The worst feeling ever, and importance of candor

Imagine a sexual harassment EEOC charge which alleges that a corporate executive displayed pornographic images on his computer to a female subordinate. You interview the executive, in addition to everyone else at the company who could have seen the images; everyone denies they existed. In fact, the executive has a plausible explanation. The charging party is a disgruntled, terminated employee who may have accidentally received an email forward of a dirty joke, and is now exaggerating that one isolated incident to extort money through a bogus claim. You have no reason to disbelieve this executive and everyone else at the company. You respond accordingly in the company’s position statement to the EEOC, which finds no probable cause.

Flash forward six months. The lawyer for the ex-employee (now a plaintiff) is deposing the same executive. Her lawyer marks your position statement as Exhibit 1, and the executive re-affirms his story. Her lawyer then marks as Exhibit 2 the discovery responses in which the company denied that any pornographic photos existed, and the executive again re-affirms his story. When her lawyer marks a manila envelope as Exhibit 3, you start to feel a pit in your stomach. When the executive opens the envelope and reveals a half-dozen pornographic photos, the pit moves up into your throat. When you realize that the photos are of the same executive cavorting with two women—whom he identifies as “escorts”—you just about throw up. And the case settles for much more than it was worth.

I often relay this story to clients from whom I think I may not be getting the whole story. I remind them that whatever they tell me is privileged. I tell them that they might think they are protecting their company, but in this age of email, and Facebook, and computer forensics, it is likely, if not certain, that the truth will eventually come out. I explain that when it does, the liability risk, potential verdict amount, and the value of any settlement goes up exponentially.

The word “candor” is one of the the most important words to lawyers. It’s in our ethical rules—attorneys owe a duty of candor to the tribunal. Almost as important, however, is the candor between a lawyer and client. We owe you a responsibility to be completely honest with you about your case and the risks it presents. We cannot do that, however, without your reciprocal honesty about the facts. It’s our job to tell your most compelling story. We cannot do that, though, if we don’t know what that story truly is.

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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? The Department of Labor updates its strategic plan for the next five years

Earlier this year, the Department of Labor launched its We Can Help website, offering employees a one-stop-shop for wage and hour information, and information on how to file complaints against their employers. The DOL recently put a little more meat on its regulatory plans, announcing its updated five-year strategic plan, called “Good Jobs for Everyone” [pdf]. The plan has five strategic goals:

1. Prepare workers for good jobs and ensure fair compensation.
2. Ensure workplaces are safe and healthy.
3. Assure fair and high quality work‐life environments.
4. Secure health benefits and, for those not working, provide income security.
5. Produce timely and accurate data on the economic conditions of workers and their families.

One key provision of this plan caught my eye, and should concern employers.

Outcome Goal 1.5—Secure wages and overtime. This goal has four key components:

• Protecting vulnerable workers: The DOL believes that employers who use contract or temporary workers, in addition to young workers, are at a greater risk for wage and hour violations. It will target these types of workers for greater protection and enforcement efforts.

• Targeting high-risk fissured industries: The DOL will specifically target the following “high‐risk” industries for greater enforcement: agriculture, janitorial services, construction, and hotels/motels. The DOL will continue to conduct investigation‐based compliance evaluations to determine the percent of prior violators who come into and stay in compliance with the FLSA.

• Securing sustained compliance: The DOL will enhance its complaint investigation program, in addition to expanding pubic awareness and outreach. Most notably, the DOL will target the most persistent violators by pursuing corporate‐wide compliance strategies and by imposing appropriate penalties and sanctions.

• Identifying employee misclassifications: The DOL is concerned that employers are misclassifying employees and independent contractors to deny access to benefits and legal protections, such as family and medical leave, overtime, minimum wage, and unemployment insurance. The FLSA recordkeeping regulations under development will require that employers notify each worker of their rights under the FLSA, and provide employees with information regarding their hours worked and wage computations.

In other words, the DOL is making good on its promise to increase monitoring and enforcement of wage and hour laws, specifically as they pertain to low-wage/high-risk employees, and employee/contractor misclassifications. For more on what this means for you and your business, I recommend the following:

• Compliance and training key to victory in overtime lawsuit.
• Study of American working conditions presents opportunity for employers to tune up legal compliance.
• Department of Labor to step up enforcement; employers should step up self-audits.
• Make a list and check it twice – FLSA exemptions.
• Department of Labor investigations highlight important wage and hour compliance issues.
• Use a wage and hour audit to proactively head off claims.

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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.

Helping those who help themselves: Be wary of common law retaliation claims

Just because a specific statute does not provide a remedy to a terminated employee does not mean that the employee cannot pursue a claim. In fact, Ohio recognizes a wrongful discharge claim for just this situation. When an employee’s termination offends a clearly defined public policy, courts will permit that employee to pursue a claim for wrongful discharge.

