Author: Gillian Flynn

Here are some of the common trouble spots for employers under the FLSA or statewage and hour laws:

• Thinking that simply calling an employeeby a managerial title warrants an exemption.

• Categorizing an employee as exemptbecause he or she does some exempt-type duties, but not as a primary partof the job.

• Forgetting to check the exemptionrequirements under state law, particularly in California.

• Docking salaried employees for partial-dayabsences-a mistake that will cost their exemption.

How to Avoid Future Problems

• Know both FLSA and state rules onexemptions.

• Don’t try to force an exempt classificationon employees who don’t meet every qualification.

• Conduct a self-audit, and in doingso, have employees describe how they spend most of their workdays.

• Review pay policies to ensure thatyour company doesn’t allow for partial-day deductions for salaried employees.

• Make sure formal job descriptionsmatch actual jobs. Review and update job descriptions periodically.

Workforce, October 2001, p. 40, SubscribeNow!

As more and more employers store and share employee information electronically,HR professionals face a major question: What is the company’s liability as faras privacy goes? If a service provider leaks your company’s confidential employeeinformation, who gets sued? If a hacker gains access to the data, is it the company’sfault? It’s a worrisome are — particularly when it comes to medical records.Kerry Kearney, partner and head of the privacy task force for Reed Smith in Pittsburgh,offers some guidelines.

What are the protocols for electronically sharing private employee information– like medical records — with service providers?

There’s no national requirement, no uniform standard in terms of how far theemployer has to go with protecting employee medical information. That goes forwhether the sharing is in-house, or whether the information is shared with serviceproviders. However, there is a growing body of case law and state statutes sayingthat you need to provide confidentiality for information that’s not of a publicnature. And I don’t know a single employer that does not feel an obligationto protect the privacy of employee information. But it’s not a right set instone. It’s a common-law right. People recognize that private information shouldstay private.

What should employers consider when sharing information with service providerselectronically?

One thing employers could do to protect themselves is to enter into contractsthat require the service providers to accord privacy and security to employeeinformation that is transferred.

If the information gets leaked or mishandled on the service provider’s end,is there liability for the employer?

Sure. If the employer failed to enter into a contract whereby the service providerundertook to provide confidentiality, then the common-law cause of action couldseek money damages from the employer for being cavalier about the way it handledconfidential employee information. So you need to protect yourself by contract,and make sure the entity with whom you enter into a business relationship isa viable company. Because if that company gets sued and is no longer around,they’ll look to you for money.

How should a company store medical information electronically?

Employers aren’t allowed to use medical information much. If an employee comesto you seeking an accommodation because he or she has a medical condition, thenyou have an affirmative obligation to do what you can to help. That requiresa record of their medical problem. But most employers very carefully segregateout any health information about employees from anything to do with personnel.So personnel records normally wouldn’t have medical information, unless theemployee is claiming entitlement under ADA or FMLA, for example. Then you’dhave the information, but you should be very careful not to disseminate it morewidely than is absolutely necessary.

There’s been a lot of buzz about HIPAA’s new medical privacy regulations– what do employers need to know?

The first thing they need to know is that they are not covered entities forpurposes of the new HIPAA medical privacy regulations unless they have a self-insuredERISA plan. So if they’re self-insured for purposes of ERISA for employee health,then that department is covered by HIPAA, the Health Insurance Portability andAccountability Act of 1996. They would need to comply with the HIPAA privacystandards. They’ll be effective on April 13, 2003. But it doesn’t normally applyto employers. The bottom line for most employers in regard to HIPAA is thatthey won’t be allowed to use employee claims information to buy insurance coverage.

Where does the liability lie if the company computer gets hacked and theemployee information is accessed?

There has been no litigation in which any company has been found responsiblefor not operating a secure site that results in hacking. Your company does havean obligation to maintain a certain standard of security. To the extent youdo not, and you harm somebody with whom you have an obligation, a relationship,that person could claim you had acted tortiously.

But there’s no history of such litigation as yet?

The only verdict I can think of that’s close is Doe v. Medlantic HealthcareGroup Inc. A District of Columbia superior court awarded a plaintiff patient$250,000 for a hospital’s lack of adequate security measures in protecting patientmedical information online. The patient was HIV-positive and his records wereaccessed by a part-time unauthorized employee and then disclosed to coworkers.The court cited lack of security, including the inability of software used bythe hospital to trace and identify who had accessed the records.

