Kaufman and Canoles

Kaufman & Canoles Law Blog

Labor & Employment Law

Thursday, June 23, 2016

Employment Law Alert – June 2016


Most employers are aware that, under the at-will employment doctrine, either the employer or the employee may terminate the employment relationship at any time with or without cause. Traditional definitions of at-will employment in Virginia have added that “reasonable notice” of the intent to end the relationship is required. So, for years, employers in Virginia have been left to ponder, “What is reasonable notice?” The Virginia Supreme Court answered that question in its recent decision in the case of Brenda Johnson v. William E. Wood & Associates, Inc.

In that case, Brenda Johnson was fired by William E. Wood & Associates, Inc. after 17 years of employment. Ms. Johnson, an admittedly at-will employee, sued her employer for wrongful termination and breach of an implied term of her employment contract because her employer failed to provide advance notice of her termination. After reaffirming that the “at-will doctrine constitutes a cornerstone of [Virginia’s] employment law,” the Virginia Supreme Court rejected Ms. Johnson’s argument that advance notice is required to terminate employment. Instead, the Court held that “‘reasonable notice’ simply means effective notice that the employment relationship has ended.”

So, the Virginia Supreme Court has confirmed what the K&C Employment Law team has been advising employers for years – employers in Virginia can terminate employees and make their terminations effective immediately, so long as they are clear that the employment relationship is over.

At Kaufman & Canoles, we are dedicated to keeping our clients informed of important legal changes like these. Join us at our 32nd Annual Employment Law Update on July 21, 2016 at the Hampton Roads Convention Center where this and other developments in employment law, including the new DOL overtime regulations and the EEOC’s electronic charge handling system, will be discussed. To register or for more information, click here. In addition, members of our Labor & Employment Team are readily available to assist you with any immediate needs you might have regarding employment law.

Friday, August 21, 2015

Employment Law Update – Spring 2015


James Shoemaker regularly sues employers on behalf of his employee clients. So his being a featured speaker at a seminar presented for the benefit of employers may have been unexpected by attendees of K&C’s 31st Annual Employment Law Update on November 13, 2014 at the Virginia Beach Convention Center. But Mr. Shoemaker provided attendees with a valuable perspective and guidance on how to avoid being sued by lawyers like him.

Mr. Shoemaker told attendees that he accepts a very small percentage of the employee claims that he reviews. He indicated that the cases he accepts generally have compelling and sympathetic facts that involve clear violations of laws governing employers’ legal obligations. Mr. Shoemaker noted that he prefers cases that involve groups of employees as opposed to one employee who simply feels he or she was treated unfairly. He noted that Virginia law governing “at-will” employment makes it very difficult to win cases based solely on fairness.

Mr. Shoemaker described a number of cases where he obtained good results for groups of employees as a result of “rogue” supervisors who either were not properly trained or simply refused to comply with policies implemented by employers. He noted that jurors can identify with victims of workplace harassment and mean-spirited supervisors. To avoid negative results like these, Mr. Shoemaker stressed that employers should make sure supervisors are properly trained. He added that employers might need to monitor their supervisors to make sure they are complying with company policies.

Mr. Shoemaker also commented on the recent rise in cases involving groups of employees complaining of not being paid properly as well as the increase in disability cases filed under the Americans with Disabilities Act (ADA). He indicated that the wage claims of groups of employees many times result from a failure to follow what are sometimes technical requirements of applicable federal wage laws. Mr. Shoemaker added that the broadening of what constitutes a disability under the ADA Amendments Act of 2008 (ADAAA) has led to more cases filed for disability discrimination. He indicated that with the ADAAA, the “battleground” for these cases has shifted to whether or not the employers have met their duty to accommodate disabilities.

After his presentation, Mr. Shoemaker answered a number of questions from the audience and, immediately thereafter, spent some time in the K&C Answer Booth addressing questions that attendees may have been a little reluctant to ask in an open setting. All in all, the attendees appreciated the opportunity to hear the perspective of a lawyer who sues employers.

Practical Pointer

The K&C Employment Team, which only represents employers, firmly believes that providing different perspectives like Mr. Shoemaker’s helps employers avoid workplace liability. That is why a number of current and former representatives of government agencies that enforce employee rights will be on hand at the April 16th showing of the 31st Annual Employment Law Update at the Greater Richmond Convention Center along with another top plaintiff’s lawyer, David R. Simonson, Jr., who, like Mr. Shoemaker, specializes in suing employers.

EEOC Files Landmark Transgender Discrimination Lawsuits

This past September, the Equal Employment Opportunity Commission (“EEOC”) filed lawsuits against a funeral home in Michigan and an eye care clinic in Florida alleging discrimination against male-to-female transsexual workers in violation of Title VII. These lawsuits mark the first time the EEOC has sued under Title VII, accusing a private sector employer of sex discrimination based on actions taken against a transgender worker. In these lawsuits, the EEOC claimed that workers who were transitioning from male to female were discriminated against because they are transgender and/or did not conform to their employer’s gender or sex-based stereotypes, expectations, or preferences.

