the ten employment law issues employers should be … · top ten issues for 2010 the ten employment...

TOP TEN ISSUES FOR 2010THE TEN EMPLOYMENT LAW ISSUES EMPLOYERS SHOULD

BE MOST CONCERNED ABOUT IN THE EARLY MONTHS OF 2010

Evan J. SpelfogelEpstein Becker & Green, P.C.

March 5, 2010

NY:4103494_1 Copyright © 2010 by Epstein Becker & Green, P.C.

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AGENDA:

1) The Americans with Disabilities Act - Under the recent amendments, who is "disabled/' and to which accommodations are the disabled entitled?

2) The Family and Medical Leave Act - As recently amended, what are the new types of available leave?

3) Employee Handbooks - Why should yours be updated?

4) Non-Competes and Trade Secrets - How can you protect your company's trade secrets from the growing risk of misappropriation?

5) Social Networking - What are your risks as an employer?


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AGENDA:

6) The Enforceable Release of Claims – What should you know about the EEOC's newly issued guidance?

7) Wage and Hour Laws - How should you deal with the use of employer-provided technology during employees' off hours?

8) The Misclassification of Workers - What is the difference between "employees" and "independent contractors,” between “exempt” and “non-exempt employees, and why does it matter?

9) Discrimination/Retaliation Lawsuits - How can your company avoid becoming the target of these increasingly popular lawsuits?

10) New York State and City Developments


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No. 1 ADA

• Proposed regulations to implement the ADAAA make it easier for individuals seeking protection under the ADA to show they have a disability– Interprets “disability” broadly– Expands the definition of major life activity


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No. 1 ADA

• Disability = physical/mental impairment that substantially limits (“S/L”) a major life activity– Major life activities were defined as seeing, hearing,

walking, performing manual tasks, etc.– Now also defined as operation of major bodily

functions• Respiratory• Cell growth• Endocrine system


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No. 1 ADA

• An impairment that substantially limits one major life activity need not limit other major life activities– Diabetic with endocrine system S/L due to

diabetes does not also need to show S/L in major life activity of eating

– Cancer victim with S/L cell growth need not show S/L in working


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No. 1 ADA

• Transitory ailments that last less than 6 months can S/L a major life activity

• Effects of mitigating measures (other than glasses/contacts) are not to be considered


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No. 1 ADA

• Conditions that are a disability: – Deafness, blindness – Mental retardation – Missing limbs, mobility issues – Autism – Cancer – Cerebral palsy – Diabetes – Epilepsy – HIV/AIDS – Multiple sclerosis/dystrophy– Depression/bipolar/OCD/PTSD/schizophrenia


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No. 1 ADA

• Conditions that may be a disability for some individuals: – Asthma– Hypertension– Learning disability– Back/leg impairment– Psychiatric impairment – CTS – Hyperthyroidism


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No. 1 ADA

• Impact on employers– More employees will be protected as

“disabled”– Imposes duty:

• To reasonably accommodate• To not discriminate against

– Need to:• Update policies• Train managers


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No. 2 FMLA

• FMLA regs recognize two new types of leave, both military related:– Exigency when spouse/child/parent called to

active duty– Caregiver for a servicemember

(spouse/parent/child/next of kin) with a serious injury/illness


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No. 2 FMLA

• Amendments to the FMLA effective 10-28-09 affect the military leave provisions


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No. 2 FMLA

• Exigency leave– An Employee may take up to 12 wks. FMLA leave

when a spouse, child or parent is on active duty or called to active duty in a foreign country for one or more of 8 qualifying exigencies

• Previously, this leave was not available if the family member was a member of the regular armed forces


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No. 2 FMLA

• 8 circumstances in which exigency leave is allowed:– To address issues arising from the military

duty 7 days or closer to deployment– To attend military programs or those of

support organizations re military duty– To arrange for child care and schooling

necessitated by the military duty– To make financial/legal arrangements


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No. 2 FMLA

• Exigency leave also allowed for:– Counseling for employee, military member or

child of the military member due to military duty

– R & R (max 5 days)– Attending post deployment activities– Addressing other events arising out of the

military duty– employer and employee must agree on qualifications, timing, duration


