Reasonable Suspicion and Workers Compensation Claims

May 26, 2015

Let’s start off by stating if you do not have a written drug testing (or alcohol) policy in place you should get one. The times are changing.

Many companies require employees to submit to drug tests after suffering a workplace injury. The rationale is simple – intoxication (drugs or alcohol) is one of the few complete defenses an employer has to a workers’ comp claim for a workplace injury.

What happens, though, if the injured employee refuses to take the drug test? That scenario has presented itself many times. In one case, the employee left work complaining of a non-work-related backache. He told the ER nurse, however, that his pain was caused by an aerial harness he had to wear at work. Upon hearing the injury was work-related, the nurse asked the employee to submit to a drug test, which he did.

The employee returned to work the following week with light duty restrictions. The HR department then informed him that he needed to submit for drug testing. The employee complained that he had already taken a test the prior week. The employer, however, required a re-test because the earlier test did not comply with its policy for the employee to be transported to the testing facility. The employee had gone on his own, without the employer even knowing he had suffered a workplace injury.

Because of the employee’s protests about the re-test, and his “nervous and fidgety” reaction, the assistant manager required that the re-test be monitored. Upon learning that the drug test would be observed, the employee refused to be tested. The employer subsequently terminated him for refusing to submit to a drug test in contravention of company policy.

Of course you know what happened, the employee sued, claiming that the employer terminated him in retaliation for his workers’ comp claim. The Superior Court and the Court of Appeals for the jurisdiction both dismissed the former employee’s claim.

The courts determined the assistant manger had made that determination after noticing Ferguson’s “nervous and fidgety” reaction to being asked to resubmit to a drug test. The manager’s decision, the court determined, was not punitive action against the employee because he had filed a workers’ compensation claim. Instead, it was a management decision predicated on a reasonable suspicion that the employee was using drugs or alcohol in the workplace.

In short, it was the employee’s own refusal to submit to the test that motivated his discharge. That refusal, under the written policy, was likewise sufficient to result in the employee’s discharge.

Drug testing policies are complicated and very easy to get wrong. Make sure you have an experienced professional write your policy if you do not have one. Keep in mind that the policy should state that you have a right to test if there is a reasonable suspicion or in the case of a work related accident and any refusal to do so will result in termination.

Note: For our California clients do not take any action without calling us first!

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How Many “Incidents” Qualifies as Creating a “Hostile Work Environment”?

May 17, 2015

A common question from our clients is “how many incidents does it take to create a hostile work environment?” Good question, and now at least one Court of Appeals has given us what might be a growing trend.

According to the Fourth Circuit Court of Appeals, sometimes once is enough.  In a just issued a decision that overturns established circuit precedent, the Fourth Circuit held that a single workplace incident was sufficiently severe to trigger Title VII’s protection.

In Boyer-Liberto v. Fontainebleau Corp.(May 7, 2015), an African-American hotel worker was fired after she complained that a white employee had called her a “porch monkey” twice within 24 hours.  During the initial litigation process, the employer won summary judgment because of established Fourth Circuit precedent that a single workplace incident is never severe enough to raise a triable Title VII claim, per Jordan v. Alternative Resources Corp., (2006).  A divided Fourth Circuit panel (2-1) affirmed.

Now, In a 12-3 decision, the court overturned circuit precedent to hold a single workplace incident can be “severe” enough to trigger Title VII’s protection, particularly when the alleged harasser asserts supervisory authority and threatens to get the employee fired.  The Fourth Circuit also held that the employee had also raised a triable Title VII retaliation claim because she opposed conduct that she reasonably believed was unlawful racial harassment.

The Fourth Circuit overruled Jordan to the extent that it suggests a viable hostile work environment claim always requires more than a single incident of alleged harassment.  The Fourth Circuit also overruled Jordan‘s holding that an employee fired after complaining about a single incident of alleged harassment cannot claim retaliation unless there is evidence that there was a plan in motion a hostile work environment.

As explanation for the departure and change in courts’ direction, the full Fourth Circuit explained that the “Jordan standard is at odds with the hope and expectation that employees will report harassment early, before it rises to the level of a hostile environment.”   “Rather than encourage the early reporting vital to achieving Title VII’s goal of avoiding harm, the Jordan standard deters harassment victims from speaking up by depriving them of their statutory entitlement to protection from retaliation,” the court said.  The court concluded the Jordan standard was “incompatible” with Supreme Court precedent that “Title VII’s anti-retaliation provision be interpreted to provide ‘broad protection from retaliation.’”

Now look, you have heard us say many times that every complaint must be taken seriously. Take the appropriate action even when there is only one incident. This my at least help to minimize any potential damages if the plaintiff is successful.


Employee Handbooks: Disclaimers and Acknowledgements are the Keys to Success

May 13, 2015

Employee handbooks come in all shapes and sizes. For example, some employers have different policies that cover exempt versus non-exempt employees. Some employers have policies that create an introductory period for employees during the initial few months of employment. Some employers have progressive discipline policies. And some even grant formal appeal rights to employees who are disciplined or terminated.

