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The Forgotten Overtime Exemption

In recent years, the federal Fair Labor Standards Act—or one of its state law equivalents—has become the weapon of choice for plaintiff-side employment attorneys. Taking advantage of cryptic regulations, inconsistent case law and innumerable traps for the unwary, the plaintiffs’ bar has vigorously pursued class and collective claims against employers for overtime violations. All too frequently, these suits have been successful, resulting in the imposition of sometimes crippling financial liability on employers.


    Most employers are quite familiar with the FLSA’s executive, administrative and professional exemptions. These exemptions relieve employers of the obligation to pay overtime if the employee in question meets the duties, salary-basis and salary-level tests required to qualify as exempt. Lawsuits over these exemptions tend to focus on the imprecise “duties” test for “administrative” employees or on a failure to pay a fixed salary without the possibility of improper deductions.


    Much less well known is the overtime exemption set forth in Section 7(i) of the Fair Labor Standards Act. Limited to retail or service establishments, this exemption focuses not on the duties of the employee, but on how the employee is paid. Qualifying establishments are relieved from paying overtime to employees who are paid the majority of their compensation in commissions on goods or services and who earn at least one-and-a-half times the minimum wage. Given that all of these conditions must be present before an employer may utilize the exemption, employers should be wary of the nuances associated with each requirement.


    Companies with employees who set their own schedules or work uncontrollable numbers of hours, or that need to align labor costs more closely with revenue, should consider whether this exemption for might work for them.


    Employees currently paid on an hourly or other basis can be converted to exempt 7(i) commissioned employees by basing their compensation on the amount of revenue that they or their work unit generate. Once properly implemented, the company can be more flexible about scheduling and need not worry about employees who may inadvertently cross the 40-hour threshold. Employees who generate more revenue for the company will see their compensation increase commensurately and the company can be assured that this higher compensation is fully funded by higher revenue.


    Although the FLSA no longer defines the term “retail or service establishment,” the Department of Labor and the courts have borrowed the definition given to the phrase by the now-repealed Section 13(a)(2) of the act. Accordingly, a retail or service establishment is one that:


  • Engages in the making of sales of goods or services;
  • Seventy-five percent of its sales of goods or services, or of both, are recognized as retail in the particular industry;
  • Not more than twenty-five percent of its sales of goods or services, or of both, are sales for resale.

   Notably, the exemption may only apply to specific “establishments” within a company. For example, a manufacturer may operate a plant for production of its goods, a separate warehouse for storage and distribution and several retail stores from which its products are sold. While employees working in the manufacturing plant or the warehouse would not qualify for the exemption, the retail store employees could. With regard to each establishment, the FLSA does not impose a minimum or maximum threshold of employees or revenues necessary to qualify for the exemption.


    Typically, an establishment that will qualify as a retail or service establishment is one that sells goods or services to the general public, servicing the everyday needs of the community by selling products directly to end users and not taking part in the manufacturing process.


    By way of recent examples, courts and the U.S. Department of Labor have found that private health clubs, pest control companies, propane dealers, automobile dealerships and furniture stores constitute retail or service establishments. By contrast, the regulations accompanying the FLSA identify accounting firms, credit companies, finance companies, insurance brokerages, loan offices and tax services as lacking the requisite retail concept. These examples do not, however, foreclose an establishment from qualifying for the exemption simply because its retail concept is directed at commercial consumers rather than households.


    Satisfaction of the “retail or service establishment” prong of the inquiry permits potential exemption of all employees employed by such an establishment, provided that their compensation satisfies certain requirements. Specifically, the employee’s regular rate of pay must exceed one-and-a-half times the applicable minimum wage. Further, more than half of the employee’s total earnings during a representative period must represent “bona fide” commissions on goods or services.


    The former requirement is straightforward. With a current federal minimum wage of $5.85 per hour, the employee’s regular rate must be at least $8.78 per hour before the exemption is applicable. (The federal minimum wage rises to $6.55 per hour on July 24, 2008, and to $7.25 per hour on July 24, 2009.) The regular rate can include “all remuneration paid to, or on behalf of, the employee” except gifts, vacation pay, premium pay or other amounts specifically identified under Section 7(e) of the FLSA.


    The “bona fide commission” prong is more exacting. The regulations accompanying the FLSA make clear that where an employee always earns the same fixed amount for each workweek, or where the employee receives a regular payment representing a percentage of the sales that the establishment can always be expected to make, the employee does not earn a bona fide commission and will not qualify for the exemption.