The Michigan case involved the claim of Funeral Director/Embalmer Amiee Stephens. She claimed that after she revealed she was undergoing a gender transition from male to female and planned to start wearing female business attire at work, her employer told her that what she was “proposing to do” was unacceptable and fired her. In announcing the lawsuit, a spokesperson for the EEOC indicated “Title VII prohibits employers from firing employees because they do not behave according to the employer’s stereotypes of how men and women should act, and this includes employees who present themselves according to their gender identity.”

In the Florida case, the EEOC claimed an eye clinic confronted its Director of Hearing Services after he began wearing makeup and women’s tailored clothing to work. When this employee informed his employer he was undergoing a gender transition, all but one of the clinic’s doctors stopped referring patients to him, depriving him of his client base. The eye clinic then fired this employee claiming it was eliminating the Director of Hearing Services position, but two months later it hired a male employee who conformed to traditional male gender norms, according to the EEOC.

The EEOC lawsuits are but the latest in a growing trend of legal developments recognizing civil rights for transgender workers. This past summer, President Obama issued Executive Order 13,672 prohibiting federal contractors from discriminating against lesbian, gay, bisexual, and transgender employees and job applicants. Also, the Labor Department’s Office of Federal Contract Compliance Programs subsequently released a new agency directive clarifying that sex-based job discrimination under another Executive Order includes bias based on gender identity and transgender status. The EEOC’s more recent lawsuits are consistent with its Strategic Enforcement Plan. Under that plan, the EEOC has stated that a top enforcement priority is furthering “coverage of lesbian, gay, bisexual, and transgender individuals under Title VII sex discrimination provisions.”


Human resource professionals are usually very leery, and rightfully so, of counseling managers to terminate the employment of a worker who has just filed a Charge of Discrimination. But a recent case reminds us that even this cautionary principle has its limits.

In Curley v. City of North Las Vegas, the plaintiff was a long-time employee of the City of North Las Vegas, working as a “pretreatment inspector” cleaning sewers. Although he had received reprimands over the course of his employment, he remained an employee in good standing. The employee apparently developed a hearing impairment and requested an accommodation, but it was denied and he filed an EEOC Charge. The very next month, the employee made another, separate request for a different accommodation – keeping him away from a noisy truck – which the City also denied. As part of an investigation, a physician found the plaintiff fit for duty and ready to return to work. But the City fired the employee, who sued.

Long-term employee; pending EEOC Charge based on denied request for accommodation; another request for accommodation denied the next month; employee fired promptly thereafter despite medical ability to return to and perform work – sounds like possible illegal retaliation. That is until further facts were considered. It turns out that shortly after the second request for accommodation was made, the employee was accused of making threats to co-workers. An investigation into that issue disclosed that the employee had threatened to kick out a co-worker’s teeth; threatened to put a bomb in a worker’s car – and threatened to shoot out the kneecaps of his supervisor’s minor children. Although the physician’s report concluded that the employee did not pose a future safety threat (what was that doctor thinking?), a federal court of appeals held that the City acted properly in firing him. He was not fired solely because he might pose a danger in the future, but also because the threats themselves were a sufficient reason for termination whether or not he really meant to carry them out.

Practical Pointer

When an employee files a charge, or a complaint, or is denied a requested accommodation, management needs to monitor the situation to ensure that no retaliation occurs. But sometimes, discharge is clearly warranted. An assertion of discrimination should never be treated by employers as a “get out of jail free” card for employee misconduct. In this case, the employer also had the great good sense to muster evidence as to all of the reasons the employee was fired, not only the most critical or the one closest in time to the termination.


In an attempt to minimize overhead, an employer may seek to utilize independent contractors, as opposed to employees, to achieve operational goals. The use of independent contractors seemingly enables an employer to avoid payroll taxes, overtime payments, unemployment insurance, workers’ compensation insurance, benefits, and other costs that are otherwise associated with employees. However, an employer must be certain that its independent contractors are not really misclassified employees. If the realities of the working relationship, including the employer’s degree of control over the worker, establish that the worker was misclassified, the employer may be faced with substantial damage claims from a complaining worker (or even worse, a group of workers).

The United States Department of Labor (“DOL”) has taken a keen interest in this issue. It has launched its own Misclassification Initiative and has publicly announced that independent contractor misclassification will continue to be a key enforcement issue in 2015. In addition, employers of all sizes and in all industries have been hit with lawsuits seeking damages for alleged misclassifications. For example, Lowe’s Home Centers recently reached a multi-million dollar settlement in a federal lawsuit brought by a group of home improvement contractors who claimed that, despite being characterized as independent contractors, they acted as employees and were entitled to employee pay and benefits. Likewise, a Federal Appeals Court recently ruled that 2,300 FedEx Ground delivery drivers were improperly classified as independent contractors. This decision may require FedEx to pay its delivery drivers hundreds of millions of dollars in damages.

