MMC, INC. E-Newsletter Volume V, Issue No. 1

January 2009 

Auld Langs Syne (Translation: To The Good Old Days)?

For many, 2008 was a dynamic year filled with change: professionally and financially. From the introduction of ‘new’ politics, unpredictable weather, the declaration of an “economic downturn,” and a year filled with business uncertainty, 2008 will undoubtedly be remembered as a challenging year.  Nonetheless, many businesses confronted obstacles of 2008 and ‘rose to the occasion’ by adopting winning business strategies which should prove key to assuring long-term success. 

It is in the American tradition of singing “Auld Langs Syne” or “To The Good Old Days” as the New Year approaches.  However, for many, 2009 will signal a welcome anticipation to new and innovative ways to approach business.  Hoping all of our E-Newsletter subscribers a very happy and prosperous 2009, we at MMC welcome the opportunity to introduce our you to management approaches designed to build enduring/recession proof strength.  On behalf of everyone at MMC, we wish all a Happy New Year!

In this issue

• Staff Reductions: The Last Resort (Part 2)
• Conducting an Official Internal Investigation (Part 2)
• Changes in Federal Law: Leaves of Absence
• The Year In Review: Labor & Employment Law Update 2009

Staff Reductions: The Last Resort (Part 2)

Written by: Michele O'Donnell, M.S. Human Resources Management

In follow up to our December 2008 article, this second installment of our What To Do During An Economic Downturn article reviews best practices for when employee lay-offs are unavoidable.

Legal commentators speculate that 2009 will see an increase in litigation arising out of reductions in force (“RIF”) cases. Generally, this is because RIF cases involve plaintiffs who are often more sympathetic than other employment law litigants.

The key to limiting liability associated with RIF cases is planning. Planning which employees will be impacted by a layoff should be managed carefully and not rushed, even when top management is demanding immediate action.  A timeline with realistic expectations should be developed and followed closely.

Also, employers should avoid viewing a RIF as the opportunity to get rid of the “bad apples” or poor performers. Employers who do decide to lay-off employees based on poor performance, should do so only if they have documented issues beforehand.  In other words, an employer’s failure to document performance issues and/or efforts to give “poor performing” employees satisfactory written performance reviews or salary increases risk exposing their companies to wrongful termination, discrimination, and retaliation suits.

There are a number of concerns that should be weighed prior to reducing one’s labor force.  A few of these concerns have been highlighted below.

• Worker Adjustment and Retraining Notification Act (WARN) (Federal): Requires employees with 100 employees or more to provide 60 days notice in the case of a mass layoff.
  • California’s adoption of the WARN requires 60 days notice for employers with 75 or more employees.
• Older Worker’s Protection Act (OWBPA): requires special language and timelines when presenting an employee who is 40 years of age or older with a severance and release agreement.
• Federal and State anti-discrimination and anti-retaliation regulations.
• Federal and State wage & hour and final pay regulations.
• California’s adoption of the WARN requires 60 days notice for employers with 75 or more employees.

Due to the complicated nature and maze of regulations, employers should work closely with human resources professionals like those at MMC.  If you have questions regarding your lay-off plan, do not hesitate to call the Labor & Employment Law Department at MMC at (800) 899-MMCI (6624).

Conducting an Official Internal Investigation (Part 2)

Written by: Selena Rojhani Dallal, Esq.

Trying to identify unscrupulous activity in the workplace can pose challenges to an organization. In Part One of this series, we discussed general guidelines for conducting an internal investigation. This second installment demonstrates some of the step-by-step efforts that should be taken for more complex investigations of employee wrong doing.

