Employment Law Update – Winter 2005
EEOC, DOL Collect Record Amounts From Employers in 2004
The Equal Employment Opportunity Commission (EEOC) and the Wage-Hour Division of the Department of Labor (DOL) both reaped record amounts from employers during their 2004 fiscal years. The EEOC collected $415 million in connection with the resolution of discrimination claims. This was an increase of over $30 million from FY 2003 despite the fact that the number of discrimination charges filed was down slightly. However, EEOC attorneys filed more lawsuits during FY 2004 and the Chairperson of the EEOC, Kari Dominguez, has pointed out that more emphasis was placed on resolving a backlog of nearly 900 charges dating back nearly five years.
The DOL reported collecting a total of over $196 million for 288,296 workers during their FY 2004. This represented an increase of approximately $14 million from FY 2003. Most of what was collected resulted from employee complaints regarding overtime and minimum wage pay violations. U.S. Secretary of Labor, Elaine Chao, stated “I am pleased to announce that, once again, Wage and Hour continues to set records in the collection of back wages for workers.” With the new FairPay regs, the Wage and Hour Division also dispatched staff to hundreds of seminars to help employers make sure they were prepared to comply with the new rules and pay their workers accordingly.
On November 4, 2004, the Area Director of the Norfolk Office of the EEOC, Herbert Brown, told attendees at the 21st Annual Employment Law Update that many of the national trends were holding true for Virginia. Mr. Brown indicated that FY 2004 had resulted in substantial dollars obtained for claims of discrimination locally. Also, as was the case nationally, the most prevalent claim continued to be race discrimination and the EEOC mediation program continued to successfully grow. He indicated this program has helped resolve many charges and has generally been well-received by both employers and employees. As with past programs, present or past representatives of both the EEOC and DOL will be on hand for the March 24, 2005, Richmond showing of K&C’s 21st Annual Employment Law Update to provide attendees with an “insiders view” of the activities of these two important federal agencies.
5 Steps to Reduce Liability in ’05
With employee claims and litigation on the rise, employers are well-advised to review their employment policies and practices with an eye to reducing potential liability. To this end, many employers are conducting comprehensive self-audits either with or without the help of outside professionals. Recognizing that every employer is not in a position to conduct more extensive self-audits, here are 5 suggested steps for employers to take given recent changes in the legal environment:
1. Review pay practices as to salaried, exempt employees.
The new FairPay regs which went into effect in 2004, changed the rules as to when certain employees will be exempt from overtime. Commonly known as the “white-collar” exemptions, executive, administrative and/or professional employees were all affected by these new rules, so it makes good business sense to ensure that your pay practices are in compliance. Keep in mind that wage-hour claims are becoming more and more popular among lawyers who sue employers and mistakes in this area can be very costly.
2. Review/update employee handbooks.
First, make sure your company has an employee handbook. Some employers have a misconception that not having an employee handbook will somehow place them in a better legal position. This is not the case, and employers need to make sure that they update handbooks. Such an update is particularly important in 2005. The FairPay regs provide benefits to employers who have certain written policies in place. Other areas, including workplace harassment, FMLA leave, equal employment opportunity, discipline & discharge, and employment-at-will, should all be covered.
3. Consider training supervisors.
Generally, a company’s policies are implemented through its supervisors. What supervisors say and do can, and many times does, create legal liability for employers. Accordingly, training supervisors in areas such as workplace harassment, the dos and don’ts of hiring, effective evaluation techniques and consistent handling of discipline is something that every employer should consider.
4. Monitor Internet usage and policies.
As computers become more and more an integral part of most businesses, workplace liability related to computer usage is increasing. Employers have every right to monitor employees’ use of company computers to make sure they are being used for proper business reasons, but employees should be informed that what they do on company computers may be reviewed and may lead to disciplinary action. Accordingly, employers should maintain email and Internet usage policies and make sure that appropriate security measures are in place to prevent computer misuse or theft of information maintained in company computers.
5. Review documentation practices.
Even employers who are doing all the “right” things may have trouble defending against employee claims if employment actions are not properly documented. Companies should make sure their supervisors are trained to consistently document all employment actions. Consider making documentation efforts part of a supervisor’s duties and evaluate how effective he/she is in this area. Not only should employee files be reviewed for having the necessary documentation, but unnecessary/inappropriate documentation inadvertently placed in those files should be removed.
HR Director Who Quit Cannot Sue for Wrongful Termination
In Honor v. Booz-Allen & Hamilton, Inc., an African-American Human Resources Director became dissatisfied with his employer allegedly because of a lack of support of his efforts to increase diversity and a Recruiting Director’s discriminatory behavior. This led to Mr. Honor looking for other options while remaining employed by Booz-Allen. Among other things, Mr. Honor stated in an email to another company, USAirways, that he began initiating a “confidential job search” six to eight weeks before contacting USAirways and that he had a “definite interest in joining your team.” Approximately four months later, the HR Director was allegedly informed by Booz-Allen’s in-house lawyer that he was going to lose his job and he was further encouraged to explore other opportunities with Booz-Allen, including becoming a consultant. Mr. Honor subsequently accepted an offer to go to work with USAirways and tendered his resignation.
