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.
]]>No “Employment at Will”
The U.S. concept of employment at will does not exist in Canada. In Canada, both employment standards legislation and the common law require an employer that terminates an employee’s employment without just cause to provide certain entitlements.
Under the employment standards legislation in each province, an employer must provide an employee notice of termination of employment in lieu of notice (usually one week per year of service to a maximum of eight weeks: more for group terminations), unless the employee is terminated for willful misconduct or willful neglect of duty. Some jurisdictions also require an employer to pay severance pay in addition to providing notice. For example, in Ontario, an employee with five or more years of service with an employer that has an annual payroll of at least $2.5 million is entitled to one week’s pay per year of service up to a maximum of 26 weeks.
The common law requires that an employer provide an employee “reasonable” notice of termination or pay in lieu of notice unless just cause exists, there is a clear agreement otherwise, or a union represents the employee. Reasonable notice for each employee is determined on a case-by-case basis and depends on a number of factors, such as the employee’s position, age, and length of service, and the availability of similar employment elsewhere. Reasonable notice at common law almost always exceeds the notice required by applicable legislation.
Pregnancy and Parental Leave
Whereas the U.S. Family and Medical Leave Act (FMLA) requires an employer to provide an employee up to 12 weeks of unpaid leave, employment standards legislation in all Canadian jurisdictions require an employer to provide up to at least 52 weeks of pregnancy and parental leave. In addition, the right to pregnancy and parental leave applies to all employees in Canada, not just to those employed by employers with 50 or more employees (as provided by the FMLA).
Discrimination and Harassment
Prohibitions against discrimination and harassment in employment under various U.S. statutes, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act of 1967, may be found in each province’s or territory’s human rights legislation (e.g., in Ontario, the Human Rights Code). Canadian human rights legislation in all jurisdictions prohibit discrimination and harassment on the basis of sex, disability, age, race, national or ethnic origin, color, religion or creed, marital status, and sexual orientation.
An employee in Canada may not file a civil action for discrimination, as is permitted in the United States. An employee may complain only to an administrative tribunal in the province he or she works, which adjudicates complaints. Administrative tribunals across Canada have wide powers to order reinstatement of employees, to require an employer to take steps to prevent discrimination and harassment, and to award monetary compensation. Monetary awards, however, are generally much lower than U.S. jury awards.
There are other significant differences between Canadian and U.S. employment laws. Local legal counsel can help to ensure that you are in compliance with all applicable laws. Other Canadian employment-related laws with which you should comply include:
For more information on Canadian employment law issues, contact James R. Hassell or Patricia S.W. Ross of the Employment and Labor Law Department of Osler, Hoskin & Harcourt LLP Barristers & Solicitors:
(416) 362-2111
P.O. Box 50
1 First Canadian Place
Toronto, Ontario, M5X 1B8
Or log on to www.osler.com, Osler, Hoskin & Harcourt’s website, which contains numerous articles on Canadian labor and employment law: canadaonline.about.com/od/labourstandards/Canada_Employment_and_Labour_Standards.htm for links to Ministry of Labour websites across Canada that provide information on employment standards, health, and safety, and labor relations, and to www.ohrc.on.ca, for Ontario’s Human Rights Commission, and links to other human rights agencies across Canada.
Provided by James R. Hassell and Patricia S.W. Ross of Osler, Hoskin & Harcourt LLP, Toronto, Ontario. www.osler.com.
]]>(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:
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:
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.
]]>Employers do not need to police employee communications around the clock. However, employers can and should provide clear policies about employee conduct in the workplace and appropriate use of social media to mitigate the risk of being held responsible for an employee’s misconduct. Employer concerns about employees making potentially defamatory statements were slightly curtailed in the Fourth Circuit’s recent decision on June 11, 2018 in Sade Garnett v. Remedi Seniorcare of Virginia, LLC, No. 17-1890 (June 11, 2018). However, that holding certainly does not completely relieve employers from liability for rogue employee statements.
The Fourth Circuit’s decision provided further clarification as to when an employer can be held vicariously liable for an employee’s defamatory statements and, more specifically, when an employee is acting within the scope of their employment. The plaintiff in that case sued her employer for defamation based on crude sexual comments that her supervisor made about the reasons she was out of work for surgery. The plaintiff claimed that because the comments were made at work, the employer should be held liable.
