Labor and Employment Seminar


Published on

On April 25, 2013, Ward and Smith, P.A. held a Labor and Employment Seminar at the Crowne Plaza in Asheville, North Carolina. We are pleased to share the PowerPoint presentation from the event. The topics presented were: Criminal Background Checks, Wage and Hour Issues, Social Media, FMLA ADA and REDA Issues, Affordable Care Act, and Termination and Unemployment Claims

Published in: Career, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Labor and Employment Seminar

  1. 1. Selecting Quality EmployeesCredit and Criminal Background Checks© 2013 WARD AND SMITH, P.A.Rendi L. Mann-StadtWard and Smith, P.A.82 Patton Avenue, Suite 300 (28801)Post Office Box 2020Asheville, NC 28802-2020P: 828.348.6016F: 828.348.6077E:
  2. 2. More Than Just Guessing2
  3. 3. • Criminal Background• Credit check• References• Internet3Pre-Employment Background Checks
  4. 4. • Federal Fair Credit Reporting Act ("FCRA") requires:– Signed, separate release– If deny hiring, promoting, etc. based on creditreport, employer must provide a copy of thereport and brochure of rights and advise theapplicant know of his/her right to challenge thereport under the FCRA• Reasonably necessary for job duties or could beopen to claim of discrimination4Credit Check
  5. 5. NOT "IF" BUT "HOW"Its Not What You Learn, But How You Use It• EEOC does not dictate that an employer cannotuse arrest, conviction, or other criminal recordsin hiring and promotional decisions; but• Avoid risk and claims of discriminatory treatmentwith careful and systematic checks5Criminal Background Checks
  6. 6. EEOC Guidance• Based on legal developments and studiesover the past 20 years.• Studies also show that incarceration andarrest rates are particularly high forAfrican-American and Hispanic males.• Criminal history information is moreavailable but may be inaccurate orincomplete.6
  7. 7. TITLE VII• Title VII does not prohibit employers fromobtaining criminal background informationabout a candidate or employee. However,certain uses of criminal information, suchas a blanket policy and practice ofexcluding applicants or disqualifyingemployees based solely upon informationindicating an arrest record, can result in acharge of discrimination.7
  8. 8. Questions to Avoid8• "Have you ever been arrested?"• "Have you ever been charged with a crime?"• "Other than a traffic ticket, have you been convicted of acrime?"
  9. 9. Use of Criminal Background ScreeningMinimize risk in selection or promotion ofemployees bya) Distinguishing between decisions based onarrest versus conviction; andb) Making sure that the screening criteria arejob-related and consistent with theemployers actual business necessity.c) Avoid disparate treatmentd) Avoid disparate impact9
  10. 10. Job-Related and Consistent withBusiness NecessityEmployer should operate "to effectively linkspecific criminal conduct, and its dangers,with the risks inherent in the duties of aparticular position." An employer shouldattempt to use the information for exclusiononly where there is a tight nexus betweenthe criminal conduct and the position.10
  11. 11. Considerations1. The nature and gravity of the offense orconduct;2. The time that has passed since theoffense, conduct, or completion of thesentence; and,3. The nature of the job held or sought.11
  12. 12. Other Screening• Statutory requirements• References• E-verify• Drug testing• Physical exam12
  13. 13. Wage and Hour Issues© 2013 WARD AND SMITH, P.A.Grant B. OsborneWard and Smith, P.A.82 Patton Avenue, Suite 300 (28801)Post Office Box 2020Asheville, NC 28802-2020P: 828.348.6017F: 828.348.6077E:
  14. 14. I. "Hes an independent contractor." … Not.The Fair Labor Standards Act of 1938 ("FLSA") does notcover every kind of paid worker.The FLSA, for example, does not cover "independentcontractors."Independent contractors, as a rule, are evaluated based onresults of their work rather than on their day-to-dayoperations.14What You Dont Know Can Hurt You: The Top Five (or so) Best Waysto Avoid Clumsy Violations of Federal and State Wage and Hour Laws
  15. 15. What is a bona fide "independent contractor?"Traditional legal standard: "economic reality test." One federal Court ofAppeals has described the test in this way:"The focal point in deciding whether an individual is an employee iswhether the individual is economically dependent on the business towhich he renders service or is, as a matter of economic fact, inbusiness for himself. In applying this test, the courts generally focuson five factors: 1) the degree of control exerted by the allegedemployer over the worker; 2) the workers opportunity for profit or loss;3) the workers investment in the business; 4) the permanence of theworking relationship; and 5) the degree of skill required to perform thework."Note: Subjective opinions dont matter if facts show that worker is economicallydependent upon the employer.15What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  16. 16. Courts sometimes apply, instead of "economic reality test," a "right to control" test,which hinges upon six (6) factors:1. Who exercises what degree of control over the manner in which the work isto be performed?2. What is the so-called contractors opportunity for profit or loss,depending on the amount of his or her investment, skills, and management?3. Who has made what type of investment in materials or equipment?4. Does the service or work require special skill?16What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  17. 17. 5. What is the degree of permanence of the working relationship?6. Is the workers service an integral part of the employers business?Has been applied in our federal jurisdiction by federal appellate courtwhere court held that members of Saudi princes security detail werenot independent contractors for FLSA purposes. Schultz v. CapitalInternational Security Inc., 460 F.3d 595 (4th Cir. 2006).Why?A: 1. Prince and security firm, as joint employers, exercised nearlycomplete control over how workers did their jobs;2. Workers had no opportunity for profit or loss that depended onmanagerial skills, as they were paid set rate per shift;3. Firm and prince supplied all necessary equipment for workers,including cell phones, cars, firearms, and cameras; and4. Prince employed some workers for several years.17What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  18. 18. II. Exemptions under FLSA: "We call it a "salary." Isnt that enough?"The "salary basis" test:For an employee to be exempt from the minimum wage and overtimeprovisions of the FLSA, the employees duties must match those of astatutory exemption and the employee must be paid on a "salary basis."Exempt employees (with some exceptions, such as physicians, lawyers,teachers, and certain employees in computer-related occupations) may not bepaid by the hour.If salary basis requirement is not satisfied and no exception applies, theemployee will not meet the requirements of the desired exemption and mayhave to be paid overtime pay, regardless of whether employees totalcompensation equals or exceeds $455 per week.18What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  19. 