Despite having resigned, Mr. Honor sued his former employer claiming he was constructively discharged, retaliated against and not promoted following his complaints about a hostile work environment. The Fourth Circuit Court of Appeals ultimately ruled that the HR Director’s claims failed despite evidence that his employer intended to terminate him because he had earlier begun a job search and ultimately chose to resign voluntarily. In so ruling, the Court found that his working conditions were not so intolerable as to require him to resign.
The evidence contained in the HR Director’s emails helped the employer prove that frustration over internal professional relationships prompted the plaintiff to start a job search and ultimately resign voluntarily. Without such evidence, it may have been difficult to refute a claim that the HR Director was constructively discharged. This case highlights the growing practice to obtain and use evidence created by an employee in his or her computer. In this case, a search for computer evidence helped the employer, but the plaintiff’s lawyers are also adept at discovering emails created by supervisors that can be used against companies to prove discrimination.
Assault By Employee Leads to Negligence Claims Against Virginia Tech Contractor
The Fourth Circuit Court of Appeals recently ruled that a janitorial contractor for Virginia Tech may be liable for negligence in connection with an alleged attack of a Virginia Tech student by one of its employees. In Blair v. Defender Services, the employer failed to conduct a criminal background check on the employee in question despite the contractor’s contractual obligation to Virginia Tech. Presumably, such a background check would have disclosed that the employee was subject to a protective order for assault in a neighboring county. Unfortunately, the employee subsequently attacked a female Virginia Tech student in a class building restroom.
The Court held that, under the circumstances, the employee was acting outside the scope of his employment. However, the Court went on to rule that the employer could be liable for negligent hiring or negligent retention of the employee if a subsequent trial determines that the employee’s violent propensities should have been discovered by the employer before placing that employee in a situation in which he posed a threat to others. The Court cited evidence that the employer may have discovered that the employee was the subject of a protective order and criminal complaint if the contractually required background investigation had been conducted.
While in this case a background check was contractually required, more and more employers are conducting criminal background checks to ensure against hiring criminals, particularly when the position in question poses a risk to the public or other employees. Steps that Virginia employers can take to prevent hiring a criminal include:
- Posting prominent signage that background checks and drug tests will be conducted for all new hires;
- Posting a similar notice on the company’s website and on the application form itself;
- Informing all current employees of policies regarding new hires and placing current employees on notice that they may be subject to background screening should the employer find it necessary in the future;
- Insist that any temporary employment agencies used perform background checks and drug tests on their candidates and request copies of reports on any workers an employer hires through such agencies; and
- Require any vendor or independent contractor that places employees in an employer’s facilities to conduct background checks.
Burt Whitt Recognized as Top Employment Lawyer
Burt Whitt, chairman of Kaufman & Canoles’ employment law section, was recently selected as Virginia’s top employment lawyer in Virginia Business Magazine’s “Legal Elite” poll. Virginia Business Magazine conducted a statewide survey among lawyers to identify those attorneys who are the best in their practice areas. Burt not only made the exclusive list but received the highest number of nominations among employment lawyers and was identified as the “top” employment lawyer in the state.
Six other members of the Employment Law Team also recognized in the “Legal Elite” poll include David Anthony, Stanley Barr, Robert Barry, Marie Carter, Scott Kezman, and Susan North.
21st Annual Employment Law Update Dealing With Risk in the Workplace
On March 24th, the K&C Employment Law Team will host the second showing of the 21st Annual Employment Law Update at the Greater Richmond Convention Center. This year’s program will feature new information and materials designed to help employers deal with risk in the workplace. Topics on deck include Severance & Settlement Strategies, Interviewing & Hiring, and Reducing Worker’s Compensation Liability. Also, you won’t want to miss The K&C Discipline & Discharge Clinic with all new video vignettes. Reserve your seat now! We are expecting a full house. For more information or to register, contact Kristen Bown at (757) 624-3232 on the Southside and Peninsula. Dial (804) 771-5722 in Richmond.
This program has been approved for 5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org.
New 2005 Supervisory Training Clinic Series
Our new On The Job: Supervisory Training Clinic Series schedule for 2005 has been issued. Not to be confused with the Kaufman & Canoles annual day-long seminar for human resource professionals, the Supervisory Training Clinic provides more focused training for supervisors. Whether an employer is interested in a new training program for all its supervisors or reinforcement training in one or two areas for a few supervisors, the K&C Training Clinic should be of help. Topics covered this year include Workplace Harassment and Effective Interviewing & Hiring Strategies. For more information or to register, contact Kristen Bown at (757) 624-3232 on the Southside and Peninsula. Dial (804) 771-5722 in Richmond.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2023.