Do you know? Unsupervised waivers of federal wage and hour claims

Generally, courts recognize only two ways for an individual to release or settle a claim for unpaid wages under the Fair Labor Standards Act: 1) a DOL-supervised settlement under 29 U.S.C. § 216(c), or 2) a court-approved stipulation of settlement. Failing to use of these two options for the approval of a waiver will likely result in the invalidity of the waiver an the employee being able to sue for any unpaid balance.

If you are engaged in active litigation with an employee, the latter option is easy to achieve. You simply submit the settlement agreement to the assigned judge for his or her approval. Similarly, a DOL investigation will culminate in some combination of both options.

What are your options, though, if you are not in on-going litigation or already part of a DOL investigation? As I see it, you have 2 choices:

1. If you intend to pay less than the full amount owed, you can ask the employee to file a lawsuit for the sole purpose of judicial approval of the settlement; or
   
2. If you intend to pay the full amount owed, you can pay the employee in full for any wages owed and forego the release and waiver. This leaves a slight risk that the employee(s) could still bring a suit for unpaid liquidated damages (the FLSA provides for double back pay as liquidated damages for willful violations). Your voluntary mitigation, however, will go a long way to deterring any future lawsuits.
   

What shouldn’t you do? Contact the DOL for its supervision of the settlement. That is a radar that you do not want to be on. The supervised settlement will beget a full-blown wage and hour audit, which will beget an OSHA on-site, which will beget an OFCCP inquiry, which will beget an ERISA audit…. You get the picture. With the Obama administration pumping more funds into the DOL and promising increased enforcement, there is no need to throw yourself under its bus.

6 universal truths about avoiding retaliation liability

According to French philosopher Albert Camus, “Retaliation is related to nature and instinct, not to law. Law, by definition, cannot obey the same rules as nature.” In other words, it is human nature to retaliate, and if accused of wrongdoing, a natural response is to get even.

This month’s issue of the American Bar Association’s Law Practice Today contains my thoughts on what law firms can do to curb this natural instinct and limit potential liability for retaliation claims by employees. While the article’s intended audience is law firm partners and managers, its message is universal:

Retaliation claims are among the biggest risks facing employers in every industry…. It is the quickest way to turn to a defensible employment claim into a liability problem. It is incumbent upon everyone in your organization to take personal responsibility to suppress the natural urge to retaliate, and incumbent upon every firm to educate lawyers and staff about this critical responsibility.

For my 6 best-practices for avoiding retaliation within your organization, click over to Revenge Is a Dish Best Never Served to Employees: Avoiding Retaliation Liability.

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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 #114

The big story this week is the Senate's successful blockage of NLRB nominee Craig Becker. Becker was potentially dangerous for businesses because of his fringe views on labor unions, and the risk that he would try to circumvent Congress by implementing the Employee Free Choice Act administratively.

• Nominee Craig Becker's Appointment to the NLRB is Blocked in Senate from Hunton Employment & Labor Law Perspectives™

• Outlook Not So Good Becker Recess Appointment from Jeffrey Hirsch at the Workplace Prof Blog

• Out in the Cold? Becker not confirmed, Labor not affirmed from LaborPains.org

• Article Paints Grim Picture for Labor Agenda from Washington D.C. Employment Law Update

• Senate Blocks Nomination of Craig Becker to NLRB from Washington Labor & Employment Wire

• 52- 33; Becker Loses from Michael Fox’s Jottings By An Employer's Lawyer

• Meyerson in WaPo: EFCA is Dead from EFCA Report

“Undercover Boss”

• “Undercover Boss” has lessons for upper management from Warren & Hays Employment Law Blog

• ‘Undercover Boss’: A Fairy Tale That Ignores Grim Reality from Workplace Fairness

• Undercover Boss: You Wish That's All It Took to Change Your Business... from The HR Capitalist, Kris Dunn

• What Kind of Boss Are You? from Minnesota Labor & Employment Law

• Why employment lawyers screamed more than those Denny’s chickens from Jay Shepherd’s Gruntled Employees

Wage and Hour

• Is It Working Time Or Not? Employer Compulsion Is The Key Element from Wage & Hour - Development & Highlights

