TOP TEN TIPS FOR 2010 THE TEN EMPLOYMENT

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TOP TEN TIPS FOR 2010 THE TEN EMPLOYMENT LAW ISSUES EMPLOYERS SHOULD BE MOST

TOP TEN TIPS FOR 2010 THE TEN EMPLOYMENT LAW ISSUES EMPLOYERS SHOULD BE MOST CONCERNED ABOUT IN THE EARLY MONTHS OF 2010 Julie Badel Peter A. Steinmeyer Epstein Becker & Green, P. C. Allyson Bouldon Mead Johnson Nutrition January 21, 2010

No. 1 EMPLOYEE FREE CHOICE ACT • Off the radar due to health care

No. 1 EMPLOYEE FREE CHOICE ACT • Off the radar due to health care • Specter reports he’s been hammering out a compromise • Likeliest compromise is elimination of card check in favor of a shortened period before election

No. 1 EMPLOYEE FREE CHOICE ACT • Average time from petition to election now

No. 1 EMPLOYEE FREE CHOICE ACT • Average time from petition to election now 42 days • Compromise bill likely would shorten that to 5 -10 days • Effect: minimal time for employer to communicate disadvantages to unionization

No. 1 EMPLOYEE FREE CHOICE ACT • Employers must become proactive – Educate management

No. 1 EMPLOYEE FREE CHOICE ACT • Employers must become proactive – Educate management on the early warning signs of union activity – Educate work force on disadvantages of union • • No guarantee of anything Wages and benefits could go up or down No right to deal directly with management Any gains achieved through strike never compensate for lost striker wages

No. 2 The need to protect trade secrets A recent study confirms that departing

No. 2 The need to protect trade secrets A recent study confirms that departing employees frequently steal while leaving: – 59% admit stealing data – 92% admit taking CDs/DVDs – 73% admit taking USB memory sticks Is the problem getting worse? Yes. Why? – Job insecurity/decreased loyalty – New technologies make it easier – “anything goes” mentality among Internet generation

No. 2 The need to protect trade secrets What constitutes a “trade secret”? -

No. 2 The need to protect trade secrets What constitutes a “trade secret”? - Fact-specific inquiry - Factors courts consider include: 1. The extent to which the information is known outside of the owner’s business 2. The extent to which the information is known by employees and others involved in the owner’s business 3. The extent of measures taken by the owner to guard the secrecy of the information

No. 2 The need to protect trade secrets What constitutes a “trade secret”? Trade

No. 2 The need to protect trade secrets What constitutes a “trade secret”? Trade secret factors (continued): 4. The value of the information to the owner and to the competitor 5. The amount of effort or money expended by the owner in developing the information; and 6. The ease or difficulty with which the information could properly be acquired or duplicated by others

No. 2 The need to protect trade secrets Examples of trade secrets • Blueprints

No. 2 The need to protect trade secrets Examples of trade secrets • Blueprints and design manuals • Computer software • Customer lists (so long as not generally known or readily ascertainable) • Formulas • Manufacturing processes • Marketing plans • Pricing information • Research studies • Strategic business plans • Testing data • Training manuals

No. 2 The need to protect trade secrets Proactive steps to protect trade secrets

No. 2 The need to protect trade secrets Proactive steps to protect trade secrets • • • Consider restrictive covenants Use of “assignment of invention” clauses Consider confidentiality agreements Safeguard computer information Identify trade secrets Limit access to trade secrets

No. 2 The need to protect trade secrets Proactive steps to protect trade secrets

No. 2 The need to protect trade secrets Proactive steps to protect trade secrets • • • Limit document circulation Safeguard documents Take periodic inventory of trade secrets Disseminate company policies Use exit interviews Notify new employers of restrictive covenants • Dispose of documents completely

No. 3 ADA • Proposed regulations to implement the ADAAA make it easier for

No. 3 ADA • Proposed regulations to implement the ADAAA make it easier for individuals seeking protection under the ADA to show they have a disability – Interprets “disability” broadly – Expands the definition of major life activity

No. 3 ADA • Disability = physical/mental impairment that substantially limits (“S/L”) a major

No. 3 ADA • Disability = physical/mental impairment that substantially limits (“S/L”) a major life activity – Major life activities were defined as seeing, hearing, walking, performing manual tasks, etc. – Now also defined as operation of major bodily functions • Respiratory • Cell growth • Endocrine system

No. 3 ADA • An impairment that substantially limits one major life activity need

No. 3 ADA • An impairment that substantially limits one major life activity need not limit other major life activities – Diabetic with endocrine system S/L due to diabetes does not also need to show S/L in major life activity of eating – Cancer victim with S/L cell growth need not show S/L in working