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No. 2 FMLA

• Leave to care for covered servicememberwith a serious injury or illness– Military member must be treated on outpatient

basis– Employee must be spouse, child, parent (not

in-law) or next of kin of servicemember– Employee may take up to 26 workweeks of

leave in 12 mo. period


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No. 2 FMLA

• The Oct. amendments made two changes to caregiver leave. Now available:– Within 5 years of the date the veteran served

in the military (under prior law, leave was available only if the servicemember was currently in the military)

– Even if the servicemember aggravated a preexisting condition in the line of duty


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No. 2 FMLA

• 6 NEW FORMS– Notice of eligibility and rights and

responsibilities– Designation notice– Health care provider (employee)– Health care provider (family member)– Exigency military leave– Illness/injury of covered servicemember


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No. 3 Outdated Employee Handbooks

• Does your handbook comply with current law? FMLA – amended 1/2009 and again10/2009

• Does your handbook comply with the vacation pay and other employment laws of each state in which you have employees?

• Pre-dispute mandatory arbitration policies


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No. 3 Outdated Employee Handbooks

Are your restrictive covenants/confidentiality agreements included in your handbook (i.e., the same handbook that should have a disclaimer stating that it is not a contract?)


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No. 4 The need to protect trade secrets

A recent study confirms that departing employees frequently steal while leaving:

– 59% admit stealing data– 92% admit taking CDs/DVDs– 73% admit taking USB memory sticks

Is the problem getting worse? Yes.

Why?– Job insecurity/decreased loyalty– New technologies make it easier– “anything goes” mentality among Internet generation


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• Blueprints and design manuals

• Computer software

• Customer lists (so long as not generally known or readily ascertainable)

• Formulas

• Manufacturing processes

• Marketing plans

• Pricing information

• Research studies

• Strategic business plans

• Testing data

• Training manuals

Examples of trade secrets


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• Consider restrictive covenants• Use of “assignment of invention” clauses• Consider confidentiality agreements• Safeguard computer information• Identify trade secrets• Limit access to trade secrets

Proactive steps to protect trade secrets


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• Limit document circulation• Safeguard documents• Take periodic inventory of trade secrets• Disseminate company policies• Use exit interviews• Notify new employers of restrictive

covenants• Dispose of documents completely

Proactive steps to protect trade secrets


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No. 5 Legal Issues Associated with the Digital Age

Welcome to the Virtual World of:

• “Friends”: Facebook & MySpace- mostly social, but growing business network

• “Connections”: LinkedIn- “Facebook in a suit”

• “Followers”: Twitter- Instant messaging on steroids


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POTENTIAL LEGAL THREATS: ‘TEXTUAL HARASSMENT’

‘omg, u look gr8’“[T]ext messaging is the most revealing of the true thoughts — the unrestrained thoughts — of the harasser....They bang it out real quick, late at night, after a couple glasses of wine. They don't think twice about it. And they make big mistakes…”

“’Textual Harassment’ on the Rise,”The National Law Journal, July 20, 2009


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‘TEXTUAL’ HARASSMENT• “Not only am I using [texts] more, but I'm actually finding

situations where my clients will forward them on, print them out and bring them into my office with them. Some of them will even bait the harassers beforehand...”

Recent admission of a plaintiff’s attorney in The National Law Journal, July 20, 2009

• Turning the tables: Can an accuser’s online activity compromise his or her credibility?


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• “Inside information”/securities laws

• Is it really a trade secret if it is posted on the Internet?

• Defamation

• Obligation to third parties to monitor employees??

… and speaking of monitoring…


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• Possible employee privacy rights: - Hot issue: Accessing employee’s private SNSor email account without permission

- What if employee used company equipment?

• “Protected concerted activity” under National Labor Relations Act

• “Lifestyle discrimination” laws• Whistleblower laws• Managers “friending” subordinates• Public references for former employees


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• Every company’s situation is unique – some may decide to totally ban SNS at the workplace and others may embrace it

• Each employer has to weigh pros and cons- Balance business interests v. realities, e.g., is it practical to ban texting on personal cell phones?

