FIRM SEMINAR
Spring Cleaning 2003: Sprucing Up Your Personnel Policies And Procedures

This seminar includes:
• clearing the cobwebs from COBRA - a review of federal and state issues
• mopping up your concerns about the ADA, the FMLA and the latest cases
• dusting off the FLSA - are those employees really exempt
• pruning and polishing your personnel files, including INS issues
• tidying up your forms - from applications to terminations and everything in between
• and MUCH more!

Once you have completed this seminar you can put your policies and procedures in shipshape and concentrate on making the rest of your business shine!

The seminar is set for Thursday, March 27, 2003, at 1700 West Loop South, 7th floor from 1:00 to 5:00 p.m. Cost is $75 per person. Space is limited and reservations will be taken on first come, first serve basis. Call early! You don't want to miss this excellent opportunity to sweep away the outdated and possibly illegal policies that are cluttering up your business.

Call for reservations at (713) 629-1800 or complete the form on the last page of this newsletter and send it to us along with your check.

"This program has been approved for 3.75 recertification credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org."

A POTPOURRI OF PROBLEMS

1) OSHA

Another Warning About Corporate Responsibility. As many of you recall, Congress, in response to the corporate accounting scandals, passed the Sarbanes-Oxley Act. This act requires all covered employers to provide a company executive to certify that certain employer's reports to government agencies are true, accurate and complete. In most instances, there are very few employment or labor law implications to this Act.

However, OSHA recently enacted regulations requiring similar measures of corporate account-ability to be taken in the reports one makes to the agency. In particular, OSHA's new regulations require an employer's annual summary of work-related injuries and illnesses to be certified by an executive. In particular, an employer's annual summary of work-related injuries and illnesses must be certified by an executive. The failure to properly certify the summary can result in fines for the company and may increase whatever penalties OSHA may assess for any errors that it discovers.

The Act defines an executive as the owner, an officer of the company, the highest ranking official working at the establishment or the immediate supervisor of the highest ranking official at the establishment. OSHA's regulations suggest that at a minimum the executive must be familiar with the record keeping requirements of OSHA, the company's record keeping requirements, and the company's injury log. These regulations can be a burden for employers who don't have executives or high ranking officials trained in this capacity. As a result, if you need help reviewing some of these requirements, please feel free to contact us.

Happy New Year From OSHA.

According to the Administrator of the agency at a recent news conference, OSHA will increase its work site inspections by an additional 1,300 inspections during fiscal year 2003. Furthermore, the agency will try to pursue ergonomic cases under the general duty clause of the Act. The general duty clause provides that every employer shall furnish a place of employment free of recognized hazards that are causing or are likely to cause death or physical harm. The agency figures that even though the Clinton administration regulations were undone by the Bush administration, this general duty clause provides the agency with enough authority to go after the recognized hazards caused by ergonomically incorrect workplaces. In fact, the agency had some success in pursuing a similar matter against a nursing home last year.

2) FMLA

The Siege Continues. Ever since its inception, Congress has been under siege by bills attempting to expand the Family and Medical Leave Act (FMLA). Several of these attempts included efforts to make FMLA leave paid, or to even make it longer. Unfortunately these attempts do not deter judges from interpreting the statute a bit broadly at times.

In one recent case, an employee requested leave so that he could care for his perfectly healthy children. As many of you know, the FMLA allows parents to take leave for among other things, to care for a spouse, parent or child who is suffering from a serious health condition. The employee wanted to babysit and care for his healthy children while his spouse was at the hospital caring for a sick child. The court held that this leave was acceptable under the FMLA even though it did not fall within the express provisions of the Act. According to the court, Congress passed the FMLA to provide support to families faced with a crisis. As a result, the court concludes the scope of the Act was intended to include one parent's desire to care for the healthy children, while the other parent cares for the sick child.

More Incentive To Brush. In another recent FMLA case, an employee suffered a severe toothache and her face started swelling. Understanding the situation, her supervisor gave her permission to leave work to go see a dentist. Rather than immediately seeing a dentist, the employee leisurely took the rest of the day off and went and saw the dentist first thing in the morning. The dentist provided the employee with a prescription for an antibiotic and a pain killer. The dentist was also kind enough to reward the employee with a hall pass excusing her visit to the dentist that day.

After missing the next day of work, the employee returned and worked a couple of extra days. On a scheduled day off, the employee's tooth started to hurt again, so she went back to the dentist her next day of work to see if it was okay. As you can probably imagine, this employee had numerous absences prior to her toothache. As a result, the company decided the employee had enough bites of the apple and decided to terminate her. The employee sued alleging that she was terminated because she had exercised her FMLA rights in taking the absences. The court concluded that the employee's terrible toothache was not a serious health condition as required by the FMLA. Although the employee alleges she was unable to work as a result of the toothache, the employee was not entitled to FMLA leave because she failed to bring forth any medical proof. As a result, her termination was not the result of retaliation.