So what does happen if the violation is internal — if an employee accessesthe information?

Ideally you should have specific policies in place that address the sanctions,and procedures for enforcing compliance up to termination. In addition to that,if you want to avoid getting in trouble yourself, you have to be able to showyou had in place state-of-the-art procedures to avoid employee malfeasance.We talk about hackers, but the majority of computerized losses that companiessuffer are from employees rather than outsiders. There has historically beena recognition that you’re most vulnerable from those who really know you. Inthis case, that’s obviously your employees. They’re the ones who know whereyour vulnerabilities are.

What should a company do security-wise to avoid liability?

How you go about providing security is not set in stone anywhere, but you wantto be thinking about your physical safeguards. Do you have password-protectedcomputers? Do you regulate access to the data systems? Is there a person incharge of security? Are there firewalls in place? Do you have chain-of-trustagreements with anybody who exchanges data? Do you have internal audit procedures?Do you train employees so they know what their obligations are? Do you havetraining on security management? Are there discipline or termination proceduresfor employees who violate your security regulations? And of course, everybodyshould have an employee e-mail policy. And not just for employees dealing withsensitive information — every employee. It should emphasize that the employerowns the e-mails, and they will be monitored.

How much legal protection does all that provide?

If you are going to be sued by third parties who claim your procedures werelax, even if you don’t avoid liability, you’ll reduce the damages if you proveyou did everything you could. You had good procedures in place, and this particularperson was so determined, he or she had to go through several levels of securityto get this information and do the dirty deed.

It’s a classic HR conundrum: Your company wants to help employees save forretirement by offering a 401(k) or other pension plan. And since these plans areincreasingly laden with options, your company wants to offer education to employees,so they can make responsible decisions. Your company does not, however, want tobe held legally liable by employees whose investments don’t reap the expectedbenefits. So how do you give employees the information and tools they need tomake smart retirement-investment decisions without exposing the company to lawsuits?

Representative John Boehner (R-Ohio) recognized the problem when he introducedthe Retirement Security Advice Act of 2000, which is intended to “clarifyexisting federal law to give employers the green light to provide their employeeswith access to high-quality investment advice.” But the legislation failedto pass the House and was not reintroduced this session. So what to do now?Michael Nassau, head of the employee benefits and executive compensation practiceat Kramer, Levin, Naftalis, & Frankel in New York, gives guidelines to safepension-investment counseling.

Are a lot of employers concerned about offering investment advice?

Many companies feel that it’s proper to help employees save for retirement.And that, to make the plan work, they ought to offer education about the plan.But employers recognize that whenever you do anything that you don’t haveto, there’s some legal risk. Employees who feel it’s worked out badlyfor them may feel more misled than they would have if the employer had nevertried to offer any education. But you get to the question: If you really wantyour retirement program to work, and we’re giving participants a huge responsibilityin how it will work out, can your program meet its goals if you don’t givethem some basic concept of what they ought to be doing?

Are there any government guidelines that protect employers from liabilityfor offering investment advice?

In 1996, the Department of Labor decided it didn’t want fears of liabilityto deter employers from helping employees pick among different investment options.So it came out with a bulletin intended to give comfort, Interpretive Bulletin96-1 [posted in full on the DOL Web site, www.dol.gov]. The bulletin basicallyoutlines the information employers can offer without being considered fiduciaries.

What does being a fiduciary mean and how can it lead to liability?

Fiduciaries have discretionary authority over running the plan. It’s possiblethat by advising participants as to what investing is all about, or hiring someoneelse to do so, either you or they are acting as “fiduciaries.” Ifyou’re a fiduciary, you have certain burdens. You have to act prudently,which means you have to do your job right. It basically raises the stakes forliability under ERISA.

The DOL tried to address that?

Yes. It recognized that fiduciaries are held to certain standards, and if theydepart from them they can be subject to liability. The DOL realized that employersmight not want to give information unless they’re assured they won’tbe viewed as fiduciaries. So it offered an outline of the information you canimpart, information that won’t make you a fiduciary and therefore won’tleave you subject to liability under ERISA.

What kind of information can an employer offer?

The bulletin outlines safe harbors for employers to provide four specific categoriesof investment information and materials: plan information, general financialand investment information, asset allocation models, and interactive investmentmaterials.