Employers should take heed and closely analyze all independent contractor classifications to ensure compliance with applicable laws. As seen by the results of recent lawsuits and DOL investigations, the short term cost savings may be severely outweighed by the risk of potential damages should the classification be deemed improper.


K&C’s Annual Employment Law Update returns to the Greater Richmond Convention Center on April 16, 2015 with new employment law information featuring the new Richmond EEOC Director, Daron Calhoun. Topics will include the latest on the ADA, Obamacare, outrageous cases and more. Attendees will have the opportunity to consult with Mr. Calhoun and other relevant experts in our ever popular Answer Booth.

In keeping with this year’s reality TV theme, attendees will have a chance to win a 48” flat screen TV and earn 6 HRCI credits. For more information or to register, contact Andrea King at 757.624.3232 or adking@kaufcan.com.

Thursday, August 20, 2015

Employment Law Update – Summer 2015


The Court of Appeals for the Fourth Circuit – the federal court that governs application of employment law in Virginia, Maryland, North and South Carolina, and West Virginia – has over the past few years been edging towards a more employee-friendly view of the law. The decision by the Court of Appeals in Boyer-Liberto v. Fontainebleau Corp. on May 7, 2015, marks a substantial step in that direction in the treatment of hostile environment cases under Title VII. It is arguably the most important hostile environment case, decided under both Title VII and Section 1981, in this Circuit in many years.

For years, courts have cautioned employees that the employment laws are not a “code of civility,” and that only objectionable conduct that is severe and pervasive will create a hostile environment and violate the law. One of the linchpins of the “severe and pervasive” test is whether the conduct is frequent, or a mere “isolated offensive utterance.” In almost every case up to this point, the courts in this area have held that only one or two racially- or sexually-offensive incidents were not sufficiently “severe and pervasive” to be unlawful.

The new decision changes the landscape. In this case, an African-American plaintiff alleged that, while working as a cocktail waitress in Ocean City, Maryland, she was twice called a “porch monkey” and threatened with the loss of her job by a Caucasian restaurant manager. She alleged that she complained to higher authority at the hotel and was promptly fired. She lost at the trial court level, based on existing case law that suggested no reasonable person could believe those “isolated incidents” were “severe and pervasive.” But on appeal the Court ultimately held that two uses of the term “porch monkey” within 24 hours, accompanied by threats to terminate the employee, were sufficiently severe and pervasive to constitute a hostile environment. Significantly, the Court wrote that the term “porch monkey” “is about as odious as the use of the word ‘nigger’ . . . [and] pure anathema to African-Americans.”


This case underscores the need for human resource professionals to become involved as early as possible once an offensive incident occurs. We are all accustomed to taking “prompt and effective remedial action” after a complaint, but if a single incident – here two identical incidents the same day – is enough to impose liability for harassment and for retaliatory discharge, line managers and supervisors must be trained to bring HR on board as soon as humanly possible. And keep in mind that while this case involved race claims, the same scenario could arise for comments/acts that are offensive from the standpoint of any other protected class.


Attendees of the April 16, 2015, showing of the 31st Annual Employment Law Update were able to meet and interact with the new Director of the Richmond office of the EEOC, Daron Calhoun. This was one of the first seminar appearances for Mr. Calhoun, who came to Richmond from the Detroit EEOC office earlier this year. More recently, Noberto Rosa-Ramos was chosen to be the new Director of the Norfolk EEOC office. Mr. Rosa-Ramos replaced longtime Norfolk Director, Herbert Brown, who retired late last year. Mr. Rosa-Ramos was a Senior Investigator in the Richmond EEOC office before transferring to Norfolk as the new Director of that office.

Mr. Rosa-Ramos will be introduced to attendees at the final showing of the 31st Annual Employment Law Update on July 16, 2015, by the new Deputy District Director from Charlotte, Thomas Colclough. Both Mr. Rosa-Ramos and Mr. Colclough will be available on July 16 at the Hampton Roads Convention Center to participate in workshops and answer any questions that attendees may have regarding what to expect from the EEOC going forward. Mr. Colclough will also provide a brief summary of the enforcement objectives for the EEOC locally at the end of the day before randomly selecting an attendee to be the lucky winner of a brand new 48 inch HDTV.


The Pregnancy Discrimination Act (“PDA”) requires employers to treat “women affected by pregnancy … the same for all employment-related purposes … as other persons not so affected but similar in their ability or inability to work.” But until Peggy Young took her cause to the U.S. Supreme Court, there was uncertainty over exactly what was required. Young was a part-time driver for UPS. When she became pregnant, her doctor restricted her from lifting more than 20 pounds. Because UPS required drivers to lift up to 70 pounds, UPS told Young that she could not work until her lifting restrictions were removed. So, Young sued for discrimination under the PDA, claiming that, even though UPS provided light duty accommodations to drivers injured on the job, drivers who lost their DOT certification, and drivers with a disability covered by the Americans with Disabilities Act (“ADA”), it did not provide light duty accommodations to pregnant drivers.