• All employers should ensure policies decided upon are:- Comprehensive- Specific and clearly communicated to

employees, e.g., activities prohibited, scope of monitoring

- Fairly and consistently enforced


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No. 6 Drafting Enforceable Releases

2009 EEOC guidance regarding releases provides as follows:

• Employees cannot be barred from filing a charge

• Employees cannot be required to return severance pay before filing a charge

• According to John Hendrickson, regional EEOC attorney, no “re-hire/re-apply”clauses are per se retaliation (EBG disagrees)


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EBG Tips:• Do not inadvertently provide for waivers of future

claims• Don’t be overly complex with language; may result

in unenforceable agreement• Include representations that: (a) no other amounts

are owed (e.g. vacation or overtime); (b) no requested LOA was denied, nor was employee denied reinstatement after a LOA; and (c) all company property has been returned


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• Include agreement that if any of these representations are later proven false, must return $

• Beware of tax issues–Withholding obligations–Deferred compensation issues

• Beware of the OWBPA and its special requirements for multi-employee terminations

• Use Split $ Consideration Cause


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No. 7 WAGE HOUR ISSUES

Exploding Class and Collective Lawsuits• Lucrative for employee lawyers• Horror stories jury verdicts/settlements

Off the Clock Work Time• T-Mobile employees sued, claiming they were

required to use company issued smartphones after hours to respond to messages – 10-15 hours/week

• CB Richard Ellis maintenance worker sued claiming worked after hours receiving and responding to cell phone messages


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• Off the clock work poses risks for employers– Logging onto email, text messaging, using

blackberries and smartphones after work hours and on weekends by non-exempt employees can be working time


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• Off the clock work may also result from supervisors not approving overtime and employees needing to work additional hours due to short staffing resulting from workforce reductions– Employee does not request overtime approval– Supervisor looks the other way


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• On-call time generally not compensable unless employee is effectively precluded from using his free time

• De minimus doctrine – employee need not be compensated for insubstantial or insignificant periods of work– But 30 min./day checking emails, making

calls, etc. amounts to 10 hrs./mo. and 120 hrs./yr.


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• What to do? – Self Audit– Payroll practices should be as up-to-date as

technology – audit payroll practices annually– Policy should require employees to report all working

time regardless of where and when– Train supervisors that employees are NEVER to work

off the clock– When issuing remote access technology to non-

exempt employees, require acknowledgement of obligation to record all working time


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No. 8 WORKER MISCLASSIFICATION

• Employees As Independent Contractors, and Non-Employees as Exempt

• The new frontier– misclassification litigation– 10.3 million workers, over 7% of the

workforce, treated as independent contractors– IRS estimates 15% of employers are

misclassifying 3.4 million employees• Resulting in underpayment of $1.6 billion in

taxes


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• Federal law a jumble– IRC, NLRA, Title VII, FLSA

• Different statutory definitions• Widely varying court decisions

– Enforcement often incidental to other issues– Federal agencies rarely exchange information


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• Greater threat at the state level– States desperate for increased revenue– New York Labor Commissioner Task Force and

dedicated area and industry “sweeps” (U.I., W/C, Tax, Labor)

• AG’s Nationwide suing FedEx – Decisions for and against


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• Prime areas of risk– Terminating employee and engaging as

independent contractor– Independent contractor working alongside

employee, same work and working conditions– Classifying telecommuters as independent

contractors


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• Major legal risks in New York– Unemployment

• Massive interest for unpaid contributions– Workers’ Compensation

• Unpredictable results• Inconsistent WC decisions


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• The White Collar Exemptions – Part 541– Management– Administrative– Professional

• Salary Test Duties Tests– $455 per week; $23,660 per year– Short test $100,000 per year – “customarily

and regularly performs”


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• Prevention– Review job descriptions of all exempt employees

• Compare with actual duties– Audit status of independent contractors

• Examine all 1099’s• Painter test

– Reclassify questionable or misclassified workers– Consider treating individual as:

• Part-time employee• Intermittent/seasonal employee

– Adjust benefits if needed


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No. 9 Trends in Discrimination Law

20.4%

25.8%

34.3%

3.4%

11.1%

29.7%

35.6%

95,402

FY 2008

19.7%

22.0%

29.5%

3.1%

10.7%

30.6%

35.5%

75,428

FY 2005

23.0%18.9%22.0%Disability

24.4%23.6%18.3%Age

36.0%27.0%25.4%Retaliation – All Statutes

3.6%3.0%2.3%Religion

11.9%10.7%9.2%National Origin

30.0%30.2%30.9%Sex

36.0%35.4%37.3%*Race

93,27784,44277,444Total Charges

FY 2009FY 2002FY 1999

EEOC Charges Filed (view horizontally)