Dohme v. Eurand America provides a good example. In that case, Eurand fired Dohme after he provided an on-site insurance inspector with computer printouts showing overdue fire alarm inspections. Two days late, Eurand fired him. Among other claims, Dohme asserted that his termination violated a public policy in favor of workplace safety. The appellate court agreed:

An employee who reports fire safety concerns to the employer’s insurance inspector, regardless of the employee’s intent in doing so, is protected from being fired solely for the sharing of the safety information. Eurand argues that Dohme’s claim must fail because Dohme did not report the safety issue to a governmental employee. We do not agree. It is the retaliatory action of the employer that triggers an action for violation of the public policy favoring workplace safety.

Regardless of whether a specific statute exists to protect an employee, courts will often find a way to protect someone when it is perceived that an employer retaliated. If it looks like you are firing someone “because of” some complaint the employee made, pause and give some serious thought to the decision before pulling the trigger.

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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 #140 (the social media training edition)

I spend part of this week conducting social media training for a client. I spoke to groups of managers and supervisors. What surprised me most about their collective response to the policy wasn’t the ban on personal social media at work, or their potential personal liability for harassment under Ohio law, but the fact that their employer expected them to be responsible for what their friends and followers posted on their social media sites that could potentially reflect poorly on the company. As someone who is well engaged with social media, I also found it interesting that while the group was nearly unanimous in their use of Facebook and LinkedIn, no one (but me) tweeted. What I took away from these sessions was that if you are going to be rolling out a social media policy—and you should be—you should incorporate training sessions about the policy. What seems straightforward to you might be troubling to your employees. It also makes sense to cover the social media basics, because you will have employees that can’t tell a tweet from Tweety Bird.

Here’s what I read this week:

Wage & Hour

• Yes, You Can Get Fired After Taking Maternity Leave: The confusing state of family-leave policies – from Sharon Lerner at Slate

• Do You Have to Pay People Who Work the Computer Help Desk Overtime Pay? – from Overtime Advisor

• Where’s MY Pay Czar? Why We Need a Total Rewards Audit of Congress – from Ann Bares at Compensation Force

• Independent Contractors and the ABC Test: The Future is NOW – from Michael Haberman’s HR Observations

• US Chamber: Equal Pay “a Fetish for Money,” Women Should “Choose the Right Partner at Home” – from Work in Progress

• Union Representation Activities: Are They “Working Time” Under The FLSA? – from Wage & Hour—Development & Highlights

• Unpaid Internships – from Matthew Gibson’s Wills & Wealth

• The Slacker: Striving For Mediocre – from I Hate People…But It’s Nothing Personal

• Police Sergeant Sues for Overtime Based on Time Spent Reading and Responding to E-mails – from Texas Employment Law Update

Discrimination

• Tick, Tock. Watch the (Retaliation) Clock – from Mindy Chapman’s Case In Point

• It Comes with the Job—Or not – from Workplace Prof Blog

• 2nd Circuit issues interesting opinion on sexually hostile environment Mike Maslanka’s – from Work Matters

• “Similarly situated” can be a high bar – from Sindy Warren at the Warren & Hays Employment Law Blog

• Service dog’s untimely calls of nature – from Walter Olson’s Overlawyered

Human Resources & Employee Relations

• I’m Mad As Hell? – from The Word on Employment Law with John Phillips

• I Don’t Think That Constitution Means What You Think It Does – from Popehat

• A lesson in how NOT to fire an insubordinate employee – from Stephen Meyer’s HR Cafe

• Hospital Workers Post Pics of Dying Man on Facebook: Highlights Need to Educate Employees on Proper Use of Social Media – from Megan Erickson’s Social Networking Law Blog

• Workplace Violence Prevention: Having Police or Security Available at a Termination Meeting – from Dan Schwartz’s Connecticut Employment Law Blog

• Proof That Background Checks Actually Work: If You Use Them – from Nick Fishman at the employeescreenIQ Blog

• The Importance of Office Space – from Adria Martinelli at the Delaware Employment Law Blog

• Telling lies hard work in workplace – from Andrea Kay at the Pittsburgh Tribune

• Monitoring the Monitors – from Sarah Needleman at the Wall Street Journal

• Workplace smoking bans spark obesity? – from USA Today

Trade Secrets

• Lawsuit of the Day: Major Lindsey Files RICO Action Against Former Employee – from David Lat at Abovethelaw.com

• Training and Social Networking Policies: Essential Elements in Protecting Your Company Secrets – from TLNT

• Departing Wells Fargo Vice-President Accused of Looting Data and Clients – from Trade Secrets Blog

• Eighth Circuit Affirms Award Of $1,369,921 As Liquidated Damages In No-Compete Case – from Trade Secrets and Noncompete Blog

Litigation

• SANCTIONS—DENIED!!! – from Katherine Gallo’s Resolving Discovery Disputes

• 80% of Employers’ Summary Judgment Motions Granted – from Philip Miles’s Lawffice Space

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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.

