Category Archives: employers

So Here’s What I Think About That Former Employee…

Contributed by Carlos Arévalo, April 23, 2018

Unless we have been living under a rock for the last few weeks, it is likely that we may have wondered if former FBI Director James Comey could sue President Trump for defamation. Indeed, President Obama’s former Ethics Chief, Norm Eisen, recently tweeted that the president’s “false, malicious accusation of criminal conduct is libel [published defamation] per se by Trump. @Comey could sue-& might win…”  Without weighing in on the viability of such a claim, however, it is prudent to review a few defamation principles to keep in mind.

gavelAcknowledging that laws vary from state to state, to establish a claim for defamation a plaintiff must show the following: 1) that the defendant made a false statement about the plaintiff; 2) that the defendant “published” the statement to a third party; 3) that the defendant either knew the statement was false or lacked reasonable basis to believe the statement was true; 4)  that the statement was not “privileged”; and 5) that the plaintiff was harmed by the publication of the false statement. In a per se defamation case, the plaintiff may not have to show harm because the statement is so damaging on its face, e.g. the individual is said to have “committed many crimes.”

In the context of employment, such claims typically arise in connection with an employee reference check. These kinds of claims are difficult to prove and laws generally provide certain defenses and privileges or immunities. For instance, truth is an absolute defense – if the statement is true, the claim would fail. In addition, statements of opinion will not be sufficient, even if they are negative and unkind (“slippery…not smart”). An individual making the statement may also have the protection of an “absolute privilege” or immunity, such as the president or other high ranking public officials who enjoy absolute immunity for statements made “in the course of their official acts.” Other types of statements fall under a “qualified privilege,” where the individual has a right to make the statement, such as might be found in the context of an employment relationship where a supervisor is engaged in evaluating an employee. Here, the plaintiff would have to show that the individual acted with malice to establish liability.

Of course, most employers and their agents will not enjoy “absolute immunity.” Depending on your home state, certain immunities in providing references may apply under a specific statutory framework. To minimize the incidence of such claims, however, it will be critical to establish specific guidelines to ensure consistency in handling reference requests. Designate certain individuals to respond to reference requests. Additionally, employers may want to maintain a database of how to address specific reference requests as there may be, in addition to written guidelines, specific separation agreements that will govern how references will be provided. Finally, managers and supervisors ought to be trained in proper evaluation and performance review methodology to avoid making statements that may be deemed defamatory by a disgruntled employee (e.g., sticking to the handbook policy the employee violated in a write up, as opposed to the opinion of the employee being a criminal or thief). And finally, do not use Twitter or other social media vehicles to address an employee’s performance or separation.

 

FYI, Text Messages and IMs Are Discoverable Too

Submitted by Suzanne Newcomb, April 12, 2018

Back in November we reported on a federal judge ordering several members of management to turn over messages from their personal email accounts and counseled employers to be proactive in managing employees’ use of personal email for company business. The guidance set forth there rings true for text messages and other forms of electronic communication (e.g. WhatsApp, Slack, Trello and myriad others) as well.

49297353 - woman using mobile phone in office workplace.As we explained in our prior post “document production” encompasses not only “documents” in the traditional sense, but all relevant information “stored in any medium” along with its metadata. To be fair, private entities are not required to retain every communication or even every document generated in the course of conducting business. But certain communications are subject to retention regulations and knowledge that litigation is “reasonably foreseeable” triggers a separate and distinct obligation to retain all information relevant to the potential dispute.

Companies that fail to preserve information once an obligation to do so arises run the risk a court will issue a “spoliation instruction” which allows the jury to assume, based on the fact that a party failed to retain relevant evidence, that the evidence it lost or destroyed must have been unfavorable to that party’s position in the litigation. Not a comforting thought for any business.

So, how does a company square the need to keep pace in today’s world of lightning-fast communication and also avoid falling victim to claims of spoliation?

  1. Electronic Communications Are Business Records. Remind employees all communications – including text messages and electronic communications sent via messaging apps — are official business records subject to retention policies and discovery in the event of litigation.
  1. Review your Litigation Hold Notice Form. Make sure it covers not only documents in the traditional sense, but also email, text messages, instant messages, and other forms of electronic communication.
  1. Regulate and Police How Your Employees Communicate. Publish clear policies addressing when texting and other forms of electronic communications are appropriate and when they are not. Can an employee text his/her boss if s/he is going to be late? Is it appropriate for sales personnel to negotiate terms with customers by text?
  1. Involve IT Professionals. Enlist the help of IT professionals to safeguard electronic communications the organization is required to retain and to establish protocols that will allow you to quickly capture communications (along with their metadata) that are relevant to actual or potential litigation when the need arises.

 

Your Company’s Bonuses Are Discretionary, You Say?

