High-profile sexual harassment scandals involving the entertainment, politics and media fields are spurring businesses everywhere to take a closer look at their policies and training programs, according to a post on the website of Androvett Legal Media & Marketing.

In many cases, employers are finding that generic policies with cut-and-paste legal text and one-size-fits-all instructional videos are simply not doing enough to connect with employees and address key issues.

With careers at stake – not to mention the reputations of entire companies – employers are re-examining workplace culture, training, complaint procedures and everything in between, says employment attorney Audrey Mross of Dallas’ Munck Wilson Mandala. For example, businesses are finding that live training provides a more interactive experience that resonates with workers. “Previously, many employers thought showing an off-the-shelf training video would be sufficient, but the interactivity of live training does a better job of ensuring that key concepts are fully understood.”

In addition, training is moving beyond a focus purely on harassment to address problems including rudeness, poor judgment and disrespect toward co-workers. States are moving in a similar direction with a recent amendment to California law requiring harassment training to include bullying.

“I am a big fan of moving beyond a recitation of the applicable law to delving into actual examples to help workers begin to understand where the line is between acceptable and unacceptable behavior,” says Mross, who frequently makes presentations to businesses on workplace policies and employment law. “I’ve found that this is what triggers an ‘aha’ moment for many, and often individuals will speak up and share their own experiences with their peers in the training session. When attendees are hearing the message from both the trainer and their fellow workers, it really starts to resonate.”

On Thursday, Jan. 18, 2018, the experts at NAVEX Global will discuss the challenges of ethics and compliance and offer predictions for 2018’s most pressing compliance issues.

The complimentary webinar will be at 1 p.m. Pacific time/ 1 p.m. Eastern time.

This past year was filled with news headlines that resulted in major legal repercussions for many organizations—causing workplace unrest or wreaking havoc on reputations.

Webinar participants will be able to take a proactive look at their programs and make sure they have a legally defensible strategy that’s prepared for any scenario, NAVEX says in its invitation.

Register for the webinar.

The concept of off-duty misconduct and any on-duty punishment that may occur can sometimes be a slippery slope, warns Natalie Lynch of Lynch Service Company in a web posting.

While there are plenty of instances of people being fired or reprimanded for their off-duty behaviors, there are also instances of terminated employees fighting for reinstatement under the guise that their off-duty conduct did not impact their on-duty work or the reputation of the company, she writes.

“Problems may arise when a company fails to outline what type of off-duty conduct is considered verboten and how employees are to conduct themselves during their off-duty hours. Problems can also arise when an employee punishes or terminates an employee for thoughts or actions that the company deems unsatisfactory, but are not illegal or truly damaging to the company, Lynch writes.

Read the article.

Jason M. Knott of  Zuckerman Spaeder LLP describes a recent case in which  T3 Motion, Inc. (a Segway competitor) used a lack of mutual assent to avoid arbitration of its claims against its former CEO, William Tsumpes.

Writing in the firm’s Suits By Suits blog, Knot explains that it’s unusual for an employee to seek arbitration in a contract dispute.

“T3 wanted to litigate in court, and its former CEO, William Tsumpes, wanted to force T3 into arbitration. T3 had brought suit against Tsumpes and various corporate entities that it alleged were his alter egos, alleging that Tsumpes improperly took money from the company for his own personal use,” Knott writes.

Tsumpes presented a signed employment agreement that required arbitration, but T3 contested whether it had agreed to the written contract.

Read the article.

A recent federal court denied an employer’s motion to compel arbitration, finding that it waived its right to arbitration by engaging in litigation.

George L. Kanabe, a partner in the San Francisco office of Orrick, Herrington & Sutcliffe LLP, discusses three key lessons the ruling provides for plaintiff-employers.

Kanabe reports that the ruling noted, “[t]here is no other reasonable interpretation of plaintiff’s untimely demand for arbitration than as a deliberate tactic to test the judicial waters but then, when those waters did not flow the direction plaintiff intended, to change routes in hopes of finding a different current.”

Read the article.

After weeks of growing scrutiny of alleged sex-related improprieties involving Social Finance CEO Mike Cagney, the start-up said he would leave as chief executive by the end of the year and that he would step down immediately as chairman, reports The New York Times.

“Although many of the issues at other firms stemmed from the actions of midlevel executives or investors, Mr. Cagney personally faces questions about his role,” write reporters Nathaniel Popper and Katie Benner. “His conduct was described by more than 30 current and former employees, most of whom asked to remain anonymous for fear of retribution.”

