Do you know? A company cannot represent itself in an Ohio court

In the April 9 New York Times, Jonathan Glater reported that more and more people are turning to self-representation during the current economic downturn. In Ohio, individuals may be able to do it themselves without lawyers, but businesses cannot.

If a business appears in court without an attorney, the representative is illegally engaging in the unauthorized practice of law. Under Ohio law, a corporation or other business only can maintain litigation or appear in court through an attorney. It may not do so through an officer of the corporation or some other appointed agent or representative. At least in Ohio, there is no such thing as a business appearing pro se (without a lawyer).

The only exception exists in small claims court, where a corporation can bring a claim based on a contract to which it is a party, as long as the representative does not “engage in cross-examination, argument, or other acts of advocacy.” For example, without a lawyer a company can file a claim in small claims court to recover an unpaid account. If the individual disputes the amount due, however, a non-lawyer cannot cross-examine the individual or argue to the magistrate.

Next time your business thinks about going it alone in court to save a few dollars, think about whether it worth the likely risk of a default judgment or dismissal of the case for not being represented by an attorney.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Senate seeks to ban use of credit in employment decisions

There is little doubt that the current economic crisis has caused havoc on a lot of good intentioned people’s credit scores. During the good old days , people over-extended their credit, bought houses they can no longer afford, and otherwise lived beyond their means. With the retraction of the credit market and the exponential rise in home foreclosures, many people’s credit histories and FICO scores have suffered.

Ohio Senate Bill 91, however, is a reactionary move to this crisis that simply goes too far. This bill proposes to prevent employers considering people’s credit histories when makes an employment decision:

It shall be an unlawful discriminatory practice for an employer to use a person’s credit rating or score or consumer credit history as a factor in making decisions regarding that person’s employment, including hiring, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment.

Jim Siegel, a reporter for The Columbus Dispatch, quotes Tony Fiore of the Ohio Chamber of Commerce:

Senate Bill 91 will face opposition from business groups that want flexibility in how they determine whether someone is right for a job.

“Do you want someone with a bad credit history managing the company’s money, or yours?” said Tony Fiore, a lobbyist for the Ohio Chamber of Commerce.

“The employer needs that ability because they want to make sure they’re putting the best people forward, not only to help the company, but help the people relying on the company.”

Aside from the concerns voiced by Mr. Fiore (which I wholeheartedly echo), there is also a bigger issue at play here. There already exists a federal law the gives employees significant protections in how employers use credit information. The Fair Credit Reporting Act [PDF] make it illegal for any employer to obtain or use one’s credit for making an employment decision without the individual’s written authorization. And, an employer cannot take an adverse action (such as firing, or refusing to hire) based on information contained in a credit report without first giving the individual a reasonable amount of time to dispute the accuracy of the information or otherwise offer an explanation. With these federal protections in place for employees and applicants, Ohio’s businesses do not need to be prohibited from using this important tool.

[Hat tip: employeescreenIQ Blog]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #75

The employment law story of the week is courtesy of Overlawyered and OnPoint. The Poplar Bluff, Missouri, library has agreed to pay a former library assistant $45,000 to settle her religious discrimination claim. She resigned after refusing, on religious grounds, to participate in an event promoting the publication of a new Harry Potter book. OnPoint provides additional details:

Library director Jacqueline Thomas had offered to let Smith help out behind the scenes at the Harry Potter celebration “in a way that Plaintiff’s church community would not know she had participated.” Smith alleged she was “constructively discharged” from her job after she “vehemently objected to participating in Harry Potter Night in any role.”

“Plaintiff has a bona fide religious belief stemming from her Christian identity and membership in a Southern Baptist church that she sincerely believes prohibits her from being involved in promotion of the worship of the occult, especially to children,” the complaint said.

Rush Nigut, of Rush on Business, on the efficacy of non-solicitation agreements, as compared to broader non-competition agreements.

Teri Rasmussen at Ohio Practical Business Law provides a very helpful FAQ on Ohio’s new Business Docket, which is being given a test run in Cuyahoga, Franklin, Hamilton, and Lucas counties. Of particular interest to employers, this new docket covers non-competition and trade secret cases, but not other employment disputes such as discrimination claims.

