While New Jersey is the first state to enact such a law, which will go into effect in January 2020, it follows a growing trend in cities throughout the country – particularly in Chicago, Miami, Sacramento, and Seattle – that have seen the passage of ordinances requiring panic devices for certain hotel employees, among other protections. Other cities, such as Las Vegas and New York City, have seen the introduction of panic devices in the wake of union negotiations. The introduction of panic devices will likely go beyond major metropolitan areas, however, as executives at some of the largest hotels have reportedly revealed their plans to provide panic buttons to their employees across the country by 2020.

If you have operations in New Jersey, you need to immediately familiarize yourself with this new law and take compliance steps. And if you don’t have operations in the state or one of the other areas with such a law, you should still be aware of this trend, as it not only presents some concepts for best practices in a hotel setting, but may soon arrive in your own area.

Coverage And Scope

The New Jersey Panic Device Law defines hotel to include not just hotels, but also inns, boarding houses, motels, and other similar establishments that offer and accept payment in exchange for rooms, sleeping accommodations, or board and lodging and that retain rights of access and control over their premises. Regardless of the type of “hotel,” the establishment must also have at least 100 guest rooms in order to be subject to the Panic Device Law. If your business has fewer than 100 guest rooms, compliance with the Panic Device Law is unnecessary.

The Panic Device Law defines an employee as one who performs housekeeping and room service functions on a full or part-time basis at a hotel for, or under the direction of, a hotel employer or any subcontractor of the hotel employer. The law therefore covers and protects hotel employees, contractors, and subcontractors, sweeping them together under an expansive definition of an employee.

The definition of an employer is as broad or broader and includes any person, including corporate officers and executives, who directly, through an agent, or another person (e.g., a staffing agency) employs or exercises control over a hotel employee’s wages, hours, or working conditions. Awareness of and compliance with the Panic Device Law is thus essential by directors, managers, supervisors, and anyone else who may exercise sufficient control over hotel employees.

Provision And Use Of Panic Devices

Employers of covered hotels must provide employees that work in a guest room by themselves with a panic device. Employers are prohibited from charging employees for the panic device and must purchase and furnish them at their expense. The Panic Device Law defines a panic device as a two-way radio or other electronic device that can be used by the employee to call for immediate assistance from a security officer, manager, supervisor, or other appropriate person.

Employees are permitted to use their panic device whenever they believe there is ongoing crime, an immediate threat of assault or harassment, or some other emergency in their presence warranting the use of their panic device. Once used, employees may stop their work and leave the area for safety and assistance.

Employers’ Duties When A Panic Device Is Used

Employers are forbidden from taking adverse action against an employee for using a panic device. After a panic device is used, aside from promptly responding to the call, employers must also:

Note an accusation against a guest to for “violence” – which is broadly defined to include sexual assault, sexual harassment, and other inappropriate conduct – toward an employee and put the guest’s name on a list and retain it for five years from the date of the reported incident, along with details of the accusation.
Report any alleged crime by a guest or other person to law enforcement and cooperate in any investigation by law enforcement.
Reassign the employee who activated the panic device to a different work area away from the accused guest’s room for the duration of the accused guest’s stay.
Notify employees assigned to a guest room where a reported incident has occurred of the presence and location of the accused guest named on the hotel’s list and provide them with the option of servicing the accused guest’s room with a partner or declining to serve the accused guest’s room for the duration of the accused guest’s stay.
If an employer later learns that the accused guest is convicted of a crime as a result of the activation of a panic button, the employer may prohibit the guest from staying at the hotel.

Programs For Employees

Employers must develop and maintain programs to educate employees about the use of panic devices and their rights in the event they use their panic devices. The programs should also encourage employees to use their panic devices. Written information may supplement, but not substitute, training programs for employees.

Information For Guests

Covered hotels must also inform their guests about panic devices in one of two ways. They may either require guests to acknowledge a panic device policy as part of the terms and conditions of checking into a hotel, or they may prominently place a sign on the interior side of guest room doors, in large font, detailing their panic device policy and the rights of their employees.

Collective Bargaining Agreements

The Panic Device Law provides a carveout for collective bargaining agreements. If a collective bargaining agreement addresses the issuance of panic devices to hotel employees or addresses employee safety in guest rooms and the procedures for reporting questionable conduct, the collective bargaining agreement controls and hotel employers are not required to provide panic devices to employees.

Penalties For Noncompliance

Hotel employers who fail to provide panic devices or respond as required when a panic device is activated are subject to fines of $5,000 for the first violation and $10,000 for each subsequent violation. The fines are recoverable by the Commissioner of the New Jersey Department of Labor and Workforce Development.

Next Steps For Employers

Covered hotel employers in New Jersey that are not governed by a collective bargaining agreement should begin taking steps to comply with the Panic Device Law and watch for regulations promulgated by the Commissioner, particularly since the Panic Device Law grants the Commissioner with the authority to develop regulations to facilitate its implementation.

Covered hotel employers should budget for panic devices and obtain a sufficient number of them, develop employee training programs, and update your terms and conditions or create signs for guest rooms regarding their panic device policies. Covered hotel employers should likewise review their handbooks and other policies to ensure cohesion with the Panic Device Law.

Hotel employers outside of New Jersey and cities with similar ordinances should be on the lookout for the adoption of similar panic device measures in their localities—or for their inclusion in collective bargaining agreements, if they are not there already. The more widespread introduction of panic devices seems all the more probable in the #MeToo era.

What Are Predictive Scheduling Laws?

Predictive scheduling laws are generally straightforward. In short, they require employers to post employee work schedules a set number of days in advance of when the work is to be performed. Once posted, however, employers are penalized for making any scheduling changes.

In theory, these laws seek to balance respective interests between employers and employees—a balance that was recently addressed in the landmark California decision, Ward v. Tilly’s. In that case, the court assumed the role of the employee’s champion and explained that schedule predictability was an absolute necessity that allowed employees to plan around second jobs, make child-care arrangements, coordinate school schedules, or commit to social plans, among other things. Glaringly absent from this analysis, however, was the employer’s perspective and concurrent recognition that scheduling changes and fluctuating staffing needs are often caused by unforeseeable market realities such as inclement weather, employee call-outs, and unposted community events.

In practice, unfortunately, legislators have expressed wide disagreement over how to address this problem, causing many jurisdictions to take wildly different approaches. For example, in New York City, certain employers are only required to post schedules 72 hours in advance, with changes thereafter being completely prohibited. In contrast, San Francisco requires employers to post schedules not less than two weeks in advance. Once posted, however, any changes require the employer to pay the affected employee anywhere between one and four hours of additional “Predictability Pay,” depending on how last-minute the change actually was. As these examples demonstrate, legislators have yet to agree on any centralized model for predictive scheduling laws, creating a potential minefield for those employers that attempt to apply consistent scheduling practices throughout multiple jurisdictions.

What Industries And Jurisdictions Have Been Most Affected?

Since the first predictive scheduling law arose in San Francisco several years ago, other states and major U.S. cities have contributed to a precipitous rise in these laws. Places like Oregon, New York City, Chicago, Seattle, and Philadelphia have all since participated in this rising regulatory experiment by respectively proposing and implementing their own unique frameworks.

Simultaneously, other states have actively sought to combat the rise of these practices. In the wake of San Francisco’s law, states like Georgia and Tennessee quickly implemented legislation that prohibited their own major cities from enacting similar predictive scheduling laws at the local level, seeking to stifle an already-emerging trend.

To date, however, the retail and hospitality industries have taken the brunt of the regulatory force, with the vast majority of predictive scheduling laws targeting these industries exclusively. As justification for this disparate treatment, legislators have pointed to the disproportionate number of low-wage workers present in these industries who they believe warrant greater protection. For these employees, securing a reliable schedule through traditional means, such as direct negotiation, is far less likely. Accordingly, in these industries, the employer-employee tension between scheduling flexibility and predictably is at its zenith.

So What Should You Do Now?

Unfortunately, compliance with predictive scheduling laws is far from easy. Larger employers with locations throughout multiple jurisdictions tend to be the most affected, although even smaller employers can find themselves in a position that requires a full overhaul of their current staffing model. Accordingly, it’s important to keep a few points in mind.

First, you should audit your locations. The piecemeal framework of predictive scheduling laws means that you may have multiple locations subject to different predictive scheduling requirements. As a result, a centralized staffing model can quickly become outdated, or even worse, a liability. Location-specific policy changes may need to be made, and managers may require retraining on how to handle staffing shortages.

Second, avoid the related pitfalls. No employment law exists in a vacuum, and predictive scheduling laws are no exception. Implementing predictive scheduling models will often impact other aspects of your business and, in some cases, could create unforeseen liability traps. For example, in San Francisco, forgetting to tell your payroll company to separately delineate the “Predictability Pay” scheduling change penalty on your employees’ wage statements could saddle you with a host of unexpected labor code violations and class action demand letters—all for a simple oversight.

