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Recruiting on the Right Side of the Law

Abercrombie & Fitch engaged in “creative” recruiting to fill sales jobs with candidates who matched the company’s carefully constructed marketing image. The high-profile clothing retailer staffed its stores with handsome young white men and touched off a lawsuit that ultimately cost the company $50 million and a barrage of bad publicity. More than 10,000 applicants and employees received their checks for damages in December 2005 after Abercrombie settled the suit.


    Although companies generally operate in a heightened state of awareness about the potential for discrimination charges during terminations, the possibility of lawsuits arising from the recruiting process draws less attention. But faulty recruiting and hiring procedures can generate claims from unsuccessful applicants. In addition, employees who initiate lawsuits often reach all the way back to the hiring process to show systemic practices.


    Objective sourcing and selection standards are the key to staying on the right side of the law, but many recruiters are still working with subjective criteria. “Creative” evaluation techniques and the ever-popular “best fit” explanation for selecting candidates can invite discrimination charges.


    Abercrombie recruited for a certain “look.” Some recruiters go on a “gut feeling” about candidates or search for a match with the corporate “culture.” It’s a subtle landscape, but red flags pop up along the way.


    The Equal Employment Opportunity Commission filed the lawsuit against Abercrombie for using image-driven recruiting and hiring practices that led to the exclusion of minorities and women and limited their employment. As part of the settlement, Abercrombie agreed to hire 25 diversity recruiters, set benchmarks for hiring women and minorities, overhaul its recruiting procedures and end recruiting at fraternities, sororities and certain colleges. A court-ordered monitor will evaluate the company’s recruiting practices for at least five years.


    Damage to the company’s reputation exceeded the direct dollar costs of the settlement.


   “When a discrimination charge is filed, applicants are making one of the most serious charges anyone can make short of a criminal accusation,” notes Eric Dreiband, who was general counsel for the EEOC when the agency moved against Abercrombie. “They are charging that their civil rights have been violated. People fight over money all the time, but a discrimination charge goes to the integrity and reputation of the employer.”


    Companies with large, sophisticated staffing functions are more vulnerable than they may think. On March 29, the EEOC filed a lawsuit against UPS on behalf of a Rastafarian who was told he would have to shave his beard to be hired as a driver helper. Two days later, it filed a national class-action sex discrimination lawsuit against Lawry’s Restaurants Inc. on behalf of male applicants who allege they were systematically rejected for jobs as food servers.


    Applicants and employees file more than 75,000 charges with the EEOC each year and the agency pursues more than 400 full-fledged lawsuits annually.


    “Any midsize or large employer will experience some form of discrimination claim through the EEOC or state law,” says Dreiband, who is now a partner at Akin Gump Strauss Hauer & Feld in Washington, D.C.


Setting objective standards
    Abercrombie & Fitch was seeking a particular “look” for its sales force in a retail setting, which is not inherently unlawful. “But if recruiters use a subjective or ‘creative’ component in the hiring process, the employer must carefully review the results for disparate impact,” Dreiband warns. “The company needs to consider whether this ‘creative’ component breeds discrimination. At Abercrombie, it created a group of employees who were young, lily-white males.”


    Employers must use objective standards for selecting candidates. To the extent that these criteria may have an adverse impact on a specific group of applicants, the employer must ensure that the criteria are job-related and be prepared to demonstrate their relevance. Otherwise, the company is open to charges that it uses artificial standards to screen out a particular group.


    “In addition, for any element of subjective decision-making, the employer should involve multiple people in the hiring process, preferably of diverse gender and race,” Dreiband advises. “This provides a more defensible position than using one decision-maker.”


    The nuanced skills and capabilities that a growing number of jobs require make it more difficult to set sharp parameters for selection.


    “But general statements used to explain selection, such as the successful candidate was a ‘better fit,’ are almost becoming code for a potentially discriminatory practice,” warns Margaret Edwards, shareholder at the San Francisco office of Littler Mendelson, the largest employment law firm in the country.


    Subjective screening and selection criteria often rest on speculation about customer preferences or how a candidate will perform on the job.