Molly DiBianca at the Delaware Employment Law Blog discusses DuPont’s decision to use voluntary unpaid leave to try to stem the need for layoffs.

Michael Maslanka at Work Matters reports on a case which held that that an employee’s intent to become pregnant (such as telling a supervisor you want to start a family) is protected by the Pregnancy Discrimination Act.

The Evil HR Lady has some advice on whether an employee who is not entitled to FMLA leave under the statute could otherwise obtain leave rights through misstatements by management.

Ginni Garner at COSE Mindspring gives the top 10 trends in the employee screening industry.

The Washington Labor & Employment Wire has information on the choice to head the Department of Labor’s Wage and Hour Division.

Finally, Bob Sutton’s Work Matters illustrates how not to do a layoff with a real-life example.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio makes significant changes to its mini-COBRA law, effective April 1, 2009

More ink has been spilled about COBRA in the past two months than was written about it in total since its passage in 1985. And, the hits keep on coming. On April 1, 2009, Governor Strickland signed Sub. H.B.2, which amended Ohio’s mini-COBRA law, which makes health care continuation coverage available to employees of businesses with less than 20 employees.

Under the amended law, group health policies that are issued, delivered, or amended on or after April 2, 2009, must include the following changes:

• Continuation coverage is extended from 6 months to 12 months.
• Entitlement to unemployment compensation is no longer required to be eligible for continuation coverage .
• Employees merely must be involuntarily terminated, other than for gross misconduct (mirroring the federal COBRA requirement).
• If the group coverage includes prescription drug coverage, the continuation coverage must also include it.

Because continuation coverage has been extended to up to 12 months, Ohio employees of small businesses will now be eligible to receive the entire 9 months of federal subsidy under the federal stimulus bill. Small employers are not responsible for paying any portion of the premiums. The ex-employee will pay 35% out of pocket, and the insurance company will claim the IRS payroll tax credit for the remaining 65%.

For more information, the Ohio Department of Insurance issued detailed guidance. It has also available for download a model Continuation Coverage Election Notice.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

EEOC settlement highlights red flags for English-only policies

The EEOC announced that it settled a national origin discrimination claim against a California nursing home company for $450,000. The lawsuit arose from a charge of discrimination filed by a Hispanic janitor who only spoke Spanish. The nursing home terminated him for violating its English-only policy. By contrast, employees who spoke other languages at work, such as Tagalog, were not disciplined or terminated. According to the EEOC, it identified a total of 53 current and former Hispanic employees who were prohibited from speaking Spanish to Spanish-speaking residents, or disciplined for speaking Spanish in the parking lot while on breaks.

The Los Angeles Times further discusses some of the affected employees:

Shilo Schilling, a 40-year-old certified nursing assistant, said she was emphatically told at orientations … that only English would be allowed. In one case … she said a resident told her in Spanish that she needed to use the restroom. When Schilling responded in Spanish, she said, she was told by a supervisor that she would be written up or fired if she continued to speak that language….

Jose Zazueta, a Mexico native who worked as a janitor at the Royalwood facility, filed the original complaint alleging that he was fired because he could not guarantee he would speak only English. Anna Park [the EEOC’s regional attorney] said Zazueta was a monolingual Spanish-speaker who warned a colleague in Spanish to watch out for the wet floor he had just mopped. When a supervisor heard him, Park said, he was asked to pledge to use only English but could not and was fired.

Despite this lawsuit, there is nothing inherently illegal about English-only policies. Generally speaking, an English-only rule is okay if supported by a legitimate business justification such as promoting communication with customers, coworkers, or supervisors who only speak English, enabling employees to speak one language to promote safety or cooperation, or facilitating supervisors’ ability monitor job performance. The employer in this case made a few critical errors:

1. It applied the rule during employees’ breaks.
2. It selectively applied the rule to certain nationalities, but not others.
3. It prohibited employees from communicating with patients in their native tongue.

