You’d think we’d all know the dangers of “reply all” by now

Is there any more helpless feeling in today’s business world than sending an email, and then immediately realizing that you made a mistake? The biggest cause of an emailer’s stomach sinking through the floor—”reply all.” We’ve all had it happen. This story from the Toronto Star explains how a reply-all mistake brought one company an expensive wrongful discharge lawsuit:

Maria Fernandes … accidentally received an email discussing whether or not she should be fired.

Court documents allege that Linda Guerin, the company’s Director of Operations intended to send the email to the company’s lawyers. Too late she realized Fernandes was also on the list and she unsuccessfully sent three recall notices. She also sent an email to Fernandes asking that she delete the message without opening it.

Fernandes read it, treated the information in the email as a constructive dismissal and hired a lawyer. She had worked for the company for over six years and was earning $145,000 a year.

This case is a great reminder that a mis-addressed email can cost employers dearly in a wrongful discharge lawsuit. Other reply-all risks include the disclosure of trade secrets and other confidential information.

How do you protect against this problem affecting your business? The Toronto Sun article discusses some add-ons for Outlook that will either remove the “reply all” button or require an extra confirming step to use it.

Technology, however, will only mask the symptoms. It will not cure your workplace of this problem. To really attack the problem, you need to educate and train your employees.

• Do you train your employees on proper email etiquette, including when to use (and, more importantly, not use) “reply all?”
• Do you teach your employees to proofread entire emails carefully before they click “send,” including double-checking the “to,” “cc” and “bcc” boxes?

Taking issue with the term “wage theft”

Lately, I’ve read a lot of blogs that accuse employers of committing rampant wage theft (e.g., here, here, and here).

I have a huge problem with the term “wage theft.” It suggests an intentional taking of wages by an employer. Are there employees are who paid less than the wage to which the law entitles them? Absolutely. Is this underpayment the result of some greedy robber baron twirling his handlebar mustache with one hand while lining his pockets with the sweat, tears, and dollars of his worker with the other? Absolutely not.

Yes, we have a wage-and-hour problem in this country. Wage-and-hour non-compliance, however, is a sin of omission, not a sin of commission. Employer aren’t intentionally stealing; they just don’t know any better.

And who can blame them? The law that governs the payment of minimum wage and overtime in the country, the Fair Labor Standards Act, is 70 years old. It shows every bit of its age. Over time it’s been amended again and again, with regulation upon regulation piled on. What we are left with is an anachronistic maze of rules and regulations in which one would need a Ph.D. in FLSA (if such a thing existed) just to make sense of it all. Since most employers are experts in running their businesses, but not necessarily experts in the ins and outs of the intricacies of the Fair Labor Standards Act, they are fighting a compliance battle they cannot hope to win.

As a result, sometimes employees are underpaid. The solution, however, is not creating wage theft statutes that punish employers for unintentional wrongs they cannot hope to correct. Instead, legislators should focus their time and resources to finding a modern solution to a twisted, illogical, and outdated piece of legislation.

In my most recent book, The Employer Bill of Rights: A Manager’s Guide to Workplace Law, I summarized this issue best:

Congress enacted the FLSA during the great depression to combat the sweatshops that had taken over our manufacturing sector. In the 70 plus years that have passed, it has evolved via a complex web of regulations and interpretations into an anachronistic maze of rules with which even the best-intentioned employer cannot hope to comply. I would bet any employer in this country a free wage-and-hour audit that i could find an FLSA violation in its pay practices. A regulatory scheme that is impossible to meet does not make sense to keep alive….

I am all in favor of employees receiving a full day’s pay for a full day’s work. What employers and employees need, though, is a streamlined and modernized system to ensure that workers are paid a fair wage.

Big verdicts might grab headlines, but it’s the final judgment that counts

I never thought I’d read about a case in which I could say to myself, “A $240 million jury verdict doesn’t seem all that out of whack.” Then I read about the EEOC’s recent $240 million jury verdict against Henry’s Turkey Service. The agency alleged that the farm subjected its 32 mentally disabled workers to decades of abuse:

The EEOC’s press release describes the horrible working conditions to which the turkey processing plant subjected these individuals:

Specifically, the EEOC presented evidence that for years and years the owners and staffers of Henry’s Turkey subjected the workers to abusive verbal and physical harassment; restricted their freedom of movement; and imposed other harsh terms and conditions of employment such as requiring them to live in deplorable and sub-standard living conditions, and failing to provide adequate medical care when needed.

