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Statutory Remedy Prevails in Sexual Harassment Case

A plaintiff who brings a statutory sexual harassment claim and a common-law negligent supervision and retention claim can recover only the statutory remedy if both are based on the same facts, the Texas Supreme Court has ruled.


According to the decision Friday, June 11, in Waffle House Inc. v. Cathie Williams, Williams quit her job as a waitress at a Waffle House restaurant in 2002 after unsuccessfully complaining about sexual harassment by a restaurant cook.


A jury found in Williams’ favor on both the statutory sexual harassment claim under the Texas Commission on Human Rights Act as well as the common-law negligent supervision and retention claims.


It awarded her $425,000 in compensatory damages and $3.46 million in punitive damages. The trial court subsequently entered a judgment of $425,000 in compensatory damages and $425,000 in punitive damages.


Williams elected to recover on the common-law claim. Under the statutory claim, she would have received a maximum of $300,000 in compensatory and punitive damages. Waffle House appealed.


The Texas Supreme Court, on a 7-2 vote, overturned an appellate court decision and held that the statutory claim pre-empts the common-law claim “when the complained-of negligence is rooted in facts inseparable from those underlying the alleged harassment.”


The two claims against Waffle House “stem from the same boorish and objectionable conduct,” the high court ruled. “Where the gravamen of a plaintiff’s case is sexual discrimination that lies at the heart of the TCHRA, allowing negligence damages for a TCHRA violation would eclipse the legislature’s prescribed scheme.”


Allowing Williams “to recover on her tort claim would collide with the elaborately crafted statutory scheme, a scheme that, as with the workers compensation regime, incorporates a legislative attempt to balance various interests and concerns of employees and employers,” the high court ruled.


The case was remanded to the appellate court.  


Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Dear Workforce How Much Support Staff Should We Employ?

Remember grade school and the three R’s? We recommend that you apply another set of R’s—reliability, relevancy and results—to assess whether your support departments are staffed appropriately. Like the R’s, these form the foundation for working with benchmarks in almost any organizational setting.

Reliability: Make sure your sources are first-rate
With the proliferation of information via electronic media, it is easy to find benchmarking studies. Some are reliable, while others are … well, much less so. Be sure any data you use is from a trusted source and:

• Includes multiple organizations so that you can slice the data by company size, industry and geography to get the most relevant comparisons.

• Is recent. As business conditions change, so do organizations. Be especially certain you are looking at information reflective of the current economic cycle.

• Read the fine print. In today’s world, sizing of a department is dramatically affected by outsourcing and process automation. Most robust surveys will provide details of what is included in a given benchmark so you can determine if it compares to your situation.

Additionally, always use several reliable sources in order to look at a range of statistics. Never rely on one source of information.

Relevancy: Evaluate how applicable the data are to your organization
The second R involves understanding context—how relevant are the benchmarks for your particular organization?

Although benchmarks can be useful diagnostic tools to uncover problem areas, they should never be used as prescriptive tools to “get to the right answer.” What is right for other companies may not be right for yours. For instance, are you in growth mode? Changing your go-to-market strategy? In the midst of a transformation? Is your competitive advantage directly linked to your people or a unique staffing model? Benchmarks will not reflect the needs of your unique situation. Keep your business context in mind as you compare yourself with others.

Results: Stay focused on what you need to accomplish
External benchmarks that are reliable and relevant show how you stack up, but be sure to also establish internal benchmarks that measure what matters most in your business. In other words, rather than focusing on the number of people in a given department, focus on their results. Probe internal data such as:

• By what percentage have customer complaints been reduced year after year?

• Are productivity levels increasing?

• Is the quality of candidates increasing while the time to fill open positions is decreasing?

• Are your processing times better than last year?

Following these three R’s will undoubtedly put you well ahead of others when it comes to using benchmarks in a meaningful way.

SOURCE: Courtney Mohr, managing director, BPI group, Chicago, May 10, 2010

LEARN MORE: Learn from staffing mistakes made by the federal Transportation Security Administration.

Workforce Management Online, June 2010 — Register Now!

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. Also remember that state laws may differ from the federal law.

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Rules Lay Out Exemptions to Health Care Reform Law

Final interim rules detail situations in which group health care plans will be exempt, or grandfathered, from complying with certain requirements of the new health care reform law.


While the law bans certain plan features, such as exclusions for pre-existing medical conditions and lifetime dollar limits for all health care plans, other requirements such as full coverage of preventive services do not apply to grandfathered plans.