By Steven Jados, April 5, 2018

When it comes to employee bonuses, employers often prefer “discretionary” bonus policies—as opposed to more rigid and definite policies and procedures that answer the questions of “who” is eligible to receive bonuses, “when” bonuses will be paid, and “how much” the bonuses will be.

29483972 - bonus of businessmanA problem can arise, however, when the underlying method the employer uses to award bonuses remains consistent from year to year.  Under Illinois law, for example, past practice—even in a non-union setting—can give rise to a legally-enforceable expectation that a given employee is entitled to a bonus under the same method that has been used, uninterrupted, in prior years.

So what is an employer to do to protect itself?

The actual facts behind the company’s method for awarding bonuses will dictate whether a bonus is truly discretionary or not.  But the bottom line is that if your company intends to make changes to a long-used and fairly clearly-defined method of calculating bonuses, such changes should be made and announced to affected employees prior to the start of the bonus year.  Employers should also bear in mind that changes to a bonus procedure made in bad faith (for instance, where it appears clear that bonus procedures were changed specifically to deny a particular employee a bonus) may not withstand a court’s scrutiny.

For companies that truly do use a discretionary bonus system, include language in employee handbooks and other policy documents clearly stating (1) that bonuses are a discretionary, voluntary contribution by the company, based on company profitability and employee performance; (2) that bonuses are not earned until they are actually awarded and, as such, may be withheld, increased, decreased, or discontinued, at any time up to the bonus award date; and (3) that management reserves the unilateral right to change bonus policies at any time and for any reason. Whether the company’s bonus procedure is truly discretionary or not, factors that disqualify employees from bonus eligibility should also be clearly stated in all relevant handbooks and policies documents.

If you have concerns that your company’s discretionary bonus policies may not stand up to court scrutiny, we recommend contacting experienced employment counsel for a comprehensive bonus policy review.  In doing so, employers should bear in mind that state law often controls the question of whether a bonus is discretionary or not, and the law may differ significantly from state to state, so employers must be sure they seek legal advice covering all states in which the employer operates.

 

Will Amazon, Berkshire Hathaway and JP Morgan Change Healthcare for Employers?

Contributed by Suzannah Wilson Overholt, February 19, 2018

What happens when you combine Amazon, Berkshire Hathaway and JPMorgan Chase? Apparently, a new non-profit health care company. That was the news last month when the three companies announced that they are forming their own health care company to increase transparency for their employees.

Health Insurance and Money

Health insurance policy and dollar bills on white background 

Anyone involved with employee benefits knows that one of the most dreaded moments annually is getting the renewal quote for the health benefit plans. The quote starts the agonizing dance of trying to get the astronomical increase to a manageable number while calming the budgeting folks, panicked by the opening salvo. The idea of somehow removing the mystery and agony of that process is incredibly appealing. But is it possible? Maybe.

The push for transparency appears to be aimed at the elimination of the overhead costs that are built into the health insurance expense. According to the Wall Street Journal, the new venture plans to help current vendors work better by focusing on technology solutions, improved patient experience and customer service.  Initiatives might include flat fees and using technology to provide more tracking and care outside traditional health-care settings. The final outcome could result in providers being adequately paid for the services they provide, new technology for streamlining services, and reduced costs due to elimination of unnecessary overhead charged by the insurance companies.

While the new company will be focused on the employees of its founders, its success will likely have a ripple effect. The companies hope the project will save them hundreds of millions of dollars and possibly be a blueprint for others.

The gain for employers would be a potential reduction in the cost of insurance, which, as reported by SHRM, currently consumes on average around 10% of operating budgets. While CNN reports that the rate of increase has slowed over the past few years, a recent study found that employers expect health care costs to increase by more than 5% this year. Thus, reduced costs could eliminate the annual debate between giving raises or keeping insurance contributions in check.

Don’t expect changes anytime soon, though. The existing insurance marketplace has big players with the infrastructure to provide services to millions of people. The new company will have to prove itself. We’ll keep you posted.

 

I Heart You! Office Romance and Risk Management

Contributed by Beverly Alfon, February 13, 2018

As most turn their thoughts to love and romance this Valentine’s Day, we remind you of the potential liability that Cupid’s arrow may unleash. In this post-Weinstein and #MeToo period, the thought of office romance may catapult an employer into sheer panic. Although a recent CareerBuilder survey indicates that office romance is at a 10-year low, the stats are still telling: 36% of workers admitted to having dated a colleague in the past year. Of workers who had an office romance, 30% dated someone in a higher position. Yikes. A soured relationship at work can result in a broken heart for the employer – usually in the form of a sexual harassment claim. How can an employer address this?

