Twelve Reminders to Reduce Liability in 2016

December 28, 2015

The year is coming to an end and as I glance back over the last twelve months I am in “shock and awe” as to the amount of unnecessary money employers have had to pay out. Be it to get rid of a frivolous allegation or one that had merit. The problem with both categories is that managers and supervisors let their guard down. Simply stated, “You cannot!”

I have listed below some reminders that will hopefully keep you focused throughout 2016. Print them out or tattoo them on your forehead! Whichever you prefer but do not forget them.

  1. Be fair, firm, and consistent with all of your employees.
  2. When employees are out on a medical leave or have called out sick, DO NOT CALL THEM.
  3. Never terminate an employee when they are on a leave absence.
  4. Never terminate an employee who has just returned from a leave of absence.
  5. Document! If it is not written down, it did not happen.
  6. When documenting, give a written or verbal warning in writing. Signatures from the employee helps.
  7. Use emails responsibly (and for documentation when possible).
  8. Stop yelling at your employees. Take a deep breath. Remember, once you said it, it cannot be taken back.
  9. Remember we are living in an age of technology. Cellphones are used for more than making calls!
  10. Take the time to make the right hiring choice. Do not get impatient.
  11. Watch out for the wage and hour compliance changes on the state and federal levels. They are coming.
  12. Treat others the way you would like to be treated!

Alright, there they are. Twelve simple reminders that will hopefully keep you out of trouble. The only key for you to remember is not to forget! Stay focused.

Happy New Year!



Two Key Decisions, one state, one Federal!

December 21, 2015

Two new employment decisions were issued recently, one by a California Court of Appeal and the other, a Federal decision by the Ninth Circuit Court of Appeals.  In Prue v. Brady Company, the California court held that a plaintiff who suffered a work-related injury and subsequently was fired stated a valid legal claim against the employer for wrongful termination in violation of public policy.  The employer argued that the plaintiff’s claim was invalid because it effectively was a Labor Code section 132a retaliation claim that could only be brought before the Workers’ Compensation Appeals Board, not in court.  The court disagreed, reasoning that the plaintiff adequately alleged that he was wrongfully terminated for having a disability, in violation of the public policy of the Fair Employment and Housing Act, and therefore the claim was not barred by the doctrine of workers’ compensation exclusivity.

The employer argued that even if the claim was based on the public policy of FEHA, the claim would be barred by the one-year statute of limitations applicable to FEHA claims.  The court rejected this argument as well, ruling that a wrongful termination in violation of public policy claim is governed by a two-year statute of limitations and not by the statute of limitations applicable to FEHA claims.  This decision is not particularly novel, but is a good reminder for employers that employees who believe they have been fired for reasons relating to a work comp injury can sue their employer in court and seek punitive damages (under a disability discrimination theory) and are not limited to the remedies set forth in Labor Code 132a.

This is going to be problematic. Employers need to be mindful not to take ANY action against an employee who has filed a workers comp claim. Do not terminate them just because you have not “heard from them” and be sure to return them to their same job, or a comparable position with comparable pay.

On another note, the Ninth Circuit issued its decision in Rosenfield v. GlobalTranz Enterprises, holding that a high-level HR manager had presented sufficient evidence to go to trial on her claim for retaliation under the Fair Labor Standards Act (FLSA).  The district court had granted summary judgment in favor of the defendant-employer, holding that the HR manager had not presented sufficient evidence that she engaged in activity that the employer reasonably could have understood as a protected complaint under the FLSA.  Reversing the district court’s ruling, the Ninth Circuit held that there was sufficient evidence from which a jury could conclude that the manager had complained about non-compliance with the FLSA and that this complaint was protected by the FLSA’s anti-retaliation provision.  The Ninth Circuit acknowledged that the fact that the complaining party is a manager (and may have job duties that include advising the company on compliance or non-compliance with the FLSA and other employment laws) must be considered in assessing whether his or her conduct rises to the level of a protected complaint under the FLSA.