    Instead, decisional law and the regulations make clear that a bona fide commission contemplates a compensation arrangement where the amount of sales an employee makes increases the employee’s pay. Where the commission plan does not affect the rate of pay, it likely fails to qualify as bona fide. Thus, an employee paid a flat amount without regard to the value of the services performed or goods sold would not qualify.


    The regulations direct employers to test whether the commission amounts represent a majority of the employees’ compensation by reviewing an employee’s compensation for a “representative period” of not less than one month.


    The representative period must typify the total characteristics of an employee’s earning pattern with respect to the seasonal or other fluctuations such that for the entire representative period, more than half of the employee’s total compensation is derived from commissions. Alert employers should maintain records of the basis for, and the results of, the determination of the “representative period” inquiry.


    Employers that clearly qualify as a retail or service establishment and whose employees meet the compensation requirements of Section 7(i) should still be vigilant to guard against potential pitfalls. For instance, while the FLSA does not require that an employer maintain certain records for exempt executive, professional or administrative employees, such as hours worked each workday, failure to maintain such records may prevent an employer from substantiating that the conditions under Section 7(i) have been met, if the employer is challenged. In particular, since employees must make at least 1.5 times the applicable minimum wage, the number of hours the employee worked must be known to ensure that this minimum is satisfied. Some employers pay employees a draw equivalent to 1.5 times the applicable minimum wage and have them earn commissions against that draw to fulfill this prong of the test.


    Further, employers ostensibly qualifying as retail or service establishments should be wary of using the exemption for an employee or group of employees who are employed by the enterprise’s central office and not by the retail or service establishment itself. Lastly, employers considering taking advantage of the exemption must consider whether state law impacts or even eliminates its availability.


    Despite these caveats, the potential utility of the Section 7(i) exemption is generally worth considering. Employers with retail or service establishments employing commissioned employees may be able to eliminate overtime liability and significantly curtail labor costs. The exemption may be particularly useful for employers with commissioned employees who set their own schedule and work hours that, as a practical matter, evade employer control. At the very least, the availability of this exemption is worth remembering.

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Dial M for Mobile Learning

Black & Decker has found a way to eliminate waste, shorten delivery time and gain better quality control over the training for its 300 field reps, all by replacing paper-based training materials with mobile learning content delivered directly to their hand-held PDAs.


    The globally recognized manufacturer of power tools, hardware and home-improvement products spends thousands of dollars every year researching the most effective displays and educational materials for its products. Careful research goes into the planning of each display, and the field reps’ jobs are to set up those displays to exact specifications in the aisles of retailers, including Home Depot. They are required to replicate every detail, from the way the product is angled and the number of packages on every shelf to sign placement and inventory control. They are also expected to educate the Home Depot staff about the new products that they stock.


    In the past, to create consistency across all markets, the reps were sent manuals, photographs and other materials on paper to guide them through these exacting steps. But there was no way to track whether they were reading or following the guidelines, or whether they’d even received them, says Cesar Saavedra, field sales analyst for Black & Decker. “You get bombarded with so many communications when you work in the field, there is so much waste and no accountability. A lot of it never even gets looked at.”


    To minimize waste and keep closer tabs on rep performance, Black & Decker began using a Reflexis Enterprise Learning System tool called Enfoblasts, which deliver short two- to three-minute information bites directly to the PDAs used by every rep. The digitized learning modules deliver key points of the products and displays, including include task lists, images, quizzes and short videos about the products.


    “It’s an easy way to deliver information,” Saavedra says. “It saves money, and it creates accountability because we can track who opens and reads the files.”


    The field reps can also show the videos to the Home Depot personnel in the aisles as a quick training tool rather than explaining the new product to them. “It increases the number of people we touch and creates a consistent message,” Saavedra says.


    While the idea of replacing paper-based training with multimedia content may sound expensive, it actually costs less and takes less time. The savings in cost and time come primarily from the elimination of printing and mailing materials, which can take days to produce and distribute, Saavedra says. Instead, he creates content using videos already produced by the marketing department for the product, which means there are few additional costs to develop the training.


    “We just compress the videos with Reflexis and blast them to their PDAs,” he says. “I can send all of the training materials for a new product to 300 reps in less than three hours.”