In a split decision, the Supreme Court ruled that pregnant employees are not entitled to preferential treatment, but an employer may violate the PDA if it fails to accommodate pregnant employees with work restrictions in the same manner as other, non-pregnant employees with similar limitations. A pregnant employee may establish a violation by showing that: (1) an employer’s policies (even facially neutral ones) “impose a significant burden” on pregnant employees; and (2) the employer’s reasons are not strong enough to justify the burden. To do this, a pregnant employee may demonstrate that the employer accommodates a large percentage of non-pregnant employees, but not pregnant employees. And, employers may not rely on increased costs or inconvenience as justification for the failure to accommodate pregnant employees.


Employers need to review their light duty and accommodation policies. Policies providing accommodations for on-the-job injuries or disabilities under the ADA may need to be revised to provide accommodations for pregnant employees. At a minimum, an employer should establish a practice of engaging in an interactive dialogue with such employees about potential accommodations.


On May 6, 2015, the EEOC announced the start of ACT Digital, which it described as the “first step in [its] move toward an online charge system.” Currently, the EEOC is running a pilot program in 11 of its 53 offices, including the Norfolk and Richmond offices, and expects to have the system implemented nationwide by October 1, 2015. Under the system, employers will be able to view and download charges of discrimination, view and respond to mediation invitations, submit position statements, update their contact and legal representative information, and communicate online with the investigator through a secure portal. New Notices of Charge of Discrimination will contain a unique password-protected log-in that will allow the employer to access the specific charge.

The ACT Digital system is intended to streamline the administrative process and improve “customer service.” For many technologically savvy employers, it may make the process more convenient, especially if they have a designated contact person (with an e-mail address) on file with the EEOC. Of course, traditionalists can choose to opt out of the digital system and continue to receive and submit documents via mail.


“Ban the box” is the code name for a movement to eliminate questions about criminal history on job applications. In 2012, the U.S. Equal Employment Opportunity Commission (EEOC) endorsed this movement with guidance that discourages blanket questions about criminal history on employment applications. In this guidance, the EEOC indicated that employers who ask such blanket questions and discriminate against anyone with convictions might face lawsuits for “disparate impact” discrimination. This past April 3, Governor McAuliffe signed a new Executive Order essentially “banning the box” for state agencies in Virginia. The Executive Order also encourages “similar hiring practices among private employers operating within the Commonwealth and state government contractors.”

Neither the EEOC’s guidance nor the Governor’s Executive Order requires private employers in Virginia to remove questions about criminal history from their employment applications. Virginia employers typically ask blanket and individualized questions about criminal history to avoid negligence claims that may result from hiring someone with a propensity to commit a crime who then commits a similar crime in the workplace after being hired. However, consistent with the “ban the box” national movement, the EEOC and Governor McAuliffe have taken steps to encourage employers to only ask questions about criminal history on an individualized basis and refrain from letting criminal history dictate hiring decisions unless an individual’s criminal history bears some specific relation to the job for which he or she is being considered.


K&C’s Annual Employment Law Update returns to the Hampton Roads Convention Center on July 16, 2015 with new employment law information and will feature top-gun employee lawyer David R. Simonsen, Jr. Mr. Simonsen will provide attendees with a valuable perspective and guidance on how to avoid being sued by lawyers like him. Topics will include the latest on the ADA, Obamacare, workplace harassment and more. In keeping with this year’s reality TV theme, attendees will have a chance to win a 48” flat screen TV and earn 6 HRCI credits. For more information or to register, contact Andrea King at 757.624.3232 or adking@kaufcan.com.

Thursday, October 24, 2013

Kaufman & Canoles Annual Employment Law Update Turns 30 Years Old

For three decades Kaufman & Canoles has been educating human resource professionals in the Hampton Roads region on updates and changes in employment law with the Annual Employment Law Update. This year’s pearl anniversary theme is The Times They Are A Changin’ and the update will feature new information and  popular employment law subjects including; workers compensation, unemployment claims and Obamacare to name a few.

Kaufman & Canoles Employment Law Update began 30 years ago when Member and Chair of the Labor & Employment team Burt Whitt, wanted to try a new way to bring current clients and regional human resource representatives up to speed with law changes. It was the first seminar of its kind in Virginia and remains the best attended. Now approaching its 30th birthday, thousands of human resources professionals have attended the seminar and its agenda has been modeled by competitors across the region making it a success the firm hopes to continue for years to come.