Third, consider novel and creative approaches. To address the rise of these laws, some large companies have implemented the use of scheduling apps. In addition to viewing pre-posted schedules, employees can use the apps to swap shifts with coworkers or sign up for unfilled shifts in upcoming weeks. Although, even without apps, voluntary schedule swapping and sign-up policies are both phenomenal ways to reduce, and even eliminate, the need for last-minute scheduling changes—all while boosting employee morale.

Conclusion

Ultimately, when it comes to employment policies, there is rarely a “one size fits all” approach. What’s right for one company may not be right for another. As a result, it’s important to keep up to date on the newest changes in both law and compliance strategies. In the modern day, employment laws are changing at an ever-increasing pace; if the recent rise in predictive scheduling laws hasn’t hit your state or city just yet, it soon may.

For more information, contact the authors at CCook@fisherphillips.com (415.490.9032) or AGuzman@fisherphillips.com (415.490.9028).

Yes, indeed—the labor market is tight. And with the nationwide unemployment rate below 4 percent, 263,000 new jobs created in April 2019, and a sizzling economy, the labor market is likely to get even tighter. This is especially true for the hospitality industry, which has traditionally relied upon a steady stream of lower-skilled and younger applicants eager to enter into the job market. In fact, the National Restaurant Association predicts that jobs in the food service industry will top 15 million in 2019, and lists recruiting and retaining employees among the top challenges for operators.

Yet, just 19 percent of 15- to 17-year-olds had jobs in 2018, and 58 percent of 18- to 21-year-olds had jobs, according to a Pew Research Center study published in November 2018. This is significantly down from years past. The cause of this trend is difficult to predict. Whether parents are not pushing their kids to enter the workforce, or there are too many other extracurricular activities to occupy their time, one thing is certain: younger workers are not as eager to pick up a part-time job, even at the local eatery that is begging for help.

Legal Roadblocks Also Complicate Hiring

Federal and state laws can also deter hiring anyone who is under 18 years of age. Under the federal Fair Labor Standards Act (FLSA), there are regulations that preclude employees who are 16 and 17 from performing certain job duties, such as operating power-driven machines like mixers and meat processors, and delivering food via automobile. Another layer of federal regulations applies to 14 and 15-year-olds, which significantly restricts the number of hours that can be worked during a day and workweek, particularly during the school year. If you are skeptical, check out “Fact Sheet #2A: Child Labor Rules for Employing Youth in Restaurants and Quick Service Establishments Under the Fair Labor Standards Act (FLSA)” on the U.S. Department of Labor’s website.

State laws also serve as a bugaboo to employing minors, and these laws can vary greatly from state to state. One example is in Louisiana, where additional rules and regulations for employing require that all minors (defined as under 18 years of age) to have a 30-minute uninterrupted work break within every five hours of employment. A failure to comply with this requirement will subject the employer to a significant fine.

Time To Get Creative

So, what can Mr. Joe at Big Eats do to increase applicant flow and hire more employees at his stores? We told Mr. Joe that one idea is to increase his starting wage and increase benefits, which he did not want to hear. The fact is, however, many competitors for this part of the workforce (such as big-box retailers) have increased their starting wages well above minimum wage in order to attract applicants.

A quick Google search offers other examples of how employers are creatively trying to solve this workforce problem. From utilizing mobile apps that allow employees to swap shifts at the last minute when conflicts arise, to allowing employees to express their opinions on branding of the products being sold, to handing out recruiting cards to customers who visit the establishment, to offering bonuses to employees who recruit other employees to join the company, to teaming up with AARP to recruit and hire older workers—it is clear that creative thinking gives employers a distinct advantage.

Need another example? Look no further than the Louisiana Restaurant Association’s Education Foundation (LRAEF), which is tackling the workforce issue head on. The LRAEF is a major supporter of the nationwide ProStart program, a two-year program for high school students teaching culinary techniques and management skills that are specifically tailored to the food service industry. Today, there are 56 Louisiana high schools and almost 2,000 Louisiana high school juniors and seniors participating in the program.

According to Wendy Waren, the Vice President of Communications for the LRA, “The LRAEF provides school support grants to purchase ingredients for labs, testing materials, and for field trips. The high school students also participate in the Raising Cane’s ProStart Invitational, held yearly at the New Orleans Convention Center, and that event provides the students with a chance to show their skills and compete for $1.2 million in scholarships. ProStart is a comprehensive program and it is a great way to get our young people interested in the food service industry. We hope they will discover that there are exciting and fulfilling career opportunities in the industry. While employing teens may present challenges, hiring ProStart students will make the challenge worth it given their advanced training.”

Conclusion

So, our advice to Mr. Joe at Big Eats? In addition to suggesting that he may want to look at raising his starting wage and offering additional benefits, he will have to get creative in his search for more applicants and good employees.

Yes, the labor market is tight. But, by partnering with a local restaurant association, using technology and social media, and just generally letting the creative juices flow, even Mr. Joe will be able to find and retain the elusive employees that he so desperately needs.

For more information, contact the authors:

Steven Cupp – Partner, Gulfport office | New Orleans office
SCupp@fisherphillips.com
(228.822.1440)

Steve Cupp is a partner in the firm’s Gulfport office. He has experience across a range of industries, including manufacturing, financial services, construction, and retail.

He has devoted his practice to representing management interests in various areas of labor and employment law, including traditional labor litigation before the National Labor Relations Board (NLRB), handling Department of Labor (DOL) wage and hour audits, and litigation of Fair Labor Standards Act (FLSA) cases.

Steve is certified as a Senior Professional in Human Resources from the Human Resource Certification Institute and he is an active member of the Society for Human Resource Management.

Jaklyn Wrigley – Of Counsel Gulfport Office
JWrigley@fisherphillips.com
(228.822.1440).

Jaklyn Wrigley is a high-energy labor and employment law litigator who exclusively represents the interests of management. Over the years, she has achieved countless employer-friendly results, recently in the form of a full defense verdict in a complicated he-said/she-said sexual harassment lawsuit.  Jaklyn is committed to providing the highest level of service, and in this “24/7” client service business, she recognizes that near-fanatical responsiveness is often as critical as innovative and quality legal representation.  She prides herself in offering both. These efforts have been recognized, and Jaklyn has been selected for inclusion in Mississippi Super Lawyers – Rising Starsevery year since 2013.

Practicing in both Mississippi and Florida state and federal courts, as well as before administrative agencies, Jaklyn has extensive experience with the alphabet soup of federal labor and employment laws: ADA, ADEA, FLSA, FMLA, NLRA OSH Act, and Title VII; and litigation involving immigration issues, wrongful termination, and breached employment agreements.   In her practice, Jaklyn applies a laser focus on the healthcare industry, and understands the interplay between and among healthcare compliance issues, the medical staff, and employment law. She also actively represents clients in the retail, gaming and hospitality, agriculture, and auto dealer industries (among others). Jaklyn has made a point to learn the business environments in which her clients operate so that she can offer advice that is specifically tailored to their needs.

When she is not litigating on behalf of her clients, Jaklyn is working diligently to help her clients avoid legal problems. This is particularly true as it concerns sexual harassment, gender identity, sexual orientation and gender equity issues in the workplace.  From internal audits, management training and employee contracts, to handbook reviews and practical day-to-day advices, Jaklyn believes the easiest problem to solve is one that never arises in the first place.

But not every article of clothing constitutes a “uniform” under the FLSA. The U.S. Department of Labor (USDOL) has long maintained that certain clothing, although required by the employer, is of such a character that it may be reasonably worn outside the context of work and therefore is not a uniform. Shoes are an interesting case-study.

Does The Shoe Fit?

Many hospitality employers often require employees, such as culinary department workers, to wear a certain type of shoe during work hours. Perhaps the most popular variety is the dark-colored, non-slip shoe—widely used both for their appearance and for safety reasons.

Some employers may be surprised to learn that the USDOL takes the position that these shoes do not constitute a uniform under the FLSA. As a result, employers can impose the cost of such shoes even if the cost results in the employee receiving less than the minimum wage after such deduction.

Before The Other Shoe Drops…

A word of caution before hospitality employers rush out to take advantage of this cost transfer. Experience in USDOL investigations teaches us that the agency does not give employers complete freedom regarding shoe deductions, even when it comes to dark-colored, non-slip shoes. For example, if you require employees to order a specific brand of shoe from a certain vendor when a comparable, less-expensive alternative is available, the USDOL may conclude that the shoe is no longer “basic street clothing.” The agency may reach the same conclusion if the employee already owns a pair of shoes but is told that they must order a new pair. Finally, the USDOL will be on the lookout for any ordering mechanism whereby the employer receives a fee or profit anytime an employee orders shoes through a designated vendor.

Many hospitality employers are familiar with Shoes for Crews, a manufacturer of non-slip shoes and other accessories. Shoes for Crews offers a corporate program to businesses which includes a “warranty” in the form of a $5,000 payment if an employee wearing Shoes for Crews slips at work. The USDOL finds this warranty problematic. The agency has been known to take the position in investigations that this warranty constitutes a benefit to the employer that changes the legal characteristic of the shoe such that it becomes a uniform. Thus, according to USDOL, an employer participating in this Shoes for Crews corporate program may not impose the cost of the shoe on an employee if doing so cuts into the minimum wage or overtime wages. The agency has taken this position even when an employer has never asserted a claim for the Shoes for Crews warranty payment.