    This mobile learning model delivers on the just-in-time training promise that is especially beneficial for field workers who may not work out of an office or have a computer at home, says Jerry Massey, director of operations in the enterprise learning systems division of Reflexis in Kennesaw, Georgia. “With mobile learning there are no excuses,” he says. “Everyone has a cell phone or PDA and it’s with them all the time.”


Support on the go
    Like Black & Decker, CA (formerly Computer Associates) arms its field reps with Blackberrys that they can use to access training materials and read or respond to blogs and wikis (collections of Web pages that let anyone accessing them contribute or modify content). The blogs and wikis are built around specific course content, such as new-hire training, leadership development and sales coaching. The conversations take place in virtual rooms, developed using GeoLearning’s GeoEngage, to which participants subscribe when they sign up for conventional classroom or e-learning courses, says Ron Ateshian, senior principal learning consultant for CA. Whenever new content or comments are posted, subscribers receive alerts on their Blackberrys.


    “It’s self-paced training that extends the learning,” he says of the virtual conversations. “Because they can access it anywhere, our people participate more often, and the social networking aspect of the discussions spurs them to more fully engage in the learning.”


    The addictive quality of the Blackberry is an added benefit, Ateshian says. “They respond to the alerts just as addictively as they respond to their e-mails.”


    Ateshian is currently exploring more ways to use mobile learning for his mobile workforce, including sending video segments and presentations directly to their Blackberrys.


    “Our sales workforce is so important to our business, and this will help them do their jobs more effectively because they can use it anytime, anywhere,” he says.


    But he is cautious as he looks to the future. “We have to make sure any content we use will work on their technology and will integrate with our learning management system before we commit to it.”


Improving technology
    In fact, technology integration is one of the biggest obstacles for mobile learning, particularly if learners use a variety of mobile devices. In the case of Black & Decker and CA, the content was designed for their standard-issue technology. But for businesses hoping to reach workers via their own cell phones, the content has to be universal, which can limit choices


    “You can do anything on some phones that you can do on a PC, including Java, Flash, animation and videos,” says Bob Sanregret, founder and CEO of Hot Lava Software, a provider of products for mobile authoring, publishing, delivery and tracking in Warrenton, Virginia. “But there is such a variety of devices out there, and not all phones can do all things.”


    That, however, is beginning to change. As cell phone technology and mobile learning authoring tools improve, such content is becoming a viable option for trainers who are struggling to meet the learning needs of a growing mobile workforce.


    Mobile learning formats are already commonly used outside the U.S., particularly in Europe and Asia, says Sanregret. “The U.S. is three to four years behind the rest of the world.”


    The Kauffman Foundation hopes to change that, at least for its own education purposes. Based in Kansas City, Missouri, the foundation is the 30th largest in the U.S., with a vision “to foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities.”


    A big part of that vision is education, and Merrilea Mayo, director of future learning initiatives for the foundation, believes that mobile learning can help deliver that vision.


    “The emphasis of the foundation is to use technology to reach lots of people, and certainly mobile communication technology has that potential,” she says, noting that in low-income communities, cell phones are the most common technology device used. “There are 3 billion cell phones in the world. Education on that scale is very interesting.”


    Mayo has watched the growing popularity of mobile learning in the European Union, but the foundation is not yet convinced that cell phone users in the U.S. will embrace the concept as easily. To gauge their interest, Mayo is launching a nationwide mobile learning pilot program using sports themes to teach math and science. The pilot, developed by Hot Lava, will run in July and August—during the Summer Olympics—and will include embedded animations, clickable icons and interactive question-and-answer links. “The look and feel of the content will be like a Web page interface, rather than a console game,” she says. This simple format was designed to engage potential users while working on most cell phones and PDAs.


    To promote use of the content, the Kauffmann Foundation will market the learning modules on sports and gaming Web sites, during televised sporting events and via score boards at sports arenas, with prizes delivered in real time to users in their seats.


    The point of the pilot is not to prove learning effectiveness, but rather to demonstrate that people will use it, Mayo points out. Her goal for the two-month program is 100,000 users answering at least one question.


    “The challenge for any educational product is that profits are small and marketing is difficult,” she says. “If this pilot is a success and we can show that we had thousands of users for an optional program, we can demonstrate to other agencies that this is a cost-effective way to reach a large number of people,” she says.


    Mayo expects to reach 10 to 30 times more users than she would with more conventional training offerings. “People are swayed by the numbers,” she says. “Once we prove the economics, we can put time and money into making it better.”


