Tag Archives: employment law

Employer May Be Held Liable For Employing Murderer!

Contributed by Noah A. Frank, July 27, 2017

Claims of negligent hiring, training, and retention is alive and well. Employers must be prepared to investigate, and fully remediate supervisors’ misconduct.

code of conduct

Recently, the Seventh Circuit Court of Appeals (Illinois, Wisconsin, Indiana) held that an employer may be liable for intentional acts committed by supervisory employees against other employees outside of work if the employer has been negligent. The tragic case, Anicich v. Home Depot USA, Inc., 852 F. 3d 643 (7th Cir. 2017), arose from the death and rape of a pregnant employee at the hands of her supervisor.

Background

Home Depot and its garden centers subcontractors (together, the “Employer”) jointly employed Brian Cooper as a regional manager. The victim’s estate alleged the employer knew Cooper had a history of sexually harassing, verbally abusing, and physically intimidating female subordinates, which included making crude and lewd comments, yelling and swearing at them, rubbing against them, controlling their conduct by pressuring them into spending time with him alone, and even throwing things.

The supervisor’s mistreatment of one subordinate, Alisha Bromfield, began in 2006 when she started working for the employer seasonally as a teenager. Cooper fixated his attention on her, calling her his “girlfriend” at work and repeating the above misconduct with her. Senior management, aware of Bromfield’s repeated complaints, failed to take reasonable steps to protect Bromfield, ensure that Cooper completed mandated anger management training or remove his supervisory duties. This ended in tragedy.

In 2012, when Bromfield was 7 months pregnant, Cooper threatened her. Using his supervisory authority, he demanded that she attend an out-of-town wedding with him, telling her he would fire her or reduce her hours if she refused. Bromfield acquiesced, but denied Cooper’s recurring demand to “be in a relationship.” After the wedding, Cooper murdered Bromfield, and then raped her corpse.

The Court held that employers have a duty to act reasonably in hiring, supervising, and retaining their employees, and that this was part of a broader trend toward recognizing employer liability for supervisors’ intentional torts committed outside the scope of employment – even where the harm caused was wholly disproportionate to more predictable harms (e.g., murder/rape versus continued sexual harassment, emotional/mental trauma). Because Cooper was alleged to have abused the employer’s grant of supervisory authority over Bromfield, the employer could be vicariously liable for Cooper’s torts committed against Bromfield.

Employers’ Duty in Light of the Seventh Circuit Court Ruling

Anicich is instructive. Employers that fail to act to stop an employee’s abuse of supervisory authority could be held liable for even the most extreme and gruesome intentional tortious and criminal conduct.

As such, employers must protect their businesses, including the following minimum steps:

  • Understand the risks associated with subcontracting and joint employer relationships, including supervision and control;
  • Implement and train employees on anti-discrimination, harassment, and sexual harassment policies, including a published complaint/reporting procedure, and prohibiting retaliation;
  • Take seriously and investigate all reports and complaints – no matter how minor, and even for repeat complainants;
  • Remediate any issues – including stripping supervisory authority, mandating training, and transferring/terminating employees;
  • Prohibit and protect those involved from, retaliation;
  • Respect and comply with collective bargaining rights – and get the union’s buy-in when necessary; and
  • Seek the advice of and guidance from experienced employment counsel when issues arise to ensure legal compliance and implementation of best practices to mitigate exposure.

OVERTIME RULE UPDATE – DOL APPEALS PRELIMINARY INJUNCTION

Contributed by Noah A. Frank

As we previously reported, on 11/22/2016, Judge Amos Mazzant (E.D. Texas) granted a preliminary injunction that halted the 12/1/2016 implementation of the DOL’s Final Overtime Rule, which would have more-than-doubled the minimum salary level for executive/administrative/professional exempt employees.Wage-Hour2

On 12/1/2016, the U.S. DOL filed a notice of appeal to the Fifth Circuit Court of Appeals, indicating that it strongly believes that the DOL followed all required administrative processes, and there is no reason to delay implementation of the Final Rule.

This fight is not over. Employers that have not yet undertaken serious analysis of the duties of claimed exempt positions should do so promptly and determine the strategies they will implement should the injunction be vacated. Stay tuned for further news and analysis of this hotly evolving issue.

Is Your Contractor Really Independent?

Contributed by Noah A. Frank

Recently, a California labor commissioner found that an Uber driver was an employee and not an independent contractor (“IC”), awarding the driver over $4,000 in expenses (Uber Techs., Inc. v. Berwick, CGC-15-546378 (Cal. Sup. Ct. June 16, 2015)). Similar lawsuits, including class action matters, are being filed around the country.  The implications for Uber are huge: unemployment taxes, workers’ compensation insurance, minimum wage, overtime, and third-party tort liability to start.

What is so surprising about this ruling is that Uber drivers seem to epitomize the IC relationship. They enter into explicit IC agreements, work when and where they want, accept the fares they want, supply their own vehicle, pay their own gas and maintenance costs, and work for competitors (i.e., Lyft and traditional taxi services). Uber generally requires drivers to complete an application, be safe drivers, and be knowledgeable about the city’s geography. Uber processes the fare, deducts its fee, and pays the remainder to the driver.

How did the IC relationship become so complex?  Well, the law favors the employer-employee relationship as the default.  It ensures workers receive minimum and overtime wages, are covered by workers’ compensation and unemployment benefits when the relationship ends. Of course, this also means that the government receives taxes (rather than hope an IC actually pays taxes), and will not become the guarantor of an unemployed or uninsured individual through social welfare programs like Medicaid.

ContractIt’s not so simple after all.  Here are five tips for engaging an Independent Contractor:

  • First, consider whether the IC arrangement is really best for your business. For example, if you want a lot of control versus an end product, it may be better to hire employees.
  • Second, will you be engaging individuals or companies?  Most employment law tests favor the IC arrangement when the two parties are independently established businesses.
  •  Third, have a good, tailored contract.  While not conclusive, contracts are meant to provide black-and-white evidence of the parties’ intent (which, by its nature, is drafted when things are going well to protect them for when things go south).
  • Fourth, perform an audit of the relationship under the various substantive laws governing your industry (e.g., special rules for construction, trucking, and temporary labor to name a few) before entering into the IC relationship.  The key is: would the relationship satisfy an administrative agency’s test if an IC complained?
  • Finally, seek the advice of counsel to ensure that the four steps above are conducted with an objective eye towards protecting your business now and going forward.  While most business deals can be made, upfront review may save costly legal fees in litigation and otherwise.