In one case, a terminated employee claimed that each of these policies set forth in the employee handbook either created an implied contract of employment, or consisted of a definitive promise on which she reasonably relied thereby binding her employer.

Thankfully for the employer, its handbook contained two items that no employee handbook should be without – an at-will employment disclaimer, and a signed acknowledgement by the employee affirming her at-will status. The disclaimer stated:

Employment At Will

An employee of the company (name omitted) is an employee at will. The employee or employer can terminate the employment relationship at any time for any reason. No statement in this manual will be interpreted or applied as a contract of employment.

The signed acknowledgement stated:

I recognize the employer (name omitted) has the right to change provisions in this manual and other policies…. I understand that no representative of the company has the authority to make an agreement contrary to the provisions of this manual.

I recognize this manual does not constitute a contract of employment. I understand that, at any time, for any reason, I can separate my employment relationship and that the company has the same right regarding my employment status.

Based on these two statements, the appellate court affirmed the trial court’s dismissal of the former employee’s promissory estoppel and breach of implied contract claims.

This case not only illustrates the vital importance of disclaimers and acknowledgements in handbooks, but also the need that certain critical language appear in all handbooks

A specific statement that employment is at-will, without exception.

An explanation, in plain English, of what at-will employment means.

A statement that no one can create a contract contradictory to the provisions of the handbook.

A statement that that handbook is merely a unilateral statement of rules and policies which creates no rights or obligations.

A statement that the handbook is not a contract and not intended to create an express or implied contract.

A statement that the employer has the unilateral right to amend, revise, or eliminate policies and procedures as needed.

A statement that employees should not rely on any statement in the handbook as binding on the company.

For those of you who do not believe in handbooks, take heed! A well written handbook can help, not hinder you.


Part Two: California Proposed Bills

May 11, 2015

For those of you just joining us, this is the second of two parts regarding a number of new laws that are being proposed to the California Legislature.

AB 67 (Double time for working on certain holidays):  This bill would require employers to pay double time to employees who work on Christmas or Thanksgiving.

AB 357 (employees of food and retail establishments):  This bill would require employees of certain food and retail establishments to be given at least two weeks’ notice of their work schedules, and would require employers to provide additional compensation to employees in certain circumstances for changes to their work schedules, as well as additional pay for being on-call but not being required to come in.

AB 588 (right to cure for wage statement violations):  This bill would require employees to provide an employer with time to cure certain wage statement errors prior to being able to bring a PAGA action for penalties for such wage statement errors.

AB 1038/SB 368 (individual alternative workweek schedule):  This bill would allow an individual non-exempt employee and an employer to agree that the employee may work an alternative work schedule of up to 10 hours per day, without the need for payment of daily overtime.

AB 1470 (overtime exemption for highly compensated employees):  This bill would provide an overtime exemption for employees who earn at least $100,000 per year, who regularly perform any of the duties of an exempt executive, administrative, or professional employee, and whose primary duty is office or non-manual work.

AB 908 (expansion of paid family leave benefits):  This bill would expand the state’s paid family leave program (administered by the EDD) to provide partial wage replacement benefits for family leave purposes for 10 weeks instead of the current maximum of 6 weeks’ benefits.

SB 358 (employee right to discuss wages):  This bill would expand protection of the employees’ rights to discuss their wages with other employees, and expands the prohibition on paying employees of one sex less than employees of the opposite sex by placing the burden on an employer to affirmatively justify any pay differentials based on bona fide factors other than sex.

SB 3 (further minimum wage hikes):  This bill would further increase California’s minimum wage to $11/hour effective January 1, 2016, and to $13/hour effective January 1, 2017.

SB 406 (expansion of CFRA):  This bill would expand coverage of California’s family and medical leave law (CFRA) to employers with 5 or more employees (currently it only applies to employers with 50 or more employees, like the FMLA).  It would also expand the circumstances in which an employee may take leave to care for a family member by expanding the definitions of eligible family members for whom leave may be taken.  The bill would also expand leave eligibility by providing that employees are eligible for leave if the employer has at least 25 employees within 75 miles of the employee’s worksite (the current requirement is 50 employees within 75 miles).

SB 579 (use of sick leave for child care or school emergency):  This bill would require that employers who provide sick leave permit employees to use that sick leave for a child care or school emergency.

We will keep you posted of important developments as these bills make their way through the California legislative process.

NOTE: The Podcast this week discusses “Exempt Employees Who Fail to Work 40 Hours!” http://www.pottsandassociates.com or go to ITunes and find “Listen Up with Jim Potts.”


Deducting from an Exempt Employee’s Salary

May 5, 2015

Assuming the majority of my readers understand the importance of properly classifying employees as “exempt” and “non-exempt” I feel the need to address a very common question “can I deduct from an exempt employee’s wages?” The classification as exempt is significant, because it enables an employer not to pay the employee overtime for an hours worked over 40 in week.

To qualify under most of the Fair Labor Standards Act’s (FLSA) exemptions, the employee must be paid on a salary basis, which means that the exempt employee must receive his or her full salary for any week in which the employee performs any work, without regard to the number of days or hours worked. For this reason, the FLSA only permits an employer to take deductions from an exempt employee’s salary in very limited circumstances:

For full workweeks in which the exempt employee performs no work.

