Although law firms can be subject to the NLRB's jurisdiction, there are not many reported decisions. An administrative law judge recently issued a decision involving a small law firm in Alabama that addressed the issue of whether a lawyer who was not a partner could be a supervisor within the meaning of Section 2(11) of the National Labor Relations Act. The issue involved the termination of an associate who violated the firm rule prohibiting discussion among employees of wages or benefits. One of the employer's defenses was that the associate was a supervisor and therefore exempt from coverage of the Act.
The firm had one partner who made all the decisions concerning hiring, firing, wages, and benefits. There were five associates, and four case managers who assisted the associates. Ms. Rouse was the charging party and was the only employee in the firm admitted in Mississippi. She therefore handled all the cases in Mississippi. She was assisted by a case manager. While there was a scheduling software used in the firm, it was not used for Mississippi cases. The firm had a rule prohibiting the discussion of wages and benefits by employees.
The administrative law judge found that the rule violated the Act. The discussion of wages is a core Section right, and its prohibition is unlawful absent a proof of a legitimate and substantial business interest. With respect to the issue of supervisory status, the judge stated that the key issue was how the attorneys interacted with the case managers to fulfill the case handling responsibilities.
The judge found that Rouse had effectively recommended the hiring of a case manager. The judge also found that Rouse had complained about a case manager and requested the individual be terminated. The judge noted that since the partner had not worked with the case manager and had no first hand knowledge of performance, he relied on Rouse's judgment and fired the individual.
The judge recognized that the firm was small and that each attorney is lead counsel in his or her cases with the independent authority to decide how to handle the cases. The attorneys are subject to adverse consequences if the case manager does not properly perform the assigned task. The judge noted that this fact differentiated the firm from legal services organizations whose lawyers operate under multiple layers of supervision. Because Rouse was a statutory supervisor, her termination did not violate the act.
Law firms and especially large law firms should be aware that associates may be covered by the Act as employees. Law firms should consider whether and the degree to which an associate's assessment of support staff is considered in personnel decisions. It could be the critical difference if an issue of an attorney's employee status becomes an issue. Law firms should also make sure that firm policies are valid under the Board's expanded view of protected, concerted activity.
Regular updates and commentary on current events in labor and employment law, focusing on developments in Michigan.
Monday, May 20, 2013
Thursday, May 16, 2013
The NFL and the ADA
The New England Patriots released Kyle Love, a defensive tackle recently. According to his agent, Love was released for an "Non-Football injury/illness." The release comes within two weeks of Love being diagnosed with Type-2 diabetes. His agent stated that they were disappointed by the team's action since there have been a number of players who have successfully pursued careers while managing their diabetes. Love's agent also said that the team has taken the position that Love retire or be released and that the team did not want to take a chance as to his ability to play.
What if employer A learned one of its employees had been diagnosed with diabetes and terminated the employee because of concern over the employee's ability to work? How would this not be a violation of the ADA? Are the Patriots different because they are a football team? Now, it may well be that the team explains its actions and distances its action from the diagnosis, but the designation of "Non-football injury/illness" seems to be a pretty strong link to Love's diabetes. The frequent response has been how can the Patriots get away with this? Love is focusing on picked up by another team so it is unlikely that he will pursue this unless he is unsuccessful. I wonder what the EEOC thinks?
What if employer A learned one of its employees had been diagnosed with diabetes and terminated the employee because of concern over the employee's ability to work? How would this not be a violation of the ADA? Are the Patriots different because they are a football team? Now, it may well be that the team explains its actions and distances its action from the diagnosis, but the designation of "Non-football injury/illness" seems to be a pretty strong link to Love's diabetes. The frequent response has been how can the Patriots get away with this? Love is focusing on picked up by another team so it is unlikely that he will pursue this unless he is unsuccessful. I wonder what the EEOC thinks?
