Author: Rick Bell

Posted on

The Importance of an Anti-Harassment Culture

Jon Hyman The Practical Employer
I came across an interesting article at the Harvard Business Review — The Omissions That Make So Many Sexual Harassment Policies Ineffective.
The article starts with a simple question. “If 98 percent of organizations in the United States have a sexual harassment policy, why does sexual harassment continue to be such a persistent and devastating problem in the American workplace?”
The article suggests the answer lies in corporate and cultural norms that such policies fail to address — that sexual harassment is embedded in organizational culture, which in turn are embedded in a larger national culture in which men have traditionally been granted privileges over women. As a result, sexual harassment policies focus on the behaviors of harassment and victims perceptions of those behaviors (which one can marginalize, ignore, or blame on the victim).

The article goes on to suggest two related solutions to this harassment-policy drafting problem:

  • “Include culturally appropriate, emotion-laden language in sexual harassment policies. For example, language such as ‘Sexual harassment is a form of predatory sexual behavior in which a person targets other employees.’ Using terms such as ‘predatory’ instead of ‘perpetrator’ and ‘target’ instead of ‘victim’ can shape how organizational members interpret the policy.
  • “Sexual harassment policies should include bystander interventions as a required response to predatory sexual behavior. Most policies place responsibility for reporting harassment exclusively on the target, which puts them in a vulnerable position. If they report the behavior, then they are likely to be viewed with suspicion by their colleagues, often becoming socially isolated from their coworkers. On the other hand, if they do not report the sexual harassment, then it is likely to continue unabated, creating harm for the targeted employee, and wider organizational ills, too. Mandating bystander intervention can relieve the target of their sole responsibility for reporting and stopping predatory sexual behavior, and rightly puts the responsibility of creating a healthier organizational culture on all members of the organization.”
This all makes for a very interesting read, but I don’t think it goes far enough. Any anti-harassment policy, no matter how drafted, is not be worth the paper on which it’s written unless the company has an overall culture that abhors harassment.
In other words, an employer must take all complaints seriously. Taking complaints seriously includes ensuring that all employees understand the harassment policy, that employees have more than one avenue to make complaints, that investigators are properly trained, that the company regularly reviews its policies and procedures for compliance and effectiveness, and that no one ever suffers retaliation.
No anti-harassment program is perfect, but you must have one that’s effective. Otherwise, no matter where the he-said/she-said pendulum swings, you will start every harassment case at a disadvantage.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
Posted on

When Is a Settlement not a Settlement? When FLSA Is Involved

Jon Hyman The Practical Employer

When you settle a lawsuit with an employee, you are bargaining for finality. You are paying that employee to resolve all disputes between you, whether asserted or unasserted. You want to be done with that individual forever.

Except that is not always the case.

An employer cannot release or otherwise waive one’s FLSA rights by contract without a court-approved stipulation or settlement, or a DOL-supervised settlement. Which is why, in Nasrallah v. Lakefront Lines, an Ohio federal court recently permitted a plaintiff to continue with her FLSA lawsuit for unpaid overtime despite her signing a general release and waiver in a prior discrimination case.

When Tamara Nasrallah settled her discrimination claim, she and Lakefront Lines signed a settlement agreement, under which Lakefront paid her $40,000, and for which she agreed to a general release “of and from any claims … and expenses (including attorneys’ fees and costs) of any nature whatsoever, whether known or unknown, against [Lakefront] which Nasrallah ever had, now has or asserts or which she … shall or may have or may assert, for any reason whatsoever from the beginning of the world to the date hereof.” The release is “unrestricted in any way by the nature of the claim including, … all matters which were asserted or could have been asserted in the Charge, including, but not limited to, matters arising out of Nasrallah’s employment with the company, and any other state or federal statutory … claims, including, … all statutory claims under federal [and] state laws regulating employment, including …the Fair Labor Standards Act [and] any and all Ohio Wage and Hour Laws.”

Separately in the agreement, Nasrallah waived “any claims for additional compensation and acknowledges that she has been appropriately compensated for all hours worked,” that Lakefront has “paid all sums owed to [her] as a result of her employment with the Company (including all wages),” and that “she is not entitled to anything separate from this Agreement.”
Her justification for her after-the-settlement FLSA lawsuit?