Conclusion: Putting Yourself In Your Employees’ Shoes

The cost of purchasing (or cleaning) a uniform can be problematic for employers, when the cost (or part of the cost) is borne by the employee. Setting aside whether there is a legal basis for the USDOL’s position on the shoe warranty program, hospitality employers should carefully review their policies as they relate to the cost of required clothing worn by employees.

For non-slip shoes, if you have decided to pass on the cost of these shoes to employees, consider giving the employee the option of purchasing shoes at a retailer of their choice or wearing already-owned shoes which are compliant with safety requirements. This is particularly true for employers that participate in the Shoes for Crews corporate program.

For more information, contact the authors:

Andria Ryan – Partner, Atlanta office
ALureryan@fisherphillips.com
(404.240.4219)

Ted Boehm – Partner, Atlanta office
TBoehm@fisherphillips.com
(404.240.4286)

(Sesame) Seeds Of Dissension: Fast-Food Employees Want To Wear Their Buttons

After the Burgerville employees refused to remove the buttons, they were sent packing for the day. In a statement responding to the incident, the company cited to its verbal, unwritten policy against “personal buttons,” and subsequently instated a written dress code, banning the politically charged buttons and reiterating its need to protect its public image.

In response to the button incident, the “Burgerville Workers Union” (BVWU)—the first federally recognized fast food union in the United States, and an active one at that—geared up for battle, indicating that it would pursue legal options. Despite the company rescinding the policy the very next day and paying backpay to those employees who were sent home, the union solicited customers to boycott the chain and encouraged its workers to go on strike, picketing three of Burgerville’s locations—which incidentally occurred on National Cheeseburger Day, September 18.

Pinning Down What “Special Circumstances” Justify A Button Ban

Burgerville’s button issue is not the first time that burger-chain employers have faced politically motivated buttons at work. In April 2015, In-N-Out employees in Austin, Texas sported “Fight for Fifteen” buttons on their uniforms, in solidarity with the push for a $15 minimum wage. There, like Burgerville, the employer asked employees to remove the buttons, as they violated In-N-Out’s policy against non-company related pins, buttons, and stickers.

In-N-Out’s button-as-political-protest issue had so much traction that, in May 2017, the National Labor Relations Board (NLRB) weighed in on the issue.

When the agency analyzed In-N-Out’s policy, it rejected the “special circumstances” which authorizes companies to ban union apparel and insignia in order to maintain restaurant consistent image. The NLRB was unconvinced, ruling that any uniform policy forbidding employees from wearing buttons, pins, or stickers on one’s uniform violated Section 8(a)(1) of the National Labor Relations Act (NLRA), which makes it an “unlawful labor practice” to interfere with employees’ exercise of their Section 7 rights (to unionize or collectively bargain) under the NLRA.

The issue of whether an employer can regulate politically charged apparel and insignia has been festering for years, in and out of the fast-food arena, and a sampling of several recent cases reveals that the issue remains a challenge for employers to resolve:

• Pacific Bell employees were allowed to wear union insignia and buttons that read “WTF Where’s The Fairness,” “Cut the Crap! Not My Healthcare,” because the employer had not demonstrated any justifiable prohibition on the insignia, in spite of their vulgar content.
• However, employees at the W Hotel in San Diego were not allowed to wear buttons that read “Justice NOW! JUSTICIA AHORA! H.E.R.E. LOCAL 30,” as the hotel demonstrated special circumstances that the buttons would not jibe with its “trendy, chic, and alternative” hotel experience.
• Daily Grill employees could not be prohibited from wearing union buttons, as Daily Grill presented no evidence that the small buttons and pins would impede its restaurant’s “ambience” of traditional and classic style.
• Starbucks was able to limit its employees to one union button after successfully arguing that multiple buttons would be disruptive to its image.

What Can Employers Do?

In determining how you should respond should this issue arise in your workplace, the first thing to know is that, regardless of whether an employer is unionized or not, the NLRA applies to almost all private employers. And given the current divisive political climate, displays of political speech in the workplace are not uncommon and could make an appearance at your worksites. So it’s more important than ever for you to understand the rules governing these kinds of situations.

The NLRB has articulated three limited circumstances under which employers may place limits and prohibitions on the clothing choices of their employees while at work. These circumstances are:

• when its display may jeopardize employee safety or damage machinery or products;
• when its display might exacerbate employee dissension; or
• where it unreasonably interferes with a public image which the employer has established as part of its business plan, through nondiscriminatory appearance rules for its employees.

The burden is on the employer to show the special circumstances exist, and that the prohibitions are narrowly tailored to the circumstances at issue. As the aforementioned cases make clear, this is a highly fact-intensive inquiry, and employers must set forth evidence in support of its “special circumstances.”

While you can still regulate what goes on in your workplace, the policies you enforce cannot run afoul of Section 7 of the NLRA. Therefore, best practices would include having a uniformly enforced, well-documented dress code or other policy that articulates your image or particular safety concerns, if relevant. Given the presumption of at-will employment in most states, you can terminate your at-will employees for any lawful reason.

You should be mindful that, while political affiliation is not a federally protected class, states like California provide protections for employees against discrimination based on political activity and affiliation. If an employee is wearing a button, it is also critical that you avoid a harsh rebuke, whether suspending employees, sending them home, or terminating them, as such an overreaction could be evidence of illegal bias. If buttons are unavoidable, it may also be helpful to cap insignia at one pin/button a person, a la Starbucks.

Wrapping Up

While it remains to be seen what will become of the Burgerville button incident, you would be best served to approach any type of insignia with a cautious, pragmatic attitude, and to consult with your labor attorney before proceeding with a new policy or response to a button in the workplace.

For more information, contact the authors:

Setareh Ebrahimian | SEbrahimian@fisherphillips.com (703.682.7096)
Setareh Ebrahimian is an associate in the firm’s Washington D.C. office. She represents employers in a wide range of employment matters in state and federal courts. Setareh defends employers facing claims of race, gender, national origin, age, religion, pregnancy and disability discrimination, harassment and retaliation, purported violations of leave, wage and hour laws, enforcement of non-competes, as well as claims arising under local and state law. She also represents companies facing investigations by the Equal Employment Opportunity Commission and related local and state agencies.

In addition to litigating, Setareh advises and counsels employers on matters involving personnel policies, hiring, training, employee handbooks, discipline, termination, reasonable accommodations, protected leave, reductions in force, employee complaints and internal investigations, as well as regulatory compliance.

Danielle Krauthamer | DKrauthamer@fisherphillips.com (213.330.4472)
Danielle Krauthamer is an associate in the Los Angeles office. In her practice, Danielle advises companies of all sizes in an array of labor and employment matters, including claims of wage and hour violations, retaliation, wrongful termination, and discrimination.

Prior to joining Fisher Phillips, Danielle gained valuable experience as a judicial law clerk for the Honorable Ronald S.W. Lew at the United States District Court for the Central District of California, managing the judge’s docket in one of the busiest districts in the nation. While there, she had significant exposure to civil litigation cases across a wide range of subject matter.

This article will focus on four risks that this season may bring: how to properly compensate your workers during weather-related absences, the dangers of this year’s flu season, how to limit risks associated with cold-weather exposure, and making sure your company holiday party doesn’t lead to a lawsuit.

You Know Nothing (About) Snow: Paying Employees During Snowstorms

First and foremost, you should plan ahead and develop policies addressing inclement weather, including how employees can find out if the business is open, how their schedule may be changed, what they should do if they are unable to make it to work or continue working due to the weather, and any reporting time rules for compensation that may apply under state law. If you already have such policies on the books, now is the time to review them to make sure they are up-to-date, compliant with applicable wage and hour laws, and reflect the current company philosophy on these issues.

The Legal Standards Involved

In addition to dealing with scheduling and commuting or travel time issues, you must also ensure that employees are paid properly. Your company must comply with the federal Fair Labor Standards Act (FLSA) and any associated state or local wage and hour laws.

Employees are treated differently under the FLSA depending on whether they are classified as non-exempt or exempt. Non-exempt employees are those who are entitled to overtime pay. Exempt employees are those who are paid on a salaried basis and also meet specific legal requirements so as to be exempt from the overtime pay requirements. In addition, conditional exemptions from overtime may be available for eligible outside or inside salespersons provided all requirements are satisfied under local, state, and federal laws.

Pay Non-Exempt Employees For Time Spent Working

Compliance with the FLSA for non-exempt employees is fairly straightforward: you only have to pay non-exempt employees for hours they work. Absent some contractual obligation (such as an individual employment agreement or a union contract) or obligations arising under public policy (e.g., reporting time regulations), you do not have to pay non-exempt employees if they miss work, in whole or in part, due to snow or other inclement weather. Also, non-exempt employees may be required to use vacation time for an absence due to inclement weather (even for a half-day).