Let’s take these piece by piece: What does plan information cover?

Here’s a no-brainer. It’s how the plan works and the consequencesof doing things under the plan. Information like: if you take out money pre-retirement,you’re going to have less. You can also explain the benefits of plan participation,the benefits of contributing more rather than less, the way that withdrawalsbefore retirement can hurt your income. All of that is perfectly fine.

What’s covered under “general financial and investment information”?

It’s basic information regarding the plan. For instance, the differentobjectives of different funds, the concept that investing involves a trade-offbetween risk and potential return. All that’s clearly OK. Then there’sthe basic primer on what investing is all about. So that’s the explanationfor concepts like dollar cost averaging, tax-deferred investments, compoundedreturn, the effects of inflation, and how to estimate future retirement-incomeneeds.

What do “asset allocation models” include?

You may give a participant a mechanism such as worksheets, pie charts, or graphsto allow the employee to figure out what his or her asset allocation model wouldbe. These include materials like model portfolios of hypothetical individualswith different time horizons and risk profiles. These models should be basedon widely accepted investment theories that take into account the historic returnsof different asset classes — such as equity, bonds, and cash over periods oftime. As long as you’re not counseling any particular individual as towhat specific investment decision he should make, offering those models is nota fiduciary activity.

And what are interactive investment materials?

Questionnaires, worksheets, and software that help the employee estimate hisor her future income needs in retirement, and estimate the impact of differentasset allocations on retirement income. Again, these should be based on widelyaccepted investment theories that take into account historic returns.

If HR plans to use an outside company, like an investment firm, to handlethe education on 401(k)s, what should HR consider?

If the company offering education is also offering the menu of investment options,there’s an issue of appearance (of conflict of interest). A mutual-fundsponsor, for instance, makes more money from stock funds than from bonds ormoney market funds. So you don’t want a situation where there’s arguablyan incentive on their part to skew the advice. This is an issue the mutual-fundssponsors are well aware of, however, and if they’re offering investmenteducation, they can avoid that problem.

So in the end, what’s the risk level?

I don’t believe the legal risks of offering an investment education programare great enough to deter you. If an employer wants to offer a 401(k), the employerwill probably want to offer education about it. If you’re going to do something,you ought to do it right.

Workforce,July 2001, pp. 54-55 — SubscribeNow!

The mapping of the genetic code of human life: it sounds improbable, thestuff of science fiction. But it’s now possible to test people forpredisposition to diseases, and as the practice becomes more widespread andpractical, an array of issues — scientific, moral, and political — willemerge. And add to that employment-law complexities. Already, observers arewarning that legislation must be put in place to protect the privacy rights ofindividuals. Will employers deliberately screen out candidates who have a highlikelihood of contracting certain diseases? Can they? What are the pragmaticuses of genetic testing, if any? Frank Morris, an expert disability attorney inthe Washington, D.C., office of employment-law firm Epstein Becker & Green,offers a peek at the future.

How practical is testing right now?

We now have the possibility of meaningfully doing this. Up until now, youcould do genetic testing for a few very specific conditions. Now you have theprospect of doing it in a much more generalized fashion. So you could takeyour two-page list of everything that might go wrong with the genetic code anddetermine whether or not any individual has any problems. So the question ofall-out testing will arise.

What does the mapping of genetic codes mean to employers?

As we fully learn what the gene coding will mean in terms of susceptibilityto potential diseases, there are many within the employer community that wouldhave an interest, for better and for worse reasons. Among the worse would beto try to simply screen so as to have better insurance-risk profiles. I thinkthere’s a pretty good argument that the ADA might very well prevent that. Ifnot, there would be legislation quickly introduced to address the situation ifa widespread practice arose of employers trying to base employment on thegenetic testing of potential employees.

So there may be a complete ban on using genetic testing in employmentdecisions?

On one level, you’d ask what possible interest does an employerlegitimately have here, and in the larger number of cases that’s probablytrue. On a different side, consider an individual who’s flying a 747 jetwith 300 passengers on board who may be subject to catastrophic events of aphysical or mental nature. Wouldn’t society at one level say to an employer,”You should be using every tool in your possession to screen out thosewho would put at risk those 300 passengers”? So here’s where it getsinteresting.

So certain jobs may elicit testing more than others?