    Taking this pilot approach is an excellent way to try out mobile learning technology and gather early numbers on the effectiveness of the model, says Saavedra. “It can be scary to invest in a new technology, but once you look into it, you’ll see how many benefits you get,” he says. “For me, that outweighed all hesitation.”

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Seats at the Table, but Whos Ready

When it comes to the long-sought “seat at the table” for HR leaders, Libby Sartain sees both good news and bad. Sartain, who sits on the board of directors at retailer Peet’s Coffee & Tea, notes that human resource leaders are increasingly joining such boards—a clear sign of growing clout for the profession. But she notices a dearth of HR practitioners who are prepared for top jobs in the field.

On the profession’s progress:
    I probably know 20 HR people that are now serving on public boards of directors. That’s a new trend. When you look over my 30-year career in HR, it was a “personnel administrator” when I started, and now it’s a “senior executive” and even a “board member.”

    I can remember when the Society for Human Resource Management changed its name from the American Society for Personnel Administration, because we were part of management. Now we’ve moved from part of management to part of the senior leadership team. We’re that person who is part of the leadership team—some people are fighting to get that seat at the table—there to manage the return on investment in talent or human capital.

    To me, the job of HR is evolving to one of, really, talent management as a resource. Not all the administrative part, which is still there and part of the price of admission.

    The question that boards want to know about and CEOs want to know about—and HR has to be prepared to address—is, if we’re investing this much in our compensation of our senior leaders or our workforce, are we getting a return on that investment, just like if we made any other capital investment? Are we running our company with the right governance when it comes to ethics and policies? Are things above board? Because nobody wants to be caught in any of these embarrassing situations.

On the next generation of HR talent:
    That’s one of the things that I’m very concerned about. I get a lot of headhunter calls for great jobs that are very strategic, that are focused on all the right things.

    And then I try to think, who do I know who can do this job?

    What we’ve done is we’ve created some real specialists in HR. So you specialize in compensation or you specialize in organizational development, or you become a generalist. But we haven’t created the right mixes of experiences so that enough people get everything they need for that top job. They need the comp. They need the O.D. They need to have been the business partner. They need to understand talent management more than anything else. So that’s one thing I feel more HR leaders should be working on.

    That’s one of the things I’m really proud of at Yahoo. I did create the experiences, so I had two candidates who were capable of taking my job.


Workforce Management, May 19, 2008, p. 21 — Subscribe Now!

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Survey Defined-Benefit Plans Still in the Retirement Mix

The largest of large American corporations are making fewer changes to their retirement plan offerings. And now it appears that the most dramatic change of all has run its course.


After a wave of companies earlier in the decade terminated their defined-benefit plans—or froze the plans to new hires—fewer businesses have been eliminating these traditional pension plans during the last two years.


According to a Watson Wyatt analysis of the retirement plans of the 100 largest U.S. corporations, more than half of the employers—54 to be exact—still offer defined-benefit plans to new employees.


Granted, that’s a sizable drop from the 90 that offered DB plans in 1998. Indeed, the total number of defined-benefit plans at the 100 largest companies declined by 30 percent from 2002 to 2006, a period marked by corporate concerns about administrative costs and the volatility of plan funding.


Yet the pace of change has slowed considerably of late. The number of defined-benefit plans sponsored by the 100 largest employers decreased by only 5 percent and 4 percent in 2006 and 2007, respectively, signaling that sizable changes in pension offerings in the private sector have stabilized.


Watson Wyatt’s research also revealed that the use of traditional pension plans may have waned, but hybrid defined-benefit plans have actually become more popular. In fact, only 28 of the 100 largest companies now make a traditional pension available to new hires, a nearly 60 percent drop since 1998. But 26 companies now offer hybrid plans, up from 22 a decade ago.


Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Ford to Lay Off Salaried Workers

Ford Motor Co. will lay off an undisclosed number of salaried employees this summer and hopes to complete the reductions by August 1, a spokesman said Wednesday, May 28.


Earlier in the day, Detroit media reported that Ford will cut 10 percent to 12 percent of its salaried workforce, or more than 2,000 employees.


“We’re not going to comment on internal discussions we’re having with our employees,” Ford spokesman Mark Truby said. “As soon as we finalize some of these details, we’re going to tell our employees as quickly as we can.”


Because Ford wants the cuts made by August, the company doesn’t expect to offer voluntary packages, Truby said.