Of course, before implementing such a policy, you should consider how disgruntled your employees might be if they are forced to use vacation time when missing work. Your employees are more likely to favor a policy that allows them to choose whether to use a vacation day to cover their winter-related absence, or to simply not be paid if they are saving vacation for special plans.

Exempt Employees Must Often Be Paid When Operations Are Suspended

Exempt employees are different. You must pay them their full salary for any week in which they perform work. So, for example, if your company is shut down for three out of five days during the workweek, you must still pay the exempt employees their normal weekly salary. To do otherwise signifies that an employee is not exempt and might lead to costly litigation.

The FLSA does not require you to provide paid vacation or time off for any employees, exempt or non-exempt. But if you have a vacation or PTO policy that covers exempt employees, unless otherwise prohibited by local or state law, you may substitute or reduce the accrued leave for the time an employee is absent from work. Even if the substitution is for less than a full day, it will not affect the classification of the employee as exempt. Either way, if the exempt employees work for a small portion of the workweek, they must be paid for the entire week, even if your operations are closed for a portion of the week.

What If Exempt Employees Are Snowbound?

The above discussion assumes that your company is shut down due to inclement weather. What should you do when you stay open but the employee is unable to come to work? The U.S. Department of Labor says that if you are open for business and an exempt employee chooses not to (or is unable to) report to work, you may count this as time off for personal reasons.

Under the FLSA, you can take deductions from an exempt employee’s salary or leave time for absences due to personal reasons other than sick leave. The sole caveat is that you may deduct from an exempt employee taking personal leave in full-day increments only, not for half-days missed. Thus, a salaried exempt employee who misses a full day of work due to personal reasons generally may receive a deduction of the day’s salary, although some restrictions may apply (for example, if an employee works remotely by checking emails or performing work at home). Thus, if your exempt employee shows up for work at noon and works until 6 pm, you will not be able to deduct from their pay (although you may be able to reduce the vacation leave bank).

What Do We Say To The Flu? Not Today.

Although flu activity typically peaks in January, it is not uncommon for your workforce to start displaying signs of the sickness well before the holidays. The time to prepare for an outbreak is now. You can start by educating yourself about preventive steps you can take and planning for what you will do if an outbreak hits your workplace this winter.

Under the FLSA, if you have a bona fide sick leave policy (and some states or localities may require it), you can take deductions from an exempt employee’s salary if the sick leave bank is empty, but only in full-day increments only, not for half-days missed. If there is no bona fide sick pay policy, no deductions for illness may occur in any week during which a salaried exempt employee has worked.

Use Common Sense

Several common sense actions can be utilized to help keep a flu epidemic from breaking out at your company. Some of these measures are very easily implemented and cost-effective. For example, you should urge your workers to thoroughly wash their hands and to use proper cough and sneeze etiquette. Keep a supply of antibacterial or waterless soap readily available. You should provide cleaning supplies for telephones, keyboards, and desks to help limit the spread of germs.

In the coming weeks, you should introduce these measures and train your workforce to take advantage of them. And of course, encourage those workers under the weather to stay at home in order to reduce the contagion.

Take A More Proactive Approach

Depending on your business operations and the potential effect of a widespread flu outbreak among your workers, you may want to take a more aggressive approach to help limit flu cases. For example, you may want to consider suspending or changing some of your workplace policies in order to encourage workers to avoid spreading the flu. You may want to temporarily alter your paid-time-off or attendance policy to lessen the chance that sick employees will rush back to work.

Or perhaps you could permit workers to telecommute or otherwise work from home during an outbreak so that an entire department doesn’t get wiped out for days or even weeks. At the first sign of symptoms, consider sending sick workers home or providing them with protective gear, such as face masks, to help prevent the spread of germs.

Another smart idea is educating employees about the benefits of the flu vaccine. The CDC and medical professionals urge the general public to get the flu vaccine to lessen the effects of an outbreak. You should consider suggesting and even encouraging your employees to get a flu shot this season, preferably before Thanksgiving. You can even consider bringing in a qualified medical professional to administer shots at your workplace.

The Pushback To Mandatory Vaccination

Requiring employees to get mandatory flu vaccinations is a controversial issue. Many workers will refuse to comply, although in some industries such as healthcare, mandatory flu shots are common.

The Occupational Safety and Health Administration (OSHA) and the Equal Employment Opportunity Commission (EEOC) have largely deferred to the CDC policies to determine the proper way to view and handle mandatory flu shots in the workplace. A risk assessment is the first step in making such a determination, and the nature of the workplace and the responsibilities of the employees will be major factors to be considered. In fact, OSHA requires you to assess each task performed by employees to determine what personal protective equipment, including hats, gloves, and other clothing, is required to perform a job safely.

Certainly some jobs and some businesses will face far more serious problems with the flu than others, and you must be prepared to take into consideration many elements when an employee objects to the vaccination. For example, is the worker objecting to the vaccine on religious grounds? Would the vaccine aggravate another health condition or set off an allergic reaction? Does the employee simply fear needles?

According to the EEOC, an employer must interact with any employee who objects to vaccines, whether based on religious or health reasons. You need to consider possible issues under the Americans with Disabilities Act (ADA) and whether reasonable accommodations are necessary.

You should consider creating forms for employees to fill out if they want to request exemptions from any required inoculations based on religious, disability, or medically-related reasons. Make sure you have a team available to review and resolve any such requests in a professional and expeditious manner.

Collective Bargaining Concerns

If your employees are represented by a union, remember that you may have a duty to bargain about flu-prevention policies. Before you make any policy changes or implement any mandatory actions, make sure that you can do so under the collective bargaining agreement.

The Winds Of Winter Are Blowing: Handling Weather Exposure Issues

With winter bearing down upon us, it is a good time to familiarize yourself with the dangers of weather-related health threats, and gain some important tips to help protect your workers from the cold weather. While the cold-weather months are obviously dangerous to employees spending long hours outside such as construction workers, other workers may be exposed as well. Remember, your employees may be conscripted to help out with shoveling out or other weather-related cleanup activities they do not normally handle.

What Does The Law Say?

Although there are no regulations specifically addressing work in cold temperatures, OSHA’s general duty clause requires you to provide a safe and healthy workplace for your employees. Besides protecting your workers from expected threats like winter-weather exposure, you also have an obligation to rid your workplace of winter-related hazards like icy walkways and parking lots to avoid a citation under the general duty clause

The Science Of Cold Weather

First, some science to help understand the dangers your workers will face. An individual gains body heat from food and activity, and loses it through convection, conduction, radiation, and sweating to maintain a constant body temperature. If the body temperature drops slightly below its normal temperature of 98.6°F, the blood vessels will constrict. This decreases blood flow to reduce heat loss from the surface of the skin. The body shivers to generate heat by increasing the body’s metabolic rate.

The environmental conditions that cause cold-related stress are low temperatures, high/cool winds, dampness, and contact with cold water. Wind chill, a combination of air temperature and speed, is a critical factor to evaluate when working outside. For example, when the actual temperature is 40°F but the wind is at 35 mph, it feels like 11°F to exposed skin. A dangerous situation of rapid heat loss may occur for someone exposed to high winds and cold temperatures even if it is not technically “freezing” outside.

The Dangers Of Cold Weather

Prolonged exposure to freezing or cold temperatures can result in serious health problems like trench foot, frostbite, hypothermia, and, in extreme cases, death.

Trench foot is caused by long, continuous exposure to a wet, cold environment, including actual immersion in water. Work involving small bodies of water or working in trenches with water pose particular threats. Symptoms include a tingling or itching sensation, burning, pain, and swelling, sometimes forming blisters in more extreme cases.

Frostbite occurs when the skin tissue actually freezes, causing ice crystals to form between cells and draw water from them. This typically occurs at temperatures below 30°F, but wind chill can cause frostbite at above-freezing temperatures. Initially, frostbite symptoms include uncomfortable sensations of coldness; a tingling, stinging, or aching feeling of the exposed area is then followed by numbness.

Hypothermia occurs when body temperatures fall to a level where normal muscular and cerebral functions are impaired. While hypothermia is generally associated with freezing temperatures, it may occur in any climate where a person’s body temperature falls below normal. The first symptoms, which begin when the individual’s temperature drops more than one degree, include shivering, an inability to perform complex motor functions, lethargy, and mild confusion.

How To Protect Employees

Obviously, employees should watch for the symptoms described above, including uncontrolled shivering, slurred speech, clumsy movements, fatigue, and confused behavior. If the employee observes the danger signs, emergency help should be called.

There are many methods to protect your employees from the cold, including protective clothing (e.g., gloves and hats), engineering controls, and common safe work practices. OSHA distributes a free “Cold Stress Card” with tips on handling cold weather. Some tips include:

• train workers about cold-induced illnesses and injuries;
• encourage workers to wear proper clothing for cold, wet, and windy conditions including layers so they can adjust to changing conditions;
• be sure that workers take frequent short breaks in warm dry shelters to allow the body to warm up;
• try to schedule work for the warmest part of the day;
• avoid exhaustion or fatigue (because energy is needed to keep muscles warm);
• use the buddy system – work in pairs so that one worker can recognize danger signs;
• drink warm, sweet beverages (sugar water, sports-type drinks) and avoid drinks with caffeine (coffee, tea, sodas, or hot chocolate) or alcohol; and
• eat warm, high-calorie foods such as hot pasta dishes.