In addition, the requirement that employers extend coverage to employees’ adult children up to age 26 does not apply to grandfathered plans until January 1, 2014, in situations where the adult child is eligible for coverage from his or her own employer.


The rules, released Monday, June 14, by the Internal Revenue Service and the departments of Labor and Health and Human Services lay out changes that current plans can make and still keep their grandfathered status.


For example, a grandfathered plan would lose its status if it eliminated coverage of a specific condition, even if the condition affects few individuals. The interim final rules cite cystic fibrosis as an example.


In addition, plans cannot boost co-insurance requirements and retain their grandfathered status.


However, grandfathered plans can boost deductibles and out-of-pocket limits, but only up to a certain percentage. The maximum percentage is defined as the increase in medical care component of the Consumer Price Index since March 23, plus 15 percentage points.


Take the case of a medical plan with a $1,000 family deductible. If medical care inflation rose by 5 percent from March 23 through the end of the year, the employer could raise the deductible by $200 for 2011 and the plan could retain its grandfathered status for 2011.


In the case of co-payments, a plan could retain its grandfathered status if it increased co-payments up to $5 or a percentage equal to medical inflation plus 15 percentage points, whichever is greater.


In addition, employers cannot decrease the percentage of the premium they paid as of March 23 by more than five percentage points and retain their exempt status. Except for plans set by collective bargaining agreements, switching from one insurer to another would result in a plan losing its grandfathered status, though changing plan administrators would not.


The rules also state that retiree-only health care plans are automatically exempt from health care reform requirements.


In addition, the three federal agencies are asking for public comment on whether a plan should lose grandfathered status if the sponsor moves from purchasing coverage to self-insuring health risks.   


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Study Few Discrimination Suits Filed as Class Actions

Most plaintiffs in employment discrimination lawsuits are solo plaintiffs and are likely to receive modest settlements if they receive anything at all, says a study by the Chicago-based American Bar Foundation, a research institute.


Class-action lawsuits, such as the sex discrimination lawsuit filed by Wal-Mart Stores Inc. employees, although widely reported, are extremely rare, according to the study, which is discussed in the June issue of the Journal of Empirical Legal Studies in an article titled “Individual Justice or Collective Legal Mobilization? Employment Discrimination Litigation in the Post Civil Rights United States.”


Laura Beth Nielsen, a co-author of the article, said in a statement: “There is a lot of speculation about what kinds of claims make up the bulk of employment discrimination litigation, but these debates are rarely informed by the numbers.


“For example, many commentators claim that class-action lawsuits are quite common. In reality, they make up less than 1 percent of the federal caseload.”


The study, which covers employment discrimination cases filed in federal courts from 1987 to 2003, found that about 19 percent of cases are dismissed, and 50 percent of closed filings involve an early settlement.


Of the cases that do not settle early, plaintiffs lose the motion for summary judgment in 57 percent of the remaining cases, or 18 percent of filings overall, the study said. In the 14 percent of cases that remain active after the disposition of the motion for summary judgment, 57 percent, or 8 percent of filings overall, settle before a trial outcome. In the 6 percent of filings that result in trial outcomes, plaintiffs win 33 percent of the time, or in 2 percent of filings overall.  


Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Gains Appear in U.S. Corporate Retirement Plan Assets

U.S. corporate defined-benefit and defined-contribution plans had combined assets of $5.727 trillion as of March 31, up 4.7 percent from three months earlier, according to the Federal Reserve’s Flow of Funds report issued Thursday, June 10.


Corporate DB plan assets totaled $2.17 trillion as of March 31, up 3.1 percent from the previous quarter. Total assets in corporate DC plans were $3.557 trillion, up 5.7 percent.


Total assets in state and local government retirement funds as of March 31 were $2.794 trillion, up 4 percent, while assets in the federal government’s retirement funds totaled $1.318 trillion, down 0.5 percent.


The value of equities in corporate DB plans was $819 billion as of March 31, up 1.7 percent, while the value of bonds in those plans totaled $343 billion, up 3 percent.


In corporate DC plans, the value of equities was $1.099 trillion, up 6.6 percent, while the value of bonds was $109 billion, down 0.55 percent.

Corporate DB plans saw outflows of $48.4 billion for the quarter, while corporate DC plans had inflows of $29.5 billion.


Craig Copeland, senior research associate for the Employee Benefit Research Institute, said it was unclear why the federal government’s retirement plan assets were down overall because all asset categories except miscellaneous assets were either even or up for the quarter.