Last week, Ford abandoned its goal of returning to profitability by 2009 amid slumping U.S. light-truck sales. It also made sweeping production cuts, slashing output by 15 percent in the second quarter compared with the same quarter last year. Third- and fourth-quarter production will plunge as much as 20 percent and 8 percent, respectively.


Ford said that by July it will have more details about how it plans to cut costs.


The automaker entered this year’s launch cycle with one-third third fewer salaried workers than it had earlier this decade.


Filed by Craig Trudell of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Skip the PIP

With the exception of Donald Trump, employers usually do not enjoy firing an employee. Sometimes, though, parting ways is the right thing to do, and introducing a formal process that merely forestalls an inevitable result seems straight out of Dilbert. So, I offer five arguments for employers to consider before placing employees on performance improvement plans, or PIPs:

1. It’s Not Fair to the Employee
    Despite its name, a performance improvement plan, like probation, is supposed to inform the employee in SMART (Specific, Measurable, Action, Results, Time-bound) format that performance needs to improve dramatically and that his or her job is in jeopardy.


Of course, most managers regularly provide informal feedback to employees. When an informal discussion does not work, a perceived problem can be addressed at a regular performance review or a specially scheduled one. Thus, by the time an employee is placed on a PIP, almost always there’s a manager who has concluded that the usual avenues for improvement are not going to generate the desired results.


With the manager having lost confidence in the employee, the PIP does not typically do the employee any good. It might even hurt the employee’s chances of landing a job with another employer. (The employer will most likely avoid contradicting the written PIP even with a neutral reference, and the PIP might come up at an interview in discussing the circumstances of the employee’s departure.) The PIP therefore makes it harder for the underperforming employee to move on.


2. A PIP Puts the Employer in a Box
    A PIP documents the reasons for termination, establishing that the employer’s legitimate business needs were not being met and that the employee was given a last chance. Indeed, PIPs have helped employers successfully defend lawsuits and have become a prevalent best practice in human resource management. In addition, the SMART format protects employers from their own managers’ possible illegal prejudices.


While important, these benefits should be weighed against a PIP’s appropriateness. Sometimes the real culprit underlying poor performance defies the SMART format, whether it is a communication breakdown, a personality conflict or simply an employee’s lack of enthusiasm for the job.


Moreover, a PIP’s time frame, which typically is 30 to 90 days, forces the employer to evaluate the employee yet again. Even worse, the artificial deadline may not correlate to the employer’s business goals or the actual time needed for an employee to improve, and it undoubtedly postpones the search for a replacement employee.


3. Doublespeak Complicates
    Because PIPs focus on future performance objectives, and no one wants to hear that his or her job is on the line, it’s easy for employees to focus only on the positive message that the PIP is about working together to improve performance. The manager, however, may view the PIP as a formality on the path to termination, given whatever it was that brought the manager one step away from firing the employee. Besides, to the extent a PIP masks the actual causes of a manager’s past, subjective displeasure by focusing on future performance, the PIP steers an employee away from the actual criteria that may be necessary for that manager’s long-term satisfaction.


4. The Employee Will Strike Back
    Those employees who get defensive could use the PIP to fight back. For example, the employee might challenge the PIP’s criteria or the adequacy of the company’s training. Even employees with no legal protections for their own incompetence might file complaints, causing employers to worry about evoking a retaliation claim. Unfortunately, all too often a PIP transforms the firing of an at-will employee into a painfully complicated ritual.


5. There Are Better Ways to Terminate Employees Than Through a PIP
    Once an employer is ready to initiate a PIP and fire the employee, the employer might as well look for ways to part amicably. Under the best of circumstances, former employees can become new customers, vendors, referral sources and goodwill ambassadors.


To encourage that result, employers should consider offering employees the option of resigning instead of going through a PIP. When documenting performance is desired, performance reviews can accomplish everything a PIP can and more. They document the employee’s past performance against objective as well as subjective criteria and, if needed, can offer expectations for necessary immediate improvements. If it is not time for a regular review, employers can schedule a special midyear performance review and state the reason for it.


Moreover, if an employer is willing to put up with a 30- to 90-day PIP, that employer can consider giving 30 to 90 days’ notice or offer a severance package (in exchange for a general release of claims, of course) that gives the employee an opportunity to find another job. If an employee finds a comparable job, it will mitigate his or her potential damages. And, if the employee does sue, that special performance review will come in handy.