  • For an exempt employee who is absent for a full work day for personal reasons other than sickness or accident.
  • For an exempt employee absent a day or more for sickness or disability, if the company maintains a plan that provides compensation for loss of salary caused by sickness and disability and the employee exhausted that leave.
  • For penalties imposed for violation of safety rules of major significance (watch your individual state law on this one! California employers—forget it!).
  • To offset any amounts received by an employee as jury or witness fees, or military pay.
  • For unpaid disciplinary suspensions of one or more full work days for workplace conduct rule violations.
  • For partial weeks worked during the initial or final weeks of employment.
  • For an exempt employee working a reduced or intermittent work schedule under the Family and Medical Leave Act.

Otherwise, if an employer deducts pay from an exempt employee’s salary for time missed for any other reason, that deduction will cause the employer to lose the benefit of that employee’s exemption for that work week. Moreover, it will also cause the employer to lose the benefit of the exemption for any other employee working in the job classification for the same manager, regardless of whether any of those other employees also suffered improper deductions that week.

But hold on! Let’s put some common sense to the question that brought us here. Maybe the real question employers should be considering, however, isn’t whether the FLSA permits deductions from an employee’s paid time off in increments of less than a full work day, but whether it makes sense to take those deductions at all. Above all else, being a salaried exempt employee means that they work until they get the job done. Some weeks it means that the employee works 40 hours, some weeks 60 hours, and some weeks even more. And, it also means that some weeks, the employee works less than 40 hours. If a salaried exempt employee is performing (that is, getting the job done in a timely and quality manner), then if that employee needs a few hours off to take a child to a doctor’s appointment, or a half-day to attend an event at a child’s school, do we really need to nickel-and-dime that employee over a few hours of personal time off? Or, do we recognize the employee’s diligent performance, permit the time off, with the understanding that the time will be “made up” when the employee works to get the job done?

You decide but do not forget to factor in morale. If they are truly “putting their nose to the grindstone” why put a damper on that for a few hours they needed to be off? Just a thought.


New Employment California Laws Awaiting Approval

May 4, 2015

There are nineteen employment-related bills pending before the California legislature this session.  While it is too early to tell which of these bills ultimately will be passed and signed into law, California employers may wish to follow the progress of some of these bills and/or to submit comments, opposition, or support (for the most part, unlikely) for a particular bill.  The first nine are found below. Next week (to alleviate your stress!) I will post the remaining ten.

AB 465 (arbitration agreements):  This bill would require that any agreement to waive any forum for resolving certain employment disputes (alleging violations of the Labor Code) must be knowing, voluntary, and in writing.  The bill would prohibit employers from requiring employees to agree to arbitrate as a condition of employment.

AB 676 (job applications/current employment):  This bill would prohibit employers from requiring that an applicant be currently employed in order to apply for a job opening and would prohibit an employer from inquiring about current employment until after the employer determines that the applicant meets the minimum qualifications for the job.

AB 987 (FEHA):  This bill would amend California’s employment discrimination statute, FEHA, to expressly prohibit discrimination or retaliation against an employee for requesting accommodation for a disability or religious practice.

AB 1017 (salary information):  This bill would prohibit employers from advertising for open jobs without including the minimum pay, and would prohibit employers from paying less than the pay that was advertised.  The bill would also prohibit employers from inquiring into the salary history of an applicant as a condition of employment, and would prohibit employers from disclosing salary information of employees or former employees without their written consent.

AB 1383 (preference for veterans in employment):  This bill would allow employers to establish a policy for giving veterans a preference for hiring or retaining over other qualified applicants or employees, without running afoul of discrimination provisions of FEHA.

AB 11 (paid sick leave):  This bill would amend the recently enacted statewide paid sick leave law to extend its provisions to providers of in-home supportive care services.

AB 304 (paid sick leave):  This bill is intended to clean up some aspects of the recently enacted statewide paid sick leave law.  However, it is not clear what aspects it will ultimately aim to clean up, as the language of the bill has been changed several times already.  Some of the issues being looked at include the manner of calculating sick leave pay where an employee has variable compensation, and whether the eligibility requirement of working in California at least 30 days in a year means working for the same employer for those 30 days.

AB 622 (use of E-Verify):  This bill would generally prohibit employers from using E-Verify to check the employment authorization status of an existing employee or of an applicant for employment prior to being given an offer of employment.

AB 1065 (I-9 practices):  This bill would prohibit employers from requiring more or different documents than are required under federal law to verify that an individual is not an unauthorized alien, or from refusing to accept or honor documents that reasonably appear on their face to be genuine.  It would also prohibit employers from discriminating against applicants based on the status or term of status that accompanies their authorization to work.

AB 67 (Double time for working on certain holidays):  This bill would require employers to pay double time to employees who work on Christmas or Thanksgiving.

Note: The Podcast this week discusses “Cutting an Employees’ Pay”. http://www.pottsandassociates.com 

 ***A second article will be posted Tuesday (Issues that impact employers Nationally).