LITTLER MENDELSON, P.C.
Compliance Training in
How to Protect Your Organization
on a Shrinking Budget
David N. Goldman, Esq.
Littler Learning Group (LLG)
Littler Mendelson, P.C.
San Francisco Office
1. How Our Turbulent Economy
Shapes Employment Law
2. Critical Employment Law
3. Protecting the Bottom Line
With Compliance Training
Risk Exposure in a Down Economy
The economy will shape
your risk profile in 2009.
Every 1.5% increase in
a ~21% increase in
Source: The Changing Nature of Employment
Discrimination Litigation, 43 Stan. Law. Rev.
The Unemployment Rate Soars
More than 1 year of straight
? – 4.4 million jobs lost since 2007.
8.5% is highest rate in 25 yrs.
– Up 3.8% in the past 15
– Rates often higher for
National rate could hit 9.4%+
or higher and remain high
Wage & Hour Settlements
Impact on Your Business
Every additional claim hits your budget hard:
– Average defense costs for single plaintiff
discrimination lawsuit can cost $250K+ through
Source: Littler Mendelson
Average Discrimination Jury Verdicts:
– Age: $250,500
– Sex-based: $200,000
– Disability: $217,000
– Race: $172,500
– Retaliation: $200,000
Employment Practice Liability:
Jury Awards Trends & Statistics, 2008 Ed.
Ending “Wage Theft”
• President Obama is committed
to pay equity and fairness.
• Key component of the economic stimulus
plan: fight “wage theft.”
• Obama increases DOL budget by $600M
for 2010; Wage and Hour enforcement
a key focus.
• Combined with key appointments
to lead the charge of defending
• Hilda Solis: Head of the Department
Lilly Ledbetter Fair Pay Act – 1/09
“It’s fitting that with the very
first bill I sign — the Lilly
Ledbetter Fair Pay Act —
we are upholding
one of the nation’s first
principles: that we are all
created equal and each
deserve a chance to
pursue our own version
Jan 2009: Obama Comments at Signing Ceremony
Advancing Equal Pay
• Reverses 2007
U.S. Supreme Court
• Reinstates the
resetting the statute
of limitations for
filing a wage claim
each time the
gets a paycheck.
Major Legislative Action
– (ADAAA) Americans with
Disabilities Amendments Act
– (GINA) Genetic Information
– (FMLA) Family Medical Leave
– (ENDA) Employment Non-
– (EFCA) Employee Free Choice
Act – or something similar
• The ADA Amendments Act of 2008:
– Effective Jan. 1, 2009.
• Most significant changes:
– Disability to be interpreted broadly.
– Most mitigating measures cannot be considered.
– Expansion of who is perceived/regarded
– Major Life Activities expanded.
• “EEOC Getting More Aggressive in Pursuing
Disability Claims” National Law Journal
• Trend Watch:
– Increased litigation – with cases tougher to
– Age/Disability cases.
Nondiscrimination Act (GINA)
Title II of GINA (effective Nov.
2009) is most relevant for
– Cannot discriminate against someone
on basis of genetic information.
– Cannot intentionally acquire genetic
information except under specific
– Imposes very strict confidentiality
protections for genetic information,
which can be revealed only when
permitted by statute.
– Prohibits retaliation.
The New FMLA Regulations
The regulations are too extensive
to discuss today, but include:
• Changes to both general
and specific employer notice
• Changes to employee notice
• New guidance/rights relating
to managing intermittent leave.
• Clarification on denying leave.
• New forms.
Most recently passed by
House of Representatives
in November 2007.
– This version applied
only to sexual orientation.
– Gender identity was removed.
Expect to see it re-
introduced in 2009.
Sex Orientation & Gender Identity
Protections are Expanding
Could Be on Its Way
Employment Non-Discrimination Act
of 2009 (H.R. 2981), a bill that would create
comprehensive employment anti-discrimination
protections for individuals based on their
sexual orientation or gender identity was
introduced in the House on June 28, 2009
Under the Spotlight
An employee accused of harassment was fired by the employer after
According to the alleged harasser, his employer made minimal, if any,
efforts to verify the accusations against him.
His supervisor stated: "I really don't have any choice. Michelle [the
alleged victim of harassment] knows a lot of attorneys; I'm afraid she'll
sue me. And besides you probably did what she said you did because
you're male and nobody would believe you anyway."
The alleged harasser sued under Title VII, arguing that his supervisor's
statement was evidence that impermissible "sex stereotyping" (i.e. that
men have a propensity to engage in sexual harassment) played a role
in the decision to terminate his employment.
And the court allowed the claim to go forward!
Sassaman v. Gamache (2ND Cir 2009)
EEO Claims Continue to Evolve
Expanded definition of retaliation
(USSC - Jan 2009).