    “It is not inherently unlawful to not hire someone on the basis of speculation, but speculation is a first cousin to stereotyping, and screening out candidates on the basis of stereotypes is where employers get into deep trouble in the hiring process,” Edwards notes. “Engaging in subtle assumptions about applicants or customer preferences can lead to charges of discrimination.”


Ending speculation
    A common example of stereotyping occurs when applicants are rejected as “overqualified.”


    “This presents a conundrum for employers,” Edwards says. “The employer may look at a highly experienced person with a tremendous résumé, and assume that the person will have no interest in a lower position, or will only keep it until he finds something better.”


    The assumption may be true.


    “However, case law says that a person who is overqualified is, by definition, qualified, so the person cannot be rejected on that basis,” Edwards cautions. “The rejection must therefore be based on other criteria.”


    She advises employers to avoid screening out seemingly overqualified candidates.


    “If a person is truly qualified but not hired, the candidate may assume that age discrimination occurred,” she warns.


    The best solution is to call the candidate in and ask why they are interested in a position for which they seem overqualified.


    “They may honestly be looking for a career change or less responsibility,” Edwards notes. “If there is evidence that the candidate has been job hopping, then you are no longer simply speculating about whether they will stay in the job.”


    One of the earmarks of hiring discrimination is a selection process that is inconsistent or does not match the actual pattern of decision-making when someone reviews the entire pool of candidates. “For example, the employer may state that an applicant was not hired because of insufficient experience, but the successful candidate had less experience,” Edwards says. “The reason given can be interpreted as a pretext for discrimination if it is not true or appears to be contradictory.”


    Kathleen O’Toole, director of employment law and litigation management for Milwaukee-based Manpower Inc., advises companies to drop the use of terms such as “best fit.”


    ” ‘Fit’ is a difficult word that can be a mask for discrimination,” she says.


    Recruiting and hiring on the basis of a “gut feeling” must go as well.


    “It opens the employer to discrimination charges and makes it far more difficult to reconstruct the selection process and explain why the candidate was hired,” O’Toole notes. “The story is harder to tell.”


    The required qualifications must make sense to the EEOC and its equivalents at the state level.


    “They are looking for a simple, fair process that treats all applicants the same,” O’Toole says. “It is HR’s responsibility to make sure that recruiters and hiring managers can articulate objective, neutral reasons for selecting an applicant.”


    Edwards advises companies to issue a policy that prohibits recruiters, hiring managers and HR staff from engaging in conversations with unsuccessful candidates about why they were not hired.


    “Although HR staff may be well versed in the problems generated by these conversations, direct calls to hiring managers are where many mistakes are made,” she says.


Beginning at the beginning
    Although lawsuits typically hit after an applicant has been rejected, the conditions that can lead to a discrimination charge often exist long before the first résumé arrives.


    “Employers need to invest more time before they even begin the hiring process,” says Juliann H. Panagos, member at law firm McGlinchey Stafford in Houston.


    “Specifically, they need to prepare a completely accurate, current job description that lists the essential functions of the job and the required and desired qualifications.”


    The employer must preset these job requirements before posting the position. Panagos reminds employers that there is no potential for a lawsuit from any applicant who does not meet the stated job-related requirements.


    Crafting a job description based on objective standards is a critical preventive step.


    “For example, if the position requires work on one Saturday every month, state that clearly in the job description,” Panagos advises. “If you do, an employee who is fired for not working on those Saturdays cannot charge discrimination based on religious beliefs. If the job requires climbing stairs, state that in the job description. Then you are protected from an employee in a wheelchair who claims discrimination based on a disability.”


    Panagos notes that the courts generally will not second-guess an employer on the requirements for a job.


    “The law gives deference to employers in preparing the job description,” she says. “If the requirement can be linked to a business reason, it will generally hold up.”


    Even if a discrimination claim is without merit, employers must respond, typically by assembling documents, interviewing all the participants in the hiring process, and then presenting all the relevant material to the government.


    “A discrimination charge is very disruptive,” Dreiband says. “It heightens anxiety and emotions and generates morale problems. Even when the actual dollar amounts that may be at stake are relatively small, a discrimination charge raises questions about racism and bigotry.”


    The EEOC is now devoting greater resources to pursuing systemic discrimination cases, which can generate awards that run into hundreds of millions of dollars. The new EEOC initiative is another good reason to ensure that recruiters and hiring managers rely on objective standards instead of a more expedient but potentially more costly subjective approach.