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Diversity Among Detroits Doctors

Recently, Henry Ford Health System president and CEO Nancy Schlichting had a visit from Dr. Mostafa Ibrahim.

   Ibrahim, a gastroenterologist who has been at Henry Ford Hospital for 25 years, explained that the 25 to 30 Muslim doctors, nurses, technicians, patients and family members who gather for Friday prayers at the hospital currently use the hospital’s chapel.

   They move some chairs to make room in the back of the chapel, and the hospital provides sheets that they spread on the carpeted floor to kneel on. It’s functional, Ibrahim said, but it would be better if the hospital had a designated space for Muslim prayer.

   “That’s my new task,” Schlichting says. “And he said the food could be better, so we’ll work on that too.”

   The example is one of the results of having executives, doctors and support staff from about 60 countries.

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Faith Groups Let People Bring Their Whole Selves to Work

It is a rare forum because of the disparate groups it frequently brings together: Muslims, Jews, Buddhists, Hindus, Catholics, Orthodox Christians and members of the Church of Jesus Christ of Latter-Day Saints, more commonly known as Mormons.


    Often they collaborate on events such as the National Day of Prayer. On other occasions, they work separately to educate their co-workers about their faiths. In the years since the Ford Interfaith Network was founded, the members have received the active encouragement of their employer, Ford Motor Co., which sees the organization as an example of its commitment to diversity.


    Nearby, at Acro Service Corp., a Livonia, Michigan-based information technology and engineering staffing company with about 3,000 employees, owner and president Ron Shahani strives to celebrate his staff’s religious diversity. When it is time for the Hindu New Year, Shahani encourages the customary passing out of sweets. In December, Christmas trees dot his office complex. Jewish and Muslim holidays get a good deal of attention too.


    Ford and Acro illustrate how Detroit employers of different sizes are working to manage religious diversity in the workplace. To be sure, it is not always an easy task. Some civil rights groups say not all employers take such an enlightened view of religious diversity. But changing laws and the growing populations of Hindus, Muslims and Buddhists also mean employers and human resource leaders must be more attuned to religious differences.


    “Corporations that are sensitive to diversity have to understand that diversity is more than just about race and gender,” said the Rev. Lonnie Peek, director of religious studies at the Wayne County Community College District and co-owner with his wife, Eunice, of e-Business Strategies, a diversity training firm.


    “It includes religion. What makes religion a little bit more sensitive is that there are certain practices and procedures that have differences. The boss and the manager have to be aware of the nuances of religion.”


    This lack of understanding sometimes leads to charges of insensitivity by employees.


    “Most of the complaints we get have to do with religious holidays or a feeling of not being treated fairly,” said Betsy Kellman, director of the Michigan regional office of the Anti-Defamation League. “A lot of the onus is on the individual employer. A lot of times this has to do with employers or school districts feeling they don’t have to give the benefit of doubt to employees.


    “There was a woman who was a Jew by choice, meaning she converted. Because she was African-American, her employer had doubts. He would not allow her to leave early when the sun went down to celebrate Shabbat,” Kellman said. “I had to really explain to the employer how offensive that sounded. Even though she had her work covered, he would not allow this person to have the time off. We had to work hard to make this employer understand that she was not putting something over on the employer.”


    Kellman said most of the complaints received by the ADL come in spurts. Sometimes, her organization goes weeks or months without getting a single complaint, she said.


    Harold Core, public information officer for the Michigan Department of Civil Rights, said that while religious discrimination complaints spiked shortly after September 11, 2001, the number of complaints received by the agency over the past five or six years has been fairly consistent.


    But Patricia Nemeth, founder and partner in Detroit-based Nemeth Burwell and an employment lawyer who represents corporations, said her office has seen an increase in complaints, many from people of Middle Eastern descent.


    “We see claims based on alleged comments and alleged denied promotional opportunities. The comments go toward claims of a hostile work environment. The alleged comments feed into hostile-work-environment and wrongful-termination claims.”


    Experts say the best preventive medicine against lawsuits or claims of wrongful discrimination is common sense.


    “The best practices we see are consistent enforcement of policies,” Nemeth said. “That’s the best way to combat these claims. Put policies and procedures in place for investigations for any types of complaints that might arise. You have to have a lot of open communication and a lot of understanding.”