Religion & National Origin:
Pregnancy Discrimination, Family
Responsibility Discrimination (FRD).
The Employee Free Choice Act
In its original form:
– Eliminates secret-ballot elections.
Unions can use “card check” process –
– Arbitrators have power to impose
contract terms (1st contracts) if employer
and union unable to agree.
03/09: EFCA reintroduced.
– 03/09: Obama tells AFL-CIO it will pass,
and he supports it.
Passage in current form is not assured.
Original support is wavering.
03/25/09: New compromise versions
being floated, including the “Third Way”
The Law of Training – EEO Rules
There are many types of
compliance training – all of
which can add value to your
EEO / anti-discrimination
training is the only true
mandatory training subject that
impacts all employers, across
all industries, and is most
critical during a downturn.
The Law of Training
Training may be legally mandated.
Training may be necessary to
establish affirmative defenses.
Training makes good business
– Reduces mistakes and errors.
– The best policies are useless if
employees don’t understand them.
– Training gives your employees the tools
they need to become compliance allies.
California Mandatory Training –
Requires employers who do business in
California, and who have more than 50
employees, to provide 2 hours of high quality,
“interactive” harassment training to all
Every 2 years; 2009 is a “re-train” year.
Not just sexual harassment.
No cap on penalties.
Benchmark training law. AB 1825’s detailed
and rigorous regulations are influencing
compliance training across
U.S. Supreme Court
Mandatory Training Guidelines
Faragher and Ellerth (1998); Kolstad (1999)
• Train all employees on harassment
• Train all managers on discrimination
• Distributing policies is not training.
• Evidence of training may provide:
• Defense to liability.
• Defense to punitive damages.
And More Federal Guidelines…
1999 EEOC Guidelines specifically direct that employers
train employees and managers on harassment prevention.
EEOC consent decrees routinely mandate periodic
The Impact of a
“[L]eaving managers in ignorance of
the basic features of [employment]
laws is an ‘extraordinary mistake’
for a company to make, and a jury
can find that such an extraordinary
mistake amounts to reckless
Mathis v. Phillips Chevrolet, Inc.,
7th Cir. 10/15/01
Harassment Training is Not Enough
Harassment training DOES NOT protect
you if you’re sued for a different form of
discrimination – like race.
You must train on both harassment and
You must cover all protected classes:
You must cover new legal developments –
Policies are Not Training
U.S. Ct. denied review on
Employee claimed he had
been denied a reasonable
Alleged that managers did not
handle his request properly.
Jury agreed and awarded
– $8,000 in compensatory damages.
– $100,000 in punitive damages.
Bad (Uneducated) Managers
Good/fair managers are less likely to
be sued. And if sued, less likely to
be subject to punitive damages.
Survey of unemployed people who
had been terminated found that:
– Only 4% of those who thought
termination was fair sued.
– While 90% who felt mistreated either
sued or considered it.
Source: Dr. Joni Johnston, Why Jurors Fire
Back During Wrongful Termination
Lawsuits, Nov. 24, 2003
Training Pays Off
Preventing even one claim a year
pays for your training.
– Independent ROI study conducted by
Littler client: Basic EEO / HR training
tied to annual hard cost savings of
Training decreases the settlement
value of tough cases.
Training can help an organization
avoid/reduce a punitive damage
The Power of Training
8th Circuit Court of Appeals held
that punitive damage award was
not appropriate because the
employer demonstrated good
faith, which included requiring
supervisors to go through
Dominic v. DeVilbiss Air Power Co.,
8th Cir. No. 06-3236 (July 20, 2007)
Under the Spotlight
“Whoever conducts the investigation
should be well trained in the skills that
are required for interviewing witnesses
and evaluating credibility.”
(Equal Employment Opportunity Commission,
Enforcement Guidance: Vicarious Employer
Liability for Unlawful Harassment by
Choosing Not to Train
Bains v. ARCO Prods. Co., 405 F.3d 764
(9th Cir., 2005). Plaintiffs were originally
awarded $1 in compensatory damages and
$5 million in punitive damages for failing to
train on harassment.
Swinton v. Potomac Corporation., 270 F.3d
794 (9th Cir., 2001). Lack of manager training
justified a punitive damage award of $1 million
in a single plaintiff case. Having a policy alone
is not sufficient.
Godinet v. Management and Training Corp.,
2003 C10 16 (USCA10, 2003). Punitive
damage awarded based in large part on failure
Can Save You Millions
DOL: 70% + of employers are out
of compliance with Wage and Hour
Virtually every organization has a
target on its back.
The only way to limit exposure is:
– Get it right from the start.
– Build a good faith defense that
can limit liquidated (double) damages and
3rd year back wages for willful violations.
– Wage and hour training helps you