I signed the Settlement Agreement based on my understanding it was unlawful to compromise my overtime claims without Department of Labor or court approval in any manner and that any attempt to do so—including by any “representations” made therein—was legally null and void. Thus, when I entered the Settlement Agreement and made the “representations” therein, I believed my representations about being paid in full and being owed no wages were ONLY representation for purposes of my non-overtime claims (e.g., contract claims for claims for discriminatory pay).

The court agreed:

According to Lakefront, a private settlement agreement can preclude a future FLSA claim as long as the underlying dispute did not involve a FLSA dispute. In other words, the only time an employee can waive a FLSA claim is when there is no bona fide dispute over hours worked, and therefore, likely no discussion or negotiation over compensation due. This is precisely the opposite of what the case law holds. … [S]uch a situation clearly implicates Congress’s concerns about unequal bargaining power between an employer and employee and undermines FLSA’s goals. Rather, … even the most liberal interpretation of the ability to privately compromise FLSA claims only allows such compromises when they are reached due to a bona fide FLSA dispute over hours worked or compensation owed. … [T]he prior dispute between the parties did not involve the FLSA and there is no evidence that the parties ever discussed overtime compensation or the FLSA in their settlement negotiations. Thus, while the Settlement Agreement contains a general statement that Nasrallah was paid for all hours worked, there was no factual development of the number of unpaid overtime hours nor of compensation due for unpaid overtime.

So what is an employer to do?
If you are engaged in litigation, the answer is simple. Ask the court to approve the FLSA portion of the settlement agreement.
If, however, there is not active litigation (e.g., severance or pre-lawsuit negotiations), the issue is much thornier.
I do not recommend that you contact the DOL for its supervision of the settlement. That is a radar that you do not want to be on. The supervised settlement may (will?) beget a full-blown wage and hour audit, which leads to an OSHA on-site, which leads to an ERISA audit…. You get the picture. There is no need to throw yourself in front of this regulatory steamroller.

You could file a lawsuit that simply asks the court to approve the settlement, but that seems likes overkill in almost all situations (even though it is the safest court of action under the strictest interpretation of the FLSA’s requirements for waivers).

A reasonable middle ground? Develop a bargaining history with the employee’s attorney that the employee may have an FLSA claim for unpaid wages, and that you are specifically bargaining for the release and waiver of that claim.
If you can develop a record that overtime pay was specifically negotiated, you will be in a much better position to assure a court in later FLSA litigation that the plaintiff has been compensated for the overtime wages later claimed to be owed. In other words, you almost need to create a claim that does not exist to then bargain that claim away. While this route seems highly inefficient, it may be the only way to protect yourself from a later FLSA claim.
Otherwise, you have zero certainty that the certainty for which you think you have bargained and paid actually exists.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
Posted on

Google, Just Come Clean Already

There’s nothing worse than a leader who refuses to admit when he or she is wrong. That goes for companies too. If you’re a leader in your industry, a household name, whatever, that does not make you perfect. That just makes you popular.

Therefore, if you do something wrong, own up to it already. Why drag out the suffering? Eventually, we’re going to figure out everything anyway. Why not set yourself, or your company up for a comeback, and let the healing begin? Why not embrace those teachable moments, push forward with integrity?

But that’s what happens in a perfect world. I get it. I understand why Google, currently being sued by the U.S. Department of Labor over possible widespread gender pay discrimination, doesn’t want to go the mea culpa route given what’s at stake.

Even though I’m pleased as punch the tech giant is in the hot seat — and other women should be too, given what the right outcome could mean for women in tech and elsewhere — some part of me feels a vague, nonsensical kind of pity because this is no little mistake. This isn’t even an FCC nipplegate fine type mistake. If the DoL finds that Google has been systemically underpaying women, not only will its salary band stretch beyond all recognition, it will be ripe for lawsuits from past employees and who knows what else. With the wrong damage control strategy, Google could conceivably hit the skids. But I’m getting ahead of myself.

Google
Tech giant Google is being sued by the Department of Labor over possible widespread gender pay discrimination.

This is going to be one of those deny, deny, it wasn’t me, deny to the last breath scenarios because a guilty verdict here would COST, and I do mean dearly. There would be serious damage to Google’s brand reputation. There likely would be government sanctions, and the internal cost of fixing a broken pay system — and I’m not even talking about pay reparations, but how the company would proceed going forward — would certainly not be cheap.