A Love Contract?

heart

Red outline of heart on white background

These things exist. They are written relationship agreements that employers seek from employees to confirm the existence of a consensual relationship. The employer’s goal is to mitigate risk by documenting the employer’s expectation that they comply with all existing policies, including anti-harassment policies. They can also be used to set ground rules for other conduct, including public displays of affection (PDA), favoritism – and retribution (in case the relationship turns sour).  However, while these contracts can be a good “band-aid” for addressing the relationship, if a company does not have an anti-harassment program or policy regarding office relationships; it is not the best option.

A love contract alone will not likely defeat an employee’s claim of harassment. Most sexual harassment plaintiffs can claim that they were coerced into signing one because their employer presented the agreement in the context of their at-will employment. Practically, a love contract is also difficult because it requires employees to admit to the existence of a relationship in the first place. In the same CareerBuilder survey, 41% of the workers kept their romance a secret – and almost 25 of survey respondents admitted to an affair with a colleague where one person involved was married at the time.

Snap out of it!

You can more effectively mitigate legal risk by focusing on your anti-harassment program. If you don’t have a written policy in place, invest the time and dollars to get one. Having a policy on the books is not enough. It should be supplemented with annual interactive training courses (a legal requirement for California employers) – ones tailored for non-supervisory and supervisory employees. The goal is to document that employees have been trained on the internal complaint procedures. Equally important is training your supervisors on how to avoid harassment claims and how to properly handle claims if the supervisor receives knowledge of a claim. A solid anti-harassment/discrimination program demonstrates employer good-faith and can form a defense against such claims.

A general workplace romance or “fraternization” policy can address concerns over PDA and favoritism. Don’t play footsie over this. Specifically address office relationships to make it clear that you expect professional and respectful behavior of all employees, regardless of any personal relationship between them. You can prohibit PDA in the office or on company time. And yes, you can forbid romantic relationships between supervisors and subordinates. According to a 2013 survey conducted by SHRM, of businesses that had a romance policy, 99% banned supervisor-subordinate relationships. And, it’s no wonder. In addition to harassment claims, soured relationships can result in claims of assault and battery, false imprisonment and defamation against the alleged harasser. Inevitably, the employer will be rolled into any related litigation.

Bottom Line: Love contracts are uncomfortable and not very effective.  It is more effective to prohibit the risky conduct in the first place. Implementing a strong anti-harassment program and addressing employee relationships in a policy will go further in mitigating risks.

 

Oh No, Not You (Again): Serious Enforcement of Harassment Policies Is Absolutely Necessary

Contributed by Steven Jados, November 22, 2017

During the past several weeks, it seems that every day has featured new allegations of sexual harassment involving celebrities, politicians, and others in positions of power.

These allegations invite a question to employers: Do you want to be in the news for all the wrong reasons? No? Good, because this moment in time should impress upon all businesses the importance of vigilant enforcement of anti-harassment policies.

HandbookThe first step in enforcement is ensuring that anti-harassment policies are properly communicated to all employees—from entry-level to C-Suite.  All employees should be told, in no uncertain terms, on day one of their employment and regularly thereafter, that they have the right not to be sexually harassed at work. The company’s management—all the way to the top of the organization—must also be put on notice that employees have the right not to be sexually harassed at work, and that credible allegations of harassment will carry real consequences for those who engage in such unacceptable behavior.

Employees must also be trained on how to make internal complaints of harassment within the company.  On that point, employees should know that they can contact human resources, or any appropriate member of management with whom the employee is comfortable with, to disclose improper conduct without fear of retaliation.

Training must also extend to human resources and all members of management, so that they know to recognize harassment complaints for what they are—and so the company’s investigation and enforcement procedures can promptly be put into action. Management must take all complaints or possible situations of harassment seriously, and investigate them to their reasonable conclusion.  There can be no off-the-record complaints; companies cannot look the other way because an accused manager was “just kidding” or, even worse, because an individual “gets to do whatever he or she wants.”  In the end, appropriate disciplinary action and re-training must follow when the company’s investigation determines that harassment occurred.

While proper investigation procedures can shield companies from liability in certain circumstances, failures in implementation, training, investigation, and enforcement of anti-harassment policies are more likely to result in legal liability, negative publicity and adverse financial implications.

Attention employers: Do you have questions on how to implement or communicate anti-harassment policies? Are you uncertain how you should respond to employee complaints? Do you need help in training your employees and management on company anti-harassment policies and procedures? Or, like many employers, are you simply hesitant to investigate harassment allegations against high-level managers?

Ultimately, if you are asking these questions, the best approach is to seek the advice of experienced employment counsel so that potential areas of liability can be contained and minimized, or better yet, eliminated as soon as possible.