3) Inadequate Training/Supervision

Rent-A-New HR Department. A federal court in Illinois recently granted approval to a $47 million consent decree settling two separate lawsuits brought by both private attorneys and the EEOC against Rent-A-Center. The decree calls for the company to provide a whopping $33 million to a class of women who allege they were denied promotions, sexually harassed and demoted from their positions in the company. An additional $2 million was provided to applicants and, of course, the attorneys received approximately $11.25 million for their fees and costs. The primary thrust of the company's problems seemed to stem from its total lack of human resources' supervision at its 2,300 retail outlets spread across the country. Each was its own fiefdom.

If paying out $47 million was not enough, Rent-A-Center was forced to agree to create an HR department and give current executives extensive training. In addition, the company was required to create a position of vice president of human resources, and appoint an outside consultant to oversee the enforcement of the decree. Also, the president and CEO of the company will broadcast videotape messages promising a new climate which welcomes women into the workforce and provides warnings regarding future sex discrimination.

It's Not So Funny Anymore. A jury verdict for $5,162 in back pay, $30,000 for emotional distress and a whopping $1 million for punitive damages was upheld recently by the appellate court reviewing this case. An African- American employee who was employed for only six months was subject to constant racial jokes and slurs. Over the course of his six months of employment, the employee alleges to have heard the "N" word more than 50 times. However, the employee failed to report the problem to his supervisor and quit.

According to the employee, the supervisor was also witness to the jokes and laughed along. The employee's supervisor admitted that he had overheard the racial jokes. However, he failed to report the conduct even though he knew he was obligated under the company's policy. The co-workers admitted to the racial joking and claimed to be equal opportunity bigots, making fun of every race, gender and national origin the same. The jury must not have bought this defense when it awarded its verdict.

In the court's own words, "this case should serve as a reminder to employers of their obligation to keep their workplaces free of discriminatory harassment. Although much of what happened here was characterized as "jokes," neither the discrimination nor the jury verdict is a laughing matter." This case points out just how important it is to make sure your supervisors are well trained and prepared to deal with harassment, whether there is a complaint or not.

4) Wage & Hour

There has been a material increase in litigation activity under the wage and hour laws in recent years. Most of this centers on the plaintiff's bar seeking class actions against multi-locationed employers who have a policy of treating certain categories of employees as exempt under the white-collar exemptions. Other class actions are brought when multiple locations of the same employer evolve similar practices of not compensating employees for some of their "hours of work" (not corporate policy).

Wally World is in a World of Hurt. Thirty-nine class actions have been filed in 30 states by workers seeking compensation for unpaid over-time. A federal jury in Portland, Oregon found Wal-Mart guilty of forcing employees to work under such circumstances. The Oregon case is the first to achieve class-action certification against Wal-Mart.

Brown Pays Green. UPS recently paid out a multimillion dollar settlement agreement for not properly paying its part-time managers overtime. Six thousand former and current part-time employees of UPS in California are eligible for the nearly $18 million settlement. Although only nine employees originally brought the lawsuit, plaintiffs' attorneys requested and received certification for the entire class of part-time employees.

Although frequently litigated, especially lately, the critical issue in this case was not whether the "managers" could be considered exempt under the overtime provisions of the FLSA. Instead, the suit was brought under California law. California law requires that an employee must be paid a minimum monthly salary of approximately $2,340 if he is considered exempt from overtime by his employer. Since these part-time employees were not provided overtime, and did not receive the monthly minimum, the company settled its case for a hefty sum. This case points out the caution necessary whenever a company grows and expands into other states, especially California. This particular case emphasizes the importance to our clients who have multi-state operations who may need to take advantage of our partnership with the other firms in the Worklaw Network in order to comply with various state laws in those jurisdictions.

5) ADA

Getting Passed By Science. An employee recently brought suit under the Americans with Disabilities Act against the City of San Antonio after he applied to be a police officer but was refused the position because he has ITDM or insulin-treated diabetes mellitus. Historically, the Fifth Circuit has held an employee afflicted with such a condition was not qualified to drive a vehicle on a public highway as a matter of law because of the risk of injury to himself and/or others.

Rather than standing by their previous ruling, the Fifth Circuit decided to abandon this per se rule. According to the court, the Supreme Court requires determinations regarding whether an employee is disabled to be made on a case by case basis. As a result, the per se rule regarding employees with ITDM is in direct conflict with this case by case basis test. The court also noted the miracles of modern science regarding the advancements made in the control of diabetes. As a result, the court withdrew its per se rule, and implemented a case by case basis.

6) Now For Something Completely Different ...

Negligence. As cellular phones grow in popularity, it would be advisable as employers to consider the potential risks which exist whenever an employee who is working for you is using his/her cell phone. A recent series of cases illustrate this point. In an ongoing case in Virginia, a law firm is being sued for nearly $30 million because one of its associates, while talking on a cell phone, swerved off the road, struck and killed a teenage girl. The argument brought by the employee alleges that since the attorney was spending time on the cell phone doing work for a client, she was acting within the course and scope of her employment. As a result, the employer might be vicariously liable for the associate's action. A Miami jury recently awarded approximately $21 million when an employee was making a sales call on his cell phone and struck a 78 year old. Although these cases have specific showings that the employee involved in the accident was using their cell phone for business purposes, they should cause concern for all employers. So what can an employer do?