No. 3 ADA • Transitory ailments that last less than 6 months can S/L

No. 3 ADA • Transitory ailments that last less than 6 months can S/L a major life activity • Effects of mitigating measures (other than glasses/contacts) are not to be considered

No. 3 ADA • Conditions that are a disability: – – – Deafness, blindness

No. 3 ADA • Conditions that are a disability: – – – Deafness, blindness Mental retardation Missing limbs, mobility issues Autism Cancer Cerebral palsy Diabetes Epilepsy HIV/AIDS Multiple sclerosis/dystrophy Depression/bipolar/OCD/PTSD/schizophrenia

No. 3 ADA • Conditions that may be a disability for some individuals: –

No. 3 ADA • Conditions that may be a disability for some individuals: – Asthma – Hypertension – Learning disability – Back/leg impairment – Psychiatric impairment – CTS – Hyperthyroidism

No. 3 ADA • Impact on employers – More employees will be protected as

No. 3 ADA • Impact on employers – More employees will be protected as “disabled” – Imposes duty: • To reasonably accommodate • To not discriminate against – Need to: • Update policies • Train managers

No. 4 Outdated Employee Handbooks Does your handbook comply with current law? FMLA –

No. 4 Outdated Employee Handbooks Does your handbook comply with current law? FMLA – amended 1/2009 and again 10/2009 Does your handbook comply with the vacation pay laws of each state in which you have employees?

No. 4 Outdated Employee Handbooks Are your restrictive covenants/confidentiality agreements included in your handbook

No. 4 Outdated Employee Handbooks Are your restrictive covenants/confidentiality agreements included in your handbook (i. e. , the same handbook that should have a disclaimer stating that it is not a contract? )

No. 5 FMLA • FMLA regs recognize two new types of leave, both military

No. 5 FMLA • FMLA regs recognize two new types of leave, both military related: – Exigency when spouse/child/parent called to active duty – Caregiver for a servicemember (spouse/parent/child/next of kin) with a serious injury/illness

No. 5 FMLA • Amendments to the FMLA effective 10 -2809 affect the military

No. 5 FMLA • Amendments to the FMLA effective 10 -2809 affect the military leave provisions

No. 5 FMLA • Exigency leave – An Employee may take up to 12

No. 5 FMLA • Exigency leave – An Employee may take up to 12 wks. FMLA leave when a spouse, child or parent is on active duty or called to active duty in a foreign country for one or more of 8 qualifying exigencies • Previously, this leave was not available if the family member was a member of the regular armed forces

No. 5 FMLA • 8 circumstances in which exigency leave is allowed: – To

No. 5 FMLA • 8 circumstances in which exigency leave is allowed: – To address issues arising from the military duty 7 days or closer to deployment – To attend military programs or those of support organizations re military duty – To arrange for child care and schooling necessitated by the military duty – To make financial/legal arrangements

No. 5 FMLA • Exigency leave also allowed for: – Counseling for employee, military

No. 5 FMLA • Exigency leave also allowed for: – Counseling for employee, military member or child of the military member due to military duty – R & R (max 5 days) – Attending post deployment activities – Addressing other events arising out of the military duty– employer and employee must agree on qualifications, timing, duration

No. 5 FMLA • Leave to care for covered servicemember with a serious injury

No. 5 FMLA • Leave to care for covered servicemember with a serious injury or illness – Military member must be treated on outpatient basis – Employee must be spouse, child, parent (not in-law) or next of kin of servicemember – Employee may take up to 26 workweeks of leave in 12 mo. period

No. 5 FMLA • The Oct. amendments made two changes to caregiver leave. Now

No. 5 FMLA • The Oct. amendments made two changes to caregiver leave. Now available: – Within 5 years of the date the veteran served in the military (under prior law, leave was available only if the servicemember was currently in the military) – Even if the servicemember aggravated a preexisting condition in the line of duty

No. 5 FMLA • 6 NEW FORMS – Notice of eligibility and rights and

No. 5 FMLA • 6 NEW FORMS – Notice of eligibility and rights and responsibilities – Designation notice – Health care provider (employee) – Health care provider (family member) – Exigency military leave – Illness/injury of covered servicemember

No. 6 Legal Issues Associated with the Digital Age Welcome to the Virtual World

No. 6 Legal Issues Associated with the Digital Age Welcome to the Virtual World of: • “Friends”: Facebook & My. Space - mostly social, but growing business network • “Connections”: Linked. In - “Facebook in a suit” • “Followers”: Twitter - Instant messaging on steroids

No. 6 Legal Issues Associated with the Digital Age POTENTIAL LEGAL THREATS: ‘TEXTUAL HARASSMENT’

