Two Articles: eVerify & Arbitration Agreements

February 11, 2019

There is good news and bad news regarding eVerify.

Good News:

The President’s signature on the continuing resolution reopening the government brought eVerify back to life.  eVerify is now back up and running and accepting employee information.

Bad News:

eVerify employers now have a limited time to enter the employee information for every person they hired in the last thirty-five days.  Employers should expect slow/sluggish performance from the eVerify system and longer than normal response times when contacting eVerify for assistance while the backlog of data and requests for service are processed. With another “possible” partial shutdown on the horizon, eVerify may be interrupted again.

What it Means for Employers:

The partial government shutdown did not affect an Employer’s obligation to create an I-9 Employment Eligibility form.  All employers (eVerify and non) are required by law to create an I-9 form after employment is offered and no later than the employee’s third day on the job.  Employers should store I-9 forms in a filing system separate from other personnel records.

U.S. Supreme Court Provides More Guidance on Arbitration Agreements

In the last two weeks, the nation’s high court issued two opinions concerning an important issue relating to enforceability of arbitration agreements, namely, who decides the “gateway” issue of whether or not a particular dispute is arbitrable—a court or an arbitrator?  According to the Court, if the arbitration agreement contains a provision expressly delegating issues of arbitrability to the arbitrator (rather than a court), that provision governs, and a court does not have authority to decide the issue.  There is a limited exception to this principle, however.  If the dispute involves transportation workers who are involved in interstate commerce, the issue of arbitrability must be decided by a court because the Federal Arbitration Act (“FAA”) expressly states that it does not apply to contracts of employment for such workers.  Thus, even if an arbitration agreement with an interstate transportation worker includes a clause delegating arbitrability issues to an arbitrator, a court still must decide the issue of arbitrability in that limited context.


Medical Marijuana Bill Pending Could Change Terminations for Use!

February 4, 2019

Employers and employees continue to be somewhat in the dark about the use of marijuana since California (and other states) has legalized the use of medical and recreational marijuana.  These laws have placed employers in a tough situation as they grapple with crafting and enforcing workplace drug policies that comply with an area of the law that is arguably unsettled. Let’s clarify.

Marijuana remains a Schedule I drug under federal law, and California employers may maintain and enforce policies prohibiting its use. And California employers are not required to accommodate an employee’s use of medical marijuana while at work.

But that may change soon. In February 2018, a bill known as AB-2069 was proposed that would amend the California Fair Employment and Housing Act to make users of medical marijuana a legally protected class. This means they would be protected from employment discrimination and entitled to reasonable accommodation. My obvious concern is that every person who smokes marijuana will go to one of those “$40.00 doctors” and easily obtain a medical marijuana card. Having a medical condition will become commonplace which will open the door to more disability claims, an issue which is already out of control in California.

AB-2069 is still working its way through the legislature. In the meantime, let’s take a look at the evolution of medical marijuana law in California.

In 1996, California became the first state to legalize medical marijuana. Proposition 215 legalized the cultivation and use of medical marijuana for the treatment of illnesses “for which marijuana provides relief.” Recognizing the need for a distribution system, the California legislature then passed SB-420 in 2004. This permitted patients to form nonprofit medical cannabis collectives and protecting the cultivation and distribution of marijuana for medical purposes.

As a result of Proposition 215 and SB 420, Californians were able to easily obtain medical marijuana prescriptions for seemingly any medically related reason.

In 2008, the California Supreme Court ruled in Ross v. Raging Wire Telecommunications, Inc., that California law does not prohibit an employer from refusing to employ, much less accommodate, a medical marijuana user, even if the marijuana use is permitted under California law. The state Supreme Court held that the state’s disability discrimination laws do not require employers to accommodate illegal drug use, even if prescribed for medical purposes. And because marijuana is still illegal under federal law, the employer in this case was not required to accommodate the plaintiff’s use of medical marijuana.

The growing acceptance of marijuana use culminated in 2016 with the passage of Proposition 64, which legalized the recreational use of marijuana in California. The sale of recreational marijuana became legal in California on January 1, 2018.

California legislatures may look for guidance from other states. Currently there are eleven other states that have laws protecting medical cannabis patients from employment discrimination: Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New York, Pennsylvania, and Rhode Island, although the level of protection varies from state to state. California — surprisingly — does not currently have any such protections. But if enacted, AB-2069 would undoubtedly create a host of issues for employers with operations in California.

