Not another post on wage and hour class actions?

I know what you’re thinking—not another post on wage and hour compliance. Workplace compliance specialist ELT published the results of a recent survey that caught my eye:

The money on the table for wage and hour class action settlements is huge, averaging $23.5M at the federal level and $24.4M at the state level. With the majority of employers already out of compliance with wage and hour laws, these are the kind of open and shut cases plaintiff’s law firms love to take on. Although these lawsuits are often positioned as valiant efforts toward worker protection, most of the money ends up in the hands of the attorneys while many class participants see as little as a few hundred dollars.

Average settlements over $20 million for “open and shut” cases should certainly get your attention. Yet, as long as businesses continue to ignore wage and hour compliance, I’ll continue to write posts about it.

---

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 #141 (the creepy-crawly edition)

It all started with a short press release from the National Pest Management Association, which announced the results of the 2010 Comprehensive Global Bed Bug Study. Now the press is all over this bed bug story (The Bed Bug Hub: One-Stop Shop for Bed Bug Information for a collection of links), and people everywhere are itching. Once limited to hotels, the little buggers are even showing up in downtown offices, which poses its own unique set of problems for employers (More offices see bedbug infestations). I’m phantom-scratching myself as I write this. Yick!

Anyhow, here’s the rest of what I read this week:

Social Media & Technology

• Twitter Law (cont.): Doctor Drives Off Cliff While Sending Twitter Message – from Bruce Carton at Law.com - Inside Opinions: Legal Blogs

• Fired: Wore Wrong Hat, Tweeted Wrong Tweet, Misused Facebook – from The Word on Employment Law with John Phillips

• Germany to Outlaw Facebook Stalking Employees – from Frank Roche’s KnowHR Blog

• The Tsunami of Smartphones in Computer Forensics – from Sharon Nelson’s Ride The Lightning

• Fired Employee Makes Unauthorized Changes to Company Website and How to Prevent this From Happening to Your Company – from Defending The Digital Workplace

• Social Media Screening (Potential Hires): Part 1 – from Rob Radcliff’s Smooth Transitions

Wage & Hour

• US Chamber of Commerce Apologizes, But Don’t Be Fooled – from Michael Whitney’s Work in Progress by

• A Wrong and Wrong-Headed Look at the Wage Gap – from David Chavern at the ChamberPost

• Just In Case You Didn’t the Feds Were Controlling Enough In HR – from Michael Haberman’s HR Observations

• Hospitals and Nursing Homes Are Focus of the Department of Labor over Wage Violations – from Wage & Hour Defense Blog

• Nursing Mothers Get a Timeout – from Matthew Gibson’s Wills & Wealth

• Insufficient notice of need for FMLA leave proves fatal for insubordinate employee – from Sindy Warren at the Warren & Hays Employment Law Blog

• Email Time is Probably Compensable Time – from Tom Crane San Antonio Employment Law Blog

• FMLA FAQ - What To Expect When The DOL Comes Knocking – from FMLA Insights

Discrimination

• Statistical Analysis of the Twombly Era – from Philip Miles’s Lawffice Space (guest post by Stephanie Thomas)

• The ADA at 20 - how changes impact your business – from Employment Law Bits

• Religious Discrimination Claims on High – from Employment Essentials

• Tasting Breast Milk And Other Alleged Misdeeds in the Library of Congress – from Adria Martinelli at the Delaware Employment Law Blog

• 3rd Circuit Affirms Workplace Head Scarf Ban – from Fitzpatrick on Employment Law

Litigation

• Lawsuit demands $38 quadrillion – from Walter Olson’s Overlawyered

• $38 Quadrillion Demand is World’s Second Largest – from Lowering the Bar

• Mediator needed to change ‘Ground Zero Mosque’ dialogue – from Lee Jay Berman’s Eye on Conflict

• Civility and Litigation – from Evan Schaeffer’s Trial Practice Tips Weblog

Employee Relations

• What Are Dress & Grooming Policies Doing to Your Talent Pool? – from Lance Haun at TLNT

• How to Tell When Your Boss Is Lying: Cool New Study – from Bob Sutton

• How Not to Obtain a Good Reference From a Former Employer – from employeescreenIQ Blog

Trade Secrets and Competition

• Top Ten Mistakes Made by Departing Employees and Top Ten Things to Do When an Employee Resigns to Join a Competitor – from Trade Secrets & Non-Compete Blog

• Eleventh Circuit Finds 43-City Non-Compete Enforceable Under Georgia Law – from Trading Secrets

• Hooters and the Heavy Consequences of Having Boobs – from Elie Mysta at Abovethelaw.com

---

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.

Wal-Mart seeks Supreme Court review of billion-dollar class action

Yesterday, the nation’s largest private employer asked the Supreme Court to review the class certification of the nation’s largest employment discrimination lawsuit. The case—Dukes v. Wal-Mart—is remarkable for several reasons:

1. It has been pending for nine years, and yet the parties are still dealing with the preliminary procedural issue of whether this case will proceed as a class action.
2. The plaintiffs seek a nationwide class, to include every woman employed by Wal-Mart for the past decade, in any of Wal-Mart’s 3,400 separately managed stores, across 41 regions and 400 districts, in any of 53 departments and 170 different job classifications. In other words, there is not much similar about these women other then the fact that they all worked for Wal-Mart.
3. The potential class is more than 1.5 million women.
4. The potential damages are billions.

Steven Greenhouse, at the New York Times, frames the dispute on the class certification issue:

Mr. Boutrous [one of Wal-Mart’s lawyers] said that even if the seven lead plaintiffs had suffered discrimination, that did not mean there was across-the-board bias at thousands of stores nationwide. He said the women’s claims should be tried individually, or if a manager discriminated against a store’s 200 women employees, then perhaps as a 200-member class action for those women.

Joseph Sellers, a lawyer for the plaintiffs, said the case should be a class action because Wal-Mart had and still has a common set of personnel policies at all of its stores. “We regard them as cookie-cutter operations that are similar to each other,” he said.

Wal-Mart—which strongly disputes liability and describes itself as “a leader in fostering the advancement and success of women in the workplace”—has asked the Supreme Court to review the propriety of a class action seeking money damages under the class action provision for injunctive or declaratory relief. The New York Times has available for download a PDF of Wal-Mart’s brief.

There is a lot at stake for businesses in the Supreme Court’s decision of whether to accept review of this class certification. A refusal by the Supreme Court to hear this case, or, worse yet, an affirming of the class by the Court, would greatly increase the risk for employers defending employment decisions (and resulting class actions) that involve disparate groups of employees, reporting to different managers, and working in different facilities. It would result in larger classes with a higher potential for recovery, neither of which is good for companies. It’s safe to say that the class action epidemic in this country would get a whole lot worse.

I am certain I will be one of many blogger commenting today on this case. For a snapshot of what some others have already said, take a look at the following:

• Dukes v. Wal-Mart certiorari petition – from Ted Frank at PointOfLaw Forum
• Dukes v. Wal-Mart Cert. Petition – from Workplace Prof Blog
• Wal-Mart appeals in job bias case – from SCOTUSblog

---

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 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.

---

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.

---

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.

---

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

---

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.