• Start by reviewing any physical evidence, such as documents (electronic and paper) and equipment which may help to uncover what scheme was undertaken and clearly point a finger to the suspected employee(s) responsible. 
• Make sure to review company policies and handbooks, and any other written background information to remind yourself of workplace rules stating what investigations will entail, and also about what are the duties and tasks assigned to suspected employees to clearly define what work scope has been exceeded. 
• Make a list of potential witnesses, and the order in which each should be interviewed.  Make sure to consider any potential victims, third party witnesses, managers and supervisors.  Also, the alleged wrongdoer(s) should be included on your list of interviewees because you will want to hear directly from them what their side of the story is--- you do not want to make a rush judgment. 
• Conduct the interviews in an entirely private environment.  Under most circumstances, you will want to have an impartial person witness interviews.
• Document each interview.  Include the date, time, location and persons present.  Take careful notes and have each witness sign the notes, if possible.
• Before conducting any interviews, write down your introductory remarks, including the following information.
  • Announce the seriousness and general purpose of the investigation without revealing any details that may color the witnesses’ responses. 
  • Ask that each witness keep the nature and contents of your discussions confidential. 
  • Let each witness know that participation in the interview will not result in retaliation.
  • Last, but not least, let the witness know that you need his full, truthful cooperation. 
• After your preliminary statements, start with general statements about wrongdoings in the office.  Enable the witness to become comfortable so they feel safe speaking honestly and allow them to speak freely with you.  Listen carefully and pay attention to the witness’s demeanor and body language (avoid phone interviews).  Allow the witness to draw pictures or re-enact the scene. Consider questions which clarify:
  • Who, or with who
  • What
  • When
  • Where
  • How much
  • How often
  • Was anyone else present, or were there any other witnesses …
• Prepare a written, uniform closing statement thanking the interviewee.
  • Ask for the witness to sign a statement attesting to what he or she has disclosed during the interview.  You can review your notes with the witness to verify the facts and give the witness the opportunity to make any corrections, if necessary.
  • Ask all interviewed what they would like to see result from the investigation.
  • Remind the witness that everything that transpires should remain confidential.
• After the investigator has conducted all interviews and collected all documents, it is critical for the investigator to review the evidence and write a report that accounts for everything that occurred.  The following, along with any other relevant information, should be included in that report:
  • A chronology of events.
  • What started the investigation?
  • Immediate actions that were taken (before the official investigation began).
  • Allegations that were made, and against whom they were made.
  • Any background information, including workplace policies and protocol (how was the investigation conducted).
  • Disclosures of evidence, if any, that was gathered and that the report is based on; attach evidence if possible.
  • Factual conclusions based on facts which majority of witnessed agreed on and facts for which witnessed gave varying versions.
  • A recommendation and any thoughts regarding the credibility of each witness.
  • The investigator’s signature and date of report.

As always, MMC is here to help and step in to investigate matters of suspected wrongdoing.  However, in the event your workplace is unable to coordinate outside assistance beforehand, the steps above should prove fruitful for positioning your organization to make adverse employment decisions and/or prosecute employees who are engaged in dishonest acts.  For questions or help with matters like these, do not hesitate to call the Labor & Employment Law Department at (800) 899-MMCI (6624).

Changes in Federal Law: Leaves of Absence

Written by: Selena Rojhani Dallal, Esq.

In the past year, amendments have been made to the Family and Medical Leave Act of 1993 (FMLA).  Based on guidance from employers, court cases, and recommendations from the U.S. Department of Labor, Congress has adopted amendments intended to clarify and update existing law.  The Final Rules for how amendments are to be adopted by employers has been summarized, in part, below.

• For eligibility, “serious health conditions” are better defined and are closely tied to consecutive days off from work, plus a minimum of visits to health care providers within certain time constraints.
• “Light duty” work may no longer count against an employee’s FMLA leave entitlement; even if an employee is voluntarily performing a light duty assignment.
• Employees may voluntarily settle or release their FMLA claims without court or DOL approval. However, an employee may not waive his or her FMLA rights in advance.
• Regarding medical certifications, employer representatives contacting the health care provider must be a health care provider, human resource professional, a leave administrator, or a management official, but in no case may it be the employee’s “direct supervisor.”  And employers may not ask health care providers for additional information beyond that required by the certification form.  An employee is not required to permit communication between his/her doctor but an employer may deny leave for such failure to consent.
• An employer may deny a “perfect attendance” award to an employee who does not have perfect attendance because she took an FMLA leave, as long as other non-FMLA leaves are treated similarly.
• Unforeseeable leave requires employees to follow the employer’s usual and customary call-in procedures for reporting unscheduled absences to the extent possible.
• Employers may require that a fitness-for-duty certification specifically addresses whether an employee who took leave is able to perform the essential functions of the employee’s job; where reasonable job safety concerns exist, an employer may require a fitness-for-duty certification even before an employee may return from intermittent leave.
• An employee may elect, or an employer may require that the employee substitute any of the accrued paid vacation, personal, family, or medical or sick leave for any part of the leave period.  However, the “substitution of paid leave” must be applied consistent with the employers leave policy and not treated differently for FMLA purposes.

Two Additional Qualifying Leave Events:

• The Military Caregiver Leave, which took effect on January 28, 2008, permits an employee who is a spouse, son, daughter, parent, or next of kin (nearest blood relative) of a covered service member to take a total of 26 workweeks of leave in a single 12-month period.  The service member must be undergoing medical treatment, recuperation, or therapy (or other outpatient status, or on temporary disability retirement) for a serious injury or illness incurred in the line of duty. 
• The second new leave allows an employee to take up to 12 weeks of leave to tend to “any qualifying exigency” arising from a spouse, parent or child’s actual or impending active military service.  “Qualifying exigencies” for leave include short-notice deployment; military events; childcare/schooling activities; counseling; rest and recuperation and other post-deployment activities. The effective date of this leave is unclear, however, employers with an employee in need of such leave are strongly encouraged to consider making (unpaid) time off available under this qualifier.