As this case illustrates, employers should be careful to limit the reach of an English-only requirement only as far as it necessary to reach the articulated business rationale for the policy. Businesses should also consult with employment counsel before implementing any English-language requirements in the workplace to ensure that the policy is not discriminatory as written or as applied.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

The worst television show ever? FOX to air corporate layoffs

From the network that brought us reality TV gems such as The Littlest Groom, Who Wants To Marry a Millionaire, and My Big, Fat, Obnoxious Fiance comes the next awful idea to grace our airwaves: Someone’s Gotta Go. If you’ve yet to hear about this atrocity, here’s the premise of this in production FOX show, courtesy of Juju Chang and Kelly Hagan at ABCnews.com:

The show will highlight a small business that needs to downsize because of the economy, but instead of the bosses deciding who gets the axe, co-workers must choose who among them has to go. Workers will have to defend themselves, justifying their work habits, all leading to a group discussion to determine who gets dumped.

To help make their decision, employees will have access to each others' usually private records including budgets, human resources files and salaries.

This show is just plain wrong. First, the set-up has myriad legal risks for the employer. Having co-workers instead of management make the decision will not insulate the employer from potential liability. Risks abound for coworker harassment, coworker retaliation, or discrimination courtesy of the cat’s paw. Moreover, the inevitable release that employees will have to sign to appear on the show might insulate the producers from liability, but likely will not protect the employers. (As a side-note, I wonder if the show runners are indemnifying participating employers from any lawsuits that result from the layoffs).

More fundamentally, however, I question the corporate integrity of any company that would agree to take part in this freak show. Except in the most egregious of cases, terminating an employee is the worst thing an employer has to do. Why turn this into public humiliation? Maybe the winner in all of this is the laid-off employee, cast free from a company callous enough to televise his or her termination to millions.

[Hat tip: The Business of Management and Overlawyered]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Employees have no right to access to personnel files

There is no law in Ohio that requires an employer to grant an employee access to his or her personnel file. There are, however, two key exceptions: medical records and wage and hour records.

1. Medical Records

Ohio Revised Code 4113.23(A) covers employees access to their own medical records. It provides:

No employer … shall refuse upon written request of an employee to furnish to the employee or former employee or their designated representative a copy of any medical report pertaining to the employee. The requirements of this section extend to any medical report arising out of any physical examination by a physician or other health care professional and any hospital or laboratory tests which examinations or tests are required by the employer as a condition of employment or arising out of any injury or disease related to the employee’s employment.

Thus, employees have a right to see the medical records from a physical examination that is required for employment or stemming from a job-related injury or disease. Employers can charge employees for these records, up to 25 cents per page.

2. Wage & Hour Records

Ohio Revised Code 4111.14(G) covers employees access to their own wage and hour records. It requires an employer to provide the following information to an employee or person acting on an employee’s behalf (union representative, attorney, or parent, guardian, or legal custodian) upon request:

1. Name

2. Home address;

3. Occupation;

4. Rate of pay, which means an employee’s base rate of pay or annual salary, but does not include bonuses, stock options, incentives, deferred compensation, or any other similar form of compensation;

5. Each amount paid, which means the total gross wages paid to an employee for each pay period; and

6. Hours worked each day, which means the total amount of time an employee works during a day in whatever increments an employer uses for its payroll purposes (except for exempt employees).

An employer may require that the request be in writing, signed by the employee, notarized, and that it reasonably specifies the particular information being sought. The employer cannot charge the employee for this information, and typically an employer has 30 days to produce the records following a request..

It is not a bad idea for employers to review their current handbooks and other policies to check whether they allow for the disclosure of these two classes of information.

Guarding against defamation liability

Courtesy of my friends at PointofLaw.com is the story of the dangers that lurk when distributing information about an employee’s termination.

Staples fired one of its salesmen, Alan Noonan, after an internal audit discovered he had deliberately falsified expense reports. The day after his termination, Staples’s Executive Vice President sent the following email to all of the company’s North American employees:

It is with sincere regret that I must inform you of the termination of Alan Noonan’s employment with Staples. A thorough investigation determined that Alan was not in compliance with our [travel and expenses] policies. As always, our policies are consistently applied to everyone and compliance is mandatory on everyone's part. It is incumbent on all managers to understand Staples[’s] policies and to consistently communicate, educate and monitor compliance every single day. Compliance with company policies is not subject to personal discretion and is not optional. In addition to ensuring compliance, the approver’s responsibility to monitor and question is a critical factor in effective management of this and all policies.