Keeping with tradition, this year’s updates will be presented by subject matter specialists from K&C’s Labor & Employment Law practice group and  representatives from key employment agencies in the Hampton Roads area. Additionally, the popular answer booth will be available for participants to question leading presenters regarding employment law during breaks. In honor of the 30th pearl anniversary, registrants will also be entered into a drawing for a chance to win a hand-strung freshwater pearl necklace donated by David Nygaard Fine Jewelers.

This year’s seminar will be at the Virginia Beach Convention Center on November 14, 2013, from 8:30 a.m. to 4:30 p.m. The cost to attend is $345 for the first registrant and $325 for each additional. For more information visit www.kaufcan.com.

Friday, June 28, 2013

New Virginia Law Affirms Right Not to Disclose Employee Data

Over the years, the K&C Labor and Employment Team has advised employers to be extremely wary of disclosing personal information about their employees. A new law passed by the General Assembly, effective July 1, 2013, provides companies with additional legal support for this good human resources practice. The statute defines an employee’s “personal identifying information” as home or mobile telephone number, e-mail address, or shift times and work schedules. The new law does not prohibit the disclosure – the employer retains the discretion to disclose the information if warranted – but provides that the employer “shall not . . . be required to disclose” the data. Exceptions exist for disclosures mandated by a subpoena, civil discovery, a warrant or court order, or federal law. But in the absence of those circumstances, the new statute confirms that Virginia employers retain the right to decline to disclose personal details about their employees.  —Burt H. Whitt

Wednesday, February 13, 2013

News from the Courthouse

The federal court of appeals in Richmond reminded us of a principle that bears repeating: former employees can win retaliation suits even if the conditions about which they complain are not illegal.  In a case involving Virginia Tech, the court of appeals dismissed all of the three female plaintiff’s Equal Pay Act claims, but sent one plaintiff’s retaliation claim under Title VII back to the district court for trial.  Maron v. Virginia Polytechnic Institute and State Univ.  Ms. Maron, who had complained about sex-based pay disparities, was told by a manager – during a meeting intended to discuss her personal use of e-mail – that she had “shown very poor judgment” and that she needed to “stop pursuing the things that [she was] pursuing or [she would] ruin [her] career in a very public way.”  The manager told her she “needed to become invisible” and “stay off the radar for the next six months at a minimum,” while he would be “watching [her] very, very closely.”  In addition, there was evidence that the manager told Ms. Maron that he did not “know what [she] did, but whatever [she] did, [she] really pissed [two other managers] off.”  Even though these statements, reasonably perceived as threats to terminate her employment,  did not rise to the level of “adverse employment action” needed to bring a discrimination case, they could reasonably be found to be sufficient to dissuade a reasonable employee from complaining about discrimination.  Thus, reasoned the court, a jury could find in Ms. Maron’s favor on her retaliation claims.


Never allow a counseling session on one topic (e-mail abuse) to wander into another area (complaints about discrimination?) on which the manager may not be as prepared.  And it’s seldom a good idea to tell an employee that she “pissed off” managers by complaining, or that someone would “ruin your career in a very public way.”  ‘Nuff said. —John M. Bredehoft

Monday, November 19, 2012

Business Owners and HR Managers Beware – Individual Liability for Wrongful Termination

A November 1, 2012 Virginia Supreme Court decision may expand radically the potential personal liability of managers, human resources personnel, and other individuals involved in the termination of employment.  The sharply-split, 4-3 decision in VanBuren v. Grubb holds for the first time under Virginia law that an individual co-worker – and not only a corporate employer – can be held liable for the common-law tort of wrongful termination of employment.  “[W]e conclude that Virginia recognizes a common law tort claim of wrongful discharge in violation of established public policy against an individual who was not the plaintiff’s actual employer but who was the actor in violation of public policy and who participated in the wrongful firing of the plaintiff, such as a supervisor or manager.”  (Emphasis added.)

The Court’s opinion may be proof of the old axiom that hard facts make bad law.  The allegations of misconduct are extreme (and, since the case was pending on a motion to dismiss, the allegations made by the plaintiff were all assumed to be true).  The former employee, a nurse, alleged that her physician/supervisor (an owner of the medical practice) grabbed her, rubbed her “back, waist, breast and other inappropriate areas,” told the nurse that he loved her, encouraged her to leave her husband, attempted to “kiss and grope her,” asked her to “accept his love for what it was and what it could be,” and asked her whether she planned to stay with her husband.  When the nurse told the doctor she did not intend to leave her husband, the doctor fired her, giving “no other explanation for terminating [the nurse’s] employment”.  The nurse sued both the medical practice and the doctor for wrongful termination.  A federal judge threw out the wrongful termination claim against the physician, reasoning that the termination of employment was an act of the medical practice, not the individual.  The federal court of appeals asked the Virginia Supreme Court for its opinion, and the Court said the doctor could be held liable personally, as well as the practice, for wrongful termination.