You can quickly posit certain jobs and situations. Any job where a medicalproblem would make it difficult or dangerous for the person to perform.Consider an employer that manufactures chemicals. Wouldn’t it be great toknow if a certain person ought not to be employed producing a particularchemical agent? Because of testing, we can know that that individual has agenetic structure that makes him susceptible to illness if exposed over longperiods to this chemical. I’m not saying there’s a violation of OSHA inthe manufacturing process, but that the lawful five-parts-per-billion standardthat protects 99.9 percent of the population might not protect Thomas Smith.

 

Should an employer be able to find that out and screen out Thomas Smith fromthat job? That has two implications. On a base money level, if the employerdoesn’t test, and Thomas Smith becomes disabled, for the next 30 years,disability benefits are going to be paid to him. At another level, if theemployer doesn’t test, the company gives Thomas Smith a job that leaves himunable to enjoy a full and happy life because the company didn’t use theknowledge available.

Is there concern that legitimate testing will lead to non-legitimatetesting?

Society is not going to allow you to have genetic testing just so you canhave less utilization of your health plan. It just won’t happen, andemployers shouldn’t be going there anyway. But there are issues, even inlegitimate testing. The whole notion of doing any testing opens up the wholeissue of what happens to that information and the potential for adverserelease. It happens. I had a case not long ago of an individual who was HIVpositive. The person’s medical claim forms came through the HR office, andthe individual who normally processed those was out. The paperwork sat in thetop of the in box for days, so individuals who came into the office and werevaguely snoopy saw that information, and pretty soon everyone in this facilityknew the employee was HIV positive.

 

So when you have this kind of situation,you open the possibilities that something inadvertent would happen and theinformation would be disclosed. The ADA requires employers to keep medicalinformation separate from other employee personnel files. But you could seethe mischief that could quickly arise if we have employers who have access togenetic testing of their employees, and then that information were improperlydisclosed.

What are the employer liabilities of not using genetic testing?

Let’s say we don’t test. And we have a medically triggered event that wemight have had pertinent information about had we tested. Now the airplane hascrashed and killed 300 people. We know there will be a lot of lawsuits filedthe next afternoon. Will one of the claims be that we were negligent in notusing every available screening device to make sure we had the most qualified– including physical and mental capacity — pilot corps available? And whilebefore the accident most people would be saying we shouldn’t be going there,after the accident there would certainly be a lot of people saying we mostabsolutely should have gone there.

So what’s the responsible approach for employers to take right now?

The employer community needs to become proactive and make it clear that itdoes not want to use genetic testing for improper purposes. Perhaps employersshould work with the EEOC, with Congress, to delineate certain situationswhere, because of health and safety concerns, testing should occur. Theyshould establish protocols to protect the privacy of individuals and protectagainst abuse in the use of information. But they need to establish aframework rather than having one employer be out there on the firing linetrying to do the right thing, and then having people after the fact saying,While we applaud your goal, the way you did it was wrong, and therefore — 10million bucks.

 

The way employers are going to have to approach this verydifficult issue, which cuts across lots of interest groups and lots ofinterests, is to try to get a consensus, get the issue broadly considered, andcome up with safe-harbor circumstances where testing would be permissible, andsafe-harbor procedures for doing so.

How do you see that fleshing out?

It should be approached much the way we handle substance-abuse screening.There are protocols for screening and certain labs that have been certified togive accurate results. And if you follow the appropriate protocols and use acertified lab, then generally speaking, there will be no adverse consequencesfrom having a substance-abuse testing program. While this may be certainlymore difficult than coming up with the protocol for a substance-abuse testingprogram, the goal nonetheless would be to establish a carefully considered,broadly accepted protocol within those limited circumstances where it’sappropriate.

Workforce, December 2000, Volume 79, Number 12, pp.108-109 SubscribeNow!

Y

ou know what to do when one of your supervisors makes unwelcome advancestoward his employee. HR is well drilled in the policies, protections, andactions warranted by basic workplace sexual harassment. But third-party sexualharassment is almost as common — and is rarely taken as seriously or dealt withas swiftly. Yet it’s just as wrong, and just as laden with liability for yourcompany. Employment law attorney Bradley T. Adler of Atlanta-based FreemanMathis & Gary, LLP discusses the dos and don’ts of dealing withthird-party sexual harassment.

The focus of employers really revolves around workplace harassment byemployees. That’s the traditional arena in which they try to preventharassment. But employers need to be aware that there is liability in harassmentby non-employees.

