TOP TEN TIPS FOR 2010
THE TEN EMPLOYMENT LAW ISSUES EMPLOYERS
SHOULD BE MOST CONCERNED ABOUT IN THE EARLY
MONTHS OF 2010
Julie Badel
Peter A. Steinmeyer
Epstein Becker & Green, P.C.
Allyson Bouldon
Mead Johnson Nutrition
January 21, 2010
No. 1 EMPLOYEE FREE CHOICE ACT
• Off the radar due to health care
• Specter reports he’s been hammering out
a compromise
• Likeliest compromise is elimination of card
check in favor of a shortened period
before election
No. 1 EMPLOYEE FREE CHOICE ACT
• Average time from petition to election now
42 days
• Compromise bill likely would shorten that
to 5-10 days
• Effect: minimal time for employer to
communicate disadvantages to
unionization
No. 1 EMPLOYEE FREE CHOICE ACT
• Employers must become proactive
– Educate management on the early warning
signs of union activity
– Educate work force on disadvantages of
union
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No guarantee of anything
Wages and benefits could go up or down
No right to deal directly with management
Any gains achieved through strike never
compensate for lost striker wages
No. 2 The need to protect trade secrets
A recent study confirms that departing
employees frequently steal while leaving:
– 59% admit stealing data
– 92% admit taking CDs/DVDs
– 73% admit taking USB memory sticks
Is the problem getting worse? Yes.
Why?
– Job insecurity/decreased loyalty
– New technologies make it easier
– “anything goes” mentality among Internet generation
No. 2 The need to protect trade secrets
What constitutes a “trade secret”?
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Fact-specific inquiry
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Factors courts consider include:
1.
The extent to which the information is known
outside of the owner’s business
2.
The extent to which the information is known
by employees and others involved in the
owner’s business
3.
The extent of measures taken by the owner to
guard the secrecy of the information
No. 2 The need to protect trade secrets
What constitutes a “trade secret”?
Trade secret factors (continued):
4. The value of the information to the owner and to the
competitor
5. The amount of effort or money expended by the
owner in developing the information; and
6. The ease or difficulty with which the information could
properly be acquired or duplicated by others
No. 2 The need to protect trade secrets
Examples of trade secrets
•
Blueprints and design
manuals
•
Computer software
•
Customer lists (so long as
not generally known or
readily ascertainable)
•
Formulas
•
Manufacturing processes
•
Marketing plans
•
Pricing information
•
Research studies
•
Strategic business plans
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Testing data
•
Training manuals
No. 2 The need to protect trade secrets
Proactive steps to protect trade secrets
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Consider restrictive covenants
Use of “assignment of invention” clauses
Consider confidentiality agreements
Safeguard computer information
Identify trade secrets
Limit access to trade secrets
No. 2 The need to protect trade secrets
Proactive steps to protect trade secrets
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Limit document circulation
Safeguard documents
Take periodic inventory of trade secrets
Disseminate company policies
Use exit interviews
Notify new employers of restrictive
covenants
• Dispose of documents completely
No. 3 ADA
• Proposed regulations to implement the
ADAAA make it easier for individuals
seeking protection under the ADA to show
they have a disability
– Interprets “disability” broadly
– Expands the definition of major life activity
No. 3 ADA
• Disability = physical/mental impairment that
substantially limits (“S/L”) a major life activity
– Major life activities were defined as seeing, hearing,
walking, performing manual tasks, etc.
– Now also defined as operation of major bodily
functions
• Respiratory
• Cell growth
• Endocrine system
No. 3 ADA
• An impairment that substantially limits one
major life activity need not limit other major
life activities
– Diabetic with endocrine system S/L due to
diabetes does not also need to show S/L in
major life activity of eating
– Cancer victim with S/L cell growth need not
show S/L in working
No. 3 ADA
• Transitory ailments that last less than 6
months can S/L a major life activity
• Effects of mitigating measures (other than
glasses/contacts) are not to be considered
No. 3 ADA
• Conditions that are a disability:
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Deafness, blindness
Mental retardation
Missing limbs, mobility issues
Autism
Cancer
Cerebral palsy
Diabetes
Epilepsy
HIV/AIDS
Multiple sclerosis/dystrophy
Depression/bipolar/OCD/PTSD/schizophrenia
No. 3 ADA
• Conditions that may be a disability for
some individuals:
– Asthma
– Hypertension
– Learning disability
– Back/leg impairment
– Psychiatric impairment
– CTS
– Hyperthyroidism
No. 3 ADA
• Impact on employers
– More employees will be protected as
“disabled”
– Imposes duty:
• To reasonably accommodate
• To not discriminate against
– Need to:
• Update policies
• Train managers
No. 4 Outdated Employee Handbooks
Does your handbook comply with current
law? FMLA – amended 1/2009 and again
10/2009
Does your handbook comply with the
vacation pay laws of each state in which
you have employees?
No. 4 Outdated Employee Handbooks
Are your restrictive
covenants/confidentiality agreements
included in your handbook (i.e., the same
handbook that should have a disclaimer
stating that it is not a contract?)