Ultimately, the Fourth Circuit rejected this theory of liability holding that although the supervisor’s alleged defamatory statements were made at work, they were nonetheless outside the scope of employment. The Court explained that it would be impossible for an employer to police its employees’ speech and prevent such misconduct. The Court emphasized that “[l]iability will attach only if the employer (a) bears at least partial responsibility for the tortious conduct; or (b) has some ability to limit the likelihood that the employee would commit a tort.”
The Court relied on the Restatement (Third) of Agency Law which limits vicarious liability to situations in which the employee was either (a) performing work assigned by the employer; or (b) engaging in a course of conduct subject to the employer’s control. Employers are not liable when an employee acts independently or in a manner that does not serve any goal of the employer. The Court held that “[i]n other words, there must be a nexus between the employee’s workplace responsibilities and the offensive act.”
Thus, the court’s decision did not relieve employers of all liability for alleged defamatory statements made by rogue employees. Employers can still be held liable for an employee’s conduct when the employer orders or endorses that conduct or where it occurs in the execution of an employee’s professional duties. The Court provided specific examples of cases where employers were held liable because an employee facilitated a tort or crime through their position and the employer’s business, such as a bank teller using his position to facilitate a forgery scheme (i.e., Gina Chin & Assocs., Inc. v. First Union Bank, 260 Va. 533, 542 (2000)), or a psychologist engaging in sexual intercourse with a patient (i.e., Plummer v. Ctr. Psychiatrists, Ltd., 252 Va. 233, 237 (1996)).
There is no single mechanical test to determine when an employee is engaged in activities that fall within the scope of employment, but case law has yielded various formulations which are instructive. Generally, an employer can be held liable for an employee’s defamatory statements if they are made at the direction of the employer, made in the interest of the employer, made during the discharge of a duty for the employer, or if the employee acts under the express or implied authority of the employer. For example, in contrast to the facts and holding in Sade Gannet, in McLachlan v. Bell, 261 F.3d 908 (9th Cir.2001), the Ninth Circuit held that employees’ alleged defamatory statements about a co-worker concerning matters related to his work on aeronautical engineer projects for NASA were deemed within the scope of employment. Ultimately, because the statements about the plaintiff took place in the workplace and were related to business activities, the court denied the defendants’ motion for summary judgment and found that the employer could be held liable.
Workplace disputes and personal issues between co-workers often result in negative communications which – depending on the circumstances – could lead to defamation claims against the employer. The context in which a defamation claim may arise varies widely from statements made during investigations, disciplinary meetings, and reference checks to simple interoffice communications between employees. Given the rise in the number of defamation claims, employers should implement clear policies about how employees are expected to behave, including policies addressing Standards of Conduct, Business Ethics, and employee communications and statements on Social Media. Effectively communicating clear expectations about employees’ responsibilities, conduct, and the workplace will help mitigate the risk of defamation liability, though employers should also ensure these policies are conveyed and implemented in a manner that does not impact employees’ Section 7 rights under the National Labor Relations Act. If an employer knows or has reason to know that an employee is not abiding by those policies, it should take immediate action regardless of whether the employee’s statements are considered defamatory under applicable state common law principles.
]]>Looking down the barrel of a class action with substantial exposure, Starbucks argued that the amount of time (totaling $102.67 over 17 months for the named plaintiff) was too small to consider. Rejecting this argument in a decision that could affect small amounts of unpaid time in a variety of circumstances, the Court held that “[t]he relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off-the-clock without compensation.”
At issue was the so-called de minimis doctrine, which derives from the maxim de minimis curat lex, which means “the law does not concern itself with trifles.” This doctrine has been part of federal law, as specified by the U.S. Supreme Court under the Fair Labor Standards Act (“FLSA”), for over 70 years, and has been used to excuse the payment of wages for otherwise compensable time in circumstances where it is administratively difficult to capture such time through customary time recording methods. In determining whether otherwise compensable time is de minimis under the FLSA, consideration is given by the Ninth Circuit Court of Appeals to (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.