Back in 1997, the EEOC filed regulations that said essentially that anemployer can be held responsible for the actions of non-employees with respectto the harassment of employees in the workplace. Liability begins if an employerknows or should have known of the conduct and failed to take immediate andappropriate corrective action. It’s pretty similar to the affirmative defense.Which is: If you have notice of it or should have notice of it, you need to takeaction and correct it.

Take a cybercafe, where you have coffee and log on to the Internet. What if acustomer comes in, and each time, he logs on to Porn.com, and each time thewaitress who serves him sees that he’s logged on to this site. If the managerat this cybercafe knew about this — either by virtue of seeing it or virtue ofher complaining — the manager would need to take action if the waitress felt itwas harassment.

It may be they transfer a male to the customer’s section — although thatmay not relieve the cafe of liability; there’s nothing to say a male can’tbe harassed either. But the business can transfer over different employees whoaren’t bothered by the fact the customer is looking at the pictures while they’rewaiting on him. Or the manager could tell the customer he can’t have thescreen up on porn sites while being waited on. It comes down to correctiveactions — the remedy isn’t exclusive. The options are numerous.

If, for instance, the computer faces the window, and the employer wouldn’tknow, then if the employee wants something to be done, the employer should beput on notice. That can be simply saying to the manager, “This guy islooking at porn. I don’t like it. It makes me uncomfortable.”

In Lockard v. Pizza Hut, a 10th Circuit case, a waitress was waiting on someindividuals. After one of the individuals at the table made some remarks shefelt were harassing and made her uncomfortable, she reported the behavior to oneof her managers. The manager essentially instructed Ms. Lockard to wait on them.She continued to be harassed. She was putting a beer down on the table, and oneof the customers pulled her to him by the hair, grabbed her breast and put hismouth on her breast. She resigned and brought suit against Pizza Hut.

The court found that an employer can be held responsible for thesexually-harassing actions of a non-employee, and in doing so they cited theEEOC regulations. Again, the waitress had told the manager she didn’t want towait on the people, she didn’t feel comfortable, and no appropriate reactionwas taken to remedy or relieve the situation.

Sexual harassment still needs to have the purpose or effect of reasonablyinterfering with a person’s work performance, or it has to be creating anintimidating, hostile, or offensive environment. It needs to be objectively andsubjectively offensive. That means if the individual didn’t find it offensive,certainly that can’t be harassment. The perspective that’s taken by a courtmay change depending on the particular employer. But certainly a waitress at amore risqué restaurant is not in any way precluded from suing.

In fact there’s one case of a casino waitress who was employed as a mime –a type of living doll. She brought suit under Title VII alleging she was beingharassed by a casino patron who was touching her as she was performing. In thatcase the 9th Circuit found the employer liable for sexual harassment on behalfof a private individual — the casino patron — where the employer eitherratifies or acquiesces in the harassment by not taking immediate action when itknew or should have known of the conduct.

There are situations where provocative dress codes are going to lead to areal likelihood of harassment. Like dress codes where an employee is required towear provocative uniforms, like a short skirt and low-cut blouse. Even if it isprovocative dress, and the employee knows this going in, if there’s harassmentand the employee complains to the employer, the employer still needs to takeaction.

There’s a case in which the plaintiff was a lobby attendant, and she wasrequired to wear as a condition of her employment a poncho. It was prettyskimpy, open at both sides, and she wasn’t allowed to wear a blouse, skirt, orother garment under the poncho. The uniform revealed her buttocks. Shecomplained it was subjecting her to harassment — lewd comments and suggestions– frankly, what people may expect to happen wearing that kind of uniform. Whenshe notified her employer that she was being subjected to this harassment, shewas told no exceptions to the uniform would be granted. She refused to wear theuniform and was discharged.

The court found the employer discriminated against her based on violation ofTitle VII, because it required her to wear the uniform when it in fact knew itwas subjecting her to this harassment. So it comes back to this: Does theemployer know and does it do anything? Now, the employer could have gotten auniform that fit the plaintiff — apparently she was tall and it didn’t fit aswell as it could have — or it could have somebody posted by her to prevent herfrom receiving any sort of comment, or if she did receive comments, to escortthat person out. Again, there are a lot of options.