In this case, the plaintiff was the employer’s Manager of Human Resources (and later the Director of Human Resources).  Over a period of time, she informed her superiors several times that she did not believe the company was in compliance with the FLSA and that several employees likely were misclassified.  She alleged that her boss told her that he was in charge of FLSA compliance, not her, and that he would determine whether any recommended changes would be implemented.  She further alleged that her recommended changes were not implemented and that she instead was fired.  On these facts, the Ninth Circuit held that there was sufficient evidence from which a jury could conclude that she had made a protected complaint under the FLSA.  The court emphasized the evidence that FLSA compliance was not part of the plaintiff’s job duties (according to plaintiff), implying that if FLSA compliance had been part of her regular job duties (as it often is with high level HR managers), the result may have been different.

Here’s the takeaway. Keep in mind, that even upper level managers who are tasked with informing the company of potential compliance problems as part of their regular job duties may, on certain facts, be able to show that their conduct rose to the level of a protected “complaint” of FLSA violations and thereby succeed in stating a claim for retaliation against the employer for any adverse action taken against them following their “complaint.”

Note: If you have a person in the position of protecting the company whose job it is to ensure compliance, LISTEN TO THEM! (yes, it is in caps which means I AM shouting LOL!!).

Can Alcoholics Be Terminated Under the ADA?

December 14, 2015

The question as to whether alcoholics are a protected class has once again come up. For you sports fans, you have probably heard that on October 12, 2015, USC fired its head football coach, Steve Sarkisian. Well he has filed a lawsuit against USC challenging his termination. His allegation is that USC violated state disability-discrimination laws by terminating him because of his disability and failing to accommodate his disability—alcoholism.

Now, keep in mind that the ADA protects alcoholism as a disability. On the other hand, there is a line to be drawn between protected addiction and unprotected on-the-job misconduct even when the former causes the latter. In other words, an employer may require an employee who acknowledges that he or she is an alcoholic to meet the same standards of performance and conduct as applied to other employees. They do not get a free pass.

As an example, an employer does not have to tolerate poor job performance or unsatisfactory behavior—such as absenteeism, tardiness, insubordination, or on-the-job accidents—related to an employee’s alcoholism if similar performance or conduct would not be acceptable for other employees. If the employee does violate any of these noted infractions, the employer can discipline the employee (please, always in writing) even if the conduct stems from alcoholism.

Although the ADA is a federal protection Sarkisian was a California employee so I feel compelled to add a caveat here. Under the California Labor Code if an employee acknowledges they have an addiction to drugs or alcohol, the employer would have to back away from a termination and advise the employee that they are eligible for a 30 day unpaid leave of absence to give them the opportunity to get into a rehab program. If the employer has an Employee Assistance Program through their insurance then that can be offered. If no, the employee would have to seek out a program of their choosing at their own expense. When the employee returns they need to be told that they have to comply with the terms of the program, they cannot violate any of the employer policies, they can be subject to random testing and, if they refuse to be tested, they can be subject to termination. Again, I will emphasize putting this in writing.

As a reminder, the employer may impose the same discipline that it would for any other employee who fails to meet its performance standard or who violates a uniformly-applied conduct rule. If the appropriate disciplinary action is termination, the ADA would not require further discussion about the employee’s disability or request for accommodation. An employee whose poor performance or conduct is attributable to alcoholism may be entitled to a reasonable accommodation, separate from any disciplinary action the employer chooses to impose and assuming the discipline for the infraction is not termination. If the employee only mentions the alcoholism but makes no request for accommodation, the employer may ask if the employee believes an accommodation would prevent further problems with performance or conduct. If the employee requests an accommodation, the employer should begin an “interactive process” to determine if an accommodation is needed to correct the problem. This discussion may include questions about the connection between the alcoholism and the performance or conduct problem. The employer should seek input from the employee on what accommodations may be needed and also may offer its own suggestions. Possible reasonable accommodations may include a modified work schedule to permit the employee to attend the on-going self-help program.