There is a glimmer of hope. The pending AB-2069 includes two critical limitations. First, it explicitly states that employers may discipline or terminate an employee who “is impaired” at work or during work hours due to the use of cannabis. But it is difficult to know when someone is under the influence of cannabis. Unlike alcohol, where Breathalyzer tests may show the exact level in a person’s blood, there are no available tests that show the level of impairment for marijuana at a specific point in time. This had been a longstanding issue. Drug tests show only that marijuana was consumed within the past 30 days or so. Therefore, as a practical matter, it may be difficult for employers to prove that an employee was under the influence of marijuana at work. Second, AB-2069 acknowledges that because marijuana remains illegal under federal law, California employers must be allowed to refuse to hire or may terminate a marijuana user if employing the person would “cause the employer to lose a monetary or licensing-related benefit under federal law or regulations.”

For now, employers with operations in California may continue to treat medical marijuana (and recreational use) as an illegal drug that need not be accommodated in the workplace. But even if AB-2069 does not pass, we are likely to see similar bills seeking to protect medical marijuana users from employment discrimination.

Employers with California operations would be wise to plan ahead and consider policies for future implementation in the event that California joins the growing list of states protecting medical cannabis patients in the employment context.


New Test To Determine Independent Contractors!

January 28, 2019

We continually come across clients who are still confused about using independent contractors. It can be complex. I understand that. There is a vitally important distinction between employees and independent contractors because key employment laws, such as anti-discrimination laws, wage and hour laws and labor laws do not apply to independent contractors.

Previously the National Labor Relations Board significantly limited the coverage of which workers qualify as independent contractor under federal labor laws. At that time, the Board reversed decades of precedent by concluding that workers only qualify as independent contractors if they are “rendering services as part of an independent business.” This narrow test subjected myriad workers to coverage as employees, even if the employer exercised limited (or no) control over how they performed their jobs.

Recently, in SuperShuttle DFW, Inc., the Board reversed course and reinstated its pre-FedEx test. This test balances the following 10 factors to determine whether the “employer” exercised sufficient control over the workers’ employment.

  1. The extent of control which, by the agreement, the master may exercise over the details of the work.
  2. Whether or not the one employed is engaged in a distinct occupation or business.
  3. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision.
  4. The skill required in the particular occupation.
  5. Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work.
  6. The length of time for which the person is employed.
  7. The method of payment, whether by the time or by the job.
  8. Whether or not the work is part of the regular business of the employer.
  9. Whether or not the parties believe they are creating the relation of master and servant.
  10. Whether the principal is or is not in business.

In balancing these factors, the Board concluded that the airport shuttle franchisees were not employees, but instead independent contractors. The Board relied heavily on the facts that the drivers leased or owned their work vans, that they were paid by the customer per fare (as opposed to by the hour or day), and that they maintained nearly unfettered control over their daily work schedules and working conditions. Thus, the franchisee-drivers had significant entrepreneurial opportunity for economic gain (or loss).

This decision is significant, in that it restores some common sense middle ground to the issue of who counts as an employee under the National Labor Relations Act. It bears watching if other agencies (such as the Department of Labor’s Wage and Hour Division) continue this trend.

This is an excellent decision by the Board and clarifies in simple language the requirements that can create an independent contractor. As usual, a word of caution! A written agreement, alone, is not sufficient to determine the status.  The business and independent contractor must interact following the guidelines noted above. Do not stray. If you are not sure have your counsel or an experienced consultant assist you.


Religious Accommodation: Use Common Sense!

January 21, 2019

A federal court jury found in favor of a dishwasher after concluding that her employer failed to honor her religious beliefs by repeatedly scheduling her on Sundays, and then firing her.

The employee claimed that she told her employer that she needed Sundays off for her missionary work. The hotel accommodate her for the first three years of her employment, but then began scheduling her on Sundays. After she advised that she would have to quit, the company again accommodated her scheduling request for another six years. Then, however, the hotel again changed her schedule to include Sundays. Pierre then provided a letter from her pastor explaining her religious need for the time off. The hotel, however, refused and ultimately fired her for unexcused absences.

The hotel argued that it had no idea that she was a missionary or had requested Sunday off. Her lawyer, however, disagreed. “There were letters in [her personnel] file and her pastor went down there.”

Title VII requires an employer to reasonably accommodate an employee who’s sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. An accommodation would pose an undue hardship if it would cause more than a small cost on the operation of the employer’s business. Factors relevant to undue hardship may include the type of workplace, the nature of the employee’s duties, the identifiable cost of the accommodation in relation to the size and operating costs of the employer, and the number of employees who will in fact need a particular accommodation.

Scheduling changes, voluntary substitutions, and shift swaps are all common accommodations for employees who need time off from work for a religious practice. It is typically considered an undue hardship to impose these changes on other employees involuntarily. However, the reasonable accommodation requirement can often be satisfied without undue hardship where a volunteer with substantially similar qualifications is available to cover.