Company leaders would have to look perplexed — “We just don’t know how this happened.” — blame some people, point some fingers, fire some folks to show they’re taking it all seriously. The clean out in the wake of being found guilty of a charge like this would naturally bring some hiring, recruitment and replacement-related talent costs, and the legal fees? Good night.

Of course, that’s assuming Google will be found guilty, not that we’ll see a resolution any time soon. I predict I’ll be watching this story unfold over the next few, dare I say, years? Google is going to engage in a gladiator-style fight to the death to keep from admitting wrongdoing here. But if they did own up to their mistake, you know, rather than try to block the media from even covering the lawsuit — good luck with that, by the way — things might not be ruinous for them. At least, not from a brand reputation recovery perspective.

The company would take a significant hit. The issue is too big and involves too many people for them not to get a Floyd Mayweather-style punch to the face on this one. But if they did say, you know what? We screwed up. And then did what was necessary to fix the problem, they could recover. They’d be significantly lighter in the purse, but they could recover.

First, it’s not like we can do without Google. Sure another company could take over or start something similar, but people will still say, “Google it,” when they don’t know something. Second, how stunning would it be if Google’s supposed downfall became its resurrection as a new industry standard with global implications for literally half of the work world? Olivia Pope — or her real-life equivalent — could spin that into comeback company gold.

It could totally happen. If a company as large and well known as Google not only admitted that women get short changed — pun intended — then fixed its pay policies to ensure that women didn’t perennially get the short end of the stick, that we would in fact be paid equitably? *whistles* That’s huge. That’s life-, no, that’s world changing.

But no. Google claims it has eliminated its gender pay gap globally thanks to “innovative compensation models.” Those would be good to share, Mr. Tech Giant. Even if you have to sell them, share.

Yeah, Google’s gonna fight the good fight on this one. I want to say they’ll lose because they should. Women should be paid equitably. Period. But I don’t know.

So far, the DoL hasn’t been able to compel Google, a federal contractor, to reveal salary histories and other documentation for its internal pay practices. This despite having “received compelling evidence of very significant discrimination against women in most common positions at Google headquarters,” according to a Forbes piece I read.

And we all know, what’s right doesn’t always win, does it?

Kellye Whitney is associate editorial director for Workforce. Comment below or email editor@workforce.com.

Posted on

Class-action Waivers Remains a Huge Issue for Employers

Jon Hyman The Practical Employer
There has been much judicial and administrative ink spilled over the past few years over whether the National Labor Relations Act permits employers to require employees to give up their rights to litigate or arbitrate class or collective actions.
This is one of the most important issues facing employers, which have looked to class-action and collective-action waivers as an important weapon to fight to scourge of wage and hour litigation.
Last week, in NLRB v. Alternative Entertainment [pdf], the 6th Circuit Court joined the battle.
At issue in this case is the following arbitration provision.

By signing this policy, you and AEI also agree that a claim may not be arbitrated as a class action, also called “representative” or “collective” actions, and that a claim may not otherwise be consolidated or joined with the claims of others.

This 6th Circuit concluded that this provision violates Section 7 of the the NLRA, which guarantees to employees the right to engage in protected concerted activity.

The NLRA prohibits mandatory arbitration provisions barring collective or class action suits because they interfere with employees’ right to engage in concerted activity, not because they mandate arbitration. These are grounds that would apply to any contract. …

Ultimately, we conclude that the NLRA is unambiguous and that the statute itself makes clear that the right to concerted activity is a substantive right.

Checking the scorecards, let’s see where we stand on this issue.
Upholding the legality of class-action waivers:
Concluding that the NLRA invalidates class-action waivers:
While the “no’s” have it, in reality, this issue is deadlocked, as the SCOTUS has already agreed to decide this dispute and (hopefully) resolve this issue once and for all. This case will be very interesting to watch, as the Court has already upheld class-action waivers in consumer agreements. It remains to be seen whether layering the NLRA on top of this issue will make a difference to SCOTUS, although I have my doubts.
For now, follow the law of your Circuit, and stay tuned, as we should have some much needed clarity on this issue within the year.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
Posted on

When Equal Pay is not ‘Equal’ Pay

Jon Hyman The Practical Employer

The Equal Pay Act requires that an employer pay its male and female employees equal pay for equal work.