As for California law in general, the Court recognized that the de minimis principle is a well-imbedded principle, and is even included as a “Maxim of Jurisprudence” in Section 3353 of the California Civil Code, which states that “[t]he law disregards trifles.” With respect to wage and hour issues in particular, the Court further recognized that the California Division of Labor Standards and Enforcement has included the de minimis doctrine in its Enforcement Policies and Interpretations Manual, as well as in its Opinion Letters, which virtually adopt the test used in the Ninth Circuit under the FLSA.
Given this long and extensive use of the de minimis doctrine, and the reliance on this doctrine by California employers in addressing wage payment issues, you might think that it would be a simple and logical matter for the California Supreme Court to recognize this doctrine. Nevertheless, the Court found that the protections afforded to employees under the wage orders compelled it to reject application of a de minimis doctrine to the off-the-clock work that was in issue in the case before it.
Specifically, plaintiff Douglas Troester filed a class action in the Los Angeles Superior Court on behalf of himself and all non-managerial California employees of defendant Starbucks Corporation who performed store closing tasks from mid-2009 to October 2010. Mr. Troester submitted evidence that Starbuck’s computer software required him to clock out on every closing shift before transmitting daily sales, profit and loss, and store inventory data to Starbuck’s corporate headquarters on a separate computer terminal in the back office. After Mr. Troester completed this report, he activated the alarm, exited the store, locked the front door, and walked his co-workers to their cars in compliance with Starbuck’s policy.
The undisputed evidence was that these closing tasks required Mr. Troester to work four to 10 additional minutes per day. Over the 17-month period of his employment, Mr. Troester’s unpaid time totaled approximately 12 hours and 50 minutes, which at the then-applicable minimum wage came to $102.67, exclusive of any penalties or other remedies.
As for these tasks, the Court assumed that they were compensable for purposes of its analysis. After considering the history of the de minimis doctrine, the Court held that (i) the California wage and hour statutes and regulations have not adopted the FLSA’s de minimis doctrine, since there is no indication in the text or history of the relevant statutes and wage orders of such adoption, and (ii) the relevant wage order and statutes do not permit application of the de minimis rule on the facts before it, where Starbucks required Mr. Troester to work “off the clock” for several minutes per shift. The Court noted that “a few extra minutes of work each day can add up,” and that the $102.67 earned by Mr. Troester over a 17-month period was enough to “pay a utility bill, buy a week of groceries, or cover a month of bus fares,” and that “[w]hat Starbucks calls de minimis is not de minimis at all to many ordinary people who work for hourly wages.”
In ruling against the de minimis doctrine in these circumstances, the Court emphasized the fact that the California Labor Code and the wage orders contemplate that employees will be paid for all work performed, in contrast with the less protective federal law that in some circumstances permits employers to require employees to work as much as 10 minutes a day without compensation. The Court’s conclusion was further reinforced by its beliefs that (i) the modern availability of class action lawsuits to some extent undermines the rationale behind a de minimis rule with respect to wage and hour actions, and (ii) many of the time recording problems that existed 70 years ago, when the U.S. Supreme Court first addressed the de minimis rule under the FLSA, no longer exist.
As for the practical administrative difficulty of recording small amounts of time for payroll purposes, which is one of the main impetuses behind the de minimis doctrine in wage cases, the Court concluded that “employers are in a better position than employees to devise alternatives that would permit the tracking of small amounts of regularly occurring work time.” The Court suggested a restructuring of the work so that employees would not have to work before or after clocking out. The Court further suggested taking advantage of technological advances in time-tracking products, or perhaps reasonably estimating work time through such things as time studies. In any event, the Court “declined to adopt a rule that would require the employee to bear the entire burden of any difficulty in recording regularly occurring work time.”
The bottom line is that the California Supreme Court believes that employees should be paid for all of their work, and that any difficulty in capturing this time for its non-exempt employees is the employer’s problem to resolve. As the Court stated, “An employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.”