This decision may initiate a sea change in Virginia employment law.  Most employment discrimination law in Virginia derives from federal statutes: for example, Title VII of the Civil Rights Act of 1964 governs discrimination on the basis of sex, race, color, religion and national origin; the Age Discrimination in Employment Act prohibits age discrimination, and the Americans with Disabilities Act covers discrimination against individuals with disabilities.  The majority of courts have held that these federal statutes do not impose liability on individuals; the corporate “employer” is the entity at risk to be held liable.  (The Fair Labor Standards Act requirements of overtime and minimum wage payment are exceptions to this general rule.)  Moreover, most of the federal anti-discrimination laws provide for limited damage awards to successful former employees.  For violation of the ADA or Title VII, a small company is subject to no more than $50,000 in potential general and punitive damages combined (plus attorneys fees and lost wages).  Exposure under the ADEA generally is limited to double the lost wages.  However, there is no damage cap for general damages that may be awarded to a prevailing former employee under the common law wrongful termination action.  In other words, a former employee who sued his boss and his former company, and convinced a jury that he was fired in violation of Title VII, might persuade a jury to award him two million dollars.  But that Title VII award against the individual boss would be thrown out by the court, and the award against the company (assuming it was a small business) would be cut down to $50,000.  In contrast, a former employee bringing a common law wrongful termination claim against his boss and his former company, who is awarded two million dollars by the jury, gets the two million dollar judgment.  What’s more: the boss is, in most cases, likely to be jointly and severally liable with the company for the entire judgment.  The only limit on damage awards for wrongful termination cases is the general Virginia prohibition on punitive damage awards in excess of $350,000.

There was a spate of wrongful termination cases filed in Virginia in the mid- to late-1990s, but few have been filed in recent years.  The fact that a wrongful termination claim now exposes individual co-workers and supervisors to personal liability may well revitalize that cause of action.  And the standard for liability seems very broad: an individual co-worker or manager may be held personally liable where she or he “was the actor in violation of public policy and who participated in the wrongful firing of the plaintiff.”  What does this mean?  Hundreds if not thousands of federal court decisions have struggled for decades with the standard of causation necessary to impose liability for a discriminatory termination.  Must the unlawful act be the “but for” cause of the termination?  What happens in the case of mixed motives, where the employee is fired for a legitimate reason but some bad actor “participated in” the termination?  Just this last Term the U.S. Supreme Court first weighed in on the “cat’s-paw” theory of liability, where the person who makes the termination decision is innocent of wrongdoing but is influenced by a bad actor.  Under Virginia law, would both be liable if the innocent manager knew of the “bad acts,” even if the manager condemned them?  Maybe so!  We anticipate many more wrongful termination claims to be filed as a result of this decision.

How can Human Resources and managerial personnel protect themselves from the far-reaching effect of this new decision?  Should companies rush to get insurance coverage that would protect their line managers from individual discrimination judgments?  Even if available, that likely would cost a fortune.  The best advice we have right now is for HR and managers to do what they should always have been doing: train managers, supervisors, and employees; investigate all complaints and take prompt and effective remedial action; document any legitimate disciplinary issues as well as any instances of discrimination or harassment, and make sure termination decisions are made on a fully-informed record, with fairness and consideration.

There are a number of other noteworthy – albeit more legalistic – issues raised by this decision.  For example, the Supreme Court says that the claims asserted by the nurse against the corporate employer were viable: “[t]here is no question that [the nurse] has stated a cognizable wrongful discharge claim against her employer.”  The Court noted that the “discharge” was “wrongful” because, in part, it violated the public policy underlying Virginia’s criminal prohibition of adultery – but not mentioning that this same Court held the adultery statute unconstitutional years ago!  Even garden-variety wrongful termination claims, made against corporate employers, will be given new life by this decision.  —John M. Bredehoft

Thursday, August 23, 2012

NLRB (Unnecessarily) Weighs in on Workplace Investigations

The National Labor Relations Board’s (NLRB) most recent effort to maintain relevance in an era of declining union membership recently landed and it’s a doozy.  As you will recall, in the last two years, the NLRB has busied itself with  becoming the “Facebook Police” and finding that numerous employers’ social media policies were unlawful because they improperly restricted employees from making negative comments about their employer(s).  Not content to stop there, however, the NLRB has now decided that employers cannot have a blanket policy of asking employees who make a complaint about employee misconduct to not discuss the complaint with other employees while the investigation is ongoing.  According to the NLRB, such a policy has a tendency to coerce employees and restrains their Section 7 rights (i.e. their rights to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection).  Instead, employers must now engage in a case by case analysis, balancing the employer’s concern for the integrity of its investigation against employees’ Section 7 rights: “[I]n order to minimize  the impact on Section 7 rights, it was [employer’s] burden ‘to first determine whether in any give[n] investigation witnesses needed protection, evidence [was] in danger of being destroyed, testimony [was]in danger of being fabricated, or there [was] a need to prevent a cover up.'”  Banner Health System and James A. Navarro,  NLRB case 28-CA-023438 (July 30, 2012).