No. 5 FMLA
• FMLA regs recognize two new types of
leave, both military related:
– Exigency when spouse/child/parent called to
active duty
– Caregiver for a servicemember
(spouse/parent/child/next of kin) with a
serious injury/illness
No. 5 FMLA
• Amendments to the FMLA effective 10-2809 affect the military leave provisions
No. 5 FMLA
• Exigency leave
– An Employee may take up to 12 wks. FMLA leave
when a spouse, child or parent is on active duty or
called to active duty in a foreign country for one or
more of 8 qualifying exigencies
• Previously, this leave was not available if the family
member was a member of the regular armed
forces
No. 5 FMLA
• 8 circumstances in which exigency leave
is allowed:
– To address issues arising from the military
duty 7 days or closer to deployment
– To attend military programs or those of
support organizations re military duty
– To arrange for child care and schooling
necessitated by the military duty
– To make financial/legal arrangements
No. 5 FMLA
• Exigency leave also allowed for:
– Counseling for employee, military member or
child of the military member due to military
duty
– R & R (max 5 days)
– Attending post deployment activities
– Addressing other events arising out of the
military duty– employer and employee must
agree on qualifications, timing, duration
No. 5 FMLA
• Leave to care for covered servicemember
with a serious injury or illness
– Military member must be treated on outpatient
basis
– Employee must be spouse, child, parent (not
in-law) or next of kin of servicemember
– Employee may take up to 26 workweeks of
leave in 12 mo. period
No. 5 FMLA
• The Oct. amendments made two changes
to caregiver leave. Now available:
– Within 5 years of the date the veteran served
in the military (under prior law, leave was
available only if the servicemember was
currently in the military)
– Even if the servicemember aggravated a
preexisting condition in the line of duty
No. 5 FMLA
• 6 NEW FORMS
– Notice of eligibility and rights and
responsibilities
– Designation notice
– Health care provider (employee)
– Health care provider (family member)
– Exigency military leave
– Illness/injury of covered servicemember
No. 6 Legal Issues Associated with the Digital Age
Welcome to the Virtual World of:
• “Friends”: Facebook & MySpace
- mostly social, but growing business network
• “Connections”: LinkedIn
- “Facebook in a suit”
• “Followers”: Twitter
- Instant messaging on steroids
No. 6 Legal Issues Associated with the Digital Age
POTENTIAL LEGAL THREATS: ‘TEXTUAL HARASSMENT’
‘omg, u look gr8’
“[T]ext messaging is the most revealing
of the true thoughts — the unrestrained thoughts
— of the harasser....They bang it out real quick,
late at night, after a couple glasses of wine.
They don't think twice about it. And they make
big mistakes…”
“’Textual Harassment’ on the Rise,”
The National Law Journal, July 20, 2009
No. 6 Legal Issues Associated with the Digital Age
‘TEXTUAL’ HARASSMENT
• “Not only am I using [texts] more, but I'm actually finding
situations where my clients will forward them on, print
them out and bring them into my office with them. Some
of them will even bait the harassers beforehand...”
Recent admission of a plaintiff’s attorney in The
National Law Journal, July 20, 2009
• Turning the tables: Can an
accuser’s online activity
compromise his or her
credibility?
No. 6 Legal Issues Associated with the Digital Age
• “Inside information”/securities laws
• Is it really a trade secret if it is posted on the Internet?
• Defamation
• Obligation to third parties
to monitor employees??
… and speaking of monitoring…
No. 6 Legal Issues Associated with the Digital Age
• Possible employee privacy rights:
- Hot issue: Accessing employee’s private SNS
or email account without permission
- What if employee used company
equipment?
• “Protected concerted activity” under National Labor
Relations Act
• “Lifestyle discrimination” laws
• Whistleblower laws
• Managers “friending” subordinates
• Public references for former employees
No. 6 Legal Issues Associated with the Digital Age
• Every company’s situation is unique – some may decide to totally
ban SNS at the workplace and others may embrace it
• Each employer has to weigh pros and cons
- Balance business interests v. realities, e.g., is it practical to ban
texting on personal cell phones?
• All employers should ensure policies decided upon are:
- Comprehensive
- Specific and clearly communicated to
employees, e.g., activities prohibited,
scope of monitoring
- Fairly and consistently enforced
No. 7 WAGE HOUR ISSUES
• Off the clock work poses risks for
employers
– Logging onto email, text messaging, using
blackberries and smartphones after work
hours and on weekends by non-exempt
employees can be working time
No. 7 WAGE HOUR ISSUES
• Off the clock work may also result from
supervisors not approving overtime and
employees needing to work additional
hours due to short staffing resulting from
workforce reductions
– Employee does not request overtime approval
– Supervisor looks the other way
No. 7 WAGE HOUR ISSUES
• 2009 brought law suits
– T-Mobile employees sued, claiming they were
required to use company issued smartphones
after hours to respond to messages – 10-15
hours/week
– CB Richard Ellis maintenance worker sued
claiming worked after hours receiving and
responding to cell phone messages
No. 7 WAGE HOUR ISSUES
• On-call time generally not compensable
unless employee is effectively precluded
from using his free time
• De minimus doctrine – employee need not
be compensated for insubstantial or
insignificant periods of work
– But 30 min./day checking emails, making
calls, etc. amounts to 10 hrs./mo. and 120
hrs./yr.