19. Basic rule: Exempt employees salary cannot be reduced because of variations inthe quality or quantity of work performed. Therefore, exempt employee must receivehis or her full salary for any week in which he or she performs any work, without regard tothe number of days or hours worked, unless an exception applies.Exceptions??They are: 1. Employee is absent from work for one or more full days for personalreasons, other than sickness or disability;2. Employee is absent for one or more full days because of sickness ordisability (or work-related accident), and deduction from pay ismade in accordance with a bona fide plan, policy, or practice of providingcompensation for loss of salary resulting from sickness and disability;3. Employer imposes penalties in good faith for infractions of safety rules ofmajor significance;19What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  20. 20. 4. Employer imposes, in good faith, unpaid disciplinary suspensions of oneor more full days for infractions of work-place conduct rules;5. Employee takes a leave of absence in accordance with the FLMA; or6. Employee is absent for the entire work week.20What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  21. 21. III. "You just call out my name, and you know, wherever I am, Ill comerunning. . ." (C. King 1971):"On-call" time under the FLSA:Time spent by employees, usually off the working premises, in theirown pursuits where the employee must remain available to be calledback into work on short notice if needed. The FLSA requiresemployers to compensate workers for on-call time when such time isspent "predominately for the employers benefit."21What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  22. 22. According to U.S. DOL regulations (way before ubiquitous cell phones,apparently):"An employee who is required to remain on call on the employers premises orso close thereto that he cannot use the time effectively for his own purposes isworking while "on call." An employee who is not required to remain on theemployers premises but is merely required to leave word at his home or withcompany officials where he may be reached is not working while on call." 29CFR §785.17.Whether on-call time is "compensable" is always fact-specific, but certainfactors have long predominated, such as:22What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  23. 23. 1. The terms of the employment agreement, if any;2. Physical restrictions placed upon the employee while on call;3. The maximum period of time allowed between the time that the employee wascalled and the time that he or she is required to report back to work (i.e.,"response time");4. The frequency of calls received during on-call periods;5. Actual uses of on-call time by the employee; and6. The disciplinary actions, if any, taken by the employer against employees whofail to respond to calls.23What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  24. 24. Underlying inquiry in most on-call pay disputes:The amount of freedom enjoyed by the employee while on call, andwhether this measure of freedom permitted the on-call time to beeffectively used by the employee for his or her own purposes.Example: Police officers assigned to a county airport wererequired to carry pagers that operated on a state-wide basis while offduty, and some of the officers were required to live within 30 miles ofthe airport. Court held that no compensation was required,because the officers were free to engage in their regular personalactivities, the actual calls were infrequent (i.e., 20 times in 3 years),and the officers off-duty time was not utilized predominately for theemployers benefit. (6th Cir. 2006.)24What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  25. 25. IV. "You cant touch this!": Deductions from wages under North Carolina Wage andHour Act.Controlled by North Carolina statutes and related regulations.When may an employer withhold earned wages from an employee?1. When the employer is required or empowered to do so by federal or statelaw (e.g., wage garnishments ordered by the IRS or child supportgarnishments ordered by state court).2. When the amount or rate of the proposed deduction is known and agreedupon in advance, in which case the employer must obtain writtenauthorization from the employee that meets statutory requirements (e.g.,if deduction is for the convenience of the employee, such as savings plans,union or club dues and uniform rental), the employee must be given a"reasonable opportunity to withdraw the authorization."); and25What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  26. 26. 3. When the amount of the proposed deduction is not known and agreedupon in advance, the employer must still obtain written authorization fromthe employee that meets statutory requirements, which include (in part)written notice of the right to withdraw the authorization and that theemployee be given a "reasonable opportunity to withdraw the authorizationin writing."Fundamental requirements:1. In non-overtime work weeks, the employer may reduce wages to theminimum wage level;2. In overtime work weeks, the employer may reduce wages to the minimumwage level for non-overtime hours; and3. "No reductions may be made to overtime wages owed." N.C. Gen. Stat.§95-25.8(b).26What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  27. 27. "May I make deductions for costs of personal protective equipment that the employee wears only onthe job?"NO.: Regulations "[require] …. the employer to provide, at no cost to the employee, all personalprotective equipment which the employee does not wear off the jobsite for use off the job."What if the employee is stealing from me?"In addition to complying with" the written authorization requirements set forth above, "anemployer may withhold or divert a portion of an employees wages for cash shortages, inventoryshortages, or loss or damage to an employers property after giving the employee written notice of theamount to be deducted seven days prior to the payday on which the deduction is to be made, exceptthat when a separation occurs the seven-day notice is not required."Note: "If criminal process has issued against an employee, an employee has been indicted, or anemployee has been arrested…for a charge incident to a cash shortage, inventory shortage, or damageto an employers property, an employer may withhold or divert a portion of the employees wages inorder to recoup the amount of the cash shortage, inventory shortage, or damage to the employersproperty, without the written authorization required" by the Wage and Hour Act.27What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  28. 28. V. "This guy has been a no call, no show for three days. And, when hes here, hesleeps on the job, when hes not on Facebook. I need to fire him. Do I really have topay him his accrued vacation time?"Answer: Yes. Unless you dont."No employer is required to provide vacation pay plans for employees.However, if an employer provides these promised benefits for employees, theemployer shall give all vacation time off or payment in lieu of time off inaccordance with the company policy or practice. Employees shall benotified in accordance with [a designated statute]…of any policy or practice[that] … requires or results in loss of forfeiture of vacation time or pay.Employees not so notified or not subject to such laws or forfeiture." N.C. Gen.Stat. §95 25.12.If an employer wants the right to withhold accrued vacation pay from anemployee who has been discharged for cause, such a forfeiture had better beprescribed in a written and disseminated vacation policy.28What You Dont Know Can Hurt You: The Top Five (or so) Best Ways toAvoid Clumsy Violations of Federal and State Wage and Hour Laws (cont.)