Sunday, May 5, 2013
NLRB "Advice" concerning employer investigations
In Verso Paper, the Division of Advice reviewed an employer's confidentiality rule and found it to be unlawfully overbroad. The rule was overbroad because it did not provided for confidentiality on a case by case basis consistent with the Board's ruling in Banner Health System, 358 NLRB No. 93(2012). To justify confidentiality, the Board in Banner Health held that an employer must show more than a generalized concern with protecting the integrity of its investigations. An employer must determine whether witnesses need protection; whether evidence is in danger of being destroyed; whether testimony is in danger of being fabricated; and whether there is a need to prevent a cover up.
In the advice memo, the first two sentences of the company's policy were determined to be lawful. The memo then set forth language that could be used to make the policy lawful. The new policy would read: Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep the evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover up. The advice memo would add: Verso may decide in some circumstances that in order to achieve these objectives, (employees) must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and (employees) do not maintain such confidentiality, (employees) may be subject to disciplinary action up to and including immediate termination.
It is apparent from the first two sentences of the policy that the employer was trying to incorporated the language of Banner Health. The "flaw", according to the advice memo, was the failure to avoid a blanket imposition of confidentiality of on all investigations.
So what are the types of investigations that warrant confidentiality? Certainly investigations that involve theft, misuse of confidential information, and harassment including sexual harassment can be justified in light of the need to maintain evidence and prevent testimony from being influenced or fabricated. As was noted in a Forbes article, the NLRB's position is contrary to the ABA 2009 "best practices" for internal investigations.
Until the Board's position on confidentiality is reviewed by a court of appeals, an employer should avoid the blanket imposition of confidentiality. An employer should nevertheless be able to justify the imposition of confidentiality in virtually all situations. The integrity of an investigation is paramount. Allegations of theft or sexual harassment are extremely serious. The damage caused by discussions and speculation are not easily undone when an investigation is finished.
The NLRB's emphasis of form over substance is an indication that it does not understand the challenges facing an employer in a difficult investigation. Fortunately, employers can and should establish the reasonableness of the need for confidentiality in investigations that truly warrant it.
In the advice memo, the first two sentences of the company's policy were determined to be lawful. The memo then set forth language that could be used to make the policy lawful. The new policy would read: Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep the evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover up. The advice memo would add: Verso may decide in some circumstances that in order to achieve these objectives, (employees) must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and (employees) do not maintain such confidentiality, (employees) may be subject to disciplinary action up to and including immediate termination.
It is apparent from the first two sentences of the policy that the employer was trying to incorporated the language of Banner Health. The "flaw", according to the advice memo, was the failure to avoid a blanket imposition of confidentiality of on all investigations.
So what are the types of investigations that warrant confidentiality? Certainly investigations that involve theft, misuse of confidential information, and harassment including sexual harassment can be justified in light of the need to maintain evidence and prevent testimony from being influenced or fabricated. As was noted in a Forbes article, the NLRB's position is contrary to the ABA 2009 "best practices" for internal investigations.
Until the Board's position on confidentiality is reviewed by a court of appeals, an employer should avoid the blanket imposition of confidentiality. An employer should nevertheless be able to justify the imposition of confidentiality in virtually all situations. The integrity of an investigation is paramount. Allegations of theft or sexual harassment are extremely serious. The damage caused by discussions and speculation are not easily undone when an investigation is finished.
The NLRB's emphasis of form over substance is an indication that it does not understand the challenges facing an employer in a difficult investigation. Fortunately, employers can and should establish the reasonableness of the need for confidentiality in investigations that truly warrant it.
Thursday, May 2, 2013
The EEOC and wellness programs: Time for an answer?
The EEOC has announced that it will be holding a meeting on May 8, 2013, to hear from invited panelists on the treatment of wellness programs under federal law, with an emphasis on understanding the ways that the ADA, the Genetic Information Nondiscrimination Act as well as other statutes that the EEOC enforces may be implicated. The meeting may provide a basis to finally address the issue it has left open since 2000.