Cagney’s position with the company had become delicate after a sexual harassment suit was filed against him by a former employee.

Cagney denied any improprieties.

Read the NYT article.

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Above the Law follows up on an earlier report on the disparity of benefits offered to staff members of big law firms, compared to those offered to lawyers, this time with a focus on family leave.

“There’s a reason, grounded in scarcity and specialization, to pay attorneys more than the staff,” writes Joe Patrice. “But there’s not much reason why an attorney needs more time to bond with a newborn than someone in human resources would. Perhaps the firm knows that its associates are so socially dysfunctional they need an extra several weeks to seem human? That’s certainly a colorable argument.”

The article points out that some firms avoid the attorney-staff disparity by making benefits equal.

Read the Above the Law article.

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Potentially significant policy changes are on the horizon regarding federal rules that determine how and whether workers are entitled to overtime pay, according to a post on the website of Androvett Legal Media & Marketing. Businesses hoping to avoid overtime obligations for hourly workers must jump through three hoops in most cases. One of those hoops is to pay at least the minimum salary set by the U.S. Department of Labor.

Last year, the Labor Department under the Obama administration more than doubled the minimum salary threshold that is exempt from overtime, raising it from $23,600 to $47,476. But the salary increase proposal was stiff-armed by a Texas federal judge’s injunction before the change could take effect. While not endorsing the Obama-era regulations, newly appointed Labor Secretary Alexander Acosta mused in recent congressional testimony that the current salary threshold is too low and should be raised to “somewhere around $33,000.”

“The DOL is now seeking comment on how the overtime exemptions should be determined, as well as issues including whether salary levels should be allowed flexibility based on various factors, such as size of employer or region of employment,” says employment attorney Audrey Mross of Dallas-based Munck Wilson Mandala.

“There’s a lot on the line for employers who could be affected by these changes,” she said. “More than anything, employers are seeking consistency in order to plan for the future. This information-gathering phase provides parties a chance to be heard. If the salary threshold for exemption does increase, employers will be making hard decisions about whether to raise affected worker pay to maintain overtime exemptions or closely monitor worker hours, or otherwise be prepared to start paying overtime.”

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Above the law and Lex Machina will present a webinar on trends and legal analytics for employment litigation on Thursday, July 13, at 12 p.m. EDT.

David Lat, founder of Above the Law, says the event will address such questions as: The What do recent political and economic changes mean for the employment litigation landscape? How can knowledge management and technological tools help litigators navigate the transformations in this sector?

Lex Machina is expanding its Legal Analytics to a new practice area, Employment Litigation, shedding light on this rapidly evolving area of law, Lat writes. The webcast will feature panelists discussing new employment litigation data, with never-before seen trends and insights about judges, parties, lawyers and law firms.

Register for the webinar.

The Association of Corporate Counsel released its latest in-house trends report, which revealed that a higher percentage of women’s salaries were on the lower end of the salary scale than those of their male counterparts, reports Above the Law.

“The survey, based on responses from 1,800 in-house counsel in 53 countries, further stated that while a higher proportion of men existed in six of seven salary bands above and beyond $199,000, only 8 percent of male respondents actually believed that the in-house gender wage gap existed,” according to reporter Staci Zaretsky.

The ACC report also found that more than one-third of female respondents have had trouble finding satisfactory after an absence of six months or less. And longer absences hurt even more.

Read the Above the Law article.

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By Natalie Lynch
Lynch Law Firm

Businesses may hire independent contractors and employees, and it is important that they understand the differences between these two classifications. Independent contractors do not get the same legal protections as employees do, such as being eligible for unemployment benefits or being protected by labor laws. Independent contractors often do not receive benefits of any type. Due to these distinctions, it is important for businesses to clearly classify independent contractors. Without proper classification, an independent contractor may be able to make claims reserved for employees if a court or governmental agency decides that it was actually an employee instead of an independent contractor. The business may even be held responsible for paying payroll taxes on behalf of the newly-classified employee and face significant monetary penalties.

Right of Control Test
The Internal Revenue Service and other government agencies use the right of control test to determine whether an individual is an independent contractor or employee. If the employer has the right to control how the work is performed then the worker is considered an employee. However, if the business can only accept or reject the final product, then the person is considered an independent contractor. The IRS uses about 20 factors to evaluate who controls the work performed. The more control a company exercises over the work that is performed, the more likely that the worker will be classified as an employee. A worker does not have to meet all of the factors in order to be considered an employee or independent contractor. No one specific factor is dispositive. The IRS also gives different weight to different factors depending on the individual circumstances. Every state has additional tests. For example, Texas has an excellent chart to help make the evaluation more clear.