* Percentages exceed 100% as many charges assert multiple grounds of discrimination


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• Ten Year Trends:– Retaliation claims up 50% (losers still win)– Age claims up over 33% (the economy)

• Recent trends, and prognostications:– Disability claims up (ADAAA)– National origin and religious claims up (War on

Terror)


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– Crawford v. Metro. Gov’t. of Nashville, January 26, 2009:• U.S. Supreme Court expands retaliation

protection to employees who report workplace race or gender discrimination during employer’s internal investigation

• Need to revisit investigation practices• Need to investigate independently all new

allegations


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• Jan. 29, 2009. The Lilly Ledbetter Fair Pay Act:– Overturns 2007 U.S. Supreme Court decision

– Amends Title VII, the ADA and the Rehabilitation Act and provides that the statute of limitations to file a discrimination claim concerning pay disparity begins anew each time a paycheck issues, regardless of how many years earlier the actual compensation decision was made

• Payroll and other records no longer available• Witnesses gone or memories faded

– Impact on disparities in other benefits and working conditions, e.g., seniority.


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WHAT EMPLOYERS SHOULD BE DOING IN RESPONSE:

According to Stuart J. Ishimaru, acting chairman of the EEOC, as quoted in Law 360 on January 7, 2010, “Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC.”

– Self Audit– Diversity training


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No. 10 New York State and City Developments

• Background checks for employment purposes –Feb. 1, 2009– Post copy of Article 23A Convictions Law (re: past

criminal convictions)– Provide a copy to job applicant

• Written notice to all employees hired after July 26, 2009, – Straight time and overtime pay rates and normal pay

day;– Must be acknowledged in writing by employee


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• Civil fines and penalties for violations of NY State Human Rights Law – July 7, 2009 (in addition to make whole and compensatory damages)– Up to $50,000 per discriminatory act– Up to $100,000 for “willful, wanton or malicious discrimination

• Whistleblower and Labor Law Retaliation Protection –November 24, 2009– Up to $10,000 penalty– 25% liquidated damage add on (unless employer can prove

good faith)– Informal complaints to low level supervisors expressly covered

under whistleblowing provisions


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• The New York City Local Civil Rights Restoration Act of 2005 – The City’s Antidiscrimination Laws:

“. . . shall be construed liberally for the accomplishment of the uniquely broad and remedial purposes thereof, regardless of whether Federal or New York State Civil and Human Rights Laws, including those laws with provisions comparably-worded to provisions [of the City Law] have been so construed . . .”


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– Williams v. New York City Housing Authority(App. Div. July 2009)• Sexual harassment need not be “severe

and pervasive” – merely that women treated “less well”

– Zakrzewska v. New School (2nd Cir. July 2009)• Whether Faragher and Ellereth defenses

are available under N.Y. City law –question certified to NY Court of Appeals, pending decision


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– Phillips v. City of New York (App. Div. July 2009)• In disability discrimination cases, employer has

burden of proving undue hardship in implementing specific accommodation requested by employee (federal law allows alternative effective accommodation)

– Hoffman v. Parade Publishing (App. Div. 2009)• New York City anti-discrimination laws apply to

workers – even if not living or working in New York City, if decision to take adverse action complained of was “made” in New York City.


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Health Insurance Benefits• New legislation signed into law July 29, 2009

– New York State’s “Little COBRA Act” amended to provide health insurance continuation coverage for36 months

– State Insurance Law amended to require insurers to allow unmarried children, regardless of financial dependence, to be covered by parents’ group health insurance policy up to age 29.

[Note also Federal extension of COBRA government subsidies under AARA: 35%-65%premium split – extended to cover employees separated as late as March 31, 2010.

Concluding Remarks

Thank you for your attendance & participation

Evan J. Spelfogel212-351-4539

[email protected]

Evan J. Spelfogel is a shareholder of Epstein Becker & Green, P.C., based in its New York office. He represents employers in all aspects of labor and employment law.

Copyright © 2010 by Epstein Becker & Green, P.C

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