare

I am always nervous about citations to studies prepared by outfits with political agendas (although what organization doesn't have an agenda these days?).  But the numbers cited in this assessment by the Heritage Foundation are consistent with numbers that I saw from the CBO and other relatively unbiased sources when the debate over the PPACA was raging a year and a half ago.

The short answer is that for a minimum-wage worker, Obamacare will impose an almost 80% wage surcharge per family in the form of mandatory health insurance payments that will be absorbed primarily by the employer.

In hard numbers, average employees that cannot contribute at least $20,000 (single plan) or $27,500 (family plan) of value to their employer will not receive full-time employment positions. For states like Illinois, which has a higher minimum wage than the federal requirement, the overhead cost assigned to an employee with family plan medical insurance rises to almost $30,000 a year (based on a 2000 hour work year).

These values will be very hard for many unskilled laborers to meet. Employers will have no economic alternative but to hire unskilled workers to part-time positions, or hold their workforces below the 50 person threshold, in order to meet the new Obamacare requirements.  This is in addition to dumping the low value producers into the government run health insurance exchanges, which appears to be the main goal of the statute in the long run.

Well, This Makes Me Feel Better about Photographic Evidentiary Standards

Based on this demonstration, it seems that you can insert just about anything into a photograph, a video, or any other computer-generated image. And you can do it very inexpensively, and very quickly, unlike the old photo retouching process.  In other words, soon you won't be able to believe your eyes.  This has some troubling implications for trial evidence. Presumably, any time you can get a witness to testify that the picture offered in evidence resembles his recollection of the way things were at the time the picture was taken, then the picture comes in as evidence and goes to the factfinder, typically a jury. The only way a jury or a judge could evaluate the picture's accuracy is by trying to assess whether the witness was telling the truth.
I'm certainly not comfortable with that standard.

What Does a US Worker Really Cost?

An enlightening discussion here.
Some thoughts--

Compensation remains slightly more than half of the GDP, but more and more of it is in the form on non-wage type payments for taxes, benefits, etc.  So workers are taking home less, even as they make about the same in total compensation relative to the size of the economy.

The non-wage expenses are making our workers more and more expensive vis-a-vis their foreign counterparts, with the resulting incentives that cause employers to move jobs out of the US.

These non-wage costs (and their government-regulated nature, think payroll taxes, Obamacare health insurance) also act as a brake on domestic hiring.  As long as employers face economic uncertainty (in the form of the possibility of increased or changed regulation) every time they hire an employee, they will hesitate.  If enough of them hesitate, you get stagnant employment numbers.  Sound familiar?

Why Pro Athletes are Different from the Rest of Us

Other than the money, the partying, the bling, the off-duty issues, the attention, etc.

I'm referring, of course, to the fact that some of them get to drink while performing their duties as baseball players.  Maybe it's the attire--Sox teams seem to have gotten the attention here.  It sounds worse than Mad Men.

I don't think an open bar is a prudent workplace policy.  But I especially don't think it's smart for people to imbibe at work when their job description includes hitting 95 mph fastballs being thrown within inches of their heads, or tracking down 3 inch spheres being hit hundreds of feet from their location.

And now MLB wants to take action:  "I'm shocked, shocked, to find drinking going on in this establishment..."

The Employment Relationship Matters

A recent FMLA case here in Illinois shows why it's important for companies to carefully manage, or in this case, to at least understand, their own workforce relationships, or else find themselves wrapped up in lawsuits that they cannot defend.

Plaintiff worked as a manager for a regional air service that conducted flight operations in conjunction with United and United Express in Chicago. His paycheck and W-2 listed his employer as Trans-State Holdings, Inc ("TSH"). But his business card bore the logo of Trans-State Airlines ("TSA"), the improbably named (at least in affiliation with United) GoJet Airlines, and TSH. Company internal directories identified plaintiff as the O'Hare Airport contact for all three entities. He participated in employee meetings with both TSA and GoJet, drafted policies and procedures for both airlines, and represented both airlines in meetings with United Airlines and United Express operations. Company management determined that the plaintiff was only employed by Trans State Airlines, which had 33 employees within 75 miles of O'Hare. Note that the payroll employer, Trans-State Holdings had no employees at O'Hare at the time.

