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.”

Applying the federal COBRA subsidy to Ohio’s Mini-COBRA law

As I’ve previously reported, the federal stimulus bill, enacted last month, requires employers to provide a 65% subsidy of COBRA premiums for employees involuntarily separated. As I’ve also previously reported, Ohio has its own “mini-COBRA” for small employers with between 10 and 19 employees.

Do not assume, however, that merely because COBRA does not apply to small businesses that the subsidy also does not apply to small businesses. The federal stimulus bill specifically provides for COBRA premium assistance to former employees covered under state continuation coverage law such as Ohio’s mini-COBRA.

Just like its federal counterpart, small employers covered by Ohio’s mini-COBRA are not obligated to pay any portion of the premium. The former employee will pay 35% of the premium and employer will claim the payroll tax credit from the IRS for the 65% of the premium not paid by the former employee.

There are, however, three key differences between the subsidy under COBRA versus Ohio’s mini-COBRA.

1. Although the federal subsidy lasts for 9 months, Ohio continuation coverage, and therefore the subsidy obligation, only extends for 6 months.

2. To be eligible for the subsidy under COBRA, an employee need only have been involuntarily terminated for a reason other than gross misconduct. To be eligible for the subsidy under Ohio’s mini-COBRA, the employee must have been involuntarily terminated and: (i) continuously insured for the 3 months prior to the termination; (ii) eligible for unemployment; and (iii) not covered or eligible for Medicare or any other group health coverage.

3. Under COBRA, the federal subsidy is retroactive to September 1, 2008. In comparison, Ohio’s mini-COBRA only covers terminations that occur on or after February 17, 2009. Both subsidies expire at the end of this year.

The Ohio Department of Insurance has published a model COBRA notice for small employers to use.

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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.

Department of Labor to step up enforcement; employers should step up self-audits

You may have noticed that I write a lot about wage and hour issues. I do so because it’s an issue that often gets even well-intentioned businesses into trouble. As if employers don’t already have it bad enough with the explosion of wage and hour class action litigation, this week brings us news that new Labor Secretary Hilda Solis promises to “reinvigorate the work” of the DOL’s Wage & Hour Division. Her quote comes in response to an investigation by the General Accounting Office, which reports that the Wage & Hour Division has mishandled hundreds of cases.

In yesterday’s New York Times, Steven Greenhouse reports:

The report pointed to a cavalier attitude by many Wage and Hour Division investigators, saying they often dropped cases when employers did not return calls and sometimes told complaining workers that they should file lawsuits, an often expensive and arduous process, especially for low-wage workers.

In light of the DOL’s planned stepped-up enforcement, employers must be extra vigilant in uncovering wage and hour violation in their own workplaces. A wage and hour audit feels like an unpleasant medical exam. The investigator is not necessarily limited to the alleged violation, and will turn your workplace upside-down, pouring through years of records and privately interviewing your employees. And, once you are on their radar, it is hard to get off. In other words, they’ll be back to make sure you are staying on the path of all that is right and just.

For employers, the best advice I can give is to get out ahead of this issue. Take a hard look at all of your current wage and hour issues: employee classifications, meal and rest breaks, off-the-clock issues, and child any workers. Make sure you are 100% compliant with all state and federal wage and hour laws. If you are not sure, bring in an attorney to check for you. If you are ever investigated by the DOL or sued in a wage and hour case, it will be the best money your business has ever spent.

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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? Pay for employee training time

Do you know? Lost of opportunities exist for employees to train, take educational classes, or otherwise better themselves – inside classes, outside classes, seminars, lectures, and continuing education requirements, to name a few. Whether attendance at these activities counts as “working time” under the Fair Labor Standards Act depends on four factors:

1. Is attendance outside of the employee’s regular working hours?
2. Is attendance truly voluntary?
3. Is the course, lecture, or meeting indirectly related or unrelated to the employee’s job?
4. Does the employee not perform any productive work during such
   attendance?

You must be able to answer “yes” to all four of these questions to consider an employee’s attendance non-working time.

For non-exempt employees, this determination is important for two reasons. First, working time must be paid at the employee’s regular rate. Secondly, it counts towards the number of hours worked in a work week for determining overtime eligibility.

This issue is even more important in today’s tight economy. Failing to consider these factors before requiring or suggesting training or education for employees could result in the added expense of unbudgeted wages and overtime.

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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.