In 2000, the EEOC stated that a wellness program is voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. Since that time, the EEOC has repeated its mantra that it has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether the withholding of the reward from those who do not participate constitutes a penalty, thereby making the program involuntary.
It will be interesting to see if the 11th Circuit decision in Seff v. Broward County is addressed where the issue of the application of the bona fide benefit was addressed by the court in its decision while issue of "voluntariness" was not. Many employer wellness programs are stand alone and not related to nor a part of group health plan documents.
Employers have enacted programs which may not pass the voluntariness test. The publicity which CVS Healthcare attracted is a good example of what employers are doing in this area. A CVS employee who does not participate in a "voluntary" wellness review which collects information concerning blood pressure, body fat, cholesterol, and weight will result in the additional payment of $600 a year for healthcare coverage.
The EEOC is finally taking the first step to answer a question of increasing importance to employers. Employers should not be surprised if the ultimate answer to the question of voluntariness is not what they want.
In 2000, the EEOC stated that a wellness program is voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. Since that time, the EEOC has repeated its mantra that it has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether the withholding of the reward from those who do not participate constitutes a penalty, thereby making the program involuntary.
It will be interesting to see if the 11th Circuit decision in Seff v. Broward County is addressed where the issue of the application of the bona fide benefit was addressed by the court in its decision while issue of "voluntariness" was not. Many employer wellness programs are stand alone and not related to nor a part of group health plan documents.
Employers have enacted programs which may not pass the voluntariness test. The publicity which CVS Healthcare attracted is a good example of what employers are doing in this area. A CVS employee who does not participate in a "voluntary" wellness review which collects information concerning blood pressure, body fat, cholesterol, and weight will result in the additional payment of $600 a year for healthcare coverage.
The EEOC is finally taking the first step to answer a question of increasing importance to employers. Employers should not be surprised if the ultimate answer to the question of voluntariness is not what they want.
Sunday, April 21, 2013
Lessons from Boston: Employers confront terrorism
The events of the past week in Boston highlight the not so new reality that terrorism not only impacts society but also the workplace. How do employers respond when the government declares a state of emergency; closes roads; stops mass transportation; and tells employees to stay in their homes?
Obviously, the first concern is the safety of the community including employees. As employers know only too well, issues like Friday's business shut down has repercussions for them. What legal obligations, if any, do employers have to pay their employees? For exempt employees, employers will not deduct a day's pay from their salaries. The DOL issued an letter in October of 2005 which addresses the application of the FLSA to exempt employees with respect to leave taken or directed to be taken during inclement weather. (thanks to Alisa Arnoff) The letter is instructive but not totally applicable given the role of the government in preventing the employee from getting to work is a critical factor.
What about non exempt employees? How should they be treated? It is likely that in many instances, the question will be preempted by an employer's decision to pay employees for the day. There are many reasons why an employer would choose to pay. Perhaps the biggest consideration is the morale of the workforce. The savings realized by not paying would not come close to the loss of employee goodwill. There is no legal obligation to pay employees who do not work. An employer could allow the day to be treated as personal time off. After an event such as the one in Boston, the decision concerning pay will likely not be driven by the bottom line of the business.
Employers who took the possibility of a flu pandemic seriously and created procedures to address the closing of business can adjust the policy to apply in the case of domestic terror. Issues such as working from home and the technology to support it; access to files; customer contact information; and employee communication should be addressed. Employers who have no policy need to establish one. A policy addressing domestic terrorism is like a workplace violence policy: it should be formulated before any event and be ready for immediate implementation, but hopefully will never to be used.
Obviously, the first concern is the safety of the community including employees. As employers know only too well, issues like Friday's business shut down has repercussions for them. What legal obligations, if any, do employers have to pay their employees? For exempt employees, employers will not deduct a day's pay from their salaries. The DOL issued an letter in October of 2005 which addresses the application of the FLSA to exempt employees with respect to leave taken or directed to be taken during inclement weather. (thanks to Alisa Arnoff) The letter is instructive but not totally applicable given the role of the government in preventing the employee from getting to work is a critical factor.