The jobs need not be identical, but they must be substantially equal, and substantial equality is measured by job content, not job titles. This act is a strict liability law, which means that intent does not matter. If a women is paid less than male for substantially similar work, then the law has been violated, regardless of the employer’s intent.

This strict liability, however, does not mean that pay disparities always equal liability. The EPA has several built-in defenses, including when the pay differential was “based on any other factor other than sex.” So, what happens if two comparable employees, one male and one female, come to you with different salary histories. Does the Equal Pay Act require that you gross up a lower earning female to match the salary of a higher paid male, or do the mere disparate prior salaries justify the pay disparity under the Equal Pay Act?

According to Rizo v. Yovino (9th Cir. 4/27/17), “prior salary history” alone can constitute a “factor other than sex” to justify a pay disparity under the Equal Pay Act.
Fresno County uses a salary schedule to determine the starting salaries of management-level employees. It classifies math consultants as a management-level position. It starts all math consultants at Level 1 of the salary schedule. Level 1, in turn, is broken down into 10 steps. To determine at which step within Level 1 to start a newly hired math consultant, it takes the employee’s most recent prior salary plus 5 percent.
Rizo, a newly hired math consultant, earned less than the Level 1, Step 1, salary at her prior job, even when adding in the 5 percent kicker. Accordingly, the county started her at its lowest starting salary for that position (Level 1, Step 1). Rizo sued under the Equal Pay Act when she learned that a recently hired male math consultant was hired with a starting salary of Level 1, Step 9.
The 9th Circuit concluded that these facts did not support Rizo’s Equal Pay Act claim.

The plaintiff and the EEOC … argue that prior salary alone cannot be a factor other than sex because when an employer sets pay by considering only its employees’ prior salaries, it perpetuates existing pay disparities and thus undermines the purpose of the Equal Pay Act. …

[W]e do not see how the employer’s consideration of other factors would prevent the perpetuation of existing pay disparities if … prior salary is the only factor that causes the current disparity. For example, assume that a male and a female employee have the same education and number of years’ experience as each other, but the male employee was paid a higher prior salary than the female employee. The current employer sets salary by considering the employee’s education, years of experience, and prior salary. Using these factors, the employer gives both employees the same salary credit for their identical education and experience, but the employer pays the male employee a higher salary than the female employee because of his higher prior salary. In this example, it is prior salary alone that accounts for the pay differential, even though the employer also considered other factors when setting pay. If prior salary alone is responsible for the disparity, requiring an employer to consider factors in addition to prior salary cannot resolve the problem that the EEOC and the plaintiff have identified.

Before everyone rejoices, note that Rizo is contradictory to the law of the 6th Circuit (which covers Ohio employers)—Balmer v. HCA, Inc. (“Consideration of a new employee’s prior salary is allowed as long as the employer does not rely solely on prior salary to justify a pay disparity. If prior salary alone were a justification, the exception would swallow up the rule and inequality in pay among genders would be perpetuated”). Rizo is also contradictory to other circuits, such as the 10th and 11th. In fact, Rizo very much appears to be the minority view on this issue.

So what is an employer to do? Follow the law of your jurisdiction. In Ohio, that means that you cannot rely solely on an employee’s prior salary history to justify a pay disparity between similar male and female employees (although you can rely on prior salary plus other factors such as experience, skill, or training). It also means that we wait for the appeal of Rizo to the Supreme Court, and see if SCOTUS decides to take this case and provide some national clarity on this issue.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.

Posted on

Leaders Can Learn a Lot from Working Moms

 

Motherhood, despite the challenging, multi-faceted, always-on nature of the gig, is not a job we would typically associate with leadership.

Worse, when discussed in a workplace context, motherhood is usually a negative. But when I read Moira Forbes’ “7 Leadership Lessons You Can Learn From Working Mothers” this week, I saw things in a whole new light.

Forbes asked a group of successful women to share the most important leadership lessons they’ve learned since becoming a mother. What follows is my take on how a diversity leader might consider a few of those lessons on the job.