Free copies of OSHA’s Cold Stress Card may be obtained through OSHA’s website or by calling 1-800-321-0SHA. The card is available in both English and Spanish.

Remember that workers may face increased risk because of factors including age, medications, if they are in poor physical condition, or suffer from illnesses such as diabetes, hypertension, or cardiovascular disease. Other more obvious risk factors include wearing inadequate or wet clothing, or having a cold.

Throw A Holiday Party, Not A Red Wedding

If your employees aren’t planning your company holiday party right now, they soon will be. It’s time for you to get involved to make sure things don’t go off the rails.

There is always a human resources risk involved in holding any company-sponsored function. Serving alcohol only compounds the problems. According to one study, 36% of employers reported behavioral problems at their most recent company party. These problems involved everything from excessive drinking to off-color jokes to sexual advances to fist fights (but hopefully no bloody massacres).

Since most employers still want to hold holiday parties despite the risks, you can reduce your legal liability by observing as many of the following recommendations as possible:

• If you’ve had troubles in the past or want to organize the most conservative holiday party possible, have a catered lunch at your offices without alcohol present.
• But if, like most, you serve alcohol, you should invite spouses and significant others so that there will be someone there to help keep an eye on your employees and, if necessary, get them home safely.
• Always serve food and always have plenty of non-alcoholic beverages available.
• If your party is a dinner, consider serving only wine or beer (plus non-alcoholic alternatives) with the meal, not hard liquor.
• If you do serve alcohol, don’t have an “open bar” where employees can drink as much as they want. Instead have a cash bar or use a ticket system to limit the number of drinks. Close the bar at least an hour before you plan to end the party. Switch to coffee and soft drinks from there on.
• Let your managers know that they will be considered to be “on duty” at the party. They should be instructed to keep an eye on their subordinates to ensure they do not drink too much. Instruct managers that they are not to attend any “post-party” parties.
• Consumption of alcohol lowers inhibitions, and impairs judgment. This can result in employees saying and doing things that they would not ordinarily do. Remind employees that, while you encourage everyone to have a good time, your company’s normal workplace standards of conduct will be in force at the party, and misconduct at or after the party can result in disciplinary action.
• Hire professional bartenders (don’t use supervisors!) and instruct them to report anyone who they think has had too much. Ensure that bartenders require positive identification from guests who do not appear to be substantially over 21.
• Arrange for no-cost taxi or other driving service for any employee who feels that he or she should not drive home. At management’s discretion, be prepared to provide hotel rooms for intoxicated employees.
• Finally: never, ever, hang mistletoe! Just as R plus L probably equals J, you can be sure that mistletoe + alcohol = lawsuit.

For more information, contact the authors:

Courtney Leyes | CLeyes@fisherphillips.com (901.526.0431)
Courtney Leyes is an associate in the firm’s Memphis and Gulfport offices. She represents employers throughout Mississippi and the greater Memphis-metropolitan area, with particular focus on the burgeoning industrial areas in the northern part of the state. Courtney has experience representing employers in litigation related to discrimination and harassment in the workplace, in particular, federal jury trial experience. She also has experience representing employers on wage and hour issues in both the court system and before the Department of Labor’s Wage & Hour Division (WHD). Specifically, Courtney has represented employers in several Fair Labor Standards Act (FLSA) collective actions over the past couple of years.

Richard Meneghello | RMeneghello@fisherphillips.com (503.205.8044)
Rich Meneghello is probably writing something as you’re reading this. As the firm’s Publications Partner, Rich focuses much of his time developing legal alerts, web articles, newsletter features, and blog posts for the Fisher Phillips website – in fact, he has published more than 225 such pieces in the last two years alone, and has edited hundreds of others written by the firm’s wide collection of talented writers. Rich is also an accomplished litigator. So far, the highlight of his 22-year career is winning a unanimous decision before the U.S. Supreme Court in the case of Albertsons v. Kirkingburg, an Americans with Disabilities Act (ADA) case. He’s won cases for clients at the Ninth Circuit Court of Appeals, the Oregon Supreme Court, and the Oregon Court of Appeals; he’s also won trial victories in both state and federal courts.

John Skousen | JSkousen@fisherphillips.com (949.798.2164)
John Skousen is a partner in the firm’s Irvine office. His practice is concentrated on wage and hour law and employment litigation. John has a unique blend of managerial experience in business and personnel management prior to law school, coupled with transactional and trial experience as a lawyer.John not only represents employers in class actions and other employment litigation, he creates and presents webinars and conducts management training on a variety of topics, including management practices impacting on state and federal equal employment opportunity laws, harassment prevention, and compliance with state and federal wage & hour laws.

Travis Vance | TVance@fisherphillips.com (704.778.4164).
Travis Vance is a partner in the firm’s Charlotte office. He has tried matters across several industries and various subject matters, including employment litigation, business disputes and matters prosecuted by the Mine Safety and Health Administration (MSHA) and Occupational Safety and Health Administration (OSHA). He uses unique or outside-the-box approaches to counsel employers and owners on all aspects of employment law and the development of preventive policies and procedures to avoid employment and workplace safety-related claims. Travis handles litigation in both federal and state courts as well as claims pending with state and federal agencies including the Equal Employment Opportunity Commission (EEOC), MSHA, OSHA, and the U.S. Department of Labor (USDOL).

Equally as troubling as the actual allegations of misconduct is the fact that these reports have pulled back the curtain to reveal organizational cultures that have often permitted the systemic and pervasive harassment to continue for years on end. Employers that have stuck their head in the sand about a toxic workplace environment could be forced to answer for their years of neglect both in the courtroom and in the court of public opinion.

The time is now to examine your organizational culture to ensure that you are not only providing a workplace free of harassment, but also a workplace culture that does not embolden your employees from carrying out unprofessional and hurtful behavior. The good news is that this is a fairly straightforward process, and we have boiled it down to a five-step plan that you can implement immediately. The bad news is that members of your organization might find it uncomfortable to address this situation and confront this sort of behavior. It is imperative, however, that human resources representatives, legal counsel, business owners, and managerial personnel take the lead and force your organization to adjust to this new reality without further delay.

Step One: Make Sure Your Policies Match Modern Standards

All too often, employers amend their handbooks to address developing legal and administrative changes (paid leave policies, for example, or shifting organizational structure), but will leave in place some of the tried-and-true policies that have served the company for years without thought of revision. If you haven’t updated your sexual harassment policy in the past several years, you might be behind the curve. Recent court decisions have placed greater responsibility on employers to establish policies that address sexual harassment in a more realistic and thoughtful manner.

At a minimum, your policy should clearly indicate that you have “zero tolerance” for sexual harassment in any form. You should clearly define the term and provide examples of conduct that would run afoul of your standards (including, for example, boorish behavior, off-color jokes, unsolicited hugs or shoulder rubs, sharing pornographic images, etc.) so that there is no confusion.

Your reporting policy should encourage employees to report their concerns about potential harassment immediately. You should also provide several avenues for the employee to provide their report, whether through their immediate manager, a human resources representative, another manager, or even a hotline number or intranet reporting mechanism.

Finally, your policy should clearly guarantee your workforce that they will not face retaliation as a result of their report. Providing this level of safety and security is important if you truly want to foster an open and respectful atmosphere.

Step Two: Disseminate Your Policies In A Thoughtful Way

Your policy is worthless if it sits on a shelf and is never accessed by your employees. You need to ensure that your workforce is aware of your position on sexual harassment if you want the policy to be effective. Most employers distribute the policy as part of the onboarding process and require new employees to sign an acknowledgment of receipt. And that’s a good start – but it’s just a start. You should take additional steps if you want the policy to truly become part of your workplace culture.

At the time of hire, a human resources representatives should take the time to specifically describe your harassment policy and start a conversation about your organization’s zero-tolerance philosophy. That lets the new employee know right out of the gate that you take this issue seriously. If your organization has an intranet, you should consider hosting the policy there permanently so that it can be readily accessed by anyone at any time. You should periodically provide copies of the policy as a standalone document to all of your employees to remind them of their rights and responsibilities. A good way to accomplish this is by having one of your highest level officials – if not the highest level executive – distribute the policy from their email account or via signed memorandum. By setting the tone from the top, your organization will send a signal to everyone that you take the subject matter seriously.

Step Three: Train Your Managers To Address Issues And Avoid Common Mistakes

Training your managers on your sexual harassment policy is a critical step. Your organization could be held automatically liable for any proven sexual harassment if carried about by a managerial employee, so all of your hard work in developing and disseminating your policy could be deemed irrelevant if your managers act inappropriately. You need to drill your policies into their minds on at least an annual basis through formal training sessions.