It’s always best to assure members of your management team are aware of FMLA rights and how to identify eligibility as they are often the first to learn about an employee’s health care status and need for time off.  MMC clients can anticipate receiving notices of changes to post in the upcoming year.  And of course all of our Client E-News subscribers should feel free to call MMC’s Labor & Employment Law Department with any questions regarding FMLA leave at (800) 899-MMCI (6624).

The Year In Review: Labor & Employment Law Update 2009

Written by: Crystal M. O'Brien, Esq. 

As a preview to MMC’s Annual Labor & Employment Law Update Seminars, we take this opportunity to highlight some changes to Labor & Employment Law below and include helpful internet links for those responsible for managing and supervising to reference throughout the new year. 

WAGE & HOUR CHANGES

• Overtime/EE Classification.  Case law continues to mold and shape what employers must do to comply with current state and federal laws regarding fair pay standards. 
  • How to comply with overtime, rest and meal periods continued to be in the spotlight for legal cases.  What was often times key for clarifying what an employer’s responsibilities were well written workplace policies, and employer practice for providing opportunities for and permitting employees to take duty-free time off during the workday for lunch and rest periods.  (See Brinker Restaurant Corp. v. Superior Court of San Diego)
  • Further, the courts provided good news for employers and advised that employers need not ‘police’ the workplace in order to assure meal periods are taken. (See Brinkley v. Public Storage, Inc)
  • Multi-state employers, on the other hand, should be very careful to observe state laws controlling who is entitled to rest breaks and overtime – even if the employee does not reside in a particular state (such as California) visiting that state can invoke a legal obligation to comply with local wage and hour laws. (See Sullivan v. Oracle Corporation)
• Minimum Wage.  Federal minimum wage increased to $6.55 on July 1, 2008 and on July 1, 2009 will increase to $7.25.  (See Fair Labor Standards Act)
• Computer Professionals.  Computer professionals earning at least $75,000/year are exempt from overtime (rest and meal period as well) laws in California. (See California Department of Industrial Regulations Memorandum)

EMPLOYMENT LAW CHANGES

• Criminal Arrests. Employers should stray away from applications which ask for the disclosure of certain criminal arrests/detentions which don’t result in convictions. (See Starbucks v. Superior Court)
• Fair Credit Reporting Act. An issue of growing concern in background checks, employers seeking credit reports for applicant background inquiries will need to comply with stricter guidelines of the Fair Credit Reporting Act, namely advising applicants/employees of the extent to which you are performing certain credit checks. (See here for more details.)
• Family Medical Leave Act – Changes Effective 1/1/09
  • Along with expanded eligibility rules, employers cannot force employees to use paid time off benefits while out on FMLA eligible leaves.
  • Also, employees are not required to articulate they want a “FMLA” leave, employers have the duty to identify what qualifies as protected leave. (See FMLA Article above and Final 2009 Regulations)
• ADA Protections Expanded
  • Identifying who is considered “disabled” now more complex. Bodily function impairments and disability from engaging in a broader circle of  “major life activities” are to be considered and mitigating measures such as wrist harnesses and glasses will not lessen workplace protections for employees regarded as ‘disabled’. (See EEOC Guidelines re ADA Changes)
• ADEA Burden Shifting
  • Employer has duty to prove policies which appear neutral but result in a workplace disparity to a certain class or group of employees.  No longer does the lion’s share of proving the plaintiff’s case rest with the plaintiff. (See Meacham v. Knolls Atomic Power Laboratory)
  • Employees may not pile on evidence of employer discrimination by finding other employees from unrelated departments/branches/locations who also have workplace beefs. (See Sprint v. Mendelsohn)
  • Employees filing formal charges and mere intake questionnaires lodging complaints of age discrimination with the EEOC have met their obligation for first bringing administrative claims prior to filing civil actions. (See Federal Express v. Holowecki)
• Retaliation
  • Section 1981 Retaliation Claims: Longer Statute of Limitations for federal  claims alleging workplace discrimination. (See CBOCS West, Inc. v. Humphries)
  • ADEA interpreted as permitting retaliation claims. Employees who bring claims of age discrimination and then are subjected to retaliation for exercising this right are also protected--- even though the statute of the Age Discrimination in Employment Act does not specifically permit such. (See Gomez-Perez v. Potter)