  1. Know when to push and when to let go. Christa Quarles, CEO of Open Table and mother of two sons, said that “so much of parenting is wrestling with the dichotomy of when to push your child and when to let go and let them drive the direction; thereby enabling the condition that they might fall or fail.”

A leader or manager faced with a problematic employee situation has to walk a tightrope between what’s good for the employee and what’s good for the company. But I would encourage those leaders not to err on the side of caution. Meaning, don’t decide not to say the hard truth for fear of repercussions or making the situation worse.

And it doesn’t need to be a case of “a hard head makes a soft ass,” as my mama liked to say when I got into some mess. With a bit of thoughtful planning – and perhaps a word or two with your HR peers — there’s a diplomatic way to handle almost everything.

There have been many times I’ve learned a lesson late, far later than I needed to because a manager neglected to tell me a hard truth. I can understand why someone wouldn’t want to go there. Let’s say you have a smart, strong black woman known for calling a spade a spade — I may or may not be talking about myself — who’s underperforming in some way; that could be intimidating. I too have shied away from dicey situations with direct reports. But that’s rarely the right way to handle a situation.

It certainly isn’t worth bearing arms for every fight, but when a certain behavior or a lack of knowledge will affect someone’s ability to do their job, or potentially have a long-term impact on their career, for goodness sake. Bite the bullet, and let them know. If they’re anything like me, they’ll thank you for your honesty. “It’s … important to step in and course correct,” Quarles said. “Striking that balance is what defines effective leadership.”

  1. A personalized approach is key. Lizzie Widhelm, senior vice president of ad product strategy at Pandora, was talking about her three sons when she said, “My children are two parts amazing, one part insane, and a whole lot of nothing alike. If I don’t adjust to their unique personalities and spend quality time with each of them, we have total chaos at home.” But leaders have to face the same diversity of opinion and behavior in the workplace. It requires equal parts diplomacy, policy, curiosity and empathetic consideration.

Widhelm said her team at Pandora was able to benefit from the many mistakes she made at home because those mistakes helped her bring a more perfect leadership strategy to work. But there’s nothing wrong with making mistakes as long as you do that very modern thing — fail fast, and learn the lesson.

When working with diverse personalities or individuals, consider their personal and professional situation carefully, and if there’s a challenge, make it crystal clear you’re there to help. Communication is important in most situations, but I’d say it’s critical in a problematic situation with an employee. Ask questions, and listen thoughtfully to the answers. Offer solutions, and where possible, collaborate before making final decisions.

“Everyone has different strengths, passions and motivations,” Widhelm said. “The interesting thing about putting the extra time in with your team is they appreciate you for the investment and in turn your relationship grows and leads to more open and honest conversations.”

  1. Embrace unknown territory. Michelle Cordeiro Grant, founder and CEO of Lively was talking about her son and daughter when she said, “motherhood has taught me not to fear the unknown but instead embrace the journey of learning on the go!” But her sentiment is no less viable in a work context. A manager dealing with a diverse team, or certain personality types for the first time, may encounter any number of new and potentially unnerving situations. But Grant’s advice to enjoy “figuring it out” has weight.

Too many of us shy away from any dimension of diversity because of the inherent discomfort when encountering something new or unfamiliar. But that discomfort often goes hand in hand with learning. That opportunity for learning and development is what any leader should embrace.

With learning comes growth, and with both there will be milestones and accomplishments. Grant said each of her milestones built upon the next, creating momentum and empowering her to continue to build. “The big takeaway for me is to use moments of accomplishment, big or small, as fuel to have the courage to go after it all – the sky’s the limit!”

  1. Balance competing needs. Kathy Hochul, lieutenant governor of New York, was talking about her two children when she said, “an essential role of motherhood is being a conciliator: resolving conflicts — which in my case was often with warring children.” But two squabbling kids aren’t all that different from two adults having a heated difference of opinion at work. I know. I’ve seen both.

Workplace conflicts are inevitable as knowledge workers leverage collaboration and are freed from the restrictions associated with command and control leadership. But they needn’t be the end of the world. “While mediating an argument, I sought to teach empathy for the feelings of others and respect for different faiths and backgrounds that may give others a different point of view,” Hochul said. “Children learn by example.” Employees do too.