There is some glimmer of comfort insofar as the Court expressly recognized that the de minimis rule might apply in other, appropriate circumstances, and that “a properly limited rule of reason does have a place in California labor law.” As the Court stated,
The overarching rule is, and must be, that employees are entitled to full compensation for time worked, and employers must make every reasonable effort to ensure they have adequately measured or estimated that time. But the law also recognizes that there may be some periods of time that are so brief, irregular of occurrence, or difficult to accurately measure or estimate, that it would neither be reasonable to require the employer to account for them nor sensible to devote judicial resources to litigating over them.
It remains to be seen how broad this exception will become. The plaintiffs’ bar naturally will argue that virtually any time that is capable of being recorded is required to be paid. The defense bar will understandably argue for a much broader exception. As usual, the courts will have to address this in the anticipated litigation.
In the meantime, employers should carefully review their timekeeping systems and policies to make sure that they capture all working time, and they should modify these systems and policies in accordance with the California Supreme Court’s pronouncement, beginning with placing all opening and closing duties after punching in and before punching out. Failing to do so could result in significant exposure.
Paul L. Bressan is a Shareholder and Chair of the Buchalter’s Labor & Employment Practice Group. He can be reached at 949.760.1121 or pbressan@buchalter.com
]]>Retailers use a variety of tactics to battle this epidemic, from low-tech options such as offering rewards to employees who turn in thieves, to high-tech systems that can, for instance, monitor transactions to reveal issues that managers would normally be unable to detect. Yet unscrupulous employees remain undeterred, and will forever try to beat the system.
Even more upsetting is that catching an employee red-handed on video sliding product will not necessarily prevent them from bringing a wrongful termination claim against you. Many individuals, even guilty ones, feel compelled to try to clear their name through litigation. Although you would likely win such a suit in the end, the expense and time involved can be hundreds of times the amount of the theft, and might sway you to instead negotiate a frustratingly unfair settlement.
In order to maintain consistency, there is usually no choice but to terminate employees who engage in dishonest or even suspicious behavior. But if you or your managers were to make innocent mistakes during what should be a legitimate termination, you could find yourself facing a lawsuit. Worse, you could learn that your mistakes gave the lawsuit legs because it opened you up to exposure to an individual who stole from your company.
In this issue, we’ll look at some common mistakes that have resulted in otherwise unassailable terminations going south in court, and step-by-step solutions to prevent the worst-case scenario from unfolding.
The Investigation
In virtually every employment lawsuit arising from a termination for wrongdoing, the first step of the termination process—the investigation—becomes the most critical when scrutinized in front of a jury. It’s even more important when theft is involved. An allegation of theft is a powerful accusation and one that should never be taken lightly. While ordinarily you bear no burden of proof at trial, the jury will often look to you to prove theft beyond a reasonable doubt. Thus, the employee’s first tack in a trial will be to attack the quality of your investigation.
The Appropriate People Should Conduct The Investigation
There are many important missteps to avoid. First, at least two individuals should be involved in your investigation and, optimally, one should not be personally acquainted with the subject. This will help avoid claims that the allegation was trumped-up against an employee by a hostile or biased investigator. For example, an employee might claim that they were framed for theft by a manager for refusing earlier sexual advances. Using several investigators might shield such an accusation from gaining traction.
Make Sure The Accused Tells Their Tale
You must allow any employee being investigated to tell their story and include the account in your record of the investigation. Otherwise, a jury may think the employee was railroaded. The investigation must be thorough, and your investigator should never limit questioning to the witnesses identified by the accused when there may be other individuals with relevant knowledge.
Follow Your Own Internal Policies
If your company has a protocol for investigations, it must be followed to the letter. Juries demand that employers follow written procedures. Failure to do so can serve as evidence of “pretext” (a justification for a course of action that is found to be false) and could defeat your efforts at winning the case on written motions, rather than going all the way to trial.
Make Sure Your Witnesses Provide Their Own Testimony
It is important for witnesses to write their statements in their own handwriting and using their own words. Nothing tanks the credibility of a witness faster than when they don’t understand the meaning of words used in “their” written statement when testifying on the stand.
Preserve Records And Recordings
Another concern arises when a company acts as if it will never hear from the employee again once they depart the workplace following a termination. Even if you obtain a written confession of theft, it will be no substitute for a complete investigative file. Your investigator must organize and store all the records of the investigation for future use. Nothing should be destroyed.