Noonan sued Staples for defamation based on the content of the email. Even though the contents of the email were truthful, the court, in Noonan v. Staples, Inc. (1st Cir. 2/13/09), still found that Noonan could proceed to trial on his claim because a jury could conclude that the email was sent with what is called “actual malice.” The court focused on three key facts:

1. In his 12 years with Staples, it was the first post-termination email in which the Executive Vice President ever referred to the terminated employee by name.

2. The EVP could have sent the email to cover his own misfeasance in failing to detect widespread expense report abuses.

3. Because many of the employees who received the email did not travel, they had no reason to be advised of the travel policy or its enforcement.

Ohio law grants employers a privilege to make truthful disclosures about an employee’s job performance. Ohio’s statute, however, has an exception for the disclosure of information “with the knowledge that it was false, with the deliberate intent to mislead the prospective employer or another person, in bad faith, or with malicious purpose.” The Noonan case provides insight in how to avoid an inference of a malicious purpose when giving job performance information.

1. Consistency. If your company has a policy or practice in what types of information it discloses, stick to that policy or practice. Giving more than what is customary for your business, even if truthful, could lead one to conclude that some ulterior motive to harm motivated the disclosure of additional information.

2. Narrowness. Information should only be disclosed on a need-to-know basis. If information is sent to people who have no reason to receive it, one could infer a motive to smear one’s reputation, even if the information is truthful.

As PointofLaw.com makes clear, “in the down economy, workplace defamation lawsuits are on the rise.” Being truthful and consistent, in what you say about employees, and narrow in to whom you say it, is the best defense against such a claim.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #74

Yay! I’m number 71, alphabetically, on the Delaware Employment Law Blog’s list of the top 100 employment law blogs. Seriously, this list is a great resource if you are looking for more employment law information. Take a few minutes to add a few of my blogging colleagues to your feed reader. If you don’t know what a feed reader is, Problogger has a very good explanation. Then, add my feed also.

This week brings us some thoughts on social networking in the workplace. Rob Radcliff at Smooth Transitions gives some ideas on appropriate social networking policies. Nolo’s Employment Law Blog reminds everyone to behave on spring break lest embarrassing pictures end up online. Molly DiBianca at the Delaware Employment Law Blog has some thoughts on whether Facebook makes employees more productive.

The Trade Secrets Blog reports that the Ohio Supreme Court will decide whether standardized tests qualify as a school district’s trade secrets.

Alaska Employment Law itemizes ways plaintiffs can prove pretext in discrimination cases.

ScotusBlog analyzes the Supreme Court’s opinion in 14 Penn Plaza, LLC v. Pyett, which held that mandatory arbitration clauses in collective bargaining agreements can cover statutory discrimination claims.

Michael Maslanka’s Work Matters, on how to handle violent employees.

Michael Fox at Jottings By An Employer’s Lawyer looks at a 1st Circuit case holding that a mother of triplets was entitled to a jury trial on her sex discrimination claim based on her employer’s stereotyping of working moms.

Finally, the EFCA Report (PDF download) has put together an excellent white paper on what lies ahead for the EFCA in Congress.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Preparing for the golden age of labor and employment law

As an employment lawyer, my practice has a lot of different aspects. I’m a counselor, helping clients tame workplace issues before they become problems. I’m a drafter, writing employee handbooks, policies, contracts, and forms. I’m an investigator, questioning employees involved in harassment and other complaints. I’m a trainer, guiding workforces, managers, and supervisors through the alphabet soup that makes up our labor and employment laws. I’m a negotiator, trying to amicably resolve employee disputes before they become fights. And, I’m a litigator and  trial lawyer, navigating companies through our state and federal courts and administrative agencies.