In other words, permitting the employee in this case to take every Sunday off may have imposed an undue hardship, depending on the nature of her work performed and her job duties. Other employees could have agreed to move shifts around to cover for her, but employers cannot force such scheduling changes. What is interesting in this case was that the hotel appears to have accommodated her for eight years and this action by the employer should have weighed heavily in favor of the reasonableness of the accommodation. The problem is they fired her. Arguably, they should have continued with the accommodation and certainly not fired her for excessive absenteeism when they had knowledge as to why she had been taking off. Quite frankly, under these facts, this case should have been settled. The argument they used “we did not know” was “lame” (excuse the language!).

Look, the times are changing and there might be a way around granting time off for an employee to observe a religious practice, but do you want to risk the inevitable (and expensive) lawsuit?

Legalities aside, this issue asks a larger question. What kind of employer do you want to be? Do you want to be a company that promotes tolerance or fosters exclusion? The former will help create the type of environment that not only mitigates against religious discrimination, but spills over into the type of behavior that helps prevent unlawful harassment and other liability issues. If you can grant the accommodation, why not do so? And if you have granted it, why take it away?

Developing Middle Managers: 5 Suggestions!

January 14, 2019

We’ve all heard and likely executed, the notion that the example and company culture starts at the top with senior leadership. While it is tremendously important for those in senior leadership positions to embrace, embody, and champion organizational changes and organizational culture, middle managers play a crucial part in implementing and executing organizational strategies and cultural changes.

Neglecting to strengthen the middle of an organization may lead to high turnover, a decrease in employee engagement, or poor succession down the line.

Strengthening the middle leads to better leaders, prepared for managing change, coaching emerging leaders, and executing the strategic vision of the organization. Employers need to train and develop mid-level managers.

Middle managers face a whole new set of leadership challenges as they begin to progress their careers. It’s no longer just about holding employees accountable for their work and their contributions. Here are five suggested skills your mid-level leaders need for success:

  1. Strategic Leadership

Leadership is much different from management. Middle management is the cornerstone of an organization’s strategic initiatives and the execution of those initiatives. Making the transition from manager to strategic leader requires much more critical thinking.

While managing demands planning, budgeting, organizing, performance managing, and staffing, it takes a true leader to understand the significance of setting direction, aligning people, empowering, motivating, and inspiring.

It’s when a manager finds his or her ability to go beyond the managing and embrace being a leader that success is reached.

  1. Retaining and Engaging Talent

Building a greater awareness of how talent development is a critical success factor in ensuring the future of the organization in a competitive marketplace. Middle managers should obtain the knowledge of what defines the top talent in an organization and what qualities or characteristics are associated with talented professionals.

  1. Developmental Coaching

Managers have a lot of responsibility. They have routine team management to look after and often have a plate full of work only they can complete. It’s crucial for middle managers to not only manage their day-to-day but to strategically think about how they can improve the way their team works.

One of the key aspects of their role is to help their team members grow, develop, and flourish. This can be achieved through coaching.

A great leader is someone who manages workload and performance but also someone who nurtures their individual team member’s abilities. Someone who is one their employee’s side, who encourages, and works with employees to set goals that challenge them.

Turning middle managers into developmental coaches can have an incredible impact on the success of an organization. Coaching employees turns into engagement increases, performance boosts, and job satisfaction.

  1. Finance for the Non-Financial Professional

Financial acumen is a skill that can be invaluable to a mid-level leader. Having an understanding of how a department, division, or team financially impacts people, expenses, revenue, margin, and indirect costs such as time, inconvenience, etc., puts middle managers in an advantageous spot for their group to strategically align with the organization.

The results of a mid-level manager understanding basic business finance include the ability to identify and quantify key drivers, develop, measure, and report key metrics, budget, present effective business cases, and interpret key financial statements, among many more.

  1. Emotional Intelligence

Understanding self-awareness and social awareness begins with discovering more within oneself and others. A mid-level manager should use their emotional intelligence to improve their own communication, conflict management, and the communication with their team.

In addition, losing their emotions and lashing out an employee can create a negative effect on everything the manager tried to accomplish. Not to mention such outburst can lead to liability. Managers have to stay in control of their emotions.

Senior management should keep in mind that good middle managers makes their job easier. Good luck!

2019 HR Compliance Checklist!

January 7, 2019

Today is the start of the first full week of 2019. Which means it’s a perfect time to take a step back and review your efforts at HR and employment-law compliance for the coming year.

This list is not meant to be complete or exhaustive, but should provide a high level look at the top 20 issues that you should be reviewing this year, and every year for your business.

☑️ How many employees do you have (15 / 20 / 50)?

☑️ When is the last time your handbook has been reviewed and updated?

☑️ When was your last harassment / respectful workplace training?

☑️ Do you require restrictive covenants for key employees?

☑️ Do you have employees that work in states in which marijuana is legal?

☑️ Do you have federal contracts?

☑️ Are you employment law posters up to date?

☑️ Has your state or local minimum wage increased?