Factors
Some of the factors that are considered include:

Level of Instruction
An employee relationship is more likely to be determined when a worker is directed as to how to perform his or her work, when to perform it and where to perform it. Independent contractors generally have more freedom in these regards.

Training
Company-provided training suggests an employee relationship because the business is directing the methods by which the work should be performed.

On-Site Services
An employment relationship is suggested when the employer requires the worker to be at the company site even when the work can be performed somewhere else because this gives the employer more control over the worker.

Sequence of Work
When the employer determines the sequence of work such as which work should be performed first and last, this suggests greater control and an employment relationship.

Schedule
When a worker is required to work full-time hours, this is indicative of an employment relationship because the company has greater control over a majority of the client’s time. Contractors have more flexible schedules while employees have more set hours.

Payment
An important difference between employees and independent contractors is how they are paid. Employment relationships may be based on hourly, weekly or monthly pay schedules. However, contractors are often paid based on project completion or by commission. Additionally, an employer may pay for business or travel expenses while an independent contractor is usually expected to pay these costs on its own. Likewise, an employer may provide tools and other materials necessary to complete a job for employees while an independent contractor must usually supply his or her own tools and materials.

Business Integration
Workers who perform tasks that are integrated into the business are more likely to be found to be employees rather than independent contractors.

Assignment
Employees are usually expected to perform the work themselves. However, independent contractors are often able to delegate work to another person. Likewise, contractors may be able to hire, pay and supervise people who assist him or her. If the business controls assistants, there is more likely to be an employee relationship than a contractual one.

Termination
Employees can often be terminated for any reason or no reason in at-will states. However, contractors often have a contract that must be followed in order to avoid liability for early termination. The contract terms usually govern termination. Likewise, employees can usually quit their jobs for any reason while independent contractors usually cannot terminate the working relationship without ramification.

Carefully evaluating these factors can help businesses avoid possible liability associated with misclassifying employees.

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Practical Law will present a 75-minute webinar addressing common issues and structures for partnership and LLC equity compensation.

The event will be Wednesday, June 21, 2017, 1-2:15 p.m. EDT.

Partnership and LLC equity compensation programs raise many of the same issues that arise with corporate equity compensation. However, because of the“flow-through” nature of partnership taxation, there are some unique planning opportunities and pitfalls that can arise in the realm of partnership equity compensation.

Topics will include:

• The difference between a “capital interest” and a “profits interest”;
• Profits interests subject to vesting restrictions;
• Tax Treatment of partnership and LLC equity awards upon various liquidity events; and
• Collateral tax and employee benefit consequences of partnership and LLC equity awards.

Presenters:

• Michael P. Spiro, Partner, Finn Dixon & Herling LLP
• Adam S. Mendelowitz, Associate, Finn Dixon & Herling LLP

A short Q&A session will follow.

Register for the webinar.

By Natalie Lynch
Lynch Service Company

Employee handbooks contain pivotal information about the business and expectations of employees. Handbooks that contain outdated information may contain illegal provisions or lack best practices. This can expose the business to unnecessary civil liability or a backlash by the public for perceived slights or biases. By reviewing employee handbooks on a regular basis, employers can proactively safeguard their company’s interests.

Importance of Employee Handbooks
Employee handbooks contain important information about the business, including general rules, expectations, and protocol. Employee handbooks establish acceptable behavior and defines unacceptable behavior. These important documents often explain the fundamental policies that the business employs. With clear policies in place, it is more likely that they will be followed. If rules are broken, there is a set plan in place to deal with these issues. If the company is sued, the written contents of the employee handbook may protect the business.

Employee handbooks must be carefully constructed, taking into consideration the company’s industry and other factors specific to the business. While setting out the expectations of the business, an employee handbook can often be most effective as a defensive tool against potential lawsuits from employees or others because it establishes that a particular rule or policy was in effect at the time of some specified event that led to the filing of a complaint. If the company followed its own policies and the employee was aware of these policies, there will be less of an argument in favor of the employee.