Although not required, it might not be a bad idea to consider adopting a strict policy prohibiting employees from making or receiving cell phone calls while driving. Like most employment policies, it is better to adopt some of these policies now than face a $21 million verdict later. Although these policies will not guarantee you won't get sued or even lose a case, they at least provide the employer with some ammunition to combat these types of lawsuits.

TRADITIONAL LABOR LAW

Be Careful, The Salts Are Back. A recent case before the Fifth Circuit can serve as a checklist of conduct an employer should not engage in, unless it wants to get sued.

A non-union employer served as a contractor for a non-union plant. As the plant grew larger and larger, the International Brotherhood of Electric Workers decided it was time to grab their share of this ever growing pot. As a result, two incognito union organizers ("Salts") applied for employment and were hired. Upon arriving at work the next day, the Salts were walking around the plant wearing their IBEW buttons. One of their co-workers recognized them. The plant's "safety" manager threatened to run them off. On the same day as the threat, a 10-foot piece of conduit fell near the union organizers.

Over the next couple of days the foreman of both plants attempted to come up with a reduction in force to get rid of the union employees. Despite this, the plant manager approached the union organizers and point blank asked them if they were there to organize the plant. Upon receiving a yes, the two organizers were promptly terminated.

Rather than just bringing this case before the NLRB, the union decided to take additional steps to guarantee an NLRB charge. As a result, they sent out two union employees wearing buttons to the plant for employment. Recognizing the fact that they were pro union, the company decided it did not need to hire anyone at this time and sent these applicants away. During the same day but a short while later, another union employee, who was not wearing any union regalia, went out for the plant and sought employment. Surprisingly, the company now had positions available. After this additional set of facts, the union brought an unfair labor practice charge against the company. The NLRB held, and the Fifth Circuit affirmed, several of the charges against the employer for discriminatory treatment and coercion of its employees.

LABOR ARBITRATION

Smoking Out(side of Work). Those crazy arbitrators are at it again. In one particular case, Arbitrator Michael Paolucci seemed to go out of his way to make a mockery of the arbitration process when he reinstated an employee who tested positive for THC or marijuana use shortly after an accident. The arbitrator starts out by discussing the fact that an employer cannot afford to have employees who are under the influence of alcohol or narcotics. As the arbitrator put it, "the risks are too great."

Through no fault of his own (other than his failure to wear a furnished athletic supporter), an employee was injured on the job and sent home by the nurse with an ice pack and instructions to apply the ice to his injured part. Upon return to work the next day he was sent to a doctor for a proper return to work release. In accordance with normal practice following an on-the-job injury, a drug test was given.

Upon receiving the employee's drug results back which included testing positive for marijuana use, the employee was terminated pursuant to company policy and the employee filed a grievance. The arbitrator concluded that the type of drug being abused, marijuana, and the fact that the use was off duty, resulted in only a minor issue and will not justify the discharge of any employee.

According to the arbitrator's own self-imposed standard there must now be a nexus or relationship between the on-the-job injury and the off duty drug use. Since there was no relationship between his off duty conduct and the job injury, the arbitrator sustained the grievance. However, the arbitrator felt that giving the employee full back pay would be unfair to the company, so he did not provide additional drug money in the form of back pay. However, the employer had to rehire someone who had tested positive for marijuana shortly after an accident even though the risks are so great to the employer.

Union Organizational Activity Since Our Last Newsletter. Six petitions for certification have been filed by unions. One petition for decertification has been filed by management. One decertification election was held and the employer won decertification. Four certification elections have been held, of which management won two.

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The Quarterly Update is a newsletter providing recent items of interest to our clients in the various areas of employment law. While the Update is to alert you to potential new problem areas or changes in the law, it is not to be considered legal advice or a legal opinion. Such can only be given after careful consideration of the facts unique to any situation. The contents of this newsletter are copyrighted and may not be used without express written consent of Neel & Hooper, P.C.

** Neel & Hooper, P.C. is a member of WORKLAW Network.  WORKLAW Network is comprised of independent law firms that devote their entire practice to representing management in all facets of labor and employment law.  Formerly known as LABNET, the network was founded in 1989 to provide employers with access to high quality law firms throughout the U.S. specializing in labor and employment law matters.

WORKLAW Network firms meet stringent quality standards, and are evaluated not only for their labor and employment law expertise but also for their professional integrity.  They are committed to providing employers with high quality and cost-effective advice along with personal attention.

Member firms are linked by e-mail and share a computerized database containing research memoranda, briefs, election campaign materials and other pooled resources, allowing for more efficient representation of clients.  All WORKLAW Network firms represent employers in employment litigation and labor relations.  Several firms also represent employees in employee benefits and workers’ compensation.