Copeland said the slight drop in corporate DC bonds could be attributed to “the movement of money, with people going for the higher stock market returns that occurred at the end of 2009.”


“The overall asset increase was consistent with the market returns in both the equities and bond markets during the quarter,” Copeland added. 


Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Senate Amendment Would Extend COBRA Subsidy

Employees laid off from June 1 through November 30 would be eligible for COBRA premium subsidies under a tax bill amendment proposed Wednesday, June 9, by Sen. Robert Casey, D-Pennsylvania.


“Millions of Americans have been hard hit by the recession and lost their jobs through no fault of their own. If Congress turns its back on them, they will have an even more difficult time making ends meet,” Sen. Casey said at a news briefing.


Casey’s amendment to H.R. 4213 would need approval by the Senate, which is considering amendments to the broader bill.


When the Senate first approved H.R. 4213 in March, the bill included a provision to extend the 15-month, 65 percent federal premium subsidy to employees laid off through year-end. But the House stripped the COBRA subsidy provision and its projected nearly $8 billion cost from the tax measure in May before passing the broader bill and sending the bill back to the Senate.


The revamped tax bill that Senate Democrats unveiled Tuesday, like the House-passed measure, omits an extension of federal COBRA premium subsidies for laid-off employees.


The last congressional extension of the subsidy expired May 31, which means employees involuntarily terminated starting June 1 have not been eligible to receive the subsidy.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Study Wall Street Compensation Took a Nose Dive in 2009

New York City job losses in the recession were far fewer than economists’ dire predictions, and Wall Street profits last year soared to record levels on the back of near-zero interest rates and federal bailouts.


But by one measure—securities industry wages and salaries—2009 was the darkest year in modern history, including the Great Depression, according to an analysis of new federal data by the city’s Independent Budget Office.


Real average annual wages in the city’s securities industry plummeted 21.5 percent from 2008 to $311,279 in 2009, a blog posting Tuesday, June 8, by IBO Senior Economist David Belkin shows. Over a span of two years, the wages fell 24.6 percent.

The steep decline was primarily caused by the security industry’s “crack-up in 2008,” Belkin wrote. Firms posted record losses, revenues were down by half and the year-end bonus pool—which gets recorded in the first quarter of 2009—shrunk by nearly 40 percent.

Also, Wall Street revenues did not keep up with surging profits, Belkin wrote, leading to continued shedding of jobs throughout 2009. The city’s securities industry lost 18,400 jobs in 2009, dragging salaries down for those who remained, with non-bonus baseline wages declining by 7.4 percent in 2009.


By comparison, securities industry wages dropped by 10.1 percent in the post-September 11 recession. And before that, there were only three occasions since 1929 when they fell by at least 10 percent in a year. The highest previous decline was in 1947, when trading controls may have contributed to an 18 percent drop in securities industry wages, Belkin writes.


Aggregate Wall Street wages—which reflect the combined effect of layoffs and wage declines—also declined in an unprecedented fashion, by 29.4 percent, or an estimated $21.4 billion.


Despite the record decline and Wall Street’s general volatility, wages grew in the securities industry between 1990 and 2009 by 5.4 percent. By contrast, wage growth outside the city’s finance industry was only 1.6 percent over the same period. Belkin writes that this difference shows “the challenge New York City could face adjusting to a securities industry that is unable to return to the kind of breakneck earnings growth it exhibited during the last 20 years—spectacular crashes and all.” 


Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Most Employers to Wait to Cover Adult Children

Many companies do not intend to comply early with a provision in the new health care reform law that will require group health care plans to extend coverage to employees’ young adult children up to age 26, according to a survey released Tuesday, June 8.


Among the 501 large employers responding to a Hewitt Associates Inc. survey, 77 percent said they will wait until the effective date before offering the coverage. Ten percent of respondents said they will extend coverage early to all eligible adult children, 9 percent said they will continue coverage for graduating students already covered in their plans, and 4 percent were undecided.


The law requires the extension to be made on the first day of the plan year starting after September 23, 2010. For calendar-year plans, which are the most common, the effective date of the provision would be January 1.

There are several reasons why most employers are not expanding coverage before they are required to do so.


“The cost and administrative complexities of early adoption are key factors, but it’s really about their view of access,” Ken Sperling, Hewitt’s global health care leader in Norwalk, Connecticut, said in a statement.


“Many employers believe most adult children are healthy and can find affordable coverage in the individual market. They view COBRA as another option, particularly for those adult children with pre-existing health conditions. So, for many employers, they don’t see a coverage gap they feel compelled to immediately close,” Sperling said.