Importance of Updating Employee Handbooks
Laws are constantly changing and evolving. It is important that employee handbooks are updated periodically to account for these changes in the law. Additionally, employees must be updated about new policies and changes. In addition to providing employees with a copy of the handbook, employees should also sign an acknowledgement indicating that they received the handbook. It is often recommended that employee handbooks be updated at least on an annual basis. Having a professional periodically review relevant laws and regulations can ensure that only the most current information is included in the handbook. Additionally, reviewing the handbook for clarity can help remove ambiguous language. Like with the original receipt of the handbook, employees should be required to sign an acknowledgment indicating that they are aware of the changes and have received a copy of them.

Provisions Included in Employee Handbooks
Handbooks may contain a variety of different provisions based on the particular needs and considerations of the business. However, some common provisions that are incorporated into these handbooks include:

At-Will Statement
By having an employee handbook, the employer will not want to infer in any way that the handbook takes the employment relationship outside of the at-will framework. This provision may state very simply that an employee can be terminated at any point and for any reason. This statement can help shield the business from claims that the employee can only be terminated for cause.

Disciplinary Procedure
The employee handbook should specify a disciplinary policy. This policy may be progressive in nature, such as increasing the severity of discipline as repeated conduct occurs. By following these procedures closely, the business may be able to shield itself from claims of discrimination. Any disciplinary policy should also make it clear that egregious activity will result in immediate termination.

Attendance Policy
The handbook should also specify the attendance policy. The handbook may state that excessive absences may result in termination. At the same time, the handbook should take care to differentiate between regular absences and absences due to medical purposes to avoid violating any federal or state laws.

Overtime Policy
A policy regarding overtime may also be included in the employee handbook. Any policy should take care to comply with the Fair Labor Standards Act. There may be a requirement for managers to approve before overtime work is performed. To avoid legal liability, the time may be paid, but the employee may be disciplined.

Anti-Discrimination Policy
An anti-discrimination policy is an important component to an employee handbook. The employer may state that it has a zero-tolerance policy for harassment. This policy should outline the process that an employee should follow to report complaints of harassment. The policy may provide examples of harassment and outline the potential disciplinary measures that will be followed in the event of non-compliance.

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In a new effort to compete with Amazon’s delivery system, Walmart says it plans to have store employees on their way home from work deliver online orders to customers. While it may make business sense, it also raises a host of legal questions, says Justin Markel, a Houston labor and employment lawyer with Roberts Markel Weinberg Butler Hailey PC.

Markel’s comments on the matter were posted on the website of Androvett Legal Media & Marketing:

First is determining how much to pay the employees for this extra work. The deliveries will be considered non-exempt under the Fair Labor Standards Act, so the employees will be entitled to overtime if this extra drive time puts them over 40 hours in a workweek. But how can Walmart be sure as to how long the deliveries actually take? If employees are required to electronically check in when deliveries are made, that may create an incentive to take the scenic route to the customer’s home. If, on the other hand, Walmart requires them to have GPS trackers, state law privacy concerns might arise. What about the extra gas and maintenance costs? Walmart should consider paying employees extra to ensure that these out-of-pocket expenses don’t cause them to fall below minimum wage.

Then there are public safety issues. Walmart should look into the employees’ driving histories before asking them to make deliveries. According to news reports, Walmart will conduct background checks. That should be a comprehensive review. Criminal histories that might have been less relevant for certain non-interpersonal store jobs might be more relevant if an employee is sent to customers’ homes.

Even with safe drivers on the road, accidents will be all but inevitable. If an employee is in an accident on the way to a customer’s house, the employee will likely be considered acting in the scope of employment. That will likely lead to vicarious liability on Walmart’s part. To protect against risk of claims from injured victims, it would be advisable for Walmart to discuss its non-owned auto insurance coverages with its insurance brokers.

As Walmart tests this program, it will have to carefully navigate many legal issues. Time will tell whether the cost savings and efficiencies will outweigh the legal risks.

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Uber Technologies Inc. said it fired 20 employees and was improving management training following an investigation by a law firm into sexual harassment allegations and other claims at the ride-hailing company, according to a Reuters report.

The firings came after a report by law firm Perkins Coie, which Uber hired to look into claims of harassment, discrimination, bullying and other employee concerns, report Joseph Menn and Heather Somerville.

Perkins Coie investigated 215 staff complaints, taking action in 58 cases and no action on 100 more. Uber said 54 were related to discrimination, 47 related to sexual harassment, 45 to unprofessional behavior, 33 to bullying and 36 to other types of claims, according to the Reuters story.