Leaders may have to teach employees how to collaborate effectively, mediate, even argue or communicate respectfully. But it’s worth it when those different points of view produce great work, innovation or service/product improvements.

I’ve often thought adults could learn a lot from watching how children go through life: wide-eyed and curious, fearless and laughing even when they fall down or make mistakes. We can learn a lot from their mothers, too.

Kellye Whitney is associate editorial director for Workforce. Comment below or email editor@workforce.com.

Posted on

Wage Theft is a Misnamed, Overused Phrase

Jon Hyman The Practical Employer

Writing at Inc.com, Suzanne Lucas (aka Evil HR Lady) reports on a study published by the Economics Policy Institute, which says that employers short their employees $15 billion in wages per year.

According to Suzanne, “Wage theft isn’t always the case of a corrupt boss attempting to take advantage of employees.” She is 100 percent correct. In fact, most instances of an employer not paying an employee all he or she is owed under the law results from our overly complex and anachronistic wage and hour laws, not a malicious skinflint of a boss intentionally stealing from workers.

This is as good a time as any to revisit a topic I haven’t addressed in a few years — ”wage theft” (or, as I call it, a term coined by the plaintiffs’ bar and the media recast employers as the arch nemesis of the American wage earner).

Here is what I wrote on this issue three-plus years ago:

I have a huge problem with the term “wage theft.” It suggests an intentional taking of wages by an employer. Are there employees are who paid less than the wage to which the law entitles them? Absolutely. Is this underpayment the result of some greedy robber baron twirling his handlebar mustache with one hand while lining his pockets with the sweat, tears, and dollars of his worker with the other? Absolutely not.

Yes, we have a wage-and-hour problem in this country. Wage-and-hour non-compliance, however, is a sin of omission, not a sin of commission. Employer aren’t intentionally stealing; they just don’t know any better.

And who can blame them? The law that governs the payment of minimum wage and overtime in the country, the Fair Labor Standards Act, is 70 years old. It shows every bit of its age. Over time it’s been amended again and again, with regulation upon regulation piled on. What we are left with is an anachronistic maze of rules and regulations in which one would need a Ph.D. in FLSA (if such a thing existed) just to make sense of it all. Since most employers are experts in running their businesses, but not necessarily experts in the ins and outs of the intricacies of the Fair Labor Standards Act, they are fighting a compliance battle they cannot hope to win.

As a result, sometimes employees are underpaid. The solution, however, is not creating wage theft statutes that punish employers for unintentional wrongs they cannot hope to correct. Instead, legislators should focus their time and resources to finding a modern solution to a twisted, illogical, and outdated piece of legislation.

In my most recent book, The Employer Bill of Rights: A Manager’s Guide to Workplace Law, I summarized this issue best:

“Congress enacted the FLSA during the great depression to combat the sweatshops that had taken over our manufacturing sector. In the 70 plus years that have passed, it has evolved via a complex web of regulations and interpretations into an anachronistic maze of rules with which even the best-intentioned employer cannot hope to comply. I would bet any employer in this country a free wage-and-hour audit that i could find an FLSA violation in its pay practices. A regulatory scheme that is impossible to meet does not make sense to keep alive….

“I am all in favor of employees receiving a full day’s pay for a full day’s work. What employers and employees need, though, is a streamlined and modernized system to ensure that workers are paid a fair wage.”

Do we need to draw attention to the problems posed the FLSA? Absolutely. It misleads, however, to suggest that evil, thieving employers created this mess. Instead, let’s fix the cause of the problem — a baffling maze of regulations called the FLSA.

As for my day? I’m off to draft an answer in an FLSA lawsuit filed against one of my clients.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.
Posted on

The National Labor Relations Act Protects the Rights of Non-employees Under Other Statutes‽

Jon Hyman The Practical Employer

In MEI-GSR Holdings, LLC (5/16/17) [pdf], a two-member majority of the National Labor Relations Board held that an employer violated section 8(a)(1) of the National Labor Relations Act when it banned from its property an ex-employee who had filed against it a wage/hour collective action under the Fair Labor Standards Act.

Let me pause for a second to let this sink in.

The board held that the NLRA protects former employees who assert rights under a law that the board has no jurisdiction to enforce.

Wow.