No. 6 Legal Issues Associated with the Digital Age POTENTIAL LEGAL THREATS: ‘TEXTUAL HARASSMENT’ ‘omg, u look gr 8’ “[T]ext messaging is the most revealing of the true thoughts — the unrestrained thoughts — of the harasser. . They bang it out real quick, late at night, after a couple glasses of wine. They don't think twice about it. And they make big mistakes…” “’Textual Harassment’ on the Rise, ” National Law Journal, July 20, 2009 The

No. 6 Legal Issues Associated with the Digital Age ‘TEXTUAL’ HARASSMENT • “Not only

No. 6 Legal Issues Associated with the Digital Age ‘TEXTUAL’ HARASSMENT • “Not only am I using [texts] more, but I'm actually finding situations where my clients will forward them on, print them out and bring them into my office with them. Some of them will even bait the harassers beforehand. . . ” Recent admission of a plaintiff’s attorney in The National Law Journal, July 20, 2009 • Turning the tables: Can an accuser’s online activity compromise his or her credibility?

No. 6 Legal Issues Associated with the Digital Age • “Inside information”/securities laws •

No. 6 Legal Issues Associated with the Digital Age • “Inside information”/securities laws • Is it really a trade secret if it is posted on the Internet? • Defamation • Obligation to third parties to monitor employees? ? … and speaking of monitoring…

No. 6 Legal Issues Associated with the Digital Age • Possible employee privacy rights:

No. 6 Legal Issues Associated with the Digital Age • Possible employee privacy rights: - Hot issue: Accessing employee’s private SNS or email account without permission - What if employee used company equipment? • “Protected concerted activity” under National Labor Relations Act • “Lifestyle discrimination” laws • Whistleblower laws • Managers “friending” subordinates • Public references former employees

No. 6 Legal Issues Associated with the Digital Age • Every company’s situation is

No. 6 Legal Issues Associated with the Digital Age • Every company’s situation is unique – some may decide to totally ban SNS at the workplace and others may embrace it • Each employer has to weigh pros and cons - Balance business interests v. realities, e. g. , is it practical to ban texting on personal cell phones? • All employers should ensure policies decided upon are: - Comprehensive - Specific and clearly communicated to employees, e. g. , activities prohibited, scope of monitoring - Fairly and consistently enforced

No. 7 WAGE HOUR ISSUES • Off the clock work poses risks for employers

No. 7 WAGE HOUR ISSUES • Off the clock work poses risks for employers – Logging onto email, text messaging, using blackberries and smartphones after work hours and on weekends by non-exempt employees can be working time

No. 7 WAGE HOUR ISSUES • Off the clock work may also result from

No. 7 WAGE HOUR ISSUES • Off the clock work may also result from supervisors not approving overtime and employees needing to work additional hours due to short staffing resulting from workforce reductions – Employee does not request overtime approval – Supervisor looks the other way

No. 7 WAGE HOUR ISSUES • 2009 brought law suits – T-Mobile employees sued,

No. 7 WAGE HOUR ISSUES • 2009 brought law suits – T-Mobile employees sued, claiming they were required to use company issued smartphones after hours to respond to messages – 10 -15 hours/week – CB Richard Ellis maintenance worker sued claiming worked after hours receiving and responding to cell phone messages

No. 7 WAGE HOUR ISSUES • On-call time generally not compensable unless employee is

No. 7 WAGE HOUR ISSUES • On-call time generally not compensable unless employee is effectively precluded from using his free time • De minimus doctrine – employee need not be compensated for insubstantial or insignificant periods of work – But 30 min. /day checking emails, making calls, etc. amounts to 10 hrs. /mo. and 120 hrs. /yr.

No. 7 WAGE HOUR ISSUES • What to do? – Payroll practices should be

No. 7 WAGE HOUR ISSUES • What to do? – Payroll practices should be as up-to-date as technology – audit payroll practices annually – Policy should require employees to report all working time regardless of where and when – Train supervisors that employees are NEVER to work off the clock – When issuing remote access technology to nonexempt employees, require acknowledgement of obligation to record all working time

No. 8 Trends in Discrimination Law EEOC Charges Filed FY 1999 FY 2002 FY

No. 8 Trends in Discrimination Law EEOC Charges Filed FY 1999 FY 2002 FY 2005 FY 2008 FY 2009 Total Charges 77, 444 84, 442 75, 428 95, 402 93, 277 Race 37. 3% 35. 4% 35. 5% 35. 6% 36. 0% Sex 30. 9% 30. 2% 30. 6% 29. 7% 30. 0% National Origin 9. 2% 10. 7% 11. 1% 11. 9% Religion 2. 3% 3. 0% 3. 1% 3. 4% 3. 6% Retaliation – All Statutes 25. 4% 27. 0% 29. 5% 34. 3% 36. 0% Age 18. 3% 23. 6% 22. 0% 25. 8% 24. 4% Disability 22. 0% 18. 9% 19. 7% 20. 4% 23. 0%