Read the Reuters article.

Workplace investigations may be initiated after the employer is accused of wrongful conduct, such as permitting unlawful harassment or discrimination. While an employer may want to reach out to various employees including the alleged victim, doing so can negatively impact the ongoing workplace investigations, warns Natalie Lynch of Lynch Service Company.

Understanding the importance of objectivity while workplace investigations are underway may help the employer shield against potential liability, she advises.

In a post on the company’s website, she discusses the need for clear policies to be in place before any workplace investigation begins, how to respond to alleged misconduct, and the unique concerns that arise with text messages in the context of an investigation.

Read the article.

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The U.S. House of Representatives voted to pass a bill that Republicans have promoted since the Newt Gingrich era, one that would allow private-sector employees to exchange overtime pay for “compensatory time” off, electing to accrue extra hours off rather than extra pay in their wallets, The Washington Post reports. The bill passed 229 to 197, largely along party lines.

“Under the proposed changes, eligible employees — if their employer decides to offer the option — would be able to voluntarily choose to receive comp time they can bank and use at a future date in lieu of immediate overtime pay in their paychecks,” reporter Jena McGregor explains. “If they change their minds and want the pay after all, employees would have the option of ‘cashing out,’ with the employer required to pay the overtime within 30 days.

Some opponents of the legislation say they worry that employers will feel pressured to choose comp time.

Read the Washington Post article.

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Plano, Texas attorney Jason Van Dyke was all set to begin a new chapter of his legal career as an assistant district attorney in Victoria County. So he was startled to receive notice that the District Attorney’s office had rescinded its job offer with no explanation. Van Dyke speculates the reversal could be related to media coverage of a Twitter exchange he had involving a case he was working on in 2014. He has since filed suit seeking answers from Victoria County.

In a post on the website of Androvett Legal Media & Marketing, Rhonda Reddick quotes Dallas labor and employment attorney Leiza Dolghih of Godwin Bowman & Martinez, who says this is a cautionary tale for both employers and job-seekers.

The post continues:

“Many employers these days Google prospective hires and look them up on social media for any evidence of red flags that indicate that the applicant may be violent, unethical, unstable or simply have bad judgment. These behind-the-scenes, informal background checks often result in rejection, or even withdrawal, of a job offer,” she says.

While a Texas employer may reject a prospective candidate for a myriad of reasons, including social media activity, a prospective employee cannot be rejected on the basis of race, gender, religion, age or other protective categories – information that can often be gleaned from social media. If a candidate can show that a job rejection was based on information protected under employment law, there could be basis for a claim of discrimination.

“However, in this case, if the employer discovered what they considered unsavory comments, or possible evidence of poor judgment or lack of self-control, after offering Mr. Van Dyke a job, the withdrawal of that offer based on the newly discovered information, would be acceptable,” says Ms. Dolghih. “While everyone has the right to speak their mind freely, that speech may result in rather harsh consequences in terms of employment.”

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For the past two years, there’s been a new player in the world of employee whistleblower enforcement, writes Evan Gibbs for Above the Law.

In 2015, the Securities and Exchange Commission issued its first administrative order finding that a company violated SEC rules based on language in an employment agreement.

“In the first and only case of 2017, the SEC fined another company $340,000 because its standard severance agreement previously contained a provision in which employees waived recovery of incentive payments from the SEC,” Gibbs writes. “The company received the six-figure fine despite having removed the offending provision on its own in March 2016 as part of the company’s regular review process prior to being contacted by the SEC.third parties unless compelled to do so by law and after notice to the company.”

Read the article.

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Partners at the law firm Chadbourne & Parke, in an unusual public gesture, voted on Thursday to expel from its ranks a female partner who filed a gender discrimination and pay inequity lawsuit against the firm last year, according to a New York Times report.

Campbell argued her case before the partners of the firm, but in a poll of the partnership conducted by telephone, she cast the only vote against expulsion. About 70 partners voted to expel her from the firm, Chadbourne said in a statement.

“On Monday, a federal district judge in Manhattan rebuffed her effort to block the vote, which her lawyers argued was retaliation for her lawsuit, which seeks $100 million and claims that the firm paid female partners less than their male counterparts and denied them advancement opportunities,” reports Elizabeth Olson. “Two other female partners have joined the lawsuit since it was filed in August in Federal District Court in Manhattan.”

Read the NYT article.

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