No. 7 WAGE HOUR ISSUES
• What to do?
– Payroll practices should be as up-to-date as
technology – audit payroll practices annually
– Policy should require employees to report all working
time regardless of where and when
– Train supervisors that employees are NEVER to work
off the clock
– When issuing remote access technology to nonexempt employees, require acknowledgement of
obligation to record all working time
No. 8 Trends in Discrimination Law
EEOC Charges Filed
FY 1999
FY 2002
FY 2005
FY 2008
FY 2009
Total Charges
77,444
84,442
75,428
95,402
93,277
Race
37.3%
35.4%
35.5%
35.6%
36.0%
Sex
30.9%
30.2%
30.6%
29.7%
30.0%
National Origin
9.2%
10.7%
10.7%
11.1%
11.9%
Religion
2.3%
3.0%
3.1%
3.4%
3.6%
Retaliation – All
Statutes
25.4%
27.0%
29.5%
34.3%
36.0%
Age
18.3%
23.6%
22.0%
25.8%
24.4%
Disability
22.0%
18.9%
19.7%
20.4%
23.0%
No. 8 Trends in Discrimination Law
TRENDS:
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Retaliation claims up (Erin Brockovich effect)
Age claims up over historic levels (the economy)
Disability claims up (ADAAA)
National origin and religious claims up (War on Terror)
WHAT EMPLOYERS SHOULD BE DOING IN RESPONSE:
• According to Stuart J. Ishimaru, acting chairman of the EEOC, as
quoted in Law 360 on January 7, 2010, “Employers must step up
their efforts to foster discrimination-free and inclusive workplaces, or
risk enforcement and litigation by the EEOC.”
No. 9 WORKER MISCLASSIFICATION
• The new frontier– misclassification
litigation
– 10.3 million workers, over 7% of the
workforce, treated as independent contractors
– IRS estimates 15% of employers are
misclassifying 3.4 million employees
• Resulting in underpayment of $1.6 billion in
taxes
No. 9 WORKER MISCLASSIFICATION
• Federal law a jumble
– IRC, NLRA, Title VII, FLSA
• Different statutory definitions
• Widely varying court decisions
– Enforcement often incidental to other issues
– Federal agencies rarely exchange information
No. 9 WORKER MISCLASSIFICATION
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Greater threat at the state level
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States desperate for increased revenue
New legislation in
• Illinois – over 100 complaints
- Recent $325,000 fine against Chicago
area contractor
• Colorado
• Delaware
• Maryland
• New Jersey
• AGs in Montana, N.J., N.Y. suing FedEx
No. 9 WORKER MISCLASSIFICATION
• Prime areas of risk
– Terminating employee and engaging as
independent contractor
– Independent contractor working alongside
employee, same work and working conditions
– Classifying telecommuters as independent
contractors
No. 9 WORKER MISCLASSIFICATION
• Major legal risks in Illinois
– Unemployment
• A, B, C test
• Massive interest for unpaid contributions
– Workers’ Compensation
• Unpredictable results
• Inconsistent WC Comm. decisions
No. 9 WORKER MISCLASSIFICATION
• Prevention
– Audit status of independent contractors
• Roofer test
– Reclassify questionable or misclassified
workers
– Consider treating individual as:
• Part-time employee
• Intermittent/seasonal employee
• Adjust benefit policies if needed
No. 10 Drafting Enforceable Releases
2009 EEOC guidance regarding releases
provides as follows:
• Employees cannot be barred from filing a
charge
• Employees cannot be required to return
severance pay before filing a charge
No. 10 Drafting Enforceable Releases
According to John Hendrickson, regional
EEOC attorney, no “re-hire/re-apply”
clauses are per se retaliation (PAS
disagrees)
No. 10 Drafting Enforceable Releases
PAS Tips:
• Do not inadvertently provide for waivers of future claims
• Beware of the OWBPA and its special requirements for multiemployee terminations
• Don’t be overly complex with language; may result in
unenforceable agreement
• Include representations that: (a) no other amounts are owed
(e.g. vacation or overtime); (b) no requested LOA was
denied, nor was employee denied reinstatement after a LOA;
and (c) all company property has been returned
• Include agreement that if any of these representations are
later proven false, must return $
• Beware of tax issues
– Withholding obligations
– Deferred compensation issues
Concluding Remarks
Thank you for your attendance & participation
Julie Badel
312-499-1418
jbadel@ebglaw.com
Peter A. Steinmeyer
312-499-1417
psteinmeyer@ebglaw.com
Julie Badel and Peter A. Steinmeyer are both members of the Chicago office of Epstein
Becker & Green, P.C., where they represent employers in all aspects of labor and
employment law.
Copyright © 2010 by Epstein Becker & Green, P.C.