Verbal abuses included frequently referring to the workers as “retarded,” “dumb ass” and “stupid.” Class members reported acts of physical abuse including hitting, kicking, at least one case of handcuffing, and forcing the disabled workers to carry heavy weights as punishment.  The Henry’s Turkey supervisors, also the workers’ purported caretakers, were often dismissive of complaints of injuries or pain.

Robert A. Canino, regional attorney of the EEOC’s Dallas District Office, which tried the case, … told the jury that Henry’s Turkey treated the men “like property.” … Canino urged the jury to think of the “broken lives of 32 hard-working but vulnerable intellectually disabled men” who were employees of Henry’s Turkey.

For more background on the Henry’s Turkey labor camps that this case helped bring to an end, I recommend this story from the Des Moines Register, which includes a timeline summarizing the camps’ 40-year history. In this context, the $7.5 million awarded to each of the 32 disabled employees ($5.5 million in compensatory damages, on top of another $2 million in punitive damages) begins to look more reasonable.

While the $240 million verdict is historically large (he biggest ever obtained by the EEOC), ultimately it will only serve as a symbol of the cruelty these 32 men endured. As the Des Moines Register articles points out, Henry’s Turkey’s assets cover less than two percent of the total verdict. Additionally, the Civil Rights Act of 1991 caps these non-economic damages, depending on the size of the employer:

• For employers with 15 – 100 employees, damages are capped at $50,000.
• For employers with 101 – 200 employees, damages are capped at $100,000.
• For employers with 201 –  500 employees, damages are capped at $200,000.
• For employers with more than employees, damages are capped at $300,000.

Thus, Henry’s Turkey maximum exposure for non-economic damages is $9.6 million.

Perhaps the lesson that employers should take away from this horrible story is that a verdict is only the first step in a plaintiff attempting to remedy a wrong. A verdict is simply the jury’s unfiltered opinion about what those eight people think the case is worth. That opinion, however, is not the final say; it is still subject to the law. A judge can lower the amount because of damage caps or for some other reason. A judge can take away the entire verdict by entering judgment notwithstanding the verdict for the defendant, or by ordering a new trial. A court of appeals can find some error in the case and reverse the judgment. Moreover, even if some or all of the verdict survives to a final judgment on which a plaintiff can execute, the plaintiff still has to be able to collect. A multi-million judgment against an insolvent defendant is not worth more than the paper on which it is printed.

We put so much effort into, and place so much emphasis on, the jury verdict that we can lose sight that often it is merely the end of the first act of a much longer play. The verdict might grab headlines, but for a defendant, the war is not over until the final judgment is entered.

WIRTW #272 (the “sensual harassment” edition)

We’ve all heard of sexual harassment. But, have you heard of “sensual harassment?”

Here’s the rest of what I read this week:

Discrimination

• No, I am not from the Midwest. Sex Discrimination Lives On — from Molly DiBianca’s Delaware Employment Law Blog
• Third Circuit says VIPs cannot sue for Title VII discrimination — from Eric Meyer’s The Employer Handbook Blog
• Initial Discovery Protocols in Discrimination Cases: A Connecticut Update — from Dan Schwartz’s Connecticut Employment Law Blog
• First Circuit Rejects Age Discrimination Claim Based on Isolated Comment — from Employer’s Law Blog
• Sexual Harassment Complaints By Males On The Rise: 2012 EEOC Enforcement and Litigation Statistics — from Outten & Golden Employment Law Blog
• Ostracism and petty mistreatments may collectively rise to the level of hostile work environment — from Employment Law Matters
• Bills Would Extend Workplace Protections to LGBT Employees — from Washington D.C. Employment Law Update
• What It Takes To Win An Age Discrimination Suit — from Forbes