☑️ How are you calculating and paying overtime to non-exempt employees?

☑️ When did you last analyze your exempt employees?

☑️ Do you have independent contractors?

☑️ Is all of your workplace OSHA compliant?

☑️ Are your OSHA 300 logs up to date and your 300A form posted?

☑️ Are your FMLA forms up to date?

☑️ Are you managers trained on the ADA interactive process?

☑️ Are you job applications and workplace accessible for the disabled?

☑️ Do you know what devices are accessing your network?

☑️ Have you tested your network and work environment for security?

☑️ Are employees trained on cyber security compliance?

☑️ Do you have necessary and appropriate insurance (EPLI / Cyber / D&O)?

It’s a new year with unknown issues confronting businesses. The list above is designed to hopefully cut down on the possibilities. I strongly suggest that you go through the list and address those issues that are applicable to you. If you need assistance in any of the above consult with your counsel or feel free to contact Potts & Associates.

Don’t forget, Jim Potts is streaming live on LA Talk Radio on Sundays at 3 pm PST.


Can an Employer Refuse to Hire Smokers?

December 31, 2018

More and more companies than ever won’t hire people who smoke without taking into consideration whether or not the hiring policy is legal. Let’s take a closer look.

First, and foremost let’s be clear there’s no federal law that protects cigarette smokers or entitles them to equal protections when it comes to hiring, promotions, etc. That’s because the Equal Employment Opportunity Commission doesn’t recognize smokers as a protected class.

That said, there are 29 states (along with the District of Columbia) that do offer protections for smokers. If your company is in one of those states, you can’t refuse to hire people just because they smoke (although you can turn them down for other, legitimate reasons).

According to the American Lung Association, here’s the list of states that provide employment protections to smokers:

§  California

§  Colorado

§  Connecticut

§  District of Columbia

§  Illinois

§  Indiana

§  Kentucky

§  Louisiana

§  Maine

§  Minnesota

§  Mississippi

§  Missouri

§  Montana

§  Nevada

§  New Hampshire

§  New Jersey

§  New Mexico

§  New York

§  North Carolina

§  North Dakota

§  Oklahoma

§  Oregon

§  Rhode Island

§  South Carolina

§  South Dakota

§  Tennessee

§  Virginia

§  West Virginia

§  Wisconsin

§  Wyoming

 If you’re not located in one of those states, you’re likely permitted to enact a smoke-free hiring policy and keep people who smoke out of your workplace. But is a ban on hiring smokers really the right way to go? Opinions differ.

On the one hand, there was a study by the Journal of Tobacco Policy & Research that found smokers take more sick days than their non-smoking co-workers. It also found that even if a smoker is in relatively good health (isn’t obese, doesn’t have chronic health conditions like diabetes, etc.), there’s a good chance he or she will still have higher medical costs than a comparable non-smoker over a three-year period.

But a smoking ban is worthwhile only if smokers quit for good. If the prohibition causes people to quit until they’re hired — and then they take up smoking again as soon as they pass the nicotine test — it’s not an effective cost-cutting tactic.

The results point to a need for constant testing to ensure former smokers don’t fall back into the habit after they’re hired — which can get expensive.

 Cons of a ban on hiring smokers

Another study from anti-smoking journal Tobacco Control found that a tobacco-free hiring policy might not be a good idea. Here’s why:

  • It’s a slippery slope. If the decision were based on health-related costs, couldn’t a case be made for banning people with weight-related problems, such as high cholesterol or diabetes? And wouldn’t that raise discrimination concerns?
  • Would you be turning away good talent because of a smoking addiction — an addiction that could be licked with some help?
    Sure, when unemployment is high and lots of people are job hunting, you can be choosy. But do you really want to lose that top salesperson or IT manager to a competitor because of smoking?
    And what about when the employment market turns around, and you find yourself scrambling for good people?
  • It’s the end of the year and as we enter into the New Year we sit down and come up with our “New Year’s Resolution.” Diet control, addictive habits, and maybe time management to name a few. Given the current political turmoil, how about a resolution that we be a little more tolerant of each other’s political views. History has already shown that a divided nation cannot stand.
  • Every analysis of such programs shows they’re cost-effective in improving absentee rates and time lost because of smoking-related illnesses.
  • Researchers at Tobacco Control instead say employers should push hard to get employees into smoking-cessation programs.

Every analysis of such programs shows they’re cost-effective in improving absentee rates and time lost because of smoking-related illnesses.

Well, it’s the end of the year and as we enter into the New Year we sit down and come up with our “New Year’s Resolution.” Diet control, addictive habits, and maybe time management to name a few. Given the current political turmoil, how about a resolution that we be a little more tolerant of each other’s political views. History has already shown that a divided nation cannot stand. Good luck to you in 2019!