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McDonalds Consistency Begins with an Education at Hamburger University

When the sun rises over Oak Brook, Illinois., so do the flags outside Hamburger University. The training campus of McDonald’s Corp. hoists national flags each morning coinciding with the nationalities of those inside learning the company’s ways.


    McDonald’s flies a lot of flags. The company operates in 118 countries, and any one of them might be represented in classes at Hamburger U. on any given day. In the age of globalization, few brands are as well known as McDonald’s, and few corporations have gone as far in their training and development programs to accommodate associates from around the world. The company has the ability to give instruction in 28 languages.


    “We do very little outsourcing,” Maura Havenga, senior vice president of the restaurant solutions group. “Our ability to train leaders in a global environment is something we are looking to make part of our core competency.”


    McDonald’s goal is fairly straightforward: to give customers a similar dining experience anywhere in the world, and to maintain high standards of service of quality. There may be regional differences in menus or manners, but ultimately a McDonald’s should be consistently the same for the customers regardless of whether it’s in the United States or the United Arab Emirates.


    The company localizes for particular parts of the word, Havenga says. But always, the service standard is the same: “Fast, accurate and friendly.”


    The heart of the system is Hamburger University, which is where 5,000 to 7,000 store managers are trained each year. Hamburger U. is housed in a 130,000-square-foot building at the corporate headquarters in Oak Brook. Built in 1983, it is in a tranquil setting on 80 acres, complete with two man-made lakes. Inside are four theater-style classrooms, a 300-person auditorium, 20 seminar rooms, three working restaurant labs and various offices. Translation booths are at the back of classrooms.


    There is a staff of 19 “professors” who teach the essential elements of running and managing restaurants. More in-depth business training comes from outside instructors.


    Many of the foreign visitors to Oak Brook are there for advanced management training. The basics are often taught through satellite operations using curriculum crafted in Oak Brook and customized as needed for local consumption. McDonald’s operates six satellite universities around the world.


   The universities, in turn, are backed by another 139 regional country training centers scattered about the globe where other new employees get initial training.


    McDonald’s keeps tabs through a series of tracking methods. It begins with basic bookkeeping measures: how many people have taken training, what classes they took and whether every shift manager is certified in safety.


    Tracking then moves up in sophistication as McDonald’s seeks to measure the results of its training. Students take competency tests after completing classes. Participants and bosses give feedback on how the training worked. Finally, review teams visit and evaluate restaurants. The process includes “mystery shoppers” who drop in unidentified at stores around the globe.


    One of the first things store personnel learn is to greet each customer in a friendly, welcoming way. Initial attendance records will tell whether an employee received the training. The mystery shopper can then determine whether the training took.


While the greeting method may be slightly different in Tokyo—a respectful bow instead of an informal howdy—the end result should be the same. It’s the job of Hamburger University to ensure that those results get replicated each day in every country where McDonald’s operates.


    “As the world continues to evolve, we need to focus on those things that made us successful,” says Diana Thomas, U.S. vice president of training and the dean of Hamburger University. “We need to continue to invest in our people.”

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Mergers Transforming Outsourced Training

Big mergers are in vogue again. In terms of dollar volume, 2005 was the biggest year for worldwide corporate merger activity since 2000. All those newly supersized companies inevitably develop extra-large training and development needs. And those needs are driving change in the training and development outsourcing field.


    “When people are doing lots of acquisitions, it creates a lot of people who need to be trained,” says Jack Kramer, vice president of global alliances at SumTotal Systems Inc., a provider of learning and business performance services. “They need to be taught who the new company is, what the values are.”


    Helping indoctrinate new employees is just one item on a growing list of tasks that expanding organizations often ask vendors to provide. Bigger companies seek assistance not just in delivering services, but also in coordinating and tracking far-flung training networks.


    With increased size comes more complexity. As a result, big organizations in need of training help are more often shopping for vendors with long track records and demonstrable results.


    “Our customers are requiring a lot more sophistication and experience,” Kramer says. When pitching training and development services to large organizations, Kramer says, “companies want to see where you have done this 10 or 15 times before.”