Social Media & Workplace Technology

• New Jersey Federal Court Issues Sanctions For Deletion of Facebook Profile — from Trading Secrets
• FireMe! App rescues tweeting employees from own indiscretions? — from Employment Law Worldview
• Time for those six second “selfies” with latest Vine update — from TiPb
• Twitter: A Sleeping Discovery Giant? — from Law.com
• The Mayo Clinic and Healthcare Social Media — from SocialFish
• The “Employee Tricked Me Into Firing Her” Defense — from Social Media Employment Law Blog
• NLRB Issues Facebook Firing Decision — from Phil Miles’s Lawffice Space
• “Catfishing” Gets Its First Legal Mention — from The Not-So Private Parts
• If a Tweet falls in the forest — from iFractal

HR & Employee Relations

• Workplace Violence, Part 2: Crisis management tips for employers — from Robin Shea’s Employment & Labor Insider
• When Uncle Sam calls your employees, what do you do – and not do? — from HR Cafe
• Alcohol Testing in the Workplace: An Employer’s Dilemma — from i-Sight Investigation Software Blog
• An Observation on Work-Life Balance — from Blogging4Jobs
• Paid Sick Leave Has Some Business Owners Feeling Ill — from You’re the Boss Blog
• The don of donut discipline — from PassiveAggressiveNotes.com

Wage & Hour

• DOL Audits Will Rise With New Funding Increases — from Wage & Hour - Development & Highlights
• Eighth Circuit Holds Plaintiffs Must Provide Evidence of Actual Damages Even when Employer Doesn't Keep Accurate Time Records — from Wage & Hour Counsel
• “Comp Time” Proposal: Be Careful What You Wish For — from Wage and Hour Laws Blog
• The Unpaid Internship Dilemma: Everyone Loses in This Crackdown — from TLNT

There’s no such thing as a free lunch

Your accounting records might soon look a little different—that is, if you provide perks at work such as free meals and if the IRS gets its way.

According to the Internal Revenue Code, certain employer-provided meals are exempt from the definition of “gross income” and, therefore, not taxed. To be considered non-taxed, an employer must provide a meal on its premises and for its convenience. Examples that might qualify:

• Employees working at remote sites (e.g., oil rigs).
• Emergency workers who have to be on-call.
• Employees whose peak work coincides with the lunch hour (e.g., bank tellers).

Silicon Valley’s tech companies are famous for the perks they offer to lure the best and brightest employees. One such perk—elaborately gourmet free meals (how does Facebook’s spicy she-crab soup and grilled steak with chimichurri sauce sound?). Never one to leave money on the table, the IRS is reportedly examining the taxability of these meals.

From the Huffington Post:

The free meals that tech companies like Facebook, Google, and Yahoo provide their employees should actually be taxed. But what does that really mean? Who should be paying for these meals and where is the line drawn? According to Martin J. McMahon, Jr., professor of tax law at the University of Florida, companies like Facebook and Google report these meals as tax-free fringe benefits, when they should be considered taxable fringe benefits. The cost of these meals, McMahon explains, should be considered a part of the employee’s salary. “Let’s say that an employee gets $2,000 in free meals and makes $50,000 a year. The company should report to the IRS that it paid the employee $52,000 in compensation on which the employee would be taxed,” McMahon says….As Professor McMahon explained … : “A company cannot provide tax-free meals if workers commute from home and have the ability to bring their lunches with them.”

I’m not a tax attorney. I don’t want to be a tax attorney. This might be the only tax-based post I will ever write. Here’s what to take away from this story. If you provide free food to your employees, however, you might soon need to start accounting for that food as a taxable benefit instead of tax-free benefit.

This post originally appeared on The Legal Workplace Blog.

[photo credit: Rich Anderson via photopincc]

Can we please fix Ohio’s age discrimination law?

It’s no secret that Ohio’s age discrimination statute is a hot mess. The statute has four different ways a plaintiff can file an age claim against an employer, each with a different statute of limitations and available remedies. What’s more, the statute requires that the plaintiff elect which one of the four specific statutory provisions the claim is asserted. Filing under one provision precludes a plaintiff from asserting a claim under any of the other three. This election can have a significant impact on the litigation, because it will dictate the remedies a plaintiff can seek.

If this scheme not complicated enough, federal law also requires that a plaintiff file an age discrimination charge with the EEOC as a prerequisite to filing a lawsuit alleging a violation of the ADEA. Because Ohio is a deferral state, any charges filed with the EEOC are automatically deemed dual-filed with the OCRC.