  29. 29. A Brave New World:Social Media Issues Affecting theWorkplace© 2013 WARD AND SMITH, P.A.Hayley R. WellsWard and Smith, P.A.82 Patton Avenue, Suite 300 (28801)Post Office Box 2020Asheville, NC 28802-2020P: 828.348.6018F: 828.348.6077E:
  30. 30. Current Legal Issues• Social Networking and the Hiring Process• Employer vs. Employee: Whose Rights AreStronger?– Traditional Employment-Related Claims– Claims under the National Labor RelationsAct• Protecting the Companys ConfidentialInformation, Image and Brand: How to CraftSocial Media Policies that Survive Scrutiny30
  31. 31. Using Social Media in theHiring Process• A recent online survey reports that 45% ofparticipating employers use socialnetworking sites to research candidates.• Benefits:– Efficient means to gather information– Gather information not on resume31
  32. 32. Your Applicant32
  33. 33. Risks to Using Social Media in theHiring Process• Once an employer reviews a candidates online profile, acourt will assume that it is are aware of the applicantsprotected characteristics that are part of his/her onlinepostings.– Race; Age; Disability; Religion; Pregnancy• The information, positive or negative, may be inaccurate.– Wrong individual– The information may not have been posted by theindividual33
  34. 34. Risks to Using Social Media in theHiring Process (cont.)• Potential violations of the Fair Credit ReportingAct ("FCRA")– FCRA requires that an applicant or employee give consentbefore an employer engages a "consumer reportingagency" to produce a "consumer report" on that individual.– FCRA requires that notice be given to an applicant oremployee when the information results in an adverseemployment action.– An employer that uses a third party to screen onlineactivity of job applicants may be subject to the FCRAsconsent and notification requirements.– The FCRA does not apply to employers that performonline screening.34
  35. 35. Develop Policies for UsingSocial Media in Hiring• Develop clear policies concerning the purposes for whichsocial media may be used and relied upon forinformation about job candidates.• Make sure that the policies are adhered to and enforcedconsistently.• Print or save screenshots if you find something thatcauses you to question a candidate’s candor,professionalism, or judgment.• Ensure that application materials, employee handbooks,etc., include the necessary permission forms andnotifications concerning the companys policies onscreening practices.35
  36. 36. The National Labor Relations Act("NLRA")• NLRA generally governs employersrelationships with unions, BUT portions ofthe Act apply to virtually ALL employers.• NLRA limits the way employers can reactto workers who engage in concertedactivity related to workplace issues.• Supervisors are not "employees" underthe NRLA and, generally, are not subjectto its protections.36
  37. 37. Basics of NLRA• National Labor Relations Act originally passed in 1935– Basic rights of employees under NLRA:• To form, or attempt to form, a union in theworkplace for collective bargaining• Join a union (even if union is unrecognized byemployer)• Assist union in organizing coworkers• Decertify union that has lost support of employees• To be fairly represented by a union37
  38. 38. Section 7"Employees shall have the right to self-organization, to form, join, or assist labororganizations, to bargain collectively throughrepresentatives of their own choosing, and toengage in other concerted activities for thepurpose of collective bargaining or othermutual aid or protection."38
  39. 39. Definition of "Concerted Activity"• "[A]n activity is concerted when anemployee acts with or on the authority ofother employees, and not solely by and onbehalf of the employee himself."– NLRB Assoc. General Counsel MemoOM 11-74 (quoting Meyers Industries, 268NLRB 493 (1984))– Note that not all concerted activity isprotected under NLRA.39
  40. 40. "For Other Mutual Aid or Protection"• Concerted activity under Section 7 is protected if itspurpose is connected to terms and conditions ofemployment.– This generally is not a difficult standard to meet.– Eastex, Inc. v. NLRB (1978): Supreme Court holdsthat distributing literature encouraging employees tovote against a constitutional amendment for right towork provision met standard because it sought toimprove all employees work conditions.40
  41. 41. Concerted Activities Under Section 7• When employee forms, joins, or aids aunion, he is by definition engaging inconcerted activity.• Employees in non-unionized workforcescan engage in concerted activity formutual aid and protection.41
  42. 42. The Water Cooler• The proverbial water cooler was themeeting place of the past for potentialprotected concerted activity.42
  43. 43. Social Medias Expansion ofConcerted Activity• Social media has given employees a newplatform to engage in concerted activity.• Under Section 7 of NLRA, such activity isgenerally protected, regardless of the sizeof the company.• Section 7 applies to non-unionizedworkforces.43
  44. 44. Impact of Social Media• Unlike the water cooler, employees use ofsocial media to discuss work issues easilycan reach thousands, even millions, ofpeople.• These people can include coworkers, butalso customers, vendors, governmentagencies, media, and others.44
  45. 45. Section 8(a)(1)• Makes it an unfair labor practice for anycovered employer to "interfere with,restrain, or coerce employees in theexercise of the rights guaranteed" bySection 7.45
  46. 46. National Labor Relations Board("NLRB") Guidance• The Acting General Counsel of the NLRBhas issued three lengthy reports regardingsocial media cases.– OM 11-74 (August 18, 2011) ("First Report")– OM 12-31 (January 24, 2012) ("SecondReport")– OM 12-59 (May 30, 2012) ("Third Report")46
  47. 47. NLRBs Definition of Social Media• From First Report: "Social media include variousonline technology tools that enable people toeasily via the internet share information andresources. These tools can encompass text,audio, video, images, podcasts, and othermultimedia communications."• First Report specifically mentions Facebook,Twitter, and YouTube.47