All these roles will be tested over the next several years. A liberal Congress, a Democrat President, and the worst economic downturn in 80 years have combined to create a world of problems for our nation’s struggling employers. The Ledbetter Fair Pay Act has already increased pay discrimination liability, and myriad layoffs have heightened the risk for age and other discrimination lawsuits. If Congress has its way, over the next several years the Employee Free Choice Act will make it significantly easier for unions to organize and bargain favorable first contracts, the FMLA will be expanded to cover smaller employers, and paid sick leave will become a reality. For these reasons, we may be at the dawning of the golden age of labor and employment law.

In light of all of these changes, it is critical that businesses not be caught unprepared. According to April 8th’s Wall Street Journal, “U.S. businesses, fearful of rising union influence and a crackdown by the Obama administration on workplace practices, are scrambling for legal advice and training.” Luckily for my readers, KJK is offering some of this advice and training for free. On May 13, my colleagues and I will present How to Stay Union Free in a Union-Friendly World, a free seminar on how to best position your non-union business to stay that way. Feel free to contact me for more information, or if you would like to attend.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Announcing the next KJK Breakfast Briefing: How to Stay Union Free in a Union-Friendly World

Join KJK’s Labor & Employment attorneys to learn How to Stay Union Free in a Union-Friendly World. Capitol Hill is gearing up for one of its most contentious fights in decades as Congress takes sides over the Employee Free Choice Act. If passed, the EFCA will radically alter our labor laws by making it much easier for unions to be certified (whether the change in law authorizes certification by way of a simple majority of signed authorization cards and without a secret ballot election, by an election after a much shortened period of time for the employer to campaign against the union, or otherwise). Even if the EFCA never becomes law, there are a lot of lessons to learn about how best to position your business to keep unions out.

We will not only discuss what the EFCA is and how it will affect your business, but also offer some essential tips on how to effectively manage your workforce to make union penetration less likely, no matter what form the new law ultimately takes. This free Breakfast Briefing is crucial for any business that is and wants to remain union free.

• Date: Wednesday, May 13, 2009

• Time: 8:00-8:30 Continental Breakfast
               8:30-9:30 Presentation
               9:30-10:00 Q&As

• Place: The Club at Key Center, 127 Public Square, Cleveland (on-site parking is free)

If you are interested in attending this free seminar, or for more information, please contact Andrea Hill, (216) 736-7234 or ach@kjk.com, by May 11, 2009.

Errata: Ohio does prohibit cost-shifting for pre-employment medical exams

Famed columnist William Safire once said, “Nobody stands taller than those willing to stand corrected.” I hope he’s right, because I feel pretty small right now.

Last week I stated that Ohio law is silent on the issue of whether an employer can charge an employee for a pre-employment medical exam. As it turns out, I was wrong. A colleague directed me to Ohio Revised Code 4113.21, entitled, “Employee shall not be required to pay cost of medical examination.” It provides:

No employer shall require any prospective employee or applicant for employment to pay the cost of a medical examination required by the employer as a condition of employment.

In other words, Ohio employers are absolutely forbidden from passing on the cost of pre-employment medical examinations to employees.

The penalty provision of this statute is also worth taking a look at:

Any employer who violates this section shall forfeit not more than one hundred dollars for each violation.

Assuming a routine physical costs more than $100, what is an employer’s incentive not to violate this provision by passing the cost onto employees and paying whatever lesser fines may come later?

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Legal risks in considering cancer survivors for employment

Cancer survivors are 37% more likely to be unemployed than their healthy counterparts. (See Cancer Survivors Struggle to Find Jobs, Study Finds). There are two likely explanations for this disparity: some cancer survivors are simply not healthy enough to return to work, while others become too expensive to employ because of the added health care costs. It is the treatment of the latter category that concerns me as an employment lawyer.

Pre-screening applicants with a history of cancer from consideration for positions raises two huge red flags: disability discrimination based on a record of an impairment or perceived impairment, and genetic information discrimination. Refusing to hire an applicant based solely on a history of cancer would almost certainly violate both the Americans with Disability Act (and its Ohio counterpart), and possibly the Genetic Information Nondiscrimination Act.