    Given those demands, it’s no surprise that merger mania is also sweeping the outsourced learning sector. The most recent major deals took place in 2005, marked by Saba’s $60 million takeover of Centra Software and SumTotal Systems’ acquisition of Pathlore Software for $48 million. Also in 2005, Oracle finally closed its controversial $10 billion takeover of PeopleSoft. Both enterprise resource planning systems included learning management capabilities.


    The human resources outsourcing group at Hewitt Associates reports that companies frequently seek two levels of outsourced learning services: training programs and management of the vendors that provide those programs. Many companies still haven’t centralized vendor management and sourcing. In some companies, managers at different levels and locations all have the authority to order up a training program. That can lead to duplication.


    Will Hipwell, vice president of marketing at GeoLearning Inc., a learning services management company, says organizations are moving toward a clearinghouse approach to outsourced training services.


    Customers, he says, “want to centralize everything.” That means hiring a vendor to manage a range of learning resources, from webcasts to instructor-led training to knowledge bases to mentors. With that arrangement, a client feels that “whatever I need, I can go to one place and figure out how to get it,” Hipwell says.


Workforce Management, May 22, 2006, p. 28 — Subscribe Now!

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Cingular Wireless Approaches Union as a Strategic Partner

During the past six months, 18,000 Cingular Wireless employees have joined the Communication Workers of America union. In the most recent quarter, Cingular achieved the best financial results in its history.


Lew Walker, Cingular vice president of human resources for operations and labor, believes there’s a connection between the two. The company remained neutral while a majority of workers authorized union representation by signing cards. The result, according to the company, is engaged employees who are focused on customer service and building the Cingular network rather than nursing grudges against management.


“We view the CWA as a strategic partner,” Walker said at an event at the Center for American Progress, a Washington, D.C., think tank, on May 18. “What’s good for Cingular is good for CWA.”


That attitude undergirds negotiations on wages, benefits and work rules, according to Walker.


“They allow a contract to go out that allows us to be competitive,” he says of the union.


He emphasized several times the fierce battles that are waged every day between competing wireless carriers. Cingular, with 39,000 employees in unions, is the only one that is organized.


In fact, before it was taken over by Cingular, AT&T Wireless waged a “viciously anti-union campaign that had a negative impact on its workforce,” says Jeff Rechenbach, executive vice president of the Communications Workers of America. Rechenbach sat two chairs down from Walker on the Washington panel.


The goodwill the union receives from Cingular may produce business results. The CWA has launched a campaign to market Cingular’s service.


“We’re trying to convince people to make the switch,” Rechenbach says. A Web site has been established that offers discounts for people who sign up with Cingular.


The Washington event took place in part to promote the Employee Free Choice Act, legislation that would enable workers to sign up for unions through a card-check process. Union elections are often conducted via secret ballot and overseen by the National Labor Relations Board.


Some businesses assert that card-check campaigns subject workers to coercion from unions, whose representatives force them to sign up in face-to-face meetings. The U.S. Chamber of Commerce has launched a campaign to build support for a bill called the Secret Ballot Protection Act.


Unions too often ignore worker sentiment and focus on “what (they) can do to get the company to cave in,” says Michael Eastman, director of labor policy at the chamber. “We’d prefer to see the will of workers determine whether there’s a union, not a pressure campaign.”


Critics contend that secret balloting is undermined by employer intimidation and that workers who seek remedies through the NLRB have their cases bogged down in sclerotic legal proceedings.


“It is a deeply flawed system,” says Mary Beth Maxwell, executive director of American Rights at Work.


—Mark Schoeff Jr.

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Sex Harassment Law Not ‘Civility Code’

When Amaani Lyle interviewed for a job as writers’ assistant on the television show Friends, she was warned that she would be hearing and transcribing notes of the writers’ discussions and jokes about sexual matters. She accepted the job, but four months later was terminated because of problems doing the work.


    Lyle sued Warner Bros., NBC Studios and the show’s producers and writers for race and sex discrimination and harassment, retaliation and related claims. She claimed that the writers regularly discussed their personal sexual preferences and experiences, made sexual gestures and doodles and commented on the cast’s sexual activities.


    After the trial court dismissed all of Lyle’s claims, a California court of appeal held that Lyle should be permitted to proceed to trial because sexually coarse and vulgar language was not necessary for the creative process.