  48. 48. Losing Section 7 Rights• Under Atlantic Steel Co., 245 NLRB 814 (1979),employees can lose protection of Section 7 if theirlanguage is so abusive, vulgar, offensive, scurrilous, orinsubordinate.• NLRB considers four factors– Place of the discussion;– Subject matter of the discussion;– Nature of employees outburst; and– Whether outburst was provoked by employers unfairlabor practice.48
  49. 49. Gripes• Example:– An employee at a home improvement storewas reprimanded by her supervisor in front ofthe Regional Manager for not doing a taskshe was never asked to do.– During her break, she used her phone toupdate her Facebook status "with a commentthat consisted of an expletive and the name ofthe Employers store."49
  50. 50. Gripes (cont.)• Four people, including one coworker,"liked" her Facebook status.• Thirty minutes later, the employee postedonce more, stating that the company didnot appreciate its employees.– Several people commented on this post; noneof the employees coworkers did. She wasfriends with four coworkers.50
  51. 51. Gripes (cont.)• Employee was later fired for her Facebook posts.• NLRB found that the employee was not engaged inprotected concerted activity; instead she had expressedan "individual gripe."– First status update was mere frustration about an interaction withher supervisor. Employee had no particular audience in mind,and the post contained no language suggesting that she wascalling for group action. Furthermore, the comment did not growout of earlier group discussions or activity.– Interestingly, NLRB did not specifically analyze second post.Because no coworkers "liked" this post, and because this postalso did not spring from earlier discussions, it was not concerted.51
  52. 52. Tips For Addressing Section 7Discipline Issues• Familiarize supervisors with the companysobligations under Section 7. Make suresupervisors consult with senior HRemployees before taking action.• When disciplining employees for socialmedia postings, be cognizant of whetherthe posting represented a gripe or venting,or whether the individual was speaking onbehalf of herself and other employees.52
  53. 53. Tips For Addressing Section 7Discipline Issues (cont.)• Do not assume that employees use of profanity or othervulgar terms disqualifies her from protection underSection 7.– Focus instead on whether concerted activity ispresent.• Have legal counsel review policies and procedures forSection 7 compliance.• Consult legal counsel prior to terminating any employeerelated to social media postings.– This is very important, because the NLRBs guidance on thisissue has been in almost constant flux over the last two years.53
  54. 54. Social Media Policies• The NLRB Reports also addressed thelawfulness of employers social mediapolicies.• The NLRB consistently strikes downpolicies as overbroad if they can bereasonably construed to restrictemployees Section 7 activity.54
  55. 55. Policies Prohibiting"Disparaging Comments" Online• NLRB ruled that policy prohibiting employees from"making disparaging comments about the companythrough any media, including online blogs, otherelectronic media, or through the media" was overbroadbecause employees could reasonably construe it aslimiting Section 7 rights.– NLRB specifically mentioned that policy could be interpreted toapply to statements that employer was "not treating employeesfairly or paying them sufficiently."– NLRB also noted that there was not limiting language to clarifythat Section 7 rights were not affected.– Furthermore, NLRB found that employer violated Section 8(a)(1)because it fired employee for violating this overbroad policy.55
  56. 56. Use of Companys Name orTrademarks• NLRB has analyzed policies prohibitingemployees from using companys nameand/or trademarks, service marks, orcopyrights without prior approval.• While recognizing that companies haveproprietary interests in these materials, theNLRB found such prohibitions to be toobroad.56
  57. 57. Policies Regarding Accuracy Online• The Third Report analyzed a policyadmonishing employees to ensure that allof their online postings about the companywere "completely accurate and notmisleading."– Same policy warned employees: "When in doubtabout whether the information you are consideringsharing falls into [a prohibited category], DO NOTPOST." In that event, employees were encouraged toconsult with the companys PR or legal departments.57
  58. 58. Policies Regarding Accuracy Online (cont.)• NLRB struck down this policy asoverbroad.• One basis for doing so was policysadmonition that employees should consultwith company prior to posting.– "The Board has long held that any rule that requiresemployees to secure permission from an employer asa precondition to engaging in Section 7 activitiesviolates" the NLRA. Brunswick Corp., 282 NLRB 794,794-95 (1987).58
  59. 59. Online Tone and Content Rules• The Third Report also addressed a policywith the following general prohibitionsregarding its employees onlineinteractions:– "Adopt a friendly tone when engaging online."– "Dont pick fights."– Maintain a "professional tone" without making"objectionable or inflammatory" remarks.59
  60. 60. Online Tone and Content Rules (cont.)• NLRB struck this policy down as unlawful.– "Discussions about working conditions or unionismhave the potential to become just as heated orcontroversial as discussions about politics or religion."– No context or examples to clarify what was"objectionable or inflammatory."– Thus, employees reasonably could construe rule toprohibit "robust but protected discussions aboutworking conditions or unionism."60
  61. 61. Savings Clauses• Many social media policies will include asavings clause, through which thecompany tries to clarify that its policy is notintended to restrain employees rightsunder Section 7.61