The best defense against this type of claim is not to gather medical information at the application or interview stage. Yet, even when an employer tries to avoid the topic, it can innocently arise. For example, when someone has a two-year gap on his or her resume, it is necessary to ask, “What were you doing for the two years you weren’t working?” For someone who was away from the workforce because of cancer treatments, the answer likely will reveal information that could lead to an inference of discrimination if the applicant is not hired. The best defense against these problems is two-fold:

1. Meaningful and effective training of interviewers so that they do not fall into these potential traps. For example, instead of asking, “Why weren’t you working?” ask, “What did you do during your gap in employment to keep your skills current?” The latter question will not only avoid the potential disclosure of medical information, but also provide some useful information about the applicant’s skill-set.

2. Ensuring that the best, most qualified person is hired to fill any vacancy, regardless of medical history and gaps in employment.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

More on laying off the protected

Last month I provided some tips on how to properly layoff employees who happen to fall into a protected class. Last week, in Bell v. Prefix, Inc., the 6th Circuit helped drive home my point, and teaches some important lessons on proper layoff techniques.

Jonathan Bell claimed that Prefix included him a layoff in retaliation for a recent FMLA leave of absence he took to care for his dying father. Between July 22 and August 5, 2005, Bell took 3½ days of approved FMLA leave while his father was hospitalized for heart surgery. At the same time, Prefix’s new general manager began an ad hoc termination of employees to save money during a substantial downturn in business. Bell’s termination came August 8, just two weeks after the start of his FMLA leave and three days after his last FMLA absence.

In reinstating Bell’s FMLA retaliation claim for a jury trial, because a reasonable jury could conclude that Prefix held a retaliatory motive in terminating Bell. The court focused its decision on the collective strength of five pieces of evidence:

1. When Bell had to leave work after receiving an emergency call from the hospital, the general manager belittled him in front of his co-workers, and in a raised voice “accused him of ‘abandoning’ Prefix when there was work to be done.”

2. In discussing Bell’s termination, the general manager commented that he needed to work more hours.

3. The general manager’s comments about poor work quality are directly contradicted by Bell’s only written performance review.

4. The close temporal proximity between Bell’s FMLA leave and the termination.

5. The lack of any formal structure for the RIF, or the use of any objective process or criteria in selecting employees for inclusion.

This case teaches employers some very important lessons in how to conduct a RIF.

1. It is important to have some structure for the RIF, whether it is written criteria (objective or subjective), past performance, ranking of employees, or some other basis. A rationale that can be justified is needed for why one employees was RIFed over another.

2. Discussions about who will or will not be included should be kept to a minimum. This point rings even more true if the decision is solely based on some objective criteria.

3. Assume that any comments that can in any way be twisted to appear discriminatory or retaliatory will come back to haunt you in later litigation.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #73

After last week’s glut of posts on the Employee Free Choice Act, I bring you this week’s EFCA-free WIRTW.

This week the Supreme Court held oral argument in Gross v. FBL Financial Services, which will hopefully give some much needed clarity on the proper standard for obtaining a mixed-motive jury instruction in discrimination cases. For details and analysis, read Marcia McCormick’s thoughts at the Workplace Prof Blog. Dan Schwartz at the Connecticut Employment Law Blog shares his insight as well.

Mark Toth at the Manpower Employment Blawg reports on the illegality of a policy that prohibits employees from working overtime while on light duty.

The Word on Employment Law with John Phillips provides some additional thoughts maternity and layoffs.

Eric Welter at the Laconic Law Blog reports on a poll finding that the FMLA is HR’s biggest headache.

Where Great Workplaces Start looks into the future and makes some predictions about the future of HR.

Christopher McKinney at the HR Lawyer’s Blog and Diane Pfadenhauer at Strategic HR Lawyer discuss careless twittering.

Finally, two blogs give their takes on The Office and the Michael Scott Paper Company: Rob Radcliff at Smooth Transitions and Michael Elkton at Trading Secrets.

 

 

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Think before having employees sign that arbitration agreement

Yesterday, the Supreme Court issued its opinion in 14 Penn Plaza v. Pyett, which enforced a provision in a collective-bargaining agreement that required union members to arbitrate statutory discrimination claims. My fellow bloggers have already provided some thoughtful analysis of this opinion – Michael Moore at the Pennsylvania Labor & Employment Blog, Michael Fox at Jottings By An Employer’s Lawyer, and Richard Bales at the Workplace Prof Blog.