But, you are no doubt thinking to yourself, employment lawyers are always telling us that employer investigations into complaints of employee misconduct should be kept “as confidential as possible” — don’t these employment lawyers know what they are doing?  Well, as hard as this may be to believe, the left hand of the federal government (NLRB) doesn’t know what the right hand of the federal government (EEOC) is doing.  EEOC’s 1999 “Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors”  has this to say about confidentiality in investigations of harassment complaints:


An employer should make clear to employees that it will protect the confidentiality of harassment allegations to the extent possible. An employer cannot guarantee complete    confidentiality, since it cannot conduct an effective investigation without revealing certain information to the alleged harasser and potential witnesses. However, information about the allegation of harassment should be shared only with those who need to know about it. Records relating to harassment complaints should be kept confidential on the same basis.

A conflict between an employee’s desire for confidentiality and the employer’s duty to investigate may arise if an employee informs a supervisor about alleged harassment, but asks him or her to keep the matter confidential and take no action. Inaction by the supervisor in such circumstances could lead to employer liability. While it may seem reasonable to let the employee determine whether to pursue a complaint, the employer must discharge its duty to prevent and correct harassment. One mechanism to help avoid such conflicts would be for the employer to set up an informational phone line which employees can use to discuss questions or concerns about harassment on an anonymous basis. (emphasis added).

As can be seen, the positions of EEOC and the NLRB on the issue of confidentiality in investigations into employee misconduct are not only not consistent with one another, they are, to some extent, antagonistic, especially where the employee misconduct at issue is harassment. This, of course, puts employers conducting investigations into allegations of employee misconduct in a very difficult position.  Such investigations often are time sensitive and the necessary scope of investigation is not always readily apparent–making the analysis suggested by NLRB, on the surface, highly impractical.

In practice, however, adding  the considerations suggested by NLRB to your case file and documenting  your analysis of them (e.g. “Do witnesses need protection from possible retaliation– yes; Is testimony in danger of fabrication– yes; and is there a need to prevent a cover up– yes”) may be more of a bother than a burden.  Indeed, when you think about it, retaliation is likely a concern with any significant employee complaint.  There also is a danger of employees getting together to “get their stories straight”  when a complaint against a co-worker or supervisor is being  investigated.  And, really, when isn’t there a need to prevent a cover up?

So, when faced with your next investigation into employee misconduct, unless your analysis reveals it is one where there is: 1) no concern of retaliation, 2) witnesses may not lie, and 3) a cover up does not need to be prevented, you likely will find yourself erring on the side of keeping your investigation as confidential as possible under the circumstances.
Scott W. Kezman

Friday, July 6, 2012

Payment of Wage Transition

Due to budget constraints, the Virginia Department of Labor & Industry stopped administering Virginia’s Payment of Wage Act effective June 25, 2012. According to the VDOLI website, employees must now direct all claims concerning minimum wage or overtime to the Federal Department of Labor’s Wage and Hour Division or, if the employee has a claim for unpaid wages that is a minimum of $2,500 dollars and has documentary evidence in support of a claim, he/she should call the law firm appointed as special counsel at 1-877-VA-WAGE4. This is a dramatic change to the enforcement of the Virginia wage-hour law. —Burt H. Whitt

Monday, June 11, 2012

Fluctuating Workweek

Like many employment litigation attorneys, more and more of my practice involves federal wage and hour issues. One potent but, in my experience, underutilized tool in an employer’s wage and hour arsenal is the fluctuating workweek (half-time) method of overtime compensation.  The fluctuating workweek method of overtime compensation requires an employer to pay an employee a fixed salary that is subject to the FLSA’s “salary basis” rules.[1]  This salary is intended to cover all straight time hours of work during a workweek.  Thus, when an employee works more than forty (40) hours in a workweek, all of his or her straight time hours have been paid and the employer only owes the additional one-half overtime premium. It is generally good practice to have a written understanding with employees who are being paid pursuant to the fluctuating workweek method.

This method of overtime compensation is useful to: i) minimize overtime liability for non-exempt employees, ii) transition employees classified as salaried, exempt to salaried, non-exempt when there is a concern about the propriety of an employees’ exempt classification and  iii) to help settle misclassification claims brought by the Department of Labor or  private plaintiffs.

i) With the fluctuating workweek method, as an employee works more hours, his or her effective overtime rate decreases.  Here are a couple of illustrations:

Normal OT Fluctuating Workweek OT
1. Hourly Rate = $12.50
Hours Worked = 35
Overtime Hours = 0
Overtime Pay Due = $0