  62. 62. Savings Clauses (cont.)• Examples:– "This Policy will not be construed or applied ina manner that improperly interferes withemployees rights under the National LaborRelations Act."– Companys "Social Media Policy will beadministered in compliance with applicablelaws and regulations (including Section 7 ofthe National Labor Relations Act)."62
  63. 63. Savings Clauses (cont.)• Example:– "This policy will not be interpreted or applied in a waythat would interfere with the rights of employees toself-organize, form, join, or assist labor organizations,to bargain collectively through representatives of theirown choosing, or to engage in other concertedactivities for the purpose of collective bargaining orother mutual aid or protection or to refrain fromengaging in such activities."63
  64. 64. Savings Clauses (cont.)• NLRB struck each of these savingsclauses down as unlawful.• In each case, it felt that the savingsclauses did not cure the otherwiseunlawful aspects of the rest of the policies.• Furthermore, it stressed that the savingsclauses did not "explain to a laypersonwhat the right to engage in concertedactivity entails."64
  65. 65. Prohibition of Harassment• In the Third Report, NLRB considered thefollowing policy:– "[A]ny harassment, bullying, discrimination, orretaliation that would not be permissible in theworkplace is not permissible between co-workersonline, even if it is done after hours, from home andon home computers. . ."– NLRB found this policy to be lawful, becauseemployer provided a list of "plainly egregiousconduct." Thus, the policy would not chill employeesSection 7 rights.65
  66. 66. Prohibition of Harassment (cont.)• Contrast the upheld policy from previous slide with thefollowing policy, which NLRB struck down:– "TREAT EVERYONE WITH RESPECT. Offensive,demeaning, abusive, or inappropriate remarks are asout of place online as they are offline, even if they areunintentional. We expect you to abide by the samestandards of behavior both in the workplace and inyour social media communications."• Unlike the harassment policy, this policy did not giveenough context for employees to determine what wasand was not "demeaning, abusive, or inappropriate."66
  67. 67. Posting on Behalf of Employer• NLRB has considered policies prohibitingemployees from giving impression thattheir online posts reflect the companysposition.– "No unauthorized postings: Users may not postanything on the Internet in the name of [Employer] orin a manner that could reasonably be attributed to[Employer] without prior written authorization from thePresident or the Presidents designated agent."67
  68. 68. Posting on Behalf of Employer (cont.)• NLRB found this policy to be lawful. Thisprovision could not be reasonably construed torestrain Section 7 activities, because it is limitedto official communications of the company.• NLRB also blessed a requirement thatemployees posting about their employmentincluded the disclaimer: "The postings on thissite are my own and do not represent[Employers] positions, strategies, or opinions."68
  69. 69. Wal-Mart Policy• Prohibits "inappropriate postings" including"discriminatory remarks, harassment, andthreats of violence or similar inappropriateconduct."• Tells employees that they "are more likely"to resolve disputes by speaking directly tocoworkers and using open door policythan by "posting complaints to a socialmedia outlet."69
  70. 70. Wal-Mart Policy (cont.)• Prohibits communications that "reasonablycould be viewed as malicious, obscene,threatening, or intimidating," as well as anythat "disparage" individuals (includingemployees) or that "might constituteharassment or bullying."• Prohibits disclosure of trade secrets andother confidential information.70
  71. 71. Wal-Mart Policy (cont.)• NLRB felt that there was enough contextin this policy to allow employees to knowthat their Section 7 rights were notaffected.• Many employers have criticized the NLRBon this point, because some of theprovisions in Wal-Marts policy are verysimilar to others previously held unlawfulby the NLRB.71
  72. 72. Tips For Drafting Social Media Policies• Use NLRB memos for a guide, but craftthe provisions to fit your companys needs.• Avoid references that violate Section 7 ontheir face.• Use examples that clarify what activitiesare prohibited, rather than relying ongeneral terms such as "inappropriate."• Be wary of vendors with "cookie cutter"handbooks.72
  73. 73. Tips For Drafting Social Media Policies (cont.)• Include a "savings provision" that explainsSection 7 rights in terms that laypeoplecan easily understand.• Avoid any application of the policy thatviolates Section 7.• Have policy blessed by an attorneyfamiliar with the NLRBs enforcement ofSection 7 in the social media context.73
  74. 74. FMLA, ADA, and REDA Issues© 2013 WARD AND SMITH, P.A.Grant B. OsborneWard and Smith, P.A.82 Patton Avenue, Suite 300 (28801)Post Office Box 2020Asheville, NC 28802-2020P: 828.348.6017F: 828.348.6077E:
  75. 75. I. Family and Medical Leave Act of 1993:Twelve (12) weeks of leave during a 12-month period?What 12 months?Qualified employees of covered employers may take up to 12 weeksof unpaid FMLA leave during any 12-month period (with the exceptionof "service member family" leave for "qualified exigencies" and the 26weeks of FMLA covered leave to care for a service member or veteranwho is injured or ill during active duty).How to measure the 12-month period?FMLA left it up to the Department of Labor to figure that out.75FMLA, ADA, and REDA Issues
  76. 76. The regulations offer four (4) options:1. The calendar year;2. Any fixed 12-month leave year, such as a fiscal year, or one startingon the employees "date of hire" anniversary date;3. The 12-month period measured forward from the date on whichthe employee first took FMLA leave; or4. A rolling 12-month period measured backward from the date onwhich the employee uses any FMLA leave.76FMLA, ADA, and REDA Issues (cont.)