Cost increases for the expanded coverage will be modest. Among employers that have estimated how much their plan costs will increase annually by extending coverage to the adult children, 18 percent expect costs to rise by less than 1 percent, 11 percent expect costs to increase by between 1 and 2 percent, and 11 percent project costs to rise by between 2 and 5 percent.


Interim final regulations published by the Internal Revenue Service and the departments of Labor and Health and Human Services estimate that the expansion of coverage would increase premiums by an average of 0.7 percent in 2011.


So far, just one major self-funded employer—United Technologies Corp. in Hartford, Connecticut—has announced that it will comply early. Effective immediately, the company will continue coverage of employees’ adult children enrolled in its plan who would have lost coverage for reasons that include graduation from school.


Then on July 1, coverage will be offered to employees’ adult children up to age 26 regardless of whether they now are covered, unless they are eligible to enroll in another employer’s health care plan.


United Technologies, which had stopped coverage of employees’ children at age 19 or 23 if the child was a full-time college student, had until January 1, 2011, to comply. A top company executive said United Technologies was complying sooner than required because it was the right thing to do and because such action was consistent with its practice of providing competitive benefits.


This week, several major employers are expected to announce early adoption of the young adult expansion provision, a source said. 


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Senate Tax Bill Omits COBRA Subsidy Extension

Senate Democratic leaders unveiled a revamped tax bill Tuesday, June 8, that, like a House-passed measure, omits an extension of federal COBRA premium subsidies for laid-off employees.


That omission makes it even less likely that lawmakers will again extend the 15-month, 65 percent COBRA premium subsidy, which has expired and is not available to workers who are terminated involuntarily after May 31.


In March, the Senate approved a tax bill, H.R. 4213, extending the subsidy to employees laid off through year-end. But the House in May stripped the COBRA subsidy and its projected $8 billion cost from the measure before passing it and sending the bill back to the Senate.


While Senate Democratic leaders had discussed reducing the extension to November 30, the latest Senate version that Finance Committee Chairman Max Baucus, D-Montana, unveiled Tuesday did not mention the subsidy.


While the tax bill could be amended on the Senate floor to include a shorter extension, legislators have grown more leery of approving measures that would boost the federal deficit, and even a short extension would face an uphill battle, observers say.


The Senate measure also, like the House bill, would give employers more time to fund their pension plans. 


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Groups Sue Feds Over Anti-Staffing Rule

The TechServe Alliance and others filed a lawsuit Tuesday, June 8, against U.S. Citizenship and Immigration Services.


The suit targets a USCIS rule that information technology staffing firms are not “U.S. employers” and therefore aren’t eligible to bring in tech workers on H-1B visas.


“USCIS’ actions are a thinly veiled attack on the IT staffing industry and its business model,” said TechServe Alliance CEO Mark Roberts.


In January, a document called the Neufeld Memo reversed previous USCIS policy and determined that IT staffing firms are not “U.S. employers” allegedly because they don’t exercise control over their consultants. The memo is in contrast to other areas of law recognizing an employer-employee relationship between staffing firms and temporary workers, according to the TechServe Alliance.


The USCIS has been denying H-1B visa petitions on the basis of the memo, the TechServe Alliance reported. Requests for new H-1B visas and requests for renewals are affected.


The suit alleges that the government improperly changed long-standing policy that allowed IT staffing firms to obtain H-1B visas on the same basis as other companies. It seeks a preliminary injunction to prevent the USCIS from enforcing the rule.


In addition, the lawsuit says the USCIS didn’t follow the proper notice-and-comment rulemaking process for the rule, didn’t conduct required analysis of the rule’s impact on small entities, that the USCIS exceed its regulatory authority and that the rule is not authorized by law.


The suit also names Homeland Security Secretary Janet Napolitano and USCIS Director Alejandro Mayorkas as defendants.


Roberts said the TechServe Alliance tried to reach out to the USCIS prior to the lawsuit without any luck, and at one point USCIS officials canceled a meeting with them.


“There’s just no indication they are going to rescind this policy without this action,” Roberts said.


The USCIS held two listening sessions regarding the rule this year, but both sessions took place only after the new policy had taken effect.


Joining the TechServe Alliance in the lawsuit as plaintiffs are the American Staffing Association and three IT staffing firms—Broadgate Inc., Logic Planet Inc. and DVR Softek Inc.


H-1B visas are used to bring in workers with college degrees and special skills.Messages were left at the USCIS’ national press office, but calls for comment were not returned. 


Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.


 


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