    Ultimately, Shahani said, an employer that embraces the religious and ethnic diversity of its workers stands to gain from their unique worldviews.


    “Every system has a different way of resolving issues,” said Shahani, a Hindu who came to the U.S. from India.


    He cited an example that he has seen at work on a few occasions.


    “We may bid on a big contract,” he said. “Sometimes you win and sometimes you lose. This may be something we worked hard on. Then we get the note that we didn’t get it. Then there is someone sitting there with a religious faith that says our job is to put in the work. We don’t control the outcomes. It’s very positive energy. It just adds to our company’s collective strength.”


    Ford says its approach to religious accommodation benefits the automaker in other ways.


    “Having a group like this allows people to bring their whole selves to work,” Ford spokeswoman Marcey Evans said. “People’s spirituality is so much a part of them. Anecdotally, we hear that employees value that so much that it keeps them motivated and that it prevents them from worrying about how to fit their daily prayers or meditations into their schedule. There are meditation rooms and rooms set aside for prayers. There is a lot of accommodation made for employees. This allows them to be more productive at work.”

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Hard Hit by the Auto Industrys Troubles, Detroit Aims to Keep Its Young

Y ou want what? Daily feedback, a sympathetic boss, a sneakers-and-jeans dress code and a resumé where no job lasts longer than two years?


    These are a few of the items on the wish lists of the Millennials—workers born between 1977 and 1989.


    Their job wants came from recent research on Millennials’ career concerns and priorities by staffing firm Robert Half International Inc. and Yahoo Hot Jobs. Other findings: Millennials take a long-term view of their careers, job-hopping aside, to focus on pay and benefits now and adequate retirement planning.


    Experience still counts. In today’s workforce, how much it counts depends on whom you’re asking. Companies may employ several generations of workers—and each group has an opinion about whose way is the best.


    “Addressing generational differences in the workforce is critical,” says Ron Cooper, regional talent director for the North Central region at Deloitte Services. “We have four discrete generations interacting in the workplace. We help senior managers understand that one-management-style-fits-all will not be appropriate going forward—that’s the reality of our marketplace.”


    What are the key differences? “All generations have their strengths and weaknesses. Baby boomers (born 1946-1964) have a genuine appreciation for employment,” according to Andrea Linn, franchise owner, Adecco of Ann Arbor, Michigan, a large employment agency. “It’s a positive thing and consistent throughout their lives.”


    “Gen Xers (born 1965-1976) are happy to get a job, but anxi You want what? Daily feedback, a sympathetic boss, a sneakers-and-jeans dress code and a resumé where no job lasts longer than two years?


    These are a few of the items on the wish lists of the Millennials—workers born between 1977 and 1989.


    Their job wants came from recent research on Millennials’ career concerns and priorities by staffing firm Robert Half International Inc. and Yahoo Hot Jobs. Other findings: Millennials take a long-term view of their careers, job-hopping aside, to focus on pay and benefits now and adequate retirement planning.


    Experience still counts. In today’s workforce, how much it counts depends on whom you’re asking. Companies may employ several generations of workers—and each group has an opinion about whose way is the best.


    “Addressing generational differences in the workforce is critical,” says Ron Cooper, regional talent director for the North Central region at Deloitte Services. “We have four discrete generations interacting in the workplace. We help senior managers understand that one-management-style-fits-all will not be appropriate going forward—that’s the reality of our marketplace.”


    What are the key differences? “All generations have their strengths and weaknesses. Baby boomers (born 1946-1964) have a genuine appreciation for employment,” according to Andrea Linn, franchise owner, Adecco of Ann Arbor, Michigan, a large employment agency. “It’s a positive thing and consistent throughout their lives.”


    Gen Xers (born 1965-1976) are happy to get a job, but anxious to move up the career ladder fast,” Linn said. “As supervisors, they want to get the job done, but they’re also kind.


    “One of the biggest barriers to employment for the youngest [Millennials] is understanding that work rules exist and that it isn’t personal to be held to these standards.”


    It’s hard to avoid the boomers. They’re by far the largest generation in the workforce.


    That seems true for Oakland County, Michigan, in particular, according to United Way research director Kurt Metzger. “Oakland County is baby-boomer central (46.6 percent of the working-age population versus 44.3 percent for the tri-county area), and it’s short on 18- to 27-year olds, probably because most of them get college degrees and have more options open to leave town,” Metzger said.