If you plan to use business records or recordings that are ordinarily destroyed in accordance with your company’s record retention and destruction protocol, they should be moved from their usual location and preserved. Just as video footage of an employee pocketing a twenty is solid gold in a court, not having that video footage is solid gold for the plaintiff in an employment trial. If the video is missing, no explanation will overcome a jury’s assumption that you did not want them to see the video for some nefarious reason. Likewise, if an investigator reviews evidence, such as financial reports, stored on a computer, they should create copies of these records to be included in the investigation file.
Catching The Thief
The method used to catch thieves is another aspect that can result in liability. For example:
Because of factors like these, it’s important that you take several steps while attempting to catch an employee on suspicion they are stealing.
Destroy The Expectation Of Privacy
First, every employee should sign an acknowledgment that they understand they have no privacy rights in regard to those items they choose to bring on the premises. While not required by federal law, you should also have your employees acknowledge and consent in writing that they are under video surveillance while in all public and employee-only spaces at your store (not bathrooms or other private spaces). This will prevent them from bringing a successful invasion of privacy claim in the future.
Set Expectations For Investigations
At the outset of any investigation into alleged theft, the accused employee should be made aware that participating in company investigations is mandatory. Provide them a written notice that refusal to cooperate may result in termination.
Create And Enforce Policies Related To Company Assets
Finally, you should expressly advise all of your employees regarding your policies pertaining to the protection of company assets. Instruct them that violations of the policy may lead to their immediate termination without any finding of intentional wrongdoing.
The Termination Meeting
The termination meeting should not be the first time the accused is informed that they are suspected of malfeasance. However, even if you have done some legwork into the matter and feel like you have a rock solid case before talking with the suspected thief, you should still consider your plan for carrying out the disciplinary action.
Consider A “Suspension Pending Investigation”
Regardless of any benefit to keeping the employee in the dark about your suspicion while you conduct a covert investigation, and even if termination is essentially a foregone conclusion at the time of your interview with the accused, you should still hold off on making a termination decision and from communicating that sort of message during that first interview. It is far better to suspend the employee pending the outcome of the investigation. Many times the employee will not return for a follow-up meeting and can be terminated as having abandoned their job. There are far fewer facts to argue when an employee is terminated on these grounds.
Your Words Matter
How the termination meeting is to be conducted depends heavily on the strength of your evidence. If all the signs point to theft but you don’t necessarily have anything that is conclusive, you should not use terms like “theft,” “dishonesty,” or even “suspicion of theft” as reasons the employee is being terminated. This does not mean you cannot terminate the employee, but accusing an individual of a crime is per se defamatory in many jurisdictions, and you may be required to prove in court that the employee did, in fact, commit a crime. Instead, language centering on your lack of trust in the employee—“we are terminating you because we have lost confidence in your ability to perform your job up to our expectations”—is much less likely to be considered defamatory.
Focus On Your Policies, Not The Criminal Code
Another way to couch your justification for termination if you are less than 100 percent certain of the employee’s guilt is to cite a violation of your company policies and not any allegation of criminalwrongdoing. In this scenario, you should tell the employee that you have not reached a conclusion as to their culpability for a crime, but that the termination is because proper store procedures were not followed.
Stay Tuned For Part Two
Terminating employees for the reasons stated in this article may not prevent the employee from securing unemployment compensation, but as we’ll discuss in Part Two of this article, fighting unemployment compensation is overrated. In the next issue of the Retail Update, we’ll look at other problem areas in terminating for theft, including when—and when not—to call the police.
For more information, contact the author at EHarold@fisherphillips.com or 504.522.3303.
]]>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
Often times, employers tend to focus solely on their duty of care obligations to their employees domestically. Employers, however, would be remiss not to focus on their duty of care to their employees abroad. The bottom line is that employers need to be familiar with and sufficiently address the issues facing their workers who travel and/or perform work abroad. Understanding the legal obligations and preventing the risks associated with employee foreign travel and work assignments is imperative for employers, exclusive of size and industry.