    On review, the California Supreme Court unanimously concluded that Lyle failed to demonstrate that the writers’ actions were severe or pervasive enough to create a hostile work environment. Rather, “most of the … language at issue did not involve and was not aimed at [Lyle] or other women in the workplace.” Additionally, the “workplace focused on generating scripts for an adult-oriented comedy show featuring sexual themes.” Lyle v. Warner Bros. Television Prods., Cal., No. S125171 (4/20/06).


    Impact: Employers should adopt and follow anti-harassment policies, conduct appropriate training of employees and carefully investigate every harassment and discrimination complaint.

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Housing Woes Hinder Efforts to Shorten Stays

Companies that want to increase retention for their valuable overseas employees by shortening their assignments are quickly discovering a major stumbling block: Adequate short-term housing is difficult to come by.


Employers have been bedeviled by failed foreign assignments for years. Attrition among expatriates is more than twice the 10 percent rate in the general workforce, according to a survey by GMAC Global Relocation Services, based in Woodridge, Illinois. The “Global Relocation Trend Survey” polled 125 small and large companies.


Some 21 percent of expatriates leave their companies during an assignment, according to the study. The problem often lies with family matters, such as the strain of being separated from loved ones or having an accompanying spouse who becomes dissatisfied with the job prospects in their new country of residence.


And that’s why companies are trying to reduce the duration of those postings, according to Helen Sharman, vice president of client services at Saunders 1865, a U.K. relocation specialist. The new assignments may be more along the lines of six months rather than the conventional three- to five-year postings that require family relocations. The shorter assignments make it less psychologically taxing to take on the challenge of being an expatriate, Sharman says.


Companies may be willing to change their foreign assignments, but the market has yet to catch up with their needs, Sharman says. The shortage is particularly acute in burgeoning Asian business centers, such as Shanghai, China, Beijing and Mumbai, India.


Frustration with temporary housing overseas seems to be widespread. Some 71 percent of respondents in a recent Saunders survey said they were dissatisfied with accommodation arrangements for expatriates. The company polled 216 employers.


In many cases, the dissatisfaction is attributed to unmet promises, Sharman says. Difficulties can arise if an expat is offered accommodations in a central location but is instead placed on the outskirts of a city, or if an expat is told to expect certain amenities, like a cleaning service or high-speed Internet, but nothing of the sort is available.


Getting out of a temporary housing mishaps may prove to be a costly undertaking, particularly if a lease or contract has been signed. Depending on their size and needs, companies can protect their expatriate employees by dedicating a person to be responsible for vetting accommodations overseas, or by outsourcing the task.


“What is important,” Sharman says, “is making an expatriate’s international experience as positive as possible.”


—Gina Ruiz

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Chinese Study Japanese Way of Manufacturing

Chinese manufacturers face many of the same obstacles—increased costs, quality breakdowns—that bedevil their American counterparts when they must quickly begin high-volume production of new products to meet fickle market demand.


Applying Japanese production efficiency techniques could help them cope. A group of Chinese plant managers recently turned to an American who used to work for Honda to teach them.


“The development of manufacturing is happening here faster than anywhere it has happened on planet Earth in history,” says Kevin Hop, a member of the Manufacturing Management and Technology Institute who traveled to Shanghai in March to conduct a seminar sponsored by consultancy JF Pearson.


As an engineer at U.S. Honda plants, Hop oversaw seven major model changes and became an expert in Japanese lean manufacturing methods. In Shanghai, he introduced his 34 Chinese students to the Japanese way of eliminating waste, analyzing and solving problems, sharing information, communicating succinctly and developing a learning culture.


Chinese manufacturing operations have to improve in an area in which the United States and Japan excel—mass manufacturing of new products. The skill is particularly important for the China operations of the companies represented at the Shanghai seminar—Logitech, Ericsson, Emerson, General Motors, Honda and the soon–to-be-merged Lucent and Alcatel, among others.


If Motorola promises a new cell phone to the global market, it can’t be held up by production problems in China. “We’ve all become addicted to new products,” Hop says. “It’s pushing everyone in the world to become quicker.”