What about non exempt employees? How should they be treated? It is likely that in many instances, the question will be preempted by an employer's decision to pay employees for the day. There are many reasons why an employer would choose to pay. Perhaps the biggest consideration is the morale of the workforce. The savings realized by not paying would not come close to the loss of employee goodwill. There is no legal obligation to pay employees who do not work. An employer could allow the day to be treated as personal time off. After an event such as the one in Boston, the decision concerning pay will likely not be driven by the bottom line of the business.
Employers who took the possibility of a flu pandemic seriously and created procedures to address the closing of business can adjust the policy to apply in the case of domestic terror. Issues such as working from home and the technology to support it; access to files; customer contact information; and employee communication should be addressed. Employers who have no policy need to establish one. A policy addressing domestic terrorism is like a workplace violence policy: it should be formulated before any event and be ready for immediate implementation, but hopefully will never to be used.
Sunday, April 14, 2013
Whistleblowing Rutgers Style
One of the more intriguing aspects of the Rutgers' termination of basketball coach Mike Rice are reports, like the New York Times story, that the FBI is investigating the former assistant who released the video of the conduct that led to Rice's firing. The inquiry centers around a letter from the former assistant's attorney to the university demanding $950,000 which the university did not pay. The video was subsequently released. The assistant has filed a wrongful termination suit against the university and several individuals.
Obviously, without seeing the contents of the letter, it is difficult to put the demand in its proper context. The investigation does highlight what is a significant difference between whistleblower claims and other employment based claims. That difference is in the motivation of the whistleblower. The protection that is afforded depends upon the law of the state, but in general, it is to protect an individual who has or is about to report a violation of law as defined in the statute.
In May of 2012, the Michigan Supreme Court agreed to review the court of appeals' decision in a whistleblower case--Whitman v. City of Burton. In granting leave to appeal, the Court directed the parties to brief the issue of whether a prior Supreme Court case holding that the primary motivation of an employee pursuing a whistleblower claim must be a desire to inform the public on matters of a public concern, as opposed to person vindictiveness is still valid. The court of appeals had held that the statute's purpose is to protect the public and not to be used an offensive weapon by disgruntled employees. The plaintiff's motivation dealt with obtaining pay for a unused sick and vacation days, and the court of appeals noted that the plaintiff dropped his threat of legal action when he received his money and waited to asset a legal violation until after he accumulated thousands of dollars in unused leave.
What if the university involved had been in Michigan? Until and unless the Court changes the law in Whitman, it would seem that a demand for money for a whistleblower would doom subsequent litigation. Any employer that is confronted with a demand to pay by an alleged whistleblower would do well to contact its counsel immediately. Whether there is any criminal liability in the Rutgers case remains to be seen, but it is clear that demanding anything other than the compliance with the law could lead to consequences neither intended nor wanted by the complaining individual.
Obviously, without seeing the contents of the letter, it is difficult to put the demand in its proper context. The investigation does highlight what is a significant difference between whistleblower claims and other employment based claims. That difference is in the motivation of the whistleblower. The protection that is afforded depends upon the law of the state, but in general, it is to protect an individual who has or is about to report a violation of law as defined in the statute.
In May of 2012, the Michigan Supreme Court agreed to review the court of appeals' decision in a whistleblower case--Whitman v. City of Burton. In granting leave to appeal, the Court directed the parties to brief the issue of whether a prior Supreme Court case holding that the primary motivation of an employee pursuing a whistleblower claim must be a desire to inform the public on matters of a public concern, as opposed to person vindictiveness is still valid. The court of appeals had held that the statute's purpose is to protect the public and not to be used an offensive weapon by disgruntled employees. The plaintiff's motivation dealt with obtaining pay for a unused sick and vacation days, and the court of appeals noted that the plaintiff dropped his threat of legal action when he received his money and waited to asset a legal violation until after he accumulated thousands of dollars in unused leave.