Total Compensation = 35 hrs x $12.50 = $437.50

1.  Salary = $500 per week
Hours Worked = 35
Overtime Hours = 0
Overtime Pay Due = $0

Total Compensation = $500

2.   Hourly Rate = $12.50
Hours Worked = 42
Overtime Hours = 2
Overtime Pay Due = 40 hrs. x $12.50 = $500

$12.50 x 1.5 = $18.75 (ot rate)
$18.75 x 2 hours = $37.50

Total Compensation = $500 + $37.50 = $537.50

2.  Salary = $500 per week
Hours Worked = 42
Overtime Hours = 2
Overtime Pay Due = $500/42 hrs = $11.90/hr

$11.90/2 = $5.95/hr  2 hrs ot
x $5.95 = $11.90 ot pay due

Total Compensation = $500 + $11.90 = $511.90

3.  Hourly Rate = $12.50
Hours Worked = 52
Overtime Hours = 12
Overtime Pay Due = 40 hrs. x $12.50 = $500

$12.50 x 1.5 = $18.75 (ot rate)
$18.75 x 12 hours = $225

Total Compensation = $500 + $225 = $725

3.  Salary = $500 per week
Hours Worked = 52
Overtime Hours = 12
Overtime Pay Due = $500/52 hrs = $9.62/hr

9.62/2 = $4.81/hr   12 hrs ot
x $4.81 = $57.72 ot pay due

Total Compensation = $500 + $57.72 = $557.72

4.  Hourly Rate = $12.50
Hours Worked = 62
Overtime Hours = 22
Overtime Pay Due = 40 hrs. x $12.50 = $500

$12.50 x 1.5 = $18.75 (ot rate)
$18.75 x 22 hours = $412.50

Total Compensation = $500 + $412.50 = $912.50

4.  Salary = $500 per week
Hours Worked = 62
Overtime Hours = 22
Overtime Pay Due = $500/62 hrs = $8.06/hr

8.06/2 = $4.03/hr   22 hrs ot
x $4.03 = $88.66 ot pay due

Total Compensation = $500 + $88.66 = $588.66

5. Hourly Rate = $12.50
Hours Worked = 72
Overtime Hours = 32
Overtime Pay Due = 40 hrs. x $12.50 = $500

$12.50 x 1.5 = $18.75 (ot rate)
$18.75 x 32 hours = $600

Total Compensation = $500 + $600 = $1,100

5.  Salary = $500 per week
Hours Worked = 72
Overtime Hours = 32
Overtime Pay Due = $500/72 hrs = $6.94/hr

Problem! Cannot drop below minimum wage for straight time hours.

Resolution: Must increase salary to $522/week so that employee is paid at least $7.25/hour for each straight time hour.

So $522/72 = $7.25/hr

$7.25/2 = $3.63 hr

32 hours ot x $3.63/hr = $116.16

Total Compensation = $522 + $116.16 =  $638.16

When using the fluctuating workweek method of overtime compensation, an employee’s effective hourly rate will change each week based on the number of hours worked that week; correspondingly, up to the point of hitting minimum wage, the employee’s effective overtime (i.e. half-time) rate decreases as more hours are worked.  Thus, while, as demonstrated above,  substantial savings can be achieved by using the fluctuating workweek method of overtime compensation where employees regularly work significant amounts of overtime, it remains underutilized because it is not as easily calculated as traditional time and one-half overtime.

ii) The fluctuating workweek is a good “transition” from salaried, exempt to salaried, non-exempt. At one point or another, all employers are faced with re-evaluating exemption decisions.  Whether it be because of changes in job duties, personnel or an incorrect original classification decision, it is often difficult to tell a “salaried” employee that they need to punch a clock and will be paid hourly. Converting a salaried, exempt employee to hourly, non-exempt could lead to a DOL complaint or litigation seeking back overtime. Often, even though these employees will earn more if being paid hourly and earning overtime, many employees view a salary as equating to status–and no one likes to see their status decreased — which can cause morale issues.   Using the fluctuating workweek to transition these employees allows them to maintain their salaried “status” and be rewarded for all the extra hard work they do for their employer– which is a much more positive–and less likely to lead to litigation– state of mind for the converted employees.

iii) The fluctuating workweek is increasingly coming to the rescue of employers facing costly misclassification suits seeking large amounts of back overtime. Five United States Courts of Appeal and the Department of Labor have permitted employers to calculate back overtime to improperly classified employees using half-time rather than time and a half.  One key to having this remedy available is that the salaried exempt employee understand that his or her salary is intended to cover all  hours worked by the employee; so adding a sentence to that effect to your company’s standard offer letter to salaried exempt employees can become quite important down the road if there is a misclassification suit.

When addressing your company’s wage and hour issues, keep the fluctuating workweek at the ready– you never know when it may be able to prevent– or extricate–your company from a delicate wage and hour issue. —Scott W. Kezman

[1] The “salary basis” rules require that the salary: i) be at least $455 per week and paid on regular pay periods; and ii) not reduced because of variations in the quality or quantity of the employee’s work.  This typically means that if an employee performs any work in a workweek, the employee must be paid the full salary.  There are exceptions to this rule when, for example, an employee is absent for one or more full days for personal reasons other than sickness or accident.

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