  77. 77. The third and fourth options can be a little tricky because they are not fixed.Option number 3: This third alternative varies with the individual and changesevery time that the employee uses FMLA leave. The employee is entitled to 12weeks (or 26 weeks in some cases) of leave during a year that begins on thefirst day on which FMLA leave was taken. After completion of 12 months fromthat date, the next 12-month period begins the next time that FMLA leave isused. The cycle is repeated as FMLA leave is used. The leave year is tied tothe employees need for such leave.Example: Chris takes 12 weeks of FMLA leave on May 1, 2008. Her leave yearis established as May 1, 2008, through April 30, 2009. She does not needleave again until September 1, 2009. Her new leave year will be September 1,2009, through August 31, 2010, during which she is entitled to take up to 12weeks of FMLA leave if she qualifies. The leave year will change every timethat she takes FMLA leave during a 12-month period.77FMLA, ADA, and REDA Issues (cont.)
  78. 78. Option number 4: Eliminates the problem of stacking FMLA leave from one year to thenext. The 12-month leave period is measured backward from the date on which theemployee used FMLA leave. Every time that the employee takes FMLA leave, theremaining balance in the leave entitlement is equal to the portion of the 12-week leaveentitlement that was not used during the immediately preceding 12 months.Rolling period provides a snapshot of the preceding 12-month period that changes daily.On each day of the year, an eligible employees FMLA leave entitlement is determined bythe amount of leave that he or she used during the preceding 12 months. As each newday is added, one day from 12 months ago is eliminated.Note: An employee, to be entitled to FMLA leave, must have worked 1,250 hours duringthe last 12 months. The employer will, therefore, need to conduct a new 1,250-hour testlooking back at the 12 months preceding the date on which the employee begins theleave of absence. The employee qualifies for a new 12 week period of family medicalleave if she has worked 1,250 hours during the 12-month period in question and has notalready exhausted her FMLA leave for the year.78FMLA, ADA, and REDA Issues (cont.)
  79. 79. II. Americans With Disabilities Act of 1990:"Feeling just fine, thank you. You?": Permissible and impermissiblequestions under the ADA.The ADA prohibits employers from discriminating against qualifiedapplicants with disabilities by using job screening techniques thatwould eliminate such individuals from consideration. Employersshould therefore not ask job applicants about their health or requiremedical examinations or other tests that might reveal disabilitiesbefore a firm offer of employment has been made.79FMLA, ADA, and REDA Issues (cont.)
  80. 80. Questions to avoid:1. Have you ever had or been treated for any of the followingconditions or diseases?2. Have you been treated in the past three years for any conditions ordiseases and, if so, what were they?3. Have you ever been hospitalized? If so, for what condition?4. Have you ever been treated by a psychiatrist or psychologist? Ifso, what for?5. Is there any health-related reason that you may not be able toperform the job for which you are applying?80FMLA, ADA, and REDA Issues (cont.)
  81. 81. 6. How many days were you absent from work because of illness lastyear?7. Do you have any disabilities or impairments that may affect yourperformance in the position for which you are applying?8. Are you using prescribed drugs?9. Have you ever been treated for drug addiction or alcoholism?10. Have you ever filed for workers compensation insurance?81FMLA, ADA, and REDA Issues (cont.)
  82. 82. In contrast, permissible questions:1. What is your name?2. Can you fulfill the requirements of our attendance policy?3. Can you perform the essential tasks of this position with or withoutsome kind of accommodation?4. Describe or demonstrate how you would perform this function, withor without an accommodation. (May be asked of applicants whohave a known disability that might prevent them from performing ajob function.)82FMLA, ADA, and REDA Issues (cont.)
  83. 83. 5. Do you use unlawful drugs?6. Have you ever been arrested for driving under the influence?7. Do you have the required licenses and degrees to perform this job?8. Where are you from?83FMLA, ADA, and REDA Issues (cont.)
  84. 84. III. North Carolina Retaliatory Employment Discrimination Act:State statute adopted in 1991 that prohibits discrimination or "anyretaliatory action against an employee because the employee in goodfaith does or threatens to" take specified actions.Applies to all employers in North Carolina.Protects the right of every employee to "file a claim or complaint, initiateany inquiry, investigation, inspection, proceeding or other action, ortestifying or provide information to any person with respect to any of thefollowing":1. The Workers Compensation Act;2. The North Carolina Wage and Hour Act;84FMLA, ADA, and REDA Issues (cont.)
  85. 85. 3. The Occupational Safety and Health Act of North Carolina;4. The Mine Safety and Health Act of North Carolina;5. The N.C. statute pertaining to "discrimination against any personpossessing sickle cell trait or Hemoglobin C trait";6. The N.C. "National Guard Reemployment Rights" statute; or7. The N.C. statute pertaining to "discrimination against persons basedon genetic testing or genetic information."85FMLA, ADA, and REDA Issues (cont.)