What if the university involved had been in Michigan? Until and unless the Court changes the law in Whitman, it would seem that a demand for money for a whistleblower would doom subsequent litigation. Any employer that is confronted with a demand to pay by an alleged whistleblower would do well to contact its counsel immediately. Whether there is any criminal liability in the Rutgers case remains to be seen, but it is clear that demanding anything other than the compliance with the law could lead to consequences neither intended nor wanted by the complaining individual.
Monday, April 8, 2013
Termination Rutgers Style
Rutgers President Barchi was quite adamant that Mike Rice, the men's basketball coach, was not fired for cause. He stated, "The outside counsel says that could not be done...I fired him. Not for cause. I just fired him." Not terminating the coach for cause cost the university a little over a million dollars. In light of the report of the investigation of the Rice matter, a fair question is why wasn't Rice fired for cause?
As part of the investigation of the alleged abuse and other misconduct attributed to Rice, the university retained outside counsel to investigate. A comprehensive report was submitted, and on pages 34 and 35 of that report, the conduct of Rice was found to have "crossed the line" of permissible conduct and to have constituted harassment and intimidation in violation of university policy. In addition, the report stated that the athletic director could reasonably determine that the coach's actions tended to embarrass and to bring shame or disgrace to the university in violation of the employment contract. The outside counsel was not retained to give a recommended penalty; he did however find a breach of university policy and of the employment contract.
"Cause" in Rice's employment contract is identified as: Material breach of this contract(won-loss record shall not constitute a material breach), neglect of duty, willful misconduct, act(s) of moral turpitude, conduct tending to bring shame or disgrace to the University as determined in good faith by the Director of Intercollegiate Athletics, violation of University regulations, policies,procedures,or directives not remedied after 30 days written notice...criminal conviction, or unapproved absence from duty, other than for bona fide use of sick leave in accordance with University policy without the consent of the director. In his resignation letter, athletic director Pernetti stated that his first instinct when he saw the video tape was to fire Rice immediately, but the university decided to follow a process involving university lawyers, human resources professionals, and outside counsel. After reviewing the the independent investigative report, the consensus was that university policy would not justify dismissal.
So, on the one hand, there is the claim that outside counsel said that termination was not appropriate, yet on the other hand, the decision not to terminate was based on consensus following a process chosen by the university. Ralph Izzo, the chairman of the university's Board of Governors stated that the university "paid dearly for good advice and I'm not sure we got good advice in this case."
Perhaps a more accurate summary of what happened than that offered by Chairman Izzo is that the university retained an outside law firm to do an investigation which it did, and in reviewing that report of that investigation along with some unidentified factors, university representatives decided that a fine and suspension were adequate.... until unfavorable publicity called the process into question. So, is there anything than employers and their counsel can learn from Rutgers' handling of this matter?
From the perspective of drafting an employment contract, an employer wants to include all possible reasons for termination so that it will not have missed something serious enough to warrant termination, thereby exposing the employer to liability for breaching the just cause provision of the contract. While it is tempting to use a boilerplate definition of "cause," an employer should consider the position in question, and with the aid of counsel, really review what action or inaction would give rise to the need for termination. It may be necessary to list non exhaustive examples with the prohibited conduct.
There is a level of intensity in coaching college athletics not found in the ordinary workplace. Past experience has shown that coaches have been terminated for striking opposing players; choking players; grabbing students; bullying players; forcing injured players to practice; and partying with college students. In light of these past misdeeds of coaches, a university or college would want to make sure that such conduct fit into the definition of "cause." in relation to specific categories. In this case, Rice's actions do seem to fall within the category of bringing shame or disgrace to the university.
With respect to outside counsel, a firm which is being retained to conduct an investigation should do what was done in this case; identify the scope and the nature of the engagement, and state specifically what is being done, i.e. conducting an investigation into the designated areas. Upon completion, it is advisable to once again identify the scope of the engagement and to indicate that if additional work is requested upon review of the report, it will be identified in writing with the specific additional actions to be taken by the firm.