Not all Ohio state-law age discrimination claims, however, require exhaustion with the civil rights agency. In fact, R.C. 4112.99, which provides the most expansive remedies, has no exhaustion requirement at all. What happens, however, if a plaintiff files an age discrimination charge with the EEOC? Does that mean that the dual filing with the OCRC asks an election by the plaintiff to pursue an administrative claim (with limited remedies) instead of a civil lawsuit with more expansive remedies?

In Flint v. Mercy Health Partners of Southwest Ohio (S.D. Ohio 4/16/13), the district court concluded that filing first with the EEOC does not serve as an election of administrative remedies under Ohio’s age discrimination statutes:

This Court concludes that the Ohio Supreme Court would likely rule that filing a charge of age discrimination with the EEOC does not comprise an election of remedies…. Therefore, the Court holds that Plaintiffs’ pro se filing of an EEOC charge was not an election of remedies under the Ohio statute. This result acknowledges the complementary nature of federal and state employment discrimination procedures and disarms the “minefield” Ohio’s statutory scheme creates for the litigant wanting to pursue a remedy for age discrimination — something this Court finds particularly important when an employee is attempting to navigate that minefield without the assistance of legal counsel.

Ohio is contemplating expansive changes to its employment discrimination laws. The legislature should take the opportunity to disarm this "minefield" by creating one unified statute of limitations for all discrimination claims (I suggest one year to bring Ohio more in line with its federal counterpart), and eliminate the goofy and confusing election requirement that results from having four different types of age discrimination claims.

The legal and ethical issues of the class action “pick off”

Have you heard that the new owner of the Cleveland Browns has gotten himself into a bit of legal trouble? It’s alleged that Jimmy Haslem’s other business, Pilot Flying J, defrauded trucking companies of fuel rebates. In an effort to head-off a stream of civil lawsuits, Mr. Haslam has been meeting with customers to settle the alleged missing rebates. One such customer sought a temporary restraining order to stop such meetings because, according to the Wall Street Journal, Pilot was “obtaining releases, and settling claims before the potential class members even know the full extent of their claims.” Yesterday, the court denied the restraining order, permitting Haslem’s company to continue attempting to settle these claims.

Recall that just two weeks ago, the Supreme Court decided a case involving the pick-off named plaintiffs in wage and hour collective actions. In the Genesis Healthcare case, however, the employer communicated the offer to the plaintiff through her attorney. What happens, however, if the employer communicates directly with un-represented and un-named members of a yet-to-be-certified class? Is there anything prohibiting an employer from contacting them directly in an effort to obtain settlements of their potential claims? It depends.

There is nothing inherently unethical in defense counsel contacting putative class members at the pre-certification stage. According to ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 07-445 (2007) [pdf], communications between defense counsel and putative class members does not violate the Models Rules of Professional Responsibility because there is no attorney-client relationship between plaintiffs’ counsel and members of an un-certified, putative class.

Yet, a court still might limit such communications if they are designed to confuse or coerce.

In Gulf Oil v. Bernard (1981), the U.S. Supreme Court rejected the argument that defense counsel are per se prohibited from contacting putative class members before a class is certified. Instead, a court can only limit pre-certification communications to address communications that misrepresent the status or effect of the case or that have an obvious potential for confusion, and must be based on “a specific record showing by the moving party of the particular abuses by which it is threatened.”

In accordance with the Supreme Court’s Bernard decision, federal district courts have routinely refused to exercise their supervisory authority over communications with putative class members in situations where the complaining party cannot demonstrate actual abuses. Such abuses that would justify a gag order include communications that coerce putative members into excluding themselves from the class, undermine cooperation with or confidence in plaintiffs’ counsel, or suggest retaliation for participating in or assisting the class.

For example, in Parks v. Eastwood Ins. Servs. (C.D. Cal. 2002), the named plaintiffs brought a collective action against their employer for unpaid overtime under the Fair Labor Standard Act. Prior to sending a court-approved notice to putative class members, the employer sent a memorandum to its employees asking them to contact the company’s general counsel if they had any questions regarding the case. The court concluded that a curative communication was unnecessary because the at-issue memorandum was not coercive and did not suggest that any employee would be retaliated against for joining the class.

There are significant strategic decision that companies and their attorneys must make when defending class action lawsuits. Pre-certification communications with potential class members carries a big upside, albeit with the potential of significant risk.