There are a few common mistakes to warn your managers about at these sessions. First, many companies get in trouble when managers ignore inappropriate behavior that they believe is “welcomed” by the victim, or if it appears to be part of a mutual and voluntary interaction. Your managers need to know that victims of harassment will often pretend to “go along” with the behavior for fear of losing their job, or simply because they want to appear to be part of the team, but that they will more than welcome managerial intervention that puts a stop to the conduct. Moreover, the conduct that your managers see out in the open, or hear about through the grapevine, is often just the tip of the iceberg, and it could signal that much worse behavior is taking place outside of your knowledge. For these reasons, your managers should be trained to address any behavior they witness or hear about, no matter if it appears that it is all in good fun and that no harm is occurring.

Second, it is common for some managers to allow extra leeway for certain employees because it is commonly accepted that their behavior is simply a harmless personal idiosyncrasy. Reports about misconduct or inappropriate behavior are met with a chuckle and a statement such as, “Oh, that’s just Harvey being Harvey!” It becomes commonly known around the workspace that you need to operate differently around that employee because they’ve been acting like that forever. “He likes to give hugs but he’s harmless,” or “Just don’t caught in his office one-on-one and you’ll be fine” are common sentiments in these workplaces. This is exactly the kind of attitude that leads to festering situations and that should be eradicated from your workplace. All employees should be held to the same standard, no matter how long their actions have been tolerated in the past.

Step Four: Promptly Investigate Any Issues Raised

Once you receive a report of sexual harassment, it’s time to take immediate action. If you delay your investigation until work slows down or until an important project is completed, you will send a signal to your workforce that this isn’t a priority. Moreover, you could face hostile questioning under oath in a subsequent lawsuit about what you were doing that was so important that it trumped the well-being of your workers. Therefore, you should clear the decks and do everything reasonably possible to make the investigation your highest priority.

Your human resources department should take the lead in the investigation, as they are trained to carry out an effective and legally compliant inquiry. There is no cookie-cutter approach to investigations because they are all unique depending on the circumstances, but there are some common threads that accompany a reasonable examination:

• Try to obtain a written report from the victim so you have a clear and specific understanding of the issues at play, but don’t delay your investigation if for some reason a written report can’t be generated right away.
• All relevant witnesses should be interviewed, including those who might be able to provide a glimpse into the working relationship between the employees in question.
• To the extent you need to obtain evidence to support the claims or defenses – emails, texts, documents, photos, etc. – make sure you have reviewed them all before concluding your investigation.
• Make a clear record of your investigation by taking notes during your interviews and review of the evidence. This will help you sort out all of the claims as you conduct your review, but will also serve as evidence that you are taking the matter seriously if you are later called into question for your role in the matter. Keep the notes focused on objective information and free of conclusions and opinions; you should be ready for your notes to be an exhibit in a lawsuit one day.
• During the pendency of your investigation, you should take reasonable steps, if possible, to ensure that the victim is not forced to work side-by-side with the accused. This might mean reassigning the accused worker to a different assignment, but it might also mean suspending the accused (with or without pay) for that period of time.
• Finally, don’t ignore older complaints. You never know what you might find when you start exploring a situation involving an alleged harasser. For example, you might ask a witness if they’ve ever seen that employee do or say something inappropriate, and that witness might reluctantly tell you about some obscene behavior from the office holiday party three years ago. Just because it’s older news does not make it irrelevant. Again, each situation is unique, and the specific facts and circumstances of the situation will dictate your response and how you factor that unearthed information into your decision.

Step Five: Consistently Enforce Your Standards

Finally, and perhaps most importantly, you need to take action against the accused employee if the allegations against them are substantiated through your investigation. If your workforce figures out that your policy is toothless, they will lose respect for your organization and will feel dissuaded from reporting other misconduct. This could lead to legal trouble, but also to flagging morale and high turnover among your key contributors.

Your goal in meting out a response is to take action sufficient to ensure that the behavior is not reasonably likely to occur again. In some situations involving mild misconduct, it might be sufficient to give a documented verbal warning to the employee along with an acknowledged reminder of your sexual harassment policy. In more severe or reoccurring situations, the only reasonable possible response is termination. In between the two are a whole host of possible options, including written warnings, mandatory professionalism classes, behavioral improvement plans, suspensions, demotions, and the like.

Some employers run into trouble when they inconsistently apply standards to high-performing or high-ranking individuals accused of harassment. When push comes to shove, these organizations value the contributions these employees make to the company’s bottom line more than they value the ideals contained in the sexual harassment policy. There is no better way to hurt morale at your organization and neuter your harassment policies than to give a pass to a key executive accused of misconduct while coming down hard on a mid-level manager or hourly worker accused of similar behavior. On the other hand, your policy’s effectiveness will be given a boost if your workforce sees it applied in an evenhanded manner, no matter who is accused of a violation.

What Next?

You will soon receive additional guidance about how to prevent sexual harassment in the workplace from the Equal Employment Opportunity Commission (EEOC). In an instance of opportune timing, the Commission recently announced that it will soon release updated guidelines on the subject for the first time in over 20 years. Acting EEOC chair Victoria Lipnic acknowledged that “the update comes up at a time of burgeoning publicity for sexual harassment and assault in the workplace,” though she said the timing of the update was “purely coincidental.”

After several years of drafting and editing, which included incorporating public opinion on key issues, the Commission unanimously approved the new guidelines in early November. The draft guidelines are in the process of being reviewed by the Office of Management and Budget, and, once approved, will be released to the public. Fisher Phillips stands ready to analyze the new guidelines and provide additional recommendations once published, which is expected in the near future.

Conclusion

These are challenging times for employers. You are being asked to reexamine your organizational culture to ensure you are providing a safe and professional working environment for everyone in your service, and it’s not always easy to take an honest look at what has been created. However, going through this exercise will make your organization even stronger. Once you have addressed this situation and put into place an effective mechanism for addressing possible harassment claims, your workforce will be free to accomplish their mission without troubling distractions interfering with their jobs.

Authors

Jennifer Sandberg – Partner, Fisher & Phillips
Joseph Shelton – Partner, Fisher & Phillips

Besides being eminently re-watchable, the movie also provides valuable instruction on how to throw a proper office holiday party. The folks at the Nakatomi Corporation did some things right, and did some things wrong, when it comes to hosting annual holiday festivities. If you learn from their example this year, you’ll enjoy the holidays knowing that your office party won’t lead to any human resources disasters or lawsuits.

“Can I Get You Anything? Food? Cake? Some Watered-Down Champagne?”

Any discussion of office holiday parties has to start with a discussion about alcohol – the cause of many an HR headache. The alcohol was certainly flowing at the Nakatomi party: the moment McClain stepped into the office, a roving bartender offered him a glass of mystery punch. While there’s nothing inherently wrong with having alcohol available at a holiday party, there are some established best practices when you throw adult beverages into the mix.

First, let’s look at two of the things that Nakatomi did that you should emulate. Number one: they hired professional bartenders to serve the alcohol, which helps avoid a situation where one of your own employees is serving drinks. Professional bartenders are trained to spot attendees who have had more than their fair share and need to be cut off, and they can also limit your own company’s liability. Number two: the company offered a spread of food to go along with the liquor, which helps slow down the processing of alcohol in the body and can help minimize its undesirable side effects. Plus, even the Scroogiest of people love a good holiday treat: even Hans Gruber, the leader of the gang of criminals, snacks on some of the food during the heist.

But there is a long list of things that Nakatomi could have done to handle its liquor better, so to speak. We have no idea if they offered non-alcoholic alternatives to the guests. In fact, manager Holly Gennaro encourages her very-pregnant assistant Ginny to have some champagne, which is one of the more cringe-worthy moments of the movie. They serve a mystery punch to their guests, which (like spiked eggnog) is never a good idea. If your guests don’t know what they’re drinking or how much alcohol they are consuming, they are more likely to become inebriated. Along those lines, shots are a bad choice nearly 100% of the time.

Another problem: the liquor flows freely with no oversight or limitations. In contrast, you should establish a drink ticket system so that your guests are limited in their alcohol consumption, are less likely to become drunk, and more likely to leave the party with their dignity fully intact. Moreover, you should ask a few managers to forego drinking for the night; they can spot problems before they get out of hand, and hang out near the exit doors to prevent people from driving home if they walk out of the party more lit than the holiday tree.

We never find out if Nakatomi planned to close the bar early before the end of the party (as, alas, their party ended prematurely when Gruber and his boys roll up), but you should shut down access to alcohol about an hour before the end of the festivities to help your guests sober up so that they leave filled with holiday spirit, not alcohol and spirits. You can even hold an awards ceremony, make special announcements, or give away door prizes near the end of the evening to keep people sticking around.

“Mr. Mystery Guest – Are You Still There?”

Guests at the office holiday party are a mixed bag; our job is to let the good ones in and keep the bad ones out. Nakatomi Corporation made one smart move in this regard: they invited spouses and significant others to attend (well, at least one spouse that we know of). Employee’s significant others do some of the babysitting for you, as their attendance will reduce the chances of crude and unprofessional behavior among your workforce. People tend to make more scrupulous choices when they are in the presence of loved ones. Likewise, those loved ones are likely to pressure their counterparts to act right.