That atmosphere is creating workforce pressure for Chinese manufacturers. “Our research team in Suzhou is pretty young. We are just accumulating the experience,” says Jonas Chen, large-program manager at Emerson Climate Technologies in Suzhou. The city is located 50 miles southwest of Shanghai.


The area between Shanghai and Suzhou is a seamless strip of industrialization. Only cities and slivers of farmland break the string of factories.


Finding the talent to staff those plants can be difficult. Chen faulted the Chinese education system for focusing too much on rote learning and too little on innovative thinking. His company looks for candidates who may not have scored high on tests but are creative.


“We don’t want the library,” he says. “We try to find high-potential people and we teach them how to be good engineers.”


Those new hires can help companies with challenges like maintaining high quality while dealing with myriad suppliers and rapidly changing production processes.


“We need talented, experienced people in this area,” says Wu Hy, new program engineering director at Astec Electronics Co. “In order to be competitive, we have to introduce (new products) quicker and quicker.”


The talent shortage is compounded by societal factors. For instance, workers from rural areas may toil in a factory for a while and then return to the farm. Women may go back to their families after a few years.


The fast pace of growth in China also creates opportunities, such as the chance for people to manage a plant while still in their twenties.


“It’s almost like the Wild West in the gold rush,” Hop says of the chance to stake a business claim. “Everyone has a shot at it.”


—Mark Schoeff Jr.

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Five Questions for Louis Uchitelle

Louis Uchitelle
Author, The Disposable American:Layoffs and Their Consequences

Louis Uchitelle has been writing about busi­ness, labor and economics for The New York Times since 1987. In his new book, he discusses how employers, government and society as a whole have become too indifferent to the growing trend of layoffs in this country. Uchitelle spoke to Workforce Management staff writer Jessica Marquez.

Workforce Management: Why did you write this book?

Louis Uchitelle: People who are laid off are moving back into the workforce, but almost always at lesser jobs than they had before. I’m not arguing that we can stop the layoffs, but I am arguing that we are blaming the victims so much that they blame themselves. Rather than take responsibility for the layoffs, it’s easier for employers and the government to send the message to workers that it’s their fault and that if they keep trying, they will find the right job. Employers should be asking whether all the layoffs they are making are necessary.

WM: Why should employers be concerned about this?

Uchitelle: For one thing, lots of public health studies show stress from job insecurity might be the cause of physical illness. Companies should measure the costs of layoffs beyond the immediate dollars and cents. Employers may not be able to stop layoffs altogether, but at least we can take into consideration that damage is being done. Also, companies that don’t have major layoffs seem to be successful. Southwest Airlines is the most notable example of that. Harley-Davidson has agreements with the union to do staged limited layoffs, and they are doing well too.

WM: Why do you believe that the retraining programs offered to laid-off employees don’t work?

Uchitelle: Too often, laid-off employees are just trained for whatever happens to be available, and often that is below their education and skill level. There are training programs that instruct participants that if they commit themselves, they can do a certain job at a certain wage. That’s more helpful.

WM: What does the trend of layoffs say about the state of the labor movement?

Uchitelle: The labor movement seems to have lost its ability to withstand the problem, and I don’t think it will regain it so easily. If there is hope, it is with employee associations, where members of the community—including labor and religious groups—come together to represent the community. So if, for example, Levi Strauss has a plant in a certain community and is facing layoffs, the community organization can put pressure on the company to stem layoffs in that region.

WM: What implications do you think the situation at General Motors may have on this trend?

Uchitelle: We have forgotten that when (Chrysler) went through this 25 years ago, it was viewed as a social problem. As a result, the government helped it get back on its feet. But today the discussion is all about high labor costs and we are blaming the workers. The role of the government isn’t even on the table. That shows how society’s perspective on layoffs has changed.

Workforce Management, May 8, 2006, p. 14 — Subscribe Now!

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Three Steps for Immunizing Your Company From Overtime Suits

If  lawyers who represent employees against employers—plaintiffs’ attorneys—were rats in a maze, they would get to the cheese faster than a politician gets to a handshake.


    Plaintiffs’ lawyers are maze-wise. They know how the system works. They know that if they can create factual issues of “he said, she said,” throw in some “David and Goliath” pathos and skip past the trapdoors leading to legal issues, they will most likely get their client in front of a jury. And that leads to dollars in their pockets, either through settlement (because many employers would rather settle than go through a lengthy, painful trial) or through a substantial dollar award by a jury.