An additional example may help. This one is offered by the EEOC.

An employer has warned an employee several times about her tardiness. The next time the employee is tardy, the employer issues her a written warning stating one more late arrival will result in termination. The employee tells the employer that she is an alcoholic, her late arrivals are due to drinking on the previous night, and she recognizes that she needs treatment. The employer does not have to rescind the written warning and does not have to grant an accommodation that supports the employee’s drinking, such as a modified work schedule that allows her to arrive late in the morning due to the effects of drinking on the previous night. However, absent undue hardship, the employer must grant the employee’s request to take leave for the next month to enter a rehabilitation program.

The problem I see for USC is the timing of Sarkisian’s termination relative to his entrance into a treatment program. Sarkisian received the call that he was fired while on an airplane on his way to an alcohol treatment center. The day prior, his assistant coach pull him out of a game, believing he was drunk on the sidelines, and his boss announced that Sarkisian would be taking an indefinite leave of absence to enter treatment. Earlier in the season, Sarkisian apologized for apparent drunken behavior at a booster event and promised then to seek treatment. He also stated he would not drink for the remainder of the season. Those promises were not kept, leading to his termination. The key issue in this case is whether, given all of the evidence of misconduct, USC was justified in terminating Sarkisian even though it granted him leave to obtain treatment. This may be problematic under the ADA as well as under California Law. USC needs an explanation as to why it changed its mind from leave-for-treatment to termination. There is probably some behind the scenes issues that will eventually come out. We shall see.


EEOC Issues New ADA Guidelines

December 8, 2015

The Equal Employment Opportunity Commission has recently issued its’ guidelines regarding employees who may have tested positive for HIV.

With these new guidelines, employers need to understand that the American with Disabilities Act (ADA) makes no distinction between an employee who has asymptomatic HIV and one who suffers with the AIDS virus. An employer cannot discriminate against an employee because of one’s HIV status, and an employer must make reasonable accommodation, if necessary, to enable that employee to perform the essential functions of the job.

The EEOC’s publications — Living with HIV Infection: Your Legal Rights in the Workplace Under the ADA and Helping Patients with HIV Infection Who Need Accommodations at Work — provide important information for employers and employees about the ADA’s legal protections for HIV-positive employees.

  1. Employee are not obligated to disclose their diagnosis to their employer. Moreover, the ADA prohibits an employer from asking, unless:
  • The employer is asking for a voluntary disclosure for affirmative action purposes.
  • The employee asks for a reasonable accommodation.
  • It’s part of a pre-employment, post-offer conditional medical inquiry, as long as the employer asks everyone entering the same job category the same questions.
  • On the job, if the employer has objective evidence that the employee may be unable to do the job or may pose a safety risk because of the condition.
  1. An employee may be entitled to a reasonable accommodation if the HIV infection, the side effects of HIV medication, or another medical condition that has developed because of HIV negatively impacts an employee’s job performance. Once an employee requests a reasonable accommodation, the employer must engage in an interactive process to determine which accommodation, if any, will permit the employee to perform the essential functions of the job.
  2. The ADA prohibits an employer from discriminating against an employee simply because of an HIV infection. This discrimination includes firing the employee, rejecting the employee for a job or promotion, and forcing the employee to take a leave of absence.
  3. An employer can consider health or safety when deciding whether to hire an applicant or retain an employee with HIV, but only under limited circumstances. The ADA does not protect employees who pose a direct threat—a significant risk of substantial harm—to the health or safety of the individual or to the safety of others, if that risk cannot be eliminated or reduced below the level of a “direct threat” by reasonable accommodation. The employer, however, must establish, through objective, medically-supportable methods, that there exists a significant risk that substantial harm could occur in the workplace. According to the EEOC, “Transmission of HIV will rarely be a legitimate ‘direct threat’ issue,” because “there is little possibility that HIV could ever be transmitted in the workplace.” What could an HIV-related direct threat look like? According to the EEOC:

A worker with HIV who operates heavy machinery and who has been experiencing unpredictable dizzy spells caused by a new medication he is taking might pose a direct threat to his or someone else’s safety. If no reasonable accommodation is available (e.g., an open position to which the employee could be reassigned), the employer would likely not violate the ADA if it removed the employee from the position until a physician certified that it was safe for the employee to return to the job.