This becomes important because plaintiff tried to exercise FMLA leave rights as a result of a psychiatric disorder. The company denied plaintiff's request for FMLA leave, and terminated him when he failed to return from a 2 week personal leave.
The company's initial argument was that the FMLA was not applicable because it did not have the required number of employees  - 50 - within 75 miles from the work site. The court rejected the company's defense, finding that while TSA and GoJet had different labor representations and different seniority lists, the company shared the same upper level management - the president, the vice president, and chief financial officer were the same for all three. The company with no employees in the area, TSH, maintained the personnel files for TSA and GoJet and TSH's recruitment department performed services for all three companies. Apparently, employees moved seamlessly between the three companies on occasion.

Looking at this confusing and irregular factual background, the court tried to impose some type of order.  It noted that the US Department of Labor allows employees from one company to be considered employees of another for purposes of an FMLA headcount either under a "joint employment" or "integrated employer" test. Each test looks to see whether there are significant links between the employee and the various companies at issue such that each company can be considered an employer.  If the employment circumstances meet the test, the workforces are merged for purposes of counting towards the FMLA threshold of 50 employees.

In this case, the court had little difficulty in finding that the three companies, individually and jointly, had control over plaintiff's employment. He was named as their representative at O'Hare, he represented them in dealings with the airlines and the Department of Homeland Security, they were listed on his business card as his employer, and all three benefited from his services.  The court did not bother to check the application of the integrated employer test.

Once it determined that TSH, TSA and GoJet met the joint employment test, the Court found that plaintiff's medical condition qualified him for FMLA. The employer tried to defeat the FMLA entitlement with a novel argument--that plaintiff made his medical condition worse (i.e. he turned it into an FMLA qualifying condition), by not following his doctor's advice. The Court rejected this "plaintiff should have been a better patient" defense, determining that there was no case law for that proposition, and no authority for it in the regulations. The Court granted summary judgment for the ex-employee, ruling that the companies were liable for terminating him without granting him the FMLA leave he requested.

This case is noteworthy because of the confusion evidenced on part of the companies as to exactly who was employing plaintiff. Prior to the irrevocable decision to deny plaintiff his FMLA leave and terminate him, it would have been prudent for someone in charge to sit down and look at the nature of the employment relationship between the three entities. A situation where an employee is being used as a representative of multiple entities should raise a red flag as to how court will look at the employment relationship for headcount and ultimate legal liability purposes.

Friday, October 21, 2011

A Cheek Swab Would Have Sufficed

The British military is famous for absorbing and accommodating into its ranks soldiers from many of its former colonies. Particularly noteworthy among these groups are the Ghurkas, a fierce fighting tribe from Nepal.

Unsurprisingly, things occasionally get lost in the translation between British Army requirements, and Gurkha culture. I guess that explains how this particular individual came up on a court-martial charge for zealously collecting a DNA sample from a Taliban fighter that he engaged.

Quite reasonably, it seems that the charges have been dismissed on the soldier returned to his unit. I hope they were careful to inspect his carry-on bag before he got on the airplane home, however.

A Fair FMLA Result

A recent Family and Medical Leave Act ("FMLA") case out of Illinois shows the importance of not rushing to a decision when the FMLA is involved, and reinforces the ability of an employer to require compliance with its attendance procedures, even where the FMLA applies.

The employee worked as a mushroom picker for company in central Illinois (insert inappropriate jokes here about being kept in the dark, etc. with regard to your current working conditions). She advised her supervisor that she needed to take leave one summer to help her sick mother in Mexico. The manager directed her to coordinate her trip with HR to ensure that the leave was properly recorded. The company's FMLA policy required employees to submit requests for foreseeable FMLA absences at least 30 days in advance, and as soon as possible for unforeseeable events. The company typically did not enforce the 30 day notice requirement, but did ask for some type of advance documentation when possible. The company provided the employee with the necessary documentation (in Spanish, even) so that she could take it to Mexico and get it completed by her mother's physician there.