No. 8 Trends in Discrimination Law TRENDS: • • Retaliation claims up (Erin Brockovich

No. 8 Trends in Discrimination Law TRENDS: • • Retaliation claims up (Erin Brockovich effect) Age claims up over historic levels (the economy) Disability claims up (ADAAA) National origin and religious claims up (War on Terror) WHAT EMPLOYERS SHOULD BE DOING IN RESPONSE: • According to Stuart J. Ishimaru, acting chairman of the EEOC, as quoted in Law 360 on January 7, 2010, “Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC. ”

No. 9 WORKER MISCLASSIFICATION • The new frontier– misclassification litigation – 10. 3 million

No. 9 WORKER MISCLASSIFICATION • The new frontier– misclassification litigation – 10. 3 million workers, over 7% of the workforce, treated as independent contractors – IRS estimates 15% of employers are misclassifying 3. 4 million employees • Resulting in underpayment of $1. 6 billion in taxes

No. 9 WORKER MISCLASSIFICATION • Federal law a jumble – IRC, NLRA, Title VII,

No. 9 WORKER MISCLASSIFICATION • Federal law a jumble – IRC, NLRA, Title VII, FLSA • Different statutory definitions • Widely varying court decisions – Enforcement often incidental to other issues – Federal agencies rarely exchange information

No. 9 WORKER MISCLASSIFICATION • Greater threat at the state level – – States

No. 9 WORKER MISCLASSIFICATION • Greater threat at the state level – – States desperate for increased revenue New legislation in • Illinois – over 100 complaints - Recent $325, 000 fine against Chicago area contractor • Colorado • Delaware • Maryland • New Jersey • AGs in Montana, N. J. , N. Y. suing Fed. Ex

No. 9 WORKER MISCLASSIFICATION • Prime areas of risk – Terminating employee and engaging

No. 9 WORKER MISCLASSIFICATION • Prime areas of risk – Terminating employee and engaging as independent contractor – Independent contractor working alongside employee, same work and working conditions – Classifying telecommuters as independent contractors

No. 9 WORKER MISCLASSIFICATION • Major legal risks in Illinois – Unemployment • A,

No. 9 WORKER MISCLASSIFICATION • Major legal risks in Illinois – Unemployment • A, B, C test • Massive interest for unpaid contributions – Workers’ Compensation • Unpredictable results • Inconsistent WC Comm. decisions

No. 9 WORKER MISCLASSIFICATION • Prevention – Audit status of independent contractors • Roofer

No. 9 WORKER MISCLASSIFICATION • Prevention – Audit status of independent contractors • Roofer test – Reclassify questionable or misclassified workers – Consider treating individual as: • Part-time employee • Intermittent/seasonal employee • Adjust benefit policies if needed

No. 10 Drafting Enforceable Releases 2009 EEOC guidance regarding releases provides as follows: •

No. 10 Drafting Enforceable Releases 2009 EEOC guidance regarding releases provides as follows: • Employees cannot be barred from filing a charge • Employees cannot be required to return severance pay before filing a charge

No. 10 Drafting Enforceable Releases According to John Hendrickson, regional EEOC attorney, no “re-hire/re-apply”

No. 10 Drafting Enforceable Releases According to John Hendrickson, regional EEOC attorney, no “re-hire/re-apply” clauses are per se retaliation (PAS disagrees)

No. 10 Drafting Enforceable Releases PAS Tips: • Do not inadvertently provide for waivers

No. 10 Drafting Enforceable Releases PAS Tips: • Do not inadvertently provide for waivers of future claims • Beware of the OWBPA and its special requirements for multiemployee terminations • Don’t be overly complex with language; may result in unenforceable agreement • Include representations that: (a) no other amounts are owed (e. g. vacation or overtime); (b) no requested LOA was denied, nor was employee denied reinstatement after a LOA; and (c) all company property has been returned • Include agreement that if any of these representations are later proven false, must return $ • Beware of tax issues – Withholding obligations – Deferred compensation issues

Concluding Remarks Thank you for your attendance & participation Julie Badel 312 -499 -1418

Concluding Remarks Thank you for your attendance & participation Julie Badel 312 -499 -1418 jbadel@ebglaw. com Peter A. Steinmeyer 312 -499 -1417 psteinmeyer@ebglaw. com Julie Badel and Peter A. Steinmeyer are both members of the Chicago office of Epstein Becker & Green, P. C. , where they represent employers in all aspects of labor and employment law. Copyright © 2010 by Epstein Becker & Green, P. C.