Workplace health and safety is a paramount concern in the United States, as evidenced by the Occupational Safety and Health Administration Act of 1970 (“OSHA”) and workers’ compensation laws. OSHA establishes the primary standards for workplace health and safety and a general duty of care. OSHA’s main focus is on preventing workplace injuries by imposing obligations upon employers to maintain a safe work environment. On the other hand, workers’ compensation laws impose responsibilities on an employer to financially compensate an employee who actually suffers an injury or occupational disease in the course of employment. Although costly and constantly evolving, OSHA and the workers’ compensation system at least provide some level of certainty to an employer regarding its financial and legal responsibilities when an employee is injured, contracts an illness, or dies on the job.
Once a United States employee steps outside of the United States borders, however, employers find themselves outside the confines of these commonly understood and applied protections and laws. The result is that an employer finds itself subject to a negligence claim with virtually no level of certainty with respect to liability and damages.
The recent increased emphasis on the duty of care and the idea that an employer is responsible for the health, safety, security, and well-being of its globally mobile employees has proved to a daunting and scary concept for employers to comprehend. To mitigate risks and provide some level of certainty, employers should strive to understand its legal obligations and to mitigate its liability risk through a travel risk management plan that involves assessing company-specific risks and developing policies and procedures, communicating to and training of employees, and documenting and analyzing incidents.
To learn more about employer best practices and drafting a travel risk management plan, please see the following article entitled “Legal Perspective on the Health, Safety & Security Responsibilities for US Mobile Workforce,” which can be found here. The article was published in partnership with the International SOS Foundation and the American College of Occupational and Environmental Medicine.
]]>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:
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
Create Exclusive Deals for Your Text Messaging Subscribers
Customer loyalty is important in any industry, but especially in hospitality where competition is fierce. You want your guests to feel valued, and one way to do so is to create exclusive deals that only your subscribers can receive. When your guests feel special, they are more likely to be loyal to your company. When you send out deals through text messaging, make sure that those who are receiving these messages know that the deal is exclusive to texts. With SMS alerts for hotels, you can give your customers discounts on hotel stays, or offer upgrades when bookings are low.
Send Text Messages as Reservation Confirmations
Text messages are an easy way to let a hotel guest know that you have received their request for a booking. Whether the guests want to stay an extra night or is reserving a table at your restaurant, a quick text lets your guest know that the request has been received. While you can take the time to make a phone call to let your guest know the information was received, a text message is faster and a more direct form of communication.
Let Guests Know What is Going on in the Area
Guests feel cared about when you share interesting activities that are going on during their stay. Whether your hotel is hosting a comedy night, or there is a fun event in town, share these events with your guests through text messaging. You’ll be able to reach guests no matter where they are, and you’ll be providing great customer service at the same time.
Texting Can Be Essential for Communicating in a Crisis
It’s simply not possible to call every guest at once, but you can reach all your guests instantly through texting. With two-way texting, you can both send out alerts and also enable guests to respond to confirm their safety or give tips to law enforcement. A real-world example of using texting during a critical situation is Omni Dallas Hotel was able to use their texting platform to ensure the safety of staff and guests when the Dallas police shootings occurred in 2016. They sent a total of four messages during the crisis that allowed them to first alert employees about the issue and then give them the all clear when they hotel had been secured. They said about the whole ordeal that it brought them “great peace of mind to know that we can reach our entire team during events like this.”
Allow Guests to Order Room Service
When you have guests that would prefer to text an order rather than use a phone, text messaging in a room service order provides the opportunity. Once the food has been ordered, you can send out a text to let the guest know that their order has been received. Once the meal is ready for delivery, another text can be sent to the recipient to let them know the meal is on the way to their room. Text messaging makes ordering room service a more streamlined process.
Ask for Hotel Guest Feedback Right Away
It’s important to know if your guests enjoyed their stay at your hotel. If there is a problem, you’ll want to address this problem right away. When you send out a survey to ask for feedback when the guest checks out of your hotel, you are more likely to receive the feedback that you want. Guests will often answer the survey while traveling back home, when the stay is still on their mind. Keep the survey simple so that you receive clear answers to the questions you seek.
Text messaging is an essential tool when you are trying to provide quality customer service. With messaging in place, you can request customer feedback and offer deals that are exclusive to recipients. Texting offers an open form of communication that is clear and direct, giving you the ability to provide excellent customer service at all times.
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