• Staples, Inc. Settles Assistant Store Managers' Overtime Claims for $42 Million from WorkplaceHorizons

• President Obama Backs Department of Labor Misclassification Fight from Florida Employment Law Blog

• Don't Forget: States Have Penalties for Overtime Violations Too from Overtime Advisor

• Sales rep falls within FLSA’s “administrative” exemption because of independent strategic planning responsibilities from Employment Law Matters

Social Media

• Employment Law Blog Maven in 5 Easy Steps from Philip Miles’s Lawffice Space

• Social Media & HR Primer: 3 Key Tools from Molly DiBianca’s Delaware Employment Law

• A Tale of Two Reference Check Responses — Liability for One, But Not the Other from George's Employment Blawg

• Social Media: Your Best Offense or Your Best Defense? from HR Daily Advisor

• Employment Background Checks on Facebook from employeescreenIQ Blog by Nick Fishman

ADA

• $6.2 Million Settlement in EEOC Complaint Against Sears, Roebuck & Company Re: Inflexible Leave Exhaustion Policy Violates ADA from The Labor and Employment Law Blog

• The ADA Trumps Absence Policies at Sears from by Mary Keating’s Maryland Employment Law Developments

• An Important Step in the ADAA: The Interactive Process from Michael Haberman’s HR Observations

Statistics

• Including Statistical Analysis Into Your Employment Litigation Risk Management Plan from Stephanie Thomas

• Survey Statistics: Are You a Mean or a Median Aficionado? from Ann Bares’s Compensation Force

Miscellaneous

• (It's) Snow Joke: Weather Plays Games with Employers -- A Recap from Dan Schwartz’s Connecticut Employment Law

• It's not that hard to say you’re sorry from Michael Maslanka’s Work Matters

• Pitfalls to Avoid in Workplace Investigations from Debra Reilly’s Workplace Investigations Blog

• Another Valentine’s Day, Another Rant on Why Workforce Romance Is a Bad Idea from The Business of Management

• Conan Versus NBC Fiasco Illustrates Contract Law at Work in “Real Life” from Teri Rasmussen’s Ohio Practical Business Law

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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.

Let your actions speak louder than your employees’ harassing words

Perhaps no single act can more quickly alter the conditions of employment and create an abusive working environment than the use of an unambiguously racial epithet such as “nigger” by a supervisor in the presence of his subordinates.

So said the 7th Circuit in Rodgers v. Western-Southern Life Ins. Co. Harassments works on a sliding scale. To be actionable, the offensive conduct creating the hostile work environment has to either be severe or pervasive. Isolated incidents are not pervasive, but can be severe, depending on the language used. A white employee dripping an “N-bomb” on a black employee can certainly satisfy severity.

How then, did the employer escape liability for workplace “N-bombs” in Hargrette v. RMI Titanium Co. (Trumbull App. 2/5/10) [pdf]? It took swift remedial action.

In 2002, Kearns allegedly called McKinnon a “nigger.” … [T]he inappropriate comment occurred during an argument between Kearns and McKinnon. The argument resulted in both Kearns and McKinnon being suspended for three days. In his deposition, McKinnon states that Kearns was not a supervisor. In addition, this remark appears to be an isolated instant. While McKinnon stated he did not get along with Kearns, it is only alleged that Kearns called McKinnon a “nigger” on this single occasion. Finally, we note that, upon being informed of the incident, management investigated the situation and reprimanded Kearns for his misconduct.

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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 have a severe weather policy?

I laugh at the east coast’s ongoing snow woes because (a) I grew up in Philadelphia, (b) my family is still there, and (c) last week notwithstanding, Philly’s winters don’t hold a candle to Cleveland’s. In fact, Forbes.com just crowned Cleveland as America’s worst winter weather city. (We’re also number 4 on the list of America’s most miserable cities – we’re nipping at your heels Chicago).

As I cleared my driveway this morning, I decided to share the following thoughts for drafting a severe weather policy for your workplace.

1. Communication. How will your business communicate to its employees whether it is open for business or closed because of the weather? Are there essential personnel that must report regardless of whether the facility closes?