  86. 86. Procedure:1. Employee may file a written complaint with N.C. Commissioner of Labor within180 days of alleged violation; Commissioner of Labor may investigatecomplaint.2. Commissioner "shall attempt to eliminate the alleged violation by informalmethods" ("conference, conciliation, and persuasion"). Supposed to makedetermination within 90 days of filing of complaint.3. Department of Labor typically will issue a "right-to-sue" letter that enablesemployee to file suit.4. "An employee who has been issued a right-to-sue letter or the Commissionerof Labor may commence a civil action against the employer. The action mustbe filed within 90 days of the date upon which the right-to-sue letter wasissued."86FMLA, ADA, and REDA Issues (cont.)
  87. 87. Possible remedies:1. An injunction to enjoin continued violation of the Act;2. Reinstatement of the employee to the same position held before theretaliatory action or discrimination occurred;3. Reinstatement of full fringe benefits and seniority rights; and4. Compensation for lost wages, lost benefits, and other economiclosses that were "proximately caused by the retaliatory action ordiscrimination."87FMLA, ADA, and REDA Issues (cont.)
  88. 88. But wait, theres more!1. Right to jury trial: Yes.2. "The trouble with trebles": If "the court finds that the employee wasinjured by a willful violation" (what the heck is "non-willful retaliation"), then"the court shall treble the amount awarded under subdivision 4" (i.e., shall trebleall back wages and all "other economic losses" caused by the unlawful conduct).3. "I may have to pay HIS lawyer too??":The court may award to the plaintiff "the reasonable costs and expenses,including attorneys fees, of the plaintiff in bringing an action pursuant tothis section."Note: "If … court determines that the plaintiffs action is frivolous, it may award to the defendant… the … attorneys fees, of the defendant in defending the action".Good luck with that.88FMLA, ADA, and REDA Issues (cont.)
  89. 89. Patient Protection and Affordable Care Actand 2013: How Employers Must Brace ForCompliance© 2013 WARD AND SMITH, P.A.Bridget L. WelbornWard and Smith, P.A.Wade II, Suite 4005430 Wade Park Boulevard (27607)Post Office Box 33009Raleigh, NC 27636-3009P: 919.277.9125F: 919.277.9177E:
  90. 90. • Patient Protection and Affordable Care Act and2013: How Employers Must Embrace theAffordable Care Act90Affordable Care Act
  91. 91. • Patient Protection and Affordable Care Act("ACA")• Signed into law on March 23, 2010• Beware of the January 1, 2014 Compliance Date91Affordable Care Act (cont.)
  92. 92. • Insurance Quality and Coverage Initiatives• Transformations to the Delivery ofHealth Care• Exchanges• Medicaid Expansion• Individual Mandate• Employer Shared Responsibility92Whats in 974 Pages of Legislation?
  93. 93. • Minimum Essential Coverage• Preventive Care with No Cost Sharing toInsured• No Lifetime or Annual Limits• Dependent Coverage up to Age 26• Medical Loss Ratio93Insurance Quality and Coverage Initiatives
  94. 94. • Quality Reporting of Certain Health CareProviders• Transparency Reporting (PhysicianPayments Sunshine Act)• Revisions to Medicare Coverage andPayments• Expanded Access to Primary CarePhysicians94
  95. 95. • Federal Exchange – Default and CurrentN.C. Option• State-Based Exchange• Federal and State Partnership Exchange95Exchanges
  96. 96. Medicaid Expansion96• Expanded Medicaid access to 133% underthe poverty line.– Approximately $14,000 for a single adultin 2010• February 12, 2013, Governor McCrory statedNorth Carolina would not expand Medicaidunder the ACA.
  97. 97. Individual Mandate andShared ResponsibilityIndividual Mandate– Requirement for individuals to buy health coverage if notavailable through employer– 2014: Penalty is $95 per adult and $47.50 per child (up to $285per family) or 1% of family income, whichever is greater– 2015: $325 per adult and $162.50 per child (up to $975 perfamily) or 2% of family income, whichever is greater– 2016 and beyond: $695 per adult and $347.50 per child (up to$2,085 per family) or 2.5% of family income, whichever is greater97
  98. 98. Individual Mandate andShared Responsibility (cont.)Individual Shared Responsibility– If you make more, you pay more.– For wages earned on or after January 1, 2013, anadditional Medicare care tax of 0.9% will apply toincome in excess of $200,000 for single filers or$250,000 for married filing jointly.– New 3.8% Medicare Tax on "unearned" netinvestment income for taxpayers with an AGI inexcess of $200,000 for single filers or $250,000 formarried filing jointly.98
  99. 99. Employer Shared ResponsibilityPay or Play Mandate– Beginning January 1, 2014, "applicable largeemployers" may be subject to a penalty tax for(1) failing to offer minimum essential healthcoverage for all full-time employees (and theirdependents) or (2) offering health coveragethat is not "affordable" or does not offer a"minimum value."99
  100. 100. Employer Shared Responsibility (cont.)Translation – Employers with 50 or more full-timeemployees (including full-time equivalents) aresubject to penalties if they fail to offer adequatecoverage to full-time employees.100
  101. 101. Analysis1. Does the mandate apply?2. When will the mandate apply?3. To whom must I offer health coverage?4. What are the potential penalties?101
  102. 102. Does the Mandate Apply?The mandate applies to "applicable largeemployers" which are employers with 50 ormore full-time or full-time equivalentemployees.Full-time employees + 30+ hourly employees + Full-time equivalents = Employer status102