Opioids in the Workplace

Contributed by Michael Wong, November 3, 2017

One of the first questions I ask when providing drug and alcohol training to managers, supervisors and employees is “What is the most commonly used illegal drug?” Typically, the response that I get will be alcohol (albeit not illegal) or marijuana. What most do not realize until the training is that prescription drugs, in particular opioids, are the most commonly abused illegal drug. Prescription opioids include hydrocodone, oxycodone, morphine, codeine and fentanyl, while illegal opioids include heroin.

J0337282Opioid use in the United States has started to take on a whole new form and is now commonly referred to as the opioid epidemic. Illinois has not escaped the opioid epidemic; in 2016 there were 2,278 drug overdose deaths of which over 80% (1,826) were opioid related. The number of opioid related deaths in 2016 was an increase of over 30% of the opioid related deaths in 2015 and an increase of over 70% of the number of opioid related deaths in 2013.

In looking at these numbers, it is important to understand that these are only the deaths – not the actual number of individuals using or abusing opioids. In a recent study by the National Safety Counsel, over one in three Illinois residents (35%) reported being impacted by opioid/heroin use by knowing someone (self, family/friend, co-worker/co-workers’ family, or neighbor/neighbor’s family) that started using opioids/heroin, became addicted to opioid/heroin, survived an opioid/heroin overdose or had died from an opioid/heroin overdose. Indeed, one issue with the opioid epidemic is that the gateway to opioid use does not always come from illegal activities, but can start out with a legitimate legal prescription. When there is a valid use for a prescription drug, an individual can feel like they are not doing anything wrong and their use can quickly turn into a slippery slope of addiction, activities that negatively impacts their work performance and potentially illegal activities. As a result of this, the opioid epidemic does not discriminate and can be found across all demographics, industries and positions.

One of the concerns with opioids for employers is that it is more difficult to tell if someone is under the influence or using opioids or heroin than other more traditional drugs. For instance, opioids and heroin do not come with symptoms or indicators that are easy to perceive like with alcohol – a smell, shaking hands and movements, and behavior changes; or with marijuana – a smell, red eyes, delayed reaction time, anxiety, and lack of coordination. With opioids, it is often difficult for employers to make the connection between an employee appearing groggy, sleepy or forgetful in the workplace to being linked to drug use. Indeed, what employers will typically see, if anything at all, is a gradual decline in an employee’s attendance and performance, until the employee loses their job or stops coming to work altogether.

The traditional tool of employers to identify and prevent drug and alcohol use within the workplace is drug testing. Pre-hire drug testing can be effective in preventing illegal opioid users from joining the workforce. However, drug testing is not always effective where the opioid user has a legal prescription or where the individual is not yet an opioid user. Reasonable suspicion drug testing can also be effective, but first requires reasonable suspicion of opioid use which can be difficult to identify.

So what does this leave? First and foremost, employers should re-evaluate their drug policies and testing procedures and understand the potential legal implications. For example, drug testing can be modified to test for legal prescription medications, but in order to avoid a violation of the ADA the applicant or employee must be able to provide an explanation for the positive drug test, such as a prescribed medication. Additionally, employers must realize that even if the employee is using prescription medication, there may be an underlying medical condition that they need to be aware of to avoid any kind of disability discrimination claim.

Next, employers should consider questioning its health care benefit carrier and workers’ compensation carrier on what actions they are taking to address the opioid epidemic and collaborating with them on any specialized programs or options for addressing. This can include learning about whether the carrier has programs for the conservative use and risk of prescription opioids, an opioid management program and/or a prescription benefit management program, which can help in preventing prescription medication abuse and identify the abuse of prescription medications. In doing so, employers should also consider investing in an employee assistance program (EAP), which can help employees avoid or address addiction.

Another investment that can pay dividends is management and employee education. Better training and education for not only management, but also employees regarding the impacts of opioids, how to identify opioid use and how to address opioid abuse. Management training can help make management more aware of how to identify potential issues before they occur and get employees help before it escalates to more serious problems. This includes not only taking into consideration the symptoms of opioid and other drug use, but also recognizing changes in how employees are acting, their performance, their attendance, any recent injuries they have had and any other issues that could indicate drug abuse. Employee training can help employees understand the danger of opioids, how the use of legal use of prescription opioids can lead to addiction, and what steps can be taken to seek assistance. Of course, any training should be tailored to include information regarding the Company’s policies, drug testing, benefit programs and reassurances regarding the Company’s commitment to providing confidential and accessible help and treatment.

Finally, one thing to remember is that despite the high numbers of deaths in 2016 in Illinois, Illinois is still behind many states in its exposure to the opioid epidemic. Indeed, in some places manufacturing employers have found using pre-hiring drug testing was not effective. The reason for this is it significantly increased the number of applicants they have had to go through in order to hire for a position or was making it near impossible to fill their staffing needs due to applicants not returning after learning there was drug testing or applicants consistently failing the drug test.