Take an assisted living center, in which a particular resident likes to grabwomen as they come into help him bathe or to make the bed. If the employeecomplains about the resident and no action is taken, that can subject theemployer to liability. It kind of seems crazy; in many cases you’re dealingwith somebody who’s much older, whom you’re not going to take as seriously– Oh, that’s just Mr. Jones, come on! Yet those actions can still subjectemployers to liability if they know about it, or should have known about it, anddidn’t take corrective action.

Say there’s a rep from Switzerland touring my facility, and one of myassistants is a lady that the rep is attracted to. What happens if the rep comeson to the assistant? The assistant comes to me and says, “Look what thisrep is doing — I don’t like it a bit.” If I were to say, “Tough,this is our biggest revenue gainer. I want you to put up with it, and if hegrabs your butt, if he plays footsie with you under the table, fine.” That’sa liability. And if she doesn’t do it, and I fire her — that’s retaliationalso.

Let’s say I own a computer consulting company and I send my reps all overthe country. I send one to my biggest customer, ABC Inc., and the president ofABC harasses the rep. What happens when the consultant comes back and reportsthe harassment? And ABC says, “You need to continue to send this consultantout every week.” Tough. The employer is under the duty to take some sort ofcorrective action to remedy the situation.

Neither — it all falls under Title VII. You have an obligation to make sureyour employee isn’t subjected to an environment filled with or injected withconduct that’s improper and unlawful under Title VII.

Don’t limit your policies or training to actions taken by employees againstother employees. Expand them to cover actions taken against employees byemployees and non-employees: Harassment of employees is not tolerated.Disseminate the policy and implement it by having some training sessions. Or ifyou’re sending an employee to a customer site, remind that employee to reportany behavior that makes him or her uncomfortable. Make sure your employeesunderstand there’s a sexual harassment policy that covers not only conduct byemployees but by non-employees,and give them ways of reporting harassment.

Correct any actions you do know about or should know about. The “shouldknow about” is taken care of by the fact that if you have a policy in placethat allows people to complain, you’re putting the burden on the employee tolet you know. You don’t need to check in all the time; the employer can’tknow all the actions that go on in or out of the workplace. But HR needs to knowif something is going on. And that will happen if the employees communicate tothem.

Workforce,November 2000, Vol. 79, No. 11, pp. 88-92 — Subscribenow!
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

The service sector is the industry most often targeted for unionization rightnow, whether it’s hotel workers in Las Vegas or a Los Angeles “Justicefor Janitors” strike. The health-care industry also is seeing increasedactivity, from hospital workers to (imagine this) doctors. It’s a little lessnoticeable among large companies because it’s not as if an entire motel chainbecomes unionized at once.

Most often, unionization in large companies is done in bits and pieces,because that’s the easiest way to get that necessary 30 percent of the cards.And here’s where we pick up where we left off in the InTrouble.com example.

Unions like to splinter large companies into narrow organizational units,which is perfectly legal under the NLRA. Unions segment a company into what theycall communities of interest: groups whose needs are unified by geographicproximity, physical proximity, commonality of supervision, or personnelprograms. Take a hospital: you have a physicians’ unit, a nurses’ unit, acertified professionals’ unit, a maintenance crew unit, a clerical unit, aguard unit, and so on. Each unit can be approached separately.

One large East Coast service company discovered that its workforce wassimilarly segmented. It hadn’t conducted what professional union-busters calla bargaining unit vulnerability assessment. This is highly recommended for largecompanies: An analyst reviews your workforce as a union would, in segments, soHR can keep its eye on discontent or brewing union trouble unit by unit, a moreefficient way of remaining union-free and addressing problems early on.

The fact that the large company, which we’ll call FatCat, hadn’tconducted such an assessment is notsurprising, because it didn’t really have much of an HR interest in potentialunionization. In fact, it hadn’t occurred to the company that a union couldtouch it, given its impressive collection of lawyers. The firm didn’t evenhave a policy detailing what communications could and couldn’t be distributedthrough bulletin boards or e-mail, afirst (and very simple) line of defense against unionization.

“Large companies should have professional HR people who can make ittheir business to make sure employees are aware that their company prefers to beunion-free, that they know they have a good level of benefits, and their safetyrecord is great,” says Norm Davis, a labor and employment attorney withMiami-based Steel Hector & Davis.