The employee planned to cover the first two weeks of her absence with vacation time, and then use FMLA time for the rest. At the end of the vacation portion of her absence, she unsuccessfully tried to fax the completed FMLA paperwork to her employer. Back in the US, when the employee did not return to work the employer unsuccessfully attempted to contact the employee by phone and via mail at her house. In the meantime, the employee's brother called her in Mexico and told her that she needed to contact the employer. She ultimately talked to her supervisor who told her that the company did not have her FMLA medical certification  The employee sent another copy. This fax did not make it, either, nor did the employee call to confirm that the employer received her second fax. The employer terminated her shortly thereafter.

In finding for the employer, the court noted that the company was entitled to impose reasonable procedural requirements for requesting FMLA leave, including preliminary authorization where possible. The court determined that the company exercised reasonable discretion in the application of its procedures in this case, and that the company did not receive any FMLA certification before it terminated the employee Although there was some confusion about who said exactly what to the employee, it was clear that the company had not rushed to terminate the employee under its formal deadline, but rather extended it to try to accommodate the employee's situation. Because the employee knew that she had to get the information to the company and failed to do so, the court determined that she was out of luck with respect to her request, even though she made a good faith attempt to send the information

This case has two important messages. The first is that in an absence case, an employer should avoid making summary decisions and carefully assess its obligations before making a decision. The courts are not looking for a perfect process in these cases, but only one that provides the statutory requirements for notice and reasonable opportunity to respond. The second is that even when the employer does not follow its own attendance policies, the employer can still enforce reasonable requirements as long as those requirements are effectively communicated to the workforce.

Monday, October 10, 2011

As Many of Us Predicted

The NBA will start cancelling regular season games today if no agreement is reached.  Once both sides cross this particular Rubicon, it might be a while before something else looms large enough to get the parties back to the table in any meaningful way.
The NFLPA and owners were smart enough to avoid this milestone, but the season is longer in the NBA, and the cost per cancelled game is arguably less.  Perhaps there is still some financial calculus at work notwithstanding the jangled pace and tenor of the negotiations.

UPDATE:  Looks like the NBA will lose the month of November, completely. 

Thursday, October 6, 2011

Are Pets "Family Members"?

Apparently for some people in Florida.  I would love to know the circumstances that triggered some constituent to get a state senator to include "threats against pets" as a basis for guaranteed leave under Florida law.
The Florida statute in question provides up to three days of unpaid leave for victims of domestic violence, as defined by the statute. If this amendment goes forward, a threat of violence against a pet would be considered a protected reason to leave a job, and one more reason that employers will have to learn more than they wish to know about the private lives of their employees.

Does the Army Have a Discipline Problem?

You'd think so from this article and the comments below. A huge chunk of of military jurisprudence consists of what is essentially employment law, albeit in a criminal law setting. Outside of the traditional torts-assault, battery, murder, etc.-military law focuses on getting people to do their jobs, and do them properly in a coherent team.

This leads to some interesting angles on what are traditionally employment matters. For example, sexual harassment is a criminal offense under military law (Uniform Code of Military Justice Article 93, Maltreatment of subordinates). Under certain circumstances, so is adultery, along with unduly familiar relations between superiors and subordinates (UCMJ Article 134). Refusing to dress properly might get you a warning letter, or fired; in the military, it can get you tossed in the slammer.

Thus the article, and the comments following it, reflect legitimate concerns about how people do their jobs, and whether they are following the proper customs and courtesies required of all military members. I suspect that a lot of what is perceived as a breakdown in this type of discipline is a result of the heavy combat operations tempo our Armed Forces have been subjected to, particularly in the Army and the Marine Corps. Things like having your boots shined, uniforms pressed, and being properly attired are usually given less emphasis in units actively engaged in combat, for obvious reasons. That slackness tends to carry over into the garrisons, unless properly addressed by NCOs and officers. 

It will be interesting to see if this perception continues as we wind down our active operations in Central Asia. 