    Given the U.S. Department of Labor’s newest regulations and the fact that the number of collective actions filed under the Fair Labor Standards Act now exceed all other types of employment collective actions combined, the rats are after one big hunk of cheese.


    Remember that juries decide questions of fact. And an employee’s FLSA claim is chock-full of these questions.


    Think of the employee who testifies that in spite of the company’s handbook rules regarding overtime and the prominent time clock posted on the break room wall, employees routinely worked “off the clock” because there was so much work to do. Or the employer who delegated a supervisor to ensure employee compliance with overtime rules, but looked the other way when payroll budgets were too high and production levels were low.


    There is no easy fix to eliminate a hungry lawyer on the prowl for a good plaintiff case, but some simple steps taken early on, and consistently followed, can help barricade entry to the employer’s checkbook.


    First, employers must keep in mind that there are only a handful of exceptions to the rule that employees should receive hourly pay, with time and a half for overtime.


    My first rule? Have three sets of eyes scrutinize any exception to hourly pay. The company’s corporate management, human resources administrator and legal department or outside counsel should sign off on every situation that falls outside the hourly pay standard.


    Second, audit your company’s pay practices, frequently. Regularly re-examine each job position: Review the position’s job description, the employee performance and evaluation form, and the pay scale for that position, all with the objective of a fair, impartial evaluation as to whether the position is truly exempt or nonexempt. Use someone with a fresh eye to conduct the audit, not the person who originally designated the position as exempt.


    Third, employers should develop a culture of fairness and good faith in dealing with employees. Avoid the trap of demanding mammoth output goals be accomplished within a 40-hour workweek, encouraging employees to work longer hours without overtime pay to meet quota.


    Coach and counsel, discipline and document all occasions when employees are discovered working off the clock. And save a copy of each of those disciplinary actions in a “plaintiffs’ attorneys will never take advantage of me” file. When an allegation comes along that the company has allowed a policy of encouraging employees to work off the clock to flourish, just reach for that file. You’ve made your defense lawyer’s job infinitely easier, and less costly.


    An employer’s good faith can also be established through well-drafted, even-handed and consistently enforced company policies. Employers can also ask the U.S. Department of Labor for a written ruling, approval or interpretation of a particular position’s pay status. An employer’s good faith application of a particular action because of such a ruling is an absolute defense to a minimum wage and/or overtime claim.


    By following just a few pre-emptive and proactive procedures to monitor its pay practices, a company can stop even the hungriest maze-wise plaintiffs’ lawyers in their tracks.

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No Right to Bear Arms on Employer Property

Weyerhaeuser Co. operated a paper mill in Oklahoma for which Kellogg, Brown & Root and Kenny Industrial provided contract maintenance employees. Weyerhaeuser policy barred employees from having firearms on company property and in employee parking areas. KBR and Kenny policies prohibited employee firearms anywhere on customers’ property and required compliance with customers’ policies.

   In October 2002, Weyerhaeuser used search dogs to identify vehicles that might contain drugs. A number of employees admitted having firearms in their vehicles and consented to a search of their cars. Weyerhaeuser, KBR and Kenny fired their employees found with firearms or drugs in their vehicles.

   Eight workers sued Weyerhaeuser, alleging violations of the Oklahoma state constitution, the state gun-possession law and various common-law claims. That state’s constitution provides that the “right of a citizen to keep and bear arms in defense of his home, person or property … shall never be prohibited.” The Oklahoma Self-Defense Act (OSDA) empowered employers, among others, “to control the possession of weapons on any property (they) owned,” but a 2004 amendment to that act permitted the storage of guns in locked vehicles.

   Upon appeal, the U.S. Court of Appeals for the 10th Circuit in Denver found that there was no violation of the employees’ rights under state law, in part because the OSDA 2004 amendment was not retroactive. Bastible v. Weyerhaeuser Co., 10th Cir., No. 05-7037 (2/13/06).

    Impact: Employers should carefully research current legal restrictions and employee rights, especially concerning privacy, before conducting any search of their employees, including private vehicles.

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.

Workforce Management, May 8, 2006, p. 8 — Subscribe Now!