Unfortunately, FatCat didn’t keep a cool head. It instead went on theattack; it fought the union through its lawyers, and never reached out toemployees. In short, it smacked down the union through sheer force of power andmoney. It won, but not really. Because the job market was strong, employeesbegan quickly drifting away to jobs that offered more involvement and respect.The company began hemorrhaging workers.

And the ones who didn’t leave? Before the attempt, they were reluctant tooffer comments about improving jobs or increasing productivity. Now, theyactually kept any advice to themselves, determined not help the company in anyway. The workplace became a quiet, angry battleground between a company thatdidn’t get why its employees were so angry (they had fine wages and benefits,after all) and employees who didn’t have one whit of loyalty to their company.Productivity took a nosedive.

In the end, sometimes a company has to play rough with unions. If a union istruly unwanted and a company has the resources to fight it, of course it will.However, as in all employment relations, there’s a smart way and a not-smartway. Had the company reached out to employees and explained its actions, itmight have kept a little faith.

In the end, there’s no magic cloak that will protect your company fromunionization. But there are courses of action that HR can take to help preventorganization in the first place, or, if it must happen, to make it actuallywork. If you find your company under attack, refrain from the knee-jerk reactionthat unions are organizing just to organize. Take a company-wide look, and planaction from there.

Workforce,November 2000, Vol. 79, No. 11, pp. 86-87 — Subscribenow!

Much as we’ve been hearing about the death of unions, it seems they’vebeen prettyactive of late, at least in some industries. While the labor movement hasseen declining membership over the past 30 years (and that’s mostly a sign ofgood HR and smart business), there are areas that are being hit for the firsttime by the glare of unionization. Service industries, health-care industries,and even particular parts of the country are seeing a growth in union activity.If yours is one of the companies that is experiencing union flirtation, theinitial reaction may be to panic. Don’t.

How you handle an attempt at organization will affect relations with youremployees for years to come, no matter whether you win or lose the unionizationbattle. “If you get in a bloodbath and try to win at all costs, you’lllose either way,” says Paul F. Clark, associate professor of labor studiesat Penn State University. “You’ll lose the election and have a union asmad as hornets when they come to the bargaining table. Or you’ll win theelection and have a workforce that’s mad as hell and disillusioned.”

Indeed, the one thing these case examples of small (under 500 employees),medium (500-5,000), and large (5,000 plus) companies have in common is therealization that — surprise — people policies can make all the difference inthe world, union or not.

The examples here are composites, based on real companies’ experiences asrelatedby experts in the field. Companies contacted would not agree to talk abouttheir union experiences.

Workforce,November 2000, Vol. 79, No. 11, pp. 82-83 — Subscribenow!

When a union paid acall to a Midwest retailer, the company dismissed it entirely. It had great wages and benefits, asolid HR department, and a lot of nice extra goodies. What it didn’t know,however, is that it had a thoroughly disillusioned workforce. While the companyflourished, employees didn’t. Sure there was profit-sharing and day-caresubsidies, tuition reimbursement and lunchtime lectures.

But the problem was that employees didn’t really have the time to take thecompany up on any of these goodies. Rather than allowing employees flexiblehours, telecommuting, job sharing, or compressed workweeks, the firm maintaineda culture that valued face time, and lots of it. It wanted employees to put thecompany first, with no questions (and no involvement).

And when the union first approached its clerical department, the firm, whichwe’ll call Smug, Inc., considered playing hardball. But it opted forInTrouble.com’s approach. It convinced employees that they shouldn’t votefor unionization, that things would be different. It ticked off all it had donefor its workforce over the years, and how much more it would do now that it hada second chance. And the company probably believed itself at the time. Theemployees certainly did. They chose not to go down the road to unionization.

“In the first organization drive, employers make a lot of promises. ‘Giveus another chance. If you vote the union out, we’ll make things right.’ Thenthe employers don’t make things right,” Clark says. “Even if you winan election, that union can come back in a year, and the win rate on a secondorganization drive is much better than the first.”

Which is just what happened at Smug, Inc.

And this time, despite the company’s somewhat feeble protests, the unionwas voted in. The managers could at that point have made a decision to be asadversarial as possible; the union certainly wasn’t running out with a whiteflag after having been shut down once. But the HR leaders were smart. They heldout an olive branch by signing a neutrality clause. What this means is that whenit came to the two other branches of Smug Inc., which were until now union-free,the organization would remain neutral.