2. Early closing. If a business decides to close early because of mid-day snowstorm, how will it account for the orderly shut-down of operations? Which employees will be able to leave early and which will have to remain to ensure that the facility is properly closed? Is there essential crew that must stay, or is there an equitable means to rotate who must stay and who can leave?

3. Wage and hour issues. To avoid jeopardizing exempt employees’ status, they should be be paid their full salary when a company closes because of weather. For non-exempt employees, however, it is entirely up to the company whether to pay them for a full day’s work, for part of the day, or for no hours at all. Will employees have to use vacation or other paid time off if they want to be paid for the day, or will the company consider it a freebee? If your company closes but an employee does not get word and reports to work, will the company pay that employee anything for reporting?

4. Attendance. Will the absence be counted against employees in a no-fault or other attendance policy, or defeat any perfect attendance bonuses?

5. Telecommuting. If your area has frequent bouts of severe weather, consider whether you want to allow employees to telecommute. Even if your business does not typically permit employees to work from home, exceptions for exceptional weather could potentially save you lost productivity.

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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? Why statistics are so important in reduction in force cases

For the past week, I’ve been examining the use of statistics in workforce reduction discrimination cases (6th Circuit downgrades importance of statistics in reduction-in-force cases and How small is too small? Litigating sample sizes in reduction in force cases). What’s been missing from this analysis, however, is an explanation of why raw numbers are so important in these cases, especially in age discrimination claims.

Many workforce reductions are accompanied by an offer of severance to the group of terminated employees. In fact, I don’t think any employer should pay severance without getting something in return from the employee, namely a release and waiver of liability.

The Older Workers Benefit Protection Act requires all releases and waivers of federal age discrimination claims provided as part of a severance program offered to a group of employees (such as in a reduction in force) to include a written disclosure of the job titles and ages of all eligible individuals selected for the program and all not selected for the the program. The EEOC, in its guidance on Understanding Waivers of Discrimination Claims in Employee Severance Agreements, provides the following example of what this disclosure should look like:

Job Title	Age	# Selected	# Not Selected
(1)	25	2	4
	28	1	7
	45	6	2
	63	1	0
(2)	24	3	5
	29	1	7

When the lone 63-year-old employee in Job Title 1 is going to decide whether to sign the waiver or pursue an age claim, the only fact he and his lawyer will have to go on is that within his job grouping, 7 out of the 9 oldest employees were RIFed, including the oldest employee. In other words, the raw statistics that the court discussed (and dismissed) in Schoonmaker will likely be the critical piece of information on which your employees will base their decision whether to sue or walk away. And, you have no choice but to turn this information over. Failing to do so will result in the invalidity of the age discrimination waiver.

Schoonmaker may question the relevance of raw statistics, but because the numbers must be disclosed to the terminated employees, they are nevertheless critical to any workforce reduction decision.

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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 small is too small? Litigating sample sizes in reduction in force cases

Last week’s post on the use of statistics in reduction in force cases garnered some interest from a fellow blogger, Stephanie Thomas. She argues on her blog that small sample statistics still have a place in workforce reduction litigation. After reading Stephanie’s take on this issue, we carried the conversation over to Twitter (Are you following me on Twitter @jonhyman? If not, shame on you).

My conclusion is that the Schoonmaker decision merely begs the question of how small of a sample size is too small to make pure statistics irrelevant in a RIF case. Stephanie and I agree that you will see more expert witness battles on the issue of whether a sample size is large enough to be statistically relevant.

If I’m defending a RIF, the first thing I’m doing is hiring a statistical expert to opine that the sample size is too small to be statistically significant. From there, I’ll argue that under Schoonmaker the case should be dismissed, unless the plaintiff can come forward with some “plus” evidence of discrimination.

Conversely, if a RIFed employee wants to rely on statistics alone, he or she will have to hire an expert to opine that the sample size is large enough to be statistically significant. If you have competing experts, you very well might have a factual issue over the sample size. Or, the judge could decide as a matter of law that the sample size is too small and toss out the statistics as irrelevant.

On my first read through Schoonmaker, I thought it gave concrete answers on a plaintiff’s prima facie requirements in a workforce reduction. After more deliberation, and a healthy Twitter debate with Stephanie Thomas, I’ve now concluded that Schoonmaker may create more questions than it answers.

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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.