Apparently in the Rutgers case, hindsight required that someone take the blame, whether deserved or not. There is nothing wrong with using a process as was done in this case. In fact, using a process with the involvement and input from different perspectives often avoids mistakes. Here the process is not to blame; rather, those who should have been more attentive during the process were not. As a result, Rutgers will be literally paying the price.
As part of the investigation of the alleged abuse and other misconduct attributed to Rice, the university retained outside counsel to investigate. A comprehensive report was submitted, and on pages 34 and 35 of that report, the conduct of Rice was found to have "crossed the line" of permissible conduct and to have constituted harassment and intimidation in violation of university policy. In addition, the report stated that the athletic director could reasonably determine that the coach's actions tended to embarrass and to bring shame or disgrace to the university in violation of the employment contract. The outside counsel was not retained to give a recommended penalty; he did however find a breach of university policy and of the employment contract.
"Cause" in Rice's employment contract is identified as: Material breach of this contract(won-loss record shall not constitute a material breach), neglect of duty, willful misconduct, act(s) of moral turpitude, conduct tending to bring shame or disgrace to the University as determined in good faith by the Director of Intercollegiate Athletics, violation of University regulations, policies,procedures,or directives not remedied after 30 days written notice...criminal conviction, or unapproved absence from duty, other than for bona fide use of sick leave in accordance with University policy without the consent of the director. In his resignation letter, athletic director Pernetti stated that his first instinct when he saw the video tape was to fire Rice immediately, but the university decided to follow a process involving university lawyers, human resources professionals, and outside counsel. After reviewing the the independent investigative report, the consensus was that university policy would not justify dismissal.
So, on the one hand, there is the claim that outside counsel said that termination was not appropriate, yet on the other hand, the decision not to terminate was based on consensus following a process chosen by the university. Ralph Izzo, the chairman of the university's Board of Governors stated that the university "paid dearly for good advice and I'm not sure we got good advice in this case."
Perhaps a more accurate summary of what happened than that offered by Chairman Izzo is that the university retained an outside law firm to do an investigation which it did, and in reviewing that report of that investigation along with some unidentified factors, university representatives decided that a fine and suspension were adequate.... until unfavorable publicity called the process into question. So, is there anything than employers and their counsel can learn from Rutgers' handling of this matter?
From the perspective of drafting an employment contract, an employer wants to include all possible reasons for termination so that it will not have missed something serious enough to warrant termination, thereby exposing the employer to liability for breaching the just cause provision of the contract. While it is tempting to use a boilerplate definition of "cause," an employer should consider the position in question, and with the aid of counsel, really review what action or inaction would give rise to the need for termination. It may be necessary to list non exhaustive examples with the prohibited conduct.
There is a level of intensity in coaching college athletics not found in the ordinary workplace. Past experience has shown that coaches have been terminated for striking opposing players; choking players; grabbing students; bullying players; forcing injured players to practice; and partying with college students. In light of these past misdeeds of coaches, a university or college would want to make sure that such conduct fit into the definition of "cause." in relation to specific categories. In this case, Rice's actions do seem to fall within the category of bringing shame or disgrace to the university.
With respect to outside counsel, a firm which is being retained to conduct an investigation should do what was done in this case; identify the scope and the nature of the engagement, and state specifically what is being done, i.e. conducting an investigation into the designated areas. Upon completion, it is advisable to once again identify the scope of the engagement and to indicate that if additional work is requested upon review of the report, it will be identified in writing with the specific additional actions to be taken by the firm.
Apparently in the Rutgers case, hindsight required that someone take the blame, whether deserved or not. There is nothing wrong with using a process as was done in this case. In fact, using a process with the involvement and input from different perspectives often avoids mistakes. Here the process is not to blame; rather, those who should have been more attentive during the process were not. As a result, Rutgers will be literally paying the price.
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