Wednesday, October 5, 2011

Why the NFL Players Association Agreement Makes Sense

 I attended the first meeting for football agents convened by the reconstituted NFLPA last week. After listening to the union version of events, and looking at the compensation numbers that came out of the first draft and free agent signings, it's reasonably clear that the extremely vocal critics of the deal signed between the NFLPA and the National Football League don't know what they are talking about.
I've always assumed that the union people knew exactly what they were doing when they settled the Brady litigation and the NFL agreed to end the owner lockout. Whether it was the decertification, or the realization that some real money was about to go away, the end result reflects a fairly thoughtful assessment of revenue sources, incentives for desirable behavior, economic trade offs for "quality of life" work conditions and appreciation of just how important (and lucrative) football has become in the American cultural landscape.
I won't try to recreate the full presentation here, but want to focus on a couple of major points that demonstrate pretty clearly the kind of detailed thought process that took place on both sides of the contract football.
For example, the players relinquished a claim to approximately 60% of "Total Revenue" reported by the NFL--a number subject to heavy discounting for expenses--in exchange for a lower percentage of the more all-inclusive "All Revenue". What's noteworthy about this All Revenue figure is that it is not discounted so heavily for expenses, and has a sliding scale of player entitlement, based on the level of effort expended by the clubs in earning the dollars. So, for example, players share in 55% of the media revenue, which represents very little effort by the clubs and their organizations. On the other hand, the local club revenue stream, arising from ticket sales and club specific activities, provides only 40% of its revenue to the players. This rewards clubs willing to make the extra effort to market locally, and generate more revenue off things like naming rights.  Overall, the players are effectively guaranteed an average of 47% of the All Revenue number generated by league activities.  If that seems like a low percentage, consider the projection that TV revenue alone should make up any total dollar shortfall--a prediction that is already being borne out in the latest ESPN contract.
In addition, the union gets out of the revenue sharing business with the league in exchange for locked-in cash spending requirements. The minimum each team can spend in cash expenditures on player compensation is 89% of the total salary cap number set by the league and union each year. This has the affect of significantly increasing the spending by certain cheapskate clubs. Teams that don't spend that money on their own players will be forced to contribute it directly to the union, which will then have the discretion to distribute these shortfalls in spending. If there's a better incentive for owners to put the dollars out, I can't think of it.
But most notable for the players, and probably most important in the long term, are the limitations on practice time and intensity that were negotiated as part of this economic package. Players had serious and legitimate concerns about overtraining throughout the football year. Off-season workouts are now limited not only in duration, but in type of activity,  with only 10 authorized OTAs (organized training activities) which involve full speed work (and only limited hitting) on the both offensive and defensive sides of the ball. The collective bargaining agreement also limits the number of so-called padded practices, where players engage in full-speed or near full-speed hitting, to a total of 14 over the course of the regular season. Preseason practices are limited to 1 padded practice per day, and a total of 4 hours of practice time, only 3 of which can be in full pads.
There are a number of other concessions made by clubs on training in exchange for compensation issues by the union. But both sides realized how much money the game was capable of making and how totally damaging a strike/lockout that cost regular season games would be. In fact, both sides appear to be absolutely correct in their perceptions - NFL games were on top of the ratings for television programs in the first several weeks of the season. And remember, these are not even playoff games. It's a testament to the quality of the product, and the intelligence of the people handling the negotiations, that led to an agreement that seems rational and maintains the momentum of one of the greatest spectator sports in the country.

Hiring via Social Media

I am frequently queried by clients about the use of social media as a tool for hiring. Surfing Facebook, Linked In, or even Twitter, can frequently give a company insights into an applicant's personality, work ethic, and propensity for teamwork that will not come through in a relatively brief interview or a resume. However, companies must be aware of the pitfalls that exist when using social media information to make significant employment decisions such as hiring.

For example, it's possible that a social media site can provide too much information, in the form of an applicant's race, age, religious affiliation, or other protected category. This type of information is typically not included on an employment application for good reason--it provides a basis for a discrimination claim in the event the applicant isn't hired. In the employment discrimination world, there's no legal difference between learning that someone is a practicing Druid from reviewing an application and learning it from a Facebook site.

In addition,, social media data are often subject to reliability issues. If you have not figured out by now that everything you read on the World Wide Web isn't true, then you should not be in a position of responsibility not only at your company, but within your family. The operative phrase for Internet information: Don't Trust, and Always Verify.