  1. The ADA also protects disabled employees (including those with HIV) from harassment. If an employee complains about such harassment, you must treat it like any other harassment complaint—investigate and take prompt and reasonable corrective action to protect against the harassment continuing.

Granted, we do not hear as much about AIDS anymore but understand it is still out there and these individuals will be protected. If an employee in your company contracts the virus educate yourself and your staff and be sure to follow the guidelines as noted above.


Gonzalez: A New Law Effective January 1, 2016!

December 7, 2015

A very good friend, and mentor of mine, Art Silbergeld, (Norton Rose Fullbright) has been practicing Labor Law for well over 35 years. He was involved in the Gonzalez v. Downtown Motors, Inc. case from the outset. I recently asked him his opinion about what employers should do in light of the Gonzalez decision. The following was written and offered by him.

“Companies that utilize piece rate or flag hour compensation face serious risks if they do not modify their pay practices immediately.

For years, many California dealers and repair shops have used flag hour pay to incentivize service technicians to be more productive, providing increased compensation when their output exceeds the company’s minimum expectations.  Highly productive employees who worked hard and increased efficiency over time have earned multiples of minimum wage.

In the age of electronics, when paid for flag hours, most service technicians recorded the time when they started work, time out and back in for lunch, and the time when work ended for the day on their work PCs.  They used separate software to record each task to which a flag hour rate applied, noting the starting and ending time for each compensable task.  At the end of each payroll period, a human resources manager or software program would compare the two electronic records to ensure that gross pay met minimum wage and overtime standards for all hours worked.  If, for some reason it did not, additional pay would be added to bring compensation for the period to the level of minimum wage. Employers assumed that if the minimum wage (or higher) was met, it was pay for all hours worked. In over 90 years, no one — not even the State — ever claimed that this violated California law.

In the last 5 years, flag hour pay has been repeatedly challenged in California wage class litigations.  We represented the defendant in the first cutting-edge case, Gonzalez v. Downtown Motors, Inc., resulting in a California appellate court ruling for the first time that piece rate pay did not compensate employees for “down time” in between compensable tasks.  A separate appellate court later ruled that piece rate/per mile pay did not compensate employees for rest periods.  These courts held that “down time” and rest periods had to be paid separately because California does not allow pay averaging.  These decisions have upended pay practices in several industries, including manufacturing, retail auto service departments, transportation, and agricultural companies.

Effective January 1, 2016 Labor Code 226.2 requires employers who have not already abandoned flag hour/piece rate pay to separately compensate employees at an hourly minimum rate for meal and rest periods as well as recovery time (resting when workplace temperatures are too hot) when they are not engaged in work for which they will be paid.  An analyst for industry alone estimates that the cost of compliance will be $200 million.

Damages in these cases go back at least three years.  New Labor Code 226.2 provides a safe harbor, allowing employers with exposure to liability to avoid litigation, fines and penalties by paying affected employees up to three years of back pay by December 31, 2016.  The cost, however, may be prohibitive.  The Gonzalez trial court imposed damages based on underpayment of 1.85 hours per day. Employers who have used a flag hour or piece rate system within the last 3 years should, at least, consider converting to a base hourly rate pay program with an incentive bonus that allows employees to continue to earn as much as they had under the prior pay practice.”

Well, there you have it. Art’s advice is excellent. Please pay attention to the deadlines offered and if you have any questions please do not hesitate to contact me by email (