  103. 103. Does the Mandate Apply?Company A has 70 employees20 – Full-time salaried employees10 – Hourly workers each averaging 35 hours per week40 – Part-time workers each averaging 20 hours per week103
  104. 104. When Will the Mandate Apply?Current health insurance renewal date or theplan may qualify for a delay if the currentplan is a non-calendar year plan.104
  105. 105. To Whom Must I Offer Coverage?• To all full-time employees (and theirdependents).• But not to part-time employees.• And not to full-time equivalents unlessthey work more than 30-hours per week.105
  106. 106. To Whom Must I Offer Coverage?Return to Company A Example70 Employees:20 – Full-time salaried employees10 – Hourly workers each averaging 35 hours per week40 – Part-time workers each averaging 20 hours per weekCompany A must offer coverage to 30 employees106
  107. 107. What are the Potential Penalties?1. Penalties for not offering coverage to all full-time employees.(Number of Full-Time Employees – 30) * $167 = Monthly PenaltyMonthly Penalty * 12 = Annual Penalty107
  108. 108. What are the Potential Penalties?The penalty for Company A would be $0.00!108
  109. 109. What are the Potential Penalties? (cont.)2. Penalties for not offering affordable coverage that meets minimumvalue requirements to all full-time employees.Affordable means the employees premium contribution is not morethan 9.5% of the employees household income.Minimum Value means the health plan pays for at least 60% of thetotal costs of benefits provided under the plan.Number of full-time employees receiving subsidy on exchange* $250 = Monthly PenaltyNumber of full-time employees receiving subsidy on exchange* $3,000= Annual Penalty109
  110. 110. Employer Hot List for 20131. Pay or Play Mandate: Avoid the SledgehammerPenalty2. Summary of Benefits and Coverage3. Notice of Exchange4. W-2 Reporting5. Notice of Material Change to a Plan OutsideRenewals110
  111. 111. Termination of EmploymentWhat to Think About When Its Over© 2013 WARD AND SMITH, P.A.Rendi L. Mann-StadtWard and Smith, P.A.82 Patton Avenue, Suite 300 (28801)Post Office Box 2020Asheville, NC 28802-2020P: 828.348.6016F: 828.348.6077E:
  112. 112. Mechanics of the Interaction• Timing• Witness• Quickly and efficiently• Firmly• Security measures– IT access– Keys– Property• Return appointment for personal items• As private as possible• Consider law enforcement assistance112Ending Employment
  113. 113. • Contractual Buyout• Severance Agreement• Confidentiality Agreement• Non-Compete113Post-Employment Agreements
  114. 114. • Consideration• Advantages:– Release of claims– Non-disparagement– Non-disclosure/confidentiality– Return of property114Severance Agreement
  115. 115. • All wages due at next regular pay period• Vacation pay/PTO accrued, unlesspublished forfeiture policy• Earned bonuses/commissions when theycan be calculated• Deductions from pay only with writtenauthorization for specific instances115Post-Employment Wage Payment
  116. 116. • COBRA• North Carolina Continuation of Benefits• Exceptions:– Misconduct– Length of employment– Availability of other insurance116Health Benefits
  117. 117. • Less is probably better• Consistent policy avoids future problems• Address neutral reference policy inseverance agreement117References
  118. 118. The World is Round, but thePlaying Field is Not Level118
  119. 119. • Goal of ESC is to provide displacedworker with benefits• Payment of claims from fund so no directeconomic impact for most employers• Payment of claim may affect "mod" or"experience" rating• Some categories are "non-charging"119Employment Security Benefits
  120. 120. • Notice of Claim• Response• Initial Determination• Right of Appeal• Hearing Officer/ Appeals Referee Decisionafter Appeal• Appeal to Full Commission• Appeal to Superior Court120Employment Security Benefits (cont.)
  121. 121. DISQUALIFICATION• "left work without good causeattributable to employer"• "discharged for substantial fault on part ofemployee connected with work not rising to thelevel of misconduct"• "misconduct connected with the work"– Exception for severely disabled veteran121Employment Security Benefits (cont.)
  122. 122. Qualifying Reasons• Disability incurred or other health condition• Bona fide medical diagnosis• Advance notice to employer• Moving spouse• Unilateral reduction in pay more than 15% orhours more than 20%• Domestic violence/family hardship122Employment Security Benefits (cont.)
  123. 123. • Misconduct connected with the work:• "intentional acts or omissions evincing disregardof an employers interest or standards ofbehavior which the employer has a right toexpect or has explained orally or in writing to anemployee or evincing carelessness ornegligence of such degree as to manifest equaldisregard."123Misconduct
  124. 124. • Disability incurred or other healthcondition• Moving spouse• Domestic Violence• Family hardship• Inability to do work within 100 days ofhiring124Non-Charging to Employer
  125. 125. • Usually by telephone• Employer has burden if the employeeclaims involuntary separation• Consider partial disqualification/stipulation• Send all exhibits in advance• Caution witnesses re speed of hearing12Employment Security Hearing
  126. 126. • Blacklisting is a Class 3 misdemeanor• Enforcement of non-compete and otherrestrictive covenants126Post-Employment
  127. 127. © 2013 WARD AND SMITH, P.A.Ward and Smith, P.A.www.wardandsmith.com800.998.1102Asheville Greenville New Bern Raleigh Wilmington