At the same time, you should do your best to prevent unwanted gate-crashers from attending. It is doubtful that a band of well-armed European safe-crackers will crash your party, but it is possible that your employees’ friends might decide to stop in for the fun if nobody is guarding the door. That can be a recipe for trouble. Nakatomi stationed a building security guard in the lobby to admit known guests. Likewise, you should have someone make sure that the only people who are enjoying your party are invited guests.

“Welcome To The Party, Pal!”

Attendance at your party should be voluntary, not mandatory. After all, you might have some employees whose religious beliefs prevent them from celebrating holidays. Or you might have recovering alcoholics who would prefer not to be in the presence of liquor. Nakatomi violates this rule by holding the party at the office at the end of a work day (Christmas Eve, no less!), so if you do the same, make sure you let your employees know they don’t have to stick around if they don’t want to.

At the same time, don’t be a Scrooge and make your employees work during the party. At the beginning of the movie, the party is already in full swing, and Gennaro’s assistant Ginny is still hard at work finishing up some paperwork while everyone else is having a good time. Besides being a possible wage and hour problem, this approach will surely kill everyone’s holiday vibe. If you want loyal employees with good morale, don’t make them work late and miss the party.

“Yippee-Ki-Yay, #$@&%*!”

The whole point of hosting a holiday party is so that you can thank your employees and collectively have a good time with them. And while you don’t want to be a party pooper, you also don’t want the party to be so wild that it later becomes the festive centerpiece of a lawsuit. You should send a communication to all of your employees in advance of the party reminding them to keep it classy, as work rules still apply during the festivities.

This means that you should not tolerate off-color remarks (such as the one referenced in the memorable quote from this section’s subheading), untoward humor, illegal drug use (as demonstrated by the smarmy coworker Harry Ellis in someone else’s office), sexual innuendos or misconduct (such as the amorous couple spending time in the private office), or any other unprofessional behavior. Let your employees know that they are still subject to your regular policies and that violations could lead to disciplinary consequences.

“I’m Argyle…I’m Your Limo Driver”

Another solid move by Nakatomi was hiring a private driver for their guests (or at least for McClain). Argyle the limo driver picked McClain up from the airport and was on standby to drive him wherever he needed to go after the party was over. We’re not saying you need to rent a fleet of limousines to chauffeur your guests around, but you should offer rides to all attendees who are departing the party. You can pay for taxis or set up ride-share cars via a corporate account to make payment easy and rest easy knowing that you won’t be held responsible for any injuries or deaths caused by drunk drivers. This extra expense is the best insurance to keep your employees and the general public safe and spare you from costly liability claims.

“Now I Have A Machine Gun. Ho – Ho – Ho”

The most memorable holiday decoration in the film was the plain, grey sweatshirt worn by one of the criminals, which McClain transformed post-mortem into a classic ugly Christmas sweater with a red Sharpie marker. But keen observers of the film will also note that Nakatomi also set up a few tastefully appointed Christmas trees around the office. Should you be worried if you want to set out holiday decorations at your office party?

Although you may be concerned about political correctness run amok, you will be happy to hear that the Equal Employment Opportunity Commission (EEOC) has said that typical Christmas decorations – wreaths, trees, holiday lights, Santa and reindeer, etc. – are secular symbols and do not automatically create a religious discrimination situation in your private workplace. However, the EEOC’s words of caution from its Compliance Manual are worth noting: “As a best practice, all employers may find that sensitivity to the diversity of their workplace promotes positive employee relations.” In other words, take the specific dynamics of your workplace into account before decorating for the holidays.

Regardless of your office dynamics, the cardinal rule of office holiday decorating is no mistletoe. Careful viewers will see that Nakatomi followed this rule: although they might have a legacy of greed around the globe, at least they knew well enough not to hang what amounts to an invitation for a sexual harassment lawsuit in the office. Avoid the mistletoe and avoid the problems it will inevitably create.

“Nice Suit. John Phillips London. I Have Two Myself.”

Certainly every workplace varies in its location on the style spectrum. Some offices embrace a more business casual, John-McClain-like approach with simple slacks and plaid button-ups. Others are more formal and favor black on black and expensive suits (perfectly coordinated with Heckler & Koch HK94 machine guns, which should be unwelcome at your holiday party and every other day at your office).

Regardless of your company’s normal style, you should still maintain some semblance of a dress code, and your employees should stick with outfits that they would normally wear to work. You should communicate to your employees that they should dress appropriately since it is a work-related event. Revealing clothing is for the night club. Bloody, white muscle tanks are for fighting German terrorists. Neither of those styles have a place at the office holiday party.

“Its Just A Small Token of Appreciation . . . It’s A Rolex”

Maybe you’re thinking that all of this holiday party business sounds more like an obstacle course where you have to outmaneuver employees who are ready to hit you with a lawsuit. If you have an antisocial or poorly behaved workforce, it may be better to show your appreciation in a different way. Holly Gennaro was rewarded for her hard work for the year with a Rolex, for example. Your budget may not contemplate your employees walking out of the office dripping in company-gifted diamonds, but there are alternatives.

Some employees might prefer to take the time that would be otherwise spent at the party as PTO. You could also take the money that you would normally spend on the party and issue bonuses, gift cards, or other treats. Just remember that if you go this nontraditional route, any tangible gifts you offer up should be treated as supplemental wages subject to payroll and income tax.

Authors

Richard Meneghello – Partner, Fisher & Phillips
Katherine Sandberg – Associate, Fisher & Phillips

However, the failure to address work performance issues during employment or at the termination stage could have legal ramifications if the employee later challenges an employment decision and files a claim against the company. In order to address this problem, you should resolve to practice the act of radical candor.

What Is Radical Candor?

In her recent book, “Radical Candor: Be a Kick-A** Boss Without Losing Your Humanity,” Kim Scott provides employers a detailed roadmap on how to be honest with employees while retaining their respect and loyalty. Scott, an entrepreneur and former executive at Google and Apple, saw firsthand how the lack of candor can lead to unpleasant conversations (or worse) when an employee must ultimately be terminated due to a performance issue about which they were never counseled.

For example, Scott tells the story of how she fired an employee who had been performing shoddy work for years, but no member of management had ever told him there was an issue. Management liked him; he was a nice guy, but performed horrible work. As you would imagine, he was shocked and felt betrayed when he was fired. “Why didn’t anyone tell me about my work? I thought you liked me.”

Scott knew she made a mistake with that employee. She should have been more honest with him. Not only did it upset him, her company’s work product and efficiency suffered, particularly when the work done by the fired employee had to be “fixed” by another worker. As part of her reflection on this eye-opening incident, she made it her mission to counsel other employers and leaders on how to avoid her mistake.

If You Aren’t Candid In Performance Reviews, You Could Land In Legal Hot Water

Many discrimination claims brought by employees in a protected class, such as age, sex, and disability, involve circumstances where the employee’s protected status had nothing to do with their termination. However, the plaintiff claims they had never received a bad performance review and the employer always gave them a raise or, even worse, a performance bonus. And many times it’s true.

If you don’t give an employee a bad performance review, but instead provide generic feedback like “meets expectations” or “average,” that employee will be shocked if you discipline or terminate them later due to poor work product or failure to perform. Reeling from this disappointment, there is a good chance the ex-employee will visit a lawyer or government agency to start the process of filing a legal claim against you, predictably rationalizing that age, gender, or other protected status must have been the real reason for the termination, given the consistently neutral or positive performance reviews they received. When it comes time to defend the case, you won’t have any “bad” performance reviews to validate your claim that the termination was for legitimate and non-biased reasons. Ultimately your decision to be “nice” instead of honest turned out to be a very bad idea.

Hiding The Ball At Termination Could Be Costly

Another common scenario is trying to avoid the uncomfortable truth when the time comes to terminate a worker. Some employers will invent a reason such as “the business is slowing,” while others believe that they don’t need to provide any reason at all for the termination simply because the employee is “at will.” It’s not uncommon to hear stories of employers trying to do the right thing (or the nice thing) by telling an employee that they are being fired, but no reason will be given for the termination because of their at-will status.

There are several major problems with such an approach. First, the truth will always come out. Any plaintiffs’ attorney worth their salt will examine the financial records of a company claiming that economic woes were the driving force behind a termination, and can often find a much rosier picture than the company had painted (along with evidence that the company hired new personnel to replace the departed employee).

Second, the law generally punishes an employer who lies to a worker about why they are being let go, even if the employer’s heart was in the right place. A company on the defense will have an uphill climb to prove that the fabricated reason was not intended to shield some discriminatory reason. Finally, those employers that choose to avoid providing any reason for termination provide the perfect opportunity for the terminated worker to invent their own narrative. This is a prime motivator for ex-workers to seek out legal assistance, as they can’t help but want to know the truth and will have a natural curiosity to explore further.