If the majority of employees in each location signed cards, the companyagreed it wouldaccept the union without going through the ugly election process. Crazy? No.The union was already in the largest company unit. The two others were doingfine; they showed no sign of interest in unionization. And if they did? Betterto dispense a little goodwill than to engage in a battle the company wouldlikely lose.

In short, once you’re unionized, the more positive and cooperative yourattitude, the better. The union’s not suddenly going to leave just becausethings get nasty. Unions in the past 30 years have gotten quite accustomed tonasty. Your employees will appreciate your cooperation, too. “If you getorganized, the sun will come up tomorrow,” Clark says. “Theorganization will continue to operate. Unionization can represent some realpositive opportunities by bringing employees collectively together.”

Medium-sized companies are probably the best candidates for quality unionrelations. They’re not small enough that a union simply takes over, but notbig enough so that the sides naturally square off against each other. Smug,Inc., looked to mid-size companies like Saturn for examples of strongunion-employer harmony. HR leaders created union-liaison positions, and set upregular meetings with union leaders. They found that the union’s grievanceprocedure was actually more effective than the company’s former one. It hadmore teeth to it, and truly seemed to resolve disputes that previously hadfestered.

The union also brought new job descriptions and some time restrictions thatforced the company to reconsider how work was divvied up. And it gave employeesa venue for making changes that made their jobs better. Suddenly there was a lotmore talking going on. Would the company have preferred to remain union-free? Ofcourse. But it took advantage of the advantages it could. Smug, Inc., became alot less smug. In the best way.

Workforce,November 2000, Vol. 79, No. 11, pp. 84-86 — Subscribenow!

The candidate sitting across the desk from you seems eager to work, has agood attitude and strong references — from a parole officer. Where do you gofrom there? Are former criminals worth the risk? In some cases, yes. In somecases, no.

“Companies should probably not take on this kind of risk if theiremployees are dealing with the public in person or handling money or sensitivedocuments,” says Chrys Martin, an employment-law attorney withPortland-based firm Bullivant Houser Bailey. “It’s not worth the legalrisk.” For example, if you hire a person with a history of violence, andthe employee attacks someone, you have increased liability. And it’s generallya company’s prerogative to refuse to hire someone with a record — there areno national civil-rights laws per se covering that group.

But a few things to keep in mind: Some states do have these laws. InWisconsin, for instance, employers can’t refuse to hire a person simplybecause of arrest and conviction records. And if a conviction was decades ago,and the person has a clean record since, most courts would frown on using thisas a reason not to hire.

In many states, it’s illegal to ask about or refuse to hire because ofarrest records, theory being that a person may be arrested yet later ruledinnocent. Also, not hiring because of arrest could have an adverse impact onminority groups. Even refusal to hire because of convictions could have anadverse impact — affecting more minorities than whites. But if the adverseimpact is job-related — you refuse to hire people convicted of embezzlement foran accounting position — you’re generally justified. And for tightlyjob-related convictions you may want to avoid hiring these employees altogether.It’s risky, for instance, to hire someone with a record of drunk driving to beyour new trucker.

But, depending on the crime, ex-convicts may be perfectly suited to work in atelemarketing or production position. Most experts will tell you employment iskey to keeping these people from repeat offenses.

If you decide to hire such a person, there are several things a company cando to protect itself from increased liability. First, practice full disclosure:Make sure you know about every conviction, not just the most recent. Talk to theparole officers, the district attorney, the work-release officer. They can giveyou the details you need. For instance, a conviction may look like nothingserious on paper, but it’s possible that it’s the result of a plea bargain– the person pled to accessory to a crime, but was actually involved in anarmed robbery. Ask the parole officer if he or she deems the person a good risk,and whether the person is subject to any work restraints.

Once you hire an ex-convict, if you can have them not interact with customers– or even work off the premises — your risk decreases. Make sure thesupervisor knows so he or she can be aware in training, management anddiscipline. Courses in anger management, alcohol abuse or any related classeshelp demonstrate you’ve tried to lower the risks and can be helpful if anyproblems arise. “Every employee brings a risk,” says Kerry Notestine,a lawyer with the Houston office of Littler Mendelson. “Assess your risks.Lots of criminals can be rehabilitated and need jobs so they don’t turn backto crime. There are good reasons for a company to consider this under the rightcircumstances.”

Workforce, October 1999, Vol. 78, No. 10, p. 38— Subscribenow!