The bigger question for employers to think about, though, is whether arbitration of employment claims makes business sense. Companies and their lawyers often use mandatory arbitration of employment claims for two reasons: (1) as a cost-effective alternative to court; and (2) as an insurance policy against runaway jury verdicts.

In my experience, however, arbitration can prove just as costly as court. More and more arbitrators are allowing plaintiffs to engage in discovery that is nearly as expansive (and expensive) as what is permitted by trial courts. Additionally, employers have to add into the equation the cost to file the claim, which the employer usually shares. With the American Arbitration Association, these fees can run anywhere from $950 to a cap of $65,000. These fees do not include the arbitrators’ time, which often exceeds $500 per hour, and includes all pre-hearing conferences, discovery and motion practice, the actual hearing time, and the drafting of the opinion. It is not hard to see how in many cases the defense costs associated with arbitration outweigh defense costs in a traditional court proceeding.

Given these high costs, there is a much better alternative to hedge against a runaway jury verdict – contractual jury trial waivers. A properly drafted jury trial waiver accomplishes the following goals:

1. No appeal rights are lost. Judicial review of arbitration awards is very narrow. An appellate court, however, will have a much wider scope of review of a bench trial.

2. A bench trial eliminates the risk of a runaway jury awarding obscenely high damages.

Before asking your employees to sign that arbitration agreement, consider whether there are other viable alternatives to reach the same goal, such as a jury trial waiver.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Poor communication of layoffs raises significant risks

According to CNN, French workers are holding management hostage over their refusal to negotiate severance:

Hundreds of French workers, angry about proposed layoffs at a Caterpillar factory, were holding executives of the company hostage Tuesday, a spokesman for the workers said….

The workers were angry that Caterpillar had proposed cutting more than 700 jobs and would not negotiate, said Nicolas Benoit, a spokesman for the workers’ union….

Benoit said all the workers wanted to do was negotiate with Caterpillar and they were upset that the company did not show up to two earlier scheduled negotiating sessions.

In the face of a layoff, your workers likely will not take the drastic step of physically taking people hostage. They are much more likely to take your business hostage in another way – through costly and time-consuming litigation.

The only insurance policy against a laid-off employee filing suit is a well-drafted severance agreement. The key to getting an employee’s signature on that agreement is treating the employee with dignity. Don’t let an employee find out that he or she is going to be included in a layoff by email, text message, or workplace gossip. As difficult as it will be, have a face-to-face conversation with each laid-off employee:

1. Script out what you plan to say ahead of time. The message should be clear yet compassionate.

2. Have an HR representative or other witness present in the room, just in case any dispute arises down the road as to what was said.

3. Keep the lines of communication open, both for the laid-off and those left behind. Both groups will likely have questions. Being available to answer them is crucial.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Charging for pre-employment medical exam

The Americans with Disabilities Act sets limits on when and how employers can ask applicants or employees medical questions. At the pre-employment stage, an employer is allowed to ask any medical questions and conduct medical examinations, as long as two conditions are met: 1) it does so for all entering employees in the same job category; and 2) the applicant has been provided a conditional job offer and has not yet started working.

A question sometimes arises to whether an employer must pay for a pre-employment medical exam. The ADA and Ohio’s parallel law are oddly silent on this issue, which leads me to conclude that an Ohio employer can require an applicant to bear the cost of the medical exam.

The bigger question, though, is whether you want to charge job applicants for medical exams in the first place, of if you want to eat those costs as part of recruitment and hiring. Because the overwhelming majority of employers choose the latter, passing the costs onto applicants could pose real problems in recruiting quality employees.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

How to layoff the protected

Sunday’s New York Times ran an articles called When the Stork Carries a Pink Slip. It makes the point that there is nothing illegal about including pregnant women or women on maternity leave in a layoff. The same holds true for minorities, those over 40, the disabled, those out on FMLA leave, or anyone who happens to find themselves in any of the other groups protected by state or federal discrimination laws. What is illegal, however, is to include a pregnant women in a layoff because she’s pregnant.