Privacy is another issue, although frankly, if your hiring managers are hacking into people's private Internet sites as part of their routine practices, your general counsel should be getting ready for criminal indictments instead of EEO discrimination claims.

Smart, astute companies (such as the ones that rely on yours truly for advice) have developed written operating policies to guide their hiring managers on the use of social media sites. These policies focus searches on relevant, job-related criteria, and frequently use some type of screening mechanism to prevent protected status data from making it to a decision-maker.

Here's a link to a reasonably comprehensive guide on social media use in the hiring process (it's the PDF link with "Internet Use" in the title).

And remember, as with so many things in the employment law world, less is frequently more with respect to these types of inquiries.

Tuesday, October 4, 2011

Tweety Bombs

It should be abundantly clear that employers with routine access to the Internet (and that includes those of you reading this, otherwise you wouldn't be able to read this) should have some type of social media policy in place. A proper social media policy clarifies the allowable use of things like Facebook and Twitter, serves to manage expectations and set standards for the workforce about its behavior online, warns employees about posts that will get them or the company (or both) into trouble, especially with those friendly people at the Federal Trade Commission, and generally reminds people that the Internet is typically not the place to be sharing proprietary company information.

For most companies, these policies are directed at a relatively small portion of the workforce. Typically, employees don't have time to embarrass themselves on Facebook during the workday, and no inclination to do so, anyway. However, there is at least one workforce that seems to not only embrace foolishness online, but in fact revel in it. 

I'm talking about the professional athlete community. And if you think I'm kidding, see the posts from NFL receiver Bernard Berrian, for example.  Especially the one where he tells a double amputee, Iraq war vet to "sit down" and shut up with the criticism.  Oops (in fairness, Berrian didn't know the guy was disabled, but still).

With the announcement that the NHL has now put in place a social media policy, most of the major sports leagues (that is, if you consider the NHL a major sports league) have social media policies for the players that are noteworthy for their pickiness, and their enforcement.

For example, the NFL prohibits its players from using social media within 90 minutes of the start of a game, through the end of the postgame media interviews. Updates to a player's Twitter account by surrogates are also prohibited. Even as media tolerant as the NFL is, having players taunting each other via smart aleck tweets during a game, especially when the coaches are trying to get their attention, is simply too much. Players have been fined up to $25,000 for violating the time limit policy, and one running back was fined by his club for criticizing the team's catering choices.

Major league baseball prohibits the use of electronic communication devices on the bench, bullpen or field once batting practice starts before a game, and cell phone use in a clubhouse is prohibited 30 minutes before the game. Although content can get you in trouble, Chicago White Sox manger Ozzie Guillen was fined $20,000 with a two-game suspension for launching a post-ejection tweet tirade back in April not for his verbiage, but his timing.

Surprisingly, that repository of petty, silly rules, the NCAA, does not have a social media policy for players. It needs one, although the Association does prohibit all kinds of social media activity in the recruiting context. A number of schools have prohibited social media use by their athletes, and players have been suspended for criticizing their coaches, or making what are referred to as "insensitive" remarks on Twitter.

I would not hold these policies up as examples for the non-jock workforce sector, however. Most of these restrictions are done in the context of a collective-bargaining environment, and the NLRB continues to show particular interest in employers that limit their employees' expressiveness on social media. Just enjoy the fact that you don't have to worry about your average white-collar worker blasting out something about your workplace catering to more than 1 million followers on a day-to-day basis.

UPDATE:  True to form, the NCAA institutes a major change in its recruiting policy re athlete contact by coaches, allowing unlimited calls and texts to rising high school juniors, but still no social media policy for kids in college.  Too bad.

Monday, October 3, 2011

Selfless Leadership

Here's a very good, concise view of leadership and selflessness, and how selfless leaders put the needs of their subordinates first, for the good of the organization.  Not surprisingly, it's written by an Army officer.

One of the most enduring lessons I learned as a junior officer was also a simple one--when in command of a group, you go to the end of the chow line, and let everyone else eat first.  Would that more managers, CEOs, and political leaders kept this basic principle in mind.

Check out the rest of the author's leadership series here: