minimizing risk within your organization by auditing your employment policies
TRANSCRIPT
Minimizing Risk Within Your Organization By Auditing Your Employment PoliciesMarian Zapata-Rossa
September 14, 2017
Learning Objectives
How to tackle the daunting task of auditing your organization’s employment policies and procedures in order to:
Identify policy deficiencies.
Reduce risk to the organization.
Support the organization’s strategic objectives.
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Areas That Expose Your Organization to Risk
• EEO policies and practices.
• Hiring and firing practices.
• Fair Labor Standards Act class claims.
• Protecting confidential and proprietary information.
• Maintaining a safe and violence free workplace.
• Keeping up to date with posters, personnel records, and changes to employee handbooks.
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Taking a Strategic Approach
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EEOC FY2016 Charge Statistics
Total Charges: 91,503 nationwide (not including charges filed with state or local civil rights agencies).
* The data are compiled by the Office of Research, Information and Planning from data reported via the quarterly reconciled Data Summary Reports and compiled from EEOC's Charge Data System and, from FY 2004 forward, EEOC's Integrated Mission System.
Category Percentage *
Retaliation (all statutes) 45.9%
Retaliation (Title VII only) 36.2%
Race 35.3%
Disability 30.7%
Sex 29.4%
Age 22.8%
Taking a Strategic Approach
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Perc
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From FY1997-FY2016*
Retaliation (Title VII only) Retaliation (All statutes) Disability
Types of EEOC Charges on the Rise
* The data are compiled by the Office of Research, Information and Planning from data reported via the quarterly reconciled Data Summary Reports and compiled from EEOC's Charge Data System and, from FY 2004 forward, EEOC's Integrated Mission System.
Taking a Strategic Approach
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Employment Litigation filed in U.S. District Courts
*Judicial Facts and Figures, U.S. District Courts—Civil Cases Filed, by Nature of Suit—During the 12-Month Periods Ending June 30, 1990 and September 30, 1995, 2000, 2005, and 2011 Through 2015.
Category Fiscal Year * 2015
Employment Discrimination 12,205
Fair Labor Standards Act 8,781
ERISA 7,228
Americans with Disabilities Act 2,076
EEO Policies & Practices
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Wells Fargo $35.5 million settlement with African American financial advisers based on alleged discriminatory policies and practices for client account distribution.
In 2013, Bank of America Corp.’s Merrill Lynch resolved a racial-discrimination employment case for a record $160 million.
Time Warner subsidiary, TWC Administration LLC, lost at summary judgment and will be proceeding to trial for allegedly failing to follow its progressive discipline procedure when it terminated a 30+ year long African American employee over 40 years of age. Westmoreland v. TWC Admin. LLC, W.D.N.C., No. 5:16-cv-00024, 9/5/17.
By comparison, a former female employee was unable to show her hospital employer retaliated against her when she was terminated in accordance with the company's progressive discipline policy. Cummings v. Valley Health Sys., LLC, 9th Cir., No. 16-15369, unpublished opinion 8/11/17.
EEO Policies & Practices
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Employee's retaliation claim allowed to proceed to trial based on employee being terminated for causing too much workplace "drama" after she filed a complaint of hostile work environment. Baez v. Anne Fontaine USA, Inc., S.D.N.Y., No. 14-6621, 1/5/17.
Employer was awarded summary judgment on employee's claim of retaliation because the decision-maker was unaware of her protected activity at time of discharge, and his inability to pinpoint exact policy rule she violated on company trip does not give rise to inference of pretext in light of his honest belief she acted inappropriately and exercised poor judgment. The Court also found it immaterial whether company policy would have permitted lesser form of discipline. Donley v. Stryker Corp., 2017 BL 3279, N.D. Ill., 15 C 5586, 1/6/17.
EEO Policies & Practices
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Although not expressly prohibited under Title VII, since 2012, the EEOC has taken the position that transgender discrimination is sex-based discrimination. This position was adopted by the U.S. District Court for the District of Columbia. The Sixth and Eleventh Circuits have found it to be a form of sex stereotyping under Title VII.
19 states and more than 200 municipalities prohibit transgender discrimination.
Even companies with transgender friendly policies are facing such lawsuits. Schawe-Lane v. Amazon.com.KYDC LLC, E.D. Ky., No. 17-00134, complaint filed 8/9/17.
Auditing EEO Policies & Practices
Review policies against discrimination and harassment.
Review and discuss supervisory training (hiring and firing legally and effectively, EEO awareness, harassment, performance evaluation, discipline documentation, mock EEO/UC hearing).
Review discipline protocol and possible centralization in personnel office.
Review employee evaluation forms and method of determining merit pay.
Review ADA compliance (post expiration of FMLA leave).
Review methods for employees to voice concerns.
Review harassment investigation protocol.
Review protocol on discrimination charges or other legal proceedings and related document retention and “Electronically Stored Information” practices and procedures.
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Auditing Hiring Practices
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Review employment application and policy on application acceptance and retention.
Review applicant selection criteria (interviewer instructions, etc.).
Review employment offer letters.
Review I-9 compliance and procedures.
Review employment drug testing procedures (both pre- and post-hiring).
Review policies concerning background checks.
Auditing Firing Practices
Review practices for issuing final paychecks.
Review PTO (vacation, sick pay, etc.) policies and practices regarding issuing payment upon termination.
Consider exit interviews.
Review severance agreements/releases.
Review appropriate COBRA notices.
Review policy on obtaining and providing references.
Review unemployment compensation contest protocol.
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Wage & Hour Class Actions on the Rise
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Wage and hour class/collective actions generally easier for plaintiffs' bar to litigate.
Conditional FLSA certification granted about 75% of the time.
Typically less costs for experts and less extensive discovery than discrimination class action lawsuits.
Top 10 wage and hour settlements in 2016 totaled $695.5 million, up from $463.6 million in 2015.
Wage & Hour Class Actions on the Rise
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An Oklahoma oilfield drilling consultant was allowed to proceed with a nationwide collective action claiming that the company's policy of paying consultants a day rate as independent contractors violated federal overtime law. Because the independent contractor policy applies company-wide, the court declined to limit the action to certain locations. Whitlow v. Crescent Consulting, LLC, W.D. Okla., No. CIV-16-1330-R, 8/14/17.
Nearly 2,500 delivery drivers for a Pizza Hut franchisee granted conditional class certification for alleged compensation scheme that denied the drivers minimum wage as a result of per delivery reimbursement policies that failed to reasonably approximate actual vehicle expenses. Meetz v. Wisconsin Hospitality Group LLC, E.D. Wis., No. 1:16-cv-1313-WCG, order 8/29/17.
On October 2, 2017, the U.S. Supreme Court will hear oral argument in the case of NLRB v. Murphy Oil USA to address whether the NLRA bars employers from obtaining employee class action waivers.
Wage & Hour Audit
Review employee status (e.g., “employee” and “independent contractor” worker classifications).
Review FLSA classifications as “exempt” or “non-exempt.”
Review job descriptions.
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Review policies regarding permissible deductions and procedure for reporting errors.
Review wage-hour records and wage-hour practices (overtime, bonuses, premiums, etc.).
Ways to Protect Confidential & Proprietary Information
Review confidentiality policy.
Review agreements concerning non-competition, non-solicitation, inventions assignment, and confidentiality.
Review policies regarding BYOD and telecommuting.
Review social media policy.
Review HIPAA notices.
Review practices concerning return of property upon termination.
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Ways to Protect Confidential & Proprietary Information
The Defend Trade Secrets Act of 2016 ("DTSA") limits employers’ ability to seek relief against former employees who have not been given appropriate notice that they can use the company's trade secrets in a retaliation suit.
The notices may be given via contracts or through a cross reference to a written policy.
An employer who fails to provide this notice cannot obtain punitive damages or attorneys’ fees in a theft of trade secrets case against an un-notified employee.
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Maintaining a Safe and Violence Free Workplace
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Federal OSHA maximum fine levels are presently at $12,675. The previous maximum was raised by 78% in August of 2016.
In fiscal 2016, the average federal OSHA fine for a serious violation was $2,279.
OSHA proposed $207,690 in penalties against a healthcare treatment center for failing to address workplace violence against its staff.
Aluminum manufacturer faces $1.9 million in penalties for unsafe workplace conditions that sent employees to the hospital at least twice.
Maintaining a Safe and Violence Free Workplace
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Review OSHA compliance program and, if applicable, review employee hazard communication and blood born pathogen programs.
Review policy for reporting workplace injuries.
Review policies concerning workplace violence and weapons.
Review evacuation plans.
Address bullying in the workplace.
Assess process for seeking injunctions against harassment in the workplace.
Good Housekeeping
• Review and verify placement of required EEO, FMLA, OSHA, USERRA, wage-hour and other employment related posters.
• Review form, content and maintenance of employee personnel and separate medical files (privacy and record retention issues and recommended practices).
• Review employee handbooks and policy manuals.
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NLRB Changes on the Horizon
NLRB findings that a myriad of employer policies were overly broad and unlawful:
A confidentiality policy that broadly prohibits employees from discussing, publishing, or disclosing any type of information regarding fellow employees.
A policy that prohibits employees from maligning, defaming, or disparaging anyone within the company (including using inappropriate language and criticizing the company in a public forum and on social media).
A conflict-of-interest policy that employees could reasonably read to prohibit engaging in union organizing while on non-work time.
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NLRB Changes on the Horizon
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NLRB findings that a myriad of employer policies were overly broad and unlawful (cont'd):
A policy placing a total ban on photographing, recording, or possessing a camera or recording device, which could be reasonably interpreted to prohibit attempts to document health and safety violations, or documentation of unfair labor practices.
A media policy that contains a blanket restriction on employee communication with third parties or use of company logos.
NLRB Changes on the Horizon
A Republican majority on the NLRB could adopt a new test for reviewing employer handbooks, rules, and policies.
The current test broadly considers whether employer rules that are neutral or legitimate on their face can be “reasonably construed” by employees to prohibit activity protected by the NLRA. The focus is on employees’ possible misunderstanding of the rules.
A new test is expected to balance the employer's legitimate basis for the rule with any potential adverse impact on protected activity, and to be rooted in empirical evidence.
The pendulum may finally be swinging in a more rational direction.
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© 2017 Quarles & Brady LLP -This document provides information of a general nature. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations or issues. Additional facts and information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about your particular circumstances before acting on any of this information because it may not be applicable to you or your situation.
Thank You! Questions?
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Marian [email protected]