Layoffs are supposed to be blind at to issues of race, sex, age, etc. But, if you are making these decisions in the dark, you are making a big mistake that could prove very costly. Before a layoff is implemented, it is crucial to review the demographics of who is staying and who is leaving:

1. You want to make sure that neutral selection criteria do not have a disparate impact on a particular protected group.

2. You want to make sure that it does not look like the layoff targeted a particular protected group.

3. You want to identify those risky inclusions (such as the new mom on maternity leave or the employee with a history of FMLA-leaves) who may need some additional incentive to sign off on a severance agreement and release.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #72

I’ve never been a huge fan of Arlen Specter, Pennsylvania’s senior Senator. When I was a junior in high school, I participated Presidential Classroom, a week-long educational program in D.C. all about the federal government. One of the perks of the program was special meet-and-greets with our Congressman and Senators. Growing up in Philly, I was very excited to meet Sen. Specter, especially since his dad and my granddad somehow knew each other from their old neighborhood. When he blew off our scheduled appointment (the only one of three to do so), he made my list.

This week, however, the Senator took a huge step towards redemption by publicly stating that he will not support the Employee Free Choice Act. Because he’s previously supported the EFCA, and because he’s a Republican, his vote is critical for supporters to reach the 60 votes needed to end a filibuster and bring the bill to a vote. The following blogs have extensive coverage of Sen. Specter’s big announcement: Michael Moore at the Pennsylvania Labor & Employment Blog, the EFCA Report, Michael Fox at Jottings By An Employer’s Lawyer, EFCA Updates, and Dan Schwartz at the Connecticut Employment Law Blog, who has the video and transcript of Specter’s speech.

In other EFCA news this week, a group comprised of the CEO’s of Starbucks, Whole Foods, and Costco have come up with their own compromise on the controversial labor bill. For the details, jump over to the EFCA Report and The Word on Employment Law with John Phillips.

In some local news, Above the Law reports on a gender discrimination lawsuit filed in Summit County. According to the complaint, the alleged harasser is of foreign dissent, and HR cited “cultural differences” to explain why he referred to the plaintiffs as a “Bunch of B*tches,” “Hormonal Messes,” and a “F*cking Lesbian.”

Meanwhile, Molly DiBianca at the Delaware Employment Law Blog shares her thoughts on cursing in the workplace.

Kara Maciel at the EBG Trade Secrets & Noncompete Blog reports on what happens when one gentlemen’s club tries to poach dancers from another.

OnPoint has the details of a Florida case in which a Virginia jury rejected the sex discrimination claim of a female dock worker caught relieving herself outdoors.

Anthony Zaller at the California Employment Law Report writes on a topic I covered earlier this week, the DOL’s intent to step up wage and hour enforcement.

Ross Runkel’s LawMemo details a case in which an employer snooped on an employee’s private AOL email account that the employee accessed from a work computer. Workplace Privacy Counsel suggests that employers draft policies covering employees’ use of personal Internet-based email accounts using company computers.

Point of Law, on the hidden costs associated with layoffs – litigation costs.

Jason Morris at Employeescreen IQ Blog, on whether former bankers wear a scarlet letter in their current job searches.

Rob Radcliff’s Smooth Transitions has 9 pointers on hiring employees covered by non-compete agreements.

Mark Toth at the Manpower Employment Blawg gives his thoughts on a report about the high incidents of employee data theft.

Corporate Voices for Working Families suggests that family-friendly work benefits might take a big hit during the recession.

David Yamada’s Minding the Workplace reports that Massachusetts has introduced a workplace bullying bill in its legislature. For my thoughts on workplace bullying laws, see Sticks and stones may break my bones...

Carl Bosland at The FMLA Blog reminds us that every lawsuit boils down to two key issues, liability and damages, and winning on the latter is just as important for employers as the former.

Ted Moss at COSE Mindspring, on shield laws for job references. For my thoughts on this misunderstood issue, take a look at Do you know? Ohio law protects employers that give negative job references.

Finally, some gallows humor to end the week – Frank Roche at KnowHR links to an online game called “Layoff.”