But, hold on. Chairman Miscimarra is here to save the day. In another of his scorching dissents, he asserts exactly why this decision is incorrectly decided:

Under my colleagues’ position in this case, it constitutes a per se violation of the NLRA whenever any former employee pursuing a non-NLRA employment claim with one or more other employees is denied access to the employer’s private property if other former employees are granted access, even though (i) the former employee has no other right to be on the premises, (ii) the former employee does not seek to engage in NLRA-protected activities on the premises, and (iii) the former employee is not seeking access to the premises for any purpose that relates to the non-NLRA claim. I do not believe that Congress, when enacting the NLRA, intended to guarantee that every former employee would have a right of access to the private property of his or her former employer whenever he or she joined other employees in a non-NLRA lawsuit against that former employer.

It could be that GSR’s action here constituted retaliation for Sargent’s pursuit of the FLSA claim. However, even such a retaliatory motive does not empower the NLRB to defend the interest that Sargent or others may have in pursuing their rights under a different statute. … [T]he FLSA has its own anti-retaliation provision, and we are not permitted to take it upon ourselves to assist in the enforcement of other statutes. The Board was not intended to be a forum in which to rectify all the injustices of the workplace.

Bingo. And while this is only a dissenting opinion, given that President Trump still has two appointments to make to fill the NLRB to capacity (reported to be Marvin Kaplan and William Emanuel, two management-side labor attorneys), it is safe to assume that Mr. Miscimarra’s minority view will soon become the board’s majority view. Thus, while the logic of this decision is certainly troubling, one can rest reasonably comfortably knowing that at some point this year, a majority of the NLRB will no longer wax sympathetically with this viewpoint.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.

Posted on

Is Your Non-compete Agreement Killing a Fly With a Sledgehammer?

Jon Hyman The Practical Employer

At least half of my legal practice is serving as outside labor-and-employment counsel for small to midsize businesses. And, increasingly, much of that practice is consumed with drafting post-employment covenants, sending cease-and-desist letters to employees who are in violation of said covenants, or filing lawsuits to enforce said covenants; or, conversely, advising a business whether it can hire an employee with a non-compete agreement, responding to cease-and-desist letters, or defending a lawsuit seeking to enforce said covenants.

When a client calls me to draft a restrictive covenant agreement, I must work with that client to determine how wide of a net they need to cast (or how big of a hammer they have to swing). Knowing that most courts only enforce such agreements as necessary to protect an employer’s legitimate interest, I need to determine the scope of the legitimate interest the employer is trying to protect, and is entitled to protect.

  • Are they worried about a theft or disclosure of confidential information? In that case, maybe a non-disclosure agreement is all they need.
  • Are they worried about the employee poaching customers, employees, or vendors? Then a non-solicit is in order (plus the non-disclosure).
  • Or, is what the employee provides so unique in nature that the business genuinely will be irreparably harmed by the employee jumping to a competitor. Then, and only then, is a broad non-competition agreement called for (plus the non-disclosure and non-solicit).

I raise this issue after reading Your Non-Competes Aren’t Saving Your Business, They are Destroying Lives, written by my friend Suzanne Lucas (aka Evil HR Lady). Suzanne argues that “non-compete agreements should be limited to people who could damage your business by going elsewhere. … A non-compete for any other person should be extremely narrowly tailored and probably non-existent.”

Suzanne is 100 percent correct. Employers, use some discretion and common sense. Narrowly tailor your restrictive-covenant agreements to the specific interest(s) you are trying to protect. And, if you don’t have such an interest, forego the agreement altogether for that employee or group of employees. Otherwise, you will spend gaggles of money attempting to enforce an unenforceable agreement. While that strategy is great for me, it’s terrible for your business, which should be in the business of making money, not throwing it away chasing a fool’s errand.

Posted on

The Power of Collective Influence, the Cost of Misdiagnosis and More

Andie Burjek, Working Well blog

I recently attended the Midwest Business Group on Health’s 37th annual conference, where they hit the nail on many employer-sponsored benefits related topics.

I was prepared to be very “eye-rolly” about the “employers as superheroes” theme, but, to be honest, I dug it. It meant a lot of corny jokes (who doesn’t appreciate a solid corny joke?) and it meant the speakers, people with impressive careers in the employee benefits space, often identified themselves as a superhero before talking about the heavy stuff.