Show Radical Candor With Your Employees

Instead of trying to spare feelings, you should employ radical candor at these critical junctures. Here are five practical lessons you can glean from Kim Scott’s advice:

1.  Be Critical. Not everyone does a great job, at least the first time. “Your job as a boss is to set and uphold a quality bar,” Scott says. Being candid with employees improves work product and ensures clear communication without causing unwanted surprises like the employee fired by Scott. This will help you defeat a later claim that “no one ever said I wasn’t doing well.”Don’t allow generational differences to keep you from being honest. Some may think baby boomers are more likely to accept and understand criticism, whereas millennials are perceived by some as more sensitive. Developing trust with employees will help make it less difficult to offer criticism, no matter their age.
2. Be Timely. Check in with the employee on their performance early and often. You are building a business with high quality work. It’s important to stress quality early in the employee’s tenure with the company. You can even begin to set expectations in the employee’s interview. If there are no issues, you can lengthen the period between performance reviews. However, don’t wait until the employee’s annual review to be critical. Your formal evaluations are meant to reinforce, not substitute for, the feedback you should give to your employees frequently about their work product.
3. Be Consistent. As a supervisor, show no favorites. If you demonstrate to your entire team that you care but that you treat everyone fairly, they will be more likely to respond positively to your mission of promoting excellence in the workplace.
4. Be Descriptive. At the time of termination, you should present your employee with a short one-page letter explaining your reasons for letting them go. It should contain a brief, to-the-point summary of your justification for termination, devoid of emotion. This letter begins your process of providing clear and consistent reasons for termination at every step along the way (unemployment claims, demand letters, lawsuits, etc.), and should be written in such a way as to serve as Exhibit A in any lawsuit defense you might need to muster.
5. Be Compassionate. In her book, Scott cautions that effective honesty in the workplace is not just about candor. She urges employers to show compassion to employees as well, saying you can’t have one without the other. If you exhibit both of these qualities during employee reviews, you will develop a stronger workforce and avoid awkward confrontations when poor performance requires the termination of an employee.

Be open with your employees. Listen to them. Don’t try to convince them that your values are “right” and theirs are “wrong.” One way to accomplish this goal is to remain open to new ideas and listen to how your employees feel and why they feel that way. If an employee hasn’t done great work, Scott encourages you to allow employees to work on a project where they can shine. Put them in a position to succeed. This gives your employees an opportunity to show their potential. It also shows you care about their success with the company. If you show compassion, your employees will be more likely to accept criticism if and when it’s necessary.

Conclusion

Kim Scott’s book offers practical and important advice for all employers. Be honest with your employees and show them compassion. It will not only help you grow a stronger business and develop better employees, but hopefully prevent future unanticipated legal claims. Your legal counsel can assist with documenting the steps you took to advise the employee on performance issues and in drafting an effective termination letter should you need to defend a future lawsuit.

For more information, contact the authors at TVance@fisherphillips.com (704.778.4163) or RMeneghello@fisherphillips.com (503.205.8044).

Authors

Richard Meneghello – Partner, Fisher & Phillips
Travis Vance – Partner, Fisher & Phillips

Background: What Are Mandatory Class Waivers?

Agreements requiring employees to submit workplace claims to an arbitrator instead of a court have become increasingly commonplace in today’s workplaces. These agreements are a favored tactic of the modern employer, lowering the cost of litigation and introducing some much-welcomed efficiency to the resolution of workplace disputes. Due to a recent series of victories at the Supreme Court over the past six years heralding the “liberal federal policy favoring arbitration agreements,” the use of mandatory arbitration agreements has become safer and less apt to be challenged in court.

But mandatory arbitration agreements in and of themselves do not protect employers from their biggest fear – a class or collective action. Consequently, rather than simply requiring employees to bring workplace claims through arbitration instead of court, employers have regularly incorporated into their agreements class and collective action waivers. Pursuant to these waivers, employees agree not to pursue claims against their employer on a class or collective basis. The result of a mandatory arbitration agreement with a class and collective action waiver is that a worker’s only avenue for redress is limited to single-plaintiff arbitration hearings.

NLRB Disfavors Class Waivers

The National Labor Relations Board (NLRB), however, has issued several rulings striking down class and collective action waivers as violating the National Labor Relations Act (NLRA). In 2012, in the infamous D.R. Horton case, the NLRB held that arbitration agreements are unlawful if they prevent employees from filing class or collective action claims in court or arbitration. The NLRB reasoned that class and collective action waivers violate Section 7 of the NLRA because they interfere with workers’ rights to engage in concerted activity for their mutual benefit and protection (in this case, class or collective action litigation).

Although that decision, and the NLRB’s reasoning, was rejected by a federal court and is therefore not considered “good law,” that has not stopped the NLRB from continuing to attack class and collective action waivers whenever possible. In the intervening years, the Board has issued several additional rulings striking down class and collective action waivers, without regard for whether reviewing circuit courts upheld those decisions. Until recently, the NLRB’s position had not found much traction in the courts.

Courts Had Consistently Upheld Class Waivers

Between 2013 and May 2016, three circuit courts ruled on this exact issue and determined that the NLRA does not prohibit class and collective action waivers:

• As discussed above, in 2013, the 5th Circuit (Texas, Louisiana, and Mississippi) overturned the NLRB’s seminal R. Horton decision. The 5th Circuit revisited the topic and once again upheld the use of mandatory class action waivers in the October 2015 Murphy Oil USA v. NLRB decision.
• Later that year, the 2nd Circuit, in Sutherland v. Ernst & Young LLP, and the 8th Circuit (covering Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota), in Owen v. Bristol Care, Inc., similarly rejected the argument that the NLRA prohibits class and collective action waivers.
• In 2014, the 11th Circuit (covering Georgia, Florida, and Alabama) upheld a class and collective action waiver in Walthour v. Chipio Windshield Repair, LLC, although the decision did not directly involve an interplay between class waivers and the NLRA.

Employers Sustain Two Big Losses In 2016

But the level of comfort that employers enjoyed on the subject was shaken in 2016 by a pair of federal appeals courts decisions. On May 26, 2016, the 7th Circuit (covering Illinois, Indiana, and Wisconsin), in Lewis v. Epic Systems Corp., became the first appeals court to strike down class and collective action waivers. The 7th Circuit adopted the NLRB’s position that class and collective action waivers violate Section 7 of the NLRA, opining that there is nothing quite so “concerted” as a piece of class or collective action litigation, where employees band together to collectively assert a legal challenge to a workplace practice.

Then, on August 22, 2016, the 9th Circuit (covering California, Washington, Arizona, Nevada, Oregon, Hawaii, Idaho, Montana, and Alaska), in Morris v. Ernst & Young, LLP, joined the 7th Circuit and became the second circuit court to strike down class and collective action waivers. This was perhaps the most bruising loss for employers to date, not only because the 9th Circuit covers such a large area of the country, but because the ruling demonstrated that the 7th Circuit’s Epic Systems decision was not an anomaly.

SCOTUS Steps In To Resolve Conflict

On Friday, January 13, the Supreme Court (SCOTUS) agreed to resolve the conflict between the circuits. It accepted three of the cases for review: the 5th Circuit’s Murphy Oil case, the 7th Circuit’s Epic Systems case, and the 9th Circuit’s Ernst & Young case. The cases will be consolidated for purposes of oral argument (not yet scheduled) and final written opinion, and we can expect a final decision by late June 2017.

What’s Next For Employers?

Given the clear circuit split among the federal appeals courts and the significance of the topic, most Court observers were not surprised that the Supreme Court took up this dispute. How the case will be decided is anyone’s guess, however, given the fact that the SCOTUS still sits in a state of uncertainty with a balance of four mostly employee-friendly justices and four mostly business-friendly justices. Whether President-elect Trump’s soon-to-be-announced choice to occupy the vacant ninth chair on the Supreme Court bench will be confirmed by the Senate in time to participate and weigh in on this decision remains to be seen.

Until then, it could be a crucial distinction that the arbitration agreement in the Ernst & Young case was mandatory, required to be signed by employees as a condition of their employment. The 9th Circuit’s conclusion states that “an employer may not condition employment on the requirement sign such a contract.” The court also cited favorably to a 2014 9th Circuit ruling (Johnmohammadi v. Bloomingdale’s, Inc.) where no NLRA violation was found given the fact that the employee had the right to opt out of the arbitration agreement and pursue class action litigation in court. Therefore, it appears that implementing non-mandatory agreements, or ones that include opt-out provisions, could be a way to avoid the same fate as the employer in that case.

It is possible that the Supreme Court could “punt” these cases and send them back to lower courts for further proceedings, and it is also possible that a 4-4 tie will result in the status quo remaining in effect. If either of those outcomes comes to fruition, multistate employers operating across different judicial jurisdictions might be required to continue using specific policies and practices for each location given the patchwork of differing standards across the country. However, there stands a very good chance that we will have finality on this subject before the Supreme Court concludes its 2016-2017 term – which could either provide a measure of welcome relief for employers, or could spell further trouble.

For more information, visit our website at www.fisherphillips.com or contact your regular Fisher Phillips attorney.

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