Evidence of moonlighting and misuse of email system prove fatal to retaliation claim

Rudolph Escher claimed that he was terminated in retaliation for complaints he made about his employer’s designation and accounting of his military leave time, in violation of the Uniformed Services Employment and Reemployment Rights Act. As it turned out, his employer fired him for egregious misuse of its computer system through the use of that system to perform substantial work for the Naval Reserves:

Samuel Long, a human resources specialist, reviewed the e-mails and documents Escher had stored on the server. Long initially discovered more than 3,200 e-mails, from 1999-2005, in more than 240 individually named folders and subfolders. He also discovered files outside the e-mail system containing: 18 PowerPoint Presentations; 75 Word documents; 38 Excel spreadsheets; 12 PDF documents; and 140 miscellaneous documents. Long determined that Escher was working on these e-mails during work hours, and using his BWXT e-mail address as an automatic signature, which invited recipients to respond to it. Long could tell from his review that Escher was spending “an inordinate amount of time by reviewing the e-mails, by replying to the e-mails, by writing paragraph after paragraph in response to different e-mails.”

If you are going to moonlight, best not to do business through your main employer’s computer system. Needless to say, the 6th Circuit upheld the trial court’s dismissal of Escher’s USERRA lawsuit. The case is Escher v. BWXT Y-12, LLC (6th Cir. 8/18/10) [pdf].

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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? Handbook disclaimers

Yesterday, I noted that employees often feign ignorance of employee handbooks. Here’s a textbook example.

In Steadman v. Sterilite Corp. (Ohio Ct. App. 7/19/10) [pdf], the employer’s handbook contained the following language:

Sterilite is an “at will” employer in that your employment may be terminated with or without cause and with or without notice at any time at the option of either you or Sterilite, except as otherwise provided by law…. No statement or promise by a supervisor, manager or department head, either verbal or written, may be interpreted as a change in policy nor will it constitute an employment agreement with any employee.

Additionally, the employee signed the following acknowledgement form upon receipt of the handbook:

I understand that this handbook is not a contract of employment, express or implied, between Sterilite and me and that I should not view it as such, or a
guarantee of employment for any specific duration. 

I further understand that no manager or representative of Sterilite, other than the president, has the authority to enter into any agreement guaranteeing employment for any specific period of time. I also understand that any such agreement, if made, shall not be valid or enforceable unless it is in a formal written agreement signed by both the president and me.

Based on this language, the Court affirmed the dismissal of the employee’s claims, which were premised on the handbook constituting a contact of employment:

As a general rule in Ohio, employee handbooks do not constitute an employment contract. The handbook is simply a unilateral statement of rules and policies creating no obligations or rights…. [A]n employee handbook that expressly disclaimed any employment contract could not be characterized as an employment contract.

Reviews of disclaimers should be part of any handbook audit. They will likely make the difference between whether your handbook is a series of aphoristic aspirations and guidelines, or a policy manual that binds your conduct as a contract between your business and your employees.

On Dustin Johnson and knowing the rules: A lesson for your employees

Rule 13.4 of the USGA’s Rules of Golf provides a two stroke penalty for grounding one’s club in a hazard. Certainly Dustin Johnson knew this rule when he approached his second shot on the final hole of Sunday’s PGA Championship leading by one. What he did not know was that trampled area in which his ball rested was a bunker. The two stroke penalty he incurred when he grounded his club cost him the tournament, his first major championship, a five-year tour exemption, and the more than $1M difference between first and fifth places.

His mistake was that he did not read the tournament rules, provided to him before the tournament started and conspicuously posted in the locker room: “All areas of the course that were designed and built as sand bunkers will be played as bunkers (hazards), whether or not they have been raked. This will mean that many bunkers positioned outside of the ropes, as well some areas of bunkers inside the ropes, close to the rope line, will likely include numerous footprints, heel prints and tire tracks during the play of the Championship. Such irregularities of surface are a part of the game and no free relief will be available from these conditions.”

He did not run from his mistake. Instead, he took responsibility for not knowing the rules. From ESPN.com:

I just thought I was on a piece of dirt that the crowd had trampled down…. I never thought I was in a sand trap. It never once crossed my mind that I was in a bunker…. Obviously I know the rules of golf and I can’t ground my club in a bunker, but that was just one situation I guess. Maybe I should have looked to the rule sheet a little harder.

I cannot tell you how many depositions I’ve taken in which an employee tried to justify his or her misconduct by claiming not to have read the handbook. The common refrain: “No one reads those things.” Never mind their signatures on receipts stating that they read the handbook and had the opportunity to ask questions. Consider relaying Dustin Johnson’s story to your new employees during orientation. Maybe it will incent them to do what they should be doing in the first place—reading the handbook and asking questions.

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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.