(My answer: Buffy the Vampire Slayer. She had a stake named Mr. Pointy. She talked like a valley girl. She dusted a lot of vampires. See, it’s fun.)

Here are some of the major takeaways I got from various speakers:

Health Care: Yes, employer-sponsored health care was a priority topic. Needless to say, there is a lot of uncertainty around the GOP health care bill. It doesn’t help that there will be more than one in the future. Although the revived and reconsidered American Health Care Act narrowly passed the House, the Senate is a whole other story. The AHCA is not popular, and the Senate is creating their own health care legislation.

A few panelists and speakers had different things to say about health care. I appreciated the point of view of health care entrepreneur/medical economist JD Kleinke, who made jokes, shared vacation photos and somehow made a session about health care funny. A few things that I found valuable:

  • On consumer-driven health plans: No matter what you do with benefits design, it won’t change the basic fact that people are not rational consumers for any product. And when it comes to feeling better and getting healthy, that doesn’t change. He gave a silly example of people paying twice as much for a brand of cereal that wasn’t very different from the generic brand at all, but people still paid for it. Use the same logic with health care annnnnd … can consumers of health care really be rational consumers if they assume the most expensive option is the best option for them, or for one of their loved ones?
  • He does not expect the AHCA to go through, for a few reasons. One is that half of Americans have pre-existing conditions, he noted. Many Trump voters and Republicans believe that preexisting conditions should be covered (which the AHCA doesn’t do well, many have argued). If their constituents don’t want this, then the legislators voting on the bill probably won’t vote for it.
  • His level of nonchalance about this was noteworthy to me because for employers, the uncertainty around health care is one major stress. How do you make a long-term plan when you don’t know what the health care landscape will look like in 5 years? So, hearing a medical economist speak like this in a way that was not anxious or uncertain was refreshing.

Pharmacy Spend: Cheryl Larson, vice president of the MBGH, and a panel of experts also had a discussion about the relationship between employers and pharmacy benefits managers. PBMs have been in the news a lot recently: A few weeks ago, Anthem broke up with Express Scripts, arguing over $15 billion. This week, Express Scripts announced a deal with drug price transparency company GoodRx to reduce drug prices for the uninsured. Also, states like California and New York are beginning to consider and push forward PBM transparency laws.

This topic was especially interesting for me, as I’m writing on it for the next issue of Workforce. A lot of people have had differing ideas for why prescription drug costs are increasing at such an alarming rate. No matter who’s doing the finger pointing or who’s being pointed at, the key question remains: How do companies contain pharmacy drug spend?

More to come about this from me later for Workforce, but for the time being … what’s been a common theme in this conference and in interviews with various people is the need for collective action, and for employers to work together and share ideas to push for change that will benefit all employers.

Other Noted Takeaways (Thoughts? Comment Below)

  • Consumer-driven health plans won’t lead to major change in health care in the big picture. If we’re just changing how and who pays for care, does it really make a difference?
  • Misdiagnosis is a major cost driver for employer health care costs. Sally Welborn, senior vice president, global benefits, Walmart Stores Inc., noted that inappropriate care (care that should not be delivered) accounts for 30 percent of the GDP spent on health care (which is 18 percent, by the way). “The worst dollar spent is the dollar spent on care that does not need to be delivered,” said Welborn. A solution Walmart uses is centers of excellence.
  • Vision and dental should not be considered side benefits. “We focus so much on medical, we forget about the other two that are integral to the health of the individual,” said one panelist.
  • Obesity is a complicated but necessary issue to deal with in the workplace. As body mass index rises, so do health care costs, presentee-ism and absenteeism costs, and workers’ comp costs. “Telling people with obesity to eat less and move more is like telling someone with depression to cheer up,” said presenter Gabriel Smolarz, quoting Dr. Ayra Sharma, a leading obesity specialist in Canada. This attitude shows lack of understanding of the disease. He also noted that a 5 to 10 percent decrease in body weight can make a significant impact on employees’ health and employers’ cost. What can employers do? I don’t have the answer now, but suggestions are welcome.

Andie Burjek is a Workforce associate editor. Comment below, or email at aburjek@humancapitalmedia.com. Follow Workforce on Twitter at @workforcenews.