    The good news: The group that is younger than 18 years old—1 million strong—is big enough to take care of Detroit’s future job openings, if they stay. That is the focus of efforts by several business groups, including Michigan Future Inc., an Ann Arbor think tank.


    A 2006 survey by consumer research firm Yankelovich found that of 25- to 34-year-old college grads, two-thirds choose where to live first and then look for a job.


    Doing well with a multigenerational workforce requires leaders willing to create a new company culture. “We must think strategically to develop the new leaders of the next generation,” said Lynn Wooten, clinical assistant professor of strategic management at University of Michigan’s Ross School of Business. “It requires training and employee retreats. The companies most willing to make the necessary changes are those in crisis or problem mode.”


    By contrast, some organizations find a balance. At Internet2, an Ann Arbor-based nonprofit consortium working on research and development of the Internet, scientists and engineers of all ages work well together, said Emilie Stawiarski, senior human resources manager.


    “We have a diverse staff—50 percent boomers and 50 percent Gen X. The culture is unique because it’s an academic base,” she said.


    “Everyone is dedicated to what Internet2 does. They are thoughtful of different opinions. People collaborate. Our boomers and Gen Xers have common interests. All engineers speak the same language.”

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High Court Confirms Alternate Avenue for Retaliation Claims

Employees can pursue race-related retaliation claims under a law passed during the Civil War era, the Supreme Court confirmed on Tuesday, May 27.


Although the decision gives plaintiffs an avenue for higher damage awards and a longer deadline to file cases than they have under a four-decade-old civil rights law, employment lawyers say the impact will be limited.


Citing numerous circuit court decisions, a 7-2 Supreme Court majority ruled that Hedrick Humphries, a former Cracker Barrel assistant manager, could sue the restaurant’s parent company under a 19th century law for allegedly firing him after he complained about the discriminatory behavior of a supervisor. Humphries is African-American.


Known as Section 1981, the law does not explicitly mention retaliation but it does provide a four-year statute of limitations as well as unlimited damages. It was established following the abolition of slavery to protect African-Americans in making and enforcing contracts.


A provision of the Civil Rights Act of 1964, called Title VII, is more restrictive. It caps damages, requires plaintiffs to file their cases within months of a discriminatory act and establishes an administrative procedure through the Equal Employment Opportunity Commission to try to resolve disputes.


The Supreme Court ruling “allows an employment law plaintiff to do an end run around Title VII,” says Joel Rice, who is of counsel to Fisher & Phillips in Chicago. “It’s beneficial to employees but not entirely surprising given the trend of the law in this area.”


Companies are used to defending themselves against Title VII and Section 1981 suits simultaneously, Rice says, because courts have been allowing the practice for years.


In a 1989 case, a ruling narrowed the interpretation of Section 1981, effectively preventing a plaintiff from bringing retaliation claims under the law.


But the Supreme Court said that Congress broadened the definition when it approved the Civil Rights Act of 1991. Lower courts then consistently applied it to retaliation cases.


The Supreme Court decided to respect those decisions. In the majority opinion, Justice Stephen Breyer argued that “the view that Section 1981 encompasses retaliation claims is indeed well embedded in the law.”


But in a dissenting opinion, Justice Clarence Thomas said that the majority was misguided in upholding what he called the flawed reasoning of the lower courts. Thomas was joined by Justice Antonin Scalia in the opinion.


“Two wrongs do not make a right, and an aesthetic preference for symmetry should not prevent us from recognizing the true meaning of an Act of Congress,” wrote Thomas, a former EEOC commissioner.


He maintained that Section 1981 does not address retaliation.


“On its face, Section 1981 is a straightforward ban on racial discrimination in the making and enforcement of contracts,” he wrote.


Although that was one of the arguments made by Cracker Barrel’s parent company, employment lawyers say the ruling will not come as a shock to employers.


It will not change the way retaliation cases are defended or significantly increase the damages awarded, said Sarah Kelly, a partner at Cozen O’Connor in Philadelphia.


“It’s the sort of decision that perpetuates and confirms what most lawyers thought the current law was,” she said. “The decision doesn’t have a big impact.”


But it does reinforce the image of the Supreme Court under Chief Justice John Roberts as a body that looks to the past when making its decisions.


“They don’t legislate from the bench, but rather they follow precedent,” said Ted Meyer, a partner at Jones Day in Houston. “This is typical of a fairly conservative court. They follow the law.”


—Mark Schoeff Jr.